Deal Completed By Next Week?

[USA320Pilot]

FA Mikey:

FA Mikey said: "Potential investors? Yea I am sure they are lining to get involved with a failed company, who made all the cuts they can in there operation. Screwed there employees to the end in pay, health and retirement. Yet is still losing millions daily. I am sure they are lining up. Funny though no one can be named. Are these potential investors large banks or old lady investment clubs?

Good luck on those high yielding Hawaii flights. Those will make you a fortune and they are hardly ever used by FFs to cash in miles. LOL

No, the WSJ is not nearly as funny as you. Chasing at the hope that some sucker is going to bail U out and put in billions of dollars to buy up assets of other companies. Then given the way it operates and the environment in which it is in, surrounded by LCC's. Allow it to continue to lose money. Not going to happen.

USA320Pilot comments: I believe the merger will be announced within the next couple of days and third party investor(s) will step up, create a holding company, then buy both US Airways & America West who will merge, and you will be stunned at the amount of new equity that will come to the combined business entity.

Regards,

USA320Pilot

 

[Bear96]

Bet we'll be even more stunned at how fast the combined entity burns through it.

 

[funguy2]

Wow... this will be the third time in a row USA320Pilot and I agree on something...

While US Airways has it problems, as does, America West... I can see how one might sell a US-HP merger to potential investors... A nationwide LCC to rival industry leader and perennial profiting Southwest. That is the potential... Everyone here is focusing on the obstacles... The investment community will focus on the risk/reward ratio... $0.5billion to get something which could be worth $12bil in a few years if those obstacles are overcome... Even if you are "half as successful" as LUV, you create a company worth $6Bil. Seems to me like a bet someone might be willing to make.

I am not sure I will be "stunned," but I can see how the powers that be may be able to sell this merger to investors... And it would never have been possible for an independent US Airways...

Note: I edited this to reflect today's LUV market cap, which is just under $12Bil.

 

[RowUnderDCA]

I wonder if we'll be stunned at the restructuring costs and perhaps devestments. Is DCA sacred? Is Europe sacred? Is the Shuttle sacred? Obviously, the LGA terminal (whatever occupancy rights U has) isn't sacred. Obviously MDA and the wholly owneds aren't secure in the U/HP fold.

We'll see. Stunned might be the word.

 

[funguy2]

Row... The "US Airways Terminal" may not be sacred... But I beleive those slots are US Airways' (and maybe Republic's... depending on what happens). If US Airways does not occupy the "US Airways Terminal"... so what? As long as it holds the slots, I would think the airport would be "forced" to accomodate them. ("US Airways Terminal" in quotes because they actually lease it from CO... Eastern Airlines who actually built it).

I suspect nothing is "sacred". That is part of US Airways' historical problem... retaining operations as "sacred" even in failure... If the merger doesn't address these items, it is doomed to failure.

 

[us0004us]

"USA320Pilot comments: I believe the merger will be announced within the next couple of days and third party investor(s) will step up, create a holding company, then buy both US Airways & America West who will merge, and you will be stunned at the amount of new equity that will come to the combined business entity."


ok....what did you hear?...how much?

$500 million-$900million?

$900million-$1.1billion?

$1.1billion-$2.4 trillion quillion zillion?



wonder if any connection with the $55 million offered to management retention?

 

[the turtle]

the only winner I see in any of this is Rebublic

 

[USA320Pilot]

US Airways has scheduled a hearing in bankruptcy court on the management "retention bonus" motion for May 19, which is two days after the America West shareholders meeting. The timing of the hearing seems to coincide with the pending merger, which should be announced on or before March 15 and could be addressed by the America West shareholders on Tuesday, May 17.

Regards,

USA320Pilot

 

[us0004us]

looks like usairways management is out the door if this merger takes place.

...

sure would like to be stunned by the amount of equity involved in the proposed deal!

just give a round figure...

 

[Schwanker]

US Airways has scheduled a hearing in bankruptcy court on the management "retention bonus" motion for May 19, which is two days after the America West shareholders meeting. The timing of the hearing seems to coincide with the pending merger, which should be announced on or before March 15 and could be addressed by the America West shareholders on Tuesday, May 17.

Regards,

USA320Pilot

[post="268141"][/post]​

March 15th has came and gone. No announcement yet. :blink:

 

[markkus757]

Look, just because there are several potential investors on the end product, doesn't mean they would be willing to pull the trigger. Boeing has refundable deposits for the 787 from over 60 airlines. It does not mean all sixty are going to buy the damn thing. If I'm looking at this as an investor in this current market, I'd want to make about 30% on my money. If the new US stock started at $1.00 on the market, you could fool people for about 6 months that the company was great and start unloading it and take profits. I know all about the SEC rules A320pilot, don't waste the carpal tunnel on me.

 

[wnbubbleboy]

Bubbleboy...  Be very careful making statements like that.  Many a mighty have fallen and many more will fall in the future.  Don't think just because you have a "LUV" sign on your a/c eliminates your company from the same fate that has befallen others.

