AA7573E
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America West And US Air

Fri Nov 07, 2003 4:46 am

Given the current economic conditions in the world, and the slippery slope that most major air carriers find themselves on, is there any logic to a merger between US Air and America West?

Here are my general thoughts:

  1. Credit Rating - The combined economics of the two airlines should garner a stronger credit rating, which would lead to a stronger position in lease negotiations (for aircraft and real estate), and more importantly provide easier access to debt and equity, from institutional sources.


  2. Fleet Commonality - Both carriers operate a very similar fleet, centered around newer Airbus A319 and A320 types, and supplemented by older Boeing 732, 733, and 734 types. In addition, both carriers have extensive regional fleets, with Canadair 200, 700 and 900 aircraft, EMB 145, and a variety of turboprop variants operating up and down the East Coast with US Air

  3. Dissimilar Route Networks - Neither carrier poses a substantial threat at the other's fortress hubs, and in fact, the flights that currently exist into those hubs would cross feed traffic to the other carrier's network. I would not expect much Sherman Anti Trust motion from the government, as was the case with United and US Air, because as the route maps below show, there is not much overlap to worry about:

    America West
    http://www.americawest.com/aboutawa/companyprofile/aa_routemap.htm


    US Air
    http://www.usair.com/travel/maps/route/us_canada.htm



    I am sure there are a myriad of contractual, union and other issues that would hold up a deal like this, but on its face, does it have merit? It just seems that America West completes US Air, and vice versa. US Air would stand to see a substantial boost to their trans Atlantic business, and the America West component would have the ability to establish a stronger presence in Mexico - and venture further south. The ability to buy planes in bulk would have the major manufacturers clamoring to get a deal with the new airline, as it will soon be time to phase out the older aircraft in both fleets.

    So lets here it, what do you folks think?

See you up front!
 
asianguy767
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RE: America West And US Air

Fri Nov 07, 2003 4:54 am

i think that would be a great idea! From what I see, everyone stands to gain but then again, bigger isnt always better in this business...if they do merge, i wonder what the new name would be?
 
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OzarkD9S
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RE: America West And US Air

Fri Nov 07, 2003 4:54 am

Given the US/UA marketing arrangement I don't see this happening. A few years ago, a US/HP or US/HP/TW combo might have been a logical step but the $$$ is just not there these days for anything more than alliances and perhaps a few asset sales/purchases.
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RE: America West And US Air

Fri Nov 07, 2003 4:54 am

It seems logical but unlikely to happen.
 
SunValley
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RE: America West And US Air

Fri Nov 07, 2003 4:55 am

Why would HP, who is re-inventing their operation as a Premium LCC, want to take on something like US? HP is developing more of a niche now, and is doing a good job at it, and is not tied to "expensive & inclement weather" hubs. Look for HP to do more point to point trafficking as they have done by picking up their JFK & BOS coast to coast runs.
 
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RE: America West And US Air

Fri Nov 07, 2003 4:57 am

Given the US/UA marketing arrangement I don't see this happening.
I'll agree that this won't happen -- mainly b/c the two carriers don't have money & different operations (HP wants to be a Lower Cost Carrier), but the US/UA marketing agreement means nothing -- the operating carrier gets virtually all the revenue. Thus, when somebody books a flight via US on UA, it's really not that lucrative to them...
 
PBIflyguy
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RE: America West And US Air

Fri Nov 07, 2003 5:05 am

It kind of reminds me of when Delta swallowed up Western......but better, expecially because of the fleet commmonality. US would be able to fold the entire HP fleet into their current fleet. US has done a great job restructuring, I'd love to see them with a greater presence out West. But would they keep both of HP's hubs?

If the merger were to ever go through, we could even see more European city pairs out of PHX and LAS.
 
727LOVER
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RE: America West And US Air

Fri Nov 07, 2003 5:13 am

AA7573E,

did you know that 6-1/2 years ago, USAir changed it's name to US Airways?
 Insane
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scottysair
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RE: America West And US Air

Fri Nov 07, 2003 5:15 am

Yeah, this is great idea for European city pairs out of LAS & PHX hub and also, bettr need for HP as orders with Airbus A330 or B777 nonstop to European.
 
AA7573E
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RE: America West And US Air

Fri Nov 07, 2003 5:20 am

727 Lover

Yeah I did know that. I suppose I forgot when I was looking on their website at http://www.usair.com!

PBIflyguy

I think a merger would mandate that both of HP's hubs would be maintained, and more likely expanded. The ability to put more of the HP fleet to work opening lucrative leisure routes to Mexico and business routes to Central America would add flights to both hubs. Additionally, I would expect more international service out of LAS and PHX. In fact, that was the origination of this thread in my mind. What could HP due to establish European service from LAS?

It seems like it would also mean that the new organization would have to buy more long haul aircraft. Which way do we think they would go? Does it make more sense for this hybrid to look at Airbus to maintain commonality, or do the economics of the 777 mandate they take a closer look at Boeing?


