Kip Powick Posted May 16, 2005 Share Posted May 16, 2005 PHILADELPHIA, (Reuters) - US Airways Group Inc. and America West Holdings Corp. , which are in merger negotiations, are trying to raise up to $400 million in funding and secure a loan from Airbus in exchange for ordering new airplanes, according to The Wall Street Journal.The two airlines are expected to announce their merger within the next week, an industry source previously told Reuters. That pact would likely begin as a marketing alliance and unfold in stages, the source said. The Wall Street Journal reported on Sunday that US Airways and America West have been in talks to gain new funding from Air Canada and two hedge funds. The carriers also may secure additional funds through a rights offering, the newspaper said in its electronic edition. America West, based in Tempe, Arizona, and US Airways, based in Arlington, Virginia, could not be immediately reached for comment. Air Canada's parent, ACE Aviation Holdings Inc., is in talks to invest up to $150 million in equity, the newspaper said. Hedge fund PAR Capital Management Inc., formerly a large stakeholder in America West, and a second hedge fund may provide another $125 million of equity. In addition to that funding, the airlines are in negotiations to get a $250 million loan from aircraft-manufacturer Airbus in return for ordering about 20 new A350-model planes, the Journal reported. General Electric Co. the largest creditor to America West and US Airways, also is finalizing its own deal with the carriers to reduce its financial exposure by $1 billion, the newspaper reported. GE plans to cut off most of the regional-jet financing and take back more leased planes than previously expected. Link to comment Share on other sites More sharing options...
Super 80 Posted May 16, 2005 Share Posted May 16, 2005 It sure looks like Continental during the Frank Lorezno days, where the Texas Air Group just starting taking over weak and or dying carriers under the auspices of making themselves too big to fail. In the end all they were left with was a massive and dysfunctional industry pariah. I don't understand what value America West sees in a merger with US Airways. I don't understand what value anyone sees in US Airways. America West is pretty weak, but not in serious danger in the immediate future and has the distinction of being the only second generation LCC to survive to the present day. US Airways is a case study in the abuse of liberal American bankruptcy laws and would be best put out of its misery along with United. Link to comment Share on other sites More sharing options...
Kip Powick Posted May 16, 2005 Author Share Posted May 16, 2005 Super 80 I think you took the question the wrong way. When Hollis Harris was in charge of Air Canada, he had AC invest a bunch of money in Continental when they were in Chapter 11 and when they came out, AC made a mitt full of money and Hollis got his revenge ......as he had been "fired" from Continental. Link to comment Share on other sites More sharing options...
CanadaEH Posted May 16, 2005 Share Posted May 16, 2005 How much of an impact would the liquidation of United have on Air Canada? Link to comment Share on other sites More sharing options...
Super 80 Posted May 16, 2005 Share Posted May 16, 2005 It is like Continental in more ways that one, but it is interesting to see how times change. A decade can change alot. 10 years ago we would have been anticipating the impending death of Continental and laughing at Northwest as a basket case. Link to comment Share on other sites More sharing options...
Fido Posted May 16, 2005 Share Posted May 16, 2005 The only good thing about ACE investing in this sack-of-**** is that IF it works out they could make a bunch of money on the investment and I bet a bunch of money as advisors to the other investors. Otherwise there is no fit to AC's present operations. Link to comment Share on other sites More sharing options...
AME Posted May 16, 2005 Share Posted May 16, 2005 Otherwise there is no fit to AC's present operations. Given this In addition to that funding, the airlines are in negotiations to get a $250 million loan from aircraft-manufacturer Airbus in return for ordering about 20 new A350-model planes I'd be willing to bet that this Air Canada's parent, ACE Aviation Holdings Inc., is in talks to invest up to $150 million in equity Turns into a heavy Maint contract for ACTS Link to comment Share on other sites More sharing options...
GDR Posted May 16, 2005 Share Posted May 16, 2005 Air Canada emerged from CCAA in a very sound financial position. I doubt that there is an airline in a stronger position financially in North America and the airline is stronger than most of its international competitors. It was Robert Milton who quarterbacked all of this. My guess is that along with the investment USAir is also getting Milton's expertise in restructuring the airline. This should be a huge win win for both parties. Link to comment Share on other sites More sharing options...
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