ARCHIVE: US LCC & AMR / AA Takeover / merger Rumors and Discussion (consolidated)
 

Glad to see AA wants to stand alone, but Horton remarks a bit odd, even knowing the way media can shape the story without the fuller context.

(extract from Charlotte Observer quoting a Dallas newspaper)

"But Horton, in comments made to the Dallas Morning News editorial board on Thursday, seemed to dismiss any suggestion of a merger.
"This is not US Airways' first attempt at this. This is a small company very strategically limited, I would argue - not any international flying, hubs of less strategic importance," Horton said.
His remarks came a day after American issued a broad outline of its plan to cut costs and exit bankruptcy court as a standalone carrier. The Fort Worth-based carrier will seek to cut 13,000 jobs, about one out of every six workers, and to terminate its employee pension plan. It also plans to overhaul its fleet with more efficient planes, restructure leases and grow revenue by an average of $1 billion a year, partially by increasing departures from key cities.
On Thursday, Horton pointed to US Airways' checkered past in the merger arena.
"This will be their fourth try at this: twice for United, once for Delta while they were restructuring, now American. I would argue that this will be every bit as successful as their prior tries," Horton told the Dallas Morning News. "I'm not sure what's in the water out there in Phoenix. Maybe it's the cactus. I don't know what it is."

He's pretty confident. :D

He has to be, or at least put on a confident face.

I'll stage an Occupy DFW protest if US comes anywhere near AA.

+ 1

US is the one company I've consistently boycotted, even when their fares were significantly lower than competitors'. Worst airline ever.

Actually its stupidity. The message should be AA management is open to combinations that strengthen its position. AA is a premier brand in the aviation world and while we believe we can go it alone, we also understand that there could be opportunities to grow via merger or acquisition. Under my leadership I will always look at all options that secure AA's future for investors, employees and customers.

AA should hire you!!!

;)

Are you just saying what you think Horton should've said here, or are you angling for his job?

I mean at least he could say, "We would like to merge with our key JV partner IAG as soon as we can convince the government on the benefits of allowing majority shareholding by foreign entities."

BA has had three key U.S. partners - first was their Marketing Marriage with UA, followed by their investment in US and then AA, which they seriously considered ditching at one point for CO.

If AA can't right its ship why wouldn't BA look for more stable alternatives? I think Horton and crew perhaps take for granted that BA/IAG will always be there unless A) they are a strong, profitable carrier or B) they are in fact part of IAG.

He also is a bit off base about US internationally...No doubt AA is larger than US internationally, yet US send their metal to more cities in Europe than AA. It is odd that US can be found in secondary European markets like VCE, LIS, at one time ATH (some admittedly seasonal)...most of us would be in shock if AA started serving those cities.

If you took out AA's LHR ops I wonder how their European network/revenue/RPMs would look?

well said!

He comes off a bit cocky and brash, but Wall Street looooves cocky and brash.

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Rude and unprofessional. Profitability in Tempe vs unprofitability in Dallas.

How's
Your European network AA?

Wall Street likes Revenue Growth/Profit Growth/Cost and Risk Control

I'm sure AA is open to combinations - on their own terms post-bankruptcy.

But right now AA is fighting for it's life. You don't merge in bankruptcy, you get bought out. And then you become part of US's LCC model.

No thanks.

How about we occupy the ACs systemwide?

Actually I rode US for the first time post merger recently, in F SEA-PHL. I must confess, it wasn't bad at all.

Those comments from Horton are, in a word, dumb. He's in no position to burn bridges, even if it is Doug he's talking about.

They haven't said that. Tilton and Grinstein both made it clear they would look at combinations that made sense.

I hope it doesn't occur as a US Elite, the hub mismatch is one huge issue, the focus on domestic versus international another. It will be exceedingly difficult to get these new pilots and FAs onboard as the post-merger integration is still an issue (ask a US flier what East-West is). Picking up the European, Asian and LatAm routes would be nice, but not nice enough to justify purchasing AA. It would make a lot more sense for US to simply try and acquire the routes they want like was done by various carriers before when rivals when bankrupt. That and they might consider acquiring any jets and gates that they want. Having worked in M&A the chance of post-merger success is small.

The situation is very different now with the JV/ATI which AA has with IAG. Would BA invest or do something again with US? Possibly, but I don't think BA at this point in time is too interested in US even remotely. If anything they are more interested in investing in B6.



Right, as if neither HP nor US didn't go through BK to cut costs...:rolleyes:


AA has indeed said that.

"AMR Corp (AAMRQ).’s American Airlines plans to exit bankruptcy as a stand-alone carrier and would consider making acquisitions afterward, Chief Executive Officer Tom Horton said. "

http://www.bloomberg.com/news/2012-0...ut-merger.html

Can't agree with you more that a merger senseless..

