USA320Pilot
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US/UA Possible Merger Discussion IV
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767jetz
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Wow! I actually agree with some of this. I'll take them one at a time...
I don't agree that the social issues would have been overcome, simply because there is too much deep seeded resentment between the cultures over the many years and attempts at merging, plus the fact that one only needs to look at the AWA/US merger to see how long these things can drag out and how emotional the issues are. IMO the only way the social issues would have been resolved is by a strong prenup forced onto one side. Let's face it, both sides have strong personalities and no one would relent except by force. Even that has it's risks. So in the end I think your description above of having too much risk is accurate.
This is exactly the emotion surrounding the deal. I know for a fact that the ALPA UAL MEC definitely feels that we are better off taking our chances alone and forging ahead with an alliance, rather than merging for the sake of "claimed" corporate savings. This is the same conclusion CO came to. It is the opinion of our MEC that, like big government, the company would find a way to squander all of the claimed savings on bonuses and dividends schemes, leaving much less for employees and the proper running of the airline. The risks far outweigh the potential benfits, and our CEO's (US and UA) have the track record to support our greatest fears.
In the end US and UA will have to find ways to deal with their respective problems. Right now it seems to be "every man for themselves" and I am confident that UA has the assets and access to capital to right the ship if management choose the right course of action. US will have to find their own path too, but frankly that is not my concern right now. (Nor is UA's financial problems the concern of US anymore.)
[
Just out of curiosity, you were a strong supporter in the past of DOH and the push to decertify ALPA, which helped lead to the current situation. As you said, riding the "my seniority is not for sale" airplane into the ground is not prudent. In hindsight would you have done anything different?
I don't agree that the social issues would have been overcome, simply because there is too much deep seeded resentment between the cultures over the many years and attempts at merging, plus the fact that one only needs to look at the AWA/US merger to see how long these things can drag out and how emotional the issues are. IMO the only way the social issues would have been resolved is by a strong prenup forced onto one side. Let's face it, both sides have strong personalities and no one would relent except by force. Even that has it's risks. So in the end I think your description above of having too much risk is accurate.
This is exactly the emotion surrounding the deal. I know for a fact that the ALPA UAL MEC definitely feels that we are better off taking our chances alone and forging ahead with an alliance, rather than merging for the sake of "claimed" corporate savings. This is the same conclusion CO came to. It is the opinion of our MEC that, like big government, the company would find a way to squander all of the claimed savings on bonuses and dividends schemes, leaving much less for employees and the proper running of the airline. The risks far outweigh the potential benfits, and our CEO's (US and UA) have the track record to support our greatest fears.
In the end US and UA will have to find ways to deal with their respective problems. Right now it seems to be "every man for themselves" and I am confident that UA has the assets and access to capital to right the ship if management choose the right course of action. US will have to find their own path too, but frankly that is not my concern right now. (Nor is UA's financial problems the concern of US anymore.)
[
I agree that the ship has sailed WRT leverage and everyone's collective bargaining. It makes me wonder what would have happened if the civil war at US, that started after the Nicolau award came about and resulted in UA pilots reinforced opinion that the US pilot's leaders would not keep their word or negotiate in good faith, would not have happened. I can not help but think that if the DOH mantra would have been more flexible from the start, or if the pilot's would have accepted the legally arbitrated binding results, the outcome of this latest merger attempt would have been different. IMO the actions of SOME of the East pilots and the continued war between USAPA and the West pilots has poisoned the trough forever. But this is all a discussion I suppose for a different thread. In the end we are left with the results, and USAirways must continue to deal with their last integration as well as the risky economic times ahead.
Just out of curiosity, you were a strong supporter in the past of DOH and the push to decertify ALPA, which helped lead to the current situation. As you said, riding the "my seniority is not for sale" airplane into the ground is not prudent. In hindsight would you have done anything different?
USA320Pilot
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United, US Airways CEOs say no deal "for now"
CEOs of United, US Airways tell employees their effort to combine is off for the time being
See Story
AP said: "(The proposed deal) could have shored up their finances but also would have resulted in fewer routes and higher ticket prices for consumers."
USA320Pilot comments: Agreed.
AP said: "The attempt was shadowed by the tightening financial outlook for all airlines, which has dried up cash and made them less attractive for the banks that would have to provide capital, as well as by the likelihood of labor turbulence and difficulties integrating the operations."