[Edited 2003-11-06 21:23:43]
See you up front!
 
727LOVER
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RE: America West And US Air

Fri Nov 07, 2003 5:28 am


I just tried that link and it leads to this:

http://www.usairways.com/

Interesting.

Anyway, back to the topic, I have also wondered why US didn't buy TW or HP
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PBIflyguy
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RE: America West And US Air

Fri Nov 07, 2003 5:59 am

AA7573E...

First off, great topic of discussion, thanks for posting.

Of course, this is all hypothetical..... but I would think US would stick with , and increase the size of their Airbus widebody fleet for Transatlantic flights. They already passed on the 777 when they chose the A330. And unless someone out there knows something I don't, they are replacing their aging 767's with A330's( I had the unfortunate experience of flying an ex Piedmont 762 to LAX form CLT.. those birds are getting OLD and need cabin overhauls BADLY)

As for HP starting up Eurpoean service from LAS or PHX... I don't see that happening. They are really pushing to brand themselves as a LCC and I don't think they have the ability to find the capital to invest in the fleet they'd need to start up Transatlantic operations. Also, do they really have a big enough route network to fill up widebodies for service to Europe? I think that CO ( via IAH) and AA ( via DFW) draw a majority of European bound travel from cities served by HP.
 
DeltaRules
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RE: America West And US Air

Fri Nov 07, 2003 6:04 am

I've never thought about that....if US would've bought out TW or HP. US with a hub in STL? Would have been really interesting.

In addition to the common fleet listed above by AA7573E, both airlines also have a decent amount of 757s.

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AA7573E
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RE: America West And US Air

Fri Nov 07, 2003 6:24 am

I agree that as things stand now, HP would have a difficult time competing with CO and AA , in terms of driving traffic to PHX or LAS for European routes, and keeping them from going to IAH or DFW. However, if HP's current flights to PHL and PIT were feeding traffic into the US Airways network of European flights, it seems that in short order, the new hybrid airline could gain enough market share to start those routes out of PHX or LAS on a direct basis.

Lets not lose sight of the fact that both PHX and LAS are two of the fastest growing cities in the US. In fact, according to Claritas and the US Census, the LAS metropolitan statistcal area experienced 83% population growth from 1990 through 2000. I have to think with that kind of population growth, the abilty to offer direct service to European locations would be huge!
See you up front!
 
PBIflyguy
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RE: America West And US Air

Fri Nov 07, 2003 6:44 am

AA7573E

Seems we can cover all the angles.... maybe we should go work for HP or US??
 
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STT757
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RE: America West And US Air

Fri Nov 07, 2003 6:56 am

A HP/US merger would pretty much mean the end for both, here's why..

US Airways costs even after Ch-11 are too high, they are too high to compete in the new enviroment where AA, UAL have slashed their costs to bring them closer to LCC levels.

US Airways cannot ask for more wage concession unless they file for CH-11 , again (which is possible). US Airways is still losing money, and the forecast does not look good for that to change.

Southwest "owns" Phoenix and Las Vegas, and now they are moving into PHL. HP is able to keep up with WN out West is because of their low costs, if you kept HP's operations the same but with US Airway's CASMs HP would be bankrupt.

The only way this type of merger would work is if US Airways again filed for CH-11, HP could then buy up US Airways in bankruptcy court (ala AA/TWA) and force labor concessions onto US Airway's employees. US Airways operating with HP's costs would be successful, HP operating under US Airways cost structure would mean their demise.
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PBIflyguy
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RE: America West And US Air

Fri Nov 07, 2003 6:59 am

AA7573E...

I just thought of one more thing......the only LCC carrier I can think of that ever operated Transatlantic was People's Express..... remember the 747's they flew EWR-LGW? If memory serves Air Florida tried too, I know they operated Dc-10's but I am not sure from what city. Probably MIA-LGW
 
phxmkeflyer
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RE: America West And US Air

Mon Nov 10, 2003 1:20 pm

STT757: "Southwest "owns" Phoenix and Las Vegas" huh?!?!?!

Pretty bold statement considering HP has the most passenger volume and most take-offs and landings in and out of PHX, how exactly does SWA 'own" PHX?


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PVD757
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RE: America West And US Air

Mon Nov 10, 2003 1:28 pm

I believe that this idea is currently dead since US and UA are in bed together. Although it seems that they have similar fleets, HP has different engines on their Airbus fleet. That would not necessarily stop some sort of merger, it would just make it more expensive. Plus, does CO still have first right of refusal or did they sell back their stake in HP?
 
Sydscott
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RE: America West And US Air

Mon Nov 10, 2003 1:47 pm

PBIflyguy, what about a route from Las Vages to Tokyo?? I would have thought the two most viable routes out of Vegas for America West to serve would be London and Tokyo. They could probably apply the LCC model to these routes quite successfully because I would imagine they would be able to generate a significant number of cheaper package deals to fill say an A340 type of aircraft??? Just a thought, feel free to correct me if I'm wrong.

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