Merger News

[WorldTraveler]

new airplanes don't come close to meaning a carrier can successfully deploy those airplanes into new markets.

PHL might be a good hub for adding new flights to Asia; DFW can certainly be expanded - but both hubs - and even PHX if it is used - come far short of providing true nationwide coverage which is what DL and UA offer from their hubs. And those two are not going to sit by and not add flights.

Some markets in the world are only large enough to support one or two carriers. Part of the problem with the US is that we have 3 large carriers - assuming AA and US merge. There are just not that many markets that are large enough to support a large presence by 3 US carriers as well as the local carriers from that country.
example: AA and UA both added flights to Moscow and pulled back. Aeroflot just happens to be a DL partner just as oneworld has a very small presence in China while DL has several carriers.
A lot of people like to make fun of Skyteam w/o recognizing that Skyteam has a strong presnence in some of the most important developing economies - and ones where there isn't room for everyone.
Just because US created a nice spot for itself to Europe doesn't mean AA/US can grow into other parts of the world from the network they would have post-merger.

There might be some expansion possibilities in Africa but UA has tried to add some flights without anywhere close to challenging DL in the region.
The Middle East - a region where DL and UA have expanded - are political dynamite.

 

[Super FLUF]

So Fluf, do you do anything here besides cut and paste WSJ articles?

You are one to talk. What do you have to offer other than sticking up for this failure of a management team?

If you did not like the content of the article, the author's contact information was listed at the bottom of the article. I'm sure you contacted him to tell him how wrong he is, and how all of the airline analysts have it wrong and this whole thing will be a disaster....right? So, what was his response? Or, do you just keep your "expertise" limited to this obscure web site?

Maybe we can change the subject to all of the long term successes of AA's inbred management team.

FAILURE financially. BILLIONS in losses. BANKRUPTCY.

FAILURE in the Pacific. An afterthought behind UAL and DAL.

FAILURE in Europe. Once again, DAL and UAL trounce AA.

FAILURE at ORD and BOS. Massive shrinkage.

FAILURE in NYC. Getting humiliated by DAL. Billion dollar terminal with no feed in JFK.

FAILURE in SJU. Hub gone.

FAILURE in employee relations. All employees effing HATE management.

FAILURE in rebranding. Paid millions for ugly-ass paint job. Can't wait to see the new Village People uniforms.

Yeah......good times.

Maybe we can start a betting pool. Winner has to guess the next market we will cede to competitors and pull out of. That Tombstone plan is such a winner.

Good riddance to this management team. Hope the door doesn't hit them in the ass on the way out.

 

[jimntx]

Superfluf to be fair now...

1. There was no failure at SJU. There was no longer a need for a hub at SJU. When the SJU hub was established air service to most of the Caribbean islands was limited to rjs. Therefore, we had to have an airport within rj range of those islands. Now, most of the Caribbean vacation islands have runways that could land an A380. (I heard that there is one island that the runway built out over the water is longer than one of the measurements of the island itself.) So, those same islands are being served from MIA. No reduction in service; just a different takeoff point.
2. All employees do not hate management. I don't think of them often enough to hate them. Let's just call it despise.

P.S. I think that you will find that FWAAA is in tune with the management mantra...the reason all those other failures (including the ugly ass paint job) occurred is because "we pay the frontline employees too much."

 

[NewHampshire Black Bears]

WT,
A lot of what you say is correct. BA/AA and US have 'screwed things up, pretty good lately' .
However, .. "IF" BA and the new AA use thier assets to thier fullest potential, they will be Unstopable. (Yes, I'm aware that "if" is a dangerous word) There's reasons why LHR-JFK-LAX is THE Premier route pairs in the world. (Maybe it's also LHR/JFK/LAX/NRT)
BA, despite it's 'slump' is STILL the undesputed king in LHR(despite how hard Branson tries to knock them off thier perch) AA/US 'can' (again a dangerous word) monopolize the GIGANTIC US population center for International traffic, from a line from BWI to Hartford CT. by successfully utilizing ..TWO airports (PHL/JFK) as opposed to One(like DL at Kennedy, and EWR with UA)
AA (new) will control the Very Valuable premier Transcon routes from the Northeast to LAX/SFO.
DL/VS are only going from ONE airport...JFK, and same for UA from EWR, while (new) AA uses T W O airports.
The Caribbean/South America.... NO CONTEST. As for domestic O+D, all carriers have thier strengths (DL/LGA), UA/EWR, AA/PHL/CLT and DCA,........and of course AA/DFW...DL/ATL.
UA is of course...KING for O + D, and International from ORD.
Finally, I see a Lot of E-jets going into JFK with International connections for AA, as US has now for PHL.

Ooops, almost forgot BOS !

 

[dash8roa]

You are one to talk. What do you have to offer other than sticking up for this failure of a management team?

If you did not like the content of the article, the author's contact information was listed at the bottom of the article. I'm sure you contacted him to tell him how wrong he is, and how all of the airline analysts have it wrong and this whole thing will be a disaster....right? So, what was his response? Or, do you just keep your "expertise" limited to this obscure web site?

