cubfan02us
Member
- Sep 10, 2002
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From a USA today piece in airline news...
Federal officials have been lobbied more quietly on another sensitive topic: airline consolidation. Faced with the possibility of financial failure, US Airways has been building a case in Washington that an airline merger wouldn't be a bad thing.
"We've been very frank with regulators and legislators that consolidation is the inevitable next step," says US Airways executive Chris Chiames.
US Airways is in far worse shape than it was three years ago when Justice nixed its deal with United, citing the likelihood of higher fares and reduced competition. The airline hasn't made money since leaving bankruptcy protection last year. Its CEO and chief financial officer recently resigned, and the airline suggested in a securities filing this month that it might be headed back into Chapter 11.
In the case of US Airways, a prospective buyer could use the "failing firm" argument to win Justice's approval. That means the company being acquired can't survive on its own, and letting it disappear from the marketplace would be worse for consumers than a merger. In the only big airline acquisition in recent years, American Airlines used that defense against antitrust action when it bought TWA in 2001. TWA was entering bankruptcy court for the third time.
Gerchik, the former DOT official, says federal policymakers should recognize that the environment has changed for airlines, and that some consolidation may be unavoidable. "For the next two, three or four years, this industry will have a lot going on," he says. "Airlines are going to need a lot of support."
Contributing: Dan Reed
There is nothing new here but while all Airways employees are focused on
the third round of cost cuts,the company is also moving foward with it's "Plan B".
PIT's end as a hub is just another signal of the plan,but cost cuts are needed to
keep us alive till the merger.I'm not sure what each labor group has in place for
seniority integration,but during these upcoming talks protection for the employees
should be a high priority.
Many posters have discussed this merger scenario before and in greater
detail than I can,but if you listen you can hear the sound of inevitability.
Federal officials have been lobbied more quietly on another sensitive topic: airline consolidation. Faced with the possibility of financial failure, US Airways has been building a case in Washington that an airline merger wouldn't be a bad thing.
"We've been very frank with regulators and legislators that consolidation is the inevitable next step," says US Airways executive Chris Chiames.
US Airways is in far worse shape than it was three years ago when Justice nixed its deal with United, citing the likelihood of higher fares and reduced competition. The airline hasn't made money since leaving bankruptcy protection last year. Its CEO and chief financial officer recently resigned, and the airline suggested in a securities filing this month that it might be headed back into Chapter 11.
In the case of US Airways, a prospective buyer could use the "failing firm" argument to win Justice's approval. That means the company being acquired can't survive on its own, and letting it disappear from the marketplace would be worse for consumers than a merger. In the only big airline acquisition in recent years, American Airlines used that defense against antitrust action when it bought TWA in 2001. TWA was entering bankruptcy court for the third time.
Gerchik, the former DOT official, says federal policymakers should recognize that the environment has changed for airlines, and that some consolidation may be unavoidable. "For the next two, three or four years, this industry will have a lot going on," he says. "Airlines are going to need a lot of support."
Contributing: Dan Reed
There is nothing new here but while all Airways employees are focused on
the third round of cost cuts,the company is also moving foward with it's "Plan B".
PIT's end as a hub is just another signal of the plan,but cost cuts are needed to
keep us alive till the merger.I'm not sure what each labor group has in place for
seniority integration,but during these upcoming talks protection for the employees
should be a high priority.
Many posters have discussed this merger scenario before and in greater
detail than I can,but if you listen you can hear the sound of inevitability.