MoJ0

I'll give you that 2012 vs 2012 numbers are impressive - NET income was 637M, not 856M operating ... nevertheless a huge growth over 2011 and they outpaced DL revenue growth.

I'm jaded by how horribly the US/HP merger went - I lived in BOS at that time and since US was a *A member, flew them A LOT (70+ segments in 2008)... I think I still have a cockroach pin somewhere in my memorabilia bin. US stunk pre HP and got worst during that merger.

Now having lived and flown through two crappy mergers ... I'm dreading how this could play out.

diver858

On what basis do you make such claims. Even before the labor and other cost savings from the BK filing, AMR is showing improved financials, relative to their peers:
http://www.flyertalk.com/forum/ameri...-analysis.html

This should continue to improve as BK-related gains are implemented, older, less fuel efficient aircraft are replaced, more (profitable) international routes are created.

GunsOfNavarone

[QUOTE=morrisunc;20129223]Again, the majority of posters in this forum are seriously detached from reality. Us made 800m profit in 2012. US is not going bankrupt and unlike aa - their CEO has built a sustainable model. /QUOTE]

Reminds me of HP with Hurd as the CEO, record short term profits and stock price. Only Hurd put off CAPEX and many other things. Soon after his departure his actions were exposed. HP stock price has collapsed. LCC can't handle a collapse, as they are deep in debt. LCC can't even handle a 25% rise in fuel costs, that will send them into BK as they do not hedge fuel- how can that be when they are deep in debt. a 2% rise in interest rates BKs LCC, as their paper profit will turn into losses, triggering loan convenant issues.

In time, LCCs short term profits may be exposed as Enron like profits. time will tell.

NiceLanding

Even if we assume this to be true, which is somewhat questionable, there's no evidence that this "sustainable model" will translate to a much larger and more complex network. Letting the "successful" niche-airline CEO take over all of AA would be the same mistake made at UA and would likely have a similar bad result.

elitetraveler

Wow - $637 million is horrible

<redacted>
I don't think there are many people nominating Dougie for CEO of the decade or even year, but he has taken two distressed airlines with weak networks and cobbled them into an entity that has survived and is still at the table.

Aside from maybe Anderson and DL management, I can't see any other legacy carrier where one can show that their management team is streets ahead of Team Dougie.

AApologist Warning: This post is not to award Dougie - it is simply a statement of fact that he has done as good a job as anyone could conceive of with the cards he was given. If you want to hold the fact that he started from the weakest point of any existing legacy against him - feel free - but that doesn't reflect on his management ability.

edwards183

Go to the 10K and look for the page that outlines debt obligations. LCC's unsustainability without some deus ex machina is quite evident. All that short term debt is poison, when the Fed eventually raises rates, LCC is in trouble. That along not engaging in derivatives for fuel seems very risky.

Let's face it, in the long term Parker needs this merger a whole lot more than a leaner, newer fleeted, better hubed AA does.

jspira

And going back to the actual topic of the potential merger:

American-US Airways Merger Negotiations: Major Issues Yet to be Overcome

TWA884

If Parker learned his lesson from Delta, how come US Airways East is still not integrated with US Airways West (formerly America West)?

rrgg

I've read this argument before. I thought I read that George Soros took a very large position in LCC last year. With the White House at his ear wouldn't he lean on a merger approval a little?

jspira

There is simply no way of predicting outcome. The ATT-Tmo (failed) merger proved that no one gets a free pass. The DoJ said it would eliminate a viable competitor but DT had already said it wanted to exit the U.S. market. Almost everyone predicted smooth sailing (even a friend of mine who was an esteemed economist at UC Berkeley, who was doing consulting for ATT to support the merger - we had some great arguments about why it would/would not fly and, needless to say, he ended up buying me dinner).

joejones

By the time the economy gets strong enough for the Fed to raise rates, all of the airlines should be swimming in cash anyway.

kcaluwae

News in 'De Tijd' (Belgium Newspaper, local 'Financial Times') today:
http://www.tijd.be/nieuws/ondernemin...95619-3085.art

News is in Dutch so I will translate the most important parts:
- Sources at both AMR and US Airways have stated that they will merge
- Only some minor issues still need to be looked at so things can still go wrong
- Final decision is expected in 2 weeks
- The management of the merged company would be appointed by the creditors of AMR together with people from the management teams of AMR & US.

FlyerTalker688786

Found in Chinese news source as well. But mainstream English news sources are somewhat quiet. Might be the false alarm. Until either Reuters, WSJ or Bloomberg report the similar story, I would say it is armchair politics.

Dr. HFH

I wonder what it would take to lure Crandall out of retirement. Like him or not, he built AA from a bit player to a force to be contended with.

diver858

We Americans like to romanticize flawed leaders from the past, tend to forget their shortcomings as time goes on - presidents are the best example.

While Crandall was quite prolific, the reality is that he and other AMR chairmen since have made some TERRIBLE decisions along the way (not pursuing the Asia market), most importantly: believing they would be the only legacy airline that could change its structure without a trip through BK7. Despite the best of intentions, this is the primary cause of the current toxic labor relations, Crandall chose to retire, as he too could not find another solution.

I do not know Horton well enough to judge him as a leader, it may be a bit too early to do so, but the truth is that under his leadership, AMR was able to negotiate contracts with pilots and FAs, implement a growth plan that appears financially viable, maintains more of its premium service culture - unlike its mega-merger competitors.