More merger talk form Doug

[BoeingBoy]

What Doug has said repeatedly, in town halls, the 'State of the Airline' webcast to employees preceeding the earning conference call, and the conference call itself, is:

1 - Consolidation only makes sense when one of the carriers is in BK, allowing for the fleet/labor/facility/debt changes, etc, needed to make the merger work.

2 - He and the rest of senior management would be remiss in their responsibilites to shareholders if they didn't at least look at any possibilities that might come along, consistent with #1 above.

3 - Senior management's focus is on completing this merger, but

4 - With two carriers in BK (see #1), one or both of which may need a merger to finance their exit (see #2), senior management is not ignoring any potential possibilities nor are they expending any effort/time actively pursueing them.

At least that's the way I've understood his comments.....

Jim

 

[E-TRONS]

Sounds like DP has caught the Peoplexpress syndrome. PEX had early success as a LCC. Then the visions of grandeur began to cloud CEO BURR's eyes. More routes, more airplanes, more companies were added to the mix. Then along came a spider (Lorenzo) and you know the rest of the story.

Doug, If you are of sane mind, AVOID the SCAB infested NWA at all costs!! They will be the poison pill to this new found success at U-S Airways!! They simply have the worst management team on earth!! And you can do much better than that.
As DELLDUDE suggested, Sit back and let the new found success soak in.

NWA = Nitwits With Airplanes!!

 

[FWAAA]

Sounds like DP has caught the Peoplexpress syndrome.

One would hope that institutional memories in Tempe go back far enough to remember when HP itself was afflicted completely with PEX Syndrome. Flying 747s to Hawaii and NGO was but one example. Then came the three year trip thru bankruptcy.

 

[hp_fa]

One would hope that institutional memories in Tempe go back far enough to remember when HP itself was afflicted completely with PEX Syndrome. Flying 747s to Hawaii and NGO was but one example. Then came the three trip thru bankruptcy.

I think you are comparing apples to oranges.

AWA made a mistake with the 747 fiasco, in part because they did the expansion during a downturn in the cyclical aviation business. Ed and Mike were thinking too grand at the time they needed to hold that status quo or retrench a bit. AWA then ended up in the BK, Ed and Mike were gone and the devil himself came to the airline as Chairman and CEO.

AWA had one BK, period. U had two. But to count the one and the two together to get three is not a fair way to look at the history.

 

[FWAAA]

Sorry about the typo, hp_fa, but I wasn't talking about three bankruptcies. I intended to type "three year trip thru bankruptcy." It has been edited.

 

[HPearlyretiree]

Look at the Alaska Airlines route map, the answer is right there.

Alaska would be a great grab, keep the 737NG, dump the MD80's, and you have a great North-South route structure on the west coast.

NWA would be great for Asia, but who the hell wants their pissed off employees and union goons? Let them kill the airline.

DL would be nice, but not a hell of a lot of common fleets which would be $$$.

 

[rvolkcpa]

Alaska would be a great grab, keep the 737NG, dump the MD80's, and you have a great North-South route structure on the west coast.

NWA would be great for Asia, but who the hell wants their pissed off employees and union goons? Let them kill the airline.

DL would be nice, but not a hell of a lot of common fleets which would be $$$.

Alaska is a great airline that offers good service and competitive fares. I have flown them twice from EWR-SEA, and both trips were good. There were 3 beverage services and a hot snack on every flight. I know they are switching to BOB for most flights, but they are keeping complimentary food on the transcons. They don't have regular in flight entertainment, but for $10 you can rent a DigEPlayer that has about 6 movies, music and shorts. If LCC's coach service ever equalled Alaska, that would be a step in the right direction.

I see two reasons why they would not be a good fit for LCC:

First, their fleet is all Boeing, while LCC is headed to an all Airbus narrow body fleet.

Second, I would imagine that a lot of their revenue comes from code-shares with AA, DL, CO and NWA. I guess they code share will almost everybody except UA and LCC. If AK were to merge with LCC, isn't there a risk that this revenue would be lost?

 

[TheWatcher]

If AK were to merge with LCC, isn't there a risk that this revenue would be lost?

Nope because they dominate the areas they serve in thier mainstay- the northwest and Alaska.

 

[etops1]

trust e , it will be nw.

 

[USCREW]

trust e , it will be nw.

It sure sounds like NW. Their labor issues make me very nervous. h34r:

 

[FWAAA]

trust e , it will be nw.

There's not a snowball's chance that LCC outbids AA for NW. Trust me. B)

 

[USFlyer]

There's not a snowball's chance that LCC outbids AA for NW. Trust me. B)

True, but with AA strong in ORD and NW strong in MSP/DTW, the government might require too much in terms of divestitures to make it worthwhile.

 

[Fly]

I would think the LCC has one great big chance of taking NW. AA has left some bitter memories and LCC merged their airline into a serious WINNER!! As a shareholder, who would you want? (didn't LCC's networth become higher than ANY airlines this past week? Doesn't that mean they could OUTBID anyone?)

Don't forget LCC, we (ual and US) were in the bowels a mere year ago. The people at NW would happily enjoy a healthy merger with a decent company compared to the crap they have. LCC is healthy and waiting. The people are good, the management are scum....HUGE difference.

 

[george]

AA+DAL
UAL+CO
US+NWA
= everyone has a new dance partner!

 

[FWAAA]

(didn't LCC's networth become higher than ANY airlines this past week? Doesn't that mean they could OUTBID anyone?)

Nope. On Wednesday, the market cap of LCC exceeded that of AMR. The large drop by LCC on Thursday reversed that. Anyway, the value of the stock isn't what will enable AA to outbid LCC; AMR has over $5.2 billion of unrestricted cash compared to $2.2 billion of unrestricted cash at LCC.

Which company has more money with which to bid? And if you want to talk stock, then AMR could always issue stock to make the deal work, just like LCC.