- Thread Starter
- #16
I find it interesting to evaluate certain airline strategic business actions. The current AMR news leaks and management quotes regarding a potential US Airways - American Airlines corporate combination is intriguing, which are likely designed to be third party comments made to influence others.
Yesterday's news that American VP of Flight John Hale believes his company's pilots have very serious concerns about a US Airways takeover bid seems odd.
Normally, employees at Hale’s level are not permitted to speak with the news media. And, why did Hale provide Bloomberg News the letter he wrote to Horton when he could have walked down the hall to speak to his boss?
Another interesting comment is Hale’s belief US Airways will make a hostile merger attempt. This comment flies in the face of Doug Parker and Scott Kirby’s comment that hostile takeover attempts do not work.
According to TheStreet.com “speaking at the JP Morgan transportation conference, Kirby was asked what lessons US Airways has learned from its failed 2006 effort to acquire Delta in a hostile takeover. "One thing we learned is we can't do it alone," Kirby responded. "In an ideal world, it's important to have the constituents of bankruptcy, particularly labor, on your side. An outright hostile transaction won't work."
Click here to read the story.
Hale seems to know a lot about Doug Parker, Scott Kirby, and US Airways. I wonder how Hale seemed to miss this key point regarding US Airways’ view of hostile takeovers made to airline analysts and the news media.
I don't know if APA is using the potential US Airways - American merger as a means to negotiate a better contract with AMR or with US Airways.
What I do known is that APA seems to have a different view.
The Dallas-Fort Worth Star-Telegram reported today, “Late Tuesday, a memo written by American Airlines' chief pilot John Hale was leaked and in it Hale said pilots are skeptical that a US Airways takeover bid could be successful.”
“The Allied Pilots Association responded today, painting the memo as negative and a publicity stunt by American. ‘Our take is for whatever reason, American Airlines management feels threatened by US Airways management,’ Overman said, adding that APA president David Bates has seen the memo.”
“He pointed out that the current industry landscape does not support some of Hale's assertions particularly if one looks at the operational performance of American and US Airways. For example, US Airways has outperformed American in metrics such as on-time performance and baggage handling, Overman said.”
“Overman added that the APA has been publicly noncommittal about a possible merger with US Airways and has not commented at this point. He also did not comment on Hale's assertion that the APA would talk publicly in favor of a US Airways merger because the union would be able to use it as leverage at the negotiations table.”
Moreover, the facts are US Airways has hired IB and Legal merger advisors, US Airways has apparently met with members of the unsecured creditors committee who apparently are supportive of Doug Parker's overtures, and US Airways believes the corporate combination could generate about $2 billion/year in financial benefits not otherwise available to either company as an independent business entity ($1 billion in revenue, $500 million in non union cost cuts, and unspecified labor cost reductions).
In my opinion, Tom Horton's emotional view that a merger would be considered after his company's bankruptcy emergence is about so-called "social issues." I believe Horton and his management team are more concerned about their own jobs/desire to run an airline versus merging during the bankruptcy process to cut costs more than can be accomplished post bankruptcy.
Finally, I find yesterday's comments by Hale to Bloomberg’s Mary Schlangenstein bizarre. AMR management’s somewhat disparaging comments about the reported deal strike me as words of fear and frustration. When people cannot control an outcome that goes against their personal desires often times the individual lashes out, purposely mispronounces names, misrepresents information, and lacks decorum.
I suspect US Airways is pushing hard for a merger, Doug Parker is gaining traction/support with the unsecured creditors committee, and AMR's management is becoming desperate because the company's POR does not have labor/creditor's support. In fact, maybe many members of the unsecured creditor's committee are now lobbying for the proposed merger, which is why Hale made his unusual comments to Bloomberg News.
Yesterday's news that American VP of Flight John Hale believes his company's pilots have very serious concerns about a US Airways takeover bid seems odd.
Normally, employees at Hale’s level are not permitted to speak with the news media. And, why did Hale provide Bloomberg News the letter he wrote to Horton when he could have walked down the hall to speak to his boss?
Another interesting comment is Hale’s belief US Airways will make a hostile merger attempt. This comment flies in the face of Doug Parker and Scott Kirby’s comment that hostile takeover attempts do not work.
According to TheStreet.com “speaking at the JP Morgan transportation conference, Kirby was asked what lessons US Airways has learned from its failed 2006 effort to acquire Delta in a hostile takeover. "One thing we learned is we can't do it alone," Kirby responded. "In an ideal world, it's important to have the constituents of bankruptcy, particularly labor, on your side. An outright hostile transaction won't work."
Click here to read the story.
Hale seems to know a lot about Doug Parker, Scott Kirby, and US Airways. I wonder how Hale seemed to miss this key point regarding US Airways’ view of hostile takeovers made to airline analysts and the news media.
I don't know if APA is using the potential US Airways - American merger as a means to negotiate a better contract with AMR or with US Airways.
What I do known is that APA seems to have a different view.
The Dallas-Fort Worth Star-Telegram reported today, “Late Tuesday, a memo written by American Airlines' chief pilot John Hale was leaked and in it Hale said pilots are skeptical that a US Airways takeover bid could be successful.”
“The Allied Pilots Association responded today, painting the memo as negative and a publicity stunt by American. ‘Our take is for whatever reason, American Airlines management feels threatened by US Airways management,’ Overman said, adding that APA president David Bates has seen the memo.”
“He pointed out that the current industry landscape does not support some of Hale's assertions particularly if one looks at the operational performance of American and US Airways. For example, US Airways has outperformed American in metrics such as on-time performance and baggage handling, Overman said.”
“Overman added that the APA has been publicly noncommittal about a possible merger with US Airways and has not commented at this point. He also did not comment on Hale's assertion that the APA would talk publicly in favor of a US Airways merger because the union would be able to use it as leverage at the negotiations table.”
Moreover, the facts are US Airways has hired IB and Legal merger advisors, US Airways has apparently met with members of the unsecured creditors committee who apparently are supportive of Doug Parker's overtures, and US Airways believes the corporate combination could generate about $2 billion/year in financial benefits not otherwise available to either company as an independent business entity ($1 billion in revenue, $500 million in non union cost cuts, and unspecified labor cost reductions).
In my opinion, Tom Horton's emotional view that a merger would be considered after his company's bankruptcy emergence is about so-called "social issues." I believe Horton and his management team are more concerned about their own jobs/desire to run an airline versus merging during the bankruptcy process to cut costs more than can be accomplished post bankruptcy.
Finally, I find yesterday's comments by Hale to Bloomberg’s Mary Schlangenstein bizarre. AMR management’s somewhat disparaging comments about the reported deal strike me as words of fear and frustration. When people cannot control an outcome that goes against their personal desires often times the individual lashes out, purposely mispronounces names, misrepresents information, and lacks decorum.
I suspect US Airways is pushing hard for a merger, Doug Parker is gaining traction/support with the unsecured creditors committee, and AMR's management is becoming desperate because the company's POR does not have labor/creditor's support. In fact, maybe many members of the unsecured creditor's committee are now lobbying for the proposed merger, which is why Hale made his unusual comments to Bloomberg News.
