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)
Jan 18, 2013, 9:48 am
#2866
Join Date: Aug 2011
Location: ELP
Programs: AAdvantage, Amex MR
Posts: 2,314
Horton wants a merger and wants to be CEO of worlds largest airline and he's using every PR weapon to make that happen - ie, a merger after bk. unfortunately for him aa's creditors and more importantly unions are most likely not going to let that happen. The unions would FLIP out of aa emerged from bk solo - allowing Horton to cash in - and then merge. I would love to see aa Stan alone, but I do think their new strategy is unsustainable. They just don't have the route network to compete with delta and ual and due to poor management the only partner left is us airways.
As a flyer I would prefer to see Horton run a combined carrier. As an investor I would choose Douggie and alow him to do his hacket job.
As a flyer I would prefer to see Horton run a combined carrier. As an investor I would choose Douggie and alow him to do his hacket job.
Jan 18, 2013, 10:15 am
#2867
Join Date: Dec 2002
Location: eastern Europe & NC
Posts: 4,527
Paying off Dougie's bribes to the unions is a big reason why a thinking investor would NOT want Dougie running the show. The US debt load is another reason why a thinking investor would not want the merger. Let US go to the boneyard and pick up the desirable pieces without the debt load. Or wait until their stock crashes when the merger does not happen and do a hostile takeover on the cheap. Merger, especially with Dougie in command is stupid to tne nth degree.
Horton wants a merger and wants to be CEO of worlds largest airline and he's using every PR weapon to make that happen - ie, a merger after bk. unfortunately for him aa's creditors and more importantly unions are most likely not going to let that happen. The unions would FLIP out of aa emerged from bk solo - allowing Horton to cash in - and then merge. I would love to see aa Stan alone, but I do think their new strategy is unsustainable. They just don't have the route network to compete with delta and ual and due to poor management the only partner left is us airways.
As a flyer I would prefer to see Horton run a combined carrier. As an investor I would choose Douggie and alow him to do his hacket job.
As a flyer I would prefer to see Horton run a combined carrier. As an investor I would choose Douggie and alow him to do his hacket job.
Jan 18, 2013, 10:56 am
#2868
Join Date: Mar 2011
Location: NYC LAX RDU
Programs: US-Plt;Concierge key; American AAirpass; Delta Silver;Starwood - Platinum; Amex Cent
Posts: 710
I couldn't disagree more with you. Bigger is not better. If that was so, then AA should have been doing better than everyone else up until a couple of years ago. NW was a very strong smaller and nimble airline. Look at Alaska...
If you watched the press conference yesterday Horton said he expected to take delivery of all 100+ dreamliners they have on order, that sounds like they plan to expand their international foot print and by quite a bit.
If you watched the press conference yesterday Horton said he expected to take delivery of all 100+ dreamliners they have on order, that sounds like they plan to expand their international foot print and by quite a bit.
As I said. Any aa ff would prefer to have Horton as CEO, but his plan is using the same template airlines used pre 9-11. Delta is probably the best run mega in the us right now and their formula is radically different that aa plan - which is more of the same. As an INVESTOR (which I am not) I would say the best path for aa is to scale back jfk sans lhr service, bulk up in Philly, Clt, phx, Mia, dfw and lax and let united have Chicago. Lets delta and ual fight over Asia and concentrate on everything south of the border and DOMINATE. This whole idea of having fancy silver birds with fancy amenities and "premium products" has been tried over and over in the USA and it doesn't work. Douggie has it right - the was to make money in airlines is to DOMINATE your hubs. Which is what delta has done with JFK, Lga, Atlanta, Detroit, msn. What united has done with ewr, iad, ord, den, iah and sfo( which is really an amazing pairing). What us airways ha done with dca, Clt, Phl and phx. Aa only has Mia and dfw. Not to oversimplify. But as an investor I would be thinking that most of what Horton has promised anybody can do. Borrow a ton of money to buy lots of fancy planes with premium products into airports we don't really dominate. If everybody else is using this model and it works then what makes aa think ther different model is better. Plus they can't just add capacity. Delta and ual are too strong to let tem organically grow they way Horton speaks of.
