united usairways deal may be falling apart
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Crzipilot
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- Mar 23, 2004
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was about to say that.....blame it on labor and those ugly contracts.... Meanwhile the execs had loaded up there contracts with COC language and such, and I guess Chuggy couldn't handle the idea of playing 2nd fiddle???/ Guess someones BOD doesn't want to hand over the reins to a drunk?
767jetz
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- Aug 20, 2002
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On May 25 2008 at 7:51 PM, USA320pilot posted this:
Proven wrong once again.
United/Usairways talks on permanent hold
On May 25 2008 at 10:38 PM, USA320pilot posted this:
Perhaps the interesting news is that nothing is going to happen after all?
I will say again what I said to you yesterday. We are very impressed with the "obviously" (sarcasm intended) well informed and accurate opinions you are famous for smothering these boards with. We are even more impressed with your resilience in the face of having none of it EVER come to fruition.
Keep up the good work. thumbup.gif
Proven wrong once again.
United/Usairways talks on permanent hold
On May 25 2008 at 10:38 PM, USA320pilot posted this:
Perhaps the interesting news is that nothing is going to happen after all?
I will say again what I said to you yesterday. We are very impressed with the "obviously" (sarcasm intended) well informed and accurate opinions you are famous for smothering these boards with. We are even more impressed with your resilience in the face of having none of it EVER come to fruition.
Keep up the good work. thumbup.gif
767jetz
Be carefull what you wish for. UAL and AAA lead the industry - if you happen to be digging a grave. The current model no longer works. Consolidation at least would have bought more time. Once again it's resembling the scenario of which one of us outruns the other with the bear in pursuit.
The faster runner usually weighs less.
US1YFARE
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- Mar 31, 2004
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Yes, but in this case, the fat boy can shed some weight and pick up speed...skeletor really has nothing to give up as it is a laggard in the industry and is already barely operating at a barebones level
Travelpro72
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- Jan 30, 2005
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Well one wonders what kind of trick Tempe comes up with now. What the talent? Hmmmmm not looking bright folks. :blink:
Hey - when a bear is chasing you it's a sprint - not a marathon, and certainly not a training regimen.
ThirdSeatHero
Veteran
Well, if the unnamed sources in the article can be trusted, it does raise some intriguing questions.
Unfortunately most involve Chap 11 and possible AA/TWA type shenanigans :unsure:
Unfortunately most involve Chap 11 and possible AA/TWA type shenanigans :unsure:
767jetz
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Your analogy is not relevant. This is not a sprint. This is about liquidity and the ability to obtain capital. In that regard UA is in far better shape, with around $3Billion in unencumbered assets to borrow against, plus Mileage Plus which could be tapped or borrowed against to raise Billions more.
Then there's this quote from the OP's article:
"United, which has one of the industry’s strongest route systems in the United States and across the Pacific, would have gotten little help internationally from US Airways, which has minimal overseas service."
Tough times ahead for all. But I'll gladly take my chance solo, than hitch my wagon to USAirways with it's ongoing civil war, mortgaged to the hilt, and little international presence to offset it's mostly domestic exposure.
767jetz
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I've said this before and I'll say it again... The UA Board of Directors is slowly starting to see things in a new light. I think you will FINALLY see UA start to change directions, now that the merger distractions are gone.
I believe the United-US Airways merger (potential) impasse is over who will run the company and who will be combined carrier’s senior executives. It appears that talks did not happen over the weekend, but that they could be revived again in the not-to-distant future.
Furthermore, I suspect United’s Public Relations Department leaked the information that talks “appear to have fallen apart (not have fallen apart with the key word appear)" to Micheline Maynard after the holiday weekend, similar to what many people suspect United did with Mary Schlanenstein over the reported Continental Alliance, which apparently was designed to pressure US Airways executives to agree to terms desirable to Glenn Tilton.
This article could be Tilton and Jake Brace’s way of trying to convince US Airways’ Board to agree to have United’s management team run the combined business entity versus Doug Parker and his team.
Do not be surprised if discussions begin heating up as opposed to cooling down as the parties continue to posture one another. After all…United has been spurned by both Delta and Continental and the Chicago-based company does not have very many, if any, other merger options and the company is hemorrhaging cash.
Finally, I believe there is still more to be told on this story and there will be more interesting news in the future.
Regards,
USA320Pilot
Furthermore, I suspect United’s Public Relations Department leaked the information that talks “appear to have fallen apart (not have fallen apart with the key word appear)" to Micheline Maynard after the holiday weekend, similar to what many people suspect United did with Mary Schlanenstein over the reported Continental Alliance, which apparently was designed to pressure US Airways executives to agree to terms desirable to Glenn Tilton.
