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US Airways and American formally agree to consider merger [New Master Thread]

US Airways and American formally agree to consider merger [New Master Thread]

 
Old Aug 31, 12, 7:21 am
  #1  
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Exclamation US Airways and American formally agree to consider merger [New Master Thread]

AMR Corporation And US Airways Announce Non-Disclosure Agreement

FORT WORTH, Texas and TEMPE, Ariz., Aug. 31, 2012 /PRNewswire/ -- AMR Corporation ("AMR"), the parent company of American Airlines®, and US Airways Group, Inc. (LCC) today announced that they have entered into a non-disclosure agreement ("NDA"), under which the companies have agreed to exchange certain confidential information and, in close collaboration with AMR's Unsecured Creditors Committee, to work in good faith to evaluate a potential combination.
The companies do not expect to provide any further announcements regarding the status of any such discussions unless and until the parties have entered into a transaction or discussions between the parties have been terminated. Furthermore, AMR and US Airways have each agreed while they are evaluating a potential combination that they and their representatives will not engage in discussions with other parties concerning a potential combination of AMR and US Airways. The companies noted that there can be no assurance that a transaction will result from these discussions.
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Old Aug 31, 12, 8:48 am
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Reuters

American Airlines and US Airways Group said Friday they have agreed to consider a potential merger.

A deal, which is still far from reality, would create an airline giant on par with the world's largest — United Continental Holdings Inc. and the slightly smaller Delta Air Lines.


http://marketday.nbcnews.com/_news/2...er-merger?lite
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Old Aug 31, 12, 9:00 am
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Here is the Press Release from American. . .

AMR Corporation And US Airways Announce Non-Disclosure Agreement

FORT WORTH, Texas and TEMPE, Ariz., Aug. 31, 2012 /PRNewswire/ -- AMR Corporation ("AMR"), the parent company of American Airlines®, and US Airways Group, Inc. (NYSE: LCC) today announced that they have entered into a non-disclosure agreement ("NDA"), under which the companies have agreed to exchange certain confidential information and, in close collaboration with AMR's Unsecured Creditors Committee, to work in good faith to evaluate a potential combination.

The companies do not expect to provide any further announcements regarding the status of any such discussions unless and until the parties have entered into a transaction or discussions between the parties have been terminated. Furthermore, AMR and US Airways have each agreed while they are evaluating a potential combination that they and their representatives will not engage in discussions with other parties concerning a potential combination of AMR and US Airways. The companies noted that there can be no assurance that a transaction will result from these discussions.

SOURCE AMR Corporation
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Old Aug 31, 12, 10:30 am
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Finally, Parker has been muzzled and has been banned from negotiating with AA's labor unions. Just last week, when the AA pilots should have been negotiating with AA, they were off at a meeting with Parker.
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Old Aug 31, 12, 10:52 am
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Here's what the US employees got:

Dear Fellow Employees:

Today we announced that US Airways has entered into a Non-Disclosure Agreement (NDA) with American Airlines’ parent company, under which both companies have agreed to exchange certain confidential information and to work in good faith to evaluate a potential combination. We are pleased to be working directly with American to study a potential merger and we consider this very good news. It does not mean we are merging – it simply means we have agreed to work together to discuss and analyze a potential merger.

A Non-Disclosure Agreement is pretty much what it sounds like. We, along with American, have agreed to not publicly disclose anything about the discussions or analysis as we move forward because we don’t believe that would be productive. We have also agreed not to discuss the work that is being done to analyze a potential combination with anyone not covered by the NDA. This agreement will likely remain in place until either a deal has been signed or we have determined this process will not result in a transaction.

As a result, we will not be able to be as open and candid about the discussions with American as we usually are about issues that are important to all of us. We will still be very communicative, of course, about all other aspects of our airline, and our Communications Team will continue their great work through About US, US Daily, Wings, State of the Airline webcasts, Crew News webcasts, etc.

I trust you recognize the importance of signing this NDA and we appreciate your understanding. While we may not be providing regular updates on this process, rest assured your management team is working diligently and aggressively to do what is best for US Airways and our hard-working team members. I will let you know more as soon we are able.

In the meantime, please keep up the great work. You all are doing a wonderful job of taking care of our customers and running a great airline. The results are remarkable. Thank you so much for all you do.

