Originally Posted by
Frisco727
US had more cash? Before or after the reverse acquisition?
I was on to this guy a few months ago. All I had to do was check his facts and they don't add up.
US Airways Outlines Time Frame for Possible Liquidation
By Keith L. Alexander
Washington Post Staff Writer
Monday, September 27, 2004; Page A20
US Airways faces a "high probability" of liquidation by mid-February if the temporary pay cuts it requested are not approved by the U.S. Bankruptcy Court.
It was the first time since the Arlington-based airline filed for Chapter 11 bankruptcy protection on Sept. 12 that it publicly gave a time frame for a possible liquidation. This possibility was raised in a filing Friday.
The SEC filing says it was a reverse acquisition.
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Background
The merger has been accounted for as a reverse acquisition using the purchase method of accounting. As a result, although the merger was structured such that America West Holdings became a wholly owned subsidiary of US Airways Group, America West Holdings was treated as the acquiring company for accounting purposes due to the following factors: (1) America West Holdings’ stockholders received the largest share of US Airways Group’s common stock in the merger in comparison to unsecured creditors of US Airways Group; (2) America West Holdings received a larger number of designees to the board of directors; and (3) America West Holdings’ Chairman and Chief Executive Officer prior to the merger became the Chairman and Chief Executive Officer of the combined company. As a result of the reverse acquisition, the 2005 consolidated statement of operations for the new US Airways Group presented in this report is comprised of the results of America West Holdings for the 269 days through September 27, 2005 and consolidated results of US Airways Group for the 96 days from September 27, 2005 through December 31, 2005. The results of operations for fiscal years 2004 and 2003 are those of America West Holdings
Company Overview
As of September 27, 2005, US Airways Group, Inc. was acquired by America West Holdings Corp. in a reverse merger transaction. US Airways Group, Inc., through its subsidiaries, operates a network air carrier. Its
subsidiary, US Airways, Inc. (US Airways) engages in the transportation of passengers, property, and mail. As of December 31, 2004, its subsidiary operated 281 jet aircraft and 22 regional jet aircraft; and provided scheduled service at 89 airports in the continental United States, Canada, Mexico, France, Germany, Italy, Spain, Ireland, the Netherlands, the United Kingdom, and the Caribbean.
Tell you what sport, go look at 10-Ks and other info. AWA didn't have any money to buy anything. The cash raised by the merger paid off BOTH of the airlines ATSB loans. The ATSB had us by the balls and restricted a large chunk of our cash. Most of the money raised for the merger was done by our CEO, Bruce Lakefield and the Luth group. But don't take my word for it, how about the word of highly respected arbitrator, Mr. Bloch in the US/AW dispatcher SLI, a name you may see again unlike the name Nicolau:
"The Financial Picture
From the evidence, it is clear enough that the merger with AWA was a meaningful factor in U.S. Airway’s emergence from bankruptcy. Together, the two companies were able to attract investments that, operating alone, they might not have secured. However, West’s claim that U.S. Airways emerged from bankruptcy “only because it [was] acquired by a stronger enterprise” is reflected neither in the KPMG audit report (cited by West)nor in any other portion of the evidence. Instead, each carrier had something to contribute. Airways, for example, was much larger. It served almost twice as many destinations as AWA and carried twice the number of passengers. Airways has substantially more cash on hand, following the merger agreement. AWA, for its part, brought.
relative success as a low cost carrier operation with a meaningful presence in the Western United States. Airways’ “fresh start”13 included a series of steps designed to strengthen Airways’ financial situation. Among other things, it entered into concessionary bargaining with its unions, ultimately securing some $1 billion dollars per year in cost reductions. Termination of certain existing defined benefit and other post-retirement benefit plans generated substantial savings. A 35 percent decrease in labor cost taken together with other cost saving measures, resulted in a positive net operating income for the second and third quarters of 2005, prior to approval of the merger agreement in September of 2005. AWA, for its part, while not in bankruptcy, was attempting to confront what it regarded as a troubled and potentially perilous future, absent the merger, in the face of rising fuel costs and depressed unit revenues as a result of over capacity, among other things. It, too, needed cash.
West characterizes the merger decision on AWA’s part as a one-way economic bailout. But there is no support for this in the record; surely, the respective companies did not endorse that view. AWA concluded, according to the statements of its CEO, that “…when we looked out at our future, what we saw wasn’t good…. Assuming we couldn’t go out and restructure or raise cash, it is possible that AWA would have been facing its own Chapter 11 at some point. Employees may like to think we “saved” US but the fact is we saved each other…
The June 10, 2005 issue of “Plane Deal”, an AWA publication, touted some of the benefits of joining fleet forces:
When merged, the combined airline will become the nation’s 5th larges airline, as measured by domestic available seat miles (ASMs). The combined airline is expected to operated a mainline fleet of 361 planes (supported by 239 regional jets and 57 turbo props for feed into the mainline system), down from a total of 419 mainline aircraft operated by both airlines at the beginning of 2005….
In the context of a “Town Hall” Q&A , the company noted
the prospect of a combined airline was more enticing to investors:
The money is being raised for the combined airline, because investors see the value in the merged entity. Frankly, airlines in their current state don’t look appealing to investors, who are savvy to know industry change needs to take place. The proposed merger represents the kind of change that investors believe will be successful. So, unfortunately, we wouldn’t garner this kind of interest if we were seeking funding for America West “as is.”
Much of West’s claimed superiority over East, in terms of what it brought to the merger, is speculative. "
And one other thing he left out, we were a member of the Star Alliance, AWA-none.
It was a meger. US Airways never shutdown. If the bottom AA guy was put below a guy now in indoc, how would AA guys feel after all you have done to keep this airline alive
Frisco, you show me a fact that doesn't add up and I will admit it. The article you posted was from Sept 2004. The AWA merger was announced May 2005. How come we didn't shut the doors? Was that article for negotiating pressure you think? Kinda like some of the things AA management put out a few years ago?
If you want to compare newspaper articles, try this one:
http://old.post-gazette.com/pg/05142/508153.stm
You really, really don't know what you are talking about.