Merger News

[wings396]

WT is no more a cheerleader for DL than you are for LCC. To read your posts is to know that LCC is the savior of AMR, and will show us how to operate in the airline business. Instead of attacking WT personally, why not come up with some data to prove him wrong? The difference between you two is that he has provided data (aka, facts) to support his positions. Why don't you do the same?

Don't bother pointing out that LCC had it's largest quarterly profit in history last quarter until you answer the question...what would that profit have been if LCC were paying industry standard wages to pilots and flight attendants (or even AA wages)? And, the phrase "largest quarterly profit in history" is a meaningless phrase until put into context. If an airline had never made a profit at all up until last quarter, and made a net profit of $1.42, it would still be the "largerst quarterly profit in company history."

You fail to understand that WT isn't in the industry, which makes his obsession a bit absurd. For those of us that have a vested interest in the outcome, its understandable to voice ourselves. For the record, I never claimed that US was the savior for AA, nor the opposite. I merely stated that it would benefit BOTH carriers to get together in order to level the playing field with UA & DL. I'm sure that you have read that many reliable sources agree.
I have also NEVER been one that has touted the US profit in this arena, so get your facts straight prior to posting BS based on a general assumption. I'm sure that you will be right there to line your pockets with whatever may come your way as a result of this possible merger.

 

[737823]

WT is retired. His time is his own. How much is DP paying you to be on here all day everyday defending LCC? I would hate to think that you are stupid enough to defend LCC on here 24/7 for free on your own time.

Wings is either attacking WT or going after FA Mikey.

Josh

 

[jimntx]

FWAAA, I find that level of naivete refreshing in someone your age. Do you really think that the boys in Tulsa will stand for someone in a high cost city like NYC, or Boston, to draw one dime per hour more than they? You obviously want to guarantee that the TWU will reign supreme at AA--old or new--for all eternity.

 

[jimntx]

You fail to understand that WT isn't in the industry, which makes his obsession a bit absurd. For those of us that have a vested interest in the outcome, its understandable to voice ourselves. For the record, I never claimed that US was the savior for AA, nor the opposite. I merely stated that it would benefit BOTH carriers to get together in order to level the playing field with UA & DL. I'm sure that you have read that many reliable sources agree.

No, you fail to understand that WT is retired from the airline industry. Does that make him ineligible to comment? And, I never heard you disparaging Boeing Boy for butting in on conversations of active employees. And, neither you nor anyone else has yet to dispute the facts that he puts forth. You are running him down on emotion alone. You and others know in your hearts and minds that his facts are accurate.

Yes, I have read that many sources agree. I have my doubts as to their reliability. Most public comment by "sources" can be tempered by the question, how much money do they expect to make out of the merger or the failure of the merger? Hope you don't think that they have taken a position one way or the other out of a deep concern for you or me and our futures.

 

[wings396]

Wings is either attacking WT or going after FA Mikey.

Josh

And joshie either attacking US or the IAM. You have Zero room to call me out financial boy, BTW still waiting to hear who you work for.
I think that's its safe to say that you are a hater of organized labor Joshie boy.

NO SOUP FOR YOU.

 

[FWAAA]

FWAAA, I find that level of naivete refreshing in someone your age. Do you really think that the boys in Tulsa will stand for someone in a high cost city like NYC, or Boston, to draw one dime per hour more than they? You obviously want to guarantee that the TWU will reign supreme at AA--old or new--for all eternity.

I'm just eternally (or hopelessly) optimistic.

According to Bob Owens, even jetBlue mechanics earn more than AA's mechanics. Of course, the easy explanation is that B6 doesn't have a Tulsa; B6 probably employs mechanics primarily where the COL is high, like BOS and NYC. And being union-free, if B6 does have mechanics in low COL cities, the bossman can just tell them that their big-city colleagues will make more money than they will in Mayberry.

 

[737823]

And joshie either attacking US or the IAM. You have Zero room to call me out financial boy, BTW still waiting to hear who you work for.
I think that's its safe to say that you are a hater of organized labor Joshie boy.

NO SOUP FOR YOU.

Hate is a very strong word but yes I'm not a fan of organized labor and applaud efforts by our government and the business community to restrict and diminish organized labors presence and influence. So far it has been successful with unionization rates at record lows and the new generation of workers see the damage organized labor has done to society. I'd say I feel unions have outlived their purpose, there are significant worker protections like Affirmative Action, Equal opportuniy act, fair labor standards and OSHA protection for many workers are in place, many things that unions once championed.

