Originally Posted by deelmakur
These two carriers together would be a "debt bomb". ... The government is in up to it's eyeballs, with guarantees that neither can pay back. In effect, it would take a government write off of the debt to properly recapitalize them in a way that they could repair their balance sheet. If the government did that, every other carrier would scream bloody murder. My guess is that it was the government pressuring HP that caused them to suddenly break off the ATA bid.
OK, first of all, HP is doing just fine paying back the government, and doesn't look to have any problem to continue doing so. HP had some very strong revenue trends explained in great detail in the earnings release and conference call Wednesday.
In fact, it is US' ATSB-backed debt that could lead to some sort of deal. That airline is dying, and I bet you Uncle Sam doesn't want to be the one to turn out the lights. But with US still in the bankruptcy process, a capable management team (meaning HP's) could shed more debt in terms of leases and issue equity to other debtholders to further reduce the debt load.
Finally, the ATSB had signed off on HP's potential bid for TZ. Again, what happened was Doug Parker couldn't get the assets at a price he was willing to pay. That's just plain smart. Anyone underestimating Doug Parker is likely to be surprised.
Originally Posted by ClueByFour
I've yet to hear any good reasoning as to why David Bonderman (a very smart cookie) is going to intentionally piss away his perfectly healthy %55 stake in HP (bearing in mind that he did not think enough of the US franchise to get into a bidding war with Bronner 2 years ago)
Actually, Bonderman only have 55 percent of the voting interest in HP. Most of that is due to owning all the supervoting Class A shares, with 50 votes per share. But by pretty much any account, the Class A shares are not considered to be worth 50 times the Class B shares.