1 Billion In Financing For Merger

[USA320Pilot]

The Arizona Republic said, "Parties involved in the talks say the two airlines will shed at least 60 aircraft from the combined fleet, most likely Boeing 737s."

USA320Pilot comments: It's my understanding the statement above is accurate and that aircraft would come out of both company fleets.

Regards,

USA320Pilot

 

[whlinder]

Which would imply shedding the workers that currently work on those 60 737s, no?

 

[usair_begins_with_u]

This sums it all up...

Serious rumors of an impending merger started to fly (ahem, no pun itended) around the beginning of April when AWA was trading around $5.50. Since that point, the stock has dropped about 16%. I don't think 'the street' is sold on this party yet, and neither am I. Everyone at the party right now already seemingly has something at stake with HP/U. When I see an outsider come to the table with some big bucks, maybe.. just mabye I will consider this any thing more than a desperation move.. You disagree?? Over capacity and destructive competition are not going to go away just because HP/U merge.

DOH!

 

[700UW]

Last time I checked HP was not in bankruptcy, it will cost them money to park planes that are still on active lease.

 

[LGA / 037]

The Arizona Republic said, "Parties involved in the talks say the two airlines will shed at least 60 aircraft from the combined fleet, most likely Boeing 737s."



Is this where the FedEX rumor comes in ?

 

[funguy2]

Boeing Boy: I think you got it right... Here is my comment from another thread:

Let's break it down:
$375-500mil in new equity financing (from AirWisc/ACE/PAR, new financing)
$100-250mil loan from Airbus
$254mil unrestricted cash from HP
$513mil unrestricted cash from US
+ any cash generation during the summer (predicted by both carriers, to lead into the cash drain that is September...

So... adding it up, that's $1.24 to 1.52 Billion in Liquidity + whatever they are able to create during the busy summer season.

The only thing here that is "new" is the Airbus loan... Otherwise, US Airways and its creditors have been saying they need $375mil to $500mil for the deal (Remember the Republic deal required $375mil in total equity financing, plus gave the option for an additional $110mil through the slot/aircraft deal...)

The cash we all know about from their 1Q05 reports...

The only thing "new" is the Airbus loan... and quite frankly, its not THAT surprising.

Here are my comments from another thread regarding the apparent removal of Republic from the deal:

My recollection is that the Republic deal included a number of things...

Republic was to invest $125mil in equity into US. Period.
Then, there was an additional sale/lease-back provision (roughly) for the Commuter Slots + reassignment of the EMB-170/190 flying to Republic. If this were to occur, Republic gets the flying and slots, US gets $110mil + assurances that the slots and aircraft are used on US's behalf + a repurchase right. This transaction was at US's discretion/need (i.e. no requirement to proceed).

It would appear that, if US does not intend to give up the slots/aircraft (as would now seem to be the case), then Republic can find better uses for its cash. A reasonable determination for both sides.

As I said before, I suspect the aircraft, and more-so the slots, are a big part of what make US Airways an attractive acquistion. If US sells them, what is HP trying to buy?

So again, it seems like if Republic doesn't get the aircraft/slots, its not really interested in the deal... Probably a good perspective from Republic's view. Also, this gives US Airways another option when it comes to rejecting US Airways Express contracts (i.e. now no "requirement" to keep Chautauqua, owned by Republic Holdings). The only Express partners the combined US-HP are "stuck" with would be Air Wisconsin and the America West-Mesa contract... presumably US Airways could reject the US-Mesa contract, along with other US Express contracts.

In fact, one might argue a sale of Piedmont to Mesa (another Dash-8 operator) could increase liquidity even further and strengthen ties between US-HP and Mesa... now at the expense of Chautauqua/Republic. Now, that, is just speculation on my part, but plausible none the less.

 

[robbedagain]

thanks for the answer usa320. My next thing is will the combined carrier close any cities even if the cities had already been outsourced?

 

[jack mama]

Anyone care to guess on the details of the Bplan? Can elimatinating top executive level really create enough savings to turn a profit?

What is so great about the new plan that has everyone wanting to throw money at it?

 

[Mtnman928]

"Not sure if I can get used to the phrase "fixin" as used by our brethren to the south of NJ."

What's to get used to - sounds perfectly normal to me......

Jim

[post="269877"][/post]​

Passing throught PHX once I spied upon the WN arrival monitors and they all referred to their inbound flights as "Fixin to Land".

Just an observation.

Mtnman

 

[DCAflyer]

Passing throught PHX once I spied upon the WN arrival monitors and they all referred to their inbound flights as "Fixin to Land".

[post="270133"][/post]​

I'm fixin' to puke!

 

[a320av8r]

I'm fixin' to puke!

[post="270134"][/post]​

 

[luvn737s]

So what do we have so far:

Air Wisconsin - $125 million
Air Canada - maybe $100 - $150 million (in exchange for maintenance contracts?)
Par Capital + another hedge fund (TPG?) - $125 million
Republic - $110 million (Emb-170's & slot sales), more iffy

Airbus - $250 million loan, of which most or all will return to them within a couple of years as deposits/progress payments on 20 A350's ($2 billion plus) and renegotiating current orders (deposits/progress payments).

I haven't read all the articles - have I left out anyone?

Jim

[post="269760"][/post]​

Just remember that all these investors are in a position to skim their money off the top in addition to repayment of any cash put up.

Air Wisconsin and Republic? Don't expect any bargain rates or reduction in fee per departure.

Air Canada? Why put major maintenance out for bid?

Airbus? Expect extremely high lease rates.

Heck if I had a couple million I'd loan it to them just to get the contract to dump the lavs. $500 a turd seems fair. These investors are clamoring because the feeding trough is open for business. I would expect this combined entity to have a hard time posting a profit for a long time to come.

This whole thing looks more like a storyline from the Sopranos every day.

 

[whlinder]

Anyone care to guess on the details of the Bplan? Can elimatinating top executive level really create enough savings to turn a profit?

What is so great about the new plan that has everyone wanting to throw money at it?

[post="270131"][/post]​

I can only assume the 'plan' is the same great US Airways plan we've heard for so long, about how they'll be a low cost carrier with legacy benefits like alliances and transatlantic flights. The 'plan' where you get all the benefits of a legacy (higher revenue) while operating with the costs of a low-cost carrier. I can't see another plan, a national low-cost carrier 'to rival Southwest' doesn't order 20 A350s. It orders A350s because it flies to Europe and maybe will fly to South America or Asia in 5 years, and orders more than it needs so that it can get a loan. Right now, US has the high revenue (but it is slipping) with the high costs. HP has the low revenue with the low costs. Can they keep the low costs of HP while maintaining the high US revenue? I'm skeptical, but I want to see US survive so I hope it works, and at the worst I hope it enables the airlines to hang on long enough for fuel prices to recede. If that ever happens.

 

[us0004us]

Anyone care to guess on the details of the Bplan? Can elimatinating top executive level really create enough savings to turn a profit?

What is so great about the new plan that has everyone wanting to throw money at it?

[post="270131"][/post]​

part of it may be the fact that awa management will be running the show...in one press report

a source stated bronner was surprised that usa management, after all the cuts, was still runing

usa as a legacy carrier, not taking advantage of the lower labor rates ...

awa management will operate the new entity as a LCC...thus even more efficently..adding

to the overall picture of increased productivity...more bang for the buck...and less waste..

(maybe good-bye ccy and ridc)....through consolidation.

the sooner the better!