Print from Airliners.net discussion forum
http://www.airliners.net/aviation-forums/general_aviation/read.main/5356271/

Topic: DL Interested In Acquiring AMR?
Username: audidudi
Posted 2012-01-12 09:51:11 and read 39890 times.

Just heard on FOX Business News that according to The Wall Street Journal, DL may be interested in acquiring AMR. '' DL and TPG Capital are separately assessing possible bids for American Airlines parent AMR".
No further details.

[Edited 2012-01-12 09:55:23]

Topic: RE: DL Interested In Acquiring AMR?
Username: United1
Posted 2012-01-12 10:00:10 and read 39797 times.

Quoting audidudi (Thread starter):
No further details.

Its also being reported in the Wall Street Journal.

Any likely bid would come months from now at least according the free part of the article.

Topic: RE: DL Interested In Acquiring AMR?
Username: Av8tor
Posted 2012-01-12 10:02:56 and read 39733 times.

This will be the first step in breaking up AMR with assets going to Delta, United, US Airways etc..

Topic: RE: DL Interested In Acquiring AMR?
Username: STT757
Posted 2012-01-12 10:06:01 and read 39696 times.

According to the article both Texas Pacific Group and DL are interested:

Quote:
Delta Air Lines Inc. and private equity firm TPG Capital are separately assessing possible bids for American Airlines parent AMR Corp., with hopes that AMR's troubles presents another opportunity for airline consolidation, people familiar with the matter said.

AMR filed for bankruptcy court protection in late November and is in the midst of restructuring its debt and cutting labor costs after it. Any bid for AMR likely would come several months from now. AMR could use the bankruptcy process to shed a trove of obligations that a buyer might be hesitant to assume.
Quote:
Delta has hired Blackstone Group as its financial adviser to assess a potential AMR bid, people familiar with the matter said. Blackstone helped Delta restructure in its 2005 bankruptcy.
Quote:
Delta has conducted an antitrust analysis on a possible tie-up with AMR and concluded that with some concessions, such a deal has a good chance of getting approval from regulators.

Here's what I think if DL makes a play:

DL would drop ORD. ORD would be become like Denver and Atlanta that went from two Legacy hub carriers to one legacy and one LCC.

DL would grab DFW, MIA, LAX.

DL would be required to divest all of AA's slots at LGA and JFK, however they would be able to acquire T-8 at JFK. The JFK slots would go into a pool to be bid upon (B6, WN, VX being the beneficiaries IMO). The LGA slots would be pursued by UA and WN.

Topic: RE: DL Interested In Acquiring AMR?
Username: ScottB
Posted 2012-01-12 10:08:30 and read 39572 times.

Quoting audidudi (Thread starter):
Just heard on FOX Business News that according to The Wall Street Journal, DL may be interested in acquiring AMR. '' DL and TPG Capital are separately assessing possible bids for American Airlines parent AMR".
No further details.

Delta probably does not want all of AMR, but rather selected assets like MIA, DFW, and the JFK terminal. The key is figuring out how much of AA they'd be allowed to take by DOJ/DOT.

Topic: RE: DL Interested In Acquiring AMR?
Username: commavia
Posted 2012-01-12 10:10:04 and read 39512 times.

The actual article from WSJ says that Delta is assessing a bid as a potential further consolidation opportunity, believing that with some concessions they would stand a "good chance" of winning antitrust approval. I doubt it. I think Delta may well be interested in picking apart certain pieces of AMR, but I don't expect that to be successful. Like many others, I think AMR - particularly given some if its inherent strengths and advantages as it goes through this process - stands a very good chance of emerging from this process as an independent company (i.e., not picked apart and/or bought by another airline/airlines).

Separately, the article also mentioned that TPG is also examining a bid for AMR and - unlike Delta - has made contact with the company about such a proposal. This seems far more plausible. Not only does TPG have extensive experience (and success) in the airline industry, but TPG and AMR have a longstanding and positive relationship. I could absolutely see AMR bringing TPG into the fold in any restructuring and recapitalization.

Topic: RE: DL Interested In Acquiring AMR?
Username: STT757
Posted 2012-01-12 10:10:28 and read 39505 times.

Quoting Av8tor (Reply 3):
This will be the first step in breaking up AMR with assets going to Delta, United, US Airways etc..

DL will not be allowed to acquire any more slots at LGA (and probably not JFK), AA's T-8 is something I can see DL picking up. T-4 needed to be expanded anyway, with or without DL as a major tenant.

DFW (albeit a bit smaller), MIA and LAX fit perfectly into DL's network.

Topic: RE: DL Interested In Acquiring AMR?
Username: commavia
Posted 2012-01-12 10:13:06 and read 39441 times.

Quoting STT757 (Reply 7):
DFW (albeit a bit smaller), MIA and LAX fit perfectly into DL's network.

I'm sorry - I just think the prospect of this is laughable. I simply do not see any way that any administration is going to allow one airline to grow that large through an acquisition. Hubs in ATL, JFK, DTW, MSP, DFW, MIA, SLC, and LAX? I have a hard time believing that would ever pass regulatory approval - even if it was just DFW/MIA/LAX.

I recognize the salivating that some are doing over the concept, but I think it's unrealistic.

Topic: RE: DL Interested In Acquiring AMR?
Username: par13del
Posted 2012-01-12 10:17:56 and read 39339 times.

If AA sheds 50-60% of itself in Chpt.11 no one really cares who buys them, but if they do not shed that much size, I don't see government approval of any purchase by DL or UA, US maybe.

Topic: RE: DL Interested In Acquiring AMR?
Username: TeamInTheSky
Posted 2012-01-12 10:18:39 and read 39312 times.

Whoever DL is paying to do their "Anti-Trust Analysis" is obvioulsy touching their hand to a document and then saying, "Yep feels good to me." It took 47 years to get a slot swap through, no way this gets done (even though I would personally love it).

Maybe this is DL's way of going after WN. "You buy into my market by taking Airtran, I will take Numero Uno position in Dallas."

Topic: RE: DL Interested In Acquiring AMR?
Username: commavia
Posted 2012-01-12 10:22:24 and read 39184 times.

Quoting par13del (Reply 9):
If AA sheds 50-60% of itself in Chpt.11 no one really cares who buys them, but if they do not shed that much size, I don't see government approval of any purchase by DL or UA, US maybe.

If AMR shrinks by 50-60% in Chapter 11, AA will cease to exist. It's as simple as that. Not sure why anybody would expect that, seeing as that was far from the experience at Delta, United, and USAirways during their restructurings, during which all of them shrunk more in the 5-10% range, and considering that it is arguable that AMR is - in several ways - in a far stronger position than they were entering Chapter 11.

Thus, since I think it's far-fetched to see AA shrinking by half or more in bankruptcy, I think it's unlikely that this hypothetical Delta-AMR cherry-picking thing would ever receive regulatory approval.

Topic: RE: DL Interested In Acquiring AMR?
Username: PPVRA
Posted 2012-01-12 10:22:49 and read 39178 times.

Another example of why Chapter 11 needs to go.

Topic: RE: DL Interested In Acquiring AMR?
Username: elmothehobo
Posted 2012-01-12 10:26:29 and read 39074 times.

Quoting par13del (Reply 9):
If AA sheds 50-60% of itself in Chpt.11 no one really cares who buys them, but if they do not shed that much size, I don't see government approval of any purchase by DL or UA, US maybe.

There is no way that American is cutting itself in half. That would amount to keeping DFW, MIA and keeping either LAX or JFK. There is no way that American drops two cornerstones in bankruptcy. At the extreme, American sheds 25% of its total capacity (including mainline, Eagle and Connection) - that would entail cutting one of the cornerstones (LAX or NYC) and half of ORD.

IMO you won't see anything greater than 5-7.5% of its total ASMs (again, mainline, Eagle and Regional) - and that's short term. Remember, American spent the last decade cutting away the fat, its network is about as lean as it'll get, now they are trying to address overhead costs - leases and labor.

Topic: RE: DL Interested In Acquiring AMR?
Username: alitalia744
Posted 2012-01-12 10:27:16 and read 39079 times.

Would be a great move toward more consolidation and making a healthier US airline system. Bring it!

Topic: RE: DL Interested In Acquiring AMR?
Username: yellowtail
Posted 2012-01-12 10:29:20 and read 39030 times.

Quoting STT757 (Reply 3):
DL would grab DFW, MIA, LAX.

MIA for sure...that IMHO is the crown jewel.

Topic: RE: DL Interested In Acquiring AMR?
Username: flyingcaT
Posted 2012-01-12 10:32:55 and read 38935 times.

What is not mentioned is the kind of bid Delta may offer.

What if they tried another variant of the Pan Am deal. They acquire one or two hubs along with the necessary equipment. Heck they could them

In all this recent history on mergers everyone forgets that these transactions were big in the 80s.

Of course in hindsight the deal was a last gasp for PA as DL quickly withdrew their support of PA. IT took longer than necessary but DL would not be where it is today in NY if it werent for this.

They still are NY focused however they could cut back on CVG and MSP if they got their hand on MIA and DFW

Topic: RE: DL Interested In Acquiring AMR?
Username: PlaneAdmirer
Posted 2012-01-12 10:37:04 and read 38804 times.

Quoting commavia (Reply 6):
Separately, the article also mentioned that TPG is also examining a bid for AMR and - unlike Delta - has made contact with the company about such a proposal. This seems far more plausible.

   It's far more plausible that either a single private equity firm or a consortium of PE firms will provide the necessary equity to fund the bk exit than DL buying AA. A purchase by DL is politically undesirable on anti-trust grounds and the loss of employment at AA if AA were sold or carved up to various airlines. DL's interest may motivate the other partners in Oneworld to invest alongside the PE firm(s) to avoid losing their US partner.

It makes sense for DL to look and it should be expected that US will too, but looking isn't the same as buying or being able to complete the transaction.

Topic: RE: DL Interested In Acquiring AMR?
Username: tsnamm
Posted 2012-01-12 10:38:24 and read 38743 times.

Quoting commavia (Reply 7):
I simply do not see any way that any administration is going to allow one airline to grow that large through an acquisition

exactly...all relevant agencies would throw up so many roadblocks its not funny. While many in the industry see consolidation as good and inevitable, the government seemingly doesn't. With the possible exception of US, I couldn't envision any other merger or acquisition will get any green light. Unless AA liquidates DL won't be cherry picking their assets.

Topic: RE: DL Interested In Acquiring AMR?
Username: IADLHR
Posted 2012-01-12 10:39:27 and read 38746 times.

I think what could happen is that at some point BA will make nosies, again, about raising the foreign ownership levels in US airlines to 51%. BA will say that doing so will preserve competition jobs.

Compare that to the possibility of DL taking over AA and competition decreasing and jobs lost and there is a major dilema for the US Congress and President Obama in an election year.

[Edited 2012-01-12 10:41:35]

Topic: RE: DL Interested In Acquiring AMR?
Username: flyinryan99
Posted 2012-01-12 10:40:48 and read 38678 times.

If this were to happen, I would be buying stock of business aircraft manufacturers. More small cities being cut and less competition would drive businessmen/women to less productivity.

The only way I could see this happening is if USAirways and Delta go in and do a packaged bid to split up assets. I am definitely against this as I think the airline system is very healthy the way it is. No growth or very limited growth over the next 5 years is what I think would do well for the industry.

Topic: RE: DL Interested In Acquiring AMR?
Username: commavia
Posted 2012-01-12 10:44:14 and read 38592 times.

Quoting tsnamm (Reply 17):
While many in the industry see consolidation as good and inevitable, the government seemingly doesn't.

I disagree - I think regulators in the last few years actually have woken up to the industry's chronic capital destruction problem, and have recognized the value and need for consolidation. Nonetheless, I think this has a limit. And allowing the nation's second largest airline to acquire its third largest, and in the process lock up around one third of the nation's airline capacity, is - I suspect - far beyond that limit.

Quoting tsnamm (Reply 17):
With the possible exception of US, I couldn't envision any other merger or acquisition will get any green light.

Agreed. While I'm not necessarily predicting or advocating it, I do think an AA-USAirways merger could get regulatory approval. I do not think the same is true of any AA-Delta transaction, short of something so limited and watered down so as to - in my estimation - make it not worth the time, money and effort for either party.

Quoting tsnamm (Reply 17):
Unless AA liquidates DL won't be cherry picking their assets.

  

Agreed.

[Edited 2012-01-12 10:46:00]

Topic: RE: DL Interested In Acquiring AMR?
Username: tsnamm
Posted 2012-01-12 10:53:34 and read 38410 times.

Quoting commavia (Reply 20):
I disagree - I think regulators in the last few years actually have woken up to the industry's chronic capital destruction problem, and have recognized the value and need for consolidation. Nonetheless, I think this has a limit.

I agree with your assessment overall ; I was speaking in terms of this particular match up. As you say, their acceptance has limits, and this scope of a merger well exceeds it. A domestic industry with 2 mega carriers, 1or 2 medium ones,and a few smaller ones is a scenario regulators would surely want to avoid.

Topic: RE: DL Interested In Acquiring AMR?
Username: LDVAviation
Posted 2012-01-12 10:53:39 and read 38437 times.

Clever move by Delta. They are trying to entice US Airways to make a bid. They want to muddle the process.

Now, the TPG bid on the other hand could very well succeed if the strategic partner were a Oneworld airline or two.

Topic: RE: DL Interested In Acquiring AMR?
Username: LAXdude1023
Posted 2012-01-12 10:54:26 and read 38390 times.

Ironic that some of the same posters cheering this were the ones up in arms about US acquiring DL several years ago.

I guess there is no objectivity left.

Topic: RE: DL Interested In Acquiring AMR?
Username: yellowtail
Posted 2012-01-12 10:56:59 and read 38339 times.

You guys forget that ultimately there is only one way to survive in the airline industry...and that is grow. and ultimately at some point the only way to grow is to buy competitors.

If US and DL were to come up with joint bid where DL gets JFK, MIA and LAX and US gets DFW, LGA and ORD I see no problem with this this...both carriers would be stronger. US (presumably keeping the AA brand) would then go into OW and you would have three very strong legacy carriers competing vigorously, with 2 very strong LCCs (WN and B6) and some nice niche player NK, AS and HA. Sounds like a sound air transportation system to me.

DL would have ATL, MIA, JFK, LAX, MSP, SLC and a small hub at LGA.
US (AA) would have PHX, DFW, CLT, PHL, ORD
UA would have EWR, IAD, ORD, DEN, IAH and SFO

Topic: RE: DL Interested In Acquiring AMR?
Username: dtw9
Posted 2012-01-12 11:12:19 and read 39521 times.

Quoting yellowtail (Reply 24):
DL would have ATL, MIA, JFK, LAX, MSP, SLC and a small hub at LGA.
US (AA) would have PHX, DFW, CLT, PHL, ORD
UA would have EWR, IAD, ORD, DEN, IAH and SFO

So you're saying Delta would just close their second largest hub at DTW?

Topic: RE: DL Interested In Acquiring AMR?
Username: kiwiandrew
Posted 2012-01-12 11:17:43 and read 39855 times.

Quoting LDVAviation (Reply 22):
Clever move by Delta. They are trying to entice US Airways to make a bid. They want to muddle the process.

  


I think we may have a winner here.

I cannot believe that DL would seriously bid with any hope of being allowed to take over AA. I simply cannot imagine any regulatory body permitting the acquisition of AA by either of the other 'big three' players DL or UA. There would be way too much concentration of market share.

Topic: RE: DL Interested In Acquiring AMR?
Username: LDVAviation
Posted 2012-01-12 11:21:22 and read 40347 times.

Quoting yellowtail (Reply 24):
You guys forget that ultimately there is only one way to survive in the airline industry...and that is grow. and ultimately at some point the only way to grow is to buy competitors.

If US and DL were to come up with joint bid where DL gets JFK, MIA and LAX and US gets DFW, LGA and ORD I see no problem with this this...both carriers would be stronger. US (presumably keeping the AA brand) would then go into OW and you would have three very strong legacy carriers competing vigorously, with 2 very strong LCCs (WN and B6) and some nice niche player NK, AS and HA. Sounds like a sound air transportation system to me.

DL would have ATL, MIA, JFK, LAX, MSP, SLC and a small hub at LGA.
US (AA) would have PHX, DFW, CLT, PHL, ORD
UA would have EWR, IAD, ORD, DEN, IAH and SFO

What you seem to forget is that all three of AA's major unions have a seat on the unsecured creditors committee. If they are scared of losing their jobs now, what do you think your proposal would do for their peace of mind?

Ironically, the hint of a Delta or US bid will only serve to unify the AA unions around a cause, saving the AA enterprise as it is. That's exactly what happened at Delta after US made an unsolicited bid for them.

Topic: RE: DL Interested In Acquiring AMR?
Username: TeamInTheSky
Posted 2012-01-12 11:23:28 and read 40385 times.

I got it Gents! This is FINALLY DL's way to get their hands on AS, which has been their target all along per this outlet.

Topic: RE: DL Interested In Acquiring AMR?
Username: rjm777ual
Posted 2012-01-12 11:31:14 and read 39953 times.

Wow good move by DL. If they do in fact buy AA, they can possibly open up more asian routes to compete with UA and their huge asian network.

Topic: RE: DL Interested In Acquiring AMR?
Username: srbmod
Posted 2012-01-12 11:42:16 and read 39495 times.

If DL is going to make a play for AA, I see it being something more along the lines of the abortive merger between UA and US about a decade ago. Some US assets were going to be spun off into a separate airline (DC Air) and some were going to be sold to AA. But the question is, who would join them in the breaking up of AA? US is of course a likely answer, but what about someone like JetBlue or Virgin America?

If this were to come to fruition, here's my DL hub lineup post-buyout:

ATL
DTW
MSP
LAX
NYC (JFK/LGA)

I could see them having MIA and DFW as focus cities with some international services to key European markets.


Do I see this actually happening? No, as there are far too many potential anti-trust hurdles to make this workable without complicating the deal by bringing in other competitors to purchase assets.

I think that the more likely option is that TPG Capital will take the airline private as part of a "club deal" with some other private equity investment firms, since that will not be under as much scrutiny as if an airline or a group of airlines made a play for them. Then again, TPG Capital was the company that bought Midwest Air Group in order to stave off the hostile takeover bid from AirTran. TPG Capital lost a lot on that deal considering they bought Midwest for $452 million and eventually sold the airline to Republic for $31 million. Of course AA would be a whole different kettle of fish in comparison to YX.

Topic: RE: DL Interested In Acquiring AMR?
Username: catiii
Posted 2012-01-12 11:43:44 and read 39412 times.

Could it be a move by DL to force US' hand, and thus begin the industry consolidation endgame in the United States? There's no doubt in my mind that Doug Parker already had a strategy in place before AA went into Chapter 11 as to how US would react, and my sense is that DL knows this and wants to force them to make a move so they can see how things shake out.

Topic: RE: DL Interested In Acquiring AMR?
Username: Viscount724
Posted 2012-01-12 11:43:46 and read 39338 times.

Quoting yellowtail (Reply 24):
If US and DL were to come up with joint bid where DL gets JFK, MIA and LAX and US gets DFW, LGA and ORD I see no problem with this this...both carriers would be stronger. US (presumably keeping the AA brand) would then go into OW and you would have three very strong legacy carriers competing vigorously, with 2 very strong LCCs (WN and B6) and some nice niche player NK, AS and HA. Sounds like a sound air transportation system to me.

Sounds like a very good solution to me. Even with recent consolidation the U.S. doesn't need as many carriers as it has. It would also make U.S. airlines stronger competitors in international markets, as they would be able to focus on competing with their many foreign competitors rather than with each other.

Will be interesting to see how it plays out.

Topic: RE: DL Interested In Acquiring AMR?
Username: Tdan
Posted 2012-01-12 11:44:06 and read 39286 times.

Won't happen unless AA is broken up into pieces and acquired by DL, UA and US due to antitrust issues. Don't think UA and US will sit on the sidelines with this news. Doug will be VERY aggressive in pursuing some of AA's assets...particularly DFW. Also, the unions could make a deal with AA management in order to prevent a possible takeover or breakup of the company. In the end, I think the unions and management make a deal and AA emerges from bankruptcy. There's a long way to go with this one and it will be interesting to follow!

Topic: RE: DL Interested In Acquiring AMR?
Username: Macsog6
Posted 2012-01-12 11:45:24 and read 39246 times.

Quoting kiwiandrew (Reply 26):
I cannot believe that DL would seriously bid with any hope of being allowed to take over AA. I simply cannot imagine any regulatory body permitting the acquisition of AA by either of the other 'big three' players DL or UA. There would be way too much concentration of market share.

Let's not forget that this would also require foreign regulatory approval. AA being acquired would likely mean the end of 1W as AA would be merged into ST and I cannot see the other regulatory bodies about the world letting it get to two alliances.

Topic: RE: DL Interested In Acquiring AMR?
Username: jayspilot
Posted 2012-01-12 11:48:20 and read 39021 times.

First off I don't think it will happen and its just talk. Of course people at other carriers are going to try but I think that the asset holder at AA who has a vote in the sale will see the most value in their purchase as one compnay (like Delta's asset holders did when US tried this crap in 2007) If they do go after something I bet it will be to try to pick off a hub (with gates and equipment to operate it) where DL doesn't have a strong position. MIA is the first thing to come to mind for me, Going after half of DFW reclaming that city as a hub doesn't seem like a logical move, maybe Lax to have a direct Asia presense. But again if something does happen I see it as similar to the DL pick off of PA in JFK 20 years ago.

I think once AA clears up the leases and gets a lot of concession's see a much stronger cash position and a compnay that can stand and win/compete on its own. Get ready in 10-14 months to see "keep AA my AA" stickers  

Topic: RE: DL Interested In Acquiring AMR?
Username: deltaflyertoo
Posted 2012-01-12 11:53:18 and read 38891 times.

The reality is to get the US market fully balanced (its only half way there) an airline has to die. There is still too much capacity. For years peeps thought United would be it, now prolly not. Then it was US, well they're sticking around at least for short term. THEN everyone thought it would be and should be AMR (esp with a dual hub w/ UAL in ORD bloating capacity not just at ORD but nationwide on connections when paired w/ DFW). If AMR doesn't merge and comes out of Ch 11-even w/ capacity cuts, there will still be way too much to profitably sustain all the players.

STT757 in reply 3 actually lays out a really convincing model as to how this could potentially shake out. Basically it would def lower capacity, and thus allow for higher fares in return better profitability.

Topic: RE: DL Interested In Acquiring AMR?
Username: LAXdude1023
Posted 2012-01-12 11:55:10 and read 38844 times.

This may well be DL trying to force US to come out of hiding and reveal their intentions.

I cannot see this passing any hurdles from a anti trust stand point without serious concessions.

Topic: RE: DL Interested In Acquiring AMR?
Username: commavia
Posted 2012-01-12 11:57:57 and read 38781 times.

Quoting deltaflyertoo (Reply 36):
The reality is to get the US market fully balanced (its only half way there) an airline has to die. There is still too much capacity. For years peeps thought United would be it, now prolly not. Then it was US, well they're sticking around at least for short term. THEN everyone thought it would be and should be AMR (esp with a dual hub w/ UAL in ORD bloating capacity not just at ORD but nationwide on connections when paired w/ DFW). If AMR doesn't merge and comes out of Ch 11-even w/ capacity cuts, there will still be way too much to profitably sustain all the players.

There is no need for AMR to cease to exist in order for the U.S. airline industry to reach a sustainable, profitable equilibrium. Again, the U.S. airline industry is really already there now - it's broadly profitable, except AMR. And, once AMR's cost structure and business model is radically transformed in bankruptcy - just as happened at their peers - they should be profitable, too.

Quoting deltaflyertoo (Reply 36):
STT757 in reply 3 actually lays out a really convincing model as to how this could potentially shake out. Basically it would def lower capacity, and thus allow for higher fares in return better profitability.

You may find that hypothetical scenario plausible and "convincing." I, personally, don't in the slightest. Again, I realize that some people - especially those who have a certain personal affinity for one of AA's competitors - love to salivate over this, but I don't see it happening. Perhaps that's because many, deep down, realize that AA dramatically lowering their costs in bankruptcy - just as their peers did - is going to be a huge change (and challenge) for the competition. The reality is likely going to shake out for AMR just as it did for other bankrupt airlines in the last ten years: for all the uncertainty, speculation and drama, they will likely emerge, independent, and dramatically more competitive.

Topic: RE: DL Interested In Acquiring AMR?
Username: 1337Delta764
Posted 2012-01-12 12:12:27 and read 38324 times.

If DL does buy out AMR, expect US Airways to quickly jump to Oneworld to fill in the void left by AA leaving.

Topic: RE: DL Interested In Acquiring AMR?
Username: OA412
Posted 2012-01-12 12:14:21 and read 38162 times.

Let me begin by saying that I am generally against mergers (yes really), and really hope that AA remains a standalone carrier. However, I have always said that, as a fantasy grouping, a combined DL/AA under the AA brand would be an awesome force to be reckoned with. Hypothetically speaking, they'd have almost everything that UA/CO has, along with the one thing they do not, the MIA hub. That said, I can't see this happening for a variety of reasons, but I actually do think that it could be a very interesting match-up.

