Us Merger Speculation Ramping Up Internally
Apr 20, 2005, 11:45 am
#31
Join Date: May 2004
Posts: 1,955
I feel like a lot of the legacies have been banking their long term strategies on the failure of US (most likely) and UA. This would reduce capacity and allow them to right size and increase revenue. If this merger (and in no way is one of equals. HP had a small profit last 1/4 and they lose nothing by walking away for any negotiations that don't go their way while US has verything on the line) looks like it might threaten some other carrier like a CO, NW or DL then I think things could get very interesting....
Apr 20, 2005, 2:41 pm
#32
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Tom's take on Bonderman is good. Let's not forget that a few weeks ago there was reported contact between US and Jonathan Orenstein of Mesa. Orenstein and Bonderman are joined at the hip (Orenstein worked with him at CO Express, left to go to Belgium to run Virgin Express for him and Branson, and if memory serves me, Mr. B has some involvement with Mesa). What you are watching is the "big show". This one's out of the hands of the company. People like GE Capital, and Texas Pacific, are playing this one out, and clearly using the press to signal each other, as well as other people who have been sitting on the sidelines.
Apr 20, 2005, 3:25 pm
#33
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Location: Pittsburgh, PA
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Posts: 2,047
deelmakur - you're the God in this area (you must be loving all this action playing out in the press) so I defer.
But around the same time you posted this, I started wondering whether Branson might be involved here. Any thoughts?
Presumably with a relatively small equity investment (in US), he could get a piece of US, then buy HP. And then have a big stake in a fairly large (#4?) airline in the US. Not his usualy style, but has to at least be an interesting scenario. For him the debt must be a serious factor.
How would foreign ownership rules factor in?
But around the same time you posted this, I started wondering whether Branson might be involved here. Any thoughts?
Presumably with a relatively small equity investment (in US), he could get a piece of US, then buy HP. And then have a big stake in a fairly large (#4?) airline in the US. Not his usualy style, but has to at least be an interesting scenario. For him the debt must be a serious factor.
How would foreign ownership rules factor in?
Apr 20, 2005, 4:28 pm
#35
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There's a lot of velocity here. Bronner is flushed. The government is screwed, and most airlines have a balance sheet that looks like the economy of Bangladesh. No normal person would loan anything like this a dime, yet GE, which makes most of its profit from its financial activity, and is no slouch, is acting like a moonstruck kid. Everybody in this deal is looking for a way out, and if it accidentally pays out, so much the better. These outside money guys are calling the shots. Meantime, you have regionals trying to buy their future revenue, like Air Wis, you have Branson floating around, paying people while he tries to find an operating certificate (read domestic partner). I'm a broken recored on this, but JetBlue, and some of the other LCC's must have stained their undies when SWA figured out how to come into markets they thought were insulated. There's value here, all of a sudden. It's just like Adelphia Cable. The owners looted the joint, it bankrupted, the bonds went upside down, but smart guys bought them up cheap, realizing the value of the franchise. Next thing you see are the lenders, and investors, saying they're going to keep the place, but mysteriously, almost every day, there's a story in the Journal or Times about somebody ready to buy them. Finally, somebody floats Cablevision's name. Most people think they are poor operators, but they also frequently overpay for things. In this case, stupidity becomes a positive, since anything you put in print about an outfit like that is believable, and thus scares the other players. That deal finally came down when one night, the papers said Cablevision was making a big offer, and by next morning a consortium of Time Warner Cable and Comcast had paid a huge premium to just take the thing off the table. If you recall the original Proposed UA/US merger, it hit like a ton of bricks,with no warning. If a deal needs to be kept secret on Wall Street, it is. They know how to be quiet. This is better than a miniseries, Make no mistake, they are leaking it. For one thing, if someone at the business papers gets wind of it, you can generally get them to sit on it, by promising them an exclusive, with all the facts, when it is timely. They will trust you, until you screw them, but smart deal people don't do that. No way this stuff is out there if the wiseguys don't want it to be. Stay tuned.
Apr 20, 2005, 4:36 pm
#36
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Originally Posted by deelmakur
No way this stuff is out there if the wiseguys don't want it to be. Stay tuned.
FWIW, I agree with you, but the man does make one scratch his head.
