AA should buy ALASKA Air !

[eolesen]

It had negligible impact, Bears. The economy was starting to implode as early as 1Q01, so the corresponding pullback for air travel was already starting to take place.

It was already known that the JFK base was going to be whacked, and given the overlaps with DFW and ORD, it didn't take a rocket scientist to realise it was just a matter of time before STL was pared back to its current levels.

9/11 simply moved up the timeline for both actions.

 

[MCI transplant]

<_< ---- In this particular incidence, I believe FM is correct. The down turn in the economy was starting before 9/11. I think a lot of people use it as an excess for what was already in the works!

 

[777 fixer]

<_< Fixer,---- I don't clam to have all the answers! All I can tell you is what I heard at the time. Now if you except that or not is your problem! ------But to answer your question about that note. Yes it was due, but from what I've heard is that the note could have been renegotiated.

So basically your whole argument is based on what you "heard". In early 2001 TWA had around $20 million in cash. Not nearly enough to keep operating let alone pay off notes. Most assets had either already been sold off or were already mortgaged to the hilt. Now here's what the creditors were faced with. An airline that did not make a dime in the 1990's and had a ticket deal to late 2003 with Carl Ichan. Maybe they could have renegotiated. However all that would have done is buy a little more time. Once 9-11 happened one has to wonder how generous they would have been.

<_< In fact, the TWA Union's were negotiating with TWA's main Creditors, Boeing, Pratt, etc., to buy TWA and use MCI overhaul base as it's main warranty MRO base.(Boeing's idea!)Same scenario that aa now is bidding on! Except, now Boeing is thinking on a much larger scale. This "Golden maintenance program" idea of Boeing is a direct descendant of the earlier talks with the former TWA Unions! At the time Boeing wanted their own people in charge!( Surprise! Surprise!) Which meant they wanted Compton, and the currant board out! Compton allegedly got wind of it and accelerated his dealings with Carty! Assuring his Golden Parachute! The rest is history!---- As to how much we had on hand at the time, I heard $137 mil.--But then again, that's what they admitted to!-- Now! Believe what you want! Your going to anyway! Could we have renegotiated that note? We'll never know now will we???

Do you have any evidence of this or is this just another rumor that pops up on the shop floor every now and then. For the sake of argument let’s say that it did happen. First, by TWA unions do you mean just the IAM or all three? Second companies like Boeing have much deeper pockets than AMR. If they really wanted TWA they could have easily outbid AMR. Third, no company in its right mind would buy TWA with the Karabu ticket deal intact. The two ways to get rid of a deal like that is either pay off Carl Ichan or have company go into bankruptcy and get rid of it that way. If you were Boeing and PW what would you do?

One last thing, look up the Air Mail Act.

 

[MCI transplant]

So basically your whole argument is based on what you "heard". In early 2001 TWA had around $20 million in cash. Not nearly enough to keep operating let alone pay off notes. Most assets had either already been sold off or were already mortgaged to the hilt. Now here's what the creditors were faced with. An airline that did not make a dime in the 1990's and had a ticket deal to late 2003 with Carl Ichan. Maybe they could have renegotiated. However all that would have done is buy a little more time. Once 9-11 happened one has to wonder how generous they would have been.
Do you have any evidence of this or is this just another rumor that pops up on the shop floor every now and then. For the sake of argument let’s say that it did happen. First, by TWA unions do you mean just the IAM or all three? Second companies like Boeing have much deeper pockets than AMR. If they really wanted TWA they could have easily outbid AMR. Third, no company in its right mind would buy TWA with the Kara bu ticket deal intact. The two ways to get rid of a deal like that is either pay off Carl Ichan or have company go into bankruptcy and get rid of it that way. If you were Boeing and PW what would you do?

One last thing, look up the Air Mail Act.

