AA and US merger?

[usa1]

The only prediction relevant to this discussion is that US will fail at any attempts at remaking itself into one of the megacarriers.

And if you are wrong will you leave forever?

 

[usa1]

Oliver Stone would love this theory. And to think that deregulation was possibly conceived on the grassy knoll in Dealy Plaza. Maybe Horton and Parker are sequestered on the 6th floor of the Texas School Book Depository plotting a merger. Stay tuned.

You have to have been here for the past 35 years to see it ......

 

[Black Magic]

if it serves to shut down yet one more thread about how US can do wonders for AA, I am more than willing to throw my 2 cents worth in.

The only prediction relevant to this discussion is that US will fail at any attempts at remaking itself into one of the megacarriers.

US doesn't have to do wonders for AA, but did you stop and think that a with merger a company can take away another competitor (us) to help raise fares? Even if they don't merge I laugh at the fact that you think US will just go away..it never has and never will, it will just keep morphing into somthing else. Sure without a merger US may not thrive but it will always survive as it has profitable hubs in PHL, CLT with phx being marginally profitable. Like a cockroach it won't go away and be a thorn in deltas side. ha

 

[FA Mikey]

That just doesnt make any sense. Why after shedding all the dead weight in BK would you waste billions on another carrier just to shut it down. Usairways in not a direct competitor to AA like they are to DAL and UAL. Let them do the dirty deed.

 

[Black Magic]

That just doesnt make any sense. Why after shedding all the dead weight in BK would you waste billions on another carrier just to shut it down. Usairways in not a direct competitor to AA like they are to DAL and UAL. Let them do the dirty deed.

You wouldn't be shutting it down entirely. With a merged company US profits become AA profits and US is profitable. The CLT hub would be a valuable asset to AA, PHX however would prob be downsized to a focus city with AA already having hubs in DFW and LAX, not sure what would happen with JFK/PHL being so close. This is just my speculation though. I do know that Doug Parker would have no problem downsizing a US hub to get the deal done.

 

[FlyUs]

Our fave DL spokeman's phony compassion for AA employees is getting old. Beware, it has your interests in mind, NOT!

What WT calls "facts" and "truth", I call my opinions, Here are a couple:

DL wants AA to come out of Chapter 11 as weak as possible, alone, and smaller.
DL wants US to go away, just give it up, die, wither on the vine, pfft.
DL certainly does not want AA to have a larger eastern US presence, ergo, no US/AA merger!

Whether a merger is good or bad for AA is open for discussion, but I think it's clear that it would not be
Delta's hoped for outcome.

Spot on!! The only reason I would want to merge with AA is if we could ALL get a bigger paycheck and job security!

 

[FlyUs]

The theory about why US employees are so low paid is nothing but another excuse for why US, despite having engaged in a number of mergers, still has a well-published (and Doctor Dougie doesn't mind telling us) revenue shortfall relative to the industry. He is, of course, right on that point and this little factoid shows why.
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At LGA, currently, DL has about 25% of the slots but gets 33% of the revenue. At DCA, in contrast, US has about 1/3 of the slots but gets 25% of the revenue. Does anyone see the problem w/ this?
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Yes, Mikey, US offers nothing to AA and the proposed takeover is nothing more than an attempt to finally correct years and years of underperformance at US which have left US employees as the lowest paid in the industry - but yet they want to grab more industry assets so they can destroy the value in them and bring wages down to US levels. (perhaps under the theory that misery loves company).
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The notion that a combined AA/US would out outrank DL misses the fact that the two carriers are about the same size (slightly smaller) than DL now AND AA will cut revenue as it shrinks in BK - about 6% revenue cut on 10% less capacity. Further, all of the overlap and "synergies" that US thinks will happen only remove MORE capacity.
Oh, and DL is getting another 25% of the slots at LGA compared to a much smaller increase for US at DCA. DL's revenue growth will far outstrip US' as a result of the slot deal.
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WT calls them the way he sees them and like Mikey, I recognize there is no value added in an AA/US merger/takeover/asset raid. that fact has nothing to do with Delta or what they have done or not.....
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on the conspiracy theory line of reasoning, perhaps we should ask if DL and UA execs have plotted to carve up and do away with US. I mean after all UA seems very quiet about this whole slot swap... UA/CO is pulling some capacity out of EWR in favor of IAD... maybe DL and UA agreed that DL will take over NYC and UA can have DCA/IAD and CLT too.
sounds reasonable. Although we may be the lowest paid in the industry, it isn't by much.. at least for flight attendants. I've seen Deltas f/a contract and it is hardly anything to write home about.

