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

[satpak77]

http://online.wsj.com/article/SB100...5534.html?mod=WSJ_hpp_LEFTWhatsNewsCollection

BY SUSAN CAREY AND DENNIS BERMAN

Merger talks that came to light last week between UAL Corp.'s United Airlines and US Airways Group Inc. have become "very serious," said one person close to the matter. But they remain sensitive and it is just as likely the discussions will fall apart as result in a done deal, this person noted.
Any transaction would be an all-stock merger, with United being the surviving entity, this person said. The share premium to be paid to US Airways shareholders hasn't been settled. Another person familiar with the talks said the two sides haven't yet agreed who would run the combination.

 

[AA717driver]

CAL had better hurry...

I predict exactly NOTHING will come from this. Now they're talking about a stock swap--no cash. 'Oh, the futility!'

TC

 

[Quiet Flight]

satpak77, please change your avatar. Those two guys are creeping me out!

 

[ACL65PILOT]

Well if UAUA does go with LCC it is because CAL told them no way.

 

[another cfii]

My sympathy to my UA's bro and sis... Too bad after all this, they are still highly desirable among both our ranks and the flying public. That says a lot about UA's legacy.

 

[MCDU]

My sympathy to my UA's bro and sis... Too bad after all this, they are still highly desirable among both our ranks and the flying public. That says a lot about UA's legacy.

Lets not forget that CAL was the worst disorganized airline in the 80 and 90's. Now somehow they are better. Things change. The PFT generation on here seems to be clueless on the dynamics of airlines and how things change. United in the mid 90's was the most sought after job.

Delta in the 80's was pretty much a regional airline and grew thanks to many intl airlines like PAN AM, Braniff and Eastern failing. United had 15 year F/E's at one time. How fast you people are to label airlines shows your age and your maturity.

M

 

[Redmeat]

This is likely to induce a feces throwing contest, but it is a legitimate question none the less.

Exactly how would the UA and LCC pilot SL be merged? Correct me if I'm wrong here (and I'm sure someone will) but isn't an agreed upon joint contract between east and west the trigger that would implement the nic list?

So how does this all shake out if the merger (which some sources are stating could be finalized in as little as 2 or 3 weeks) happens before a joint contract?

Honest question. Anyone know how it would go?

 

[Crzipilot]

I highly doubt you will find you answer on FI......you will find alot of opinions. But as the saying goes.........

True answer.....ask a labor lawyer, which might get you close. Only way to tell is to watch it happen

 

[waveflyer]

Crzi pilot is right-

but IMO - the sli would be between Nic and Ual- with all the furloughs on both sides- what a cluster-

it'll be a Nic list on top of a nic list

 

[TWA Dude]

Exactly how would the UA and LCC pilot SL be merged? Correct me if I'm wrong here (and I'm sure someone will) but isn't an agreed upon joint contract between east and west the trigger that would implement the nic list?

That is the conventional wisdom.

So how does this all shake out if the merger (which some sources are stating could be finalized in as little as 2 or 3 weeks) happens before a joint contract?

If they have an announcement in 2-3 weeks that's just an agreement at the BOD level. To finalize (close) the merger a whole bunch of things need to happen including DOT/DOJ approval which is by no means assured. Plus, chances are the precedent of DL/NW will mean a joint contract will be approved as well. In other words, the merger announcement means the beginning of a 6-9 process before it can hope to close.

 

[waveflyer]

Son wouldn't have a leg to stand on since delta would still be bigger

 

[mamba20]

I seriously doubt these two will ever merge. Way too much route overlap, and they have nothing to offer each other. What this will do IMHO is force a merger with UAL and CAL.

 

[Mr.B]

lets not forget that cal was the worst disorganized airline in the 80 and 90's. Now somehow they are better. Things change. The pft generation on here seems to be clueless on the dynamics of airlines and how things change. United in the mid 90's was the most sought after job.

Delta in the 80's was pretty much a regional airline and grew thanks to many intl airlines like pan am, braniff and eastern failing. United had 15 year f/e's at one time. How fast you people are to label airlines shows your age and your maturity.

M

amen brother mcdu

 

[NuGuy]

I seriously doubt these two will ever merge. Way too much route overlap, and they have nothing to offer each other. What this will do IMHO is force a merger with UAL and CAL.

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

 

[hockeypilot44]

Crzi pilot is right-

but IMO - the sli would be between Nic and Ual- with all the furloughs on both sides- what a cluster-

it'll be a Nic list on top of a nic list

IMHO, the SLI would be between the old America West list, the old US Airways list, and the United list. I also think USAPA would be the bargaining unit between the three. It's no secret that the majority of the United pilots hate ALPA. I think anyone currently furloughed is screwed if this merger happens as there won't be call-backs for years. If anything, this merger will bring more furloughs. The Delta/NWA merger avoided furloughs within the mainline pilot group, but numerous regional pilots were furloughed and numerous office jobs were lost as a result of that merger.

 

[Fubijaakr]

IMHO...

With all your Union experience at Allegiant, I'm sure your "opinion" will be exactly how it goes down.
:laugh:

 

[Mr.B]

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

All true IF these senior management types actually wanted to run an airline, which should be apparent to all by now, that is not the case. This is all about tying the deal up, getting it past regulators, and raking in the bonuses. It doesn't have to make any sense to the flying public or the employees left holding the bag.

