AMR buys Jetblue Airways

[olderguyAMT]

OK its just a rumor, so get over it!

American Airlines and JetBlue Airways are becoming close partners. So What would prevent AMR from buying or merging with JBLU using the cash from the spin-off of AE to shareholders of AMR? Is this Arpey's trump card or will he deal from the bottom of the deck? Is this the real reason for big changes to CBA Co. proposal concerning outsourcing? Can't do all that work in TUL, AFW, and DWH, right? Time for Arpey and the gang to fess up?

JBLU has $1.2 Billion in debt, and a little under 300 million shares outstanding. How much cash and short term equivalents do they have? Earnings estimates are for a profit of .17 this Qtr. A merger would be easier? Cash and stock swap? And they operate 115 A-320's...... 30% of business is international flts ...... point to point flying.....Hmmmmm.

 

[Frank Szabo]

If there ever any buying or selling going on re: AA, I hope it's in such a way we get to vote on our "representation" - whether we want it or not.

 

[olderguyAMT]

If there ever any buying or selling going on re: AA, I hope it's in such a way we get to vote on our "representation" - whether we want it or not.

Would that be about the AMP vs. TWU election? Just learned that JBLU has about $550 million in cash and short term equivalents. Could be a lot of wheeling and dealing going on...... and it has been said that AMR will file the spin-off documents with the gov't next month.

 

[TWU informer]

OK its just a rumor, so get over it!

American Airlines and JetBlue Airways are becoming close partners. So What would prevent AMR from buying or merging with JBLU using the cash from the spin-off of AE to shareholders of AMR? Is this Arpey's trump card or will he deal from the bottom of the deck? Is this the real reason for big changes to CBA Co. proposal concerning outsourcing? Can't do all that work in TUL, AFW, and DWH, right? Time for Arpey and the gang to fess up?

JBLU has $1.2 Billion in debt, and a little under 300 million shares outstanding. How much cash and short term equivalents do they have? Earnings estimates are for a profit of .17 this Qtr. A merger would be easier? Cash and stock swap? And they operate 115 A-320's...... 30% of business is international flts ...... point to point flying.....Hmmmmm.

I hope you don't find out the hard way that making claims such as this could be a violation of Federal Law.

 

[Super FLUF]

I doubt there will be cash involved. Most likely, it will just be a stock swap.

Notice how every route AA drops as "unprofitable" JBLU picks up immediately? Convenient, isn't it? Will come in very handy for DOJ anti-trust merger scrutiny.

 

[eolesen]

LCCs thrive on moving into what appear to be established markets, either directly or by alternate airports. Few actually develop markets on their own. Lots of "past practice" on that one, so good luck with the conspiracy theory.

AMR won't be buying anyone. But I could see someone buying AMR if they went thru restructuring...

 

[Kev3188]

AA won't be buying B6 w/o adding a *huge* premium for B6 shareholders...

 

[Barfbag]

I could see American enter a pre-packaged bankruptcy with Jetblue being the white knight.

 

[olderguyAMT]

I hope you don't find out the hard way that making claims such as this could be a violation of Federal Law.

What claims? And what violation of law? Perhaps you could be more specific, Mr TWUInformer. It's just my opinion so get over it already. should have used all caps to shout that. Are you in mismanagement?

 

[JFK Fleet Service]

American Airlines will remain the international arm of the airline,and the rest of us will enjoy being "Crew Members" of the domestic arm of the airline, Jet Blue.

 

[Super FLUF]

I could see American enter a pre-packaged bankruptcy with Jetblue being the white knight.

AMR has enough cash on hand to pull off a self-financed pre-pack. Only in a Ch. 7 (or a dire Ch. 11 that looks like it will soon be a Ch. 7) situation do you need a "white knight".

Although that is a frightening possibility (the pre-pack), I doubt it will happen.

Some have speculated that AMR will not "buy" another airline. Remember, the DAL/NWA deal was not a cash purchase. It was a stock swap - I don't believe any actual cash changed hands. I believe DAL gave NWA shareholders a higher amount of DAL stock for each share of NWA stock they held.

With that in mind, I think it takes incredible hubris to say that an AA/JBLU hookup will "never" happen. Especially when your opinion is based on the cookie-cutter platitudes puked by the dime-a-dozen "analysts".

 

[WorldTraveler]

AA won't be buying B6 w/o adding a *huge* premium for B6 shareholders...

accurate and true.
The only way AA will be involved in any transaction with anyone is if AA is ACQUIRED as part of a bankruptcy process that dramatically reduces AA costs - likely largely coming from employees.
There is no way that a merger between AA and any other makes any sense other than as an asset acquisition because AA's costs are too high to allow any other airline's business plan work. Any acquisition of a lower cost airline is going to lead to significant dismantling of the lower cost carrier's operation - unless wage rates and total employee costs FALL to the level of the low fare carrier.

If AA bought B6 it would be for B6's assets at JFK - and are they really worth $1.5B or more - esp. since B6 right now is worth as much as AMR.

AA COULD acquire B6, lay off or push out tens of thousands of AA's own higher cost employees, trash the labor contracts - and then make a B6 acquisition viable.

I don't think that many people will say that as a viable or desirable scenario.... and it is entirely possible that regulators will say it is not worth it either. Remember that some of the labor protection provisions regarding mergers came from the AA-TW merger that many regulators saw as being too costly to labor.
.
Further, all of this talk about an AA and B6 merger really speaks to the need for AA to regain its position in NYC relative to CO/UA and DL - and even with a B6 merger that will be very hard to do since JFK may be the preferred int'l airport for the city but for domestic travel, JFK ranks #3 behind LGA and EWR.
.
Given that reality, it is far more likely that AA will continue to buy seats - and B6 will be happy to sell them - where AA does the long haul int'l flying and B6 provides the feed....a low cost American Eagle in reality.
I'm not sure that AA labor is willing to watch AA's network continue to shrink at the hands of a low fare competitor... and with higher costs and a smaller alliance, there is also no assurance that AA's plan to focus solely on the int'l and long haul market is viable long-term either.

 

[will fix for food]

OK its just a rumor, so get over it!

American Airlines and JetBlue Airways are becoming close partners. So What would prevent AMR from buying or merging with JBLU using the cash from the spin-off of AE to shareholders of AMR?

AMR won't get enough cash from Eagle's spin-off to buy a box of paper towels let alone an airline.

 

[Buck]

AMR won't get enough cash from Eagle's spin-off to buy a box of paper towels let alone an airline.

Is Eagle worth more than American Airlines? Not asking about AMR's value......

 

[Frank Szabo]

AMR won't get enough cash from Eagle's spin-off to buy a box of paper towels let alone an airline.

They're going to give stock to the AMR shareholders - hardly anything "CASH".