US Airways Dividend Miles (Pre-FlightFund Merger) - UAL no longer sees US Airways deal completed in 2Q

``We are no longer optimistic that the transaction will close in the second quarter,'' Jake Brace, UAL's senior vice president-finance, said in a conference call with analysts.

The federal regulatory review is being slowed by the complexity of the transaction, Brace said, which involves divesting some Washington-based assets, an agreement to sell some US Airways assets to AMR Corp.'s (NYSE:AMR - news) American Airlines, an East Coast shuttle partnership with American, and the sale of some other US Airways units.
http://biz.yahoo.com/rf/010418/n18289013.html

Several members of USAirways management have stated privately that they feel that the merger as currently constituted will probably not go through, but that some restructuring was possible.

Personally I am a hard core opponent of this merger, since it is a truly bad idea.

This is the end !!!!!!!!
Few mergers in the history of this planet have needed so much time and my feeling is that unless a wonder appears somewhere there will not be a merger.
Me being against this merger but in favvour of being part in one of the big worldwide alliances that makes me smile and sad at the same time.
In terms of strategy it also becomes clear that there is no plan B. So in a minute the AA partnership ends again US will be without a club for there members and FT in any european city they are flying to, no Hawaii, no quality asian carrier for asian flights and so on... That was what I feared loose the great AA deal but get nothing new together I wish Mr. Wolf would wait with me at MC Donalds in Frankfurt!!!!!! Great view by the way and no irony for that one.

Based on today's earnings report, one would have to surmise they are working very hard on a "failing business" argument.

The way US has been giving away Europe I am not surprised at their loss. Indeed, it makes you wonder if Mr. W & Co. are intentially selling off their seats THAT cheap.

Despite an agreement to sell a substantial amount of US Airways assets — including half of the East Coast shuttle — to American Airlines to meet antitrust concerns, there is still no sign that United has satisfied the Justice Department and state attorneys general.

The New York attorney general wants United to give up additional slots at crowded LaGuardia Airport to allow for flights to cities in upstate New York.
http://news.airwise.com/stories/2001/04/987941519.html

The managers of US Airways say it can't survive as a stand-alone airline. But some industry analysts, union leaders and competitors disagree. They say the airline can fix itself by controlling costs, eliminating unprofitable routes and generally tending to the business of running an airline rather than merging one.

Both US Airways and United seem to be suffering. When the merger was announced 11 months ago, the economy was stronger. Earnings and stock prices at both airlines have declined and competing carriers such as Southwest Airlines Co. and AirTran Airways have expanded into their markets. Fuel prices are about 12 percent higher than they were last year and labor costs are nearly 15 percent higher than in 1999.

"Both airlines might be better served concentrating on improving their own operations rather than trying to force this deal through," ING Barings analyst Ray Neidl said.
http://washingtonpost.com/wp-dyn/articles/A50012-2001Apr22.html

I usually save the Post business section to read once I'm truly awake, but after seeing that headline, I changed my habit.

Loved the quotes from CO leader Gordon Bethune--I tend to believe there's much truth in what he says.

(1) Last time I checked, USAirways' stock price was about double what it was a year ago. Granted UA's is down to 60% of what it was.

(2) Southwest & AirTran are not eating into UA & US's routes, they are eating into DL & US' routes - East Coast primarily. So why isn't DL hurting - surprise, they ARE!

(3) US only lost a little more this 1Q than they did last 1Q. DL, on the other hand, lost about what they had previously made last 1Q. Why isn't there a call for DL's management to improve?

(4) The last thing in the world USAirways needs is to cut routes!!! That will surely kill it. The severe limitations in the Western part of the country (no even midwest hub, no western cosdeshare) is what is hampering profitability! 85% of US' routes are 500 miles or less, that's gotta be a killer in terms of cost of crew (minimum times, aircraft servicing, all that...)

(Makes me want to stop this business traveling nonsense and become an analyst...)

(Edited by Surfrider for the typo on mileage - maybe if I randomly inflate numbers by a factor of 10, should stick to my current job - putting in cost accounting systems...seriously! http://www.flyertalk.com/forum/biggrin.gif)

[This message has been edited by Surfrider (edited 04-24-2001).]

Originally posted by Surfrider:
85% of US' routes are 5000 miles or less, that's gotta be a killer in terms of cost of crew (minimum times, aircraft servicing, all that...)

(Makes me want to stop this business traveling nonsense and become an analyst...)

Hmmm... I'll take a wild guess here; but I'm pretty confident that 100% of US routes are 5000 miles or less. http://www.flyertalk.com/forum/biggrin.gif

I'm sure you meant 500 miles or less... sorry couldn't resist. http://www.flyertalk.com/forum/wink.gif

RZ

Yeah, I think the longest non-stop is PHL-FCO at 4368 miles. http://www.flyertalk.com/forum/biggrin.gif

Samuel Buttrick, a UBS Warburg analyst, told clients late last week that the deal appeared to be "crumbling under its own complexity" and that the chances of it getting approval in its current form were just 35 per cent.

http://markets.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3QT8DZXLC&live=true&useoverridetemplate=ZZZ6MJPM90C&tagid=ZZZGF39D20C&subheading=US%20equities