Time for AMERICAN to persue....JET BLUE !
- Thread starter NewHampshire Black Bears
- Start date
There is no way US could have grown much, and remained profitable, over the last 8+ years. Doing so would have not been a wise strategy. Breaking into new hubs and focus cities is not a trivial undertaking, as is evidence by jetBlue's slowing growth, Virgin America's inability to turn a profit, etc.
robbedagain
Veteran
- Oct 13, 2003
- 11,125
- 2,676
wt when you say the big 3 i would hope you mean DL UA and AA though WN is or should be very close to 3rd if not in 3rd bec AA is definitely a distant 3 if not in 4th DL and UA both grew thanks to the doj blessings in their mergers and WN is too as for LAX DL seems to be growing there despite the limited spaces
FWAA i dont think US could have grown given they are the 5th or 4th and toughter to compete against the big boys of DL and UA and throw in WN in the mix but i do think they could have done some growing instead of focusing in on merging with DL and the slot swap deal
FWAA i dont think US could have grown given they are the 5th or 4th and toughter to compete against the big boys of DL and UA and throw in WN in the mix but i do think they could have done some growing instead of focusing in on merging with DL and the slot swap deal
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #34
yes, big 3 means AA, DL, and UA. AA is not THAT far behind in total size. It is much closer to DL and UA than it is to US in size.
DL is growing at LAX because it has had not used its facilities to the max because it has focused its attention on the east coast. DL also fought very hard to keep LA World Airports from taking any of its gates in BK and now they are ready to use them all yet I hear reports that there are times of the day where DL is struggling to park all of its planes.
DL does supposedly have an agreement with AS for preferential use of some of the gates DL and AS share on Terminal 6 because DL apparently paid part of the cost for them to move. It is possible that DL could keep growing which could force AS to shrink - but I don't know how likely that is to happening.
It is very possible that AA could survive as a separate, smaller airline than DL and UA, in part because their employees (pilots esp) agreed to extensive domestic codesharing with carriers including AS and B6. Codeshares don't provide all of the benefits that operating a flight on your own equipment do but codeshares are a viable alternative to being small.
Also, remember that US has pared a lot of capacity from its own network because it couldn't compete with other carriers. You legitimately have to ask if US really needed to cut as much capacity as it did and leave as many focus cities and hubs as they have and then turn around and say they need a merger.
AA and US have both merged with or acquired a number of companies only to remove a lot of capacity and walk away from large portions of those operations. It is all the more suspect to regulators to now be asked to bless yet another merger when the two players have that kind of history.
Tough words to hear but they are reality.
DL is growing at LAX because it has had not used its facilities to the max because it has focused its attention on the east coast. DL also fought very hard to keep LA World Airports from taking any of its gates in BK and now they are ready to use them all yet I hear reports that there are times of the day where DL is struggling to park all of its planes.
DL does supposedly have an agreement with AS for preferential use of some of the gates DL and AS share on Terminal 6 because DL apparently paid part of the cost for them to move. It is possible that DL could keep growing which could force AS to shrink - but I don't know how likely that is to happening.
It is very possible that AA could survive as a separate, smaller airline than DL and UA, in part because their employees (pilots esp) agreed to extensive domestic codesharing with carriers including AS and B6. Codeshares don't provide all of the benefits that operating a flight on your own equipment do but codeshares are a viable alternative to being small.
Also, remember that US has pared a lot of capacity from its own network because it couldn't compete with other carriers. You legitimately have to ask if US really needed to cut as much capacity as it did and leave as many focus cities and hubs as they have and then turn around and say they need a merger.
AA and US have both merged with or acquired a number of companies only to remove a lot of capacity and walk away from large portions of those operations. It is all the more suspect to regulators to now be asked to bless yet another merger when the two players have that kind of history.
Tough words to hear but they are reality.
I agree with much of your post, WT.
On the one hand, every analyst has said that AA is too small where it matters Arpey told us those markets were NYC, CHI and LAX. Following his promotion, Horton has said the same thing, and he came up with a bankruptcy growth plan to remedy that size disadvantage. Delta thought it was too small in NYC, CHI and LAX and has bolstered its capacity in each of those markets.
