How Us Airways/america West

[USA320Pilot]

How US Airways/America West merger got off the ground

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.

Complete Story

Regards,

USA320pilot

 

[StraaightTaalk]

I don't think anybody here can say, with any certainty, that HP-US is, in fact, "off the ground" yet.


Hey A320...

You've been quiet the last few days. Were you out pricing homes in PHX?

 

[hharotz]

-- 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. Regards,

USA320pilot

[post="271906"][/post]​

 

[hharotz]

I don't think anybody here can say, with any certainty, that HP-US is, in fact, "off the ground" yet.

[post="271915"][/post]​

I agree...much in the same way RSA stepped in at the last minute when Siegel and crew had TPG lined up for us to exit BK1, I won't believe this HP transaction until it is a done deal. Just another stupid move in this airline's history of many...such a shame that we didnt learn from the PSA fiasco (even AA couldn't make the RenoAir merger work and AA had/has a decent nationwide network and a huge cash reserves!)... :down:

 

[deltawatch]

Whats so funny, you would have to PAY someone to take United now!

 

[deelmakur]

What's interesting is that there doesn't seem to be a breakup fee. These are fairly normal in such transactions, and require the original buyer (let's face it, with AWA having the majority of Directors, that's what it is) to be paid a bunch of money if someone else comes in. In additon to making the buyer whole for what they have spent, it also raises the cost of the deal for the next guy. Without one, the "backdoor" is open for another buyer, or even someone who comes in and buys both guys.

 

[wnbubbleboy]

Just another stupid move in this airline's history of many...such a shame that we didnt learn from the PSA fiasco

[post="271936"][/post]​

Here's a cost prespective that I have for your with the regards to mergers.

I worked in Pittsburgh stores back when the merger had taken place. One of the Controllers was amazed at the Hidden debt PSA had regarding parts borrows and loans. I don't have any idea what the total debt cost would have been.

To put it in prespective though we (WN) recently removed a part from an aircraft that was loaned to us buy either U or Delta that was costing us if I can remember right about $5,000 a day to use. Exchanging these are usally A level priority planning RON jobs. Say though your Planning or Maintenace isn't on top of these items and the part stays on for a few months even though there is a replacement part in stock your are losing money every day.

Finding this out post merger couldn't have been good news for the company back then with all the other problems they were having.

 

[Bear96]

-- 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.

[post="271906"][/post]​

Why the bolding? Apparently it was just another of U's pipe dreams.

You didn't highlight this bit from a couple of paragraphs later (I guess you "forgot" or something), saying how U ultimately rejected those options, because "United didn't have any interest in a deal."

Hmmm, I could have sworn we read things posted here by you detailing how UA executives were in Arlington (or was it U executives in Elk Grove Village, I forget which), and how things were being extensively discussed on a high level.

How can that be, if United didn't have ANY interest in a deal"?

 

[USA320Pilot]

Bear96:

It's my understanding that Tilton did not want to participate in the UCT or ICT in 2003 because it would have lead to the fragmentation of United. I was told that if the Iraqi War or SARS would have lasted longer then US Airways, with RSA financing, would have made a hostile run at United's assets.

Do you remember the four separate interviews's with David Bronner when he said he was interetested in buying Uninted assets for US Airways?

With US Airways' problems deepening, along with the rest of the industry, the company was forced into bankruptcy a second time and that interrupted discussions.

However, that did not stop the US Airways' "executive suite" from seeking M&A activity. A few months ago when news began to leak about an America West - US Airways deal, United approached US Airways seeking another merger attempt. With the America West talks picking up stem, US Airways lining up a "stunning" amount of equity, and the America West merger better for US Airways than with United, I was told this time Lakefield "shunned" Tilton's overture.

That's water over the dam now because it appears a merger or United fragmentation involving US Airways is dead and the alliance will change too. It appears that there will be changes in the domestic alliance with United as US Airways books its flights to the west on America West jets and deepens its relationship with Air Canada, which will include increased gate utilization and ground handling.

Regards,

USA320Pilot

 

[ClueByFour]

Bear96:

It's my understanding that Tilton did not want to participate in the UCT or ICT in 2003 because it would have lead to the fragmentation of United. I was told that if the Iraqi War or SARS would have lasted longer then US Airways, with RSA financing, would have made a hostile run at United's assets.

Do you remember the four separate interviews's with David Bronner when he said he was interetested in buying Uninted assets for US Airways?

[post="272074"][/post]​

Given that Bronner did not put a single dime into the "new" US, it's pretty funny that "somebody told you" he was going to drop (what would have to be) several hundred million more on United assets.

Regarding the "stunning" amount of equity, there is a whopping $150 million from people without skin in the game (rj providers, existing creditors, etc). That's not that stunning. What it does indicate is that the vast majority of the equity going in is trying to get existing equity back out.

Oh, and U will be stuck with Air Wisconsin at cost + 5% for years. And will be buying Airbus 350s whether needed or not. And so forth. It's predatory lending on a grand scale. "Stunning," even.

 

[mga707]

How US Airways/America West merger got off the ground

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,

Incorrect. The two carriers took their final bows in early and late 1991, respectively.
But it's forgivable...I see more and more instances of early '90s history and events being lumped in with "the '80s", just as stuff from the early '70s is misremembered as "the '60s" and (this one is REALLY prevalent) pre-Kennedy in Dallas/Beatles stuff gets lumped into "the '50s"!
Curiosly, though, the '80s (culturally, anyway) seems to last from about 1979 to 1992, making it one long decade! JMHO...

 

[usfliboi]

Negotiations are still taking place with bronner and a certain bank in charlotte. The finals havent been published yet!

 

[whlinder]

Just because you want to do something doesn't make it possible or reasonably.

I'm sure FlyI would like to buy UA too. That doesn't mean they can.

US had a plan to 'gobble' UA. It doesn't mean their plan was a reasonable one.

 

[funguy2]

-- 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.

But US Airways ultimately rejected those options.

... Unlike a certain US Airways pilot.

As I always said on the issue... I beleived that US Airways may have looked at this proposition as one of a number of options. Apparently, it was discussed the day USA320Pilot was wandering around CCY. Because, while US Airways considered it, and ultimately rejected it, USA320Pilot went on and on about it, at one point, saying the UCT, as he had dubbed it, imminent.

 

[Bear96]

Do you remember the four separate interviews's with David Bronner when he said he was interetested in buying Uninted assets for US Airways?

[post="272074"][/post]​

As has been explained to you innumerable times before, no one has any doubt that Bronner was "interested" in acquiring UA's assets. He probably had wet dreams where he was "interested" in acquiring AA's, or LH's, or [insert your airline of choice]'s assets too -- or even of making U a profitable carrier. But it didn't happen.

You can lust after something all you want to, but if the other side isn't interested, it's a rather futile exercise, isn't it.