Us Airways on creditors

[GOTAFLY]

TEMPE, Ariz., Dec. 20 /PRNewswire-FirstCall/ -- US Airways Group, Inc. LCC today issued the following response to a statement from Delta's Creditors' Committee regarding the filing of Delta's Plan of Reorganization.
(Logo: http://www.newscom.com/cgi-bin/prnh/20050223/LAW097LOGO )
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"As expected, the Committee's statement makes clear that it has not decided to endorse Delta's Plan of Reorganization and is continuing to evaluate our proposal. With the filing of Delta's Plan, the process is moving forward. We will continue to work with the Creditors' Committee as it evaluates the value created by our proposal compared with Delta's standalone plan."

 

[General Lee]

TEMPE, Ariz., Dec. 20 /PRNewswire-FirstCall/ -- US Airways Group, Inc. LCC today issued the following response to a statement from Delta's Creditors' Committee regarding the filing of Delta's Plan of Reorganization.
(Logo: http://www.newscom.com/cgi-bin/prnh/20050223/LAW097LOGO )
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• Delta, PBGC deal on pilots' pension gets court nod
• Dow Down 7 on Lackluster FedEx Forecast

"As expected, the Committee's statement makes clear that it has not decided to endorse Delta's Plan of Reorganization and is continuing to evaluate our proposal. With the filing of Delta's Plan, the process is moving forward. We will continue to work with the Creditors' Committee as it evaluates the value created by our proposal compared with Delta's standalone plan."

Parker has to say that so his stock won't fall more than it did today--$1.70.


Bye Bye--General Lee

 

[xanderman]

?

GL I gotta ask... If the deal goes down and everything Lorenz... Uh, I mean Parker promised i.e. no furloughs etc. are you gonna be pissed just cause someone bought you guys? I mean really, it's as if you guys just can't handle the fact that there might be an airline other than delta doing well...

Andy

P.S. I know,I know you guys are gonna come out shiny clean and ready to clean eveybodys clock (thankfully I remembered the "L" in clock or you'd really be having a tissy). I'm just asking a hypothetical question here...

 

[General Lee]

GL I gotta ask... If the deal goes down and everything Lorenz... Uh, I mean Parker promised i.e. no furloughs etc. are you gonna be pissed just cause someone bought you guys? I mean really, it's as if you guys just can't handle the fact that there might be an airline other than delta doing well...

Andy

P.S. I know,I know you guys are gonna come out shiny clean and ready to clean eveybodys clock (thankfully I remembered the "L" in clock or you'd really be having a tissy). I'm just asking a hypothetical question here...

I don't think it is like that. We just don't want the hub losses or job losses. I don't have a problem with the USAir pilots, etc, just Parker and his ego. We really don't think our poop don't stink anymore---since BK has a way of getting rid of your company pride. But, we have been through a lot, and we would rather try it on our own, or try it with someone who doesn't take away a lot of our jobs. The USAir deal is just crazy, with the overlap etc. Grinstein had it right when he said USAir would be the "worst" one to merge with. "Worst" meaning overlap wise, not airline wise. We think you should get your merger done first and then look for a partner. Parker is biting off more than he can chew, and everyone, including the DOJ, can see it.


Bye Bye--General Lee

 

[xanderman]

...

fair enough...

Andy

 

[On Your Six]

I don't think it is like that. We just don't want the hub losses or job losses. I don't have a problem with the USAir pilots, etc, just Parker and his ego. We really don't think our poop don't stink anymore---since BK has a way of getting rid of your company pride. But, we have been through a lot, and we would rather try it on our own, or try it with someone who doesn't take away a lot of our jobs. The USAir deal is just crazy, with the overlap etc. Grinstein had it right when he said USAir would be the "worst" one to merge with. "Worst" meaning overlap wise, not airline wise. We think you should get your merger done first and then look for a partner. Parker is biting off more than he can chew, and everyone, including the DOJ, can see it.


Bye Bye--General Lee

Very well stated. No problem with the USAirways pilots - just Parker and his plan that would result in overlap and no real strategic benefit (unlike a NWA combination with its Asian routes).

 

[Tejas-Jet]

Parker is biting off more than he can chew, and everyone, including the DOJ, can see it.

