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US/AA merger- MASTER DISCUSSION THREAD/incl 'when will US leave STAR'

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US/AA merger- MASTER DISCUSSION THREAD/incl 'when will US leave STAR'

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Old Dec 8, 13, 9:45 am   -   Wikipost
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There is an existing thread in the AA forum that may be useful to US and AA Flyertalkers:
US-AA Merger: Just the Facts thread

As facts become posted, that should be the place to look.

Merger discussion, speculation, and other questions can be directed here, or the similar thread in the AA forum:
MERGER: US and AA 9 Dec 2013 and implications for AA flyers (new)

AA - US Merger Agreement / Announcement / DOJ Action Discussion (consolidated, and now closed to new posts)
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Old Aug 23, 13, 9:49 pm
  #1531  
 
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Why would US leave *A anyway? I thought the merger move to OW was mostly to stay consistent with what the larger airline was already doing. That and the fact that UA probably would have pushed back on the merged US/AA staying in *A - there's no domestic pressure by joining OW as AA was the only domestic in it. US as a standalone fits pretty well in *A.
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Old Aug 23, 13, 10:07 pm
  #1532  
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Originally Posted by PWMTrav View Post
Why would US leave *A anyway? I thought the merger move to OW was mostly to stay consistent with what the larger airline was already doing. That and the fact that UA probably would have pushed back on the merged US/AA staying in *A - there's no domestic pressure by joining OW as AA was the only domestic in it. US as a standalone fits pretty well in *A.
US as a stand alone carrier fits pretty well in OW as well. Remember that US joined Star a decade ago. Before the UA/CO merger. That void in the NE that US filled, is now eclipsed by the pmCO presence out of EWR. AA is still weak on the east coast compared to UA and DL. US in OW fills in that gap. And don't forget that at the time of the UA/CO merger, questions were raised as to whether or not US was going to stay in Star because its relevance in the alliance had been diminished somewhat.
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Old Aug 23, 13, 10:14 pm
  #1533  
 
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Originally Posted by Fanjet View Post
US as a stand alone carrier fits pretty well in OW as well. Remember that US joined Star a decade ago. Before the UA/CO merger. That void in the NE that US filled, is now eclipsed by the pmCO presence out of EWR. AA is still weak on the east coast compared to UA and DL. US in OW fills in that gap. And don't forget that at the time of the UA/CO merger, questions were raised as to whether or not US was going to stay in Star because its relevance in the alliance had been diminished somewhat.
Yeah I suppose I hadn't thought of it that way. AA's northeast presence is almost non-existent. I may be approaching it from the perspective of not wanting US to leave *A
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Old Aug 23, 13, 10:34 pm
  #1534  
 
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Originally Posted by dcpatti View Post
The $3b AT&T paid to T-mobile was to cover any potential collateral damage to T-mobile's brand name; both parties spun it so that t-mobile's finances, business plan, customer base, network, etc were as weak and unfavorable as possible, and that t-mobile wouldn't survive on their own. The $3b was to be a huge cash infusion to keep investors and customers from fleeing if the merger didn't go through. Who wouldn't pull their investment in a company after seeing pages and pages of affidavits that the company was sure to go bust if they didn't tie up with the competition?
,
That's almost like having to pay alimony & child support without
the benefits of a honeymoon... no kids, or even a marriage!
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Old Aug 24, 13, 12:34 am
  #1535  
 
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AA is a good airline and their exec. plat. used to be very good (I hear it still is excellent), I had problems on UA so they lost my business a long time ago, althoght recently I have had better luck with them that AA (I have AA status but when I was booking the award seats I booked to HA in March I am all set with UA, AA has not confirmed anything yet...except 1 out of a party of 4.
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Old Aug 24, 13, 12:36 am
  #1536  
 
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why would US leave * alliance

Originally Posted by PWMTrav View Post
Why would US leave *A anyway? I thought the merger move to OW was mostly to stay consistent with what the larger airline was already doing. That and the fact that UA probably would have pushed back on the merged US/AA staying in *A - there's no domestic pressure by joining OW as AA was the only domestic in it. US as a standalone fits pretty well in *A.
because they have to. You cant have one airlines operating under the AA name and 1/2 the flights going to * alliance and AA flights (original) going to OW, right?
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Old Aug 24, 13, 6:53 am
  #1537  
 
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Originally Posted by CenterWaters View Post
if the merger does not go through, will AA refuse to sponsor US's entry into OW? What incentive does AA have for inviting US?

