Delta taking over AA - impact on OneWorld ? [speculation]
Jan 17, 2012, 9:28 pm
#16
Join Date: Jan 2007
Location: Mostly AUS or rural England
Programs: BAEC redundant Bronze, AAdvantage Lifetime PLT, CO, WN, B6
Posts: 6,526
Jan 17, 2012, 11:17 pm
#17
Join Date: Jul 2010
Location: NYC, SLC, LAX
Programs: AA EXP, UA Plat
Posts: 3,952
I can't see Delta (a) getting regulatory approval without HUGE concessions and (b) a strategic reason for a merger besides simply swallowing up another competitor.
The main reasoning is that as it stands from the DL-NWA tie up, DL has a hub in basically every other US city.
ATL
CVG
DTW
MSP
NYC (JFK/LGA)
MEM
SLC
AA has hubs in:
MIA
ORD
DFW
JFK
LAX
This is simply too many hubs to operate sustainably. DL would almost inevitably shut 2 of 4 (keeping ORD): MEM, CVG, DTW, MSP
Consolidation would happen between MIA/ATL/DFW
NYC, SLC, LAX could be kept.
At that point, you're simply trading crap hubs like MEM for slots at more lucrative hubs like ORD - a good strategy in theory, but not one that would be best for DL at this point, based on what I know about their position.
Given the extremely strong DL AF KL tie up, a AA/DL would without a doubt stay in Skyteam. This would be extremely devastating to oneworld, as the only other North American player (US) has really quite crappy hubs, EVEN if they pulled them from *A to 1W. I can just see that PHX-HKG service
What is more likely, in my opinion, is that AA will emerge from CH11 independent. AMR will then proceed to look into ways it can strengthen its own position, likely in the form of an enhanced AA-AS partnership (instead of the current AS-DL tie up) or perhaps outright buyout, or, a AA-US merge, which would likely lead to AA closing CLT or PHL as a hub but taking significant advantage of the DCA slots. The combined airline would be named AA and would retain 1W membership.
I'd say, though, that it is most likely that AA will simply walk out of CH11 and continue business as usual.
The main reasoning is that as it stands from the DL-NWA tie up, DL has a hub in basically every other US city.
ATL
CVG
DTW
MSP
NYC (JFK/LGA)
MEM
SLC
AA has hubs in:
MIA
ORD
DFW
JFK
LAX
This is simply too many hubs to operate sustainably. DL would almost inevitably shut 2 of 4 (keeping ORD): MEM, CVG, DTW, MSP
Consolidation would happen between MIA/ATL/DFW
NYC, SLC, LAX could be kept.
At that point, you're simply trading crap hubs like MEM for slots at more lucrative hubs like ORD - a good strategy in theory, but not one that would be best for DL at this point, based on what I know about their position.
Given the extremely strong DL AF KL tie up, a AA/DL would without a doubt stay in Skyteam. This would be extremely devastating to oneworld, as the only other North American player (US) has really quite crappy hubs, EVEN if they pulled them from *A to 1W. I can just see that PHX-HKG service
What is more likely, in my opinion, is that AA will emerge from CH11 independent. AMR will then proceed to look into ways it can strengthen its own position, likely in the form of an enhanced AA-AS partnership (instead of the current AS-DL tie up) or perhaps outright buyout, or, a AA-US merge, which would likely lead to AA closing CLT or PHL as a hub but taking significant advantage of the DCA slots. The combined airline would be named AA and would retain 1W membership.
I'd say, though, that it is most likely that AA will simply walk out of CH11 and continue business as usual.
Jan 18, 2012, 3:22 am
#19
FlyerTalk Evangelist
Join Date: Aug 2002
Location: London
Programs: Mucci. Nothing else matters.
Posts: 38,644
... American has made clear that it will place high priority on its alliance relationships as it goes through this process, citing the great value it gains from oneworld notably on the North Atlantic under the antitrust immunity regime and, by implication, from its main partner, British Airways.
(The anti-trust benefits may be skewed with Americans passengers appreciating the alliance more than BAs. BA commercial director Drew Crawley remarked the largest growth on BA trans-Atlantic flights is from Americans frequent flyers taking BA-coded and BA-operated flights, essentially bypassing American except to earn frequent flyer miles. The largest growth for AA, however, is from BA selling codeshares on American-operated flights, indicating BA customers are still making BA their first point of call to book flights. Explanations could be that Americans passengers are finally availing themselves of BAs more extensive US destinations before ATI they could not earn frequent flyer miles on BAs US-UK flights and/or they prefer BAs service.)
(The anti-trust benefits may be skewed with Americans passengers appreciating the alliance more than BAs. BA commercial director Drew Crawley remarked the largest growth on BA trans-Atlantic flights is from Americans frequent flyers taking BA-coded and BA-operated flights, essentially bypassing American except to earn frequent flyer miles. The largest growth for AA, however, is from BA selling codeshares on American-operated flights, indicating BA customers are still making BA their first point of call to book flights. Explanations could be that Americans passengers are finally availing themselves of BAs more extensive US destinations before ATI they could not earn frequent flyer miles on BAs US-UK flights and/or they prefer BAs service.)
Jan 18, 2012, 3:58 am
#20
Fontaine d'honneur du Flyertalk
Join Date: Jul 2001
Location: Morbihan, France
Programs: Reine des Muccis de Pucci; Foreign Elitist (according to others)
Posts: 19,213
What I do wonder some days is whether people have come over to BA rather than fly AA of they can earn miles at BA - or have more gone to AA from BA for the same reasons?
That is about as speculative and without any substance as these rumours DL/AA but just as interesting.