Could US Airways Take Over American?

[SparrowHawk]

Oh believe me, I never agree with UPNAWAY either. What I was saying is if you mixed the environment and troubles with US and it's environment and troubles it would be pretty much hell on earth.

I read you loud and clear. Mixing the two work groups and cultures together would be like blending Chicken Poop and Pig Poop. When you're done you just have a different flavor of poop.

 

[TheBadCat1313]

There's a valid reason to keep the US name if this ever happens: The change of control clause at US, that would trigger a snapback to pre-BK pilot wages. This was a factor in keeping the US name in the AWA/US merger.

I'm thinking we're looking at an AA pre-packaged BK filing in early 2012, followed by a TWA/AA style takeover, but with McKaskill-Bond governed seniority integration.

 

[LD3]

I read you loud and clear. Mixing the two work groups and cultures together would be like blending Chicken Poop and Pig Poop. When you're done you just have a different flavor of poop.

There goes a perfectly good bowl of oatmeal in the trash...

 

[wings396]

There's a valid reason to keep the US name if this ever happens: The change of control clause at US, that would trigger a snapback to pre-BK pilot wages. This was a factor in keeping the US name in the AWA/US merger.

I'm thinking we're looking at an AA pre-packaged BK filing in early 2012, followed by a TWA/AA style takeover, but with McKaskill-Bond governed seniority integration.

I don't see the US name sticking around in any case. Doug made that clear when he went after Delta a few years ago by stating that the Delta name would stay if the merger were to take place. This was again the case had the deal with United gone thru. The change of control has nothing to do with the name of the company, but more so who is running it. The change of control issue was part of the deal breaker with the UA deal because their BOD wasn't sold on the idea of US taking over UA on paper and keeping the United name to skirt around the control language in the pilots contract. The US name was kept over HP because it was better known domestically and Internationally as well. IF US merges with AA, you can bet the AA brand will survive over US.

 

[AAviator]

This board cracks me up. I never come here anymore, but when I saw that Ted Reed article, I laughed out loud and thought to myself Uh oh this ITC/UTC space cowboy on here is going to give his keyboard a work out! Sure enough, here's the thread, and the pilot labor thread is close to 2,000 pages with the same argument as page 1, and US is going to be the surviving entity with DL, UA, or AA wearing US colors.. Just like it has been on here for years. And at the end of the day, DP as you like to call him, still has no plans on how US will succeed other than being merged into one of the big three. That hasn't changed... at all.

Just think, if the US pilot group gets a contract and steps out of the industries compensation cellar, US will never have the money to buy anyone.

There are lots of things going on at AA that will be in motion this year. Watch for cozier ties with B6. BK.. if that becomes a reality, will be pre-packaged and exclude any involvement of US. Count on it.

 

[usa1]

This board cracks me up. I never come here anymore.

Welcome back, we've missed you!

 

[Travelpro72]

AAviator actually summed it up around here pretty well.

 

[FWAAA]

There's a valid reason to keep the US name if this ever happens: The change of control clause at US, that would trigger a snapback to pre-BK pilot wages. This was a factor in keeping the US name in the AWA/US merger.

You're oversimplifying the operation of the change of control clause; IMO, the name painted on the airplanes isn't the dispositive factor in the snap-back provisions. Besides, the US East pilots won't cut their noses off to spite their faces forever, will they? Won't they eventually figure out that DP is the enemy (and not US West pilots) and band together with the West pilots to substantially increase their payrates?

I'm thinking we're looking at an AA pre-packaged BK filing in early 2012, followed by a TWA/AA style takeover, but with McKaskill-Bond governed seniority integration.

I'm thinking that we're looking at a US Ch 11 filing not too far down the road once oil prices recover and head thru the stratosphere, causing unhedged US to run out of cash. AA has been successful at borrowing more money the past few years even without filing Ch 11. If AA files Ch 11, I see AA getting even more financing, negating the need for a Doug Parker takeover. If lenders cut off AA (which they did in late 2002, early 2003 before AA's employee concessions), then sure, DP's extraordinary financing skills would be necessary.

Problem with Ted Reed's wet dream of a US takeover of AA is that US is still a high-cost (but low wage) airline, despite two trips thru Ch 11 last decade. AA, on the other hand, is a lower-cost airline (when wages are excluded) than US. US succeeded in slashing wages but didn't lower its total costs as much as it should have, and that failure would cause a combined US-AA to eventually fail to lower-cost DL and UA.

 

[autofixer]

If history is any indication, people on these boards have no clue about anything. Every USAir merger has been out of the blue and not what the know-it-alls thought it would be. I personally hate mergers, they are NEVER good for employees.

 

[700UW]

People forger, Ted use to work for the Charlotte Observer and was fired, he then got hired by US in Corporate Communications and he was let go after the merger, then went to work for the street.com. He is not very bright in regard to the airlines and gets his stuff wrong most of the time.

And who in their right mind would lend Parker money to by AA when after five years he still hasnt completed the US/HP merger?

 

[Harry Callahan]

And who in their right mind would lend Parker money to by AA when after five years he still hasnt completed the US/HP merger?

No one. Ain't going to happen

 

[wings396]

People forger, Ted use to work for the Charlotte Observer and was fired, he then got hired by US in Corporate Communications and he was let go after the merger, then went to work for the street.com. He is not very bright in regard to the airlines and gets his stuff wrong most of the time.

And who in their right mind would lend Parker money to by AA when after five years he still hasnt completed the US/HP merger?

