Other suitors come out of the woods after AA

[FWAAA]

In my opinion, IAG would like to have both AA and US in the oneWorld alliance. This would provide more code share opportunity and weaken the Star Alliance. Furthermore, IAG may be working with both AA and US to put together a deal.

If your supposition is correct, then I have to ask: Why hasn't BA been banging the drum to get US into Oneworld for the past decade? Ever since US was admitted to Star Alliance, it's been excluded from the antitrust immunity joint venture reindeer games by UA and LH. Then, four years ago, UA and LH invited CO to join *A and the immunized joint ventures while US is still outside with its nose pressed up against the glass, wishing it didn't have to compete with the immunized joint venture of its "partners" across the Atlantic. So if US would add anything of substantial value to Oneworld, why has BA been sitting on its hands for so long?

 

[signals]

To me it sounds like folks still believe in the AA product. This isn't a merger but rather an investment. It also sounds like, as has been stated, AA is fully capable of restructuring.

 

[Phoenix]

To me it sounds like folks still believe in the AA product. This isn't a merger but rather an investment. It also sounds like, as has been stated, AA is fully capable of restructuring.

Folk's belief in the product apparently hasn't made AA profitable. They will need more than belief to make them viable again. Of course AA can restructure but can they shed enough costs to make them profitable.. And more to the point can secured creditors gain more in a standalone model or some other arrangement?

 

[FWAAA]

Folk's belief in the product apparently hasn't made AA profitable. They will need more than belief to make them viable again. Of course AA can restructure but can they shed enough costs to make them profitable.. And more to the point can secured creditors gain more in a standalone model or some other arrangement?

Last year, AA's labor expense was about $2.2 billion higher than it would have been if AA had paid its employees pursuant to US' contracts, with US wages and work rules. And how much did US earn last year? $111 million, excluding special items. Not counting its special items (primarily aircraft writedowns), AA lost $1.136 bilion last year. If AA were to cut its labor expenses as low as those at US, AA would be highly profitable.

The real question is whether adding a low-wage, high-cost airline (US) to a higher-wage but lower cost airline (AA after its Ch 11) is a winning combination. Some posters here think it's the greatest thing ever. We'll see.

 

[Phoenix]

Last year, AA's labor expense was about $2.2 billion higher than it would have been if AA had paid its employees pursuant to US' contracts, with US wages and work rules. And how much did US earn last year? $111 million, excluding special items. Not counting its special items (primarily aircraft writedowns), AA lost $1.136 bilion last year. If AA were to cut its labor expenses as low as those at US, AA would be highly profitable.

The real question is whether adding a low-wage, high-cost airline (US) to a higher-wage but lower cost airline (AA after its Ch 11) is a winning combination. Some posters here think it's the greatest thing ever. We'll see.

Looking at a comparison of one year's worth of current labor costs to fix the problems of the last ten years is a bit too narrow of a focus. Secured creditors and potential new investors will be looking at a broader picture.

 

[Hawkhunter]

What surprises me is that it took this long for all the vultures circling the AA carcass to make themselves known.

I don't think Doug is going to be able to get AA for what he wants to pay. That's why I still think he should make a play for Frontier, buy the assets and not the people, close DEN, use MKE as US's Midwest hub and go about his business. IMO Frontier is headed for the dung heap and can be had for dirt. Fleet type is the same, not sure on power. Now you have an airline that is big enough to compete effectively. Apparently I'm a committee of one on this.

Apparently, nobody gives a crap what you think." Buy the assets and not the people", sounds exactly like someone of your caliber would say.Now go play with yourself.

 

[FWAAA]

Folk's belief in the product apparently hasn't made AA profitable. They will need more than belief to make them viable again. Of course AA can restructure but can they shed enough costs to make them profitable.. And more to the point can secured creditors gain more in a standalone model or some other arrangement?

Looking at a comparison of one year's worth of current labor costs to fix the problems of the last ten years is a bit too narrow of a focus. Secured creditors will be looking at a broader picture.

You mean UNsecured creditors, not secured creditors. The secured creditors are presumed to vote in favor of management's POR. Unsecured creditors are the ones who will vote on management's plan and give it the thumbs up or thumbs down.

I chose last year because it illustrated my point, but if you want, you can compare the dismal results at US since the merger in 2005; since 2005, US has lost an aggregate $1.1 billion or so (add the net income in profitable years and subtract the net losses in the losing years) despite the three bankruptcies between US and HP and the corresponding low wages those bankruptcies caused.

Further, US has paid more than AMR for fuel each year since the merger except for one year, 2010. Last year, in 2011, US paid $139 million more for fuel than it would have at AMR's price. In the years since the merger, US has paid several hundred million dollars more for fuel than it would have at the price paid by AMR.

There are more examples of the failure of Doug Parker and Co to keep pace with AMR, but to keep going looks like kicking someone once they're down.

