Wn And Aa Say Us/hp Merger A Good Thing

[FA Mikey]

I find it quite amazing that AA employees among others are so upset by this merger. It just goes to show how stupid people get when they drink too much Kool Aide. If US Airways or America West want to merge, let em'. Do you honestly think that's going to put your job as a pilot for American Airlines on the line? No. Its, petty, pathetic, and downright low to wish people to lose their jobs so you can move up faster. People like you are no better (you're worse in my book) than these a-hole management weenies that come in take 30 million and blow the clambake. Sorry. Looks like you'll have to get your airline voodoo doll out of its US Airways colors this company isn't dying anytime soon.

[post="270978"][/post]​

Care to point out where the AA people are saying things that would show they are upset by the U-AWA combo?

It may be pathetic and down right low to wish people to lose there job, Has anyone EVER said that anywhere here? No. People have made the point the weakest should be allowed to die, not indefinitely propped up at the expense of others.

In a free market economy the weak must be allowed to fail so the stronger continue to grow. Not just for the sake of a company but an industry. In a socialist state it would be OK to let U operate in the red with no regard for future earning, just keeping people employed where they are at. Instead is an open and free market based system. You must be able to make money in order to stay in business.

Twisted you think so much less of a person who says I wish U would just finally close up VS. a CEO who takes millions of dollars right from the few dollars you have left to operate on.

As for U not dying anytime soon. Sorry to be the one to break it to you. U has been dying for years. Looks like they are just trying to drag it out a little bit longer.

 

[phasersonstun2]

Judging by our last system bid (pilots), the downsizing in PHL is already underway.

 

[WorldTraveler]

With complete recognition of everything US employees have been through, I don't think there is any doubt that other carriers will do everything possible to sink the combined carrier - and as Jim points out there are still a basketfull of reasons why US will pull the whole thing down. US revenue continues to be under assault at every significant city on the system and an HP merger isn't going to make the big 3 LCCs pull back from their expansion plans. There is nothing more the employees can give to get costs down and costs do not go down for a shrinking airline - even when it's in bankruptcy (contrary to what some posters on the UA board believe). US' only way up is to improve revenue and that is highly unlikely to happen.

 

[madders]

wait a minute here the only thing killing usairways revenue is oil price and the negative effects of being in BK.

After the merger if positive news reach the public that U will be a stronger company that coupled with the falling oil prices everything should start looking up for Usairways

 

[FWAAA]

wait a minute here the only thing killing usairways revenue is oil price and the negative effects of being in BK.

After the merger if positive news reach the public that U will be a stronger company that coupled with the falling oil prices everything should start looking up for Usairways

[post="271017"][/post]​

I'm usually kinda dense, so bear with me. How does the price of oil harm U's revenue?

I agree that BK causes bookaway, which has harmed revenue, but I thought oil was a cost item. Does its price increases cause bookaway, too?

 

[madders]

oil harms U revenue because of cost issues as it associates with fuel

 

[ELP_WN_Psgr]

Let me throw this in.

If anything, the high cost of fuel should help, rather than harm, the revenue side of things - unless the high cost of oil and related petrochemical products tanks the whole freakin economy, and that does not appear to be happening.

All things being equal, people need to travel for business and for pleasure.

The cost of a barrel of oil directly impacts the cost of gasoline for someone's automobile.

If the cost of gasoline gets high enough, the cost of traveling by automobile gets close enough to the cost of flying to where it makes no sense to drive. Hence people migrate from the highway to the airplane seat.

Simultaneously, some airlines may tweak their fares a little to compensate for them having to pay higher costs for Jet-A. That's expected.

So you have the cost of driving -vs- the cost of flying. If the cost of driving escalates faster than airfares, then you will have increased demand for airplane seats even while modestly increasing the airfare, resulting in increased airline revenue.

It may or may not be enough to offset the higher costs of the fuel....but again, that's not the point. The point is that higher oil prices do not reduce airline revenue.

 

[FWAAA]

The point is that higher oil prices do not reduce airline revenue.

[post="271031"][/post]​

My point exactly. B)

Higher oil (fuel) prices divert revenue that the airline might have preferred to spend on something else, but higher fuel bills don't really affect that pax are willing to pay. U's Yield and RASM suck, and the fuel bill has nothing to do with it.

 

[madders]

does the fuel bill affect profit or losses

 

[Rico]

You know Jim, as always you have some solid concerns, but I think everyone needs to look at the big picture.

And that is that in the not too distant future there will be only a few carriers remaining, that is not just a predction... It has to happen. For the main issue is not "too much capacity", rather the inability for anyone to have pricing power because there are so many players in each market.

