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CO Offers TWA Cash To Stay Alive  
User currently offlineRepublic From Canada, joined Dec 2012, 0 posts, RR: 0
Posted (13 years 5 months 2 weeks 5 days 9 hours ago) and read 2549 times:

Hi,

CO offers to pay $400 million to TWA for certain assets. This would allow TWA to stay independent, join CO in an alliance, and keep flying. Read the story: http://www.chron.com/cs/CDA/story.hts/front/804692

Rgds,

Joe

46 replies: All unread, showing first 25:
 
User currently offlineDas Flugzeug From United States of America, joined Nov 1999, 161 posts, RR: 1
Reply 1, posted (13 years 5 months 2 weeks 5 days 9 hours ago) and read 2279 times:

This would be awesome! Competition would be preserved, Continental could expand, and TWA could stay alive.

User currently offlineFlashmeister From United States of America, joined Apr 2000, 2900 posts, RR: 6
Reply 2, posted (13 years 5 months 2 weeks 5 days 9 hours ago) and read 2255 times:
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Wow... I'd bet that Carty is not pleased...

In the end, if there's a bidding war, I have little doubt that AMR will win, but at least CO can make it a lot more expensive for them.


User currently offlineAKelley728 From United States of America, joined Dec 1999, 2182 posts, RR: 5
Reply 3, posted (13 years 5 months 2 weeks 5 days 8 hours ago) and read 2220 times:

YES!

Go Continental! I hope it happens!


User currently offlineTWAneedsNOhelp From , joined Dec 1969, posts, RR:
Reply 4, posted (13 years 5 months 2 weeks 5 days 8 hours ago) and read 2226 times:

I wonder what CO wants with TW's JFK slots? Maybe a regional jet operation to compliment EWR hub and the new RJ operation at LGA? In this way, CO could realy cement its position as NY's #1 airline.

Let's see.


User currently offlineTooL From , joined Dec 1969, posts, RR:
Reply 5, posted (13 years 5 months 2 weeks 5 days 8 hours ago) and read 2195 times:

Go Continental. I hope that this goes through.

User currently offlineTan flyr From United States of America, joined Aug 2000, 1902 posts, RR: 0
Reply 6, posted (13 years 5 months 2 weeks 5 days 8 hours ago) and read 2179 times:

This could also cause TWA to be chopped up like a chicken..a leg here(gates), a breast there(slots)..and fights over the wings(planes). While an offer from CO or even NW DL for this asset or that might bring a few more dollars for the bond holders it does nothing for the employees. At least AA promised the court that the TWA employees would have jobs.

Better to think the implications of these offers before jumping for joy.


User currently offlineRaddog2 From , joined Dec 1969, posts, RR:
Reply 7, posted (13 years 5 months 2 weeks 5 days 8 hours ago) and read 2175 times:

This will never be accepted by the court, as it doesn't really provide for the long term viability of TWA. CO is going to strip TWA of its most valuable assets, and deploy the airline as a smaller, weaker little codeshare partner. It will be bankrupt again in a matter of a couple years. It sounds generous, but it's really pretty evil. This is precisely what happened to Pan Am before it went down. Other airlines stripped it of its most valuable assets, and what do you know? It died.

User currently offlineMEA-707 From Netherlands, joined Nov 1999, 4293 posts, RR: 36
Reply 8, posted (13 years 5 months 2 weeks 5 days 8 hours ago) and read 2169 times:

A RJ slot to feed LGA and EWR at JFK??? Wow, imagine they will fly JFK-LGA or JFK-EWR twice an hour for $29 or so for the 10 minute flight. I'm sure many people who want to change over without spending hours in public transport, gather FF-miles or just for the fun of flying over NYC area will sure fill these planes up.


nobody has ever died from hard work, but why take the risk?
User currently offlineWolfpacker From United States of America, joined Jun 1999, 354 posts, RR: 0
Reply 9, posted (13 years 5 months 2 weeks 5 days 7 hours ago) and read 2131 times:

Wouldn't the $75million breakup fee weigh into the courts decision?

User currently offlineDas Flugzeug From United States of America, joined Nov 1999, 161 posts, RR: 1
Reply 10, posted (13 years 5 months 2 weeks 5 days 6 hours ago) and read 2118 times:

I read that TWA doesn't even use some of the slots that CO wants. By code sharing with CO, TWA could fill its planes more easily, and offer a wider network to its customers, therebye increasing its ability to make a profit.

User currently offlineTWFirst From Vatican City, joined Apr 2000, 6346 posts, RR: 52
Reply 11, posted (13 years 5 months 2 weeks 5 days 6 hours ago) and read 2122 times:

This story also appeared on ABCNews.com and our local paper.

