AmWest, USAirways Decision Soon?

[storminpilot]

http://www.azcentral.com/business/articles/0503amwest03.html

AmWest, US Air decision expected


Dawn Gilbertson
The Arizona Republic
May. 3, 2005 12:00 AM

Will April talks bring a May merger?

That's the $500 million question in the airline industry as Tempe-based America West Airlines and US Airways feverishly work on a deal that will somehow join the carriers.


No one from America West or US Airways is commenting - except to say the two sides are still talking - but some industry observers believe any announcement will come sooner rather than later.

A source involved in US Airways' bankruptcy case said the goal has been to reach an agreement as early as this week. Whether that's achievable is unclear.

Mesa Air Group CEO Jonathan Ornstein, whose Phoenix-based company is weighing an investment to help US Airways get out of bankruptcy, said things appear to be moving quickly.

He would not say whether Mesa, which gets more than 70 percent of its revenue flying regional flights for the two carriers, has decided to invest.

"I imagine that this will all be resolved in the not-too-distant future," he said.

Bear Stearns airline analyst David Strine said in a report last week that it believes the two carriers are on an accelerated timetable in part because of US Airways' urgency to file a reorganization plan.

The airline's largest creditor, General Electric's aircraft leasing arm, had given it until Saturday to file a plan. Such a plan details how a company will repay creditors and reorganize its finances to emerge from Chapter 11.

That deadline passed without any filing over the weekend. No new deadline has been set, at least publicly.

"We are talking with GE about the timing for filing our plan of reorganization," US Airways spokesman David Castelveter said Monday.

In a hotline message to employees Friday, US Airways CEO Bruce Lakefield said the two carriers are still in discussions.

"We continue talking with America West about a potential strategic transaction," he said.

He added, "I am optimistic about our future and I'm even more optimistic in the role you will play in that future."

The big unknowns are what any transaction will look like, and who the money behind it will be. America West has said it doesn't have the cash to pull off such a deal, and US Airways certainly doesn't. So they have been scouting for outside investors.

A host of potential investors have been mentioned including GE, Retirement Systems of Alabama, Mesa, Air Canada, and Lufthansa. Investment groups like Texas Pacific and other big-money bargain-hunters also have been mentioned. TPG has a controlling interest in America West and previously tried to buy US Airways during its first trip through bankruptcy court. It was trumped by Retirement Systems of Alabama, a state pension fund whose CEO is now US Airways' chairman.

As for what any deal might look like, there are so many uncertainties that Strine laid out four possible scenarios in his report last week.

They were, from most to least complex: an outright combination, like American and TWA; formation of a new holding company, like Air France and KLM; a joint venture, like Northwest and KLM; or a code-share agreement, like United Airlines and US Airways and Southwest Airlines and ATA.

Of course, there is a chance that no agreement will be reached. America West made a high-profile run at ATA's assets last year, but never submitted a bid because it couldn't make the deal work financially.
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[Formula1]

I hope this deal gets hashed out sooner than later as well, those of us in the pool at AWA are patiently wondering if we will be able to come to work there or if we are just going to get flushed out of the pool because of a merger!

I am assuming that if nothing happens then AWA might start running classes again very soon, but then there is always the next merger talks with xyz airlines(fill in the blank). Oh well.

Patiently waiting.

 

[TWA Dude]

Formula1: It's good that you're able to wait patiently but untill you actually start class I'd recommend keeping the broader job search going. Should this thing come to pass they'll be immediately reducing capacity.

And BTW, just because a "deal" is announced doesn't mean it'll happen, a la UA-US a few years ago. A lot of entities, not the least of which all the unions, must come together to allow this to happen. I'm not saying it can't but I remain skeptical.

 

[blzr]

Does anyone know if Vegas has odds on this merger, and if so, what would it be?

 

[Wiskey Driver]

Formula1: It's good that you're able to wait patiently but untill you actually start class I'd recommend keeping the broader job search going. Should this thing come to pass they'll be immediately reducing capacity.

And BTW, just because a "deal" is announced doesn't mean it'll happen, a la UA-US a few years ago. A lot of entities, not the least of which all the unions, must come together to allow this to happen. I'm not saying it can't but I remain skeptical.

That's sound advice. There have been statements made about reduction of a/c if the deal goes forward. The money man or woman in this is GECAL and they are not going to allow the a/c they are financing to take desert naps!! I think that it just may happen this time around. I don't know which is more fun this industry or playing blackjack on my LAS and RNO overnights, it's all a gamble...

WD.

 

[crashpad]

I think the union is the least of which will be a factor in whether this comes together.

 

[Tomct]

Well, for AWA's sake, I hope it does not go through! There will be a lot of unhappy people at AWA if this happens. I believe the most junior guy at US right now is like 18-20 years. AN FO!!
Bad JU JU my friends!

 

[Formula1]

Yes, and I believe there are aproximately 1900 pilots on furlough from US AIR- that would not be good. Although I am sure alot of the furloughed US Air guys and gals are probably already working somewhere else- including some already at AWA, Jet Blue, Air Tran, and various others or they have given up on the whole aviation scene altogether.

