Regarding the TPG bid this is not a surprise because for the most part TPG has had pretty good success with their Airline Investments minus YX. However Parker's offer sheet to the Unions could be a point of contention.
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Originally Posted by newyorkgeorge
(Post 18674614)
I still question whether B6 and particularly AS would want to be acquired by AA. AS has a very special and profitable market niche with great codeshare arrangements. In fact, in some other thread (maybe I read it on airliners.net) someone called AS the slut of the air because AS will hook up with anyone.
About B6, though: B6 brings a fair amount of market share in BOS and JFK plus the JFK slots. Big problem is the very low wage structure at B6. Although jetBlue pays its pilots more money than US East pays its A320 and E190 pilots, B6 is very stingy with everyone else and thus B6 enjoys overall labor costs that are far below even the bargain-basement, bankruptcy-imposed-contract labor costs at US. That alone would make integration of B6 into AA a rather expensive proposition. |
Originally Posted by FWAAA
(Post 18675293)
I agree with you about AS, and that's why I didn't mention AS. Alaska is a low-cost, high-profit, well-run airline and I don't see AS marrying anyone willingly. That doesn't mean someone won't try to grab her by the hair and drag her back to their cave - but she won't be a willing participant, IMO. It would take a successful hostile takeover, and when's the last time that happened in the airline industry?
About B6, though: B6 brings a fair amount of market share in BOS and JFK plus the JFK slots. Big problem is the very low wage structure at B6. Although jetBlue pays its pilots more money than US East pays its A320 and E190 pilots, B6 is very stingy with everyone else and thus B6 enjoys overall labor costs that are far below even the bargain-basement, bankruptcy-imposed-contract labor costs at US. That alone would make integration of B6 into AA a rather expensive proposition. That said, I think B6 would like to implement a full code sharing with AA, "maybe" even join OW. For AA, a JFK hookup could bring in lucrative connecting traffic. Even if you an International business traveler from RIC or BUF you are probably going to be connecting to a hub somewhere on likely a barbie jet. So the initial domestic portion on B6 remains attractive. However, there would need to be a better connection system at JFK. |
Originally Posted by FWAAA
(Post 18675293)
About B6, though: B6 brings a fair amount of market share in BOS and JFK plus the JFK slots. Big problem is the very low wage structure at B6. Although jetBlue pays its pilots more money than US East pays its A320 and E190 pilots, B6 is very stingy with everyone else and thus B6 enjoys overall labor costs that are far below even the bargain-basement, bankruptcy-imposed-contract labor costs at US. That alone would make integration of B6 into AA a rather expensive proposition.
I'm under the impression there is a lot of flexibility due to the bankruptcy filing. |
In an interview Wednesday, US Airways Chief Financial Officer Derek Kerr said that if the carrier makes an offer for American's parent company, AMR Corp., it would not be contingent on financing. But if it needs cash for the merger, it has access to it. Read more here: http://www.star-telegram.com/2012/05...#storylink=cpy |
AssumingUS-AA goes ahead, what will the eventual hubs be?
DFW, PHL, CLT, ORD, MIA and PHX. Surely with PHX you would not need any west coast base? |
Originally Posted by GRALISTAIR
(Post 18679338)
AssumingUS-AA goes ahead, what will the eventual hubs be?
DFW, PHL, CLT, ORD, MIA and PHX. Surely with PHX you would not need any west coast base? PHX would likely not continue at its present size, however, as quite a bit of its traffic is connecting and not O&D. For instance, US connects TUS-LAX traffic at PHX and connects TUS-JAX traffic at PHX and CLT (double connection thanks to the "barbell" hub setup at US). AA would fly TUS nonstop from LAX and flies TUS-JAX traffic via single connection at DFW (avoiding the double connection on US). There are many other examples. The importance of PHX declines significantly when US and AA combine. |
Originally Posted by GRALISTAIR
(Post 18679338)
AssumingUS-AA goes ahead, what will the eventual hubs be?
DFW, PHL, CLT, ORD, MIA and PHX. Surely with PHX you would not need any west coast base? That's really the only way an LCC-AMR merger makes financial sense, LCC's low wage employees, combined with the core of AA's network operated by the least expensive planes in AA's fleet. AA's employees/retirees and US's customers would be out of luck, both companies' unsecured debt would also still need to be written down substantially. |
Originally Posted by GRALISTAIR
(Post 18679338)
AssumingUS-AA goes ahead, what will the eventual hubs be?
DFW, PHL, CLT, ORD, MIA and PHX. Surely with PHX you would not need any west coast base? |
Originally Posted by LovePrunes
(Post 18679557)
Not that any of us speculating have any crystal ball, but if you add in LA, Chicago, Dallas and Miami to USAir, I would think US would keep PHL and CLT but not need much else. Remember how solid America West was at Las Vegas? Wouldn't be surprised to see PHX go away. They already promised to move HQ to TX, didn't they, if the merger happened?
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Originally Posted by Ambraciot
(Post 18679420)
AA's employees/retirees and US's customers would be out of luck, both companies' unsecured debt would also still need to be written down substantially.
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Originally Posted by 3Cforme
(Post 18679966)
That certainly expresses a curious idea about how unionized work forces would be joined under the Railway Labor Act and other relevant statutes.
I don't think LCC is really going to sign a contract with the AA unions that guarantees future levels of employment will resemble the current ones or allow the east and west groups to integrate with AA mainline with comparable compensation. |
Originally Posted by Ambraciot
(Post 18680219)
You simply keep the current four sub carriers separate and cut back the operations allocated to the two current AMR carriers until they eventually disappear.
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Originally Posted by FWAAA
(Post 18679417)
If US and AA combine, LAX would continue to be at the center of the airline's west coast operation. International O&D from PHX is miniscule compared to LAX.
PHX would likely not continue at its present size, however, as quite a bit of its traffic is connecting and not O&D. For instance, US connects TUS-LAX traffic at PHX and connects TUS-JAX traffic at PHX and CLT (double connection thanks to the "barbell" hub setup at US). AA would fly TUS nonstop from LAX and flies TUS-JAX traffic via single connection at DFW (avoiding the double connection on US). There are many other examples. The importance of PHX declines significantly when US and AA combine. |
I don't believe AA's cash position has fallen since filing for BK protection, and in fact I believe it has increased nominally. So, when you can possibly tap into the $4bn of cash sitting on AA's balance sheet, and the likelihood that a US offer without firm financing behind won't be taken seriously, this is not a surprise.. US' 1Q2012 10Q indicates a cash position of $2.2bn.
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