General,

You have a point here....Many here don't remember the frank lorenzo days, but the biggest rap on him was that he was always interested in "the deal"...but was not interested in the day to day details of actually running an airline.

A merger ( even a proposal like this one) takes managements focus away from actually running the airline...witness the failed UAL/U attempt of a few years ago. Gangwal and Wolf basically quit operating US Air as a competitive entity while this whole merger attempt drained a year or more took energy away from the US Air operation.

PArker really should concentrate on getting the current combined US Airways operation on track.

Tejas

 

[Dr. Rumack]

Tejas,
I am not saying DAL isn't too much to bite off but consider this. While Doogie was putting together a back-alley deal to make a bid for DAL his 'new' USAirways was making hundreds of millions. The same could be said for making money (albeit much less) with AWA while preparing the USAir offer. Without the profits he wouldn't get the credit. Looks like he can operate a merging airline and look to the future at the same time.

 

[General Lee]

Tejas,
I am not saying DAL isn't too much to bite off but consider this. While Doogie was putting together a back-alley deal to make a bid for DAL his 'new' USAirways was making hundreds of millions. The same could be said for making money (albeit much less) with AWA while preparing the USAir offer. Without the profits he wouldn't get the credit. Looks like he can operate a merging airline and look to the future at the same time.

We all were making money over the Summer. And, it may have been easy to integrate two airlines with primarily Airbus aircraft, and hubs that fit together well. You can't get better integration than one airline with PHX and LAS hubs, and the other with East Coast hubs. That is easy. And, overall, USAir needed to be bought or accept liquidation. Most USAir employees, while still wanting DOH etc, still wanted to have a chance at a future.

Delta, on the otherhand, is nothing like that merger. Not even close. Hubs are right next to USAir hubs (the DOJ knows this, and will strike it down anyway). Fleets are totally different. A combination would result in a total debt of $23 billion, a lot more than United. Our DL employees are NOT receptive to a merger, which is important due to the fact that we are the frontline employees with the customers.

So here it is in a nutshell:

Parker would be taking on:

1. Hub closings and political ramifications from local politicians
2. 18 different planes in the combined fleet
3. $23 billion in debt
4. A DL pilot contract that will stay active until 2009 at least, block hours
etc. that have to be kept, screwing up Parker's plan already
5. Unhappy frontline employees all around, at both airlines


Is he taking on too much? Yes. Will the creditors and the DOJ see this mess? Yes.


Bye Bye--General Lee

 

[GOTAFLY]

General, I agree, but if was that simple why would they wast the time on all this crap? I do have the answer and neither do you, we are just poor pilot's with crap pay!

 

[On Your Six]

I think Parker and his investment bankers thought they could take advantage of the bankrupcty process (convince creditors to take the cash vs. consider the strategic implications of the merger) and Grinstein's willingness to retire soon. Well, that backfired... Again, hostile takeovers just don't work well in service industries - that's a fact. If Delta were in serious decline with little hope (like USAirways was a few years ago), maybe people would be more receptive.

Now I think it is an ego issue with Parker - he won't back down despite some HUGE obstacles to getting things done. The only people happy about this continuing drama are the investment bankers and attornies involved - they get paid by the hour in many cases...

Beyond the valuation issue, this proposed merger does not make strategic sense - period. NWA would be a better fit due to its Asian routes and lack of overlapping hubs.

 

[Bringupthebird]

I don't think it is like that. We just don't want the hub losses or job losses. I don't have a problem with the USAir pilots, etc, just Parker and his ego. We really don't think our poop don't stink anymore---since BK has a way of getting rid of your company pride. But, we have been through a lot, and we would rather try it on our own, or try it with someone who doesn't take away a lot of our jobs. The USAir deal is just crazy, with the overlap etc. Grinstein had it right when he said USAir would be the "worst" one to merge with. "Worst" meaning overlap wise, not airline wise. We think you should get your merger done first and then look for a partner. Parker is biting off more than he can chew, and everyone, including the DOJ, can see it.


Bye Bye--General Lee

So how many front-line people have been laid off in the US-AWA merger?
How many hubs were closed?
How many cities had service discontinued?
What has the DOJ said about the US-AWA merger?
What major roadblocks have stopped the merger progress at US-AWA?
Did AWA have profit sharing prior to the merger?
Did US have profits before the merger?
Is US better positioned to weather an economic downturn now or before the merger?

