UA getting cold feet on U? (fingers crossed)

[Elevation]

Something tells me UAL will be insisting on LCC doing some severe pruning before the deal goes forward.


Cheers,
Z B)

LCC is pruned already but UA needs a turn at the barber.

 

[cltrat]

I still believe talks are on permanent hold. Tomorrows meeting is not a negotiation. It is Tilton's last ditch effort to give a final offer to the increasingly frustrated and impatient Doug Parker. One that will actually get past UA's skeptical BOD. He will be playing hard ball and presenting his last "take it or leave it" offer to Parker... pre-nup and all.

I don't think either of these clowns is in position to "hard ball" anyone given the trainwrecks they both lead

 

[US1YFARE]

LCC is pruned already but UA needs a turn at the barber.

yes, and look how poorl you are still doing...where can you cut next? tick tock tick tock

at least UA has a lot of room to shed some weight to stay in the game

 

[767jetz]

Talks are over for now. As predicted Tilton met with Parker to basically say politely, "no thanks."

United/US Airways Merger Plans Suspended

"United is very near an alliance agreement with Continental Airlines Inc., said two people familiar with the situation."

Report Says Talk Ends

"Thursday night that Glenn Tilton of UAL Corp.'s United informed Doug Parker of US Airways Group Inc. at the meeting that United had decided not to continue the merger talks."

 

[nostradamus]

Talks are over for now. As predicted Tilton met with Parker to basically say politely, "no thanks."

They tried with Delta but found out below;

"Financial details were not clear. But the talks involve United being the name of the combined airlines, the headquarters staying in Chicago"

Financial details were not clear. But the talks involve United being the name of the combined airlines, the headquarters staying in Chicago click here

"That 2006 agreement, provided United almost $5.5 million in financing to assist with the build-out of office space, along with as much as $10 million in fuel tax relief, if the carrier moved its corporate headquarters downtown from suburban Elk Grove Village instead of out-of-state. In return, United promised to remain on Wacker Drive, staffed with no fewer than 325 full-time workers, for at least 10 years."

Then they tried with Continental Airlines, Continental ran out of the building.

United sold their soul to Chicago to stay alive. Any merger partner has to live with this. That is why they are going home at night, lonely.


United US Airways called off talks on the May 30 meeting.

Is United the one being asked to dance or are they the ones asking to dance in the merger talks?

325 employees times 40000 pay and benefits times 10 years, do the math. Add building expenses, plus expenses for phones and insurance and,,,,,,,,,............./////////////

 

[maddogdriver]

HOPEFULLY FOR GOOD

 

[nostradamus]

Delta to united. NO

Continental to united. NO

Who said no this time?

 

[prechilill]

This is telling....guess who's traveling where to meet Glenn....and kiss his ring!

"US Airways boss Doug Parker and United Airlines boss Glenn Tilton intend to meet tomorrow in Chicago to discuss a merger between the two carriers, according to a source familiar with the deliberations, who said US Airways is "ready and willing" to negotiate final details."

Sounds like DP knows he doesn't have many cards to play is about to fold. The only thing I hope for is that Glenn will drive a HARD bargain and UAL will be dictating the conditions, management, who get's axed (read fleet downsizing, HQ staff, etc). Sources at WHQ tell me that UAL isn't too keen on LCC after looking at their books and feels time is on UAL's side insofar as Glenn feels it'll just be a matter of time before DP and the suits in Tempe coming knocking with hat in hand. Looks like he was right.

It's all speculation but one of the things that could come out of this is a big rationalizing of the fleets. Don't get me wrong. I certainly hope it doesn't go forward. But, should it, then I think there'll be a big push to rid the carrier of ALL 737's and go to a single narrow-body fleet (A320/321). Significant savings/scheduling flexibility to be gained in this regard. The hard part will be who take's the hit?

Something tells me UAL will be insisting on LCC doing some severe pruning before the deal goes forward.


Cheers,
Z B)

I think you nailed it perfectly. Tilton saw through Doug's potemkin village and realized after looking at the books he can drive a much harder deal because USAir will be bankrupt by 2009. Eventually, in some way, UAUA will probably pick up a few pieces of USAir but whether it is a buyout or an asset purchase (probably routes and gates only without the employees or aircraft) remains to be seen. I would have to go with asset purchase from the bankruptcy judge. USAir is a mess, always has been and the employees of AWA knew things wouldn't change- we knew in May 2005 Doug merged with the Titanic. It is funny to remember all of their lush power points and predicted savings they purported a HP/US merger would bring. DAL ran from Doug, now UA. With Thursday's news I think Tilton effectively blew a hole in Doug's career. Certainly the immediate future of USAir is not good.

 

[LD3]

Both CEO's were whoring our their airlines....UA's management is no better than US's....

 

[ZMAN777]

Delta to united. NO

Continental to united. NO

Who said no this time?

UAL told LCC to go pack sand! Pressure from the unions, especially UAL ALPA, appears to have been a major concern. From what my sources at WHQ have been telling me lately this was pretty much the outcome everyone had been expecting for the past few weeks. Basically more downside than upside trying to bring on LCC with no clear advantage being seen to the major cluster over there.

YIPPEE!!!!!!!