Josh

 

[WorldTraveler]

Well this thread has lit up like a Christmas tree… I was getting worried that forums was going to dry up and blow away… thank goodness for Friday to liven up the place.

WT is no more a cheerleader for DL than you are for LCC. To read your posts is to know that LCC is the savior of AMR, and will show us how to operate in the airline business. Instead of attacking WT personally, why not come up with some data to prove him wrong? The difference between you two is that he has provided data (aka, facts) to support his positions. Why don't you do the same?
Don't bother pointing out that LCC had it's largest quarterly profit in history last quarter until you answer the question...what would that profit have been if LCC were paying industry standard wages to pilots and flight attendants (or even AA wages)? And, the phrase "largest quarterly profit in history" is a meaningless phrase until put into context. If an airline had never made a profit at all up until last quarter, and made a net profit of $1.42, it would still be the "largerst quarterly profit in company history."

Thank you, Jim.
The whole reason why I have upset so many on this and other chat forums is because I have used fact-based logic to not only know with certainty where the airline industry really is but where it is going.
It matters not one iota whether I work for the government of India or Skychefs in Honolulu if the facts are there and can be supported.

Of course, it isn't lost that Wings and others from US who support this merger have said they do so because it will increase their own retirement.
How are we supposed to take seriously someone who has openly - at least honestly - acknowledged - that this merger is about doing something positive for themselves even if it comes at the cost of others, including lower seniority peers who will very likely be laid off?

The problem or an aweful lot of people on this forum is that I have consistently made them confront the reality that what they want the airline industry to be is not supported by the facts that exist in the industry.
The simple fact is that DL went into BK with a very clear plan as to what they needed to do to turn the company around, they came out w/ that plan already very apparent and very much in process, and they moved aggressively in the next couple years to execute against that plan.
People can pick on me all they want but it won’t change the fact that DL knows exactly what it needs to do to keep building momentum and what AA/US does or does not do is not going to effect them. When you consider that DL has a laundry list of strategic initiatives in process RIGHT NOW that will blunt the ability of AA/US to gain advantages from the merger while an AA/US merger would take at least six months and probably a year before the merger can even be approved – and the real books between AA and US exchanged, it is sheer foolishness to think that AA/US will accomplish as much as Parker thinks it will.
No one has yet to demonstrate how AA/US is going to overcome the first mover advantage that DL had in merging – and why DL is not going to accomplish its strategic objectives. Considering DL has a very strong track record of achieving its financial objectives and a nearly 50% market value premium over UAL, it isn’t terribly realistic to believe that AA/US – which hasn’t even been announced, let alone approved, is going to stop DL from doing what it needs to do.
And again, I speak about DL because they are the most aggressive strategically in the industry right now. Every other airline has a plan for dealing w/ an AA/US merger. You can absolutely bet your bottom dollar.

The combined total market share in BOS may in fact be larger than 25%, as that's the mainline total marketshare, according to RITA:

No doubt, but tell me again on how we are supposed to believe that AA/US is going to become a super power at BOS when they will have to compete in just about every domestic market against B6 who happens to have the lowest CASM among large jet carriers in the US and for whom BOS is a major city where they continue to expand because of growth limitations at NYC.
But AA/US has no int’l service from BOS on its own metal, right? So everything they do will have to do in BOS will be against B6, at whose hands AA has conceded a number of markets at JFK.
BTW, surely it wasn’t lost on this crowd that the very flights to the Caribbean that AA cancelled were picked up by DL. It’s not been hard for DL, just like WN, to grow in AA and US markets – they just have to follow other low fare carriers that soften AA and US up and then move in to gain the market.

There is no point in restarting BOS-STL. We used to have 3 flights/day in each direction that were pretty much full all the time. In its infinite wisdom, the company decided to abandon that route. WN is grateful for the business. When we stopped that route, they started 3 nonstops/day STL-BOS. Evidently, the route is working quite well for them. Just like STL-MCI, STL-SEA, STL-LAS, STL-PHX...ad nauseum. And, please note, WN did not run us out of those markets. They did not start service until we abandoned those routes.

