who is that man behind the curtain?

Aug 20, 2002
The Washington Post reported that David Bronner, head of the Alabama Pension Fund, paid Rono Dutta $100,000 to measure the viability of US Airways.
That report is so remarkable I''ll leave the comments to other posters.
Anyway, most folks know that the Alabama Fund displaced Texas Pacific Group as the new money guys at US. Why did TPG give up so easily? Could TPG have their sights set on a bigger prize and they want to take Segal with ''em?
TPG is smart money. Right now they''re even balking at a previously-announced agreement to buy Burger King because BK has gotten hammered in the fast-food price wars.
On a similar note, yesterday''s WSJ said that GE is facing a credit downgrade because of their huge exposure in the airplane-leasing and insurance markets. Again, GE is very smart money and not very patient. GE''s credit rating has been a foundation for their overall success. Why isn''t GECAS taking a higher profile in coming to the airlines'' rescue?
Who would you rather have as your sugar daddy: David Bronner or GE?


November 15 is the deadline for potential equity investors to notify the bankruptcy court of their plans to replace RSA as the US Equity Plan Sponsor (EPS).

Former UA president Rono Dutta has a consulting contract with RSA & UA.

GECAS has agreed to provide US RJ financing, for 200 orders and 300 options, once US emerges from Chapter 11.

Groups headed by TPG and Marvin Davis/Jonathan Ornstein both discussed or were selected as the US EPS and are now talking with UA to be the bankruptcy EPS. In addition, George Soros, who has never run a company is reportedly discussing with UA, is interested in becoming the UA EPS.

If UA files for bankruptcy, Bethune has said CO would be interested in buying UA assets, in particular the DEN hub, but the Houston-based carrier is not interested in merging.

In a letter sent to all pilots dated November 11 (yesterday), by Ed Bular, US vice president of flight operations, said Most analysts agree that the industry will go through some sort of consolidation as a result. Those carriers willing to adapt to this new environment and learn to operate more efficiently will be around when that consolidation takes place.

Today in an interview with Bloomberg News CO chief executive officer Gordon Bethune said he doesn't expect airlines to return to profitability next year. We've got a long row ahead of us, Bethune said. Some of us are going to fall by the wayside. I can see that clearly. That may change the landscape after the end of next year.

The Sept. 11, 2001, terrorist attacks, coupled with the U.S. recession, caused a drop in air travel. US Airways Group Inc. filed for Chapter 11 protection from creditors in August, and UAL Corp. is seeking to restructure United Airlines outside of bankruptcy. Those will be macro changes in the business that will be healthy for all of us, Bethune said. He said the industry needs to shrink about 15 percent.

Provided US can meet the DIP financing and ATSB requirements, per Captain Bular's letter I fully expect US to survive and to participate in industry consolidation.

The US restructuring plan is solid in the medium to long-term, but some additional employee sacrifice in the short-term, to be completed by December 9, appear to be necessary for US to be able to participate in industry consolidation.



Aug 20, 2002
Rono may be a sound financial strategist, but he couldn't lead a horse to water. For your sake, I sincerely hope he is only doing minor consulting work for US Airways.


Aug 21, 2002
Just as a sidebar: George Soros is a major investor in Hainan(remember where the P-3 was forced down?) Airlines, which stated witnin the past year it was interested in acquiring a US carrier.