Merger Talks Gain Between Us Air And America West

[dfw79]

Well since OKC is mentioned again...I figure I'll jump in with some comments.

Airport's website: http://www.flyokc.com/

The terminal expansion is half way over now. The new west concourse and gates 1-18 are open. All the existing airlines have moved over. This allows them to begin work on the east concourse which will bring the total gate numbers up to around 25-30.

http://www.flyokc.com/index.aspx?page=expansion

Airport has 3 useable runways, 2 parallel 9800 ft (17/35 L&R) and 1 7800 ft (13/31). The airport has discussed the planning for a third parallel runway on the east side of the airport. As far as facilities go...I don't see why they wouldn't be capable of support increased air traffic. The airports other major tennants include AAR's Oklahoma overhaul & paint shop, Oklahoma ANG, MetroTech (trade school), the FAA Center, and the US Marshall's transfer center. Land wise plenty of room to grow and the new terminal layout will allow them to easily expand should it be required.

The City itself sprawls ~620 sq miles itself...population in 2000 was 506,132 and the 2003 estimate is around 523,303 with a metro population of 1.25 million. 1990 pop was under 445,000. Unemployment is under 5% with the median income around $35k a year. Cost of living and doing business is in the bottom 5 (as far as larger cities). Compare OKC to like Boston...the difference is anywhere from 30-50% cheaper to live in OKC.

Nice little site with more city info: http://www.absoluteastronomy.com/encyclope...y,_Oklahoma.htm

Employer wise...latest major announcements include Dell's new 3 story service center along the river near downtown, Ciber which is an IT/programming outsource firm, and several others that escape me.

Can the city support a large scale hub? No. However, the city with little congestion and pretty decent weather (besides those moments in May/Jun and Oct) would allow for a pretty low cost operation. Okay enough of my sales pitch...for those that have never been here before, would recommend it. Its a nice little get away...and has a downtown you can actually spend time in without looking over your back. Oh...and the people are nice.

 

[JayBrian]

Maybe MCI is due for a new terminal. They could build a new one, shaped like a giant X with common security to all gates and lots of shopping to keep passengers occupied while waiting for the next bank of flights.

 

[DCAflyer]

Well first it has to be low cost. Right now it isn't. Merging a high-cost airline with a sorta-low-cost airline does not make the combined airline a low-cost airline.

[post="267733"][/post]​

I agree that right now UAir is not low cost, but that is the result of doing things wrong across the board, as RSA has done, rather than doing things right, as TPG has consistently done! If TPG were at the helm at UAIR, as it is at AWA, certainly employees would have taken cuts, but probably only once. I believe the combined airline would have been in a better position to protect itself against assault from Southwest, would have made significant cuts in non-personnel cost centers, restructured routes, and hedged fuel costs.

I agree that the U/UAL codeshare would be scaled back, but it won't be eliminated unless the new U starts up service to South America and Asia upon completion of the merger. And Star will still be dependent on UA; the only Star Airlines that fly into PHX or LAS are LH, AC, UA and US. The new airline isn't a replacement for UA, but can certainly enhance the alliance. If UA fails, you aren't going to see all the Star carriers that serve SFO and LAX move their flights to PHX.

[post="267733"][/post]​

UAIR/AWA may not have a choice as to whether to scale back because who knows how long United will be around! It certainly seems to me that the new Airways entity is positioning itself for life without UAL, weather by choice or by circumstance. I haven't stopped to figure out all the nuances of UAIR/AWA getting married and UAL parishing... what STAR carriers might be able to pick up feed into the Americas and what the new US Airways might be able to feed out. It is safe to say that if United became no more, we would see a significant STAR route shift. I think it's also safe to say that United has probably been in discussions with CCY throughout this process, and it may be positioning itself to shed some routes that Airways might be able to pick up. It remains to be seen what role GE would play in this, or what role the STAR carriers might play for that matter, if United goes away.

 

[Fatherknowsbest]

Wait a minute here, wasn't Siegel TPG's idea? That was tried already and failed IMHO.

 

[hharotz]

Maybe MCI is due for a new terminal. They could build a new one, shaped like a giant X with common security to all gates and lots of shopping to keep passengers occupied while waiting for the next bank of flights.

[post="267808"][/post]​

ROTFLMAO!

 

[vsi0]

ROTFLMAO!

[post="267819"][/post]​

Jaybrian/hharotz:

rofl! Are we the only three that finds that absoultly hilarious?

 

[usfliboi]

28 E-170's are not counted in the mainline fleet.

Once again, don't let the facts get in your way.

[post="267729"][/post]​

Now thats telling him 700 and making a great contribution to this discussion!

 

[RowUnderDCA]

He keeps saying 'ONCE again,' but he lies

 

[MrAeroMan]

Jaybrian/hharotz:

rofl! Are we the only three that finds that absoultly hilarious?

[post="267838"][/post]​

I bet I know where they could get a set of plans for it on the cheap...

 

[usair_begins_with_u]

I thought hub and spoke was dead in the new wolrd of the LCC?? Its all about the ptp baby...