Last edited by longing4piedmont; Apr 20, 2005 at 4:58 pm
Apr 20, 2005, 5:17 pm
#37
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Location: PIT/DFW/MEL; AA Exec. Platinum & 4MM, QF WP
Posts: 7,689
Originally Posted by deelmakur
If you recall the original Proposed UA/US merger, it hit like a ton of bricks,with no warning. If a deal needs to be kept secret on Wall Street, it is. They know how to be quiet. This is better than a miniseries, Make no mistake, they are leaking it. For one thing, if someone at the business papers gets wind of it, you can generally get them to sit on it, by promising them an exclusive, with all the facts, when it is timely. They will trust you, until you screw them, but smart deal people don't do that. No way this stuff is out there if the wiseguys don't want it to be. Stay tuned.
Apr 20, 2005, 5:54 pm
#38
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Bronner works with a meat cleaver. Whoever is doing this is a surgeon. Don't worry about profits. This is all about strategy, gates, cheap airplanes, cheap capacity, busted unions, and not letting Southwest get any bigger.
Apr 20, 2005, 6:02 pm
#39
Join Date: Apr 2005
Location: Wake County, NC (KRDU)
Posts: 13
Originally Posted by ClueByFour
If the ATSB allows HP to swallow US (particularly in light of the fact that America West has an ATSB loan), all taxpayers everywhere should scream.
America West and US have both coasts covered. They have nothing in the middle. This stellar combination, for those of you with long memories, is a large part of the reason why the PSA/US merger failed.
The other issue is this: United is not going to stand by and let HP into Star. They directly compete in all sorts of ways out west.
America West and US have both coasts covered. They have nothing in the middle. This stellar combination, for those of you with long memories, is a large part of the reason why the PSA/US merger failed.
The other issue is this: United is not going to stand by and let HP into Star. They directly compete in all sorts of ways out west.
Originally Posted by RON01
So you build up a Focus-City and/or a HUB at Kansas City (KMCI)
This would have the added benifet of N-S traffic:
Midwest from/to Gulf Coast & Florida
Along with E-W traffic.
Example a list of cities that could be served by KMCI:
KJAX - Jacksonville, Florida
KMCO - Orlando, Florida
KTPA - Tampa, Florida
KFLL - Ft Lauderdale, Florida
KMIA - Miami, Florida
KRSW - Fort Myers, Florida
KTLH - Tallahassee, Florida
KAPF - Naples, Florida
KPBI - West Palm Beach, Florida
KDAB - Daytona Beach, Florida
KGNV - Gainesville, Florida
KBIX - Biloxi, Mississippi
KHKS - Jackson, Mississippi
KBNA - Nashville, Tennesee
KMEM - Memphis, Tennesee
KTYS - Knoxville, Tennesee
KCHA - Chattanooga, Tennesee
KLEX - Lexington, Kentucky
KPAH - Paducah, Kentucky
KSDF - Louisville, Kentucky
KCLE - Cleveland, Ohio
KTOL - Toledo, Ohio
KDAY - Dayton, Ohio
KCVG - Cincinnati, Ohio / Covington, Kentucky
KCMH - Columbus, Ohio
KIND - Indianapolis, Indiana
KFWA - Fort Wayne, Indiana
KMDH - Carbondale/Murphysboro, Illinois
KSPI - Springfield, Illinois
KBMI - Bloomington/Normal, Illinois
KPIA - Peoria, Illinois
KDEC - Decatur, Illinois
KRFD - Rockford, Illinois
KMLI - Moline, Illinois
KARR - Chicago (Aurora), Illinois
KMDW - Chicago (Midway), Illinois
KORD - Chicago (Ohare Intl), Illinois
KDPA - West Chicago (Du Page), Illinois
KLAN - Lansing, Michigan
KDTW - Detroit, Michigan
KMBS - Saginaw, Michigan
KTVC - Traverse City, Michigan
KMQT - Marquette, Michigan
KMSN - Madison, Wisconsin
KMKE - Milwaukee, Wisconsin
KGRB - Green Bay, Wisconsin
KMSP - Minneapolis, Minnesota
KDLH - Duluth, Minnesota
KINL - International Falls, Minnesota
KBRD - Brainerd, Minnesota
KDSM - Des Moines, Iowa
KSUX - Sioux City, Iowa
KCBF - Council Bluffs, Iowa
KDVN - Davenport, Iowa
KDBQ - Dubuque, Iowa
KJEF - Jefferson City, Missouri
KSTL - St. Louis, Missouri
KLIT - Little Rock, Arkansas
