UA and CO seems a go

[BoeingBoy]

If US/AA were to merge it would become the biggest airline (in revenues). The new United is listed at 29 Billion. 2009 revenues for both LCC and AMR total 30.3 Billion combined.

I suspect that if it happened, AA/US would still have less revenue than UA/CO since there would be more overlap with AA/US and greater market dominance at key airports, which would require divestitures. Just look at DCA where US is by far the largest carrier by a wide margin currently. A merger with #3 AA would put AA/US even further ahead of everyone else, so the DOT/DOJ would almost certainly require some DCA divestitures and unquestionably would if the revised US/DL slot swap is approved since it would result in AA/US ahead of where US would have been in the original swap deal that was rejected.

Also remember that in the one serious attempt at a UA/US merger, the Shuttle was offered up as part of the original proposal to improve chances of approval. Since then AA has started a semi-shuttle using EWR and mostly if not all RJ's, so something would have to give there for approval. DL/NW didn't have that problem since NW was a relatively small player in LGA making the new DL the biggest by a small margin, but AA/US would have the biggest share of slots by a significant margin. I can imagine a requirement that the Shuttle and it's slots be divested.

Just those two would probably be enough to keep AA/US from passing UA/CO in revenues. Then there the possible, or even likely fleet divestitures. Would AA want to operate 14 widebody Airbuses for the next 5-10 years? Or 10 old 767-200's? Or even mostly old 757-200's? How about the 737-300/400, with most 20+ years old? Of course, UA/CO will have some of the same problems - EWR with it's lack of additional capacity, the 747's, etc.

In short, I'm really just saying that two airline's individual revenue, ROM's, ASM's, or whatever yardstick can be just added together and say that the result is what the merged carrier will achieve.

Jim

 

[mweiss]

AS is a pretty well run airline. They seem to squeeze out a profit more often than not. The key to sucess of ANY Alaska takeover/merger if for them to keep NONE of the Sr. Management of the airline aquired.

No arguments here. My point about indigestion is that it's hard to infuse a combined AS/US with the AS culture company-wide. AS has organically grown into other territories, maintaining the unique AS culture.

It's very hard to make it work on that scale overnight.

 

[mweiss]

Of course, UA/CO will have some of the same problems - EWR with it's lack of additional capacity, the 747's, etc.

Oddly enough, I think those two points are in a way solutions to each other. Combining UA and CO will make it cost-effective to upgauge some of EWR's routes, which won't require more gates or runways. I don't know enough about EWR's operations to be able to comment on Terminal C's ability to handle more pax on the same number of flight ops. Do you have some insights there?

 

[Hope777]

Oddly enough, I think those two points are in a way solutions to each other. Combining UA and CO will make it cost-effective to upgauge some of EWR's routes, which won't require more gates or runways. I don't know enough about EWR's operations to be able to comment on Terminal C's ability to handle more pax on the same number of flight ops. Do you have some insights there?

EWR is a mere shell of what it once was for UAL.

Has anyone tried pulling up www.ual.com ???? Check out the response......... CO and UAL together......

 

[Richard]

OK with the announcement of the UA/CO merger, this thread has outlived its usefulness. We will begin a new thread on what's next for US.