Jan 18, 2013, 11:18 am
#2869
Join Date: Oct 2010
Location: San Diego, Ca
Programs: AA 2MM LT PLT; AS MVP Gold75k; HHonors Diamond; IHG PLT
Posts: 3,502
Then why have AMRs financials improved since implementation of the new strategy - INDEPENDENT OF BK-related cost reductions? Newer, more efficient aircraft will reduce costs even further. If it is all too fancy for you, there are plenty of leather economy seats on WN, they are happy to have you as a customer, will feed you all the peanuts you can eat.
AMR made a play last year for UA 1ks, is now going after DL DMs after their qualification requirements were changed. As a career AA elite, I obviously like the strategy, am VERY encouraged by this trend, suggests that loyal customers are valued, will remain so after any merger - assuming the current management remains in control.
Labor played their hand last summer and lost, creditors and BK judge stood firmly behind management during the labor action, negotiations. They can now whine all they want, but now that they own part of AMR, it is in their best interest to be good team players.
Jan 18, 2013, 11:45 am
#2870
FlyerTalk Evangelist
Join Date: May 2001
Location: LAX; AA EXP, MM; HH Gold
Posts: 31,789
So AA is doomed in NYC and CHI because it doesn't dominate those cities yet you think AA should "bulk up" in PHL and CLT? Those are US fortress hubs. That would be like UA attacking AA in MIA or DL growing in DFW or AA adding lots of capacity in ATL. That suggestion makes no sense. AA should grow in PHX? It is not a major business market like NYC or CHI and yet is shared by WN and US. AA's major corporate customers are likely not clammoring for a bigger AA presence in Phoenix.
AA should abandon Asia? AA currently flies five daily 777 flights to Tokyo from four gateways. It has a joint venture agreement with JAL where AA and JAL share revenues and profits and coordinate schedules and capacity. Why on earth would AA give that up? DL has the largest market share between US and Tokyo thanks to the NW legacy. UA-NH is in second place and AA-JAL is a close third. AA should give up its three daily flights to China? AA should not inaugurate flights to Korea? Again, if AA can't compete to Asia, might as well liquidate now.
Delta does not dominate JFK. It's slightly larger than AA, but no one airline dominates JFK. DL is now the largest airline at LGA thanks to Parker's slot giveaway. DL dominates ATL, DTW and MSP. With DL's recent moves in SEA, it's making a push to dominate SEA-Asia.
US does not dominate PHX. WN is just about the same size. DCA? US has about half the slots - that's big, but not domination. Just like DL at LGA with about half the slots. CLT, a city with just slightly more O&D than much-smaller RDU, is dominated by US. The small amount of O&D at CLT is high-yield. Just wait until WN moves in. PHL? IMO, that's an under-appreciated US asset. Huge business-market albeit with lower O&D than its metro-area population would suggest given the ease of business travel on Amtrak to NYC and WAS.
And a large position in Los Angeles at LAX. And a large position at ORD. And a lot of revenue at LGA. And a lot of revenue at JFK. No one airline dominates any of those airports, but they are the three largest cities in the country. If your advice is that AA retreat from them, then AA might as well liquidate.
Not to oversimplify. But as an investor I would be thinking that most of what Horton has promised anybody can do. Borrow a ton of money to buy lots of fancy planes with premium products into airports we don't really dominate. If everybody else is using this model and it works then what makes aa think ther different model is better. Plus they can't just add capacity. Delta and ual are too strong to let tem organically grow they way Horton speaks of.
Many analysts said in December, 2011, that AMR would shrink by 10% to 20% while in bankruptcy because most other airlines shrunk by those amounts when they were in Ch 11. AA ended up 2012 about 1% smaller than when it filed its Ch 11 petition.
Will Horton's plan work? I have no idea. He hasn't been able to implement very much of it yet.
Will Parker's plan work? He's already promised raises to the AA employees; the US employees will also get tag-along raises equalling hundreds of millions of dollars. Will the combined airline report any profits? Only if the "synergies" are far better than at any other merged airline thus far.
