Judge lets US Airways weigh rival bids

[stall022]

Reuters
Judge lets US Airways weigh rival bids
Tuesday May 31, 12:30 pm ET

ALEXANDRIA, Va. (Reuters) - A federal judge on Tuesday allowed US Airways Group Inc. (OTC BB:UAIRQ.OB - News) to consider any bids that rival its proposed merger with America West Holdings Corp. (NYSE:AWA - News).

Judge Stephen Mitchell approved a set of procedures that would let other qualified investors submit rival plans to help US Airways emerge from bankruptcy.

"We want to shake the tree and see if there are any higher or better offers available," Brian Leitch, US Airways lead bankruptcy attorney, told the court.

So far, the proposal by America West and a group investors is the only one that has been negotiated.

Mitchell, of the U.S. Bankruptcy Court for the Eastern District of Virginia, granted US Airways' request, giving any rival bidders about a month to come forward with proposals.

It is not clear if rival investors would want to buy the entire US Airways operation or portions of the business, or seek to displace the five investors that have pledged nearly $500 million of new equity as part of the America West deal.

On May 19, US Airways and America West announced plans to merge in order to compete more aggressively with low-cost carriers. The new airline would become the sixth-largest domestic carrier in terms of passenger revenue and would use the US Airways name. It would also fly internationally.

Key investors include ACE Aviation Holdings Inc. (Toronto:ACERV.TO - News), Air Canada's parent; PAR Capital Management and Wellington Management Co LLP, both of Boston; Eastshore Aviation, the investment arm of regional carrier Air Wisconsin Airlines; and Virginia-based Peninsula Investment Partners LP.

General Electric Co. (NYSE:GE - News) will take back planes, and Airbus (Paris:EAD.PA - News) will provide a $250 million loan in exchange for being the A350 launch customer.

US Airways hopes to emerge from bankruptcy by Aug 31.

 

[TWA Dude]

Just in case anybody is confused by this, it's a normal and necessary part of the bankruptcy process. Other entities may indeed step in with a bid but they won't likely be interested in the whole of USAirways; they'll only want parts. The judge will favor the bid which preserves the company intact, eg, the AWA deal.
Anbody see Carl Icahn around?

 

[DIAMONDDD]

Anbody see Carl Icahn around?

Funny you should mention that. I did just see him, then I flushed and washed my hands.

 

[soulcracker]

Well, I am expecting to see Southworst come in at the 11th hour again and drop about two million more than the highest bid as they did with ATA. Then we can all expect to see SWA play up Philly as the white knight who is going to come in and "save everyone from high airfares"....until two months later when there will be no compitition, then they will raise the fares to regular prices. Meanwhile, every sucka in a two hour driving radius will be driving to PHL thinking they are getting the "best deal in town" while spending $200 more in gas and parking than the local airport ticket price on a domestic carrier. Oh well, its their choice I guess. ONLY EN AMEARIKA!!! Im Out.



Holla.

 

[ivauir]

SWA play up Philly as the white knight who is going to come in and "save everyone from high airfares"....until two months later when there will be no compitition, then they will raise the fares to regular prices.

I know this is flame bait, but here goes ....

Where/when has SWA ever done this? Even when we dominate a market we keep the fares low.

 

[aa73]

Anbody see Carl Icahn around?

No, but I heard he is gonna reinstate late fees at Blockbuster. Dang!

 

[soulcracker]

I know this is flame bait, but here goes ....

Where/when has SWA ever done this? Even when we dominate a market we keep the fares low.

...PIT for starters, SWA has a two month promo on routes then they are going to raise the fares. Don't be hatn'! Im out.


Holla.

 

[ultrarunner]

The judge will favor the bid which preserves the company intact, eg, the AWA deal

The judge would rule, I would think and hope, in the best interest of the shareholders. The company could be worth more and give a better return to it's shareholders and investors, then just simply "preserving" the company.

We've seen how well that's been working the last few years.

 

[kelbill]

Soulcracker,

Of course we will raise fares in PIT after we start. Did you ever hear of a "Sale" and "Promo". Our max fare ANYWHERE is $299, walkup. We didn't move into PIT to fly below a profitable fare. Do reread your airline history books. When SWA moves in, fares drop 30% +, and passenger traffic goes through the roof. That is our business model, and business, is good.

 

[ivauir]

...PIT for starters, SWA has a two month promo on routes then they are going to raise the fares. Don't be hatn'! Im out.