Maybe we can change the subject to all of the long term successes of AA's inbred management team.

FAILURE financially. BILLIONS in losses. BANKRUPTCY.

FAILURE in the Pacific. An afterthought behind UAL and DAL.

FAILURE in Europe. Once again, DAL and UAL trounce AA.

FAILURE at ORD and BOS. Massive shrinkage.

FAILURE in NYC. Getting humiliated by DAL. Billion dollar terminal with no feed in JFK.

FAILURE in SJU. Hub gone.

FAILURE in employee relations. All employees effing HATE management.

FAILURE in rebranding. Paid millions for ugly-ass paint job. Can't wait to see the new Village People uniforms.

Yeah......good times.

Maybe we can start a betting pool. Winner has to guess the next market we will cede to competitors and pull out of. That Tombstone plan is such a winner.

Good riddance to this management team. Hope the door doesn't hit them in the ass on the way out.

US has had their share of failures.
1.Awarded a route to China and never made good on it.
2.Failed at PIT.
3.Two trips through chapter 11.
4.Shrinking Piedmont over the years while saying they are looking for more dash's.
5.Giving away slots at LGA at less than half they slots they got at DCA.
6.Wasting those slots at LGA over the past years with 35 seat dash-8's
7.And last all,wonder boy Dave Seigal.

Many airlines had failures such as Pan Am,Eastern,Presidential,Northeast,Eastwind,any many more but some still are with us. My fear is that AA will turn into just a larger version of US. AA has many new planes on order, both wide body and narrow body and with long range goals that consider the passenger as their most important asset, the company can thrive and all employees will benefit.

Much of the banter on this forum will have to be reviewed in the future to see how much this merger will accomplish in a very tough environment. The global economy in the tank, rising oil prices that have nothing to do with supply and demand and the threat of terrorism.
"Please fasten your seat belts,we expect much turbulence ahead" "Have a nice flight".

 

[Flying low]

From "The Motley Fool"
http://www.fool.com/investing/general/2013/02/08/this-may-be-the-worst-company-ever.aspx

 

[KILOFINAL]

BA the most powerful airline in the world? I don't agree with that assessment. I think BA is bleeding. I wish my friends well at the "new" American, but I think once the Kool-Aid is finished, more cuts will come and more sacrifices will have to be made. American has a 12 year capacity purchase agreement with Republic and I don't see buyers lined up for Eagle.

 

[robbedagain]

kilo is it possible if that eagle has no buyer is it possble that may be a deal with airbus/boeing might do a similar deal or even embraer for new planes in exchange for the rjs similar to delta getting airbuses for crjs

 

[WorldTraveler]

Bears,
Yes, Bears, “if” is a very dangerous word because there is no certainty that AA/US can do what you put behind the “if” or that other carriers can’t also do what they need to do to keep AA/US from achieving what they need to do.

In case you’ve missed it, AA will almost certainly drop from being the largest carrier in terms of seats and revenue on JFK-LAX when they put their 321 service in place; they would have to increase their overall number of flights by quite a bit in order to maintain their number one position.
As I have already noted, DL will be the #1 carrier in the JFK-SFO in terms of seats by this summer. UA has taken the same philosophy of going after a niche market that AA is taking which has just given other carriers including DL and VX space to grow.

As for how many airports in the NE each carrier operates from to Europe, DL CURRENTLY has service to Europe on its own metal from BOS as well as from EWR – one flight today and one more this summer - in addition to its hub at JFK. Correct me if I am wrong, but DL now has the only US carrier long haul int’l service on its own metal from BOS and DL is the only carrier in the NE that has longhaul int’l service from another carrier’s hub.
And given that PHL int’l is 75% connecting traffic from the rest of the country, other hubs including ATL and DTW and IAD - are just as viable for picking off connecting traffic as the little box you drawn to show that AA/US will have two gateways in the NE. The real measure is how well each carrier does at winning local traffic. DL still carries more local traffic on its own metal from the NE than AA/US do. Even if you throw in the JVs – which very much should be included since it is as much AA revenue as it is BA, DL as it is AF/KL/AZ, and as much UA as it is LH/LX /OS etc – then the Skyteam JV plus Virgin will carry more local traffic from the NE to Europe than any other airline group. The likely merger of AA/US is undoubtedly one of the motivations that DL looked at for buying equity in Virgin and developing a joint venture which is now in process. The DL – VS JV will likely be approved and operating before AA/US integrate as one carrier even from a marketing standpoint.

We can argue all day long about the strength of one carrier vs. another – but the fundamental reality – which others here have affirmed – is that AA and US have both made some significant strategic errors which have provided an opening for other carriers, including DL. Add in that DL has already finished its merger and is moving onto a new round of strategic initiatives that are designed to keep AA/US from gaining the advantage their merger is intended to produce and it isn’t hard to see the challenge that AA/US have in actually delivering all the benefits the merger is supposed to produce.
The article linked above validates again that UA has not yet delivered the benefits it promised from its merger.

