767jetz, I would like to simply respond to your questions point-by-point by number. Here goes:
Question #1 – I disagree. The only time you normally post is to refute every comment I make. It’s not a debate, it’s more of “let’s visit the US Airways board to see what Chip says because we do not like the music, therefore, it is more of “shoot the messenger†versus constructive debate.
Question #2 – Yes I did. The information was obtained from ALPA EF&A through Duane Woerth. The ATA industry numbers were surprising and beat expectations across-the-board, which has helped immensely.
Question #3 – The end of the year is not over yet. Let’s see how things work out.
Question #4 – United posted a net loss of $149 million in October; therefore, if they lost $251 million in November and December the $400 million target will be hit. The $400 million number was obtained from the Denver Post who said analysts predicted the numbers.
Question #5 Yes, but I doubt the board of directors were meeting to discuss something other than M&A activity. Let’s not forget that a former senior vice president told our entire crew about the meeting two weeks ago. In addition, two, not one, but two of the most knowledgeable airline analysts told me something is brewing. In addition, multiple US Airways management sources have commented to me on the subject, but as I have said I know believe the plan has shifted because the UCT does not remove cost.
Question #6 – I sincerely doubt m sources are wrong. They are the same ones that told me about the last merger before it was announced, why I publicly told the MEC about the offer, the AMR carve out, AMR ambivalence, the 21-day Hart-Scott-Rodino Act notice, the domestic alliance, and the Star alliance. I predicted every one of these announcements; therefore, I have a lot of faith in their comments.
767jetz, I have been recently told by a very reliable member of the US Airways Exeuctive Suite that the Company stabilizes its business plan, then the company consider a
merger (which is a shift), but consolidation is inevitable. In addition, I understand Bronner is not interested in becoming an equity investor in United unless the company can prove it can emerge (which is uncertain), which requires the company to obtain a resolution to the pension problem, obtain mutiple municipal bond agreements, fix 174 aircraft EETCs that deal with more than 100 financial institutions, figure out what to do with the deepening Dulles problem, and file a loan guarantee application that does not get rejected (this needs a 7% profit margin within 7 years that is more difficult to project because of the LCC issue).
With United's bankruptcy so complex and the uncertainty of whether or not the Chicago-based company can emerge, especially since Jake Brace called Susan Carey, asking her to let the Wall Street Journal be their cheerleader to say the company would be out of bankruptcy by now (by the way -- when this nes broke who said Brace was simply blowing smoke? Did you forget that or do you only try and "shoot the messenger"), nothing can be done on M&A activity, yet.
Regardless, things will be interesting going forward, however, it would not surprise me to see RSA become an airline holding company with two airlines under its umbrella: US Airways and United. United would join the holding company with RSA becoming the equity plan sponsor providing additional exit financing in exchange for a controlling stake in the post bankruptcy company. Then RSA and its chief advisor Rono Dutta would create an integration similar in scope to AF-KLM where the surviving word mark and paint scheme would be US Airways, the surviving senior management would be US Airways, and the combined name would be United Airlines for market identity. This type of consolidation would be a hybrid between the two European carriers and ValueJet and AirTran, where ValueJet acquired AirTran and took its name.
Will it happen? Maybe, maybe not, but a top US Airways official told me "consolidation is Inevitable" and Jeff Stanley from United a few weeks ago said, "If things stay the way the are now, there will be
several Chapter 7 (bankruptcy liquidations) down the road, and that's not good for anyone. The
most feasible solution to the situation is consolidation in the domestic airline industry."
767jetz, why would Stanley have made this comment, which was
prepared before his speech? With the comments taken from a written speech and not off-of-the-cuff, could it be the intentional comments were a thrid-party communication through the press via Dow Jones Newswires of pending actions? I believe so...
767jetz, consolidation is coming and it does not matter whether you, I , or anybody else likes it, it's coming as a means to reduce costs through economies of scale. The likely suitors: United and US Airways, who just took two more incremental integration steps by announcing their intent for US Airways to take custody of some of United's Los Angeles gates (just like the airline did in Seattle on October 1) shortly after the holidays and the new joint ServiceAir cargo handling contract.
What will be next after Los Angeles? San Francisco, Denver, and ...
Regards,
Chip
