America West FlightFund (Pre-2005 US Airways merger) - America West & US Airways merger official.

It's being reported on CNBC right now.

Here's what's being reported about the deal...


merger supposed to take place on a stage-by-stage basis.
$1 billion in equity raised from Airbus($250million), Air Canada, Air Wisconsin, hedge funds, some rights offerings, and sale/lease back of aircraft.

No "official" word yet, but is imminent.


It's being reported on CNBC right now.

Here's what's being reported about the deal...


merger supposed to take place on a stage-by-stage basis.
$1 billion in equity raised from Airbus($250million), Air Canada, Air Wisconsin, hedge funds, some rights offerings, and sale/lease back of aircraft.

It's being reported on CNBC right now.

Here's what's being reported about the deal...


merger supposed to take place on a stage-by-stage basis.
$1 billion in equity raised from Airbus($250million), Air Canada, Air Wisconsin, hedge funds, some rights offerings, and sale/lease back of aircraft.



http://www.msnbc.msn.com/id/7908207/

NEW YORK - America West Holdings Corp. and US Airways Group, Inc. are merging, creating the sixth largest U.S. airline.

According to a press release on America West’s Web site, America West CEO Doug Parker said: "Building upon two complementary networks with similar fleets, closely-aligned labor contracts and two outstanding teams of people, this merger creates the first nationwide full service low-cost airline. Through this combination, we are seizing the opportunity to strengthen our business rather than waiting for the industry environment to improve. A combined US Airways/America West places the new airline in a position of strength and future growth that neither of us could have achieved on our own."

US Airways President and CEO Bruce Lakefield said: "US Airways has a strong franchise and great employees that will be enhanced by America West's strengths and success in the low-fare, low-cost marketplace. That we have secured such an impressive slate of equity investors and partner support in a period of such industry uncertainty is a strong indication of the prospects and enthusiasm for this transaction. It has been my objective to ensure the long-term viability of US Airways and the security of our outstanding employees; this merger with America West will accomplish that objective."

Subject to approval by the U.S. Bankruptcy Court overseeing US Airways' pending Chapter 11 case and transaction closing, which is anticipated to occur this fall, the merged airlines will operate under the US Airways brand under the leadership of CEO Doug Parker.

It's official. The press release:

http://www.shareholder.com/americawest/ReleaseDetail.cfm?ReleaseID=163980

Here's the release. Lots of good, juicy details:

* New airline to provide customers full-service offerings and consumer-friendly pricing structure of a low-cost low-fare carrier * Transaction is expected to be financed with approximately $1.5 billion of new capital from: * $350 million of committed new equity plus a planned rights offering * More than $675 million from partners and suppliers * $250 million or more from aircraft-related financings and/or sales * Expected release of $200-300 million in cash reserves * The combination would form one of the industry's most financially stable airlines with $10 billion in annual revenues, approximately $2 billion in total cash and among the lowest debt levels of all major airlines * The new airline is expected to have one of the most efficient work groups in the industry. Once the anticipated annual cost savings and revenue synergies of over $600 million are implemented, the new airline will be positioned for profitability at oil prices above $50 per barrel * The new airline will operate under a single brand of US Airways, but its operational labor groups will be integrated over two to three years with emphasis on minimizing any dislocations within the work groups

PHOENIX, May 19, 2005 /PRNewswire-FirstCall via COMTEX/ -- America West Holdings Corporation (NYSE: AWA) and US Airways Group, Inc. (OTC Bulletin Board: UAIRQ) today announced an agreement to merge and create the first full-service nationwide airline, with the consumer-friendly pricing structure of a low-fare carrier. Operating as the first national low-cost (LCC) hub-and-spoke network carrier, customers can look forward to simplified pricing, international scope, access to low-fare service to over 200 cities across the U.S., Canada, Mexico, the Caribbean and Europe, and amenities that include a robust frequent flyer program, airport clubs, assigned seating and First Class cabin service.

(Logo: http://www.newscom.com/cgi-bin/prnh/20050223/LAW097LOGO)

America West Holdings Corporation Chairman, President and CEO Doug Parker said: "Building upon two complementary networks with similar fleets, closely-aligned labor contracts and two outstanding teams of people, this merger creates the first nationwide full service low-cost airline. Through this combination, we are seizing the opportunity to strengthen our business rather than waiting for the industry environment to improve. A combined US Airways/America West places the new airline in a position of strength and future growth that neither of us could have achieved on our own."

