Merger US/HP/AC

Old Apr 28, 2005, 6:27 am
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Exclamation Merger US/HP/AC

The latest is Air Canada is talking to US and HP about a merger???? Here is the article: http://www.thestar.com/NASApp/cs/Con...acodalogin=yes

Who knows what will happen???

Last edited by RICflyer; Apr 28, 2005 at 6:58 am Reason: spelling
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Old Apr 28, 2005, 6:38 am
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A snip from the article...

"Milton also said during a conference call that the airline never sought from Boeing any assurances that parts and equipment would be made in Canada. He also didn't dismiss speculation brewing on Wall Street that Air Canada may be involved in coming months in a merger, possibly with regional airline America West Airlines, which has confirmed merger talks with U.S. Airways.

A Wall Street source said yesterday that Air Canada may be in talks with both U.S. Airways and America West in a deal that may see Air Canada take on international traffic with the U.S. Airways-America West concern handling domestic U.S. traffic.

"Consolidation in the North American industry is inevitable," Milton said. "To the extent Air Canada is or isn't part of that is yet to be determined." "
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Old Apr 28, 2005, 6:56 am
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See also the discussion about this on the AC forum: http://www.flyertalk.com/forum/showthread.php?t=425840
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Old Apr 28, 2005, 8:09 am
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I wonder how the ban on foreign investment in US flag carriers would work in such a scenario?
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Old Apr 28, 2005, 8:48 am
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I thought there's just a maximum stake in US airlines that foreign entities can have. Perhaps NAFTA has some special treatment for Canadian/Mexican entities (well maybe hopefully not; I don't want to become an AeroMexico or whatever frequent flyer anytime soon).
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Old Apr 28, 2005, 8:59 am
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I'm willing to bet that someone has figured this out by now.
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Old Apr 28, 2005, 9:47 am
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Looks like the ball is back in play.....
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Old Apr 28, 2005, 10:05 am
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Well, if these three do merge, it will be very interesting to see what happens with Dividend Miles. Air Canada's AeroPlan program is not particularly customer friendly from everything I've read. If they get involved, the value of dividend miles is likely to drop. Of course the alternative, no more dividend miles, is far less appealing.
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Old Apr 28, 2005, 5:04 pm
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Originally Posted by NYCommuter
I thought there's just a maximum stake in US airlines that foreign entities can have. Perhaps NAFTA has some special treatment for Canadian/Mexican entities (well maybe hopefully not; I don't want to become an AeroMexico or whatever frequent flyer anytime soon).
the 49% limit does apply to canada. so whatever the US portion of such an operation would be, AC could own only 49% of it. I believe Canada has equivalent or stricter foreign ownership limits.
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Old Apr 28, 2005, 6:29 pm
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Originally Posted by MileKing
Well, if these three do merge, it will be very interesting to see what happens with Dividend Miles. Air Canada's AeroPlan program is not particularly customer friendly from everything I've read. If they get involved, the value of dividend miles is likely to drop. Of course the alternative, no more dividend miles, is far less appealing.
My thoughts, exactly. I'd much rather see US & HP without Air Canada and it's ErrorPlan programme influence.
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Old Apr 28, 2005, 9:51 pm
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Originally Posted by TravelScholar
My thoughts, exactly. I'd much rather see US & HP without Air Canada and it's ErrorPlan programme influence.
Canada is a much different market than the US. In Canada, there is no other frequent flyer program to keep Aeroplan honest. You can bet that if an AC/HP/US scenario were ever to happen, separate frequent flyer programs would exist for quite some time.
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Old Apr 29, 2005, 11:01 am
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Not necesserally a merger, but the article just said a "Deal". I bet its more of a code share agreement with a consolidated US/HP than a merger.

Originally Posted by RICflyer
The latest is Air Canada is talking to US and HP about a merger???? Here is the article: http://www.thestar.com/NASApp/cs/Con...acodalogin=yes

Who knows what will happen???
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Old Apr 29, 2005, 11:48 am
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If you go way back to the original KLM/Northwest deal, I believe KLM provided equity money for the buyout of Northwest by the investment group that took it over. The quid pro quo for that was the codeshare. KL simply bought market share. Although the 49% rule is in effect, AC (which I believe,itself, has been bought by private interests) could still acquire a minority share. Their protection (normally people don't like being minority shareholders...has to do with being outvoted), assuming the enterprise was a money maker, and there was a disagreement, would be to acquire enough additional stock to put them in violation of the 49% foreign ownership limit. The government would require a sale of the airline, or a reduction of the foreign ownership. That would require a buyout of the foreign investor. Either way, they'd get their money out. Whatever, as a number of us have observed over the last few months, something is going on.
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Old Apr 30, 2005, 8:59 pm
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Oh no!

Not ErrorPlan!
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Old Apr 30, 2005, 9:17 pm
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Originally Posted by cedric
Canada is a much different market than the US. In Canada, there is no other frequent flyer program to keep Aeroplan honest. You can bet that if an AC/HP/US scenario were ever to happen, separate frequent flyer programs would exist for quite some time.
Would the exchange rate between US/HP and AC be like the exchange rate for US/Canadian $$?? I would hope not.
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