Our Nation's Flag Carrier

[mrman]

There will not be any merger. Why would you want existing liabiliites of another including high seniority people. What you may get is one of the two in bankruptcy and the other buying assets. Why merge when there is a desert full of unused planes going for cheap. It's cheaper to buy planes and hire people than merge two cultures and two groups of large liabilities

 

[Whadayano]

There is a loophole to antitrust that has been employed called the failing carrier exemption or doctrine. If you can argue that UAL is headed for the sunset you can acquire it to "save it." My guess is that AA would insist on alot of the same provisions as in TWA. But I still think it would be a bad idea as the gov't would insist on getting some competition into ORD and giving a hefty chunk of LHR slots to someone else.

 

[whatkindoffreshhell]

There is a loophole to antitrust that has been employed called the failing carrier exemption or doctrine. If you can argue that UAL is headed for the sunset you can acquire it to "save it." My guess is that AA would insist on alot of the same provisions as in TWA. But I still think it would be a bad idea as the gov't would insist on getting some competition into ORD and giving a hefty chunk of LHR slots to someone else.

Exactly. For the next year (or until the BK judge says "enough" -- whichever comes first) how could UA not be classified as a 'failing carrier' ??

Folks, you've got to think in new ways here. Toss out all the old terms like 'merger' and 'seniority issues' and such. Think national champion!

Most of you would've probably thought a new low-cost carrier operating from an expensive and remote hub (with leather seats & free TV!) would never work.

jetBlue proved otherwise.

 

[jimntx]

Folks, you've got to think in new ways here. Toss out all the old terms like 'merger' and 'seniority issues' and such. Think national champion!

Most of you would've probably thought a new low-cost carrier operating from an expensive and remote hub (with leather seats & free TV!) would never work.

jetBlue proved otherwise.

And, you seem to think that there is no way Congress or the government agencies would let a big company like United go under even to the extent of allowing a merger between the two largest carriers in the United States.

The almost deafening silence coming from the halls of Congress in support of the ATSB loan guarantee seems to prove otherwise.

 

[WorldTraveler]

I don’t think I would go so far as to say that the government will NEVER allow anything to happen in the airline industry. However, an AA-UA combination is about the last possible thing that could happen. The only way UAL would likely be acquired by a US airline is at most an asset sale and then only when the creditors honestly believe UA cannot be resuscitated by any other means since asset sales (at least in the airline industry) are more like fire sales. The only US airlines competitively that could acquire UA based on lack of overlap are CO, DL, and US; from a financial resources perspective, DL is probably the only airline that could possibly acquire a significant part of UA and then only if they turn themselves around in very short order. Given that UAL has lined up DIP financing for almost another year, we will probably face another crisis point with them by then.

AMR does have a boatload of cash which they could use to purchase quite a bit if they wanted. The only real UAL assets they would likely be interested in and have a likelihood of receiving government approval to obtain would be the SFO hub and the beyond-NRT rights. Given that these are the operations which are sustaining UAL, they won’t be sold until the towel is ready to be thrown in and then probably as part of a much larger package – possibly excluding AA from participating. AA/NW has been discussed as possible but there has to be a place for all of those Airbii to go – won’t buy an airline just so it can complicate its operations which is what a NW acquisition would do. AA/NW also would gain considerable strength in the Midwest, something which the DOJ would not allow. An Alaska acquisition is probably most likely but even that probably has a relatively low cost-benefit comparison given many of the benefits already exist through codesharing. AA also is very close to having a very complete network with the Asian deficiencies correctable by internal growth within a couple years.

AMR probably won’t engage in any mergers or acquisitions right now because they are in the best financial position to control the game if anyone else does start the process.

 

[mrfish3726]

I don't think AA could pick up UAL for 750MIL like they did TWA? I don't know why AA management, or any of the employees could EVEN think anything good could come from a UAL/AA Merger.

 

[MCI transplant]

<_< Being someone who has been through it, I know this may seem a good way out for UA, and it's employees. But, let's look at what's happened to TWA and it's people. First, at the time of the buy-out there were aprox. 22,000 employees working for TWA. Today, maybe, approx. 3,000 are still employed by a.a. Senority has been striped from vetran TWA people at all but a few places! Thank you fellow AFL/CIO brothers! Today you have a.a. employees flying TWA equipment with less than five years senority, and ex-TWA with 20+years, out on the street! Promises were made, and broken! Yes, I realize that the alturnative may have been that TWA would have gone out of business. But it would have with it's dignity, and heredtage still in place!