Feb 14, 2013, 9:50 am
Last edit by: JDiver
MODERATOR GUIDEPOST
The AA - US merger was approved by AMR creditors and the boards of directors of both airlines on 13 Feb 2013, and announced the 14th.
There is no further speculation about whether the merger will occur; all that is pending is approval from the bankruptcy court and the regulatory authorities.
American Airlines and US Airways approve merger: just the facts, please outlines the facts we know;
AA - US Merger Agreement / Announcement Discussion (consolidated) is the thread for discussion of the announced merger.
The AA - US merger was approved by AMR creditors and the boards of directors of both airlines on 13 Feb 2013, and announced the 14th.
There is no further speculation about whether the merger will occur; all that is pending is approval from the bankruptcy court and the regulatory authorities.
American Airlines and US Airways approve merger: just the facts, please outlines the facts we know;
AA - US Merger Agreement / Announcement Discussion (consolidated) is the thread for discussion of the announced merger.
ARCHIVE: US LCC & AMR / AA Takeover / merger Rumors and Discussion (consolidated)
Jul 23, 2012, 5:47 am
#1486
Join Date: Oct 2003
Location: TX
Posts: 2,734
1. With US Airways credit cards, if you spend $25k, 10,000 of the miles that you earn get converted into Preferred miles. The fee is reasonable- I think $90 per year? I have multiple US Airways credit cards and have a much higher level of Preferred status than I would just through flying. I see that AA has a credit card that can earn 10,000 Preferred (or whatever the name is for AA) miles, but the annual fee is $450, and it takes 40,000 miles to trigger a 10,000 mile conversion into Preferred miles. So there goes my higher-level status.
Jul 23, 2012, 6:46 am
#1487
Join Date: Mar 2007
Location: ABQ & RNO
Programs: AA EXP 4MM, Piper Dakota, Admirals Club, Hyatt Glob, Hilton Gold, Wyndham Diamond
Posts: 1,426
I must say I'm amused at those who think that taking a poll and send it to a bankruptcy judge or an airline announcing FF program changes to make FF's happy has one iota of influence on a bankruptcy decision.
And the poster above was correct (as a current 1K and 10yr CP myself), you'd much, much rather be with US than UA right now in most situations.
And the poster above was correct (as a current 1K and 10yr CP myself), you'd much, much rather be with US than UA right now in most situations.
Jul 23, 2012, 3:43 pm
#1488
Join Date: Nov 2009
Location: LGA
Programs: HHonors Diamond, AA PLT
Posts: 195
Searched the forum for speculation about the fate of lifetime statuses post-bankruptcy and didn't come up with much. Is there any precedent for lifetime status after an airline declares bankruptcy? Did those airlines recognize lifetime accumulation (in AA's case, Million-Miler Balance) post-merger?
Jul 23, 2012, 7:40 pm
#1489
Join Date: Oct 2003
Location: TX
Posts: 2,734
Searched the forum for speculation about the fate of lifetime statuses post-bankruptcy and didn't come up with much. Is there any precedent for lifetime status after an airline declares bankruptcy? Did those airlines recognize lifetime accumulation (in AA's case, Million-Miler Balance) post-merger?
Jul 23, 2012, 9:56 pm
#1490
Join Date: Dec 2006
Location: ORD
Programs: AA EXP,2MM, DL Gold,Starwood PLT
Posts: 3,876
These types of concerns will have very little or any impact on the merger decision that AA makes. This or million millage concerns will have next to zero impact on the decision making process. It's just not on the big list of factors if they merge or not.
Jul 23, 2012, 10:27 pm
#1491
Join Date: Mar 2007
Location: ABQ & RNO
Programs: AA EXP 4MM, Piper Dakota, Admirals Club, Hyatt Glob, Hilton Gold, Wyndham Diamond
Posts: 1,426
Maybe these concerns should be considered....UA's treatment of elites and the the devaluation of their FF program may very well be having a negative impact on their bottom line, the next quarter or two may tell. If the US Frequent Flyer program influence in an AA merger were to have a heavy negative financial affect then that should be considered by AA and others.
