Potential suitors circle American Airlines

[AAviator]

I know one thing without a doubt - if every article about potential mergers with AA gets posted this thread will be 40-50 pages long before AA finishes writing it's POR....

Jim

10-4 Jim

Given AA's importance to BA and Oneworld, we haven't seen so much as a peep in that direction. 40-50 pages might be on the low side for USA320PILOT!

 

[usfliboi]

3 Suitors for American Airlines

Merger of LCC and AMR

We see this as the hottest pair in the industry as it would be in the best interest of the customers. Both companies are struggling to remain competitive amid steeply rising fuel prices and a weak travel demand environment. US Airways, the fifth largest U.S. airline, has long-standing problems with its pilot union. Troubles at American Airlines have intensified due to high labor costs and a debt-heavy balance sheet. We believe the AMR-LCC merger deal could change the competitive dynamics of the airline industry. US Airways has been looking for a merger candidate following its bankruptcy protection filing in 2002. The company failed to acquire Delta, when it went bankrupt in 2006. As a result, US Airways might take American Airlines’ bankruptcy as a great opportunity to take over its larger rival.

Click here to read the story.


Passed over by other airlines mergers, American Airlines looks more attractive in bankruptcy

Wolfe Trahan & Co. analyst Hunter Keay put the chances of AMR emerging from bankruptcy as a stand-alone airline at no better than 20 percent. He thinks that with Delta's access to borrowing and US Airway's connections to deep-pocketed TPG, there could even be a bidding war for AMR.

"The combination that makes the most sense is US Airways with American because they both need a bigger presence to appeal to business travelers," said Saranthi Syth, an analyst for Raymond James Financial Inc.

Click here to read the story.

Personally I think this is why Delta is even involved...To stick it to Usairways and force US to pay a premium! Delta really doesnt need nor want AMR!

 

[john john]

Personally I think this is why Delta is even involved...To stick it to Usairways and force US to pay a premium! Delta really doesnt need nor want AMR!

Yep, parker and gang piss Delta off

 

[signals]

So US continues to cry merger-wolf.
It doesn't really matter what the final outcome to the AA BK is. Merge with Delta or Spirit or who gives a crap. Just don't merge with lUSers

 

[autofixer]

If you continually cry "merger wolf", you don't actually have to run your airline. Management gets to keep it in a perpetual state of "for sale".

 

[USA320Pilot]

American Airlines is better off flying solo

Click here to read the story.

 

[USA320Pilot]

AMR bankruptcy sparks American-US Airways merger speculation

Click here to read the story.

 

[USA320Pilot]

AMR Risks Losing Control of Bankruptcy Exit as Suitors Circle

Wolfe Trahan’s Keay drew a lesson from US Airways' unsuccessful bid for Delta: It came more than a year into the latter’s bankruptcy, when an exit strategy was already taking shape. Tempe, Arizona-based US Airways or Delta probably would move sooner against American rather than later, when its plans are firm, he told clients in a Jan. 13 note.

Click here to read the story.

 

[USA320Pilot]

US Airways Said to Develop AMR Merger Plan

Click here to read the story.

 

[BoeingBoy]

Traffic to American’s hubs would grow by funneling in travelers from US Airways, the person said. In turn, a stronger domestic system would feed into American’s routes across the Atlantic and to Latin America, said the person, who declined to give financial details because the numbers are preliminary.

US can either feed it's own or AA's hubs but doesn't have the fleet to do both - so what happens with CLT/PHL/PHX? AA's European operation isn't any bigger than US' if you take LHR out of the equation (and has a lot of duplication with US otherwise) and AA feeds the LHR flights pretty well already. For Latin/South America AA is the hands down winner, but again that means feeding primarily MIA - at what expense to US hubs?

Sounds like someone is trying to package a merger that would almost entirely help US and do little for AA by wrapping it in fancy "here's what it would do for AA" paper...might as well just say that US would do nothing but provide SE feed to AA's system.

Jim

 

[damajagua]

I agree with you 100% Jim.

There was something interesting about the article.

According to the article a merged us/aa would eclipse
Delta and the new entity would become the #2 carrier
after United. My question is would a combine AA/US
bring in more revenue than DL?
Would it be more profitable. I honestly don't know.
But I doubt it.

 

[zethya]

Traffic to American’s hubs would grow by funneling in travelers from US Airways, the person said. In turn, a stronger domestic system would feed into American’s routes across the Atlantic and to Latin America, said the person, who declined to give financial details because the numbers are preliminary.

US can either feed it's own or AA's hubs but doesn't have the fleet to do both - so what happens with CLT/PHL/PHX? AA's European operation isn't any bigger than US' if you take LHR out of the equation (and has a lot of duplication with US otherwise) and AA feeds the LHR flights pretty well already. For Latin/South America AA is the hands down winner, but again that means feeding primarily MIA - at what expense to US hubs?

