United, Us Airways, and Continental?

[IberiaMAL]

Bloomberg is reporting that United has put talks with US Air on hold and focusing on Continental.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aXbKWMsGF4v8&pos=11

Everyone is reporting different stuff. in another article that I've read today is that United's Plan A is to merge with US and such.

 

[bigbusboy]

Ahh......you might want to see this update.

http://www.bloomberg.com/apps/news?pid=conewsstory&tkr=UAUA%3AUS&sid=ac2lzmAC2Fx8

It seems as though Continental is very much interested. On another note, speaking of work already completed by the two carriers, the very fact that this has been done makes the COST of a merger all that much less. Think of it. When you see Continental and UAL gates just about everywhere now aligned, in addition to the pilots of the two groups pretty well synched up, this is enormous. Basically it's much further along than anything Delta/Northwest had done.

Contrast that to what a UAL/LCC merger would require, not to mention that the combined UAL/CAL, according to a few analysts, be worth nearly $10 billion. A combined UAL/LCC outfit would be half of that.

What's more, if you combine UAL/LCC you'd have to relinquish much of what's valuable to the carriers operating independently thereby putting that many more employees on the street.

A UAL/CAL presents much less of a headache all around. And don't even get me started on the nightmare of trying to get the USAPA guys on board with their totally whacked out DOH nonsense.

Bottom line is I guess we'll see in a week or two. Right now I'm betting NOTHING happens at all. The UAL board will be in favor of a UAL/CAL merger but like two years ago, will not want anything to do with LCC. The costs are just too high to justify the risk.

Cheers,
Z B)

So the plot thickens for all of us speculators. No one anywhere outside of the four walls containing the slew of lawyers haggling over this whole thing knows truely what is being discussed. As Boeingboy said before, "sources close to the negotiations" could mean anybody with or without credentials or credibility. I always find it amusing when sources refuse to give their names because negotiations are "private." Well shoot fire, they can't be all that private if someone "close to the situation" is willing to blab. Honestly folks, these legal firms and investment bankers are sophisticated and experienced enough to keep these negotiations private, if they really wanted too.

 

[eckoa6]

Bloomberg is reporting that United has put talks with US Air on hold and focusing on Continental.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aXbKWMsGF4v8&pos=11

As stated in this article, with this news that they have shifted their focus to Continental all three airlines UA, CO, and US's stocks fell. While I think that a UA-CO tie up would produce better results with fewer integration issues, it seems that the market has indicated a preference of UA-US.

 

[robbedagain]

I believe that just may be, that UA may be saying they put US on hold may be a ploy, I think that its a possiblity they may have a merger lined up, but UA wants to deepen their alliance with CO and then bring it all shortly after the 1Q results. justmy guess. But I believe there is going to be a 3 way deal but UA and US be the marriage partners and CO to deepen their alliances with UA

 

[IberiaMAL]

As stated in this article, with this news that they have shifted their focus to Continental all three airlines UA, CO, and US's stocks fell. While I think that a UA-CO tie up would produce better results with fewer integration issues, it seems that the market has indicated a preference of UA-US.

Does that have to do with European airspace being shut down and all this Volcano biz?

 

[gaucho99]

Whatever happens in the short term, I think in the long run, you've got to consider the following:

There are three major global alliances....Star Alliance, Sky Team and One World. Within a few short years, there will only be three major global U.S. carriers, one per alliance:

American - One World
Delta - Sky Team
United - Star Alliance

US and Continental will merge somewhere into One World or Star Alliance. I don't see more than one airline per alliance and I really don't think it matters which one we end up with.

 

[SparrowHawk]

I've no crystal ball, but for the life of me I can't imagine CO or UA agreeing to a merger that puts the Frat Boys from US in charge once the merger is completed..

I also keep looking at the legacies declining market share and Ikeep thinking that US should firmulate a strategy that has them aquiring one or more of the smaller airlines and get rid of some LCC capacity. I might be all alone on an island with my thinking however I think it would be prudent for US Management to at least explore the possibility.

Why not reach out to Spirit, Virgin, Allegiant or even Republic? The worst that could happen is they laugh DP and SK out of their office.

Some or all of the above are owned in part by hedge funds and with those boys, Money Talks and BS walks. The Frat Boys come up with the right number and POOF they're sold to US.

Frankly if I were Alaska I'd go after US. Alaska knows how to operate an airline and based on my Limited experience knows how to treat customers

From a Customer Satisfaction perspective a 2 way or 3 merge with either UA and/or CO is an absolute nightmare scenario unless CO ends up being the dominant corporate culture and even then I think it's still going to end up a Cluster Fornication of the first order.