Jan 18, 2013, 11:52 am
#2871
Suspended
Join Date: Sep 2006
Programs: AAdvantage PP
Posts: 13,913
Really?
Then why have AMRs financials improved since implementation of the new strategy - INDEPENDENT OF BK-related cost reductions? Newer, more efficient aircraft will reduce costs even further. If it is all too fancy for you, there are plenty of leather economy seats on WN, they are happy to have you as a customer, will feed you all the peanuts you can eat.
AMR made a play last year for UA 1ks, is now going after DL DMs after their qualification requirements were changed. As a career AA elite, I obviously like the strategy, am VERY encouraged by this trend, suggests that loyal customers are valued, will remain so after any merger - assuming the current management remains in control.
Labor played their hand last summer and lost, creditors and BK judge stood firmly behind management during the labor action, negotiations. They can now whine all they want, but now that they own part of AMR, it is in their best interest to be good team players.
Then why have AMRs financials improved since implementation of the new strategy - INDEPENDENT OF BK-related cost reductions? Newer, more efficient aircraft will reduce costs even further. If it is all too fancy for you, there are plenty of leather economy seats on WN, they are happy to have you as a customer, will feed you all the peanuts you can eat.
AMR made a play last year for UA 1ks, is now going after DL DMs after their qualification requirements were changed. As a career AA elite, I obviously like the strategy, am VERY encouraged by this trend, suggests that loyal customers are valued, will remain so after any merger - assuming the current management remains in control.
Labor played their hand last summer and lost, creditors and BK judge stood firmly behind management during the labor action, negotiations. They can now whine all they want, but now that they own part of AMR, it is in their best interest to be good team players.
Of course the issue often becomes too many players chasing a very profitable but small market segment. Most people flying to far flung destinations like HKG, SYD or SIN are going to do it in coach, including a sizable number of business travelers. Look at the number of business only airlines that failed shortly after starting operations (although soaring fuel prices were part of that failure).
Airlines constantly struggle and tweak this business model. Its one reason that AA will eventually only have an F product on very selective International routes and some airlines have given up completely on F International or have scaled back on the number of routes and/or seats (like QF).
The unknown is will all of this investment payoff for AA, particularly if the airline continues to have a much smaller global footprint than DL and UA.
Jan 18, 2013, 2:43 pm
#2872
Join Date: Mar 2011
Location: NYC LAX RDU
Programs: US-Plt;Concierge key; American AAirpass; Delta Silver;Starwood - Platinum; Amex Cent
Posts: 710
Well, there aren't any more Northwests with which to merge and it's doubtful that AA can convince airlines to give it lots of LGA slots (the way Anderson duped Parker). DL has added lots of international service since it filed for Ch 11, which is what AA proposes to do. Specifically, how is the Delta plan "radically different" from the Horton plan?
So your advice would be to leave the nation's two largest aviation markets to the competition? If you want lots of corporate contracts, doesn't it help to have a big presence in NYC and CHI? Retreating sounds a lot like the US retreat from NYC.
Dca swap was good for us and delta. Us at lga was pathetic and flights sans hubs I flew on were regularly empty.
Your taking my thoughts to literally. Us gave up on NYC but didn't pull out completely. I just don't think they should focus many resources on adding capacity to Asia. Do they even have a partner in china to feed service? Delta may be bigger than ual to Tokyo, but star alliance really shines in Asia. Only reason I keep my us membership.
Obviously I'm not suggesting aa duplicate hubs at. Clt, phx and Phl. I'm assuming they merge. You can't argue that aa only has 2fortress hubs vs 6 and 4 for ual and delta. Easier to compete when theres not much competition.
Not NYC but Chicago, yes. I saw a jp Morgan presentation on this somewhere and thought it was a good idea. They will never catch up to united in Chicago. I think aa should concentrate in new yorj on where they are strong and not get into a price war with ual and delta which they will loose - trying to duplicate what their competitors have. NYC may be the largest aviation market but I can fly from rdu to lga for 200 walkup or 80 a week out vs 480 and 225 to dca. There's just so much competition in NYC.