And your observation is precisely why the WSJ article misses the point, which FWAAA so adequately noted.
Airline mergers are notorious for destroying investor value because they cannot create new revenues as a result of a merger.
Mergers have to be about more than just 1 plus 1 equals 2. Mergers esp. in the airline industry have to make 1 plus 1 equal 2.X or more.
Considering not only AA’s track record w/ mergers and then adding in that AA/US won’t even be allowed to make 1 plus 1 =2 because of divestitures and new competition, no one here can quite grasp that AA/US will be a lot less than a combination of the two today.
AA/US will be approved just in time for competitors to be allowed to add a couple dozen new flights at DCA in order to get the deal through – with WN and B6 certain to be at that table, just in time for the Wright Amendment to fall at Love Field which will give WN enormous opportunities to shift high yield business traffic from DFW to DAL, and just in time for a number of key countries in Latin America to begin true Open Skies with the US, including allowing true competition in MIA-Latin America for the first time since other US carriers cannot even start new services in many of those markets right now…. Add up all of those factors and the competitive response to the merger as a whole, and it is utopian not to question if AA/US will even grow revenues above what a combination of the two today. It is VERY possible that AA/US 2 years after the merger might end up w/ lower fares and a smaller network than what they have at the time of the merger, even after adjusting for whatever the rate of capacity reduction the rest of the industry will see as well as closure of duplicate AA/US hubs.

WT is probably going to have to see a therapist when/if Deltaflot goes back to #3.

IN reality, there will be people here who will absolutely stroke out when they wake up and realize that AA/US isn’t #1 after all of the above plus strategic actions from other carriers – which haven’t even been announced, and the closure of hubs – which even the WSJ recognizes is likely.
It is Delta Air Lines. Your inability to properly acknowledge your competition highlights your inability to recognize the size of the challenge facing AA and US individually and collectively.

And once again, no one here or anywhere in the media has yet to acknowledge how much of a challenge AA/US has as the third, really fourth, of the megamergers in the US.
To somehow think that AA/US will proceed down the same path as the mergers before them is nothing short of wishful think with no basis in fact or reality.
For those who want to live that way, don’t let me or Jim or anyone else bust your bubble.
But you probably shouldn’t be participating in a chat forum with people who might tell you the whole truth either.

 

[WorldTraveler]

Aren't you the guy that was prematurely drooling over Delta flexing their muscle in a bidding war over AA, and picking up DFW & MIA? How is the accuracy of that prediction looking? Give it a break already, as you are the only one who enjoys and believes everything that you post. Is there any topic on these boards anywhere that you haven't started a fire with someone? Any posts that don't somehow happen to incorporate Detla and how superior they are in some way? Take time to read all of the BS propaganda that you post, and just perhaps your broken record rants will jump out at you. An obsession such as yours with a company that you don't work for isn't healthy.

uh, I never said that DL WOULD bid for DFW and MIA, only that they could have - IF the creditors chose to entertain bids to carve up the company which they clearly did not.
DL made it very clear it was not interested in all of AA.

In fact, after DL announced it was looking at AA, it announced a series of initiatives that give it most of the key benefits it could have obtained from AA - but at much less cost - and w/ much less risk:

- DL spent $300M or so to buy 49% of a carrier at LHR that is larger than AA; because the companies will not merge, there are no labor issues.
- The remainder of the countries in Latin America that don't have true Open Skies will have it with the US in less than 2 years - about as fast as a merger with AA could be approved.
- DL is acquiring 88 717s that will be used to replace RJs in markets where DL will provide more mainline service than many of those cities have had in decades, including above what AA could have provided. DL is counting on - and no analyst worth its salt has doubted the viability of DL's strategy - to reduce costs and to gain an advantage over other carriers who will be forced to put passengers on RJs that passengers don't like.

DL clearly chose to go with a series of initiatives that duplicate most of the benefits they could have gained from AA but w/ far less risk and at far less cost.

And I can assure you from my retired perch that DL has not announced its last strategic initiative that will affect AA/US.

 

[Kev3188]

Hate is a very strong word but yes I'm not a fan of organized labor and applaud efforts by our government and the business community to restrict and diminish organized labors presence and influence. So far it has been successful with unionization rates at record lows and the new generation of workers see the damage organized labor has done to society. I'd say I feel unions have outlived their purpose, there are significant worker protections like Affirmative Action, Equal opportuniy act, fair labor standards and OSHA protection for many workers are in place, many things that unions once championed.

Josh

"Damage?" Really?

I recognize that you and I live in complete different universes, but I can tell you that some of the most ardent proponents of organized labor I run into are young. I don't mean the sort of trust fund dilettantes that roll around in Che shirts - I mean genuine people that recognize where the middle class is at vs. where it needs to be, and posses real solutions on how to get there.

