BoeingBoy:
BoeingBoy said: "Since they've been expressing a desire to reduce their exposure to US for a year now - that was the whole rational behind LOA 91 - it'll be interesting to see this play out....."
USA320pilot comments: I agree. However, GE owns about 50% of the combined US Airways - America West fleet. GECAS wants their aircraft in the air and they do not want either airline to fail, thus their interest in the deal. Last Thursday's meeting between Bronner, Lakefield, and Hubschman, along with their IB's and most likely with J.P. Morgan's IB's, likely focused on this point.
Meanwhile, on April 11 America West CEO Doug Parker told Susan Carey that it is naive for airlines to hope that GE will do anything but look our fot its own interests.
According to the WSJ report, "And those interests aren't entirely aligned with those of (all) carriers, says Bill Warlick, an airline debt analyst at Fitch Ratings."
Also noteworthy, Fitch Rating was retained by the ATSB to audit all loan guarantee applications. Moreover, Warlick directly reviewed the US Airways and America West applications.
Meanwhile, the Journal noted, GE's interest is "in keeping as much capacity in the air as possible because so much of their lease exposure is in the U.S.," Mr. Warlick says. A big airline liquidation would be bad for GE, he says, because it would flood the market with planes and drive down lease rates.
Mr. Hubschaum says there may be some overcapacity in the U.S. industry, "but it's not clear to me that simply a liquidation is the answer." If 200 or 300 planes were grounded by an airline failure, stronger companies such as Southwest and JetBlue Airways would lease or buy more planes from willing manufacturers and expand, he says.
"Do you think Airbus is going to sit there when somebody calls them up, or Boeing, and say, "No, we won't sell to you?", he ask rhetorically, the WSJ noted.
Regards,
USA320Pilot
