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US Asks Court To Allow Alternatives To Merger W/HP  
User currently offlineTOLtommy From United States of America, joined Dec 2003, 3288 posts, RR: 4
Posted (9 years 2 months 1 week 2 days 19 hours ago) and read 5791 times:

Hmmmm.... Maybe Jennifer Wilbanks is in line to run US Airways, 'cuz it sounds like someone is getting cold feet...  stirthepot 

http://www.usatoday.com/money/biztra...el/2005-05-22-airmerger-usat_x.htm

"In a motion filed Friday with federal Bankruptcy Court, US Airways asked the court to approve procedures allowing others to submit alternative proposals to bring the airline out of reorganization."

Is it just a ploy to get more money out of those willing to invest in this "risky scheme"? I certainly would be in favor of anything that gets the shareholders any of their money back. OTOH, US might not want to annoy the only group will to put up money to save most of the current US jobs.

Thoughts?

30 replies: All unread, showing first 25:
 
User currently offlineFlyboyaz From , joined Dec 1969, posts, RR:
Reply 1, posted (9 years 2 months 1 week 2 days 18 hours ago) and read 5758 times:

This article makes good points but it was something that is required to happen anyway. They are in bankruptcy and by court laws, they have to allow others to bid. This was already stated by Parker. It's a process that lasts 30-45 days.

User currently offlineTOLtommy From United States of America, joined Dec 2003, 3288 posts, RR: 4
Reply 2, posted (9 years 2 months 1 week 2 days 18 hours ago) and read 5748 times:

If it "has" to happen, then why would US "have" to petition the court? Wouldn't it be part of the filing anyway?

I agree, the article makes good points. It's going to be difficult to pull off, and IMO, it shouldn't happen. I fear Parker isn't seeing the whole picture, and chasing the merger just to grow to the east.


User currently offlineMidway2airtran From United States of America, joined Jul 2003, 864 posts, RR: 2
Reply 3, posted (9 years 2 months 1 week 2 days 18 hours ago) and read 5622 times:

It's typical, nothing alarming about it. It's a good move. US is just keeping options open and has to take what Wall Street says seriously, especially if they have plans for another public offering; I believe I saw that on the merger proposition? Not doing the merger at all could also be risky for both. Also may make more incentives for more capital to come in too. Maybe Mesa is coming up with something to the mix?

Goldman Sachs lowered its rating on America West's stock from outperform because of the merger's potential to expose Western-focused America West to ruinous fare wars and rapidly growing overcapacity of airplane seats in the East — a major source of US Airways' problems.
IMO, I would disagree with them, from my knowlege, HP already handles heavy LCC competition well in the west too? The East Coast fare-wars and over capacity is not going to be long-term either as something/someone will give in the short-run. To add to that, US Air's capacity already exists on the East coast and capital generated from the deal should help wait out the storm.



"Life is short, but your delay in ATL is not."
User currently offlineLaxintl From United States of America, joined May 2000, 24878 posts, RR: 46
Reply 4, posted (9 years 2 months 1 week 2 days 17 hours ago) and read 5542 times:

Now.. would it not be funny if SWA, or some one else manages to place a bid that would block this whole deal? Like ATA/Airtran, SWA could come in be willing to pluck huge sums of money for instance for an entire hub(s), or maybe the entire B737 fleet, or offer a code share deal.

This would throw a real monkeys wrench into the operation, as the BK court at the end of the day must look at what is best not for the airline parse, however its creditors.

As crazy as these ideas sound, there are lots people out there including many in the finance world that do not agree with the HP+US match up and could come up with other offers.



From the desert to the sea, to all of Southern California
User currently offlineByrdluvs747 From United States of America, joined Jul 2004, 2351 posts, RR: 1
Reply 5, posted (9 years 2 months 1 week 2 days 17 hours ago) and read 5484 times:

Quoting Laxintl (Reply 4):
there are lots people out there including many in the finance world that do not agree with the HP+US match up and could come up with other offers.

If they didn't agree with the merger then why would they be risking their own money?

Quoting Laxintl (Reply 4):
Now.. would it not be funny if SWA, or some one else manages to place a bid that would block this whole deal? Like ATA/Airtran, SWA could come in be willing to pluck huge sums of money for instance for an entire hub(s), or maybe the entire B737 fleet, or offer a code share deal.