So AA is doomed in NYC and CHI because it doesn't dominate those cities yet you think AA should "bulk up" in PHL and CLT? Those are US fortress hubs. That would be like UA attacking AA in MIA or DL growing in DFW or AA adding lots of capacity in ATL. That suggestion makes no sense. AA should grow in PHX? It is not a major business market like NYC or CHI and yet is shared by WN and US. AA's major corporate customers are likely not clammoring for a bigger AA presence in Phoenix.
AA already dominates south of the border. Open Skies is coming to much of Central and South America, and AA is well-positioned for that, as AA continues to grow in Latin America Where AA needs to grow is in CHI and NYC and LAX. The three biggest business travel markets in the country.
AA should abandon Asia? AA currently flies five daily 777 flights to Tokyo from four gateways. It has a joint venture agreement with JAL where AA and JAL share revenues and profits and coordinate schedules and capacity. Why on earth would AA give that up? DL has the largest market share between US and Tokyo thanks to the NW legacy. UA-NH is in second place and AA-JAL is a close third. AA should give up its three daily flights to China? AA should not inaugurate flights to Korea? Again, if AA can't compete to Asia, might as well liquidate now.
Really? Delta is doing it, and it's working for DL. But you say it wouldn't work for AA?
US hasn't generated an aggregate net profit since the merger (net the profits and losses since 2005 if you don't believe me) and if US didn't pay its pilots and FAs hundreds of millions of dollars less than they'd earn at UA/DL/AA wage rates, US would report no profits at all.
Delta does not dominate JFK. It's slightly larger than AA, but no one airline dominates JFK. DL is now the largest airline at LGA thanks to Parker's slot giveaway. DL dominates ATL, DTW and MSP. With DL's recent moves in SEA, it's making a push to dominate SEA-Asia.
UA does not dominate ORD. It has a good fortress position in the other cities listed.
US does not dominate PHX. WN is just about the same size. DCA? US has about half the slots - that's big, but not domination. Just like DL at LGA with about half the slots. CLT, a city with just slightly more O&D than much-smaller RDU, is dominated by US. The small amount of O&D at CLT is high-yield. Just wait until WN moves in. PHL? IMO, that's an under-appreciated US asset. Huge business-market albeit with lower O&D than its metro-area population would suggest given the ease of business travel on Amtrak to NYC and WAS.
And a large position in Los Angeles at LAX. And a large position at ORD. And a lot of revenue at LGA. And a lot of revenue at JFK. No one airline dominates any of those airports, but they are the three largest cities in the country. If your advice is that AA retreat from them, then AA might as well liquidate.
2012 is just one year, but AA increased its unit revenue by a larger percentage than did UA or US. Only DL managed to keep pace. And that was while AA was in bankruptcy and suffered a two-month pilot work action. Horton's plan was to increase revenue by $1 billion by 2017. And AA's 2012 revenue was up by $900 million in 2012 alone.
Many analysts said in December, 2011, that AMR would shrink by 10% to 20% while in bankruptcy because most other airlines shrunk by those amounts when they were in Ch 11. AA ended up 2012 about 1% smaller than when it filed its Ch 11 petition.
Will Horton's plan work? I have no idea. He hasn't been able to implement very much of it yet.
Will Parker's plan work? He's already promised raises to the AA employees; the US employees will also get tag-along raises equalling hundreds of millions of dollars. Will the combined airline report any profits? Only if the "synergies" are far better than at any other merged airline thus far.
So your advice would be to leave the nation's two largest aviation markets to the competition? If you want lots of corporate contracts, doesn't it help to have a big presence in NYC and CHI? Retreating sounds a lot like the US retreat from NYC.
Dca swap was good for us and delta. Us at lga was pathetic and flights sans hubs I flew on were regularly empty.
Your taking my thoughts to literally. Us gave up on NYC but didn't pull out completely. I just don't think they should focus many resources on adding capacity to Asia. Do they even have a partner in china to feed service? Delta may be bigger than ual to Tokyo, but star alliance really shines in Asia. Only reason I keep my us membership.
