US Air - United in Merger Talks Again
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US Air - United in Merger Talks Again
April 7, 2010, 5:04 pm
United and US Airways Said to Be in Merger Talks
5:20 p.m. | Updated The UAL Corporation, the parent of United Airlines, and US Airways are in talks to merge, in a potential deal that would create one of the world’s largest airlines, people briefed on the matter told DealBook on Wednesday.
The negotiations mark the latest efforts to consolidate the struggling airline industry. Both companies have been vocal in calling for greater consolidation within the industry to help prop up falling revenues, with United’s chief executive, Glenn F. Tilton, among the leading proponents for more mergers.
“The investor seems to have spoken,” Mr. Tilton told The Financial Times in February. “The market seems to have suggested that scope and scale in a global business are important.”
United and US Airways are deep in their merger discussions, though a transaction is not expected to be announced for at least several weeks, these people said, cautioning that talks may still collapse. One potential hurdle could be union opposition...
United and US Airways Said to Be in Merger Talks
5:20 p.m. | Updated The UAL Corporation, the parent of United Airlines, and US Airways are in talks to merge, in a potential deal that would create one of the world’s largest airlines, people briefed on the matter told DealBook on Wednesday.
The negotiations mark the latest efforts to consolidate the struggling airline industry. Both companies have been vocal in calling for greater consolidation within the industry to help prop up falling revenues, with United’s chief executive, Glenn F. Tilton, among the leading proponents for more mergers.
“The investor seems to have spoken,” Mr. Tilton told The Financial Times in February. “The market seems to have suggested that scope and scale in a global business are important.”
United and US Airways are deep in their merger discussions, though a transaction is not expected to be announced for at least several weeks, these people said, cautioning that talks may still collapse. One potential hurdle could be union opposition...
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Sounds to me like a merger of the two weakest airlines in the US, each one of them with their own set of chronic problems.
I know that some business nerds will tout the benefits of such a merger, the economies of scale
, the syneries 
(of what?), and maybe even use the term "critical mass." 
The physics nerds
would, correctly, point out to them that in their field when something reaches a "critical mass" it spontaneously explodes.
I wish them luck if they do decide to marry.
I know that some business nerds will tout the benefits of such a merger, the economies of scale
, the syneries (of what?), and maybe even use the term "critical mass." The physics nerds
would, correctly, point out to them that in their field when something reaches a "critical mass" it spontaneously explodes. I wish them luck if they do decide to marry.
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How do you figure they are the two weakest airlines in America?
I don't see it that way.
AS a pilot for the USAIRways side, I will remind people that these two airlines have talked about mergers since the late 90's early 2000's. Indeed there was talk of just tossing out the bottom 600 pilots at usair for seniority integration.
I think it is more likely to see an invasion of the USA by Cuba than a merger of these airlines.
I'd love to see alpa try to justify putting a 22 year pilot with usair on the bottom of the list at united. Talk about your experience in the cockpit.
I don't see it that way.
AS a pilot for the USAIRways side, I will remind people that these two airlines have talked about mergers since the late 90's early 2000's. Indeed there was talk of just tossing out the bottom 600 pilots at usair for seniority integration.
I think it is more likely to see an invasion of the USA by Cuba than a merger of these airlines.
I'd love to see alpa try to justify putting a 22 year pilot with usair on the bottom of the list at united. Talk about your experience in the cockpit.
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ALPA national is chomping at the bit to get the US Air pilots back in the fold. They will have to greatly favor the UAL ALPA folks with the seniority fences to get them to go along with the deal. USAPA will easily be voted out with the help of the West folks.
Pilots not yet born will be arguing over this one for years to come.
Pilots not yet born will be arguing over this one for years to come.
Bet it's UA method of forcing CAL to make a decision and dance before it's too late.
Sure Tilton would rather dance with a cute one than an ugly one but he's intent on merging and I'll bet he hasn't quite given up on CAL. Many of the impediments of the proposed merger (if rumors are to be believed) of a few years ago have been removed, namely nearly 100 737's CAL didn't like. UAL's health is significantly better than it was two years ago as well.
Drunk Doug is being used.
Sure Tilton would rather dance with a cute one than an ugly one but he's intent on merging and I'll bet he hasn't quite given up on CAL. Many of the impediments of the proposed merger (if rumors are to be believed) of a few years ago have been removed, namely nearly 100 737's CAL didn't like. UAL's health is significantly better than it was two years ago as well.
Drunk Doug is being used.
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Many of the impediments of the proposed merger (if rumors are to be believed) of a few years ago have been removed, namely nearly 100 737's CAL didn't like.
UAL MEC seems to still oppose a US Air merger but they may be lobbying for a sweeter slice of the prenup on the seniority integration.
Or, as you imply, it may be part of a bigger scheme to get CAL into play...
Your point is taken, this could very well be a message to the UA MEC as much as it's for outside consumption.
Who's list looks more attractive, more obtainable and provides the best relative seniority might be a subplot.
Who's list looks more attractive, more obtainable and provides the best relative seniority might be a subplot.
this could very well be a message to the UA MEC as much as it's for outside consumption
Of course it also is a message to all players, but the valuation effect is paramont
One does not put out statements of this magnitude to affect internal matters like unions without a clear assesment of the impact on stock and the investors.
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One gotcha with US Air in any new merger is the wage snapback provision in the pilot contract. It would put book rates at, shudder, pre-BK 2002 levels:
US Airways:Pilot Contract Threatens Merger | Transportation | Financial Articles & Investing News | TheStreet.com
US Airways:Pilot Contract Threatens Merger | Transportation | Financial Articles & Investing News | TheStreet.com