[post="267862"][/post]​

Ok, just a second, let put my beer down so's I can type with both my fingers.

I understand all to well, WN is the second airline I have worked for. What I learned from the 1st layoff is the sun comes up and life goes on.

U has stuck it to PIT too many times if the County has a chance to revive the airport why not WN.

I started with WN in BWI in 94 shortly after U lowered flights to the the airport. Several Shops in "C" pier were getting ready to close at the airport. Now look at BWI they are opening "A" in the next couple of weeks with growth by WN and in partnership with BWI.

No matter how I feel about the Stalinist regime of the people who run the day to day operations at BWI. They have been sucessful in spite of themselves.

With a successful carrier flying in to PIT displaced airline employees can find another home given time. Think of us like McDonald's setting up on the corner if we are successful Wendy's and Burger King's pop up close by. If we are making money at PIT Other carriers will come or increase their operation. I am using BWI success as the template for PIT.

With all this being said there enough room for everyone if you can compete.

Finally, if for some reason WN goes out of business next year so be it. I do the best job I can do at my position and I can say I have been delt with honestly and fairly the whole time I have been here. It would have been a great ride and great memories.

Ok, where's my beer.

 

[sfb]

While US Airways has it problems, as does, America West... I can see how one might sell a US-HP merger to potential investors... A nationwide LCC to rival industry leader and perennial profiting Southwest. That is the potential... Everyone here is focusing on the obstacles... The investment community will focus on the risk/reward ratio... $0.5billion to get something which could be worth $12bil in a few years if those obstacles are overcome... Even if you are "half as successful" as LUV, you create a company worth $6Bil. Seems to me like a bet someone might be willing to make.

While I suppose the strategy is to "sell" the merger this way, I am still unable to comprehend how anyone with more than a few functioning brain cells could believe it is a good investment. The concept of instantly creating a nationwide LCC similar in scope to SWA certainly sounds appealing, but the reality doesn't match the concept being pitched. Southwest has a single fleet type. The combined HP/US would have at least four type families (not including the regionals!), and the Airbus narrowbody fleets have different engine types. Integrating the two workforces may well make the AMR purchase of TWA look amicable. Standardizing policies, products, procedures, etc. between the two airlines will be expensive.

Southwest has a market cap of $12 billion because (1) they have been profitable for the last 32 years, (2) they possess assets worth a bit over $13 billion with roughly $4.8 billion in liabilities, (3) management has shown that they are able to control costs while maintaining good employee relations, and (4) their business model has been proven to work in good times and bad.

America West has made a profit in one year of the past five. US Airways' only profit in the last five years came as a result of discharging its liabilities in the first bankruptcy. The combined entity would still owe roughly a billion dollars on ATSB-guaranteed loans. What specifically would be "different" about a combined HP/US that would allow it to make a profit? About the only things they have in common are some of the lowest pay rates among the network carriers -- and neither is profitable! America West's first quarter profit came largely on mark-to-market gains on fuel hedges for future quarters.

It would take a heck of a lot more than a whizzy PowerPoint presentation to convince me that this dog would hunt. For some reason, I think a lot of potential investors tend to ignore how deftly airline labor unions tend to throw a monkey wrench into the integration machine.

I am not sure I will be "stunned," but I can see how the powers that be may be able to sell this merger to investors... And it would never have been possible for an independent US Airways...

I personally am stunned that any money manager would be dumb enough to throw any appreciable sum of money at this merger. I can easily understand why AWAC and Republic put money into US Airways; AWAC needed an exit strategy and bargaining chip with UAL, while Republic stood to gain the MDA business and a slew of slots (and their commitment to the reorganization plan was nebulous at best). GE's motivation is obvious, but it is interesting to me that GE is unwilling to directly risk any of its own funds so far. I suppose Bronner could try to save face, since the value of RSA's investment in the first reorganization was basically wiped out as a result of the second bankruptcy.

I still do not see, however, how combining a bankrupt non-LCC with a struggling sort-of-LCC creates this "nationwide LCC" to rival Southwest. It just does not add up, even if you drop half a billion into this hare-brained scheme.

 

[funguy2]

sfb - can't disagree with you at all... All I was pointing out was the way you, if you are HP and US, try to package this deal to potential investors (in my opinion). I think everyone on this board is well aware of all of the problems, obstacles, challenges, etc that this proposed merger would face. I think what folks fail to see is why the powers that be are pushing for it anyway. That is what I was trying to address.

 

[Finish or Ignore]

I certainly am not a financial person but in todays times 500 mil is nothing. It is a vast sum of money to me but to many entities it is nothing. Bill Gates and Warren would spend that much on a house. So far we have lined up 100 mil from a commuter outfit. And if we beg enough we might find someone to put up the 500 mil for the merger. There are billions and billions of investment dollars out there, in my view they are not fighting for US.