Leaked: US and UA in merger talks for over a month

[FutureUScapt]

At least we'll know where we'll be getting the a/c to fly to China from if this happens

DCA or IAD would have to be reduced, remember DC Air idea?

And presumably, the other airlines would argue that it should be DCA...

If this is all true, I wonder where the new airline would decide to use as is major base for TATL ops -- PHL or IAD? If it's PHL, perhaps they could satisfying the DOJ by downsizing IAD and keeping the higher yielding (from a domestic standpoint) DCA ops.

driven by the strength of US Airways' route network in the East

It's a shame US East couldn't have soldiered on by its own for a few more years; it'd be a much more lucrative takeover target

 

[robbedagain]

i remember the DC Air thing thanks for the memories 700

 

[YVINTERN]

i remember the DC Air thing thanks for the memories 700

Sorry...I'm a product of the 90's...I was in middle school playing America Worst Airline Pilot w/ the Just Say No T-Shirts...

What is DC Air?

An Mesa B1900D Operation between BWI/IAD/DCA?


*Edit to Add...

Oh SoulPlane out of DCA doesn't sound too bad...

 

[700UW]

Well it was nicknamed soul air by few because it was going to be owned by BET Founder Robert Johnson. And they were going to aquire a significant amount of US' F100s.

And AA was going to operate half of the Shuttle and US operate the other half.

At the same time, though, the all-cash offer may have hobbled the improbable dream that Robert L. Johnson would become an aviation executive. Johnson, founder, chairman, and CEO of Black Entertainment Television, was picked to acquire the D.C. assets by US Airways Chairman Steven M. Wolf last April as he negotiated the sale of his company to UAL. For $141.2 million, Johnson would buy enough takeoff and landing rights at the Washington airport to support a 222-flight-a-day airline serving 44 cities.

Never mind that Johnson, 54, has absolutely no experience running an airline. US Airways and UAL contend that by selling to Johnson, they will create a brand-new regional carrier, DC Air, and answer critics who charge that their $11.6 billion merger will cut competition. DC Air would become the only carrier in the nation owned by an African-American. And they would be handing it to a proven entrepreneur: Johnson launched the Black Entertainment Television cable channel in 1980 with just two hours of weekly programming; today, it has 60 million subscribers. And Johnson is known to dabble in various businesses, such as restaurants and web sites.

ON A STRING? Good selling points, to be sure. But from the moment the deal was proposed, DC Air drew flak from competitors, lawmakers, and consumer advocates who see it as a thinly disguised puppet of UAL. DC Air would lease its biggest planes--10 Boeing 737s--from UAL at market rates for four years. And for as long as seven years, UAL would supply the airline with United flight, maintenance, and airport personnel, market-rate fuel and insurance, and other services. DC Air passengers would even earn points on United's frequent-flier program. ''A virtual airline,'' scoffs Democratic Rep. Louise M. Slaughter, whose upstate New York district would be in DC Air's territory. Johnson did not comment.

Investors also have objected. Accusing Wolf of cronyism--Johnson is a US Airways director and was the only buyer the airlines sought out--shareholders have hit US Airways with eight lawsuits to try to force US Airways and UAL to auction off the assets. Wolf and UAL chairman and CEO James E. Goodwin say in recent interviews that the pact with Johnson bars them from talking with anyone else, so they've given Continental the cold shoulder. They also insist the deal creates new competition for everyone. But analysts suspect that UAL prefers Johnson because once stuck with high-cost crews, he would have a hard time undercutting United's fares.

So far, only Continental has made an offer, Wolf and Goodwin say. But analysts foresee a furious bidding war if the takeover is approved. There simply is no other way to get gates and landing rights at Reagan National Airport, a crucial stop along the heavily trafficked Northeast Corridor. Analysts say American Airlines and Delta Air Lines could ante in, and even some startups.

Could DC Air come out on top in an auction? Though he's had more than five months, Johnson hasn't lined up any financing. But he could soon. Viacom Inc. ( VIA.B) reportedly is in talks to buy BET Holdings II Inc., the cable channel's parent. Johnson's take if that deal closes may approach $2 billion. That could allow Johnson to up the stakes on Bethune. But it wouldn't necessarily give consumers an independent alternative to United.

 

[WCT]

US-UA merger makes more sense. Similar route structure. Huge dominance on the West coast and East coast markets. Our NE shuttle, Transatlantic flying, UA's huge Asian market.
CO-AA would be a better match, same fleet, just overlap in IAH and DFW. AA would need to beef up it's West Coast presence in LAX, or maybe SFO. I guess we shall all see very soon!

 

[LD3]

Well it was nicknamed soul air by few because it was going to be owned by BET Founder Robert Johnson. And they were going to aquire a significant amount of US' F100s.

And AA was going to operate half of the Shuttle and US operate the other half.

You see how well run the Bobcats are....

 

[700UW]

True but did you see how much he cleared when he sold BET?

 

[767jetz]

Sorry to burst everyone's bubble, but just because two airlines "talked" doesn't mean there is a pending deal. Just like DL "talked" with United before entering into a deal with NW. They hedge their bets and explore possibilities. How many times have US and UA "talked" without a deal materializing?

UA may have talked to US, but the money is on a UA/CO merger next. CO already bought back their golden share from NW. Additionally, CO and UA both put out similar press releases yesterday preparing everyone for an upcoming announcement. The groundwork for a UA/CO deal was laid last year when you guys made a takeover attempt on DL. Then they were resumed when DL and NW were talking. The UA/CO merger is in advanced stages, and even mostly has the support of both pilot groups. The only thing that would prevent it is a bidding war or if CO decides they are better of in Skyteam than Star. (Which IMO is highly unlikely.)

