By the time they get to merging US will also have an authority on their CLT-PHL-ANC-PEK A330 service.
And with UA requesting postponement of their SFO-CAN today due to gas prices (so they say), who really wants all those China routes anyway?
What will be AA's move if DL/NW merge?
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And with UA requesting postponement of their SFO-CAN today due to gas prices (so they say), who really wants all those China routes anyway?
AA is probably going to sit this one out hoping that the Justice Department will make the existing mergers divest some of their China route authorities to avoid anti-trust scrutiny. This would be likely to happen in any other Administration's Justice Department, but I don't know if it will under the Bush Administration (airline CEO's break out your checkbooks).
Route authorities AA should try and grab (and re-apply to fly from their key airports because ATL-PVG is a real stinker).
1) ALT-PVG: Because Northwest already has won authorities to serve it from DTW and ATL's O&D loads for this flight suck. AA since AA already has an ORD-PVG service, AA should push for either an LAX (west coast) or NYC (tons of financial traffic).
2) PHL-PEK: Does anyone think that USAir is actually going to be able to pull off its PHL-PEK service? It starts shortly (in what 8 months?) and they still don't have Mandarin speaking staff, an airplane that fly the route, or the flight even loaded in the computer. This would be another route authority to try and grab and reapply for LAX or JFK to PEK.
3) SFO-CAN: UA has announced they are going to delay launching this route for 1 year, potentially violating their application to the DOT for the route authority last year. I know UA has applied for a modification for their current application to legally delay the service, but AA should play some hardball and fight them hard on this. LAX or ORD-CAN service would be a great addition to the Asian route network (and I don't think any airline serves the CAN direct from the US so there would be no competition and the massive amounts of cargo that would fly on this route would probably more than pay for it).
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As for a merger or a takeover... I see the following likely targets.
1)AA makes a hostile bid for NWA with the intension of forcing Delta to pay more. Delta doesn't, NWA goes to American
2)JetBlue- For the JFK slots, E190's, brand new terminal, and domestic feeder network for its rapidly growing International operations at JFK. Would finally allow AA to consolidate a domestic and international presence at one NYC airport
3)Alaska- Would give AA a nice Pacific coast presence but without any service to Asia from SEATAC, it would sorta defeat the whole purpose of acquiring Alaska in the longer run.
4)AirTran- Would be a great way to really really really piss of Delta. They would get a bunch of 717's which they could use and the ATL hub would be nice with the exception of the fact that DAL is also hubbed at ATL.
5)Frontier- I have no idea as to why AA would want those Airbuses or a major hub at DEN, especially with major hubs at ORD and DFW and a significant presence at STL.
6)Continental- We saw the reports that CO was talking to both AA and UA, but only one of those combinations actually makes any sense and only one would possibly be able to skate by the regulators without significant anti-trust concerns. Hint: its not the AA/CO combo.
Route authorities AA should try and grab (and re-apply to fly from their key airports because ATL-PVG is a real stinker).
1) ALT-PVG: Because Northwest already has won authorities to serve it from DTW and ATL's O&D loads for this flight suck. AA since AA already has an ORD-PVG service, AA should push for either an LAX (west coast) or NYC (tons of financial traffic).
2) PHL-PEK: Does anyone think that USAir is actually going to be able to pull off its PHL-PEK service? It starts shortly (in what 8 months?) and they still don't have Mandarin speaking staff, an airplane that fly the route, or the flight even loaded in the computer. This would be another route authority to try and grab and reapply for LAX or JFK to PEK.
3) SFO-CAN: UA has announced they are going to delay launching this route for 1 year, potentially violating their application to the DOT for the route authority last year. I know UA has applied for a modification for their current application to legally delay the service, but AA should play some hardball and fight them hard on this. LAX or ORD-CAN service would be a great addition to the Asian route network (and I don't think any airline serves the CAN direct from the US so there would be no competition and the massive amounts of cargo that would fly on this route would probably more than pay for it).
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As for a merger or a takeover... I see the following likely targets.
