What Will This Mean For Future Of Usairways

[MrAeroMan]

The reason Bronner doesn't want to invest in UAL is the same reason why no one else does. The fundamentals aren't right and the investment would surely crumble under the weight of UAL's still enormous financial burden.
There is another reason that I suspect he's not interested also. Why would he want to save a competitor of his investment (despite the codeshare) when he can pick up pieces of the competitor at decent prices and in the same step enhance the chance of survival of his UAIR investment. Of course there will be no investment unless he can get a competitive cost structure and that issue is still the major sticking point. Nevertheless there will be interesting days ahead.

 

[RowUnderDCA]

If Bronner did think USAirways had any chance of a future why wouldn't he find a way to cherry pick UAL's assets for the good of USAirways. Wouldn't it be better for USAirways to see those assets getting in their hands instead of other airlines?

Wouldn't it look good to the employees seeing some stepping up to the plate?

Wishful thinking but fun . :unsure:

borrowed pic from 700UW

well, if USAirways "votes no" why would Bronner think that U had any chance? Think about it.

 

[usairways_vote_NO]

Um are we off topic? Not that I never stray

 

[usairways_vote_NO]

well, if USAirways "votes no" why would Bronner think that U had any chance? Think about it.

I have thought about it alot and I have never thought that by voting no it would in itself bring about the demise of USAirways. If Bronner does.. oh well

 

[RumorS]

I thought this post was about UAL and the Loan??????????????????????????

 

[coolflyingfool]

IF, and it's a big IF, UAL were to go away, US is in a postion to get more passengers and maybe some of the a/c that would be idled. I can really only see US going after A320s. The low-cost airlines are really the ones that US would have to watch and see what they do. Let's say that SWA picks up 30 of theit 737s, anf Jetblue and Frontier go after some A320s also. It is a long way down the road even IF it happens.

 

[USA320Pilot]

For the past nine months or so I have repeatedly posted on this message board that US Airways will not be involved in a corporate transaction until it stabilizes its finances. Management has made that message clear, however, some sort of deal could occur in the future.

If US Airways restructures outside of bankruptcy, then you could see some form of a deal between US Airways and United.

David Bronner has said in multiple interviews that RSA is interested in buying some of United's assets if it makes sense for US Airways, but that was before the industry saw its recent decline in fundamentals.

From a business perspective, if United is forced to sell assets, it makes sense to sell them to its business and Star alliance partner, to keep the revenue within alliance(s) and the business relationship(s). However, it's probably way too early to tell how United management will react to the recent ATSB setback.

I continue to believe US Airways will be involved in some sort of M&A activity, but not until it has a competitive cost structure and the airline stabilizes its finances. Brooner is not going to risk more RSA money unless he can get a bond-like ROR with further investment(s) with a stable business enterprise.

Regards,

USA320Pilot

 

[phasersonstun2]

People:

The UAL rejection is not great news for U. The reason why is obvious. The ATSB has taken a much harder line, and they are in no mood to be charitable. It's irrelevant if UAL assets are up for sale, or vica versa. The UAL ruling is a warning. The ATSB won't hesitate to call the U loan if U does not lower costs by the end of September and thus show a positive cash flow.

It's the cost structure at U that will dictate whether U goes on or dies on the vine. UAL has a long road ahead to avoid devastating changes, some which would affect U since we code share.

It's a shame that it has come to this for both U and UAL, but this is the hand we are dealt, and it ain't our card game anymore.

Bottom line, don't cheer against UAL, cheer for U.

 

[usairways_vote_NO]

The UAL ruling is a warning. The ATSB won't hesitate to call the U loan if U does not lower costs by the end of September and thus show a positive cash flow.

Can you tell us how you can state that as a fact?