US Airways President and CEO Bruce Lakefield said: "US Airways has a strong franchise and great employees that will be enhanced by America West's strengths and success in the low-fare, low-cost marketplace. That we have secured such an impressive slate of equity investors and partner support in a period of such industry uncertainty is a strong indication of the prospects and enthusiasm for this transaction. It has been my objective to ensure the long-term viability of US Airways and the security of our outstanding employees; this merger with America West will accomplish that objective."

Subject to approval by the U.S. Bankruptcy Court overseeing US Airways' pending Chapter 11 case and transaction closing, which is anticipated to occur this fall, the merged airlines will operate under the US Airways brand under the leadership of CEO Doug Parker. The merged airline's 13-member board will be comprised of one member from each of three new equity investment companies, six members from the current America West board, including Parker as chairman, and four members from the current US Airways board, including Lakefield as vice-chairman. The combined airline's headquarters will be consolidated into America West's headquarters in Tempe, Ariz. For regulatory purposes, both airlines will operate under separate operating certificates for a transition period of two to three years, keeping flight crew, maintenance and safety procedures for each airline separate. To ensure that the substantial consumer benefits are realized quickly, however, the airlines will work together to coordinate schedules, frequent flyer programs and other marketing programs as soon as practical.

Lakefield continued: "We believe that the airline created from the merger of US Airways and America West will bring more choices for customers, as we expand the low-fare pricing structure of America West to dozens of new cities, while also offering passenger-service amenities, such as an attractive frequent flyer program, assigned seating and a First Class cabin."

Customers

With the creation of the first full-service nationwide airline, customers will enjoy simplified pricing across an expanded east/west network along with access to international destinations. Both airlines' frequent flyer programs will ultimately be combined once the merger is complete. Members of both programs will retain all of their miles and elite status designation and will receive similar benefits in the merged airline's frequent flyer program. Other customer amenities will include access to airport clubs, assigned seating and First Class upgrades.

Financing

The merger is expected to create one of the industry's most financially stable players, with over $10 billion in annual revenues and a strong balance sheet that includes approximately $2 billion in total cash at closing with which to weather the current industry environment and fund further growth strategies. The airline's strong cash balance is expected to be created through a combination of current cash on hand at US Airways/America West, $350 million of new equity commitments (which may be supplemented with additional commitments), and proceeds from a contemplated $150 million rights offering. In addition, the merged airline will receive cash infusions of over $1.1 billion, principally from partners and suppliers (approximately $675 million), asset-based financings or sales of surplus aircraft (approximately $250 million) and release of certain cash reserves (approximately $200-300 million).

The $350 million of new equity is expected to be provided by four separate investor groups. The new investors are: ACE Aviation Holdings Inc., ($75 million commitment) a Canadian holding company that owns Air Canada, Canada's largest airline with over $7.5 billion in annual revenues; PAR Investment Partners, L.P., ($100 million commitment) a Boston-based investment firm; Peninsula Investment Partners, L.P., ($50 million commitment) a Virginia-based investment firm; and Eastshore Holdings LLC, ($125 million commitment and agreement to provide regional airline services), which is owned by Air Wisconsin Airlines Corporation and its shareholders. The merged company also plans to conduct a rights offering that could provide an additional $150 million of equity financing.

Approximately $675 million of additional cash financing is being secured through a combination of refunding of certain deposits, debt refinancing (which reduces collateralization) and signing bonuses from companies interested in long-term business relationships with the merged airline. The companies have signed commitments or firm proposals for more than $425 million in additional cash liquidity from strategic partners and vendors, including over $300 million in a signing bonus and a loan from prospective affinity credit card providers for the merged company. Negotiations with credit card companies are still in progress. Another $250 million will come from Airbus in the form of a loan. The companies have also agreed that the merged company will be the launch customer for the Airbus A350, with deliveries scheduled from 2011 to 2013.