IF AA can pull it off and come out of it, there is really nothing to gain from an alliance with US and the issues that you outlined above may wind up sinking both of them!!

In my humble opinion, you don't have to be #1 - you have to be the best and put out a product that people are willing to buy!!

Can AA do that?? Anyone's guess...

Unfortunately then he is not being very clear about it…

"Henry Harteveldt, an aviation analyst with the Atmosphere Group, called Horton's remarks "unnecessarily arrogant." But he did say that American is serious about not merging.

"Mr. Horton and his team absolutely want to see American remain independent. American doesn't want to be asked to dance," Harteveldt said."

Read more here: http://www.charlotteobserver.com/201...#storylink=cpy

Horton is dead on the mark. I applaud what he said. Everyone who is bagging on him are asking him to be like Arpey. You want a serious leader? There you go. He has said in no uncertain terms "This is what we are going to do, and this is how we are going to do it." For all you people that pine for Crandall, well, that's exactly what he would have said being handed a bankrupt airline.

How is his plan different than Aprey's? It's the same plan with reduced labor costs through Chapter 11. In fact he refers to Arpey in a recent AAmerican Way as "my great friend Gerard Arpey." Seems hardly like somebody who is distancing himself from the AArpey doctrine.

Crandall and Arpey/Horton IMO have little in common at least so far. I do think if Crandall had ever taken AA to Chap 11 he would have gone to a $1 salary - just as a show of solidarity - did Horton do that?

Anyway, nothing very innovative that has come out - no two-tier labor structure, no innovative twists of frequent flier programs, no innovative flying plans, no innovative ancillary revenue strategies, at least so far.

The attitude has change. Arpey is a mild mannered wall flower. Horton is a confident go getter.

Agreed on that. Unfortunately he doesn't seem to have anything new to say and certainly he has done nothing that would engender support from the troops.

While he may be "fired up" according to the Dallas Morning News blog, I'm not sure the 1 in 7 employees who will be going or the 6 in 7 who will be staying are quite as pumped up.

It's early days, and he certainly needs a concrete plan. I am more confident now that will come. Time will tell.

I hope so. Would like my Lifetime Plat to stay around for while. As a pax, I am content with AA as is, AAdvantage as is. Hope the plan works...

Me too. I just found AA last year after 10+ at UA and one idiotic year at DL. The service I have gotten has been so far above what I had seen elsewhere, I would be really despondent to lose it now.

In a Chapter 11 filing essentially creditors seize control of the company. Any strategic moves need to be approved first by the creditors' committee and then the Court. If US (or anyother potential acquirer) makes a compeling deal to the creditors Horton won't be able to stop it.

That Arizona water might start smelling like swamp water to AA management.

The US Y product is actually not that bad. I flew SFO-PHL and a few times and they did a beverage service 3 times and the seats are more comfortable than AA Y. The most I get on AA twice on a transcon. Yes, US used to suck in the past, but they suck less now.

The real fear is the change in the AAdvantage program. Sadly, I strongly feel that status and upgrades based on miles flown is going to go away very soon. It was great while it lasted.

The bright side is that US flies to TLV. Who knows whether US will keep the route our not, though, assuming they buy AA.

Flew quite a bit on US last year and the planes I flew on (most of them admittedly operated by Republic) were new Embraer 170/175's with 4 across seating, and they were really pretty nice. But the feeling was of a low cost carrier with not so low fares. The typical US flight has one gate agent working it, who has to do everything. It just seems like they are always running to catch up. One family with a stroller to check and you might not push back on time. But I have to say they didn't suck - unless you had a problem in PHL. With AA it feels to me like they have a little more to work with, talent wise and personnel-wise. Of course, this may change very soon.

Cocky and Bankrupt. Interesting combination.

I'm surprised no one has made a joke out of this yet.
Who knows what Doug would try to pull next but I'm pretty sure he's drinking too much of that 1 dollar water :D

You can't put a half truth and tell it as the whole truth.
Nice way to spin it ;)
US used 2 Chapter 11 bankruptcy in 2 years to get that profitability.
We're only through our 1st Chapter 11, come back later :p

And at the same time, I can say, where are the Asian flights US? Ha:D

+1!!!!! I live in Philly and could have a much simpler flight life with way fewer connections if I used US. Every time I do use them, luggage is lost or an horrendous delay shows up.

In the days when they were called Allegheny, locally we referred to them as "Agony" Airlines for all the ick they added to life.

Plus, they kept flying into the mountains near Pittsburgh!

This is a great point. It just underscores using 11 to cut employee wages, benefits and increasing productivity doesn't work if you don't have a sound strategy.

The current US Airways is a far cry from Allegheny Airlines. I remember the CVR-580's
and I think they flew something called a Nord-262. I don't remember a PIT crash but a few birds went down near Erie.

Hence my referring to it as USless :D