Aa To Buy Ual Pacific-rumor
- Thread starter skyflyr69
- Start date
WorldTraveler
Corn Field
- Dec 5, 2003
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I don't think UAL is ready to do it yet since it would be the end of United.
I dont think UAL is selling mode. However U is more likely to be having a sale of assets and slots. LGA, DCA etc.skyflyr69 said:Just heard in DFW that AA has secured a 4 bil loan to possibly buy the Ual pacific division. that would be awsome!!!!!
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LiveInAHotel
Veteran
- Nov 5, 2003
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I heard this same rumor a couple of years ago. The rumor just faded into the sunset and I never thought about it. Now you mention that this might be happening again? The rumor I heard was that AA was going to buy all of UAL's SFO hub and the Pacific routes to go with it out of SFO. Who knows these days, but UAL needs cash fast! :blink:
nyc6035
Advanced
- Aug 20, 2002
- 123
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I read recently that U is quite constrained with regards to it's selling assets. Apparantly according to the article back at the end of May the company agreed to a revised loan provision to provide nearly all of the proceeds from an asset sale directly to pay back the government guaranteed loans.
Very little ready cash it would seem would therefore be available via an asset sale.
Very little ready cash it would seem would therefore be available via an asset sale.
For the million to one shot UAL did something that foolish. We have to recall our furloughed employees before bringing in new. Since AA needs language qualified people on the ground and in the air. Staff outlying stations we dont currently fly to. I guess it would.
PRINCESS KIDAGAKASH
Veteran
- Oct 9, 2003
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The rumor that we hear in M+R is that AA is going to buy UAL in it's entirety just like AA bought TWA, but AA has demanded that UAL has to flush it's pensions in bankruptcy court so AA can threaten to do the same to us if we don't agree to pension modifications.
AMR buying UAL would NEVER, EVER pass any sort of anti-trust scrutiny. The combined airline would control more than almost every other network carrier put together.
As for UAL selling the pacific. If they do sell the pacific- it won't be the fat lady warming up- it will most likely be the final rendition of her greatest hits. Everyone will know that it would just be a matter of time before the airline finally liquidates.
As for UAL selling the pacific. If they do sell the pacific- it won't be the fat lady warming up- it will most likely be the final rendition of her greatest hits. Everyone will know that it would just be a matter of time before the airline finally liquidates.
WorldTraveler
Corn Field
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I'm not sure this would be in AA's best interests even if UAL was willing to sell:
1. Most Asian markets are currently available for expansion by US airlines. S. Korea, Taiwan, and Singapore all have open skies w/ the US and I think Thailand does as well. AA could fly tomorrow to any one of those countries AND carry local passengers between them if they so desired. HKG and China are more restrictive but do have provisions in the bilateral for expansion by US carriers. AA already flies nearly every NRT route UA serves and could fly to other Japanese cities if it wanted under the bilateral. The only restricted access parts of UA's current Pacific route structure is HKG and China although that is changing and the beyond NRT rights.
2. NRT is one of the most costly places to connect passengers through. I'm not sure that an airline today would want to build a route system that involves carrying connecting passengers through NRT. TPE is a much less costly airport for the SE Asian markets that require a stop somewhere in Asia.
3. The 777LR is more than capable of flying to any Asian destination from the west coast and probably ORD as well. It would be far cheaper for AA to invest in aircraft to overfly NRT than to pay to hub in an expensive airport.
4. The DOJ might have objections to an AA acquisition of UAL's entire Pacific route system since AA and UA already duplicate many US-NRT flights.
5. The value of UAL's Pacific operation is due to the current revenue stream, not the market access it provides. AA has done a very good job of working its way into the key NRT markets and can probably do just as well in the other Asian markets.
6. Buying assets from UAL only serves to prop them up at this point. AA will gain far more if UA continues to downsize (which it will have to do short of a major cash infusion). Injecting cash into UAL will only keep them around longer.
7. Asset sales would probably require assumption of some of UAL's Pacific route-associated debts such as 777s or 747s as well as employees. AA needs none of these to operate a successful Pacific operation.
I may be surprised but I don't expect AMR to go after UA's Pacific routes, unless it is in a distress sale.
1. Most Asian markets are currently available for expansion by US airlines. S. Korea, Taiwan, and Singapore all have open skies w/ the US and I think Thailand does as well. AA could fly tomorrow to any one of those countries AND carry local passengers between them if they so desired. HKG and China are more restrictive but do have provisions in the bilateral for expansion by US carriers. AA already flies nearly every NRT route UA serves and could fly to other Japanese cities if it wanted under the bilateral. The only restricted access parts of UA's current Pacific route structure is HKG and China although that is changing and the beyond NRT rights.
2. NRT is one of the most costly places to connect passengers through. I'm not sure that an airline today would want to build a route system that involves carrying connecting passengers through NRT. TPE is a much less costly airport for the SE Asian markets that require a stop somewhere in Asia.
3. The 777LR is more than capable of flying to any Asian destination from the west coast and probably ORD as well. It would be far cheaper for AA to invest in aircraft to overfly NRT than to pay to hub in an expensive airport.
4. The DOJ might have objections to an AA acquisition of UAL's entire Pacific route system since AA and UA already duplicate many US-NRT flights.
5. The value of UAL's Pacific operation is due to the current revenue stream, not the market access it provides. AA has done a very good job of working its way into the key NRT markets and can probably do just as well in the other Asian markets.
6. Buying assets from UAL only serves to prop them up at this point. AA will gain far more if UA continues to downsize (which it will have to do short of a major cash infusion). Injecting cash into UAL will only keep them around longer.
7. Asset sales would probably require assumption of some of UAL's Pacific route-associated debts such as 777s or 747s as well as employees. AA needs none of these to operate a successful Pacific operation.
I may be surprised but I don't expect AMR to go after UA's Pacific routes, unless it is in a distress sale.
jimntx
Veteran
WorldTraveler said:
I agree with most of what you said, but NRT is problematic for the lack of available slots. AA was awarded route authority for daily HNL-NRT service which they had intended to start in November (I think). However, we could not get landing rights on the NRT end. There is a LOT of O&D traffic between Japan and Hawaii--it's a particular favorite vacation spot for the Japanese.
If they became available, I would see AA buying some routes into China from UAL, but as you said, there is no real need to buy routes to most of the other trans-Pacific destinations. All you have to do is start flying them.
Just Plane Crazy
Senior
- Feb 24, 2004
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I think that the article in which MBA made its opinion public that they think that AA should take over UA fueled this rumor.
AA would never receive anti trust immunity to purchase UA and UA would not give up its best cash cow (Pacific routes).
AA would never receive anti trust immunity to purchase UA and UA would not give up its best cash cow (Pacific routes).