Obviously I'm not suggesting aa duplicate hubs at. Clt, phx and Phl. I'm assuming they merge. You can't argue that aa only has 2fortress hubs vs 6 and 4 for ual and delta. Easier to compete when theres not much competition.
Not NYC but Chicago, yes. I saw a jp Morgan presentation on this somewhere and thought it was a good idea. They will never catch up to united in Chicago. I think aa should concentrate in new yorj on where they are strong and not get into a price war with ual and delta which they will loose - trying to duplicate what their competitors have. NYC may be the largest aviation market but I can fly from rdu to lga for 200 walkup or 80 a week out vs 480 and 225 to dca. There's just so much competition in NYC.
So AA is doomed in NYC and CHI because it doesn't dominate those cities yet you think AA should "bulk up" in PHL and CLT? Those are US fortress hubs. That would be like UA attacking AA in MIA or DL growing in DFW or AA adding lots of capacity in ATL. That suggestion makes no sense. AA should grow in PHX? It is not a major business market like NYC or CHI and yet is shared by WN and US. AA's major corporate customers are likely not clammoring for a bigger AA presence in Phoenix.
AA already dominates south of the border. Open Skies is coming to much of Central and South America, and AA is well-positioned for that, as AA continues to grow in Latin America Where AA needs to grow is in CHI and NYC and LAX. The three biggest business travel markets in the country.
AA should abandon Asia? AA currently flies five daily 777 flights to Tokyo from four gateways. It has a joint venture agreement with JAL where AA and JAL share revenues and profits and coordinate schedules and capacity. Why on earth would AA give that up? DL has the largest market share between US and Tokyo thanks to the NW legacy. UA-NH is in second place and AA-JAL is a close third. AA should give up its three daily flights to China? AA should not inaugurate flights to Korea? Again, if AA can't compete to Asia, might as well liquidate now.
Really? Delta is doing it, and it's working for DL. But you say it wouldn't work for AA?
US hasn't generated an aggregate net profit since the merger (net the profits and losses since 2005 if you don't believe me) and if US didn't pay its pilots and FAs hundreds of millions of dollars less than they'd earn at UA/DL/AA wage rates, US would report no profits at all.
Delta does not dominate JFK. It's slightly larger than AA, but no one airline dominates JFK. DL is now the largest airline at LGA thanks to Parker's slot giveaway. DL dominates ATL, DTW and MSP. With DL's recent moves in SEA, it's making a push to dominate SEA-Asia.
UA does not dominate ORD. It has a good fortress position in the other cities listed.
US does not dominate PHX. WN is just about the same size. DCA? US has about half the slots - that's big, but not domination. Just like DL at LGA with about half the slots. CLT, a city with just slightly more O&D than much-smaller RDU, is dominated by US. The small amount of O&D at CLT is high-yield. Just wait until WN moves in. PHL? IMO, that's an under-appreciated US asset. Huge business-market albeit with lower O&D than its metro-area population would suggest given the ease of business travel on Amtrak to NYC and WAS.
And a large position in Los Angeles at LAX. And a large position at ORD. And a lot of revenue at LGA. And a lot of revenue at JFK. No one airline dominates any of those airports, but they are the three largest cities in the country. If your advice is that AA retreat from them, then AA might as well liquidate.
2012 is just one year, but AA increased its unit revenue by a larger percentage than did UA or US. Only DL managed to keep pace. And that was while AA was in bankruptcy and suffered a two-month pilot work action. Horton's plan was to increase revenue by $1 billion by 2017. And AA's 2012 revenue was up by $900 million in 2012 alone.
Many analysts said in December, 2011, that AMR would shrink by 10% to 20% while in bankruptcy because most other airlines shrunk by those amounts when they were in Ch 11. AA ended up 2012 about 1% smaller than when it filed its Ch 11 petition.
Will Horton's plan work? I have no idea. He hasn't been able to implement very much of it yet.
Will Parker's plan work? He's already promised raises to the AA employees; the US employees will also get tag-along raises equalling hundreds of millions of dollars. Will the combined airline report any profits? Only if the "synergies" are far better than at any other merged airline thus far.
