Merger Mania Thread

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ChockJockey said:
Even more difficult than finding a merger/acquisition partner/victim of any size or color is getting the pilots to not only solve their outstanding seniority issues but formulate how another group of pilots can be integrated in addition. Even if some spectacular opportunity came along (someone else's BK or whatever) how does US overcome the leprosy that is its pilot dispute? Sure would be a shame to miss out on some real growth because the flyboys are having too much fun shoveling money at lawyers and hissy fitting on the internet...

Or is there any conceivable way that an m/a could somehow be used as an opportunity to end the deadlock?
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Well if you operate the acquisition as a subsidiary like PSA, then you delay any pilot issues until the USAPA "thing" works itself out. With the way things are in Pilotville, DP will be on Social Security when it's finally settled.

I've thought about this and it would seem to me that US could do a work around as long as they are the controlling management. IMO, US would have to set itself up as a Holding Company which they sort of do now. US Airways Group own US Airways, PI & PSA. Only US is having a PPM (Pilot Pissing Match), so if AA goes BK and US Airways Group is the acquiring company, then AA pilots don't get integrated and they make more money which would likely continue even after a BK buzz cut. Second thing US Airways Group does is set up another corporation that would allow them to integrate IT departments, Customer Service, Ground support & Mtc. They could call it US Airways Group Services and all non Inflight employees are employed by this entity. It would be a captive outsourcing company.

Now if DP is smart, the haircut the AA pilots get would bring them down to a contract that US Group would extend to US once the PPM is over. Then some number of years later your integrate the carriers. You fund this merger by selling off American Eagle as part of a prepackaged BK. just a thought.

@ Jester, you recall correctly
 
ChockJockey said:
Even more difficult than finding a merger/acquisition partner/victim of any size or color is getting the pilots to not only solve their outstanding seniority issues but formulate how another group of pilots can be integrated in addition. Even if some spectacular opportunity came along (someone else's BK or whatever) how does US overcome the leprosy that is its pilot dispute? Sure would be a shame to miss out on some real growth because the flyboys are having too much fun shoveling money at lawyers and hissy fitting on the internet...

Or is there any conceivable way that an m/a could somehow be used as an opportunity to end the deadlock?
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Sure. By merging with a carrier like AA, just by sheer numbers APA would probably be the surviving union and I would bet AA's pilots (as hard core as they may be) would be more accepting of a mediator's decision because of 1) their senority would probably give them most of the top spots anyway even in a "slotted" decision, and 2) they are probably a little more "cognisant" about merging issues since the TWA stapling.

A merger with F9 would result in three pilot groups throwing *** at each other. I would think the F9 pilots would be more sympathetic to the West pilots because of their lower senority, but who knows?

The bigger issue with the US pilots is the change of control stipulation. US (even if it were in name only) would have to be the aquiring carrier. Unless they agreed to waive it (which I doubt would happen).

I would say a merger with AA will never happen until/unless AA is in Chp 11. Their employees just make too much on a total comp perspective (pay, work rules, pensions, etc.) compared to US, DL, and UA.
 
SparrowHawk said:
Sooooo, now we have Brian Bedford making noise that Frontier might not be around all that long and is taking steps to have it succeed or fail as a stand alone carrier separate from the Regional contract carrier business. A sale/merger of the Frontier portion of Republic might make sense for US.
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The problem with US acquiring F9 is that F9 is bleeding red ink. Last quarter the Republic contract operations were profitable to the tune of something like $17 million but the "branded" operation as Republic calls the F9 operation lost $55 million. A while back, of the three carriers that served DEN-PHX-DEN F9 got the lowest yield - behind both UA and US.

Jim
 
BoeingBoy said:
The problem with US acquiring F9 is that F9 is bleeding red ink. Last quarter the Republic contract operations were profitable to the tune of something like $17 million but the "branded" operation as Republic calls the F9 operation lost $55 million. A while back, of the three carriers that served DEN-PHX-DEN F9 got the lowest yield - behind both UA and US.

