I guess it all depends on what you consider huge. Delta and United are huge. American will shrink in BK and there is no guarantee after shedding all those super 80s if they will be able to take delivery of those new planes. Many jobs will be lost. I have been through this Bk process. If AA can emerge on its own great if not a Pan Am style break up will most likely happen. US is doing fine and will soon sign better contracts (they are just about done with negotiations)with higher pay and better work rules than American will have for years to come.
AA and US merger?
- Thread starter LUVJAMESC4EVER
- Start date
How original <_<
Who told you AA is going to dump many S80s and is going to shrink?? AA has stated many times in company info that this BK will be nothing like other BK. I get the feeling that there will not be this big announcement about A/C groundings....... Just my feeling. I think this BK is about cutting costs in all aspects of our business....... from getting a/c leases reduced to catering to salaries.... etc....
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #245
AA won't dump the current fleet until it knows it can assure replacement aircraft based on the size the company will be. Alot of people fail to realize that about 200 of AA's M80s, 757s, and 763s are owned which means they cannot be dumped in BK unless AA can figure out some way to shift the debt that is attached to those aircraft (since everything that has value is mortgaged at AMR right now) somewhere else.
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AA WILL be a very viable competitor and it will be much lower cost.. the question is whether it will still have the mass to compete with DL and UA and if its employees will be so beat up because of the paycuts they will have to take to allow AA to successfully compete that they will be willing to provide a high enough level of service to keep AA viable... BK often creates a spike in service levels but when the reality sets in that "is this all I will make?" this is a whole lot less enthusiasm to get going the extra mile - and we are right back to where AA is today in terms of labor relations = and not much different from where US is.
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It is obvious that both AA and US supporters recognize that there will be further consolidation in the industry - the US people think this will be an opportunity for US to fix its perpetual structural network problems while AA people believe they can restructure on their own.
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The evidence based on history overwhelming says that companies in BK get their chance to restructure.... while I won't go so far as to say that AMR's will be unlike any other BK, they have learned from what has gone before and will build on an already pretty successful track record that airlines can successfully reorganize in BK - which means that US' dreams of getting its hands on AA has a pretty slim chance of occurring - as much as some people would like to believe otherwise.
Super FLUF
Senior
- Jun 10, 2011
- 313
- 206
Interesting that APA, TWU, and APFA all got seats on the creditors panel.
Things just got a little tougher for Dougweiser.
Things just got a little tougher for Dougweiser.
RevThruster
Member
- Nov 9, 2011
- 27
- 8
Trust me, I would not work for an airline period, it is a dead end street. It baffles me, however, that AA's employees would want to keep another fighter in the ring [US] instead of merging. AA employees are getting ready to get raped of all benefits and wages, with no increases anytime soon. The focus shouldn't be on the name of your company, rather on how it affords you to live and progress and be successful. There are many ways AA's BK could play out. Merge, not merge - and they could very well be sold off in pieces as well. AA could emerge as a "no frills" airline, even more bare bones than US, and then what? Will we still have the same emotional people [with bottom of the barrel wages intact] on here swearing that AA is the "Singapore" of airlines. It is a comedy show, at this point, that individuals get on here and immediately let their emotions take over, with ZERO sense and credibility.. AA will be something IF it emerges from BK, but not what it once was. AA is in BK, evidently that is a hard pill to swallow for many here, but it is reality, and there isn't one person that I know, who is dying to go and sign on to a Bankrupt Corporation. It sounds like brain rot has set in at AMR.
jimntx
Veteran
You're joking, right? We all got seats on the unsecured creditors committee. You know, the people that get to squabble over the leftover crumbs after the secured creditors are taken care of. There is a formula for selecting members of that committee, and it's based on the size of the unsecured debt for each of the creditors. It should tell you something that we union members represent some of the largest unsecured debt the company has.
Also, note that the PBGC, Boeing, Hewlett-Packard, and several large banks representing bondholders are also on the committee. Aside from the fact that (I'm guessing, but I think I'm right) the PBGC as a government agency gets first dibs on any of the crumbs, as well as a piece of the "new" AA, Boeing, H-P, and large banks will probably trump APA, TWU, and APFA with the court.
There is a reason why the majority of employees at Delta and United did not want to merge with US.
If AA will merge with someone in the future it will be with a company that create better value to
to the whole "new" corporation. US does nothing for AA. Just like it wouldn't have for Delta or United.
AA will come out of bankruptcy a leaner more competitive airline.
