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Texas Pacific...who are they?

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Well-known member
Feb 14, 2002
these guys are getting a controlling interest in every failing airline on the map...who are these guys and what is their intent?
The paper said they were former accountants for the Bass Brothers out of Fort Worth. Other than that, I don't know too much. With all the money owed, they get paid first. Then they get a seat on the board. I don't believe they are airline guys as much as they are money guys, but then again, all I know is what I read.


These guys are MAJOR "money guys"!

They own or control dozens of HUGE companies worldwide. They travel almost non-stop on 2 DA-900s which are (i think) the highest utilization 900s on the planet. Something like 800+ hours/yr. per airframe! The pricipals practically live onboard travelling from Asia-US-Europe.

If there is an opportunity to make some serious $$, these guys will find one!
David Bonderman

Founding Partner, Texas Pacific Group

David Bonderman is a co-founder and partner of Texas Pacific Group (TPG), a leading private investment firm with more than $8 billion of equity capital under management. David is currently a director and previously served as Chairman of Continental Airlines, Inc. Additionally, he is a director of Ryanair, plc and numerous other public and private companies including Ducati Motorcycles, Washington Mutual, Inc., Oxford Health Plans, Inc., and ON Semiconductor.

David graduated magna cum laude from Harvard Law School and is a Phi Beta Kappa graduate of the University of Washington.





Sunday August 11, 10:04 pm Eastern Time
Reuters Business Report
Texas Pacific Hopes to Save U.S. Air
By Tom Johnson

NEW YORK (Reuters) - As US Airways (NYSE:U - News) seeks protection from its creditors in U.S. Bankruptcy Court, the financial cavalry from Texas is again riding to help try to save a major U.S. airline.

Texas Pacific Group, the private investment fund whose founding partners helped turn around Continental Airlines (NYSE:CAL - News) and, later, America West Holdings Corp. (NYSE:AWA - News), has decided to invest $200 million in U.S. Airways once it emerges from Chapter 11 bankruptcy.

Led by financier David Bonderman, the firm's executives are hoping to duplicate their success of nine years ago, when they helped transform a sputtering Continental into a highly profitable organization.

In exchange for its investment on Sunday, Texas Pacific, a $10 billion buyout firm based in Fort Worth, Texas, will receive a 38 percent stake in the Arlington, Virginia-based U.S. Airways, the No. 6 U.S. airline.

The private equity fund will also assume five seats on U.S. Airways' 13-member board and presumably hold considerable sway in managing the company's turnaround efforts as it battles both its own bloated cost structure and an industry-wide slump.

"We don't think the airline industry is going to go away," Richard Schifter, a Texas Pacific Group partner, told Reuters in an interview. "We also don't think it is going to become exclusively the domain of low-cost carriers.

"There remains a role for the major carriers and ... we think the industry as a whole will come back. And when it does, we think that U.S. Airways in particular will be well-positioned to benefit from the recovery, driven, first and foremost, by the cost restructuring that management and the employees together have gone a long way toward implementing."


It is, indeed, a calculated risk. US Airways has been trying desperately to win concessions from its labor groups, vendors and lenders in order to stay afloat. Few airlines were hit harder by the Sept. 11 attacks on the United States, which forced the shutdown of Washington D.C.'s Ronald Reagan National Airport -- the airline's primary hub.

Still, Texas Pacific brings an impressive history of airline turnarounds to the table. Shortly after its founding partners created Air Partners in late 1992, the firm shocked many with its first major investment -- a $55 million allotment to help recapitalize Continental, which was losing tens of millions at the time amid a broader industry slump.

Critics scoffed at Bonderman's decision at the time, particularly given he had little expertise in dealing with major airlines and Continental had recently sought bankruptcy court protection for the second time.

But within two years, the Houston-based airline had overhauled its balance sheet, posting a more than $200 million profit, and revamped a highly criticized customer service operation. Bonderman, who with his partners formally launched Texas Pacific in late 1993, would later cash out most of his holdings, providing investors a more than tenfold profit on their initial investment.

With Continental on the upswing, Bonderman, now 59, also helped rescue America West, based in Tempe, Arizona, from bankruptcy court in 1994, ultimately cashing his investment in for a healthy profit.

Since then, however, Texas Pacific has avoided playing a major role in the airline industry, save buying a near-majority stake in Irish aircraft leasing company GPA in 1998, and Bonderman has accepted few public accolades. Much like his former boss, Texas billionaire Robert Bass of Bass brothers fame, he prefers to operate below the public radar screen.

But the US Airways transaction is his second large deal in less than a month. In late July, Texas Pacific led a consortium of private equity funds that bought Burger King, the world's No. 2 hamburger chain, from Britain's Diageo Plc (London:DGE.L - News) for $2.26 billion.

Schifter said there are similarities between the current U.S. environment in the airline industry and nine years ago, when Texas Pacific took its initial plunge.

"The airline sector in our view is ultimately a very cyclical industry," he said. "Clearly, the industry over the past year has been in a downward spiral exacerbated by September 11. We believe a lot of it is tied to the economy. But our expectation is that as the economy improves, the industry will improve as well."

US Airways has already started the cost-cutting effort, reaching wage cut deals and other concessions with its pilots and flight attendants. Before its bankruptcy filing, it also proposed a contract amendment to its machinists union.

Schifter said Texas Pacific intends to work with US Airways to help bring its aircraft ownership interests under control.


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