United Airline From Hong Kong, joined Jan 2001, 9377 posts, RR: 13 Posted (14 years 5 months 6 days 19 hours ago) and read 2231 times:
United: US Airways deal isn't dead:
May 12 2001 5:30PM, source Rocky Mountain News
Newsletter spawns rumors that both sides will walk away Aug. 1
By Heather Draper, News Staff Writer
United Airlines officials denied reports Friday that the company's proposed $4.3 billion acquisition of US Airways is in trouble.
The reports, which stemmed from an article in USA Today, quoted an internal United newsletter that said 500 employees involved in the US Airways merger would return to their "regular jobs."
United spokesman Andy Plews said the inference that the announcement meant the deal is in jeopardy is "not a correct assumption."
But industry analysts following the deal think the internal announcement is a clear indication that United, Denver's dominant carrier, is worried about it.
"It's a financial Vietnam, and they're gathering on the roof of US Airways with a helicopter right now, trying to get out," said Mike Boyd, president of the Boyd Group of aviation consultants in Evergreen. "It's a marriage made in Chapter 11."
"The whole word on the street in Washington is that it's dead and the parties are going to walk away from it Aug. 1," said Kevin Mitchell, president of the Business Travel Coalition, based in Pennsylvania.
Aug. 1 is the latest deadline for Department of Justice approval of the United-US Airways deal, which United parent company UAL Corp. announced almost a year ago. After Aug. 1, the parties are free to walk away.
"They want out as early as it can be cheaply done," Boyd said. "United has clearly understood for months that this is a financial disaster for them."
The United newsletter said: "The hundreds of employees who have focused on US Airways integration in the past nine months have finished their work -- for now. The teams have completed their planning for days one through 100, the company is prepared, and team members are returning to their regular jobs until United gets closer to day one."
United's Plews said, "There will always be those who want to interpret news like this in a certain way." But, he said, the internal announcement Thursday was meant to "formalize that the mission was fulfilled, that those teams would stand down to a degree because the bulk of their work was done."
UAL Corp. Chief Executive Officer Jim Goodwin said earlier this week that he remains optimistic the merger will be approved by the Justice Department.
David Stempler, president of the Air Travelers Association, said he thinks the internal message doesn't "mean much of anything but that they're dealing with reality. I don't see it as anything but them being financially prudent. What's the point of having (employees) just sitting there and waiting (for merger approval)?"
United Airline From Hong Kong, joined Jan 2001, 9377 posts, RR: 13
Reply 2, posted (14 years 5 months 6 days 19 hours ago) and read 2182 times:
I don't think so. Why do you have employees sitting there doing nothing while they have better things to do and nothing more they can do about the merger. So, the best way is to......... sit down and wait.
Srbmod From , joined Dec 1969, posts, RR:
Reply 3, posted (14 years 5 months 6 days 18 hours ago) and read 2170 times:
The deal will have to be altered even further to pass anti-trust muster with the Department of Justice. More than likely, slots at DCA, and selling off more of U.S. Airways' assets will have to be gotten rid of to other carriers in order to get approval. Since United has a hub at PHL as well as U.S. Airways, one of U.S. Airways' other hubs will have to be downsized in order to get gov't approval of the merger. The most likely candidate for hub downsizing would be PIT. It is close enough to the PHL hub to not really be of great use to the combined companies. U.S. Airways is beginning to struggle at PIT with the increased competition from AirTran on several routes. The smart thing to do would be to bring AirTran into the fold of this deal, by allowing them to buy a portion of the PIT operation, including gates, aircraft and slots at DCA. Whether or not AirTran could afford this deal is not a real factor, considering that AirTran was considering buying TWA around this time last year. This sort of deal would look good in the eyes of the DoJ, and may get Joe Leonard and his associates out of the government's hair for a little while. Since a low-cost carrier would be involved, this would be seen as giving more competetion in the region. That has been a concern at the DoJ that AA and UAL would control a significant portion of the Northeastern market, and by involving a low-cost carrier in the deal would make the merger as a whole seem like a godd idea for all passengers in the region.
Watewate From Canada, joined Nov 2000, 2284 posts, RR: 1
Reply 8, posted (14 years 5 months 6 days 13 hours ago) and read 2119 times:
Please excuse my ignorance, but what's the point of the merger if they throw away DCA and one of either PIT or PHL? It's very likely that UA will drastically scale back operations at either PIT or PHL after the merger- which leaves UA with CLT and PHL or PIT hub after the merger. The merger sounded too expensive to start with even with half the stake in proposed DC Air. UA shot itself and opened the floodgates for AA to cherry pick TWA.
D L X From United States of America, joined May 1999, 12094 posts, RR: 51
Reply 17, posted (14 years 5 months 5 days 12 hours ago) and read 2065 times:
The EU approved the merger (with concessions) because it won't affect the EU that much. They don't care that all flights between San Francisco and Philadelphia will be the same airline. They only care that all the flights from Italy and most of the flights from Germany will be Star Alliance flights if the merger went through. As a result, the merged airline would have to drop some of these flights.
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