Sponsor Message:
Civil Aviation Forum
My Starred Topics | Profile | New Topic | Forum Index | Help | Search 
Will Boeing Fight US/HP Merger?  
User currently offlineChrisNH From United States of America, joined Jun 1999, 4011 posts, RR: 2
Posted (8 years 11 months 2 days 22 hours ago) and read 5766 times:

I ask this because Airbus is going to be a prime investor, and we all know what THAT is a euphemism for: The next orders for aircraft will be Airbus.

Chris in NH

40 replies: All unread, showing first 25:
 
User currently offlineAvek00 From United States of America, joined Oct 2004, 4282 posts, RR: 20
Reply 1, posted (8 years 11 months 2 days 22 hours ago) and read 5745 times:

Read the merger docs closely: there's no need for euphemism - US *MUST* order/take delivery of A320s and A350s as part of the deal:

"70. Under the Airbus MOU, the Debtors have agreed to assume their existing
Airbus purchase agreements, the A319/A320/A321 Purchase Agreement and A330/A340 Purchase Agreements, in connection with their emergence from their pending Chapter 11 Cases, which agreements will be amended to delay the delivery schedule for the respective aircraft. The Airbus MOU similarly provides for a delay in the delivery schedule for the A319 and A320 Purchase Agreement between Airbus and America West and the application of certain existing pre-delivery deposits.

71. The Airbus MOU further contemplates that upon their emergence from the
Chapter 11 Cases, the Debtors and America West (together, the “Buyers”) will purchase twenty (20) A350-800 aircraft. In consideration for their commitment to purchase the A350 aircraft, Airbus shall provide the Buyers with a $250 million senior secured line of credit, which may be utilized in part for payment of designated obligations of the Debtors and otherwise for
general corporate purposes, and has also agreed, upon the satisfaction of certain conditions precedent, to provide certain back-stop financing in connection with the Buyers’ purchase of the A350 aircraft."

[Edited 2005-05-23 02:27:54]


Live life to the fullest.
User currently offlineGothamSpotter From United States of America, joined Jan 2005, 586 posts, RR: 0
Reply 2, posted (8 years 11 months 2 days 22 hours ago) and read 5728 times:

How exactly would Boeing "fight" the merger? Both airlines already have a ton of Airbii anyway.

User currently offlineAvek00 From United States of America, joined Oct 2004, 4282 posts, RR: 20
Reply 3, posted (8 years 11 months 2 days 22 hours ago) and read 5714 times:

Quoting GothamSpotter (Reply 2):
How exactly would Boeing "fight" the merger?

By teaming up with a legacy carrier and offering a financial package to US complete with 787s.



Live life to the fullest.
User currently offlinePlaneSmart From New Zealand, joined Dec 2004, 790 posts, RR: 0
Reply 4, posted (8 years 11 months 2 days 22 hours ago) and read 5714 times:

As B are and will be involved in similar mergers / re-structure initiatives later this year, it would come as an incredible surprise to those involved in the process if they do raise anything more than a token objection.

And as said before, you need to read the detail if/when it's released. It's not as simple as HP require aircraft / order A aircraft. There are conditional events. And the A deal is only one of a multitude of similar creditor / supplier deals, which involve new credit, debt forgiveness / extended repayment plans, credit guarantees, etc.


User currently offlineKC135R From United States of America, joined Apr 2005, 725 posts, RR: 4
Reply 5, posted (8 years 11 months 2 days 22 hours ago) and read 5668 times:

Quoting Avek00 (Reply 1):
The Airbus MOU further contemplates that upon their emergence from the
Chapter 11 Cases, the Debtors and America West (together, the “Buyers” Wink will purchase twenty (20) A350-800 aircraft. In consideration for their commitment to purchase the A350 aircraft, Airbus shall provide the Buyers with a $250 million senior secured line of credit

I still strongly believe this has bad idea written all over it, for all parties involved.
-The new US Airways gets 20 airplanes that, to date, no one else has expressed much interest in.
-Airbus invests 250 million in a potentially doomed company, the larger half of which has twice been in bankruptcy protection in the last 3 or 4 years.

Perhaps they will prove me wrong - it seems the only one guaranteed to benefit from this deal, of the 3 parties involved, is US - since it will delay, or stop, what likely would have otherwise been inevitable. I have a feeling they will suck HP down with them instead of HP bailing out US, but it's just a feeling - nothing more.

OOPS - I forgot to answer the original question. I do not think Boeing will fight it - there's a chance that this whole fiasco will benefit them in the long run, so why fight it? A. I don't know they would have any ground to stand on, and B. I don't really see how it hurts them, HP and US both have made it pretty clear what manufacturer they are loyal to.

