Southwest, Aa Not Worried About A New Us Airways

[USA320Pilot]

Southwest, AA not worried about a new US Airways

"And what about the nation's largest overall carrier, American? The Morning News writes that since the new US Airways will have hubs located only on the coasts, its route network may be "spread too wide to affect competitors such as American." Still, AA may be somewhat vulnerable in certain areas."

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Regards,

USA320Pilot

 

[Light Years]

My gosh, thier flight attendants sure are!

 

[FWAAA]

From the article:

Still, AA may be somewhat vulnerable in certain areas. For example, US Airways has recently developed something of a mini-hub at Fort Lauderdale, which is just up Interstate 95 from AA's Latin American gateway at Miami International. "American has really owned that region, and now they're facing more competition," says Sbarra.

I thought the "mini-hub" at FLL had already been downsized; didn't that happen shortly after it was announced?

 

[aafsc]

From the article:
I thought the "mini-hub" at FLL had already been downsized; didn't that happen shortly after it was announced?

[post="273424"][/post]​

Yes, I beleive they already cut SAL, PTY, and one or 2 others.

 

[aafsc]

My experience in business has been when a competitor goes public with a "We're not worried" statement exactly the opposite is true. AWA has demonstrated it's ability to compete in the cut throat west coast market and offer a superior product. If AWA and their culture becomes the dominate culture at the new US Airways, SWA will be in a run for its money.

If Star Alliance is part of the equation then SWA is in a dogfight. so is AA.

NOT WORRIED???? BULL FECES!!!!

[post="273430"][/post]​

If SWA or AA was really "worried" don't you think that one of them could submit a bid for USAirways' assets?

 

[USA320Pilot]

PineyBob:

The financial community must have seen something they like in the US Airways - America West business plan or the combined business entity would not have obtained commitments for $1.5 billion in liquidity.

Regards,

USA320Pilot

 

[insp89]

If SWA or AA was really "worried" don't you think that one of them could submit a bid for USAirways' assets?

[post="273432"][/post]​

Don't think SWA or AA are willing to submit a bid that tops America West's,

Since it will require these airlines to bid on Usairways as a whole, Not just certain assets...

 

[aafsc]

Don't think SWA or AA are willing to submit a bid that tops America West's,

Since it will require these airlines to bid on Usairways as a whole, Not just certain assets...

[post="273435"][/post]​

But if the creditors got more money by SW or AA offereing more for pieces, then would not they want that? Isn't the goal of bankruptcy to get the most money it can for it's creditors? I agree that no one else will take USAir whole, especially AA after the TW disaster. But say if SW bid on PHL and CLT and AA bid on the shuttle and DCA, LGA slots, and a third airline bid on PIT. And the total of these three bids are higher than what HP has offered, would not the creditor's want the latter offer? Although someone else can submit a bid, I don't think anyone will and HP will end up with US.

 

[KCFlyer]

If SWA or AA was really "worried" don't you think that one of them could submit a bid for USAirways' assets?

[post="273432"][/post]​

No, they both will be content to see the merged airline fail on it's own.

 

[insp89]

No, they both will be content to see the merged airline fail on it's own.

[post="273439"][/post]​

Time will Tell,

But, Considering all the naysayers [ stock holders, employees, etc...from competing airlines] that post their self-serving drivel on here lately,

Seems to lead me to believe that deep down they actually believe the opposite.

 

[SpinDoc]

Time will Tell,

But, Considering all the naysayers [ stock holders, employees, etc...from competing airlines] that post their self-serving drivel on here lately,

Seems to lead me to believe that deep down they actually believe the opposite.

[post="273446"][/post]​

Let's put the naysayers to rest once and
for all.

Fact: Investors have one goal and that is
to earn a return on ther investment. Agreed?

Result: Several major investors have decided
to financially back the plan that has been
offered by HP/US.

Fact: Lawyers are for the most part smart
people who can read and write contracts
that achieve a desired result.

Result: There are many lines of small print
in the merger agreement that satisfy the
lawyers and the investors enough that
they are willing to invest in the deal.

Fact: US Airways owes a large sum of
money to numerous creditors.

Result: The deal is structured to assure
the creditors will eventually see some
return on their money. As far in the hole
as US currently is, most creditors will
gamble on the future of US/HP rather
than forcing asset liquidation and
receiving next to nothing.

Opinion: If the horse was dead, none of
the investors, creditors, or lawyers would
be willing to put in the time or effort needed
to close the deal. In other words, there is
a lot more to this deal than the average
layman knows or wants to know, and
the plan must be extremely attractive.

If US was the entity that will be carrying
the deal forward, I would have serious
doubts about the viability of the plan. As
we have all seen, CCY projections have
been poor at best over the past few years;
however, HP will be in control of the new
company and their track record is much
better. I am positive the deal will be
successful long-term.

 

[ClueByFour]

If Star Alliance is part of the equation then SWA is in a dogfight. so is AA.

[post="273430"][/post]​

I don't think LUV really cares about Star, frankly. They don't fly internationally, and they face the US/UA combination today and hand them their head.

AA might be, except for the fact that "project barbell" can't provide decent service to anything west of ORD and east of PHX. OTOH, hubs in DFW and ORD certainly help in this regard.

 

[insp89]

I don't think LUV really cares about Star, frankly. They don't fly internationally, and they face the US/UA combination today and hand them their head.

AA might be, except for the fact that "project barbell" can't provide decent service to anything west of ORD and east of PHX. OTOH, hubs in DFW and ORD certainly help in this regard.

[post="273450"][/post]​

The only reason LUV is handing any airline their "head" is due to their fuel hedging.

Which, BTW is eroding as time passes by.

 

[USA320Pilot]

In a research note today, Lehman Brothers airline analyst Gary Chase made the following points:

 Southwest has the resources, brand, network, and cost structure to capitalize on material reduction in industry capacity, but capital access of weaker carriers may limit those opportunities.

 Growth opportunities remain, but rapid expansion of returns hinges on industry rationalization or lower fuel costs.

 Meantime, Southwest needs to focus on cost, particularly labor costs, which have escalated significantly in recent years.

 As expected, Philadelphia markets underperfoming system averages early on amid aggressive US Airways response. Impact on US Airways both obvious and negative.

USA320Pilot comments: In my opinion, US Airways and America West will expand into the Midwest with point-to-point service and could create a focus city. The focus city could be determined by what happens at United, which could create an ORD or DEN option.

If United is successful in its restructuring and does not shed domestic assets then I believe STL or DEN could be an option for the new buisness enterprise, with Frontier a potential M&A target.

Regards,

USA320Pilot

 

[ClueByFour]

The only reason LUV is handing any airline their "head" is due to their fuel hedging.

Which, BTW is eroding as time passes by.

[post="273453"][/post]​

Really? The hedge is not $26 forever, but they still have hedges that beat the pants off what other airlines are paying. I suggest you take a look at their annual report.

Even absent the hedges, they are still ahead of everyone but B6 on CASM, and will be several cents ahead of the combined HP/US (due to the lion's share of the employees and non-labor costs coming on the US side).

Also, their labor costs on a per CASM basis have decreased YOY, IIRC.

As for PHL, it says tons that it's the fastest growing city they've ever had, but analysts consider it "underperforming." I wonder how much of that statement was referring to the operational side of the house. US still can't hang with LUV with the fares LUV charges out of PHL.