This article could be Tilton and Jake Brace’s way of trying to convince US Airways’ Board to agree to have United’s management team run the combined business entity versus Doug Parker and his team.
Do not be surprised if discussions begin heating up as opposed to cooling down as the parties continue to posture one another. After all…United has been spurned by both Delta and Continental and the Chicago-based company does not have very many, if any, other merger options and the company is hemorrhaging cash.
Finally, I believe there is still more to be told on this story and there will be more interesting news in the future.
Regards,
USA320Pilot
Report: Talks between United, US Airways stalling
A key sticking point (in the proposed US Airways-United Merger) appeared to be labor complications, the (New York) Times reported. Sorting out issues such as union representation and seniority could have taken years, delaying any cost savings from a deal. US Airways Group Inc. has still not reached agreements with all of its unions following its 2005 combination with America West Airlines.
A combined United-US Airways would jockey with the newly proposed Delta-Northwest for bragging rights as the nation's largest carrier, dropping AMR Corp.'s American Airlines from first to third. Combined, United and US Airways have about 91,000 employees, more than 800 airplanes and annual revenues of $31.8 billion.
See Story
Considering the industries current financial crisis it would not surprise me if United and US Airways both leaked information to the New York Times to influence labor. The current USAPA, AWAPPA, East and West pilot seniority integration problem could be an impediment to a deal; however, could management be sending a third-party comment through the news media to influence labor? Moreover, could management be laying the ground work for a pre-nuptial seniority integration and a joint contract agreements?
In the case of the pilots I believe management from both companies could strike a deal before the merger is announced that would be the current AWA pilot contract plus Doug Parker’s $122 million offer with pre US Airways East and West pilot fences (including the Nicolau Award) and then this proposal would be super imposed over the United pilots.
Another words, there would be US Airways East fences around BOS, LGA, DCA, PHL, & CLT, US Airways West fences around PHX & LAS, and United fences around their crew bases. Furthermore, could all three pilot groups reach a combined agreement of the AWA contract plus 3% as part of the $122 million per year company offer?
Furthermore, I believe management could be trying to influence the AFA because the United Flight Attendant contract scope clause requires all United Flight Attendants to be on the United seniority list. Thus, with the Air Wisconsin Flight Attendant seniority integration Arbitrators ruling in favor of the AFA the United AFA MEC would have to approve the United-US Airways merger before the “corporate transaction†could proceed.
Another interesting point is that US Airways’ management wanted to meet with USAPA officials, but the new upstart unions BPR elected to not meet. The question is why did US Airways’ management and in particular Scott Kirby want to meet with the union and why did USAPA not agree to management’s request?
In a May 21 USAPA update the union said, “While your Officers and Reps realized it would not be long until the Company tested our resolve, we were a little surprised how early and trivial the first test was. Late on Friday, President Bradford received a communiqué from VP Labor Relations Hemenway requesting a meeting in Tempe for Monday with the USAPA Officers, along with a request for an open-ended Confidentiality Agreement. President Bradford was advised that CEO Parker would not be in attendance at this proposed meeting. Following a discussion with the BPR, USAPA Vice President Cleary made two requests of the Company, first, an agenda for the meeting, and second, that CEO Parker contact President Bradford directly to discuss this and future meeting requests.â€
The union continued, “More specifically on these two issues, Vice President Cleary informed the Company that, as a general matter, whenever senior management wanted to meet with the USAPA Officers that we would be happy to do so. He further clarified that these communications needed to take place between appropriate counterparts in the union and the Company – specifically between President Bradford and CEO Parker. The request for an agenda is a simple matter of good business practice that we believe our pilots demand. Although both of USAPA’s prerequisites were initially refused, CEO Parker finally called President Bradford, and between the two of them it was determined that the meeting was not required after all. The BPR and Officers took these steps to set important boundaries and protocol which will allow the pilots’ business to be conducted efficiently, and for the parties to move forward with the important issues that will face us in the days that will come.â€
And, why is USAPA not telling the rank-and-file the purpose of the meeting? Thus, could USAPA be a part of the solution or an impediment to a solution to US Airways’ financial challenges?
In conclusion, I believe management “social issues†and “labor issues†may be the final steps to complete a deal. And, with the news media reporting that “There has been little to no contact between United Airlines and US Airways in recent days and the internal teams of senior executives at both companies, as well as external bankers and lawyers assigned to the project, have put it on ‘permanent hold,’ one person involved in the talks said. While it remained possible the talks could be revived, people involved in the most recent discussions said they had never advanced to final negotiations†talks between the two business partners have and are serious, but the question is will all of the parties reach an agreement to permit the merger to proceed or will the parties not reach an agreement and both companies and their employees will have to figure out how to independently the current financial crisis?