Topic: RE: DL Interested In Acquiring AMR?
Username: yellowtail
Posted 2012-01-12 12:26:52 and read 37701 times.

Quoting dtw9 (Reply 25):
So you're saying Delta would just close their second largest hub at DTW?

No, just missed that one. sorry to the dtw fans.

Quoting commavia (Reply 38):
I realize that some people - especially those who have a certain personal affinity for one of AA's competitors - love to salivate over this, but I don't see it happening.

I propose that as part of the a.net registration process that everyone must declare their loyalties and this will appear with their screen name  
Quoting commavia (Reply 38):
Perhaps that's because many, deep down, realize that AA dramatically lowering their costs in bankruptcy - just as their peers did - is going to be a huge change (and challenge) for the competition.

And will probably send everyones domestic networks back into the red again.

IHO One of three things needs to happen for a healthy US airline industry. More consolidation, Less capacity from everyone, or one of the major carriers call its quits.

Topic: RE: DL Interested In Acquiring AMR?
Username: fpofllflyboi
Posted 2012-01-12 12:27:04 and read 37660 times.

If and only if it happens, sounds like alot more job losses, more metal being placed in storage possibly, higher fares and the list I'm sure goes on. Yah, its a win for the traveler. Oh well.   

[Edited 2012-01-12 12:27:56]

Topic: RE: DL Interested In Acquiring AMR?
Username: avek00
Posted 2012-01-12 12:32:59 and read 37534 times.

Quoting commavia (Reply 7):
I simply do not see any way that any administration is going to allow one airline to grow that large through an acquisition.

Antitrust law would not generally block a DL/AA combo depending on the concessions offered at a few key airports. There's nothing wrong, in and of itself, with being gigantic so long as effective competition is able to enter a given market and fairly compete.

Topic: RE: DL Interested In Acquiring AMR?
Username: 1337Delta764
Posted 2012-01-12 12:35:48 and read 37602 times.

One dilemma that DL will have to face is whether to keep the Delta name or the American name. Both names seem to be equally recognizable globally, so this will be a tough decision. Hopefully DL doesn't drop their livery for AA's ancient one.

Also, another dilemma that DL will face is which breast cancer organization a merged DL/AA will choose to align with. DL is aligned with the Breast Cancer Research Foundation, while AA is aligned with Susan G. Komen for the Cure. Please let it be the BCRF and keep the pink 764ER!

[Edited 2012-01-12 12:38:52]

Topic: RE: DL Interested In Acquiring AMR?
Username: micstatic
Posted 2012-01-12 12:43:15 and read 37128 times.

Quoting commavia (Reply 38):
There is no need for AMR to cease to exist in order for the U.S. airline industry to reach a sustainable, profitable equilibrium. Again, the U.S. airline industry is really already there now - it's broadly profitable, except AMR. And, once AMR's cost structure and business model is radically transformed in bankruptcy - just as happened at their peers - they should be profitable, too.

I agree, it is profitable now. But most in the industry are predicting a downward trend coming over the next few years. As stated above, a good move by Delta as it could push AA to reveal more about their post CH11 plans. I am one who is gone on record as saying I haven't heard nearly enough to suggest that AA has planned any major changes other than cutting labor cost. Maybe we'll here more soon, and I'll be a believer. But I don't see the current Cornerstone strategy as their best bet.

Quoting commavia (Reply 38):
especially those who have a certain personal affinity for one of AA's competitors

Cmon, like you don't have one for American? Nonetheless, I agree their are plenty on here with certain loyalties. This will be an interesting scenario for all to observe.

Topic: RE: DL Interested In Acquiring AMR?
Username: Viscount724
Posted 2012-01-12 12:46:14 and read 37063 times.

Quoting 1337Delta764 (Reply 44):
One dilemma that DL will have to face is whether to keep the Delta name or the American name. Both names seem to be equally recognizable globally, so this will be a tough decision. Hopefully DL doesn't drop their livery for AA's ancient one.

I think the AA name would be much better, at least in international markets, where many people have no idea who DL is or what country they're from. It's impossible to make that mistake with AA's name.

And, re the livery, even after 44 years, in my opinion AA's is much better than any of the multiple DL liveries that have come and gone during that same period. So many livery changes has also weaked DL's brand recognition since you just get used to one and then it changes again.

Topic: RE: DL Interested In Acquiring AMR?
Username: STT757
Posted 2012-01-12 12:52:09 and read 36933 times.

Quoting 1337Delta764 (Reply 39):
If DL does buy out AMR, expect US Airways to quickly jump to Oneworld to fill in the void left by AA leaving.

Why wouldn't DL switch to OneWorld. BA is a much stronger partner than AF, which is having big financial problems right now.

Topic: RE: DL Interested In Acquiring AMR?
Username: yellowtail
Posted 2012-01-12 12:52:22 and read 36890 times.

Quoting 1337Delta764 (Reply 44):
One dilemma that DL will have to face is whether to keep the Delta name or the American name. Both names seem to be equally recognizable globally, so this will be a tough decision. Hopefully DL doesn't drop their livery for AA's ancient one.

AA is generally a more recognizable name but Delta is a better global brand name. Will be hard to sell an intra-asian ticket with a brand such a AMERICAN airlines.

I would also suggest that at least in my part of the world the AA brand has lost a lot of its lustre.

Quoting Viscount724 (Reply 46):
I think the AA name would be much better, at least in international markets, where many people have no idea who DL is or what country they're from. It's impossible to make that mistake with AA's name.

Not knowing what country they are from is actually a plus.

Maybe they could resurrect Pan-Am
  

Topic: RE: DL Interested In Acquiring AMR?
Username: mogandoCI
Posted 2012-01-12 12:59:18 and read 36580 times.

Quoting commavia (Reply 38):
Again, I realize that some people - especially those who have a certain personal affinity for one of AA's competitors -

As supposed to you who is Switzerland incarnate ?

Topic: RE: DL Interested In Acquiring AMR?
Username: SATexan
Posted 2012-01-12 13:00:56 and read 36721 times.

WSJ is now reporting that US Airways is also evaluating a possible bid for AMR; They have hired advisors to evaluate the same. This is getting interesting now  

Topic: RE: DL Interested In Acquiring AMR?
Username: silentbob
Posted 2012-01-12 13:05:14 and read 36514 times.

Quoting avek00 (Reply 43):
There's nothing wrong, in and of itself, with being gigantic so long as effective competition is able to enter a given market and fairly compete.

Given the way DL has acted when other airlines have attempted to "intrude" on their hubs or core routes, it would be hard for DL to claim that effective competition was possible.

Quoting micstatic (Reply 45):
As stated above, a good move by Delta as it could push AA to reveal more about their post CH11 plans.

No, it won't. It will require AA (as well as US) and another other bidders to make the offer more lucrative to the creditor committee. That will make it more expensive to exit bankruptcy and be a larger financial burden to the company over the long term.

Topic: RE: DL Interested In Acquiring AMR?
Username: Viscount724
Posted 2012-01-12 13:07:05 and read 35919 times.

Quoting yellowtail (Reply 48):
AA is generally a more recognizable name but Delta is a better global brand name. Will be hard to sell an intra-asian ticket with a brand such a AMERICAN airlines.

It didn't seem to be a problem for Pan American, Swissair, British Airways, Air France, and many others, all of which over the years carried many thousands of intra-Asia passengers in the days when 5th freedom operations were much more common. For example, at one time almost all major European carriers had 5th freedom service between Hong Kong and Tokyo.

Topic: RE: DL Interested In Acquiring AMR?
Username: 1337Delta764
Posted 2012-01-12 13:07:58 and read 35950 times.

Here are some things that DL and AA share in common (not including fleet):
- Common model of Y seat, the Weber 5751 (although DL will be using the B/E Aerospace Pinnacle on the A330s and 739ERs).
- Possible common J seat (the Weber/Sicma Cirrus, which is rumored to be the new J seat on AA's 773ERs).
- Common new IFE system (the Panasonic eX2 with Eco 9i Integrated Smart Monitors).

Topic: RE: DL Interested In Acquiring AMR?
Username: TOMMY767
Posted 2012-01-12 13:09:07 and read 35886 times.

Could it be possible that DL and US buy out AA and split it up? Is that even legal?

Quoting commavia (Reply 5):
I think Delta may well be interested in picking apart certain pieces of AMR, but I don't expect that to be successful.
Quoting yellowtail (Reply 14):
DL would grab DFW, MIA, LAX.

MIA for sure...that IMHO is the crown jewel.

MIA, DFW, LAX. DL has the momentum to make them profitable hubs and take it away from AA's high cost hands. An MIA hub could in turn affect them at ATL (ala AA RDU vs. MIA) so this also deserves some considerable thought.

Quoting yellowtail (Reply 24):

DL would have ATL, MIA, JFK, LAX, MSP, SLC and a small hub at LGA.
US (AA) would have PHX, DFW, CLT, PHL, ORD
UA would have EWR, IAD, ORD, DEN, IAH and SFO

That would be an insane situation. My thought would be that US would buy assets from AA, but they would keep the AA name and have it run by Dougie.

Topic: RE: DL Interested In Acquiring AMR?
Username: commavia
Posted 2012-01-12 13:15:16 and read 35665 times.

Quoting yellowtail (Reply 41):
And will probably send everyones domestic networks back into the red again.

IHO One of three things needs to happen for a healthy US airline industry. More consolidation, Less capacity from everyone, or one of the major carriers call its quits.

How will a healthy AMR bring everybody else back into the red? On the contrary, a restructured AMR can be more competitive with other carriers who already have lower costs, and restore more stability to the marketplace by removing uncertainty to one of the largest market participants. Again - there is no need for AMR to cease to exist in order for the U.S. airline industry to be profitable, and there is no need for other airlines to start losing money just because, or in order for, AMR to start making money.

Quoting avek00 (Reply 43):
Antitrust law would not generally block a DL/AA combo depending on the concessions offered at a few key airports. There's nothing wrong, in and of itself, with being gigantic so long as effective competition is able to enter a given market and fairly compete.

I don't buy it - not for a minute. I do not believe this would pass regulatory approval without requiring so many concessions so as to render the underlying logic of the deal moot.

Quoting micstatic (Reply 45):
I am one who is gone on record as saying I haven't heard nearly enough to suggest that AA has planned any major changes other than cutting labor cost. Maybe we'll here more soon, and I'll be a believer.

Well, AMR hasn't announced any major changes of any kind - labor or otherwise - yet. That will come in the near future. Nonetheless, they have already started rejected leases on facilities and aircraft, and indeed Delta and United were each able to shave hundreds of millions per year off of their costs from just that alone. Labor will also be a huge component of cost reduction, and that, too, will come in time.

Quoting micstatic (Reply 45):
Cmon, like you don't have one for American? Nonetheless, I agree their are plenty on here with certain loyalties. This will be an interesting scenario for all to observe.
Quoting mogandoCI (Reply 49):
As supposed to you who is Switzerland incarnate ?

I never suggested that I don't have my own affinities and biases myself. Of course I do. But that doesn't mean that people aren't salivating and hoping out loud for things that would obviously be very beneficial to their own personal favorite carriers. This is no different that all of the hysterical A.net discussion back several years ago about how United might liquidate, who would get which pieces of Delta if it were broken up, who Continental might merge with, and on and on. Now I'm the first to admit - I engaged in those purely speculative and hypothetical discussions then, as others are now, because they are interesting and thought-provoking. But, for all the A.net discussion, I see absolutely no reason why AMR's bankruptcy won't ultimately turn out just like all those did - far less drama than was predicted by the A.net constellation of experts.

Again, I think it could very reasonably be argued that AMR has entered the bankruptcy process in a far, far stronger position than Delta, Northwest, United or USAirways did in the last decade. AMR has undergone a decade of major cost cutting, and been forced to continually restructure due to the serial bankruptcies of their peers. AMR has a massive upside potential in two of the largest areas of strategic improvement - fleet and labor - because of where it stands today relative to its peers. And AMR has its own financing, and didn't need to seek DIP financing while standing virtually on death's door. Given all that, I find most of this talk of AA being split up, sold off, broken up, bought by Delta, etc. to be just as interesting, and ultimately meaningless, if not more so, than it was when the same conversations were being had about Delta, Northwest, United and USAirways several years ago.

Topic: RE: DL Interested In Acquiring AMR?
Username: ScottB
Posted 2012-01-12 13:17:21 and read 35603 times.

Quoting LAXdude1023 (Reply 37):
This may well be DL trying to force US to come out of hiding and reveal their intentions.

Perhaps Delta's goal is to bid up the price for US, thus making the "new" American's capital structure less competitive after reorganization. Or perhaps the goal is to gain an asset like MIA or DFW as the result of a negotiation to drop a bid for AMR.

Quoting 1337Delta764 (Reply 44):
Also, another dilemma that DL will face is which breast cancer organization a merged DL/AA will choose to align with.

While breast cancer research & care is an important cause, this dilemma is pretty far down the list.

Quoting Tdan (Reply 33):
Also, the unions could make a deal with AA management in order to prevent a possible takeover or breakup of the company. In the end, I think the unions and management make a deal and AA emerges from bankruptcy.

With three creditors' committee seats, AA's organized labor groups will indeed play an important role -- but it's not impossible that a potential suitor would make a takeover worth their while.

Topic: RE: DL Interested In Acquiring AMR?
Username: srbmod
Posted 2012-01-12 13:53:02 and read 34458 times.

Quoting STT757 (Reply 47):
Why wouldn't DL switch to OneWorld.

Because they are one of the founders of SkyTeam and without DL, that alliance would likely be dissolved. I would highly doubt DL would leave SkyTeam, who would they bring in, US Airways? US Airways doesn't have the network DL does.

Quoting TOMMY767 (Reply 54):
Could it be possible that DL and US buy out AA and split it up? Is that even legal?

It can be done. As I mentioned earlier, when US and UA tried to merge about a decade ago, some assets of US were to be spun off into a new airline based at DCA (DC Air) and some assets were to be sold off to AA. Even with those plans, the merger stalled because it became quite clear that they could not get approval for the merger (There was some uncertainty about whether DC Air would truly be an independent airline or would United be pulling the strings there.). Of course this was all before 9/11, and that changed the environment within the airline industry immensely. The main reason for the proposed asset divestiture was due to UA and US having significant market share at IAD and DCA respectively.

Quoting ScottB (Reply 57):
Perhaps Delta's goal is to bid up the price for US, thus making the "new" American's capital structure less competitive after reorganization. Or perhaps the goal is to gain an asset like MIA or DFW as the result of a negotiation to drop a bid for AMR.

But of course there is some risk to that strategy. What if DL makes an offer that US doesn't match. This is how TPG Capital ended up with Midwest, as they upped their offer and AirTran walked away from the bidding.

To be quite honest, if DL wanted to hub at DFW again, they could simply ramp up operations instead of buying AA (or AA assets). They could just simply shift operations from MEM to DFW.....

Topic: RE: DL Interested In Acquiring AMR?
Username: catiii
Posted 2012-01-12 13:53:43 and read 34418 times.

Quoting STT757 (Reply 47):

Why wouldn't DL switch to OneWorld. BA is a much stronger partner than AF, which is having big financial problems right now.

One reason I can think of is that they have an approved JV with AF/KL on the books, and CDG isn't a slot constricted airport in the way LHR is. They would have to go through the regulatory process all over again to have the same with BA.

As an aside, with what little I know about antitrust law, I would like to see the antitrust theory that DL says would allow for them to acquire AMR wholly or in pieces. Seems like it might be a reach.

[Edited 2012-01-12 13:59:32]

Topic: RE: DL Interested In Acquiring AMR?
Username: TOMMY767
Posted 2012-01-12 13:59:54 and read 34258 times.

Quoting srbmod (Reply 57):
To be quite honest, if DL wanted to hub at DFW again, they could simply ramp up operations instead of buying AA (or AA assets). They could just simply shift operations from MEM to DFW.....
Quoting srbmod (Reply 57):

I recall DC Air. That merger would have been a pisser had it ever come to be. But that was created on the behalf of US/UA merging. In this situation, would DL and US bid together and then agree to split AA? I'm just wondering how such a situation would occur? Is AA that vulnerable in chapter 11?

Mark my words though -- if US buys out AA they will keep the American name. USAirways don't mean jack overseas.

EDIT: DL doesn't have enough at MEM to transfer it all to DFW. It's become a very small hub over the last few years.

[Edited 2012-01-12 14:02:58]

Topic: RE: DL Interested In Acquiring AMR?
Username: DeltaMD90
Posted 2012-01-12 14:02:36 and read 34165 times.

Lol of course the obvious posters taking the obvious positions. I'd love for it to happen, but I don't see if passing DOJ, even if concessions are made. The current administration would be against it, IMO. I think they'd be against an AA cut up.

Really, I think DL is trying to catch US off balance and get a piece or two of AA. Many seem to be hinting towards a AA+US merger, so why not try and snag a hub or two?

Don't forget, however, AA has great potential to be a strong stand alone airline, and that is something investors will be considering.

PS: I doubt DL would leave ST and their great relationship with AF/KL/AZ. And US would definitively want AA's brand, I think DL's is strong enough

Topic: RE: DL Interested In Acquiring AMR?
Username: ripcordd
Posted 2012-01-12 14:11:52 and read 33981 times.

AA wont just sell 1 hub either DFW or MIA they are the future of the company and with MIA growing and a long list of future routes it will be a cash cow for a very very long time. I see MIA making more in profits than DFW down the road. DL just wants to force US hand and drive up the price the same way the did when they bid up JAL its just a game. I'm sure DL would love to get LAX/MIA/JFK/DFW from AA but they would rule the airline world for a very long time if they did.

Topic: RE: DL Interested In Acquiring AMR?
Username: realsim
Posted 2012-01-12 14:16:18 and read 33777 times.

I don't see it happening at all. Not only there would be competition concerns, but also there would be a lot of political implications here: for example, Texas would "lose" its two legacies (UA at ORD, AA/DL at ATL). And it would be difficult for the Administration to justify so much consolidation and its consequences: higher fares, less capacity, less domestic connections for small/medium markets, etc. Apart from that, there's also alliances. OneWorld carriers won't allow it, specially BA, but also QF, CX or QF.

Quoting TOMMY767 (Reply 54):
MIA, DFW, LAX. DL has the momentum to make them profitable hubs and take it away from AA's high cost hands. An MIA hub could in turn affect them at ATL (ala AA RDU vs. MIA) so this also deserves some considerable thought.

Yes, I don't know why everyone here assumes that MIA would be great for DL's: all Latin American routes would be moved to MIA ipso facto, and ATL would become smaller as a global hub. Anyway, one thing I'm sure is that, if DL tried to purchase MIA, UA would react, because MIA fits a lot better in the new UA than in DL.

Topic: RE: DL Interested In Acquiring AMR?
Username: KC135TopBoom
Posted 2012-01-12 14:17:23 and read 33814 times.

I really hope this happens. I would love to see DL returning to DFW as a hub. DL could pick up more than T-8 at JFK, and slots at LGA. They would also return a bigger operation at BOS. They would also get to pick and choose which AA airplanes they may want, and future deliveries and the Boeing and Airbus order (parts of which may get canceled, DL doesn't need 460 new airplanes), but they will get AAs huge maintenance facilities at TUL and AFW. Of course they will have to take many of AA's employees, and some of its management. I wonder if they would also want AMR's HQ that is just south of DFW?

Would they keep the AA code share agreement with BA, and get AA's slots at LHR?

Topic: RE: DL Interested In Acquiring AMR?
Username: srbmod
Posted 2012-01-12 14:28:18 and read 33499 times.

Quoting TOMMY767 (Reply 59):

I recall DC Air. That merger would have been a pisser had it ever come to be. But that was created on the behalf of US/UA merging. In this situation, would DL and US bid together and then agree to split AA? I'm just wondering how such a situation would occur? Is AA that vulnerable in chapter 11?

The airline industry of 2000-9/10/2001 was a completely different landscape that what the industry became after the 9/11 Attacks. I think that had the UA/US merger been attempted post-9/11 and not before, it would have been more likely to have been approved. The spinoff of DCA assets was something they knew would need to be done in order to even have a chance of approval and was part of the deal from the outset, as the owner of DC Air was to have been Robert Johnson, who was a director on US Airways' board.

http://www.businessweek.com/2000/00_46/b3707155.htm

They probably would have stood a better chance of getting it approved had they offered to sell those DCA assets to another airline instead of selling them to someone who had close ties to one of the airlines in the merger from the start. By the time AA got involved into the mix, the damage was done.

The airlines (as well as investment groups) learned a lot from that failed merger and looking at the major airline mergers of US and HP, DL and NW, UA and CO and even WN and FL, they've tried to avoid situations in which red flags are raised by the government.

At this point, any buyout of AA by any airline will require multiple parties in order to avoid any anti-trust complications that could scuttle the whole deal.

Topic: RE: DL Interested In Acquiring AMR?
Username: AirGabon
Posted 2012-01-12 14:30:00 and read 33513 times.

Quoting STT757 (Reply 47):
Why wouldn't DL switch to OneWorld. BA is a much stronger partner than AF, which is having big financial problems right now.

DL will never leave SkyTeam because, not only of the JV, but also of the very strong links with AF, KL, AZ and even KE, AM and SU.

OneWorld has less commercial links and synergies between airlines than SkyTeam.

And don't forget the access to the Chinese market with CZ and MU.

AF has financial problems but not as exagerate as it is stated in the other topic! And CDG despite the usual critics is a very powerful hub for DL giving an excellent coverage of Europe and Africa. And don't forget also the French domestic market, one of the biggest in Europe, despite the competition of the TGV.

So for sure, DL and AF & KL will collaborate for a long time.

Topic: RE: DL Interested In Acquiring AMR?
Username: klkla
Posted 2012-01-12 14:42:40 and read 33140 times.

Quoting ScottB (Reply 56):
Perhaps Delta's goal is to bid up the price for US, thus making the "new" American's capital structure less competitive after reorganization. Or perhaps the goal is to gain an asset like MIA or DFW as the result of a negotiation to drop a bid for AMR.

This makes the most sense.

From an anti-trust standpoint the only major assets DL could buy with no regulatory resistance would be the MIA and LAX operations, which would be a perfect fit. The rest would go to US.

Topic: RE: DL Interested In Acquiring AMR?
Username: jetlanta
Posted 2012-01-12 14:50:54 and read 32948 times.

Quoting avek00 (Reply 43):
Antitrust law would not generally block a DL/AA combo depending on the concessions offered at a few key airports. There's nothing wrong, in and of itself, with being gigantic so long as effective competition is able to enter a given market and fairly compete.

Exactly, and if the surviving carrier were to agree to divest the majority of AA LGA/JFK slots to other carriers, there would be virtually no legal justification to stop it. We heard the same bunch of "no way the government will let this happen" crap when DL bought NW. I vehemently argued that merger would be allowed to proceed AND there would be no divestitures required, which is exactly what happened. It simply did not violate the law, which has concrete hurdles rather than arbitrary "feelings".

The same is true here. There would be divestitures involved, which would almost exclusively involve NYC. Beyond that, there is no place where the combined carrier reaches the level of market concentration that warrants rejection.

The bottom line is that the combined carrier would have less than 30% revenue share in a network business. The laws that applies are is similar to the laws that apply in telecom, where several mergers have been allowed that sent providers over 30%. This deal would not begin to approach the market concentration that the failed AT&T/T-Mobile deal would have led to. And even that deal wasn't a no-brainer rejection.

There are lots of reasons an AA/DL probably won't happen...U.S. anti-trust law is not likely one of them.

Topic: RE: DL Interested In Acquiring AMR?
Username: STT757
Posted 2012-01-12 14:53:31 and read 32997 times.

Quoting KC135TopBoom (Reply 63):
I really hope this happens. I would love to see DL returning to DFW as a hub. DL could pick up more than T-8 at JFK, and slots at LGA.

If you read the Wall Street Journal article it's pretty clear DL is going into this without any misconceptions regarding getting approval (divestitures). They're not going to get more slots at LGA, especially in light of the recent slot swap. Same with JFK, although AA's T-8 is of no concern to anti-trust regulators. In fact the ad-hoc approach to DL's JFK terminal redevelopment leads open the possibility of DL not moving in to the expanded T-4. T-4 was going to need to be expanded anyway, with or without DL. It's not like AA's demise and DL's moving to T-8 would leave T-4 empty, the terminal is jam packed already. The capacity being added to T-4 will be utilized with or without DL.

Quoting KC135TopBoom (Reply 63):
They would also return a bigger operation at BOS.

AA doesn't add much at BOS.

Quoting KC135TopBoom (Reply 63):
but they will get AAs huge maintenance facilities at TUL and AFW

It's been rumored AA is looking at closing one or both of those facilities, I think DL would do just the same and focus on ATL for some maintenance and out source the rest to HAECO etc..

Quoting KC135TopBoom (Reply 63):
Would they keep the AA code share agreement with BA, and get AA's slots at LHR?

