What If.......CO + UA .."DO the deal" ?

[flyhigh]

AirwAr,

AA would gain a lot (in my opinion) with an NW Asian routes purchase. Here's why...

1)NW have very prime NRT landing rights. While you can almost always add service there, it's not exactly a big airport with lots of runways from what I understand. By purchasing NW's rights, they could gain premium connecting opportunities to JAL.

2) As for the JAL relationship...it is very lucrative, however, those relationships are always about finding a way to get what you can't any other way. If AA could serve the largest Asian cities itself, it might actually benefit JAL as well as AA. By not selling seats to connecting AA pax, JAL could sell them to local and connecting JAL which might be better for them. By offering the service itself, AA would also get all the revenue, but also the natural benefit of being able to sell your own metal the whole way which people are generally more comfortable with.

3)People loyal to NW would likely come to AA. Assuming that like every merger/acquisition in the industry AA would give you full credit for your FF miles, most customers would likely switch directly to AA vs. having to build a network and win the customers from NW/UA.

4) Route profitability in long hauls has a lot to do with aircraft type among other things obviously. AA would likely dump NW's 747's where they could and almost definitely the 330's in favor of 777's. 777's have pretty good operating stats from a cost perspective and would likely help NW's current route profitability. NW is known for buying the cheapest thing on the market which is primarily why few were truly baffled by the decision of the 330 over the 777 even though the 777 is far superior.

These are just my thoughts, but I believe that the Asian authorities in AA's hands could seriously hurt UA much more than CO's latin in UA hands could hurt AA...

 

[eolesen]

Don't assume that a purchase of NWA's Pacific would include their fifth freedom rights at NRT. It is just as likely (if not moreso) that any successor to NWA would retain the unlimited frequency rights to Japan, but lose the beyond rights because they create an imbalance and aren't as valuable to the Japanese carriers serving the US.

 

[FA Mikey]

I remember reading during the transfer to UAL from PAA, that the Japanese would not let another carrier get transfer of the 5th freedom rights.

 

[NewHampshire Black Bears]

I remember reading during the transfer to UAL from PAA, that the Japanese would not let another carrier get transfer of the 5th freedom rights.

///////////////////////////////////////////////////////////

Well, if what FA Mikey says is true, then that alone could make AA "stand alone", as earlier suggested by Former ModerAAtor !!!!


In the meantime, AA could always "drive the $$ price UP" on a bidding carrier.(Something that they are a MASTER at doing)


NH/BB's

 

[FWAAA]

Don't assume that a purchase of NWA's Pacific would include their fifth freedom rights at NRT. It is just as likely (if not moreso) that any successor to NWA would retain the unlimited frequency rights to Japan, but lose the beyond rights because they create an imbalance and aren't as valuable to the Japanese carriers serving the US.

You may be right, but remember that the authority granted to NW is spelled out in the 1952 Air Transport Agreement, and although the Japanese might piss and moan about it, in the absence of amendment, the successors and assigns to NW will likely inherit all rights enjoyed by NW.

How to end-run Japanese complaints on a purchase of the Japanese rights? Easy. The desirable NW assets are placed in a subsidiary (the undesirable ones are left to rot). That sub merges with a sub of AA, and the NW sub is the survivor. Viola - AA now controls those rights. The new company changes its corporate name to AA.

As we've discussed before - with the advent of long-range aircraft that didn't exist in 1952 (or even 1992), NRT fifth freedom rights may not be as valuable as they once were. Still, NW controls a lot of gates and slots at NRT, a very congested place, and there's no doubt some value there.

Here's a decent discussion of the NRT fifth freedom issues:

http://ntl.bts.gov/data/letter_am/jatww3-2matthews.pdf

 

[JFK777]

The UA Pan Am deal is different because UA bought a division of Pan Am not the whole airline, so the Japanesse had more room to judge. IF AA( or any airline or corporation) bought NW they are merging with NW so all NW traffic righs would transfer, WORLD WIDE. NOW let say AA does merge with NW.

Since AA has been grabbing any traffic rights to Japan they can, LAX and JFK to NRT, the DOT might make the merged airline give up some traffic rights from let say LAX to NRT, since both AA & NW serve that market. A merger between these two would be nice with nonstop service to many points now served via Tokyo.

 

[flyhigh]

...they may have to give some rights up, but likely would be able to keep most of the lucrative opportunities.

 

[JFK777]

IF AA had to give up the beyond rights, they would still have NW slots from all the operations(beyond and transpacific) at NRT. So AA would have extra slots to lease out or negociate for better ones.

 

[FA Mikey]

Even with the TWA rights and the open skies, AA would need something like NWA for its structure, slots and planes.blast from the past

 

[donttouchthebeauty]

[quote name='JFK777' date='Aug 16 2006, 03:35 PM' post='407191
Isn't it just amazing how people sit around and ponder this "what if" crap? I doubt anyone will want to be a dance partner with the nAAtives - I know i wouldn't considering the track record - Maybe they will hire all those foreign nationals while they are at it - i hear saliva dripping - get me a towel - yuck

 

[NewHampshire Black Bears]

"Beauty".

I'd be the first one to admit that with "potential" M/A's, the climate can be ...well...."unsettling" !!

Having said that, look at it this way.

Would you agree, that if you lived at the base of (say) Mt. St. Helens, and the mountain started "SMOKING", that you "might" start DISCUSSING how you "might" start to "plan" your departure route ????

Consider a UA/CO "wedding" in the same context as Mt. St. Helens "BELCHING" !!!!!!!!!!


NH/BB's

 

[FA Mikey]

donttouchthebeauty might want to check out what if thread started filled by the people they work withNWA/US combo

 

[777 fixer]

4) Route profitability in long hauls has a lot to do with aircraft type among other things obviously. AA would likely dump NW's 747's where they could and almost definitely the 330's in favor of 777's. 777's have pretty good operating stats from a cost perspective and would likely help NW's current route profitability. NW is known for buying the cheapest thing on the market which is primarily why few were truly baffled by the decision of the 330 over the 777 even though the 777 is far superior.

These are just my thoughts, but I believe that the Asian authorities in AA's hands could seriously hurt UA much more than CO's latin in UA hands could hurt AA...

Given that Boeings order book for the 777 is preety full at the moment AA would not have enough 777's to fill those new routes. Which would mean that AA would have to hold onto those 747's and A330's. Which makes for one big headache.

 

[NewHampshire Black Bears]

"donttouchthebeauty" spends 63% of the time, on the US/HP board.

With such an affinity towards US/HP, I suggest that "beauty" realize that US/HP has 2 choices to get into Asia.(NRT excluded)

Choice # 1; SLIM !!
Choice # 2; NONE !!!!

NH/BB's

 

[FWAAA]

Given that Boeings order book for the 777 is preety full at the moment AA would not have enough 777's to fill those new routes. Which would mean that AA would have to hold onto those 747's and A330's. Which makes for one big headache.

That headache would be shortlived. During that period, it would probably be NWA LLC, a division of American Airlines, Inc., so the different airplanes wouldn't be the hassle you paint it.

Oh, and the 777 order book is hardly full. In December, El Al ordered two 777-200ERs which will be delivered in early 2007. Many of the 777 orders are deferred well into the future. On top of that, the 777 line has some slack - Boeing could easily crank out one or two more per month if orders warranted it.