Airline stocks down sharply - DOJ reportedly to block AMR/LCC

[AAviator]

WT, that is why I specifcally mentioned the 787.

AA + LLC STILL HAS significant network challenges that AA can address better without LLC.

Why isnt anyone mentioning the $1.4 Billion check LLC has coming due that will be written from the AA account?

 

[nevergiveup]

AA's future business plan may cancel quite a few of those orders!

 

[AAviator]

They were ordered prior to bk and prior to any merger talk. If some get canceled, so be it.. You forgot to comment on the 1.4 billion.

 

[WorldTraveler]

There have been lots of people argue that US needs AA more than the other way around and that may very well be true. US can probably refinance that debt but at higher interest rates and a higher risk profile if the merger doesn't go thru.

 

[Phoenix]

Playing a "your worse off that us" game doesn't help anyone. AA and US both have significant revenue challenges to overcome. New airplanes don't fix revenue problems; they fix cost problems. Only if an aircraft can do things that nothing else before it could do does a new aircraft type really make a difference - and at best that only happens with the E175 aircraft which provides mainline cabin standards to a smaller aircraft. And remember the E175 class jets are flown by regional partners which doesn't do anything to improve mainline cost performance.

The reason why AA and US are both pushing for the merger is because there is real potential to improve the outlook for both via a merger. Both can help the other some but the merger itself brings a certain amount of baggage - not the least of which is the market concentration that will result in certain parts of the combined AA/US network - exactly where the DOJ is focused.

Neither side should be poking sticks in each others' eyes as if they are invincible.

invincible... yeah. TWA was invincible! Eastern was invincible! Delta was invincible!

 

[Phoenix]

They were ordered prior to bk and prior to any merger talk. If some get canceled, so be it.. You forgot to comment on the 1.4 billion.

$1.4B is that a trick question? Is that the cost of a new fleet of planes without fireproof batteries?

 

[nevergiveup]

They were ordered prior to bk and prior to any merger talk. If some get canceled, so be it.. You forgot to comment on the 1.4 billion.

Just drop a check in the mail.....tkx!

 

[AirwAr]

There have been lots of people argue that US needs AA more than the other way around and that may very well be true.
.,..

Is US the only option for the long term survival of AA?

Let's say for a moment that the forced merger were off the table and that AA has $7B in the bank to play with. What would be the best way to invest those limited dollars? Should they still merge with US? Should they pursue a marketing agreement with US instead? Maybe buy a fuel facility?

 

[700UW]

US has all ready refinanced once and got a lower rate, just because they are gonna redo the credit line/loan, doesn't mean rates will be higher

 

[WorldTraveler]

interest rates were much lower at the time US refinanced. With Fed intervention in markets being reduced, interest rates are going back up and it will cost more money to refinance.

As long as US continues to make money and can pay their bills, banks will continue to loan money to US... but it doesn't take a rocket scientist to realize that Parker (if he keeps his job) will have to place a priority on repaying banks above, well, handing out pay raises.

And US employees were tossed a promise of pay raises in order to get this deal done and it is pretty unlikely they are going to just walk back to their "cubicles" and continue to accept some of the lowest average pay rates in the industry.

 

[700UW]

No promises were made to the Mechanic and Related, Fleet Service, Maintenance Trainers, or the Flight Attendants at US.

And US' labor costs are more than WN, which is a larger airline than US.

 

[WorldTraveler]

And US' labor costs are more than WN, which is a larger airline than US.

on average, no.

 

[psa8979]

WorldTraveler. By Low Sell High is how one makes money on WS. Airline Stocks (Union or Non-Union) are a HIGH Risk Investment even DL. Non-Union Airline Workers fare the worst when the Inc. they work for loose $$ and WS like YOU don't give a rats ass ! Now go away and count your $.

 

[700UW]

on average, no.

You are wrong.

http://www.airlinefinancials.com/uploads/2011_Mainline_Summary.pdf

 

[robbedagain]

b6 us were just 2 of the lowest in terms of labor costs... us was 580 b6 189