That's why I see DL saying so long to AF and Skyteam, the Oneworld Alliance and their Joint Venture from Heathrow are huge assets.

Quoting AirGabon (Reply 65):
DL will never leave SkyTeam because, not only of the JV, but also of the very strong links with AF, KL, AZ and even KE, AM and SU.

AF and CDG vs BA and LHR. It's not a tough decision.

Quoting srbmod (Reply 64):
They probably would have stood a better chance of getting it approved had they offered to sell those DCA assets to another airline instead of selling them to someone who had close ties to one of the airlines in the merger from the start.

Gordon Bethune offered $400 million to purchase US's slots at DCA as part of the UA/US merger.

Topic: RE: DL Interested In Acquiring AMR?
Username: NYCAdvantage
Posted 2012-01-12 14:54:09 and read 32866 times.

Quoting ScottB (Reply 56):
Perhaps Delta's goal is to bid up the price for US

Maybe, but it also could be a genuine bid, Delta could see US as a real partner in this bid, they have worked together already, We can all agree that there is no way Delta can buy AA alone it wont pass DOJ anti trust, but between the two of them they could even over pay for AA, Delta may get what they want,

US will get AA name,I feel that US would have to get most of JFK slots even thou Delta may want to get some to get as big as UA at EWR, LGA will go to US, what ever AA has in DCI will go to DL, DFW will be mostly for US, LHR slots maybe divided by them as LAX, DL will get MIA and some gates at JFK T8 so that the can relocate some of the airlines from T4, that way they may keep almost the whole T4 for them selves.

Topic: RE: DL Interested In Acquiring AMR?
Username: ERJ170
Posted 2012-01-12 15:29:13 and read 32184 times.

Hmm... I could see DL wanting the following of AAs:

LHR slots
Corporate Contracts
B738s
B777s
B787 slots
LAX route authorities
Brazil route authorities
JFK slots

I think DL will probably let ORD, DFW, and MIA go to other spoilers.. US may go after MIA and some LAX.. UA would go for the ORD slots, perhaps with B6 and VX, DFW would probably see a sizable decrease in service.. perhaps B6 but doubtful...

But that's just my opinion.. DL doesn't really seem to need or want MIA since it has ATL. It may add some flights but I don't see DL wanting it as a hub. I could be wrong, but that's just not what I see..

Topic: RE: DL Interested In Acquiring AMR?
Username: STT757
Posted 2012-01-12 15:37:02 and read 31894 times.

Quoting ERJ170 (Reply 71):
B787 slots

Considering DL has NWA's that they keep deferring I don't think it's a priority.

Topic: RE: DL Interested In Acquiring AMR?
Username: ERJ170
Posted 2012-01-12 15:40:38 and read 31801 times.

Quoting STT757 (Reply 73):

Considering DL has NWA's that they keep deferring I don't think it's a priority.

A slot is a slot. Just because it's a 787 slot, as DL has shown, it could be transferred to a 77W slot.. with DL, all things are possible..

Topic: RE: DL Interested In Acquiring AMR?
Username: STT757
Posted 2012-01-12 15:46:19 and read 31644 times.

Quoting ERJ170 (Reply 74):
A slot is a slot. Just because it's a 787 slot, as DL has shown, it could be transferred to a 77W slot.. with DL, all things are possible..

Again DL has NWA's firm slots plus several dozen delivery slot options (which are probably better than AA's).

Topic: RE: DL Interested In Acquiring AMR?
Username: GSPSPOT
Posted 2012-01-12 15:47:38 and read 31624 times.

Are we just going to end up with our own version of the Soviet-era Aeroflot?? This is insanity! There are few enough choices as it is now.

Topic: RE: DL Interested In Acquiring AMR?
Username: peanuts
Posted 2012-01-12 15:50:48 and read 31508 times.

Surprised by some of the "definite no" answers. Never say never. History has proven many scenarios are possible.

Anti trust fears are mostly unfounded. There are many huge, powerful companies in other industries. Regulators do realize the airline industry is a tough industry and economies of scale are crucial to keep it sustainable. Surrender a few things to make the percentages work and call it a day.

The main point, if there is any legitimacy on DL's part with this is: MIA.
Now that NYC is in "operational" mode soon, DL is setting all their eyes on Latin America.

Latin America is where it is, internationally. AA owns it. DL knows it and they want it.

Anything else is just "noise".

Topic: RE: DL Interested In Acquiring AMR?
Username: 1337Delta764
Posted 2012-01-12 15:50:50 and read 31558 times.

I wouldn't be so sure if DL would want to give up DFW. DL after all has had a hub in DFW for years until 2005. AA drove DL out of DFW, and if DL bought AA, I would think DL would want to take back their DFW hub.

Topic: RE: DL Interested In Acquiring AMR?
Username: United1
Posted 2012-01-12 16:03:23 and read 31061 times.

Quoting ERJ170 (Reply 74):
A slot is a slot. Just because it's a 787 slot, as DL has shown, it could be transferred to a 77W slot.. with DL, all things are possible..

No a slot is not just a slot at Boeing it's for that particular aircraft....and while buying AA would give them the potential to get a hold of whatever slots that Boeing has reserved for AA there are allot easier and less risky ways to get 787 slots. Remember Boeing does not sell out every single slot they leave a few open for new customers so they don't have to use the sales pitch of "sure we would love to sell you an airplane in 2020."

Quoting 1337Delta764 (Reply 79):
I wouldn't be so sure if DL would want to give up DFW. DL after all has had a hub in DFW for years until 2005. AA drove DL out of DFW, and if DL bought AA, I would think DL would want to take back their DFW hub.

Assuming a breAAkup occurred I think DL would draw down CVG and MEM fairly quickly and, using some assets acquired from AA, have a decent sized operation in DFW.

I think this raises the stakes quite a bit in AAs bankruptcy.... remember that the BK Judge is not there to preserve AA as a company or jobs. He's to recover the most for AAs creditors and if that is by breaking up the company that is what will occur.

As DL, US and TPG are now involved I'm almost certain that there are some lights on at 77 W Wacker in Chicago tonight spooling up for a bid as well. UA can't afford to sit this out and as they have very deep pockets there's a good chance they could end up with a piece of AA.

Topic: RE: DL Interested In Acquiring AMR?
Username: commavia
Posted 2012-01-12 16:04:55 and read 31000 times.

Quoting peanuts (Reply 78):
Surprised by some of the "definite no" answers. Never say never. History has proven many scenarios are possible.

Anything is possible, but I just do not see it - for countless reasons. I further see that plenty of A.net contributors who are big Delta and United fans seem to be loving the idea, just as how there were plenty of other people ten years ago salivating over United being broken up into pieces, or Delta merging, or USAirways going out of business, etc. Then as now, I continue to expect that reality will likely end up being - in this case as those - far less exciting, and far less dramatic.

Topic: RE: DL Interested In Acquiring AMR?
Username: peanuts
Posted 2012-01-12 16:09:41 and read 30911 times.

Quoting commavia (Reply 82):
Then as now, I continue to expect that reality will likely end up being - in this case as those - far less exciting, and far less dramatic.

Agreed. Most likely, yes.

Personally:
-AA emerge from Ch11 independent and remain so for a while: 50%
-AA emerge from Ch11 and announce merger with US: 40%
-AA broken up: 10%

Topic: RE: DL Interested In Acquiring AMR?
Username: 1337Delta764
Posted 2012-01-12 16:10:02 and read 31053 times.

If an AA breakup between DL and US occurs, here is what I expect for the fleet:
-DL gets 763ERs, 772ERs and 738s
-US gets 757s (which are RR-powered like the US fleet)
-US gets Airbus orders
-DL gets Boeing orders
-MD-80s go to the desert

Topic: RE: DL Interested In Acquiring AMR?
Username: DeltaMD90
Posted 2012-01-12 16:11:46 and read 30896 times.

Airlines have done stupid things in the past, but the fact that DL, US, and this other company are paying their lawyers lots of money to look into this says something... if it had a snowball's chance in hell like some posters are saying, I doubt these airlines would be shelling out money to their lawyers...

Topic: RE: DL Interested In Acquiring AMR?
Username: GSPSPOT
Posted 2012-01-12 16:17:57 and read 30756 times.

Quoting DeltaMD90 (Reply 83):
Airlines have done stupid things in the past, but the fact that DL, US, and this other company are paying their lawyers lots of money to look into this says something... if it had a snowball's chance in hell like some posters are saying, I doubt these airlines would be shelling out money to their lawyers...

Maybe, but I can't figure out WHY. DL/NW are still working out their relatively recent merger and US is still dealing with unpleasant repercussions of it's merger. Maybe these airlines see the lack of an AA out there as a positive thing, but I guarantee you, nobody else does.

Topic: RE: DL Interested In Acquiring AMR?
Username: delimit
Posted 2012-01-12 16:22:31 and read 30604 times.

Oh wow, lots of thoughts and I am on my phone so no quoting:

Jetlanta, i repect you enormously but I really have to disagree. The DOJ would sue to block, regardless of whether there is anything legal or illegal, claiming competition would be negatively impacted. The case would take years. That wouldnt necessarily stop interation work, of course, but it would be a long, ugly trial. My feeling, at least, is that DL and UA are about as large as they are comfortable with. Witness their protest of the slot swap. I don't think the DOJ is ready to see a network duopoly.

LDVAviation brought up a good point as well. The slightly labor-heavy trustees are going to take a whole lot of convincing that famously union less Delta is going to be a good partner.

It's rather a shame, because the combined airline would be just brutal. A real hub at LAX, a presence in NYC that would give UA a good fight, locks on some of the strongest markets in the county.

OneWorld would be seriously, perhaps irreparably injured.. Where AF may in fact be weaker than BA as far as Europe is concerned, ST dominates OW inAsia, and frankly I'll take Asia over Europe anytime.Also, were this to go through I am fairly sure LATAM would end up in either ST or Star. I am not sure OW would survive that.

We're they somehow to surmount those obstacles, my god, what an airline. We'd finally have our Pan Am replacement.

[Edited 2012-01-12 16:27:24]

Topic: RE: DL Interested In Acquiring AMR?
Username: boilerla
Posted 2012-01-12 16:23:51 and read 30586 times.

Quoting LDVAviation (Reply 22):
Clever move by Delta. They are trying to entice US Airways to make a bid. They want to muddle the process.

++ This. Working so far.

Quoting avek00 (Reply 43):
Antitrust law would not generally block a DL/AA combo depending on the concessions offered at a few key airports. There's nothing wrong, in and of itself, with being gigantic so long as effective competition is able to enter a given market and fairly compete.

There is nothing that makes a monopoly illegal, true. But engaging in monopolistic practices, in an industry with high barriers of entry, is illegal. I'd say that the airline industry qualifies as having high barriers of entry and I'd say that the #2 airline in the world trying to buy another top 10 airline would constitute monopolistic practices.

People are also forgetting that it's not just the DOJ and DOT that need to approve. The EU, JAA and several other foreign entities would have to approve, and when it's all said and done, the states of Texas, Florida, California and New York (all stakeholders in hub airports owned by AA & DL) will get involved. I could easily see one or more of those states suing to block the merger before the DOJ even pulls out its reading glasses.

The EU could sue, or require such major concessions that it would not be worth the while--e.g. giving up all the LHR slots owned by AA, revoking the JV with BA, etc.

Topic: RE: DL Interested In Acquiring AMR?
Username: deltaflyertoo
Posted 2012-01-12 16:28:26 and read 30430 times.

Quoting GSPSPOT (Reply 84):

Maybe, but I can't figure out WHY

Because lets for semantics say in a magical world gov't okays this. It would be a win win for US/DL. They could pull massive capacity out of market, raise fares, while simultaneously securing market share in core markets. DL could cement JFK and LAX, MIA would compliment the system well (even w/ ATL nearby) and US would get DFW (Or even DL, infact none of the media have ever indicated US is in this so don't know why its so popular on this thread, but I'll play along). ORD would close giving more traffic through DFW/MSP/DTW/ATL..

IMO this all comes down to ORD, LAX and MIA. EVERYONE wants more out of LAX and MIA, from what I understand AA does subpar at ORD yet its enough to be thorn in UAL and DLs side (DL cause it adds capacity system wide, UAL cause they can't make it fortress like DL has at ATL).

Topic: RE: DL Interested In Acquiring AMR?
Username: unattendedbag
Posted 2012-01-12 16:28:28 and read 30472 times.

6 hours, 84 replys and no link to the actual story?

Potential suitors circle American Airlines

[Edited 2012-01-12 20:11:07 by SA7700]

Topic: RE: DL Interested In Acquiring AMR?
Username: commavia
Posted 2012-01-12 16:37:11 and read 30362 times.

Quoting DeltaMD90 (Reply 81):
Airlines have done stupid things in the past, but the fact that DL, US, and this other company are paying their lawyers lots of money to look into this says something

... just like how USAirways paid their lawyers "lots of money" five years ago to take over Delta? For that matter, I see an AA-USAirways merger being far more logical, and far more plausible, than any hypothetical Delta transaction, and certainly more than AA being split up into pieces as some here are already assuming.

Quoting DeltaMD90 (Reply 81):
if it had a snowball's chance in hell like some posters are saying

I have yet to read any post saying this has a "snowball's chance in hell," but I sure have seen plenty of comments that are already working out how the break up process will work and how the other carriers will divvy up the pieces as if this is already a foregone conclusion.

Quoting delimit (Reply 83):
We're they somehow to surmount those obstacles, my god, what an airline. We'd finally have our Pan Am replacement.

I think we already do. From a hubs and network perspective, it's United.

Topic: RE: DL Interested In Acquiring AMR?
Username: delimit
Posted 2012-01-12 16:40:34 and read 30214 times.

It's not Pan Am without MIA and South America.

Topic: RE: DL Interested In Acquiring AMR?
Username: jetlanta
Posted 2012-01-12 17:16:02 and read 29464 times.

Quoting commavia (Reply 88):
... just like how USAirways paid their lawyers "lots of money" five years ago to take over Delta? For that matter, I see an AA-USAirways merger being far more logical, and far more plausible, than any hypothetical Delta transaction, and certainly more than AA being split up into pieces as some here are already assuming.

Wouldn't logic also dictate that the carrier with more financial resources would likely win a bidding war?

Listen, I think it is highly unlikely that a DL/AA merger happens. But if Delta were intent on it, it is entirely plausible. The networks are good a good match. The freed up NYC slots would surely go to LCC's, making it politically digestible. The surviving carrier would be a global powerhouse in a business that is breaking down borders. This would provide a massive amount of security to investors and creditors.

US provides very little of real value to AA, Certainly no international franchise of any value. And US couldn't match the financial terms that DL would be able to muster. A US/AA merger is logical for US, but I really don't see what great value it brings to AA. Its valuable assets (PHL/CLT/DCA) are all growth-limited. It will still be 3rd class in NYC and 3rd class in CHI. A Delta merger would really solve all of AA's structural network problems and vice versa. US solves only the lack of a southeastern hub.

So the question is, why bother with US if you are going to do a merger? If you are going to go through all that, go for all the marbles.

If Delta wants to pursue a merger, AA will have a lot of explaining to do to justify accepting an inferior bid that will lead to an inferior strategic position. Of course, it won't be entirely in AA's hands, will it? The judge will have something to say about it.

Topic: RE: DL Interested In Acquiring AMR?
Username: commavia
Posted 2012-01-12 17:26:18 and read 29335 times.

Quoting delimit (Reply 89):
It's not Pan Am without MIA and South America.

The new United is closest than any U.S. carrier has ever gotten to what I would consider a truly "perfect" network, with hubs located in exceptionally large, vibrant population centers that are excellently geographically situated to cater to both domestic and international traffic and connections.

In the northeast, New York and D.C. are the first and second choice hubs. In the midwest, Chicago is numero uno in terms of market size and economic impact. In the Rockies, nothing will ever replace Denver. Out west, Los Angeles and San Francisco - like New York and D.C. in the Northeast - will always be the two absolute best hubs. And Houston is one of only two truly excellent south-central hubs (the other being D/FW). The only two geographic hub gaps United's network has is in the Atlantic Southwest (where, like with Denver in its region, Atlanta will always be the undisputed 800-lb gorilla), and in Florida/Latin America, where nothing will ever touch Miami. But, alas, no airline has everything.

Quoting jetlanta (Reply 90):
Wouldn't logic also dictate that the carrier with more financial resources would likely win a bidding war?

Listen, I think it is highly unlikely that a DL/AA merger happens. But if Delta were intent on it, it is entirely plausible. The networks are good a good match. The freed up NYC slots would surely go to LCC's, making it politically digestible. The surviving carrier would be a global powerhouse in a business that is breaking down borders. This would provide a massive amount of security to investors and creditors.

US provides very little of real value to AA, Certainly no international franchise of any value. And US couldn't match the financial terms that DL would be able to muster. A US/AA merger is logical for US, but I really don't see what great value it brings to AA. Its valuable assets (PHL/CLT/DCA) are all growth-limited. It will still be 3rd class in NYC and 3rd class in CHI. A Delta merger would really solve all of AA's structural network problems and vice versa. US solves only the lack of a southeastern hub.

So the question is, why bother with US if you are going to do a merger? If you are going to go through all that, go for all the marbles.

If Delta wants to pursue a merger, AA will have a lot of explaining to do to justify accepting an inferior bid that will lead to an inferior strategic position. Of course, it won't be entirely in AA's hands, will it? The judge will have something to say about it.

I suspect AMR's position is that it wants to remain independent - of Delta or USAirways. However, I understand the point you're making - if you're going to do a merger, use the process to create the biggest, strongest carrier you can. The problem with that is regulatory.

Regardless of what anybody here says, I do not believe an AA-Delta merger would receive regulatory approval without enormous concessions required. Those concessions would render the logic of the deal - and the ostensible advantage of pursuing a transaction with Delta as opposed to USAirways - moot. It is my belief that, by the time AA and Delta got done satisfying regulators, they might as well have just skipped the whole thing and AA gone with USAirways to begin with, where I doubt there would be much regulatory challenge at all.

Not to mention, I still contend that AA is going to work very hard - likely with the help of several key elements of the creditors committee, the unions first and foremost - to remain independent, or else to pursue some form of transaction post-bankruptcy, on AMR's terms. As I said, I could see a merger with USAirways, or for that matter with JetBlue, making far more strategic sense for AA - for a variety of reasons - than Delta.

Topic: RE: DL Interested In Acquiring AMR?
Username: DeltaMD90
Posted 2012-01-12 17:26:53 and read 29212 times.

Quoting commavia (Reply 88):
Quoting DeltaMD90 (Reply 81):
Airlines have done stupid things in the past, but the fact that DL, US, and this other company are paying their lawyers lots of money to look into this says something

... just like how USAirways paid their lawyers "lots of money" five years ago to take over Delta? For that matter, I see an AA-USAirways merger being far more logical, and far more plausible, than any hypothetical Delta transaction, and certainly more than AA being split up into pieces as some here are already assuming.

Yes, and it had a good chance of working. I never said they'd only shell out money if it was 100%, only if they had a good shot or reason to

Quoting commavia (Reply 88):
Quoting DeltaMD90 (Reply 81):
if it had a snowball's chance in hell like some posters are saying

I have yet to read any post saying this has a "snowball's chance in hell,"

semantics

Topic: RE: DL Interested In Acquiring AMR?
Username: GSPSPOT
Posted 2012-01-12 17:33:27 and read 29063 times.

This merger may increase "consolidation" and improve the lot of some airline corporations, but what will it do to the person planning a honeymoon or vacation? A small business owner who is trying to decide if he can afford to fly to a convention?? I'm all for free enterprise, but ultra-large mega corporations shouldn't be allowed to take choices away from consumers!

Topic: RE: DL Interested In Acquiring AMR?
Username: delimit
Posted 2012-01-12 17:34:35 and read 29022 times.

If you are truly for free enterprise then consumer choice is not a factor. True free market capitalism depends on market forces to control corporate behavior, not regulation. Government protection of the consumer distorts the market.

Tangent but...a Pan Am replacement in my books would need a similar level of coverage on all of the continents. I wouldn't say either have that In South America. Honestly, by a lot of measures UA and DL both have long passed PA in terms of size and destinations served. What they lack is breadth of coverage.

[Edited 2012-01-12 17:40:32]

Topic: RE: DL Interested In Acquiring AMR?
Username: jetlanta
Posted 2012-01-12 17:40:35 and read 28901 times.

Quoting commavia (Reply 91):
Regardless of what anybody here says, I do not believe an AA-Delta merger would receive regulatory approval without enormous concessions required. Those concessions would render the logic of the deal - and the ostensible advantage of pursuing a transaction with Delta as opposed to USAirways - moot. It is my belief that, by the time AA and Delta got done satisfying regulators, they might as well have just skipped the whole thing and AA gone with USAirways to begin with, where I doubt there would be much regulatory challenge at all.

But I don't understand your legal justifications for this perspective. Your belief isn't the law. I vividly recall having this same discussion about DL/NW with many, many posters. No one on a.net seems to understand anti-trust law as it applies to network industries...even at a basic level (which is where my understanding ends).

What I do know is that size itself is not illegal. Market concentration is the issue. And there are mathematical formulas that determine whether a proposed deal violates that law. In this case, a cursory look indicates that LGA & JFK are likely the only markets/airports where such an issue will rear its head. If anyone disagrees, I'd love to hear WHERE and WHY. I just don't think the math is going to support that position. I believe that this is the same determination that Delta's review of a potential deal indicated.

Their lawyers certainly understand this law better than any of us, especially having been through this process twice in just a few years (NW and US Slot Swap). Could politics get in the way? Possibly, but that really hasn't happened as much as people want to believe. The Obama Administration approved both the UA/CO merger and the DL/US Slot Swap. The AT&T /T-Mobile merger was blocked because it was fatally flawed from a structural standpoint, and AT&T didn't act quickly enough to alleviate concerns. That is a lesson Delta will learn from.

Topic: RE: DL Interested In Acquiring AMR?
Username: Cubsrule
Posted 2012-01-12 17:45:44 and read 28819 times.

Quoting jetlanta (Reply 95):
What I do know is that size itself is not illegal. Market concentration is the issue. And there are mathematical formulas that determine whether a proposed deal violates that law.

The DL/US slot swap pretty clearly violated what you call the "mathematical formulas" and yet was approved with minimal concessions.

Alfred Kahn was right - the government has completely abdicated whatever responsibility it has or ought to have with respect to airline consolidation.

Topic: RE: DL Interested In Acquiring AMR?
Username: CALPSAFltSkeds
Posted 2012-01-12 17:51:24 and read 28713 times.

If anyone's looking out for the SA)">AA employees, then a merger with SA)">DL may see the airline kind of broken up. I can't see the merged company be allowed to keep all the NYC slots, LHR slots, MIA, ATL & JFK international routes. While the networks are complimentary, there's duplication from JFK and LAX. The probable result would be moire SA)">UA service or LLC flying transcon. LCCs may bring down yields.

Then there's the SkyTeam vs. OneWorld choice. In either case LHR or AMS/CDG will miss feed unless OneWorld merges with SkyTeam.

The MD80s would be parked, ORD might go in favor of DTW, NYC would be reduced from the current combined operation, MIA would be reduced or ATL international frequencies may go if they want to keep MIA-International. SA)">UA and others would pick up additional SA frequencies that they could fly from EWR/IAH/IAD/ORD/LAX/SFO. With the loss of service, if all the MD80s can't be replaced, then maybe MEM would be killed.

US isn't much better as they are lacking international diversity, just where SA)">AA is weak. What do you do with NYC and PHL hubs? how about PHX and LAX?

Topic: RE: DL Interested In Acquiring AMR?
Username: delimit
Posted 2012-01-12 17:54:51 and read 28586 times.

Better coverage of South America and the Middle East than either DL or UA.

As far as destinations served, DL and UA beat PA for Europe and probably Asia as well now. UA matches them in the South Pacific, DL in Africa.

Pan Am was something of a one stop shop for a while there internationally. I was trying to convey that by using breadth of coverage rather than depth, especially as both airlines easy dwarf PA.

Topic: RE: DL Interested In Acquiring AMR?
Username: enilria
Posted 2012-01-12 17:56:34 and read 28608 times.

Quoting audidudi (Thread starter):
Just heard on FOX Business News that according to The Wall Street Journal, DL may be interested in acquiring AMR. '' DL and TPG Capital are separately assessing possible bids for American Airlines parent AMR".
No further details.
Quoting STT757 (Reply 3):
DL would grab DFW, MIA, LAX.
Quoting STT757 (Reply 3):
DL would be required to divest all of AA's slots at LGA and JFK,
Quoting ScottB (Reply 4):
Delta probably does not want all of AMR,

The situation with DL has been brewing for a long time. I think it is mostly an attempt to throw a wrench in the process. I think all they really want is MIA...maybe DFW. There is nobody else to buy LAX or JFK IMHO, so I don't think they need to buy it. ORD is worthless to them. I think what DL does is probably take the reorg out of AA management's hands and put it in the creditors' hands. I think these are the likely outcomes...

