Merger with LCC in the spring

[ual777fan]

Here we go again...there is reason to believe US & UA could merge.

And, I agree with Doug Parker's comments to US News & World Report. Parker was asked, "Conventional wisdom seems to be there will be these two big mergers, Delta-Northwest, and maybe United-Continental, and then the dust will settle. Do you foresee any surprises?" Parker responded, "It's fair to say there will be surprises. Whatever seems like the most likely scenario is probably not where we'll end up. It's much more likely that something else will happen."

See Story

Moreover, one should not discount US Airways Vice-Chairman of the Board Bruce Lakefield's ability to work the financial markets to obtain M&A funding.

Regards,

USA320Pilot

It's been a long time since I've seen you around... so welcome back. I doubt that UA will try to tie up with US/AWA. CO would would be a much cleaner merger with a much stronger presence going transatlantic and to Latin America than US Airways could offer. Also the widebody fleet types would match up very well.

I see three senarios
1)USAirways sits on the sidelines because no one wants them
2)AA makes an offer for East as PHL would provide them a good up in the NE (LGA/JFK don't count as they are both operations largely based on O&D traffic. Plus landing in LGA and having to connect international through JFK is a huge pain in the #$%) and a great location to battle Delta in the southeast out of CLT.
3)AC somehow getting involved with US/AWA but that would be extremely complicated and messy considering the foreign ownership restrictions, different unions, different labor laws, different cultures etc.

 

[767jetz]

Here we go again...there is reason to believe US & UA could merge.

Yes, here we go again. But with all due respect, you should check your source again. The UAL MEC Chairman just indicated to me today that no one is interested in the mess that is USAir/America West. When I say no one I mean the unions and management.

I said this many months ago on the US Thread, but it is worth repeating now that we are faced with "real" transactions. The next mergers will involve prenuptial agreements that address pay, equity, and seniority to include slotting and ratios that protect current relative position and future expectations. All the current players (NW/DL/CO/UA) understand that DOH is not going to happen, and that binding arbitration is to be avoided at all cost. Management understands and accepts that the pilot's concerns will be addressed as a precondition of their merger aspirations.

The biggest difference this time around is that no one is in bankruptcy, needing a merger in order to emerge.

I must say that I have been ultimately impressed and encouraged by the information I have seen in the past days from my sources that show pilots from other airlines working together for a common goal and avoiding the poisonous venom of infighting.

LCC brings nothing to the table that UA or the others really want, or can't obtain on their own. All the investment money in the world won't change that fact.

Once again, Doug and others may WANT to crash the party, but they are not coming by invitation, and will be shown the door if they show up.

 

[magsau]

Here we go again...there is reason to believe US & UA could merge.

If this is going to happen can we make it after you vote out ALPA? Without a requirement to have to abide by ALPA merger policy this could turn out very nice. Would love to staple one particular pilot to the bottom. (Not intended for all US pilots but just a ICT/UCT supporter)

Who is going to merge with US if you guys can not even decide on your last merger seniority? How will the other carriers know where to put the Mendoza line for stapling? "USAPA" Now that is funny.

 

[USA320Pilot]

If American & Continental merge than that would leave only US Airways & United as legacy companies without a dance partner. And, apparently American & Continental have held recent merger discussions according to last week's media reports.

See Story

In regard to a US AIfways USAPA and United ALPA pilot seniority integration the new federal mandate would apply. Missouri Senator's Claire McCaskill and Kit Bond introduced a little-noticed amendment to the omnibus spending bill that brings back a regulation-era worker-protection policy. The law subjects mergers and buyouts to Sections 3 and 13 of the Civil Aeronautics Board's decision in the 1972 Allegheny-Mohawk merger. Prior to deregulation in 1978, the Civil Aeronautics Board (the primary airline regulator) required merged airlines to include some onerous "labor protection provisions" in the terms of the merger, many of which were negotiated into collective bargaining agreements after deregulation.

The McCaskill-Bond amendment requires just two of the labor protections: that "provisions shall be made for the integration of seniority lists in a fair and equitable manner" and that disputes over seniority be submitted to binding arbitration.