There's more to a bid than just offering money for assets. The judge will look at what's best for the entire company/employees. WN coming and buying planes would do nothing for the employees. Besides, I don't think WN could match the 1.5 billion in financing that has already been arranged. I know AirTran cant.



The 747: The hands who designed it were guided by god.
User currently offlineBNAflyer78 From United States of America, joined Feb 2005, 258 posts, RR: 0
Reply 6, posted (9 years 2 months 1 week 2 days 17 hours ago) and read 5478 times:

Quoting Laxintl (Reply 4):
Now.. would it not be funny if SWA, or some one else manages to place a bid that would block this whole deal? Like ATA/Airtran, SWA could come in be willing to pluck huge sums of money for instance for an entire hub(s), or maybe the entire B737 fleet, or offer a code share deal.

http://www.usatoday.com/travel/flights/today/sky.htm#us

There's already speculation......



Long live the Widget!
User currently offlineTOLtommy From United States of America, joined Dec 2003, 3288 posts, RR: 4
Reply 7, posted (9 years 2 months 1 week 2 days 15 hours ago) and read 5312 times:

Quoting Byrdluvs747 (Reply 5):
Besides, I don't think WN could match the 1.5 billion in financing that has already been arranged.

Are you kidding? With the amount of cash WN has on hand and their low debt/equity ratio, they could certainly could raise the money. I went on Yahoo Finance, as of 3/31/05, WN had nearly 2 billion of cash and cash equivalents on hand. Not that they would be foolish and use that money to overpay for anything, but they certainly could drive the price of the Shuttle or CLT hub up significantly!


User currently offlineDfwRevolution From United States of America, joined Jan 2010, 962 posts, RR: 51
Reply 8, posted (9 years 2 months 1 week 2 days 15 hours ago) and read 5280 times:

Quoting Byrdluvs747 (Reply 5):
Besides, I don't think WN could match the 1.5 billion in financing that has already been arranged.

That wouldn't be a problem.

Buying-out an airline with fundamentally different opperations would.


User currently offlineOuboy79 From United States of America, joined Nov 2001, 4567 posts, RR: 23
Reply 9, posted (9 years 2 months 1 week 2 days 15 hours ago) and read 5248 times:

How can you drive the price of Shuttle up when it's no longer a stand alone entity? All they would need to do is acquire the slots in LGA and DCA. Shuttle, Inc. was merged into US Airways, Inc. years ago and is flown off the same operating certificate now.

Either way...I don't think we can expect the same from Southwest in this deal like ATA. Doug Parker has clearly stated that they have other investors willing to dump more cash into this if they need it.


User currently offlinePope From , joined Dec 1969, posts, RR:
Reply 10, posted (9 years 2 months 1 week 2 days 15 hours ago) and read 5242 times:

Quoting Byrdluvs747 (Reply 5):
The judge will look at what's best for the entire company/employees

At least in theory, the judge should be looking at what is in the best long-term interest of US's creditors.

When are people going to realize that airlines shouldn't be run for the benefit of their employees but instead for the benefit of their shareholders.


User currently offlineFlyboyaz From , joined Dec 1969, posts, RR:
Reply 11, posted (9 years 2 months 1 week 2 days 15 hours ago) and read 5214 times:

Quoting Pope (Reply 10):
When are people going to realize that airlines shouldn't be run for the benefit of their employees but instead for the benefit of their shareholders

Don't have much of an airline without employees! Now if that wasn't a republican statement...LOL.


User currently offlineTOLtommy From United States of America, joined Dec 2003, 3288 posts, RR: 4
Reply 12, posted (9 years 2 months 1 week 2 days 15 hours ago) and read 5199 times:

OUboy -

While WN might not buy the shuttle for reasons you've outlined, it wouldn't be hard to structure a deal that gave a buyer the slots at DCA, LGA, and BOS, and at the same time had an agreement in which the selling carrier would exit that market. Might not be a standalone shuttle, but would accomplish the same thing.


User currently offlineMariner From New Zealand, joined Nov 2001, 25009 posts, RR: 85
Reply 13, posted (9 years 2 months 1 week 2 days 15 hours ago) and read 5196 times:
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Quoting TOLtommy (Thread starter):
I certainly would be in favor of anything that gets the shareholders any of their money back.

