How Soon Before The Merger?

[USA320Pilot]

Fly:

By whom? UAL Pilot Vaughn Cordle and Mike Boyd or people like UBS Securities airline analyst Bob Ashcroft or Lehman Brothers airline analyst Gary Chase?

Regards,

USA320Pilot

 

[LGA Fleet Service]

Did you catch this?


AMR stockholders are advised that TRC Capital's offer is subject to numerous conditions. Included among those conditions are: TRC Capital's receipt of financing reasonably acceptable to it

So they want to buy four million shares of AMR at below market prices, but they don't quite have the cash to do so? :blink:


Sounds like an Emil Bernard "Global Airlines Corporation" special to me...

Where is Emil these days anyway?

 

[usairways_vote_NO]

Fly:

By whom? UAL Pilot Vaughn Cordle and Mike Boyd or people like UBS Securities airline analyst Bob Ashcroft or Lehman Brothers airline analyst Gary Chase?

Regards,

USA320Pilot

[post="241387"][/post]​

By the ones that can put 2 and 2 together and also those that don't have an agenda.

 

[ITRADE]

I would actually see a marriage with HP more likely.

With the exception of the A320 family, you've got complete fleet and engine commonality.

 

[700UW]

HP and US would be a perfect fit operational wise, it would be a great combination of a route system and would be a opportunity for growth with Asia with HP's stong west coast presence and would feed more Europeon flights from the East Coast.

The map on your web page is a nice touch.

 

[ITRADE]

Any idea on how the costs for each work group differ now based upon the new contracts?

 

[700UW]

HP is probably pretty equal too the US Counterparts, the company's goal in concessions was to get the employees as close to HP's wages as possible.

I dont think the two companies should do a physical merger, I think US should buy HP once it emerges from Chapter 11 and do a codeshare linkup and keep the two companies identities seperate but own by the same holding company.

 

[funguy2]

Dyeing industries consolidate to create economies of scale. It happened to the railroads and steel industry, and will likely occur to the airlines.

Unfortunately, aircraft fleets, according to studies I have read, generally reach most economies of scale at around 25-35 airframes. So, in that sense, both UAL and US Airways already have reached economies of scale. You might be able to save a few heads by streamlining operations at some spoke cities. But the only place you might be able to "save" more through scale would be senior management... Because, after all, if you merge UAL and UAIR, its not like revenue management department gets smaller... You still have the same number of markets to manage. Ditto for aircraft maintenance and others. But obviously, there is no need for two CEO's, two CFO's, two COO's, etc. (Of course, if you pay the one guy that remains in each position a higher salary, then you lose the advantage of combining Senior managements... and this is farely common as senior management types are usually paid by the size of the operation, in very general terms).

A UAL-US Airways merger is still a bad deal in my book. Two wrongs do not make a right... Two bankrupt airlines do not make a profitable airline. That's just how it is. Will consolidation take place... Everyone seems to think so... But again, industry consolidation could take more forms than just "mergers". One possible form is "liquidation".

 

[Bob Owens]

Dyeing industries consolidate to create economies of scale. It happened to the railroads and steel industry, and will likely occur to the airlines.

A report I read indicated that UAL’s E&FA department believed the former UAL attempt to acquire US Airways would have generated an extra $1.9 billion per year in combined revenue. That number is likely smaller due to consolidation and industry-wide revenue deterioration, however, it's still very large.

Meanwhile, both US Airways and UAL’s restructuring are aligning the companies and there could be a deal in the not-so-distant future, especially with UAL’s inability in over two years to craft a plan of reorganization.

By the way, see what you can find out from J.P. Morgan regarding their IB activity between the two companies.

Regards,

USA320Pilot

[post="241287"][/post]​

Ok but is the industry dying or is the overall trend for continued growth?

 

[funguy2]

With that said, the venture capitalists are circling around CCY and WHQ, just like they are in DFW.

See Story

Just because there is a potential transaction going on at AMR does not incinuate that US Airways is in the same boat. KMart and Sears just announced a merger... That does not mean that Target and Wal-Mart are about to do the same.

Again, you are using "evidence" of something completely unrelated to US Airways and making the argument that US Airways will have this too. That argument simply doesn't hold water. In fact, one could say that these particular investors chose AGAINST investing in US Airways when they chose to sink their money into AMR.

Furthermore, there is not an unlimited amout of "venture capital" out there.

 

[mweiss]

Ok but is the industry dying or is the overall trend for continued growth?

[post="241922"][/post]​

I believe the correct economic term would be "maturing."

It would become a dying industry if a better substitute arose. Look what the airline industry did to the passenger railroads, for example.

 

[jimntx]

Speaking of merging airlines, anyone beside me old enough to remember the sterling success of the Pan Am-National merger? Two airlines both struggling to overcome major losses.

By the way, I haven't seen any Pan Am ads lately. Why is that? :huh:

 

[mweiss]

Let us not forget that PanAm was late coming to the mid-80s merger party. Had they done so earlier, they would have had a better chance at linking with an airline that had a more compatible route structure. UA would have been a fantastic choice.

Instead, by the time they were ready to play, they were stuck with National, and airline with an extensive domestic route structure that was nearly the worst possible fit for PA.

 

[RowUnderDCA]

er?

I'd have sworn that PA-NA predated

TW-OZ, NW-Republic and Delta Western, by a bit.

 

[mweiss]

In 1980. My memory failed me badly there, didn't it? 🙂