What the experts are saying

UPNAWAY

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DOUG PARKER AT THE NATIONAL PRESS CLUB
JULY 18, 2012
WHAT PEOPLE ARE SAYING
ABOUT A US AIRWAYS-AMERICAN AIRLINES MERGER
TIMING: WHY MERGE NOW?
“I don't know anybody who's looked at it from 30,000 feet that would tell you that they think the
standalone scenario is superior. [AMR] has not competed well when it was going from No. 1 to No. 2 now
to the third position, and I don't see how a standalone would solve that, especially with this 'shrink and
then re-grow' strategy they are doing.”
– ROBERT W. MANN, AIRLINE ANALYST, R.W. MANN & COMPANY (06/07/12)
“AMR’s standalone plan contradicts itself, in our view. Just this afternoon AMR’s restructuring adviser said
AMR would consider a merger because management’s fiduciary duty involves “maximizing stakeholder
value.” If that’s true then why not explore one now? Is labor not a stakeholder? Even in a post-BK merger
with LCC, wouldn’t AMR standalone have to reset wages higher? To us this feels more about selfpreservation
than maximizing stakeholder value, which an LCC bid would seem to do.”
– HUNTER KEAY, SENIOR AIRLINE ANALYST, WOLFE TRAHAN &CO. (4/25/12)
“Looking ahead, AMR’s plan to grow 20% over 5 years is toxic to industry pricing, which makes it bad for
AMR & the industry in our view. Ultimately, AMR suffers a billion dollar plus revenue deficit to the
industry & creditors must decide which is the stronger revenue model: AMR standalone? Or AMR/LCC
combined? The network muscle AMR would inherit to support domestic & int’l flying makes it an open and
closed case in favor of LCC in our view.”
– DAN MCKENZIE, ANALYST, RODMAN & RENSHAW (4/20/12)
“In order to get the best resolution for everybody, all options should be on the table.”
– JOSH GOTBAUM, PRESIDENT, PENSION BENEFIT GUARANTY CORPORATION (4/20/12)
“If they merge in bankruptcy, they can keep the extra value inside…The airline could invest in the
company and in making labor happy.”
– VAUGHN CORDLE, ANALYST, AIRLINEFORECASTS LLC (4/20/12)
 
What the guy who is actually in charge of the process is saying:

American Airlines Chief Executive Officer Tom Horton said his bankrupt company doesn’t need a merger as badly as smaller suitor US Airways Group Inc. (LCC) because its value is on the rise.

“American is not going to determine its strategic future based on the urgent need of another company to make a deal,” Horton said in an interview yesterday at Bloomberg’s global headquarters in New York. While the value of US Airways “is probably at its high water mark,” he said, the “value of our company is increasing.”
http://www.bloomberg.com/news/2012-07-19/american-airlines-needs-merger-less-than-suitor-ceo-says.html?cmpid=yhoo
 
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Put this down for reference:

Even if Parker gets his way there will be no merger with AA during it's bankruptcy. Any merger with another airline will happen either together with bankruptcy exit as part of the POR or afterward. Any "expert" saying otherwise has no clue...

Jim
 
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http://online.wsj.com/article/SB10000872396390444330904577539493841489320.html

Hmmmmmmm I think Horton hears a who has had a change of heart!!!
 
WASHINGTON — The chief executive of British Airways’ parent company voiced support for a merger between American Airlines and US Airways, saying such a deal has merit.

Willie Walsh, chief executive of International Airlines Group, said American would “be at the center” of another round of airline consolidation. In a speech Tuesday in Washington, he complimented US Airways’ aggressive pursuit of a deal with American, which is trying to emerge from bankruptcy as an independent carrier.

“I give credit to [US Airways CEO] Doug Parker,” Walsh said. “I think he’s played this very, very well, and he has certainly forced the issue of consolidation fairly on the agenda.”
 
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WASHINGTON — The chief executive of British Airways’ parent company voiced support for a merger between American Airlines and US Airways, saying such a deal has merit.

Willie Walsh, chief executive of International Airlines Group, said American would “be at the center” of another round of airline consolidation. In a speech Tuesday in Washington, he complimented US Airways’ aggressive pursuit of a deal with American, which is trying to emerge from bankruptcy as an independent carrier.

“I give credit to [US Airways CEO] Doug Parker,” Walsh said. “I think he’s played this very, very well, and he has certainly forced the issue of consolidation fairly on the agenda.”


This is what Doug does best. Actually running the day to day of an airline? Not his strong point. If he pulls this rabbit out of the hat then he is one hell of a deal maker. If not then maybe not so great at anything.
 
This is what Doug does best. Actually running the day to day of an airline? Not his strong point. If he pulls this rabbit out of the hat then he is one hell of a deal maker. If not then maybe not so great at anything.

I think a good thing about Parker is that he's not affraid to hire intelligent people. Some of those people are strong in areas that he is weak.

Bean
 
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Good point Robert Isum for example has done wonders for the operation. And I think Hector has been effective for inflight to name a few.
 
Oh, please, not one of those "smart" people has made near the difference on the bottom line that underpaid mechs, FAs, and pilots have.
 
Actually, Phoenix, it's quite an accomplishment to get such a successful operation out of underpaid employees. It takes a smart group to pull something like that off. Wall street likes Team Tempe for a reason.
 
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