US Airways and TPG
There is a story making the rounds that US Airways and TPG may partner in a merger/acquisition of American Airlines and it’s got some legs. Some seem surprised by this and some seem impressed by this. I’m neither surprised nor impressed. It just makes sense.
US Airways probably could muster the cash necessary to buy off certain creditors and probably could use some of that rather large cash reserve that American Airlines is holding on to in order to pay off people too. But why not spread the risk?
TPG isn’t adverse to the airline world. It’s made good (and bad) investments in airlines and unlike most, has generally done very, very well. It’s Chairman, David Bonderman, continues to sit as non-executive Chairman and shareholder of Ryanair in Ireland. These guys know the airline business.
So why not partner up with them? This is a company that could provide excellent finance advice, access to relatively cheap capital and who doesn’t need to be educated on what makes a good airline. That’s just smart, good business.
Hoping TPG is on board with this one. I think it will help solve many a problem at both carriers, though of course will open up a whole new can o’ worms for the “little guy” (like me) in the trenches!
Eric
capnaux.blogspot.com
One big advantage to TPG is that they have worked with the US Airways management before and they do know what better board of directors would look like for a combined airline.