Cheers,
Z B)

 

[hulagirl]

WSJ is reporting Tilton told Parker the deal was off for now and Tilton is pursuing a CAL alliance.
Good luck to ALL of us, I think we are all going to need it!

 

[USA320Pilot]

Speculation thick on airline merger failure

A day after meeting face-to-face in Chicago, the bosses of US Airways and United Airlines informed employees yesterday that consolidation with another airline would not occur "at this time" -- both using the same phrase in separate releases.

See Story


United left to fly on its own - Unable to conclude a merger with several potential partners, airline chief Glenn Tilton must come up with a viable operating plan

United Airlines is turning its attention inward to the painful cost cuts it will need to survive

http://www.chicagotribune.com/business/chi...0,2981634.story


UAL Pursues Continental Alliance

By SUSAN CAREY
May 31, 2008; Page A4

CHICAGO (WSJ.com) - UAL Corp. walked away from a merger with US Airways Group Inc., to pursue an alliance in which it would share some routes and marketing with Continental Airlines Inc. But contractual and regulatory obstacles could delay the potential UAL-Continental linkup until late 2009, and it isn't clear the tie-up would cut costs or boost revenue enough to overcome the surge in fuel prices choking the two airlines.

The United Airlines parent and Continental are in advanced talks about creating a close bilateral marketing alliance and bringing Continental into the Star Alliance, a global marketing group involving 20 major airlines, people familiar with the matter said. An agreement could be reached in the next few weeks, one person said.

The relationship may be impossible to implement until late next year. That is because Continental is tethered contractually to its current domestic alliance partners, Delta Air Lines Inc. and Northwest Airlines Corp., carriers that plan to merge. That means United could be left without the strong domestic partner it desires for more than a year at a time when high fuel prices, the tight credit market and a slowing economy are wreaking financial damage on the entire industry.

United, based in Chicago and the nation's No. 2 airline by traffic after AMR Corp.'s American Airlines, hoped to merge with No. 4 Continental. But in late April, Houston-based Continental rebuffed United, saying it preferred to remain independent. Continental said at the time that it would review its alliance options in light of the Delta-Northwest merger plan.

Since then, Continental has been entertaining separate alliance discussions with its current alliance partners in the SkyTeam global marketing group, with American and its partners in oneworld, as well as with United and Star.

Meanwhile, United looked at merging with US Airways, the No. 7 airline, its existing domestic marketing partner and fellow member of Star. But United got cold feet this past week, telling the Tempe, Ariz., carrier a merger is too risky. The news was imparted Thursday by Glenn Tilton, UAL's chief executive officer, at a lunch in Chicago with Doug Parker, his US Airways counterpart, said people familiar with the matter.

Despite the attractions of a merger -- the ability to cut capacity and costs and boost revenue -- United was worried about labor-contract issues that could raise expenses, change-of-control debt triggers, liquidity and other factors that could have diluted the financial benefits of a merger. One-time integration expenses also appeared daunting in a time of tight credit.

Messrs. Tilton and Parker, in separate bulletins to their employees Friday, confirmed that neither airline would pursue a merger at this time, though they both remain proponents of consolidation. Both cited high fuel prices and told workers that they are preparing new initiatives to cope.

Alliances offer carriers ways to boost revenue by sharing passengers and linking frequent-flier plans, but little opportunity to slash capacity or streamline expenses. One appeal of alliances is that they avoid the labor tensions, service disruptions, regulatory hurdles and upfront costs of mergers.

An important ingredient is code-sharing, in which one airline effectively sells seats on partners' flights as if they were its own. Such arrangements, which have become widespread in the past decade, are reviewed by the U.S. Department of Transportation. In some cases, U.S. and foreign partners seek antitrust immunity from the DOT so they can share information about capacity, schedules and fares and pool revenue on certain overseas routes.

Continental, though a member of SkyTeam, has no such antitrust immunity to operate joint-venture international flights with any partners in that marketing group. People familiar with the matter said United would apply for such immunity for overseas routes in a Continental alliance.

For now, Continental isn't free to act. Its three-way domestic code-sharing partnership with Delta and Northwest runs until 2012. That contract could end about nine months after the Delta-Northwest merger closes, said people familiar with the situation, so if the merger cleared Justice Department scrutiny by year end, the alliance could take effect in September 2009.

Regards,

USA320Pilot

 

[Fly]

Good news: We DON'T have to merge with LCC!!!!

Bad News: It's a matter of weeks before they announce huge layoffs. Fasten seatbelts. The cuts have to come from somewhere. :down: :down:

 

[767jetz]

Better to take our hits now and go it alone, even if it means some downsizing, than to tie ourselves to the mess at USAirways and destroy our airline. (IMO of course.) We will live to fight another day.

I'm not convinced that USAirways has as much time as their CEO thinks. I'm also not convinced that furloughs at UA will be massive. Historically we have been pretty good at mitigating furloughs with early outs, voluntary furloughs, leaves of absence, and surplus reduction lines.

I for one would take a surplus reduction line in a heart beat if they are offered again.

 

[jimntx]

Just curious...is a surplus reduction line a line flown by 2 pilots or f/as? At AA we call those partnership flying--each flies half the month. They are only offered during overage mitigation efforts.