Boeing Doesn't See AA-US Merger

[American6]

Color me shocked!!!!..........Boeing doesn't want Airbus's biggest customer buying one of their most loyal customers.............hmmm.

Nah, if AA and US merge, it would be mixed Airbus and Boeing, plus some E-190s. Like here is what the mainline fleet may look like

A319-100
A320-200
A320neo
A321-200
A330-200
A330-300
A350-800
A350-900
Boeing 737-800
Boeing 737 MAX
Boeing 777-200ER
Boeing 777-300ER
Boeing 787-9
Embraer E-190

See, a mix. The 757s and 767s of both airlines would be phased out in this case (well US is already phasing out the 757 and 767 and American is phasing out the 757)

 

[Hopeful]

Not at all - I was responding to your post that said nothing about no furlough language - just a "market based" contract. All I said is read the fine print since in at least one of the "bridge agreements" agreed to by Parker the no furlough protection is only for 2 years after the closing of the merger. And given that it's likely that AA employees will be furloughed before a potential merger takes place, did Parker also agree to recall them for any period of time?

In other words, don't jump on bullet points as being the whole story...all three unions seem to be emphasizing the positive and not mentioning the negatives in their bullet points...

Jim

I agree..It's not so much about getting a better deal...it's also a slap at AA....
I see a worse case scenario plying out....UA/CO, DL and US bidding on AA routes SANS the employees.
For those who believe US will be the knight in shining armor, think again..

I suggest you think more along the lines of the buzzards circulating the dying corpse.

 

[Soaring Eagle]

How exactly does that work? I mean, how do airlines bid on another airlines' routes? Can they only bid on international routes, since anyone can fly anywhere domestically?

Hopeful, I fully agree with your thoughts on US. Based on their past history, I think anyone who views them as a savior is severely mistaken.

 

[FWAAA]

How exactly does that work? I mean, how do airlines bid on another airlines' routes? Can they only bid on international routes, since anyone can fly anywhere domestically?

Hopeful, I fully agree with your thoughts on US. Based on their past history, I think anyone who views them as a savior is severely mistaken.

Hopeful is talking a Ch 7 liquidation in bankruptcy where the other airlines will bid on everything of value. Obviously, domestic routes aren't an "asset" and have no value. Slots and gates, on the other hand, have value. Internationally, same thing for the Open Skies destinations where only slots and gates have value.

 

[Hopeful]

Hopeful is talking a Ch 7 liquidation in bankruptcy where the other airlines will bid on everything of value. Obviously, domestic routes aren't an "asset" and have no value. Slots and gates, on the other hand, have value. Internationally, same thing for the Open Skies destinations where only slots and gates have value.

Not only that, FWAAA..What if the BK judge was to allow merger offers in CH.11?
I also meant that US may not be the only player.

 

[eolesen]

I wouldn't call anything offered by by DL or UA at this point a merger. It would be a parting out offer in sheep's clothing.

There's no way that AA's NYC or DCA presence would survive a merger with DL, and its arguable whether it would hold up with UA.

Start looking at the other hubs, and similar chainsawing would have to occur (you couldn't realistically keep every IAH & DFW international route intact in a UA merger, nor could you keep every MIA and ATL route intact in a DL merger).


An offer from WN, or a B6-AS tie-up funded by TPG would be actual mergers, but I don't see those coming forward anytime soon.

 

[WorldTraveler]

Since AA plus DL at DCA would amount to less than 25% share, there is no reason to think there are problems there.
.
NYC is the problem area when considering any merger with DL or UA and DCA is the problem area when considering any merger/combination/asset sale with US.
DAL/DFW is a problem with WN.
JFK is a problem with B6.

Summary, there isn't a single combination of AA with any other viable carrier besides AS that doesn't involve some degree of anti-trust issues.

There is no precedent for successfully combining 3 airlines - a 3 way merger - in the airline industry.

 

[eolesen]

JFK for a combined AA+B6 is still less than DL @ JFK+LGA or UA @ EWR+LGA.

There is no precedent for successfully combining 3 airlines - a 3 way merger - in the airline industry.

Wrong.

CO+PE+NY, February 1, 1987. Probably one of the most successful mergers from a strategic standpoint in the long run, although the first few months were quite painful for customers and employees alike (as a PE employee, I got 3 hours of classroom training on Shares prior to the merger, and everyone had to go to EWR for the training...)

 

[WorldTraveler]

The merger you noted was an operational merger of diverse Texas Air subsdiaries. It was not the the bringing together of 3 unique companies.

It also ushered in the darkest hours for the US airline industry w/ respect to labor relations.
Average compensation including pay and all benefit costs for CO employees never reached the average levels enjoyed by AA, DL, and UA employees all the way to the day CO was acquired by UA.
CO's rapid growth came because of below average costs and a negligence of other carriers to the NYC market for much of the time when CO was rapidly building EWR.

AMR's shareholders aren't going to wait the years that it will take to turn AMR around in a 3 way merger. And AA is still multiples times larger than AS and B6 combined, which means that the risk those two companies would take is more than they would tolerate.

AS and B6 might buy surplus assets if a larger airline bought the majority of AA but they won't drive an acquisition, even with an investment fund.

The DOJ still looks at size at specific airports as the primary concern. It is highly unlikely that AA/B6 could exceed 50% at JFK, even though DL and UA both have far more share in the NYC area as a whole. You need only look at the slot swap and the size limits that US was held to even though US is much smaller in the WAS area when all 3 airports are considered.

The best chance remains for AA to successfully restructure - and only if it fails to do so will other options be considered.

On top of the potential labor problems at UA and the deepening European problems - of which AA/BA is somewhat insulated by not being tied to the Euro, AA's outlook doesn't look as bad as alot of people might think or want it to sound like in the midst of the 1113 process.

 

[eolesen]

The merger you noted was an operational merger of diverse Texas Air subsdiaries. It was not the the bringing together of 3 unique companies.

Having been there, I'm sure you know best. Oh, wait. I was the one who was there. Silly me.

 

[WorldTraveler]

Then you should remember that New York Air and CO were both Texas Air Corp. airlines several years prior to the 1987 operational merger.

 

[Soaring Eagle]

Doesn't matter that they were all owned by Texas Air. They were separate airlines. American and American Eagle are both owned by AMR but they are separate airlines.

 

[robbedagain]

aa is now going to consider a merger with usairways as well as others

 

[eolesen]

Texas Air also owned Eastern. Guess that would have just been an operational merger as well.

 

[WorldTraveler]

The difference is that AA, B6, and AS all are separate airlines with completely independent financial interests. It is a big and incorrect leap to argue that AA, AS, and B6 could succeed in a 3-way merger because several Texas Air Corp. subsidiaries were merged to operate as one airline leaving EA as an operationally separate airline owned by the same group - but none of the them remain today.