<_< ----Good Evening Fixxer!--- First, you say "early in 2001, TWA had around $20 million". And you fault me because I used the word "heard"! Well, let me ask you this? Where did you come up with that figure? I did say I didn't claim to have all the answers, didn't I? It's "rumored" that Carty and Compton were working this deal for about three years! Prove me wrong! It was "rumored" TWA had more like $136 million going into Chapt.11., or a little before. Hell, I was told it would take approx. $90 million just to liquidate!-----As for Kara bu, this deal wouldn't have put an extra dime in Ichan's pocket! The only hold Ichan had on TWA at that time was his ticket sales deal! That's it! Boeing was talking an "Aircraft Maintenance Operation", not necessarily flying more passengers, or selling more tickets! It would have pumped up TWA's bottom line, and possibly carried us through the remaining three years left on Ichan's Kara bu contract!!!----- As for the Unions that were party to the talks! The IAM, and the Pilot's Union both held seats on the Board of Directors, And the largest single block of voting stock was held buy the employees of TWA! Can I prove any of this?---- No more than you can prove other wise!!!!! ---- And what you pointed out is absolutely true!--- The only way to get reed of Ichan would be to: buy him off,(not an option for aa!),or take TWA into bankruptcy! (Which I feel was the main reason TWA purposely was taken into bankruptcy! But not the only reason!) What made Boeing back away from the deal? Or the exact details of the deal, we'll never know!---- As only a AMT on the floor of MCI, I can just guess!

 

[eolesen]

What made Boeing back away from the deal? They probably realized it would have ended as badly as it did for AMR.

Karibu was a deal killer, and only ejectable in bankruptcy. That's why every other airline in North America passed up the opportunity to merge with TWA. Carty was just too arrogent to realize how bad of a decision it really was, even though Arpey, Baker and Crandall were all said to be against it.

 

[aafsc]

<_< ----Good Evening Fixxer!--- First, you say "early in 2001, TWA had around $20 million". And you fault me because I used the word "heard"! Well, let me ask you this? Where did you come up with that figure? I did say I didn't claim to have all the answers, didn't I? It's "rumored" that Carty and Compton were working this deal for about three years! Prove me wrong! It was "rumored" TWA had more like $136 million going into Chapt.11., or a little before. Hell, I was told it would take approx. $90 million just to liquidate!-----As for Kara bu, this deal wouldn't have put an extra dime in Ichan's pocket! The only hold Ichan had on TWA at that time was his ticket sales deal! That's it! Boeing was talking an "Aircraft Maintenance Operation", not necessarily flying more passengers, or selling more tickets! It would have pumped up TWA's bottom line, and possibly carried us through the remaining three years left on Ichan's Kara bu contract!!!----- As for the Unions that were party to the talks! The IAM, and the Pilot's Union both held seats on the Board of Directors, And the largest single block of voting stock was held buy the employees of TWA! Can I prove any of this?---- No more than you can prove other wise!!!!! ---- And what you pointed out is absolutely true!--- The only way to get reed of Ichan would be to: buy him off,(not an option for aa!),or take TWA into bankruptcy! (Which I feel was the main reason TWA purposely was taken into bankruptcy! But not the only reason!) What made Boeing back away from the deal? Or the exact details of the deal, we'll never know!---- As only a AMT on the floor of MCI, I can just guess!

Highly doubt that Carty and Compton "worked on the deal for 3 years". Why? Because AA wanted NW and made an offer after the proposed UA/US merger. When NW demanded a much higher price, AA settled for tw's assets.

 

[MCI transplant]

Highly doubt that Carty and Compton "worked on the deal for 3 years". Why? Because AA wanted NW and made an offer after the proposed UA/US merger. When NW demanded a much higher price, AA settled for tw's assets.

<_< -----aa you do have a point, but I believe that's an over simplification of what really went on. There definitely was more going on than just TWA. But Carty wanted to make aa number one. And by picking up TWA and it's assets, would be the fastest way to do it! No matter if it was three years, or one, I still believe Carty and Compton deliberately took TWA into bankruptcy for the following reasons: 1) To get reed of Ichan and Karabu! 2) To shed TWA of as much dept as possible! 3) To drive TWA stock down to zero! 4) To reed the Unions of their scope clauses! But than again, this is all ancient history. And there is a lot of what really went on that we'll never know! And this thread is supposed to be about Alaskan Airlines now isn't it?

 

[eolesen]

I'll forgive your ignorance regarding your adopted employer's history, but AA was already the largest carrier by 2000. Carty wanted to ensure AA remained in that spot if UA/US went forward, and TW provided that buffer.

Regardless of who ultimately provided the lifeline, TWA as a corporate entity would have benefitted from every one of your four points with or without the AA offer, so I don't know why you think it was such a huge conspiracy. Anyone contemplating a merger with a partner as financially distressed as TWA was at the time would have been foolish to try attempting a rescue without a bankruptcy filing.

 

[MCI transplant]

I'll forgive your ignorance regarding your adopted employer's history, but AA was already the largest carrier by 2000. Carty wanted to ensure AA remained in that spot if UA/US went forward, and TW provided that buffer.

