USAirways/America West Merger Talks -WSJ

[Whatnow?]

Seems to me that it would be a pretty good match. US's labor costs are now that of the LCC's and the fleet types and even the labor unions are the same. As for the route maps, they seem to fit together perfectly, AWA has it's major presence on the West Coast with limited flying to the East and US has its presence on the East Coast, Carribbean, and Europe with limited flying to the West. I hope it does work out. What a combination, a National, Carribbean, and European LCC!

 

[Busdrvr]

America West spokesman Phil Gee, reached by Reuters, called the merger report a "market rumor" and declined to comment further. America West is the eighth-largest U.S. carrier.

US Airways could not immediately be reached for comment but has said previously it would not confirm any talks it might have with other airlines or potential investors about acquiring a stake.

Very Interesting.

[post="263174"][/post]​

Have you ever noticed that in many cases it's not the first "bidder" that "wins" in merger games? Is it possible that the AWA "talks" are a ploy by GE to attempt to induce other bidders to "sh1t or get off the pot"? Maybe try to stop the vultures from waiting for a Chapt 7 and go for the more expensive purchase....

Now where did I put my vast conspiracy decoder ring......

 

[EyeInTheSky]

Who knows. All we see is US Airways doing all the talking. And, this is a company that does not communicate well with its own employees. Weirder things have happened. Heck, maybe the ugly girl is getting a prom date afterall.

 

[FlyUs]

the 6th largest U.S. airline (the same as U pre-BK?) with pretty much the same international destinations as before.

[post="263172"][/post]​

Exactly! Even if this does occur, I believe US will remain partners with UA and the Star Alliance.

 

[BoeingBoy]

Another article, this time from Reuters. Adds some analyst comments....

Reuters Article

Jim

 

[USA320Pilot]

Last Thursday US Airways chairman of the board David Bronner and chief executive officer Bruce Lakefield flew to New York City and reportedly met with GECAS and GEES officials including chief executive officer Henry Hubschman; as well as IB's. Then later in the day the parties agreed to extend the period for US Airways to file its plan of reorganization with the U.S. bankruptcy court until the “end of the monthâ€. I believe it is significant to note that Bronner attended the meeting because the chairman is not normally involved in day-to-day executive work, thus his appearance indicates the Board and possibly RSA is now taking an active role in the restructuring/M&A activity.

It appears that GECAS/GEES has become the most important business entity in US Airways’ future. GECAS is US Airways’ largest creditor with $2.9 billion in aircraft leases, GEES conducts US Airways power-by-hour engine overhaul for all B767, A320 family, & B737 aircraft, and GE desires to have another buyer for future GE engine sales, new mainline and PSA (if PSA is not sold) aircraft deliveries.

WSJ said: “One person familiar with the matter said US Airways has talked to several other airlines over the past two years about a potential merger.â€

USA320Pilot comments: As I said in the past, US Airways was involved in UCT and ICT talks with United for the past couple of years and also had talks with Northwest. Did that result in a deal? No, but we were very close to having one announced.

700UW said: “It looks like US is going to be the buyer and survivor, and more then likely it will be dovetailing as US employees have LPPs in thier contracts.â€

USA320Pilot comments: I agree, which has been the intention all along, just like with the UCT or ICT.

AVEK00 said: “So while a HP/US merger probably won't be considered good news for United, neither will it be an unmitigated disaster.â€

USA320Pilot comments: Agreed.

It remains unclear if the widely speculated corporate combination between US Airways and America West will unfold, but GECAS is apparently brokering a deal between US Airways, America West, and the Arlington-based airline’s RJ partners to complete a key portion of the POR. In my opinion, with Bronner directly involved in the discussions, could RSA, GECAS, and/or another third-party investor take another financial position in US Airways and/or America West to provide the Arlington-based carrier exit and then M&A financing?

Also noteworthy, GE has significant exposure to Mesa and America West Airlines too. In fact, GE holds leases on about half of the combined US Airways – America West fleet, with a lot of exposure to Mesa and is also interested in helping those companies.

Moreover, how would a corporate combination between US Airways and America West effect the Arlington-based carriers relationship with its alliance partner United Airlines?

Regards,

USA320Pilot

 

[Cosmo]

AVEK00 said: “So while a HP/US merger probably won't be considered good news for United, neither will it be an unmitigated disaster.â€￾

USA320Pilot comments: Agreed.