KXNA - Fayetteville, Arkansas
KHOT - Hot Springs, Arkansas
KMSY - New Orleans, Louisiana
KSHV - Shreveport, Louisiana
KAEX - Alexandria, Louisiana
KBTR - Baton Rouge, Louisiana
KMLU - Monroe, Louisiana
KAUS - Austin, Texas
KIAH - Houston (Intcntl), Texas
KHOU - Houston (Hobby), Texas
KSAT - San Antonio, Texas
KDFW - Dallas-Fort Worth, Texas
KELP - El Paso, Texas
KLBB - Lubbock, Texas
KMAF - Midland, Texas
KAMA - Amarillo, Texas
KGLS - Galveston, Texas
KCRP - Corpus Christi, Texas
KBRO - Brownsville/South Padre Island, Texas
KLRD - Laredo, Texas
KOKC - Oklahoma City, Oklahoma
KTUL - Tulsa, Oklahoma
KFOE - Topeka, Kansas
KICT - Wichita, Kansas
KDDC - Dodge City, Kansas
KLNK - Lincoln, Nebraska
KLBF - North Platte, Nebraska
KPIR - Pierre, South Dakota
KFSD - Sioux Falls, South Dakota
KBIS - Bismarck, North Dakota
KGFK - Grand Forks, North Dakota
KMOT - Minot, North Dakota
KDIK - Dickinson, North Dakota
To see what those airport codes mean:
Airport Locator
This would have the added benifet of N-S traffic:
Midwest from/to Gulf Coast & Florida
Along with E-W traffic.
Example a list of cities that could be served by KMCI:
KJAX - Jacksonville, Florida
KMCO - Orlando, Florida
KTPA - Tampa, Florida
KFLL - Ft Lauderdale, Florida
KMIA - Miami, Florida
KRSW - Fort Myers, Florida
KTLH - Tallahassee, Florida
KAPF - Naples, Florida
KPBI - West Palm Beach, Florida
KDAB - Daytona Beach, Florida
KGNV - Gainesville, Florida
KBIX - Biloxi, Mississippi
KHKS - Jackson, Mississippi
KBNA - Nashville, Tennesee
KMEM - Memphis, Tennesee
KTYS - Knoxville, Tennesee
KCHA - Chattanooga, Tennesee
KLEX - Lexington, Kentucky
KPAH - Paducah, Kentucky
KSDF - Louisville, Kentucky
KCLE - Cleveland, Ohio
KTOL - Toledo, Ohio
KDAY - Dayton, Ohio
KCVG - Cincinnati, Ohio / Covington, Kentucky
KCMH - Columbus, Ohio
KIND - Indianapolis, Indiana
KFWA - Fort Wayne, Indiana
KMDH - Carbondale/Murphysboro, Illinois
KSPI - Springfield, Illinois
KBMI - Bloomington/Normal, Illinois
KPIA - Peoria, Illinois
KDEC - Decatur, Illinois
KRFD - Rockford, Illinois
KMLI - Moline, Illinois
KARR - Chicago (Aurora), Illinois
KMDW - Chicago (Midway), Illinois
KORD - Chicago (Ohare Intl), Illinois
KDPA - West Chicago (Du Page), Illinois
KLAN - Lansing, Michigan
KDTW - Detroit, Michigan
KMBS - Saginaw, Michigan
KTVC - Traverse City, Michigan
KMQT - Marquette, Michigan
KMSN - Madison, Wisconsin
KMKE - Milwaukee, Wisconsin
KGRB - Green Bay, Wisconsin
KMSP - Minneapolis, Minnesota
KDLH - Duluth, Minnesota
KINL - International Falls, Minnesota
KBRD - Brainerd, Minnesota
KDSM - Des Moines, Iowa
KSUX - Sioux City, Iowa
KCBF - Council Bluffs, Iowa
KDVN - Davenport, Iowa
KDBQ - Dubuque, Iowa
KJEF - Jefferson City, Missouri
KSTL - St. Louis, Missouri
KLIT - Little Rock, Arkansas
KXNA - Fayetteville, Arkansas
KHOT - Hot Springs, Arkansas
KMSY - New Orleans, Louisiana
KSHV - Shreveport, Louisiana
KAEX - Alexandria, Louisiana
KBTR - Baton Rouge, Louisiana
KMLU - Monroe, Louisiana
KAUS - Austin, Texas
KIAH - Houston (Intcntl), Texas
KHOU - Houston (Hobby), Texas
KSAT - San Antonio, Texas
KDFW - Dallas-Fort Worth, Texas
KELP - El Paso, Texas
KLBB - Lubbock, Texas
KMAF - Midland, Texas
KAMA - Amarillo, Texas
KGLS - Galveston, Texas
KCRP - Corpus Christi, Texas
KBRO - Brownsville/South Padre Island, Texas
KLRD - Laredo, Texas
KOKC - Oklahoma City, Oklahoma
KTUL - Tulsa, Oklahoma
KFOE - Topeka, Kansas
KICT - Wichita, Kansas
KDDC - Dodge City, Kansas
KLNK - Lincoln, Nebraska
KLBF - North Platte, Nebraska
KPIR - Pierre, South Dakota
KFSD - Sioux Falls, South Dakota
KBIS - Bismarck, North Dakota
KGFK - Grand Forks, North Dakota
KMOT - Minot, North Dakota
KDIK - Dickinson, North Dakota
To see what those airport codes mean:
Airport Locator
Apr 20, 2005, 6:07 pm
#40
Join Date: Apr 2005
Location: Wake County, NC (KRDU)
Posts: 13
Originally Posted by phlwookie
There sure would some serious sickness over at UA WHQ if F9 were to do that. 