See Story

I believe it's too early to tell what will happen, but I thought Doug Parker's recent interview with US News & World Report was interesting. Parker was asked, "Conventional wisdom seems to be there will be these two big mergers, Delta-Northwest, and maybe United-Continental, and then the dust will settle. Do you foresee any surprises?"

Parker responded, "It's fair to say there will be surprises. Whatever seems like the most likely scenario is probably not where we'll end up. It's much more likely that something else will happen."

See Story

Not many people believe me when I said US Airways was negotiating to buy UA assets or the company and then the news media reported Project Minnow (UCT and then ICT). For information on Project Minnow see the articles below:

See First Story

See Second Story

Furthermore, nobody expected US Airways to make a bid for Delta, but Parker did. I think it's too early to tell what will happen and United may end up with Continental, but I believe Parker's comment that "It's fair to say there will be surprises. Whatever seems like the most likely scenario is probably not where we'll end up. It's much more likely that something else will happen." The question is what will that be?

Regards,

USA320Pilot

 

[ual777fan]

If American & Continental merge than that would leave only US Airways & United as legacy companies without a dance partner. And, apparently American & Continental have held recent merger discussions according to last week's media reports.

See Story

In regard to a US AIfways USAPA and United ALPA pilot seniority integration the new federal mandate would apply. Missouri Senator's Claire McCaskill and Kit Bond introduced a little-noticed amendment to the omnibus spending bill that brings back a regulation-era worker-protection policy. The law subjects mergers and buyouts to Sections 3 and 13 of the Civil Aeronautics Board's decision in the 1972 Allegheny-Mohawk merger. Prior to deregulation in 1978, the Civil Aeronautics Board (the primary airline regulator) required merged airlines to include some onerous "labor protection provisions" in the terms of the merger, many of which were negotiated into collective bargaining agreements after deregulation.

The McCaskill-Bond amendment requires just two of the labor protections: that "provisions shall be made for the integration of seniority lists in a fair and equitable manner" and that disputes over seniority be submitted to binding arbitration.

See Story

I believe it's too early to tell what will happen, but I thought Doug Parker's recent interview with US News & World Report was interesting. Parker was asked, "Conventional wisdom seems to be there will be these two big mergers, Delta-Northwest, and maybe United-Continental, and then the dust will settle. Do you foresee any surprises?"

Parker responded, "It's fair to say there will be surprises. Whatever seems like the most likely scenario is probably not where we'll end up. It's much more likely that something else will happen."

See Story

Not many people believe me when I said US Airways was negotiating to buy UA assets or the company and then the news media reported Project Minnow (UCT and then ICT). For information on Project Minnow see the articles below:

See First Story

See Second Story

Furthermore, nobody expected US Airways to make a bid for Delta, but Parker did. I think it's too early to tell what will happen and United may end up with Continental, but I believe Parker's comment that "It's fair to say there will be surprises. Whatever seems like the most likely scenario is probably not where we'll end up. It's much more likely that something else will happen." The question is what will that be?

Regards,

USA320Pilot

American and Continental aren't going to merge. They have had conversations, but then Continental was also talking to Delta. Continental has also talked to Northwest over the years. If UA merges with anyone it will be with CO.

Why would AA want EWR or IAH. More importantly, would the Feds let them keep IAH and EWR... I think not. Would you buy an entire airline just for the Cleveland operation? No!

 

[767jetz]

If American & Continental merge than that would leave only US Airways & United as legacy companies without a dance partner. And, apparently American & Continental have held recent merger discussions according to last week's media reports.

What you do not have access to is information about the actual discussions going on between DL/NW ALPA and UA/CO ALPA. Nor do you seem to realize that all four are talking not only about integration, but the leverage all four have to significantly raise the bar in contract negotiations. Management understands and has accepted that they need the pilot's pre-approval and that they will have to pay to get it. If DL pulls the trigger and the dominos fall, the contract at all four (or should I say the new two) will look very much alike. The company's boards will have a prepackaged deal to vote on that includes the key ingredient of pilot's approval and integration. That is by design to fend off any competing bids or enter into a price war. With that key ingredient it won't matter how much money USAirways or AA can come up with. No prenup... No merger.

Add to that the fact that LH has now said they are considering investing in a CO/UA merger, and the pot gets even sweeter.