They also are doing a helluva job waking up those that fell asleep at the wheel over the last 10-15 years.

The idea that all of those you've noted will somehow magically stay in place w/o a counterbalance is a fallacy. All one has to do is look at how fast things like Act 10 in WI, and the RTW laws in MI were rammed through to see it. There's nothing to say that other workplace laws/rules couldn't see the same fate.

P.S. Not for nothing, but labor *still* champions those items you listed.

 

[silverbird007]

Isn't Southwest the most unionized carrier in the US? It doesn't seem to hurt them.

 

[wings396]

Hate is a very strong word but yes I'm not a fan of organized labor and applaud efforts by our government and the business community to restrict and diminish organized labors presence and influence. So far it has been successful with unionization rates at record lows and the new generation of workers see the damage organized labor has done to society. I'd say I feel unions have outlived their purpose, there are significant worker protections like Affirmative Action, Equal opportuniy act, fair labor standards and OSHA protection for many workers are in place, many things that unions once championed.

Josh

In that case you are in the wrong arena, as this place is filled with unionized employees. It's a good thing that you can make these type of comments while hiding behind a keyboard. I'm not a friend of a crooked bunch of so called financial people either. It is the likes of you that caused the financial collapse of this country, then had their hands out for a bailout. You sir, are nothing more than a coward. It's no wonder why you don't have the Nuts to admit who your employer is, you are ashamed to do so.

 

[NewHampshire Black Bears]

OK..WT,...It's time to now(or very soon) deal with FACTS, present or VERY Highly likely(soon) FACTS !

FACTS;

AA let JFK go to 'HELLL in a hand basket' !
DL took full advantage of AA's JFK mismanagement !
I don't doubt DL's current D O T stats !

The worlds MOST Powerful Airline is,........A. ..AF.........(or) B. ...LH......(or) C. ....BA...?

YES, W T,...You answered Correctly,.......it's......" C " ! (Give that man a PRIZE).

Behind the scene's, (WHO)....W T, is 'Pulling ALL the Strings' ?
CORRECT again...WT, it's...." C ", British Airways ! !

(Attention 'One World', Now arriving,...... US Airways) !

You can (for now) Scoff at the following, BUT when this thing finally shakes out,...The 'new AA (AA+US+ " B A ") will DOMINATE the NE to (all of) Europe,.....The CARIBBEAN,........SOUTH AMERICA, and the 'creme of the crop' Transcons, the NE to LAX/SFO !
The ONLY part of the world the (new) AA WONT Dominate, probably never...is Asia.
That will always belong to UA/CO.

UAL does thier own thing, and quite frankly, I never(or shall I say...will never now) worry about them.

DL has ALWAYS been an Unnatural fit in NY/JFK, but that is all about to change relatively soon.
So thanx for keeping that # 1 spot 'warm' for AA. You're about to 'reclaim' the ol' # 3 spot !

PS,
Nobody gives a S..T....if DL flies from HOT-LANTA to Monrovia !

 

[WorldTraveler]

Bears,
Earlier in this thread you wanted to make the discussion just about AA and DL. Now you want to expand it to BA – but I’m guessing you probably don’t want to include AF/KL/AZ as well as VS as immunized partners for DL or will be by the end of the year.

Sure, BA is the largest foreign airline in the US but calling them the "world's most powerful airline" is probably over the top.
I'd have to refresh my notes but I believe that AF/KL and LH are both larger than BA. In case you missed it, BA is also up to its eyeballs dealing with Iberia with whom it jumped into bed right as southern Europe began its meltdown.
Your assessment of BA does remind me of DL's ad campaign in the UK a while back in which it had fun with BA's tagline of being "the world's favourite airline" by noting that DL carried more passengers than BA. That was quite a while ago, even before DL went into LHR but it showed that even then little ole DL with a couple flights from the UK to US wasn't afraid of taking on BA.
More recently, DL managed to put a model of its lie flat Business Elite seat in BA's terminal at LHR.

