Originally Posted by tuolumne
Well, AMR and UAL both have upwards of $5.5 Billion in the bank, nearly double of what CO has. Both have valuble assets; Heathrow, Tokyo (UA), etc. that CO also does not have.
Regardless, the only entity that is going to be purchasing another airline is the banks who will loan the money to the purchaser
I think that the quote above needs a little bit of clarification. The closest thing United has to "$5.5 Billion in the bank" is $4.0 billion in cash and cash equivalents as reported in its March 31 10-Q. AMR has $167 million in cash and $4.986 billion in short-term investments. Continental reported $2.2 billion in cash and $270 million in short term investments for the most recent calendar quarter.
It's good to examine the three financial statements in concert to get an overall picture of each carrier. United hasn't yet published its second quarter results. They may be available as early as Monday. Right now, Continental is in the strongest position of the three carriers you mention. The trend in monthly traffic and lot factor data support the claim.
If there is consolidation within the industry, it's very unlikely that it will happen through acquisition. The only scenario that I see where an acquisition makes sense is if one carrier has an inordinate amount of debt and has filed for bankruptcy protection. Failing this situation, the likely route for consolidation is a merger. In a merger, the role of the banking community is likely to be greatly diminished.