I still think that any near term consolidation of sick airlines will need to be done with the combination of Chapter 7 bankruptcy and a third party to stich together the remaining assets. I suppose even a three-way merger, something like HP + UA + US could work in this way. Note that I'm not hoping for such a scenario - it would more than likely be horrible for many employees - but it will take something dramatic to fix the mess that is the legacy airlines.
I still think that any near term consolidation of sick airlines will need to be done with the combination of Chapter 7 bankruptcy and a third party to stich together the remaining assets. I suppose even a three-way merger, something like HP + UA + US could work in this way. Note that I'm not hoping for such a scenario - it would more than likely be horrible for many employees - but it will take something dramatic to fix the mess that is the legacy airlines.
That would have United quaking in their boots, and maby push United into ch7.
Apr 20, 2005, 6:17 pm
#41
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Location: east coast USA
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Posts: 403
Uh, I highly doubt KANSAS CITY could be a hub...much less serve cities like KAPF and KDAB- DAB doesn't even have service to NYC nor any US service! But the main point is that two small cities relatively far apart ain't gonna work...I like the barbell a lot better than switching resources over to someplace like Kansas City.
Example a list of cities that could be served by KMCI:
KJAX - Jacksonville, Florida
KMCO - Orlando, Florida
KTPA - Tampa, Florida
KFLL - Ft Lauderdale, Florida
KMIA - Miami, Florida
KRSW - Fort Myers, Florida
KTLH - Tallahassee, Florida
KAPF - Naples, Florida
KPBI - West Palm Beach, Florida
KDAB - Daytona Beach, Florida
KGNV - Gainesville, Florida
KBIX - Biloxi, Mississippi
KHKS - Jackson, Mississippi
KBNA - Nashville, Tennesee
KMEM - Memphis, Tennesee
KTYS - Knoxville, Tennesee
KCHA - Chattanooga, Tennesee
KLEX - Lexington, Kentucky
KPAH - Paducah, Kentucky
KSDF - Louisville, Kentucky
KCLE - Cleveland, Ohio
KTOL - Toledo, Ohio
KDAY - Dayton, Ohio
KCVG - Cincinnati, Ohio / Covington, Kentucky
KCMH - Columbus, Ohio
KIND - Indianapolis, Indiana
KFWA - Fort Wayne, Indiana
KMDH - Carbondale/Murphysboro, Illinois
KSPI - Springfield, Illinois
KBMI - Bloomington/Normal, Illinois
KPIA - Peoria, Illinois
KDEC - Decatur, Illinois
KRFD - Rockford, Illinois
KMLI - Moline, Illinois
KARR - Chicago (Aurora), Illinois
KMDW - Chicago (Midway), Illinois
KORD - Chicago (Ohare Intl), Illinois
KDPA - West Chicago (Du Page), Illinois
KLAN - Lansing, Michigan
KDTW - Detroit, Michigan
KMBS - Saginaw, Michigan
KTVC - Traverse City, Michigan
KMQT - Marquette, Michigan
KMSN - Madison, Wisconsin
KMKE - Milwaukee, Wisconsin
KGRB - Green Bay, Wisconsin
KMSP - Minneapolis, Minnesota
KDLH - Duluth, Minnesota
KINL - International Falls, Minnesota
KBRD - Brainerd, Minnesota
KDSM - Des Moines, Iowa
KSUX - Sioux City, Iowa
KCBF - Council Bluffs, Iowa
KDVN - Davenport, Iowa
KDBQ - Dubuque, Iowa
KJEF - Jefferson City, Missouri
KSTL - St. Louis, Missouri
KLIT - Little Rock, Arkansas
KXNA - Fayetteville, Arkansas
KHOT - Hot Springs, Arkansas
KMSY - New Orleans, Louisiana
KSHV - Shreveport, Louisiana
KAEX - Alexandria, Louisiana
KBTR - Baton Rouge, Louisiana
KMLU - Monroe, Louisiana
KAUS - Austin, Texas
KIAH - Houston (Intcntl), Texas