Most likely to least likely
1) IAG allies with TPG and makes a successful DIP bid
2) US buys AA (which puts them back in Ch11 in a few years)
3) AA must increase its return to creditors to meet the bidders return levels and sheds ORD (could sell ORD to B6, for example)
4) The judge backs management based on employee concerns and allows a management led restructuring
5) DL buys MIA and owns the Southeast USA and Latin market; the rest probably goes to US (see #2)

I think for the consumer and for employees #1 is the best option. I also believe there are scenarios here where F9 is shutdown and their airplanes are used to fund something like #3 because nobody wants AA's MD80s or E145 and AA doesn't have enough good airplanes to let any go in a transaction like #3 or #5.

I still see a serious possibility of JetBlue coming out of this with 100 flights at ORD using former F9 E190s and Airbuses. Another big question is whether US wants ORD. I could make the case for or against it. It's a toss-up.

Topic: RE: DL Interested In Acquiring AMR?
Username: Splitterz
Posted 2012-01-12 18:14:55 and read 28154 times.

Would UA sit idle during this process? I would like to see UA gain more control of ORD and LAX. If AA is being broken up....I don't see why UA would sit on the sidelines when it could pick up some valuable assets as well, especially with their financial position.

Topic: RE: DL Interested In Acquiring AMR?
Username: delimit
Posted 2012-01-12 18:16:53 and read 28106 times.

I think UA might want to actually finish the merger they are currently involved in before going looking for another one.

Topic: RE: DL Interested In Acquiring AMR?
Username: Splitterz
Posted 2012-01-12 18:17:35 and read 28086 times.

And on another point, wouldn't the labor issues be an absolute nightmare in some of the projected outcomes stemming from this board?

Topic: RE: DL Interested In Acquiring AMR?
Username: yellowtail
Posted 2012-01-12 18:23:57 and read 27994 times.

Quoting ERJ170 (Reply 70):
But that's just my opinion.. DL doesn't really seem to need or want MIA since it has ATL. It may add some flights but I don't see DL wanting it as a hub. I could be wrong, but that's just not what I see..

Trust me DL has been salivating at the LatAm AA MIA operations for some time

Topic: RE: DL Interested In Acquiring AMR?
Username: jetlanta
Posted 2012-01-12 18:40:44 and read 27582 times.

Quoting Cubsrule (Reply 97):
The DL/US slot swap pretty clearly violated what you call the "mathematical formulas" and yet was approved with minimal concessions.

Really? Can you support that? But your point is well taken, those that think the government will stop this just "because" are deluding themselves.

Quoting delimit (Reply 99):
Better coverage of South America and the Middle East than either DL or UA.

As far as destinations served, DL and UA beat PA for Europe and probably Asia as well now. UA matches them in the South Pacific, DL in Africa.

Pan Am was something of a one stop shop for a while there internationally. I was trying to convey that by using breadth of coverage rather than depth, especially as both airlines easy dwarf PA.

I wish someone would post PA's ASM's by region at its peak versus what UA and DL offer. I think there is an impression that PA was just a huge airline. It wasn't. Certainly not in comparison to our giants of today. DL and UA would dwarf PA in probably every region today, in terms of ASM's.

Topic: RE: DL Interested In Acquiring AMR?
Username: Cubsrule
Posted 2012-01-12 18:45:48 and read 27540 times.

Quoting jetlanta (Reply 105):
Really? Can you support that?

I ran the numbers - at your request, as I recall, at the time DL and US proposed the swap. You can likely find the posts as easily as I can. There were certain assumptions involved that may have been somewhat off, but the numbers were so far in excess of the cutoffs for a presumption of anticompetitiveness that some fiddling with the assumptions would not have affected the qualitative result at all.

Topic: RE: DL Interested In Acquiring AMR?
Username: jcs17
Posted 2012-01-12 20:45:45 and read 25598 times.

Quoting ERJ170 (Reply 70):

But that's just my opinion.. DL doesn't really seem to need or want MIA since it has ATL. It may add some flights but I don't see DL wanting it as a hub. I could be wrong, but that's just not what I see..

DL wants MIA as a hub and will use it just as AA does. You won't have flights to Albuquerque or Des Moines, but you will have them to nearly every major city in the US to feed the Caribbean and South America flights. MIA's value is also determined by their O&D passengers to Latin America. It would be conceivable that current Latin American flights would simply stay at ATL so DL could feed a larger set of cities on a single stop, in addition to new ex-AA/MIA flights. Also keep in mind that despite a new Concourse coming online soon at ATL, it still is a congested airport.

In my mind, here's what DL wants out of this deal:
MIA
Caribbean/Latin America slots ex-MIA/JFK
JFK T-8 (and the ability to expand it, which is possible, and cheaper than their T-2 and T-4 plan) (LGA is already settled for DL)
LHR slots
LAX
LAX-Pacific slots
DFW... to a much lesser extent than mentioned above

I think that DL would cede ORD to United, allowing them to develop a more efficient, less congested operation in Chicago. I do think that DL would be forced to give up a number of AA route authorities from Latin America to USAirways.

I still believe that AMR's inaction and their mistakes post-9/11 and acquisition of TW has doomed them. They never responded to CO and DL challenging them in their tries for supremacy in the NYC market ex-Europe. They never tried to develop their Asian routes aside from a few half-hearted efforts. When LHR got thrown to the rest of the US airline pack, it probably spelled the end for AA. Given the fact that AMR has unions that are quite militant, I don't know how they are going to accept further cuts.

At the end of the day, it might be Delta, United, and USAirways (as a LCC/legacy/minor international carrier) as the sole legacies left. Frankly, it needed to happen earlier. We're in a world of $100 ppb oil -- and that isn't likely to change except for an upswing in oil price. There are only so many full-service airlines the US can support. I just hope that pilots and FAs at AA have a chance to flee the sinking ship for a close to equitable salary at the three I mentioned.

Topic: RE: DL Interested In Acquiring AMR?
Username: TSS
Posted 2012-01-12 20:55:29 and read 25365 times.

Quoting 1337Delta764 (Reply 39):
If DL does buy out AMR, expect US Airways to quickly jump to Oneworld to fill in the void left by AA leaving.

If US is genuinely interested in outright acquiring, merging with, or simply enjoying relatively headache-free codeshare synergies with AA, then I can't understand why US hasn't already begun moving towards leaving Star Alliance for Oneworld... or perhaps US is already making plans along that line and simply haven't announced said plans yet?

Quoting STT757 (Reply 47):
Why wouldn't DL switch to OneWorld.

Asked...

And answered:

Quoting srbmod (Reply 57):
Because they are one of the founders of SkyTeam and without DL, that alliance would likely be dissolved. I would highly doubt DL would leave SkyTeam, who would they bring in, US Airways? US Airways doesn't have the network DL does.

Whereas US joining Oneworld would, or at least could, provide most of the benefits of a US-AA merger with few if any of the usual merger-associated drawbacks.

Topic: RE: DL Interested In Acquiring AMR?
Username: luckyone
Posted 2012-01-12 21:10:56 and read 25127 times.

Quoting jcs17 (Reply 105):
Also keep in mind that despite a new Concourse coming online soon at ATL, it still is a congested airport.

As is MIA, with a much less efficient runway configuration than ATL.

Quoting ERJ170 (Reply 70):
But that's just my opinion.. DL doesn't really seem to need or want MIA since it has ATL. It may add some flights but I don't see DL wanting it as a hub. I could be wrong, but that's just not what I see..

Given the opportunity, Delta would drop all but a handful of their ATL-LatAm flights in a New York minute. With respect to Latin America Miami will always be the top dog. I imagine the biggest cities like MEX, GRU, GIG, and EZE, and anything subject to finicky rights issues such as CCS would stay, but the rest would head South so fast it would make your head spin. Having said all that I sincerely doubt any of that will happen.

Topic: RE: DL Interested In Acquiring AMR?
Username: anonms
Posted 2012-01-12 21:34:37 and read 24840 times.

Quoting GSPSPOT (Reply 74):

Are we just going to end up with our own version of the Soviet-era Aeroflot?? This is insanity! There are few enough choices as it is now.

If DL bought AA and reverted to their previous livery, then, yes we would get the American version of Soviet-era Aeroflot.

Topic: RE: DL Interested In Acquiring AMR?
Username: ericaasen
Posted 2012-01-12 21:59:00 and read 24571 times.

Quoting jcs17 (Reply 105):
I think that DL would cede ORD to United, allowing them to develop a more efficient, less congested operation in Chicago.

Umm, why is everyone assuming that ORD will be gone? Why would any airline just hand the keys to Chicago to UA?

Topic: RE: DL Interested In Acquiring AMR?
Username: DeltaMD90
Posted 2012-01-12 22:12:32 and read 24458 times.

Quoting ericaasen (Reply 109):

Quoting jcs17 (Reply 105):
I think that DL would cede ORD to United, allowing them to develop a more efficient, less congested operation in Chicago.

Umm, why is everyone assuming that ORD will be gone? Why would any airline just hand the keys to Chicago to UA?

Keep ORD, competing with a strong UA and WN @ MDW while competing with MSP and DTW, or keep MSP and DTW strong, hubs with very little competition serving the same region?

Topic: RE: DL Interested In Acquiring AMR?
Username: ericaasen
Posted 2012-01-12 22:41:22 and read 24147 times.

Quoting DeltaMD90 (Reply 110):
Keep ORD, competing with a strong UA and WN @ MDW while competing with MSP and DTW, or keep MSP and DTW strong, hubs with very little competition serving the same region?

I get that, and frankly that's why I don't see this merger happening, that and the New York mess. Do you try to keep DTW, MSP, and ORD? Do really want to cede ORD to UA? Do you really want to close MSP? I can't imagine anyone would think about leaving DTW.

AA and UA have been fighting at ORD for years. I'm sure that AA has some lucrative contracts with Chicago businesses, and DL would be stupid reducing ORD to a simple spoke only flying to hubs and letting UA take those contracts. But then DL would be stupid to close MSP and completely brain dead to close DTW.

If this merger happens I would bet that ORD would still be at least a focus city with some international flying perhaps to NRT, LHR, or maybe a few others. Maybe finally close CVG for ORD?

And I'm sure US would love to have ORD.

Topic: RE: DL Interested In Acquiring AMR?
Username: DeltaMD90
Posted 2012-01-12 22:47:47 and read 24094 times.

Quoting ericaasen (Reply 111):
And I'm sure US would love to have ORD.

This is what I think would end up happening anyway. I see where you are going now... DL wouldn't want ORD but I'm sure they'd try and give it to another carrier before just giving UA a monopoly at ORD. I highly doubt DL is trying to merge all of AA with them... I think they're just trying to get any combination of LAX, DFW, MIA, NYC stuff, aircraft/slots, and corporate contracts. I honestly think they'd be happy getting just one hub, rather than seeing US gobble it all up. That's what I think is going on, they're catching US off guard and trying to create havoc and get a piece of the action...

Topic: RE: DL Interested In Acquiring AMR?
Username: PlanesNTrains
Posted 2012-01-12 23:56:02 and read 23540 times.

Quoting enilria (Reply 98):
I think for the consumer and for employees #1 is the best option. I also believe there are scenarios here where F9 is shutdown and their airplanes are used to fund something like #3 because nobody wants AA's MD80s or E145 and AA doesn't have enough good airplanes to let any go in a transaction like #3 or #5.

Not deriding your post at all, but I just have to comment on how ironic it is in this thread that you somehow weaved the death of F9 into it.  

It reminds me of a skit some years ago on SNL where Dana Carvey portrayed Tom Brokaw going on vacation, so they needed him to pre-record news headlines beforehand. The subject was the possibility of the death of Gerald Ford, and he'd do various ones, such as "In the news tonight, a meteor has struck Paris...and Gerald Ford is dead."

Only, for you it'd be "In the news tonight, DL eyes bid for AA....and F9 is dead."  
Quoting enilria (Reply 98):
I still see a serious possibility of JetBlue coming out of this with 100 flights at ORD using former F9 E190s and Airbuses. Another big question is whether US wants ORD. I could make the case for or against it. It's a toss-up.

Interesting scenarios. What would a Star Alliance stranglehold on ORD mean to regulators?

-Dave

Topic: RE: DL Interested In Acquiring AMR?
Username: mikey72
Posted 2012-01-13 00:33:48 and read 23300 times.

Quoting STT757 (Reply 68):
That's why I see DL saying so long to AF and Skyteam, the Oneworld Alliance and their Joint Venture from Heathrow are huge assets.
Quoting STT757 (Reply 68):
AF and CDG vs BA and LHR. It's not a tough decision.
DL are so ambitious I can't see them thinking twice about saying 'au revoir' to AF and CDG and 'hello' to BA and LHR.

Trouble is either option would spell the end of one of the alliances. Two of them would have to merge.

Quoting peanuts (Reply 75):
Latin America is where it is, internationally. AA owns it. DL knows it and they want it.

If Skyteam and oneWorld merge into..I dunno...SkyWorldOneTeam (LOL) and then they get Latam (which they would) then to survive the Star Alliance would have to merge with SkyWorldOneTeam and we'd have..

StarTeamSkyWorldOne !! (sounds pretty good)

  

(N.B - I've just had a thought..if that did happen Sir Richard Branson would probably self-combust ! And..when the 3 alliances were originally conceived were EK's plans out in the open ? Maybe 3 is too many with them in mind)

[Edited 2012-01-13 01:06:11]

Topic: RE: DL Interested In Acquiring AMR?
Username: bevisisback
Posted 2012-01-13 03:46:18 and read 22166 times.

If this were to happen, where would it leave BA and the rest of OW? I think BA in particular would be weaker without AA.

Topic: RE: DL Interested In Acquiring AMR?
Username: AAplat4life
Posted 2012-01-13 04:39:03 and read 21780 times.

Under bankruptcy rules, AMR management has at least 180 to present an exclusive plan of reorganization. AMR has plenty of cash. It went into bankruptcy with over $4B of cash on hand and is still collecting plenty of revenue. At this point, any talk of an acquisition by rivals is beyond speculation and is just pure conjecture.

Topic: RE: DL Interested In Acquiring AMR?
Username: mikey72
Posted 2012-01-13 05:27:23 and read 21273 times.

Quoting bevisisback (Reply 115):
If this were to happen, where would it leave BA and the rest of OW?


With no American presence in OW...up sh*t creek without a paddle.

A combined DL/AA (with AA's presence at LHR and relationship with BA) would have far more to gain buy being in OW over Sky though surely ?

LHR/BA... that duo with its high yielding routes to the U.S.A....would be crazy for no American carriers to have this combo in their alliance under anti-trust immunity.

Topic: RE: DL Interested In Acquiring AMR?
Username: bevisisback
Posted 2012-01-13 05:45:12 and read 21015 times.

Quoting mikey72 (Reply 117):
A combined DL/AA (with AA's presence at LHR and relationship with BA) would have far more to gain buy being in OW over Sky though surely ?

Or BA would gain from joining SkyTeam. I doubt this would happen either - BA are pretty tight with QF in terms of kangaroo routes.

Topic: RE: DL Interested In Acquiring AMR?
Username: BobLoblaw
Posted 2012-01-13 05:45:44 and read 21059 times.

A breakup of AA with most assets going to Delta isnt going to happen. US has no incentive to help DL take over parts of AA since (Unlike AA helping UA take over US in 2000) US can take over ALL of AA without any regulatory problems. Delta cant.

Everyone seems to be forgetting that even Southwest failed in its bid to take overly lowly Frontier 2 years ago. Delta also failed to lure JAL away from OneWorld and US failed to get DL. And of course The Donald tried to takeover AMR in 1989. Delta is simply reaching for a bridge to far here. If their actual goal is to take over AA, Delta will fail. If their goal is to get US or AA to pay more, they will likely succeed.

AA will have to pay creditors more or might accept a US bid which should be more than a DL bid since DL is only bidding for a few assets, US will likely bid for the whole thing.


AA isnt TW or PA. AA with lower costs is indeed a viable airline and business model. Creditors will likely want to see AA survive as their best option. Certainly the employees who are creditors will want to see AA continue, though they will likely lose their pensions anyway.

Topic: RE: DL Interested In Acquiring AMR?
Username: BobLoblaw
Posted 2012-01-13 05:56:22 and read 20871 times.

Quoting luckyone (Reply 107):
Given the opportunity, Delta would drop all but a handful of their ATL-LatAm flights in a New York minute

I dont think they would. ATL serves different traffic flows to Latin America than does MIA. ATL trafficf flows are more USA point of sale and have very high yields. For instance the 1-2 people traveling from DSM to SCL pay a much much higher average fare than do all the pax traveling from ORD to SCL.

Topic: RE: DL Interested In Acquiring AMR?
Username: staralliance85
Posted 2012-01-13 06:16:40 and read 20620 times.

I think it would be iffy if regulators would approve this acquisition. DL might just be seeking for AA's hubs such as MIA, JFK ,LAX and DFW . If I were AA, I would Never give up MIA because it is one of their strongest markets. DL wants AA out of JFK so they can get Terminal 8. If DL is successful in getting AA out of JFK, they would be by far the largest carrier in NYC (much bigger than UAL). DL has always wanted a big presence at LAX, so now is their chance. At LAX, they could probably add more flights to the Asia Pacific. I am sure that AA will fight harder for DFW but DL might want a piece of the pie. I don't think that DL would be interested too much in ORD.


Acquisition:

Would by far by the Largest Airline in the World. UA's Smisek would probably give AA a counter offer to stop his nemesis DL from being the Most Powerful and stall them as much as possible. If unsuccessful, UA might pick up US and/or B6 to compete with DL/AA.

A combined DL/AA would change the face of the airline industry because it would drive the price of airline tickets up substantially and eliminate smaller carriers who can't keep up with them.

JFK: DL's dream would come true and move into modern Terminal 8 and leave T2 to someone like VX. They would pick up the LHR routes which is a very valuable. DL would Rule NYC!!!!UA might consider buying B6 to compete with DL/AA on their home turf.

MIA: DL would be getting all the S America routes that they always wanted and would dominate the South (MIA and ATL).

ATL: Eventhough it is their largest hub, they would probably shed some capacity (some S America and Europe flights) because of their dominance at JFK and MIA.

ORD: DL might want to fight up with UAL on their home turf or Not. We shall see.

DTW: They might maintain or shed capacity depending on what they would do with ORD.

MSP: They would substantially cutback capacity.

DFW: DL would love to have a Mega Hub at DFW to compete with UA's IAH.

LAX: It is every airlines dream to have a hub at LAX. DL/AA would be the largest carrier at LAX and add flights to the Asia-Pacific. UA would put more emphasis on their SFO hub to compete with DL/AA's LAX hub.


Alliance:

It makes a lot more sense for DL to ditch ST and move over to OW. Having so many flights to LHR and BA as a partner is a major asset. DL does Not have a many flight to CDG and AMS as AA has to LHR. AF/KL are in big financial trouble and everyone wants an LHR slot so that would be their chance.

OW has a broader network than ST. ST strength are Europe and Asia. OW strong points are S America, Europe, Asia and Australia. Plus, OW it getting Kingfisher Airlines and ST is desperate for an Indian Partner. Also, ST is desperate for Virgin Australia. Two years ago, DL was begging JAL to switch over to ST. ST has a strong China domestic market but they are Not as strong as *A or OW in many aspects.

If DL were to leave ST for OW, they should give AF/KL and KE an invitation to switch over to OW as well. By having those two partners switch over would make OW much stronger than *A. HAving KE and JAl in the same alliance is like having ANA and Asiana in *A. All the other ST members are menial

Topic: RE: DL Interested In Acquiring AMR?
Username: ATLTPA
Posted 2012-01-13 06:22:57 and read 20521 times.

Quoting BobLoblaw (Reply 119):
AA with lower costs is indeed a viable airline and business model. Creditors will likely want to see AA survive as their best option.

Yours is a very thoughtful post. It's about the creditors.

Post financial crisis, creditors are jittery and workout sessions are tougher than ever. Past Chapter 11 filings are not necessarily prologue. Creditors are still not thinking on a long term basis and are instead trying to drive bad debts off of their books as quickly as possible, while recovering as much money as possible.

For the creditors, it comes down to this: which "haircut" will be the shortest?

I don't have the answer to that one, however.

ATLTPA

Topic: RE: DL Interested In Acquiring AMR?
Username: UALWN
Posted 2012-01-13 06:32:00 and read 20445 times.

Today's newspapers seem to hint to a US+TPG bid for AA. That would actually make more sense.

Topic: RE: DL Interested In Acquiring AMR?
Username: par13del
Posted 2012-01-13 06:36:36 and read 20341 times.

Quoting PPVRA (Reply 11):
Another example of why Chapter 11 needs to go.
Quoting deltaflyertoo (Reply 36):
The reality is to get the US market fully balanced (its only half way there) an airline has to die. There is still too much capacity.

So the perception is that if AA dies no other airline will be created? In the near term DL, US, WN and UA will cherry pick and attempt to satisfy the market place, but ultimately, unless laws or rules are put in place to prevent new airline creation, its only a matter of time before some investor who would have spent money investing in AA while in Chpt.11 decides its best to start from scratch. Investors are free to invest in either something new of take over something that is failing, it may be harder to start from scratch but hard work has never been a preventor of dreams and opertunity.

The issue of Virgin American was simply them attempting to play loose with the existing regulations. Market places traditionally if access is free, tend to have a "limit" on the size of individual companies, and with the mergers in the US so far, either capacity has to fall to make them "manageable" in the customers eyes, or if growth continues in the aviation industry domestically, expect more ailines to enter the fray, however small they start a market will be there for them.

Topic: RE: DL Interested In Acquiring AMR?
Username: jcs17
Posted 2012-01-13 06:53:50 and read 20146 times.

Quoting ericaasen (Reply 109):
Umm, why is everyone assuming that ORD will be gone? Why would any airline just hand the keys to Chicago to UA?

DTW and MSP are much more efficient hubs than ORD and serve the same purpose as ORD without the delays and congestion. DL does plenty of business in Chicago. Besides, there is no chance at all that this gets approved with DL having hubs in MSP/ORD/DTW, especially under the current administration who made it a point that UA/CO had to move its headquarters to Chicago instead of Houston. Did UA/CO really want to do that? Not at all. Move from one of the most business-friendly states in the nation to one of the (if not the) least?

Topic: RE: DL Interested In Acquiring AMR?
Username: CHRISBA777ER
Posted 2012-01-13 06:57:51 and read 20091 times.

Quoting 1337Delta764 (Reply 44):
Also, another dilemma that DL will face is which breast cancer organization a merged DL/AA will choose to align with. DL is aligned with the Breast Cancer Research Foundation, while AA is aligned with Susan G. Komen for the Cure. Please let it be the BCRF and keep the pink 764ER!

I love it - we're talking regulatory approval and hub wars, and you want to talk about a pink livery 767-400ER. At least you are consistent!

Topic: RE: DL Interested In Acquiring AMR?
Username: luckyone
Posted 2012-01-13 06:59:38 and read 20080 times.

Quoting jcs17 (Reply 125):
DTW and MSP are much more efficient hubs than ORD and serve the same purpose as ORD without the delays and congestion. DL does plenty of business in Chicago. Besides, there is no chance at all that this gets approved with DL having hubs in MSP/ORD/DTW, especially under the current administration who made it a point that UA/CO had to move its headquarters to Chicago instead of Houston. Did UA/CO really want to do that? Not at all. Move from one of the most business-friendly states in the nation to one of the (if not the) least?

I'm not sure I follow. United's headquarters was already in Chicago, so it wasn't like the entirety of both companies was moved there. Other than that I agree!

Topic: RE: DL Interested In Acquiring AMR?
Username: LAXtoATL
Posted 2012-01-13 07:03:08 and read 20078 times.

Quoting AAplat4life (Reply 116):

Under bankruptcy rules, AMR management has at least 180 to present an exclusive plan of reorganization. AMR has plenty of cash. It went into bankruptcy with over $4B of cash on hand and is still collecting plenty of revenue. At this point, any talk of an acquisition by rivals is beyond speculation and is just pure conjecture.

AMR will be in bankruptcy roughly a year that $4bln will not last long. I think they were burning through a billion a quarter and they mortgaging assets to maintain their cash on hand. Considering that costs should be reduced during bankruptcy they should have enough cash through the process if they don't hit any snags but they will almost certainly need a large cash infusion before exiting bankruptcy as the coffers will probably be dry by then. As for the exclusive period, 180 days will be here and gone long before they exit bankruptcy. Unless AA comes up with a reorg plan that blows the creditors away (which is not going to happen, AA is in bankruptcy to squeeze every cent they can out of them) , competing plans will be coming. Of course any talk of an acquisition is speculative at this point, but the cash on hand and exclusive period have nothing to do with it - it is speculative because we don't know who will be bidding, what their bids will be or what AA's own proposal will be. Things will start to take shape after those 180 days are up, sometime this summer I believe.

Quoting BobLoblaw (Reply 119):
Creditors will likely want to see AA survive as their best option.