Jul 23, 2012, 10:36 pm
#1492
Join Date: Dec 2006
Location: ORD
Programs: AA EXP,2MM, DL Gold,Starwood PLT
Posts: 3,876
Maybe these concerns should be considered....UA's treatment of elites and the the devaluation of their FF program may very well be having a negative impact on their bottom line, the next quarter or two may tell. If the US Frequent Flyer program influence in an AA merger were to have a heavy negative financial affect then that should be considered by AA and others.
The real reason it had little impact is because DL handled the OPERATIONAL integration for a merger of the size fairly smoothly. What's really aggravated UA/CO folks more than anything is how poorly that's gone with the SHARES transition, drop in one time performance etc.
Last edited by grahampros; Jul 23, 2012 at 10:46 pm
Jul 23, 2012, 10:39 pm
#1493
Join Date: Nov 2003
Location: ORD / MDW / FLL
Programs: DL DM/1MM, AA EXP, SPG Platinum, Hyatt Platinum, Marriott Platinum
Posts: 2,295
Jul 25, 2012, 11:17 am
#1494
FlyerTalk Evangelist
Join Date: May 2001
Location: LAX; AA EXP, MM; HH Gold
Posts: 31,789
Horton comes out swinging; merger with US was my idea, not Parker's
Horton sets the record straight: He raised the idea of a potential merger with US, not Doug Parker.
http://finance.yahoo.com/news/americ...154508886.html
The most telling part, IMO:
Even the "analysts" who initially claimed that AA and US abosolutely had to merge have changed their tune:
I think it will eventually happen, but on Horton's terms, not Parker's.
http://finance.yahoo.com/news/americ...154508886.html
The most telling part, IMO:
But in an interview with The Associated Press Horton was emphatic that there's more financial pressure on US Airways than American to find a partner. And he cited Parker's repeated overtures as a sign of desperation.
Perhaps the biggest problem on the horizon for US Airways is that its labor costs are going rise, Horton said. Unions there haven't had a new contract in more than seven years. Horton said Parker is in "a race against the clock" to somehow increase revenue before he has to pay higher salaries in a new contract. A combination with American would help do that because American flies many more international routes, which bring in higher fares per passenger.
"It would be tremendously unwise for us to pursue a combination with a company because they are seeking to solve their own problems," Horton said.
Perhaps the biggest problem on the horizon for US Airways is that its labor costs are going rise, Horton said. Unions there haven't had a new contract in more than seven years. Horton said Parker is in "a race against the clock" to somehow increase revenue before he has to pay higher salaries in a new contract. A combination with American would help do that because American flies many more international routes, which bring in higher fares per passenger.
"It would be tremendously unwise for us to pursue a combination with a company because they are seeking to solve their own problems," Horton said.
Ray Neidl, a Maxim Group airline analyst who met with Horton at the breakfast, said he was swayed by Horton's determination to keep American independent. "I reduce (the) odds of a merger happening from 90 (percent) to less than 50," he said.
Another analyst, Helane Becker from Dahlman Rose, noted that "it's more important for US Airways to do the deal than it is for American."
Another analyst, Helane Becker from Dahlman Rose, noted that "it's more important for US Airways to do the deal than it is for American."
Jul 25, 2012, 12:12 pm
#1495
FlyerTalk Evangelist
Join Date: Aug 2007
Location: SEA, but up and down the coast a lot
Programs: Oceanic Airlines Gold Elite
Posts: 20,393
That being said, right now, the ugly girl isn't all that ugly.
Jul 25, 2012, 12:15 pm
#1496
Join Date: Jun 2011
Location: BOS
Programs: AA EXP
Posts: 7,710
That being said, right now, the ugly girl isn't all that ugly.
Jul 25, 2012, 12:21 pm
#1497
FlyerTalk Evangelist
Join Date: May 2001
Location: LAX; AA EXP, MM; HH Gold
Posts: 31,789
That being said, right now, the ugly girl isn't all that ugly.