 

[USA320Pilot]

Rob:

Hope777 is correct. The terminal construction is problematic and security is a big issue. Separately, Funguy 2 is right too because MCI does not enough O&D traffic. If United implodes then there could be other opportunities such as ORD and/or DEN. If not, then I believe STL or DEN with Frontier could be the best option.

Today's legacy carrier hub and spoke needs to be a rolling operation similar in scope to what Southwest uses in its biggest cities to increase efficiency and productivity.

Regards,

USA320Pilot

 

[jimcfs]

Jaybrian/hharotz:

rofl! Are we the only three that finds that absoultly hilarious?

[post="267838"][/post]​

I find it sad... wasn't that what PIT was supposed to be?

No, stop me, CCY killed it off in favor of PHL, the crown jewel.

Back on topic... MCI would need a new terminal in order to do any kind of hub ops. Those small concourses with individual security won't cut it... unless you are going to run lots of shuttle buses with lots of stops.

 

[USA320Pilot]

Merger Talks Gain Between US Air and America West

NEW YORK (Wall Street Journal) - Merger negotiations between US Airways Group Inc. and America West Holdings Corp. picked up momentum last week, according to people familiar with the matter, with the carriers hoping to hammer out a deal ahead of America West's annual meeting May 17.

Several potential investors in a merger are studying a proposed business plan that foresees the combined company operating under the US Airways brand and focusing attention on Midwestern markets while introducing flights to Hawaii.

A potential combination of the nation's seventh- and eighth-largest airlines by traffic has been in the works for weeks. On April 22, the two confirmed they were talking, but they haven't commented further. No agreement is certain to result from the complex discussions, and possibly no deal will be reached before the meeting. Previous target dates for a merger announcement already have slipped, according to people close to the talks.

These people said the carriers are closer to signing up new equity investors to help fund US Airways' exit from bankruptcy-court protection and to pay the higher freight a merger would entail. The goal was thought to be a total of $500 million in new cash, but a merger agreement could come with just $375 million of initial equity attached, said one person briefed on the matter.

The companies are debating tricky valuation issues and how many board seats potential investors would receive. There also are multiple parties that would have a say in the transaction, including the federal government; General Electric Co., the largest creditor of both carriers; other investors and creditors; and America West shareholders, including a private-equity firm that has a majority voting stake in that company. GE has signaled its eagerness to reduce its overall exposure by taking back about 60 leased aircraft and some GE-made engines from the combined fleet, said one person familiar with the matter.

People close to the talks said potential new investors are studying a proposed business plan that foresees significant revenue synergies from a combined route network as well as substantial cost savings. One person familiar with the plan said some added revenue would come from flights to Hawaii, a destination neither carrier serves. Another person said the merged airline's ability to compete for passengers in the Midwest also would be important, as would the shift of America West's routes into the global Star Alliance marketing group, which already counts US Airways and UAL Corp.'s United Airlines as members.

"There are abundant sources of equity for the deal," said one person close to the talks. Those investors could include hedge funds, other airlines and Retirement Systems of Alabama, a pension fund that is US Airways' largest shareholder. Pension-fund officials have declined to comment.

US Airways already has raised $125 million from an affiliate of Air Wisconsin Airlines Corp. Another regional carrier, Republic Airways Holdings Inc., has provisionally agreed to invest a like amount when US Airways steps out of court protection.

Knowledgeable people said US Airways is talking to Wexford Capital LLC, the investment firm that controls Republic, about whether it will take up that option and participate in a separate, potential $110 million transaction involving US Airways regional jets and landing slots. The firm declined to comment Friday.

People involved with the talks assume that Doug Parker, America West's chairman and chief executive, would head the combined company. Questions about which executives from the respective airlines would take what roles in the merged entity haven't been sorted out, said one person. A decision about where the combined carrier would be headquartered also remains under discussion. US Airways is based in Arlington, Va., and America West is in Tempe, Ariz.

Private-equity concern Texas Pacific Group owns all of America West's Class A shares and has a 55% voting stake in the carrier. A person close to the situation said the airlines are under the impression that TPG would support the transaction. The firm declined to comment Friday.

 

[xoxo]

Now thats telling him 700 and making a great contribution to this discussion!

[post="267841"][/post]​

Where do you all keep getting 28 emb-170's? MAA has 25. Numbered from 801 to 824..they skip 825, I do not know why, then it goes to 826..so that makes 25 a/c..right? 700UW, this ? was meant for you...

 

[USA320Pilot]

XOXO:

US Airways may exercise an option to obtain approximately $110 million through the sale of certain assets, including 10 EMB-170 aircraft owned by US Airways; three EMB-170 aircraft currently committed for delivery to US Airways; other EMB-170- related assets; 113 commuter slots at Ronald Reagan Washington National Airport; and 24 commuter slots at New York’s LaGuardia airport.

In addition, US Airways would assign to Republic leases for an additional 15 EMB-170 aircraft.

See Story

Regards,

USA320Pilot