Rumor: AA wants to buy jetBlue
Aug 3, 2012, 3:34 pm
#1
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Rumor: AA wants to buy jetBlue
From unidentified pilot sources and the Dallas News: AA wants to buy jetBlue.
http://aviationblog.dallasnews.com/2...airlines.html/
I'm hoping it happens.
Here’s the gist, according to the circulating message:
A number of pilots had dinner with American’s senior vice president of operations Jim Ream and vice president of flight John Hale on July 26 in Los Angeles. During the discussions, the author of the message said he told the executives that he thought American would pursue JetBlue.
Ream responded, in the author’s paraphrasing, not Ream’s exact quotes:
“It is the desire of AAL to purchase JetBlue. This would be completed through a complex deal including debt, private equity and preferential shares. He explained that we are far along the road to negotiating this deal and the critical part is HAVING Contracts in place with LABOR. He further acknowledged that the same people that would be loaning us the money for Americans desired POR [plan of reorganization] were consolidating Americans debt. By doing this, they are buying debt at a discounted rate, gaining power on the UCC [unsecured creditors committee] and have little exposure for they know the financing is viable to emerge from BK [bankruptcy].”
A number of pilots had dinner with American’s senior vice president of operations Jim Ream and vice president of flight John Hale on July 26 in Los Angeles. During the discussions, the author of the message said he told the executives that he thought American would pursue JetBlue.
Ream responded, in the author’s paraphrasing, not Ream’s exact quotes:
“It is the desire of AAL to purchase JetBlue. This would be completed through a complex deal including debt, private equity and preferential shares. He explained that we are far along the road to negotiating this deal and the critical part is HAVING Contracts in place with LABOR. He further acknowledged that the same people that would be loaning us the money for Americans desired POR [plan of reorganization] were consolidating Americans debt. By doing this, they are buying debt at a discounted rate, gaining power on the UCC [unsecured creditors committee] and have little exposure for they know the financing is viable to emerge from BK [bankruptcy].”
I'm hoping it happens.
Aug 3, 2012, 3:37 pm
#2
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I don'tthink AA are currently in the financial position to do so, also how would they keep operating the nearly 100% leisure focussed B6 routes with a higher cost structure?
Aug 3, 2012, 3:39 pm
#3
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I would not oppose this at all.
Aug 3, 2012, 3:39 pm
#4
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This is the preferred option for AA's Sr. MGMT. I know from a trusted source that this is all but done.....the Pilot contract and approval is the remaining key.
Aug 3, 2012, 3:40 pm
#5
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Please please please please please. Though AA's ops at Terminal B in BOS are much preferable to B6 at C.
Aug 3, 2012, 3:50 pm
#6
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Answer: Lots and lots and lots of imprudent "investors" are willing to invest in airlines and lend them money. Billions of dollars worth.
If this were to happen, AA immediately vaults to the largest carrier at JFK and the largest carrier at BOS. AA would add lots of heft at LAX, SFO and Florida.
Aug 3, 2012, 3:53 pm
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Aug 3, 2012, 4:06 pm
#8
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Aug 3, 2012, 4:08 pm
#9
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Aug 3, 2012, 4:09 pm
#10
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Meantime, I read this as this stick, carrot or both to try to get the unions on side. There's nothing to say the deal can be completed, nor the airline be truly financially viable (ie enough to pay dividends) even if the stoooopid investors show up with barrows loads of OUR money.
Aug 3, 2012, 4:12 pm
#11
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I'm speculating about a speculation, gotta love FT
.
Aug 3, 2012, 4:13 pm
#12
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Reno air primarily served San Jose and Reno. Jet Blue serves major cities in airports that I would actually like to see more of an AA presence at. I would not exactly compare the two.
Aug 3, 2012, 4:19 pm
#13
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This would be an interesting alternative to US. I think it would go over better with a lot of current AA fliers, too.
Aug 3, 2012, 4:20 pm
#14
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Also speculating about speculation, but I think LGB would be a great locale for some American Eagle commuter flights. Halfway between OC and LA and you would really avoid a lot of the nightmare that is flying out of LAX.
Aug 3, 2012, 4:23 pm
#15
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Past results aren't very accurate predictors of the future, and mistakes that might have been made in previous acquistions are no reason not to try to make the same mistakes again.