Sincerely,
Doug
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Old Aug 31, 12, 11:13 am
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Maybe inevitable, but not looking forward to it. When we fly Biz Class between the U.S. and Brazil, AA allows 3 free checked bags, US only two. Also, the phone resevations folks with US always seemed to have difficulty finding the full range of flights and one US airport agent (at GSP) argued that the weight allowance was 50 lbs. per bag (it was 70 lbs, for Brazil) and entred a message taht our bags were suspiciousy heavy (which alerted the Customs folks in Brazil, who told us about the message; they thought it was strange, and found nothing suspicious). We did like the virtually lie-flat seats in the US 767 biz class, but AA was as good.

I wonder if US would cut back on flights between the U.S. and Brazil. I assume that if they fully merged they'd join the Oneworld alliance, leaving Star. With TAM likely leaving Star, due to the LAN-TAM merger, this will impact Star's presence in South America.
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Old Aug 31, 12, 11:32 am
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Originally Posted by SoCal View Post
Maybe inevitable, but not looking forward to it.
Since this is the US forum, most of your reasoning seems to indicate you should be looking forward to it. I'm a long-time US CP/2MM, left out in the cold with the PIT pullout, who has now moved to PLT with AA. If this means I can combine my lifetime miles to AA lifetime PLT, and get both carriers out of PIT (would have the plurality of flights, though far from majority/dominant), I think it would be the best outcome for me.

Last edited by CPRich; Sep 1, 12 at 12:06 pm Reason: Kant spel
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Old Aug 31, 12, 11:43 am
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Originally Posted by CPRich View Post
Since this is the US forum, most of your reasoning seems to think you should be looking forward to it. I'm a long-time US CP/2MM, left out in the cold with the PIT pullout, who has now moved to PLT with AA. If this means I can combine my lifetime miles to AA lifetime PLT, and get bother carriers out of PIT (would have the pkurality of flights, though far from majority/dominant), I think it would be the best outcome for me.
Not sure the bolded part is gonna happen even if US and AA combine. IIRC, when AA acquired TWA, the TWA account balances (unspent miles) were converted to AA miles and added to the AA lifetime counter. But I don't think that previously redeemed TWA miles were added to AA's lifetime counter.

To add yet another wrinkle, AA changed its lifetime Gold/Plat counters last year so that only Butt in Seat miles count toward lifetime status.
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Old Aug 31, 12, 1:37 pm
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Originally Posted by FWAAA View Post
Not sure the bolded part is gonna happen even if US and AA combine. IIRC, when AA acquired TWA, the TWA account balances (unspent miles) were converted to AA miles and added to the AA lifetime counter. But I don't think that previously redeemed TWA miles were added to AA's lifetime counter.

To add yet another wrinkle, AA changed its lifetime Gold/Plat counters last year so that only Butt in Seat miles count toward lifetime status.
Who knows what they will do, but US does award lifetime Silver at 1MM, so I would guess they would have a way to combine lifetime flight miles on US with lifetime flight miles on AA.

That being said, this is putting a cart several counties in front of a horse.
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Old Aug 31, 12, 2:03 pm
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View from the Wing reports that US isn't the only one with a NDA in place with AA:

http://boardingarea.com/blogs/viewfr...ruptcy-future/
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Old Aug 31, 12, 3:25 pm
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So the consensus is that it will be a oneworld member airline then, not StarAlliance, isn't it?
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Old Aug 31, 12, 5:03 pm
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I wonder if they will be part of Star Alliance or another chain
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Old Aug 31, 12, 5:53 pm
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Originally Posted by slowly View Post
So the consensus is that it will be a oneworld member airline then, not StarAlliance, isn't it?
Originally Posted by TallestHotelInJapan View Post
I wonder if they will be part of Star Alliance or another chain
I believe it has already been announced that they would leave Star and join OneWorld.

It is mentioned in posts 158, 162, and 164 here:
http://www.flyertalk.com/forum/us-ai...hreads-11.html

Post 180 here is pretty specific about it:
http://www.flyertalk.com/forum/us-ai...hreads-12.html

I didn't easily find anything from US about it, but I'm sure it is out there somewhere.
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Old Aug 31, 12, 6:09 pm
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Parker told the unions in April that AA's headquarters would remain at DFW and that AA would remain in Oneworld:

http://uk.reuters.com/article/2012/0...83J17320120420
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Old Aug 31, 12, 6:56 pm
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Simple Due diligence - this is not an agreement to actually merge.

AA has already prosecuted NDA agreements in relation to such discussions with other entities, including British Airways.
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