KHOU - Houston (Hobby), Texas
KSAT - San Antonio, Texas
KDFW - Dallas-Fort Worth, Texas
KELP - El Paso, Texas
KLBB - Lubbock, Texas
KMAF - Midland, Texas
KAMA - Amarillo, Texas
KGLS - Galveston, Texas
KCRP - Corpus Christi, Texas
KBRO - Brownsville/South Padre Island, Texas
KLRD - Laredo, Texas
KOKC - Oklahoma City, Oklahoma
KTUL - Tulsa, Oklahoma
KFOE - Topeka, Kansas
KICT - Wichita, Kansas
KDDC - Dodge City, Kansas
KLNK - Lincoln, Nebraska
KLBF - North Platte, Nebraska
KPIR - Pierre, South Dakota
KFSD - Sioux Falls, South Dakota
KBIS - Bismarck, North Dakota
KGFK - Grand Forks, North Dakota
KMOT - Minot, North Dakota
KDIK - Dickinson, North Dakota
KJAX - Jacksonville, Florida
KMCO - Orlando, Florida
KTPA - Tampa, Florida
KFLL - Ft Lauderdale, Florida
KMIA - Miami, Florida
KRSW - Fort Myers, Florida
KTLH - Tallahassee, Florida
KAPF - Naples, Florida
KPBI - West Palm Beach, Florida
KDAB - Daytona Beach, Florida
KGNV - Gainesville, Florida
KBIX - Biloxi, Mississippi
KHKS - Jackson, Mississippi
KBNA - Nashville, Tennesee
KMEM - Memphis, Tennesee
KTYS - Knoxville, Tennesee
KCHA - Chattanooga, Tennesee
KLEX - Lexington, Kentucky
KPAH - Paducah, Kentucky
KSDF - Louisville, Kentucky
KCLE - Cleveland, Ohio
KTOL - Toledo, Ohio
KDAY - Dayton, Ohio
KCVG - Cincinnati, Ohio / Covington, Kentucky
KCMH - Columbus, Ohio
KIND - Indianapolis, Indiana
KFWA - Fort Wayne, Indiana
KMDH - Carbondale/Murphysboro, Illinois
KSPI - Springfield, Illinois
KBMI - Bloomington/Normal, Illinois
KPIA - Peoria, Illinois
KDEC - Decatur, Illinois
KRFD - Rockford, Illinois
KMLI - Moline, Illinois
KARR - Chicago (Aurora), Illinois
KMDW - Chicago (Midway), Illinois
KORD - Chicago (Ohare Intl), Illinois
KDPA - West Chicago (Du Page), Illinois
KLAN - Lansing, Michigan
KDTW - Detroit, Michigan
KMBS - Saginaw, Michigan
KTVC - Traverse City, Michigan
KMQT - Marquette, Michigan
KMSN - Madison, Wisconsin
KMKE - Milwaukee, Wisconsin
KGRB - Green Bay, Wisconsin
KMSP - Minneapolis, Minnesota
KDLH - Duluth, Minnesota
KINL - International Falls, Minnesota
KBRD - Brainerd, Minnesota
KDSM - Des Moines, Iowa
KSUX - Sioux City, Iowa
KCBF - Council Bluffs, Iowa
KDVN - Davenport, Iowa
KDBQ - Dubuque, Iowa
KJEF - Jefferson City, Missouri
KSTL - St. Louis, Missouri
KLIT - Little Rock, Arkansas
KXNA - Fayetteville, Arkansas
KHOT - Hot Springs, Arkansas
KMSY - New Orleans, Louisiana
KSHV - Shreveport, Louisiana
KAEX - Alexandria, Louisiana
KBTR - Baton Rouge, Louisiana
KMLU - Monroe, Louisiana
KAUS - Austin, Texas
KIAH - Houston (Intcntl), Texas
KHOU - Houston (Hobby), Texas
KSAT - San Antonio, Texas
KDFW - Dallas-Fort Worth, Texas
KELP - El Paso, Texas
KLBB - Lubbock, Texas
KMAF - Midland, Texas
KAMA - Amarillo, Texas
KGLS - Galveston, Texas
KCRP - Corpus Christi, Texas
KBRO - Brownsville/South Padre Island, Texas
KLRD - Laredo, Texas
KOKC - Oklahoma City, Oklahoma
KTUL - Tulsa, Oklahoma
KFOE - Topeka, Kansas
KICT - Wichita, Kansas
KDDC - Dodge City, Kansas
KLNK - Lincoln, Nebraska
KLBF - North Platte, Nebraska
KPIR - Pierre, South Dakota
KFSD - Sioux Falls, South Dakota
KBIS - Bismarck, North Dakota
KGFK - Grand Forks, North Dakota
KMOT - Minot, North Dakota
KDIK - Dickinson, North Dakota
Apr 20, 2005, 6:58 pm
#42
Original Poster
Join Date: Oct 2001
Location: From: PWM
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Posts: 4,401
The Kansas City HUB thing has been done before.....
TWICE!
