North by Northwest
Veteran
U + Ual = Event horizon...
Us Airways And United Airlines Merger Attempt
- Thread starter deltawatch
- Start date
Good lord, if it involves U or UA it is automatically a downer, but if it is NW then its the best thing that has ever happened to the airline industry. I appreciate loyalty to employers, its rare these days for good reason, but this is just ridiculous.
A merger between the two doesn't mean that both would collapse, nor does it mean they would both suceed. It would depend on how well the merger is implemented, how much money can be saved and how much more revenue can be generated. If done properly UA/U would a very competitive airline, if screwed up it would be Ch.7 for the combined airlines and their 80-90,000 combined employees.
A merger between the two doesn't mean that both would collapse, nor does it mean they would both suceed. It would depend on how well the merger is implemented, how much money can be saved and how much more revenue can be generated. If done properly UA/U would a very competitive airline, if screwed up it would be Ch.7 for the combined airlines and their 80-90,000 combined employees.
EyeInTheSky
Veteran
We're frickin' tired of mergers over here. We're too old to put up with another one (aka crap). The whole U/UAL merger talk just blows.
EyeInTheSky said:
Feb4 Bloomberg --- Lima airport partners , a group by Frankfurt AG, is investing $1.2 billion in runways, terminals, and security as it seeks to turn Peru's capital into a regional hub serving 7 million passengers a year by 2008. The group , which includes SanFrancisco based Betchel group Inc, and Singapore Changi Airport Enterprise Pte, Ltd, last week opened seven jetways and a 5,000 square meter concourse, to complete the $140 million first phase. The group is now talking with United Airlines Inc, and USAirways Inc, to make Lima their hub for the region. " US Airlines are competing with low cost carriers on domestic flights and need to expand abroad," Daly said in an interview at his office overlooking the runway last month.
USA320Pilot
Veteran
- May 18, 2003
- 8,175
- 1,539
If a deal happens, US & UA will not decide who is the surviving business entity. It will be private equity or the venture capitalist who funds the transaction that will decide.
If US is the survivor, do not be surprised if the US management team survives and the name is changed to United Airlines for market identity, a la Valujet and AirTran.
Recently two more analysts discussed a potential corporate combination between the two companies. According to the Pittsburgh Post-Gazette:
United Airlines, the industry's No. 2 carrier has been mired in bankruptcy the last two years but CEO Glenn Tilton got people talking on Feb. 17 when he said industry consolidation was inevitable and it would be best for United to participate in a merger. "Tilton put a for-sale sign up," said local airline analyst Bill Lauer.
United and US Airways tried to join operations in 2000, but antitrust regulators opposed the deal, leading to its collapse just a month before 9/11. A union between the two still "is the most compelling" of potential combinations, but given their weakened state, the pair may need a third-party investor to act as deal maker, Lauer said. One possibility, he said, was Texas Pacific Group, the San Francisco investment firm that bid for US Airways in 2003 but lost to an Alabama state pension fund.
Justification for a merger would not be increased market reach, as was the case made by the two carriers in 2000, but the opportunity to lower costs further. Such a deal would allow the combined company to compete more effectively against superefficient Southwest Airlines or JetBlue Airways, the only airlines to post consistent profits recently.
"I think developments along this line are likely," said Kevin Mitchell of advocacy group Business Travel Coalition. "I think United is a good candidate."
See Story
Meanwhile, as I said before, J.P. Morgan has been contacted to be the IB and I understand from a headhunter that Gordon Bethune would be interested in being the combined business entity CEO.
Regards,
USA320Pilot
P.S. Maybe Air Wisconsin knows something and picked the surviving business enterprise.
If US is the survivor, do not be surprised if the US management team survives and the name is changed to United Airlines for market identity, a la Valujet and AirTran.
Recently two more analysts discussed a potential corporate combination between the two companies. According to the Pittsburgh Post-Gazette:
United Airlines, the industry's No. 2 carrier has been mired in bankruptcy the last two years but CEO Glenn Tilton got people talking on Feb. 17 when he said industry consolidation was inevitable and it would be best for United to participate in a merger. "Tilton put a for-sale sign up," said local airline analyst Bill Lauer.
