US Airways Confirms It Has Hired M&A Advisors For Possible AMR Takeover

[Maark767]

I receive The Kiplinger Letter that seems to think the odds are in favor of an US/AA merger. It points out that a Delta and AA merger would set off antitrust concerns because Delta's route overlap with AA would reduce competition. Meaning higher airfares.

AA is about to lay off 13k employees..... merging is not in the cards for our company. I know there are many articles that state it is as good as done but they dont have a clue. Because AA needs no outside cash, they control much of the decisions going forward. It's about getting thru BK then growing the good old fashion way.

 

[signals]

AA is about to lay off 13k employees..... merging is not in the cards for our company. I know there are many articles that state it is as good as done but they dont have a clue. Because AA needs no outside cash, they control much of the decisions going forward. It's about getting thru BK then growing the good old fashion way.

First, I am totally against a merger withUS because of their existing problems
But look at the big picture. Both US and AA can probably survive on their own. Unfortunately, competing is a whole different matter. DL/NW and UA/CO have created Mega airlines. US and AA can't compete against them, let alone the low cost airlines like WN and B6.

Just my 2¢!

 

[JFK Fleet Service]

Dontcha' mean low fare as it relates to WN? I seem to recall their CEO ringing the "Labor Cost" alarm not too long ago.

 

[Move2CLT]

First, I am totally against a merger withUS because of their existing problems
But look at the big picture. Both US and AA can probably survive on their own. Unfortunately, competing is a whole different matter. DL/NW and UA/CO have created Mega airlines. US and AA can't compete against them, let alone the low cost airlines like WN and B6.

Just my 2¢!

So we can survive on our own but we can't compete against anyone because we're not big nor low cost.

You're not an AA VP, are you?

And as for existing problems, you do realize you're in bankruptcy and letting go of 14K employees, right? And how much money did you lose in December?

 

[Phoenix]

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LMAO!!!!!!!!!!!

Beware the "haircut", its no laughing matter......

 

[FWAAA]

And how much money did you lose in December?

Operating loss of $3 million (excluding writedown of old airplanes). $58 million of interest expense added up to a $61 million net loss before special items and reorg expenses. Including the $725 noncash writedown and the reorg expenses, something north of $900 million.

 

[Move2CLT]

Operating loss of $3 million (excluding writedown of old airplanes). $58 million of interest expense added up to a $61 million net loss before special items and reorg expenses. Including the $725 noncash writedown and the reorg expenses, something north of $900 million.

Yes, thanks. I was hoping signals would look that up before he started pointing out problems at other airlines.

And signals, if you think $4B is a ton of money for AA, then you've got problems.

 

[AAviator]

Do you understand that you just quoted?







Nah



BTW, incase anyone was wondering why USA320PILOT wants the AA employes to get "on board" with a merger, read the last paragraph of this link..
http://www.cnbc.com/id/17099330/US_Airways_CEO_Had_Previous_Drunk_Driving_Incidents_Report

Former Delta COO believes AA will emerge as a stand alone:

http://www.bizjournals.com/atlanta/news/2012/02/06/former-delta-coo-american-will-remain.html

Video of the interview:

http://www.youtube.com/watch?v=k7kV1Q__WT8



Absolutely love Parkers comment in the first link, "We left on our own terms" LOL!! Did he mean in the back of a police car????

USA320PILOT is launching wildly speculative missives (fear grenades) about sec. 1113, how it works, and is trying to cover up just how far LCC is below, yes below the bottom of the barrel in terms of compensation.

 

[signals]

So we can survive on our own but we can't compete against anyone because we're not big nor low cost.

You're not an AA VP, are you?

And as for existing problems, you do realize you're in bankruptcy and letting go of 14K employees, right? And how much money did you lose in December?

Do you strive to be wrong, or just make an @$$ of yourself?

 

[signals]

And signals, if you think $4B is a ton of money for AA, then you've got problems.

Hey LUSer, I can't have problems if I don't work for the airlines
Next...

 

[USFlyer]

Former Delta COO believes AA will emerge as a stand alone:

"Emerge as" and "remain as" are two different things. But, again, I'm still personally rooting for a DL-US merger.

 

[BoeingBoy]

I wouldn't get your hopes up for DL-US or DL-AA. Most likely now, assuming anything is "likely" instead of a mere possibility, is an AA acquisition of US after AA emerges from bankruptcy.

Jim

 

[Move2CLT]

Do you strive to be wrong, or just make an @$$ of yourself?

You know, if you just admitted that your post contradicted itself, I'd let it go.

But no, you had to go Sparrowhawk on me.

 

[Move2CLT]

Hey LUSer, I can't have problems if I don't work for the airlines
Next...

Damn it. Another idiot.

So, if you don't work for the airline or an airline, then why are you here. You obviously have no idea of what your talking about going so far as o contradict yourself in on post. At least Sparrowhawk takes two!

Flying on SWA once a year doesn't allow you to make the points you brought up.

Please, go watch TV.

 

[Move2CLT]

I wouldn't get your hopes up for DL-US or DL-AA. Most likely now, assuming anything is "likely" instead of a mere possibility, is an AA acquisition of US after AA emerges from bankruptcy.

