Airtran's operating costs may be much lower than AA's but it would appear that US's operating costs are much lower than Airtran's. Comparing pilot wages on comparable aircraft clearly show that US pilots make substantially less (see my above post comparing pilot rates). So it would be even worse for AA to buy US. As for Airtan not having anything on the East coast, AA can build on Airtran's system organically. As far as hubbing in ATL with DL, EA and DL were able to pretty much coexist with each other. One factor you overlook is the cost of fleet and employee integration. They have new 737s, which AA has also; and they have the 717, a fairly new aircraft type which is perfect for AA in terms of capacity (100 seats). Since both types are new and AA employees are already trained on the 737, maintenance and training costs will be minimal. Compare this to AA trying to integrate US's old, warn out, duct taped A-320s and you can see the cost difference. Another positive about Airtran is the fact that 717 and 737 pay rates already exist in the current APA contract; so AA does not have to negotiate this with APA. With the A-320s, AA would have to negotiate pay rates with Hill and crew. Hill (the APA president) is very militant and has proven that he is capable of being an obstacle to AA's plans; he was successful in preventing AA from flying DFW-PEK. I doubt he would support a US/AA merger and in fact would be a formidable obstacle in this case as well. Integrating Airtran's employees into AA would be a thousand times easier than trying to integrate US's.
Merger talks could resune in 2009
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Woefully unfair treatment? I guess you think they should have received DOH and been at the top of the AA list. Yeah, that would have been real fair, employees of a dead company kicking out the employees of the healthy company. IAM-TWA/TWU went to binding arbitration just like the US/HP pilots. Like the US pilots, the TWA/IAM wanted DOH. Like the US pilots, they hated the arbitrator's ruling. Unlike the US pilots, TWA/IAM were the minority and could do nothing about it.
Those TWA people you say have it so bad have more than you. They have a pension from AA (they gave that up at TWA the same way you gave it up at US) and they have retiree medical (which you don't). It was rumored that Arpey was against the TWA deal (Carty was CEO at the time). If this is true, then he would see the wisdom of not merging with US.Good for those TWA employees were able to get back some of the benefits they lost. Woefully unfair? Yes. I'm not here to speak for former TWA employees, but if Congress had to pass a bi-partisan law to protect against unfair stapling, then something wasn't quite right. Again, thank God for McAsskill-Bond!
Can't you read? The TWA-IAM/AA-TWU went to BINDING ARBITRATION which is exactly what the McAskill Bond amendment calls for. The arbitrator ruled and the TWA-IAM employees were still not happy. They wanted their bases AND OURS; they wanted to be able to totally rape the nAAtives. The AA pilots used career expectations, (the TWA pilots had none where AA pilots had excellent ones), when they constructed the list. The APFA did it right. Those TWA employees did indeed get many benefits by coming over to AA; paid for by concessions coming from the pockets of the nAAtives.
You're right again! With DL/NW a reality and UA/CO getting really close, this leads many to falsely conclude that an AA/US deal will occur. AA's route system is one of the best and can stand alone where US's is second rate. But there are also certain similarities between US and TWA.
1. Both are/were working for the lowest wages among the legacies.
2. Both retrenched (shrank) by shutting down a hub (US at PIT and TWA at JFK).
3. Both had/have sub par route systems (all TWA had was STL).
The TWA people thought that they were going to come into AA with their DOH seniority and take everything; but the arbitrator, the APFA, and APA prevented them from doing so. US employees see themselves in the same position of the TWAers; that is why they are so sympathetic to them. They see themselves coming into AA with their DOH believing that McAskill/Bond will mandate DOH thus preventing them from ending up like the TWAers. Like the TWAers, they fantasize about going from the lowest paid with no pension or retirement benefits to among the highest paid WITH a pension and retiree medical all while going to the top of the seniority lists getting the best trips; flying the 777 and 787, etc. There is just one problem, Carty is no longer at AA; Arpey is running the show and as I posted earlier it was rumored he was against the TWA deal; if he was opposed to TWA that means AA/US WILL NOT HAPPEN.
Pacemaker
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Well, the funny thing is even after cut after cut in the pilot contract that leaves US near the bottom of the barrel in pilot compensation, one thing has not changed over the years. US Airways still has easily the highest unit costs in the industry. Look it up. bts.gov
Provides a nice cautionary tale the next time managment comes to the employees with hands out asking for help "fixing the airline".
aafsc I no doubt can read. McCaskill-Bond calls for binding arbitration. In the bill there is also the caveat "fair and equitable." Whereas "fair an equitable" is loosely defined, the fact that it had to be legislated is strong enough evidence that that caveat wasn't used in the binding arbitration that occured in the TWA transaction.
jeffster my support of McCaskill-Bond does not indicate my tacit hope of a US-AA transaction. It reflects my pragmatism: Since none of us has any control over what may or may not happen, I'd rather have as much language protecting me in the event a transaction occurs. Nothing more, nothing less, just plain pragmatism.
jeffster my support of McCaskill-Bond does not indicate my tacit hope of a US-AA transaction. It reflects my pragmatism: Since none of us has any control over what may or may not happen, I'd rather have as much language protecting me in the event a transaction occurs. Nothing more, nothing less, just plain pragmatism.
jimntx
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Not one word of this statement is true as it relates to the f/as. I am a nAAtive f/a, and I am appalled that after all this time these lies are still being put forth as justification for what we did to the TWA f/as.