Synergies

"We are exceptionally pleased with the financial support this transaction has received, but it would not be available if we did not have a business model that worked in today's difficult industry environment," said Parker. "We have created a competitive business that is profitable even with oil prices at $50 per barrel, achieved primarily because of the $600 million of annual net operating synergies. These synergies are higher than generally experienced in airline mergers for two reasons. First, US Airways and America West now have very similar labor costs so there are no large negative synergies related to contract integration, and second, US Airways' bankruptcy allows us to right-size capacity, thus increasing the network synergies."

The $600 million in anticipated annual synergies are the result of route restructuring, revenue synergies and cost savings. Route restructuring synergies of approximately $150-200 million are created by reducing aircraft and unprofitable flying, better matching aircraft size to consumer demand by route and incorporating Hawaii service into the network. Revenue synergies of $150-200 million are achieved by taking two largely regional airlines and creating one nationwide, low-cost carrier that can provide more choice for consumers when combined with improving connectivity across both airlines' networks and by increasing aircraft and other asset utilization. Lastly, the combined airline expects to realize cost synergies of $250-300 million annually by reducing administrative overhead, consolidating both airlines' information technology systems and combining facilities.

In addition to the operating synergies created by the merger, the new relationship with Air Canada provides for even greater operating improvements. The merged airline and Air Canada plan to work together to create value for each other through maintenance contracts, airport handling agreements and the eventual expansion of the Star Alliance agreement, which could include codesharing with Air Canada, consistent with the U.S.-Canada bilateral aviation agreement.

Fleet/Route System

US Airways/US Airways Express currently serves 179 cities and America West/America West Express serves 96 cities. When merged, the combined airline will become the nation's fifth largest airline, as measured by domestic Available Seat Miles (ASMs). The combined airline is expected to operate a mainline fleet of 361 planes (supported by 239 regional jets and 57 turboprops for feed into the mainline system), down from a total of 419 mainline aircraft operated by both airlines at the beginning of 2005.

US Airways projects returning 25 additional aircraft by the end of 2006, in addition to the 46 aircraft that US Airways already has announced it plans to return. Nearly all of the aircraft are being returned to General Electric Capital Aviation Services (GECAS). The combined airline also will take delivery of 13 Airbus A320 family aircraft previously ordered by America West Airlines. Airbus has also agreed to reschedule and reconfirm 30 narrow body A320-family aircraft deliveries from 2006 - 2008 to 2009 - 2010. To rationalize international flying, the merged company will work with Airbus to transition to an all-Airbus international fleet of A330 aircraft and, beginning in 2011, A350 aircraft.

Once fully integrated, the airline plans to have primary hubs in Charlotte, Phoenix and Philadelphia, and secondary hubs in Las Vegas and Pittsburgh. The merged airline plans to have focus cities in Boston, New York/LaGuardia, Washington, D.C., and Fort Lauderdale.

People/Culture

US Airways currently employs 30,100 people and America West employs 14,000 people. Contract integration of represented employees is expected to occur after integrated seniority lists have been negotiated between each respective airline's labor groups.

America West's Parker continued: "Although US Airways and America West are clearly two different airlines with two different cultures, our common traits far outnumber our differences. We are all aviation professionals proud of our heritage, eager to serve the traveling public and hopeful for the future. While seniority integration will be a challenge for us and our employees, we will ensure that those issues are discussed and resolved in a fair and equitable manner. Throughout this process, as has always been the case, we will continue our commitment of open and honest communication with our employees. We are building a new future that will present far greater job security and growth opportunities than either airline would have achieved on its own, and we are doing so with the ability for all to share in the collective upside."

Equity Allocation

The $350 million of private equity commitments are based upon a total implied private full equity value of $850 million for the merged corporation. Of that $850 million valuation, 45 percent will be allocated to America West, 41 percent to the new equity and 14 percent to US Airways. This valuation results in an implied value of $6.12 per share for the publicly traded America West stock, taking into effect dilution from outstanding warrants and options and the anticipated treatment of convertible securities. The partners have agreed that up to $650 million of total equity can be raised including any proceeds from planned a rights offering. Any additional equity would dilute all participants pro rata. However, any additional equity raised above $350 million will not reduce the $6.12 per share of implied value for the publicly traded America West stock. The right to participate in a rights offering for up to $150 million in common shares of the merged companies is to be allocated 61.5 percent to the stakeholders of US Airways and 38.5 percent to the common stockholders of America West.