Oh, and DL and UA employees will make more than US employees no matter how you slice it.

Although US may be the lowest paid employees, it isn't by much.. at least not for the flight attendants. I've seen the Delta f/a contract and it isn't anything to write home about.

 

[FA Mikey]

Why does AA need a hub at CLT? If any airline fit the bill A/C and routes Jet blue would give it what it needs. Now that IAG has bought BMI, BA may be wanting AA to get JB under its belt, either by merger or subsidiary. AA's new lower cost structure may just be low enough to keep it profitable.

 

[Black Magic]

CLT hub along with MIA gives AA a major stronghold to stick it to Delta in ATL.

 

[WorldTraveler]

US doesn't have to do wonders for AA, but did you stop and think that a with merger a company can take away another competitor (us) to help raise fares? Even if they don't merge I laugh at the fact that you think US will just go away..it never has and never will, it will just keep morphing into somthing else. Sure without a merger US may not thrive but it will always survive as it has profitable hubs in PHL, CLT with phx being marginally profitable. Like a cockroach it won't go away and be a thorn in deltas side. ha

except the problem w/ your theory is that AA rationally prices its product; US is the bottom feeder that from a pricing perspective the rest of the industry would like to eliminate... they are the modern day TWA from a pricing perspective.
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Yes, Mikey is right... if there is a carrier that makes sense for AA, it would be B6.... they could build on AA's position in the NE and vice versa. B6 likely will expand in ORD which means they could be closer to complementing AA, same for the Caribbean... but it is precisely these market overlap issues that create antitrust concerns.... if you combine AA and B6's slot portfolio's at JFK, you have the capacity for 300 flights per day and probably about half... there will be divestitures....
strategically, though, there is far more value to both carriers in an AA/B6 merger than for AA/US.....
but remember AA still wants to take on tens of billions of debt for new aircraft.... that makes them not terribly attractive to any buyer.
let's also remember that no combination of AA plus anyone addresses AA's lack of presence in Asia or continental Europe... those are far more important strategic needs than adding bulk in the US... right now it is far from clear whether AA will have the necessary size to compete ... but even if it doesn't, none of the potential combinations solve AA's strategic problems....
AA plus anyone including US still leaves DL and UA with far superior positions across the Pacific and to Europe.
and while AA is preoccupied with a merger, DL could decide to buy AS - and that would finish AA off on the west coast. AA would be better focused on turning itself around than losing some of the strategic partners that are part of what is keeping AA's network competitive w/ other carriers even if through partners.
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As for the notion that CLT could compete against DL in ATL, according to DOT stats, more than 2 1/4 times more revenue flows through ATL every day than through CLT. MIA plus CLT combined still do not carry as much revenue as DL flows through ATL. IN fact, the amount of revenue that AA flows through DFW PLUS MIA is just under the total amount that flows through ATL.
(Flows through means total revenue on all segments to/from that hub marketed by the hub carrier).

 

[FlyUs]

An AA/US merger would be Deltas biggest nightmare

 

[diamondcutter]

I am on a different page.


I would love to see US Airways (aka AWA) just go out of business. That's my personal feeling against the company.

But something tells me that, whether seen as a disaster or not, AA is prepping itself to merge with US.

Thanx so much from all the hard workin employees over at US. Happy holidays

 

[FA Mikey]

AA has repeatedly stated their focus is on JFK, MIA, LAX, DFW and ORD. The five cornerstone strategy. So who fits better, JB or U?

 

[FlyUs]

AA has repeatedly stated their focus is on JFK, MIA, LAX, DFW and ORD. The five cornerstone strategy. So who fits better, JB or U?

AA could not effectively fly B6s p2p routes out of Boston and be profitable. Not sure about JFK. The slots B6 attained to become a carrier in 2000 were slots any airline could've flown. The most valuable being the late afternoon, early evening.

 

[FA Mikey]

If it means keeping healthy competition against a strong UAL at EWR and DAL at JFK, LGA. I have no doubts Sen. Chuck Schummer who help orchestrate it would bend it to keep competition alive for NY'ers