1. The TWA f/as were hoping for proportional seniority. I.e., when the lists were combined if someone was in the top 10% of the original airline list, they would still be in the top 10% of the combined list, or as close as it could possibly be done. (The joke on the APFA and AMR is that only about 1500 of the TW f/as intended to stay. The rest were going to retire. But, they were treated so shabbily that they all decided to stay and force AA to recall them after they were furloughed--which is exactly what has happened for many of them. A few of them still on furlough may run out of time this year, but not that many in the great scheme of things.)
2. There was NO arbitrator because there was no arbitration in the case of the f/as.
3. The TWA f/as were told by the APFA president and Carty that "if you will give up your scope clause during the pro forma bankruptcy, we will take care of you." TWA was not in bankruptcy. Going into bk was a condition of the purchase by AMR. AMR wanted to abrogate the Karaboo agreement with Icahn. They needed TWA to go into bk to do that.
Whether TWA would have ended up in bk or out of business is pure supposition. Maybe it would have happened. Maybe it wouldn't have. You can't prove that something that didn't happen, would have happened.
FrugalFlyerv2.0
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A purchase of LCC by AA/AMR may not be the wisest use of money right now. DCA/LGA slots and gates would be a better purchase but are they for sale?
Also, I don't think a purchase of Airtran or Frontier (or any of thier assets should they liquidate) would be such a tremendous idea.
1) ATL and DEN: are these cities (metropolitan) areas large enough population-wise to support >1 airline hubbing there? DL could not compete with AA at DFW (>6 million) which has a bigger population than ATL (>5 million) and DEN (2.5 million). I think ORD (9 million) may be the only city large enough to support hubs by UA, AA and SW.
2) 717s/100-seaters: The 717 is a fine airplane but I think AMR management wants Eagle to fly 100-seaters at much lower rates than what is currently negotiated for the 717 with the APA.
3) This leaves only the 737-800, but with oil so cheap right now and AA's contract with Boeing - Airtrans 737's aren't so valuable.
IMHO ofcourse.
galley princess
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I hate to burst your bubbles, but most of us at US have forsworn from merger games. We all thought that a merger, any merger would rescue US from its previous management, which back then looked bad. Trust me when I say I would take back Wolf, even Siegel in a heartbeat! What we have received thru the AWA merger is nothing but abysmal and none of us trust that another merger would solve what are now intractable problems. If anything, it would just make our lives worse, which is tough to do, but we no longer doubt an avaricious airline CEO's ability to do it.
US is probably incompatible for any merger right now due to the pilot situation anyway.
The only hope on the horizon for US is that this management appears to learn, just very slowly. Whether or not they right this ship in time, who knows?
AA rarely if ever comes up when people entertain a merger, and when it does, everybody shudders. Talk about a culture clash. The only one that ever seemed to make sense was United and luckily, they want to be part of the success of Continental, who should buy routes from them, but not merge with them, in that they're a mess too.
If US merges again, it'll come out of left field.
US is probably incompatible for any merger right now due to the pilot situation anyway.
The only hope on the horizon for US is that this management appears to learn, just very slowly. Whether or not they right this ship in time, who knows?
AA rarely if ever comes up when people entertain a merger, and when it does, everybody shudders. Talk about a culture clash. The only one that ever seemed to make sense was United and luckily, they want to be part of the success of Continental, who should buy routes from them, but not merge with them, in that they're a mess too.
If US merges again, it'll come out of left field.
wings396
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Let's address a few of your quotes here.
2. Both retrenched (shrank) by shutting down a hub (US at PIT and TWA at JFK).
AA closed RDU leaving them with NO Southeastern Hub Period.
AA closed STL as a hub, leaving nothing much from TWA except for some A/C and a few employees.
3. Both had/have sub par route systems (all TWA had was STL). (And AA got rid of it, why did they buy it?)
Really, PHL and CLT are sub par Huh?
Richard
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Folks,
This topic is getting off on a tangent. If you want to discuss the history of the AA/TWA transaction please start a thread over on AA's board.
Please keep this thread on the topic of any M/A activity US may find itself in during the coming year.
Thank you.
This topic is getting off on a tangent. If you want to discuss the history of the AA/TWA transaction please start a thread over on AA's board.
Please keep this thread on the topic of any M/A activity US may find itself in during the coming year.
Thank you.
BoeingBoy
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Unfortunately a large part of the reason for the high RASM also creates high CASM - the short-haul nature of the NE route system.
Plus, if there were a merger with AA it's a sure bet that there would be LGA/DCA slots for sale. Just look at the potential merger with UA that progressed the furtherest - US slots would have been divvied up between UA, AA, and the to-be-started Potomac Air and the Justice Department still threatened to file suit to stop that merger.
Jim
