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US Airways Said to Develop AMR Merger Plan to Fix Revenue Gap
- Thread starter usa1
- Start date
Kev3188
Veteran
Not having so many unions sure made it easier, since the only big issue was the FA's - the pilots learned from US...
There was also the "big" issue of tens of thousands of ground employees as well...
BoeingBoy
Veteran
- Nov 9, 2003
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- #78
True, but my impression (maybe wrongly) was that DL also had the larger percentage of those too so a union vote among them wasn't likely to be any more successful than the AFA vote. In other words, DL didn't need to wait for a bunch of unions to settle seniority/contracts like US/HP or UA/CO because of the lack of widespread unionization at DL.
Jim
Jim
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
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- #80
never mind that intel rarely has fully disclosed data such as what is required in a merger or that the biggest challenge in intel today is getting inside the minds of people who think very differently... how data is interpreted is far more important than the actual data.
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of course part of US' decision to quit talking about AA may be precisely because they decided (with the help of some sober consultants whose testosterone levels don't influence their decisions) that US can't win if it gets in a bidding war with DL or anyone else.... which is exactly the conclusion DL wanted. Let AA do what AA needs to do to turn their business around and let US compete based on the conditions it has after 2 rounds in BK court and a merger of its own... if it can't succeed on those terms, then dragging another airline into the mix isn't likely to do anything except drag more people down to the lowest paid employees category and bring financial performance for the entire industry down several notches, reason enough that DL decided it is worth ensuring that US keeps its hands off of AA.
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Quite in contrast to US employees, DL's (including PMNW) fared far better through BK and mergers.
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DL picked NW as a merger partner in part because the ability to achieve DL's intended outcome, including w/ respect to labor relations, was more predictable than it would have been with other carriers, including UA. Not surprisingly, the 3 areas which DL needs to focus on - the west, LHR access, and a larger presence in Latin America - could have been achieved with a UA merger - but it would have come at a greater possibility that DL would have been unable to limit the growth of representation. By now focusing on those 3 areas, DL can achieve its results and still ensure that its position on labor remains secure. Given how well the NW merger went relative to most in the industry - not unlike the way the Western merger went - perhaps DL's approach to labor is essential to obtain the flexibility in a growing, adapting business which is what DL has demonstrated it needs to be in order to win in an industry which rarely adapts well or grows w/o great difficulty.
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The EU has had similar investigations into other alliances.. and there is no evidence that what DL has with AF is any different from what any other airline has with any other immunized alliance partner. I am not entirely convinced that these immunized alliances are in the best interests of consumers either but they were agreed to and approved and if the EU is now getting wet feet, they need to put it on the list of all the other things they want to amend regarding EU-US aviation protocols. (you do realize that there is a political element to aviation economics, don't you?)
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of course part of US' decision to quit talking about AA may be precisely because they decided (with the help of some sober consultants whose testosterone levels don't influence their decisions) that US can't win if it gets in a bidding war with DL or anyone else.... which is exactly the conclusion DL wanted. Let AA do what AA needs to do to turn their business around and let US compete based on the conditions it has after 2 rounds in BK court and a merger of its own... if it can't succeed on those terms, then dragging another airline into the mix isn't likely to do anything except drag more people down to the lowest paid employees category and bring financial performance for the entire industry down several notches, reason enough that DL decided it is worth ensuring that US keeps its hands off of AA.
.
Quite in contrast to US employees, DL's (including PMNW) fared far better through BK and mergers.
.
DL picked NW as a merger partner in part because the ability to achieve DL's intended outcome, including w/ respect to labor relations, was more predictable than it would have been with other carriers, including UA. Not surprisingly, the 3 areas which DL needs to focus on - the west, LHR access, and a larger presence in Latin America - could have been achieved with a UA merger - but it would have come at a greater possibility that DL would have been unable to limit the growth of representation. By now focusing on those 3 areas, DL can achieve its results and still ensure that its position on labor remains secure. Given how well the NW merger went relative to most in the industry - not unlike the way the Western merger went - perhaps DL's approach to labor is essential to obtain the flexibility in a growing, adapting business which is what DL has demonstrated it needs to be in order to win in an industry which rarely adapts well or grows w/o great difficulty.
.
The EU has had similar investigations into other alliances.. and there is no evidence that what DL has with AF is any different from what any other airline has with any other immunized alliance partner. I am not entirely convinced that these immunized alliances are in the best interests of consumers either but they were agreed to and approved and if the EU is now getting wet feet, they need to put it on the list of all the other things they want to amend regarding EU-US aviation protocols. (you do realize that there is a political element to aviation economics, don't you?)
Kev3188
Veteran
No, you're not too far off, Jim.
Fleet service was about 1.5:1 in favor of DL
The agent group (including reservations) was closer to 2.5-3:1
BoeingBoy
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Politicians having a political take on things...who'd ever have thunk it!!! You do realize that there's a political element to about anything governments (or quasi-government in this case) do, don't you? But what do I know...I've only been observing this industry over 45 years...how about you?
Jim
WorldTraveler
Corn Field
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- #83
I don't have quite as much gray as you do... perhaps 35... but I expect we both figured - and others could too - in alot less time than that.
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Speaking of fixing the revenue gap, it is noteworthy that AA recently announced that it would be implementing alot more day of week scheduling, something that CO and DL did in their post-BK restructurings and which can go a very long way to helping improve financial performance by not flying when it doesn't make sense to do so.
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AA has long been regarded as having some of the best information technology which means that they should have known for years that they could have improved their financial performance by cutting out some of its lower performing flying. DL also had to change its crew management/bidding systems in order to accommodate this type of variability in its schedules - and AA's systems and/or labor contracts might not have allowed it.
But it is easily worth hundreds of millions of dollars and I suspect AA will aggressively change the way it operates its network and will get the necessary labor contract changes to make it work.
I don't know how US compares with variability of its schedule but this is just one more thing that AA needs to do to return to profitability and can do on its own and doesn't need US to show them how to do it.
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Speaking of fixing the revenue gap, it is noteworthy that AA recently announced that it would be implementing alot more day of week scheduling, something that CO and DL did in their post-BK restructurings and which can go a very long way to helping improve financial performance by not flying when it doesn't make sense to do so.
.
AA has long been regarded as having some of the best information technology which means that they should have known for years that they could have improved their financial performance by cutting out some of its lower performing flying. DL also had to change its crew management/bidding systems in order to accommodate this type of variability in its schedules - and AA's systems and/or labor contracts might not have allowed it.
But it is easily worth hundreds of millions of dollars and I suspect AA will aggressively change the way it operates its network and will get the necessary labor contract changes to make it work.
I don't know how US compares with variability of its schedule but this is just one more thing that AA needs to do to return to profitability and can do on its own and doesn't need US to show them how to do it.
BoeingBoy
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While not as bad as the current US, that's coming up on 2 decades out of date. AA developed Sabre so had a lead on the pack (after unsuccessfully trying to get the other carriers to form a JV like ARINC to do it in the 1960's). After the sale of Sabre to EDS, things went downhill for all Sabre users.
Jim
texasreb
Senior
- Jul 26, 2008
- 378
- 171
You are right. but management and the pilots were happy with the sale as they got a piece of the action.
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