Aa To Buy Ua

Feb 24, 2004
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I just read this:


************** MBA: AMERICAN AIRLINES SHOULD TAKE OVER UNITED *****************

As one of the foremost aviation consulting firms, Morten Beyer & Agnew (mba) this week proposed the merger of United Airlines and American Airlines as the only practical solution to the financial problems of both airlines.

"We propose that American take over United, as the stronger of the two carriers and the one who possesses the more successful management", said Chairman Morten Beyer. "United is burdened by its huge unfunded pension liability, continuing heavy losses despite its bankruptcy and cost reduction efforts, and has thrice been refused government loan guarantees required to fund its recovery."

Mr. Robert Agnew, President of MBA, pointed out that American's balance sheet is stronger than United's, with $3.853 billion in cash compared to $2.226 billion at United, and stockholder's equity only minus $122 million compared to minus $6.624 billion at United.

"It is obvious that Major U.S. carriers face a dim financial future as they battle the steady growth of low cost competitors, ruinous competition among themselves, and relentless cost pressure from labor unions, rising fuel expense, and the costs of maintaining their inefficient hub-and-spoke route systems," Mr. Beyer said. "A major impediment to a merger of United and American may lie in DOT and DOJ concerns over the anti trust implication of such a combination, but we believe there is no realistic alternative if we are to avoid the liquidation of United and the resulting adverse consequences to our air transportation system," stated Mr. Agnew.

"We have always had the doctrine of saving failed corporations, including airlines, through merger, the most recent being American's takeover of TWA," stated Mr. Agnew. "We see the following major advantages to a merger of the two carriers:

1. American will become the dominant international carrier between the U.S. and all areas of the world,
2. The merger will save the jobs of many of United's 80,000 employees and possibly as many as 200,000 airport, servicing, and other employees,
3. Service will be maintained over United's extensive domestic route system and preserve competition with other Major carriers,
4. Wasteful competition between United and American will be eliminated in major markets and excess capacity reduced,
5. The investment and financing in both carriers' extensive fleets will be preserved,
6. As American has more employees, its unions and their better labor relations will prevail,
7. As American has the stronger management, progress in overcoming the merger's problems should be swift and effective,
8. The combination of station facilities, headquarters staff, and real estate will save hundreds of millions in unneeded duplication, and
9. A buy-out by American will no doubt be the best deal that United's creditors will ever get," Mr. Agnew concluded.

"What with the IAM suing to get the appointment of a trustee for United and the continued financial failure of the carrier, it is high time to take decisive action. We believe that the prospects of a merged company and the combined assets are sufficient to support the estimated $10.0 billion in additional equity and loans required to support the merger," Mr. Beyer concluded.



Reading this makes me wonder if this idea is on the pay roll of AA. :unsure:
 
If this is ever allowed to happen I can see the lawsuits now.
US/UA not allowed beacuse of anti competitive reasons, but two of the three largest allowed? NFW.
Also, gotta love number 6 especially after reading the AA board here.

And one last thing- Can anyone say TWA fiasco with how many FEWER employees? In actuality, it might be what is best for both carriers, but either the govt needs hands off or hands on. They cant keep switching sides.
 
yeah and american will staple all ual employees to the bottom of the snioritiy list and lay them all off. sound familiar? american is a heartless company. no way in hell this will happen. if any one has the the august 2004 edition of airways magazine. read the article "farewell to twa" it brought tears to my eyes to read what american did to this great company. twa would have been better off shutting down by them selves like pan am did with dignity than have american come in and do it for them and treat the twa employees like crap. i mean they even sent out a comail telling the employees not to show emotion on the the day they were being let go. how heartless is that. ual will not let american come in and screw things up . hell no.
 
etops1 said:
yeah and american will staple all ual employees to the bottom of the snioritiy list and lay them all off. sound familiar? american is a heartless company. no way in hell this will happen. if any one has the the august 2004 edition of airways magazine. read the article "farewell to twa" it brought tears to my eyes to read what american did to this great company. twa would have been better off shutting down by them selves like pan am did with dignity than have american come in and do it for them and treat the twa employees like crap. i mean they even sent out a comail telling the employees not to show emotion on the the day they were being let go. how heartless is that. ual will not let american come in and screw things up . hell no.
[post="171180"][/post]​
If and thats a big IF, AA bought UAL....then we SHOULD go to the bottom of the list. "To the victor's go the spoil of war"... :up:
 
The Ronin said:
If and thats a big IF, AA bought UAL....then we SHOULD go to the bottom of the list. "To the victor's go the spoil of war"... :up:
[post="171191"][/post]​
misquote...."To the victor goes the spoil of war"....there, thats better :up:
 
etops1 said:
ual will not let american come in and screw things up . hell no.
[post="171180"][/post]​


ROTFLMAO, LOL, screw things up??????, ROTFLMAO, LOL

OK :huh:
 
Claiming to be a prestigious aviation consulting firm and suggesting this kind of non-sense shows the complete ignorance of this particular firm. I'd laugh if this was posted on April 1 but somehow I think these people realliy believe it. It is more likely that AA will buy every other legacy airline in the country than that they will buy UA. First of all, they don't need UA's problems and secondly, they have access to nearly all of the markets UA currentliy serves except for several Asian markets which AA can easily serve based on existing treaties.
 
That is the most ridiculous proposal I think I have ever heard from some MBA. AA buying UA. AA's purchase of TWA almost landed them in bankruptcy court themselves and ultimately lost Carty his job. That MBA must have been using laced sugar cubes before making this proposal and I can't believe he is being paid for this. If some pie-in-the-sky plan is out there to shrink UA to an affordable price so that AA can purchase UA and have that Chicago bankruptcy court judge rubber stamp it, I don't think so!!!
 
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Thinking of what this consulting company suggests, I have to start wondering if any of the legacy carriers have contracts with this company. Just in case they have, that might be the reason for the inability of those carriers to get their act together.

There are some consultants out there that have some interesting suggestions to get UA out of its situation but they are in steep contrast to what this consulting company is proposing and what UA is doing. Yes their ideas might not be appealing to the management and some union members, but it would ensure that UA would survive without a loan and that it will remain one of the US best and strongest airline.
 
I know some people who would LOVE to have some of whatever they are smoking at that "consulting" firm.

Definition: Consultant - Someone who steals your watch in order to tell you what time it is.
 
best laugh i've seen today. but i have to agree that AA is ruthless when merging companies. what they did to the TWA folks is sinful . they should be ashamed.
 
I think that this may be a proposal for an orderly restructuring of UAL as well as the easiest way for the gov to effect a less chaotic restructuring of the industry. In the proceeding, the gov could require certain divestitures (of course they would at ORD and perhaps some consolidation of stations in the NE and westcoast). These divestitures would reduce the capacity of legacy carriers, allowing further growth of new entrants and relieve some of the stress on other carriers. Yes, it would be complicated. Would it be the best thing for AMR..... that is less obvious.
 
This will never happen! The only way it could possibly happen is if the airlines decide to consolidate.

No UAL/US merger and they think UAL/AA is a good idea? HA! :down:
 

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