kudzu

Minor point: AFAIK, Airbus was never a shareholder of LCC. They loaned $250m for the HP-US merger (and got US as the A350 launch customer in USA), but the loan was repaid the following year in a debt restructure.

I agree that if the merger happens, both B787s and A350s will be used widely. If the merger fails, I see Parker as an Airbus man who'd stick with Airbus in a standalone US.

jondysse

Wondering if anyone has any thoughts about delay/change in merger affecting what status they go for?

I'm CP and when the merger was definite (and fast approaching), I was planning to go again for CP to ensure being EXP on the new american...seemed like in light of merger, bloated ranks, and the currently better benefits for EXP than lower tier AA preferred that this was a no brainer...

However, if the merger is off, or even postponed a little, starting to think platinum vs. CP is not that huge of a difference. Main differences are certs, upgrades, and accruing higher % bonus. The % bonus does nothing for me because I have a large excess of miles and seldom spend, I could get envoy award tickets instead of using CP certs if I'm plat, and I'm not so sure that plats really miss UGs that often that it's worth it to be CP based on what people say on the boards.

If I don't go for CP this year, I'd probably travel less or fly a little more on delta, where I am trying to requalify for platinum or gold there.

Anyone else been thinking about this? Got pros and cons to add to my list?

McFlyPHL

I don't think the delay will impact me one way or the other in terms of what my status "plan" is for the year. I probably fly between 175-200k/yr and have lifetime Gold on AA, so I don't plan to chase Plat there.

I'll finish CP first, then load the rest onto UA and probably wind up either 1P or Plat. For my travel patterns, I either need XC (US/AA) or up and down the west coast (UA). The merger combines two big banks of miles for me, but that's about it.

From my experience, EXP is superior to CP but it's much more "painful" to get there due to the 500 mile "stickers" on AA for Plats.

Superguy

I can think of a few things.

1) CP gets to redeposit award tickets without fees. The ability to make changes or cancel award tickets outright without a fee is a great benefit - especially if plans are subject to change. $150 per ticket changes aren't fun.

2) Higher upgrade percentages. This is a YMMV, as it depends on routes flown. In my case, BWI is a fairly CP and plat heavy area. BWI-PHX is a difficult route as a platinum, but a lot easier as a CP. If you're in elite heavy areas, the extra status is helpful.

3) Priority during IRROPS. US is much more likely to accommodate a CP with the best routing possible, and accommodations if needed, without a whole lot of fuss. I've heard of US giving CPs hotel vouchers for weather related IRROPS - something you won't get at lower levels. I've had the CP desk work some miracles when things were bad. They were willing to go the extra mile to call inventory management to force seat availability in the event of an oversell.

PP isn't bad by any means. It's just good to be king - especially when it comes to IRROPS.

DCdeacon

Speaking of this, does anyone know what US has done with the 2 or 3 A332's they've taken delivery of this year? I can't think of where those aircraft have ended up. I feel like CLT-GRU accounts for two net aircraft, but that's a 767 route right now--what route did those 767's come off of that are now being flown by 332's?

nova08

Today's 332 schedule. This accounts for 9 frames with 1 spare.
PHL-TLV
PHL-MAD
PHL-MAN
PHL-VCE
PHL-FRA
PHL-CDG
CLT-FRA
CLT-CDG

Jacobin777

Maybe you meant NH and JL? UA has 35 A350-1000XWB's on order with options for 40 more.

AA does indeed have Plan-B in place (implementing their pre-merger plan), can't say about Parker and his team.

perseus11

And how well was Horton's Plan B received by the financial community and AA creditors?

hillrider

The standalone plan was Plan A, not B, but I don't think it was ever fully discussed for approval by the creditors as Parker boycotted the process mid-stream. As far as the financial community is concerned, it will always take an M&A deal over a no-deal. The former gives them tons of free money fees for work done, the second doesn't.

LETTERBOY

Well, if the merger is rejected, what other choice do they have but to go with Horton's plan (in some form)?

SusanDK

Sorry if I've missed this, but what is the timeline on when it will be known whether the merger is a definite go or no-go? In one article, I saw mention of mid-December, but with a comment that even that date could be renegotiated.

phlwookie

It'll probably take either some court hearings (to determine whether the DOJ case will proceed, set trial dates) and whether the DOJ might drop the case after getting concessions to have a better sense of this. A lot up in the air right now.

Barring a negotiated settlement or AA and US deciding to not proceed with the merger, I'd be really surprised if we knew anything else concrete this year.

FWAAA

Exactly. Well, there's a possibility that they'd rather liquidate AA instead of exiting Ch 11 as an independent airline, but the odds of that are fairly remote. AA is much larger than UA, DL or NW when they emerged from bankruptcy and AA's financial performance since it filed for Ch 11 is, IMO, more impressive than the performance of those three when they were in Ch 11 protection.

The stand-alone plan called for AA to expand by 20% over five years (which is 3.7% a year), cost reductions of $2 billion annually plus revenue improvements of $1 billion. The cost reduction target was achieved in 2012 and during 2012, AA achieved 88% of the five-year revenue target.

This week, Holly Hegeman of PlaneBusiness incorrectly said in her PlaneBusinessBanter column (more than once) that the stand-alone plan called for 20% annual growth. If Horton's plan had actually called for 20% annual capacity growth, then her childish and facile mocking of the plan would have been appropriate. Emily Litella has nothing on Holly Hegeman.

Jacobin777

Actually "revert back to Plan-A" which was happening for >12 months after BK. How it was received by the financial community & creditors can't say but certainly AA has started to "right the ship" and started to have positive earnings. In fact, record earnings for 2Q 2013. Impressive!

+1.

AFAIK, since AA entered BK back in Nov 2011, its cost AA about $150 million in legal fees and with the current daily legal fee at $500,000.

SusanDK

According to AA's general counsel, there is no Plan B:

http://www.usatoday.com/story/todayi...fails/2681345/

But I guess that could be PR rhetoric to try to convince the DOJ that AA would not survive without the merger.