STT757 From United States of America, joined Mar 2000, 16320 posts, RR: 52 Posted (6 years 9 months 2 days 10 hours ago) and read 9200 times:
It's that time of the week, time for the CO/UAL meger thread.
Here's the latest:
Quote: UAL chief exec expects airline deals to come
Friday, September 22, 2006
CHICAGO -- There's likely to be more consolidation in the U.S. airline industry, just as there has been in the oil and telecom sectors, the chief executive of UAL Corp. said yesterday.
Following three years of "hard work" with financial restructuring in bankruptcy, UAL, parent of United Airlines, now is on solid footing to participate in the merger and acquisition market, CEO Glenn Tilton told reporters at the Executives' Club of Chicago.
Tilton, who is also president and chairman of the company, didn't speculate on which airlines might come into play, but said United would consider ways to en hance value for its shareholders if an opportunity arose.
Planemaker From Tuvalu, joined Aug 2003, 5546 posts, RR: 34 Reply 1, posted (6 years 9 months 2 days 10 hours ago) and read 9087 times:
It is not like he is the only one that says that consolidation is required in the industry...
'Far too many airlines,' IATA head says
CEO believes 'open skies,' consolidation are key to reversing industry's fortunes
MONTREAL -- The skies are filled with too many airplanes and a long-overdue consolidation of the airline industry can't happen unless national governments loosen restrictive trade rules, says the head of the global air carriers' association.
"There are far too many airlines. We have over 1,000 airlines," Giovanni Bisignani, director general and chief executive officer of the International Air Transport Association, said in an exclusive interview with The Globe and Mail.
UA933 From Germany, joined Feb 2006, 220 posts, RR: 0 Reply 3, posted (6 years 9 months 2 days 9 hours ago) and read 8869 times:
Quoting B2443 (Reply 2): UA with who? NW to form monoply in the midwest and US-Asia?
Even in the current situation I don't think that this would be approved since UA would be too dominant on the pacific market (e.g. almost 50 frequencises to china). The dominance factor played a role in 2000 when UA wantet to merge with US and this was not approved aswell.
My money is on CO and I'd really look forward to it if they went through with it.
Planemaker From Tuvalu, joined Aug 2003, 5546 posts, RR: 34 Reply 4, posted (6 years 9 months 2 days 8 hours ago) and read 8720 times:
Of course there is not much political will for change but it would be nice to see consolidation on an international basis, possibly along alliance lines. Here's another link to IATA's CEO comments:
In a speech yesterday to the ICAO Symposium on Liberalization in Dubai, Bisignani said, "the flags on the tails of our aircraft are so heavy they are sinking our industry," and argued that airlines will have difficulty achieving long-term profitability without the ability to consolidate across borders.
... a US-EU open skies agreement alone "would add $5 billion to the bottom line of the industry."
"The 60-year-old rules that govern our industry are in need of a nice retirement party...The world is changing and so must air transport."
ChicagoFlyer From United States of America, joined Jan 2006, 247 posts, RR: 0 Reply 6, posted (6 years 9 months 2 days 8 hours ago) and read 8646 times:
Yawn..... Tilton has been saying this for as long as I can remember.
I second GeorgiaAME.
If mergers were not so complex in this industry (regulatory/labor/fleet issues) everybody would just consolidate. In reality, we see the 'soft' cooperation through the mega-alliances instead.
Futurecaptain From , joined Dec 1969, posts, RR: Reply 7, posted (6 years 9 months 2 days 8 hours ago) and read 8583 times:
Quoting GeorgiaAME (Reply 5): Hmm, "Continental-United" or "United Continents" or even "Unital" (Reconited?)
TedCo.
How about United and Frontier?
Dominate DEN
FR flies Airbusses....fleet commonality
FR has lots of Mexico routes....$$$$
FR is a smaller airline and would be cheaper to buy / easier to integrate.
SESGDL From United States of America, joined Jan 2001, 3385 posts, RR: 10 Reply 8, posted (6 years 9 months 2 days 8 hours ago) and read 8569 times:
I don't want anymore mergers. For a market the size of the US, 7 big airlines (AA, UA, DL, CO, NW, US, and WN) is a perfect number. 10 years ago there were 9. Merging huge airlines with other huge ones to form one ginormous carrier would case HUGE problems with labor disputes, etc. It would also just create less choices for people on who to fly. I seriously do NOT want anymore mergers to occur.
WorldTraveler From , joined Dec 1969, posts, RR: Reply 10, posted (6 years 9 months 2 days 6 hours ago) and read 8350 times:
It should be obvious to everyone that even remotely follows the airline industry that Tilton is more interested in “doing a deal” that rewards him than running a viable airline. If he focused half as much attention on running the airline as he did on trying to coming up with deals to sell or acquire, UA might actually become a viable airline.
