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Matching entries from Houston's Clear Thinkers
Conited Airlines, finally?
The NY Times is reporting that the on-again, off-again merger negotiations between Houston-based Continental Airlines and Chicago-based United Airlines are coming to a conclusion and that a definitive merger deal is likely to be announced by the end of next...
Ripples of the Delta-Northwest deal
The merger agreement between Delta Air Lines and Northwest Airlines (they were meant for each other) announced yesterday not only would create the world’s largest carrier if approved, but it has renewed talk (see this W$J article, too) in...
The Southwest Airlines culture
While Continental Airlines continues its speculative merger dance with United Airlines, Southwest Airlines continues to be the most profitable company in the U.S. airline industry. This Jeff Bailey/NY Times article reports on the unique culture of Southwest that makes it...
Are they finally getting serious?
The Wall Street Journal ($) reported yesterday afternoon that Houston-based Continental Airlines seemingly perpetual merger negotiations (see also here) with Chicago-based United Airlines are accelerating for a variety of reasons. A Continental-United deal is contingent on Northwest Airlines' ongoing merger...
Would you bet on United Airlines?
The travails of United Airlines over the past several years have been a common topic on this blog, so Professor Bainbridge's "enough is enough" declaration with regard to flying on post-bankruptcy United caught my eye. And lest you think that...
Continental's big news
The big news story today in Houston is the announcement about Continental Airlines engaging in merger negotiations with Chicago-based United Airlines. Here are the stories from the Wall Street Journal ($), the NY Times, the Financial Times and the Houston...
Have we got a bomb shelter for you
This Wall Street Journal article reports on the decision of Continental Airlines and several other local companies to lease as an emergency control center one of the most bizarre sites in the Houston area -- a 38,000 square foot, 70-foot...
Checking in on Southwest Airlines
Mitch Schnurman, the Ft. Worth Star-Telegram's business columnist, notes that low-cost airline leader Southwest Airlines is now one of the industry leaders in pilot and flight attendant compensation: Southwest employees are also paid some of the highest salaries in the...
Is United Airlines bailing out on Chicago?
Long-suffering United Airlines' first quarter of operations after emergence from its three-year hike through chapter 11 was not particularly impressive. The Chicago-based carrier reported a loss of $306 million (excluding a one-time, emergence-from-chapter 11 accounting gain) that compared with a...
Flying the friendly chapter 11 skies of United
After wallowing over three years in chapter 11, United Airlines parent UAL Corp. finally emerged from bankruptcy this past Friday (previous posts here) amidst the usual wave of optimism that greets such achievements. Recent trading in bankruptcy claims and UAL's...
While UAL lurches to chapter 11 exit, Independence Air tanks
Overall, the U.S. airline industry improved a bit last week as United Airlines parent UAL Corp. announced that it received creditor approval of its chapter 11 plan to emerge from bankruptcy next month as low-cost airline Independence Air announced its...
Another one bites the dust
Flyi Inc., which spun off a year ago into the low-fare independent airline called "Independence Air" after beginning as a contract carrier for United Airlines and Delta Air Lines Inc., filed a chapter 11 case early Monday morning, joining a...
The federal government's increasing equity stake in public companies
This Wall Street Journal ($) article picks up on a subject that I have previously addressed in regard to the legacy airline bankruptcies -- that is, the federal government's increasing equity stake in public companies resulting from the conversion of...
United Airlines finalizes chapter 11 exit financing
Following on this earlier post, UAL Corp., the parent of United Airlines, announced that it has finalized $3 billion in debt financing commitments from Citigroup Inc. and J.P. Morgan Chase & Co. that will allow the company to exit its...
More on the sad state of the airline industry
The Wall Street Journal's ($) Holman Jenkins addresses the sad state of the airline industry in his Business World column today, and hammers home a point that this previous post made about the ownership stake in the reorganized United Airlines...
