UA vs. US

[gilbertguy]

In a article appearing in today'' Yahoo!business, key congressional members are urging the President to approve UA''loan....why no such interest with US...Ted Kennedy saves 2 jobs and lets 2,500 others slide thru the cracks! For Chip or any legal beagles....can the airlines use this loan money to purchase another carrier or parts there of? Is US the feather in UA'' cap after all?

 

[DCAflyer]

Yes, ATSB loan proceeds can be used for corporate transactions.

 

[AOG-N-IT]

Gilbertguy, I don't profess to be a legal guru or anything...but UAL's locations in very populated and powerful political areas like California(LAX/SFO) , Chicago area and the DC area (IAD) does give them alot of political support in these matters.

Being the 2nd largest airline in the world only brings them more political clout and subsequint support too.

It's hard to imagine the loss of global prestige that the US would feel..should it allow a company with UAL's reach to go under.

U's alignment with UA only adds to thier ability to fill the seats to areas that we don't offer service...which is sadly alot of places both here and abroad. That aspect alone increases the cost of our revenued passenger miles too.

U is not without it's support in Washington either. Many Politicos fly the Shuttle (Obviously)...but our main areas of influence and geographic alignment (CLT and PIT)The politicians have not been verbal enough to suit me. Senator Spectre of Pennsylvania has always been a great supporter of U..especially regarding his pet concerns in PIT and PHL..however the retiring Senator Helms of North Carolina has not been verbal enough IMHO...health issues have slowed Jesse...but Elizabeth Dole will be taking his seat very soon.

Our Junior Senator in N.C , John Edwards has not done much to support U at all...he was almost non-involved during the UA/US Merger talks...and sense then , he has been galavanting about testing the waters for a possible presidential run in 2004 or maybe 2008? He trying to cruise on his boyish looks...but he really lacks substance and name recognition in national terms (IMHO)

I feel strongly that U would be in much better shape...if we had alike support in the House and Senate..as does UA. Then again UA has more votes to cast by shear employee count than U does by comparison.

I think UA will be OK regardless...but they like us will not emerge in the same size as which the entered these troubled times...frankly none of the big 6 carriers will...The Flying Wal-marts are the ones making the gains on our numerous weaknesses..and continued failure to address the actual problems that hamstring this airline.

To draw a final conclusion..UA might have the legal leverage to buy U's assets..but i'm inclined to think that it would be only in a piece meal fashion. This would make us no more than buzzard picking for what happens to be leftover. Nobody is interested in us as a whole...and they really never have been.

 

[DCAflyer]

Gibertguy asked:

So it is totally within the realm of possibility that UA, who is not as cash poor as US can pick over the carcass.....and take what they need? Meanwhile wage concessions and union givebacks at UA will be in line with US soon and whatever labor UA picks up(reilots) will be in parity and any transitions will be pre-ordained?

DCAflyer's reply:

Gilbert, I don't see that happening. As complicated as U's C-11 proceeding is, even on a fast-track proceeding, UAL's would be exponentially more complex. They have a lot more people and companies to get on-board. I don't see UAL emerging from any bankruptcy proceeding within a year. UAL can't tap the ATSB funds, assuming they even get them which at this point seems to be a bit of a longshot, until they emerge from Court. Add to that all the labor groups' estructuring agreements which I believe will become null if the loan isn't granted by a date certain (legalese for certain date, but it looks more official in a legal document to have these two words mixed around). This leads one to one of two conclusions. Either the labor groups must extend the terms of their RA's or face cuts in bankruptcy at the whim of the judge without the labor friendly restructuring U is undergoing. If protracted litigation is involved relating to the labor groups, this will certainly add time to the court restructuring process.

The only way UAL or any other airline could pick the carcas is if U is in liquidation. Otherwise, theoretically there is no carcas. UAL especially would have to pick up U employees since our unions align and seniority would have to be merged. They simply don't have the money and won't any time soon.

Then the next question becomes even if UAL's loan is conditionally granted, how long will they have to claim those funds. Congressional budgets are a tricky thing. Can they accomplish any ATSB funding deadlines if they go through C-11 rerganization? Real issues emerge here.

UAL is the least likely major to pick up any part of U right now, followed by AA since DOJ limitations will probably preclude such a marriage (and who wants to work for AA anyway?) On the other hand, there is a potential unique corporate transaction theory involving U and UAL which continues to be thrown around and from what I am hearing from my friends in CCY. There are definite possibilities in this regard. I believe we will hear more on this after UAL files bankruptcy and U is a little closer to emerging and accessing its ATSB funds.

DCAflyer

 

[gilbertguy]

On 11/27/2002 923 AM DCAflyer wrote:

Yes, ATSB loan proceeds can be used for corporate transactions.

So it is totally within the realm of possibility that UA, who is not as cash poor as US can pick over the carcass.....and take what they need? Meanwhile wage concessions and union givebacks at UA will be in line with US soon and whatever labor UA picks up(reilots) will be in parity and any transitions will be pre-ordained?

 

[Pylit]

Hi,
Please elaborate on the unique corporate transaction theory involving U and UAL.
Thanks