HP and HA to merge?

A rumor that has gotten more interesting with the resignation of HA''s court-appointed trustee has HP and HA merging, with Boeing and GE Capital financing the deal.

Anyone else hearing rumblings of this?
Hmm.........this would be extremely interesting indeed.
Hubs at PHX, LAS, HNL, and a focus city at OGG.(not a hub, most wouldnt be CONNECTING as many people dont understand what a hub is)
Fleet types of 717, 737 (2 variants), A-319, A-320, 752, and 763 soon to be A-318
7 different types which would combine to make a very small airline, and very high operating costs.
I would guess HP would retire the 733's and 732's if this were to happen.
But as pointed out by AA191, this is horrid timing to even think about acuqiring HA. HA stock has dropped like a rock and their management has some serious questions. HP is not out of the red yet either.
However if this were to happen, I think that HP could filter all the traffic to PHX and LAS from all over the midwest and east coast and feed 2x daily 763's to HNL and OGG. HA could continue operating its west coast flights but just move the SMF ( which to my knowledge has been filling up decent) and ONT flights to PHX and LAS. In theory this could actually work, but I don't know, it seems highly unlikely.
Well, take an airline that loses piles of money and works in a notoriously low yield market and combine it with an airline that loses piles of money and has hubs in two notoriously low yield markets. Couple the fact that one airline would add two new fleet types into its network along with its bloated existing fleet mix.

Yeah, when two airlines are losing money seperatly, its really a great idea to merge them!

That was sarcasm for those of you in Apache Junction...
HA isn''t THAT unprofitable, just poorly managed. If you fired all the HNL management folks and eliminated certain "consultant" contracts you''d pretty much eliminate the losses.
IF (and this is a huge "if" here) these two were to merge, underwritten by both Boeing and GE Capital, look for the Airbus fleet to be phased out.

Orders would be cancelled. Existing aircraft sold and/or returned to the lessors.

Then watch as the B-717s and 73Gs come rolling in...
Today''s Honolulu Star-Bulletin says HA made $14 million in May and by the end of May had reduced their year to date loss to less than $2 million. It looks pretty certain they will be profitable for the year by the time they report June numbers.
Virtually everything AWA ( aircraft wise ) has is leased...depends on the leases...and if Boeing and GE Capital want to put some cash up to dump the leases with the understanding that a major order from AWA will follow..... well maybe...As pointed out above the A318 is a dead duck as far as AWA Corporate is concerned.....And with Hawaiian looking profitable and 80% loads right now at AWA...could be better than you think..
Well, I am a skeptic, I''m glad HA is turning the corner, but it took the Chapter 11 refinancing of their new fleet to do it. I am very high on the 717, its a great plane, and its quite a bit more comfortable to fly on than HA''s jurrasic DC9-50''s. And the 767 is the right plane for the overwater (I remember lots of flights on the creaky L1011''s and the old, but still nice DC10''s.

What AWA needs to do is make a decision, boeing or airbus. In the short term, they would be well served to ditch the gas eating 737-200''s very soon. I''d like to see them flying 737 700''s and ''800''s and phase out the hangar queen 757''s.

I don''t think that this is the time for AWA to take on any new ventures, they need to string together 8-10 quarters of profit, build up a few more planes, lessen their reliance on Mesa (BTW, Mesa Dash 8''s and RJ''s having a nasty dispatch rate in the 110 degree heat) and become a profitable airline before exposing itself to lots of risk.

I gotta non-rev tommorow, so I will be praying to the god of Non-Rev tonite!
Can anyone explain the "pros" of a HA/HP merger? What could the two do better as one that they cannot do just as well -- or better -- operating independently with their current code-share and frequent flyer arrangements?

I can think of several major "cons" about a HA/HP merger. For sure the non-commonality of their fleets is a huge con; the cost to achieve even some semblance of fleet rationalization would be staggering.

HP has finally "turned the corner" IMHO in the areas of operations and costs; the last thing they need at this time would be to take on the messy -- and costly -- issues that come with any airline merger.

