American Airlines and US Airways reportedly seek merger extension

[Jacobin777]

That pretty much sums it up, Horton must go or the company will fail because even the Yes voters feel this way, and they are now the minority. I think Jacobin777 is Tom Horton, he is the only one who feels Horton should stay.

LOL.

+1

LOL.

Yes, off with the management's heads......

24 months later, you'll all be pissing & moaning about how the new management has screwed you.

Look as UA.... all those folks who demanded that Glenn Tilton & Jake Brace be run out of town & were downright giddy that the customer/employee focused CO management was taking over.

I don't think they're so happy today... especially the CO pilots, but that's another story for another day.

The only constant in all that are the folks who called for management's removal... They were bitter then, and they're bitter now.

AA and US will be no different. You'll demand a regime change, and you'll still long for the good old days even though you got your way.

Next.

+1

AA might have had good fuel hedges - a number of legacy airlines did... but WN hedged more fuel because they had deeper pockets and were less impacted.

The reason why Arpey made the comment you cite - which is very credible - is because WN was gaining significant advantages because of the size of its fuel hedges which did end and WN's growth slowed down dramatically as a result.

Nonetheless, WN still has a cost advantage to every legacy carrier.

And yes you are correct. US doesn't hedge anymore and they have often paid lower fuel prices. Some analysts believe that legacies still do it because it provides some certainty to a major cost item and some sense of assurance the business can continue even in the midst of a major crisis, even if it doesn't result in the lowest price.

Major carriers also have currency hedges for the same reason.

The way the price of "black gold" is going up (and subsequently Jet-A), add to the fact US won't be able to keep its "sub-average" salaries low, IMHO, US is in a lot more trouble than people think. I also don't believe AA needs US.

WN's cost savings over its competitors will also decrease in time as wages, pensions, etc. will start to outweigh many of its savings. Regardless, WN is a formidable carrier.

 

[robbedagain]

us mgmt would be able to keep us folks at below industry avg as long as they can and still make profits esp in the fees.. scott kirby even mentioned before in the past that the reason us was profitable at the time was strictly on those fees... you say aa dont need us but i ask this... lets say the air carriers lose the court battle aa stays in ch11 for an extended period the creditors are going to be very unhappy.... they may say its time to sell parts of the carrier or mgmt comes back and says to all of the unions there they need more drastic cuts what will you be saying then? im only askin bec it could happen but i doubt aa would be broken up n sold and all to satisfy the creditors

 

[Jacobin777]

us mgmt would be able to keep us folks at below industry avg as long as they can and still make profits esp in the fees.. scott kirby even mentioned before in the past that the reason us was profitable at the time was strictly on those fees... you say aa dont need us but i ask this... lets say the air carriers lose the court battle aa stays in ch11 for an extended period the creditors are going to be very unhappy.... they may say its time to sell parts of the carrier or mgmt comes back and says to all of the unions there they need more drastic cuts what will you be saying then? im only askin bec it could happen but i doubt aa would be broken up n sold and all to satisfy the creditors

AA doesn't need to stay in Chapter 11 for any extended period of time. They already had "Plan-A" ready to go before Parker & Co. started to offer lollipops to the various unions. All of the major union contracts have been negotiated for a number of years in to the future.

AA's revenues and earnings with the current structure is producting robust numbers. Sustainable? Probably.

Maybe US doesn't need AA either and maybe US can do well on its own. I have no problems with it. Personally, I like the direction AA is heading in terms of revenues, earnings and service.

 

[Thomas Paine]

All of the major union contracts have been negotiated for a number of years in to the future.

You cited that US wont be able to keep their wages low much longer, then say that AA will because "All of the major union contracts have been negotiated for a number of years in to the future.". Those contracts weren't negotiated, we negotiated for three years then the company used blackmail of having the courts impose plan B with no right to strike if we didn't accept plan A, that's not negotiations and no matter how many times you claim they were we will not forget the truth. What makes you so sure that once AA shows record profits for the year that the workers wont start rebelling with or without the blessing of Union leaders ? I'm ready. Been ready. Maybe a massive sick call Thanksgiving and Christmas week to shake management up? What makes you so sure that AA will have labor peace after going as far as they have? Wouldn't be the first time, and things weren't nearly as bad back then.

 

[WorldTraveler]

The way the price of "black gold" is going up (and subsequently Jet-A), add to the fact US won't be able to keep its "sub-average" salaries low, IMHO, US is in a lot more trouble than people think. I also don't believe AA needs US.

WN's cost savings over its competitors will also decrease in time as wages, pensions, etc. will start to outweigh many of its savings. Regardless, WN is a formidable carrier.

Crude oil prices might continue to slowly increase but it will be a lot harder to do because the US is now producing enormous amounts of new oil and there are realistic expectations that the USA, the largest petroleum user, could become energy self-sufficient within a decade.
If that happens, there will be enormous geopolitical ramifications, including that countries of the Middle East which have economies built around petroleum could be put in a very precarious position. They aren't going to just stop using pumping fuel and watch their revenues decrease. There is a real possibility that petroleum prices could start coming down not too far down the road.
Factor in also that the industrialized countries are becoming more and more energy efficient, and the demand for fuel may have already peaked.

You are correct about WN's cost increases but they also have done a very good job for a number of years of keeping efficiency high which offsets their cost increases. They still have a significant cost advantage to all of the legacy airlines and they are in no risk of losing that.
Further, they still have enormous revenue growth potential, as evidenced today by the ground-breaking at HOU of their new int'l terminal. The potential for WN to grow revenue in Latin America is enormous.

 

[Thomas Paine]

Yes, off with the management's heads......

24 months later, you'll all be pissing & moaning about how the new management has screwed you.

Look as(t) UA....

I don't think they're so happy today... especially the CO pilots,

Can you make up your mind whom you are commenting about?

 

[jimntx]

and you'll still long for the good old days even though you got your way.

Next.

+10 for the post

As one of my college history professors used to say, "Ah, yes. The good old days. Formerly known as these trying times in which we live."