Aa/ba Merger Again?

[nofaultfound]

British Airways' merger back on track
Tom Mcghie, Mail on Sunday
9 October 2005
BRITISH Airways has reopened talks with American Airlines to revive an abandoned £5bn merger plan.



MERGER: BA bosses are confident a deal could be struck within 18 months


Willie Walsh, the new BA chief executive, has met Gerard Arpey, chairman and chief executive of American Airlines, on a number of occasions in America over the past five months.

The airlines have twice attempted to merge in the past ten years, but regulatory hurdles stood in the way both times.

The latest negotiations will go ahead only if America and the European Union come to a deal on air traffic - an 'open skies' agreement that would relax laws over airline mergers.

But Walsh, 44, said he was confident that such a deal would be reached in the next 18 months. 'A right deal between the US and the EU would facilitate a closer relationship between us and American Airlines,' said Walsh.

'It's a good relationship and I have met Gerard Arpey every few months. He is an excellent guy.

'We have tried for a merger twice, but each time the price has been too high.'

Walsh insisted that Arpey was also keen on a merger. A link-up between the two would create a colossus capable of dominating the North Atlantic route.

The last time BA and AA, America's biggest airline, were poised to merge, American transport authorities demanded that BA give up at least 16 valuable slots at Heathrow, which would have made any deal uneconomic.

Walsh, who took over from Sir Rod Eddington only a week ago, also talked of placing a multi-billion pound order with Boeing to replace BA's fleet.

No final decision has been made and Walsh's fleet experts are talking to Boeing and Airbus about its requirements. But it is clear that BA is taken by Boeing's Advanced version of the 747, which has yet to be built.

:unsure:

No matter which way you look at this it's not good news for the worker bees

 

[lpbrian]

How so?

 

[NewHampshire Black Bears]

Yeah nofaultfound,

HOW SO ?????????????????????????????????

NH/BB's

 

[MCI transplant]

Yeah nofaultfound,

HOW SO ?????????????????????????????????

NH/BB's

[post="311623"][/post]​

<_< Just going by reputation Bear! I've heard their not too labor friendly!!And I'm being diplomatic here!

 

[nofaultfound]

This is not just about extending our codeshare agreement, its about trying to merge two airlines that operate on two different philosophies and rules. (FAA-CAA)AA has gone a long way trying to improve and modernise their work practises, BA on the other hand are so stuck in its ways as to be scary, while it won't affect AA maint in the UK it would have a massive impact on check in/ramp staff etc even though our operation is much more cost effective. Have you ever tried to deal with BA on an offical basis, its nearly impossible.....Personally i don't think the merger will be approved because of the anti-trust issues also because of the amount of slots BA would be forced to give up at LHR, last time it was around 250.

 

[eolesen]

It might be bad for AA workers overseas, assuming BA were to assume the role of ground handler for AA, but in the US, the opposite would happen as well, meaning more jobs for agents and FSC's.

Then again, unless there's a windfall for the mechanics, I guess it must be bad.

 

[Cosmo]

Three questions:

1.) Would AA/BA be seeking approval for a real merger or just antitrust immunity similar to NW/KL, DL/AF and UA/LH?

2.) Does anyone doubt that the U.S. and E.U. authorities would still require AA/BA to divest enough slots (and perhaps even actual flights) to (I) allow for meaningful new competition on the JFK-LHR and ORD-LHR routes where a combined AA/BA would offer about 70 percent of each market's departures (and an even larger percentage of the seats) and (II) allow U.S. carriers to at least match the number of BA's LHR flights from EWR (CO), PHL (US), DTW (NW), DEN (UA) and PHX (US/HP)?

3.) Would AA/BA be restricted in their ability to convert current U.S.-LGW flights to LHR unless competitors had a meaningful number of slots to do the same (in other words, could AA/BA change the current BA IAH-LGW flights to IAH-LHR service if CO didn't have the LHR slots to make the same change to its IAH-LGW flights)?

I recognize that it probably is too soon for there to be any meaningful answers to these questions, but rest assured that these (and no doubt other) questions will arise if AA/BA decide to merge or seek antitrust immunity, even if there is a broader U.S.-E.U. open skies agreement in place at that time.

 

[TechBoy]

Last time I checked, the foreign ownership restrictions have not been repealed. And I seriously doubt that Congress will ever do so.

 

[eolesen]

Once T5 opens up for BA, slot divestiture might be less of an issue since the bigger issue at LHR these days seems to be terminal capacity more than runway capacity.

Also, don't forget that when the 200+ slots were being demanded, Star Alliance was still a distant #2 in terms of LHR slots. Today, it wouldn't surprise me at all if Star (LH, SK, AC, BD, LO, UA, NH, SA, LX) controlled more slots at LHR than the oneworld carriers (BA, EI, AA, IB, QF) do.

But don't forget the other wildcard --- Virgin. Branson seems to wield as much power these days as BA does. He may not like BA or AA, but Sir Richard certainly doesn't want to be competing against them plus bmi, CO, DL, and US.