After 3 years of bankruptcy, UA is still one of the most vulnerable airlines due to the highest unit costs and one of the highest debt ratios which is exactly why UA reported the lowest operating margin among large network carriers in the last quarter.
Isitsafenow From United States of America, joined Feb 2004, 4984 posts, RR: 26 Reply 11, posted (6 years 9 months 2 days 6 hours ago) and read 8321 times:
Quoting GeorgiaAME (Reply 5): Hmm, "Continental-United" or "United Continents" or even "Unital" (Reconited?)
My favorite was mentioned a few months ago
Delta and Continental......Deltanetal with an logo on the tail as a tooth..
I still grin at that one.
safe
If two people agree on EVERYTHING, then one isn't necessary.
Panamair From United States of America, joined Oct 2001, 4595 posts, RR: 25 Reply 13, posted (6 years 9 months 2 days 5 hours ago) and read 8193 times:
Quoting WorldTraveler (Reply 10): It should be obvious to everyone that even remotely follows the airline industry that Tilton is more interested in “doing a deal” that rewards him than running a viable airline. If he focused half as much attention on running the airline as he did on trying to coming up with deals to sell or acquire, UA might actually become a viable airline.
I wouldn't be surprised if Tilton and Dougie were to plot (either together or separately) a way to carve up NW and/or DL to the benefit of US/UA, by approaching NW/DL's creditors and potential BK-exit financing institutions with some sort of a deal to get NW/DL out of Ch.11. Just hope that the creditors don't get fooled...
I really do feel for UA's employees as poor UA has been the victim of bad management for the past 10 or more years. Back in the '90s and early 2000-2001, UA had a masterpiece of a global network that was the envy of every airline out there - all of Pan Am's crown jewels - NRT, LHR, and Latin America from MIA (the largest market for LatAm). They could have smartly leveraged those tremendous assets to become America's premier global carrier - not just a Pan Am reincarnation, but a truly robust worldwide carrier with strategically well-placed domestic hubs. Instead, with the exception of the Pacific, management has squandered many opportunities, preferring instead to pursue a merger with US, a deal that most people (except UA management) already figured out wouldn't pass muster with the DOJ, etc. And now, once again, we have another CEO, already starting to play merger games, when he should be concentrating on making sure that UA becomes a rock-solid, viable carrier for the future....Very sad and disappointing.
Midway2airtran From United States of America, joined Jul 2003, 864 posts, RR: 2 Reply 15, posted (6 years 9 months 2 days 5 hours ago) and read 8119 times:
Currently, egos are too high in the industry for consoliation.
I would expect more work into alliances that will eventually lead into a new form of consolidation.
I vision the original LCC's starting to make the first moves with joining one of the larger alliances or forming their own, possibly AirTran being the first one to rival DL and Skyteam.
UAL and CO is just too big a merger and going through Anti-Trust regulation with that one is no walk in the park.
F9Animal From United States of America, joined Dec 2004, 4745 posts, RR: 29 Reply 16, posted (6 years 9 months 2 days 4 hours ago) and read 8057 times:
Icahn cough I mean Tilton would do anything to make a buck for himself. Whatever golden parachute he could find would be in the best interest for UA. Sorry all, but UA is sick, and Tilton is the ECOLI.
Panamair From United States of America, joined Oct 2001, 4595 posts, RR: 25 Reply 17, posted (6 years 9 months 2 days 4 hours ago) and read 8034 times:
Quoting Midway2airtran (Reply 15): UAL and CO is just too big a merger and going through Anti-Trust regulation with that one is no walk in the park.
Which is one of the reasons why I made the point that UAL and the other merger-hungry carrier, US, would most likely target the carriers currently in Ch.11. It would be easier for them to convince the authorities about the 'necessity' of a merger, i.e., they will say that NW/DL need a merger (like the old US did with HP) as that's the only way for them to get out of Ch.11 and survive. Once NW and DL are out of Ch.11, it will be much tougher to get mergers past the DOJ...Doug Parker himself has said that CH.11 is the opportunity for such 'big' mergers to occur; once the carrier(s) are out of BK, it will be much tougher to combine...
Justloveplanes From United States of America, joined Jul 2004, 878 posts, RR: 1 Reply 18, posted (6 years 9 months 2 days 4 hours ago) and read 7981 times:
I wonder if Tilton has been as bad as he seems. Back in the bad old days after 9/11, United was written off completely by many, the liquidation predictions were everywhere. It was almost taken as a given that it would fold completely and Tilton was looked at as being crazy for even getting involved. United now has at least a fighting chance - probably better than that actually. Has he really been that bad? What are the sort of things he has done that are wrong/misguided/fill in the blank?
