US Airways Sees ‘One Big Deal’ Left for U.S. Airline Mergers

[Glucose Intolerant]

This is how it begins guys . They start talking about it then... Bam!!! Announcement. Just sit tight.. There is a reason for all the upgrades and not being an LCC anymore. I mean fc on express ?? This is USAirways we are talking about .

You wish......It's way worse than that.

It's America West.

 

[PHLfa88]

Let me preface this reply by stating that I no longer work for US Airways or any of its' affiliate companies. My current job is in management for a major rental car company, and many of our customers arrive on flights operated by US Airway or an affiliate carrier. They often arrive at the rental counter pissed off due to problems they have had with US, whether it involves flight irregularities, service issues, or baggage problems. They are generally very unhappy. Rarely do I hear the same tales of woe from customers who have arrived on CO, DL, UA, WN, B6, FL, or AA. What this leads me to believe is that business people only fly US because they have no other viable choice from their point of departure.

The truth of the matter is that US Airways used to be a good company that was aiming to be at least as good as or better than CO, UA, and DL, and the employees tried to make sure their customers had a good experience. Ever since the company fell under the control of America West management, it has gone seriously downhill. Mr. Parker may be very good at attracting capital and keeping the bills paid, but he seriously sucks at leading the employees to make US Airways even a mediocre airline.

With all of that said, there is no value in US Airways as it now stands. As the old and tired cliche' often says, "The Emperor has no clothes". The only way US Airways will ever be involved in a merger transaction will be due to luck, and another carrier wanting to purchase US capacity and then close down the US operation to grow their own market share. The end game has been coming for many years, and it will be sad to see US go away, but it will be an event that is way past its' time.

If I were still employed by US Airways, I would be planning ahead for the day when the operation comes to a close, because that is the only logical conclusion that comes to mind. Good luck to you all because the end is nigh.

Really? I have worked Many flights in the last 6 months and can tell you Not One person got off any of my flts Pissed Off as you say! What rental company do You work for cause I can tell you Many people could complain with rental companies..!

 

[SS255]

Really? I have worked Many flights in the last 6 months and can tell you Not One person got off any of my flts Pissed Off as you say!

Probably because you were their FA. 😉

 

[nycbusdriver]

If I were still employed by US Airways, I would be planning ahead for the day when the operation comes to a close, because that is the only logical conclusion that comes to mind. Good luck to you all because the end is nigh.

Maybe you're right. But the announcement of the death of USAirways has been trumpeted now and again for at least the past 15 years. We've been in much worse shape (both east and west,) yet here we are.

Sure, the airline has changed, but so has the market. Why do I say that? Well, if bag fees were such a bad idea, the other carriers would have ignored them. They didn't.

Why should we believe you now?

 

[WorldTraveler]

Maybe you're right. But the announcement of the death of USAirways has been trumpeted now and again for at least the past 15 years. We've been in much worse shape (both east and west,) yet here we are.

Sure, the airline has changed, but so has the market. Why do I say that? Well, if bag fees were such a bad idea, the other carriers would have ignored them. They didn't.

Why should we believe you now?

The answer is clearly that despite the fact that US labor doesn't like Parker and he pays his people poorly and US offers nothing distinctive for customers, he understands the business and is a better strategist than some of his peers. In an industry that seems continually plagued with poorly run airlines, Parker has been able to find someone in worse position than US.
The biggest threat to US right now is its lack of hedges compared to other airlines; if fuel continues to rise, US will be in far worse shape than other airlines - but even there US has a decent enough head start on sustainability that it can absorb some of the fuel price increases relative to some other peers.

 

[BoeingBoy]

the only reason why US lost the DL deal was because Parker came out and said that there would be a lot of rationalization of capacity and he preyed on the non-union status of DL employees to say that DL employees would end up on the cutting board....

Got it. The executives are almost powerless while in bankruptcy but the employees can dictate to the creditors committee. I think you concentrate too much on the superficial while ignoring the inner workings. DL's execs were able to convince the creditors that the stand-alone plan was better for those creditors than US' plan. In addition I think the creditors were convinced that US' plan faced a lot of regulatory obstacles that the stand-alone plan didn't face.

Jim

 

[signals]

US Airways Sees ‘One Big Deal’ Left for U.S. Airline Mergers

See Story

US Airways CEO wants to be ready for a merger

"I'd like to be in the position Continental was in when they were talking to United," Parker said of two rivals that eventually merged to form the new United Airlines

See Story

Did Parker forget that US was part of that merger deal but was kicked out-sort of speak?Never say die, eh, Parker 😛
One big deal left that might happen or might not...now there are the ramblings of a sane CEO!

Looks like I have some catching up to do B)

 

[signals]

The AFA can conclude an agreement. However, USAPA cannot reach an agreement with the company until the seniority integration is complete. Seniority is Section 22 of the contract and must be "closed out" before there can be a Tentative Agreement.

