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 30, 2013, 1:19 pm
#3091
Join Date: Jun 2011
Location: BOS
Programs: AA EXP
Posts: 7,710
Perhaps, but there were similar "reputable" reports of bankruptcy for almost a decade before the filing and "reputable" reports of LCC merging with one major airline or another for just as long. The rumors may be true, but they still go well with salt.
Jan 30, 2013, 2:38 pm
#3092
Join Date: Oct 2010
Location: San Diego, Ca
Programs: AA 2MM LT PLT; AS MVP Gold75k; HHonors Diamond; IHG PLT
Posts: 3,503
1. AMR is the more desirable asset, will be in a stronger negotiating position post BK, difficult to see any advantages in a deal before exiting.
2. Most M&A deals include fat consultancy contracts, golden parachutes for management and consultants on both sides, to assure their cooperation and support during the transition - particularly those who will not be actively involved in running the new entity. For senior staff, such deals are worth MUCH more than any BK bonus.
3. It is reasonable to expect that much of the AMR BOD, management team will be replaced post BK. Such short-timers are anxious to complete the proceedings as soon as possible, move on.
4. A pre-exit deal will significantly complicate the proceedings, significantly delay the exit.
Jan 30, 2013, 4:04 pm
#3093
Join Date: Mar 2011
Location: NYC LAX RDU
Programs: US-Plt;Concierge key; American AAirpass; Delta Silver;Starwood - Platinum; Amex Cent
Posts: 710
I happen to agree that a deal is more likely post BK, highly doubt that mgmt bonuses are a factor.
1. AMR is the more desirable asset, will be in a stronger negotiating position post BK, difficult to see any advantages in a deal before exiting.
2. Most M&A deals include fat consultancy contracts, golden parachutes for management and consultants on both sides, to assure their cooperation and support during the transition - particularly those who will not be actively involved in running the new entity. For senior staff, such deals are worth MUCH more than any BK bonus.
3. It is reasonable to expect that much of the AMR BOD, management team will be replaced post BK. Such short-timers are anxious to complete the proceedings as soon as possible, move on.
4. A pre-exit deal will significantly complicate the proceedings, significantly delay the exit.
1. AMR is the more desirable asset, will be in a stronger negotiating position post BK, difficult to see any advantages in a deal before exiting.
2. Most M&A deals include fat consultancy contracts, golden parachutes for management and consultants on both sides, to assure their cooperation and support during the transition - particularly those who will not be actively involved in running the new entity. For senior staff, such deals are worth MUCH more than any BK bonus.
3. It is reasonable to expect that much of the AMR BOD, management team will be replaced post BK. Such short-timers are anxious to complete the proceedings as soon as possible, move on.
4. A pre-exit deal will significantly complicate the proceedings, significantly delay the exit.
Dreaming. Absolutely no way ucc or unions will allow Horton to be in control after bk. Merger will happen and I seriously doubt Horton will even get a token place on the board - though I do think the AMR board is sympathetic to Horton and will try.
Jan 30, 2013, 4:06 pm
#3094
Join Date: Mar 2011
Location: NYC LAX RDU
Programs: US-Plt;Concierge key; American AAirpass; Delta Silver;Starwood - Platinum; Amex Cent
Posts: 710
I happen to agree that a deal is more likely post BK, highly doubt that mgmt bonuses are a factor.
1. AMR is the more desirable asset, will be in a stronger negotiating position post BK, difficult to see any advantages in a deal before exiting.
2. Most M&A deals include fat consultancy contracts, golden parachutes for management and consultants on both sides, to assure their cooperation and support during the transition - particularly those who will not be actively involved in running the new entity. For senior staff, such deals are worth MUCH more than any BK bonus.
3. It is reasonable to expect that much of the AMR BOD, management team will be replaced post BK. Such short-timers are anxious to complete the proceedings as soon as possible, move on.
4. A pre-exit deal will significantly complicate the proceedings, significantly delay the exit.
1. AMR is the more desirable asset, will be in a stronger negotiating position post BK, difficult to see any advantages in a deal before exiting.
2. Most M&A deals include fat consultancy contracts, golden parachutes for management and consultants on both sides, to assure their cooperation and support during the transition - particularly those who will not be actively involved in running the new entity. For senior staff, such deals are worth MUCH more than any BK bonus.
3. It is reasonable to expect that much of the AMR BOD, management team will be replaced post BK. Such short-timers are anxious to complete the proceedings as soon as possible, move on.
4. A pre-exit deal will significantly complicate the proceedings, significantly delay the exit.
http://aviationblog.dallasnews.com/2...a-merger.html/
Jan 30, 2013, 4:13 pm
#3095
Join Date: Oct 2010
Location: San Diego, Ca
Programs: AA 2MM LT PLT; AS MVP Gold75k; HHonors Diamond; IHG PLT
Posts: 3,503
Who said ANYTHING about Horton running the show?
