texd

Perhaps it should go the other way. I have no idea why an oil co would want to buy an airline, but just wanted to point out that XOM has the cash on hand to buy DL, NW, US, AA, UA, CO, B6, and WN (ALL of them, not just each of them) for CASH (no stock), and still have over half their cash left over.

slippahs

FWIW, here's CO's website dedicated to this subject of mergers...
http://www.co-industryconsolidation.com/index.php

Not much in terms of substance but shows CO's really thinking hard about this one.

ndhapple

Story in today's FT that AA/CO would be part of a three way alliance involving anti-trust immunity with BA (and most likely Iberia). It would finally make OneWorld competitive with Star and SkyTeam in TATL service. Dealing with Heathrow is a whole other story.

http://www.ft.com/cms/s/0/60f9ff18-1...nclick_check=1

dvs7310

I don't think I'd be too excited to have CO leave Skyteam in favor of Oneworld, but IF CO joined Oneworld, would first class mileage redemptions finally be allowed for carriers like CX and JL? That's currently the only reason I feed miles into my AA account.

la2moscow

As a former AA Executive Platinum and current Continental Platinum, here are my thoughts:

1. AA treats its elites well: better availability to redeem miles and system-wide upgrades for its top tier. In addition, by having to earn upgrades in addition to your status, it rewards the people who spend the most. Flying more than 100,000 miles on Continental goes un-recognized. Perhaps joining OneWorld will provide greater availability for Continental OnePass elites.

2. Transatlantic crossings can be tricky. At least when I was ExecPlat, I had to fly AA across the Atlantic (BA flights would earn miles, but not elite qualification points). That just becomes painful -- the purpose of an alliance is to open up availability. Sometimes the BA flight was the only one with business seats available, but I would forego elite qualification miles.

3. European connections will be painful: connecting at LHR is a nightmare. With the only other connection in Spain, there is nothing in the center of Europe. (Paris to Florence through London?)

With overlapping hubs in NY and Texas, I only see less availability and higher prices. Same for LatAm. In Europe, everything will be forced to LHR and BA. This does not sound good to me -- but it may get the cost savings that AA and CAL need while retaining their independent status. Time to switch to FlyingBlue!

dan1431

While loosing AF/KL would be a little annoying, CO staying independant is worth that loss IMHO.

Dan

Anglo Large Clawed Otter

Losing AF/KL is fine by me. Losing AMS as a viable connection point is the true kicker, IMO. The convenience-factor of AMS cannot be overstated. I doubt I would feel comfortable at any other major European airport with a 45-Min Connection Time.

MBM3

I agree with you on this one, but enjoy the thought of a potentially new European hub at someplace like BRU and helping build up Brussels Airlines for intra-european travel.

Anglo Large Clawed Otter

I totally forgot about BRU. I wonder if CO might consider a Codeshare agreement with Jet Airways as well, as they intend to build up a presence in BRU. That would definitely be ^.

Also, if this proposed alliance goes through, the long-rumored IAH-MAD is certain to become one of the first new IAH routes once enough spare widebody exists. I doubt CO will drop IAH-CDG/AMS, as there's simply loads of oil traffic on those routes as-is.

Also, perhaps IAH-SCL nonstop will finally be in the cards, to hook into LA's network (though they have fairly extensive service ex-LIM and EZE already). Here's to IAH-SCL-IPC redemptions with CO mileage

Weatherboy

A lot of the thoughts here revolve moreso around acquisition than alliance. And I just don't think an acquistion is in the cards.

I think what is is a NW-style alliance in which there's limited code-sharing and reciprocal elite perks --the things that'll be going away from CO from NW/DL once NW/DL solidify.

I just don't see much more else happening in the short term.

Buster CT1K

There is just too much overlap for me to see this alliance as anything more than a desperation maneuver.

sbm12

I don't know how much CO wants to partner with Jet; CO wants the long-haul traffic to India for themselves and is more than happy to dump off the local connecting flights to Kingfisher. I don't think that the BRU connection is appealing to CO at all.

FWAAA

On the contrary. Lotsa overlap means that an alliance might permit CO and AA to cooperate on all those overlapping routes (as in STOP COMPETING), which ought to help both raise fares.

Raising fares (by removing capacity and by cooperating) is the only reason for consolidation right now. Fares are way too low and they've gotta go up.

Anglo Large Clawed Otter

Perhaps losing NW's easy access to Asia ex-NRT will spur CO to aggressively expand out there (what are those 787s for, anyhow?). Also, HKG/CX would appear to be preferable connection options to NW/KE (NRT/ICN).

If QF becomes a partner through OneWorld, does that make CO more likely to take a stab at IAH-SYD with the 789s, once they come online? All sorts of intriguing possibilities.

Agreed that beyond a few oddball routes to S. America, this alliance doesn't bring much to the table that CO didn't already have access to through SkyTeam. CO stands to gain quite a few new AA customers on TATL routes, as those AA customers can't earn miles on BA's TATL services (and presumably would be able to do so with CO). Why bother with BA, LHR, and no miles, when CO could get you to many secondary European cities with only a domestic connection at EWR necessary? That could be quite a huge revenue stream for CO (assuming BA doesn't see such an arrangement as a potential threat and renegotiate its agreement with AA).

Not my preferred alliance arrangement, to be sure, but it does look shinier than SkyTeam, with all sorts of new minute details to learn about the alliance I know least about. My guess is that CO had a thorough look at the train-wreck that is UA, and decided "no way, no how." If one of the top airline management teams in the U.S. can't figure out how to cure that mess, I say let Dougie run UA/US into the ground...CO can always scoop up the desirable pieces at the liquidation fire-sale.

If or when that occurs, CO gets all the benefits of acquiring UA (routes, planes), with none of the mess (problematic labor issues, debt). It's all highly speculative, but this is a merger/alliance speculation thread

Anglo Large Clawed Otter

I doubt too many intra-Texas fares will rise to obscene levels, merely due to the WN effect. WN is very strong in HOU/DAL/SAT/AUS/CRP/ELP/etc. Getting to places like TYR, LRD & BPT might become prohibitively expensive, but the WN markets should be fine.