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AAMRQ: TPG, US Airways (LCC) and Delta (DAL) consider bids for AMR Corp-- WSJ ($0.36)

AAMRQ: TPG, US Airways (LCC) and Delta (DAL) consider bids for AMR Corp-- WSJ ($0.36)

 
Old Jan 12, 2012, 11:34 am
  #16  
 
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Originally Posted by kingarthur
here is the article: http://online.wsj.com/article/SB1000...DDLETopStories

I think a private equity takeover would be a disaster. At least Delta and US Airways know how to run an airline. I image a DAL merger would be a difficult sell to regulators, though I can see why they would make a lot of concessions to ditch Skyteam for (or combine with) Oneworld.
You will not see DL leave SkyTeam for OneWorld.
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Old Jan 12, 2012, 11:34 am
  #17  
 
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From a network perspective I suppose this looks attractive. As someone who has enjoyed countless benefits as part of the AAdvantage program though, I fear further consolidation of the "classic" FFPs will accelerate the decline of these programs towards LCC territory, i.e. rebate programs. With the sorry shape this entire industry is in business-wise, perhaps this is inevitable.

In any case, should be an interesting year
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Old Jan 12, 2012, 11:44 am
  #18  
 
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Thumbs down

That would be the worst possible outcome from a loyalty point of view. SkyPesos are terrible and DL elite treatment and benefits leave much to be desired. There's no chance a DL/AA in present form would receive approval, thankfully.
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Old Jan 12, 2012, 11:53 am
  #19  
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Only with some divesting of routes could this deal even come close. In the end, I don't see what this would give DL if DL had to cede certain lucrative routes/markets to the lccs.

What huge markets does AA have that DL is only a bit player in.
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Old Jan 12, 2012, 11:56 am
  #20  
 
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Originally Posted by bubb1
From a network perspective I suppose this looks attractive. As someone who has enjoyed countless benefits as part of the AAdvantage program though, I fear further consolidation of the "classic" FFPs will accelerate the decline of these programs towards LCC territory, i.e. rebate programs. With the sorry shape this entire industry is in business-wise, perhaps this is inevitable.

In any case, should be an interesting year
I agree about all programs gravitating toward the Southwest model.....

At the risk of asking people to speculate on something that probably won't happen, I am wondering --based on past mergers-- how long will the AAdvantage program exist if they package bankruptcy with a merger?

Those of us creeping up to lifetime status would be wise to lock that in before it gets approved and implemented, though my instinct is that it would take well over a year.
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Old Jan 12, 2012, 12:19 pm
  #21  
 
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Originally Posted by CityFlyerNYC
  • Citing sources, the WSJ reports that Dal believes a deal with AMR Corp could get anti-trust approval
  • The WSJ also notes that TPG is looking to work with another airline on a bid for the company.

Let's hope this doesn't happen.

No surprise as far as TPG is concerned.

Not to say too much, but many months ago (while discussing definitive rumors of a pre-packaged bankruptcy in Jan, which turned out to be true and only 4 weeks off) and again after the bankruptcy was announced, i put out some basic details about TPG being interested in investing in post BK AMR

As with anything on the private financial boards, some info is conjecture, some are rumors and some are trial balloons put out by interested parties.

There is a prevailing school of thought that says that AMR negotiated with BOTH TPG and IAG before filing for bankruptcy and they will jointly provide the funding needed to exit BK

The thought process here is that the Board did not want to leave anything to chance and had a gentleman's agreement with both IAG and TPG

Time will tell, I suppose.. but my betting is on a joint infusion of capital by these two parties, with IAG taking a 24.9% stake and TPG taking the remaining 75.1% and IAG providing the leadership and direction
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Old Jan 12, 2012, 12:22 pm
  #22  
 
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There are several things

Originally Posted by newyorkgeorge
What huge markets does AA have that DL is only a bit player in.
I will say LHR, and the South America traffic.
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Old Jan 12, 2012, 12:27 pm
  #23  
 
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Originally Posted by chuck till
DL+AA sounds good to me... definitely preferable to US+AA. The mobile phone business eventually stabilized at three major carriers, and I wouldn't be surprised if that's the endgame in airlines as well. WN will be one of them, so further consolidation is coming.
They profit handsomely and they still keep adding fees. With so few players, it's hard to vote with your wallet because there is nobody left to vote for. And it is easier for them to tacitly collude. Have you noticed how the mobile phone companies play "follow the leader"?
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Old Jan 12, 2012, 12:29 pm
  #24  
 
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DL and TPG considering takeover bid for AA!

From the WSJ:

http://online.wsj.com/article/SB1000...DDLETopStories
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Old Jan 12, 2012, 12:30 pm
  #25  
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Originally Posted by newyorkgeorge
Only with some divesting of routes could this deal even come close. In the end, I don't see what this would give DL if DL had to cede certain lucrative routes/markets to the lccs.

What huge markets does AA have that DL is only a bit player in.
MIA, DFW, ORD, obviously. A combined AA/DL at LAX would be big, but not dominant. The big problem would be NYC- you would probably see some slot divestitures at both LGA and, most especially, JFK (possibly a few at EWR, too).

Originally Posted by panjabi
Time will tell, I suppose.. but my betting is on a joint infusion of capital by these two parties, with IAG taking a 24.9% stake and TPG taking the remaining 75.1% and IAG providing the leadership and direction
Which would get tied up in court in a nanosecond, and unlike Branson/VX, it would be very clear that IAG is holding the puppet strings.

You can't have non-US interests running a US airline (and Branson doesn't run VX, he's mostly on for marketing).
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Old Jan 12, 2012, 12:33 pm
  #26  
 
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Wow--crazy, that could be huge.
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Old Jan 12, 2012, 12:33 pm
  #27  
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An IBanker's wet dream.
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Old Jan 12, 2012, 12:34 pm
  #28  
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Originally Posted by arollins
I will say LHR, and the South America traffic.
Its not like DL does not have a footprint in these markets. At least to the extent that DL would be willing to give up some prime routes. Look at what DL had to go through for the USAir swap at DCA/LGA. You could only imagine what DL would have to give up to make the DOJ accept an AA deal.
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Old Jan 12, 2012, 12:35 pm
  #29  
 
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Originally Posted by panjabi
The thought process here is that the Board did not want to leave anything to chance and had a gentleman's agreement with both IAG and TPG
The problem is once you go into any form of Bankruptcy the outcome can be unpredictable and certainly not bound by any gentleman's agreement.

There were many round here who were banging the drum for Chapter 11 as a sure fire way to reduce costs with AA emerging as a leaner, meaner version of its previous self.

I wonder how it will all look IF (and it's a BIG IF) the majority of AA gets swallowed up by DL, the TATL ATI and maybe the deal with JAL get invalidated and we all start earning Skypesos in domestic aircraft where upgrades are next to impossible? How good will Chapter 11 look then?
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Old Jan 12, 2012, 12:39 pm
  #30  
 
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Originally Posted by newyorkgeorge
Its not like DL does not have a footprint in these markets. At least to the extent that DL would be willing to give up some prime routes. Look at what DL had to go through for the USAir swap at DCA/LGA. You could only imagine what DL would have to give up to make the DOJ accept an AA deal.
But if the TATL ATI gets undone and AA is separated from BA? I suspect that would improve the NYC-LON market in a heartbeat. I wonder if NRT isn't much more of an issue given DL's presence there courtesy of the Northwest acquisition? I can foresee problems with the combination of their sort-of hub and JAL.
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