Delta and Northwest tank
As anticipated here earlier this week, Delta Air Lines commenced its inevitable chapter 11 reorganization case yesterday and was joined by fellow legacy carrier Northwest Airlines. Both chapter 11 cases were filed in New York City, which has become the...
United Airlines files its Disclosure Statement
United Airlines parent UAL Corp. filed its Disclosure Statement yesterday in its longstanding chapter 11 case in Chicago and it was not a pretty sight. United was the second major airline to seek bankruptcy court protection during the current downturn...
United Airlines continues to flounder in chapter 11
In a move that almost certainly means that its bankruptcy case filed in December, 2002 will extend well into 2006, United Airlines parent UAL Corp. announced Tuesday that it was delaying the filing its plan of reorganization with the U.S....
Is Bethune going after United?
This Houston Business Journal article is reporting that former Continental Airlines CEO Gordon Bethune is leading one of the investor consortiums that the United Airlines' Creditors' Committee is touting as one of the groups that is interested in investing in...
The Enron Airline?
A sure sign that a discussion on a particular subject has deteriorated to an unrecoverable level is a participant's allegation that the other side's position defends Nazism in some respect. With regard to discussions about business, it's quickly becoming evident...
United Airlines takes another blow
As United Airlines continues to flounder in its nearly two and a half year old chapter 11 case amidst union strike threats and troubling pension obligations, an even bigger problem is emerging -- that is, keeping its jetliners. As noted...
It's hard to pull the plug on an airline
As noted in previous posts here, here, here, here and here, it is extremely difficult to liquidate even an insolvent airline. Rather, such companies seem to go out to pasture in chapter 11 for an indefinite period until creditors approve...
U.S. Airways to marry America West?
The airline business is all atwitter today with the news that US Airways, which has been wallowing in a chapter 22 (i.e., it's second chapter 11 case) since September of last year, is considering a merger with America West to...
Continental wins right to fly non-stop to China
The U.S. Transportation Department announced yesterday that Houston-based Continental Airlines and Dallas-based AMR Corp.'s American Airlines have won a lively contest within the U.S. airline industry to offer additional non-stop flights to China. Continental will offer a daily, 13-hour nonstop...
Attempting to cure the PBGC blues
This earlier post noted the growing concern in the business community that the Pension Benefit Guaranty Corporation -- the quasi-governmental insurer of private company pensions -- is facing a string of large company bankruptcies and pension defaults that could lead...
Put US Airways out of its misery
The airline industry in the United States is beset with an oversupply of airlines, a number of which have been wallowing in chapter 11 while unsecured creditors try to come to terms with the fact that their claims will never...
UAL wins key concession
The Air Line Pilots Association agreed yesterday not to oppose United Airlines parent UAL Corp.'s effort to terminate the group's generous defined-benefit pension plan in return for UAL's agreement to issue to the union $550 million in convertible notes that...
Southwest Airlines attempts to expand Chicago operation
You gotta love Southwest Airlines, Inc. While most of the legacy airlines are trying to figure out either how to avoid bankruptcy or find financing to exit bankruptcy, Dallas-based Southwest just continues to execute its methodical business plan of expanding...
A positive sign in airline financing
This NY Times article reports on the growing concern within the lending industry regarding the long-term ability of several of the legacy airline companies to service their existing financing. This follows the move last week reported on here of one...
UAL, we have a big problem
Most of news over the past two years about the United Airlines chapter 11 case has focused on the legacy airlines operating losses, its unfunded pension obligations, and its need to overhaul or reject its collective bargaining agreements. Here is...
United finally seeks to reject CBA's
Two years into its aimless chapter 11 case, UAL Corp. finally requested that the Bankruptcy Court allow it to reject its existing labor contracts with six unions if the company cannot reach consensual agreements on modifications to the contracts by...