 

[satpak77]

I don't see this happening. There are like 5 parties that need to "sign off" on this deal.

I think US Airways will die before this deal comes to reality.

 

[LearLove]

Yes, and I believe there are aproximately 1900 pilots on furlough from US AIR- that would not be good. Although I am sure alot of the furloughed US Air guys and gals are probably already working somewhere else- including some already at AWA, Jet Blue, Air Tran, and various others or they have given up on the whole aviation scene altogether.

not that it makes a diff but....

With resignations and retirements the number is down to 1500 and change as posted by U MEC on the code-a-phone. Guess that means they are taking the resignations of guys going to JB and other places for real. Usually these are tucked in a desk and tossed aside when/if recalls happen, however this information is from the union be it though from a senority list published by the CP's office.

Take it for what its worth...

 

[B6Busdriver]

not that it makes a diff but....

With resignations and retirements the number is down to 1500 and change as posted by U MEC on the code-a-phone. Guess that means they are taking the resignations of guys going to JB and other places for real. Usually these are tucked in a desk and tossed aside when/if recalls happen, however this information is from the union be it though from a senority list published by the CP's office.

Take it for what its worth...

JetBlue doesn't require one to resign their seniority. For what it's worth I've heard there is upwards of 300 U furloughees at JB.

 

[Formula1]

The guys from US Air that are currently at Jet Blue would probably not want to leave there to come back to US Air. I think that is one of the main reasons that Jet Blue does not make you resign your seniority at your previous employer.

All if not most of those guys are all Captains now at Jet Blue and have a bright future ahead (brighter than most anyways) to look foreward to- a growing airline vs. a shrinking airline.

 

[Wiskey Driver]

Yes, and I believe there are aproximately 1900 pilots on furlough from US AIR- that would not be good. Although I am sure alot of the furloughed US Air guys and gals are probably already working somewhere else- including some already at AWA, Jet Blue, Air Tran, and various others or they have given up on the whole aviation scene altogether.

The sad part for them is that in the last USAirways contract they signed away their rights in fragmentation so those on furlough will remain on furlough.

WD.

 

[xanderman]

The sad part for them is that in the last USAirways contract they signed away their rights in fragmentation so those on furlough will remain on furlough.

WD.

Do you know this to be a fact Wiskey? Being a junior F/O at AWA you can understand my interest...
Andy

 

[PositiveRate]

so what is the realistic outlook for us AWA newbies? should i be losing sleep?

 

[UALjan15]

PR,

I know it's hard, and I'm not so good at it myself, but stop paying attention to the "tabloids" that are predicting any number of unfounded scenarios. Fly your bus, keep your logbook current, float apps if you want, and as every Cactus pilot seems to have figured out--have a backup plan outside of aviation. Do these things and you'll sleep better.

DR
3111

 

[FDJ2]

The sad part for them is that in the last USAirways contract they signed away their rights in fragmentation so those on furlough will remain on furlough.

WD.

Whiskey, specifically what fragmentation rights were signed away? That's a bit of a broad statement. Aren't the furloughed U pilots still ALPA pilots with U seniority numbers and recall rights?

 

[B6Busdriver]

so what is the realistic outlook for us AWA newbies? should i be losing sleep?

Don't lose sleep about things you can't control.

 

[BeCareful!]

Whiskey, specifically what fragmentation rights were signed away? That's a bit of a broad statement. Aren't the furloughed U pilots still ALPA pilots with U seniority numbers and recall rights?

Actually, FDJ2, it even worse than that. Furloughed U pilots are reportedly going to have to pay back dues to ALPA and restitution to the company for allowing them to refer to themselves as "Furloughed U Pilots" since 2002. Wiskey Driver is right, and not only that, Air Wisconsin pilots are going to jump ahead on the APL and reside above all the former mainline pilots.
And that's just the beginning. Since it's obvious to anyone on this baord that regionals are where the real profits are being made, what's being discussed is a seniority integration based on how well your airline does financially. What they are going to do is take a "snapshot" and place everyone where they choose. This should allow an AWA 737 captain to immediatly bid the 767, and an Air Wisconsin CRJ FO to move into the A330 right seat as a line holder. The only real fences are reportedly going to keep the furloughed U pilot out of the picture permanently, just as Wiskey Driver alluded to.

Hey, man, don't shoot the messenger; this is the new ALPA. Merger policy is a moving target, and everyone knows that pilots at airlines where good management resides are: (1) better pilots, (2) more deserving, and (3) better able to utilize weekends and early summer vacations with their children.

 

[TWA Dude]

so what is the realistic outlook for us AWA newbies? should i be losing sleep?

Once on a TWA trip I was flying with our MEC sec/treas. I said to him, "I just wish I could wake up in the morning and not have to worry about looking for another job." His response was, "You get used to it."
You're asking a question nobody here can possibly answer and opinions are just that. I just hit the one-year mark and I'm not losing any sleep over this. My eyes are wide open but I've been through it before so I know I'm better off being well-rested.