Comments on: Is US Airways Trying to Merge with Delta? http://boardingarea.com/blogs/onlinetravelreview/2006/07/31/is-us-airways-trying-to-merge-with-delta/ The Daily Airline News by Jared Blank Tue, 02 Dec 2008 00:26:29 +0000 http://wordpress.org/?v=2.5.1 By: Tory http://boardingarea.com/blogs/onlinetravelreview/2006/07/31/is-us-airways-trying-to-merge-with-delta/#comment-644 Tory Tue, 01 Aug 2006 21:13:47 +0000 http://boardingarea.com/blogs/onlinetravelreview/2006/07/31/is-us-airways-trying-to-merge-with-delta/#comment-644 The USAir thing is a short-term - and a short-lived - effect. In bankruptcy, they *slashed* capacity, just as the economy and travel was roaring back. Supply crunch + high demand = profits. They slashed it so far, SWA, AirTran, JetBlue and others haven't had time to receive enough new planes to fill in behind them. But it's just a matter of time. And to add to their troubles, the pilots are already on record as wanting "their fair share of the profits". They will be hard negotiators and raise labor rates just as the real LCCs start moving in force into their hubs. This sounds to me like some sort of hedge fund pump and dump: buy in, slash capacity, jump profits, boost the stock, and bail before the whole edifice keels over. The USAir thing is a short-term - and a short-lived - effect. In bankruptcy, they *slashed* capacity, just as the economy and travel was roaring back. Supply crunch + high demand = profits. They slashed it so far, SWA, AirTran, JetBlue and others haven’t had time to receive enough new planes to fill in behind them. But it’s just a matter of time. And to add to their troubles, the pilots are already on record as wanting “their fair share of the profits”. They will be hard negotiators and raise labor rates just as the real LCCs start moving in force into their hubs.

This sounds to me like some sort of hedge fund pump and dump: buy in, slash capacity, jump profits, boost the stock, and bail before the whole edifice keels over.

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