Interesting Reading

galleyguy4u2

Senior
Aug 9, 2003
313
2
************** 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.
 
desertfox said:
What alternate universe does this consulting firm live in??! :shock:
[post="171186"][/post]​

Yeah. Considering the astounding success AMR had with the TWA purchase in terms of jobs saved and employee relations improvements, how could they not succeed with a purchase of United? Yeah, that's the ticket.
 
Also consider that Jane Allen and Beth Mack are at UA. For those of you who do not know Beth, she was head of inflight services at TWA and came from AA. Beth started as a f/a at AA and worked her way up to some position in marketing before coming to TWA. Things that make you go hmmmmm.

Now can you see that intergration mess?
 
galleyguy4u2 said:
Beth started as a f/a at AA and worked her way up to some position in marketing before coming to TWA.
[post="171244"][/post]​

Beth Mack left AA as a flight attendant, she never held an executive position there before AMR acquired TWA and retained her. Her airline marketing experience started while she was working at BWIA before coming over to TWA.
 
These guys must hold some UAL corporate bonds. They can't be serious.

The sure fix to AMR's financial problems is not UAL's airplanes, employees, or routes, it's UAL's failure. (along with USAir)
 
To moderator:

This should not be moved anywhere else. This could be posted somewhere else also - but it has information that interest AA.

Some of you sure are "move happy".
 
Just Plane Crazy said:
To Moderator

This thread should be linked (moved) to the United one. (AA to buy UA)
[post="171339"][/post]​

Hey Plane: This does pretain to AA. I agree who made you the post mover? Stay on your own board.
 
TWAnr said:
Beth Mack left AA as a flight attendant, she never held an executive position there before AMR acquired TWA and retained her. Her airline marketing experience started while she was working at BWIA before coming over to TWA.
[post="171298"][/post]​

Beth also worked for Kiwi Airlines after leaving AA.

Let's see Kiwi, TWA, and now United???????? <_<
 
galleyguy4u2 said:
Hey Plane: This does pretain to AA. I agree who made you the post mover? Stay on your own board.
[post="171413"][/post]​


You maybe should go over to the UA side and look at what is going on there in regard to the same topic. Just started earlier than this one.

And I don’t see a sign that the board belongs to any one specific. This is a topic that has a bigger impact on UA than on AA. Oh sorry I forgot, AA might go the same way of US and UA (Chapter11). :shock:
 
mjk said:
These guys must hold some UAL corporate bonds. They can't be serious.

The sure fix to AMR's financial problems is not UAL's airplanes, employees, or routes, it's UAL's failure. (along with USAir)
[post="171331"][/post]​


In the contrary, they have to be on AA pay roll.
 
In the contrary, they have to be on AA pay roll.


You don't really believe this do you? AMR has 3.9 billion in cash and you are suggesting that they are going to buy a company that has 8.3 billion in underfunded pension liability, among other problems.

Are you joking, niave, or just stupid?