Doug Paker Merger Q&A with Arizona Republic

[hp_fa]

I noticed the same thing and was quite surprised. He is either eating too well or not getting his exercise. Maybe he's grabbing his bucks now and the golf and tennis become full time soon.

 

[hp-csr-phx]

Time to bring the Diet Dr. Pepper back.

 

[Rico]

Please, the only thing US is good at teaching is how to leach off of others.
Now go back to your dream world where you pretend to fly for an airline with any real international relevance.

*cough* Eastern *cough, cough* Pan Am

I'm sorry, what were you saying...?

 

[longing4piedmont]

*cough* Eastern *cough, cough* Pan Am

I'm sorry, what were you saying...?

Interesting post from some one who worked for a carrier that had to purchased by another carrier in order to survive......

 

[700UW]

Ok, so who arranged the deal and arranged the money?

Let me give you a hint, it was not HP nor Doogie.

 

[longing4piedmont]

Ok, so who arranged the deal and arranged the money?

Let me give you a hint, it was not HP nor Doogie.

Seaberry. So what is your point. Who is running this train wreck? The only thing left of US is a little paint on the metal.

Isn't that what the "change of control" that the IAM is getting ready to give away is all about or am I confused again?

 

[700UW]

I guess you must be confused, no where has the IAM said they are willing to give up the "change of control", as a matter of fact they are preparing for the arbitration next month, spending money, time and resources for the case.

The IAM's track record on contractual language in arbitration is very sound.

And by the way who did Seabury work for?

 

[Rico]

Interesting post from some one who worked for a carrier that had to purchased by another carrier in order to survive......

I dunno, seems to me that both US Airways and Delta have been thru some past mergers, what is YOUR point...?

Mine is that history shows that Delta has already done exactly what US Airways is trying to now do (buy up the assets of a bankrupt carrier), so excuse me if I happen to be allergic to hyprocrisy.

Anyways, what do you care...? It's not your airline until the creditors agree to sell it back to you.

Just because you are still "living in the house", does not make us evil for placing a bid on it.

 

[longing4piedmont]

The IAM's track record on contractual language in arbitration is very sound.

Humm. I guess we will see won't we. So if the IAM is successful are you finally going to admit you were purchased.

I dunno, seems to me that both US Airways and Delta have been thru some past mergers, what is YOUR point...?

Mine is that history shows that Delta has already done exactly what US Airways is trying to now do (buy up the assets of a bankrupt carrier), so excuse me if I happen to be allergic to hyprocrisy.

Anyways, what do you care...? It's not your airline until the creditors agree to sell it back to you.

Your view is history is inaccurate at best, but it does serve your purpose to rewrite it doesn't it?


And you don't get to fly the big birds.....

 

[700UW]

It was a merger, not an aqusition, if HP purchased US we would have fallen under their CBAs and union representation.

Some good info:

How US Airways/America West merger got off the ground
Talks between airlines began in 2003, but didn't get serious until this year
Sunday, May 22, 2005

By Dan Fitzpatrick, Pittsburgh Post-Gazette

The on-and-off, 18-month courtship between US Airways and America West Airlines finally clicked into place May 12 in Washington, D.C., high above the floor of the MCI Center, where executives from both airlines had gathered in US Airways' skybox to watch a Washington Wizards playoff game.

Just minutes before tip-off, with the din of exploding fireworks filling the arena, US Airways adviser John Luth received an e-mail on his BlackBerry from Air Canada Chief Executive Officer Robert Milton. It confirmed that Air Canada's board had approved an investment in the combined airline -- the final piece of a $1.5 billion financing package needed to make the deal work.

Luth waved his BlackBerry, smiled and gave everyone the news. He congratulated Doug Parker and Bruce Lakefield, the chief executive officers of America West and US Airways, and broad smiles broke out throughout the box.

The merger was on.

Announced a week later at the Tempe, Ariz., headquarters of America West, the agreement between the nation's seventh-and eight-largest airlines paired a twice-bankrupt, East Coast legacy carrier with a younger, smaller, low-cost airline that does much of its flying on the West Coast.

If they can win a slew of antitrust, shareholder and bankruptcy court approvals, US Airways and America West together would surpass discount king Southwest Airlines in size, becoming the No. 6 carrier in the nation. Together, they also could usher in an era of consolidation in the troubled airline industry, which has lost more than $30 billion since 2001.

But there were several twists along the way, according to people familiar with the events. America West was not the only carrier to express interest in US Airways, nor was America West the only partner US Airways pursued.

The search for a deal began in the fall of 2003, when David Siegel was still US Airways' chief executive officer. Siegel had led US Airways through its first bankruptcy and wrested more than $1 billion in concessions from the company's labor unions. But even as the carrier completed a painful round of cost cuts and emerged from bankruptcy, Siegel knew US Airways was still too small and too inefficient to compete against discounters such as Southwest, which had already announced plans to start service in Philadelphia, a US Airways' hub.

Siegel was convinced that for US Airways to avoid the fate of failed carriers such as Eastern Airlines and Pan Am, both of which liquidated in the 1980s, he would have to bring US Airways' costs down further and position the airline for consolidation with another carrier. He explored several options.

Acquire United Airlines, the nation's No. 2 carrier. That option was code-named "Project Minnow," with US Airways as the small fish gobbling the bigger one.