Regards,
USA320Pilot
A key sticking point (in the proposed US Airways-United Merger) appeared to be labor complications, the (New York) Times reported. Sorting out issues such as union representation and seniority could have taken years, delaying any cost savings from a deal. US Airways Group Inc. has still not reached agreements with all of its unions following its 2005 combination with America West Airlines.
A combined United-US Airways would jockey with the newly proposed Delta-Northwest for bragging rights as the nation's largest carrier, dropping AMR Corp.'s American Airlines from first to third. Combined, United and US Airways have about 91,000 employees, more than 800 airplanes and annual revenues of $31.8 billion.
See Story
Considering the industries current financial crisis it would not surprise me if United and US Airways both leaked information to the New York Times to influence labor. The current USAPA, AWAPPA, East and West pilot seniority integration problem could be an impediment to a deal; however, could management be sending a third-party comment through the news media to influence labor? Moreover, could management be laying the ground work for a pre-nuptial seniority integration and a joint contract agreements?
In the case of the pilots I believe management from both companies could strike a deal before the merger is announced that would be the current AWA pilot contract plus Doug Parker’s $122 million offer with pre US Airways East and West pilot fences (including the Nicolau Award) and then this proposal would be super imposed over the United pilots.
Another words, there would be US Airways East fences around BOS, LGA, DCA, PHL, & CLT, US Airways West fences around PHX & LAS, and United fences around their crew bases. Furthermore, could all three pilot groups reach a combined agreement of the AWA contract plus 3% as part of the $122 million per year company offer?
Furthermore, I believe management could be trying to influence the AFA because the United Flight Attendant contract scope clause requires all United Flight Attendants to be on the United seniority list. Thus, with the Air Wisconsin Flight Attendant seniority integration Arbitrators ruling in favor of the AFA the United AFA MEC would have to approve the United-US Airways merger before the “corporate transaction†could proceed.
Another interesting point is that US Airways’ management wanted to meet with USAPA officials, but the new upstart unions BPR elected to not meet. The question is why did US Airways’ management and in particular Scott Kirby want to meet with the union and why did USAPA not agree to management’s request?
In a May 21 USAPA update the union said, “While your Officers and Reps realized it would not be long until the Company tested our resolve, we were a little surprised how early and trivial the first test was. Late on Friday, President Bradford received a communiqué from VP Labor Relations Hemenway requesting a meeting in Tempe for Monday with the USAPA Officers, along with a request for an open-ended Confidentiality Agreement. President Bradford was advised that CEO Parker would not be in attendance at this proposed meeting. Following a discussion with the BPR, USAPA Vice President Cleary made two requests of the Company, first, an agenda for the meeting, and second, that CEO Parker contact President Bradford directly to discuss this and future meeting requests.â€
The union continued, “More specifically on these two issues, Vice President Cleary informed the Company that, as a general matter, whenever senior management wanted to meet with the USAPA Officers that we would be happy to do so. He further clarified that these communications needed to take place between appropriate counterparts in the union and the Company – specifically between President Bradford and CEO Parker. The request for an agenda is a simple matter of good business practice that we believe our pilots demand. Although both of USAPA’s prerequisites were initially refused, CEO Parker finally called President Bradford, and between the two of them it was determined that the meeting was not required after all. The BPR and Officers took these steps to set important boundaries and protocol which will allow the pilots’ business to be conducted efficiently, and for the parties to move forward with the important issues that will face us in the days that will come.â€
And, why is USAPA not telling the rank-and-file the purpose of the meeting? Thus, could USAPA be a part of the solution or an impediment to a solution to US Airways’ financial challenges?
In conclusion, I believe management “social issues†and “labor issues†may be the final steps to complete a deal. And, with the news media reporting that “There has been little to no contact between United Airlines and US Airways in recent days and the internal teams of senior executives at both companies, as well as external bankers and lawyers assigned to the project, have put it on ‘permanent hold,’ one person involved in the talks said. While it remained possible the talks could be revived, people involved in the most recent discussions said they had never advanced to final negotiations†talks between the two business partners have and are serious, but the question is will all of the parties reach an agreement to permit the merger to proceed or will the parties not reach an agreement and both companies and their employees will have to figure out how to independently the current financial crisis?
Regards,
USA320Pilot
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