Has a deal been made?

[etops1]

Oh no, not the America West mindset of... "We saved your sorry butts, You are lucky to have a job, Sit down and shut up, keep your feet off the furniture, Be grateful you can lick our boots, Thank us now!"

Can we at least wait until they close the PHX crew base.

Don't be a Dick and make this into an east/ west thing ok .

 

[700UW]

How many threads do we need about a possible AA/US merger?

Who would lend US money to buy AA when six years later it even hasnt completed the US/HP merger?

 

[Keroseneuser]

Who would lend US money to buy AA when six years later it even hasnt completed the US/HP merger?

Whatever financial guru that can figure out how to make a wad of cash in the deal. Sad but true.

 

[BoeingBoy]

inflated leases on some MD80s and maybe canning some Embraer jets earlier than contracted.

I'm not sure how many, if any, of the MD-80s are leased vs mortgaged, but BK is a perfect opportunity to renegotiate the lease/mortgage payments lower that they are now. The "canning some Embraer jets" is probably precisely why the Eagle spinoff was delayed, much to the OP's chagrin. Before BK, AA couldn't do anything about all those 50 and fewer seat RJ's without penalty except spin Eagle off. Now, they can dump what they don't want.

Jim

 

[ebwgs]

I personally am taking a wait and see attitude on all of this because AA is way too early in the BK process for anyone to say with any certainty what it is or isn't going to happen. I have no idea of what's happening in this drama. There are compelling arguments on both sides. The "US brings nothing to the table" crowd seems to have no appreciation or understanding of the benefits the critical mass that US Airways does bring to the table. If you've got 3 superstars on a basketball team, yet lack the critical mass that a strong bench will bring to complement those superstars then that team isn't going to win a championship. It's the wins that ultimately determine that team's success.

It's obvious that US doesn't bring all the sexy overseas flying that CO brought to UA and NW to DL. J.J. Barea and Tyson Chandler weren't as sexy additions to the Mavericks as LeBron James and Chris Bosh were to the Heat, but demonstrated their enormous value to the Mavericks. And we know how that story played out. Al Davis said it: "Just win baby!" Successful enterprises create their value in ways unique to their model. While recognizing the fluidity of this industry and the fact that external forces can dramatically change expectations, thus far US is demonstrating an ability to aggressively manage and maximize it's revenues. It's playing the hand that it's been dealt relatively well. One can pontificate all day long about how they're doing it and on whose backs, but the bottom line is the US management team, for all of their criticism, is managing their numbers well. To paraphrase James Carville: "It's the Revenue stupid!"

The revenue that US can generate will be a factor in any carrier or alliance that partners with them. Whether people choose to accept the US revenue potential as being significant enough to warrant a serious look is their right. But it doesn't make them right.

 

[etops1]

How many threads do we need about a possible AA/US merger?

Who would lend US money to buy AA when six years later it even hasnt completed the US/HP merger?

700 , you know better than that . You know DP will get all the financing he needs . I always respect your post but this one just sounded like every other person saying " They can't even complete there own merger and they are trying to merge again . " if I had a penny for every time i heard that .. Well, you know the rest . Have a great holiday .

 

[USA320Pilot]

At last week's Crew News session Jim Courant asked Doug Parker if he would have a problem obtaining financing to aquire AMR. Doug said "no" and that lenders have already called him to offer financing. Doug indicated these lenders did so because they believed they would make a return on their investment.

 

[BoeingBoy]

Of course lenders can make a return on their "investment" (loan) barring a follow-on BK. If I could lend billions of $$$ at 5,6,7% interest I'd be calling anyone that might conceivably be interested in borrowing that much too.

Creditors don't get to pick interest on their money as a choice, however. And who gets to vote on the POR?

Jim

 

[FWAAA]

I'm not sure how many, if any, of the MD-80s are leased vs mortgaged, but BK is a perfect opportunity to renegotiate the lease/mortgage payments lower that they are now. The "canning some Embraer jets" is probably precisely why the Eagle spinoff was delayed, much to the OP's chagrin. Before BK, AA couldn't do anything about all those 50 and fewer seat RJ's without penalty except spin Eagle off. Now, they can dump what they don't want.