Regardless of who ultimately provided the lifeline, TWA as a corporate entity would have benefitted from every one of your four points with or without the AA offer, so I don't know why you think it was such a huge conspiracy. Anyone contemplating a merger with a partner as financially distressed as TWA was at the time would have been foolish to try attempting a rescue without a bankruptcy filing.

<_< ----Because Compton and the Board of Directors had a legal obligation to the TWA stock holders! If Compton purposely took TWA into bankruptcy, he breached his fiduciary trust, and that my friend, if could be proven, would be grounds for one hell'va law suit!

 

[FWAAA]

<_< ----Because Compton and the Board of Directors had a legal obligation to the TWA stock holders! If Compton purposely took TWA into bankruptcy, he breached his fiduciary trust, and that my friend, if could be proven, would be grounds for one hell'va law suit!

Ok, I'll play along. Executives and Directors purposely file Ch 11 petitions every day. Every legacy airline has now done it except for AA.

Although the diehard TWA fans will disagree until their last breath, the fact is that TWA was facing a very real liquidity crisis - IIRC, there was a big debt repayment due a few days after the filing. Yeah, we know - everyone and their brother was lining up to loan more money to TWA to cover that cash call. Uh-huh. Sure they were.

As to the "hell'va lawsuit" allegation - I'm curious: can you name a company that lost such a lawsuit to its former shareholders following a Ch 11 filing? One thing my law professors musta glossed over in my corporations and bankruptcy classes (as well as the numerous CLE presentations I've both sat thru and personally conducted) is your truism that "purposely" filing a bankruptcy petition constitutes a case of breach of fiduciary duty by the directors and officers.

 

[MCI transplant]

Ok, I'll play along. Executives and Directors purposely file Ch 11 petitions every day. Every legacy airline has now done it except for AA.

Although the diehard TWA fans will disagree until their last breath, the fact is that TWA was facing a very real liquidity crisis - IIRC, there was a big debt repayment due a few days after the filing. Yeah, we know - everyone and their brother was lining up to loan more money to TWA to cover that cash call. Uh-huh. Sure they were.

As to the "hell'va lawsuit" allegation - I'm curious: can you name a company that lost such a lawsuit to its former shareholders following a Ch 11 filing? One thing my law professors musta glossed over in my corporations and bankruptcy classes (as well as the numerous CLE presentations I've both sat thru and personally conducted) is your truism that "purposely" filing a bankruptcy petition constitutes a case of breach of fiduciary duty by the directors and officers.

<_< -----Sorry! I won't! Play along that is! At this point in time, there won't be any point to it! I'll just stand by my statement!

 

[777 fixer]

<_< ----Good Evening Fixxer!--- First, you say "early in 2001, TWA had around $20 million". And you fault me because I used the word "heard"! Well, let me ask you this? Where did you come up with that figure?

Where did I get that figure? Well it can be found in United States Bankruptcy Court Delaware District case number 01-0056 dated 4/2/2001 page 10. It’s stated there in black and white that on January 10 2001 TWA’s cash balance was $20-30 million. So I guess I was a bit “off†by saying $20 million. Not that it really would have mattered.

< http://www.deb.uscourts.gov/Opinions/2001/twa.pdf >

<_< ----It's "rumored" that Carty and Compton were working this deal for about three years! Prove me wrong!

I don’t believe I ever questioned that. However Rothschild Inc along with TWA determined in early 2000 that the only feasible means of survival was to enter into a merger. No mention about talks three years prior. In addition AA was not the only one that TWA was talking to. The year before the merger TWA also approached seven other airlines as well, case number 01-0056 page 5.

<_< It was "rumored" TWA had more like $136 million going into Chapt.11., or a little before.

At the end of 2000 TWA’s cash balance was $100 million, that’s what you might be thinking of.

<_< As for Kara bu, this deal wouldn't have put an extra dime in Ichan's pocket! The only hold Ichan had on TWA at that time was his ticket sales deal! That's it! Boeing was talking an "Aircraft Maintenance Operation", not necessarily flying more passengers, or selling more tickets! It would have pumped up TWA's bottom line, and possibly carried us through the remaining three years left on Ichan's Kara bu contract!!!-----

Couple things here. Number one that ticket deal was the main reason TWA could not make money. To try and dismiss its importance is putting your head in the sand. Second, I’m a bit confused here. Was Boeing looking to buy the whole operation or just the maintenance portion? By your wording I get the impression that it was just the heavy maintenance part.

