The latest rumor on the line seems to be that AMR is considering selling AE as a complete and seperate company from AMR. Is this a possible attempt around the scope clause? Can anyone confirm or deny this rumor?
AMR has a couple options here. They have both Eagle & Executive that can be spun off or sold to another carrier. They are only going to go down the road of selling off one of these two airlines if it makes sense, will generate a needed supply of cash, and will allow them to get around the scope clause (ala American Connection).
About a year ago, Dan Garton, while strolling thru our work area, was asked by myself, and another employee, when was AA going to spin off the Eagle ?
After Dan realized that we (myself and my co-worker) live in the industry publications, on a daily basis, he then reluctantly replied that Wall Street looks very favorable on such an idea, at this point in time!
Your observations are very astute.
That orange sign(with the black background) clearly reads, FOR SALE.
Bloomberg reported today the 3Q02 was the slowest quater for IPO's in 23 years. Dan can say the moon is made of cheese but now is clearly not the time for an IPO.
In order to get ASM cap relief AMR would have to completely divest it's self of either Eagle or Executive or both. To retain a 51% controling interest would not solve the Scope problem. Is Don ready to loose full control of Eagle highly unlikely. Is Don willing to sell Executive to Chitaqua and cut a deal to have them feed SJU and STL, highly probable.
This is a subject that comes up every quarter when the financial statements come out.
First off, IF Eagle is sold, the only way it could be done is as an IPO. No single group could or would be able to amass the cash nessecary to aquire Eagle. Would Eagle stock sell? Yes. Eagle would be able to go head to head with WN, JB and others aggressively, or at least the potential for it would be there. If there were a group of private investors that wanted to buy Eagle, that sale would be contingent on total immunity from APA's influence. There could be no restrictions on expansion at all for the new airline. Basicly AMR would be creating another competetor.
Then again I could be wrong. Maybe Bill Gates would want to diversify and buy himself a new toy in the form of Eagle. I would hate to be a plaything though! Think of it! MicroSoft Airlines, Where do you want to go today? That would be one heck of a logo on the tail too, as long as no one thinks back to Win98 and the blue screen of death, there would be good marketing potential there.
Bob, who said anything about another airline buying them if they were sold off?
There are lots of worse investments to make, but the regional airline stocks are still performing a lot better than the majors do. An IPO is probably out of the question, but there's always a private sale to outside investors to consider.
Nobody expected us to sell Sabre, either. But we did...
NASDAQ reported today that they will delay their 1Q03 IPO until the second quater 03 at the very earliest. They can not remember a weeker period for IPO's and don't predict the market for IPOs to get better within the next 6 months.
What does that tell you when a stock market doesn't even want to do an IPO?
A private investor willing to purchase all of Eagle, highly unlikly. Their are operating certificates up for sale if someone wants an airline(Vanguard). The SCOPE clause may have finally forced Don to deal with the APA. Divesting Executive would only wind up costing more in the long run and AA mgt knows it. What good is an SJU hub with no feed or when the only feeder has you at it's mercy?
On 10/25/2002 1:00:59 AM WXGuesser wrote:
Isn't Eagle actually close to breaking even, if not MAKING money? Why would AMR want to get rid of something that is actually profitable? Don't think so....
Eagle made money in July and August and lost money in September. The loss was great enough to create a loss for the quarter. However, I suspect that the list of airlines making money during any month this year is probably pretty short.
BTW, does anybody know who is actually making money? Is there a list of airlines somewhere?
[BLOCKQUOTE][BR]----------------[BR]On 10/26/2002 1209 PM will fix for food wrote:[BR][BR]BTW, does anybody know who is actually making money? Is there a list of airlines somewhere?
[P]Aside from the obvious--Southwest is profitable, among the majors Alaska reported a Q3 profit. The losses at NW and CO were very small. They seem to be inching their way closer to profitability.[/P]
[P]If you look at the threads for these airlines you will find links to their Q3 reports and you can see exactly what their numbers were, not only for profit/loss, but traffic, load factor, costs, etc. [/P]
[P]You can also find the numbers for smaller low fare carriers like jetBlue, Frontier, ATA, AirTran, Midwest Express, etc.[/P]
[P]Hope that helps.[/P]