AA and US (maybe not)

[WorldTraveler]

Interesting dialogue here and it highlights that the strategic implications of AA's filing are way larger than what AA people want to believe - and that they and their company have little control over their outcome.
The right of exclusivity for a plan - while long and can be extended - will end and will end before AA emerges. just as if AA is out of BK, corporate laws require that a publicly traded company be open to outside offers - and the creditors will absolutely be keen to ensure that those offers are heard. The longer AA remains in BK w/o hearing offers only means they will be more "cleaned up" by the time they entertain offers which will increase their value to creditors. Everyone is best served including the creditors by allowing the BK process to work as much as possible to get AA's costs back in line.
The best offer will prevail -and in corporate finance it has as much to do so with long term prospects as it does in putting cash on the table now. Like AA, an offer from US that could top DL or even oneworld partners would have to be largely with borrowed money - which diminishes the long term value of the deal.
Whether DL wants to take on AA or not will remain to be seen but what is abundantly clear is that DL has the strategic guts, the financial strength, a strong track record of merger/acquisition success, and a stable company right now to do what it needs to do.
.
AA's aircraft orders are not going to be an influence in any merger/acquisition talks or in keeping AA as a standalone carrier. AA needs to replace as many as 500 aircraft over the next ten years... right now they have committed financing for a fraction of that amount. Any major acquriring/merging airline operates or has experience in operating multiple fleet types including mixed Airbus/Boeing fleets. DL still has committed to a small fraction of what it will need for fleet replacement over the next ten years... it could easily win the creditors over by taking the AA A/B orders at the 460 aircraft intended. US still has plenty of aircraft it could retire even if its plan didn't involve reducing any network duplication.
.
The problem with AA/US remains that the combined carrier would put together the two weakest large carriers in the US industry now and would leave AA/US with a #1 or #2 position in very few segments of the market... looking at market stats today for the industry is rather meaningless when you consider that AA will shrink as it moves through BK and that other carriers - DL, UA, and WN included - will continue to grow in the 3-4 years before AA and US could even merge their operations and begin to act like one airline. Even in a best case scenario, AA/US has minimal position in Asia and a far smaller position in continental Europe than either DL or UA - either separately or with their partners.
Add in the fact that the competitive attacks on AA continue even today - and there could be 18 months or more left in BK - and AA's ability to "pick up where it left off" competitively is highly doubtful.
.
Like it or not, but AA's future likely will not be decided by itself but by those in the industry that have much more financial strength and larger strategic objectives than either AA or US can overcome.

 

[AAviator]

A DL AA merger would be a nightmare for UA . Once again UA would be forced to consider dancing with the UGLY girl . What the hell maybe UA should throw there hat in the ring for AA.

Its not an UGLY GIRL, ..Its much worse. The dance hall needs to be cleaned up. The industry is coming to that realization.
The USAirways everyone knows today will be chopped up in some fashion, if consolidation continues. There is no workable combination that has LCC maintaining all their hubs, their identity, and presence as they are today.

 

[AAviator]

Just an FYI, When someone is on your ignore list, when someone else quotes them, their posts show up.

🙁

 

[Barfbag]

Do you really believe this sh&t? AA has 4.5 Billion dollars in cash some reports say that is now closer to 5 Billion today and you say their broke please. AA has deals worth billions of dollars on the table with GE and Boeing{both on the creditors committee} that might not become reality if we get merged with someone else, all three of the Unions set on the creditors committee there is no debter in possession and the big banks involved have been kicked to the front of the line as far as creditors go. So would you mind pointing out who DL or US is going to sale their plan to assuming we ever get to a point that competing offers are allowed in, and that is to say nothing of the fact that if AA did need money IAG would have way to much at stake to stand by and do nothing.

Face the fact that this is a BK of convenience, to address the labor issues and set the aircraft leasers up, so as the new planes arrive the old ones go away not to the desert where you pay leases and storage but away out the door. While I personally will suffer the loss of wages and benifits and possibly even my job, it is hard from a strictly business point of view not to respect the way they have set this thing up and the fact that they have you and many others actually believing thier broke is proof its a master stroke!

