US Airways Dividend Miles (Pre-FlightFund Merger) - Has NWA offered to buy U ?

http://www.usaviation.com/nm/anmviewer.asp?a=348&z=8

Meanwhile, it is believed that NWAC has made an offer to acquire the Arlington based company, provided employees agree to meaningful concessions and U receives a loan guarantee

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dog food...whoops I mean snack

KLM Royal Dutch Airlines (http://groups.yahoo.com/group/KLMAirlines)
Virtual Airline Management Group (http://groups.yahoo.com/group/AirlineVirtualManagement)

*a QF here and an IB there, here a AA, there a BA, everywhere a ....?

I imagine there is number crunching taking place at every major domestic airline right now over the 'fate' of US.

How much are the pieces worth? How much is it worth as a whole, with and without the high labor costs? If U files chap. 11, what's a fair price for the Shuttle operations? Etc. Etc.

You can bet on a couple of things.

One, NW will be the perfect buyer for the A-330's if US decides to go an all 767 route. NW has its own on order.

Second, I'll bet if NW did buy US, the name Northwest would go away in lieu of the US Airways name.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by shinbal:
I'll bet if NW did buy US, the name Northwest would go away in lieu of the US Airways name.</font>

Never, Northwest is a far older and better known brand, particularly in Asia.

NW is the 4th ? largest airline in the world. US is somewhat smaller.

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dog food...whoops I mean snack

KLM Royal Dutch Airlines (http://groups.yahoo.com/group/KLMAirlines)
Virtual Airline Management Group (http://groups.yahoo.com/group/AirlineVirtualManagement)

*a QF here and an IB there, here a AA, there a BA, everywhere a ....?

The damage is done. Somebody gets the place, either whole, or in pieces. The operating paradigm for airlines has changed. While other sectors of the economy recover, they don't. Travel patterns, patrticularly higher yield, have been altered, and even healthy carriers can't get out of the hole. This management believes its only opportunity to recover is to size the airline to its costs. Since it can't really control those costs, basing decisions on the distortion created by that simply brings the whole thing to its inevitable illogical conclusion. Let's hope we get something with CO or NW. This bus we're on isn't going very far, I fear.

deelmakur

Unfortunately you are right !

As a NW/KL fan I hope US does end up with NW, because I like US. But I don't want that at any cost, only if it makes sense.

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dog food...whoops I mean snack

KLM Royal Dutch Airlines (http://groups.yahoo.com/group/KLMAirlines)
Virtual Airline Management Group (http://groups.yahoo.com/group/AirlineVirtualManagement)

*a QF here and an IB there, here a AA, there a BA, everywhere a ....?

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by shinbal:
I'll bet if NW did buy US, the name Northwest would go away in lieu of the US Airways name.</font>


Really? What are you offering? I'd take that bet. For a split second I had the same thought, and then I remembered that the Northwest name has a whole lot of recoginition in Asia. Personally, I'd like to see them revive the "Northwest Orient" name...

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Cris L:
Never, Northwest is a far older and better known brand, particularly in Asia.
</font>

The trouble is that in the United States, what the NW brand is known for is stranding passengers for 8.5 hours on planes with no water or working toilets in the middle of a snowstorm. (I'm not saying that's a truly accurate perception--though my flights on NW have always had some kind of problem--but it did happen, and it is the perception.)

Perhaps they should keep NW's Asian-language names, while using the name US Airways in English. This would not be without precedent--AC used the name Maple Leaf Air in Chinese (since Air Canada and Canadian Airlines translate the same, and CP was in the Far East first). For livery, I'd go with something similar to what US has now, with a few touches of red (the letters U•S and the stripes of the flag icon, for example) in honor of NW.

I know there are a lot of people on this board much more knowledgable about corporate finance than I am... so, is NW in a financial position to buy US?

I had figured with the post Sept. 11 drop in demand no carrier would want to buy US in its entirety and that it would end up being sold off in pieces. Does it make sense for NW to buy US?

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by idomoneus:
I know there are a lot of people on this board much more knowledgable about corporate finance than I am... so, is NW in a financial position to buy US?

I had figured with the post Sept. 11 drop in demand no carrier would want to buy US in its entirety and that it would end up being sold off in pieces. Does it make sense for NW to buy US?</font>


In the words of George W., there may be some "Strategery" being used here...

According to this press release, NW's June unit revenue is projected to be down only 2% from the same time a year ago. So NW has done a good job bouncing back from 9/11. NW has a lot of cash on hand, and with unit revenue down only slightly, may no longer be losing money. They have a lot of assets they own outright, and are fairly well protected from low fare competition at their hubs.