[Edited 2005-05-23 02:58:17]

User currently offlineCat3ils From United States of America, joined Mar 2005, 22 posts, RR: 0
Reply 6, posted (8 years 11 months 2 days 18 hours ago) and read 5498 times:

Its a risky business to get involved in the financing of cash strapped carriers in a volatile market. This is such a sensitive market with Airbus getting their reward with future orders. The fragile state of these carriers would be concerning if it were my monies. Another terror attack in the U.S. and all the airlines would be in trouble. BK courts could come in and nullify these contracts in the future. If it were my business. I wouldn't touch an airline with a ten foot pole. Except WN that is...

User currently offlineMariner From New Zealand, joined Nov 2001, 24637 posts, RR: 86
Reply 7, posted (8 years 11 months 2 days 18 hours ago) and read 5459 times:
Support Airliners.net - become a First Class Member!

So, once again, it doesn't bother anyone that Beoing invested quite heavily in Airtran - just before Airtran ordered 737's?

http://www.prnewswire.com/airtran/20010416b.shtml

Or, once again, is it one law for Airbus and another one for Boeing?

cheers

mariner



aeternum nauta
User currently offline4holer From United States of America, joined Feb 2002, 2979 posts, RR: 9
Reply 8, posted (8 years 11 months 2 days 18 hours ago) and read 5441 times:

If the A350 is as much of a dud as some people say, and if this deal commits Airbus to building the A350, then one would think that Boeing would be thrilled with the deal. This would guarantee them a superior product for 10-15 years, right?  Wink
Not to mention a quarter of a billion dollars out of the Airbus piggy bank.



Ghosts appear and fade away.....................
User currently offline777ER From New Zealand, joined Dec 2003, 11847 posts, RR: 18
Reply 9, posted (8 years 11 months 2 days 17 hours ago) and read 5395 times:
AIRLINERS.NET CREW
FORUM MODERATOR

71. The Airbus MOU further contemplates that upon their emergence from the Chapter 11 Cases, the Debtors and America West (together, the “Buyers”) will purchase twenty (20) A350-800 aircraft. In consideration for their commitment to purchase the A350 aircraft, Airbus shall provide the Buyers with a $250 million senior secured line of credit
Yip Airbus is now getting really desperate

is it one law for Airbus and another one for Boeing?
Considering both companys are in different countrys, then yes they both have different laws


User currently offlineBoeingFever777 From United States of America, joined Jul 2009, 409 posts, RR: 55
Reply 10, posted (8 years 11 months 2 days 16 hours ago) and read 5374 times:

Yeah anyways.... with this merger and Airbus selling there own a/c and buying them with the French governments money when US gets ready to buy the a/c Boeing can scream unfair practice like Airbus does everytime they lose a big orders. Although 250million gets you nothing at Boeing but an entire fleet at airbus. So no, Boeing does not care and do not want French money. That and they do not have to buy carriers to sell there a/c like Airbus does.


Faire du ciel le plus bel endroit de la terre.
User currently offlineMariner From New Zealand, joined Nov 2001, 24637 posts, RR: 86
Reply 11, posted (8 years 11 months 2 days 16 hours ago) and read 5360 times:
Support Airliners.net - become a First Class Member!

Quoting 777ER (Reply 9):
is it one law for Airbus and another one for Boeing?
Considering both companys are in different countrys, then yes they both have different laws

You miss the point - I meant the laws of behaviour among these posters.

They will condemn Airbus for doing something Boeing has done.

cheers

mariner



aeternum nauta
User currently offlineIkramerica From United States of America, joined May 2005, 21416 posts, RR: 60
Reply 12, posted (8 years 11 months 2 days 16 hours ago) and read 5353 times:

Boeing will fight it if it is financially beneficial to fight it. Not in a big way, just in a "friend of the court" filing or such, which will be reviewed by anti-trust regulators.

Anyway, US and HP were buying Airbuses anyway, as others have said. HP wasn't gonna buy any 787s, and US was going to go bankrupt. So Boeing isn't losing any sales here, Airbus is just "creating" sales by paying for them, right?



Of all the things to worry about... the Wookie has no pants.
User currently offlineMariner From New Zealand, joined Nov 2001, 24637 posts, RR: 86
Reply 13, posted (8 years 11 months 2 days 16 hours ago) and read 5345 times:
Support Airliners.net - become a First Class Member!

Quoting Ikramerica (Reply 12):
Airbus is just "creating" sales by paying for them, right?

$250 million doesn't pay for too many A350's.

GECAS - the subsidiary of General Electric - will be paying for a lot of them.

