US Airways Said to Develop AMR Merger Plan to Fix Revenue Gap

[AAviator]

I don't see it either. Let's look at the hubs:

AA

JFK
MIA
ORD
DFW
LAX

US

PHL
CLT
PHX

So a merged AA/US would have JFK, PHL, CLT and MIA on the east coast. Two of those would have to go on the chopping block, and I can guarantee you it wouldn't be JFK or MIA.

DFW and LAX for AA basically service the same markets that PHX does for US.

So there's your answer: just shut down US, it's not necessary.

More on point than you realize.

US has the highest casm in the industry. It also has the weakest performing network. What the LCC'ers are suggesting is is to dismantle theirs, use the capacity to build upon AA, and not add to the total capacity in the industry.

My question is: if AA needs to build its network, why add the highest cost, most senior, weakest performing network(s) to accomplish this? MIA is running at less than 70% of capacity. Why not build on MIA organically? Post BK AA's cost structure, new fuel efficient fleet, entry level lower cost employees will help blow LCC out of the water to the Caribbean and SA from both PHL and CLT. This amounts to natural displacement of traffic (revenue) to our network from theirs, doing it the old fashioned way -competitively. We're not meant to be partners in the industry. We're competitors (bigbusboy)

JFK needs to grow. PERIOD. LCC is of absolutely no help here. B6 absolutely is, i.e. turn key feed, newer efficient aircraft, network dynamics that complment AA and OneWorld, and a more desirable employee base. LCC's departure from the NYC market only weakens their position in terms of corporate contracts. You also have to consider just HOW important NYC in terms of international biz travel. For example, looking at Lufthansa's summer schedule, they're flying an A330 from MUC daily, along with two flights from FRA to JFK. One a 747-400, the other an A380.. All with no Star partner in JFK. AND EWR just across the river!! (They're bringing an A380 to MIA as well and we don't even serve the city pair) AGAIN, LCC is of no help in JFK!!!!

When one considers PHL's future, and to a lesser degree CLT, you have to assume in a merger scenario that LCC would depart the Star Alliance and join OneWorld. The international traffic lost would only further weaken PHL and CLT allowing their costs to creep up and lose the mass that currently makes them viable as hubs. PHX and LAS always seem to take the back burner and hardly anyone disagrees that one or both would be closed... AND the fact that LCC is more interested in AA's hubs anyway.... Are they the asset everyone claims they are or ain't they???????

Lets take a little trip down memory lane.........................

Here's DP's first unsolicited amorous advance on DAL.

http://www.sec.gov/Archives/edgar/data/701345/000095012306014162/y27297k2exv99w1.htm

What should be noted:
1. The combined airline will shrink by 10%
2. 8 billion dollars. 4 billion borrowed, and 4 billion of LCC stock.. which was based on a share price of ~$51. Todays price is $6.26
3. bases labor rates at the higher of the two carriers.

Moving onto the "revised" offer:

http://www.sec.gov/Archives/edgar/data/701345/000095012307000262/y28825exv99w2.htm

Of note:

1. The total borrowed/financed $ is now at 8+ $billion
2. AA's value today even in BK is well north of the 9-12B$ DAL was valued at in 2006.

So, what does it all mean? IF DP is going to make a drive by offer while AA is in BK, and, assuming he is successful, what would the combined company debt picture look like? Better yet, how big would the offer have to be? 13 Billion? 15 billion?

And all of this to abandon LCC's operation and attach it to the AA operation?

more later..... its happy hour!!!!

 

[signals]

Groundhog Day is almost around the corner. In regards to the movie, US keeps repeating the year 2005. They've been getting their hopes up about merging with this one,that one,and the other one, but end up retreating to the sandcastle empty handed, with their tails between their legs,waving their white flags behind them

At their last fiasco between United and Continental, US was referred to as a 'stalking horse!' I had quite a time trying to convince a rare US fan, that that is not a good thing.