Jim

About half the MD-80s that remain are leased and, as you have tried to point out to some others, the owned MD-80s are collateral for debt.

AA and AMR guaranteed roughly $2.4 billion of Eagle's debt, and all of the RJ fleet is owned and mortgaged (the only leased planes are the ATRs). Problem with spinning off Eagle was that AMR was still on the hook for all that RJ debt because AA and AMR had been forced to guarantee it. IMO, bankruptcy for Eagle (it filed too) means that any cost problems (including that debt) can be washed clean now without a spinoff.

Had Eagle been spun off, eventually it would have had to file Ch 11 once AA replaced Eagle with lower-cost commuter feed, similar to the problem XJT found itself in once CO downsized its reliance on XJT. That Eagle bankruptcy was accelerated.

IMO, AMR is going to try to squeeze as much savings as it can not only from the employees but from every airplane lease or mortgage where it can reduce the costs.

 

[Beancounter]

How many threads do we need about a possible AA/US merger?

Who would lend US money to buy AA when six years later it even hasnt completed the US/HP merger?

Some of the original investors in the AWA/AAA merger did VERY well and got out long ago. I have no doubt Doug and the board could come up with billions at the drop of a hat. I believe you are correct about the lack of a combined US/HP being a problem. There are Three people on the board of creditors that represent each of the involved work groups. I have a feeling that they want nothing to do with US because of the labor strife. This is unfortunate, because a US/AA merger, while painful in the short term, could be a huge benefit to the employees of US. Appears labor may screw up a possible deal.

 

[Move2CLT]

And HP brought value to US

Sure did. Saved them from C7.

 

[Travelpro72]

Ask not what US brings to AA but what AA brings to US. One is in BK and the other is not. Everyone at US is still sore from their two trips through the courts so I sure hope ya'll buy some durable LUBE over at AA! ! ! !

 

[Airline Employee]

Does anyone besides me think that it's very strange that AA would file for BK with $4 billion in the bank? That is unheard of in the airline industry. And they were supposed to have spun off Eagle first which didn't happen. Remember that Arpey was CEO & Chairman of the BOD. And yet the BOD outvoted him to file for BK with so much money in the bank. Just think that something has already been worked out. Some hardline AA employees might not like to hear it but what other explanation is there? AA could have waited a few months or even a year before filing. I know it's too early in the process to figure out what's going on but I am just suspicious for the BK filing right now.

 

[767one]

Some of the original investors in the AWA/AAA merger did VERY well and got out long ago. I have no doubt Doug and the board could come up with billions at the drop of a hat. I believe you are correct about the lack of a combined US/HP being a problem. There are Three people on the board of creditors that represent each of the involved work groups. I have a feeling that they want nothing to do with US because of the labor strife. This is unfortunate, because a US/AA merger, while painful in the short term, could be a huge benefit to the employees of US. Appears labor may screw up a possible deal.

While labor must take some responsiblity for the current position at U I think the major issue is that management was so intent of doing the deal on the cheap that they caused many of the problems. Keeping the goups separate has given them one of the lowest paid pilot groups in the industry but has put off for many years the possible synergies of putting the two groups together quickly. I think had the company been a bit proactive in offering something more than the Kirby and perhaps even some job security provisions the two groups would have come together long before now.


Bob

 

[lynyrdskynyrd]

While labor must take some responsiblity for the current position at U I think the major issue is that management was so intent of doing the deal on the cheap that they caused many of the problems. Keeping the goups separate has given them one of the lowest paid pilot groups in the industry but has put off for many years the possible synergies of putting the two groups together quickly. I think had the company been a bit proactive in offering something more than the Kirby and perhaps even some job security provisions the two groups would have come together long before now.


Bob

There is much truth in that. The events post nic to a certain extent have overshadowed things on the west, most of us have forgotten just how much that Kirby proposal pissed us all off way back when.