Fluff,
There is a fundamentally different perspective between the perspective of employees in their companies and companies and former employees. You as an AA employee cannot avoid seeing the strategic failures that have chipped away at AA’s competitiveness – and now require a messy merger and abundant codesharing in order to fix. I have often been accused – and probably rightly so – for not understanding the perspective of DL employees while E and FWA have been accused of not understanding how difficult the past 10 years have been on AA employees and how difficult it is to believe that things are going to be anywhere close to what active employees can want – esp. in light of what AA was in the past.
I want to see AA and US employees win – but no one should really think that AA/US will produce the same results as DL/NW or UA/CO for a number of reasons including that AA and US individually are not as large as what DL and NW or UA and CO were before the merger; AA/US is the last merger and other carriers are far better positioned to limit AA/US’ gains as a result of their merger; AA/US will face tough asset divestiture requirements; and other carriers have new opportunities to compete against AA/US which they have not had, eroding some of the strengths that AA/US will gain from the merger.

Robbed,
It is very possible that AA could and probably is seeing some of the large jet manufacturers to take back some of AA/US small RJs – but AA already has enormous orders on the books so Airbus and Boeing have little incentive to go back and renegotiate those agreements.
And in that DL and UA are doing the same thing, and it is very possible that A and B have little to no incentive to take back a bunch of small RJs – which will be hard to place at other carriers.
DL’s deal w/ Airbus isn’t finalized – it is still just rumor – although it is possible that DL has obtained a commitment from Airbus to take back some DL small RJs and DL is now shopping their deal against Boeing. DL has an advantage in doing a deal w/ Airbus since DL has never directly bought an Airbus narrowbody and hasn’t directly bought an Airbus jet in about 20 years. DL undoubtedly also has first mover advantage in this type of deal as well, meaning that DL can get rid of small RJs at a lower cost than other carriers.
Doesn’t mean that other carriers including AA don’t have other options – but restructuring the RJ operations at AA and UA are likely not going to be as easy or as cheap as DL’s process.

Best of luck to all at AA/US – but going into merger announcement day, you should have your eyes wide open as to what this merger is capable of doing and what it cannot do.

 

[robbedagain]

THE THING about the dl/airbus is they never brought airbus ever before they integrated the A-300/A310 when they inherited PANAM and then later on NWA ill admit they sure seem to know where to deploy their planes and all.

 

[AANOTOK]

The latest: http://www.reuters.com/article/2013/02/10/us-amr-usairways-merger-idUSBRE91900K20130210

 

[AANOTOK]

Report: American Airlines parent AMR Corp., US Airways delay meeting on merger


DALLAS — The boards of American Airlines parent AMR Corp. and US Airways have pushed back meeting on plans to consider a final merger, Associated Press sources say.
A source close to the matter says the AMR board wants to meet in person, and that the US Airways board would only meet after the AMR board approves a deal. The source requested anonymity because the talks are private.
It is not clear when the two boards would finally meet. People familiar with the matter say negotiations are continuing. They say issues being hammered out include AMR CEO Tom Horton's exact title and role in the combined company.
The committee representing unsecured creditors in AMR's bankruptcy case had planned to meet Monday.

 

[jimntx]

Ok, now I just wish they would make up their minds and vote--one way or the other. Just get it done. We all know that it's going to take at least a year to come anywhere close to looking like a single airline. Then again, as I've said before...DP has proven himself perfectly capable of running two separate airlines with one name. Running three separate airlines with one name should not be that much of a stretch.

His first job, though, will be to squelch that godawful new AA paint job. Please, Mr. DP. Please!

 

[Dilligas]

His first job, though, will be to squelch that godawful new AA paint job.

I think if the merger goes through, you will see the return of the AA Eagle to the tail and a new livery. Something which will recognize the contributions of the past and give the new airline some pride and promote a sense of teamwork, pulling for the future.

When coming up with the newest US livery, Parker & crew also recognized the importance of keeping some ties with the past and recognizing the contributions of the diverse airlines which comprise the current US... thus our "heritage" paint schemes, which had one aircraft each painted in the America West, Alleghany, Piedmont, and PSA paint schemes which were generally well received and appreciated by the rank and file.

It would be a huge mistake to not do something along these lines with the new AA. What the hell was Horton thinking?

The aircraft should be some combination of red, white, and blue and feature the AA eagle logo and I believe it will.

 

[A320 Driver]

I think if the merger goes through, you will see the return of the AA Eagle to the tail and a new livery. Something which will recognize the contributions of the past and give the new airline some pride and promote a sense of teamwork, pulling for the future.

When coming up with the newest US livery, Parker & crew also recognized the importance of keeping some ties with the past and recognizing the contributions of the diverse airlines which comprise the current US... thus our "heritage" paint schemes, which had one aircraft each painted in the America West, Alleghany, Piedmont, and PSA paint schemes which were generally well received and appreciated by the rank and file.

It would be a huge mistake to not do something along these lines with the new AA. What the hell was Horton thinking?

The aircraft should be some combination of red, white, and blue and feature the AA eagle logo and I believe it will.

That eagle logo is such an integral part of American's identity. I can't for the life of me figure out why they would change it so radically as to be unrecognizable. Horton seems very good at alienating his employees. Just sayin'