USA320Pilot comments: Agreed. Both companies are bleeding and the future is uncertain for both companies. Thus, maybe merger risks are too great and both companies are better off in the near-term remaining independent, which is why the AP reported "CEOs of United, US Airways tell employees their effort to combine is off for the time being."
AP said: Pairing United with US Airways -- the No. 2 and No. 7 U.S. airlines by traffic -- would have formed a powerful carrier with potentially the most extensive U.S. and international route networks. It would have been bigger than Delta-Northwest by traffic, leapfrogging current No. 1, AMR Corp.'s American Airlines, as well.
USA320Pilot comments: Agreed, which might be why the two companies have tried five times to execute a "corporate transaction."
AP said: ""After a considered review by our board of directors, United has determined that it will not be pursuing a merger at this time due to issues that could significantly dilute benefits from a transaction," Tilton said. "We are evaluating other options, and will do what is right for United."
He said United management "will take the additional steps to size the business appropriately, leverage our capacity discipline to pass on commodity costs to customers and accelerate development of new revenue sources."
USA320Pilot comments: If I were a United employee I would be concenred about Glenn Titlon's statement that "We are evaluating other options, and will do what is right for United."
He said United management "will take the additional steps to size the business appropriately, leverage our capacity discipline to pass on commodity costs to customers and accelerate development of new revenue sources." To me that sounds like a United downsizing is in the cards, which could happen at US Airways too.
In conclusion, for US Airways' propects today Doug Parker said, "we are #1 in on-time performance so far in 2008 and have great momentum as we head into the summer. We have more cash relative to size than most of our peers and have fewer obligations coming due in the next few years." In addition, S&P issued a report on Wednesday, May 28 and said, "LCC (US Airways) has little debt maturities or capex requirements over the next several years and we don't think bankruptcy is likely over the next year."
In addition, yesterday while Doug Parker and Glenn Tilton had lunch Scott Kirby held a Crew News session at the PHX Flight Training Center. Reports indicate Kirby was very straightforward in his assessment of the problems facing US Airways and how the Tempte-based airline is going to pay for an estimated additional $1.6 billion in higher fuel prices. Kirby did not rule out the possibility of furloughs, further reductions in block hours, and/or the removal of some aircraft.
Regards,
USA320Pilot
CEOs of United, US Airways tell employees their effort to combine is off for the time being
See Story
AP said: "(The proposed deal) could have shored up their finances but also would have resulted in fewer routes and higher ticket prices for consumers."
USA320Pilot comments: Agreed.
AP said: "The attempt was shadowed by the tightening financial outlook for all airlines, which has dried up cash and made them less attractive for the banks that would have to provide capital, as well as by the likelihood of labor turbulence and difficulties integrating the operations."
USA320Pilot comments: Agreed. Both companies are bleeding and the future is uncertain for both companies. Thus, maybe merger risks are too great and both companies are better off in the near-term remaining independent, which is why the AP reported "CEOs of United, US Airways tell employees their effort to combine is off for the time being."
AP said: Pairing United with US Airways -- the No. 2 and No. 7 U.S. airlines by traffic -- would have formed a powerful carrier with potentially the most extensive U.S. and international route networks. It would have been bigger than Delta-Northwest by traffic, leapfrogging current No. 1, AMR Corp.'s American Airlines, as well.
USA320Pilot comments: Agreed, which might be why the two companies have tried five times to execute a "corporate transaction."
AP said: ""After a considered review by our board of directors, United has determined that it will not be pursuing a merger at this time due to issues that could significantly dilute benefits from a transaction," Tilton said. "We are evaluating other options, and will do what is right for United."
He said United management "will take the additional steps to size the business appropriately, leverage our capacity discipline to pass on commodity costs to customers and accelerate development of new revenue sources."
USA320Pilot comments: If I were a United employee I would be concenred about Glenn Titlon's statement that "We are evaluating other options, and will do what is right for United."
He said United management "will take the additional steps to size the business appropriately, leverage our capacity discipline to pass on commodity costs to customers and accelerate development of new revenue sources." To me that sounds like a United downsizing is in the cards, which could happen at US Airways too.
In conclusion, for US Airways' propects today Doug Parker said, "we are #1 in on-time performance so far in 2008 and have great momentum as we head into the summer. We have more cash relative to size than most of our peers and have fewer obligations coming due in the next few years." In addition, S&P issued a report on Wednesday, May 28 and said, "LCC (US Airways) has little debt maturities or capex requirements over the next several years and we don't think bankruptcy is likely over the next year."
