The chances of "THIS" coming to fruition ?

[KILOFINAL]

IMO, other than from a marketing standpoint vis a vis codesharing flights, I dont see any financial benefit from any "alliance" such as one world or star alliance.

You are seeing the signs of financial pressure as mighty LH has cut the purse strings on the poor stepchild - Austrian Airlines. Austrian has to stand on their own feet or they will be dumped. The interesting thing is Emirates and Etihad are just standing back and will put money into these carriers such as Austrian and Air Berlin to gain a stronger foothold.

If BA cannot, what about IAG or OneWorld as a whole?

 

[eolesen]

IAG -is- BA. And no, oneworld has no ability to invest anything "on its own"

 

[BoeingBoy]

IMO, other than from a marketing standpoint vis a vis codesharing flights, I dont see any financial benefit from any "alliance" such as one world or star alliance.

That's because each alliance has a large network carrier partner in the U.S. market - the largest single market for air travel in the world. It would be a dark day for OW to lose it's partner in the U.S.

Jim

 

[KILOFINAL]

IAG -is- BA. And no, oneworld has no ability to invest anything "on its own"

Exactly......and that "money pit"...AKA.....Iberia wasnt a very smart move on the behalf of BA.

 

[Buck]

IAG -is- BA. And no, oneworld has no ability to invest anything "on its own"

Yes but they are also Iberian, can each unit of one world not invest in a portion of AMR? I realize there is a limitation on the foreign ownership.

 

[FWAAA]

Yes but they are also Iberian, can each unit of one world not invest in a portion of AMR? I realize there is a limitation on the foreign ownership.

Sure, they could, but there's no need to. There is no shortage of fools in the USA willing to invest new money in airlines. TPG and its friends have sufficient billions of dollars available. Even Doug Parker and his Wall St friends will have no problem raising billions of dollars.

 

[BoeingBoy]

As with JAL, I think the only reason for BA (IAG) or other OW members to invest in or help finance AA would be to prevent it from leaving OW due to a buyout by a non-OW carrier or if for some reason it looked like AA wouldn't be able to emerge from bankruptcy. A DL attempt to acquire AA would qualify. A US attempt? The combined AA/US would probably end up in OW anyway.

Jim

 

[Buck]

As with JAL, I think the only reason for BA (IAG) or other OW members to invest in or help finance AA would be to prevent it from leaving OW due to a buyout by a non-OW carrier or if for some reason it looked like AA wouldn't be able to emerge from bankruptcy. A DL attempt to acquire AA would qualify. A US attempt? The combined AA/US would probably end up in OW anyway.

Jim

You mentioned JAL. Didn't. AMR bailout JAL some time ago to about $1B?

 

[FWAAA]

You mentioned JAL. Didn't. AMR bailout JAL some time ago to about $1B?

No. AMR offered to arrange a billion dollars investment in JAL, which wouild have included a large $$$ contribution by TPG. Ultimately, JAL decided to stay in Oneworld but turned down all AA-related investment. Good thing, too, since JAL promptly filed for the Japanese version of bankruptcy. Neither AA nor any other OW airline ever invested in JAL. AA did promise JAL some revenue guarantees which AA said recently it would probably not have to make good on.

 

[WorldTraveler]

Looks like some people still are getting their kicks out of hitting the minus buttons even to posts which are pretty factually based.....
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The notion of a foreign entity (likely oneworld) investing in AA would indeed be predicated on keeping AA in oneworld but there is little incentive for an investment if AA's position in oneworld is not threatened and if AA cannot grow in order to deliver more revenue to the their partners....
Given that, at least for now, AA is not talking about adding more capacity outside of its current cornerstone but instead growing its capacity at those same cornerstones, that would mean they either need to be able to feed a whole lot more domestic traffic to their partners OR they need to start a lot more int'l routes to non-alliance hubs and then share the revenue on those routes.
Both are fairly high risk growth strategies or have limited returns relative to the investment, esp. given that TATL capacity will shrink as fuel prices continue to increase.
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But, Tom, Star and Skyteam both have alot more capacity at airports in continental Europe which can carry higher percentages of connecting traffic to more destinations which cannot be served nonstop from the US.... LHR will always be heavily focused on the local market while IB is a much smaller airline than the megacarriers in continental Europe... and Spain's global economic influence is strongest in Latin America where AA does fine on its own.
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It still comes down to oneworld partners likely investing ONLY if they need to do so to protect their feed.... and it still says that there might be other strategies they could use to increase their joint alliance revenues.

 

[signals]

BA bankrolling AA????...ummm..time to take your rose colored glasses off. BA is in no financial position to "bank roll" AA or any other money losing business. Count your lucky stars "IF" US Airways does in fact acquire AA.

Are we talking British Airways or Boeing?

 

[eolesen]

The alliances are going to have to take a long look at their current structures...

It's pretty obvious that BA needs to keep AA's feed, and AA needs to keep BA's feed. Same thing with AA & JL. They have a mutual dependency on each other.

It's a little muddier when you start looking at IB --- yes, they're part of the JV, but there's a school of thought that IB gains more from BA & AA than the other way around.

There's also a lot of uncertainty over the weaker EU economies, including Spain. BA is lucky that their biggest exposure to the Euro's meltdown is IB. LH has more exposure in general than anyone else, since they've invested in so many other small brands (think Anschluss...). AF/KL were the first to really show signs of pain, but I think it may just be a matter of time before we see one of the European based carriers fall over. It might be IB, it might be TP or AZ.

If (When?) IB starts becoming a bigger drain on IAG's books, I have no doubt that BA might look to turning them loose. They're still separate entities with common ownership.

If that happens, there is no other carrier in Spain who could take them on. Spanair shut down in February, and the remaining LCC's probably want nothing to do with IB...

Either way, the anchor tenants of the three alliances (BA, AF, LH) need to be really careful about protecting system revenue where they can, because their home markets are likely to become a serious world of hurt.

 

[WorldTraveler]

The economic crisis in Europe is more heavily concentrated in southern Europe; northern Europe's exposure is from the banks that have invested in southern Europe. on that basis, LH and BA (proper) along with KL are probably in a little better shape. France so far is handling the economic crisis fairly well compared to its southern Europe neighbors but is probably more vulnerable than other northern Europe economies.
Europe is also dealing with the consolidation of the industry which is due in part to grow fuel prices which reduce demand and make it harder to have inefficient and duplicative networks. LH is more subject to that problem but they are working quickly to rid themselves of their weaker partners and to get rid of unnecessary investments.
BA still needs a continental European partner with ample room to handle connecing traffic. IB wasn't the ideal airline for that role when BA "married" them but it was the best choice at the time and there doesn't appear to be a better solution on the horizon.
IB's Latin heavy network does fit well w/ BA's network... IB just doesn't add as much to what AA already offers... but the MIA hub is a great asset to connect AA and IB's Latin networks and all three airlines clearly benefit - and that benefit will only increase as Lan and Tam are joined.