 

[Phoenix]

You mean UNsecured creditors, not secured creditors. The secured creditors are presumed to vote in favor of management's POR. Unsecured creditors are the ones who will vote on management's plan and give it the thumbs up or thumbs down.

I chose last year because it illustrated my point, but if you want, you can compare the dismal results at US since the merger in 2005; since 2005, US has lost an aggregate $1.1 billion or so (add the net income in profitable years and subtract the net losses in the losing years) despite the three bankruptcies between US and HP and the corresponding low wages those bankruptcies caused.

Further, US has paid more than AMR for fuel each year since the merger except for one year, 2010. Last year, in 2011, US paid $139 million more for fuel than it would have at AMR's price. In the years since the merger, US has paid several hundred million dollars more for fuel than it would have at the price paid by AMR.

There are more examples of the failure of Doug Parker and Co to keep pace with AMR, but to keep going looks like kicking someone once they're down.

No. Actually I meant secured creditors (and potential new investors). They are the ones who will craft the offer that can't be refused by at lest 51% of everyone else. I have no idea what that will be (though you seem to have a fixation on airlines other than the one that is in bankruptcy) but managements will march to whatever tune they are given and labor leaders will nod their heads at the mahogany tables, then bluster for the press outside. Everyone will vent their feelings and feel like they are participating in the process.

 

[FWAAA]

No. Actually I meant secured creditors (and potential new investors). They are the ones who will craft the offer that can't be refused by at lest 51% of everyone else.

If you meant Secured Creditors, then you're mistaken about how the bankruptcy process works. The unsecured creditors will be paid, for the most part, in newly issued shares of stock in AMR or stock of the merged AMR and whichever airline that is, and those unsecured creditors will be the parties voting on the POR. The secured creditors have no say in the matter.

 

[Phoenix]

If you meant Secured Creditors, then you're mistaken about how the bankruptcy process works. The unsecured creditors will be paid, for the most part, in newly issued shares of stock in AMR or stock of the merged AMR and whichever airline that is, and those unsecured creditors will be the parties voting on the POR. The secured creditors have no say in the matter.

Voting on a POR sounds like such a powerful thing but is about as useless as having a choice between a democrat and a republican.

 

[EastCheats]

Voting on a POR sounds like such a powerful thing but is about as useless as having a choice between a democrat and a republican.

So...What is your choice? Liberal or conservative?

 

[Phoenix]

So...What is your choice? Liberal or conservative?

Ha! If we debated that it would be good for another 100 pages...

My point was that those who craft your choice have more power than those who choose and those who have a secured interest (coupled with new financiers) have the most. Voting is a means of pacification.

 

[EastCheats]

Ha! If we debated that it would be good for another 100 pages...

My point was that those who craft your choice have more power than those who choose and those who have a secured interest (coupled with new financiers) have the most. Voting is a means of pacification.

I'll give you a clue on how I stand. Some in the media have concerns that Arizona has the following law on the books because of recent events in Florida. I support the law, otherwise know as a stand your ground law.

ARS 13-405, Justification; use of deadly physical force.

It reads:

"A. A person is justified in threatening or using deadly physical force against another:
1. If such person would be justified in threatening or using physical force against the other under section 13-404, and
2. When and to the degree a reasonable person would believe that deadly physical force is immediately necessary to protect himself against the other's use or attempted use of unlawful deadly physical force.
B. A person has no duty to retreat before threatening or using deadly physical force pursuant to this section if the person is in a place where the person may legally be and is not engaged in an unlawful act."

 

[Phoenix]

I'll give you a clue on how I stand. Some in the media have concerns that Arizona has the following law on the books because of recent events in Florida. I support the law, otherwise know as a stand your ground law.

ARS 13-405, Justification; use of deadly physical force.

It reads:

"A. A person is justified in threatening or using deadly physical force against another:
1. If such person would be justified in threatening or using physical force against the other under section 13-404, and
2. When and to the degree a reasonable person would believe that deadly physical force is immediately necessary to protect himself against the other's use or attempted use of unlawful deadly physical force.
B. A person has no duty to retreat before threatening or using deadly physical force pursuant to this section if the person is in a place where the person may legally be and is not engaged in an unlawful act."

This is an example of thread hijacking.

 

[blue collar]

I'll give you a clue on how I stand. Some in the media have concerns that Arizona has the following law on the books because of recent events in Florida. I support the law, otherwise know as a stand your ground law.

ARS 13-405, Justification; use of deadly physical force.

It reads:

"A. A person is justified in threatening or using deadly physical force against another:
1. If such person would be justified in threatening or using physical force against the other under section 13-404, and
2. When and to the degree a reasonable person would believe that deadly physical force is immediately necessary to protect himself against the other's use or attempted use of unlawful deadly physical force.
B. A person has no duty to retreat before threatening or using deadly physical force pursuant to this section if the person is in a place where the person may legally be and is not engaged in an unlawful act."

Are you trying to use it in ref w/ your fight against usapa? Or are you saying it was ok in the case in FL ?