United to aquire US Airways


Sep 12, 2002
As the labor groups at UAL conclude the final negotiations with Glen Tilton to insure a company reorganisation outside the court system, look for an expidited loan approval by ATSB. The new cost structure will allow for additional capital infusion beyond the guarantee. Look for UAL to grow aggressivly, especially in the low cost operation area. While current economic conditions are horrible, UAL will have a cost structure that will allow it to gain market share especially in ORD,LAX,DEN,IAD when conditions improve next year. Also look for UAL to aquire thru the bankruptcy court those assets of US Airways which do not fit the regional airline model. Gates and aircraft at PHL,CLT,BOS. With code share framework in place UAL will be able to placate DOJ, and provide US Airways with a much needed capital infusion as the company shrinks its operations going foward. As US Airways is fragmented look for Seigel and WOLF to take the money and run, leaving a strong north south feeder.
While some on the US board see their company rising from the ashes to dominate the airline world, an ever increasing number of industry and goverment insiders are seeing a much smaller company who's resources and strategic direction will be goverened by the opportunist investors that are currently involved.
The regional model is the niche that Seigel ultimatly envisions for US Airways, lets wish them the best of luck.
ohcaptainron....I feel much better now. There's no place like home, don't part with those ruby slippers Ron. Sweet dreams...
You forgot to begin your fairytale with once upon a time...
I think most analysts expect UAL to go chapter 11 sometime before the end of October. Then the restructuring of assets which remain (after the creditors pick through them) will constitute a new UAL. That's what I would expect.
This scenario is not so far-fetched.

The following was posted by magsau on another thread, but it deserves to be restated here:

The following is from Channel NewsAsia.

----United Airlines says it may be able to avoid bankruptcy

03 October 2002 0913 hrs (SST) 0113 hrs (GMT)

US carrier United Airlines said it may be able to avoid a widely-feared bankruptcy filing if it is able to work out a deal with labour unions.

It is not a foregone conclusion but we will really only know over time, said chairman and chief executive Glenn Tilton.

He said his management team was doing everything it can to work out a deal with labour unions that would enable the carrier to return to profitability.

We are doing... everything we can, both management and labor, to reposition this airline... to compete in an out of court restructuring, he told reporters.

The two sides have been negotiating a cost cutting plan.

Unions have proposed US$1 billion in annual cuts for five years, while management in August said US$1.5 billion was needed annually for six years.

United Airlines has applied for guarantees from the Air Transportation Stabilization Board for US$1.8 billion of a two billion dollar loan.

Former chief executive Jack Creighton, who left last month, said in August the airline was preparing for possible bankruptcy ahead of US$875 million in debt payments due this quarter.

- Channel NewsAsia
You're still dreaming. UAL, as it exists right now, is beyond hope. Any other conclusion is purely the figment of imagination of people in deep denial. If the economy were to quickly recover it would buy more time, but would not fix the problems. Dream on....
Note to anyone who thinks either airline will acquire the other in the foreseeable future:

Your IP address is being logged, and you be subject to random drug screening upon reporting back to work.
You're putting the cart well ahead of the horse. I've heard from a pretty good source that the current union coalition talks with UA Senior Mgmt are stalled due to the IAM. No specifics were given as to what the sticking points are. This comes as no surprise to most who view it as extremely unrealistic for UA to get acceptable voluntary agreements from all unions in time to avoid a Ch.11 filing.
I heard the IAM was expecting some kind of managment response Fri Oct 4,2002 and for whatever reason it did not happen? I know the IAM has some big deal going on in Orlando this week, all of the high level people will be there.I really dont think the IAM thinks its in there best intrest for UAL to go the CH 11 route so I expect them to try to work it out.But it is very quiet,considering managment said they would analyze the union coaltions plan asap.In Mr Tiltons message of the week he hardly mentioned it, but did say that talks were positive and ongoing.I know that the proposed medical changes/cost etc were not very popular , and the BIG one is the retro 1st payment of 8 due DEC 15,02.
Everything is rumor until you reveal your sources or the unions/company comes out with something official.
Well, I continue to hear that the IAM is stalling the ERP progress. It doesn't surprise me, considering that they lose either way. If they give back wages and work rules and benefits, they'll lose out to AMFA. If they don't and a bankruptcy judge shreds their contract, they'll lose out to AMFA. Either way, I think the IAM's days of representing the UA mechanics are numbered!
[BLOCKQUOTE][BR]----------------[BR]On 10/5/2002 9:11:15 PM oldiebutgoody wrote:
[P]You're still dreaming.  UAL, as it exists right now, is beyond hope.  Any other conclusion is purely the figment of imagination of people in deep denial.  If the economy were to quickly recover it would buy more time, but would not fix the problems.  Dream on.... [/P]----------------[/BLOCKQUOTE]
[P][STRONG]Bankruptcy:It's not just for failures any more.[/STRONG][/P]
So UA will get concessions from its unions and turn around and acquire pieces of US Airways, which will no doubt come with employees, who will have to integrate into UA's ranks amongst employees who have just taken pay cuts?

That should go over real well.
At least US has most of its duck in a row. To the best of my knowledge, UA has not obtained ONE firm concessionary offer from a workgroup, creditor, lessor, or vendor. Therefore, as things stand now, I believe the most likely outcomes will be:

US Airways - A proud member of the Star Alliance, and America's domestic carrier of choice, with hubs in PHL, CLT, DEN, LAX, IAD, and ORD.

Delta Air Lines - The world's first truly global airline, with hubs in ATL, CVG, SLC, DFW, LHR, NRT, and SFO.

Of course, the picture changes altogether if UA stakeholders finally realize the gravity of the company's situation...

It's nice to dream. Even if we're forced to file Ch.11, I don't view the fragmentation scenarios as realistic possibilities. UA will fix its mess, either voluntarily outside of bankruptcy (which appears unlikely given the current situation and ticking clock) or in a Ch.11 reorganization. Many people have written us off and continue to write us off. That's fine. Give us a little bit of time and we'll prove all of them wrong, including you. UA is going through something that every other airline is going to have to face: downsizing and restructuring. It is inevitable. UA will attain a significantly reduced cost structure one way or another. Once that happens, it will put considerable pressure on other carriers to do the same. They can't bleed forever, either.