What AA probably will come away with is some Asian routes here and there, and a green light to cooperate more closely with BA. They also may link with a smaller player like Alaska or Frontier according to this article... businessweek

As you say, anything can happen. But right now the wheels are in motion for the four big players.

And one last point... AA will not be a spoiler for the reasons stated above. But even IF they were, there is no reason for UA to buy USAirways. This time the mergers are about global presence. US brings nothing that UA needs. And with the backing of LH's deep pockets it is more likely you would see some kind of cooperation or deal between Jet Blue and United. If nothing else UA might buy assets relinquished by AA in a merger with CO. All of this is useless speculation though because UA will be merging with CO or DL in the end. Mark my words on that.

 

[JAMAKE1]

I agree with your assessment Jetz.

 

[LGA Fleet Service]

Not many people believe me when I said US Airways was negotiating to buy UA assets or the company and then the news media reported Project Minnow (UCT and then ICT). For information on Project Minnow see the articles below:

It just never ends with you does it? 🙄

 

[NewHampshire Black Bears]

It just never ends with you does it? 🙄

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Boy...LGA.......You got that right !!!

HE(USA320) was using LCC :down: and UAL in the same breath, as LEGACYS

When In HEL* did LCC become a Legacy

Didn't they just VERY recently, get their FIRST, PREMIER(so called FAR EAST route,.............................LAS or PHX...... to................"HNL" ??

 

[magsau]

Regards,

USA320Pilot

What is the USAPA merger and integration policy? Why would anyone want or need US?


Hey I have a question for you. Why did you not predict the US / AWA transaction before it occurred? You seemed to be so focused on the gasping hope of somehow getting back to UAL where you quit that you completely missed the merger that actually took place. And to think you call yourself informed.

 

[Fly]

Details On Forthcoming Continental/United Deal; UAL Turning to ExpressJet for Regional Feed on Mesa Cancellations

As the pilots of both airlines apparently continue to try and come to terms on their seniority issues - the rest of us sit and wait. No news yet today on just when the Delta/Northwest merger may be announced.

In other rumblings however, one of our trusted moles sent us a communication this morning in which he outlined how a proposed United/Continental deal may come together. Remember, you heard it here first.

According to him, the bulk of the existing United Airlines brand will continue to be used internationally, but Continental will take over the domestic operation for the most part.

Other details we were told included the fact that there has already been a transition team put together. The deal will be announced after Delta/Northwest goes public.

There will initially be a holding company set up to run both airlines. This operation will continue for three-five years. This will allow for a "smoother transition" from the two airlines into one operation.

And, in another piece of related United Airlines news, we are being told that because of continued problems with Mesa Air Group cancellations, that United has turned to ExpressJet, and that ExpressJet is going to be adding regional service on behalf of United --beginning no later than the middle of March.

Indications are that ExpressJet will start flying at least three aircraft for United at that time, with the possibility that more aircraft could be added fairly quickly, "as needed."

Did United contact any of its other regional feeders about providing service before turning to ExpressJet? Apparently. But from what we hear there were no takers.


Read it here

 

[Rubble]

Sounds interesting but I question,

"According to him, the bulk of the existing United Airlines brand will continue to be used internationally, but Continental will take over the domestic operation for the most part."

The point of consolidation is, well, to consolidate. I think the domestic operation is too large for one carrier to take over- even if its shrunk. Jake Brace said a couple of months ago that they could dump 100 aircraft without any cost, (aircraft already paid for), but the pilots union would have to agree on that as there are contract stipulations. My take on this is that he is suggesting there would be two separate operations which doesn't make sense.

It does enhance one theory that I agree with and thats, TED IS DEAD.

 

[NoMoreKoolAid]

Perhaps a better question is why LCC people are so gung ho on a merger, when they are still fighting over the last one?

I'm sure it's to get rid of the management in Tempe.
It's a three ring circus over there. With Dougie leading the show.

 

[NoMoreKoolAid]

[ .

 

[NoMoreKoolAid]

Here we go again...there is reason to believe US & UA could merge.

See Story

Moreover, one should not discount US Airways Vice-Chairman of the Board Bruce Lakefield's ability to work the financial markets to obtain M&A funding.

Regards,

USA320Pilot

You are correct!
Theres a reason Lakefield stayed on with LCC. Dont count him out to get the money!