Mariner From New Zealand, joined Nov 2001, 22874 posts, RR: 87 Reply 19, posted (6 years 9 months 2 days 4 hours ago) and read 7952 times:
Quoting F9Animal (Reply 16): Sorry all, but UA is sick, and Tilton is the ECOLI.
Well, yes, perhaps. Or he may be one of the greater realists out there.
Tilton is not from an airline background. It may be that he sees "the company" differently than some of the more traditional airline CEO's.
And perhaps that is no bad thing. Is he out for himself? Almost certainly. Who, in the world of high finance, is not?
He was paid to get United into and out of bankruptcy. He did his job, and was well rewarded. Presumably, he is now being paid to make "the company" sustainable and profitable for the long term. He should be well rewarded.
Is he unromantic? For sure. He doesn't give airline people the warm and fuzzies like Mr. Grinstein's present recreation of Western Airlines.
But is he - Mr. Tilton - wrong about airline mergers? I wouldn't put money against him.
Panamair From United States of America, joined Oct 2001, 4595 posts, RR: 25 Reply 20, posted (6 years 9 months 2 days 4 hours ago) and read 7895 times:
Quoting Mariner (Reply 19): Tilton is not from an airline background. It may be that he sees "the company" differently than some of the more traditional airline CEO's.
Planemaker From Tuvalu, joined Aug 2003, 5546 posts, RR: 34 Reply 22, posted (6 years 9 months 2 days 3 hours ago) and read 7681 times:
Quoting WorldTraveler (Reply 10): It should be obvious to everyone that even remotely follows the airline industry that Tilton is more interested in “doing a deal” that rewards him than running a viable airline.
"It should be obvious to everyone that even remotely follows the airline industry" that it is not one but many airline CEOs, the head of IATA and ATA, among others, that are calling for industry consolidation.
Even the "revered" Gordon Bethune said in an interview 2 weeks ago in NYC that consolidation is required:
Why do we have six big airlines? Do we need six?
No. Would the marketplace have the long-term stability of good employment and predictable careers and no bankruptcies, yes, it sure would.
What keeps that from happening?
The government has been almost paranoid about antitrust provisions, to the point where they stifle any kind of consolidation. I think they may be getting more amenable. (Doug) Parker's doing a good job at US Airways (which merged with America West last year). He's a smart man. But those companies didn't have any alternatives where other companies see alternatives.
You mentioned the pairing of Continental and United. Tell us more about that.
Well, it would be strategic. Just take a look at it. United has Chicago, a huge market, Denver, the West Coast. They have facilities in San Francisco and L.A. that you can't replicate and never will. They have access beyond Tokyo, which are governmental rights that Continental can't ever, ever get. They have access to London Heathrow, which Continental will never get. Continental owns New York, has the best European connections out of New York out of anybody. And Latin America? It's the No. 2 carrier. It's got a huge operation in Houston, which is contiguous to Mexico.
You put these two companies together, it's called checkmate. You've got to have people with an IQ of over 40 to figure it out, and they kind of like what they're doing. I think Continental would be the management team, obviously, because they've got the expertise and the track record investors would like and employees would bet on.
Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
Dominate DEN
FR flies Airbusses....fleet commonality
FR has lots of Mexico routes....$$$$
FR is a smaller airline and would be cheaper to buy / easier to integrate.
What does F9 have to offer to UA? Mexico is not $$$$.
25 Mariner: It won't happen. But - perhaps it should have happened. United always saw Frontier as the competition and behaved competitively (as in: "squash the l
26 CO767FA: Mexico does add to the bottomline (as do all destinations) but compare the $$$ Japan or China offers vs. Mexico. Mexico is primarly a leisure destina
27 Jacobin777: I'm sure you meant F9 as FR flies on the other side of the pond and only flies Boeing planes..... Actually, with his backround, Tilton could have got
28 COERJ145: A UA/CO merger would be suicide for both. My bet is the costs to maintain both a large boeing and airbus fleet would be quite high. I think CO is bett
29 Mariner: Obviously, Japan and China offer more. Not eveyone can fly to Japan and China. So there are less bucks in Mexico than Japan and China? As Southwest p
30 ChrisNH: I suppose it's entirely possible to 'enhance shareholder value' by doing nothing and letting those around you do the heavy work. Mergers are not alwa
31 N174UA: US & AW with related issues. Now throw in NW. The combined airline would be huge, and the route network fairly vast, but there are too many internal
32 Ouboy79: Hmm...US merging with two airlines in a short period of time...are we just going for total deja vu this time around? lol
33 DC8FanJet: The merger that Tilton really wants he can't have ..yet..LH
34 Deputydawghere: Quoting WorldTraveler (Reply 10): It should be obvious to everyone that even remotely follows the airline industry that Tilton is more interested in "
35 WorldTraveler: Let's not forget that DL and NW had earnings at or above industry averages for the most recent quarter. DL and NW don't need anyone's help to get out
36 Futurecaptain: Better fleet commonality for starters. CO is moving to be all Boeing. While UA does fly Boeing long haul, their domestic fleet is moving to be all Ai
37 Mariner: I am sure Mr. Maounis of Amaranth Advisers would appreciate your vote of confidence. http://www.chron.com/disp/story.mpl/ap/fn/4208176.html To lose $
38 Scotron11: I certainly think it's about time there was consolidation and not just in the US. We already have the AF/KLM merger over here and I think if an opensk
39 Deputydawghere: Quoting WorldTraveler (Reply 35): All of the network carriers are publicly traded and thus report to the SEC; these statistics were pulled from SEC fi
40 Futurecaptain: Yes, someone with some common sense take ofer LH and install PTV's for long haul. But seriously, what international mergers are you thinking about? E
41 Mariner: That may the smartest geo-political statement I have read in a while. cheers mariner
42 BigB: Also just as a quick reminder, these reports to SEC have to be accurate or esle airlines will find themsevles in the hole like enron.