The shareholders are not going to see one dime of their money back.

Unless, of course, someone offers several billion in cash for the company as a going concern.

The shareholders are at the end of a very long line which includes the ATSB, Dr Bronner and the RSA, GECAS, Air Wisconsin, Wexford and every other creditor that has lent US Airways a penny.

US Airways screwed their shareholdere the first time they went bk. They found another set of shareholders to emerge from bk, and lo and behold, they screwed them, too.

cheers

mariner



aeternum nauta
User currently offlinePassBureauMgr From United States of America, joined May 2005, 99 posts, RR: 0
Reply 14, posted (9 years 2 months 1 week 2 days 15 hours ago) and read 5169 times:

I don't the the BK judge will look favorably on this, as he knows
this is their only hope.


User currently offlineTOLtommy From United States of America, joined Dec 2003, 3288 posts, RR: 4
Reply 15, posted (9 years 2 months 1 week 2 days 15 hours ago) and read 5151 times:

Mariner, I didn't say I expected it, I just said I was in favor of anything that improved the chances. HA came out of CH11 and last I heard the shareholders were going to get most if not all of their value.

User currently offlineMariner From New Zealand, joined Nov 2001, 25009 posts, RR: 85
Reply 16, posted (9 years 2 months 1 week 2 days 15 hours ago) and read 5122 times:
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Quoting TOLtommy (Reply 15):
I didn't say I expected it, I just said I was in favor of anything that improved the chances.

I agree, I think it would be terrific. Sadly, the debt at US Airways virtually prohibits the possibility.

Quoting TOLtommy (Reply 15):
HA came out of CH11 and last I heard the shareholders were going to get most if not all of their value.

HA was a very curious - an exceptional - case. A lot of finance people raised their eyebrows when HA declared Chapter 11. It was believed that were not bankrupt, in the literal sense.

Which may be true. The HA share price has been trading like a regular stock for over a year now, with a 52 week high of $8.

That tends not to happen when companies are completely insolvent.

cheers

mariner



aeternum nauta
User currently offlineSrbmod From , joined Dec 1969, posts, RR:
Reply 17, posted (9 years 2 months 1 week 2 days 14 hours ago) and read 5092 times:

From the way this sounds, it basically, "Yes I'll marry you, but I'm going to look at other guys before we get married just in case someone better (i.e. richer and better looking) comes along."

It wouldn't surprise me if another airline came to US with an offer to take over the US Airways Shuttle routes (gates, employees, slots) or some other key assets (US Airways Express carriers). Several airlines have expressed interest in operating a NE Shuttle network, so it wouldn't be a surprise if JetBlue, AirTran, or even American (Who would have jointly run the Shuttle with United had the break up of US to AA and UA gone through, and currently operates on the routes using American Eagle.) made an offer for that part of US Airways' operations.


User currently offlinePope From , joined Dec 1969, posts, RR:
Reply 18, posted (9 years 2 months 1 week 2 days 14 hours ago) and read 5055 times:

Quoting Flyboyaz (Reply 11):
Don't have much of an airline without employees! Now if that wasn't a republican statement...LOL

I don't know of any companies that exist without shareholders. I know plenty of companies that don't have any employees.

It wasn't a Republican statement - it was a capitalistic statement.

Edit - after reading your profile, I now understand why you believe that employees are the first concern - FULL PAY TO THE LAST DAY!!!! Keep drinking the Kool-Aid your union has given you.

[Edited 2005-05-23 23:28:37]

User currently offlineFlyboyaz From , joined Dec 1969, posts, RR:
Reply 19, posted (9 years 2 months 1 week 2 days 14 hours ago) and read 5021 times:

Quoting Pope (Reply 18):
It wasn't a Republican statement - it was a capitalistic statement

Yeah very similiar.

Quoting Pope (Reply 18):
Edit - after reading your profile, I now understand why you believe that employees are the first concern - FULL PAY TO THE LAST DAY!!!! Keep drinking the Kool-Aid your union has given you.

Actually my union hasn't given me anything, no contract... and I work for HP...we haven't gotten full pay yet...LOL. Wish I could say that.