We can only hope that after the pillage, those carpet baggers will get lost.

 

[waveflyer]

Ok- what's the argument for their being 3 lists integrated?

 

[jws717]

I seriously doubt these two will ever merge. Way too much route overlap, and they have nothing to offer each other. What this will do IMHO is force a merger with UAL and CAL.

No one seems to see the beauty in this. Route overlap = monopoly and increased yield. If PHL, IAD,DCA and CLT are all United then there is no one to undersell each other. If you live in the Mid-Atlantic you would be forced to use United and pay a high yield. Think evil empire!

 

[hockeypilot44]

With all your Union experience at Allegiant, I'm sure your "opinion" will be exactly how it goes down.
:laugh:

I have never worked at Allegiant. My opinion is just as valid as the other guys. No one knows how it will go down. I personally don't think this merger will ever happen. I was just posting the exact opposite of what the other guy posted. I think what I posted could actually happen though if a lot of things align, but it is not probable.

 

[Marko Ramius]

No one seems to see the beauty in this. Route overlap = monopoly and increased yield. If PHL, IAD,DCA and CLT are all United then there is no one to undersell each other. If you live in the Mid-Atlantic you would be forced to use United and pay a high yield. Think evil empire!

You do know that they tried this before and the DOJ(even under supposedly merger friendly Bush) was none too happy about it. In a world where Congress comes out with new proposals for the airline industry seemingly daily, and a president that has said he is shifting his focus from healthcare to jobs what do you think the climate for an overlapping deal is? There are zero revenue benefits from a UA/US merger. They have been codesharing for years moving passengers between the two route systems, realizing the incremental revenue from that. The only benefits are in cost reduction and that means 'optimized' hubs and jobs.

 

[Marko Ramius]

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

UA has been weak in the East and South, but revenue wise they cover that pretty well with US and CO codeshares. IAD may be a weak-sister compared to PHL, but to me it would play a big role on paper in a merger but for the DOJ. US is very strong at DCA and having a strong ledger of international and transcon flights out of IAD would seem to be a good marriage for their FF's, but Justice isn't going to let that happen.

Then we have the Doogie factor. Even if one were convinced that he wants to run an airline, he hasn't shown that he is all that good at it. Most passengers primarily fear price gouging when looking at mergers like this proposal, but with Doogie you have to fear the service changes too. Based on last years numbers, just under 2/3's of the combined airlines passengers would come from UA. I wonder how they're going to like it when they show up and find out that E-plus and EX-plus are gone? Or the movies? You like Easy Check-in? Welcome to not so Easy Check-in on some of the slowest and frustrating IT going. Power ports? That's what restrooms are for.

I also wonder how they're going to like it when Doogie completely restructures the flying so that O/D pax who had nonstops before have to change planes? Going from ORD to MIA or TPA? That will require a change in CLT now. Going ORD to LAX? That will require a change in PHX or DEN? ORD to Hawaii? Please report to LAX, SFO or PHX. Oh you liked your transcon flights out of LAX, JFK, BOS, SFO and IAD? Well those have been drastically cut or eliminated and you will have to stop in either ORD or DEN.

You can call this thing viable, something I saw more in 2000 than now, but once Doogie gets his hands on it, game over. UA is better off with Continental or going it alone with a new CEO/management team. If I were on their board, I'd be telling Glenn just that.

 

[hou757]

What is O&D?

 

[hockeypilot44]

What is O&D?

Originating and Destination traffic. It means passengers NOT connecting through a hub.

 

[pianoman]

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)...
Nu

Yes, but PHL is under assault by SWA, and it also has EWR and BWI within relatively close proximity for competition.

 

[eaglesview]

Yes, but PHL is under assault by SWA, and it also has EWR and BWI within relatively close proximity for competition.

Southwest is becoming more and more like a legacy carrier. The time for running from where ever Southwest goes is over.

PHL is still the preffered airport for all of south Jersey, Philly and it's suburbs, and Deleware. It deserves it's number 5 O&D ranking

 

[johnsonrod]

What happens when you combine two lame airlines? You get one big, LAME airline. This is a terrible idea. The fact is that the Washington DC DCA/IAD hub overlap is probably enough to kill the merger attempt. Looks like CAL ain't takin' the bait.

 

[Grandpa +65]

Yes, but PHL is under assault by SWA, and it also has EWR and BWI within relatively close proximity for competition.

I completely disagree. SW is cutting capacity in PHL

 

[Raoul Duke]

This is likely to induce a feces throwing contest, but it is a legitimate question none the less.

Exactly how would the UA and LCC pilot SL be merged? Correct me if I'm wrong here (and I'm sure someone will) but isn't an agreed upon joint contract between east and west the trigger that would implement the nic list?

So how does this all shake out if the merger (which some sources are stating could be finalized in as little as 2 or 3 weeks) happens before a joint contract?

Honest question. Anyone know how it would go?

what happens if only the West was merged and the East was left to wither. There is no combined contract or contract operations so why not merge UA with the West cert and avoid the snap back on East wages?

 

[eaglesview]

what happens if only the West was merged and the East was left to wither. There is no combined contract or contract operations so why not merge UA with the West cert and avoid the snap back on East wages?

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."