- Mar 5, 2004
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What will be AA's move if DL/NW merge?
- Thread starter local 12 proud
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Hopeful
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- Dec 21, 2002
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Oh you know what AA's next move will be...You can bet that AA has been meeting with any or all airlines for quite awhile.. I do believe that this inevitable merger mania will be bad as the mega carriers will cut thousands of more jobs as a way to shrink to profitablity.
I have to imagine that AA will be happy to sit this one out but request that any new rights to China ararded recently be granted to them to level the playing field some...
First, you would have to ask yourself, who has the a/c that we might need--such as, 737s, 787 (orders), 777s. The answer is no one who isn't already in merger talks. If we had really wanted to merge with someone, NWA would have been the perfect candidate. It would have saved us having to bid on routes to the Orient.
UAL is out of the question--too big, too much route overlap. CO's a/c are fully utilized in their own routes--both domestic and International. LCC has way too many unresolved merger problems from their last mating dance to even consider.
I agree that I think AA will sit this one out. However, Alaska and/or Frontier are possibilities for the future--how near or far into the future, I wouldn't even hazard a guess.
UAL is out of the question--too big, too much route overlap. CO's a/c are fully utilized in their own routes--both domestic and International. LCC has way too many unresolved merger problems from their last mating dance to even consider.
I agree that I think AA will sit this one out. However, Alaska and/or Frontier are possibilities for the future--how near or far into the future, I wouldn't even hazard a guess.
The driver behind these mergers is to fill pockets of hedge funds that provided exit financing. That's first and foremost. The teactic has been to find a partner that fills a void. Adding to one's domestic system at this time is not the winning. NW & US both present strong Pacific networks. DL & CO both present strong Latin & Atlantic networks. International routes are the best revenue opportunities for US carriers right now. If AA were to buy F9 or AS, they really wouldn't be helping their outlook very much. That's why I predict they will chanllenge the most recent China awards. If DL & CO get to bolster their Pacific offering, AA should get those rights and we'd get three strong competitors on the big routes. The key now is if AA can get an agreement with the pilots to serve China from DFW. This wouldn't be the regular type of route award they can afford to lose. However, if DL/NW & UA/CO offer raises to get mergers approved, AA pilots should expect the same for avoiding a merger.
I tend to agree with you - AA sits on the side and considers picking up the inevitable required divestitures to enhance it's own system letting the others wallow in the mess they create.
By the time the airlines' management personnel get their respective golden parachutes and bonuses, the pilots and probably other workgroups might be a tad perturbed - perhaps enough so they end up causing a shutdown of operations.
After the hogs are sated, they typically walk away without a care as to the mess they created.
Agree completely with this.
AA could buy Alaska, but why. AA could buy Frontier, but why. Other than using it as an excuse to remove a competitor, I don't see a use in either one.
More likely, I think AA will look internationally...for someone to invest in them. I think BA will be very interested investing in AA. With AA's stock price and the currency differences, I think we would be a great buy now. Additoinally, with AF/KLM planning to invest in the DL/NWA merger, this must be an option on the table. Is LH planning to invest in a UA/CO combination?
Actually, now that I think about it, they may just wait until management/APA/APFA take us in to bankrupcty. Once the contracts are gutted and retirments gone...we'll be an even better buy.
Remember CO was talking with AA a while back, so I could see them spillting up UA, but I doubt that would actually happen though.
DoubtfulCO and UA will probably merge but divest a few things to AA...TWU tried to organize the CO rampers, BTW.
Investing in the merger (aka, loaning money to one or more of the participants to finance the merger) is one thing, buying stock in a U.S. airline over the 25% mark (by a foreign company) is illegal under Federal law. I doubt BA would have any interest in purchasing anything less than a controlling interest.
LH has just "invested" in JetBlue to give themselves a U.S. partner at JFK.
And why would UAL be interested in doing that? Makes no sense at all.
AA is more likely to be filing for BK soon to shed some pensions while CAL and UAL merge.
I believe AA will be sitting this one out.
AA is more likely to be filing for BK soon to shed some pensions while CAL and UAL merge.
I believe AA will be sitting this one out.
eolesen
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- Jul 23, 2003
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98% certain that AA sits it out and watches the other two mega-carriers fall all over themselves during the integration.
Perhaps the pound of flesh AA might get from the Feds after the FAA debacle is another frequency or two to China (i.e. does anyone really expect DOJ to allow UA/CO and DL/NW to hold all but one of the available China authorities?).
Alaska? It wouldn't be unexpected, but I don't know what it buys AA aside from another airline to dismember.
Frontier? Their 60+ A318 & A319 Airbii could make for an interesting trade with Delta for their 738 fleet...
Perhaps the pound of flesh AA might get from the Feds after the FAA debacle is another frequency or two to China (i.e. does anyone really expect DOJ to allow UA/CO and DL/NW to hold all but one of the available China authorities?).
Alaska? It wouldn't be unexpected, but I don't know what it buys AA aside from another airline to dismember.
Frontier? Their 60+ A318 & A319 Airbii could make for an interesting trade with Delta for their 738 fleet...
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