Maybe that was the goal, but AA didn't reduce its wage/benefit costs anywhere near as low as US wage/benefit costs. It's not even clear that AA reduced them as low as UA or DL costs. Before Ch 11, AA's wage/benefit costs were far above UA or DL.
except AA's labor cost problems wasn't because their employees were paid so much more than DL or UA employees; it is because AA was inefficient due to a larger workforce than its network could support.
THAT is why I have harped on revenue for so long.
You can shrink the workforce and their pay to a size that will fit the network - that is what US has done - but it is far easier to simply grow revenue, and that should be alot easier to do for AA than other carriers because AA has such a premium oriented network.
But because AA continues to cede markets to competitors they are only not growing their network as they said they would.
The only way to keep costs down long-term is to grow revenue through a growing network or at least replacing lower quality routes (revenue generation wise) with ones that can generate more revenue- and AA hasn't demonstrated they can do that.
If AA is pulling routes this close to emergence from BK - either independently or thru a merger - they recognize the likelihood of those routes working long term is not there.
Just exactly what is considered an appropriate amount of time for one airline to court another airline? your comment is sounding a little ridiculous.
It's business and it could be argued that the only way AA affords all they want to do is by having the extra 13.7 billion in revenues US brings to the table. Not to mention the UCC would like to get a higher payback, something AA cannot provide w/o a merger.
Like it or not it makes more sense for the companies to merge because they are the only two people at the party without someone to court.
it is precisely the "they are the last two singles" left mindset that so many of us have fought in the talk about AA-US in the 7 years since US failed at its DL takeover attempt.
There are a whole lot of unhappy couples in the world who thought they had to marry someone because they were the only viable choice instead of figure out how to be happy and successful as a single.
It is NO OFFENSE to you or anyone else who supports US, but their 13.7B in revenue isn't enough to push wage rates higher, which is really all employees care about. Stockholders might be happy to see 13.7B in revenue and an increased network but if it takes keeping wages well below average or keeps AA employees from using the profits they could generate from the merger to increase their own wages, then the merger is not worth it.
AA-US is based on the flawed logic that AA-US will enjoy revenue growth because DL has seen it as the first merger that was consummated. But the reality is that UA has not seen much in revenue growth as much as they would like to blame it on integration issues. UA/CO's network was built on large presences in key cities -but does not have the presence in many medium and small cities that can create merger synergies. (UA's presence in EWR did little to help the combined airline just as CO in SFO did nothing there).
If you look at DL-NW and WN-FL, they have worked/are working because they are eliminating less profitable flying and redeploying it elsewhere.
Because AA-US is the last merger to occur, they are fighting to hold onto their presence in large markets like NYC but also are going to much harder pressed to generate revenue synergies in medium/small cities because 3 other mergers before them have already focused on that - and those other carriers are not going to roll over and let AA-US succeed in their backyards (and that applies to everyone of AA-US key hubs or regions w/ the exception of MIA-Latin America right now).
Thus, all the talk of the revenue that AA-US will generate misses the reality that AA-US is number 4 out of 4 in a consolidating industry, they are the two weakest players now who will have to fight to make the merger work in other carriers' backyards, and AA-US still does not serve many of the key strategic necessities for being a global carrier which is what AA-US says.
Above all, saying that "we will hitch up" because it is better than being single is a recipe for disaster.
