sbm12

But when was the last time there was a fully successful merger. I think that the crew integration issues alone, not to mention fleet and route scheduling make it very hard to actually realize the savings that many of the C-men envision when these mergers are being negotiated.

If the holding company sat around and actually didn't do anything other than add code-sharing and slowly moved towards a common product they'd have a chance, but they still need to be careful to not upset too many elites on any one carrier while they standardize the offering. If you too away the sundae in CO F, for instance, you'd have a lot of upset elites (who are arguably high-rev) and their frustration might equal departure, so the money you save might end up hurting you.

ContinentalFan

I love it that this thread, just like the "Head On" commercial, keeps coming back.

senatorgirth

CO's merging of People Express and Texas International? Admittedly, these were buy-outs more than full merger. And, needless to day, labor/management relations were (shall we say?) a bit contentious...

J.Edward

Not sure what thread to put this in but it looks like Pardus and Bethune are going to the stockholders directly.

http://biz.yahoo.com/rb/071116/delta...rdus.html?.v=2

Anglo Large Clawed Otter

Bethune, eh? This only reinforces my conspiracy theory that it's all a machiavellian ploy to get CO into bed with UA by scaring the pants off of them (threatening DUAL).

pixpixpix

AA+CO . That's an interesting proposition. Has anyone any insight?

This was mentioned earlier

NRT, LHR, LAX, China - they'd get a lot of that with AA.

There is the slight problem of Dallas and Houston.

OPFlyer

It would be a HUGE problem.

entropy

AA/CO wouldn't happen. makes no sense whatsoever. AA brings some LHR slots, strong latin america, DFW, ORD and MIA.

They have "fleet commonality": 738, 757 (diff engines) 767 (-300) and 777 (diff engines). the MD80s are old...

Anglo Large Clawed Otter

Actually, I don't think DFW/IAH would be a huge problem. Sure, they're close together, but it's not like comparing ORD/CLE, where CLE would almost definitely lose hub status. DFW and IAH are both huge cities with roaring economies, which can both support fortress hubs (though IAH is more of a fortress than DFW, due to less LCC competition). I doubt any merged entity would axe one city in favor of the other. Both could be operated, and profitably, at that. Having two major hubs close together could also be convenient during irrops affecting only one such city, or when equipment swaps from one of the hubs become a necessity (due to MX). UA operates a fairly sizeable operation out of LAX, and a hub out of SFO...I have never heard anyone clamoring that they need to shut one down because they are too close to each other.

bspencerco

I like the idea of AA/CO myself, we'd get to do the Texas 2 step for extra segments/ MR's

AA certainly has the long haul birds CO needs, and I wouldn't be surprised to see the MadDog's all retired immediately on a merger. Or better yet, you could get rid of alot of RJ service to many smaller cities by combining service and lowering frequencies(of the combined companies) a bit!

J.Edward

I'm hard pressed to see the merit in this one.

AA does not have a large Asian presence (beyond NRT and PVG) in addition to a potential toxic mix of labor/management relations. Ditto for the corporate tone from Aprey & Kellner.

The route structure, while by no means the sole deciding factor for a merger but an important one nonetheless, overlap horribly and no new synergies (or whatever the BS word is) would be realized.

LHR?
CO can buy slots.

Latin America?
CO already has substantial service.

More planes?
They're cheaper ways to acquire planes than merging...such as buying more from the manufactures.

Asia?
More NRT slots & PVG...both of which CO already (or will soon be) serves.

Domestic Overlap?
Horrible.

FF reasons to suggest a merger?
Not a major consideration.

HeathrowGuy

The problem with the holding company concept is the union scope clause provisions -- you'd need the unions to agree to waivers to allow the "other airline" to continue operating its aircraft with its staff, or else watch the industrial action fireworks begin.

Hartmann

I am actually a person who likes the MadDogs. Offering 2-3 seating is great for couples traveling together who do not want a middle seat.

pbarnette

But, I look at it this way:

LHR: I think CO has bought about as many slots as will be readily available at anything approaching a reasonable price.

Latin America: Why not just expand service? If there is overlap, then perhaps the markets can support the additional service. Merging allows them to perhaps dominate the market.

More Planes: It may not be cheaper, but it is faster to merge, so if their are enough other ways to add value, then the cost of those planes doesn't seem so high.

Asia: As with LA, since everyone is falling all over themselves to get in there, I don't see how overlap is that big of a deal. Don't forget that AA brings in a West Coast market that I can't imagine CO even scratches.

Domestic Overlap: Horrible? I don't get this. Everything I read suggests that most of these mergers would be with an eye toward reducing domestic capacity. Overlap just makes it that much easier to choose which routes to cut. If a deal is shot down, it won't be because their is too much domestic overlap.

I mean, all of these arguments against the merger hold for pretty much any potential tie-up, to a greater or lesser extent. But, if the dominos start to fall, everyone will have to choose their partners, and it could end up being CO/AA (or NW or UA or US) regardless of how much "sense" it makes.

ssullivan

to an AA/CO merger. I see NOTHING positive about that combination.