Delta-AA
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WorldTraveler
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They haven't seen any plan besides AA's standalone plan - and it continues to be revised because AMR continues to refine its business plan.
I suspect the next critical moment will be in the days following the court's ruling on AA's 1113 request for the pilots. If the plan is terminated and the pilots act as many say they will, then the next set of steps will start to happen.
Until then, it is all speculative.
And if you bid and then back out after you have won the bidding war, you have accomplished nothing since your competitor can simply restate his original offer.
If you bid and intend to run up the price, you are also bidding w/ the likelihood that you will win.
Many merger and asset transactions also carry breakup fees that require that real money be put on the table in order for the bid to be considered real.
I suspect the next critical moment will be in the days following the court's ruling on AA's 1113 request for the pilots. If the plan is terminated and the pilots act as many say they will, then the next set of steps will start to happen.
Until then, it is all speculative.
You can't just bid to force up the price without being a credible purchaser. If the creditors don't consider your bids as possible, then it really doesn't force up what someone else has to pay.
And if you bid and then back out after you have won the bidding war, you have accomplished nothing since your competitor can simply restate his original offer.
If you bid and intend to run up the price, you are also bidding w/ the likelihood that you will win.
Many merger and asset transactions also carry breakup fees that require that real money be put on the table in order for the bid to be considered real.
diamondcutter
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The creditors have repeatedly said their support for a stand alone carrier . Can you back this up with facts . All the creditors really?
jimntx
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I don't think you will see bids by anyone who is not serious about it. Bankruptcy courts tend to take a dim view of mockery--such as, bidding only to run up the price for someone else with no intention of buying anything. As WT said, a lot of these auctions require that serious money be put down up front. The money is forfeited if you win, but "change your mind."
BoeingBoy
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Truly amazing...
It is hard to keep up with your changing positions and your misrepresentations of my and others' words, I'll admit. Whatever necessary, you twist things so you're always right - denying your own words, taking others' out of context, whatever.
Jim
People who are not saying anything, are more in favor of the current management. The voice of a U merger needs to make its support and finances available. I haven't seen a or heard a word of that yet.
We all know AA has 6 billion in the bank IAG and possibly TPG in support as well. That being said, I see nothing of value from a U offer other than they are in desperate need. It currently seems a stand alone plan is very much in there plans.
WorldTraveler
Corn Field
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Jim,
If you or anyone thinks I have changed my position, then post the evidence to demonstrate it. I asked you to do that earlier and you still haven't done so.
The simple fact is that you made not one but two inaccurate statements regarding a potential AA-DL acquisition and you can't admit that you are wrong on either of those counts.
The simple fact is that neither I or DL ever said that DL would or could acquire AA in its entirety.
Adding AA plus DL's combined market share as whole companies was invalid then and it is invalid now.
You asserted that the deal could be blocked on the basis of DL being too large - having 50% market share - and then you gave yourself wiggle room of 20% (somewhere between 40 and 50%).
If you want to argue that there is a certain size that is too big for an airline based on DOJ concerns, then an absolute number really does matter just as it does on the weight of an aircraft.
Based on DOT data, DL had approximately 26% of US carrier boardings. AA had ~ 17%.
Even combined in their entirety, DL and AA do not have 50% of the market.
However, AA's DFW and MIA hubs plus DL's operation amounts to 33% of the US market which is well below 40 and 50% and is also well within what has been allowed for size in other industries.Given that DOJ's antitrust concerns with airlines have involved overlap at specific airports and ability of other airlines to serve those airports post merger as a competitive check, then there are likely no antitrust issues with a DL acquisition of AA's DFW and MIA operations which is what they have expressed interest in acquiring other than the overlap between MIA and NYC which DL and both fly - and which could be solved by excluding less than 10 LGA and JFK slots.
If you or anyone thinks I have changed my position, then post the evidence to demonstrate it. I asked you to do that earlier and you still haven't done so.
The simple fact is that you made not one but two inaccurate statements regarding a potential AA-DL acquisition and you can't admit that you are wrong on either of those counts.
The simple fact is that neither I or DL ever said that DL would or could acquire AA in its entirety.
Adding AA plus DL's combined market share as whole companies was invalid then and it is invalid now.
You asserted that the deal could be blocked on the basis of DL being too large - having 50% market share - and then you gave yourself wiggle room of 20% (somewhere between 40 and 50%).
If you want to argue that there is a certain size that is too big for an airline based on DOJ concerns, then an absolute number really does matter just as it does on the weight of an aircraft.
Based on DOT data, DL had approximately 26% of US carrier boardings. AA had ~ 17%.
Even combined in their entirety, DL and AA do not have 50% of the market.