Jim
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Reading the F9 thread on airlines.net, there seems to be a general conensus (if that means anything), that MKE, not DEN, is what is draining profits. Looking at tomorrow's flights out of MKE, 90% of the flights are on E70's or smaller. I just can't imagine that is very cost effective with the price of oil what it currently is. Regional airlines certainly have a place in every airline, but that is ALL MKE has it would seem.
 
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BoeingBoy said:
The problem with US acquiring F9 is that F9 is bleeding red ink. Last quarter the Republic contract operations were profitable to the tune of something like $17 million but the "branded" operation as Republic calls the F9 operation lost $55 million. A while back, of the three carriers that served DEN-PHX-DEN F9 got the lowest yield - behind both UA and US.

Jim
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The article from Aviation Week mentioned this. IMO Frontier can't survive unless the situation with the yields in DEN change. That being the case, all US has to do is wait like a big old dessert vulture, pick up the carrier in BK, draw down DEN and move forward. I have to believe that given the working relationship between Parker & Bedford they should be able to do a prepackaged BK that leaves the E-170's, 190's with Republic and fly them as US Express
 
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hp-csr-phx said:
Denver 4th Qtr Fare Data

Interesting info on Denver's yields. Also of note, WN has taken nearly 50% of the local PHX-DEN traffic.
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Thank you for that interesting bit of information. It's pretty easy to see why Frontier is struggling. It's there primary hub and they can't hold a revenue premium over WN. That can't continue forever.

If I were Doug, I'd give Mr Bedford a call
 
SparrowHawk said:
Thank you for that interesting bit of information. It's pretty easy to see why Frontier is struggling. It's there primary hub and they can't hold a revenue premium over WN. That can't continue forever.

If I were Doug, I'd give Mr Bedford a call
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Let's just merge with this airline... I don't know who they are, but they sure look like they're having fun!
http://www.youtube.com/watch?v=4m-o6xfiqnU
By the way.... who's flying the plane?

Or make him VP of Cultural Intergration.

So Two-Steps Jester.
 
hp-csr-phx said:
Denver 4th Qtr Fare Data

Interesting info on Denver's yields. Also of note, WN has taken nearly 50% of the local PHX-DEN traffic.
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DEN is a classic example of the survival of the fittest. WN moved into the market as part of its need to be in key markets. DEN has been their fastest growing station because they encountered UA which believed it was in their best longterm interest not to be price competitive.
UA now has the smallest market share of any network airline in its own hub. They have lost pricing power and their only answer at this point is to continue shrinking in what they think will leave them w/ a following of business passengers.
Anyone wanna predict when WN will decide they have "enough" market share in DEN?
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F9's entire network is a basketcase of intense competition. MKE is indeed part of the problem but they have no future either. They have been and are the weakest carrier in DEN and their financial results - both at the market and financial report level - show it.
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F9's chances of survival are very slim.
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Bedford's desire to move from the relatively well protected arena of contract flying to competing with network airlines will likely end up not much different from ExpressJet and others.....

know what you do well, ensure you are in a position to fight off the competition that will attempt to get a piece of what you do well, and then stay away from everything else that doesn't matter.
 
WN all ready tried that, didnt work, they dont need F9, they dont fly 737s and they can just pick up pieces as needed, they have nothing to offer anyone right now and are bleeding cash.
 
WN gave F9 an opportunity to sell out.... they foolishly turned the offer down.... and, yes, WN won't stop until F9 is gone. In the process they'll take a chunk of UA's DEN share because UA can't afford to bleed ink while WN takes out F9. From WN's perspective, this might turn out better for them than if they bought F9.
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F9 didn't understand that you need to know what battles you are getting into and make sure you can win them if you decide to stick it out.
 
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WorldTraveler said:
WN gave F9 an opportunity to sell out.... they foolishly turned the offer down.... and, yes, WN won't stop until F9 is gone. In the process they'll take a chunk of UA's DEN share because UA can't afford to bleed ink while WN takes out F9. From WN's perspective, this might turn out better for them than if they bought F9.
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F9 didn't understand that you need to know what battles you are getting into and make sure you can win them if you decide to stick it out.
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Perfect reason for US to pick them up at a fire sale price as part of F9 BKII
 
WT,

Your wrong once again, WN broke off the transaction as the two pilot groups could not settle the seniority issue before WN completed its offer for F9.

Good Article
 
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