US Airways to keep $200M codeshare deal with UAL - for now

[USA320Pilot]

:blink: US Airways to keep $200M codeshare deal with UAL - for now

In a filing with the Securities and Exchange Commission today, Arizona-based US Airways says it is continuing its alliance with United Airlines for the time being, while the two airlines negotiate revisions to the agreement. If talks fail, the code-share partnership would be nullified, US Airways says

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Best regards,

USA320Pilot

 

[etops1]

US Air to keep $200M codeshare deal with UAL — for now
(Crain’s) — US Airways Group Inc. is continuing a lucrative marketing alliance with United Airlines — for now.

The code-sharing arrangement, worth about $200 million annually to United Airlines, allows the two carriers to sell tickets on each other’s flights, expanding their geographic reach.

In a filing with the Securities and Exchange Commission today, Arizona-based US Airways says it is continuing its alliance with United Airlines for the time being, while the two airlines negotiate revisions to the agreement. If talks fail, the code-share partnership would be nullified, US Airways says.

Elk Grove Township-based United Airlines and US Airways agreed to code-share in 2002, after federal regulators thwarted their proposed merger. A year later, US Airways joined the Star Alliance, a global marketing alliance led by United and Germany’s Lufthansa AG. Both American carriers subsequently reorganized operations under Chapter 11 protection.

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As it emerged from bankruptcy last fall, US Airways merged with America West, which competes with United on many routes across the western U.S. The two airlines began to negotiate new terms but failed to reach an agreement before US Airways exited bankruptcy.

At that time, US Airways asked a US Bankruptcy Court in Virginia to give it an additional 60 days to decide whether to assume or reject the code-share contract. In a March 3 filing with the court, US Airways listed the contract as one it intends to “assume.â€

But that doesn’t mean the matter’s closed. The two sides still haven’t agreed to final terms. If they fail to do so, US Airway’s “codeshare relationship with United and membership in Star Alliance could be terminated,†US Airways says in the SEC filing.

 

[SpinDoc]

US Air to keep $200M codeshare deal with UAL — for now
(Crain’s) — US Airways Group Inc. is continuing a lucrative marketing alliance with United Airlines — for now.

In a filing with the Securities and Exchange Commission today, Arizona-based US Airways says it is continuing its alliance with United Airlines for the time being, while the two airlines negotiate revisions to the agreement. If talks fail, the code-share partnership would be nullified, US Airways says.

The two sides still haven’t agreed to final terms. If they fail to do so, US Airway’s “codeshare relationship with United and membership in Star Alliance could be terminated,†US Airways says in the SEC filing.

Nah Nah Nah Nah, Nah Nah Nah Nah, Hey Hey Hey - Goodbye.

The code share hasn't done much for US Airways, despite the marginal income that is generated by carrying UAL customers. Good riddance UAL and the "death star" alliance.
US will go it alone, and prosper thank you very much.

 

[etops1]

damn, you beat me by 1 minute.

 

[FCYTravis]

I'm pretty sure this is standard SEC safe harbor stuff.

US Airways is talking about something that's going to happen in the future. That's a "forward-looking statement," and that legalese means they're talking uncertainties.

Theoretically, there is a potential for the talks to fail. Therefore, US Airways has to disclose that somewhere in their release - just like in their merger releases, they listed all the worst-case scenarios "this merger could fail and there is substantial risk of bankruptcy if the Sun burns out tomorrow," etc. It's safe harbor disclosure, so they won't get sued by investors "hey you didn't tell us that the codeshare talks could fail, we lost our shirts, we want our money."

I find it highly unlikely that United is interested in kicking US out of the Star Alliance. From what I've read elsewhere, both US and UAL make a tidy profit from the codeshares.

Typical journalists jumping on the tiniest bit of wording... and I can say that because I'm a journalist

 

[etops1]

I'm pretty sure this is standard SEC safe harbor stuff.