I'd sure be happy if TW accepted it and remained an independent, but I'd still wonder about the long-term viability of TWA, now that more information about their finances has come to light due to the bankruptcy filing.

I also wonder: where was Continental before? Why didn't Continental and TWA form a code-sharing alliance before all this? I think it would be awesome if TW fully joined with the NW/CO/KLM/Alitalia alliance.



An unexamined life isn't worth living.
User currently offlineRyanair From United Kingdom, joined Jul 1999, 654 posts, RR: 0
Reply 12, posted (13 years 5 months 2 weeks 5 days 5 hours ago) and read 2068 times:

I really doubt TWA can survive long term, again looking at the numbers it'll survive until the end of Karabu, but beyond that is at best questionable.

It's so very sad to see TWA go, but a slice by slice like Pan Am is no better option.


User currently offlineTWFirst From Vatican City, joined Apr 2000, 6346 posts, RR: 52
Reply 13, posted (13 years 5 months 2 weeks 5 days 5 hours ago) and read 2064 times:

Actually, it's the other way around. I think it's questionable they'll survive until the end of Karabu, but beyond that, it looks much better.


An unexamined life isn't worth living.
User currently offlineTWAneedsNOhelp From , joined Dec 1969, posts, RR:
Reply 14, posted (13 years 5 months 2 weeks 5 days 4 hours ago) and read 2064 times:

".....would be awesome if TW fully joined with the NW/CO/KLM/Alitalia alliance."

'First, you know there is no such alliance. Alitalia is almost completely on their own now following the breakup of Alitalia and KLM, and while CO codeshares with NW, it's European codeshare partners are Air France and Virgin Atlantic. Actually, after the AF vs CO lawsuit (over Concorde disaster), that link-up may be over with.

Servaas,

Certainly, you didn't understand my post very well. I wondered if to compliment (or strengthen) its NYC market-share, CO might start up an operation at JFK very much like it has at LGA with these supposed slots. CO flights from JFK or LGA to EWR are completely out of the question and would never occur.

Regards,
russell


User currently offlineRepublic From Canada, joined Dec 2012, 0 posts, RR: 0
Reply 15, posted (13 years 5 months 2 weeks 5 days 4 hours ago) and read 2049 times:

TWFirst:

Where was CO before? Don't forget, CO was battling NW for its own independence. NW was set to control CO by 2005 if they courts did not force NW to sell back part of its stake to CO. By the time this concluded, TW had already entered into a codeshare with HP.

Is CO the knight in white/blue/silver armor? Is CO after what is best for TW? Probably not. But AA's deal was for $500 million for STL hub and Worldspan. CO's counteroffer, if this article is correct, is for slots that TW supposedly is not using. Is it dismemberment? Of course. But if TWA wants to fight to stay alive, here is a lifeline.

Rgds,

Joe


User currently offlineTWFirst From Vatican City, joined Apr 2000, 6346 posts, RR: 52
Reply 16, posted (13 years 5 months 2 weeks 5 days 4 hours ago) and read 2018 times:

Russ:

I think you misunderstood the context in which I'm using the word "alliance" here. I'm looking at this from a NW perspective. NW/KLM markets itself and operates essentially as one airline. As we know, NW and CO also operate almost as one airline here in the U.S. NW and Alitalia have a close code-share relationship. Granted, Alitalia and KLM have some bad blood, but the point here is that the 4 of them have been working on a total cooperative pact for some time, and right now, form a loose alliance (stronger between some members than others). This isn't as yet an "alliance" in the context of oneworld or Star, but I think that group is generally looked at as a foursome, thus my reference to them as such. They're definitely marketed that way here in the Twin Cities.

Also, I believe the CO/AF deal has been set to expire for sometime. AF made this clear after they hooked up with Delta.

Republic:

I'm afraid I'll have to disagree with you on the relevance of the NW stock ownership situation to Continental's code-share offer with TW. Granted, CO was busy, but I don't believe this prevented CO from working on any strategic relationships. There also wasn't any immediate danger that NW would swallow CO. CO saw an opportunity to take care of the situation now due to the DOJ's opposition to the NW stake, as well as the DOJ's skeptical view of what is happening in the industry. I believe if there was ever contact between TW and CO regarding a hook-up, and CO told TW "we want to do this but we're busy right now getting NW out of our hair, we'll get back to you" TW would have waited rather than saying something like "America West will do," which is the way I'm interpreting your comments.

