Highliner2 From United States of America, joined Nov 2000, 694 posts, RR: 1 Reply 2, posted (12 years 11 months 1 week 1 day 18 hours ago) and read 847 times:
I'm sure there are much more qualified people to explain this than me, like "TWAneedsNOhelp"........I'm sure he could explain it way better than me but I'll try.
When Carl Icahn realized he was going to be ousted from his lofty perch atop TWA, he constructed a deal through another company he owned, KARABU Inc., basically the deal allowed karabu to buy TWA tickets for 55% of their cost and resell them to the consumer at full price. As you can imagine, it was a devastating blow to TWA's yield and profits. TWA was losing more than 100 million because of the deal and I want to know how that deal with transfer to AA. It practically killed TWA, what will AA do about it?
Branvan3k From United States of America, joined Jul 2000, 168 posts, RR: 1 Reply 4, posted (12 years 11 months 1 week 1 day 16 hours ago) and read 792 times:
I think 'Karabu' is one of the most SHREWD business agreements of the 90s. Many people look at it's negative affects, but people there is a total other side to the spectrum.
Carl Ichan realized he was on the way out, by establishing the Karabu agreement he was able to make a security net of an income. That man was a total genius, and you have to admit had a keen business sense.
Flashmeister From United States of America, joined Apr 2000, 2892 posts, RR: 7 Reply 5, posted (12 years 11 months 1 week 1 day 16 hours ago) and read 780 times:
Carl Icahn is the reason that regulators exist.
As for Karabu, if AA is careful, they should be able to get out of it.
AA is buying aluminum, people, gates, and authorities -- not an airline. AA also needs to be careful that there's not a bankruptcy court that will allow an alternate bid for these same pieces of aluminum, etc., to come in...
In either case, though, US/UA wins -- the deal for the Shuttle and for DCAir is apparently not killed if the TW deal goes through. There will be quite a bit of hand-wringing about what AA will buy from US, but no skin off of UA's back.
Raddog2 From , joined Dec 1969, posts, RR: Reply 6, posted (12 years 11 months 1 week 1 day 15 hours ago) and read 775 times:
Carl Icahn and his band of lawyers may be able to muscle TWA around, but AMR is a whole new ballgame. If you haven't noticed by now, Don Carty & Co. are shrewd and pretty much ruthless. If they can make the previously much feared APA beg for mercy, Icahn will be lucky to get out of court without having his knees broken.
VirginA340 From United States of America, joined Jul 2005, 15 posts, RR: 0 Reply 8, posted (12 years 11 months 1 week 1 day 14 hours ago) and read 744 times:
It'll be a cold day in hell for Ichan. Either he settles for what AA and AMR has to offer him and not foight them for more money that his greedy overstuffed ego desires or Don CAArty will have Ichan kiss his AAss and then break him in two over his knee.
ATL Traveller From United States of America, joined Jul 1999, 166 posts, RR: 0 Reply 9, posted (12 years 11 months 1 week 1 day 13 hours ago) and read 720 times:
The way I read it, AA is buying TWA's assets, not the airline. Essentially TWA just shuts down and AA takes contol of their gates, planes etc. I think the KARABU agreement is nullified with the "shutdown" of TWA.
Blink182 From Azerbaijan, joined Oct 1999, 5455 posts, RR: 19 Reply 10, posted (12 years 11 months 1 week 1 day 11 hours ago) and read 695 times:
AMR is a very big company that makes huge profits, and they will find the best lawyers around, trust me. Carl Icahn will be lucky to get out of court not dead. American will have a big lunch with an Icahn salad on the side! Carl will lose this battle, no doubt about it. He is the reason for TWA's fall.
Give me a break, I created this username when I was a kid...
TWAneedsNOhelp From , joined Dec 1969, posts, RR: Reply 11, posted (12 years 11 months 1 week 1 day 11 hours ago) and read 682 times:
I love this thread!
"Carl Icahn is the reason that regulators exist."
".....Icahn will be lucky to get out of court without having his knees broken."
".......its lawyers will have Icahn and his cronies for lunch, with a Caesar salad on the side."
"It'll be a cold day in hell for Ichan."
"......his greedy overstuffed ego...."
"......Don CAArty will have Ichan kiss his AAss and then break him in two over his knee."
"Carl Icahn will be lucky to get out of court not dead."
"American will have a big lunch with an Icahn salad on the side!"
How eloquent! I also have a feeling that The Karabu Ticketing Agreement will be cirumvented in some way, most likely during the bankruptcy proceedings. I'm sure AA wouldn't buy into TWA with it in place. It destroys any concept of yield management.
I won't explain its origin, that can be found all over here and on PlaneBusiness.com, but it stems from another time like now, when TWA was fixed for cash and owed money (to Ichan), instead of repaying, they fashioned this agreement. Ichan has been laughing all the way to the bank since. Very shrewd.
It's possible he will be bought out, or agree to some settlement with AMR, if the bankruptcy proceedings
reject TW/AA's claim.
PS: Was it just me or did no one see this story on the 6:30 world news tonight? Peculiar. I hope WSJ and WasPost didn't muck up.
Highliner2 From United States of America, joined Nov 2000, 694 posts, RR: 1 Reply 12, posted (12 years 11 months 1 week 1 day 11 hours ago) and read 673 times:
I hope AA really sticks it to karabu.........this man killed TWA! Maybe not everyone here likes AA (I do though), but I too have the feeling AA is about to give Icahn a taste of his own medicine.......and for that I applaude AA!!!!!!!!!!