Theoretically, there is a potential for the talks to fail. Therefore, US Airways has to say that somewhere in their release - just like in their merger releases, they listed all the worst-case scenarios "this merger could fail and there is substantial risk of bankruptcy if the Sun burns out tomorrow," etc.

I find it highly unlikely that United is interested in kicking US out of the Star Alliance. From what I've read elsewhere, both US and UAL make a tidy profit from the codeshares.

Typical journalists jumping on the tiniest bit of wording... and I can say that because I'm a journalist

i am gonna have to agree with you on this one travis.

 

[USA320Pilot]

There is reason to believe the alliance could die and be replaced by another transaction.

Will it be terminated? Maybe, maybe not...and only time will tell...while the parties continue to discuss their options.

Regards,

USA320Pilot

 

[FCYTravis]

As an aside, I like how the headline says "US Air."

How long has it been since the name was changed to US Airways, and yet US Air still sticks in the minds of people?

Branding...

 

[reznc]

Not "quite important" should be "critical"

 

[FCYTravis]

Good riddance UAL and the "death star" alliance.

Tell that to your frequent flyers. :down:

The Star Alliance benefits are an important part of what the new US offers. If PineyBob is right, Tempe fully recognizes that.

I really can't foresee any stumbling blocks to the negotiations, either. OK, so there is more overlap now - but NW, DL and CO overlap like crazy and are all codeshared as part of SkyTeam.

 

[Rico]

Just to clarify something, would we need to maintain our Code Share with United to continue with our Star Alliance membership, or could we lose one and keep the other...?

 

[ClueByFour]

There is reason to believe the alliance could die and be replaced by another transaction.

What are those reasons?

That said, the end of the UAL codeshare means the end of US in the Star Alliance. And that hurts US' ability to drive global traffic much, much more than it hurts the remainder of the Star Alliance, particularly if UA becomes serious about continuing to grow IAD.

 

[Deleted by Moderator]

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US Air to keep $200M codeshare deal with UAL — for now
(Crain’s) — US Airways Group Inc. is continuing a lucrative marketing alliance with United Airlines — for now.

The code-sharing arrangement, worth about $200 million annually to United Airlines, allows the two carriers to sell tickets on each other’s flights, expanding their geographic reach.

In a filing with the Securities and Exchange Commission today, Arizona-based US Airways says it is continuing its alliance with United Airlines for the time being, while the two airlines negotiate revisions to the agreement. If talks fail, the code-share partnership would be nullified, US Airways says.

Elk Grove Township-based United Airlines and US Airways agreed to code-share in 2002, after federal regulators thwarted their proposed merger. A year later, US Airways joined the Star Alliance, a global marketing alliance led by United and Germany’s Lufthansa AG. Both American carriers subsequently reorganized operations under Chapter 11 protection.

As it emerged from bankruptcy last fall, US Airways merged with America West, which competes with United on many routes across the western U.S. The two airlines began to negotiate new terms but failed to reach an agreement before US Airways exited bankruptcy.

At that time, US Airways asked a US Bankruptcy Court in Virginia to give it an additional 60 days to decide whether to assume or reject the code-share contract. In a March 3 filing with the court, US Airways listed the contract as one it intends to “assume.â€

But that doesn’t mean the matter’s closed. The two sides still haven’t agreed to final terms. If they fail to do so, US Airway’s “codeshare relationship with United and membership in Star Alliance could be terminated,†US Airways says in the SEC filing.

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Who would they join if they left Star? I think that would throw them straight back in bankruptcy. They need * more than * needs them.

 

[whlinder]

Well if they are really a low cost carrier then perhaps they shouldn't be part of a big international alliance.

Fire up the CO codeshare/merger rumors!

I also see this news brought out one of our most unique and interesting posters. I believe he works for a corporate entity known as US Airways. But I am not sure if he deals with any kind of transactions that they may or may not make.

 

[whlinder]

Maybe US is going to be serious about being a LCC afterall and will leave Star.

Then maybe they will cancel their A330/A350 order. There is reason to believe the orders could die and be replaced by another transaction.