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US Airways to Announce New Aircraft Order in April March 15, 2007

Posted by Andrew in Airbus, Boeing, US Airways.
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Legacy carrier US Airways plans to order new aircraft at the end of April, beginning an extensive revamp of their aging fleet. According to major news outlets, the carrier is evaluating proposals from Boeing and Airbus for both narrow and wide body aircraft. US Airways plans to reach a decision by April 30, choosing either the Boeing 737 or Airbus A320 in the narrow-body segment, and the Boeing 787 or Airbus A350 in the wide-body market. Since Airbus financed a hefty chunk of US Airway’s exit from bankruptcy several years ago in exchange for a loose commitment to the A350 program, many analysts believed that an Airbus order was a certainty. However, in response to the redesigns and delays that have come to characterize the A350 program, US Airways Chief Financial Officer recently quipped, “the A350 today is not the plane we ordered.” He added that the airline was contractually able to cancel the order, if it so desired. From all appearances, US Airways is serious about possibly ordering Boeing’s 787 offering. Industry sources indicate that Boeing has reserved production slots for US Airways– but they will be given to another customer if the carrier does not come to a decision quickly. No matter which carrier US Airways chooses, it will likely not receive new aircraft for a few years, as Boeing is rumored to be sold out of production slots in the short term. Airbus’ A350 offerings isn’t estimated to enter service until 2013, at the earliest. Additionally, US Airways is rumored to be in talks with Air Canada Airlines to purchase its fleet of Airbus A340-500 aircraft, with the hope that these aircraft could serve its proposed Philadelphia to Shanghai route. Air Canada dumped these aircraft in favor of Boeing 777 aircraft, citing significant operational savings of the Boeing aircraft over Airbus’s offering.

Source: Bloomberg.comĀ 


US Airways Drops Delta Bid January 31, 2007

Posted by Andrew in Commercial Aviation, Delta, US Airways.
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When US Airways announced an offer to takeover Delta, the move left many in the industry scratching their heads. After increasing the buyout price several times to no avail, US Airways today conceded defeat . US Airways CEO Doug Parker vented his frustration to the media, quipping that the Delta creditors knew “exactly what they needed to do”, but concluded that because the Delta creditor’s committee was not being responsive to the deal and impending deadline, his company was “not willing to pursue this transaction anymore.” In an attempt to shift the focus away from the failed deal, he emphasized his airline’s need to move forward on its own. The mood at Atlanta based Delta took on a more celebratory tone on the news of the retraction of the US Airways bid. Delta’s CEO gleefully commented to the press: “this is a proud day for the thousands of Delta people, customers, communities, civic leaders and others who stood up for our standalone plan and said, emphatically, ‘Keep Delta My Delta.”

Sources: USATODAY, Yahoo Financial News

US Airways Submits $8 Billion Bid for Delta November 15, 2006

Posted by Andrew in Delta, US Airways.
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Citing an aspiration to become the premier trans-Atlantic carrier, Phoenix-based US Airways submitted an $8 billion bid today for Delta Airlines. US Airways, led by CEO Doug Parker, is still in the midst of completing the merger that united US Airways and America West. Industry analysts have “been expecting a wave of consolidation and said successful completion of a US Air-Delta deal could jump-start the process.” US Airways offered to purchase Delta after merger talks fell through. Doug Parker cited the need for speed, claiming that “if we wait for Delta to emerge from bankruptcy, it will be too late to maximize all the synergies.” The combined company would employ 82,000 employees, and according to US Airways estimates, a merger would yield $1.65 billion in annual savings. If the bid goes through, Delta’s name reportedly will be retained, as it has greater brand recognition. Despite the news, Delta CEO maintained that his company would seek to emerge from bankruptcy in early 2007 as a stand-alone carrier. At least one analysts believes that the bid is a hostile takeover, as the Delta CEO has voiced his displeasure with the deal. Ultimately, the deal hinges on the shareholders, who have been offered “$4 billion in cash and 78.5 million shares of US Airways stock, with an aggregate value of around $8 billion based on Tuesday’s closing stock price.” When questioned about the possibility of legacy carrier United Airlines making a competing bid for Delta, UAL CEO Glenn Tilton said that his company had approached Delta about a merger, but was rebuffed. Even so, Calyon Securities Ray Neidl believes that “the big concern is government regulators, if they give the green light. And if they do, it will probably set off a series of potential M&A activity in the industry.” This merger poses some major operational challanges that leave some industry analysts perplexed. Delta operates an all Boeing fleet, while US Airways is moving towards an entirely Airbus fleet. Furthermore, the proposed airline would have west coast hubs in Phoenix, Salt Lake City, Las Vegas, and Los Angeles. How will the carrier reconcile these differences? Even so, some believe that a United merger would be more logical, as the two carriers share comparable fleets and route structures that complement each other. US Airway’s bid is likely the catalyst of a round of consolidation in the North American market, as legacy carriers seek to become more efficient and battle their low-cost carrier competition.

Source: Reuters