Here ae some more articles:

United and Continental Are Likely to Be the Next Major Airlines to Merge

Reports say Continental, United talking merger

There are many more where those came from.
Reports: Continental, United talking merger

Delta, Northwest deal may lead to United, Continental merger

 

[prechilill]

US is probably a "Plan B" for UAL should the CAL merger fall through. With the problems USAir is having with customers and employees (especially the pilots) there is plenty reason for UAL to avoid USAir if possible. Consolidation is a reality and I think the end for USAir will be pieced apart to different airlines.

 

[WCT]

US is probably a "Plan B" for UAL should the CAL merger fall through. With the problems USAir is having with customers and employees (especially the pilots) there is plenty reason for UAL to avoid USAir if possible. Consolidation is a reality and I think the end for USAir will be pieced apart to different airlines.

AND who knows? With CO going with UA, this might leave poor old US alone. With all the combined mess, believe me, a much bigger mess with all the combined synergies alone, may make US better stand alone carrier!?? You think US and HP was a nightmare, just think of the REAL lawsuits, seniority issues with the biggest airlines merging?! Maybe, a blessing in disguise!!? We shall see...

 

[FM2436]

AND who knows? With CO going with UA, this might leave poor old US alone. With all the combined mess, believe me, a much bigger mess with all the combined synergies alone, may make US better stand alone carrier!?? You think US and HP was a nightmare, just think of the REAL lawsuits, seniority issues with the biggest airlines merging?! Maybe, a blessing in disguise!!? We shall see...

I agree. Consolidation does not mean growth. I'll catch hell for saying this but I've believed what this crazy US domestic airline industry really needed was not a consildation, but a liquidation. One of the more common complaints of the industry was that there is/was to much capacity being sold at to little a profit; if at any prohit at all (Skybus). Sadly, the days of even the $300 advanced purchased R/T ticket are becoming a thing of the past. The new Delta is not going to be able to keep 900 airplanes and 75,000-80,000 employees. There will be many job losses at the new Delta. Delta may have help, not only US Airways, but the other remaining major airlines but eliminating a competator. Good luck Delta, you're going to need it!!! The next three years are going to be hell trying to merge the two labor forces into one great big happy family. Oh and by-the-way, fuel prices are going to continue to skyrocket.

 

[RowUnderDCA]

US is probably a "Plan B" for UAL should the CAL merger fall through. With the problems USAir is having with customers and employees (especially the pilots) there is plenty reason for UAL to avoid USAir if possible. Consolidation is a reality and I think the end for USAir will be pieced apart to different airlines.

I'd say more like Plan B-

But, just for fun...... I'd wonder, considering the timing of the airfield reconfiguration at PHL, if a combined UA/US could argue to the Feds (and the locals) to be allowed to continue a reasonably full-fledged operation at IAD, while reducing PHL during the time of airfield disruption, with minimal reductions at DCA, until the mid-Altlantic airport infrastructure can be sorted out. Then, with (hopefully) more efficient airport in PHL, US/UA would prefer PHL over IAD, because of the market, new facility and the ability to serve Washington from DCA.

At the end of the day, with regard to the combined route system of UA/US on the East Coast, the simplest solution conceptually is to trade in IAD for LGA/PHL/DCA/CLT, lettig Star partners focus their US operations on the IAD and providing the connections most productive for those services from IAD.

 

[sharktooth]

Here ae some more articles:

United and Continental Are Likely to Be the Next Major Airlines to Merge

<snip>

Delta, Northwest deal may lead to United, Continental merger

Every single link is an article that references the same source, Reuters.

While using search engines to suggest "credible" broad-based information, perhaps you should make certain your sources do not all lead to the same place. You are going to have to do better than that.

 

[Art at ISP]

All this speculation is interesting but it is just that--speculation.

I think US would not be plan A or B for anyone--it's more like Plan 9 from outer space...... No one with any sense of fiscal responsibility would touch US in present form unless it would be to acquire the assets and break it up. The customer and employee issues are too much of a liability for any responsible company to assume.

That said, there have been tremendous rumors going through US of a combination with UA, with DP in charge. Again the truth APPEARS to be that UA would be buying US not the other way around. Now THAT makes more sense. Why would ANYONE think of letting a team who already botched one merger run another one?

Regarding AA and CO there is more than DFW/IAH to worry about--how about EWR/JFK-one of those would have to go as well...which might not be a bad thing if you want to reduce capacity and overcrowding in the skies over New York.

I think the most likely scenario would be UA/CO with Mr. Kellner in charge, and US will be left out to hang in the wind. OR they could pick up Frontier....

Regardless, the landscape will be VERY different by the end of this year methinks.

My BEST to you all....

 

[Coffee_Tea_Or_Me]

Sorry...I'm a product of the 90's...I was in middle school playing America Worst Airline Pilot w/ the Just Say No T-Shirts...

What is DC Air?

An Mesa B1900D Operation between BWI/IAD/DCA?


*Edit to Add...

Oh SoulPlane out of DCA doesn't sound too bad...

When US and UA announced a merger in 2000, it was decided that in order to leap DOJ hurdles (which never happened), they would give F-100s and DCA slots to Robert Johnson who was starting DC Air, the first African-American owned airline. Around the same time, Midway (second version with RDU hub) went Chapter 13, and US bought the operating certificate and formed Potomac Air, the airline to later become DC Air. Potomac Air flew some Dash 8s and was based in Roanoke. When the merger fell through, Potomac Air was integrated into Piedmont. DC Air never flew . . .