On the other hand, nearly every analyst has said that there's too much capacity and that bankrupt airlines must shrink. Every legacy airline did a lot of shrinking in the past 12 years. AA added a lot of capacity when it bought the assets of TWA and then drew down that capacity starting a few months later. UA, DL, NW and US all cut a lot of capacity before and during their bankruptcies. CO didn't shrink much as its low costs enabled it to grow during that decade. And following their mergers, they all cut some more capacity. Although AA did add some capacity during that decade, AA also withdrew a lot of capacity.
If AA is really too small to successfully compete against UA and DL, and if organic growth is impossible for AA to do profitably, and if the US merger is blocked, then AA is out of options. Of course, so is US.
On the one hand, every analyst has said that AA is too small where it matters Arpey told us those markets were NYC, CHI and LAX. Following his promotion, Horton has said the same thing, and he came up with a bankruptcy growth plan to remedy that size disadvantage. Delta thought it was too small in NYC, CHI and LAX and has bolstered its capacity in each of those markets.
On the other hand, nearly every analyst has said that there's too much capacity and that bankrupt airlines must shrink. Every legacy airline did a lot of shrinking in the past 12 years. AA added a lot of capacity when it bought the assets of TWA and then drew down that capacity starting a few months later. UA, DL, NW and US all cut a lot of capacity before and during their bankruptcies. CO didn't shrink much as its low costs enabled it to grow during that decade. And following their mergers, they all cut some more capacity. Although AA did add some capacity during that decade, AA also withdrew a lot of capacity.
If AA is really too small to successfully compete against UA and DL, and if organic growth is impossible for AA to do profitably, and if the US merger is blocked, then AA is out of options. Of course, so is US.
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #36
Except please tell me how AA can grow in NYC other than by upgauging given that the number of slots is fixed. They can codeshare with B6 but B6 has done more to push AA out of markets and then turn around and try to get AA to buy seats on B6's new flights.
LAX is essentially the same thing. The airport is as big as it is going to get other than the int'l gates. So, AA and DL can't grow while UA is sitting on a lot of gates it doesn't want to use.
Maybe a merger with AS or B6 could work but both would introduce market concentration in cities where there are few growth opportunities for other carriers and the potential to force up fares which the DOJ doesn't like - this month.
Yes, lots of carriers cut capacity in BK but they could justify that by their failed finances. Mergers is a different story and those cuts have come in this round of megamergers. Nevermind that fuel has taken a big spike as well and should explain capacity cuts - but the DOJ sees less capacity at the same time carriers are asking to now merge and then sending emails saying their finances will be better off w/ consolidation. Even though AA and US are saying consolidation doesn't mean less capacity, everyone knows that is what has to happen.
AA-US still wouldn't fix AA's problems in Asia or NYC; new AA would still be a distant number 3 either way. The combination would be stronger in both DCA and BOS but AA is about the same size as DL in DCA right now and in a similar league at BOS.
DFW and ORD represent the best opportunities to grow and AA has traditionally held onto its domestic share there even if UA has been far stronger internationally. But a lot of UA's international strength at ORD is related to its Pacific purchase 30 years ago or its alliance partners (continental Europe.). Other than WN and Wright, AA will be fine in Texas. WN will impact AA but DAL is only so big so they don't have enormous growth potential. Opening new routes will impact AA but AA still has a size advantage.
Honestly, AA's standalone plan is viable other than I think their mainline growth estimates are vastly inflated. Part of AA's business plan problem is that they haven't right sized costs to match the size of network they can support but if they get the network right, they can be viable with the right costs.
And Latin America is still a viable region where AA shows no signs of stepping back.
AA needs to accept that they can be a viable carrier even if they don't fly to all the same places with their own metal that DL and UA do.
LAX is essentially the same thing. The airport is as big as it is going to get other than the int'l gates. So, AA and DL can't grow while UA is sitting on a lot of gates it doesn't want to use.
Maybe a merger with AS or B6 could work but both would introduce market concentration in cities where there are few growth opportunities for other carriers and the potential to force up fares which the DOJ doesn't like - this month.
Yes, lots of carriers cut capacity in BK but they could justify that by their failed finances. Mergers is a different story and those cuts have come in this round of megamergers. Nevermind that fuel has taken a big spike as well and should explain capacity cuts - but the DOJ sees less capacity at the same time carriers are asking to now merge and then sending emails saying their finances will be better off w/ consolidation. Even though AA and US are saying consolidation doesn't mean less capacity, everyone knows that is what has to happen.
