US Airways/America West announcement soon

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http://news.moneycentral.msn.com/breaking/breakingnewsarticle.asp?feed=OBR&Date=20050519&ID=4464778

NEW YORK (Reuters) - US Airways Group Inc. (UAIRQ) and America West Holdings Corp. (AWA) are set to announce an agreement to merge after the close of trading on Thursday, the CNBC TV network reported.

The CNBC report, citing unidentified sources, also said a stage-by-stage deal was likely.

Shares in America West were up over 9 percent in late afternoon trading on the New York Stock Exchange, outperforming the Amex Airlines index, which was 0.2 percent higher.

Officials from the two airlines could not immediately be reached for comment.

An industry source told Reuters last week that a merger announcement was close, adding that the deal would probably begin as a marketing alliance and unfold in stages.

CNBC said the carriers had raised $1 billion from various investors to cover operating expenses as part of the transaction.

Investors in the deal could include the world's leading aircraft manufacturer Airbus , Air Canada's parent company ACE Aviation Holdings Inc. (ACErv) and General Electric Co. (GE), bankrupt US Airways' largest creditor, the Wall Street Journal and other financial news organizations have reported in recent weeks.

Shares in America West were up 38 cents to $4.81 on the NYSE.

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Ok, so who gets to keep their identity here? Perhaps both? Will the resulting airline still be in the Star Alliance?

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Well, the market has closed and no news of the US/AWA merger yet.

Word is that US Airways will be the name that will be used since it has a larger brand recognition. America West will be the majority owner but they'll change names.

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That's the press release being quoted on airliners. Interesting stuff indeed

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So, its a done deal, with the name US Airways surviving. I wonder if they'll stay in Star? Notice also they are to be the launch customer for the A350!!!

Andy

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It does say in the press release that they'll be working more closely with Air Canada and makes a specific reference to Star. It's not really surprising they're going to order the A350, as Airbus have given them a rather large loan.

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US Airways currently employs 30,100 people and America West employs 14,000 people. Contract integration of represented employees is expected to occur after integrated seniority lists have been negotiated between each respective airline's labor groups.

Meaning: If you work for US Airways prepare to be really, really disappointed.

This merger will end up being uglier than the American/TWA for the employees involved.

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Interesting stuff...i wonder how close this deal came to shaking the anti-trust laws..i doubt the merging like this is always a safe way to get out of chapter 11...This is however the largest airline merger in the US (even greater then the TWA one i think)..making it the 6th largest carrier in the continental USA.

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America West stockholders....

SELL NOW!!!

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There has been lots of talk about the situations of many of the US carriers, but America West rarely came to the surface in this part fo the world. What is/was their financial position, and their perceived position generally in the USA before the merger and post 9/11 ?

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What is/was their financial position, and their perceived position generally in the USA before the merger ...?

Not great, but a hell of a lot better than their new partners!

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What is/was their financial position, and their perceived position generally in the USA before the merger and post 9/11 ?

They were really struggling even before 9/11 and ended up shutting down one of their hubs. I don't think they ever got their head back above water but post-9/11 has created an environment where they look good compared to the average airline. They are hurting but not as bad as US or UA.

After they shut down their CMH hub their exposure East of the Mississippi River just about vanished. Given the percentage of the US population that lives East of the Mighty Miss. that really hurts their image. They've made back some ground post-9/11 by moving towards being a LCC (but who hasn't?).

I personally don't see AWA gaining anything from merging with US other than a stronger brand name. US is desperate to find a liferaft that they'll grab onto anything that floats by and that happened to be AWA. What success AWA has had by reinventing themselves as a LCC won't transfer into the US system especially with Southwest already gunning for them on the East Coast.

It'll be interesting to see what will remaining from the the AWA and US route structures when the dust settles from the merger. I have this feeling that it'll be only a small portion of the originals but that's my guess.

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Any chance now of LGW-PHX/LAS?

Will the new carrier codeshare on BD's MAN-LAS route?

I take it the new carrier will enter a full codeshare agreement with Air Canada?

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Thanks for that WD, very helpful :)