Jan 30, 2013, 4:18 pm
#3096
Join Date: Oct 2010
Location: San Diego, Ca
Programs: AA 2MM LT PLT; AS MVP Gold75k; HHonors Diamond; IHG PLT
Posts: 3,503
Jan 30, 2013, 5:02 pm
#3097
Join Date: Feb 2011
Programs: AA
Posts: 56
What analysts and media are saying about the merging are irrelevant. There is nothing close to a deal right now. The only thing settled is the MOU, which is agreed upon by both AA and LCC unions. The MOU will be used by AA management and UCC to evaluate the labor cost in the merged company. The most important thing is the equity split ratio between AMR and LCC in the merged company. Without that information, AMR BoD or UCC cannot cast votes on merging at all. If you want to buy a house, would you go ahead to sign the contract without knowing the price you need to pay?
The BK judge will have the final say on almost everything. Horton and AMR management can file the restructuring plan anytime by next May. They can do so without BoD or UCC approval and the judge could approve it if he believes the plan is reasonable and fair.
The AMR bondholders who constantly leaked misleading information to the media probably are Parker and other LCC investors (who bought AMR bonds after the BK filing).
The BK judge will have the final say on almost everything. Horton and AMR management can file the restructuring plan anytime by next May. They can do so without BoD or UCC approval and the judge could approve it if he believes the plan is reasonable and fair.
The AMR bondholders who constantly leaked misleading information to the media probably are Parker and other LCC investors (who bought AMR bonds after the BK filing).
Jan 30, 2013, 5:21 pm
#3098
Join Date: Oct 2010
Location: San Diego, Ca
Programs: AA 2MM LT PLT; AS MVP Gold75k; HHonors Diamond; IHG PLT
Posts: 3,503
What analysts and media are saying about the merging are irrelevant. There is nothing close to a deal right now. The only thing settled is the MOU, which is agreed upon by both AA and LCC unions. The MOU will be used by AA management and UCC to evaluate the labor cost in the merged company. The most important thing is the equity split ratio between AMR and LCC in the merged company. Without that information, AMR BoD or UCC cannot cast votes on merging at all. If you want to buy a house, would you go ahead to sign the contract without knowing the price you need to pay?
The BK judge will have the final say on almost everything. Horton and AMR management can file the restructuring plan anytime by next May. They can do so without BoD or UCC approval and the judge could approve it if he believes the plan is reasonable and fair.
The AMR bondholders who constantly leaked misleading information to the media probably are Parker and other LCC investors (who bought AMR bonds after the BK filing).
The BK judge will have the final say on almost everything. Horton and AMR management can file the restructuring plan anytime by next May. They can do so without BoD or UCC approval and the judge could approve it if he believes the plan is reasonable and fair.
The AMR bondholders who constantly leaked misleading information to the media probably are Parker and other LCC investors (who bought AMR bonds after the BK filing).
Jan 30, 2013, 8:10 pm
#3099
Join Date: Sep 2009
Location: MSN
Programs: AA Plat 1MM, HH GLD, Hyatt Diamond, SPG GLD
Posts: 325
That that is based on what data? Until May, AA mgmt is still in the drivers seat. From what I understand UCC vote is weighted by claim amount and not just a simple majority of votes. The duty of the UCC member is to extract that largest amount of value from whatever the post Chp 11 entity looks like. I can assure you that the LCC shareholders are going to get ran over in this process. Parker is desperate for AA, and will horribly overpay.
Jan 30, 2013, 9:10 pm
#3100
Join Date: Sep 2009
Location: New York
Programs: AA, WN, BA, SPG Gold, Marriott Gold, Club Carlson Gold, Hyatt Diamond
Posts: 313
The general consensus among AA employees that I have met is that the merger is going to happen. The unions are working on seniority issues, as if the merger is happening. The bondholders and BK judge will have the ultimate say, and I just can't see AA management making a promising case to continue as a stand alone company. AA has been shrinking the past few years, and their fixed costs and debt load are crushing them. The airline industry consolidation that occurred this past decade is finally catching up to AA, and US Air actually plugs some of the gaps that AA had in its flight map.
Personally, I don't like the merger, especially after seeing the issues that Delta and United had with NW and Continental, but from the AA perspective it may be their best option.
Personally, I don't like the merger, especially after seeing the issues that Delta and United had with NW and Continental, but from the AA perspective it may be their best option.
Jan 30, 2013, 10:46 pm
#3101
Join Date: Nov 2003
Location: ORD / MDW / FLL
Programs: DL DM/1MM, AA EXP, SPG Platinum, Hyatt Platinum, Marriott Platinum
Posts: 2,295
While the UA/CO merger has been a bit of a mess, I'm not sure I understand your comments about the DL/NW merger. By most accounts the merger created a stronger airline. Loads are at all-time highs, the airline if profitable, the hard and soft products continue to receive upgrades and the airline is performing well by on-time performance metrics, number of complaints and mishandled baggage. If, and it's a big if, a US/AA merger goes this well it would be a success.