43 MasseyBrown: The secured creditors have come out of the airline bankruptcies, even US Airways 2, pretty much intact. The unsecured creditors have gotten various c
44 We're Nuts: Why bother merging? With Star Alliance, SkyTeam, etc. it's not like any of the legacies actually compete anymore.
45 Acidradio: Well, there is "Industrial" Mexico or "Proper" Mexico, then there is "Vacation" Mexico. CO's large presence in Mexico is in the industrial centers an
46 Centrair: Hmmm I believe anyone can fly to Japan from the US. They just can't get slots easily at NRT... that is until the 2nd runway is complete. 5th freedom
47 Mariner: Myself, I wouldn't describe the Pacific or Mayan Peninsula resorts as "industrial" or even "normal" cities. Huatulco? But yes, Continental does also
48 WorldTraveler: there are some very upset people over the losses about Amaranth. No one invested BECAUSE they knew they would lose money. A 30 something year old ene
49 Mariner: $6 billion lost? "Very upset" might be an understatement. Yes, I do subscribe to the WSJ. But while Amaranth's losses are spectacular, they are - sad
50 NWDC10: Even with consolidation, you're still going to have the same amount of seats. Airlines have to cut flights/seats to make things work. Robert NWDC10
51 B707Stu: I'm having a flashback to 1978. I was with AA and 'de-regulation' was the new brain child. AA's position was that for the next some years there would
54 NYCAAer: I'm no fan of mergers, and went through a very ugly one when American bought TWA. Our current management has hinted that buying TW was a mistake. The
55 CIDflyer: I agree, if any merger scenarios were to occur, I think AA will remain a stand alone carrier. I also believe DL will be strong again out of bk (sound
56 Max Q: The best move for Continental to make is to grow internally. A UAL merger would be a disaster and ruin our reputation. Failing that, fill in our lack
57 CTHEWORLD: Shows how little you know about the situation. Tilton wasn't the only candidate, and he didn't "apply" for the job, a executive search firm was retai
58 CHIFLYGUY: There aren't many transactions that make sense for AA, and DL isn't one of them. The benefits (consolidated positions at JFK & LAX, extended dominanc
59 SESGDL: No chance in hell. ORD would be an absolute monopoly, one carrier would have all the LHR slots. If that were the case we might as well make all US ca
60 CHIFLYGUY: Note that I said this would be unlikely to be approved by the DOT. But consider: - LHR rights/slots can be divested. That ensures at least one other
61 Jacobin777: That would probably be about it for AA....it would complement their semi-weak California corridor...that being said, AA has had good code-sharing rev
62 Planemaker: I just want to clarify that Mr. Hunter (and others) lost billions in Natural Gas... not oil. Also I would like to point out that part of the problem
63 Ouboy79: Ummm...your lists are just slightly outdated. >7) US Airways >8) America West Airlines Umm, now together. As far as you extended list...you have a fe
64 Mariner: Let me amend my statement: "A number of funds have lost a great deal of money in the recent crude oil, natural gas and other energy components downdr
65 WorldTraveler: mariner, there's a big difference in investing in something speculative like commodities where there is a considerable amount of "guessing" as to what
66 Mariner: Last time I looked, HP, as in Hewlett Packard, does not trade commodities. It is not that long ago that Wall Street was cheering the appointment of C
67 Planemaker: I am very well aware of that... but the stone age domestic political policy will change at somepoint. I was just stating my belief that international
68 Scotron11: Awww... nope! There are more European LCCs and the European majors have already adjusted to them (furthermore, they have high-speed rail networks to
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