British Airways interested in a stake of AA

texflyer · Jan 25, 2012

http://uk.reuters.com/article/2012/01/24/us-dealtalk-americanairlines-idUKTRE80N2KI20120124?type=companyNews

This is why I think all of this talk about AA merging is hype. There are are alot of power interests out there that want AA just as they are but stronger. Interesting tidbit about TPG as well.

BoeingBoy · Jan 25, 2012

BA is part of the reason that I've said my money is on a TPG investment - not necessarily taking AA private but acquiring a significant chunk of the new stock when AA emerges from bankruptcy. TPG will, of course, accept and probably like an investment by BA up to the legal limit - 25% of voting stock.

Jim

FWAAA · Jan 25, 2012

The foreign investment limits are under 50% of the economic interest but under 25% of the voting interest, right? Potentially, that means foreign investors could end up loaning/investing almost half of the total if they were willing to accept the voting limit of just under 25%.

I've never thought there were any real shortages of domestic money willing to be lost on airlines - US found funding for both of its Ch 11 exits and UA, DL and NW all found funding without much foreign involvement. US did have some Canadian money, right (Air Canada?)? I don't see foreign capital as a necessary part, and don't see the foreign limits being changed.

BoeingBoy · Jan 25, 2012

Correct - foreign investment is limited to 50% equity/25% control. Just note that that is the limit for all foreign investors, including individual investors who might buy 100 shares. Also correct - AC was a smaller investor in LCC (as opposed to US) stock (as I recall the primary investors put in $125 million each and AC put in $75 million).

I don't know anything about TPG's financial ability of invest in AA. Could they take it private, buy 50%, 25%? Like I said, I doubt that they'd turn down BA offering exit financing for 25% of the new stock. I would think that TPG would want half or more, including that provided by "friendly" investors like BA.

Jim

strikeforce · Jan 25, 2012

At the end I might be wrong, but any AA employee will tell you....AA management are control freaks and probably the key reason AA is self-funding this BK....they really think they're smarter than the experts. And, it's probably one of the reasons why AA is in this predicament in the first place. AA needs a Management Cleansing and it's probably one thing YOU will not see in this BK. I HIGHLY doubt AA will merge or allow any takeover from outside parties.....because if they do......these outside parties will clean house and this management team will be cutting their own throats. It's probably a good thing....I just don't see it happening.

texflyer · Jan 26, 2012

strikeforce said:
At the end I might be wrong, but any AA employee will tell you....AA management are control freaks and probably the key reason AA is self-funding this BK....they really think they're smarter than the experts. And, it's probably one of the reasons why AA is in this predicament in the first place. AA needs a Management Cleansing and it's probably one thing YOU will not see in this BK. I HIGHLY doubt AA will merge or allow any takeover from outside parties.....because if they do......these outside parties will clean house and this management team will be cutting their own throats. It's probably a good thing....I just don't see it happening.

IAG may be the only keeping you from calling Parker, CEO Parker.

Frank Szabo · Jan 26, 2012

Many seem to be obssessed with Parker and his pitiful US Air.

Stop and think for a minute - Rothschild is a British Banking Firm (family) and BA is looking to invest. Advice gets dispensed in that arena for an AA/BA tie-up and AA pays for it - no cost to BA other than its actual investment. Dougie and US were not, are not, nor ever were a consideration, rather, just a item for the media to fill the otherwise blank non advertising space of their fish wrappers.

Sweet deal, huh?

chris perry · Jan 27, 2012

BoeingBoy said:
BA is part of the reason that I've said my money is on a TPG investment - not necessarily taking AA private but acquiring a significant chunk of the new stock when AA emerges from bankruptcy. TPG will, of course, accept and probably like an investment by BA up to the legal limit - 25% of voting stock.

Jim

I agree JIM,TPG will likely make a run on AA,with other investors...JAL,Quantas,BA maybe more..

ebwgs · Jan 27, 2012

Frank Szabo said:
Many seem to be obssessed with Parker and his pitiful US Air.

I can't think of anyone in this industry right now more pitiful than AA.

Jacobin777 · Jan 27, 2012

strikeforce said:
At the end I might be wrong, but any AA employee will tell you....AA management are control freaks and probably the key reason AA is self-funding this BK....they really think they're smarter than the experts. And, it's probably one of the reasons why AA is in this predicament in the first place. AA needs a Management Cleansing and it's probably one thing YOU will not see in this BK. I HIGHLY doubt AA will merge or allow any takeover from outside parties.....because if they do......these outside parties will clean house and this management team will be cutting their own throats. It's probably a good thing....I just don't see it happening.

AA has hired a lot of outside advisers.

texflyer said:
IAG may be the only keeping you from calling Parker, CEO Parker.

IMHO, even if AA were to merge with US, Horton would still be Chair-but I agree, Parker would probably be CEO. I would rather take my chances with Horton.

Frank Szabo said:
Many seem to be obssessed with Parker and his pitiful US Air.

Stop and think for a minute - Rothschild is a British Banking Firm (family) and BA is looking to invest. Advice gets dispensed in that arena for an AA/BA tie-up and AA pays for it - no cost to BA other than its actual investment. Dougie and US were not, are not, nor ever were a consideration, rather, just a item for the media to fill the otherwise blank non advertising space of their fish wrappers.

Sweet deal, huh?

Why would AA have to pay for it? If the "DD" is being done by BA, they would be paying for it.

ebwgs said:
I can't think of anyone in this industry right now more pitiful than AA.

In what sense?

ebwgs · Jan 27, 2012

Jacobin777 said:
View PostFrank Szabo, on 26 January 2012 - 11:47 AM, said:
Many seem to be obssessed with Parker and his pitiful US Air.

Stop and think for a minute - Rothschild is a British Banking Firm (family) and BA is looking to invest. Advice gets dispensed in that arena for an AA/BA tie-up and AA pays for it - no cost to BA other than its actual investment. Dougie and US were not, are not, nor ever were a consideration, rather, just a item for the media to fill the otherwise blank non advertising space of their fish wrappers.

Sweet deal, huh?

You're bankrupt, scared, not sure whether you'll be working for AA as a full stand alone entity, or if you'll be the carcass of what once was a great carrier only to be to be carried of and consumed by vultures whose intent is to feast on what was once American Airlines. To have your fate possibly reduced to aluminum waste left to be towed to the mortuary equivalent of an airport hangar is tough I know. But that could very well be your fate. Your pitiful fate. Before you engage in slamming another carrier performing relatively better then yours, please take your AArogance inward and do all you can do to save your own shipwreck.

In what sense?