HA (along with AQ) fills a unique niche whose potential can be best achieved IMHO by operating independently, with code-share feed at its Mainland gateways -- as with their present agreement with HP at PHX and LAS (as well as other cities with other airlines).

Bottom line IMHO is that a HA/HP merger would make HA a proverbial millstone to HP that could cause both to sink. Each will do better to continue operating independently with their code-share agreements than they could as one through merger.
OK, the fleet issues wouldn''t be nearly as bad as people think. The 757 and 767 have the same rating. The 717s are super-efficient, but could always be ditched for the 84-seaters AWA has through Mesa, which would solve two problems: dealing with fluctating demand on the Islands, and AWA''s having to receive more RJs that it doesn''t want. And AWA already is phasing out the 732s, they''ll be gone by the end of 2004. That leaves the 733s, which could be dumped for more Airbuses, if necessary, or kept.

Some other "plus" thoughts:

-- AWA is the only major airline with low enough labor rates to make a HNL hub work. And with operations all across the country, AWA could add HNL flights to places like ORD, ATL, DFW that HA doesn''t fly to currently.

-- Folding HA into AWA would eliminate a lot of fixed costs. I think the HA operation would go profitable overnight.

-- AWA''s "fair fares" would be well-suited for travel to/from the Islands. I think the HA/AWA codeshare is far from its potential because, from what I can tell, AWA can only sell seats to HNL, but HA sets the pricing. An AWA/HA could easily lock up the majority of business travel out of the Islands, and a good bit of it to it, because biz fares to/from Hawaii are exorbitant. At last, Hawaiians would have a "hometown" airline that could take them anywhere in the U.S. Just as ALK has a captive market up north, AWA could have one here.

-- If AWA could add HNL to its system with, in a worst case, no hit to profitability, and with a good chance to make a good chunk of change, why not?

-- PHX is a natural connecting point for Hawaii traffic, roughly halfway between the East Coast and the Islands.

-- The 767s would allow the possibility of PHX flights to LGW or CDG, should AWA wish to dream, or other trans-Atlantic possibilities if AWA ever looks to move into an Eastern hub.
Mot, I was there when we flew to HNL, now, granted we flew 19 year old 747''s in 3 class service, but even if we had 767''s we would have lost barrels of money. HP has absolutely no business doing anything other than getting profitable and sustaining profitability and not doing stupid things like acquisitions or entertaining the thought of starting up a money pit routing to hawaii, as much as I would like to nonrev there again (used to go every month). If you look at the 20 year history of HP, they have still not come close to profitability over the long run, that needs to change.

PHX isn''t a very good connection point to HNL, there are dozens of flights there from LA area and SFO, as well as non stops from JFK, EWR, ORD, IAH, and DFW. The money just ain''t in it, the expenses to setup over there are high and you would need more than one flight a day to justify the field station costs.
earlyretiree, the proposal isn''t for AWA to fly one flight a day to HNL, it''s to merge with Hawaiian Airlines. Thus, no new overhead in HNL and a lot of management redundancy eliminated.

The fleet commonality problem is annoying to schedulers and somewhat costlier, but not *that* huge a problem. The 717''s are segregated anyway and as someone pointed out the 757/767''s are common-rated. The 767''s of which HA probably has a few too many would add terrific flexibility to AWA''s capacity and ability to add new cities.

Another possibility: sell the 717''s to AirTran and use Mesa for the inter-island stuff. This would curl ALPA''s toes, but survival is survival.

Oh well, fun to speculate.
Common rated for pilots... Doesn''t mean the same parts... I would bet the parts compatability to be fairly low... I am sure the engines are different... Would having the same "brand" engine lead to compatability? Probably not. I am not expert, but I would have to think AWA going from 2 small fleets (757 and 73S) to 4 small fleets (add in 763 and 717) would probably be a bad idea. In MX expense terms, I think it would be very expensive to have 7 subfleets over 165 or so planes.