In addition, yesterday while Doug Parker and Glenn Tilton had lunch Scott Kirby held a Crew News session at the PHX Flight Training Center. Reports indicate Kirby was very straightforward in his assessment of the problems facing US Airways and how the Tempte-based airline is going to pay for an estimated additional $1.6 billion in higher fuel prices. Kirby did not rule out the possibility of furloughs, further reductions in block hours, and/or the removal of some aircraft.
Regards,
USA320Pilot
Piedmont1984
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[quote name='767jetz' date='May 30 2008,
Just out of curiosity, you were a strong supporter in the past of DOH and the push to decertify ALPA, which helped lead to the current situation. As you said, riding the "my seniority is not for sale" airplane into the ground is not prudent. In hindsight would you have done anything different?
[/quote]
I agree. USA320Pilot had a very strong pro DOH position until he moved away from it in recent months. He also used the threat of ALPA decertification if the award was not amended. But in the end, he remained an ALPA loyalist.
He seems to forget that had ALPA remained on the property, it would not have guarranteed labor peace by any means. ALPA East had filed a lawsuit against ALPA West - and the East MEC was adamant about keeping "seperate and permanent operations".
I also feel - though I can't prove it - that ego at the highest levels may have scuttled this latest merger attempt between the two carriers, despite the red herring of labor difficulties. If that is the case, then the CEO's of both companies let their employees down in a big way.
Just out of curiosity, you were a strong supporter in the past of DOH and the push to decertify ALPA, which helped lead to the current situation. As you said, riding the "my seniority is not for sale" airplane into the ground is not prudent. In hindsight would you have done anything different?
[/quote]
I agree. USA320Pilot had a very strong pro DOH position until he moved away from it in recent months. He also used the threat of ALPA decertification if the award was not amended. But in the end, he remained an ALPA loyalist.
He seems to forget that had ALPA remained on the property, it would not have guarranteed labor peace by any means. ALPA East had filed a lawsuit against ALPA West - and the East MEC was adamant about keeping "seperate and permanent operations".
I also feel - though I can't prove it - that ego at the highest levels may have scuttled this latest merger attempt between the two carriers, despite the red herring of labor difficulties. If that is the case, then the CEO's of both companies let their employees down in a big way.
USA320Pilot
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Continental says it may leave the SkyTeam alliance
The Wall Street Journal reported that United because it was close to signing an alliance deal with Continental. United hopes to bring Continental into its Star Alliance, which is shared with U.S. Airways, the newspaper said on Friday
See Story
Regards,
USA320Pilot
The Wall Street Journal reported that United because it was close to signing an alliance deal with Continental. United hopes to bring Continental into its Star Alliance, which is shared with U.S. Airways, the newspaper said on Friday
See Story
Regards,
USA320Pilot
USA320Pilot
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Can a Continental-United Alliance Do What a Merger Can’t?
United has big problems. It needs toreduce its costs and its capacity. It has made several incremental changes: it already negotiated covenant waivers with its lenders, which allowed the airline to keep its $1.5 billion credit facility. It also plans to cut some capacity after the summer. But United needs to keep an unrestricted cash balance of $1 billion to avoid blowing its lending covenants.
But against this massive new sea of troubles, an alliance might be the equivalent of United taking a canoe into the breakers.
On the one hand, that’s obviously the benefit of an alliance – to be able to grow revenues without dealing with a labor headache. But on the other hand, you can’t avoid the labor problem forever: United’s underlying problems – like those of its rivals – are the need to cut costs and reduce capacity. A merger might accomplish that. An alliance doesn’t.
An alliance is not a terrible idea. But it’s another incremental change, and it doesn’t get United anywhere near where it wants to go. With troubles coming so fast down the pike, why take the fill-in plan? Why not argue for the deal you really want to do?
See Story
Regards,
USA320Pilot
United has big problems. It needs toreduce its costs and its capacity. It has made several incremental changes: it already negotiated covenant waivers with its lenders, which allowed the airline to keep its $1.5 billion credit facility. It also plans to cut some capacity after the summer. But United needs to keep an unrestricted cash balance of $1 billion to avoid blowing its lending covenants.
But against this massive new sea of troubles, an alliance might be the equivalent of United taking a canoe into the breakers.
