239 replies to this topic

[USA320Pilot]

FWAAA said: "Today, DL reported a gain of $43 million on the slot divestitures, which paid 2/3 of the cash DL gave US. By giving away so many LGA slots, Parker guaranteed that a combined US-AA would be hobbled at LGA compared to DL. Most. Stupid. Move. Ever."

US Airways' Investor Relations Update: January 25, 2012: The (slot) transaction resulted in a $147 million gain which the Company fully deferred as of December 31, 2011 due to the DOT operating restrictions. As these restrictions lapse, the Company expects to recognize approximately $73 million of gain in the first quarter of 2012 and $74 million in the third quarter of 2012, both of which will be classified as special items/credits.

Click here here to read the update.

[USA320Pilot]

US Airways Shares Up 44% YTD: CEO Says Merger Not Needed

Click here to read the story.

[BoeingBoy]

USA320Pilot, on 25 January 2012 - 06:05 PM, said:

US Airways' Investor Relations Update: January 25, 2012: The (slot) transaction resulted in a $147 million gain...

A gain is not cash...

Jim

[bigbusboy]

BoeingBoy, on 25 January 2012 - 03:36 PM, said:

True, if only asked once or twice. But you know analysts, and media are even worse - a dozen people would have asked the same question worded differently in an attempt to get more info than he was apparently willing (or legally able) to give. It's not like news of hiring advisers hasn't leaked out already.

I suspect that he's trying to walk a tightrope - he wants a deal but doesn't want it to go the way of the DL bid. If he's half as smart as some give him credit for, he also knows that AA offers a lot more to US than US offers to AA. So I suspect that he, the management team, and the advisors are spending many long days trying to "put lipstick on the pig". Some of the rumors indicate that he's already looking at dismantling the US network so it could feed AA's hubs instead, all to show that US offers more to AA than it appears.

Jim

One thing that puzzles me is why bring in the investment bankers and lawyers so soon after AA's entrance into bankruptcy? AA has 18 months plus extensions to develope their own POR without interference. That's roughly two years from now and in this business a lifetime. And, AA isn't moving very fast with what it needs to do. Within the first few days of filing, UA, NW, DL all wanted billions of dollars in consessions from labor plus the pensions (except DL). I know AA has time on their side with the $4 billion, but that money won't last forever.

[BoeingBoy]

bigbusboy, on 25 January 2012 - 09:59 PM, said:

One thing that puzzles me is why bring in the investment bankers and lawyers so soon after AA's entrance into bankruptcy?

My guess is that despite Parker's "Aw shucks, we don't need to merge" that he's somewhat desperate for one and AA is the last opportunity to snag a big one. Plus he's got a lot of work to do to come up with a believable reason why AA needs to merge with US.

Jim

[bigbusboy]

BoeingBoy, on 25 January 2012 - 10:12 PM, said:

My guess is that despite Parker's "Aw shucks, we don't need to merge" that he's somewhat desperate for one and AA is the last opportunity to snag a big one. Plus he's got a lot of work to do to come up with a believable reason why AA needs to merge with US.

Jim

True about the "work to do" and desperation. It's going to take millions of dollars in retainer fees to figure out the numbers that might make this work and convince AA and its creditors. But, Parker can't even approach the creditors and management for two years. I know AA needs US much less than US needs AA, but they've got some real issues in terms of revenue, market share, and network feed that need to be addressed. I just fail to see any other M&A plan or go-it-alone plan that would resolve these issues. Organic growth puts capacity back into a very mature industry and B6 or AS do little for market share and revenue. US does some in terms of network feed, but would be very effective in terms of revenue and market share (if numbers are right).

[BoeingBoy]

They can approach management, US just can't file a competing POR. I'm sure that Parker would like to have the merger be the basis for AA's POR, just like it was for US' in BK2. That allows fleet plans, etc to be made with any merger in mind - perhaps not keeping as many AA planes, rejecting leases at airports with duplication, etc.

Jim

[SparrowHawk]

OK, so how they going to fund this?