American Airlines In Talks With Continental
Apr 29, 2008, 10:19 am
#91
Join Date: Jan 2007
Location: Mostly AUS or rural England
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I plan to assist the BD Forum with a "There's a Tear in My Beer" DO, should Lufty snatch BD and eviscerate our beloved Diamond Club. We have provisional plans for a retreat in the scenic Hill-Country of Texas, mixed with impractical quantities of beer, top-flight BBQ, and high-powered rifles (for shooting at a Lufty seat we'll score from Ebay).
Apr 29, 2008, 10:26 am
#92
Suspended
Join Date: Sep 2005
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The simple answer with BA is don't travel in coach - the best deal are their WT+ fares - more space, power, bonus miles, Elite qualification, and an easy and cheap route to upgrade to Club World (Business). The latter is, IMO, the best part of the deal - IAH-LON I earn enough miles to upgrade in one direction with no co-pay. Can you do that on CO on a discounted ticket?
And yes, ex-US/UK, WT+ can be a solid value. Ex-CPH, however, I don't find the value to be as good, and the fares seem to routinely price out in the $1500-range. Of course, we also see lower J fares, so it is a trade-off. Alas, I have a hard time justifying shelling out for either, when an exit row on an NW A330 provides equivalent/better legroom, 2-abreast seating, free booze, AVOD, and power - usually at $700 or less.
Apr 29, 2008, 10:36 am
#93
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OK, I'm dumb enough to buy the joke. How are they going to get to the Hill Country? LH to IAH or DFW I suppose? Or perhaps they'll take that other Lufthansa subsidiary, JetBlue, from JFK-AUS? Perish the thought they opt for UA from ORD - by that point they'll probably have to use their own Credit Cards and gas the plane themselves! It will be interesting to hear the outcome, though I'd start negotiating with the Hotel - it's gonna come, just as I think VS will end up in the Lufthansa empire.
. No need to worry about negotiating with hotels. The areas surrounding most of the hunting leases I've frequented don't have any hotels. I think negotiating liability insurance might be a prerequisite, though
Apr 29, 2008, 11:04 am
#94
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Location: NW OH
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Apr 29, 2008, 2:12 pm
#95
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Why would getting rid of Chapter 11 be a bad thing? Do you think it's helped the airline industry in the last 6~7 years? It's easy to argue that it distorts the market place by allowing some carriers to radically change their cost basis to the disadvantage of those that try to stay in business while allowing incompetent management (UA, US, and probably DL & NW) to stay in place so they can repeat the process.
Perhaps you're right that some of these areas can be tidied up. How about a rule of Chapter 11 being that nobody who was a Director and/or Executive in the 12 months prior to the filing can remain in position or get stock and/or options when the business emerges. That would focus the mind a bit and cause a bigger clear out of the deadwood, though I'm not sure how the business could operate in the first weeks after the filing?
Apr 29, 2008, 4:24 pm
#96
Join Date: Jun 2007
Location: DAL
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Posts: 632
Spin. Spin. Spin. Here is an article from today’s Fort Worth Star Telegram about the American/Continental Alliance. http://www.star-telegram.com/business/story/609296.htmlThe paper spins it in such away to make it seem that the other airlines (DL/NW) will kick CO out of Skyteam and CO will lose millions and needs AA. They got all their information wrong. CO is the one who wanted limited integration with some of the revenue sharing and other programs of Skyteam and its CO looking not anyone forcing them out. Bad reporting at its finest!
Apr 30, 2008, 3:58 pm
#97
Join Date: Nov 2002
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Apr 30, 2008, 5:02 pm
#98
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Apr 30, 2008, 5:30 pm
#99
Join Date: Oct 2004
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Guy walks into a bar, (Tilton) scans the darkly lit room and eyes his possible matchups. He grabs a drink at the bar and looks down the far end and sees a cute redhead (Delta) that smiles back at him. He straightens his glasses and downs a shot, heading down the bar with his shoulders back. As he saunters up to the redhead, she leans over to the guy sitting next to her (NW) and whispers something in his ear. They laugh together, he turns and gives her a kiss and they walk out together smiling. Tilton, a little shocked, pretends he was on his way to the end of the bar and buys another shot.
He contemplates his next move, realizing the crowd is thinning and it's getting late. Sitting at a table by herself, is a very well put together blond. (Continental) She looks shy, but locks eyes with Tilton when she finally looks up. He downs another shot and sits down next to her. He sits for quite awhile and she seems to relax and enjoy the conversation. When Tilton leans in to whisper how beautiful she is, she slaps him, pouring what's left of his beer over his balding head.