Creditors don't care about AA's survival per se, they care about their investments! They will want to see whatever plan presents them with the largest return and in the quickest time frame to remove uncertainty. Now if AA staying in tact is the plan with the creditors feel will generate the most money for them then they will want to see AA survive. The employee groups are unique in that their interests do largely lie with AA surviving as a standalone carrier, however they can be given incentives as well to consider the breaking up of AA to be their best financial option as well (large one time cash bonuses, large cash payouts to retire, stock options, profit sharing, etc). It all comes down to who presents the best plan, but current management always has the advantage over competing proposals in that all things being equal the stakeholders and the court will want to maintain status quo.

Topic: RE: DL Interested In Acquiring AMR?
Username: JasonCRH
Posted 2012-01-13 07:07:46 and read 19971 times.

Having the headquarters in Houston was never an option - it was ALWAYS going to be in Chicago.

Quoting jcs17 (Reply 125):
DTW and MSP are much more efficient hubs than ORD and serve the same purpose as ORD without the delays and congestion. DL does plenty of business in Chicago. Besides, there is no chance at all that this gets approved with DL having hubs in MSP/ORD/DTW, especially under the current administration who made it a point that UA/CO had to move its headquarters to Chicago instead of Houston. Did UA/CO really want to do that? Not at all. Move from one of the most business-friendly states in the nation to one of the (if not the) least?

Topic: RE: DL Interested In Acquiring AMR?
Username: jetlanta
Posted 2012-01-13 07:25:16 and read 19721 times.

Like I said...this deal CAN get done.

http://blogs.wsj.com/overheard/2012/...a-american-might-fly/?mod=yahoo_hs

Quote:
Now, if Delta were to merge with American, their combined share of the domestic and regional air travel market would be 35%, according to CreditSights’ Roger King.

That sounds high: United Continental, which would be the second largest, would command 22%. But, as King points out, the Department of Justice has historically focused on individual routes when assessing competition effects, rather than overall concentration. So while a combined Delta-American would almost certainly have to make concessions in New York and across the Atlantic, the DoJ might not block the deal out of hand.

Topic: RE: DL Interested In Acquiring AMR?
Username: ckfred
Posted 2012-01-13 07:25:29 and read 19678 times.

Quoting ERJ170 (Reply 70):
UA would go for the ORD slots, perhaps with B6 and VX,

ORD isn't slot controlled. The slots disappeared around 2000. Now, there was an operations cap, limiting the arrival rate, I think from around 7am to 8pm, because of the delays. That came about in 2004. The cap was eliminated in November of 2008, when the 3rd east-west runway opened.

Correct me if I'm wrong, was wasn't TPG involved, when a Canadian hedge fund was trying to merge CP and AC? The combined carrier was going to be CP and continue as a Oneworld member. I seem to recall that TPG was providing some financing to AA, since AA owned a portion of CP.

As for Delta buying American, I just don't think it would get past the Feds. The combined carrier, based on traffic data, would control 27% of the U.S. market. It would control a significant portion of the traffic across the Atlantic, as well as traffic at JFK and LGA. You would also have to assume that the combined carrier would close ORD and shift traffic to DTW and MSP. The would give UA a monopoly at ORD.

Let me build on that one. Former Chicago mayor Rich Daley, President Obama's political benefactor, was adament that new competitors had to come into ORD. Even though UA and AA have been paying a lot of the cost of ORD upgrades, Rich felt that fares were too high (despite data that suggested that WN at MDW kept fares reasonable). That's why Rich fought the government to get B6 into ORD, while the operations cap on arrivals was in place, and why it got DL to return the lease on Concourse L, thereby allowing Virgin America into ORD.

Rich still has a lot of influence with the President, despite retiring as Mayor. And, the President's outgoing Chief of Staff, Bill Daley, is Rich's brother. He's going to work on the re-election campaign. Finally, the current Mayor, Rahm Emmanual, was the President's first Chief of Staff. He's been more willing to work with AA and UA to keep the costs of ORD modernization reasonable. But, the last thing he wants is AA, the #2 tenant, reducing service to LGA, MIA, DFW, and LAX.

This all points to the Obama administration not looking favorably on a DL buyout of AA.

Topic: RE: DL Interested In Acquiring AMR?
Username: Flighty
Posted 2012-01-13 07:28:48 and read 19659 times.

A deal like this can NOT get done. It is illegal. If it were to get done, it would have to be dismantled. I have my doubts whether UA, as it sits today, is legal. A consumer class action could plausibly break it up.

American's scale was never its problem. There is no efficiency gain to being larger than American. The only gain is on the pricing side, by exploiting the consumer in a manner that is measurably, and factually illegal.

Topic: RE: DL Interested In Acquiring AMR?
Username: AAIL86
Posted 2012-01-13 07:29:02 and read 19680 times.

Quoting DeltaMD90 (Reply 110):
Keep ORD, competing with a strong UA and WN @ MDW while competing with MSP and DTW, or keep MSP and DTW strong, hubs with very little competition serving the same region?

No, build up LAX, use ORD to keep UA honest and go for complete dominance at JFK and LGA. In the meantime dump MSP, CVG and SLC... AA's hubs- ATL excluded of course, are much better placed geographically and economically (and I say this as a native of Detroit   ). Plus it would be especially fun watching the DL mechanics attempting to strip all those widgets down to bare metal for a conversion to the AA livery. [ sarcasm off ]

Seriously though- it is amusing reading all the comments by DL fans salivating over what bits of AA they want for their airline. Of course, what AA fanboy or girl wouldn't want to add ATL to the AA network. Anything's possible, of course- but even a partial merger seems far-fetched- but who knows. Those of us with an interest in nautical history will remember that even the great shipping rivals Cunard and White Star lines were forced into a once unthinkable merger in the early 1930s.

Quoting LAXtoATL (Reply 128):
The employee groups are unique in that their interests do largely lie with AA surviving as a standalone carrier, however they can be given incentives as well to consider the breaking up of AA to be their best financial option as well (large one time cash bonuses, large cash payouts to retire, stock options, profit sharing, etc).

Let's not forget that UA, DL, NW and US all emerged from BK relatively unscathed - and even an extremely weak DL was able to emerge as a standalone carrier last time around. I don't see any reason why AA- as the world's largest airline 4 years and only bested by mergers- can't do the same. But who knows - if predicting the future was that easy- we'd all be somewhere else instead of posting on A.net!

Topic: RE: DL Interested In Acquiring AMR?
Username: ckfred
Posted 2012-01-13 07:34:14 and read 19595 times.

You also have to wonder how much labor trouble DL would be getting with buying out AA. I know several AA pilots who have a very poor opinion of ALPA. So, the question as to whether ALPA or APA would represent the combined work group would be heated.

The question as to whether or not APFA and TWU would represent the F/As and ground workers, respectively, would also be heated. Considering that DL just went through these union votes after buying NW, how badly does DL want to go through that experience a second time?

Topic: RE: DL Interested In Acquiring AMR?
Username: LAXdude1023
Posted 2012-01-13 07:35:37 and read 19670 times.

I think some of you Delta cheerleaders need some perspective:

US Airways Proposes Merger With Delta (by PanAm_DC10 Nov 15 2006 in Civil Aviation)

Topic: RE: DL Interested In Acquiring AMR?
Username: mikey72
Posted 2012-01-13 07:38:58 and read 19524 times.

Look you lot never mind all that American domestic guff....

...what about us poor European saps this side of the pond....

Wouldn't this stick an A-BOMB right up the as* of all the alliances ?

Two of them would have to merge.

Every CEO from every airline in all 3 alliances would have to sit around a table and basically carve up the world from scratch. Bring some efficiency and common sense to the proceedings.

Maybe they should do that anyway !

This is all getting ridiculous now.

Topic: RE: DL Interested In Acquiring AMR?
Username: commavia
Posted 2012-01-13 07:39:46 and read 19576 times.

Quoting LAXtoATL (Reply 128):
AMR will be in bankruptcy roughly a year that $4bln will not last long. I think they were burning through a billion a quarter and they mortgaging assets to maintain their cash on hand.

That cash burn - particularly as we move into the spring and summer, and as AA begins to reject unnecessarily costly elements of their business model - should slow dramatically.

Quoting LAXtoATL (Reply 128):
Creditors don't care about AA's survival per se, they care about their investments!

The union creditors are going to have a vested interest in AA's survival, and I doubt that any competing business plan is going to be able to sufficiently "buy them off." I could see a competing business plan winning that involves a merger, but not one with Delta. A Delta transaction would basically require AA to be broken up to even have a shot (and I still believe it's a shot) at getting regulatory approval, and I fail to see how the unions are going to ever happily go along with that.

Quoting jetlanta (Reply 130):
Like I said...this deal CAN get done.

It "CAN" get done because some Wall Street analyst said the DOJ "might" not block the deal? I'm sorry - still not buying it, no matter how certain you seem to be.

I get your point about the DoJ assessing market concentration based on specific markets, but as you yourself have alluded to, the airline industry is inherently a network business, and with something this large, that would have this broad and sweeping an impact on market competition in not just particular individual markets but across the entire network, I could easily see the DoJ wanting massive concessions to approve this deal. And, again, I believe those concessions would render the deal useless - by the time it was all said and done Delta would basically end up with DFW and Miami and nothing else. There would be no point - for Delta, maybe, not for AMR's creditors.

A transaction with USAirways - at least from a regulatory perspective - makes far more sense as the two networks - both on a market-by-market basis and holistically - are far more complimentary and far less overlapping, and since USAirways is a far smaller airline than Delta. I suspect that hypothetical merger would probably garner far less regulatory challenge.

Quoting AAIL86 (Reply 133):
Let's not forget that UA, DL, NW and US all emerged from BK relatively unscathed - and even an extremely weak DL was able to emerge as a standalone carrier last time around. I don't see any reason why AA- as the world's largest airline 4 years and only bested by mergers- can't do the same.

  

Precisely. I get it that Delta and United fans love the idea of AA being broken up and sold off, but I simply fail to see why AMR's bankruptcy is likely to be any different than the others that have come before it, particularly considering that AA is arguably in a far stronger position going into Chapter 11 than either Delta or United were. Anything is possible, of course, and bankruptcy always opens up the potential for uncertainty and surprise, but from my perspective the fundamentals in 2012 are at least as good as they were for other carriers, and point to an outcome at least similar to those airlines - which is to say, likely, an independent one, or at a minimum, some form of strategic transaction on something a little closer to AMR's terms than merely having Delta come in - as some are suggesting here - and simply pick and choose whatever it wants. Personally, for a variety of reasons - economic, strategic, political, regulatory - I simply do not see that happening.

Topic: RE: DL Interested In Acquiring AMR?
Username: bevisisback
Posted 2012-01-13 07:43:37 and read 19443 times.

Quoting mikey72 (Reply 136):
Wouldn't this stick an A-BOMB right up the as* of all the alliances ?

Two of them would have to merge.

Every CEO from every airline in all 3 alliances would have to sit around a table and basically carve up the world from scratch. Bring some efficiency and common sense to the proceedings.

This is what makes me think it will never happen. The domestic issues would be enough of a headache. When you bring in everything else.... just my two cents....

Topic: RE: DL Interested In Acquiring AMR?
Username: LOWS
Posted 2012-01-13 07:45:28 and read 19414 times.

Quoting Flighty (Reply 132):
A deal like this can NOT get done. It is illegal. If it were to get done, it would have to be dismantled. I have my doubts whether UA, as it sits today, is legal. A consumer class action could plausibly break it up.

care to elaborate?

Topic: RE: DL Interested In Acquiring AMR?
Username: TOMMY767
Posted 2012-01-13 07:46:48 and read 19513 times.

I think US wants ORD for certain.

DL wants MIA, LHR slots, LAX and JFK T-8.

I think both carriers would want DFW but it's a toss up. I think US technically would have more need for DFW than DL.

DL doesn't care much for ORD, just like I don't think US cares much for MIA.

Topic: RE: DL Interested In Acquiring AMR?
Username: United1
Posted 2012-01-13 07:59:02 and read 19271 times.

Quoting commavia (Reply 137):
Quoting AAIL86 (Reply 133):
Let's not forget that UA, DL, NW and US all emerged from BK relatively unscathed - and even an extremely weak DL was able to emerge as a standalone carrier last time around. I don't see any reason why AA- as the world's largest airline 4 years and only bested by mergers- can't do the same.

  

Precisely. I get it that Delta and United fans love the idea of AA being broken up and sold off, but I simply fail to see why AMR's bankruptcy is likely to be any different than the others that have come before it, particularly considering that AA is arguably in a far stronger position going into Chapter 11 than either Delta or United were

...but unlike during UAs and DLs bankruptcy filings the industry itself is fairly healthy. UA and DL both have a significant amount of cash and financing available to play with...that wasn't the case when UA or DL went through BK. At that point their competitors were simply trying to survive.

Topic: RE: DL Interested In Acquiring AMR?
Username: mikey72
Posted 2012-01-13 07:59:47 and read 19314 times.

Quoting TOMMY767 (Reply 140):
DL wants MIA, LHR slots, LAX and JFK T-8.

The cornerstone of AA at Terminal 8 is New York-London/Heathrow service, which, during the day, is nearly hourly, given that AA is now able to coordinate schedules and pricing with partner BA.

BA itself has huge investment at JFK Terminal 7.

To anyone with an iota of business acumen DL would have to get into bed (without a rubber !!) with BA.

2 American majors....3 European majors....something would have to give. oneWorld and Skyteam would have to merge.

Topic: RE: DL Interested In Acquiring AMR?
Username: kgaiflyer
Posted 2012-01-13 08:18:14 and read 18982 times.

Quoting mikey72 (Reply 142):
The cornerstone of AA at Terminal 8 is New York-London/Heathrow service, which, during the day, is nearly hourly, given that AA is now able to coordinate schedules and pricing with partner BA.

More probably, the complete Dallas infrastructure is the real cornerstone of AA services.

AA headquarters, four different domestic and international terminals (132 gates), and major maintenence seem *at least* as important as the JFK terminal.

Remember that AA is also a major domestic carrier.

Topic: RE: DL Interested In Acquiring AMR?
Username: mikey72
Posted 2012-01-13 08:34:52 and read 18728 times.

Quoting kgaiflyer (Reply 143):
More probably, the complete Dallas infrastructure is the real cornerstone of AA services.

AA headquarters, four different domestic and international terminals (132 gates), and major maintenence seem *at least* as important as the JFK terminal.

Remember that AA is also a major domestic carrier.


Agreed. I'm just saying that if DL did grab AA and has its eye on playing hardball across the Atlantic from a desired dominant position at JFK...... to gain an ''effectual'' result at LHR it will need IAG on side.

Topic: RE: DL Interested In Acquiring AMR?
Username: mpdpilot
Posted 2012-01-13 08:51:35 and read 18445 times.

Quoting avek00 (Reply 43):
Antitrust law would not generally block a DL/AA combo depending on the concessions offered at a few key airports. There's nothing wrong, in and of itself, with being gigantic so long as effective competition is able to enter a given market and fairly compete.
Quoting jetlanta (Reply 67):

This is right, if you look at past examples, the DOJ and DOT look at individual markets and the overall system and no carrier should be merging into more than 70% market share. So with AA/DL merging they would see issues in New York and thats about it as they wouldn't even break 50% in overall market share.

That being said, I don't think DL would want a straight merger with AA, they would want to buy it and close down certain hubs that they don't need, allowing someone like US airways or someone else to pick up the slack, NYC (SW), DFW (US), and ORD (UA. B6) come to mind as these are doubles in the combined DL/AA network.

All that being said, I think AA comes out stand alone. Even a merger with US Airways would bring into question the northeast issue (though the slot swap makes this less of an issue than it would have been, maybe that is even the reason US wanted to get rid of the LGA slots) and they would be in the same issue they had with UA way back when. Not to say that it won't happen just that it wouldn't be easy certainly not much easier than DL/AA.

Quoting STT757 (Reply 68):
AF and CDG vs BA and LHR. It's not a tough decision

But it isn't just AF at CDG vs BA at LHR, it is AF, KL, and Alitalia at CDG, AMS, FCO, MXP vs BA at LHR. Not as easy of a decision. I think regardless of what happens DL stays with ST.

Topic: RE: DL Interested In Acquiring AMR?
Username: MasseyBrown
Posted 2012-01-13 08:53:48 and read 18428 times.

Quoting mikey72 (Reply 136):
Look you lot never mind all that American domestic guff....

...what about us poor European saps this side of the pond....

Wouldn't this stick an A-BOMB right up the as* of all the alliances ?

The EU/EC could, of course, refuse to allow a merger of the European routes. In fact, I wouldn't be surprised to see European objections to a Delta deal just as difficult to overcome as US objections.

I think DL's plan is simply to pick over the carcass for juicy bits, meddle in their own interests, and insure that US has to overpay for any merger they might be part of.

Topic: RE: DL Interested In Acquiring AMR?
Username: irishtexan
Posted 2012-01-13 08:56:05 and read 18368 times.

Off the original topic, but does Texas Pacific Group still have an ownership interest and board membership in Ryanair? Also seem to recall various TPG forays into airline acquisition (WizzAir and Qantas among others). They would appear to have the deepest pockets, or at least the fattest wallets, of the interested parties.

Topic: RE: DL Interested In Acquiring AMR?
Username: MasseyBrown
Posted 2012-01-13 09:01:57 and read 18318 times.

Quoting mpdpilot (Reply 145):
This is right, if you look at past examples, the DOJ and DOT look at individual markets and the overall system and no carrier should be merging into more than 70% market share. So with AA/DL merging they would see issues in New York and thats about it as they wouldn't even break 50% in overall market share.

In transportation, 40% of the market has traditionally been called an effective monopoly for anti-trust purposes. A creative DOJ/DOT could go after enough individual route monopolies to derail any airline merger if they wanted to. The Obama DOJ has been somewhat creative, but not in the field of anti-trust. Nevertheless, AA-DL is sufficiently attention getting that the government would have to do something fairly drastic.

Topic: RE: DL Interested In Acquiring AMR?
Username: realsim
Posted 2012-01-13 09:22:42 and read 18003 times.

I don't understand why a lot of people here assume that DL will rule the decision and decide which hubs and aircraft they will keep and which will be given as leftovers to US...

The only sure thing if US and DL reach an agreement is that JFK would go to DL and ORD to US. Apart from that, I think nothing else it's clear. MIA fits better in US, because CLT is more a domestic hub than an international one, so the overlap will be smaller than ATL's one. And, as I said before, I'm sure UA would also try to buy that asset. DFW could be wanted by both DL and US, as well as LAX.

Anyway, one would think that the 3 union seats in the committee will prefer that AA remains alive as an independent carrier. I also think that Boeing would prefer it, even with AA's Airbus order, because Boeing wants to sell as many aircraft as possible, so the more legacies there are, the better. Besides, AA has the 77W on order and will confirm the 787 order the day after they sign the new contract with the pilots, and that may not happen with DL, as they defered the NW aircraft. And, finally, this is pure speculation, but AA and HP have a close relationship, so they could also prefer that AA survives as a stand alone carrier.

If we add these considerations to anti trust regulations, political implications, and the fact that I'm sure that AA will present a solid reorganization plan in the next weeks, I see little chances of AA being broken up while in CH11. A US merger, although I think that AA doesn't need it, may be more plausible.

The best possibility for AA, in my opinion, is to merge with B6, expand T8, and sell T5 to DL. But I don't think B6 will make any move.

Topic: RE: DL Interested In Acquiring AMR?
Username: ual777uk
Posted 2012-01-13 09:28:18 and read 17883 times.

Quoting MasseyBrown (Reply 146):
I think DL's plan is simply to pick over the carcass for juicy bits, meddle in their own interests, and insure that US has to overpay for any merger they might be part of.

I think you are soo right, I think any suggestion that DL will just take over AA full stop is wishful thinking on some peoples parts and they need to stop salivating or they might drown. If DL do make a play for some parts, I suspect UA will not just sit there idly either.

Topic: RE: DL Interested In Acquiring AMR?
Username: staralliance85
Posted 2012-01-13 09:36:50 and read 17775 times.

Besides CLT, US doesn't offer AA much value! US has a ton of labor issues that would make maters at AA worse. UA did Not want US and I doubt AA will want them either. US really needs AA but AA does Not need US.

Quoting realsim (Reply 149):

The best possibility for AA, in my opinion, is to merge with B6, expand T8, and sell T5 to DL. But I don't think B6 will make any move.

AA is probably thinking about it once they get out of CH11.It would please DL because they would love to leave outdated T2 for modern T5. I think B6 would prefer to merge with VX before AA. But I could be wrong.

Topic: RE: DL Interested In Acquiring AMR?
Username: avek00
Posted 2012-01-13 09:37:27 and read 17876 times.

Quoting MasseyBrown (Reply 148):
A creative DOJ/DOT could go after enough individual route monopolies to derail any airline merger if they wanted to.

Not really, as DL-AA would have very, very few city pair monopolies, and those which do exist can be remedied by offerings of gates (and where applicable, slots) to new market entrants.

Size alone does not kill airline mergers, period.

Topic: RE: DL Interested In Acquiring AMR?
Username: nyc2theworld
Posted 2012-01-13 09:48:32 and read 17661 times.

Why wouldn't UA go after MIA...I don't think I've seen that suggested. This will give *A a great hub to connect Europe to South America.

Topic: RE: DL Interested In Acquiring AMR?
Username: chepos
Posted 2012-01-13 10:05:02 and read 17501 times.

I don't think this will happen.
How quickly we forget the whole DL fighting off US Airways when Doug decided to do a hostile takeover. AMR might be bankrupt but I doubt they are just going to play dead and let the airline get dismatled. Let's get real people just because DL wants some parts off the airline it does not mean it will happen that easily. I can see many parties try and either stop this or slow this down that's if DL is serious about this. I've said it once and I will say it again, it's beyond me why people around here are so gun-ho about airline mergers, the ones who loose are the employees themselves.

Regards,

Chepos

Topic: RE: DL Interested In Acquiring AMR?
Username: Alias1024
Posted 2012-01-13 10:18:07 and read 17397 times.

Quoting staralliance85 (Reply 151):

Besides CLT, US doesn't offer AA much value! US has a ton of labor issues that would make maters at AA worse.

I actually think there are two pieces that add more than CLT. To me the juicy bits of US are PHL and DCA. They totally dominate the fifth largest metro area in the United States at their PHL hub. With the slot swap deal, US is going to be the far and away leader at DCA, the preferred airport for much of the business traffic to Washington DC, the nation's capitol and seventh largest metro area.

CLT has the banking business to add to it's appeal, but the populations of both Washington DC and Philadelphia are over three times larger than Charlotte. The plus to Charlotte is that it is a relatively inexpensive and uncongested facility, which tons of people can be crammed through. It would be a nice addition for connections up and down the east coast, but would probably see it's role somewhat diminshed in a merger with AA.

All that said, I still think AA has a good chance of emerging as a stand alone carrier. Not only is it in the interest of the employee group, but I'm betting there are a few large creditors that will feel the same way.

Topic: RE: DL Interested In Acquiring AMR?
Username: mikey72
Posted 2012-01-13 10:22:31 and read 17351 times.

Quoting mpdpilot (Reply 145):
But it isn't just AF at CDG vs BA at LHR, it is AF, KL, and Alitalia at CDG, AMS, FCO, MXP vs BA at LHR. Not as easy of a decision.

Well it's IAG isn't it which includes IB at MAD....is that the faint beat of the Tango I can hear.........South America beckons...if DL wants South America in its clutches AA at MIA and IB in MAD are a pretty good place to start

[Edited 2012-01-13 10:24:32]

Topic: RE: DL Interested In Acquiring AMR?
Username: Flighty
Posted 2012-01-13 10:30:10 and read 17279 times.

Quoting LOWS (Reply 139):
care to elaborate?

This all got explored during the age of rail. If there were no anti-trust laws, we would have 1 phone company... 1 oil company... probably an airline company and a rail company. It would be impossible (indeed probably illegal) to start competition with them. They would of course write the laws. Their pricing structure would mirror the maximum amount you can pay.

In rail times, the price for freight might equal how badly you need the medicine on the railcar. If it's worth $10,000, then they would charge $10,000 per medicine unit. They can take all the money in a town. Or the oil field... as seen in the exchange between Daniel Day Lewis and the big oil men in There Will Be Blood. Towns vs rail companies did interact in that way.

Today, airlines are making a move to capture broader economic power thorugh pricing power. Past a certain market concentration, super DL, UA and WN could crush VX, B6, US, F9 (it gets easier as you go), in which case we have a natural outcome absent anti-trust laws. No possibility to launch a new entrant airline without predatory pricing and quick death. It's hard to enforce that, so market concentration is really a proxy for ability to engage in predatory pricing, it could be argued.

Quoting MasseyBrown (Reply 148):
In transportation, 40% of the market has traditionally been called an effective monopoly for anti-trust purposes.

It depends how you divide it. Say SLC-MOB. It is tricky to correctly model monopoly forces in the biz.

Topic: RE: DL Interested In Acquiring AMR?
Username: ItalianFlyer
Posted 2012-01-13 11:25:13 and read 17053 times.