1)AA makes a hostile bid for NWA with the intension of forcing Delta to pay more. Delta doesn't, NWA goes to American
2)JetBlue- For the JFK slots, E190's, brand new terminal, and domestic feeder network for its rapidly growing International operations at JFK. Would finally allow AA to consolidate a domestic and international presence at one NYC airport
3)Alaska- Would give AA a nice Pacific coast presence but without any service to Asia from SEATAC, it would sorta defeat the whole purpose of acquiring Alaska in the longer run.
4)AirTran- Would be a great way to really really really piss of Delta. They would get a bunch of 717's which they could use and the ATL hub would be nice with the exception of the fact that DAL is also hubbed at ATL.
5)Frontier- I have no idea as to why AA would want those Airbuses or a major hub at DEN, especially with major hubs at ORD and DFW and a significant presence at STL.
6)Continental- We saw the reports that CO was talking to both AA and UA, but only one of those combinations actually makes any sense and only one would possibly be able to skate by the regulators without significant anti-trust concerns. Hint: its not the AA/CO combo.
CubsFanJohn
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I could see AA possibly make a hostile bid for NW myself. I could see this happening as options
A. AA Sits this one out
B. They go crying to congress and get ATI with BA
C. They get some UA assets
D. Make a Hostile Bid for NW
I wouldn't be surprise if D is the case.
A. AA Sits this one out
B. They go crying to congress and get ATI with BA
C. They get some UA assets
D. Make a Hostile Bid for NW
I wouldn't be surprise if D is the case.
LGA Fleet Service
Veteran
There won't be a hostile bid for NW, take it to the bank.
I was kind of wondering about this as well, but what does UAL have that AA wants and that CO would be willing to let go? Of course the Asia routes are the jewel, but I would expect CO would want them just as badly.
In this negotiation, CO has the upper hand because they COULD merge with UA while AA has no chance. So if CO didn't like the deal, they would just tell AA to shove it and ride off into the sunset with UA...and the Asia routes.
Unless AA came up with a boat load of cash to payoff CO, I don't see anything else that AA would want.
WSJ story here
American makes a rival bid for Northwest: One way to fight against the Delta-Northwest deal would be to spoil it with a rival bid. American and Northwest flirted with each other back in the mists of time, in the late 1980s and early 1990s. Northwest’s pilots likely aren’t happy at being locked out of the Delta deal and may create enough trouble to give a rival bidder an opening. One caveat: American’s pilots are dissatisfied with the company already in their contract negotiations, and it isn’t clear whether they would welcome the distraction of merger talks.
American lobbies against the Delta-Northwest deal: American could take advantage of Congress’s mania for public hearings in an election year and lobby against the Delta-Northwest deal. However, it is a plan that could backfire if it fails or if American decides it would like to do a deal later.
American could jump in between United and Continental: A deal between United and Continental locks up business clients, historically American’s strength. By jumping in and making a grab for Continental, American could strengthen its business-traveler base and at the same time spoil United’s chances for a merger. The merger of Delta and Northwest puts all the other big airlines in play, according to several analysts.
American could expand its partnership with British Airways: AA and BA already have a partnership; could they either merge or team up to bid for another airline? BA and American face tough competition this month at London’s Heathrow airport, which is now subject to a new aviation treaty that allows all European and U.S. carriers to fly from their home regions to any airport on the other continent. BA said last fall that it would like a closer relationship with AA, but didn’t take any action at the time. Maybe circumstances have changed.
WSJ story here
American makes a rival bid for Northwest: One way to fight against the Delta-Northwest deal would be to spoil it with a rival bid. American and Northwest flirted with each other back in the mists of time, in the late 1980s and early 1990s. Northwest’s pilots likely aren’t happy at being locked out of the Delta deal and may create enough trouble to give a rival bidder an opening. One caveat: American’s pilots are dissatisfied with the company already in their contract negotiations, and it isn’t clear whether they would welcome the distraction of merger talks.
American lobbies against the Delta-Northwest deal: American could take advantage of Congress’s mania for public hearings in an election year and lobby against the Delta-Northwest deal. However, it is a plan that could backfire if it fails or if American decides it would like to do a deal later.