Tilton is shocked and looks around the bar to see if anyone noticed. He wipes himself off and heads back to the bar. It's almost closing time, so he orders another shot. Dejected, tired and now drunk, he looks to his left and sees a startling beautiful brunette licking her lips at the far end of the bar (US Air). She flips her hair and winks with a flirtive smile. Tilton is immediately smitten and begins to stumble down to the far end to meet his brunette beauty. He is almost there when the lights in the bar come on. His beautiful brunette is actually a very large man with a blond wig and missing his front teeth. Tilton steps back, looks around the bar, shrugs, grabs his hand and they head out of the bar together.
He contemplates his next move, realizing the crowd is thinning and it's getting late. Sitting at a table by herself, is a very well put together blond. (Continental) She looks shy, but locks eyes with Tilton when she finally looks up. He downs another shot and sits down next to her. He sits for quite awhile and she seems to relax and enjoy the conversation. When Tilton leans in to whisper how beautiful she is, she slaps him, pouring what's left of his beer over his balding head.
Tilton is shocked and looks around the bar to see if anyone noticed. He wipes himself off and heads back to the bar. It's almost closing time, so he orders another shot. Dejected, tired and now drunk, he looks to his left and sees a startling beautiful brunette licking her lips at the far end of the bar (US Air). She flips her hair and winks with a flirtive smile. Tilton is immediately smitten and begins to stumble down to the far end to meet his brunette beauty. He is almost there when the lights in the bar come on. His beautiful brunette is actually a very large man with a blond wig and missing his front teeth. Tilton steps back, looks around the bar, shrugs, grabs his hand and they head out of the bar together.
Apr 30, 2008, 5:56 pm
#100
Join Date: Apr 2007
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What an excellant analogy.
Apr 30, 2008, 6:03 pm
#101
Join Date: Aug 2005
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Why would getting rid of Chapter 11 be a bad thing? Do you think it's helped the airline industry in the last 6~7 years? It's easy to argue that it distorts the market place by allowing some carriers to radically change their cost basis to the disadvantage of those that try to stay in business while allowing incompetent management (UA, US, and probably DL & NW) to stay in place so they can repeat the process.
Does Chapter 11 ever really serve the purpose of puting businesses back on their feet. Can you name a consistently profitable business truly world class that's emerged from Chapter 11? And before you mention it, Continental fails the consistent profit test.
Perhaps you're right that some of these areas can be tidied up. How about a rule of Chapter 11 being that nobody who was a Director and/or Executive in the 12 months prior to the filing can remain in position or get stock and/or options when the business emerges. That would focus the mind a bit and cause a bigger clear out of the deadwood, though I'm not sure how the business could operate in the first weeks after the filing?
Does Chapter 11 ever really serve the purpose of puting businesses back on their feet. Can you name a consistently profitable business truly world class that's emerged from Chapter 11? And before you mention it, Continental fails the consistent profit test.
Perhaps you're right that some of these areas can be tidied up. How about a rule of Chapter 11 being that nobody who was a Director and/or Executive in the 12 months prior to the filing can remain in position or get stock and/or options when the business emerges. That would focus the mind a bit and cause a bigger clear out of the deadwood, though I'm not sure how the business could operate in the first weeks after the filing?
I recall that when CO went through it's two Ch 11 filings, Bob Crandall, the very vocal CEO of AA, lobbied mightily to have major restrictions placed against airlines regarding the Ch 11 process. His argument was that he had to compete in the exact same free market conditions as CO, so why CO should be given multiple chances to correct their failure to successfully manage their airline?
His comment was something along the lines of " it isn’t success based on solid management or product superiority that has allowed some airlines to survive – they have survived only by failing, and using the legal system to mask failure. Sure – its what the system allows, but only an idiot would call it “free market”. We shouldn’t have to compete against poor management and decision-making, resulting in multiple failures just because we have a screwed-up legal system.”
I always thought that was a great point, and is why, given an alternative, I typically avoid using products and services provided by companies in Ch 11. I prefer to not reward poor management, and prefer to reward successful management instead.
Apr 30, 2008, 6:28 pm
#102
Join Date: Jun 2004
Location: Houston,TX
Programs: Hilton Honors Gold, Marriott Gold,Priority Club Plat
Posts: 282
No joke -- I don't know if you have ever read a.net but Ctermua hit the nail on the head with this post:
Guy walks into a bar, (Tilton) scans the darkly lit room and eyes his possible matchups. He grabs a drink at the bar and looks down the far end and sees a cute redhead (Delta) that smiles back at him. He straightens his glasses and downs a shot, heading down the bar with his shoulders back. As he saunters up to the redhead, she leans over to the guy sitting next to her (NW) and whispers something in his ear. They laugh together, he turns and gives her a kiss and they walk out together smiling. Tilton, a little shocked, pretends he was on his way to the end of the bar and buys another shot.