Also, I don't understand your last paragraph. You state that CO's offer is for assets TW doesn't use. But then you state that the offer is the equivalent of dismemberment. I disagree. CO is essentially offering TW up to $400 million in working capital to pay it's bills, in exchange for some dispensable and under-used assets. The way I understand it, this allows TWA to survive pretty much intact, and more importantly, prevents AA from getting huge. CO also is offering code-sharing as way to help TW stay financially healthy. Why would CO want to do this? Again, it prevents another MEGA carrier from forming, provides CO with extended reach and feed, and helps strengthen it as an independent carrier that is strategically cooperating with 2 other smaller carriers to combat MEGA-AIR (aka United/AA).



An unexamined life isn't worth living.
User currently offlineWorkbench From , joined Dec 1969, posts, RR:
Reply 17, posted (13 years 5 months 2 weeks 5 days 3 hours ago) and read 2000 times:

AA has already paid TWA 250 million in debtor in posseccion financing that CO would have to pay back to AA. Additionally, there is a 70 million break up clause in the proposal that either TW/CO would have to pay AA in the event that this deal is broken up. Finally, the bid for TWA must be a minimum of 80 million over AA's bid.
Dont forget TWA had to surrender their 38% holding in worldspan to AA as collateral.

I dont think the AA deal can be stopped.


User currently offlineSccutler From United States of America, joined Jan 2000, 5484 posts, RR: 28
Reply 18, posted (13 years 5 months 2 weeks 5 days 3 hours ago) and read 1975 times:

Ithink this is a brilliant move on CO's part.

To address some issues raised above, first remember that the 1200-pound gorilla for TWA pre-petition was its staggering and unworkable debt load, not an inability to run an otherwise successful airline; absent its debt load and poor balance sheet, it could have negotiated dramatically better leases for aircraft, hedged fuel price risk and avoided excessively-high working line debt. With that in mind, consider the following:

1. CO was likely not interested in an alliance or codeshare w/ TW before, inasmuch as TW was financially crippled and (as its balance sheet showed) not a long-term player. Stranding pax travelling on CO tickets, regardless of who's operating the jet, is bad business.

2. If (as has been reported, though I'll hold comment until I see scope of CO's bid) the majority of the assets for which CO is bidding are, truly, un- or under-utilized, then the bulk of the cash could be used for operating capital, thus reducing or maybe eliminating one of TWA biggest obstacles to operating profits;

3. Karabu still likely goes away, as a rejected "executory contract" in bankruptcy;

4. TWA's improved balance sheet (after bankruptcy and sale of assets), coupled with CO's cozy relationship w/ Boeing, would promote much better lease terms;

5. The salutary interest of preserved competition is favored (and don't be surprised if, in this context, Justice were to weigh in as a "friend of the Court" favoring the CO plan... though, given that both AA and CO are Texas outfits, the Bush Justice Dept. might try to remain neutral);

None of this is to suggest that I think CO's bid is likely to succeed, but I think it has a shot.

Very interesting! This is good fun, eh?



...three miles from BRONS, clear for the ILS one five approach...
User currently offline767ALLTHEWAY From United States of America, joined Nov 1999, 659 posts, RR: 0
Reply 19, posted (13 years 5 months 2 weeks 5 days 3 hours ago) and read 1963 times:

Remember how Continental came back to being a great airline. TWA could learn a lot from Continental.
-767ALLTHEWAY



"Courage is not the absence of fear, but rather the judgement that something else is more important than fear"
User currently offlineRaddog2 From , joined Dec 1969, posts, RR:
Reply 20, posted (13 years 5 months 2 weeks 5 days 2 hours ago) and read 1959 times:

Debt load wasn't the only issue forcing TWA to submit to absurd lease contracts. TWA also had a very poor credit rating (which appears justified considering that they went bankrupt again). Even if TWA's debt is wiped out, I don't imagine its credit rating is going to improve after a third bankruptcy. If TWA decides to emerge from Chapter 11 as an independent entity, it WILL fail again. A $400 mill infusion for assets (regardless of whether the assets are used or not) will last at most a year or two.

User currently offlineJr From United States of America, joined May 1999, 968 posts, RR: 6
Reply 21, posted (13 years 5 months 2 weeks 5 days 2 hours ago) and read 1949 times:

yeah this is a lot of fun. But do you think karabu will go away if TWA decides to stay independent? Will it really be successful in getting it voided completely?


I've flown on 9V-SPK.
User currently offlineN766UA From United States of America, joined Jul 1999, 8182 posts, RR: 24
Reply 22, posted (13 years 5 months 2 weeks 5 days 2 hours ago) and read 1952 times:

CO managment have their heads screw on. They know that this can kill them and competition if it goes through.


