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Boeing Doesn't See AA-US Merger

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  • #76
Of course it's an incorrect leap of faith to assume that a three-way merger would be easy. And nobody claimed that.

Let's go back to your statement...


There is no precedent for successfully combining 3 airlines - a 3 way merger - in the airline industry.


You never specified three separate corporations. So the CO-PE-NY example is still valid, and I left out FL, which for all intents and purposes was also included in the Big Bang. It's not like PE was a long-time subsidiary -- the PE deal closed about 90-120 days prior to Customer Day One, and that was about 120-180 days after the Frontier deal closed.

Before you try to next argue that FL was just a PE subsidiary, you might want to look at the timings. PE took control in October 1985, and the subsidiary was independently operated just as EA was from the rest of Texas Air. NO integration took place. One was union, one was non-union, one used traditional ticketing and distribution, the other was primarily direct sales only. When FL was placed into bankruptcy, there was no impact on the PE operating subsidiary, although the holding company took a serious hit.


Want another one that's perhaps quite relevant to the discussion?....

USAir-PSA-Piedmont, All three started out 1986 as unique and separate companies. USAir took ownership of PSA in 1986, and less than a year later, took over Piedmont. The merger process for both "subsidiaries" was underway simultaneously during 1988, albeit staggered.


Since you are the most black and white person when it comes to everyone else's proofs (yet always leave an IF, Maybe, or Could in your own prose), here's a final example:

1990 --- Air Inter, Air France, and UTA

Before you try to claim that you only meant US companies, please re-read the quote above. You quite clearly said "industry".

Next time you want to try and do "Six Degrees to Kevin Bacon" in the airline industry, you might want to play somewhere else. This is the stuff my master's thesis is made of.
 
Next time you want to try and do "Six Degrees to Kevin Bacon" in the airline industry, you might want to play somewhere else. This is the stuff my master's thesis is made of.

It's been about eight hours and no reply....you hurt him, you hurt him bad.
 
The definition of a merger entails an ownership change or at least distinct companies. Combining brands operating under one corporate umbrella is not a merger.

On that basis, the US merger comes closer to the definition of what you proposed with the AA-AS-B6 scenario that the Texas Air example.

But neither change the fact that there will not be 3 way merger between AS, B6, and AA - if for no other reason that every example you have cited shows companies that spent decades overcoming the fat that came with those mergers and they never gained the competitive advantage they needed. AMR's creditors cannot and will not take that risk.
The only reason why AF has succeeded as long as it has is because most of the European megacarriers were insulated by limited access in their markets that prevented them from facing the harsh realities that the US carriers have had to face - and overcome.

And it is precisely the model of hypercompetitiveness in the USA market that AA has to figure out how to compete in, not the quasi-competitiveness that characterizes much of global aviation. US still hasn't figured out how to be a top line winner in that environment. AS has. AA might if their employees don't take the company down first.
 
AMR's board and creditors are exploring potential merger/consolidation possibilities but the press release specifically stated that they will take a disciplined approach to review OPTIONS but "To be clear, American has committed to work in collaboration with the Committee to develop only potential consolidation scenarios and this agreement does not in any way suggest that a transaction of any kind or with any particular party will be pursued."
 
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  • #82
The definition of a merger entails an ownership change or at least distinct companies. Combining brands operating under one corporate umbrella is not a merger.

Oh. I'll tell the ring up the guys at Qantas, and tell them that combining with Jetstar wouldn't be a merger because you said it wasn't.

Never mind the fact that there's absolutely nothing shared between them, except a CEO and board of directors.

You go ahead and define "merger" however you wish. When there are distinct labor agreements (or absense therefore of), different opspecs, sales structures, CRS, RM, RA, HR, finance, etc., it's a merger.

Effectively, just about the only advantage that merging two subsidiaries of the same parent has over your narrower definition of a merger is the need to get shareholder, and possibly regulatory approval.

All the remaining 4,286 things on the "how to merge airlines" checklist still need to be done, and it will be no easier to get agreement on a lot of those items.
 