Last edited by morrisunc; Jan 18, 2013 at 2:53 pm
Jan 18, 2013, 2:56 pm
#2873
Join Date: Oct 2010
Location: San Diego, Ca
Programs: AA 2MM LT PLT; AS MVP Gold75k; HHonors Diamond; IHG PLT
Posts: 3,502
Don't recall seeing this elsewhere, apologies in advance if it is a rehash:
While there are MANY compelling reasons for AMR and LCC NOT to merge at this time, there appear to be some significant benefits in taking the first step - LCC move to OW.
1. Limited overlap in domestic, international route structure with AMR --> lots of opportunity for codeshares, gain customers through reciprocal elite qualifying programs
2. MUCH larger domestic route structure for non-US OW members, making them more competitive
3. IAG could shore up LCC's financials by taking a minority position, more appropriate if they were on the same team. This could then drive LCC growth, where IAG, other OW carriers would benefit from additional domestic feeder flights in non-AMR cornerstone cities, enabling LCC to reconsider former hubs like LAS, PIT, expand No Ca presence, etc.
This could help counter at least some of the potential competitive implications of DL's recent minority investment in VS.
I liken it to a couple that is not ready for marriage, decide to move in together, see if they can make it work.
While there are MANY compelling reasons for AMR and LCC NOT to merge at this time, there appear to be some significant benefits in taking the first step - LCC move to OW.
1. Limited overlap in domestic, international route structure with AMR --> lots of opportunity for codeshares, gain customers through reciprocal elite qualifying programs
2. MUCH larger domestic route structure for non-US OW members, making them more competitive
3. IAG could shore up LCC's financials by taking a minority position, more appropriate if they were on the same team. This could then drive LCC growth, where IAG, other OW carriers would benefit from additional domestic feeder flights in non-AMR cornerstone cities, enabling LCC to reconsider former hubs like LAS, PIT, expand No Ca presence, etc.
This could help counter at least some of the potential competitive implications of DL's recent minority investment in VS.
I liken it to a couple that is not ready for marriage, decide to move in together, see if they can make it work.
Jan 18, 2013, 3:18 pm
#2874
Join Date: Mar 2011
Location: NYC LAX RDU
Programs: US-Plt;Concierge key; American AAirpass; Delta Silver;Starwood - Platinum; Amex Cent
Posts: 710
I might agree that lcc needs aa more than aa needs llc, but oneworld def needs us more than us needs oneworld. I don't even think admittance into the Atlantic jv would make it worth it.
Us feeds a ton of business to star partners in Europe. They loose those and gain, what? Ba? They can't expand at lhr if they wAnted 2. Iberia and Spain are a joke compared to all the great European star members.
Also, dca is really the gem of us airways and they get a TON of big $$$$ ual and star spenders out of dca. I was on dca to phx with daughters and I was only us elite in first. All paid ual flyers. Moving to one world hurts us at dca. Even with the merger dca becomes less valuable than it currently is because of loss of ual ff. Us has a nice niche in star.
Us feeds a ton of business to star partners in Europe. They loose those and gain, what? Ba? They can't expand at lhr if they wAnted 2. Iberia and Spain are a joke compared to all the great European star members.
Also, dca is really the gem of us airways and they get a TON of big $$$$ ual and star spenders out of dca. I was on dca to phx with daughters and I was only us elite in first. All paid ual flyers. Moving to one world hurts us at dca. Even with the merger dca becomes less valuable than it currently is because of loss of ual ff. Us has a nice niche in star.
Don't recall seeing this elsewhere, apologies in advance if it is a rehash:
While there are MANY compelling reasons for AMR and LCC NOT to merge at this time, there appear to be some significant benefits in taking the first step - LCC move to OW.
1. Limited overlap in domestic, international route structure with AMR --> lots of opportunity for codeshares, gain customers through reciprocal elite qualifying programs
2. MUCH larger domestic route structure for non-US OW members, making them more competitive
3. IAG could shore up LCC's financials by taking a minority position, more appropriate if they were on the same team. This could then drive LCC growth, where IAG, other OW carriers would benefit from additional domestic feeder flights in non-AMR cornerstone cities, enabling LCC to reconsider former hubs like LAS, PIT, expand No Ca presence, etc.