The problems with US are all her psycho relatives that aren't apparent until you take her home, like the pilots who work for less than at jetBlue but will eventually demand and get huge raises and the FAs who will eventually accept a new contract, and end up costing a lot more.
As ClueByFour used to point out, it's easy to make money when you pay your employees far less than your competitors. When that advantage goes away, things get really ugly in a hurry.
US lags AA in unit revenue increases this year, owing to what Parker has admitted is its inferior network (and perhaps less than stellar management - which he has not admitted). AA has improved its numbers a lot more this year than has US, and if that continues for several more quarters, US won't look anywhere near as attractive as she does this morning.
Jul 25, 2012, 12:30 pm
#1498
FlyerTalk Evangelist
Join Date: Aug 2007
Location: SEA, but up and down the coast a lot
Programs: Oceanic Airlines Gold Elite
Posts: 20,393
Flying most USA airlines as a peon in coach is a very generic experience, and I would be hard-pressed to think there's much of a difference between any of US/UA/DL/AA for us folks in the cheap seats. Obviously the rarefied air of an AA EXP gives one a much different perspective on things.
All that being said, the fact that US seems to have figured a few things out about optimizing their network (such as it is) while fighting WN to a draw in PHX and PHL... well, I think it makes them less ugly. Shareholders and executives think proftable operations are quite pretty.
US lags AA in unit revenue increases this year, owing to what Parker has admitted is its inferior network (and perhaps less than stellar management - which he has not admitted). AA has improved its numbers a lot more this year than has US, and if that continues for several more quarters, US won't look anywhere near as attractive as she does this morning.
I won't be shocked if any merger (if there is one) is on AA's terms, in the end- or if there isn't one.
Last edited by eponymous_coward; Jul 25, 2012 at 12:36 pm
Jul 25, 2012, 12:45 pm
#1499
Join Date: Jun 2011
Location: BOS
Programs: AA EXP
Posts: 7,710
Flying most USA airlines as a peon in coach is a very generic experience, and I would be hard-pressed to think there's much of a difference between any of US/UA/DL/AA for us folks in the cheap seats. Obviously the rarefied air of an AA EXP gives one a much different perspective on things.
Jul 25, 2012, 12:59 pm
#1500
Suspended
Join Date: Sep 2006
Programs: AAdvantage PP
Posts: 13,913
Flying as a non elite Y pax its pretty much the same on the legacies. Yes there are some subtle differences, AA may give free beer and wine on International. DL at least has in seat IFE on its Transon 757s albeit its pricey at $6 for a movie and $2 for tv series/HBO shows.
I think Parker has done well with what he has put clearly future labor costs and having an inferior route structure to attract the high end business premium pax has probably capped how far USAir can go on its own. Opening up new far flung routes is expensive and risky. For example, awhile back USAir was looking at leasing an A340 from AC to start a China route. If that route fails like AA's ORD/DEL route suddenly you have to figure out what to do with that A340 if AC won't take it back. Its not like you can deploy it running shuttle flights between PHL and PIT. Not to mention when that A340 goes mechnical (out of service) you have a real mess on your hand.
My only thought would be does DL in a pre-emptive move go after USAir, particularly if AA takes a pass for now. Sure, DL would face anti trust issues and would have give some skin to make anything work.
I think Parker has done well with what he has put clearly future labor costs and having an inferior route structure to attract the high end business premium pax has probably capped how far USAir can go on its own. Opening up new far flung routes is expensive and risky. For example, awhile back USAir was looking at leasing an A340 from AC to start a China route. If that route fails like AA's ORD/DEL route suddenly you have to figure out what to do with that A340 if AC won't take it back. Its not like you can deploy it running shuttle flights between PHL and PIT. Not to mention when that A340 goes mechnical (out of service) you have a real mess on your hand.
My only thought would be does DL in a pre-emptive move go after USAir, particularly if AA takes a pass for now. Sure, DL would face anti trust issues and would have give some skin to make anything work.