And what you pointed out is absolutely true!--- The only way to get reed of Ichan would be to: buy him off,(not an option for aa!),or take TWA into bankruptcy! (Which I feel was the main reason TWA purposely was taken into bankruptcy! But not the only reason!)

Well of course it was a major reason! That along with its heavy debt load. No airline in its right mind would enter into a deal like that with Carl Ichan. Would you?

 

[MCI transplant]

Where did I get that figure? Well it can be found in United States Bankruptcy Court Delaware District case number 01-0056 dated 4/2/2001 page 10. It’s stated there in black and white that on January 10 2001 TWA’s cash balance was $20-30 million. So I guess I was a bit “off†by saying $20 million. Not that it really would have mattered.

< http://www.deb.uscourts.gov/Opinions/2001/twa.pdf >
I don’t believe I ever questioned that. However Rothschild Inc along with TWA determined in early 2000 that the only feasible means of survival was to enter into a merger. No mention about talks three years prior. In addition AA was not the only one that TWA was talking to. The year before the merger TWA also approached seven other airlines as well, case number 01-0056 page 5.
At the end of 2000 TWA’s cash balance was $100 million, that’s what you might be thinking of.
Couple things here. Number one that ticket deal was the main reason TWA could not make money. To try and dismiss its importance is putting your head in the sand. Second, I’m a bit confused here. Was Boeing looking to buy the whole operation or just the maintenance portion? By your wording I get the impression that it was just the heavy maintenance part.
Well of course it was a major reason! That along with its heavy debt load. No airline in its right mind would enter into a deal like that with Carl Ichan. Would you?

<_< ---- I'll say it again fixxer, "I don't know where your coming up with that figure! It's certainly not on page 10 of your link! Nor is your claim of TWA approaching seven Airlines, on page 5! Interesting reading though! Makes your stomach turn! I will concede that the Ichan deal was nothing short of Moronic! I never did claim TWA's Management was too bright!!! As for the Boeing deal, we weren't previed to the details, but we all were under the assumption that Boeing wanted the MCI facility! Nothing was said about grounding the feet! Remember, our fleet was a heck of a lot smaller than aa's! Ichan's ticket deal was just that! Ticket sales! Any income from Maintenance was out of his reach!! In other words, if this deal had gone through, refinancing any dept would not have been a problem! And there may have been enough profit to our bottom line to pull us through those three years remaining on Ichan's contract! It was estimated that Ichan was scamming off up to $100 mil. per year off our bottom line!----- :angry: What made Boeing back off? We'll never know! But the timing of all this seems a little coincidental! They backed off a little before aa showed up!

 

[AMFAMAN]

Where did I get that figure? Well it can be found in United States Bankruptcy Court Delaware District case number 01-0056 dated 4/2/2001 page 10. It’s stated there in black and white that on January 10 2001 TWA’s cash balance was $20-30 million. So I guess I was a bit “offâ€￾ by saying $20 million. Not that it really would have mattered.

< http://www.deb.uscourts.gov/Opinions/2001/twa.pdf >

FYI...the link posted was for Mar 2001. Below is the correct link.

http://www.deb.uscourts.gov/Opinions/2001/TWA_STAY.pdf

 

[FWAAA]

Fixer gave us the wrong link. Here's the correct one:

http://www.deb.uscourts.gov/Opinions/2001/TWA_STAY.pdf

From page 10-11:

17. Neither American nor TWA contrived an "emergency." Before negotiating the Asset Purchase Agreement, TWA ended the year 2000 with $ 100 million in cash, which TWA's testimony established was $ 50 to $ 100 million less than TWA needed to survive its winter season. TWA's approximate cash balance on January 10, 2001 was $20 - 30 million and TWA needed $ 40 million to fund its operations the next day. First Day Tr. at 54. As this chapter 11 case progressed, TWA had, and continues to have, a cash burn rate of $ 3 million per day.

Note the bolded portion. TWA was broke. It needed $40 million to fund its continued existence on Jan 11, 2001 and had substantially less than that. Argue all you want - a federal bankruptcy court disagrees with you. Which of you was in a better position to determine the facts? You, an airplane mechanic (presumably busy fixing airplanes) or a bankruptcy court judge?

Keep it up with the outlandish conspiracy theories about how AA and TWA conned a federal bankruptcy court judge and pretty soon not even your friends and supporters will listen to your lunatic rantings and ravings. Dare I say it - you'll "Bob Owens" yourself if you aren't careful. B)