Does buying US outright make sense? Here's where the strategery comes into play. The PHL hub makes perfect sense for NW, really gives them help over the Atlantic and a good north/south hub in a market with good O&D traffic. CLT isn't quite as good, but it does give them a better place to fight DL for east coast traffic going north/south. It would give NW a lot of slots in DCA, LGA, and BOS, Shuttle, regional and mainline, plus of course, the shuttle. I can see them selling off the shuttle (my hunch is that AA would pay big bucks to get it), and maybe the PIT hub. (But would anyone want it?)

It would have to be structured like the AA/TW deal, as a prepackaged bankruptcy, as NW wouldn't want US's Airbus fleet at the price US is paying for them, based on their existing credit. In all honesty, I think it's 50/50 whether this is a smart move. Some of it is, but theres a lot of baggage that comes with it.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by silverpie:
The trouble is that in the United States, what the NW brand is known for is stranding passengers for 8.5 hours on planes with no water or working toilets in the middle of a snowstorm. </font>

Forget Runway Sunday. That was a collosal disaster. What I remember more is the stories about pilots flying shortly after drinking!

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Cris L:
Never, Northwest is a far older and better known brand, particularly in Asia.

NW is the 4th ? largest airline in the world. US is somewhat smaller.

</font>

Your points are correct. But there are cases of larger companies taking the names of the companies they swallow. The US name may have more global appeal to a younger demo set than "Northwest" which can be perceived by many to be regional.

This name idea, by the way, was not mine. It has been batted about by marketing types who thought during the UA/US debacle that the two could be a match.

Actually, it is my understanding that Wolf negotiated very attractive terms for the Airbus fleet, since he placed orders for up to 400 of them (incl. options).

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by silverpie:
The trouble is that in the United States, what the NW brand is known for is stranding passengers for 8.5 hours on planes with no water or working toilets in the middle of a snowstorm. </font>


Perhaps so, but the media continues to refer to US Airways as USAir, and customers refer to US Airways as USAir. USAir had a habit of crashing airplanes. Frequently. The USAir to US Airways name change wasn't enough, IMO. Lets call it a toss-up....

I'm not sure it would be a great idea to bring back Northwest ORIENT. Not very PC, is it?

I dunno about the rest, but if US or successor goes down here at PIT (its their largest hub, but less O/D than the others) I predict WN filling a good bit of the void. It really is a good airport for hub, only 10 years old and designed with hub traffic in mind. For WN, though, the key is that it's not congested and would have big void of flights to fill. Not a guaranteed formula for Herb and Co to come riding in, but I think they would. The proximity to CLE/CMH is a question mark, but I think the only thing preventing them from being here now is the 90-odd percent US fortress status. It's probably giving a lot of others pause as well (JetBlue, etc.) US has killed a lot of startups that added PIT to their schedules. I don't think any of the other airlines would want it. AA probably *should* want to move from O'Hare if they were in their right minds schedule/congestion-wise, but O/D-wise I'm sure it doesn't make sense. We continue to see that the market potential has been worth all the congestion at the big airports.

Hm, that's kinda drifting away from the central topic here. US. Well, I was really hoping US wouldn't go away, but I have to agree that it seems doubtful they will be able to continue to go it alone. And its highly unlikely anyone would want US as-is. I think it's worth more as parts, unfortunately.

[This message has been edited by CrazyOne (edited 06-12-2002).]

But the lack of O/D traffic makes it unlikely anyone would step in with any serious replacement to US.

Southwest, JetBlue, etc would probably all add a few flights but theyre not really hub-spoke carriers so there's no reason to come in with much of a presence.

Good point, kv99. That would never fly. I propose Northwest Chinaman instead.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by kv99:
I'm not sure it would be a great idea to bring back Northwest ORIENT. Not very PC, is it?</font>

I think that AirTran would like to get its hands on PIT if the US presence disappeared--they've tried LGA, PHL, MDW, ATL so far...it's clear that they like the airport and the city, they just haven't been able to compete with US.

ringmaruf

I had forgotten about AirTran. They'd presumably like to grab some gates here. But we're still talking about at most like 10 gates. Nothing like the 60 or so US currently uses. There would be lots of empty real estate out here.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by CrazyOne:
AA probably *should* want to move from O'Hare if they were in their right minds schedule/congestion-wise, but O/D-wise I'm sure it doesn't make sense...</font>

AA and/or UA leaving ORD brings to mind a quote "not until it is pried from my cold dead hand..." It is far and away the most lucrative hub in the U.S.

I'm sure AA/UA both keep such big operations in ORD is to ensure the other doesnt get it ALL.

It is my understanding that most of the major carriers consider PHL a very attractive asset. Conversely, many believe CLT is less attractive than it looks because it lacks enough originating (O&D) traffic. The Shuttle is also viewed favorably, although for the moment it has been badly eroded by the aftermath of September 11. The new, high speed Amtrak is a spiffy alternative, and doesn't feature gate searches. The bargain pricing on Airbuses is probably less compelling now that all the manufacturers are cutting deals, but the slots at restricted fields like DCA and LGA are very valuable This one's worth more dead than alive.