Just ponder the IT situation. UA runs Gallileo and UC/CO use SHARES, Star is moving toward Amadeus. Can you imagine the conversion to Amadeus after they band aid SHARES/Galileo together for a few years prior to making the switch? Also I think you end up with an airline with quite possibly every aircraft type flown. You have every Airbus except the 340(?), all the Boeing Irom, Every EMB and Bombardier type, Even Saab's and Beech 1900's. CO used to have some ATR's. can you even begin to imagine the mainyenance issues? Not to mention parts inventory costs.

 

[Harry Callahan]

I hear that an announcement would be made May1. Bottom line in all of this is no one here knows what's really going on & one opinion is as good as the other.

 

[ChrisUS]

Why not reach out to Spirit, Virgin, Allegiant or even Republic? The worst that could happen is they laugh DP and SK out of their office.

That's just compounding the situation we are in now with a lot of small airlines pieced together and all their corporate cultures. No real international routes either.

The unions need to stop looking out for themselves and look at the greater good. You work for US, if it goes out of business, it doesnt matter WHAT you made unless of course, you are focusing on the unemployment you'd be able to collect for awhile. We want to grow the company and make it strong. THEN you can ask for raises etc.
As for the guy ( obviously very junior) who thinks DOH is foolish ( or whatever he said) look up the definition of seniority. It is defined as status obtained as the result of a person's length of service.

 

[UALbagboy]

As stated in this article, with this news that they have shifted their focus to Continental all three airlines UA, CO, and US's stocks fell. While I think that a UA-CO tie up would produce better results with fewer integration issues, it seems that the market has indicated a preference of UA-US.

The market favors a UA/CO merger. Look at how the two airlines stocks have taken off while US has stayed the same. Like other people have said, NONE of us know what is about to happen.

 

[IberiaMAL]

Call me crazy, but I actually think United/Continental is more anti-competitive than US/United. As least United and US would create more competition (than there is now) than destroy competition (LGA, DCA, PHL)

United and Continental would control 40% of the Atlantic and 53% of the Pacific! I wonder how the other airlines compare! And if United and Continental merge, that wouldn't leave room for competition to grow like at LGA, DCA, PHL, PHX, etc.



I have heard everyone else saying US would be harder to pass because of monopoly. But I think United/Continental are the real monopoly. 53% of the Pacific and 40% of the Atlantic... US/United would create much more competition than a United/Continental merger, IMO.




http://www.nj.com/business/index.ssf/2010/04/united_halts_us_airways_talks.html

"They would control 40 percent of Atlantic passenger traffic and 53 percent across the Pacific, where United already leads. Passengers on those routes pay some of the industry’s highest fares, because U.S. airlines don’t face discount competitors."

 

[nycbusdriver]

I hear that an announcement would be made May1. Bottom line in all of this is no one here knows what's really going on & one opinion is as good as the other.

You're joking here, right? Tongue-in-cheek stuff?

How often I've heard the "big announcement" announcement for "next Monday."

Anybody want to wager that on May 2nd the entire situation will still be pure conjecture?

 

[signals]

In this ongoing bipolar soap opera, it would appear that US is the tool! But never fear because United knows, doesn't know, might know what it wants. Of course this is likely to change to further confuse all soap opera addicts.

I recall Delta-Northwest seeking their merger during the dreaded Bush administration because the administration were known 'merger friendly.' Is Obama merger friendly? Or are all these talks nothing but hot air aimed to raise stock prices? Didn't the attempted UA/HP and UA/US mergers get shot down during the Clinton adm.? In an article in Newsweek before the Presidential elections, I read that Obama is not airline friendly. He favors trains and buses.

Don't count your eggs before they hatch would be a good motto in your volatile industry! I'll wait until the pudding is ready.B)

 

[ChrisUS]

You're joking here, right? Tongue-in-cheek stuff?

How often I've heard the "big announcement" announcement for "next Monday."

Anybody want to wager that on May 2nd the entire situation will still be pure conjecture?

LOL! You are SOO right! "I heard there's a big announcement coming next week" followed by nothing.

 

[SparrowHawk]

That's just compounding the situation we are in now with a lot of small airlines pieced together and all their corporate cultures. No real international routes either.

Spirit lives and dies on the islands and South America, Mexico they are an all Airbus shop, Don't know if the power is the same. Even B^ is an Airbus/EMB shop, Frontier is an all Airbus shop. Many of these smaller airlines are Non-Union and the people can be dumped & backfilled by recalling former UP and HP employees.

Under my scenario US would become and all Airbus/EMB shop, The savings generated could be used to create a state of the art Reservations system either by implementing Amadeus or most anything not named SHARES.

By taking smaller airlines, the pain of digesting a 36 plane airline like Spirit is much easier to do than US/UA/Co trying to integrate into something that resembles a functional airline. Look what a merge with Republic does. Airbus/EMB Fleet type. Hubs in DIA and MKE. US finally gets its midwest hub.

Fast forward a few years when the A350's start coming in and you have the opps side of the small mergers done and then you expand overseas using the 350's