I think this is much ado about nothing. Corporate leadership has a fiduciary responsibility to explore optioins that would enhance operational strength and shareholder value. The capital outlays to hire legal firms to look at anti-trust issues and labor complexities is a drop in the ocean. Management at DL would not be doing their jobs if they did not examine some kind of tie up with AA and AA would not be doing their by not entertaining one. I know for a fact from my days at NWA that there were talks with AA and CO....obviously, nothing became of them.

As many have mentioned above...both carriers have enormous strengths and glaring weaknesses. AMR is not TWA or EAL or PAA. The economic landscape of 2012 is not that of 07. It is all interesting speculation....but until there is actual due diligence this is just tire kicking.

Topic: RE: DL Interested In Acquiring AMR?
Username: 1337Delta764
Posted 2012-01-13 11:37:01 and read 17272 times.

If DL kept the AA name, perhaps this would be the logo:

Topic: RE: DL Interested In Acquiring AMR?
Username: TOMMY767
Posted 2012-01-13 11:49:54 and read 17070 times.

Quoting 1337Delta764 (Reply 159):

NOOOOOOOOOO!!!!!!!!!!!!!!!!!!!!!!!

Topic: RE: DL Interested In Acquiring AMR?
Username: CALPSAFltSkeds
Posted 2012-01-13 12:28:26 and read 16885 times.

No? How about this?

Topic: RE: DL Interested In Acquiring AMR?
Username: Splitterz
Posted 2012-01-13 12:35:45 and read 16785 times.

Quoting CALPSAFltSkeds (Reply 161):
No? How about this?

This made my day. Thanks 

Topic: RE: DL Interested In Acquiring AMR?
Username: MasseyBrown
Posted 2012-01-13 12:57:39 and read 16592 times.

Quoting avek00 (Reply 152):
Size alone does not kill airline mergers, period.

Not lately, but it used to - and not that long ago. My personal opinion is that DL/NW and UA/CO should not have been permitted.

Quoting Flighty (Reply 157):
It depends how you divide it. Say SLC-MOB. It is tricky to correctly model monopoly forces in the biz.

Why pick MOB? You could find lots of better routes to mess with. How about JFK-LHR? JFK-LAX? Or target hubs - order the surviving entity to disposed of four hubs as functioning entities. If the administration wanted to throw up a roadblock, there is no question they could. The current DOT, however, seems convinced that a smaller industry is a better one for both the industry and for labor; and the DOJ's efforts are aimed at reelecting the President.

Topic: RE: DL Interested In Acquiring AMR?
Username: klkla
Posted 2012-01-13 13:50:47 and read 16341 times.

Quoting ERJ170 (Reply 70):
But that's just my opinion.. DL doesn't really seem to need or want MIA since it has ATL. It m
ay add some flights but I don't see DL wanting it as a hub. I could be wrong, but that's just not what I see..

I diasgree. I think DL would be happy if they got nothing but MIA. Even though it's relatively close to Atlanta it serves an entirely different purpose. DL has wanted to expand in rapidly growing South America for a long time and this would be perfect. Maybe work out a deal with US where DL keeps MIA and LAX terminal and US gets everything else.

Topic: RE: DL Interested In Acquiring AMR?
Username: william
Posted 2012-01-13 14:00:49 and read 16307 times.

Interesting artilcle on the subject. An interesting point is that TPG is a AA friend.

http://www.star-telegram.com/2012/01...erican-airlines-in-bankruptcy.html

Topic: RE: DL Interested In Acquiring AMR?
Username: BobLoblaw
Posted 2012-01-13 14:25:46 and read 16119 times.

Quoting LAXtoATL (Reply 128):
Creditors don't care about AA's survival per se, they care about their investments!

There arent too many examples of creditors in the airline industry abandoning the original company for a takeover in Chapter 11 when top management doesnt want to be taken over..

Delta if it tries to buy AA will be far far more leveraged than AA is post bankruptcy and AMR will gladly point this out. Also it will be far easier to get the large number of creditor groups to agree to AMR's proposal than it will be to get them on board to a Delta proposal.

Like i said above. AA's is a viable airline with lower costs. It isnt as though they are TWA or Pan AM or Eastern. The advantage here is with AA being successful in restructuring and the Delta bid being rejected. I think US would have a more likely chance than DL of being accepted due to DOJ.

If the centerist Clinton Admin rejected UA/US in 2000 with far far more competition remaining in the industry, it is highly unlikely that the left of center obama admin with the new consumer affairs office will approve a merger that will result in one carrier having nearly 30% of the domestic market especially since UA's response would be to buy US and the American Aviation Market would be left with two legacies and Southwest.

Topic: RE: DL Interested In Acquiring AMR?
Username: BobLoblaw
Posted 2012-01-13 14:30:52 and read 16101 times.

Quoting avek00 (Reply 152):
Not really, as DL-AA would have very, very few city pair monopolies, and those which do exist can be remedied by offerings of gates (and where applicable, slots) to new market entrants.

DOJ and DOT are far more sophisticated than that. They dont care about route overlap like DFW-ATL but will care about total market concentration and the ability to leverage that concentration to raise fares.

With very few exceptions (WN trying to get into ATL), lack of gates isnt what prevents competition. It is S-curve that prevents startups from taking on hub carriers in their points of strength.

Topic: RE: DL Interested In Acquiring AMR?
Username: LAXtoATL
Posted 2012-01-13 14:45:11 and read 16042 times.

Quoting BobLoblaw (Reply 166):
Delta if it tries to buy AA will be far far more leveraged than AA is post bankruptcy and AMR will gladly point this out. Also it will be far easier to get the large number of creditor groups to agree to AMR's proposal than it will be to get them on board to a Delta proposal.

You don't know this until you see what the proposals are and that is if Delta even makes one. There is no way to judge which one is better until they are made. As I already mentioned earlier, all things being equal or near equal in the proposals the creditors (stakeholders) will surely back the AMR plan.

Quoting BobLoblaw (Reply 166):
AA's is a viable airline with lower costs.

But how low? Keep in mind that the costs are being lowered on the backs of the creditors.

Quoting BobLoblaw (Reply 166):
It isnt as though they are TWA or Pan AM or Eastern.

TWA, Pan AM, and Eastern weren't either until they were. I'm not saying AA will be purchased or broken up, but no one on this planet knows that they won't either - there is an inherent uncertainty with bankruptcy.

Quoting BobLoblaw (Reply 166):
The advantage here is with AA being successful in restructuring and the Delta bid being rejected.

Agreed.

Quoting BobLoblaw (Reply 166):
I think US would have a more likely chance than DL of being accepted due to DOJ.

Once again without knowing what US or DL might propose I have a hard time handicapping that race. I was shocked Delta was even interested in AA, but if they are serious they have to have just as good a chance of succeeding as US. As for the DOJ, I believe concessions will be required but that can be managed (a lot of people thought the US-DL slot wap was dead because of DOJ objections but it got worked out).

Quoting 1337Delta764 (Reply 159):
If DL kept the AA name

I have a hard time believing if DL acquired all or part of AA that they would change the name. They have spent too much time and effort building the DL brand in key markets both domestically and internationally (in markets where American has little to no presence). Also, hypothetically if DL and US were to divide up AA's assets (as some have proposed in this thread) the AA name would be far more valuable to US than DL. I am not as sure about Delta over American as I was about United over Continental, but I strongly think the Delta name sticks (for both internal and external reasons).

Topic: RE: DL Interested In Acquiring AMR?
Username: AADC10
Posted 2012-01-13 14:51:01 and read 16035 times.

Quoting LAXdude1023 (Reply 37):
This may well be DL trying to force US to come out of hiding and reveal their intentions.

I cannot see this passing any hurdles from a anti trust stand point without serious concessions.

That is a good possibility. There were some fake rumors of UA making a second attempt at US that restarted the UA-CO merger.

While US is not an obvious or particularly good merger partner, US is going to have trouble surviving without some scale and Doug Parker was an AA exec under Bob Crandall.

A DL-AA merger is not likely to pass the Justice Department. Many years ago UA floated the concept of merger with DL which got shot down as not passing anti-trust judgements. AA would not survive after selling a significant portion of itself. AA saw what happened to TW after it bought their LHR slots.

Quoting yellowtail (Reply 48):
AA is generally a more recognizable name but Delta is a better global brand name.

How is that? Delta refers to the Mississippi River Delta. That seems even more provincial than American. Do you think that foreigners would not buy tickets on 5th freedom routes because they hate the USA? Pan-American World Airways seemed to operate for a few years without that problem.

Topic: RE: DL Interested In Acquiring AMR?
Username: FlyASAGuy2005
Posted 2012-01-13 16:14:30 and read 15754 times.

Quoting ItalianFlyer (Reply 158):

I promised myself that I wasn't even going to post on this thread but you sir, has probably stated one of the few points that actually made sense. Idk where all this uproar is coming from. Its nothing more and nothing less than what you stated.

No different than when all the US carriers "explored" the A380 or when DL recently sent analysts to Airbus to have a look at the 350. They're not doing their jobs if they don't explore all opportunities.

Now, you guys can get back and have at it  

Topic: RE: DL Interested In Acquiring AMR?
Username: delimit
Posted 2012-01-13 16:49:27 and read 15616 times.

Re: BA or AF...people saying that LHR vs CDG should figure into this decision are failing to consider just how much presence a combined AA/DL would have at LHR even without BA. Staying with AF does not cost the combined carrier London. And without London what does BA bring to the table that AF doesn't already supply?

Topic: RE: DL Interested In Acquiring AMR?
Username: aircanada014
Posted 2012-01-13 17:39:47 and read 15424 times.

Lets hope DL doesn't take over AA. I'd rather see AA survive than DL..

Topic: RE: DL Interested In Acquiring AMR?
Username: Splitterz
Posted 2012-01-13 17:45:32 and read 15391 times.

Quoting aircanada014 (Reply 172):
Lets hope DL doesn't take over AA. I'd rather see AA survive than DL..

I'd rather see F9 survive. Here's to the Animals!   



All in good fun.

Topic: RE: DL Interested In Acquiring AMR?
Username: yendig
Posted 2012-01-13 17:56:46 and read 15308 times.

Quoting IADLHR (Reply 18):
I think what could happen is that at some point BA will make nosies, again, about raising the foreign ownership levels in US airlines to 51%. BA will say that doing so will preserve competition jobs.

Is it just airlines that the US government insists on sub-50% foreign ownership of? I know the link is from Wikipedia, however I see that European auto firm Fiat now own nearly 59% of Chrysler...

http://en.wikipedia.org/wiki/Chrysler

Quoting enilria (Reply 98):
Most likely to least likely

1) IAG allies with TPG and makes a successful DIP bid

How about IAG buy a controlling interest in AA, as Fiat have with Chrysler?

Topic: RE: DL Interested In Acquiring AMR?
Username: toltommy
Posted 2012-01-13 18:56:44 and read 15083 times.

Quoting yendig (Reply 174):
How about IAG buy a controlling interest in AA, as Fiat have with Chrysler?

Not possible because its an airline, not an automaker. IIRC, no more that 49%, and no more than 25% of voting shares.

Topic: RE: DL Interested In Acquiring AMR?
Username: point2point
Posted 2012-01-13 19:58:19 and read 14898 times.

Wow.... so much to comment on here....

Quoting enilria (Reply 98):
also believe there are scenarios here where F9 is shutdown

 
How did F9 get into this? Maybe RAH will make a bid for AA as well as all of the others? After all, Brian Bedford does have a lot of friends here in the airline biz......

Quoting par13del (Reply 8):
If AA sheds 50-60% of itself in Chpt.11 no one really cares who buys them

and if somehow this were to be, well..... this could lead to the perfect opportunity for BB and RAH to make their move.

Quoting Flighty (Reply 132):
A deal like this can NOT get done. It is illegal. If it were to get done, it would have to be dismantled.

Huh????

Some elaboration could be good here....

Quoting LDVAviation (Reply 22):
Clever move by Delta. They are trying to entice US Airways to make a bid. They want to muddle the process.
Quoting rjm777ual (Reply 29):
Wow good move by DL.

   oh yes.....

Quoting catiii (Reply 31):
Could it be a move by DL to force US' hand, and thus begin the industry consolidation endgame in the United States?
Quoting LAXdude1023 (Reply 37):
This may well be DL trying to force US to come out of hiding and reveal their intentions.
Quoting srbmod (Reply 30):
Then again, TPG Capital was the company that bought Midwest Air Group in order to stave off the hostile takeover bid from AirTran. TPG Capital lost a lot on that deal considering they bought Midwest for $452 million and eventually sold the airline to Republic for $31 million.
Quoting ScottB (Reply 56):
Perhaps Delta's goal is to bid up the price for US, thus making the "new" American's capital structure less competitive after reorganization. Or perhaps the goal is to gain an asset like MIA or DFW as the result of a negotiation to drop a bid for AMR.
Quoting srbmod (Reply 57):
But of course there is some risk to that strategy. What if DL makes an offer that US doesn't match. This is how TPG Capital ended up with Midwest, as they upped their offer and AirTran walked away from the bidding.

I think that DL will know exactly what it wants, and will put in such a bid that if it wins the bid, it will get what it wants, and if it losses the bid, well then, it has driven up the price for everyone else. I think that DL will do what best it can to be in a win/win position for itself, which is what management needs to be looking at here.

Quoting deltaflyertoo (Reply 36):
The reality is to get the US market fully balanced (its only half way there) an airline has to die.

Why? I think that I can basically disagree with this. Maybe more elaboration can help?

Quoting silentbob (Reply 51):
Quoting micstatic (Reply 45):
As stated above, a good move by Delta as it could push AA to reveal more about their post CH11 plans.

No, it won't. It will require AA (as well as US) and another other bidders to make the offer more lucrative to the creditor committee. That will make it more expensive to exit bankruptcy and be a larger financial burden to the company over the long term.

But I think that from DL's pov, if this will deprive a competitor of capital, then of course this has to work in DL's favor

......

And of course, this situation is quite serious for the stakeholders involved. May all somehow have a good ending for the many parties, especially the AA employees since it's mostly with them that my sentiments are, and that as many as possible keep receiving their paychecks, and are able to have some sort of quality of life for themselves and those important to them.

But here on a.net, I think that most of us can agree to disagree with courtesy on a thread such as this, and even have a bit of fun while we theorize into the future with all of the whats and ifs, and possibly learn something new from the events as they take place.

 

Topic: RE: DL Interested In Acquiring AMR?
Username: avek00
Posted 2012-01-13 20:17:37 and read 14945 times.

Quoting BobLoblaw (Reply 167):
DOJ and DOT are far more sophisticated than that. They dont care about route overlap like DFW-ATL but will care about total market concentration and the ability to leverage that concentration to raise fares.

Airline antitrust analysis by DOJ/DOT tends to do the exact opposite of what you're suggesting. If AA and DL want to merge, as DL's advisors correctly pointed out, the antitrust hurdles can be overcome.

Topic: RE: DL Interested In Acquiring AMR?
Username: boilerla
Posted 2012-01-13 22:06:19 and read 14697 times.

One thing that has bothered me in all of this...can DL afford to buy AA?

AA had $4 billion in cash on hand when it filed BK. It had a market cap of around $1 billion, but its cash position was strong compared to their peers when they entered BK (nearly 4x the cash of DL when it entered BK). AA didn't need debtor-in-possession (DIP) financing, so DL can't cherry pick the assets it wants in a sale forced by the creditors. This also raises the likelhood that any sale of AA would at least go for the amount of cash AA has on hand; why sell a dollar bill for less than a dollar?

DL's cash on hand now is just at $3billion so they obviously need external financing, and/or a stock deal, to make a merger with AA possible. But AA's creditors are unlikely to want DL stock unless they can sell it ASAP (to get SOME kind of return on their AA money owed), but that would tank the DL stock price. DL's shareholders will most likely balk at any deal that gives AA's creditors massive amounts of new stock.

So, where is the money going to come from without massive amounts of new debt? If they wait until AA is out of BK, they can then make a stock swap a reality, since they wont' have to deal with the creditors but rather the new shareholders. Until then I don't see how it'll be possible, but I could very well be missing something.

Topic: RE: DL Interested In Acquiring AMR?
Username: jcs17
Posted 2012-01-13 23:00:05 and read 14578 times.

Quoting luckyone (Reply 127):
I'm not sure I follow. United's headquarters was already in Chicago, so it wasn't like the entirety of both companies was moved there

Taxes in Illinois are horrible, both in terms of corporate and personal income taxes. Texas has no personal income tax, and they are very tax-friendly when it comes to large corporations. Unfortunately for the new United, we have a President who is a product of the Chicago machine (the last city in the US that actually has "machine politicians"), and most likely the DOJ would've never approved the merger had the headquarters moved to Houston.

Trust me, if it was up to the bosses at UA and CO, you'd have the new UA headquarted in Houston.

Topic: RE: DL Interested In Acquiring AMR?
Username: mikey72
Posted 2012-01-14 00:10:03 and read 14536 times.

Quoting delimit (Reply 171):
Re: BA or AF...people saying that LHR vs CDG should figure into this decision are failing to consider just how much presence a combined AA/DL would have at LHR even without BA. Staying with AF does not cost the combined carrier London. And without London what does BA bring to the table that AF doesn't already supply?
BA : 18 744's, 14 777's, 2 767's and 2 A318's depart London for the U.S.A daily.

That's 36 (high yielding) departures compared to 14 at AF.

Factor in anti-trust immunity and it's a no brainer.

BA flies more times daily to the U.S.A from London than DL, AA and AF (CDG) combined.....!!

I would of thought that's quite alot ($$$) to bring to the table ?

[Edited 2012-01-14 00:15:31]

Topic: RE: DL Interested In Acquiring AMR?
Username: CALPSAFltSkeds
Posted 2012-01-14 00:41:26 and read 14449 times.

Quoting mikey72 (Reply 180):
That's 36 (high yielding) departures compared to 14 at AF.

Are you forgetting KL at AMS. I don't have a count of AMS-US flights on KL, but if DL dropped out of SkyTeam, I doubt they'd be flying nonstop to AMS and CDG from non-US hubs from the following list of DL flights. That's almost half of the 22 mostly widebodies flights to Sky Team hubs that could be cancelled. And say goodbye to multiple frequencies CDG-ATL, AMS-MSP and AMS-DTW plus CDG-SLC if DL bolts SkyTeam. There would be no way to get more slots at LHR to make up for those flights.

DL nonstop to SkyTeam hubs
CDG-JFK, MSP, DTW, ATL2, BOS, ORD, CVG, SLC = TOTAL 9
AMS- PDX, SEA, EWR, JFK, BOM, MSP2, MEM, DTW3, ATL, BOS = TOTAL 13

I think if DL takes over AA, there will be an alliance shakeout with DL/AA in the drivers seat, which would put either SkyTeam or OneWorld without a major US partner (except US Airways). So, would One World or SkyTeam fold and would the two alliances major European carriers be KL/AF/BA or LH/BA?

[Edited 2012-01-14 00:43:12]

Topic: RE: DL Interested In Acquiring AMR?
Username: mikey72
Posted 2012-01-14 00:59:48 and read 14393 times.

Quoting CALPSAFltSkeds (Reply 181):
Are you forgetting KL at AMS. I don't have a count of AMS-US flights on KL, but if DL dropped out of SkyTeam, I doubt they'd be flying nonstop to AMS and CDG from non-US hubs from the following list of DL flights. That's almost half of the 22 mostly widebodies flights to Sky Team hubs that could be cancelled. And say goodbye to multiple frequencies CDG-ATL, AMS-MSP and AMS-DTW plus CDG-SLC if DL bolts SkyTeam. There would be no way to get more slots at LHR to make up for those flights.

DL nonstop to SkyTeam hubs
CDG-JFK, MSP, DTW, ATL2, BOS, ORD, CVG, SLC = TOTAL 9
AMS- PDX, SEA, EWR, JFK, BOM, MSP2, MEM, DTW3, ATL, BOS = TOTAL 13

I think if DL takes over AA, there will be an alliance shakeout with DL/AA in the drivers seat, which would put either SkyTeam or OneWorld without a major US partner (except US Airways). So, would One World or SkyTeam fold and would the two alliances major European carriers be KL/AF/BA or LH/BA?

I agree and I can't answer your last question.

I am just pointing out that asking what BA brings to the table with its American operations from London is like asking what Germany brings to the EU.

I'm sure I don't need to remind you how hard BA and AA had to fight (unfairly in my view) for anti-trust immunity while the other alliances applications were waved through ''years'' previously giving them a massive advantage for ''years''.

Why ? Because of the importance/value of the UK/USA market. AF and LH were wetting themselves in other words and Brussels has always been in the pocket of France and Germany. It's very complicated.

I think we are sinking to new levels of industry obtuseness when the combination of ''LHR/BA's American network'' are dismissed as irrelevant to American led airline alliances.

9/11...every single major competitor to AA in and out of Chapter 11...the above mentioned bias in Europe........

No wonder AA is finding it difficult !!

[Edited 2012-01-14 01:18:38]

[Edited 2012-01-14 01:36:10]

Topic: RE: DL Interested In Acquiring AMR?
Username: anonms
Posted 2012-01-14 01:55:47 and read 14295 times.

Quoting yendig (Reply 174):
Is it just airlines that the US government insists on sub-50% foreign ownership of? I know the link is from Wikipedia, however I see that European auto firm Fiat now own nearly 59% of Chrysler...

In a time of war, commercial airlines may be chartered for military purposes, therefore foreign investment in airlines in the US cannot exceed 25%, along with some other terms. There is a reason why SRB's involvement with VX has been a problem from a regulatory perspective.

Topic: RE: DL Interested In Acquiring AMR?
Username: boilerla
Posted 2012-01-14 01:59:24 and read 14294 times.

Quoting jcs17 (Reply 179):
Taxes in Illinois are horrible, both in terms of corporate and personal income taxes. Texas has no personal income tax, and they are very tax-friendly when it comes to large corporations. Unfortunately for the new United, we have a President who is a product of the Chicago machine (the last city in the US that actually has "machine politicians"), and most likely the DOJ would've never approved the merger had the headquarters moved to Houston.

Trust me, if it was up to the bosses at UA and CO, you'd have the new UA headquarted in Houston.

This has been brought up so many times that it's beginning to be more myth than legend.

  • * UA was offered in 2008 $35 million in tax incentives to move from the suburbs to downtown Chicago. Houston/Texas would/could not match said incentives.
  • * UA was building a state of the art, brand new operations center that was much newer than CO's operations center in Houston. UA insisted Houston should offer more tax incentives to pay for an equivalent ops center in Houston. Houston/Texas refused.
  • * UA had just signed a 30 year, very low rent lease on Willis Tower. UA wanted similar lease terms in Houston/Texas. It was refused.


Why, oh why, should they have moved to Texas again? For the supposedly great tax incentives that UA was not offered?

Topic: RE: DL Interested In Acquiring AMR?
Username: mikey72
Posted 2012-01-14 02:15:03 and read 14283 times.

Doesn't it all come down to survival of the fittest ?

If AA goes bust because UA and NW etc were kept afloat when they should of cease trading years ago... is that right ?

You can argue ''what about all the jobs that would have been lost'' but what about all the jobs that would be lost if AA goes bust or is picked to bits ?

Isn't it all swings and roundabouts ?

I would say that the USA would have a much healthier airline industry without Chapter 11.

Topic: RE: DL Interested In Acquiring AMR?
Username: delimit
Posted 2012-01-14 05:34:38 and read 14057 times.

I ask what BA brings to the table barring LHR as a combined AA/DL already serve many of the same routes as BA.
On a combined carrier you can fly from: BOS, NYC, MIA, ATL, DTW, ORD, MSP and DFW. You lose IAD and the West Coast as no stops basically. Not a huge hit to take when you would be keeping AMS and CDG as a result. Not to mention AF/KL Are larger than BA and can connect you to more places beyond their hubs.

Topic: RE: DL Interested In Acquiring AMR?
Username: sofianec
Posted 2012-01-14 05:37:40 and read 14074 times.

DL buying AA is going to be terrible for competition and smaller markets. Should be blocked. DL is big enough, UA-CO is bigger that it should be, AA will emerge as a fierce competiotor. Potential AA-US link-up is the only merger that makes sense in many ways.

---

Topic: RE: DL Interested In Acquiring AMR?
Username: mikey72
Posted 2012-01-14 05:51:28 and read 14084 times.

Quoting delimit (Reply 186):
You lose IAD and the West Coast as no stops basically.
LAX, SFO, SAN, LAS, PHX, IAD, BWI, DEN, PHL, IAH, EWR, SEA, MCO, TPA...

And what about frequency...

Quoting delimit (Reply 186):
Not a huge hit to take when you would be keeping AMS and CDG

Compared to LHR margins.....no offence but you can keep'em.

[Edited 2012-01-14 05:55:38]

Topic: RE: DL Interested In Acquiring AMR?
Username: jetlanta
Posted 2012-01-14 06:11:56 and read 13961 times.

Quoting mikey72 (Reply 188):
Compared to LHR margins.....no offence but you can keep'em.

But LHR/MAD offer vastly inferior connectivity for U.S.-originating traffic versus CDG/AMS. In the hypothetical scenario that DL/AA merge, there would be plenty of LHR slots to enjoy those local O&D margins. The whole point of these alliances, however, is the network connectivity. And, in that sense, the AF/KL network is much more beneficial to a U.S. carrier.

