- Aug 20, 2002
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The point I was attempting to make was the existing shareholders could be issued new stock, thereby keeping them in the family instead running away.
BA/IAG heard from:
- Thread starter AAviator
- Start date
eolesen
Veteran
- Jul 23, 2003
- 15,940
- 9,371
I've been saying for well over a year that I'd expect something with TPG & BA/IAG. Here's one shoe. And reliable sources say that TPG would likely be willing to back what they consider to be the right deal. Let's see if they come out of the woodwork --- they've said nary a word since November.
As I've posted at least a dozen times, the existing stockholders of AMR will see their stock cancelled when the Plan of Reorganization is confirmed. The existing unsecured creditors will be issued new stock to settle a portion of their claims. Current stockholders will receive nothing and their stock will become worthless. Any stock you bought in AMR and still hold is worth what you can sell it for before the POR is confirmed.
If another airline should make a successful bid for AMR, your stock will not share in any of the riches - it will still be canceled.
You have posted before that you were holding onto some AMR - I'd sell it if I were you.
BINGO ! finally someone looking outside of the BOX ! Well done AAviator Well done !
- Aug 20, 2002
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$128.00 total outlay at .20 per share. Still gonna watch it awhile. I can double my money in the morning.
- Aug 20, 2002
- 7,319
- 1,555
Doesn't exterior paint cost fuel economy?
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
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- Banned
- #24
regarding #1, the question becomes whether they can recoup their investment... no one is going to donate anything to AA. If BA believes their ability to maintain revenues via AA is threatened if AA were to be acquired or liquidated, then it would make sense for them to consider it... but if BA's revenues are unchanged, then it is hard to make a case that they will recover their investment. It also isn't certain that their only way to obtain feed within the US is via AA; they might well find that US is as good of an option or with a combination of other carriers... I'm still not sure that, because LHR is still slot restricted and more limited access than AMS/CDG and FRA/MUC etc, the economics of a JV look the same for BA as it does for AF/KL and LH etc. Keep in mind that BA is picking up a bunch of new slots from BD and will likely further strengthen its position against VS.
2. 25% has been shown to be sufficient to keep competitors at bay... so if the intention is solely to lock up codeshare/JV revenue, then that should be sufficient.
3. I do believe that the whole wave of JVs has made people think that the previous types of interline agreements including just plain codesharing are no longer valid - but they still can deliver alot of revenue w/o the risk involved in JVs. As for domestic mass, the evidence is quite strong that DL and UA have gained a fair amount of mass as a result of their mergers and they are taking revenue at the expense of AA... the fact that both have outperformed AA in all regions except for Latin America for several quarters confirms that... although UA's most recent monthly reports indicate that their RASM growth is sputtering for some reason. Note also that US continually says its revenue generating ability relative to larger carriers is worse... and it isn't because they can't compete in their local markets. In fact, they do fairly well in their hubs and strength markets. Where they struggle is in obtaining the higher yielding traffic that is up for grabs in cities where no carrier dominates. US has given up a lot of revenue strength in non-hub cities in the SE over the past several years, esp. to DL.
Every financial analysis related to network type businesses shows that mass matters... as much as some people want to believe it doesn't matter any more (esp. those supporting AA since the DL and UA mergers), the evidence doesn't back that anything has changed from those well documented results of the past.
BoeingBoy
Veteran
- Nov 9, 2003
- 16,512
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- Banned
- #25
Part of your problem is the broad-brush generalizations you make. If mass is so important, why hasn't DL been adding capacity as other carriers have cut back? Simple - making money is more important than bragging rights to being the biggest. If there's one lesson all the network carriers seem to have learned since 911, it's that chasing market share isn't necessarily a good idea. Airline history is littered with names of carriers that were once among the biggest, but disappeared. Plus those that tried to grow wildly after deregulation, but disappeared.
Jim
Frank Szabo
Veteran
True, but the Russians count their miltary aircraft along with their civilian transport stuff, too - probably even hang gliders, if they've got 'em.
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
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- Banned
- #28
except Aeroflot didn't stumble (euphemism) because they were too big... they stumbled because they were poorly run.
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AA was happy to call itself the world's largest airline for years... but apparently being the biggest or even second biggest matters anymore.
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DL and UA's size RELATIVE to the rest of the industry is what has allowed both to move revenue share from smaller carriers, including AA, to themselves. They don't have to keep growing just to become larger.
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It is also why DL will acquire assets or merge not to add more bulk but to acquire key strategic assets and market position... Jack Welch at GE long believed - and GE confirmed that it is virtually impossible for a company to succeed long term in an industry where they are #3 or below. If GE couldn't be #1 or #2 in a market, they either grew or exited the market.
If you have doubts about the wisdom of Jack's business strategies, pick up a copy... they have been printed by the millions.
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AA was happy to call itself the world's largest airline for years... but apparently being the biggest or even second biggest matters anymore.
.
DL and UA's size RELATIVE to the rest of the industry is what has allowed both to move revenue share from smaller carriers, including AA, to themselves. They don't have to keep growing just to become larger.
.
It is also why DL will acquire assets or merge not to add more bulk but to acquire key strategic assets and market position... Jack Welch at GE long believed - and GE confirmed that it is virtually impossible for a company to succeed long term in an industry where they are #3 or below. If GE couldn't be #1 or #2 in a market, they either grew or exited the market.
If you have doubts about the wisdom of Jack's business strategies, pick up a copy... they have been printed by the millions.
johnny kat
Senior
- Oct 11, 2011
- 343
- 330
WT,
You pretty well laid out the argument for a US/AA merge.
You pretty well laid out the argument for a US/AA merge.
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #30
all the strategic reasons in the world won't and can't help a merger that is financially a poor fit - like the fact that US will have higher costs than AA by the time they emerge, US is valued less than any other airline (and thus would have to take on more debt to make the deal work), and US has a below average track record of making mergers produce the intended revenue improvements.
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Other than those piddly details, sure, an AA/US merger makes a great strategic fit.