You seem to be a wealth of knowledge, so please answer the questions based on fact rather than gloom and doom fear mongering. Personally, I think Parker should take the 8 billion and use it solely for the purpose of beating DAL to a pulp in the marketplace. That would reduce the number of seats substantially. The alternative would be for one airline (DAL) run by someone with a track record of profitability (Parker) to grow an airline (DAL) that recognizes the realities of todays airline industry.

But that effort is being met with opposition by the folks who would benefit most by it. Kind of like rejecting a life jacket because you don't like the color.

I do have to give DAL management credit, though. They neuter the entity that could bring about real change (DALPA) and at the same time allow the employees to think that all their hooting and hollering and button wearing is determining their destiny. Funny and tragic at the same time.

 

[General Lee]

So how many front-line people have been laid off in the US-AWA merger?
How many hubs were closed?
How many cities had service discontinued?
What has the DOJ said about the US-AWA merger?
What major roadblocks have stopped the merger progress at US-AWA?
Did AWA have profit sharing prior to the merger?
Did US have profits before the merger?
Is US better positioned to weather an economic downturn now or before the merger?

You seem to be a wealth of knowledge, so please answer the questions based on fact rather than gloom and doom fear mongering. Personally, I think Parker should take the 8 billion and use it solely for the purpose of beating DAL to a pulp in the marketplace. That would reduce the number of seats substantially. The alternative would be for one airline (DAL) run by someone with a track record of profitability (Parker) to grow an airline (DAL) that recognizes the realities of todays airline industry.

But that effort is being met with opposition by the folks who would benefit most by it. Kind of like rejecting a life jacket because you don't like the color.

I do have to give DAL management credit, though. They neuter the entity that could bring about real change (DALPA) and at the same time allow the employees to think that all their hooting and hollering and button wearing is determining their destiny. Funny and tragic at the same time.

First of all, you should know that the USAir/AWA merger was a good merger. There were no hubs next to each other, and both carriers had a lot of the same fleet equipment. USAir had PHL/PIT/DCA/CLT hubs, and AWA had LAS and PHX. There was NO chance for any of those to be closed. That is why the Gov't approved that merger. There were very few people laid off, and hardly any cities cut--because AWA never had a large East Coast presence. Doesn't that make sense? Delta is USAir's main competition on the East Coast. Also, USAir wanted to be merged. They were on death's door, and needed help. Parker gave them that help.

None of that above is true with Delta. We are ready to come out a stand alone carrier, and Wall St is determining our worth with the bond prices and claim sales. That is how we get our valuation.

What has the DOJ stated about a possible DL/US merge? Not much yet, but the Congressmen in charge of the oversight (the Transportation Sub committee) so far is NOT in favor. Jim Oberstar is incharge, and he said he would be able to lean on the DOJ for a ruling his way. He stated NO one is in favor of this deal so far. (except Parker) Oberstar was instrumental (and not even the committee chairman at that time) in defeating the USAir/UAL merger.

USAir may or may not be able to weather any ups or downs in the future. This money they have to try to buy us is borrowed. It isn't their's. It will add to their debt load, to the total of $23 billion. Will that help USAir out in the long run? Nope. Do you have a mortgage for a $10 million house? Pretty expensive payments I am sure. USair would have more debt than United.


So, I have answered your questions without "Fear" added. My answers are true--USAir would have to get rid of hubs and planes (their competition), assume $23 billion in debt, and cut cities due to the fact that many cities have service from both ATL and CLT--only 220 miles apart. To say those cities would gain LCC service (too small most of them for SW service or Airtran), is wrong, and they would lose choice. To think this merger would be good for anyone except Parker is wrong.


Bye Bye--General Lee


Oberstar said that by publicly exposing the potential dangers of airline consolidation, his committee may be able to "throw cold water" on merger mania. "We can nudge the Justice Department to take the action they must" to prevent a loss in competition, he said.
Oberstar also said opposition to consolidation is bipartisan. "I’ve heard from members on both sides of the aisle" as worries have grown about the impact on jobs and service, he said. "I haven’t heard anyone come forward and say this is a really good deal."