However, AA's DFW and MIA hubs plus DL's operation amounts to 33% of the US market which is well below 40 and 50% and is also well within what has been allowed for size in other industries.Given that DOJ's antitrust concerns with airlines have involved overlap at specific airports and ability of other airlines to serve those airports post merger as a competitive check, then there are likely no antitrust issues with a DL acquisition of AA's DFW and MIA operations which is what they have expressed interest in acquiring other than the overlap between MIA and NYC which DL and both fly - and which could be solved by excluding less than 10 LGA and JFK slots.
BoeingBoy
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A safe request when the search feature doesn't go back beyond the forum software change...
What you have said is that DL wouldn't let US acquire AA, outbidding US if necessary to stop a US/AA transaction.
Care to back that up?
So now you're denying that DL hired advisors to explore an acquisition of AA? It was in the headlines for a while.
There you go again - taking my comments out of context. I was answering a question, reference the title of this thread and the first post.
I'm sure there's a number, or at least a ballpark number since it might depend on certain markets. Since the #2 and #3 carrier haven't merged lately, it's anybody's guess what that number is. But I still maintain that combining the #2 and #3 carrier wouldn't fly with the regulators without divestures.
By my math that's 43% - close enough to my off the top of my head guess for me (within about 7 percentage points or 14%). If you want to make a big deal out of a few percentage points that's your problem.
BTW, is that for before the slot swap was conpleted (July 2012) or after. If before, DL's percentage should have gone up some.
Jim
WorldTraveler
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Jim,
thanks for your response. I enjoy good dialogue on the issues.
Hiring an advisor does not mean that DL believed then or now that they could acquire AA as a whole.
Google supports searches of specific websites. I'm still trying to understand the positions on which you think I have moved.
State those as a starting point... specific to AA's future, I have consistently said and still believe
1. That a standalone AA emergence is the most likely outcome of AMR's C11 - and BK laws are built around that intended outcome.
2. An AMR standalone plan would have to demonstrate that it provides the best level of return for the creditors - which is a hard, monetary number. There are other factors that might be reduced to a number - but which are more subjective - such as the perceived value of the AA name etc.
3. If AMR - mgmt or the creditors - consider a merger, they will have to evaluate the best alternatives - and it might involve an aquistion resulting in a greater value for those parties than an AA standalone plan or other plans, including the heavily talked about US acquisition.
4. DL has stated it is interested in acquiring key assets. By sheer virtue of DL's size and financial strength - and the fact that DL is not interested in acquiring the whole company, they probably could outbid other potential acquirers including US. BA is not really going to matter in a competitive bidding situation because they are subject to ownership limits. Non-US airline investors can contribute little to addresing some of the structural issues that face the US airline industry, including being able to reduce overlapping capacity.
5. There are antitrust issues involved in many of the possible merger scenarios. DL's interest in DFW and MIA alone largely avoids those. US and B6 have potential antitrust issues involving DCA and JFK.
6. If AA labor refuses to accept AMR's proposals and engages in actions to slow down or damage the company, the chances the company will move to a merger or asset acqusition greatly increase.
7. There is no requirement that the creditors would favor a sale of AA in its entirety if it results in a smaller recovery for the creditors or reduced benefits to other parties.
8. DL pilots have the highest hourly rates among US network carriers - which most certainly is attractive to AA pilots who are the most resistant to AA's contract offers.
9. DL like any other company will move to protect its strategic interests. DL has strategic reason to want to strengthen its position in Latin America, along the southern tier of the US, and to/from LHR. DL, like any other company, will also work to prevent its competitors from gaining a competitive advantage. That is not personal - it is business and what any other well-run company would do.
As I have stated, the airline industry is highly fragmented so it is far from known what the limit the DOJ would allow. AA-US would be larger than DL or UA based on their current networks. Based on passengers boarded, AA-US would also surpass WN which right now has similar share to DL and UA. Should we argue that the combined size of AA+US at 31% is too large? If AA plus DFW/MIA from AA is too large at 33% of the US market, how can anyone argue that 31% is not a problem for US, esp. since there are actually more regional concentrations resulting from AA/US (size in the southwest US and in certain East coast markets) than in DL plus DFW/MIA from AA which adds assets where DL is weak - currently number 3 carrier or smaller? Based on DOT data, AA's DFW/MIA operations amount to about half of the company WRT to passenger boardings.
If 43% is close enough to 50%, then we'll consider any other fact you state with a similar 15% SWAG..... which coincidentally would put DL's proposed jet fuel output for the refinery in line with current averages for jet fuel production at other refineries in the US.
thanks for your response. I enjoy good dialogue on the issues.
Hiring an advisor does not mean that DL believed then or now that they could acquire AA as a whole.