Approvals

Under the terms of the agreement, the merger is expected to occur subsequent to confirmation of US Airways' plan of reorganization and emergence from Chapter 11. Because the merger and related equity investments are subject to US Airways' pending Chapter 11 proceedings in the U.S. Bankruptcy Court for the Eastern District of Virginia in Alexandria, the transaction will also have to be approved by the U.S. Bankruptcy Court and will be subject to a competitive bidding process that will be proposed to the Court. The transaction, which has been approved by both company's boards of directors, is also subject to the approval of America West's shareholders.

Both airlines will file the necessary documents for review with the U.S. Department of Justice, the U.S. Department of Transportation and the Securities and Exchange Commission as well as secure other necessary regulatory approvals. In addition, both airlines hold loans with a federal guarantee from the Air Transportation Stabilization Board (ATSB), and the carriers are in joint negotiations with the ATSB on the treatment of those loans under the proposed merger.

US Airways Group, Inc. is being advised by Seabury Group LLC as restructuring advisor and financial advisor and the law firm of Arnold & Porter LLP; advisors for America West Holdings Corp. include Greenhill & Co., LLC as its principal financial advisor, Merrill Lynch & Co. as structuring advisor to certain financings, and the law firms of Skadden, Arps, Slate Meagher and Flom, LLP and Cooley, Godward LLP.

Media Call and Webcast Information. . .

Conference call states that new airline to be based in Tempe and called US Airways.

Although they will operate on separate operating certificates for awhile, the America West name will disappear quickly after regulatory approval.

Ive followed HP since day 1, flown them since 1984, have friends that currently work for them in PHX who equally love the brand and identity, and will be extremely sad to see the America West name vanish from the skies forever and be replaced with USAirways name. :(

It's being reported on CNBC right now.

Here's what's being reported about the deal...


merger supposed to take place on a stage-by-stage basis.
$1 billion in equity raised from Airbus($250million), Air Canada, Air Wisconsin, hedge funds, some rights offerings, and sale/lease back of aircraft.



What did I tell you guys? Time shall speak for itself. They are keeping the
US Airways name :).

It seems to me that America West has a better reputation overall than US Airways. Although US has better brand recognition across the country, I would keep the America West name and livery just because US Airways has already been dragged through the mud so much as it is.

It seems to me that America West has a better reputation overall than US Airways. Although US has better brand recognition across the country, I would keep the America West name and livery just because US Airways has already been dragged through the mud so much as it is.


Not to be mean, but is that revelant? It's already a fact that the name will be US Airways, not America West.

I would keep the America West name and livery just because US Airways has already been dragged through the mud so much as it is.
As a long time customer and multi year CP I agree with you. The name has become a BIG negative and needs to go.

Thanks for bailing the pig out guys. I hope it works out for all of us

The merged airline plans to have focus cities in Boston, New York/LaGuardia, Washington, D.C., and Fort Lauderdale.

What the hell happened to LAX? Are they just giving up there? :mad:

What the hell happened to LAX? Are they just giving up there? :mad:

Yes! :)

Is the partnership with Northwest now in jeporady?

Any thoughts?

The only thing of interest is if it will be in Star Alliance or not.

The only thing of interest is if it will be in Star Alliance or not.

Did you miss this from the release?
"The merged airline and Air Canada plan to work together to create value for each other through maintenance contracts, airport handling agreements and the eventual expansion of the Star Alliance agreement"

Did you miss this from the release?
"The merged airline and Air Canada plan to work together to create value for each other through maintenance contracts, airport handling agreements and the eventual expansion of the Star Alliance agreement"

press release wishful thinking... read the FAQ and it says UA retains sole discretion as to whether the merged entity can be in *; I'm sure they're absolutely thrilled by the whole deal and will do everything possible to assure its success...

i.e., time to plan for a new alliance...

press release wishful thinking... read the FAQ and it says UA retains sole discretion as to whether the merged entity can be in *; I'm sure they're absolutely thrilled by the whole deal and will do everything possible to assure its success...

i.e., time to plan for a new alliance...

Where did you read that?