AA-US still wouldn't fix AA's problems in Asia or NYC; new AA would still be a distant number 3 either way. The combination would be stronger in both DCA and BOS but AA is about the same size as DL in DCA right now and in a similar league at BOS.
DFW and ORD represent the best opportunities to grow and AA has traditionally held onto its domestic share there even if UA has been far stronger internationally. But a lot of UA's international strength at ORD is related to its Pacific purchase 30 years ago or its alliance partners (continental Europe.). Other than WN and Wright, AA will be fine in Texas. WN will impact AA but DAL is only so big so they don't have enormous growth potential. Opening new routes will impact AA but AA still has a size advantage.
Honestly, AA's standalone plan is viable other than I think their mainline growth estimates are vastly inflated. Part of AA's business plan problem is that they haven't right sized costs to match the size of network they can support but if they get the network right, they can be viable with the right costs.
And Latin America is still a viable region where AA shows no signs of stepping back.
AA needs to accept that they can be a viable carrier even if they don't fly to all the same places with their own metal that DL and UA do.
How much capacity did WN cut over the same time span?
Nope. Again it seems most jetBlue employees are happy with the direct relationship they have with the company and overall receive market competitive pay, benefits and feel respected by the company. Non-union jetBlue workers are in a far superior position to the $8/hour Air Wisconsin, American Eagle (insert bottom feeder handling company) employees handling United or US Airways flights. Not sure about DL but my feeling would be the same, after countless unsuccessful union drives over the years it seems most DL workers are happy with what the company offers and do not feel the need to seek union representation.
So much for these grassroots/bottom-up organizing drivers, my feeling is the IAM Grand Lodge planted these so called activists to propel the campaign at DL and promote the IAM agenda.
Josh
Kev3188
Veteran
It was a rhetorical question. Can't help but notice your penchant for using the same code words/messaging that they do, though...
Oh look; here's another one:
While I'm not privy to what the mindset at B6 is, I can tell you that the below quote is tinfoil hat theorizing at it's best...
Your feelings for the IAM aside, you honestly don't understand how the process works, do you?
OP
NewHampshire Black Bears
Veteran
- Aug 20, 2002
- 10,154
- 681
- Thread Starter
- Thread starter
- #41
B6, should they wind up as AA, would still be non union in CS, and Rez. Pilots/FA's/AMTs and the Ramp would be organized.
In case you 'may' have forgot, Unionized companies CAN be very $$$ successful....WN and UPS, I'm sure come to your mind.
As far as Jet Blue people having 'contracts'...Yea, but only so long as thier working for B6.
And as far as our friend "WT" is concerned,...The LAST THING he would want to see, is B6 feeding AA out of Kennedy ! I mean, visualize JFK for a moment. The last 3 terminals in Kennedy, as you exit the airpost, contain..Jet Blue,....B A, and AA in that order. THAT spells... H U G E.. trouble for any competitor, including the guys on the west side of NY Harbor (UA).
im back..!!
Senior
- Mar 26, 2011
- 499
- 504
Reference Chapter 11 explained:
As noted earlier, only the debtor may file a plan of reorganization during the first 120-day period after the petition is filed (or after entry of the order for relief, if an involuntary petition was filed). The court may grant extension of this exclusive period up to 18 months after the petition date. In addition, the debtor has 180 days after the petition date or entry of the order for relief to obtain acceptances of its plan. 11 U.S.C. § 1121. The court may extend (up to 20 months) or reduce this acceptance exclusive period for cause. 11 U.S.C. § 1121(d). In practice, debtors typically seek extensions of both the plan filing and plan acceptance deadlines at the same time so that any order sought from the court allows the debtor two months to seek acceptances after filing a plan before any competing plan can be filed.
If the exclusive period expires before the debtor has filed and obtained acceptance of a plan, other parties in interest in a case, such as the creditors' committee or a creditor, may file a plan. Such a plan may compete with a plan filed by another party in interest or by the debtor. If a trustee is appointed, the trustee must file a plan, a report explaining why the trustee will not file a plan, or a recommendation for conversion or dismissal of the case. 11 U.S.C. § 1106(a)(5). A proponent of a plan is subject to the same requirements as the debtor with respect to disclosure and solicitation.
