abeflyer

From the Wall Street Journal:

Merger negotiations between US Airways Group Inc. and America West Holdings Corp. picked up momentum last week, according to people familiar with the matter, with the carriers hoping to hammer out a deal ahead of America West's annual meeting May 17.

Several potential investors in a merger are studying a proposed business plan that foresees the combined company operating under the US Airways brand and focusing attention on Midwestern markets while introducing flights to Hawaii.

Another person said the merged airline's ability to compete for passengers in the Midwest also would be important, as would the shift of America West's routes into the global Star Alliance marketing group, which already counts US Airways and UAL Corp.'s United Airlines as members.

"There are abundant sources of equity for the deal," said one person close to the talks. Those investors could include hedge funds, other airlines and Retirement Systems of Alabama, a pension fund that is US Airways' largest shareholder.

Parker to run combined airline.


Wow Hawaii! and it sounds like Air Wisconsin to fill in Mid-West!

formeraa

Hopefully, a combined airline could exploit US Airways' relative strength in the Midwest. Certainly, HP couldn't ever do it alone in Columbus!

rrohio

CNBC just comfirmed the WSJ comments on the merger talks with focus on the midwest

ByrdluvsAWACO

Since this is a crosspost between the HP and US forums. I'll just point to what I posted on the US forum.

http://www.flyertalk.com/forum/showp...7&postcount=13

AgtMulder

Ditto to what you just said.

The US forums are full of people who were longtime US flyers who have jumped ship. Complaints are plentiful, and many people (myself included) who have had interactions with US have been left with a rotten taste in their mouth.

How in the world would HP/US operating under a US brand-name convince former (now heavily disillusioned) US-boosters to come back? Especially if they kept most of the jokers who caused US to go down the can?

Hawaii is a waste of planes and time considering the deal with Hawaiian, and I'd rather visit an international destination anyway down south.

How sad.

formeraa

Unless HP gets to dump all US employees and hire some back on its own terms, I don't see how this benefits HP at all. That being said, HP is not exactly on solid financial footing and GE (and other lenders) may be forcing the issue here.

abeflyer

Actually from what I read, the combined entity would be run by HP. US has some excellent front line people who currently like CO of the 90's are deeply demoralized. Create excitement and a good management team and the US brand could be like CO with the US employees easily carrying their weight--remember US's new contracts were patterned after AWA's along with almost the same wage scale. They have to dump the US managment who are B grade (all the good ones jumped ship already) or are financial types that wouldn't know how to run an airline.

sanFF

I havent flown HP to Hawaii since 1991 when they had Non Stop service from
PHX. I hope the route returns although I doubt it will be a 747.

WebTraveler

Here we go again.....is this really a sound business decision? Emphasis on the midwest and Hawaii? Airlines complain of over capacity and reduced fares, so America West runs off and quickly merges and then adds Hawaii to its roster? Like Hawaii is going to save the airlines? Granted, US Airways has an incredible east coast base of potential passengers to potentially draw from. But on the other hand, America West has struggled in fulfilling its code share deal with Hawaiian to route passengers through Phoenix to Hawaii....You'd think if the existing deal was a raging success that Hawaiian and America West would want to team up for more flights, but they don't because connecting traffic counts for very little of the traffic from PHX-HNL.....I am wondering if ego has taken over for good decision making.

formeraa

As for PHX-HNL, HP apparently has no pricing flexibility on HA's flights. Fares are much cheaper on HA's website. I assume that HA has total pricing authority and keeps the connecting fares very high (don't know exactly why)/

formeraa

While I like and personally know some of HP's current management, I'm not sure they are exactly CO caliber. They are good people, but it took tremendous motivation and sheer brainpower to turn CO around. It would take a miracle to pull off an HP/US merger.

It's too bad that HP and TW couldn't have merged a few years ago. I think that they would have had a better chance of survival.

ByrdluvsAWACO

Why? It would have been the same situation. One weak airline merging with a failing one.

martin33

true, but with potentially better geography through STL-- more potential for 2-leg trips than US/HP could manage. even so, it's good it didn't happen. TW's fleet costs would have sank the combined entity after 9/11 in any event.

ByrdluvsAWACO

TW's costs were too high even before 911.

formeraa

But, if you remember, TW had made tremendous strides in lowering its costs before the bankruptcy. I believe that, with some relatively minor changes in cost, that an HP/TW combination would have been interesting. That being said, 9/11 probably would have done them in.