You'd might be surprised how strong the CDG/AMS margins are for the SkyTeam carriers. Don't assume that lower volumes mean lower margins. Capacity is key.

Frankly, if such a merger were to ever happen, there would be a re-shuffling of alliances. I believe that there is a strong potential that the antitrust immune JV's would be dissolved and carriers would go back to regular alliance code-sharing while competing against each other. In that scenario, there would be little to stop BA/IB/AF/KL from all joining together in the OneSkyWorld alliance.

Topic: RE: DL Interested In Acquiring AMR?
Username: delimit
Posted 2012-01-14 06:37:54 and read 13877 times.

The cities lost (i.e., not EWR; and IAD and BWI are the same place) are all easy connections on AA/DL. The only true loss probably would be DC.

As for frequency, other than NYC. Where do BA serve multiple daily? I think the combination of AA and DL slots out of JFK (as well as the possibility of trading times with AF/KL) more than covers the NYC market.

Jetlanta put what I am trying to get at well. Other than London, AF/KL is a more valuable partner by almost every metric. And London can be served quite well by a combined AA/DL.

Topic: RE: DL Interested In Acquiring AMR?
Username: mikey72
Posted 2012-01-14 07:33:11 and read 13720 times.

Quoting delimit (Reply 191):
As for frequency, other than NYC.

Apart from 8x744 daily to JFK (!) quite a few of them are double daily.

Topic: RE: DL Interested In Acquiring AMR?
Username: STT757
Posted 2012-01-14 08:15:36 and read 13578 times.

Quoting jcs17 (Reply 179):
we have a President who is a product of the Chicago machine (the last city in the US that actually has "machine politicians"), and most likely the DOJ would've never approved the merger had the headquarters moved to Houston.

Nonsense, Chicago and the State of Illinois are aggressive at seeking to lure Corporations to their State. That's how they got Boeing to move their Headquarters from Seattle, Boeing was also looking at Denver and Dallas but chose Chicago. Boeing's move had nothing to do with politics, George W. Bush (from Texas) was President when Boeing moved and they still chose Illinois over Texas.

Chicago and Illinois have high taxes, however they cut sweet-heart deals that these corporations cannot refuse. The Governor of my State, Chris Christie of New Jersey, made a huge deal last year when Illinois raised their corporate tax rate. Governor Christie was boasting that corporations would be fleeing Illinois, he even went there on a mission to lure corporations to New Jersey. No one took him up on his offer, it was a joke.

http://www.nj.com/news/index.ssf/201...ov_christie_to_launch_campaig.html

Topic: RE: DL Interested In Acquiring AMR?
Username: CIDFlyer
Posted 2012-01-14 08:16:32 and read 13578 times.

DL/AA would be interesting, with the exception of ORD everything seems to balance out. Would it be too big? Thats the question....I still think if US/TPG teamed up for a merger/acquistion of AA that would be best. At least thats what Im hoping for. I like the combined route structure of both.

Topic: RE: DL Interested In Acquiring AMR?
Username: ckfred
Posted 2012-01-14 08:48:04 and read 13462 times.

Quoting jcs17 (Reply 179):
Trust me, if it was up to the bosses at UA and CO, you'd have the new UA headquarted in Houston.

Part of the merger agreement was that HQ would be in Chicago. UA had gotten some tax breaks to move HQ from Elk Grove Village to Chicago. If the combined carrier had wound up in Houston, UA would owe some money to the City. And frankly, with hubs in EWR, IAD, CLE, ORD, IAH, DEN, and SFO, it would make more sense for HQ to be in Chicago, rather than Houston.

Topic: RE: DL Interested In Acquiring AMR?
Username: LAXtoATL
Posted 2012-01-14 08:49:21 and read 13492 times.

Quoting boilerla (Reply 178):
AA had $4 billion in cash on hand when it filed BK. It had a market cap of around $1 billion, but its cash position was strong compared to their peers when they entered BK (nearly 4x the cash of DL when it entered BK). AA didn't need debtor-in-possession (DIP) financing, so DL can't cherry pick the assets it wants in a sale forced by the creditors. This also raises the likelhood that any sale of AA would at least go for the amount of cash AA has on hand; why sell a dollar bill for less than a dollar?

The reason AA had so much cash on hand when it filed was because for the last 2 years they had been issuing new debt for that cash. The market capitalization accounts for all assets (cash on hand included) and liabilities. At the time of the filing AA's market was less than $1bln eventhough they had $4bln in cash because of the imbalance between assets and liabilities. The cash on hand will be used (and as apparent now was stockpiled by AA) to finance their operations during bankruptcy when they wouldn't be able to issue new debt as they have been. There are a lot of different factors that would affect price, but if a bid were made for AA the value would be roughly the market capitalization was prior to bankruptcy plus a premium. The market cap would likely be adjusted upward because of the bankruptcy process which will allow AA to shed some debt and lower costs - I would expect a value if a successful bid were made to be around $1.5 - 2.5bln.

AA's cash position was strong compared to its peers because they paid a price to build it up. Their debt possession compared to competitors was horrendous (roughly twice as much debt at higher rates and only half as many assets backing it). While an asset sale forced by creditors is highly unlikely, it is still possible. Any sale of AA if it went that route would definitely be less than the amount of cash on hand ($4B), a sale of AA would not be just a purchase of the money in the bank - you acquire the liabilities with the assets. And right now AA is not worth anywhere near $4B (mainly because most of their valuable assets are all encumbered).

Topic: RE: DL Interested In Acquiring AMR?
Username: doraku
Posted 2012-01-14 10:44:40 and read 13192 times.

Is there any potential for a combined DL/US bid? A combined bid could be more attractive to shareholders if it resulted in two very strong airlines that could better compete in domestic and international markets.
Would DL and US even be allowed to collaborate in a purchase of AA?

DL could keep its name and position in SkyTeam.

US could take the AA name and join Oneworld.

As for routes, aircraft and other assets, both airlines could end up with what they want. Still there would be some issues, especially with labor.

Topic: RE: DL Interested In Acquiring AMR?
Username: bmacleod
Posted 2012-01-14 11:01:07 and read 13150 times.

Interesting just 4 or so years ago AA was the best performing of U.S. majors. I understand the situation that led them into Chapter 11, but how on earth did they become a takeover target? I remember no long ago when they were the shark..looking at acquiring US air, now they are the prey?   

[Edited 2012-01-14 11:01:45]

Topic: RE: DL Interested In Acquiring AMR?
Username: DeltaMD90
Posted 2012-01-14 13:34:22 and read 12909 times.

Quoting doraku (Reply 197):

Is there any potential for a combined DL/US bid?

I'm sure DL would favor a DL/US bid more than US would. US could probably take the whole thing without DL, and there are a few parts DL would not want from AA...

Topic: RE: DL Interested In Acquiring AMR?
Username: BobLoblaw
Posted 2012-01-14 13:46:48 and read 12837 times.

Quoting STT757 (Reply 193):
Nonsense, Chicago and the State of Illinois are aggressive at seeking to lure Corporations to their State

Pfffffff......No company right now is going to move to IL. They have enough trouble keeping the companies they have.

Quoting STT757 (Reply 193):
That's how they got Boeing to move their Headquarters from Seattle

That was over 10 years ago.

Quoting STT757 (Reply 193):
The Governor of my State, Chris Christie of New Jersey, made a huge deal last year when Illinois raised their corporate tax rate. Governor Christie was boasting that corporations would be fleeing Illinois, he even went there on a mission to lure corporations to New Jersey. No one took him up on his offer, it was a joke.

That's because no one wants to move from the frying pan to the fire.

Since Gov Quinn raised both the income and business tax, the state of IL, which had slow by positive job growth, is now losing jobs faster than any other state.

Topic: RE: DL Interested In Acquiring AMR?
Username: XT6Wagon
Posted 2012-01-14 13:54:00 and read 12836 times.

More I think about it, What UA, Delta, US, WN, and everyone else wants isn't AA to arrive the other side of chapter 11 whole. They don't even want to merge with AA. They want AA to break up like TWA into an Assets sale. This way they can bid for chunks of AA that fill holes in thier networks without paying for the rest of time for AA's horrid labor groups or other liablities. I imagine many airlines would love to see DFW shattered so they can claim thier slice. Everyone would love more Slots in the NY market. UA and Delta would love more transatlantic routes. WN I'm sure while quite occupied with thier current merger wouldn't mind AA's slice of the international flights to North and South America. Every Airline in America would count it as a victory to not have AA around next year.

Frankly, Its the best way to see the creditors get any money too. Any Merger would have trival amounts of cash given the trouble AA is in besides the debt load it can shed during chapter 11. You think Delta or US would pay large amounts of cash to then have to shed gates, routes, and slots by the hundreds? You think they want a pile of labor troubles from a merger, and thats assuming that suddenly AA's unions become lead by saints instead of the people who have been holding AA hostige for decades.

Topic: RE: DL Interested In Acquiring AMR?
Username: BobLoblaw
Posted 2012-01-14 14:08:06 and read 12775 times.

Quoting LAXtoATL (Reply 168):
TWA, Pan AM, and Eastern weren't either until they were

Actually they were. PA had no domestic network, then over paid for NA. EA has lousy labor relations and was run by an astronaut. TW was probably in the best shape. They simply ran out of time dumping their 727s, L10s, 747s for more efficient 717s, M80s and 757s and they finally bit the bullet and dumped JFK. Had they done that in the 1990-93 period instead of 1998-2000, that may have made it, though 9-11 probably would have killed them off. None of them had a network like AA does.

Quoting avek00 (Reply 177):
If AA and DL want to merge, as DL's advisors correctly pointed out, the antitrust hurdles can be overcome.

And yet the Clinton DOJ rejected far smaller UA/US even with massive concessions. Also AA wont "want" to merge with DL. It is a proposed buyout of the assets.


This isnt going to happen . As I said earlier. Southwest failed to get F9. Airtran failed to get Midwest. DL failed to get JAL. US failed to get DL. It is going to be very very hard for DL to convince the AMR creditors that their best bet is to take DL's deal, a deal TPG (theyre on AMR's side)can easily match.

AA will emerge from Ch 11 with lower costs and will be viable. A merger with US is more than 50/50 likely at some point. But DL will get nothing.


It is going to be hard to get 50% plus 1 of the creditors to agree to any one package other then AA's. AA starts out with an advantage having employees and aircraft manufactures and lessors in their corner. Yes, aircraft lessors and airbus and boeing will be in AA's corner not DL's or US's. Why? Because creditors in the aircraft leasing and manufacturing business dont want too much consolidation in the airline industry because it will give airlines market power when buying large orders. Lets say DL buys AA and then exclusively chooses Airbus, what will that mean to Boeing? Sure Boeing might be able to force a split order but only by massively discounting their existing product line or by doing expensive R&D on new or improved aircraft. AA begins with a huge huge head start when it comes to getting creditors on their side. Fact that Frontier creditors sided with Frontier over Southwest tells how difficult this will be for DL.

Topic: RE: DL Interested In Acquiring AMR?
Username: nimbus111
Posted 2012-01-14 14:13:09 and read 12864 times.

DL would be unstoppable.

Topic: RE: DL Interested In Acquiring AMR?
Username: DeltaMD90
Posted 2012-01-14 14:18:17 and read 12873 times.

Quoting BobLoblaw (Reply 202):
This isnt going to happen . As I said earlier. Southwest failed to get F9. Airtran failed to get Midwest. DL failed to get JAL. US failed to get DL. It is going to be very very hard for DL to convince the AMR creditors that their best bet is to take DL's deal, a deal TPG (theyre on AMR's side)can easily match.

I don't think it'll happen either, but DL/NW happened and UA/CO happened, both bigger than UA/US I believe...

Topic: RE: DL Interested In Acquiring AMR?
Username: yendig
Posted 2012-01-14 16:06:41 and read 12674 times.

Quoting anonms (Reply 183):
In a time of war, commercial airlines may be chartered for military purposes, therefore foreign investment in airlines in the US cannot exceed 25%

Aaahhhh, that makes it clear - thanks  
Quoting BobLoblaw (Reply 200):
Pfffffff......No company right now is going to move to IL. They have enough trouble keeping the companies they have.

You mean, like this....?

http://www.bbc.co.uk/news/business-16548595

Topic: RE: DL Interested In Acquiring AMR?
Username: jcs17
Posted 2012-01-14 22:18:42 and read 12183 times.

Quoting jcs17 (Reply 105):

I also forgot to mention that DL would love to acquire AA's fleet of 738s, 763s, and 772s. Personally, I love DL's Airbus narrow-bodies (they beat the crap out of 737s in terms of comfort), but given DL's reticence to equip the A319 and A320 with the same amenities as the rest of the fleet (not even bothering to equip them with any type of entertainment), the writing is on the wall. Also they'd love to shed the MD-88/90 fleet for the 738 -- and AA's massive list of delivery slots for 738s (many of which could be converted to 737MAX) is also a huge benefit for DL. They could potentially have a fleet of around 375 737s when all is said and done.

The additional 763s and 772s would eliminate the Airbus wide-bodies, in addition to having their regular roles ex-MIA/LAX/DFW, and more capacity from JFK. The 332 is an interesting wrench, given that it has a greater range than the 763, but they still do have 787s on order.

It's just a thought, but operationally this buy-out could have a very positive impact for DL.

Topic: RE: DL Interested In Acquiring AMR?
Username: aviationbuff08
Posted 2012-01-15 01:00:52 and read 11963 times.

Quoting 1337Delta764 (Reply 44):
One dilemma that DL will have to face is whether to keep the Delta name or the American name. Both names seem to be equally recognizable globally, so this will be a tough decision. Hopefully DL doesn't drop their livery for AA's ancient one.
Quoting BobLoblaw (Reply 201):
It is going to be hard to get 50% plus 1 of the creditors to agree to any one package other then AA's. AA starts out with an advantage having employees and aircraft manufactures and lessors in their corner. Yes, aircraft lessors and airbus and Boeing will be in AA's corner not DL's or US's. Why? Because creditors in the aircraft leasing and manufacturing business dont want too much consolidation in the airline industry because it will give airlines market power when buying large orders. Lets say DL buys AA and then exclusively chooses Airbus, what will that mean to Boeing? Sure Boeing might be able to force a split order but only by massively discounting their existing product line or by doing expensive R&D on new or improved aircraft. AA begins with a huge huge head start when it comes to getting creditors on their side. Fact that Frontier creditors sided with Frontier over Southwest tells how difficult this will be for DL.



Which is why I believe AA placed such a large order with both aircraft manufactures not long before filing Chapter 11. It is by far in the best interests of both Airbus and Boeing for AA to continue to operate as an airline. Since if they weren't there would be no need for all the new Aircraft they just ordered.

Quoting XT6Wagon (Reply 200):
More I think about it, What UA, Delta, US, WN, and everyone else wants isn't AA to arrive the other side of chapter 11 whole. They don't even want to merge with AA. They want AA to break up like TWA into an Assets sale. This way they can bid for chunks of AA that fill holes in their networks without paying for the rest of time for AA's horrid labor groups or other liabilities. I imagine many airlines would love to see DFW shattered so they can claim thier slice. Everyone would love more Slots in the NY market. UA and Delta would love more transatlantic routes. WN I'm sure while quite occupied with thier current merger wouldn't mind AA's slice of the international flights to North and South America. Every Airline in America would count it as a victory to not have AA around next year.



My thoughts exactly. One less Airline means the remaining airlines could drive up the fares and increase their own profits. I would love to see AA broken up in an asset sale, just like they did to TWA, now that would be Karma biting them in the Arse.

Quoting jcs17 (Reply 205):
I also forgot to mention that DL would love to acquire AA's fleet of 738s, 763s, and 772s. Personally, I love DL's Airbus narrow-bodies (they beat the crap out of 737s in terms of comfort), but given DL's reticence to equip the A319 and A320 with the same amenities as the rest of the fleet (not even bothering to equip them with any type of entertainment), the writing is on the wall. Also they'd love to shed the MD-88/90 fleet for the 738 -- and AA's massive list of delivery slots for 738s (many of which could be converted to 737MAX) is also a huge benefit for DL. They could potentially have a fleet of around 375 737s when all is said and done.

The additional 763s and 772s would eliminate the Airbus wide-bodies, in addition to having their regular roles ex-MIA/LAX/DFW, and more capacity from JFK. The 332 is an interesting wrench, given that it has a greater range than the 763, but they still do have 787s on order.

It's just a thought, but operationally this buy-out could have a very positive impact for DL.



America's chickens are coming home to rooooost!

I agree with you with this except DL has seem to like the Airbus Widebodies, at least the 330-300/200. Though I'd doubt they would order the A350 or the A380 airframes.

And let's not forget AA's self serving unions, They are their own worst enemy is this entire process. How many times have both the pilot's and F/A's union threaten a strike in the last 3 years??

Topic: RE: DL Interested In Acquiring AMR?
Username: mikey72
Posted 2012-01-15 01:24:14 and read 11927 times.

Quoting aviationbuff08 (Reply 206):
I would love to see AA broken up in an asset sale, just like they did to TWA, now that would be Karma biting them in the Arse.

It's quite amusing how bitchy you Americans are to each other about your airlines. I mean I know I'm a Brit and I'm not fond of VS but that's only because all their management does is whine all the time about BA. I actually quite like the airline itself.

It's been a tough 10 years for everyone and AA has got fantastic heritage...it's vintage.

I really hope this is just another case of DL beating its chest a la JAL....

Topic: RE: DL Interested In Acquiring AMR?
Username: LAXdude1023
Posted 2012-01-15 07:51:36 and read 11601 times.

Quoting mikey72 (Reply 207):
It's quite amusing how bitchy you Americans are to each other about your airlines.

I think so too. I look at people who wish for an airline to go under as simply ignorant of what they are truly wishing for. Thats a lot of people that would be without a job and a lot of hurting families.

There are airlines that Im not fond of, there isnt one where I hope their entire workforce goes hungry.

Topic: RE: DL Interested In Acquiring AMR?
Username: chepos
Posted 2012-01-15 08:21:35 and read 11493 times.

Vety well said LaxDude, anyone who wishes any airline to go under is ignorant and obviously either does not work in the airline business or has no family who works in this business.
If you do't like an airline, don't fly on the airline afterall you do have choices- plain and simple, but wishing for an airline as big as AA to disappear is just ridiculous.

Regards,

Chepos

Topic: RE: DL Interested In Acquiring AMR?
Username: jfk777
Posted 2012-01-15 08:30:53 and read 11473 times.

Quoting mikey72 (Reply 207):
It's been a tough 10 years for everyone and AA has got fantastic heritage...it's vintage.

AA is where it is by trying to do the right thing for its people, keep the pensions whole and avoid Bankruptcy. After making a "sacrifice" in 2003 they want their "sacrifice" back. Well 2008 came along and we all know how that soty ends.

Topic: RE: DL Interested In Acquiring AMR?
Username: AAIL86
Posted 2012-01-15 09:17:53 and read 11333 times.

Quoting jfk777 (Reply 210):
Well 2008 came along and we all know how that soty ends.

"2008" came along because a lot of large companies, specifically banks, went for the route of greed-at-any-cost. Are you suggesting that all companies worldwide should go that way?

I don't blame AA for attempting to take the more ethical route- I applaud them for it.

Topic: RE: DL Interested In Acquiring AMR?
Username: yellowtail
Posted 2012-01-15 10:39:51 and read 11144 times.

There is an airline with plenty of cash that could (and might want to) be involved in any hypothetical AA breakup and selloff...WN. WN would love to get ahold of MIA and LGA. WN would make a killing on routes such as MIA-PAP/SDQ/SJU

Topic: RE: DL Interested In Acquiring AMR?
Username: luckyone
Posted 2012-01-15 11:05:33 and read 11037 times.

Quoting yellowtail (Reply 212):
There is an airline with plenty of cash that could (and might want to) be involved in any hypothetical AA breakup and selloff...WN. WN would love to get ahold of MIA and LGA. WN would make a killing on routes such as MIA-PAP/SDQ/SJU

That would be biting off way more than they could chew at once, and would probably result in a fast demise of Southwest Airlines. They cannot absorb such a massive high cost structure like AA's international network in a lump. Perhaps over time they could develop a rival structure, but to buy it would be suicidal. With regards to the routes you mentioned, it would be cheaper simply for them to grow those routes organically. As for SJU, they will be serving SJU through Fort Lauderdale shortly.

Topic: RE: DL Interested In Acquiring AMR?
Username: mikey72
Posted 2012-01-15 11:08:49 and read 11053 times.

Quoting AAIL86 (Reply 211):
I don't blame AA for attempting to take the more ethical route- I applaud them for it.

Look at it this way - when this is all over AA will be the last great American airline still in its original form.

No mongrel like patchworked together group of airlines that otherwise might have gone bust for her !!

Topic: RE: DL Interested In Acquiring AMR?
Username: luckyone
Posted 2012-01-15 11:12:13 and read 11022 times.

Quoting mikey72 (Reply 214):
Look at it this way - when this is all over AA will be the last great American airline still in its original form.

Albeit one formed by mergers and corporate plundering, and significantly reduced in size.

Topic: RE: DL Interested In Acquiring AMR?
Username: STT757
Posted 2012-01-15 12:17:23 and read 10858 times.

Quoting mikey72 (Reply 214):
No mongrel like patchworked together group of airlines that otherwise might have gone bust for her !!

Except for what it acquired from Air Cal, Reno Air, Eastern Air lines, Continental airllines, TWA etc..

Topic: RE: DL Interested In Acquiring AMR?
Username: anonms
Posted 2012-01-15 12:39:26 and read 10782 times.

Quoting STT757 (Reply 216):
Except for what it acquired from Air Cal, Reno Air, Eastern Air lines, Continental airllines, TWA etc..

I think the only things out of all of those that weren't gutted was what they got from Eastern. Which still means that for the most part, AA isn't a patchworked mongel of lesser airlines.

Topic: RE: DL Interested In Acquiring AMR?
Username: homsar
Posted 2012-01-15 16:39:17 and read 10406 times.

Quoting jcs17 (Reply 205):
Also they'd love to shed the MD-88/90 fleet for the 738

If DL is so hot to shed the MD-90s for 737s, why are they buying a bunch more MD-90s?

Topic: RE: DL Interested In Acquiring AMR?
Username: nomorerjs
Posted 2012-01-15 17:17:30 and read 10339 times.

DL would dump DTW and MSP in favor of ORD due to the strong O&D at ORD and give that to TPG (Texas Pacific Group, look at their TXU buy, oh boy), or US. ORD has much more O&D and higher fairs than DTW and MSP, may not be the best hub, has competition, but ORD offers much more, especially if SA)">DL gets the SA)">AA start members

ORD offers great connections to Asia, Europe, and relief to SA (with connectons).

Topic: RE: DL Interested In Acquiring AMR?
Username: TeamInTheSky
Posted 2012-01-15 17:21:57 and read 10269 times.

Quoting mikey72 (Reply 207):
It's quite amusing how bitchy you Americans are to each other about your airlines. I mean I know I'm a Brit and I'm not fond of VS but that's only because all their management does is whine all the time about BA. I actually quite like the airline itself.

I think that is a bit unfair as I follow British Aviation threads quite closely since I am transplant here and the vitriol against BA or VS can be incredibly over the top.

However, you do bring up quite a good point and one that colors all threads but certainly any USA merger thread (except maybe WN and FL). All four legacies (least of all US Airways) have diehards or employees or ex-employees on here whose airline brand is much of a fabric of their being as anything else in their lives. And for them, whether it be DL being swallowed by US or DL swallowing AMR, fear for the company to disappear.

Most interestingly though, several of the AMR fans seem quite at peace with US taking over but are aghast by DL. Most fans agree that new management is needed and that the labor situation needs to be resolved. Well DL and US both tick the box with the new (and might I say) higher quality management. However, on the second point, US' labor issues are well chronicled on this site, while DL has pretty good labor relations. So while competition concerns are definitely understandable (but overplayed by some), is the strong reaction against the merger of DL and AA from fear of losing the cherished AA brand and also (for those fans of other airlines) fear of DL's distinct advantage from gaining the network? Because from a competition standpoint, I stand by that having three strong viable carriers are better than more that are weak.

Topic: RE: DL Interested In Acquiring AMR?
Username: flyguy89
Posted 2012-01-15 19:05:39 and read 10046 times.

Quoting TeamInTheSky (Reply 220):
Most interestingly though, several of the AMR fans seem quite at peace with US taking over but are aghast by DL.

I don't think it's so much that AA fans are "at peace" with a potential US buy-out so much as we concede that an AA-US merger at least makes semi-logical sense or that it's plausible when compared to an AA-DL merger. As a fan of AA, I wouldn't say that I'm particularly aghast at the idea of DL taking over, rather an AA-DL merger just seems ridiculous...not owing to any dislike of DL, just that the merger would be a boondoggle with an incredible amount of overlap and labor relations issues on-par with an AA-US merger, it just seems illogical.

