CARTY: DL/CO/NW Merger good for AA

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WingNaPrayer

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[FONT size=+1]AMR Chairman: Rivals'' Alliance May Benefit Co In Short Term [/FONT]​
[BR]NEW YORK -(Dow Jones)- The chairman of American Airlines parent AMR Corp. ( AMR) suggested Thursday that, if approved, the proposed code-share marketing alliance among Delta Air Lines Inc. (DAL), Northwest Airlines Corp. (NWAC) and Continental Airlines Inc. (CAL) may benefit American in the short term.
[P]While it troubles us in the long term, in the short term we see this as a diversion, quite frankly, for the three carriers, said Donald Carty, AMR''s chairman and chief executive, during the Salomon Smith Barney Transportation Conference broadcast on the Internet.
[P]Carty suggested that the process of merging reward programs, airport lounges and the like will be costly and time-consuming for the carriers. Among other things, the three carriers plan to have a code-sharing relationship which allows each carrier to sell the others'' seats as if they were its own. The move is a reaction to the similar partnership struck recently between UAL Corp.''s (UAL) United Airlines and the bankrupt US Airways Group Inc. (UAWGQ).
[P]We''d rather be focused on things that can make substantial, measurable change in our financial condition, Carty told investors.
[P]Some of the nation''s smaller carriers, including America West Holdings Corp.''s (AWA) America West Airlines, are opposing the partnership among the nation''s third-, fourth- and fifth-largest carriers, saying it would spur industry consolidation and allow a small number of airline alliances to dominate aviation.
[P]However, Carty said that Delta, Northwest and Continental would never be allowed to merge into one carrier. I think they remain fragile, he said.
[P]Still, over the long run, Carty said American, the world''s largest carrier, needs to react appropriately should the alliance wins regulators'' approval.
[P]Carty also said that he hopes the industry will have a better way to solve labor disputes in the future than the current system. Currently, the Railway Labor Act allows for a long process of federally mediated talks, sometimes culminating with presidential intervention. Under that system, Carty said many of the past labor disputes have resulted in work slowdown or travel disruption.
[P]The recent Republican sweep in Congressional elections has raised hopes that the government may side with airline management in labor disputes.
[P]Carty said American still believes it needs to reduce its structural costs by $3 billion to $4 billion annually to be competitive. The Fort Worth, Texas, carrier has identified more than $2 billion in potential savings but needs to take out another $1 billion to $1.5 billion, the executive said. [BR]------------------[BR][FONT face=Arial][EM]I guess this means Carty and crew, rather than get their own house in order, intend to just sit back and hope the other carriers fail instead.[/EM][/FONT][/P]
 
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WingNaPrayer

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I can't help but feel that the days of flying around in luxury jumbo jets are going to slowly diminish. Cheap, fuel efficient smaller jets (RJs) are going to become more commonplace, even if it takes 2 or 3 plane changes to get across country.[BR][BR]Boeing has already taken a massive hit from the industry slump and although little has been mentioned about their financial woes, I believe its just a matter of time before we start hearing Boeing talk about bankruptcy as well. With close to 90% of deliveries over the next five years either delayed or outright cancelled, Boeing won't be able to survive long on the leases and other financing packages it uses for it's B&B.[BR][BR]Now, before AA is going to be able to take full advantage of the RJs, some serious union busting is more than likely going to have to take place.
 

DLFlyer31

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Does Carty think only 5 people work in the management offices of DL,CO and NW? While it is true that CO/DL/NW want to get the alliance approved, it is far from being a major diversion. It's not a merger by any stretch.

Each carrier continues with its own cost-cutting strategies and strengthening their existing route structures. CO is expanding its reach with new long range RJ's. NW is adding new markets with RJ's. DL is expanding in the Caribbean, adding new cities to strengthen CVG, attacking US at DCA and preparing to launch a new low-cost carrier. In fact, DL is probably the only carrier that is serious about facing the lowfare carriers.
 

capeman

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Of course Caarty would agree to this. He is looking down the road for international codesharing. IF DAL,NWA and CAL get together, he will look for the AA/BA link once more. Flying domestically at Greyhound bus line fares is not going to cut it down the road.
 
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On 11/15/2002 11:12:06 AM WingNaPrayer wrote:
I guess this means Carty and crew, rather than get their own house in order, intend to just sit back and hope the other carriers fail instead.
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[/blockquote]

Yep. That just about sums it up, providing shedding 22% of management, parking aircraft, pulling capacity out of the domestic system, and laying off a couple thousand employees constitutes sitting back waiting for other carriers to fail...
 
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WingNaPrayer

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[P]
[BLOCKQUOTE][BR]----------------[BR]On 11/17/2002 4:16:09 PM eolesen wrote:[BR]Yep. That just about sums it up, providing shedding 22% of management, parking aircraft, pulling capacity out of the domestic system, and laying off a couple thousand employees constitutes sitting back waiting for other carriers to fail...[BR]----------------[/BLOCKQUOTE]
[P]You just seem to be entirely too proud of that statement![/P]
 
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