And the management tactic of keeping your fingers crossed hoping for a failure of your competition has not worked, so now on comes the wave of consolidation. Fewer competitors means more pricing power

People on here talk about "over capacity" as if there are planes flying around empty everywhere. That is not the case. Rather instead, many markets that were either dominated in years past, or at least rationally shared by a handful of carriers are now saturated with competitive choices... Not too many seats, too many carriers.

Take Washington DC for example. In recent memory SWA, Air Tran, jetBlue, Frontier, ATA, Midwest, Spirit, Indy, and yes... America West entered the market, while established carriers increased their flying options with RJ's (like the Eagle RJ Shuttle, or Cal's re-entry into IAD for example).

Where it used to be "go on carrier so and so if you need to head west, or so and so if you need to go east" from many cities... Just does not apply anymore. That airline (or maybey the other one/two choices) had the ability to set a fair price back then, but with 6-10 choices it is obvious that the fares are going to become soft.

So..?

Well, since consolidation is going to happen, then the smart will try to make the best of it. And For US Airways and HP both, ending up in the stomach of one of the big three is not the best of choices...

Yes a merger between the two is fraught with difficulties, but feel free to give me an example of another merger that would not be even moreso (more problems, more overlap, or more layoffs) than US/HP.

But really, name a better option for either carrier...

 

[gso-crew]

Southwest Lower After Analyst Downgrade
Thursday May 19, 3:39 pm ET
Southwest Shares Fall After Analyst Sees Limited Benefit From Lower Oil Prices

http://biz.yahoo.com/ap/050519/southwest_downgrade.html?.v=1

 

[BoeingBoy]

But really, name a better option for either carrier...

[post="271067"][/post]​

Can't think of one - but that's what lots of folks said in 1988 when the PI/US deal was announced and we all know how that's worked out.

My only point was that this isn't a fairy tale where the announcement will be followed by "And they lived happily ever after" as the screen goes dark. While a "merger" is probably about the only chance the folks of US have (at this company), the road ahead will most likely not be easy - in some cases I suspect it'll be downright unpleasant.

Too much capacity?

There are too many seats chasing passengers with low fares in attempts to keep market share or just keep the cash flowing for anyone but the lowest cost carriers to make money - less seats means less competition for those passengers and the possibility of raising fares to profitable levels. It's the number of seats, not the number of names on the airplanes that is the problem - unless you get down to 2 or 3 carriers in a market area that voluntarily limit capacity (what's the odds), and if one of them is a LCC the others have problems.

Hence, consolidation without a reduction in the number of seats doesn't mean much. Unfortunately, we're in the uncomfortable position of working for one of the higher cost, financially weakest carriers. A merger, with cash infusions, will buy time to get the combined house in order so that we can compete (read as get cost structure down). Unfortunately, the path to that destination may be a little rocky in my opinion.

Jim

 

[aafsc]

As far as I am concerned, there are 17,000 people in that equation of yours who should not have been "laid off." Point blank, you guys at AA can't handle more experienced airline personnel coming in your ranks or is that rAAnks.

[post="270888"][/post]​

No, we just could not handle a bunch of people with extremely high seniority from a failed airline coming in to an airline where we spent our careers building only to have them throw us out onto the street and enjoy the wages and benefits (industry leading at that time) that we fought for.
You are in basically the same position the TWAers were in; desperate and in need of a transaction. That is why you say that the TWAers should have not been laid off but instead 38,000 origional AA peole should have been laid off. Like the TWAers wanted to do with the nAAtives, you want to take you very high US seniority and use it against the HP people. Sure you are talking nice to them now but when the combined entity sheds many more aircraft you will push them onto the street (assuming you get DOH). Like the AA people, most HP people seem not to want a transaction/merger. If I were an HP employee, I would put pressure on my CEO to make the merger contingent upon US waiving LPPs and/or fences (like AA did). If US unions refuse, then HP walks away. I don't know how many F/As HP has but I believe US has about 2,000 on layoff and there will be most likely more when more aircraft are disposed of. The only thing that might eliminate/minimize the need for layoffs is the fact that US people are leaving in droves. As for the transaction itself, I don't care if it happens or not.

 

[BoeingBoy]

Rico,

Let me simplify that whole thing a little by taking your DCA example.

If there are 8-9 carriers now, ranging from low to medium to high cost, what would happen if that number were reduced to 3 - 1 low cost, 1 medium cost, and 1 high cost - without a reduction in the number of seats to each market served?

I suspect fares would stay "soft" and the higher cost carriers would continue to struggle.

Jim

 

[Light Years]

As for the transaction itself, I don't care if it happens or not.

[post="271084"][/post]​

Do you work for AA? Why would you care, or think anyone else would care what your opinion is? :blink: Get your own airline in order.