WSJ - US/UAL merger talks "becoming very serious"

[waveflyer]

Really?
You have your opinion, but it's not naive-
don't think that doug and tilton aren't figuring how to use the merger feuds to their advantage.

It won't be to the advantage of ANY work group

 

[Raoul Duke]

Why would any pilot group want to avoid a situation where another pilot group gets a raise. That mentality is part of the problem in my opinion. To much, "I'm in pull up the rope."

what does pilot groups have to do with it? I mean why wouldnt Doug and Glen sit down and say "well there is this snap back on the east contract so we are not going to merge them, we are only going to merge the west to get around it".

 

[eaglesview]

what does pilot groups have to do with it? I mean why wouldnt Doug and Glen sit down and say "well there is this snap back on the east contract so we are not going to merge them, we are only going to merge the west to get around it".

Well I see what you are getting at however from a business standpoint why would you merge with just the West in order to secure PHX and leave PHL, CLT, DCA,Europe and the Carribean on the table. I would venture to say that would cost more than a snap back. In reality our wages need to be snapping back anyway. Last I lookes us (UAL) and USAir are the bottom feeders when it comes to wages.

 

[Hpilot]

Well I see what you are getting at however from a business standpoint why would you merge with just the West in order to secure PHX and leave PHL, CLT, DCA,Europe and the Carribean on the table. I would venture to say that would cost more than a snap back. In reality our wages need to be snapping back anyway. Last I lookes us (UAL) and USAir are the bottom feeders when it comes to wages.

A stock swap with US as the aquiring airline would keep the snap back from being triggered.

 

[whymeworry?]

UAL's stock is up, what? 3-400% since last year? What are the chances the stock maintains altitude until the close of the deal. It's an airline stock, folks. Saddled with debt, a future of never-ending losses, no new aircraft any time soon. The deal won't work w/o i-bankers cash and both UAL and LCC have way too much debt to attract any cash at this point.

I don't see how the deal will get off the ground. Not at this time anyway.

But stranger things have happened.

CAL will do just fine going it alone vs. being forced into an un-happy marriage. Remember, they are already part of the Star Alliance, and the desired dance partner. It's not like UAL is going to steam-roll a JV partner w/o taking heat form the other alliance anchor tenants (ANA/ LH/ TG, et al).

 

[scoreboardII]

you underestimate the power of GE capital and leasing who wants, nay who needs those engines to be flown so they can pay down the principle. GE will cut some sweet deals so they don't take it in the face.

 

[Captzaahlie]

bump.....

 

[General Lee]

I disagree with this. UAL has always been relatively weak on the east coast. No amount of tinkering with IAD has ever fixed this.

LCC brings a top 5 O&D market (PHL), along with a solid connecting hub with a reasonable, if not spectacular catchement area (CLT) and a very decent market share up and down the east coast. Add in a reasonable number of European destinations along with good number of Carribean destinations, and you really have something worth looking at.

It would provide UAL with something they never really had...a SOLID east coast presence. They could move all the N/S connecting traffic to CLT, and focus on DCA for O&D, and that would alieviate most of the DOJ worries.

CAL would be a better choice, because it would blanket both Europe and the Pacific, and it provides the #1 O&D NYC. OTOH, it does't provide the east coast blanket that LCC does, and you're left trying to make east coast connections through EWR rather than the relatively central and fair weathered CLT.

IMHO, LCC is a very viable choice. CAL is in the unenviable position of either jumping in and dealing with UAL or becoming a distant #4. Damned if they do, damned if they dont.

Nu

If CAL doesn't go with UAL, look for them to try for AK next to give them some sort of West Coast presence. And what would happen then most likely? DL trying to C%^$ block them. Southwest will throw their hat in the ring also, but they have way too much overlap to be taken seriously.


Bye Bye---General Lee

 

[whymeworry?]

you underestimate the power of GE capital and leasing who wants, nay who needs those engines to be flown so they can pay down the principle. GE will cut some sweet deals so they don't take it in the face.

I wouldn't be so sure about GE's enthusiasm. There is a reason the stock has been a lackluster performer during the latest market rally. GE has a solid balance sheet with tons of cash. But GE Capital has been burned badly by the financial meltdown. I think they're going to be s conservative as all the other banks out there. There have been many articles about GE over the past year addressing their over-extention in the financial markets.

 

[Redmeat]

A stock swap with US as the aquiring airline would keep the snap back from being triggered.

The latest WSJ article stated that United would be the surviving entity.

Check this out...

http://www.philly.com/inquirer/business/20100413_Continental_expected_to_make_United_bid.html


Continental expected to make United bid

By Linda Loyd
Inquirer Staff Writer
A Wall Street analyst expects Continental Airlines to bid to acquire United Airlines, after reports that United and US Airways were in merger talks.
Stifel Nicolaus airline analyst Hunter Keay said in a client note Monday that a United-US Airways merger is "a suboptimal scenario" because of pilot labor issues, revenue risks, and "problems with regulatory review due to higher domestic overlap" on routes United and US Airways have in common.
"We expect Continental to respond to reported United-US Airways merger plans with a bid for United," Keay wrote, "partly as a defensive maneuver. . . .We expect Continental to respond relatively quickly." Keay said he had no knowledge of merger negotiations or discussions between Continental and United.......( I didn't paste the whole article...link is above).


So how does all this play out if Continental and UA hook up? Does this send the rest of the players scrambling for a dance partner?

Who ends up SOL when the merger musical chairs come to a stop?