 

[wings396]

Perhaps the same people who were going to with the DL DEAL

 

[WorldTraveler]

The former AA management gang now working at US is scare and rightfully so. Their track record precedes them
As far as them working for AA again there anxiety tells it all

A bunch of AA know it alls came over to DL in the early part of the 2000s in various positions, esp. in the revenue and network areas... and most of them are now gone.
You would do well to keep the former AA people away from anything that has to do with revenue or people or product or.... AA's finances people somehow manage to keep the train going regardless of the environment but they can only pull rabbits out of the hat for so long.
What positions do former AA people occupy at US?

This board cracks me up. I never come here anymore, but when I saw that Ted Reed article, I laughed out loud and thought to myself Uh oh this ITC/UTC space cowboy on here is going to give his keyboard a work out! Sure enough, here's the thread, and the pilot labor thread is close to 2,000 pages with the same argument as page 1, and US is going to be the surviving entity with DL, UA, or AA wearing US colors.. Just like it has been on here for years. And at the end of the day, DP as you like to call him, still has no plans on how US will succeed other than being merged into one of the big three. That hasn't changed... at all.

Just think, if the US pilot group gets a contract and steps out of the industries compensation cellar, US will never have the money to buy anyone.

There are lots of things going on at AA that will be in motion this year. Watch for cozier ties with B6. BK.. if that becomes a reality, will be pre-packaged and exclude any involvement of US. Count on it.

While it is true that US mgmt can only fixate on how to get into the big 3 and not run the airline he does have, it is also true that he understands the dynamics of the industry , esp. with respect to network size and revenue…. The slot swap deal is a good example… US couldn’t compete with a larger DL from NYC which largely overlapped US routes but at least Parker had the good sense to know what US can do well and it is focusing on DCA where it has a strong enough presence to succeed. There are real benefits to size and US doesn’t have the advantage that some of its network peers have who merged, acquired, and/or have a history in much larger business markets. At the same time, US has some strong niche markets and can exist quite well in key markets – one of which I believe should have been PIT but CLT is a great and valuable hub.
AA is not going to save itself by deepening relationships with B6. All AA can do is give up markets to B6 who is happy to have AA turn around and put their code on those markets. Helps B6 but does nothing to turn AA around unless AA has some other place to place its assets. AA can’t shrink itself to profitability.
You can’t have a prepackaged BK unless the terms of it are essentially agreed to by all parties. The whole purpose of bankruptcy court is for there to be a referee for contentious negotiations. The biggest cuts that AA could obtain in BK will come from labor and I can assure you that they are not agreeing to anything outside of BK court.

You're oversimplifying the operation of the change of control clause; IMO, the name painted on the airplanes isn't the dispositive factor in the snap-back provisions. Besides, the US East pilots won't cut their noses off to spite their faces forever, will they? Won't they eventually figure out that DP is the enemy (and not US West pilots) and band together with the West pilots to substantially increase their payrates?



I'm thinking that we're looking at a US Ch 11 filing not too far down the road once oil prices recover and head thru the stratosphere, causing unhedged US to run out of cash. AA has been successful at borrowing more money the past few years even without filing Ch 11. If AA files Ch 11, I see AA getting even more financing, negating the need for a Doug Parker takeover. If lenders cut off AA (which they did in late 2002, early 2003 before AA's employee concessions), then sure, DP's extraordinary financing skills would be necessary.

Problem with Ted Reed's wet dream of a US takeover of AA is that US is still a high-cost (but low wage) airline, despite two trips thru Ch 11 last decade. AA, on the other hand, is a lower-cost airline (when wages are excluded) than US. US succeeded in slashing wages but didn't lower its total costs as much as it should have, and that failure would cause a combined US-AA to eventually fail to lower-cost DL and UA.

Do you have an office on Capitol Hill where you somehow seem to be out of touch with the reality of the real world?
1. AA has cash ONLY because it is taking on enormous amounts of debt. Unlike the US government that can print cash (even if it will eventually lead to a collapse of the US economy), AA eventually must pay its debt. AA has one of the lowest if not THE lowest debt rating in the US airline industry, which is notoriously poor for credit quality to begin with. AMR is paying dearly to keep the good ship afloat.
2. Companies don’t get financing in C11 except for to secure the continued operations of the company using assets the company already holds. It is not even certain that AMR has enough unencumbered assets to obtain a sufficient amount of Debtor in Possession financing if it had to. Companies rarely obtain any additional financing until they are ready to exit bankruptcy and exit financing is usually just a reworking of the DIP facility.
3. If you think that AA is a lower cost airline, then try to operate it without the wages that you somehow think can be excluded. I haven’t seen too many AA people who are willing to accept a pay cut, let alone work for free. When you count all of the costs that EVERY AIRLINE has to pay, US is indeed a lower cost airline. To try to omit labor costs from the discussion is like saying that the Pony Express was a superior transportation system because it had lower fuel costs.
4. US is a much shorter haul airline than AA or any of its other network peers. It also generates revenue more proportional to its costs than AMR, which is probably why US’ profit margin is multiples better than AMRs.

I wouldn’t have to post so much if you would refrain from making such blatantly ignorant if not false statements.

If history is any indication, people on these boards have no clue about anything. Every USAir merger has been out of the blue and not what the know-it-alls thought it would be. I personally hate mergers, they are NEVER good for employees.

Which is why healthy internal growth is the only way to satisfy stockholders, managers, and employees.
Do you realize that DL was the only US network carrier that was larger in 2010 than it was on 2000, even excluding the capacity it acquired from NW? Even after the NW merger, DL continued to grow capacity which allowed DL to integrate people without layoffs. Perhaps that is part of the reason why DL employees chose not to be represented by labor unions because they understand that the key to their success comes when the company grows and DL recognizes that its success only comes as the company grows.
It isn’t lost on the low fare carriers either that the only way to keep their costs down is to grow internally.

 

[Harry Callahan]

One of my co workers who knows some AA people in Miami says that is all the talk they are hearing US & AA.