America West Merge with USAirways Today

[Rogue5]

The $350 million of new equity is expected to be provided by four separate investor groups. The new investors are: ACE Aviation Holdings Inc., ($75 million commitment) a Canadian holding company that owns Air Canada, Canada's largest airline with over $7.5 billion in annual revenues; PAR Investment Partners, L.P., ($100 million commitment) a Boston-based investment firm; Peninsula Investment Partners, L.P., ($50 million commitment) a Virginia-based investment firm; and Eastshore Holdings LLC, ($125 million commitment and agreement to provide regional airline services), which is owned by Air Wisconsin Airlines Corporation and its shareholders. The merged company also plans to conduct a rights offering that could provide an additional $150 million of equity financing.

 

[XJslave]

is there a chance AWAC will do some AW Express flying if this all goes through? PHX base a possibility?

good luck AWAC!

screw the express flying AWAC is putting up some big money, merge us in with AWA and USair

 

[scouts out!]

Last I Knew Air Whisky was an investor, not anyone of the airlines to merge and air whisky was to fly as another contract carrier for US Airways. The question is what happens to the two wholly owns PDT and PSA. Do they get sold off continue as a wholly owned or merge (doubtful) however we are all ALPA.

 

[WhiteCloud]

screw the express flying AWAC is putting up some big money, merge us in with AWA and USair

The only fair thing to do is staple the AWA and USAirways seniority lists to the bottom of the AWAC list.....it's only fair.

 

[LearLove]

here is an email update I got from AAA mec today:

We just received a briefing at the MEC meeting and the highlights
are:

A merger between USAirways and America West has been approved. The
merged company will have a board consisting of 13 board members.
Three form investing equity firms, four from UsAirways to include
Lakefield and six from America West to include their CEO Parker.

Parker will be the new CEO and the headquarters will be in Tempe AZ

It will take about 2-3 years to complete the integration.

The new entity will have 2 billion in cash. That is made up of cash
on hand from both airlines, $350 mil in new equity, $200 mil in
asset sales and another $2-300 mil in released restricted cash.

The $350 mil in equity is made up of:
$75 mil Air Canada
$100 mil Par (hedge fund)
$50 mil Peninsula (hedge fund)
$125 mil from Air Wisconsin

An additional $650 mil will come from other partners. $250 mil comes
from Airbus - with $185 mil available upon exit from bankruptcy. In
exchange for that the new entity has agreed to be the launch
customer for the new AB 350 to be used for international flights.

They expect $650 mil in savings from synergies. $150-200 mil from
route rationalization. Flights will begin to Hawaii.

The mainline fleet will go from a combined 419 aircraft to 361. The
company does not expect furloughs as a result and no timeline for
the fleet size was mentioned.

The plan calls for 239 RJs and 57 turboprops.

CLT PHX PHL will be hubs. LAS BOS DCA LGA and FLL will be focus
cities

USAirways group will be the overall surviving entity. Under
USAirways group will be Merger Sub - merger sub will purchase
America West

You will notice that Wexford is not on the list of equity investors.
No mention of the fate of the 170s at this time.

Mesa is out as a feeder for USAirways but will probably still have a
role with America West.

More as it comes available.

 

[pipejockey]

I certainly hope XJslave is kidding when he says awac is putting up a lot of money. 125 mill is chump change to a major airline. What would the entity which will be the merged USAirways and Amwest even need awac for anyway. If there are any winners to be had on the regional side of things it sure should be Piedmont/Allegheny, and PSA, NOT awac.

 

[Rottweiller]

What would the entity which will be the merged USAirways and Amwest even need awac for anyway.

70 RJ's ready to go and staffed plus $$$ maybe.

 

[OPECJet]

Hopefully history won't repeat itself at PDT and we'll end up with the good end of the stick. I'm still packing my parachute though.

 

[DashCojones]

I certainly hope XJslave is kidding when he says awac is putting up a lot of money. 125 mill is chump change to a major airline. What would the entity which will be the merged USAirways and Amwest even need awac for anyway. If there are any winners to be had on the regional side of things it sure should be Piedmont/Allegheny, and PSA, NOT awac.

AWAC (or Eastshore, to be more specific) will own 14.64% of the equity of the new entity. At a valuation of $850 million in total equity, this means Eastshore basically got its $124.46 Million back out of the $125Mil it put in (subject to dilution). They basically bought themselves the right to fly for US for a little over half a million...Nicely done.

NOW....this is still subject to the present Airways coming out of Bankruptcy/approvals/etc. AND DON'T FORGET....the door hasn't closed on new vendor contracts:

Approximately $675 million of additional cash financing is being secured through a combination of refunding of certain deposits, debt refinancing (which reduces collateralization) and signing bonuses from companies interested in long-term business relationships with the merged airline. The companies have signed commitments or firm proposals for more than $425 million in additional cash liquidity from strategic partners and vendors, including over $300 million in a signing bonus and a loan from prospective affinity credit card providers for the merged company.

 

[ILStoMinimums]

Sure hope you guys at AWAC succeed in this deal.