I don't know why AA's team of attorneys didn't demand $2 billion if the merger cannot be consummated. (like what AT&T had to pay when the merger with T-Mobile couldn't go through)
That sort of fee is usually computed based on the size of the deal. Compare the value of T-Mobile to AA or US.
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Old Aug 24, 13, 9:00 am
  #1538  
 
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Originally Posted by rodsren View Post
because they have to. You cant have one airlines operating under the AA name and 1/2 the flights going to * alliance and AA flights (original) going to OW, right?
You do realize the merger at this point is on hold pending the US DoJ's litigation against it. And most people who follow these types of cases have said once the DoJ does this, it's pretty much death for a merger.
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Old Aug 24, 13, 10:51 am
  #1539  
 
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Originally Posted by CenterWaters View Post
That's almost like having to pay alimony & child support without
the benefits of a honeymoon... no kids, or even a marriage!
More like paying alimony without the wedding or honeymoon because you told everyone that your almost-partner was a complete and undesirable mess that couldn't support themselves and that you would be doing the world a favor by marrying them out of pity. The crux of both AT&T's and t-mobile's arguments were that t-mobile would fail anyway. If I were the t-mobile CEO I wouldn't want my potential merger partner going on the public record with that assessment of me if I didn't have some insurance. All these company financials and business models can be positioned in ways that make the same numbers look great or downright scary; before the DOJ stepped in, both AT&T and t-mobile knew that their best chances were tied to making t-mobile look like a loser (which to me says they knew they were in a shaky position with the merger plans all along). T-mobile didn't want to risk being labelled as a loser with nothing to help them stay afloat if the merger didn't go through, and probably wouldn't have tried to merge if this insurance clause wasn't in the picture.
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Old Aug 24, 13, 11:37 am
  #1540  
 
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It all depends on the judge.

Originally Posted by GNRMatt View Post
You do realize the merger at this point is on hold pending the US DoJ's litigation against it. And most people who follow these types of cases have said once the DoJ does this, it's pretty much death for a merger.
The precedent you should look at is that every 7 out of the last 8 mergers went though. There is a LOT of money on the table. (Hint)

None of the arguments put forth by DOJ are any more true of the US Air/American merger than any of the the others that have successfully merged. The fact is that relatively small airlines don't last long when competing against giants. There are few markets that would be affected by the merger--two I believe. DOJ objections are mostly BS. Read them if you don't believe it. Zero factual data, lots of hot air.
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Old Aug 24, 13, 12:10 pm
  #1541  
 
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Originally Posted by CenterWaters View Post
if the merger does not go through, will AA refuse to sponsor US's entry into OW? What incentive does AA have for inviting US?
Consider the partnership between AA and AS - reciprocal elite benefits, very little overlap in network. More importantly, AA has been using lower cost partners (AB, AS) for saver award redemption, requiring higher priced anytime award redemption for AA metal. Should the merger not go through, US joins OW, I would expect something similar, which should go a long way toward appeasing those frustrated with the every dwindling AA saver award availability.

At one time, BA and HP had a codeshare arrangement, latter offering domestic connections for the former's TATL flights. Should US join OW, BA would again be able to offer connections out of CLT, DCA, PHL and PHX.

In my specific case, AS is increasing service out of my home SAN, offering nonstops to several Hawaiian islands, Mexican resorts, BOS and MCO, we have had little difficulty booking AA, BA awards (latter is another subject) on AS.

So inviting US into OW extends AA's network, offers many other benefits.
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Old Aug 24, 13, 12:18 pm
  #1542  
 
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I've got no idea who will win if they go to court, although if it appears one side is likely to win the other will be prompted to negotiate a settlement in exchange for concessions. They're dealing degrees, where one or two airports can make a difference in the outcome.

Jim
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Old Aug 24, 13, 12:58 pm
  #1543  
 
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Originally Posted by BoeingBoy View Post
I've got no idea who will win if they go to court, although if it appears one side is likely to win the other will be prompted to negotiate a settlement in exchange for concessions. They're dealing degrees, where one or two airports can make a difference in the outcome.

Jim
especially considering that almost all AA and US frequent flyers were overjoyed
about the AA/US merger! The court will have to take that into consideration.
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Old Aug 24, 13, 1:12 pm
  #1544  
 
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A judge can take whatever he/she wants into account, although they should so generally do stay within any established legal precedent.

Jim
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Old Aug 24, 13, 3:45 pm
  #1545  
 
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Originally Posted by CenterWaters View Post
especially considering that almost all AA and US frequent flyers were overjoyed
about the AA/US merger! The court will have to take that into consideration.
The feelings of the frequent flyers will probably take a back seat to the potential impact to the average consumer. Potentially higher fares will affect a family living on a middle-class income a lot more than a multi-billion-dollar corporation who wants its salespeople out in the field. The dollar amount may be higher to the corporation but the average consumer has smaller pockets and will feel it less. The DOJ probably doesn't much care if AA's lifetime program is more rewarding or who has better access to partner award space (which is what a lot of the elites have been using as the basis for their opinions).
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