Could US Airways Take Over American?

[USA320Pilot]

Could US Airways Take Over American?

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[lynyrdskynyrd]

That would probably be DP's wet dream. He could once again sit by and watch a bigger group gang up on a smaller group, all under the guise of neutrality, all the while reaping the benefits thereof. The largest airline in the free world, with the lowest wages. What could be better?

 

[WorldTraveler]

The article sums it up well.
"If American went into bankruptcy, it's a given, US Airways would be there," said Mike Flores, president of the US Airways chapter of the Association of Flight Attendants. "I truly think that (Doug) Parker and his companions from America West are just sitting there waiting for the day that American files."
Absent a bankruptcy filing, Flores said, a merger with American is far tougher, because most American employees still have the expensive defined benefit pension plans that other carriers shed in bankruptcy. Additionally, American's 619 aircraft includes 247 older MD-80s, which could be around for a long time absent a bankruptcy restructuring. "With those liabilities, I can't see doing a hostile takeover of American," Flores said.
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If AA continues on its present course, AA will likely have no other option than BK and US might get its chance for a presence in major markets plus a switch to oneworld where it can share revenue - which it cannot do with Star.
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The question is what will be left of AA by that point.

 

[Art at ISP]

Interesting conjecture, and of course, we all know that nothing is impossible in this business.

Any such combination, leaving Doug and Scooter in charge, however, would be disastrous. They are over their heads with this past merger, which they just can't seem to complete almost 6 years later......

 

[PHL]

There's huge labor strife at AA. I might even argue that there's more there than there is at US. The AA FAs have a strike over a year ago, pending NMB approval (which hasn't come). And the entire workforce can't stand Arpey.

Ya, AA-US sounds like a match made in heaven. If AA goes into BK and US decides to go after them, you can only imagine the HUGE divisions in the seniority based labor groups. There will be more fences than a federal prison to protect the pilots/FAs at their bases. It will be US East, US West, US DFW and US JFK. Good luck Dougie.

 

[SparrowHawk]

Could it happen? Yeah it could and I could win the Powerball of Wednesday. I think the odds are pretty similar without a BK filing from AMR. However it is the airline business so it's anyone's guess.

 

[AAviator]

Could US Airways Take Over American?

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[USFlyer]

They are over their heads with this past merger, which they just can't seem to complete almost 6 years later......
[/quote]

The facts simply don't support this statement. The US-HP merger is complete and has been for quite some time. The fact there are still separate labor contracts is tied up in the pilot union dispute. Doug and team are not responsible for the pilots' decision not to accept what the arbitrator decided. Plus, we all know having separate contracts has yielded US a financial advantage.

And, to be blunt, consolidating the labor groups isn't all that necessary: At the end of the day, there would still be "West pilots and FAs based in PHX" and "East pilots and FAs based in CLT, PHL, and DCA" with I'm sure ironclad fences around each base to prevent any material movement between west/east. The only way the west/east divide will go away is over time as folks retire and new employees are hired. (Heck, I still run into people nostalgic over the PSA or Piedmont era, over two decades after those mergers took place!)

 

[SparrowHawk]

They are over their heads with this past merger, which they just can't seem to complete almost 6 years later......


The facts simply don't support this statement. The US-HP merger is complete and has been for quite some time. The fact there are still separate labor contracts is tied up in the pilot union dispute. Doug and team are not responsible for the pilots' decision not to accept what the arbitrator decided. Plus, we all know having separate contracts has yielded US a financial advantage.

And, to be blunt, consolidating the labor groups isn't all that necessary: At the end of the day, there would still be "West pilots and FAs based in PHX" and "East pilots and FAs based in CLT, PHL, and DCA" with I'm sure ironclad fences around each base to prevent any material movement between west/east. The only way the west/east divide will go away is over time as folks retire and new employees are hired. (Heck, I still run into people nostalgic over the PSA or Piedmont era, over two decades after those mergers took place!)

Soooo How are things in your alternate Universe? More whistling past the graveyard

 

[bigbusboy]

The BODs at AA want nothing to do with US and equally nothing to do with bankruptcy. They are desperately trying to avoid both. Right now, because they know bankruptcy almost guarantees a US takeover of AA, they are collectively trying to save their hard-earned MBAs from falling into an out-of-control tailspin. If AA wants to avoid both scenarios, the unions need a reality check that results in some tough and painful decisions. Management needs to cut capacity and aircraft, along with some deeply-rooted house cleaning. In other words, they're trying to come up with some sort of solution that avoids both bankruptcy and US. Cue the stop watchers, foot tappers, and arm crossers.

 

[AAviator]

The BODs at AA want nothing to do with US and equally nothing to do with bankruptcy. They are desperately trying to avoid both. Right now, because they know bankruptcy almost guarantees a US takeover of AA, they are collectively trying to save their hard-earned MBAs from falling into an out-of-control tailspin. If AA wants to avoid both scenarios, the unions need a reality check that results in some tough and painful decisions. Management needs to cut capacity and aircraft, along with some deeply-rooted house cleaning. In other words, they're trying to come up with some sort of solution that avoids both bankruptcy and US. Cue the stop watchers, foot tappers, and arm crossers.

A capital infusion from BA would come long before a BK filing. Additionally, IF AA were to file, it would most likely be a pre-packaged deal. This nonsense of a guaranteed US takeover of AA is a pipe dream. After the US/DL slot swap at LGA, the US decline into oblivion picks up steam..

 

[Maark767]

A capital infusion from BA would come long before a BK filing. Additionally, IF AA were to file, it would most likely be a pre-packaged deal. This nonsense of a guaranteed US takeover of AA is a pipe dream. After the US/DL slot swap at LGA, the US decline into oblivion picks up steam..

Well said, US had no chance of "taking over DL" in BK. What makes you think it would happen with AA ??? Just big ol pipe dream !!!!

 

[SparrowHawk]

A capital infusion from BA would come long before a BK filing. Additionally, IF AA were to file, it would most likely be a pre-packaged deal. This nonsense of a guaranteed US takeover of AA is a pipe dream. After the US/DL slot swap at LGA, the US decline into oblivion picks up steam..

OK, hang on a minute. Isn't AA one of the major players at LGA? So wouldn't the US/DL swap open the door a little wider for a US/AA deal?

just curious if BA has the dough to provide the shot in the arm that AA requires to right itself? I don't recall them (BA) to be swimming in cash or marketable securities.

Would Arpey stand still for a BA infusion if it meant giving up a percentage of the Company to BA?

When you have AA talking about selling off American Eagle, they have or are about to have major money troubles.

Now then let's say for sake of discussion that a merger with US or C7 are the choices AA has. Do you think Wall Street has enough confidence in Doug Parker and the rest of the management team to put up the capital? I don't think they do even if AA is C11 at the time.

 

[BoeingBoy]

US had no chance of "taking over DL" in BK.

I wondered how long it'd take for that little dose of reality to be pointed out. Just because AA is in bankruptcy - IF THEY DO END UP THERE - there is still no guarantee that US would be successful in acquiring them and the example is down I85 in ATL.

Jim

 

[DCaf]

Now then let's say for sake of discussion that a merger with US or C7 are the choices AA has. Do you think Wall Street has enough confidence in Doug Parker and the rest of the management team to put up the capital?"

I think they do. From the article:
"Mann said the 2005 merger success would be an asset in raising money. "The investors in that deal did very well," he said. "If Doug (Parker) put together the usual compelling power point deck, I believe they would get it financed before they walked out of the building."