User currently offlinePope From , joined Dec 1969, posts, RR:
Reply 20, posted (9 years 2 months 1 week 2 days 14 hours ago) and read 4998 times:

Quoting Flyboyaz (Reply 19):
Actually my union hasn't given me anything, no contract... and I work for HP...

Perhaps you should go start a business and then work for yourself. That way, you'll never be at the mercy of anyone else. Once you're responsible for making payroll, ensuring compliance with countless government regulations, making sure your shareholders earn a fair return on their investment and paid yourself, maybe you'll have a different via.

Nevertheless, I'll accept your association between Capitalism and Republican. But doesn't that then mean that if Capitalism is to Republican then Socialism (the opposite of Capitalism) is to Democrat?

The problem with liberals is that it is so easy to show them for what they really are. People who belive that unions exist to "give" them things and that capitalism is a bad thing.

Full Pay 'til the Last Day - They are hiring at Chik-fil-A!!!!


User currently offlineAvek00 From United States of America, joined Oct 2004, 4342 posts, RR: 19
Reply 21, posted (9 years 2 months 1 week 2 days 14 hours ago) and read 4960 times:

Quoting TOLtommy (Thread starter):
Hmmmm.... Maybe Jennifer Wilbanks is in line to run US Airways, 'cuz it sounds like someone is getting cold feet...

In this instance, US is essentially required to conduct a competitive auction process - in order to satisfy the creditors and the Court, the debtor must show that this is the best reorganization offer available, and that it is preferable to an outright liquidation from a financial standpoint.



Live life to the fullest.
User currently offlineFlyboyaz From , joined Dec 1969, posts, RR:
Reply 22, posted (9 years 2 months 1 week 2 days 14 hours ago) and read 4946 times:

Quoting Pope (Reply 20):
People who believe that unions exist to "give" them things and that capitalism is a bad thing.

Unions have definitely taken advantage of the system...it's sad really because that wasn't what they were intended to do. I wish some of my coworkers would see that unions can't do everything for them. The union didn't help AS rampers did they? I did indeed vote for the union, but my main concern was that most of my coworkers wanted it and that was fine with me. I won't be in the business for much longer so I didn't make any difference if I got one or not.

I did own a business a few years ago so I am familiar with how they run and what their needs are. I also understand that your employees always come first...without them you have nothing. Perhaps that is why CO is still losing money...because they waited so long before cutting wages. They did it as a last resort and I admire that.

I am far from being a liberal, I just know what's right and what's wrong.


User currently offlineFlyboyaz From , joined Dec 1969, posts, RR:
Reply 23, posted (9 years 2 months 1 week 2 days 14 hours ago) and read 4918 times:

Quoting Avek00 (Reply 21):
In this instance, US is essentially required to conduct a competitive auction process - in order to satisfy the creditors and the Court, the debtor must show that this is the best reorganization offer available, and that it is preferable to an outright liquidation from a financial standpoint.

That's exactly it! I haven't studied bankruptcy law yet, but I think that is pretty common practice. Didn't the same thing happen when AA bought TW? I thought they had received a couple of other counter offers.....


User currently offlinePope From , joined Dec 1969, posts, RR:
Reply 24, posted (9 years 2 months 1 week 2 days 13 hours ago) and read 4888 times:

Quoting Flyboyaz (Reply 22):
I am far from being a liberal, I just know what's right and what's wrong.

And you're saying that it's wrong to protect shareholder's interest. I now understand why you now no longer run a business.


25 Avek00 : Yes - exactly. US' management has a fiduciary responsibility to the creditors, and therefore has to pursue the best outcome available, be it the HP p
26 Flyboyaz : Umm I don't think Enron, Tyco, MCI WorldCom or Qwest really cared so why should anyone else?.....it's the American way! They care if you're a major s
27 AEroc : Say the merger between US/HP happens. What do you think would happen to the east coast operation if anything, mainly BOS, LGA, PHL?
28 SonOfACaptain : Say the merger between US/HP happens. What do you think would happen to the east coast operation if anything, mainly BOS, LGA, PHL? Stay the same, but
29 Tockeyhockey : of all the airlines, WN would be the last one to do this. they grow through expanding their network, not through aquisition.
30 Pope : Perfect examples of company's who put employee's interest ahead of their shareholders. The difference is that their employees were all senior level e
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