So once again, those of us that are familiar with the scenario, must watch US never learn

 

[gaucho99]

So, what does it all mean? IF DP is going to make a drive by offer while AA is in BK, and, assuming he is successful, what would the combined company debt picture look like? Better yet, how big would the offer have to be? 13 Billion? 15 billion?

According to this article.....about 14 billion.

http://www.thefloridanewsjournal.com/2012/01/20/us-airways-make-offer-buy-or-merge-american-airlines-industry-changing

 

[Kittyhawk]

Found this on facebook, though it was good for a smile. Looks like someone has some time on there hands.

 

[damajagua]

Found this on facebook, though it was good for a smile. Looks like someone has some time on there hands.

Don't be surprise if AA comes out with a new livery in the near future.
There has been talk that it's time to freshen up the brand.
While I will always admire the red,white and blue AA
livery looks old and outdated.

 

[FWAAA]

AA will have to come up with something different for the 787s, unless they're chrome-plated. They certainly won't be shiny. Maybe paint them Airbus-Gray like the AB6 fleet prior to AA stripping the paint?

 

[787nightmare]

AA will have to come up with something different for the 787s, unless they're chrome-plated. They certainly won't be shiny. Maybe paint them Airbus-Gray like the AB6 fleet prior to AA stipping the paint?

I've wondered myself about the color of silver they'll use for there 787s. You would think with today's spectrum of coating colors, they'd have a "shiney" silver coating available for composite painting. We'll see I guess. Hope it's something other than battleship gray-but that's what 737NG comp panels/fairings are painted.

 

[Buck]

Does this mean that all of the airplane is going to get painted, that is metal?

 

[2ndGENAMT]

Full Paint...How many aircraft polishers does AA have?

 

[787nightmare]

Does this mean that all of the airplane is going to get painted, that is metal?

Yeah, all of the airframe is going to have to be coated. CFRP must be protected from ultra violet rays, elements. Everett never opens the 787 assy line doors-like they do in 777 routinely in summer days. And there's very little actual metal/alloy exposed on that plane.
Wait until you guys see and fly on it! pretty wild & cool.

 

[Kittyhawk]

Though, I know that the above picture is not an official sanctioned picture put forth by US/AA. But I do like the look. We are way past due for a fresh look.

 

[FWAAA]

I've wondered myself about the color of silver they'll use for there 787s. You would think with today's spectrum of coating colors, they'd have a "shiney" silver coating available for composite painting. We'll see I guess. Hope it's something other than battleship gray-but that's what 737NG comp panels/fairings are painted.

What about the aluminized mylar graphics that are used on transit buses and semi trailers? Could the 787 be wrapped in it? Probably heavier than paint, though.

 

[787nightmare]

What about the aluminized mylar graphics that are used on transit buses and semi trailers? Could the 787 be wrapped in it? Probably heavier than paint, though.

Be rather difficult to conform that material to all the bends, curves/shapes of an airliner I'd think-and, prob a bit heavier yeah. I'll bet they come up with something more appealing than reg old gray.

 

[AstroLounge]

I've wondered myself about the color of silver they'll use for there 787s. You would think with today's spectrum of coating colors, they'd have a "shiney" silver coating available for composite painting. We'll see I guess. Hope it's something other than battleship gray-but that's what 737NG comp panels/fairings are painted.

While Many will say AA needs a 'freshening up', I DISAGREE. IMHO I have always felt the American livery is TIMELESS and one of the USA's greatest Corporate Images to The World. If AA chooses to Retain it's current scheme, maybe they can do a Northwest-like Titanium livery for those 787's and narrowbody AB's. (Should a complete Makeover be in the picture, I do like the one that was floating around on the net........snappy, crisp and the Eagle retains it's Prominent position).

 

[AAviator]

My apologies .... I mixed you and AAviator up.

Huh? How did I miss this?

I never ran to the mods..

There's nothing unexpected about LCC's attempt to merge with any airline that would consider their advances. Hardly "news of a merger leaking out".

I still maintain a merged AA/LCC airline would be disastrous for AA employees. If that means LCC suxs to you, so be it.