Stop worrying wether we are going to be rape or not in bankruptcy what is it to you anyway if
you do not work here. The reality is that this process has just started. Three of the member on the
creditor committee are from labor; the chances of the creditor committee agreeing to a merger
with US will be very slim. No arrogance or denial here, just knowing that a merger with US won't work.
AA does not need to merge just because every one in Doug's camp is in full fledge campaign mode
for it. To put another spin to this how about a merger between AA,jetblue and Alaska?
Not sure about that but that seems to me like it would bring more value to the entire new
corporation then anything that has to do with US.
Black Magic
Veteran
- Jan 4, 2008
- 938
- 552
Once again US doesn't have to offer huge value to merge. It's amazing that people can't see the real problem in that air fares are TOO LOW in this industry for the airlines to be profitable! You have to merge carriers together to lower competition and RAISE ticket prices! If US remains alone it will always undercut ticket prices in which other carriers will have no choice but to match usually equaling razor thin profit margins.
Perfect example is Fedex and UPS, two very profitable businesses. Why? Because they have little or no competition with eachother..not five other carriers. When fuel prices go up, they just pass the cost along to the customer. Every notice their pilots never complain about wages? Because the company can afford to pay them respectable wages. The passenger airline industry is working toward this same level of consolidation.
Perfect example is Fedex and UPS, two very profitable businesses. Why? Because they have little or no competition with eachother..not five other carriers. When fuel prices go up, they just pass the cost along to the customer. Every notice their pilots never complain about wages? Because the company can afford to pay them respectable wages. The passenger airline industry is working toward this same level of consolidation.
For the past 25 years Government over-site made sure of this ..... they wanted cheep tickets, and pay cuts for all ..... a big mistake and now the country is paying for such foolishness, everywhere .... a bunch of clowns in Washington for sure?
Here how about "Dear God please keep usairways , usairways and a million miles from us".
I'll give you an example ... that's going on right now ...... The airlines can't afford to pay works pensions and at the same time Dem's on capital hill are getting ready to restrict our ability to collect "checked bag fees"? Which were a little glimmer of hope for an industry destroyed by governmental over-site .... not to mention the extraordinary tax burden placed on the industry.
NYCDelta
Senior
First, every BK is different, so nobody knows how this will end. The one thing AA has going for it is the amount of cash it brings into BK. Not needing DIP financing does provide a little more "breathing" room. Secondly, AMR will merge with LCC for one reason only: to eliminate a competitor and make some executives and attorneys very rich. (okay, 2 reasons).
Nobody knows if a merger will happen, but I certainly don't think AA "needs" to merge with anyone to be successful. If they execute their BK correctly, bring their costs in line with DL/UA, add all those shiny new airplanes that they got for a steal (supposedly), restructure Eagle, codeshare more of the money-losing flying, relax scope and work rules, and organically grow their "cornerstone" hubs-then they will be just fine. That's a lot of "ifs" but it's too early in the process to know how it will turn out.
Plus, whose to say that LCC won't switch to oneworld and be part of that JV? Maybe extensive codesharing with AA would be just as beneficial without the headaches of a merger?
Nobody knows if a merger will happen, but I certainly don't think AA "needs" to merge with anyone to be successful. If they execute their BK correctly, bring their costs in line with DL/UA, add all those shiny new airplanes that they got for a steal (supposedly), restructure Eagle, codeshare more of the money-losing flying, relax scope and work rules, and organically grow their "cornerstone" hubs-then they will be just fine. That's a lot of "ifs" but it's too early in the process to know how it will turn out.
Plus, whose to say that LCC won't switch to oneworld and be part of that JV? Maybe extensive codesharing with AA would be just as beneficial without the headaches of a merger?
+1. The industry is taxed as if it were a sin, like alcohol or tobacco. And efforts to extract money from passengers like bag fees and other ala carte "unbundling" efforts are resisted by idiots in Congress of both parties. Pres Bush and the Republicans added additional taxes during the last decade - a most challenging time for airlines, and Pres Obama wants to increase the fees/taxes.
Within the industry and outside the industry, there appears to be a collective refusal to believe that $3.15/gal jet fuel fundamentally changes the long-term profitability outlook and requires huge changes to the ticket prices for air travel. And if passengers won't pay higher fares, then they'll have to part with money for unbundled items. And if they won't do that, then the air travel system will shrink. For most of the industry's post-deregulation existence, fuel was very cheap, but it isn't cheap anymore. Passengers and too many employees don't want to admit that.