Google supports searches of specific websites. I'm still trying to understand the positions on which you think I have moved.
State those as a starting point... specific to AA's future, I have consistently said and still believe
1. That a standalone AA emergence is the most likely outcome of AMR's C11 - and BK laws are built around that intended outcome.
2. An AMR standalone plan would have to demonstrate that it provides the best level of return for the creditors - which is a hard, monetary number. There are other factors that might be reduced to a number - but which are more subjective - such as the perceived value of the AA name etc.
3. If AMR - mgmt or the creditors - consider a merger, they will have to evaluate the best alternatives - and it might involve an aquistion resulting in a greater value for those parties than an AA standalone plan or other plans, including the heavily talked about US acquisition.
4. DL has stated it is interested in acquiring key assets. By sheer virtue of DL's size and financial strength - and the fact that DL is not interested in acquiring the whole company, they probably could outbid other potential acquirers including US. BA is not really going to matter in a competitive bidding situation because they are subject to ownership limits. Non-US airline investors can contribute little to addresing some of the structural issues that face the US airline industry, including being able to reduce overlapping capacity.
5. There are antitrust issues involved in many of the possible merger scenarios. DL's interest in DFW and MIA alone largely avoids those. US and B6 have potential antitrust issues involving DCA and JFK.
6. If AA labor refuses to accept AMR's proposals and engages in actions to slow down or damage the company, the chances the company will move to a merger or asset acqusition greatly increase.
7. There is no requirement that the creditors would favor a sale of AA in its entirety if it results in a smaller recovery for the creditors or reduced benefits to other parties.
8. DL pilots have the highest hourly rates among US network carriers - which most certainly is attractive to AA pilots who are the most resistant to AA's contract offers.
9. DL like any other company will move to protect its strategic interests. DL has strategic reason to want to strengthen its position in Latin America, along the southern tier of the US, and to/from LHR. DL, like any other company, will also work to prevent its competitors from gaining a competitive advantage. That is not personal - it is business and what any other well-run company would do.
As I have stated, the airline industry is highly fragmented so it is far from known what the limit the DOJ would allow. AA-US would be larger than DL or UA based on their current networks. Based on passengers boarded, AA-US would also surpass WN which right now has similar share to DL and UA. Should we argue that the combined size of AA+US at 31% is too large? If AA plus DFW/MIA from AA is too large at 33% of the US market, how can anyone argue that 31% is not a problem for US, esp. since there are actually more regional concentrations resulting from AA/US (size in the southwest US and in certain East coast markets) than in DL plus DFW/MIA from AA which adds assets where DL is weak - currently number 3 carrier or smaller? Based on DOT data, AA's DFW/MIA operations amount to about half of the company WRT to passenger boardings.
If 43% is close enough to 50%, then we'll consider any other fact you state with a similar 15% SWAG..... which coincidentally would put DL's proposed jet fuel output for the refinery in line with current averages for jet fuel production at other refineries in the US.
BoeingBoy
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"In order to win a contest with DL, US will have to outbid DL" - 1/25/2012
"but I will bet that DL will keep the threat of an AA acquisition on the table until it is apparent that AA will successfully restructure on its own - and then will go after AS." - 1/26/2012
"I do know that DL does not want to allow US to get its hands on AA and is willing to and has the resources to keep AA at least independent - and DL may well decide that DL’s strategic to-do list could be largely completed with an AA acquisition." - 10/2/2012
Enough for you?
Jim
wings396
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Harldy in my dreams to merge with the AArogance of you and some of your gang, but everyone must realize that it isn't in our control. I am amazed that you are in the process of taking in in the shorts from your beloved AA, yet continue to live on their Koolaide. I actually get more of a charge knowing that merging with US is a nightmare of yours that may actually become a reality. Can't wait to see your happy little face in the PHL & CLT crew rooms someday.....
WorldTraveler
Corn Field
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sorry, Jim, but I fail to see how those statements are any different from what I stated above, all revolving around the theme that DL will bid for AA before it allows US to potentially win or else DL will wait until AA can successfully restructure and then pursue other strategic possibilities.
I have said that I believe DL would be satisfied with a standalone AA - in part because it would make it much more difficult for US. But DL sees enough value in key assets from AA and will pursue it if necessary to protect its interests. An independent AA does not change the competitive scene for DL; AA plus US most certainly does.
I have said that I believe DL would be satisfied with a standalone AA - in part because it would make it much more difficult for US. But DL sees enough value in key assets from AA and will pursue it if necessary to protect its interests. An independent AA does not change the competitive scene for DL; AA plus US most certainly does.
So that's why you continue to post more here than anywhere else and every post is in support of a U take over of AA. Blah, blah, blah, U rules and we will be taking over, blah, blah, blah.
