Lining-Up the Pricey Investment Banker Teams for AMR - USAirways Press Release

[johnsonrod]

How much is this costing USAirways? Can you take the investment banking fees out of the executives' bonus pool? No big surprise, but this statement was just released this morning:


US Airways has confirmed that it has retained Barclays Capital and Millstein & Co., among others, to explore a possible takeover of AMR, the bankrupt holding company of American Airlines, Douglas Parker, the company's CEO said on US Air's fourth quarter conference call.

The response comes after reports surfaced last week that the company was exploring options to make a bid for the carrier.

"So while its no longer imperitive that our industry consolidate, we are of course always interested in exploring value enhancing deals," Parker said on the call.

 

[Andy]

US Airways is in trouble. With United/Continental merging, there's a good chance that they'll get squeezed out of the Star Alliance, just as Continental got squeezed out of the Sky Team Alliance when Delta and Northwest merged.

US Airways also has the problem of significant route overlap with Delta, United, and AMR which would make any merger 'troublesome'. While Northwest/Delta and Continental/United had some route overlap, it was less than what US Airways will be facing. And route overlap means that the combined airline will have to shrink.

US Airways is in the very difficult position where they're not big enough to survive standalone in a worldwide alliance and they're not small enough to be a geographical niche player (Alaska, Hawaiian, Spirit).

I think that their best bet is to eventually get merged into AMR. The big problem is that Parker still hasn't integrated US Airways and America West. Parker needs to get US Airways' house in order before anyone will want to merge with US Airways. The only CEO dumb/greedy enough to have courted US Airways was Tilton.

As far as US Airways taking over AMR, I just don't see it.

 

[reepicheep]

I agree with Andy....the industry is booming and Airways pays bankruptcy-era wages yet they are barely eeking out a profit. They need a merger more than American.

 

[weasel_lips]

You online CEOs know it all.

 

[Andy]

Any guesses as to which of the first 4 posts came from a US Airways pilot? :laugh:

 

[vetrider]

With or without an AA deal, as an LCC pilot I'm not getting any warm and fuzzies these days. I do think we are kind of 'in a spot.' Going forward is going to be challenging. For now though, I guess a modest profit is better than a sharp stick in the eye.

 

[waveflyer]

"Going forward" has been challenging for 12 years vet-
If a merger with AMR is imminent, I hope it can be an opportunity to get all 3 previous carriers unified and a more reasonable contract.
Good luck to all

 

[vetrider]

"Going forward" has been challenging for 12 years vet-
If a merger with AMR is imminent, I hope it can be an opportunity to get all 3 previous carriers unified and a more reasonable contract.
Good luck to all

Especially at my 'two' airlines, AWA and LCC. A few years of relative tranquiity followed by a wondering whether the airline will exist, with rinse and repeat regularity.

 

[Guppiedriver]

Any guesses as to which of the first 4 posts came from an eastie? :laugh:

Fixed your post for you.

 

[Andy]

Guppiedriver, I knew he was an eastie but didn't want to feed on that division of the pilots. I really hope that you guys can heal yourselves; it's painful to watch the infighting.

On a more positive note, congratulations on the huge beat for earnings. The consensus was for a 4 cent loss/share; you guys showed a 17 cent profit/share. http://finance.yahoo.com/news/US-Airways-Reports-Fourth-prnews-3006651438.html?x=0