Hey, that was my quote in response to a comment by Avek00. Just setting the record straight. 😀

 

[Finish or Ignore]

Somebody get the USA320Cap here immediately. I know there is a UCT, TCU, ICU or something along those lines here............

[post="263098"][/post]​

Could it be BOHICA?

 

[BoeingBoy]

A Washington Post article....

US Airways in Talks With America West

"Rumors of merger talks between the two carriers have swirled on Wall Street for weeks. Sources familiar with the talks said it was unlikely that America West, the nation's eighth-largest airline, would acquire US Airways outright, because an acquisition could pose a major financial burden."

Jim

 

[ClueByFour]

http://www.washingtonpost.com/wp-dyn/artic...-2005Apr19.html

Some choice quotes:

The talks were focusing more on the two carriers striking an agreement under which America West would infuse millions of dollars into Arlington-based US Airways in exchange for an equity stake, according to the sources, who spoke on condition of anonymity because of the sensitivity of the negotiations.

Rumors of merger talks between the two carriers have swirled on Wall Street for weeks. Sources familiar with the talks said it was unlikely that America West, the nation's eighth-largest airline, would acquire US Airways outright, because an acquisition could pose a major financial burden.

"I could see America West making an investment, but a merger would bring that airline down," said Michael Boyd, an aviation expert at the Boyd Group. Boyd said the industry's high fuel costs and financial difficulties, along with US Airways' higher labor costs and complex route system, could make an acquisition costly.

Now, with all that said, here is the dark horse: Texas Pacific Group. Bonderman still owns 55% of HP. He did not see fit to up his original bid for US to outbid RSA. He's not going to torpedo HP with a full-on merger which would kill the combined entity and hence his investment.

He might, however, be willing to throw a desperate man (US) a bone (100 million or so) for a fat equity stake and a codeshare. Much like the GECAS deal (taking back the choice assets, getting a huge equity stake, and loan rates that make the local pawn broker look like a saint), he can trade a relatively small amount of money for potentially huge gains, and get a superpriority claim and/or preferred equity if things don't work out.

RSA is a non-factor. Bronderman is not going to lose the much more valuable HP investment to the fool who wanted to play airline the first time around--without demanding a much larger payoff enabling him to cash out of HP with a profit. If for whatever reason Bronner is willing to piss away more Alabama retirement money to buy the whole thing, I feel sorry for those retirees (as well as the employees involved on both sides). Barbell (the route structure) did not work in 1989, and it won't work now.

 

[BoeingBoy]

To borrow a metaphore from "The Wizard of Oz", could this be "the man behind the curtain" looking for a big payday regardless of whether whatever transpires proves to be a success or not.....

Firm might make a mint if US Airways can survive

Jim

 

[delldude]

excellent insight clue.....thank you. 😉

 

[USA320Pilot]

New York Times article:

See Story

According to people close to the talks, America West executives met in Washington on Friday with staff members and advisers to the Air Transportation Stabilization Board, which oversees the loan guarantees of the two airlines. US Airways owes $717 million on its package, while America West owes about $300 million.

Regards,

USA320Pilot

 

[delldude]

Sorry, most of US' employees were all ready through two mergers, PSA and Piedmont, and dovetailed was used in both.

Unlike your carrier and your union, (TWU), a union is about fairness, not about making one group suffer as the TWU did with the former TWA employees.

[post="263169"][/post]​

i'm sure in BK there is lateral room to discuss these LPP'S......

 

[USA320Pilot]

US Airways, America West in talks - Merger talks could lead to new low-cost carrier

According to the Journal report, if an agreement is reached, the initial plan would be to fly under the "US Airways" brand immediately but keep operations separate, linking the network through code-sharing, while fleets and personnel are integrated.

The merger scenario would require US Airways to find $350 million to $500 million in total new funding, and possibly to arrange an additional $250 million in loans. According to the Journal report, US Airways is approaching a number of sources, including private equity firms, other regional airlines and its creditors.

If US Airways succeeds, a holding company created by the merger would give stock in the new company to America West shareholders, US Airways creditors and new equity investors, The Journal reported, citing a person familiar with the discussions.

Complete Story

Regards,

USA320Pilot