He contemplates his next move, realizing the crowd is thinning and it's getting late. Sitting at a table by herself, is a very well put together blond. (Continental) She looks shy, but locks eyes with Tilton when she finally looks up. He downs another shot and sits down next to her. He sits for quite awhile and she seems to relax and enjoy the conversation. When Tilton leans in to whisper how beautiful she is, she slaps him, pouring what's left of his beer over his balding head.
Tilton is shocked and looks around the bar to see if anyone noticed. He wipes himself off and heads back to the bar. It's almost closing time, so he orders another shot. Dejected, tired and now drunk, he looks to his left and sees a startling beautiful brunette licking her lips at the far end of the bar (US Air). She flips her hair and winks with a flirtive smile. Tilton is immediately smitten and begins to stumble down to the far end to meet his brunette beauty. He is almost there when the lights in the bar come on. His beautiful brunette is actually a very large man with a blond wig and missing his front teeth. Tilton steps back, looks around the bar, shrugs, grabs his hand and they head out of the bar together.
He contemplates his next move, realizing the crowd is thinning and it's getting late. Sitting at a table by herself, is a very well put together blond. (Continental) She looks shy, but locks eyes with Tilton when she finally looks up. He downs another shot and sits down next to her. He sits for quite awhile and she seems to relax and enjoy the conversation. When Tilton leans in to whisper how beautiful she is, she slaps him, pouring what's left of his beer over his balding head.
Tilton is shocked and looks around the bar to see if anyone noticed. He wipes himself off and heads back to the bar. It's almost closing time, so he orders another shot. Dejected, tired and now drunk, he looks to his left and sees a startling beautiful brunette licking her lips at the far end of the bar (US Air). She flips her hair and winks with a flirtive smile. Tilton is immediately smitten and begins to stumble down to the far end to meet his brunette beauty. He is almost there when the lights in the bar come on. His beautiful brunette is actually a very large man with a blond wig and missing his front teeth. Tilton steps back, looks around the bar, shrugs, grabs his hand and they head out of the bar together.
Apr 30, 2008, 6:33 pm
#103
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Join Date: Apr 2006
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I recall that when CO went through it's two Ch 11 filings, Bob Crandall, the very vocal CEO of AA, lobbied mightily to have major restrictions placed against airlines regarding the Ch 11 process. His argument was that he had to compete in the exact same free market conditions as CO, so why CO should be given multiple chances to correct their failure to successfully manage their airline?
I always thought that was a great point, and is why, given an alternative, I typically avoid using products and services provided by companies in Ch 11. I prefer to not reward poor management, and prefer to reward successful management instead.[/QUOTE]
He was even more vocal about PanAm!
With regard to avoiding C11 companies, you're in the minority. I guess if someone elects to award good management in the transportation industry, they'd only fly on Southwest and buy Japanese cars!
Like any capital intensive industry--particular those with a high break-even point--when things turn south, prices are lowered, sometimes dramatically. Competitors are forced to follow.
Airlines are in an even worse position than many other industries. Not only is the industry capital intensive, but a major expense, fuel, is relatively price inelastic, while ticket prices seem to be very elastic--what a horrible business. It's not clear to me to what extent a judge has the latitude to refuse a C11 filing and insist on C7 instead, but it would have been interesting--and beneficial to the industry--if USAirways had disappeared when it refiled for C11 just nine months from emergence.
The bottom line is that changing the rules for C11 in the industry won't affect anything. As long as the industry is capital intensive with an inelastic cost structure and very elastic source of revenue, this saga is set to repeat indefinitely. The only way to change this behavior is to reregulate.
Apr 30, 2008, 6:42 pm
#104
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It's easy to argue that it distorts the market place by allowing some carriers to radically change their cost basis to the disadvantage of those that try to stay in business while allowing incompetent management (UA, US, and probably DL & NW) to stay in place so they can repeat the process.
Apr 30, 2008, 6:46 pm
#105
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FWIW, there's a law that prevents a CEO who has led an airline into Chapter 11 twice to ever run an airline again. It was legislated after Frank Lorenzo took CO into Chapter 11 twice to get favorable labour conditions.