Combine with British entrepreneur Richard Branson's Virgin Atlantic, which was interested in US Airways' Washington-Boston-New York shuttle, along with slots and gates in the Northeast.

Split the airline in two and merge the Philadelphia and Charlotte, N.C., hub-and-spoke network with one carrier and its slots and gates in Washington, Boston and New York with another.

But US Airways ultimately rejected those options. United did not have any interest in a deal and was too distracted by its own struggles in bankruptcy. Virgin Atlantic wanted lots of US Airways assets -- gates, planes, airport equipment -- to help launch a new U.S. airline, but all it would offer in retrun was the Virgin brand name. US Airways also turned down several inquiries from other carriers -- including Southwest, JetBlue Airways and AirTran Airways -- about acquiring the company's assets but not its employees.

In the end, only America West wanted both.

Siegel made the initial connection. He knew Parker and Executive Vice President Scott Kirby at America West. Their first face-to-face meeting was in October 2003, over dinner in a Washington, D.C., restaurant. They were joined by then-US Airways Chief Financial Officer Neal Cohen.

But the talks ended several months later. At the request of US Airways' board, Siegel departed from the company in April 2004. According to Parker, the first round of discussions failed because US Airways' costs were still too high. Siegel had started a campaign to lower union costs further, but labor leaders refused to deal with him, contributing to his ouster.

Retired Lehman Bros. executive Bruce Lakefield, a friend of US Airways chairman David Bronner, replaced Siegel and sought to save US Airways. He asked unions to help with another round of concessions. When that failed, Lakefield took the company into bankruptcy again and squeezed another $1 billion in concessions from the unions, using the power of the U.S. Bankruptcy Court to hammer home new contracts modeled after America West's labor agreements.

In January, with fuel prices at a record high and doubts aired about US Airways' survival after its Christmas baggage meltdown in Philadelphia, Lakefield picked up the phone and called Parker, suggesting that "maybe we should begin those talks again," according to Parker.

But America West did not have enough cash to lift US Airways out of bankruptcy. It was up to Luth, the US Airways adviser, to find enough investment money to piece the deal together and give the combined company a fighting chance to thrive in the battered airline industry.

Luth and US Airways had serious discussions with more than a dozen investors. They all requested shared participation in a merged airline -- no one wanted to take on all the risk. The Retirement Systems of Alabama, which rescued US Airways from its first bankruptcy in 2003 with a $240 million investment, stands to lose it all if US Airways emerges from bankruptcy and issues new stock.

Luth went after the companies that had something to gain from an investment in US Airways and America West. Aircraft maker Airbus agreed to provide $250 million in exchange for US Airways' pledge to buy dozens of A320 jets in the future. Regional commuter carrier Air Wisconsin Airlines made a $125 million investment in exchange for a jet services partnership. The Appleton, Wis.-based airline will fly for the merged carrier on a contract basis.

Credit card companies may provide $300 million in order to reach new customers. And once-bankrupt Air Canada offered $75 million, good for a 7 percent stake in the new company, in exchange for the rights to bid on the maintenance contract for the new carrier's fleet of 361 jets.

Air Canada was the last in line.

Once its approval came last Thursday, employees at both airlines scrambled to obtain approval from their boards of directors. US Airways' directors signed off Wednesday, over the telephone. America West's board approved it Thursday, in Tempe.

Labor leaders were briefed, and a press release was sent out. Parker and Lakefield spent much of Thursday night explaining the deal to reporters before Lakefield took a red-eye flight back to Washington. Parker, who has been tapped to lead the merged airline, met with employees and went home. Before going to bed, he explained the deal in one final live shot with local TV, from his house.

-----------------------------------------------------------(Dan Fitzpatrick can be reached at dfitzpatrick@post-gazette.com or 412-263-1752.
-------------------------------------------------
Correction/Clarification: (Published 5/23/05) Air Canada, as part of an investment in the proposed US Airways-America West Airlines merger, has the right to bid only on the maintenance work that can be outsourced under existing labor contracts. It does not have the right to do the maintenance work on all 361 jets belonging to the combined airline, as described incorrectly in a story Sunday. )

 

[longing4piedmont]

It was a merger, not an aqusition, if HP purchased US we would have fallen under their CBAs and union representation.

Some good info:

The only thing left of your old company (the one you used to work for) is the name on the plane. The rest is symantecs. You know it. I know it.

 

[700UW]

I guess you forgot the operating certificate which shows US Airways/East still in business and flying.

And I guess you forgot the HP and US are owned by the US Airways Group and the HP stuff was left as they were treated as the aquiring company for SEC purposes only.

 

[longing4piedmont]

I guess you forgot the operating certificate which shows US Airways/East still in business and flying.

Like I said, the rest is symantecs.

It must a double bitter pill to swallow watching doogie cash those checks knowing the reason was all the give backs from your bothers and sisters at US and the fact he didn't even do the heavy lifting with the financing. He is one very lucky guy......

 

[700UW]

Doogie making his money does not bother me.

What bothers me is Corporate America making profits out of the employees' wallets and not remembering those employees's sacrifices.

What bothers me is people like Siegel who failed at thier jobs, yet walk away with millions.

What bothers me is that the laws are made to protect business and not take care of the employees.

Doogie needs to step up and do the right thing, but as long as people like Glass and Hemenway are around, employees will be treated as liabilities and the enemy, instead of the executives actually running a business and making all parties happy including passengers.

 

[N924PS]

Well said 700UW!