AWA Not in that bad a shape!!!!

[Wiskey Driver]

But I thought we had only 60mill on hand?? Who do you believe???????????


Dawn Gilbertson
The Arizona Republic
Apr. 9, 2005 12:00 AM

America West Airlines CEO Doug Parker has repeatedly said the Tempe airline wants to be a player in the expected consolidation of the troubled industry.

One industry analyst said Friday that America West may have bankrupt US Airways in its sights.

JP Morgan airline analyst Jamie Baker said in a report that there is "early speculation" on a proposed America West/US Airways "linkage." He provided no details. advertisement




This is not the first time America West's name has come up as a possible partner for the struggling East Coast carrier, but Baker's wording and the fact that he included the speculation in his report seem to suggest it's more than just idle chatter.

America West spokeswoman Elise Eberwein reiterated Parker's comments that a shakeout is inevitable for the industry's long-term survival. But she said that at this point any talk of an America West deal with US Airways is "only speculation," and that the company does not comment on speculation. US Airways did not return calls for comment.

America West made a run at another struggling airline, ATA Airlines, late last year but decided against making a formal bid for the because it couldn't put together a deal that made financial sense. A big obstacle was the cost of acquiring the Indianapolis carrier's planes. ATA ended up in a deal with Southwest.

At the time of the America West-ATA talks, one analyst who was opposed to that deal said a merger with US Airways would make more sense.

A key attraction, observers say, is the marriage of America West's West Coast-heavy operations and US Airways' East Coast emphasis.

Given the industry's fuel price and airfare woes, however, most see more challenges than benefits to any significant deal at this stage.

The most immediate obstacle is money. America West and most other airlines are losing millions right now and need every penny for their operations. In the same report, Baker says America West will face a crash crunch by the end of the year. He said America West, which ended 2004 with unrestricted cash and investments of $306 million, could be down to as low as the $60 million range. It needs to raise a minimum of about $100 million, but Baker added it should be able to do that.

Robert Mann, an airline industry consultant in Port Washington, N.Y., said the economics don't seem right at this point. If anything, a code-sharing deal would seem to make more sense. Under code sharing, airlines link their networks and feed each other passengers. It enables them to increase their business without the added costs of new cities or the hefty expenses of a merger.

Another possible player in any deal could be Phoenix-based Mesa Air Group and its chairman, Jonathan Ornstein. Mesa is best known locally as America West Express, but it also flies as US Airways Express.

In the wake of recent large investments in US Airways by two of its other commuter partners, Mesa has said it is considering an investment in the airline. Mesa has about $300 million in cash.

Despite analyst reports this week suggesting Mesa is no longer a player on that front because of developments involving the other players, Ornstein said Friday the company still is considering ways to help US Airways return to profitability.

 

[Cactus73]

A merger with airways would be a nightmare!

To start their most junior flying pilot is senior to 2/3 of our seniority list. You can be sure that ALPA would try to bring back their furloughed pilots senior to us and send us to the street.

They have already pledged their most valuable assets as collateral for loans from Republic, AWAC, the State of Alabama, and the ATSB. These creditors are going to want their money if AWA tries to make a deal.

They have a very senior and disgruntled work force. Don't we already have our own?

I could see a code-share, but a merger would be a total mess!

I'm not sure where Baker is getting his $60 million figure from. We have two debt payments to the ATSB this year totaling around $90 million. The notes due on our other debt have already been funded by financing the training center and MX facility.

We have good cash flow, even though were taking in less than we are spending. We would have to lose around $75 million per quarter to get to his number. I guess it's possible, but the 1st quarter may not be that bad.

Maybe MESA will buy us. I always wanted to work for JO.

 

[Waitin' On LUV]

Maybe MESA will buy us. I always wanted to work for JO.

No. you don't I promise.

 

[Cactus73]

No. you don't I promise.

Sarcasm.

I would rather have a root canal on all my teeth at once.

 

[Wiskey Driver]

A merger with airways would be a nightmare!

To start their most junior flying pilot is senior to 2/3 of our seniority list. You can be sure that ALPA would try to bring back their furloughed pilots senior to us and send us to the street.

They have already pledged their most valuable assets as collateral for loans from Republic, AWAC, the State of Alabama, and the ATSB. These creditors are going to want their money if AWA tries to make a deal.

They have a very senior and disgruntled work force. Don't we already have our own?

I could see a code-share, but a merger would be a total mess!

I'm not sure where Baker is getting his $60 million figure from. We have two debt payments to the ATSB this year totaling around $90 million. The notes due on our other debt have already been funded by financing the training center and MX facility.

We have good cash flow, even though were taking in less than we are spending. We would have to lose around $75 million per quarter to get to his number. I guess it's possible, but the 1st quarter may not be that bad.

Maybe MESA will buy us. I always wanted to work for JO.

No merger that's for D amn sure but a code share that we could walk away from, not have to set up bases, not have to crew their a/c and benefit from their ETOPS. Code share is the way to go, they have market presence on the east and we have it on the west. Sounds locical to me.

 

[crashpad]

Elise Eberwein - I'd forgotten she left F9. Our lose, your gain to be sure.
On her weekly phone hotline she would do impressions of the animals on our tails...hilarious! Gotta love her.

 

[Wiskey Driver]

Elise Eberwein - I'd forgotten she left F9. Our lose, your gain to be sure.
On her weekly phone hotline she would do impressions of the animals on our tails...hilarious! Gotta love her.

Don Corleone,

Who is she?????????????????????????

WD.

 

[Marko Ramius]

It would likely be a merger/asset acquisition or nothing

A code share does nothing for UsAirways, although it would do alot for America West. Looking at the latest issue of ATW, AmWest has 5,674,539 RPK's and Airways has 9,394,517. UAL who Airways currently codeshares with has 26, 896, 159 RPK's. While these aren't asm numbers, with the high current industry load factors they're close enough. Why would Airways(or their creditors) want to trade what they currently have for 1/5 of the capacity, and limited international that is mostly duplicated. Throw in LH, Singapore, and the rest of the DeathStar Alliance, and it gets worse and you can bet UA isn't interested in AmWest being is Star, bk or not. Codeshare's only bring in revenue when passengers actually trade airlines, so the more non-overlapping opportunities you have, the better. Any possible deal between these two would have to be driven by GE Capital, who was likely behind AmWest interest in ATA. Only an outright purchase or asset(aircraft) transfer makes sense for the money people. I bet AirTran would have a hissy about any proposed deal anyway-which may be what GE wants anyway.

 

[crashpad]

America West spokeswoman Elise Eberwein.