United and US Airways tried to join operations in 2000, but antitrust regulators opposed the deal, leading to its collapse just a month before 9/11. A union between the two still "is the most compelling" of potential combinations, but given their weakened state, the pair may need a third-party investor to act as deal maker, Lauer said. One possibility, he said, was Texas Pacific Group, the San Francisco investment firm that bid for US Airways in 2003 but lost to an Alabama state pension fund.
Justification for a merger would not be increased market reach, as was the case made by the two carriers in 2000, but the opportunity to lower costs further. Such a deal would allow the combined company to compete more effectively against superefficient Southwest Airlines or JetBlue Airways, the only airlines to post consistent profits recently.
"I think developments along this line are likely," said Kevin Mitchell of advocacy group Business Travel Coalition. "I think United is a good candidate."
See Story
Meanwhile, as I said before, J.P. Morgan has been contacted to be the IB and I understand from a headhunter that Gordon Bethune would be interested in being the combined business entity CEO.
Regards,
USA320Pilot
P.S. Maybe Air Wisconsin knows something and picked the surviving business enterprise.
the pair may need a third-party investor to act as deal maker, Lauer said. One possibility, he said, was Texas Pacific Group, the San Francisco investment firm that bid for US Airways in 2003 but lost to an Alabama state pension fund.
Meanwhile, as I said before, J.P. Morgan has been contacted to be the IB and I understand from a headhunter that Gordon Bethune would be interested in being the combined business entity CEO.
USA320Pilot
Could you imagine Texas Pacific Group bringing back Dave Siegel as C.E.O. ! After all. they seem to be keeping him content with Gate Gourmet .
Meanwhile, as I said before, J.P. Morgan has been contacted to be the IB and I understand from a headhunter that Gordon Bethune would be interested in being the combined business entity CEO.
USA320Pilot
Could you imagine Texas Pacific Group bringing back Dave Siegel as C.E.O. ! After all. they seem to be keeping him content with Gate Gourmet .
Finish or Ignore
Senior
- Aug 30, 2002
- 342
- 1
deltawatch said:
Fredericks was also quoted as saying : "That was one of the most informative jumpseat rides I have ever been on."
A320 Driver
Veteran
- Aug 24, 2002
- 3,358
- 2,319
Just what we need. Another bloodbath at the hands of arbitrators. And "Cool Hand Al" would probably still be VP of Ops.
The joy of it all. :down:
A320 Driver
The joy of it all. :down:
A320 Driver
OP
deltawatch
Veteran
- Aug 20, 2002
- 887
- 0
- Thread Starter
- Thread starter
- #28
United Airlines wants to buy rivals
Once it's out of bankruptcy
Highlights from Dallas Morning News Story
Bankrupt for two years, United Airlines Inc. has a new role in mind if it can reorganize: industry consolidator.
Look for his carrier to act, he said. (Tilton)
"For the industry to get to a position where it can genuinely make some progress through the current level of disfunctionality, there need to be fewer network legacy carriers," he said at the J.P. Morgan Airline Conference.
United, based in Elk Grove Village, Ill., lost $1.6 billion in 2004. But it's primed to be an acquirer because it has the best assets and will have used its bankruptcy to strengthen its finances for mergers, Mr. Tilton said.
"The perception of what's possible in the industry from two years ago has changed," he said.
"Two years ago ... you would have not thought possible what we have already done."
Union concerns
The bigger problem has been blending labor unions together, which causes fierce seniority wars and savages morale.
With United poised to terminate all its pension plans, unions are becoming "more and more aware of the realities" of the industry's dire economics, Mr. Tilton said.
Analysts agree unions have lost their ability to dictate wages and working conditions.
"We think unions must acknowledge that there aren't any more golden eggs to squeeze out of the airlines," said Ray Neidl of Calyon Securities in a recent research report.
The last obstacle, integrating different computer systems, facilities and aircraft fleets, "is just work," said Mr. Tilton, whose background is in the oil industry.
"I think there are synergies to be had."
With six large hub carriers fighting fast-growing low-cost competitors, the industry will remain drenched in overcapacity for years to come with no clear way to get planes out of the sky.
The largest carriers are expected to lose more than $1 billion this year despite record demand for air travel.
Even top dog Southwest Airlines Co. has felt the pain of too many seats.