Holla.

What are the "regular fares" compared to the fares before we got there? Of course we do promos, that is not anything like the "bait and switch" you are implying. And trust me - no hatin' here, we are the LUV airline.

 

[atpcliff]

Hi!

Actually, SWA's max fare is NOT $299.

Here's how they charge more.

You try and book from DTW-ELP. The internet and the SWA CS rep says they don't serve that market. They DO fly into DTW, and they DO fly into ELP, but they claim they don't serve that route.

So, you end up paying for a ticket from DTW-somewhere, and then a second ticket from somewhere-ELP. So, you pay for 2 tickets, because officially SWA doesn't serve those two markets.

They are the only airline I know of that does this. With NWA, for example, if the fly to two different cities, they will sell you one ticket between those two cities. They don't claim not to serve them, as SWA does.

It works for SWA.

CLiff
YIP

 

[Doug Parker]

Hey atpcliff,

I think they have to do that for Dallas (if you're not flying to/from an adjoining state) due to the Wrong amendment.

 

[canyonblue]

Hi!

Actually, SWA's max fare is NOT $299.You try and book from DTW-ELP.

CLiff
YIP

Ok, I did book DTW-ELP, a market we serve, on July 3 returning on July 6. Max one way $291.00, whats your point?


http://www.southwest.com

 

[AA717driver]

No, but I heard he is gonna reinstate late fees at Blockbuster. Dang!

And you know what? The clerks won't see a dime of it. That 8astard will pocket every penny of those late charges. Just watch him rocket up that Fortune 400 list...

 

[TWA Dude]

The judge would rule, I would think and hope, in the best interest of the shareholders. The company could be worth more and give a better return to it's shareholders and investors, then just simply "preserving" the company.

Actually, the shareholders are just one group who's interests the judge must take into consideration. There's also the creditors, secured and unsecured, and the company's employees. Don't get me wrong, I'm not acting as a cheerleader for this thing, I'm just saying from personal experience that the judge is disinclined to accept piecemeal offers. A company in Chap 11 is geared towards reorganization and maintaining itself as a going concern.

 

[soulcracker]

Ok, I did book DTW-ELP, a market we serve, on July 3 returning on July 6. Max one way $291.00, whats your point?


http://www.southwest.com

Well, you see...I think the point is that SWA have to keep the fares low for the trailer park attendees to flyz on yous guys. Im Out.


Holla.

Ding "You are now free to travel on the ugliest planes in the country"

 

[SWA/FO]

Hey soulslacker,

Their money is green and we like making money at Southwest Airlines.

There are no smoking mirrors here, you get what we say you will get...from point A to point B with something to drink and all the peanuts you can eat for a reasonable fare. Most of the time "on-time"

As to ATPCliff...maybe that whole DTW-ELP trip had some short connections (under 45 minutes or so)...that might be why it didn't come up... Doesn't USA Jet have a run from DTW-ELP?

 

[Resume Writer]

What ATPCliff is saying is true. Also, it does have to do with the Wright Amendment. For instance, you cannot book PHX to DAL. You have to book PHX to ABQ, ABQ to DAL. So, in essence, you are paying for two tickets. However, when I priced it out leaving today, it came to $250.00. Compare that to non-stop AWA from PHX to DFW, you will pay $400 one way. It all depends on convenience. Many business people do not want to stop in ABQ, pick up their luggage, recheck it, and go back through security, etc. I think it depends on what entity is paying for the ticket....


Kathy

 

[80drvr]

What ATPCliff is saying is true. Also, it does have to do with the Wright Amendment. For instance, you cannot book PHX to DAL. You have to book PHX to ABQ, ABQ to DAL. So, in essence, you are paying for two tickets. However, when I priced it out leaving today, it came to $250.00. Compare that to non-stop AWA from PHX to DFW, you will pay $400 one way. It all depends on convenience. Many business people do not want to stop in ABQ, pick up their luggage, recheck it, and go back through security, etc. I think it depends on what entity is paying for the ticket....


Kathy

How does the example ATPCliff uses - DTW-ELP, have anything to do with the Wright Amendment? The fact that they don't connect through either of two exisiting hubs, MDW and HOU, tells me that there is insufficient demand between these segments. How would the Wright Amendment change that.

 

[SWA/FO]

Resume Writter just gave a perfect example of the Wright Amendment. ELP - DTW has nothing to do with the Wright Amendment.