This could help counter at least some of the potential competitive implications of DL's recent minority investment in VS.
I liken it to a couple that is not ready for marriage, decide to move in together, see if they can make it work.
While there are MANY compelling reasons for AMR and LCC NOT to merge at this time, there appear to be some significant benefits in taking the first step - LCC move to OW.
1. Limited overlap in domestic, international route structure with AMR --> lots of opportunity for codeshares, gain customers through reciprocal elite qualifying programs
2. MUCH larger domestic route structure for non-US OW members, making them more competitive
3. IAG could shore up LCC's financials by taking a minority position, more appropriate if they were on the same team. This could then drive LCC growth, where IAG, other OW carriers would benefit from additional domestic feeder flights in non-AMR cornerstone cities, enabling LCC to reconsider former hubs like LAS, PIT, expand No Ca presence, etc.
This could help counter at least some of the potential competitive implications of DL's recent minority investment in VS.
I liken it to a couple that is not ready for marriage, decide to move in together, see if they can make it work.
Jan 18, 2013, 3:31 pm
#2875
Join Date: Oct 2010
Location: San Diego, Ca
Programs: AA 2MM LT PLT; AS MVP Gold75k; HHonors Diamond; IHG PLT
Posts: 3,502
I might agree that lcc needs aa more than aa needs llc, but oneworld def needs us more than us needs oneworld. I don't even think admittance into the Atlantic jv would make it worth it.
Us feeds a ton of business to star partners in Europe. They loose those and gain, what? Ba? They can't expand at lhr if they wAnted 2. Iberia and Spain are a joke compared to all the great European star members.
Also, dca is really the gem of us airways and they get a TON of big $$$$ ual and star spenders out of dca. I was on dca to phx with daughters and I was only us elite in first. All paid ual flyers. Moving to one world hurts us at dca. Even with the merger dca becomes less valuable than it currently is because of loss of ual ff.
Us feeds a ton of business to star partners in Europe. They loose those and gain, what? Ba? They can't expand at lhr if they wAnted 2. Iberia and Spain are a joke compared to all the great European star members.
Also, dca is really the gem of us airways and they get a TON of big $$$$ ual and star spenders out of dca. I was on dca to phx with daughters and I was only us elite in first. All paid ual flyers. Moving to one world hurts us at dca. Even with the merger dca becomes less valuable than it currently is because of loss of ual ff.
If *A membership is so wonderful, why is LCC one recession / oil price spike / labor action away from BK7? IAG could provide growth opportunities, capital to make LCC viable.
Jan 18, 2013, 3:41 pm
#2876
Join Date: Mar 2011
Location: NYC LAX RDU
Programs: US-Plt;Concierge key; American AAirpass; Delta Silver;Starwood - Platinum; Amex Cent
Posts: 710
You are assuming that BA, AB, CX, JL, newcomer QR, AA and AB partner EY will not more than compensate? How about AMR elites who have few options to earn EQM outside of cornerstone cities.
If *A membership is so wonderful, why is LCC one recession / oil price spike / labor action away from BK7? IAG could provide growth opportunities, capital to make LCC viable.
If *A membership is so wonderful, why is LCC one recession / oil price spike / labor action away from BK7? IAG could provide growth opportunities, capital to make LCC viable.
Oneworld adds nothing to us. Us could care less about Asia, the Middle East or loney non "cornerstone" elites. Star rules Europe and ual is a good partner in dca. That trumps anything one world can offer.
Jan 18, 2013, 4:48 pm
#2877
Join Date: Oct 2010
Location: San Diego, Ca
Programs: AA 2MM LT PLT; AS MVP Gold75k; HHonors Diamond; IHG PLT
Posts: 3,502
In case you haven't been paying attention:
AMR finalized a contract with the FA in Aug 12, APA in Nov 2012; included in both agreements were buyout clauses for those who were not interested in the deal, many senior pilots retired when they saw the writing on the wall. The only promises of pay raises are from Santa Claus Parker, based on his lowball offer to AMR, and the MOU written independently by the pilots, as a post-merge framework. AMR gate agents recently voted AGAINST establishing a union, AMR has begun hiring FA and pilots again.