Both of DL's little marketing campaigns aimed at BA got a lot of press.
Combine DL's spunk w/ Virgin's longstanding practice of taunting big BA in the press and in the marketplace and I have a feeling we should be in for a host of fun at the hands of "the world's favourite airline."
Let's cut to the chase, though. We can talk about BA, throw in statistics of all sorts about AA and US, but the bottom line is that the airline industry is highly competitive – and shows absolutely no signs of becoming any less so in the next couple years as AA emerges – standalone or holding US’ hand.
And let me be brutally honest.
By your own admission – and exactly as I have noted for years on this forum – AA has been engaged in a ten year long effort to restructure itself. TEN BLOODY YEARS. And during those ten years other carriers, including DL moved far more decisively to restructure themselves, merge, and are already on another round of major strategic initiatives. US/HP merged years ago and, while finished from a marketing standpoint, is still unfinished from a personnel standpoint. Other carriers such as DL finished its merger.
Not only does AA/US have to catch up w/ other mergers that are much further down the road, but they have to overcome the position of being last to get their merger off the ground. Throw in DL’s strategic initiatives such as the NYC slot swap, Virgin, Gol, Aeromexico, and the 717/RJ deal and DL is already a step ahead of UA/CO and WN/FL who are still working thru their mergers – let alone AA/US which has yet to even be announced.
Add in that AA/US will likely face the largest divestiture of assets of DL/NW, UA/CO, and WN/FL – and the notion that AA/US will be the great powerhouse that you and others want to make them out to be is pushing the limits of logic.
Just because two people get married doesn’t give them enormous attributes as a couple – wealth, good looks, position in society – that neither one had before.
It is equally as much of a stretch to believe that AA/US will become something well beyond what either are today.

Look
I know full well that everyone of us want to be a part of a winning team. We want whatever warts we suffered from as teenagers to magically disappear on our wedding day.
But that is not the way life works; and it won't work that way w/ AA/US, as much as the press and Parker's media machine wants to convince us otherwise.
AA/US might very well put AA/US back in a game that they have been increasingly pushed out of for years because of inaction or strategic errors on both companies’ parts.
But the merger is not going to change realities that US swapped away one-quarter of the slots at LGA to DL for a much smaller pot of slots at DCA, most of which US will now have to give up to competitors – likely low fare carriers – in order to get AA/US approved.
Or that whatever advantage US gives AA and oneworld to Europe will probably be offset by DL’s partnership with VS(and note that DL has enormous potential to upgrade the size of its LHR flights w/ 747s and 333s as well as add more flights to key oneworld gateways.
Or that DL and UA both have much larger networks to Asia and the Pacific – and have the potential to grow those networks.
Or that Latin America and Love Field are both going to open up to competitors that have been blocked from expanding there – and BA won't be of any help in those areas.

The point is simply that AA and US both sat on the sidelines strategically for almost decade while other carriers got bigger and bigger. Those carriers are not going to roll out the red carpet for AA/US to make their merger work. They are going to fight tooth and nail to continue to grow at AA and US’ expense – not unlike what they have done over the past 10 years.
By the time AA and US actually are merged and operate as one company, those other airlines will be on yet another series of strategies.

I have friends at both AA and US. I want to see them finish their careers and do well.
But neither I or they believe that this merger is going to fundamentally change the trends that have been happening in the industry for a decade, including at AA and US.

Fight to make AA and US be their best; you and everyone else should settle for nothing less.
But you also shouldn't be surprised if the final outcome of a merged AA/US - if it happens - doesn't come anywhere close to what the hype today says it will.


ps... thanks for mentioning Monrovia. DL's service to Monrovia, Liberia is actually to JFK and via Accra, Ghana. DL has local traffic rights (ie makes money carrying local passengers) between the two African cities and DL's African expansion has yielded average fares well above fares to Europe, even adjusted for distance. Further, no other carrier - African or US - has come close to building a network between the Americas and Africa as large as DL's.
DL's expansion to Africa created a whole lot of new revenue for the company - took a lot of revenue away from European carriers - who previously provided the only real option to get to Africa, and was part of DL's global expansion not just to Africa but which made DL one of the world's largest carriers.

As for PHL, do you realize that 75% of US' traffic via PHL to Europe is connecting from other parts of the country, don't you?
You do realize that DL carries more local passengers from ATL to Europe than US does from PHL? And DL carries far from local traffic from NYC to Europe than they do from ATL.
And these statistics don't even include DL's Africa flights - which are a significant part of its TATL network.

The execs of BA, JL, or LH don't blow DL off as insignificant.

It would be worth your while to consider DL as the serious competitor that they really are.

 

[robbedagain]

IF we merge with aa and with their planes on order the quest is will the 777 and other plane orders continue if so then wouldnt that be more than enough to open up new markets such as china japan africa etc