This Website Censors Me
User currently offlineAA767400 From United States of America, joined Jan 2001, 2332 posts, RR: 26
Reply 23, posted (13 years 5 months 2 weeks 5 days 2 hours ago) and read 1935 times:

CO is already in EWR where it belongs!
also CO already has a alliance/codeshares with NW,
now it wants one with TW so that it can play head on with UA. megermania!
in the long run,TW will go into the deep end again.
NYC cannot be run only by CO, this is not going to happen, they are in EWR, AA is in JFK.




"The low fares airline."
User currently offlineIshky15 From United States of America, joined May 2000, 717 posts, RR: 13
Reply 24, posted (13 years 5 months 2 weeks 5 days 2 hours ago) and read 1936 times:

"AA is in JFK"? WRONG. American is spread out just as much around the New York area as Continental is. At EWR, American serves the following destinations:
Dallas
Boston
Chicago
Los Angeles
Miami
London
San Juan

Continental, on the opther hand, serves the following destinations from Dallas:
Newark
Houston
Cleveland

American serves the following destinations from LaGuardia:
Chicago
Providence
Dallas
Miami
Washington
Cleveland
Richmond
Norfolk
and many more cities in Florida and New England

Continental, however, serves the following destinations from Chicago, another AA megahub:
Cleveland
Houston
Newark

If American is allowed to have all those flights from the New York area when they don't even commit to it as a major hub, Continental should be allowed to to have just a few more flights at LaGuardia and JFK. Besides, no one said they wanted a fourth hub, all they want to do is place some of their New York passengers on flights from those two other airports.


25 AA767400 : hey shky, i never said it was a hub, i know where my hubs are at! and another thing JFK is a big international base not hub for AA. just CO out of EWR
26 TWAneedsNOhelp : No one is advocating for a CO hub at JFK dude. Just an idea that if they pick up some of these TW JFK slots, they could add a bunch of new RJ flights
27 AA@DFW : I agree with workbench -- I don't think there is any way to stop AA now. They have this tied up nice and tight. What workbench said is all true.
28 Republic : The deal between AA and TW for $500 million included the Worldspan res system. NW, in a separate filing, expressed interest in Worldspan, rumored to b
29 Redeye : here's American's response: Press Release SOURCE: American Airlines American Airlines' Statement on TWA Bankruptcy Filings By Certain Other Carriers F
30 ScottB : The creditors will likely have a say in which bid(s) are accepted as well. It's the bankruptcy judge's responsibility to ensure that the creditors rec
31 Prinair : If you believe that AA will keep their word about the TWA employees, then you are very naive. AA is acting like a sweet saintly savior, after the deal
32 Post contains images QantasA330 : I'll second Prinair's opinion. AA may not be quite as sweet as everyone thinks... Kindest Regards, QantasA330
33 AA767400 : U got that right prinair! AA eats up then spits out.
34 ContinentalEWR : AA767400, AA is most definitely NOT at JFK. They have about 70 mainline flights a day to London, Paris, and to dozens of Caribbean destinations, a han
35 AA767400 : HELLO i never said it was a HUB or the BIGGEST AIRLINE IN JFK! all i am saying is CO is in EWR where it should be!
36 Toxtethogrady : Like when Delta bought Pan Am's crown jewels!
37 Trvlr : My Theory: CO saves TW, buys into AmWest, restructures the whole damn thing and becomes a major player everywhere. NW will probably have to join in to
38 Toxtethogrady : Only a severe case of schizophrenia would get them back in. As for AA at JFK, they are investing in 60 gates - for them and their codeshare partners.
39 BNE : AA is the best thing for TWA especially the employees. All I can see Continental is forcing up the price that AA pays for TWA. Continental probably do
40 Tan flyr : Just to add a couple of other thoughts here since almost a day has passed. Politics will play a BIG role in this. Mr. Gephart of STL will push hard to
41 DCA-ROCguy : The bankruptcy court should weigh CO's and NW's bids for TWA assets carefully. The AA solution to the "What to do with bankrupt TWA and very solvent-b
42 Airman1 : Dear TWA employees supporting the AA deal: Please answer the following questions: 1) Has AA guaranteed your jobs? If so, what is securing this guarant
43 Ishky15 : I compeletely agree with Airman1's points. There are good and bad sides to both options. AMR's purchase of TWA will be good for AMR and will put a qui
44 FrontierMan : I must disagree that TWA is being dismembered. TWA has been downsizing JFK for a very long time, and focusing on STL. I watched as I saw European rout
45 Ryanair : The CO and NW offers donot in anyway address TWA's fundamental problems: 1. Gutter credit rating (ie. NO CREDIT FACILITIES AT ALL) 2. High aircraft re
46 TWA : Sounds like a longshot, But I am 100% for it!!!!! TWA
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