US Airways Dividend Miles (Pre-FlightFund Merger) - New Article on a Possible US/America West Merger (4/12/05)

http://www.post-gazette.com/pg/05102/486688.stm

It would make for a great route network, but where would the cash come from to fund such a merger.

So I wonder what would happen to FC meals. Right now, HP has better F service than US.

After working for a couple companies (non-airline) that went through the BK thing, the companies that wanted their assets waited until they went C7 and then purchased the assets for a song. While the marriage may look good, HP will not want to assume the liabilities of US and US is in no position to acquire anybody. Also, if they purchase the assets and then hire the unemployed US workers they can start them as new employees and not necessarily have to assume current wages, retirement programs, seniority, etc..

Yes, money will need to be found, but again, HP will be in a better position once US, or another airline, goes C7 and assets can be purchased at fire sale prices. Financing for that type of purchase will be much more attractive to anyone underwriting the HP purchase as many liabilities will be excluded. Obviously secured financing will not; but then again HP can pick and choose what assets, routes, etc they wish to purchase. There may be others interested but the bidding process through the BK courts, and resulting cost of ownership, if they are successful in winning their bids will be much better than if they did something now.

It would make for a great route network, but where would the cash come from to fund such a merger.

I'm thinking a combination of TPG, HP, Mesa, Air Wisc, GECAS/IFLC(if they lease to US).

Mesa has been quiet concerning the US reorganization other than say they want to help US, who needs another $100 mil to get out of bankruptcy. They also fly express flights for America West, who says they have a possible cash crunch at the end of the year.

Now suppose Mesa lends money to America West to relieve their cash crunch AND allow America West to fund the last $100 mil to US. Viola we have a Air France/KLM type of merger with each fully code sharing the others flights and having one frequent flyer program to bring down costs. Separate airlines, but working together, especially back room operations. Probably could be done for less money than an outright merger. Plane and system incompatibilty not as important as with a true merger, since still separate airlines. Mesa guarantees they won't be shut out of express flying, America West expands their network and US survives. Win-win-win for all. @:-)

But Lauer said a combination between US Airways and America West is not possible without the intervention of a third party willing to put up enough money to carry the relationship forward and protect against a continued rise in fuel prices.

ExxonMobilUSAirwaysAmericaWest anyone?

After working for a couple companies (non-airline) that went through the BK thing, the companies that wanted their assets waited until they went C7 and then purchased the assets for a song. While the marriage may look good, HP will not want to assume the liabilities of US and US is in no position to acquire anybody. Also, if they purchase the assets and then hire the unemployed US workers they can start them as new employees and not necessarily have to assume current wages, retirement programs, seniority, etc..

Yes, money will need to be found, but again, HP will be in a better position once US, or another airline, goes C7 and assets can be purchased at fire sale prices. Financing for that type of purchase will be much more attractive to anyone underwriting the HP purchase as many liabilities will be excluded. Obviously secured financing will not; but then again HP can pick and choose what assets, routes, etc they wish to purchase. There may be others interested but the bidding process through the BK courts, and resulting cost of ownership, if they are successful in winning their bids will be much better than if they did something now.

While purchasing a company's assets when it's in C7 is much more attractive, I am not sure if HP will be the buyer though! We all saw what happened with the TZ deal--HP got outmuscled by WN. Should US or other airlines go into C7, you can bet that the most desirable routes will be auctioned off to the highest bidder, which I don't think will be HP. Obviously, US as it currently stands has its baggage, which makes it unattractive for other carriers. However, to snap up the valuble portion of the route structure, it may make sense to work something out before it enters C7 if US ever goes down that route. Just my opinion.

LAX

Except for landing slots at DCA and LGA, what would HP get from a merger with US that they couldn't get on their own? There's not much commonality in the engine types their Airbusses use (perhaps not in their respective Boeing aircraft, though admittedly, I didn't check). There's usually no problem with flying where you want domestically, other than LGA and DCA. No more CAB approval required. As for employees, better to hire your own new ones and train them rather than get US's, who would, I assume, start as new employees (botton of payscale, bottom in seniority). In other words a group of po'd malcontents (who could blame them?), even more so than the ex-TWA employees AA picked up, at least the few not on furlough.

http://www.post-gazette.com/pg/05102/486688.stmWelcome to FlyerTalk, Carl! :cool:

It is customary here to place links to related articles in the existing threads discussing the same topic, particularly when it's already on the front page. Otherwise we would have dozens of threads dealing with the same issue.

See MERGER: Analyst reports possible America West/US Airways deal
http://www.flyertalk.com/forum/showthread.php?t=419983

I'll go ahead and re-post your interesting link there.

As for employees, better to hire your own new ones and train them rather than get US's, who would, I assume, start as new employees (botton of payscale, bottom in seniority).

TW employees got put essentially at the bottom of the AA list because they were represented by different unions than AA's employees. HP and US have the same unions for pilots, and also for flight attendants, so any post-merger seniority would be done according to ALPA and AFA merger policies-- not that that would be a plus, really, since it's a messy and complicated process.

TW employees got put essentially at the bottom of the AA list because they were represented by different unions than AA's employees. HP and US have the same unions for pilots, and also for flight attendants, so any post-merger seniority would be done according to ALPA and AFA merger policies-- not that that would be a plus, really, since it's a messy and complicated process.

TW employees also basically signed their seniority rights away.

And, because of the ALPA/AFA connection with America West, there won't be a "merger." It will be an "asset sale" because America West does not have the cash to deal with the same kind of stuff that AA suffered thru. They'll buy the assets, get the judge to waive any contractual protection in the US labor contracts, and the best the US folks will get is a staple job to the bottom of the America West lists.

I don't like it, but after TWA/AA, nobody is going to try another "merger" that entails seniority integration.

Unless the asset sale is done in Chapter 7, then they would have to do something to merge the seniority lists. If not date of hire, then they would probably incorporate some sort of slotting system. That is one of the few provisions our contract still maintained. It's what was used with the PSA/Piedmont/USAir merger years ago. The pilot's was a little bit different because they only fly one type of airplane and there were several "grandfather" clauses, but the f/a's basically would go date of hire.

Unless the asset sale is done in Chapter 7, then they would have to do something to merge the seniority lists. If not date of hire, then they would probably incorporate some sort of slotting system. That is one of the few provisions our contract still maintained. It's what was used with the PSA/Piedmont/USAir merger years ago. The pilot's was a little bit different because they only fly one type of airplane and there were several "grandfather" clauses, but the f/a's basically would go date of hire.

That's why if it happens, it will be under bankruptcy court supervision. If it's still Chapter 11, they will demand another 1113 motion (to remove merger language from any contract, and/or demand that the US F/As waive date of hire and/or ALPA waiving their rights), and if it's 7, it's moot.

America West knows and saw how detrimental the TWA/AA thing was and is on that workforce. They won't do a deal (especially considering the combined financial problems of both parties involved) with that kind of labor strife.

I'm not saying I favor this--please don't take that impression. But AFA date of hire combined with the beating the US-ALPA folks would take at the hand of the "career expectation" thing are enough that AMwest would probably pass if it had to be that way.