Its average fares fell 5 percent in January compared with last year, chief financial officer Laura Wright said at the conference.
Southwest's rivals will add an average of 10 percent more capacity on competitive routes this year, she said.
"There's just a tremendous amount of seats in the market," she said.
That's not stopping Southwest from increasing its schedule by 10 percent in 2005 compared with 2004. It's increasing its fleet by 29 new planes.
IT'S ALL UP IN THE AIR
Who might United Airlines might want to acquire?
US Airways: Got left at the altar with United in 2001; networks fit well together
Delta Air Lines: Probably too big to pass antitrust muster but would pose the fewest union hurdles.
Northwest Airlines: Stubbornly independent and has Asian routes that overlap a lot with United's. A bad match for airport hubs.
Continental Airlines: Great brand and strong hubs, but weakening balance sheet may force some tough decisions.
American Airlines: As unlikely as great airline coffee.
Southwest Airlines: In United's dreams. Southwest could buy several Uniteds with its current bankroll.
Once it's out of bankruptcy
Highlights from Dallas Morning News Story
Bankrupt for two years, United Airlines Inc. has a new role in mind if it can reorganize: industry consolidator.
Look for his carrier to act, he said. (Tilton)
"For the industry to get to a position where it can genuinely make some progress through the current level of disfunctionality, there need to be fewer network legacy carriers," he said at the J.P. Morgan Airline Conference.
United, based in Elk Grove Village, Ill., lost $1.6 billion in 2004. But it's primed to be an acquirer because it has the best assets and will have used its bankruptcy to strengthen its finances for mergers, Mr. Tilton said.
"The perception of what's possible in the industry from two years ago has changed," he said.
"Two years ago ... you would have not thought possible what we have already done."
Union concerns
The bigger problem has been blending labor unions together, which causes fierce seniority wars and savages morale.
With United poised to terminate all its pension plans, unions are becoming "more and more aware of the realities" of the industry's dire economics, Mr. Tilton said.
Analysts agree unions have lost their ability to dictate wages and working conditions.
"We think unions must acknowledge that there aren't any more golden eggs to squeeze out of the airlines," said Ray Neidl of Calyon Securities in a recent research report.
The last obstacle, integrating different computer systems, facilities and aircraft fleets, "is just work," said Mr. Tilton, whose background is in the oil industry.
"I think there are synergies to be had."
With six large hub carriers fighting fast-growing low-cost competitors, the industry will remain drenched in overcapacity for years to come with no clear way to get planes out of the sky.
The largest carriers are expected to lose more than $1 billion this year despite record demand for air travel.
Even top dog Southwest Airlines Co. has felt the pain of too many seats.
Its average fares fell 5 percent in January compared with last year, chief financial officer Laura Wright said at the conference.
Southwest's rivals will add an average of 10 percent more capacity on competitive routes this year, she said.
"There's just a tremendous amount of seats in the market," she said.
That's not stopping Southwest from increasing its schedule by 10 percent in 2005 compared with 2004. It's increasing its fleet by 29 new planes.
IT'S ALL UP IN THE AIR
Who might United Airlines might want to acquire?
US Airways: Got left at the altar with United in 2001; networks fit well together
Delta Air Lines: Probably too big to pass antitrust muster but would pose the fewest union hurdles.
Northwest Airlines: Stubbornly independent and has Asian routes that overlap a lot with United's. A bad match for airport hubs.
Continental Airlines: Great brand and strong hubs, but weakening balance sheet may force some tough decisions.
American Airlines: As unlikely as great airline coffee.
Southwest Airlines: In United's dreams. Southwest could buy several Uniteds with its current bankroll.
OP
deltawatch
Veteran
- Aug 20, 2002
- 887
- 0
- Thread Starter
- Thread starter
- #30
My predictions are:
United and Usairways become United
Delta, Northwest and Continental become Delta
American takes a look at America West, they already got TWA
Leaving three major hub and spoke carriers.
United and Usairways become United
Delta, Northwest and Continental become Delta
American takes a look at America West, they already got TWA
Leaving three major hub and spoke carriers.
Similar threads
Latest posts
-
-
-
-
-
Investor looking for serious changes at Southwest- Latest: Jalsporteam
-