elitetraveler

Similar methodology, "That was the conclusion I woke up this morning."

No more craaaazzzy water in Tempe.

"This is a small company very strategically limited, I would argue - not any international flying, hubs of less strategic importance,"

FWAAA

You should read the thread about the pilots' negotiations to find info on the pilots. This is the thread discussing the rumoured merger of AA and US.

Here's the thread you want (read post #161, as it answers your questions):

http://www.flyertalk.com/forum/ameri...-2012-a-5.html

eponymous_coward

None of AA's potential merger partners offer an unmixed blessing. You seem down on US, but let's see...

B6? Yeah, they have some JFK mindshre, that's great. They also are in a different terminal they just spend some cash to redo, and if AA has to drop cash on JFK renovations, that won't be cheap. There's a FLL hub that doesn't really work in conjunction with MIA. And there's LGB, which just doesn't work at all with LAX. BOS is nice, I guess, but if you're buying an airline to dismember it... how'd that work for AA the last three times they did that?

AS? SEA and PDX are spokes, and not particularly good ones at that. AA has no track record of running a West Coast operation with any competency. There's an Alaska market that AA has NO particular expertise in. And a bunch of Hawaii-Mexico flying. Whoop-de-doo.

None of the options particularly helps AA out when it comes to TPAC, unless you're reallocating some planes from CLT/PHL, and that's arguably their weak spot. (AS's feed to DL at SEA goes away if AA buys AS, and I just don't see AA priortitizing SEA-Asia when the rest of their network lift to Asia is absent- really, you'd add another SEA-NRT flight in a crowded market when you don't have JFK-anyplace other than Japan?)

So maybe Horton tells everyone "we're going to try it on our own for a while"... and tries to convince one of B6 or US to date in oneworld before they get married. That is how NW/DL and UA/CO went down...

elitetraveler

I'm ambivalent to all the choices. No merger partners answers AA Pacific hole.

I was just pointing out how the AA CEO went from dissing to kissing US. He really seems to talk too much and what he says doesn't line up - from his comments about first approaching Parker last year - to then dissing US as a piece of sh*t to now saying he is open to exploring a merger with them.

While maybe he is great CEO in the making - there is a lot of zigging and zagging - which is a bit concerning.

That said, he certainly seems to want to invest in the product and maintain the value of AAdvantage with are two big ^^

grahampros

What seems fairly clear at this stage is that Horton was not the right man to lead AA in BK. The pilots are probably not wrong about that. The process has been a mess where someone like Parker can come in an undermine him. This just doesn't happen with a strong leader in place. I'm understanding more and more the vote of no confidence on this one ( and i don't generally don't agree with the pilots on their crazy demands).

That said, if labor thanks it will be any better with a US deal, they are nuts.

uxb

I don't think Parker did a good job at undermining Horton at all. If he did, then we'd all be flying through CLT or PHX by now. Opinions aside, of course, we'll know more in a matter of days.

grahampros

Yes he did a very good job of it. It's fairly unprecedented what's going at AA right now in still the period of presenting a plan.

uxb

How could you say he did a good job? Parker had come across as a whiny ***** to the BK judge. Normally, when individuals initiate hostile takeovers, they do so from a position of strength. Parker, IMHO, seems to be grasping at straws before his company lands back in BK. I wish that US bankruptcy law had resembled Genghis Khan's Yassa code. Under Yassa, if a person went insolvent, they were forgiven. However, if after two insolvencies the individual became insolvent once more, then the person was put to death. I, for one, think it is time to put Dougie out of his misery.

elitetraveler

The other question if AA's analysis favors a merger with US is which management team. Parker already has the AA unions lined up, he has already stated the new entity would move to OW - that must have built a bit of good will with OW partners and he has said the HQ will go be Ft. Worth.

Whether Horton or Parker are willing to leave as part of a merger or willing to take the number 2 slot seems unclear at the moment.

Parker could easily take the millions and say "mission accomplished" riding off into the sunset.

Horton doesn't give the impression he is willing to step aside however it may not be his choice in the end.

Whether one likes Parker or not, based on Horton's comments just months back about not merging in 11 and not seeing US as a potential partner, if the merger does happen there is only one way to look at it.

gegarrenton

You people are funny.

AAExPlat

The more I think about all the scenarios, the more I suspect that Horton is talking about US while quietly squaring away a deal with B6 behind the scenes. It just makes sense.

For one, to acquiesce to US after the workgroups undermined their management hugely would send a chilling message to other airlines in the bk process...namely that workgroups can in essence control not only labor related issues, but also highest level decisions overruling the management team. I don't think anyone wants to reward that kind of scenario.

Two, US would likely want many of the key management positions in the merged entity, which is something that I can't imagine Horton being in favor of (even if he were to walk away wealthy beyond belief). A combo with B6 would be more balanced because B6 does not have experience running a global airline of AA's scope.

Three, B6 fleet is perfect fit for an AA merger. Tons of large regional jets and an Airbus fleet that can seamlessly integrate into the fleet plan of AA with all the new shiny Airbuses coming in starting next year.

Four, overlap between B6 and AA is fairly minimal, although I suppose some slot divestitures at JFK would be required by regulators. And of course, JFK would finally allow AA to turn NYC into a full scale hub instead of a corner stone. US has mostly second tier hub cities that don't at all fit into AAs corner stone strategy.

I think B6 is going to be it, although US is certainly possible, too...I would give it a 60/40 chance that it is B6/US.

Microwave

An off-topic YouTube link, and replies thereto, have been deleted.

~Moderator

bubba198

Makes sense to me:

1. Non-union B6 vs US pickup stix union mess.

2. New planes, simple fleet B^ vs 2x old US typical legacy hodgepodge

3. I can see greater chance of compatibility between B6 management and new AA management.

4. Better hub compatibility IMHO

B6 is like buying a recently built house with few problems. US is like buying an old tract home remodeled by amateurs and in immediate need of repair and maintenance.

eponymous_coward

PHL and PHX are top 15 metro markets in the United States. If you can't make money off of dominating O/D to metropolitan areas with a population of 3+ million, you really shouldn't be running an airline. AS makes good money having ONE top 15 metro market as a hub, and they have about 50% market share in that hub, and that's only by codesharing with everyone in the universe (so not really dominating it).

Also, I'd say overlapping hubs of FLL/MIA and LGB/LAX are a bit more than "minimal". Not only that, if you look at B6's map, they serve p2p routes that AA probably isn't remotely interested in on top of FLL, B6 and MCO: routes like OAK-IAD or BUR-LAS. They also probably want to shift a bunch of B6's JFK service to LGA (use Embraers instead of 50 seaters).

So I wouldn't characterize it as "US doesn't have anything really worthwhile while B6's markets are the bee's knees". JFK is the big prize, sure. BOS is nice, yeah. But you're going to be dismantling a lot of B6's network in a merger, arguably as much or more of that as you would of US's. It may be having dominance at JFK and a bigtime BOS presence works out better than PHL, PHX, DCA, CLT, but B6 is still an LCC, and AA is not and doesn't plan to be, so a lot of B6's network is going to go "poof" in a merger.

Science Goy

Then why doesn't every airline have 15 hubs? It's a bit simplistic to say that if a city is big, any airline can trivially make money flying to it.