American could jump in between United and Continental: A deal between United and Continental locks up business clients, historically American’s strength. By jumping in and making a grab for Continental, American could strengthen its business-traveler base and at the same time spoil United’s chances for a merger. The merger of Delta and Northwest puts all the other big airlines in play, according to several analysts.
American could expand its partnership with British Airways: AA and BA already have a partnership; could they either merge or team up to bid for another airline? BA and American face tough competition this month at London’s Heathrow airport, which is now subject to a new aviation treaty that allows all European and U.S. carriers to fly from their home regions to any airport on the other continent. BA said last fall that it would like a closer relationship with AA, but didn’t take any action at the time. Maybe circumstances have changed.
WSJ story here
jimntx
Veteran
I know you can't stand it that we have yet to go into bankruptcy as UAL did and that we still have our pension plans; however, if I might intrude with a little reality...
From the quarterly report (which yes, reported a Q1 loss of $328 million):
AMR ended the first quarter with $4.9 billion in cash and short-term investments, including a restricted balance of $426 million.
· AMR contributed $25 million to its employees' defined benefit pension plans and made an additional contribution of $50 million on April 15. Contributions since the beginning of 2002 total more than $2 billion.
Why ever would they contribute $75 million to the pension plan since the first of the year if (in your words) "AA is more likely to be filing for BK soon to shed some pensions." They would have more likely "deferred" the payments if you were correct.
NewHampshire Black Bears
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"IF"..AA doesn't have something cooking"under the radar" with CO, they should definitely...Make a counter offer on NW, to DRIVE UP....Waaaay UP, the price on DL, and keep the option of actually taking NW.
"THIS" is the time, that you really appreciate a guy like...(uncle) Bobby CRANDALL !!!!!!!!!!!!!!!!!!!!!!
"THIS" is the time, that you really appreciate a guy like...(uncle) Bobby CRANDALL !!!!!!!!!!!!!!!!!!!!!!
A
American Air Surf
Guest
HITLER, I will tell you where we are going- It's BANKRUPTCY for AA, bank on it. 11 Billion/debt., need new planes, selling off American Eagle, American Beacon Advisors. They are getting rid of assets, then they will get rid of us, and then be the low cost carrier, at a distinct /cost/ advantage. The writing is on the wall, wake up- and when the Unions strike, they will be replaced- Thank you TWU.
My guess is that htis round of negotiations will bring about a frozen defined benefit plan for existing employees, 401K for new hires, and an age weighted 401K to replace the defined benefit plan for current.
A
American Air Surf
Guest
1.) Stock Options, would have been liquidated in a Bankruptcy (then).
2.) Pull Together, to get the stock up-
3.) Oil was cheaper then, not now, and it is going lots higher (Peak Oil, We are in Hubbert's Peak)
4.) We are caught with S-80, aircraft, that are gas hogs, w/ $117/brl Oil now. Probably $150/brl by end of 2008.
5.) The Execs got their money, we will be left with the bag of you know what.
6.) We still have 11B to pay off in debt, with a/c (encumbered), and the U.S. Economy in Recession (deep)
a.) due to several factors (economic) housing, credit crunch, Bank liquidity problems etc...
b.) U.S. dollar is getting killed...
Their are other reasons, but this is just a summation. We will turn the tables on the DL/NW deal, and will have a better cost advantage. AA's debt will continue to rise, along with cost of Jet Fuel, & Oil. There is no way out, we are the HIGH cost carrier.
AA, is selling off their assets. No airline can survive $110/brl Oil, for any extended period of time, and we "AA" are now Monkey in the middle. Thank you LABOR, FOR ALL YOUR HARD WORK, AND CONCESSIONS, so the executives could get their share, before it all falls apart.
local 12 proud
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OK...."Serf"
Bring it (bankruptcy) on, I was looking for a job when this one came along.
Been turning wrenches since I was potty trained, "Have Tools will Travel" 😀
jimntx
Veteran
There seem to be quite a few people around these days who are going to be deeply disappointed if we "fail to fail." I guess if we don't go into BK, they will have to take up drinking to ease their frustrations.
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