March 12 the ATSB renegotiated the loan with USAirways.
I cannot see how that shows they will not hesitate to call the loan.

http://www.usairways.com/about/press/nw_04_0312.htm

QUOTE
In exchange for this prepayment, the financial covenants contained in the loan were modified through 2005. The revised covenants require that US Airways significantly narrow its losses in 2004 and return to profitability in 2005. The company and the ATSB also agreed to modify other terms and provisions, including lifting certain restrictions on the company’s ability to pursue asset sales.

END QUOTE

And Isn't there ongoing discussions as we speak?

 

[Superjames]

Stop complaining! Just start your own bussiness! :angry:

 

[gogogadget]

Bronner has said at times he would like assets of UAL hasn't he?

What he did say recently was no equity investment.

I with the load factor as they are now and status quo on expansion (no money) I do not see any advantage for USAirways if UAL goes away unless ticket prices rise.

You might even see ticket prices go down to attract UAL customers.

Even though the deaths are slow, I think that it is a race to the grave between airlines just as it was and is a race to the lowest costs among the different managements. Therefore IF ual were to go first it would definately be a big boon as the capacity issue, which has been plaguing the industry for 3 years now, would temporarily need to be filled. Those airlines that are still around will benefit, and dueto the fact that U and UAL's systems are supposedly the most compatible, U would stand a lot to gain from a failed UAL and unfortunately the opposite is true also.

I think you are both on the edge and the industry is ripe to claim another casualty. As proven by the recent statements by CAL and Airtran after the news this morning.

Bronner on the otherhand would like assets only and that would come from some weird deal or piecemeal. Not an investment in UAL to save the alliance. Prices will most likely stay the same and those with extra capacity will benefit by moving pax in UAL's absence. Just a thought.

 

[Bear96]

From a business perspective, if United is forced to sell assets, it makes sense to sell them to its business and Star alliance partner, to keep the revenue within alliance(s) and the business relationship(s).

No, if it comes to that point, it makes sense to sell assets to the buyer who is willing to pay the most for them. Which won't be U. If it ever gets so bad that UA has to sell significant assets, U will have been long gone by then.

But, keep dreaming.

 

[BillLumbergh]

This is the second time in a day that somebody has attempted to hijack a thread and turn it into a political debate. Those posts have been deleted.

Go debate those issues elsewhere.

 

[USA320Pilot]

US Airways and United have been negotiating different deals for the past two years, but deteriorating fundamentals have prevented an accord.

US Airways will not participate in the looming industry consolidation unless it has a competitive cost structure, either with consensual accords or a court supervised restructuring.

However, US Airways principal investor and chairman has the financial resources to acquire United assets as a venture capitalist, if desired. As we all know, he has gone on record saying he would be interested in acquiring United assets in mutiple interviews, if it made sense for US Airways. Thus, if RSA provided the best price, United could keep some of the assets revenue by selling them to RSA/US Airways and then code sharing the flights.

However, without a competitive cost structure US Airways will not participate in the pending industry consolidation in a meaningful way.

Respectfully,

USA320Pilot

 

[oldiebutgoody]

No, if it comes to that point, it makes sense to sell assets to the buyer who is willing to pay the most for them. Which won't be U. If it ever gets so bad that UA has to sell significant assets, U will have been long gone by then.

But, keep dreaming.

Personally, I think that not getting the loan will be far better for UAL (especially the employees) than getting it would have. UAIR got it, and it's being used everyday to justify poor business decisions and continued hounding of employees for concessions. The fact is, UAIR had almost as much cash before it entered chapter 11 as it got from the ATSB, but qualifying for the loan was used by the past (actually current) management team to shaft creditors, employees, terminate pensions, and lay off MORE employees. And, it hasn't created any sort of workable business plan. All it did was allow bonusses to managers who left anyway, and several million for the last CEO, CFO.
I don't think anybody can predict what happens now for UAL, any more than they can for UAIR. One thing is for certain, though. Life is going to SUCK for UAL employees just as it has for UAIR employees ever since this downturn started, which, by the way, was before 9/11.