On the one hand, that’s obviously the benefit of an alliance – to be able to grow revenues without dealing with a labor headache. But on the other hand, you can’t avoid the labor problem forever: United’s underlying problems – like those of its rivals – are the need to cut costs and reduce capacity. A merger might accomplish that. An alliance doesn’t.
An alliance is not a terrible idea. But it’s another incremental change, and it doesn’t get United anywhere near where it wants to go. With troubles coming so fast down the pike, why take the fill-in plan? Why not argue for the deal you really want to do?
See Story
Regards,
USA320Pilot
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Most psychologists would agree that obsession sometimes overtakes ones thoughts. We all knew USA320Pilot wouldn't take 700UW's advise to move on, but I thought you were different. Oh wait, maybe your more alike then different??
USA320Pilot
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United, US Airways decide now isn't the time
UAL Corp. and U.S. Airways Group have decided against any merger deal at this time as the high cost of jet fuel threatens the airline industry's financial stability, the carriers' chief executives said Friday
"The U.S. industry is facing a $20 billion increase in fuel, and United, at current prices, is looking at a $3.5 billion increase over last year," the CEO said. "It's clear that the status quo is not sustainable," Tilton added.
See Story
Regards,
USA320Pilot
UAL Corp. and U.S. Airways Group have decided against any merger deal at this time as the high cost of jet fuel threatens the airline industry's financial stability, the carriers' chief executives said Friday
"The U.S. industry is facing a $20 billion increase in fuel, and United, at current prices, is looking at a $3.5 billion increase over last year," the CEO said. "It's clear that the status quo is not sustainable," Tilton added.
See Story
Regards,
USA320Pilot
StewGuy86
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Thank goodness this possible merger is off the table, at least for now. If nothing else, maybe we'll all be treated to less of the constant drumbeat of "inside scoop" information from a certain US pilot AND a certain UA pilot that is eaten alive with a negative obsession for all things US will go away, which will help lower his blood pressure and keep him from stroking out.
While I think there would have been some positives from a merger, the negatives far outweighed them. I wish the best of luck to employees at ALL airlines during the coming months. Things don't look pretty anywhere.
While I think there would have been some positives from a merger, the negatives far outweighed them. I wish the best of luck to employees at ALL airlines during the coming months. Things don't look pretty anywhere.
N965VJ
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Flint Fire Department comes to rescue of tree-climbing kitten
BURTON, Michigan — Apparently a little scaredy-cat, Ralphie, didn't know that what goes up is supposed to come down.
The 11-month-old cat climbed 50 feet into a tree Friday and refused to come down all weekend, despite the efforts of owner Melissa Robinson, 39, of Burton.
"Everyone said call the fire department, and I thought it was cliche," Robinson said Monday. "But I got desperate."
See Story
Regards,
N965VJ
BURTON, Michigan — Apparently a little scaredy-cat, Ralphie, didn't know that what goes up is supposed to come down.
The 11-month-old cat climbed 50 feet into a tree Friday and refused to come down all weekend, despite the efforts of owner Melissa Robinson, 39, of Burton.
"Everyone said call the fire department, and I thought it was cliche," Robinson said Monday. "But I got desperate."
See Story
Regards,
N965VJ
So, the reason the airlines needed to merge in the first place was because of the high cost of jet fuel. Now, we have decided against a merger because of the high cost of jet fuel. So what does this mean??? If oil is below $90 a barell, there is no need to merge. If it goes over $120 a barrell, it is too costly to merge.....So I guess when oil settles down between $90 and $120 then it's time to merge again.
USA320Pilot
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Gaucho99 & HP-FA,
Both of you make good points. I too would like the know the price of oil per barrel that makes a merger make sense.
As far a regulation -- the airline and travel industry in general are very important to the GNP and the economy. The government is looking at lifting foreign invetment rules in U.S. carriers and is looking at other changes to imporve airline operations.
Without many options to boost revenue such as alliances and a la carte pricing and cutting capacity to to create pricing power...there are not a lot of other internal options.
Regards,
USA320Pilot
Both of you make good points. I too would like the know the price of oil per barrel that makes a merger make sense.
As far a regulation -- the airline and travel industry in general are very important to the GNP and the economy. The government is looking at lifting foreign invetment rules in U.S. carriers and is looking at other changes to imporve airline operations.
Without many options to boost revenue such as alliances and a la carte pricing and cutting capacity to to create pricing power...there are not a lot of other internal options.
Regards,
USA320Pilot
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