EA was huge there and ran a respectable hub in the infancy days of new hubs. EA is no more.
Some time after EA folded and BN (Braniff for you newbees) #3 (or was it #2) was scrambling for some way to turn a profit, they left DFW and headed for Kansas City. Needless to say, it was a horrific decision and the bottom fell totally out shortly thereafter.
In other news, I'd like someone to explain to me this repetitive notion of needing a solid N - S hub in the midwest. For What? For WHOM? NWO sort of does that now, but I wouldn't say their locations in DTW or MSP are the envy of the industry. ORD is for AA and UA, but could just as easily be in OH or KY, right? I don't understand the drumbeat by some on FT that without a midwest hub for N - S, any merger is doomed. I don't see it that way at all. There will always be markets that any given airline is weak in. UA and AA continue to be woefully weak in the midsouth USA. Ditto for CO. DL and US have it largely on their own. Likewise, NW and AA have a lot of the true midwest markets sewn up (Nebraska, Iowa, OK, etc), why would US need to be there at all?
EA was huge there and ran a respectable hub in the infancy days of new hubs. EA is no more.
Some time after EA folded and BN (Braniff for you newbees) #3 (or was it #2) was scrambling for some way to turn a profit, they left DFW and headed for Kansas City. Needless to say, it was a horrific decision and the bottom fell totally out shortly thereafter.
In other news, I'd like someone to explain to me this repetitive notion of needing a solid N - S hub in the midwest. For What? For WHOM? NWO sort of does that now, but I wouldn't say their locations in DTW or MSP are the envy of the industry. ORD is for AA and UA, but could just as easily be in OH or KY, right? I don't understand the drumbeat by some on FT that without a midwest hub for N - S, any merger is doomed. I don't see it that way at all. There will always be markets that any given airline is weak in. UA and AA continue to be woefully weak in the midsouth USA. Ditto for CO. DL and US have it largely on their own. Likewise, NW and AA have a lot of the true midwest markets sewn up (Nebraska, Iowa, OK, etc), why would US need to be there at all?
Apr 20, 2005, 7:57 pm
#43
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Posts: 4,278
Originally Posted by Arrzee
As I posted on another thread, these "merger talks" have become way too public. Something else is going on...
In my opinion, the news of this "talk" is only giving US Airways the much needed "time."
Jiburi
Apr 20, 2005, 9:20 pm
#44
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Posts: 9,255
Originally Posted by sbtinme
In other news, I'd like someone to explain to me this repetitive notion of needing a solid N - S hub in the midwest. For What? For WHOM?
When US bought PSA in the late 80s/early 90s, you had a solid N - S route structure in the east and west, and transcons (some stopping at MCI) in the middle. It did not work.
The subtle difference is that now US has southwest running them off both coasts. You can't be a nationwide airline (particularly if one of the "advantages"
claimed is hub and spoke) without N - S coverage in the middle of the country. People do live there, hard as it is to believe.
Apr 21, 2005, 12:32 am
#45
Join Date: Apr 2000
Location: Between SNA and ONT
Posts: 1,486
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.
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)