Jim

Exclusive: American Airlines creditors want to talk merger

By Soyoung Kim and Kyle Peterson
NEW YORK/CHICAGO (Reuters) - Some American Airlines unsecured creditors increasingly feel the bankrupt airline should explore a deal with US Airways Group or another carrier, after hearing parent company AMR Corp's plan to remain independent, people familiar with the situation said.
Members of the unsecured creditors committee -- which includes banks representing bondholders, labor, vendors and the U.S. pension protection agency -- are concerned about the third-largest U.S. carrier's prospect of staying competitive as a stand-alone airline after sitting out the latest round of mergers.

They want AMR management to explore other options that may lead to a better recovery of their claims, including a potential combination with another carrier, according to people who requested anonymity because they were not authorized to speak publicly on the matter.
US Airways has said it is considering an eventual bid for its larger rival.

While different creditors have different economic interests at stake, the sources said consensus is growing at the committee on the need to look at other alternatives.

Even labor unions, which traditionally do not like mergers because they come with job cuts, want to explore how a deal with a rival carrier would affect their members even though they may not necessarily favor it, the sources said. AMR's three largest unions -- pilots, flight attendants and ground-workers -- all have seats on the creditors committee.

For now, AMR management has the exclusive right to submit its own plan to reorganize under bankruptcy court protection, and the airline has said it wants to emerge as a stand-alone company.

But creditors could petition the bankruptcy judge to terminate that right to make way for competing plans, and the committee would ultimately also need to sign off on any reorganization plan.

There is no offer on the table currently, and it remains to be seen if any merger proposal by US Airways or anyone else will require concessions less painful to creditors than what is sought by AMR management.

But creditors' frustration in the ongoing restructuring talks and their interest in exploring alternatives could provide the opening for a potential suitor to step in.

AMR, however, has shown no interest in a merger with US Airways or anyone else.

"AMR will continue to pursue the objectives of Chapter 11 to restructure and build a new, better, more efficient and profitable airline in the best interests of all of its economic stakeholders, passengers and the public," the company told Reuters.
Industry insiders say high anti-trust hurdles make Delta an unlikely buyer for AMR. They also question how US Airways would benefit American outside of the East Coast, where US Airways has a particularly strong route network.
American already has plenty of cash, a strong domestic route network and service to Europe and Asia as well as related oneworld alliance partners in London and Tokyo. Labor troubles at US Airways dating to its 2005 merger with America West are also a red flag for heavily unionized American.

NO DIRECT TALKS

The creditors committee has not had any direct formal talks with US Airways or any other potential merger partner, the sources said.
Aside from unions, the committee includes the Pension Benefit Guaranty Corp (PBGC), the government agency that protects underfunded pension plans; Boeing Co, Hewlett Packard; and the banks acting for AMR bondholders -- Wilmington Trust Co, Bank of New York Mellon Corp and Manufacturers & Traders Trust Co.

Representatives for all these parties declined to comment.

AMR's unionized pilots, the Allied Pilots Association, would not comment on the prospect of a specific merger scenario. A spokesman for the group, Gregg Overman, said the union would review any proposal if "something comes up" and "we'll evaluate it on the merits."
AMR's flight attendants also declined to comment. But a source familiar with the group's thinking said that while the union prefers to see the airline "grow and succeed" as a stand-alone company, it has so far not seen a business plan from management that would allow that to happen.
The flight attendants' union believes a merger with US Airways is "dicey at best" due to the fact that it has yet to fully integrate its labor groups after its 2005 merger with America West Airlines.

The Transport Workers Union of America, which represents many ground-workers at American, is currently focused on examining AMR's business plan released last week and will fully assess it before considering other proposals, the union said in a statement to Reuters.

EXCLUSIVE RIGHT

AMR filed for Chapter 11 on November 29, citing a need to trim uncompetitive labor costs. The company told employees last week that it aims to cut expenses by $2 billion a year, slash about 13,000 jobs and terminate pensions. AMR also intends to generate $1 billion per year in new revenue.
Delta Air Lines has hired advisors to explore its merger prospects with AMR, which would bring the No. 2 and No. 3 U.S. carriers together. US Airways is the fifth largest U.S. airline.

AMR has the right to submit a reorganization plan without outside interference for 120 days after its bankruptcy filing. The judge can extend that right for up to 18 months.

The exclusive period makes it difficult for an unwanted suitor to attempt a merger unless the creditors back such a move.

US Airways has had a similar experience in the past. In January 2007 the airline withdrew its $9.75 billion hostile takeover bid for Delta, which was bankrupt then, after the creditors committee refused to support the move. Delta management convinced the panel the carrier would be stronger if it emerged from bankruptcy independent.

Among the big carrier bankruptcies of the last ten years, only US Airways came out of Chapter 11 with a merger, and that was with smaller America West. Delta and Northwest aligned their restructurings and merged in 2008 only after each stepped out of bankruptcy.

(Reporting by Soyoung Kim in New York, Kyle Peterson in Chicago and John Crawley in Washington, additional reporting by Caroline Humer; Editing by Phil Berlowitz)