Hey buddy, you're talking about the American way here. AA went BK because they couldnt stash away the $$$$ fast enough. The unions didn't read the signals and the company made a quick exit into the waiting arms of the BK judge and it's protection. That's our American law system at work.. God bless America..

 

[ebwgs]

Its not an UGLY GIRL, ..Its much worse. The dance hall needs to be cleaned up. The industry is coming to that realization.
The USAirways everyone knows today will be chopped up in some fashion, if consolidation continues. There is no workable combination that has LCC maintaining all their hubs, their identity, and presence as they are today.

From the looks of it AAviator that pretty girl in Dallas may have eaten one too many briskets while wearing the same hairdo that worked for her a back in the day. Our dance hall may need to be cleaned up but your former pretty girl apparently thinks sock hops are still in vogue. Anyway, if DL has its way your girl may have some plastic surgery in her future. And when DL is finished carving up MIA DFW and LAX your AA fat girl just may become a diva again. A Delta diva mind you. And she may very well no longer have any use for you. Be careful what you wish on others because you just may find yourself without a date holding an empty bag. And I'd hate that for you!

 

[ebwgs]

I believe it is highly unprecedented that a carrier would be able to order 230 aircraft less than a year prior to BK on top of 60 previously ordered.

Hey apitbull you may be right and I hope the time never comes again where I get to prove you wrong. 🙂

 

[aapitbull]

Hey apitbull you may be right and I hope the time never comes again where I get to prove you wrong. 🙂

I see from your previous post you are on the DL is going to takeover the world bandwangon with WT well that explains alot, by the way I have been wrong before so if you get to prove me wrong it will be alright, I guess now I am going have to make a note to tell you I told you so if I'm right, because after all being right on AI is whats important right!

 

[ebwgs]

I see from your previous post you are on the DL is going to takeover the world bandwangon with WT well that explains alot, by the way I have been wrong before so if you get to prove me wrong it will be alright, I guess now I am going have to make a note to tell you I told you so if I'm right, because after all being right on AI is whats important right!

You have got me all wrong if you think that I share WT's Delta-centric views. Nothing could be further from the truth.

 

[aapitbull]

You have got me all wrong if you think that I share WT's Delta-centric views. Nothing could be further from the truth.

Anyway, if DL has its way your girl may have some plastic surgery in her future. And when DL is finished carving up MIA DFW and LAX your AA fat girl just may become a diva again. A Delta diva mind you.

If I miss read this then my apologies but it did sound like WT.

 

[aapitbull]

You have got me all wrong if you think that I share WT's Delta-centric views. Nothing could be further from the truth.

For the record, I have no ax to grind with you. It's just that I see this BK as completely contrived and while I am convinced that had AA continued on the path they were on they would have been broke and BK had nothing changed, but they are not there today. This is simply the easiest way to fleece the employees, leasors,cities, and airports they do business in my opinion with but we shall see. while it may sound like I am supporting their postion I am not, but I do give them credit for imaginative thinking.

 

[ebwgs]

For the record, I have no ax to grind with you. It's just that I see this BK as completely contrived and while I am convinced that had AA continued on the path they were on they would have been broke and BK had nothing changed, but they are not there today. This is simply the easiest way to fleece the employees, leasors,cities, and airports they do business in my opinion with but we shall see. while it may sound like I am supporting their postion I am not, but I do give them credit for imaginative thinking.

ok

 

[fltguymk]

"Whats in the water out there in Phoenix?"

http://www.thestreet.com/_yahoo/story/11399598/1/amr-ceo-on-us-airways-bid-whats-in-the-water-in-phoenix.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

 

[UPNAWAY]

BOLD TALK FROM A COMPANY THAT HAS LOST 13 BILLION SINCE 9-11.

 

[etops1]

Yes ,very bold and very AArogant. Typical AA MO. It's their Arrogance that has got them where they are in the first place.
But as someone told me ."Trash talking is the last bastion of someone who thinks they're going to lose "

 

[Super FLUF]

Bold talk?

You mean "bold talk" like a directionless company with a raging civil war with no end in sight, led by a drunk, and bleeding a slow financial death making an unrealistic and nonviable "bid" for a bigger company?

That type of "bold?"