The Lord of Tax Havens
This NY Times article interviews Jerome Schneider, who for the past 20 years or so made a fortune setting up offshore banks and phony investments in tax havens such as the Cayman Islands, Grenada, Montserratt, Vanuatu, the Cook Islands, and...
The Wrong Amendment
After years of remaining neutral on the Wright Amendment -- that law that restricts flights from Dallas's Love Field Airport -- Southwest Airlines is now calling the rule "anticompetitive" and "outdated". It's about time. The Wright Amendment was enacted in...
Continental posts big 3rd quarter loss
Houston-based Continental Airlines reported a net loss for the third quarter on Tuesday as high fuel prices and competition from low-cost carriers continued to savage the "legacy carrier" segment of the airline industry. In announcing the loss, the fifth-largest U.S....
Analyzing airline woes
The Wall Street Journal's Holman Jenkins, Jr.'s Business World ($) column today addresses the mess that is the American airline industry, and notes that this is not a problem that has just arisen recently: Today's crisis is not materially different...
US Air tanks
As expected, US Airways Group Inc. filed its chapter 22 case (i.e., chapter 11 for the second time) in the U.S. Bankruptcy Court in Alexandria, Virginia. US Air's previous case concluded a little over two years ago. Like its larger...
PGBC objects to United's financing plan
The federal Pension Guaranty Benefit Corporation, the quasi-governmental pension insurer, challenged the key portion of United Airline's new debtor-in-possession financing arrangement in United's Bankruptcy Court on Friday by asserting that the agreement violates federal-pension law by forbidding the company from...
Union requests a trustee in United chapter 11 case
Labor relations at UAL Corp.'s United Airlines hit a new low yesterday as United's the International Association of Machinists union asked the bankruptcy judge overseeing the carrier's chapter 11 case to appoint a trustee to operate the company. Still fuming...
Pension Benefit Guaranty Corporation blues
Following this earlier post regarding United Airlines' decision to default on its obligations to its employees' pension plans to attract capital to fund its chapter 11 reorganization plan, this NY Times article reports on some experts' concern that the Federal...
United busts pension plan payment
United Airlines announced today it would not contribute to employee pension plans while it remains in Chapter 11. This is the first in a number of bold moves that Chicago-based United must take in order to save the struggling airline...
The addictive nature of governmental subsidies
Edward Lotterman is a Twin Cities-based economist who writes a column for the Twin Cities Pioneer. In this column, Mr. Lotterman points out that the original good intentions of governmental subsidies have, over the decades, generated obsolescence: News about subsidies...
United, this is getting monotonous
The federal Air Transportation Stabilization Board announced today that it was not going to change its its June 17 decision to deny United Airlines government backing for a government credit enhancement that was the central component of United's reorganization plan...
United revises bid for federal financing
As noted in this earlier post, the federal Air Transportation Stabilization Board announced last week that it had rejected Chicago-based United Airlines' application for a $1.6 billion federal loan guarantee, which was the foundation of United's reorganization plan to emerge...
United goes back to the drawing board
The federal Air Transportation Stabilization Board announced on Thursday that it has rejected Chicago-based United Airlines' application for a $1.6 billion federal loan guarantee, which is the foundation of the second largest U.S. airline's current reorganization plan to emerge from...
United Airlines - should the federal government save it?
This NY Times article gives a good overview on the state of United Airlines, which continue to flounder in a chapter 11 case filed in December 2002. As the story relates, United's emergence from chapter 11 is based upon the...
UAL bankruptcy - Will it ever end?
This NY Times article and this WSJ ($) article report on the postponement of confirmation and consummation of United Airlines' reorganization plan in its long pending chapter 11 case. UAL has been operating under chapter 11 since December, 2002, and...
Waste Management names new CEO reshuffles top management
Houston-based Waste Management named David P. Steiner to succeed A. Maurice Myers as chief executive officer. Mr. Myers will remain as chairman until November, when he will retire. Upon Mr. Myers' retirement, board Director John Pope, a former president and...
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