I see:

The merger envisions continued participation in the Star Alliance and code sharing with United Airlines. Now that the merger agreement is complete and announced, we can begin discussions with Star Alliance carriers and United to address the issues.

Where did you read that?

Here (http://www.americawest.com/aboutawa/companyprofile/usair/us_faqs.htm), point number five in the Customer Q&A on HP's web site. There are two different paragraphs addressing that question.

5. Q. How will this transaction affect current code-shares for AWA and US Airways?

A. US Airways is currently a Star Alliance member, including reciprocal frequent flyer programs with 15 airlines around the world. Their continued participation in the Star Alliance is dependent upon its domestic code-share relationship with United Airlines. The proposed merger would need to be approved by United as a modification to the terms of the United/US Airways code-share agreement for the purpose of being a member of the Star Alliance. At this time no discussions regarding the code-share agreement with United Airlines have taken place.

Nobody asked me if I am interested in flying on an airline called "US Air." I'm not. This I predict will be the worst marketing blunder since New Coke.

Here's a good article (http://www.washingtonpost.com/wp-dyn/content/article/2005/05/17/AR2005051701566.html) from the Washington Post detailing the history of US Airways and how they got into their current predicament.

When you click on the above link the Washington Post is unable to locate the article.

When you click on the above link the Washington Post is unable to locate the article.

Sorry. . . link is fixed. :o

I have a few thousand US Airways miles from many, many years ago so I'm in their system. Got this letter via e-mail a little while ago. Nothing from HP yet.

Dear AZ Travels the World:

Because of your loyalty to US Airways, I want to make you aware of an important step our company has taken. US Airways Group, Inc. and America West Holding Corp. today announced a merger that will expand service, create more choice for our customers, and enhance opportunities for you to earn and redeem Dividend Miles for award travel or upgrades.

The combined airline, which will be called US Airways, will create the first nationwide, full-service, low-cost, low-fare network airline, with service extending from coast-to-coast, as well as Canada, Mexico, the Caribbean, Latin America and Europe. With this merger, we are pioneering a new airline business model that has distinct advantages over other competitors:

-- Service, network, cost-structure and simplified pricing that you have come to expect; and
-- Customer amenities such as a world-class frequent flyer program, airport clubs, pre-assigned seating and First Class upgrades.

Until approval of the merger, a process expected to take several months, it will be business as usual for US Airways and America West customers, and there will be no joint marketing or operations between the two airlines. You should continue to book flights through www.usairways.com, US Airways reservations or your travel agent, check in for flights at US Airways counters and redeem Dividend Miles for flights on US Airways or any of our Star Alliance or frequent flyer program partners.

Upon approval of the merger, we will clearly communicate various customer initiatives, such as combining frequent flyer programs, co-locating airport gates and ticket counters, integrating Internet Web sites, and implementing other sales and marketing enhancements.

We have enclosed answers to a number of questions that you may have. Please be assured that as we move through this exciting process, we will keep you informed of important developments.

A dedicated section of www.usairways.com has been created to provide additional background information about this merger. As this process continues, we will be updating the site regularly.

Thank you for your continued support. We look forward to seeing you on your next US Airways flight.

Sincerely,

N. Bruce Ashby
Executive Vice President,
Marketing and Planning

Nobody asked me if I am interested in flying on an airline called "US Air." I'm not. This I predict will be the worst marketing blunder since New Coke.

Agree.

Joe B. has named it Air Frankenstein.

(I hope it works, but the numbers/funding are a real stretch.)

This is lousy for all the America West Elites. Their loyalty is now being rewarded with having to fly a crappy carrier. Hopefully, they will make the right choice and fly another airline.

WASJETBOY

This is lousy for all the America West Elites. Their loyalty is now being rewarded with having to fly a crappy carrier. Hopefully, they will make the right choice and fly another airline.

WASJETBOY
I don't necessarily see this being the case. I am hoping that Parker is able to turn things around over there so it isn't a "crappy carrier" anymore.

Lance

Hopefully that will be the case. In order to do that though, you need the cooperation and support of staff at all levels. US Airways at DCA is always short staffed and customer service complaints are always high. Seems ridiculous to me that when I am on the other side of the terminal flying CO, I hear broadcasts over the loudspeaker repeatedly for every US Airways flight one after the other.. "Passengers from flight XXXX from XYZ please wait at carousel 10 for your bags, they will be out in 45 minutes, thanks for flying US Airways."