The term "merger" has legal implications regarding ownership, survivorship, and transfer of assets. If two companies have separate ownership and assets, then a combination of them into one WOULD BE a merger, regardless if the same people run the show.

A merger does not legally describe the process of joining the operations of two wholly owned subsidiaries.


We could go on with this but just let me know when the 3 way merger involving AA and 2 separate companies occurs.
 
Even by your overly strict definition, there have been 3-way mergers in the airline industry. The original Frontier was created by the merging of Monarch Airlines, Challenger Airlines, and Arizona Airways in June 1950.

In SEC filings (not just PR statements filed with the SEC), US used the term "merger" when it consolidated two of it's three wholly-owned subsideries - Alleghenny and PSA - even though both were fully owned by US Group. By law mergers are generally classified as one company purchasing at least 50% of the equity of another, or at least 50% of the assets. Under that definition, it matters not whether two completely separate companies or two subsidery companies are involved. In the US case, PSA assumed all the liabilities and assets of Alleghenny so it constituted a merger.

Jim
 
.... just let me know when the 3 way merger involving AA and 2 separate companies occurs....

cause I don't think it will ever happen.

Based on the TWU votes today, AA's ability to move forward as a standalone entity looks just a tad more likely.
 
cause I don't think it will ever happen.

Based on the TWU votes today, AA's ability to move forward as a standalone entity looks just a tad more likely.

I agree. And I'm not against a merger, I'm just against a merger right at this moment, and with US Airways.

We are too weak to really protect ourselves, and US Airways is the wrong dance partner. I'm thinking more Jetblue or Alaska.
 
a B6-AS tie-up funded by TPG .

Finally, someone mentioned it.....AA does not need help expanding internationally, but JetBlue would give them back dominance in NYC, offers fleet certainty by adding MOSTLY planes they plan on having in their fleet (minus the Embraer 190s, which btw are nice airplanes for the customers).

JB would also further expand their somestic routes, but maybe I am looking at this all wrong.......

Cheers,
777 / 767 / 757
 
Of course it's an incorrect leap of faith to assume that a three-way merger would be easy. And nobody claimed that.

Let's go back to your statement...





You never specified three separate corporations. So the CO-PE-NY example is still valid, and I left out FL, which for all intents and purposes was also included in the Big Bang. It's not like PE was a long-time subsidiary -- the PE deal closed about 90-120 days prior to Customer Day One, and that was about 120-180 days after the Frontier deal closed.

Before you try to next argue that FL was just a PE subsidiary, you might want to look at the timings. PE took control in October 1985, and the subsidiary was independently operated just as EA was from the rest of Texas Air. NO integration took place. One was union, one was non-union, one used traditional ticketing and distribution, the other was primarily direct sales only. When FL was placed into bankruptcy, there was no impact on the PE operating subsidiary, although the holding company took a serious hit.


Want another one that's perhaps quite relevant to the discussion?....

USAir-PSA-Piedmont, All three started out 1986 as unique and separate companies. USAir took ownership of PSA in 1986, and less than a year later, took over Piedmont. The merger process for both "subsidiaries" was underway simultaneously during 1988, albeit staggered.


Since you are the most black and white person when it comes to everyone else's proofs (yet always leave an IF, Maybe, or Could in your own prose), here's a final example:

1990 --- Air Inter, Air France, and UTA

Before you try to claim that you only meant US companies, please re-read the quote above. You quite clearly said "industry".

Next time you want to try and do "Six Degrees to Kevin Bacon" in the airline industry, you might want to play somewhere else. This is the stuff my master's thesis is made of.

:lol: ......end of argument.

Cheers,
777 / 767 / 757
 
I agree. And I'm not against a merger, I'm just against a merger right at this moment, and with US Airways.

We are too weak to really protect ourselves, and US Airways is the wrong dance partner. I'm thinking more Jetblue or Alaska.

Couldn't agree more......Horton and company may be the "Devil" to some, but at least its the Devil you know. Losing control over compensation sucks, losing control over everything, sucks worse. Course, I never said I am against the third option: labor and rest of Creditors Committee get together to select different senior management and keep AA stand alone.

Cheers,
777 / 767 / 757
 
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