 Smile

cheers

mariner



aeternum nauta
User currently offline57AZ From United States of America, joined Nov 2004, 2550 posts, RR: 2
Reply 14, posted (8 years 11 months 2 days 15 hours ago) and read 5315 times:

Gee, let's not learn from history and make two smaller failing companies into one gigantic failing company. Anyone here remember Penn Central or even know what it was?


"When a man runs on railroads over half of his lifetime he is fit for nothing else-and at times he don't know that."
User currently offlineKeesje From , joined Dec 1969, posts, RR:
Reply 15, posted (8 years 11 months 2 days 15 hours ago) and read 5292 times:

Quoting Mariner (Reply 11):
They will condemn Airbus for doing something Boeing has done.

Mariner, agree with you. The financially powerful OEMS have been involved in "assisting" weak airliners financing new equipment for a long time. When airlines go under bankruptcy protection their influence usually rises even more. (e.g UA, AC, US..)

This Airbus-US/HP deal is one off many similar deals. This one being picked out as a new development is non-sense IMO.


User currently offlineJMV From United States of America, joined Jan 2000, 241 posts, RR: 1
Reply 16, posted (8 years 11 months 2 days 6 hours ago) and read 5105 times:

Quoting 57AZ (Reply 14):
Anyone here remember Penn Central or even know what it was?

The failed result of the merger of the Pennsylvania and New York Central railroads, which was eventually taken over by the US government and renamed ConRail. Oh, wait. That was a rhetorical question. Sorry.  Smile

I say let the merger go through, and let those wanting to invest to invest. Time will tell if this is a wise merger and investment or not.



Google begins where my brain ends! ©
User currently offlineAKelley728 From United States of America, joined Dec 1999, 2160 posts, RR: 5
Reply 17, posted (8 years 11 months 2 days 6 hours ago) and read 5086 times:

Quoting JMV (Reply 16):
Quoting 57AZ (Reply 14):
Anyone here remember Penn Central or even know what it was?

The failed result of the merger of the Pennsylvania and New York Central railroads, which was eventually taken over by the US government and renamed ConRail. Oh, wait. That was a rhetorical question. Sorry.

So in ten years we'll see the gov't take over the combined US/HP and will rename it ConAir? Oh wait, we've already had one of those!  Smile  Smile


User currently offlineKYAir From United States of America, joined Jan 2004, 362 posts, RR: 3
Reply 18, posted (8 years 11 months 2 days 4 hours ago) and read 4782 times:

Quoting AKelley728 (Reply 17):
So in ten years we'll see the gov't take over the combined US/HP and will rename it ConAir? Oh wait, we've already had one of those!

Ya know, we could if John Travolta replaced Nick Cage in the starring role!



Don't cry because it's over, smile because it happened - Dr. Seuss
User currently offlineDAYflyer From United States of America, joined Sep 2004, 3807 posts, RR: 3
Reply 19, posted (8 years 11 months 2 days 4 hours ago) and read 4667 times:

US Air: Dumb

America West: Dumber

Airbus: Dumbest.

Not only will they be out $250 Million in a couple of years, but they will have a ton of money sunk into lots of airframes they will have to re-sell, likely at a hefty discount to avoid another loss.



One Nation Under God
User currently offlineDLPMMM From United States of America, joined exactly 9 years ago today! , 3580 posts, RR: 10
Reply 20, posted (8 years 11 months 2 days 4 hours ago) and read 4643 times:

I would think that the way for Boeing to "fight" the arrangement (if they so desired) would be to make a better offer. A $250 MM secured loan seems like a pretty cheap way to secure orders to me.

I get very tired of the bashers on both sides clogging up every thread with the same tired vitriol.


User currently offlineStarrion From United States of America, joined Jul 2003, 1122 posts, RR: 2
Reply 21, posted (8 years 11 months 2 days 3 hours ago) and read 4597 times:

Airbus is trying to forestall a bunch of Busses getting parked in the desert. By helping AWA salvage what is salvageable at US they will lengthen the amount of time the aircraft return to the market as the newly formed US dumps routes and assets a la TWA. So as the leases on the aircraft expire they get returned, AWA continues to take the aircraft they committed to, and Airbus gets a North American customer for the A350.

Worst case: the planes end up on the market anyway, and Airbus has to re-allocate the A350's to someone else plus being out the 250m.

I think that AWA will get rid of enough money-losing routes and dump enough aircraft to keep the whole thing afloat.