Sounds like someone is trying to package a merger that would almost entirely help US and do little for AA by wrapping it in fancy "here's what it would do for AA" paper...might as well just say that US would do nothing but provide SE feed to AA's system.

Jim

Well that is and has been the key ?. If you interpret the article literally, it seems to imply that US will propose redirecting a portion of their existing traffic (Revenue) through JFK, MIA and DFW. How they would do that without downsizing/dehubbing PHL (JFK), CLT (MIA) and PHX (DFW) is beyond me. If the article is accurate, one could assume that Parker is providing a peek into his "hand" , which could backfire - relative to retaining city support for US if a merger fails to materialize. From the standpoint of Trans-Atlantic traffic, if Parker is planning to retain/grow the current US route system (as part of this Plan), it will be interesting to see how he envisions doing that through JFK - with all of its competition and restrictions. From my perspective, the only real AA "goldmine" at JFK is their relationship with BA and the LHR route itself. What they might propose is retaining PHL for most of the existing routes and provide feed/management to/of JFK/LHR and possibly any other Alliance dependent routes. Also, I don't believe that 1 Year comment for a second. They need to beat DL and possibly UA to the table – especially regarding MIA/Central/South America.

 

[JayBrian]

Well that is and has been the key ?. If you interpret the article literally, it seems to imply that US will propose redirecting a portion of their existing traffic (Revenue) through JFK, MIA and DFW. How they would do that without downsizing/dehubbing PHL (JFK), CLT (MIA) and PHX (DFW) is beyond me. If the article is accurate, one could assume that Parker is providing a peek into his "hand" , which could backfire - relative to retaining city support for US if a merger fails to materialize. From the standpoint of Trans-Atlantic traffic, if Parker is planning to retain/grow the current US route system (as part of this Plan), it will be interesting to see how he envisions doing that through JFK - with all of its competition and restrictions. From my perspective, the only real AA "goldmine" at JFK is their relationship with BA and the LHR route itself. What they might propose is retaining PHL for most of the existing routes and provide feed/management to/of JFK/LHR and possibly any other Alliance dependent routes. Also, I don't believe that 1 Year comment for a second. They need to beat DL and possibly UA to the table – especially regarding MIA/Central/South America.

Maybe they will redirect the PHL-LGA DASH flights to PHL-JFK.

 

[BoeingBoy]

From the standpoint of Trans-Atlantic traffic, if Parker is planning to retain/grow the current US route system (as part of this Plan), it will be interesting to see how he envisions doing that through JFK - with all of its competition and restrictions. From my perspective, the only real AA "goldmine" at JFK is their relationship with BA and the LHR route itself.

NYC-LHR is the premier TA route from a revenue standpoint (and flights across the N Atlantic have a dominant share of world-wide premium traffic), something AA and BA capitalize on with their near hourly service. The odd part of the article is the mention of feeding AA's Europe/Latin/South American routes. That would seem to indicate feeding BOS/JFK/MIA/DFW/ORD. Pulling what presumably is profitable flying out of those hubs and putting it in PHL/CLT doesn't make sense from the perspective of Parker's talk of US having 2nd tier hubs.

Add that to it not making sense to have a hub just to feed international flights, especially a 2nd tier hub, and it sure sounds like realigning US' entire system to better feed with AA's hubs. PHL/CLT may retain some TA routes where O&D traffic can support them (that'd be a very few routes) but needs hub status to make even those profitable, which gets back to feeding them as hubs that have some TA service. It's hard to feed both AA's and US' hubs given the fleet US has - the choice would seem to be to feed either AA's or US' hubs and the article indicates it would be AA's hubs.

Jim

 

[Airlinelifer]

Well that is and has been the key ?. If you interpret the article literally, it seems to imply that US will propose redirecting a portion of their existing traffic (Revenue) through JFK, MIA and DFW. How they would do that without downsizing/dehubbing PHL (JFK), CLT (MIA) and PHX (DFW) is beyond me. If the article is accurate, one could assume that Parker is providing a peek into his "hand" , which could backfire - relative to retaining city support for US if a merger fails to materialize. From the standpoint of Trans-Atlantic traffic, if Parker is planning to retain/grow the current US route system (as part of this Plan), it will be interesting to see how he envisions doing that through JFK - with all of its competition and restrictions. From my perspective, the only real AA "goldmine" at JFK is their relationship with BA and the LHR route itself. What they might propose is retaining PHL for most of the existing routes and provide feed/management to/of JFK/LHR and possibly any other Alliance dependent routes. Also, I don't believe that 1 Year comment for a second. They need to beat DL and possibly UA to the table – especially regarding MIA/Central/South America.

UA is using CO's IAH hub to Central and South America as well as thier own South American flights from ORD and DUL. UA has the old Pan Am routes out of MIA where they tried and failed to set up a gateway to South America.