Whew, what was the name of that truck? Busy day for the airline sector yesterday for two reasons -- one, airlines decided to jump on the fall fare sale bandwagon earlier than normal, and with a little more gusto than we would have liked. Secondly,

Tiger Management

appears, in our opinion, to have given Stephen Wolf,

US Airways'

(U) - Get Report

chairman, a sharp kick in the butt.

Monday, major US Airways investor Tiger Management filed a 13-D with the

Securities and Exchange Commission

, signaling its interest in taking a more active role in the airline's future with an eye toward enhancing shareholder value. The Wing Tips' translation of the filing? Okay, we've waited long enough. Do something.

We have been discussing a possible AMR

(AMR)

unit

American Airlines

/US Airways deal for so long it seems repetitive to talk about it again. But, given the number of emails Monday asking me in all caps: "WHO WOULD US AIR DO A DEAL WITH?" or similar such requests, let's go over the original plan.

The original scheme was fairly simple. American would cobble together an expanded "feeder" operation, including

American Eagle

,

Business Express

,

Reno Air

and

Midway Airlines

(MDWY)

. Then, US Airways would make an equity investment into AMR. With this investment, all of

US Airways' Express

operations, along with

Metrojet

, were then to have been combined with the AMR group into a new entity that would feed both airlines.

American Airlines, at least in our estimation, blew it. They blew the timetable for the scheme by not being up front with their pilots' union in regard to the Reno deal. As a result, the pilots then proceeded to bring the airline to its knees in February.

After that, we had a problem of another sort: the escalating price of AMR stock. AMR stock began to rise in April, not necessarily because of fundamental reasons, as it was clear the airline was going to have a substantial loss in the first quarter due to the pilot walkout. No, what happened here was the fact that

Delta Air Lines

(DAL) - Get Report

was all of a sudden the belle of the ball, in terms of the lucrative warrant position it had negotiated as part of its participation with

priceline.com

(PCLN)

. With priceline.com's stratospheric IPO, it was logical to assume AMR would do

something

with its own Internet travel site

Travelocity

, controlled through its 80% stake in

Sabre

(TSG) - Get Report

. And that

something

should preferably come more sooner than later.

We

spoke here about just what the value of Travelocity would be, if the Internet travel site was spun off. It was not chump change. Institutional investors, upset over the fact that AMR's results were going to be adversely affected by its inept handling of the Reno issue, saw a spinoff of even a part of Travelocity as a way to kick AMR's stock price upward. Internet stocks were hot. It was time to strike!

So, here we have the second problem. AMR did not do the spinoff.

Meanwhile, it appears that operational decisions were already being made at US Airways, in regard to the eventual alliance between the two airlines. These decisions were twofold. One, the airline embarked on a tremendous level of growth. Two, the airline made decisions to shut down some in-house maintenance facilities.

With the AMR deal that was in the works, US Airways would have more access to more aircraft and it would have been able to ship maintenance work to AMR.

But, as we all know, the deal did not happen.

So, where do we stand now?

Both airlines posted very poor results for the second quarter. Both have also continued to post declining customer service statistics for the last 3-4 months, according to trends in the

DOT

information that we track. In addition, US Airways is now facing serious service problems, as the airline is short aircraft, short pilots and has airplanes stacked up at Charlotte, unable to have necessary scheduled maintenance work done because the maintenance hangar is already full.

Sources tell us that the airline was forced to cancel some 700 flights this past weekend. Granted, some of these cancellations were weather related, but a hefty percentage was due to the airline just not being able to keep up with the aggressive growth plan in place.

What things are in place now that would indicate a deal is still alive?

Right now, US Airways' pilots are being asked by the company to consider two major changes to their existing contract. The first would increase the number of regional jets that the airline can fly. The second asks the pilots to allow domestic codesharing on aircraft with more than 70 seats. This is directly targeted at American Eagle ATR aircraft.

On the American pilot side, the mediated agreement between the airline and its pilot union in regard to the integration of Reno Air is now being considered by the board of the

Allied Pilots' Association

, or APA. Interesting timing on the 13-D filing Monday by Tiger, as sources had indicated to us that the APA board was to announce whether they had voted for or against the agreement.

This announcement has significant timing impact not only externally, in terms of a possible US Airways' deal, but internally on the AMR side, as the company intends to make Reno Air fully integrated with American effective Aug. 31. But that is not going to happen if this agreement is not approved. Or let me put it this way, I would not want to try and make it happen.

This agreement not only covers the Reno integration, but it also includes protocol pertaining to how future mergers and acquisitions would be handled.

The reason we did not see an AMR deal for Midway was because of the fact the Reno deal blew up. So, a very important part of this agreement that is now up for a vote with the APA Board addresses these issues directly.

And finally, as we sit and ponder as to whether AMR and US Airways will eventually come together in some fashion, we must also add that sources tell us that Stephen Wolf is not sitting on his hands waiting for the phone to ring. We understand he has been talking once again to the folks in Chicago. You know,

United Airlines

(UAL) - Get Report

.

As we have always said, there is no one in the airline industry that understands Wall Street and the needs of institutional investors better than Stephen Wolf. And we expect fully that, no matter what the outcome, Wolf will walk away on top as he always does.

Cramer

thinks Tiger Management's Julian Robertson is the key. We think Wolf is the key. But no doubt, we also think Robertson just gave Wolf a swift kick yesterday.

I, oddly enough, fly to Chicago later today to meet with the upper management at United tomorrow. I can hardly wait.

Holly Hegeman, based in Dallas, pilots the Wing Tips column for TheStreet.com. At time of publication, Hegeman held no positions in any securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. You can usually find Hegeman, publisher of PlaneBusiness Banter, buzzing around her airline industry Web site at

www.planebusiness.com. While she cannot provide investment advice or recommendations, she welcomes your feedback at

hhegeman@planebusiness.com.