Knowledge Replaces Fear
User currently offlineTockeyhockey From United States of America, joined Feb 2005, 947 posts, RR: 0
Reply 22, posted (8 years 11 months 2 days 3 hours ago) and read 4551 times:

Quoting DAYflyer (Reply 19):
Not only will they be out $250 Million in a couple of years, but they will have a ton of money sunk into lots of airframes they will have to re-sell, likely at a hefty discount to avoid another loss.

do you really think that airbus cares about $250 million? that's money they can borrow at no interest for a 30 year term, with no payments back to subsidizing governments until their deal with US/HP makes them money.

airbus can throw money around all over the place with no fear whatsoever about real-world business projections. that's the glory of being state subsidized! it's why amtrak has never gotten serious about making a profit.


User currently offlineMariner From New Zealand, joined Nov 2001, 24637 posts, RR: 86
Reply 23, posted (8 years 11 months 2 days 3 hours ago) and read 4501 times:
Support Airliners.net - become a First Class Member!

Quoting Tockeyhockey (Reply 22):
airbus can throw money around all over the place with no fear whatsoever about real-world business projections. that's the glory of being state subsidized!

So when Boeing invested in Airtran - just before Airtran ordered too many 737's - that was a sound commercial decision?

If so, why is Airtran trying to off load some of those 737's through sublease?

cheers

mariner



aeternum nauta
User currently offlineGVROYphx From United States of America, joined Apr 2004, 120 posts, RR: 0
Reply 24, posted (8 years 11 months 2 days 3 hours ago) and read 4481 times:

Boeing had its chance...

25 Post contains images DfwRevolution : Bingo...
26 Post contains links Danny : Sounds ridiculous considering huge A320 family order backlog: Orders: 3494 Deliver: 2430 Backlog: 1064 Source: http://www.airbus.com/media/orders_n_d
27 KC135TopBoom : What happens if the A-350 never gets built? Does this pave the way for a Boeing bail out of UA?
28 SU184 : I remember Boeing did the same back in the 80's, they invested in UAL parent during the hard times of deregulation, after they ordered 110 737-300's.
29 Mariner : For the order to go through, Airbus must, of course, build the aircraft. However - if it does not meet strict performance guarantees, HP/US is free t
30 Tockeyhockey : no.
31 Mariner : Okay, so this sort of stuff happens all the time. Aircraft manufacturers do not generally fund aircraft purchases, others do that. In this case, it i
32 Post contains links ComeAndGo : Read this http://igeographer.lib.indstate.edu/pritchard.pdf Proposed launch funding for the Boeing 7e7. Funding Source ----- Millions $ Item --------
33 Post contains images Aa777jr : $250 million doesn't pay for too many A350's. It does when Airbus is paying for the a/c themselves with finance (money) to HP/US. Airbus is trying to
34 Mariner : When did Airbus say they were paying for the aircraft themselves? Generally, aircraft don't leave the manufacturer - be it Boeing or Airbus - until t
35 Tockeyhockey : there are vast differences in the ways in which airbus and boeing get funding from their respective governments. there are large outstanding loans th
36 N79969 : Boeing has no grounds to object to this deal. On what basis could they "fight" the merger? Anyway, the Airtran example posted by Mariner does not quit
37 KC135R : Yes, I know about the A32S backlog - but the airplane without much interest I referred to is the A350.
38 Mariner : I'm enchanted that you think that Airbus loaning money to US/HP is "throwing money around". I cannot think of any other occasion when they (Airbus) h
39 Tockeyhockey : you don't think that airbus's investment in US is "throwing money around"? you honestly think that it's a sound investment? please elaborate.
40 BlueSky1976 : Tell that to Air France. You just blew off one of Boeing's major customers. Nice, really nice...
Top Of Page
Forum Index

This topic is archived and can not be replied to any more.

Printer friendly format

Similar topics:More similar topics...
How Will US/HP Merger Impact Middle America? posted Sun Sep 25 2005 18:03:00 by Indy
US/HP Merger Video posted Wed Nov 1 2006 20:39:27 by Walter747
Odd Litttle Questions About US/HP Merger posted Mon Oct 17 2005 19:16:33 by UALPHLCS
US / HP Merger... Fuel Vs. Earnings posted Tue Jul 19 2005 02:08:25 by PhoenixX2
US/HP Merger Cash Sources posted Sun Jul 17 2005 21:14:51 by Goodmanr
US-HP Merger Could Bring Hub To IND posted Sun Jun 5 2005 17:00:26 by KarlB737
US/HP Merger Lacking Central US Hub posted Fri May 20 2005 06:02:30 by Planespotting
US/HP Merger Relieve Overcapacity? posted Thu May 19 2005 20:27:46 by ERJ170
US/HP Merger Details - Being Released Tomorrow posted Mon May 16 2005 05:26:44 by RIOJANEIRO
US/HP Merger A Way In For VS? posted Sun May 15 2005 17:28:05 by Viscount630