Originally Posted by ryerflyer
Excerpt from AP News 11/23/05:
US Airways Group Inc. said its integration with America West -- a merger that is the cornerstone of its bankruptcy exit -- will face "significant challenges" and the combined company may not perform as expected.
While the acquisition will result in certain synergies and growth opportunities in the future, the company said its significant operating losses haven't subsided and will likely continue into 2006.
In a Securities and Exchange Commission filing, US Airways said Tuesday it "cannot assure" the synergies will be realized. "We may not perform as well financially as we expect following the merger," the company cautioned.
The integration of the two air carriers "will be costly, complex and time consuming," US Airways said, and management "will have to devote substantial effort to such integration that could otherwise be spent on operational matters or other strategic opportunities." The filing also noted that the rapid growth of low-cost carriers has "had a profound impact on industry revenues."
I think we all knew this was coming. None of US's airline forecasts have been realized. The idea that HP could suddenly make the US side of the network instantly profitable INCLUDING integration costs was nuts. However, pre-merger US was still loosing far LESS money than DL or UA. Always look for the positive.