----------------------------------------------------
Unless I'm mistaken AA filed in November of 2012. making July of 13 the 20th month....
Are they now open for hostile bids?
As noted earlier, only the debtor may file a plan of reorganization during the first 120-day period after the petition is filed (or after entry of the order for relief, if an involuntary petition was filed). The court may grant extension of this exclusive period up to 18 months after the petition date. In addition, the debtor has 180 days after the petition date or entry of the order for relief to obtain acceptances of its plan. 11 U.S.C. § 1121. The court may extend (up to 20 months) or reduce this acceptance exclusive period for cause. 11 U.S.C. § 1121(d). In practice, debtors typically seek extensions of both the plan filing and plan acceptance deadlines at the same time so that any order sought from the court allows the debtor two months to seek acceptances after filing a plan before any competing plan can be filed.
If the exclusive period expires before the debtor has filed and obtained acceptance of a plan, other parties in interest in a case, such as the creditors' committee or a creditor, may file a plan. Such a plan may compete with a plan filed by another party in interest or by the debtor. If a trustee is appointed, the trustee must file a plan, a report explaining why the trustee will not file a plan, or a recommendation for conversion or dismissal of the case. 11 U.S.C. § 1106(a)(5). A proponent of a plan is subject to the same requirements as the debtor with respect to disclosure and solicitation.
----------------------------------------------------
Unless I'm mistaken AA filed in November of 2012. making July of 13 the 20th month....
Are they now open for hostile bids?
eolesen
Veteran
- Jul 23, 2003
- 15,940
- 9,371
Yep.
I've only said that two or three times in the past week, but nobody seemed to pick up on the significance of that.
We know it won't be DL or UA. But it's no secret that both Emirates and Etihad would love to expand in the US, and this would be one quick way to do it.
I've only said that two or three times in the past week, but nobody seemed to pick up on the significance of that.
We know it won't be DL or UA. But it's no secret that both Emirates and Etihad would love to expand in the US, and this would be one quick way to do it.
Glenn Quagmire
Veteran
- Apr 30, 2012
- 4,809
- 4,343
I also saw that IAG just announced an Airbus order of 220 aircraft worth $20B
http://www.bbc.co.uk/news/business-23706878
http://www.bbc.co.uk/news/business-23706878
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #45
Obviously if B6 combined with AA it would be a threat to DL and UA in the NYC region but it doesn't change that there would be size issues with B6 and AA just as there are with AA and US at DCA.
I'm also not sure that it is worth AA's while to try to fight for another problematic merger rather than just focus on a healthy position on their own.
AA still is the 2nd largest carrier at LGA and has about 2/3 of the slots that both DL and B6 so they certainly have enough slots to compete. NYC is a closed market due to the slot restrictions so the only way other carriers are going to enter is thru trades and mergers.
As for foreign carriers, it is indeed possible that they could bid for partial ownership of AA but the US still has fairly tough ownership limits. Labor will vigorously push any efforts to relax them or to allow cabotage (foreign carrier operations within two US points). A Middle East carrier could bid on AA in hopes of gaining a foothold now and work thru the politics later but it would be a big risk for them that might not pay off... and subject AA to yet one more risky business strategy.
AA is better off alone with strong non-equity partnerships.
I'm also not sure that it is worth AA's while to try to fight for another problematic merger rather than just focus on a healthy position on their own.
AA still is the 2nd largest carrier at LGA and has about 2/3 of the slots that both DL and B6 so they certainly have enough slots to compete. NYC is a closed market due to the slot restrictions so the only way other carriers are going to enter is thru trades and mergers.
As for foreign carriers, it is indeed possible that they could bid for partial ownership of AA but the US still has fairly tough ownership limits. Labor will vigorously push any efforts to relax them or to allow cabotage (foreign carrier operations within two US points). A Middle East carrier could bid on AA in hopes of gaining a foothold now and work thru the politics later but it would be a big risk for them that might not pay off... and subject AA to yet one more risky business strategy.
AA is better off alone with strong non-equity partnerships.
Similar threads