Hopefully faithful America West flyers will not endure such foolishness with this new merger.

WASJETBOY

Hopefully that will be the case. In order to do that though, you need the cooperation and support of staff at all levels. US Airways at DCA is always short staffed and customer service complaints are always high. Seems ridiculous to me that when I am on the other side of the terminal flying CO, I hear broadcasts over the loudspeaker repeatedly for every US Airways flight one after the other.. "Passengers from flight XXXX from XYZ please wait at carousel 10 for your bags, they will be out in 45 minutes, thanks for flying US Airways."

Hopefully faithful America West flyers will not endure such foolishness with this new merger.

WASJETBOY

I fly in and out of DCA all the time. I have never heard such a thing. I almost live at that airport.

Furthermore it will be HP management that will now be in charge. From what I remember HP a while back had baggage delays and other problems and they worked them out. I have confidence in HP management that they can work out the problems that CCY management couldn't do.

Hopefully that will be the case. In order to do that though, you need the cooperation and support of staff at all levels. US Airways at DCA is always short staffed and customer service complaints are always high. Seems ridiculous to me that when I am on the other side of the terminal flying CO, I hear broadcasts over the loudspeaker repeatedly for every US Airways flight one after the other.. "Passengers from flight XXXX from XYZ please wait at carousel 10 for your bags, they will be out in 45 minutes, thanks for flying US Airways."

Hopefully faithful America West flyers will not endure such foolishness with this new merger.

WASJETBOY


This merger is exactly what the ailing industry needs. I am uncertain the source for WASJETBOYs stastics on US AIRWAYS cust serv complaints, but according to the most recent US DOT stats, US AIRWAYS ranks 5th in customer complaints after DL, AA, NW, and UA. And interstingly enough HP ranks one notch above Southwest in customer complaints. I believe that this is the "shot in the arm" that US will need to become a powerful airline once again. Do not underestimate Doug Parker.

Nonetheless, being a person who has worked IN the airline industry, I understand and sympathize for the airlines extreme complexities. The facts are that there WILL be problems/operations issues with this merger. HP and US have thier work cut out for them. If the only "foolishness" passengers will have to deal with is waiting for bags, then we will all be lucky.

Let the merging begin!


PILOTBOY :D

[QUOTE=US AIRWAYS FAN]I fly in and out of DCA all the time. I have never heard such a thing. I almost live at that airport.

Yes, well try almost any US Airways afternoon arrival on Sunday into DCA from destination XYZ and you are guaranteed to hear it at least once. I heard the announcement for different flights several consecutive Sundays in a row. Good for US that HP will be doing the majority of the managerial work anyway. Better management will be more effective for US.

WASJETBOY

"nce fully integrated, the airline plans to have primary hubs in Charlotte, Phoenix and Philadelphia, and secondary hubs in Las Vegas and Pittsburgh. The merged airline plans to have focus cities in Boston, New York/LaGuardia, Washington, D.C., and Fort Lauderdale. "


Anyone remember the USAir-PSA merger?

Could the West be in for another diaster like that?

You keep forgetting. HP is at the steering wheel not US.

Why do they repeatedly push that it's "the first full-service nationwide airline"

That statement is clearly not true. Perhaps it is when they inserted low cost carrier into the statement, but they say it multiple ways.

Anyone remember the USAir-PSA merger?


Yes, thank GOD it's HP at the helm and not the other way around. I still have a bitter taste in my mouth over that whole mess from nearly 20 years ago. "yea, lets buy PSA so that we can spead our wings out west, then we'll completely pull out of the west". Karma's a b**ch aint it :D

It seems to me that America West has a better reputation overall than US Airways. Although US has better brand recognition across the country, I would keep the America West name and livery just because US Airways has already been dragged through the mud so much as it is.

This was the perfet time to bring back the Piedmont name. I have not flown on US for several years and have no plans to go back soon. If they dropped the US name, I would know they were serious about having a fresh start. Very sad day for America West.

It's time to move this whole forum to "Discontinued Programs/Partners."