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Could US/UA Do What AA/TW Did?

Fri Feb 21, 2003 1:23 pm

Now here's an interesting thought, eh?  Big grin

US, once a basketcase, is not out of the woods but it can see daylight through the few trees remaining. UA is on its last legs.

AA rode to TW's rescue, buying the majority of TW's assets (but not the entire company outright), and taking the majority of the employees as well.

Could US and UA arrange the same sort of buyout? US (through the deep pockets of the RSA) buys the majority of UA's assets before any kind of shutdown or liquidation (taking the majority of the people with them), and the whole thing operates under US's workrules, wages, and so on.

I'd imagine they'd keep the UA name and livery, as the UA brand is undoubtedly more recognizable and valuable than the US one.

"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
B747-437B
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RE: Could US/UA Do What AA/TW Did?

Fri Feb 21, 2003 1:35 pm

They could.

But they wont.

[Edited 2003-02-21 05:35:34]
"The A340-300 may boast a long range, but the A340 is underpowered" -- Robert Milton, CEO - Air Canada
 
TonyBurr
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RE: Could US/UA Do What AA/TW Did?

Fri Feb 21, 2003 1:38 pm

Interesting concept especially since very recently UA was going to buy US! Interesting.
 
gigneil
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RE: Could US/UA Do What AA/TW Did?

Fri Feb 21, 2003 1:39 pm

I think they could, and probably will.

David Bronner is a very shrewd man, and has already stated publically that funds will be available to purchase any assets UA makes available.

This will also be something that would keep *A happy and whole.

N
 
buckfifty
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RE: Could US/UA Do What AA/TW Did?

Fri Feb 21, 2003 1:40 pm

Highly unlikely scenario, and not a very smart one either.

However, if you change the word 'majority' to 'minority', that's more likely to happen.
 
Ryefly
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RE: Could US/UA Do What AA/TW Did?

Fri Feb 21, 2003 1:46 pm

Your forgetting all the debt that comes with the United name if bought before it is liquidated. No one can take on those expenses. For a company the size of United, it would make much more sense to wait and everyone buys the chunks they want.

Someone might buy the name and logo such as what was done with Pan Am. It's a personal preference, but in my opinion it's an insult to the history of a company if it trashes it's own name and logo and try to take on an image of a company that was just liquidated.
 
gigneil
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RE: Could US/UA Do What AA/TW Did?

Fri Feb 21, 2003 1:49 pm

TWA _was_ liquidated. And AA bought it all up. UA could file Chapter 7 and RSA could be sitting there ready for the whole thing.

N
 
HlywdCatft
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RE: Could US/UA Do What AA/TW Did?

Fri Feb 21, 2003 1:52 pm

That would be interesting...

A couple of years ago UA wanted to buy out US and that is a big part of the problem that got UA in this mess, now US buys out UA?

That would be really weird.

Can you picture a USAirways 744?
 
gigneil
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RE: Could US/UA Do What AA/TW Did?

Fri Feb 21, 2003 1:54 pm

 
ouboy79
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RE: Could US/UA Do What AA/TW Did?

Fri Feb 21, 2003 8:32 pm

Any transaction would be different here than AA & TW in one major aspect...the UAL employees would NOT be brought on as well. US Airways has roughly 11,000 people out on furlough - these people will be brought back first and then the UAL employees may apply for a job at U.

Of the assets UAL has, RSA's Bronner has said ORD & IAD are on his wish list. Personally I see them wanting DEN more than ORD - but regardless...they need a midwest hub and will finally get it. IAD would be strickly an international gateway with minimal domestic feed. Also, the 319s and 320s will likely be picked up by U to completely replace the 737-300s and 400s - the fleet numbers are identical.

LHR is going to DL - Leo wants it badly and will spend millions to get it. The other hubs will all be dissolved and the market demand will justify just how much slack will be taken up. The 747-400s will be left in the desert until some overseas airline wants them...the 777s should find a home quickly with DL or AA, the 767s may end up at U to provide needed lift until the 332s start coming in 2007 but others will head to the great sandy resorts of the southwest, 757s will end up with someone...maybe a new low fare airline, and the 737s will go get a bit of a tan too for awhile until some new LLC picks them up.
 
cschleic
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RE: Could US/UA Do What AA/TW Did?

Sat Feb 22, 2003 2:16 pm

Wouldn't it be cheaper to buy the assets in liquidation? From the US point of view, that would make more sense. From the UA point of view, selling at higher prices would make sense, but look what happened to Pan Am and TWA when they started selling assets to raise cash.
 
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RE: Could US/UA Do What AA/TW Did?

Sat Feb 22, 2003 3:02 pm

Wouldn't it be cheaper to buy the assets in liquidation?

Not necessarily. What AA and TW did was essentially a pre-packaged liquidation. AA asked TW to file for bankruptcy, with the understanding that they had an agreement in place for purchase of most of their assets.

Had TW filed and been open to bidding from outside sources (other carriers), the prices for what AA got could have been much higher.

In essence, it's like AA "bid" on everything before the auction took place, without any other competing bidders to drive up the price.

If UA went into liquidation without any such agreement in place with US beforehand, the bidding war that would commence could ratchet up the price to the point where US may not be able to get much of anything.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group

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