CAL/UAL Merger

[ToThePain]

Anyone heard if this is still a possibility? This is not intended to be flame bait, we have a UAL Captain in our squadron that says that UAL pilots are still talking about this as a psooibility in the next year or two.

 

[blzr]

Magic 8 ball says............................. flame elsewhere

 

[Jetjockey]

Anyone heard if this is still a possibility? This is not intended to be flame bait, we have a UAL Captain in our squadron that says that UAL pilots are still talking about this as a psooibility in the next year or two.

Inconcievable!.................................

Sorry, just couldn't resist the princess bride quote with your avatar T.T.P. Anything is possible in aviation in the next year or two.

 

[FlickerFade]

"I don't think it means what him thinks it means"

"I am not left-handed either!"

 

[calfo]

Well, I'll put it this way... Larry Kellner has said that if Delta and NW combine, he'd be on the next plane to Chicago...

Lets all hope this doesn't come about - I don't want to have to go down to UA wages.

 

[hyflyt560]

DOH (and not what Homer says)

 

[Plug]

2 to 3 years? I don't think it'll be that long. Who knows, the Delta pilots could change things by this time next week.

 

[FlyingFarmer]

I had heard from a CO jumpseater that this was not going to happen. As far as the classic movie P's Bride! Great flick.

"Plato? Aristotle? MORONS!"

"Rodents of Unusual size? I don't believe they exist"

LOL!

 

[IXLR8]

"I have some rope up here"....."Now stop that rhyming and I MEAN it.....anybody want a peanut?"..great flick...

 

[81Horse]

... if Delta and NW combine ...

The world is not ready for Double-breasted Targetheads.

 

[Jetjockey]

"I am Inigo Mantayo, you killed my career, prepare to die"

 

[Big Slick]

Vizzini: You fell victim to one of the classic blunders! The first is never get involved in a land war in Asia. The second, only slightly less well known, is this: never go up against a Sicilian when death is on the line! Ha ha ha ha ha ha -- (he stops abrubtly and falls over, dead)



Hey wait a minute, aren't we involved in a land war in Asia right now?

 

[Occam's Razor]

Not to make the rumor any more complicated than it already is:

NWA can block any transaction involving CAL. Under the 20-year agreement signed in June, 1998, the CAL BOD must get permission from the NWA BOD to: merge, purchase another airline or certificate, be purchased by another airline, code-share, or enter into an alliance with another airline.

The price CAL paid to purchase the preferred shares David Bonderman owned was to restrict their commercial freedom until 2018.

Since the NWA pilots had contractual language to block the March, 1998 transaction that bought Bonderman's majority preferred-stock interest in CAL (which gave him control of CAL, even though he only owned about 15% of the Common stock), they negotiated 4 Letters of Agreement that:

1. Set a maximum relative size of CAL airlines (in terms of blockhours). NWA has to remain at least 107% the size of CAL. It's about 120% now.
2. Restricted CAL owned or operated RJ's.
3. Defined and restricted some operations to prevent erosion of NWA Pacific flying.
4. Gave NWA pilots some goodies.

I don't know how much the blocking ability is worth, but any suitor to CAL would need to pay it.

 

[inthepool]

"there is a shortage of perfect breasts in this world. It would be a shame to ruin yours."

 

[imadumbpilot]

1. Set a maximum relative size of CAL airlines (in terms of blockhours). NWA has to remain at least 107% the size of CAL. It's about 120% now.
2. Restricted CAL owned or operated RJ's.
3. Defined and restricted some operations to prevent erosion of NWA Pacific flying.

Not sure about #3, but 1 and 2 were a part of the NWA pilots Scope clause, not the preferred stock deal, or right to block a transaction.

 

[Correcting]

All bets are off once you enter bankruptcy and the creditors start having their say.

 

[geshields]

Not to make the rumor any more complicated than it already is:

NWA can block any transaction involving CAL. Under the 20-year agreement signed in June, 1998, the CAL BOD must get permission from the NWA BOD to: merge, purchase another airline or certificate, be purchased by another airline, code-share, or enter into an alliance with another airline.

The price CAL paid to purchase the preferred shares David Bonderman owned was to restrict their commercial freedom until 2018.

Since the NWA pilots had contractual language to block the March, 1998 transaction that bought Bonderman's majority preferred-stock interest in CAL (which gave him control of CAL, even though he only owned about 15% of the Common stock), they negotiated 4 Letters of Agreement that:

1. Set a maximum relative size of CAL airlines (in terms of blockhours). NWA has to remain at least 107% the size of CAL. It's about 120% now.
2. Restricted CAL owned or operated RJ's.
3. Defined and restricted some operations to prevent erosion of NWA Pacific flying.
4. Gave NWA pilots some goodies.

I don't know how much the blocking ability is worth, but any suitor to CAL would need to pay it.

Only thing NWA can block right now is someone buying CAL. All other points are no longer valid. We purchased the rights to all others and NWA only has the "golden" share now which they can use to block another airline from aquiring us....

 

[densoo]

It is a real possibility. Kellner has said in his employee meetings that only the large will survive this period and you can either merge or you can grow--he has chosen the latter as indicated by the constantly adding routes and hiring essentially as many as the training facility will allow. He ends with "we hope it works."

 

[bearcat]

I just checked and my ridiculous rumor currency hasn't expired yet.

 

[pkober]

I had heard from a CO jumpseater that this was not going to happen.

A rumor from a line pilot, that's a reliable source.

Everyone know's we are merging with Aeroflot and opening a pilot base in Siberia. My Uncle Larry told me so.

CLAMBAKE

 

[seahorse]

Everyone know's we are merging with Aeroflot and opening a pilot base in Siberia.

I'll be the first to bid it. Then I would start up a brothel with hot Russian women, open for all CAL pilots.

 

[pkober]

The more senior the higher the rates ??

 

[ESS PWR]

Not to make the rumor any more complicated than it already is:


Since the NWA pilots had contractual language to block the March, 1998 transaction that bought Bonderman's majority preferred-stock interest in CAL (which gave him control of CAL, even though he only owned about 15% of the Common stock), they negotiated 4 Letters of Agreement that:

1. Set a maximum relative size of CAL airlines (in terms of blockhours). NWA has to remain at least 107% the size of CAL. It's about 120% now.
2. Restricted CAL owned or operated RJ's.
3. Defined and restricted some operations to prevent erosion of NWA Pacific flying.
4. Gave NWA pilots some goodies.

I don't know how much the blocking ability is worth, but any suitor to CAL would need to pay it.

You might want to check the OAG data. The 107% was related to code-share flights only. No company may restrict other businesses growth or it becomes an anti-trust issue. According to OAG data, CAL long ago passed NW in terms of ASM, Block Hours, and RASM.

In 1998, NW was 107% the size of CAL in terms of ASM, thus the scope restriction. Since, CAL has grown faster than NW and 2 years ago it surpassed NW in all three measures. It is interesting to note that even at 107% ASM, CAL and NW were within 100 million in total revenues.

Unfortunately, none of this is valid now since scope clauses have been stripped of its soul. NW however, still owns a golden share that's only good for a vote to block any transaction that involves the purchase of a majority stake in CAL. However, like anything else, everything has a price.

It all depends how airline sizes are measured, but if total revenues were used, Air France is the largest airline in the world with roughly 255 airplanes (360 with KLM). The reason is the enjoy nearly .20 cents RASM and that makes them a nearly $18B/Yr. corporation.

Food for thought.