LCC has gone almost 8 years since the merger, yet to come to an agreement with pilots and FAs, FA have authorized a work action. LCC will likely require yet another BK11 filing to impose contracts, once AMR tells Parker thanks but no thanks.
Jan 18, 2013, 5:37 pm
#2878
Join Date: Mar 2011
Location: NYC LAX RDU
Programs: US-Plt;Concierge key; American AAirpass; Delta Silver;Starwood - Platinum; Amex Cent
Posts: 710
How much do you care to wager?
In case you haven't been paying attention:
AMR finalized a contract with the FA in Aug 12, APA in Nov 2012; included in both agreements were buyout clauses for those who were not interested in the deal, many senior pilots retired when they saw the writing on the wall. The only promises of pay raises are from Santa Claus Parker, based on his lowball offer to AMR, and the MOU written independently by the pilots, as a post-merge framework. AMR gate agents recently voted AGAINST establishing a union, AMR has begun hiring FA and pilots again.
LCC has gone almost 8 years since the merger, yet to come to an agreement with pilots and FAs, FA have authorized a work action. LCC will likely require yet another BK11 filing to impose contracts, once AMR tells Parker thanks but no thanks.
In case you haven't been paying attention:
AMR finalized a contract with the FA in Aug 12, APA in Nov 2012; included in both agreements were buyout clauses for those who were not interested in the deal, many senior pilots retired when they saw the writing on the wall. The only promises of pay raises are from Santa Claus Parker, based on his lowball offer to AMR, and the MOU written independently by the pilots, as a post-merge framework. AMR gate agents recently voted AGAINST establishing a union, AMR has begun hiring FA and pilots again.
LCC has gone almost 8 years since the merger, yet to come to an agreement with pilots and FAs, FA have authorized a work action. LCC will likely require yet another BK11 filing to impose contracts, once AMR tells Parker thanks but no thanks.
Tiger mgt - who was the largest holder of us airways in 2000 before they went bankrupt said at their quarterly lunch today that merger would be completed by end of Jan with Parker in charge. Robertson said that if he hadn't sworn off airlines after the crash that he would 1) have gone big in us/awa merger and 2) Parker currently most competent airline CEO. But that's just Julian Robertson and I doubt he knows anything.
Jan 18, 2013, 6:24 pm
#2879
Join Date: Apr 2012
Location: LA
Programs: AAdvantage, CK, 4 MM; Marriott Lifetime PLT
Posts: 308
Tiger mgt - who was the largest holder of us airways in 2000 before they went bankrupt said at their quarterly lunch today that merger would be completed by end of Jan with Parker in charge. Robertson said that if he hadn't sworn off airlines after the crash that he would 1) have gone big in us/awa merger and 2) Parker currently most competent airline CEO. But that's just Julian Robertson and I doubt he knows anything.
Parker is the most competent airline CEO? LMAO. On his 5th merger attempt in 5 years. Still cannot integrate US and AWA after 7 years. As I posted previously, US finances is a house of cards. Parker needs this merger badly. If it doesn't happen, watch US's stock drop like a rock! Sorry but Parker reminds me so much of another Wall Street darling -- Bernie Ebbers (former CEO of Worldcom). We all know how that turned out.
morrisunc, reading your posts makes no sense. Your suggestion for AA to retreat from NYC -- the most prized aviation market in the world is a failed strategy! Just go ask the fools at US Airways.
Jan 18, 2013, 6:28 pm
#2880
Join Date: Apr 2012
Location: LA
Programs: AAdvantage, CK, 4 MM; Marriott Lifetime PLT
Posts: 308
Antitrust laws
For some posters who believe that regulatory approval is a slam dunk, or the idealistic fantasies that AA could've merged with NW a decade ago; or if AA doesn't merge with US, Delta can acquire US (not making this up just read the posts in this thread), just look at what EU regulators did this very week in the aviation industry (cargo) -- rejected UPS bid for TNT.