Therefore, it will be years-and-years until the pilots get a new contract. And, I believe until the joint labor contracts are complete (maybe not the AFA contract) US Airways will not merge with another airline because no company wants to merge with the Tempe-based carrier if all of the merger benefits cannot be obtained because the two companies cannot fully integrate.

In my opinion, US Airways will be the most vulnerable legacy airline until it merges with a larger company.

Reality sucks.

 

[signals]

http://upgrd.com/mike/does-the-rumor-of-a-split-us-airways-make-sense.html I guess some see it different! MM!

A merge with WN??? Let me rephrase that...WN buys US 😛h34r:

 

[signals]

Puh-leeeease! Management created such a disaster with the last merger that NO ONE is interested in US as a merger partner. Even Greyhound has more class than US Airways and turns their nose up to US!

Doug had a chance to do this right back in 2005 and failed miserably. I doubt very seriously any airline - even Aeroflot - would consider US Airways attractive as a merger partner.

Funny, I thought the failure was due to a pilot seniority issue?

 

[signals]

all of what has been said makes it obvious that US wants to be in a position to go after AA if AA ends up in BK and is unable to defend itself.... UA and DL certainly don't need US, particularly after the LGA/DCA slot deal.
.
AA and US would have alot of network benefits, even if west is split off. obviously labor integration is necessary but if AA ends up in BK and has to rework its costs, Parker becomes pretty free to set the template for the new airline costs...
.
If it occurredd, it would likely be the AA name but US as the corporate surviver.
.
but you can look back at the US attempt to acquire DL and realize Parker is not done and realizes that US needs to "bulk up" or get left behind. He learned from the msitakes w/ the DL attempt - the least of which was saying that DL employees would be the target of the capacity that would have to be cut... and that won't be repeated again. Otherwise, there is more than a remote chance that Parker will show up in AMR's BK courtyard if they end up there.

I'm thinking that US is closer to BK. I see a US BK scenario where WN takes over. How much more far-fetched is it than your theory? At least everybody WNs 😉

 

[robbedagain]

How do you see US being closer to CH11? AA has someof the highest labor costs (besides SWA) and they still operate old jets (not that that matters much I dont think) but US is making profits whilst AA hasnt made a profit yet in a while.

 

[DCaf]

He {Parker} learned from the msitakes w/ the DL attempt - the least of which was saying that DL employees would be the target of the capacity that would have to be cut...

I'm sure I don't scour the airline news as you must, but where the heck did Parker say he was going to "target" the DL employees? That doesn't sound too smart coming from, love him or hate him, a very bright guy.

 

[signals]

How do you see US being closer to CH11? AA has someof the highest labor costs (besides SWA) and they still operate old jets (not that that matters much I dont think) but US is making profits whilst AA hasnt made a profit yet in a while.

On a local level, US seems to be downsizing. AA seems to be holding their own.

 

[FWAAA]

How do you see US being closer to CH11? AA has someof the highest labor costs (besides SWA) and they still operate old jets (not that that matters much I dont think) but US is making profits whilst AA hasnt made a profit yet in a while.

I don't know which airline is "closer" to Ch 11 right now, but if oil stays at $112/bbl long-term (or moves higher), all remaining legacy airlines are at risk.

That said, AA ended the first quarter with over $6.2 billion of cash and short-term investments, of which nearly $5.8 billion was unrestricted, or equal to about 26% of its total expected revenues for 2011. I haven't checked the Q1 projected cash numbers for US, but I doubt it had 26% of this year's revenues in cash at 3/31/11. As of 12/31/10, US had $1.86 billion of unrestricted cash which represented about 16% of its 2010 total revenues. An airline holding 26% of a year's revenue in cash is in substantially better shape and probably better able to weather high fuel prices or slack demand than one holding just 16%. AA also enjoys the higher revenue potential of NYC, CHI, DFW, MIA and LAX compared to US at PHL, CLT and PHX. AA is also just starting to realize the benefits of its immunized joint ventures with its transatlantic partners and with JAL across the Pacific - while the partners of US haven't even invited US to those parties. But like I said, AA and all other airlines look to be in big trouble, especially if fuel goes higher.

AA has the benefit of fuel hedges which will soften the blow of high jet fuel prices this year; Parker proudly proclaimed in January that US was going to gamble on steady or lower fuel prices this year - and since he made that announcement, jet fuel prices have spiked. I posted in January that Parker was foolish for flying naked without any fuel hedges in place - we'll see in a few weeks just how much money Parker's "no fuel hedges" policy has cost US in the first three months of this year.

Yes, US made a decent profit in 2010 while AA continued its losing ways. Dunno whether US will be profitable this year.