Frontier Airlines EarlyReturns - American Studying Frontier Merger

American is looking at five possible partners for merger:

USAirways
JetBlue
Alaska
Frontier
Virgin America

http://finance.yahoo.com/news/american-airlines-creditors-discuss-5-003453922.html

I would not exactly bet the farm on a F9+AA combo, but it's more than just baseless junk somebody dreamt up. If nothing else it can lead to fun speculation, especially in a multi-airline combination.

That Virgin is included really makes me wonder how serious they are about each of the airlines mentioned. I don't think Virgin America brings much to the table. But who knows...

This is mad.

Only US makes sense to me. Long shot Alaska in 2nd place.

This is mad.

Only US makes sense to me. Long shot Alaska in 2nd place.

Probably stalking horses. Though merging with a LCC would have the advantage of not having to do the big labor fight all over again.

Frontier sure would give them a bigger base in DEN, but United would still dominate it.

I'd say that the odds are low, but it's interesting to see this reported:

http://www.bizjournals.com/denver/morning_call/2012/07/american-airlines-floats-idea-of.html?ana=RSS&s=article_search&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+bizj_denver+%28Denver+Busines s+Journal%29&utm_content=Google+Feedfetcher

Although a combination of US/AA/F9/RAH is not totally out of the question. RAH still owns a large amount of US's debt, slots at DCA and the fleet types match USs current model and AA's intended model. SOOOOOOOO not out of the question.....

The New York post today said Jet Blue doesnt want America.
Alska doesn't need that mess
Virgin America ( American will never give up the BA relationship)
Frontier? Best bet. Republic would also love to get the regional flying for American Eagle.

Republic/F9 will not be successful anywhere until it aligns itself with a major loyalty program. Could F9 be positioning for an acquisition?

http://www.bloomberg.com/news/2011-06-22/american-said-to-be-in-talks-for-100-airbus-single-aisle-planes.html

If I'm AA, I realize consolidation is essential. I don't want to have anything to do with US. AS is successful on their own (not looking to merge) and doesn't offer any value (N-S network, no TPAC). Getting in to the DEN market is risky, but if I am in fact considering bringing Airbus on the property, and RAH offers F9 assets for "cheap," F9 may be attractive. JetBlue has lost its glamor as well, and additional market share in NYC may be something I'm interested in by purchasing B6.

Mergers / acquisitions are difficult. Two mergers / acquisitions are even more painful. Speculation: look for AA to acquire either B6 or F9. F9's LOI with Airbus may be a strategic move to attract a buyer, especially considering the C-Series order. 160 new airplanes doesn't make sense. F9/RAH is up to something... Maybe courting AA for an F9 purchase?

Posted over a year ago here: http://www.flyertalk.com/forum/frontier-airlines-earlyreturns/1228963-frontier-signs-loi-80-a320neo-2.html

And my post was generally scoffed... hmm...

Although a combination of US/AA/F9/RAH is not totally out of the question. RAH still owns a large amount of US's debt, slots at DCA and the fleet types match USs current model and AA's intended model. SOOOOOOOO not out of the question.....

I believe they sold the slots back to them to raise capital awhile back. But yes there is more than a friendly relationship between RAH and US. Even if it is a US/AA merger with no one else you can bet RAH will be at the table to secure more CPA flying.

Here's an interesting article that basically spells out why US Airways is the only merger that really makes sense:

http://www.azcentral.com/business/articles/20120711merger-dance-rating-american-airlines-options.html

I'd love to see a F9/AA merger for selfish reasons, such as being able to fly nonstop from SLC to Dallas on F9, but it doesn't make much sense to me, either.

I'm not sure why everyone is fixated on "complementary route structures." As said in another thread, AA can start service between just about any two cities it wants. AA has already proven through the TWA and Reno mergers that they have very little interest in maintaining hubs gained through merger.

AA may want to accelerate MD-80 retirements with 40 or so F9 Airbuses while bringing some working aircraft knowledge on property.

I believe they sold the slots back to them to raise capital awhile back. But yes there is more than a friendly relationship between RAH and US. Even if it is a US/AA merger with no one else you can bet RAH will be at the table to secure more CPA flying.

Unfortunately we still own the slots... Thats why the DOT has been so hesitant to give RAH any new slots...


Furthermore both US and AA are going to need pilots and it would be easier to "acquire" than "hire" in this market

Furthermore both US and AA are going to need pilots and it would be easier to "acquire" than "hire" in this market

Are you suggesting US and AA would shed aircraft in a merger but retain pilots? That breeds pretty poor productivity.

There are plenty of qualified and available pilots for hire. For instance, it's my understanding that Fed Ex has over 10,000 pilot applications on file, including, I bet, just about every competitive RAH pilot.

Unfortunately we still own the slots... Thats why the DOT has been so hesitant to give RAH any new slots...

I don't believe this is correct. See this 10-K from March:

http://phx.corporate-ir.net/phoenix.zhtml?c=131107&p=irol-SECText&TEXT=aHR0cDovL2lyLmludC53ZXN0bGF3YnVzaW5lc3MuY29tL 2RvY3VtZW50L3YxLzAwMDExNTkxNTQtMTItMDAwMDA5L3htbC9 zdWJkb2N1bWVudC8xL3BhZ2UvNzQ%3d

Under section 7, it says:
The Company had airport commuter slots and had assigned the right of use for these commuter slots to US Airways. On December 20, 2011, US Airways repurchased the Ronald Reagan Washington National Airport ("DCA") commuter slots for $47.5 million and a gain on sale of assets was recognized of $2.3 million.

Furthermore, I'm pretty sure RJET has several former YX slots that aren't being used. It was rumored they may have sold them at some point, but I don't see why they would want to sit on them.