Jan 31, 2013, 1:10 am
#3102
Join Date: Jan 2013
Posts: 2
Any thoughts on the FF programs? Will they stay in American's network or US Airways? I fly Alaska and United and have been accruing miles in both AA and US.
Jan 31, 2013, 1:30 am
#3103
FlyerTalk Evangelist
Join Date: Jul 2000
Location: in the vicinity of SFO
Programs: AA 2MM (LT-PLT, PPro for this year)
Posts: 19,781
What that means for the FF programs, and for earning/burning options with non-alliance partners (like Alaska)... who knows?
It's also pretty well guaranteed that the frequent flier program will still be called "AAdvantage," and will nominally be a continuation of the current program. To what degree the program will be changed or even completely restructured in a practical sense is anybody's guess (very much literally -- even if there are existing proposals on the table on each side, without knowing HOW the terms of the merger and exit from BK go down, and in which order, who will make those decisions can likely vary.)
Of course, the risk of FF program changes is there with (or ahead of) the departure from BK even if the merger doesn't happen. Unlike the case of the merger, there is probably existing management inside AA with a variety of ideas on how much they can get away with copying the customer-unfriendly changes from UA and DL over the past couple of years...
Jan 31, 2013, 3:11 am
#3104
FlyerTalk Evangelist
Join Date: Jan 2007
Location: BOS/UTH
Programs: AA LT PLT; QR GLD; Bonvoy LT TIT
Posts: 12,764
Jan 31, 2013, 3:14 am
#3105
Join Date: Aug 2011
Posts: 1,421
In terms of 7, Dougie did what every legacy is doing - focusing all resources on hubs and abandoning everything else -- DL is running a hub at LGA/JFK while US is doing likewise at DCA.
Hasn't AA close FLs in DFW and MIA?
In terms of ads, does not AA put ads on napkins in F? Perhaps tackier than tray tables in Y
although I'm sure US does both.
Wake up and smell the coffee alert: At some point FAs will have ads on the back of their clothing with the upside they will be required to walk up and down the aisle every 15 minutes. The strategy of all the legacies and most airlines today is nickel and dime the customer, generate ancillary revenue everywhere - i.e. - get on CX and you have to watch three ads before your movie starts in F!
As to the rest, longtime head of AA International Service during the heyday of its industry leading product in the 80s and 90s was David Banmiller, who came over from Air Cal. When Willie Walsh was CEO of EI he turned it into a hybrid low cost carrier taking intra-European ops into all Y. Steve Wolf was CEO of Flying Tigers the cargo airline before taking over UA and US where he focused on premium product enhancements. The CEO of Starwood hotels came from Coors. The CEO of Cathay Pacific ran Swire's Coke distribution in China for 15 years before coming back to CX. The CEO of Spirit was former CMO of US when it was a full service carrier and previously worked at AA and NW.
The continued rhetoric that because Parker did X with his current hand of cards, he will play it the same way is pretty low level thinking.
Did they replace the Dom with Coors at the St. Regis? Did WW take out First Class when he got to BA?
Hasn't AA close FLs in DFW and MIA?
In terms of ads, does not AA put ads on napkins in F? Perhaps tackier than tray tables in Y
although I'm sure US does both.Wake up and smell the coffee alert: At some point FAs will have ads on the back of their clothing with the upside they will be required to walk up and down the aisle every 15 minutes.
The strategy of all the legacies and most airlines today is nickel and dime the customer, generate ancillary revenue everywhere - i.e. - get on CX and you have to watch three ads before your movie starts in F! As to the rest, longtime head of AA International Service during the heyday of its industry leading product in the 80s and 90s was David Banmiller, who came over from Air Cal. When Willie Walsh was CEO of EI he turned it into a hybrid low cost carrier taking intra-European ops into all Y. Steve Wolf was CEO of Flying Tigers the cargo airline before taking over UA and US where he focused on premium product enhancements. The CEO of Starwood hotels came from Coors. The CEO of Cathay Pacific ran Swire's Coke distribution in China for 15 years before coming back to CX. The CEO of Spirit was former CMO of US when it was a full service carrier and previously worked at AA and NW.
The continued rhetoric that because Parker did X with his current hand of cards, he will play it the same way is pretty low level thinking.
Did they replace the Dom with Coors at the St. Regis? Did WW take out First Class when he got to BA?
also Slosar is experimenting with cutting the full meal service on regional routes-he keeps saying cathay will never create an LCC-and that statement is scary because it means Cathay will become the LCC itself and its already begun on regional routes!!
hopefully the same does not happen to AA post merger-after all these improvement a merger with US airways seems like all is gone to waste-and I hope they do not tamper with AADVANTAGE!!