CloudsBelow

As long expected, "un-trimmed" union labour costs at AA have helped pushed it into Ch 11.

AA Employees and aircraft lessors had better get prepared for a haircut in the coming months!

My prediciton : Think it's highly likely USAirways comes in, scoops up AA and leaves *A to join OW in the short term. AA will return some old MD80s and likely return some aging 757/767. Also think WS will join OW not long after

Most of the board has a real issue with US and not many redeem AP to fly US but for some, including me, adding the US network to AA and OW will make my decision to completely flip over to OW from *A a no-brainer!

Look into your crystal balls . . . Whad'ya got?

The Lev

US did try to scoop up Delta when they went Ch 11, so I'd expect them to try the same trick this time. I can't imagine AA management being keen on the idea and they will undoubtedly do what they can to stay independent.

If you fly mostly in North America, the idea of AA/US/WS all in the Oneworld alliance is intriguiging and would create real competition, but for those who do a lot of international travel, I can't imagine many of them dropping AC and its non-stops in order to one-stop with Oneworld.

Philosofaux

I doubt that US is in a strong enough position financially to straight acquire AMR; possibly a merger where shareholders split ownership in the new company.

WS joining OW is a different matter IMO; I think they would be a good partner network-wise but their lack of F or J, especially lack of F/J lounges, check-in etc, could make joining a "traditional" airline alliance problematic.

AA is definitely going to pushback.

My prediction: AMR (AA/MQ) is going to push hard (again) to lift restrictions on foreign ownership rules and try to merge with IAG (BA/IB); otherwise, survive as an independent in a stronger financial position. Likely to accelerate their move to jettison MQ and add more regional contractors.

robsaw

I think it is highly UNlikely. I just don't see US having the financial muscle in the current investment climate to pull it off. I do agree that AA will use the Ch11 to early terminate leases where possible and accelerate replacement with new aircraft. Labour costs and inefficient older part of the fleet are the big drivers for Ch11.

g46r

http://www.google.com/finance?q=NYSE:LCC&fstype=ii

http://www.google.com/finance?q=NYSE:AMR&fstype=ii

AMR has $10B long term debt. I don't see a way the much smaller USAirway able to finance an acquisition of AMR that's already in chapter 11, especially on today's credit market.

Shareholder

There aren't really any more shareholders in AA. Their stock has become pretty much worthless and they and certain category bond holders will be wiped out by Chapter 11. The whole point is to clean up AA's balance sheet, reduce its labour contract and pension obligations, so it and US can merge the way UA and CO just did. It won't be a traditional buy out by one party or the other.

CloudsBelow

Doug Parker is all about airline consolidation. He and his team were able to raise $8B to go after Delta (a much bigger airline).

I'm far from an expert but relative company sizes do not always dictate who swallows who . . . Remeber AOL buying Time Warner? There were strong rumors Telus was going to scoop up Bell Canada a couple years ago.

This is a no-brainer IMO . . . Parker will do everything he can to get this tie-up. I really see it happening and the "new" AA being very formidable. Hubs in DFW, MIA, PHL with strong presence in NYC, LAX and ORD.

Time will tell . . . Don't think we'll have to wait long . . .

CloudsBelow

Agreed it's not ideal but it's the best option to cover Canada.
Canada is not an "F/J" heavy market anyways. Got the AA lounge in YYZ, maybe add the Plaza Premium lounges in YYZ, YVR.

It's not perfect but think it might work.

WS has to keep their alliance momentum. While booking on aa.com recently, WS flight show up as it is.

jcamp028

would US/AA alliance go to star alliance? My thinking is no- it would create too many problems having two uber-giant american airline companies in one alliance. Plus, oneworld would fall apart without AA.

CloudsBelow

No chance at the combo joining *A.

It's almost a given that (if this merger were to happen) US would fade into the background and the new airline would take AA's name . . . and join AA's alliance.

Spounce

I'm sure that WS will continue to link with other carriers, but as it has been announced that they're going to form an alliance of some sort with DL in addition to their existing arrangement with AA, I'd be surprised to see them join Oneworld.

Philosofaux

There's no way in hell that DOJ and FTC in the States would allow that to happen.
Living in the States was weird, having regulators who believed in enforcing meaningful competition between parties instead of protecting incumbent de facto monopolies. DOT is especially aggressive in recent years. By comparison, the Competition Bureau here is feckless and toothless.
Actually, by any standard, the Competition Bureau is feckless and toothless.

This would be crazy.

They would, at least for a long time, have hubs at MIA, CLT, PHL and JFK, with a focus operation at LGA, DCA and at BOS. So, that's what... every major metro along the East Coast? Getting that through antitrust wouldn't be easy, and why would they want to?
US operations at LGA and DCA are already basically on top of the PHL operation. US has a dedicated terminal at LGA and AA has (a brand new) one at JFK: so, which one are they going to give up? Or are they going to operate two NYC bases only 60-90 min by train or car from their PHL hub?
International traffic would be all over the place. Currently, AA routes it through JFK and MIA and US through CLT and PHL. That traffic is going to be split four ways in a combined airline, fragmenting it and making none of the routes profitable.
Basically, no airline needs that much coverage on the East Coast, except maybe B6, which is a very different animal.
Out West, PHX is in the perfect location though: it's in the ideal location to interfere with AA operations at both LAX and DFW.

They'd acquire a great deal of leases and airport slots that would be duplications or unnecessary–they'd be overpaying by buying things they don't want, don't need and can't keep. And their fleets are incompatible, so there'd be no synergies there: US is primarily an Airbus shop while AA is all-Boeing until their A320s are delivered.

Oh God, labour: US has been unable for years to reconcile the work rules between HP and legacy US pilots; they'd now have to integrate bitter MQ and AA pilots.

Now, just because this is absolutely crazy doesn't mean it won't happen. I can definitely see Parker trying to go through with this, which would only confirm what I already suspect: US is managed by idiots.

CloudsBelow

You mention a lot of things . . .

IMO, once the merger happens . . . JFK/MIA/DFW aren't going anywhere. PHL and PHX stay. CLT/ORD/LGA are all clawed back. LAX remains where it is.

Is really does work. This BK will allow AA to return MD80s . . . Less planes = less flying = clawing back less profitable hubs.

US is actually thought of quite highly in the industry . . . For what they are. Your view, while common, might not be accurate.

Doug Parker and his PHX friends will run the merged airline, IMO.

Parker will make a STRONG push for this. It will take a lot to shake him.

CloudsBelow

Anyone still following this?? Some posters here "knew" this could never happen. . . . Certain hubs would never be pulled down. Stilll a while to go but this is serious

http://www.aviationpros.com/news/106...-with-american

Obviously, *A losing US will not be a big deal for most flyers in Canada. I think the real impact will be how much more appealing OW will be with AA/US service merged. Those two in addition to AA current ties with WS make OW that much more attractive to Canadian fliers IMO

hjohnson

I am surprised it took this long. I figured that after the UA/CO merger, US wasn't going to stick around *A very long.