Topic: RE: DL Interested In Acquiring AMR?
Username: Coronado
Posted 2012-01-15 19:13:38 and read 10022 times.

AA essentially is a 2 hub airline (DFW and MIA) and both of these hubs would fit in well with DL current operation without creating any conflicting routes. Everything else that AA lists as assets are not all that significant to any would be acquirers and their other so called hubs are not much more than large focus cities with AA a distant 2nd or 3rd or even 4th carrier in those markets----such as NYC--
Chicago is not slot controlled, LAX is not slot controlled so whatever AA has there are not all that valuable to would be acquirers. New York AA slots are probably more valuable being auctioned off to 3 or 4 different carriers.

Topic: RE: DL Interested In Acquiring AMR?
Username: DeltaMD90
Posted 2012-01-15 19:31:32 and read 9948 times.

Quoting nomorerjs (Reply 219):
SA)">DL would dump DTW and MSP in favor of ORD due to the strong O&D at ORD and give that to TPG (Texas Pacific Group, look at their TXU buy, oh boy), or US. ORD has much more O&D and higher fairs than DTW and MSP, may not be the best hub, has competition, but ORD offers much more, especially if SA)">DL gets the SA)">AA start members

Yes, DL should dump their 2nd and 3rd largest hubs that have very little competition to go up against a stronger UA @ ORD with WN just down the street @ MDW, just because ORD has a a higher O&D. That makes absolutely no sense. Plus they'd dump a huge amount of loyal passengers at DTW and MSP and basically start from scratch in the heavily competitive and segmented Chicago market.

Quoting TeamInTheSky (Reply 220):
Most interestingly though, several of the AMR fans seem quite at peace with US taking over but are aghast by SA)">DL.

I think it's because the DL deal seems to be more of a buy out / sell a bunch of stuff they don't want, whereas US would be more of a merger.

[Edited 2012-01-15 19:32:16]

Topic: RE: DL Interested In Acquiring AMR?
Username: LDVAviation
Posted 2012-01-15 19:47:14 and read 9862 times.

Here's another reason why DL is unlikely to merge with AA:

Show me the money. The FT is reporting today in an article about Virgin Atlantic that sources told them that Delta balked at the price of a strategic partnership with VS.

For the sake of argument, let's say the price for a stake in VS was more than what Delta paid for its stake in Gol ($100m) and in the neighborhood of what BA is paying for BMI (approximately $264m). AA stakeholders are going to want more cash than $300m, even with some Delta stock thrown in.

Topic: RE: DL Interested In Acquiring AMR?
Username: WESTERN737800
Posted 2012-01-15 19:54:46 and read 9796 times.

I think DFW would fit in the DL network very nicely. It would probaly mean the end of MEM though. I dont know enouth about the MIA hub to know if it would benifet DL that much, can everything there be reached from ATL? I would let UA have ORD, a lot of competion with UA at ORD and WN at MDW. Then you would have New York, ATL, DTW, MSP, SLC, LAX, DFW and possibly MIA. It would certinaly be interesting.

Topic: RE: DL Interested In Acquiring AMR?
Username: polot
Posted 2012-01-15 20:02:52 and read 9767 times.

Quoting LDVAviation (Reply 224):
For the sake of argument, let's say the price for a stake in VS was more than what Delta paid for its stake in Gol ($100m) and in the neighborhood of what BA is paying for BMI (approximately $264m). AA stakeholders are going to want more cash than $300m, even with some Delta stock thrown in.

I am sure DL would be more willing to spend more money for the valuable parts of AA than for a strategic partnership with VS. It's a question of cost versus benefits.

Topic: RE: DL Interested In Acquiring AMR?
Username: jetlanta
Posted 2012-01-15 20:08:27 and read 9830 times.

Quoting LDVAviation (Reply 224):
Here's another reason why DL is unlikely to merge with AA:

Show me the money. The FT is reporting today in an article about Virgin Atlantic that sources told them that Delta balked at the price of a strategic partnership with VS.

For the sake of argument, let's say the price for a stake in VS was more than what Delta paid for its stake in Gol ($100m) and in the neighborhood of what BA is paying for BMI (approximately $264m). AA stakeholders are going to want more cash than $300m, even with some Delta stock thrown in.

You are kidding, right? The VS price was too high because VS isn't worth it...not because DL can't afford it.

Topic: RE: DL Interested In Acquiring AMR?
Username: LAXtoATL
Posted 2012-01-15 20:08:52 and read 9824 times.

Quoting LDVAviation (Reply 224):

Here's another reason why DL is unlikely to merge with AA:

Show me the money. The FT is reporting today in an article about Virgin Atlantic that sources told them that Delta balked at the price of a strategic partnership with VS.

For the sake of argument, let's say the price for a stake in VS was more than what Delta paid for its stake in Gol ($100m) and in the neighborhood of what BA is paying for BMI (approximately $264m). AA stakeholders are going to want more cash than $300m, even with some Delta stock thrown in.

So you are suggesting that because Delta management didn't want to spend a large sum on VS, that it also means that they wouldn't want to spend on AA??? That thinking is quite flawed. Delta might place more value on AA than VS, they might have backed away from VS to pursue AA. There are any number of reasons Delta might not have wanted to put money into VS, but since they have the money and access to untapped credit lines as well as the ability to raise money for an M&A transaction I sure hope you are aren't suggesting that they don't have the funds to close the deal. Also, why would you think AA stakeholders are going to want more than $300m in cash? Considering any bankruptcy reorg where AA remains in tact all the creditors will receive is stock in the new entity, it is a question of which stock has the most potential. Also, if cash is needed to close the deal - guess what the acquiring entity can always use AA's cash on hand to closed the deal.


While I agree it is unlikely that Delta will end up end with AA for other reasons, this post seems like a stretch to find a reason why it won't happen.

Topic: RE: DL Interested In Acquiring AMR?
Username: BobLoblaw
Posted 2012-01-15 20:11:40 and read 9820 times.

Quoting TeamInTheSky (Reply 220):
Most interestingly though, several of the AMR fans seem quite at peace with US taking over but are aghast by DL.

Because a US/AA tie up doesnt result in as much market concentration as a DL/AA tie up does. Also with US/AA the AA name and brand stays.

Topic: RE: DL Interested In Acquiring AMR?
Username: ericaasen
Posted 2012-01-15 20:53:45 and read 9693 times.

Quoting DeltaMD90 (Reply 223):
Quoting nomorerjs (Reply 219):
SA)">DL would dump DTW and MSP in favor of ORD due to the strong O&D at ORD and give that to TPG (Texas Pacific Group, look at their TXU buy, oh boy), or US. ORD has much more O&D and higher fairs than DTW and MSP, may not be the best hub, has competition, but ORD offers much more, especially if SA)">DL gets the SA)">AA start members

Yes, DL should dump their 2nd and 3rd largest hubs that have very little competition to go up against a stronger UA @ ORD with WN just down the street @ MDW, just because ORD has a a higher O&D. That makes absolutely no sense. Plus they'd dump a huge amount of loyal passengers at DTW and MSP and basically start from scratch in the heavily competitive and segmented Chicago market.

Yes, and give up arguably two of the best airports in the US for a rat and cockroach infested terminal from the 60s. The DL guys were telling me the other day that before they moved from the L concourse they used to have a competition seeing who could kill a rat by throwing a chalk at it.

And, I'll say it again, DL would be stupid to give UA ORD lock, stock, and barrel and all of the lucrative corporate contracts that go with it. WN will never be a big player with the business traveler because all your WN miles get you is the same seat with the cup of ice and three drops of Coke to MCI. Your miles on UA could get you anywhere in the world in first class!

If, and that's a big IF, they keep ORD it will be at the expense of CVG, not MSP or DTW.

Topic: RE: DL Interested In Acquiring AMR?
Username: DeltaMD90
Posted 2012-01-15 23:27:31 and read 9497 times.

Quoting ericaasen (Reply 230):
And, I'll say it again, DL would be stupid to give UA ORD lock, stock, and barrel and all of the lucrative corporate contracts that go with it.

Yes, great point, one that I forgot to mention. If DL *did* buy AA and wanted to get rid of ORD, they wouldn't just de-hub ORD. Of course they'd sell it. Maybe to UA, but probably more likely to US to keep UA in check. But again, MSP and DTW are great in DL's network, I'm pretty sure ORD is not greater than MSP and DTW. If they could have ORD to themselves, MAYBE, but that's still a big if...

Topic: RE: DL Interested In Acquiring AMR?
Username: mikey72
Posted 2012-01-16 00:27:10 and read 9424 times.

Quoting luckyone (Reply 215):
Albeit one formed by mergers and corporate plundering, and significantly reduced in size.
Quoting STT757 (Reply 216):
Except for what it acquired from Air Cal, Reno Air, Eastern Air lines, Continental airllines, TWA etc..


UA/CO and DL/NW not 'quite' the same thing as what you mention though.

I would of thought anyway.

Four of the big six now two....

Topic: RE: DL Interested In Acquiring AMR?
Username: TSS
Posted 2012-01-16 01:55:49 and read 9343 times.

Quoting Coronado (Reply 222):
AA essentially is a 2 hub airline (DFW and MIA) and both of these hubs would fit in well with DL current operation without creating any conflicting routes.
Quoting WESTERN737800 (Reply 225):
I think DFW would fit in the DL network very nicely.

DL had a hub at DFW that fit in well with their network and shut it down. Granted, the competitive landscape at DFW would be quite different without AA in the picture, but I'm not sure it would be necessary with DTW, MSP, and, in light of how DL utilizes it, ATL to handle transcons.

Quoting Coronado (Reply 222):
Everything else that AA lists as assets are not all that significant to any would be acquirers and their other so called hubs are not much more than large focus cities with AA a distant 2nd or 3rd or even 4th carrier in those markets----such as NYC--

Are you saying that if an airline can't have the biggest piece of the pie in huge markets like New York, Los Angeles, and Chicago that they should just give up and refuse to take a smaller piece that's still bigger than the whole pie in most other cities?

Quoting Coronado (Reply 222):
Chicago is not slot controlled, LAX is not slot controlled so whatever AA has there are not all that valuable to would be acquirers.

LAX is not slot controlled, but gate space there is at somewhat of a premium and AA holds the lease on an entire terminal there... a terminal that just happens to be right beside the current DL terminal. I'm not sure about ORD, but I don't think it has a bunch of gates sitting empty begging for tenants either, so the gate leases would be where AA's value at ORD is, whether they're located in a (reportedly) yucky terminal or not.

Topic: RE: DL Interested In Acquiring AMR?
Username: Cubsrule
Posted 2012-01-16 05:36:55 and read 9111 times.

Quoting TSS (Reply 233):
but I'm not sure it would be necessary with DTW, MSP, and, in light of how DL utilizes it, ATL to handle transcons.

DTW, ATL and MSP are all out of the way for transcon routes involving a big swath of the country (roughly from Omaha to Houston to Nashville to Cleveland). DFW has a lot of upside as far as connecting flows are concerned.

Quoting TSS (Reply 233):
I'm not sure about ORD, but I don't think it has a bunch of gates sitting empty begging for tenants either, so the gate leases would be where AA's value at ORD is, whether they're located in a (reportedly) yucky terminal or not.

ORD has gate space but not space for a third hub airline. But the market can't support a hypothetical third hub either, so the gate space and the elimination of a competitor can't really be separated.

Topic: RE: DL Interested In Acquiring AMR?
Username: bmacleod
Posted 2012-01-16 06:14:57 and read 9026 times.

Quoting Cubsrule (Reply 234):
ORD has gate space but not space for a third hub airline. But the market can't support a hypothetical third hub either, so the gate space and the elimination of a competitor can't really be separated.

I get goose bumps at even thinking DL setting up a hub at ORD. Keeping ATL, LAX, JFK from choking is one thing adding ORD to the mix borders on catastrophe....

Topic: RE: DL Interested In Acquiring AMR?
Username: luckyone
Posted 2012-01-16 06:27:31 and read 8981 times.

Quoting Cubsrule (Reply 234):
DTW, ATL and MSP are all out of the way for transcon routes involving a big swath of the country (roughly from Omaha to Houston to Nashville to Cleveland). DFW has a lot of upside as far as connecting flows are concerned.

Would you really try to call Omaha/Houston to LAX or NYC a transcon? That's quite a stretch.

Topic: RE: DL Interested In Acquiring AMR?
Username: tharanga
Posted 2012-01-16 06:32:15 and read 8943 times.

Quoting anonms (Reply 183):
In a time of war, commercial airlines may be chartered for military purposes, therefore foreign investment in airlines in the US cannot exceed 25%, along with some other terms. There is a reason why SRB's involvement with VX has been a problem from a regulatory perspective.

I don't see why 30%, 40%, or 51% foreign ownership would preclude the government from chartering the aircraft for military needs. If you're that worried about it, then make a law that makes participation in the civil reserve air fleet mandatory, if you have foreign ownership.

Topic: RE: DL Interested In Acquiring AMR?
Username: Cubsrule
Posted 2012-01-16 06:43:36 and read 8938 times.

Quoting luckyone (Reply 236):
Would you really try to call Omaha/Houston to LAX or NYC a transcon?

Regardless of what you call them, DL doesn't have a good hub for them.

Topic: RE: DL Interested In Acquiring AMR?
Username: LAXdude1023
Posted 2012-01-16 06:56:28 and read 8888 times.

Quoting TSS (Reply 233):
DL had a hub at DFW that fit in well with their network and shut it down. Granted, the competitive landscape at DFW would be quite different without AA in the picture, but I'm not sure it would be necessary with DTW, MSP, and, in light of how DL utilizes it, ATL to handle transcons.

DFW is a much larger local market than MSP or DTW, but I also dont know if DFW would be of huge use to DL beyond flights to major O&D markets, NRT, CDG, and AMS.

Topic: RE: DL Interested In Acquiring AMR?
Username: XT6Wagon
Posted 2012-01-16 08:47:23 and read 8677 times.

Quoting tharanga (Reply 237):
I don't see why 30%, 40%, or 51% foreign ownership would preclude the government from chartering the aircraft for military needs. If you're that worried about it, then make a law that makes participation in the civil reserve air fleet mandatory, if you have foreign ownership.

China buys 51% of your airlines. You do something China doesn't like, suddenly all your airlines no long serve your nation at all. Now replace "China" with any nation with deep pockets. Do you want the UAE to own your airlines? Russia?

Worse still imagine how destructive predatory practices could be. Do you want companies like Virgin group having free reign to dumping money into your market for the sole purpose of destroying your domestic airlines? Thats what Virgin America was created to do, and they STILL got slapped down for shady dealings trying to dodge this rule. Several times. Without this rule, Virgin group could dump a couple billion into disrupting an airline's domestic network pushing it over the edge into Bankrupcy, or worse. Which then removes the competition on the international routes, so they make that money back by hoovering every single cent out of the wallets of thier customers.

Unrestricted capitalism doesn't work in real world economies, and Its even worse if you double down with having to think about things like deliberate economic warfare... or actual shooting people style warfare.

Topic: RE: DL Interested In Acquiring AMR?
Username: luckyone
Posted 2012-01-16 10:35:39 and read 8481 times.

Quoting Cubsrule (Reply 238):
Regardless of what you call them, DL doesn't have a good hub for them.

They have multiple. SLC for passengers connecting West, and they have, not one, not two, but three (and maybe five if you count CVG and MEMconnectivity) for passengers connect East and North in ATL, DTW, MSP. Many cities in that swath of the country actually see more cities served by Delta than any other airline.

Topic: RE: DL Interested In Acquiring AMR?
Username: Cubsrule
Posted 2012-01-16 10:50:32 and read 8395 times.

Quoting luckyone (Reply 241):
They have multiple.

Sure, but they are inferior. Isn't that the whole point?

Topic: RE: DL Interested In Acquiring AMR?
Username: LAXdude1023
Posted 2012-01-16 11:00:42 and read 8398 times.

Quoting TeamInTheSky (Reply 220):
Most interestingly though, several of the AMR fans seem quite at peace with US taking over but are aghast by DL.

I can tell you as a DFW area resident, I would much rather see AA fall into the hands of US than DL assuming that AA gets bought out.

Why?

-US needs DFW much more than DL does. As a result, DFW would maintain its status as is and would probably even grow. DL on the other hand has hubs all over the places that serve similar purposes. As a result DFW's service would probably be to the O&D markets (the major US cities, smaller midwestern cities, CDG, LHR, FRA, and NRT with AMS thrown in for connections). DFW would probably lose almost all of its service to South American and AM would come into 7-10 Mexico markets. If US gets a hold of DFW on the other hand, DFW will still be the international mega hub that it is.

-The HQ and all the jobs. If US gets a hold of AA, more than likely the HQ would still be in Fort Worth because the facilities are so much larger and better equiped than what US has in PHX. Also because DFW would more than likely maintain its size, the airport would not see a great reduction of jobs. If DL gets a hold of DFW, naturally the HQ would remain in Atlanta and because DFW would be downsized somewhat, jobs would be lost at the airport.

Sorry man, I got nothing against DL, but no way on earth do I want to see DL get ahold of AA. Yes indeed, I would much rather see US with AA if it has to be that way.

Topic: RE: DL Interested In Acquiring AMR?
Username: tharanga
Posted 2012-01-16 12:22:42 and read 8164 times.

Quoting XT6Wagon (Reply 240):
China buys 51% of your airlines. You do something China doesn't like, suddenly all your airlines no long serve your nation at all. Now replace "China" with any nation with deep pockets. Do you want the UAE to own your airlines? Russia?

You wouldn't allow that sort of market consolidation in the first place, from a single owner (foreign or domestic) or single set of state-backed owners.

Topic: RE: DL Interested In Acquiring AMR?
Username: Ken777
Posted 2012-01-16 12:39:30 and read 8110 times.

Why should any airline (or other type of company) who has been through bankruptcy be allowed to buy another company in, or exiting, Ch 11?

Taxpayers have already footed the bill for DL and their screwup. No way should we get hit with more costs. Same with the other airlines who played the Ch 11 card - just once or multiple times.

As consumers we certainly don't need the shrinking of competition and, as taxpayers, we certainly don't need the additional costs of picking up AA's retirement programs.

So, IMO, the first thing that needs to be done is to keep AA as a stand-alone company. And we need to keep oneworld as a competitive alliance. And, to be blunt, I believe that we need to start working a bit more vigorously to ensure we retain maintenance infrastructure within the US. AA has some major engineering centers in the US and we need to maintain those assets.

Quoting TeamInTheSky (Reply 220):
Most interestingly though, several of the AMR fans seem quite at peace with US taking over but are aghast by DL.

I wouldn't be at peace if the company disappears. That basically means that thousands of taxpayers are going onto the unemployment roll and the taxpayers will pick up the tab. As well as the tab for covering retirement plan debts.

Quoting TeamInTheSky (Reply 220):
Most fans agree that new management is needed and that the labor situation needs to be resolved.

AA had a CEO and he resigned when the company filed.

New management? What major airline is out there that does not have bankruptcy in their past?

Management only lasts so long. Evan Apple learned that lesson last year.

So what airline is there that can guarantee they will have the same management team in place in 5 years?

Or, since 9/11, who can guarantee that there will be no event in the next year or two that will turn some "well run" companies on their ears?

There are as many reasons to be against consolidation as there is to be for it,

Quoting TeamInTheSky (Reply 220):
Well DL and US both tick the box with the new (and might I say) higher quality management.

And how long will it last? Until the post-bk cost savings shrink?

Quoting TeamInTheSky (Reply 220):
Because from a competition standpoint, I stand by that having three strong viable carriers are better than more that are weak.

DL was weak enough to go Bankrupt. So was US. And CO (3 times? or 4?) and NW.

So they are strong this month - how long does that last?

My preference is to have more competitors, not fewer. I don't believe that UA and CO, or DL & NW, should have been allowed to merge. It is less competitive, generates fewer jobs, which means lower tax revenues at all levels. And it certainly doesn't produce better (or cheaper) products for the consumers.

Topic: RE: DL Interested In Acquiring AMR?
Username: STT757
Posted 2012-01-16 13:09:40 and read 8001 times.

Quoting Ken777 (Reply 245):
And CO (3 times? or 4?)

Twice, 1983 and 1990.

It was the Texas Pacific Group, whom we are discussing in this thread regarding their interest in AA, and the leadership of Gordon Bethune that brought CO out of it's second bankruptcy in 1993.

Texas Pacific has a really good track record beginning with CO and including many other companies over the years, they are also based in Fort Worth. For the sake of AA and it's employee's I hope if some kind of acquisition/merger occurs during AA's bankruptcy I hope TPG is spearheading the effort.

http://en.wikipedia.org/wiki/Texas_Pacific_Group

Texas Pacific Group partnering with US Airways might be a good deal for AA, the combined carrier would form under the AA brand with headquarters in Texas. However it would have US management, which many believe to be highly effective.

Topic: RE: DL Interested In Acquiring AMR?
Username: DeltaMD90
Posted 2012-01-16 13:11:30 and read 7972 times.

Quoting Ken777 (Reply 245):
My preference is to have more competitors, not fewer. I don't believe that UA and CO, or DL & NW, should have been allowed to merge. It is less competitive, generates fewer jobs, which means lower tax revenues at all levels. And it certainly doesn't produce better (or cheaper) products for the consumers.

The industry was (and maybe still is) way too populated. Would you rather the companies merge and reduce capacity to a reasonable level or have a company completely shut down? Or we keep them all and cycle them all through ch 11 because they can't make money. Having a bunch of airlines making money while offering cheaper airfares is completely unrealistic

Topic: RE: DL Interested In Acquiring AMR?
Username: tharanga
Posted 2012-01-16 13:17:32 and read 7932 times.

Quoting Ken777 (Reply 245):
Why should any airline (or other type of company) who has been through bankruptcy be allowed to buy another company in, or exiting, Ch 11?

Why not? Should you be forever be forced to wear a scarlet letter because you went through Chapter 11 once, even though you're healthy now?

Quoting Ken777 (Reply 245):
Taxpayers have already footed the bill for DL and their screwup.

How, exactly? Keep in mind that the PBGC is not funded by the 'taxpayers'. Rather, companies pay premiums to it. It's possible that PBGC itself will need to be bailed out at some point, but for now, my taxes don't directly go to it.

Topic: RE: DL Interested In Acquiring AMR?
Username: mikey72
Posted 2012-01-16 13:41:25 and read 7878 times.

Would it be true to say that the best option would be for a US AA combination ?

I mean hasn't DL already 'shot its bolt' so to speak regards mergers with NW. Same for UA and CO.

I can't see the DOT etc having much to say about AA and US. As where DL and AA is almost unthinkable ?

Would give it all some symmetry aswell. 6 to 3 seems a much more balanced way to go....

Topic: RE: DL Interested In Acquiring AMR?
Username: MasseyBrown
Posted 2012-01-16 13:48:52 and read 7835 times.

Quoting XT6Wagon (Reply 240):
China buys 51% of your airlines. You do something China doesn't like, suddenly all your airlines no long serve your nation at all. Now replace "China" with any nation with deep pockets. Do you want the UAE to own your airlines? Russia?

The United States used to apply that theory to ocean shipping also, but gave it up as too expensive (you could say that the unions priced themselves almost completely out of that market). It turned out that in the last few wars the US had no trouble chartering enough foreign sealift to meet its requirements. The same could probably be true for airlift.

Quoting DeltaMD90 (Reply 247):
The industry was (and maybe still is) way too populated. Would you rather the companies merge and reduce capacity to a reasonable level or have a company completely shut down? Or we keep them all and cycle them all through ch 11 because they can't make money. Having a bunch of airlines making money while offering cheaper airfares is completely unrealistic

Look at what happens to industries that devolve to only a few players. Apathy, high prices and high costs, technological stagnation, shrinking markets, government involvement, protected labor, etc. Big pretty much does equal bad.

Topic: RE: DL Interested In Acquiring AMR?
Username: DeltaMD90
Posted 2012-01-16 13:58:07 and read 7795 times.

Quoting MasseyBrown (Reply 250):
Quoting DeltaMD90 (Reply 247):
The industry was (and maybe still is) way too populated. Would you rather the companies merge and reduce capacity to a reasonable level or have a company completely shut down? Or we keep them all and cycle them all through ch 11 because they can't make money. Having a bunch of airlines making money while offering cheaper airfares is completely unrealistic

Look at what happens to industries that devolve to only a few players. Apathy, high prices and high costs, technological stagnation, shrinking markets, government involvement, protected labor, etc. Big pretty much does equal bad.

Ok then have smaller players, but a couple less than we had right after 9/11. Or have the same number of players but not complain when the fares goes up. My point is having a bunch of profitable little carriers with low fares is unrealistic. Since Ch 11 kept all these carriers from going under and everyone whines about "high fares" (which are some of the lowest in history with inflation adjusted) then merging seems like the only answer. People are gonna be angry one way or another

Topic: RE: DL Interested In Acquiring AMR?
Username: LAXtoATL
Posted 2012-01-16 14:52:45 and read 7718 times.

Quoting Ken777 (Reply 245):
Taxpayers have already footed the bill for DL and their screwup.

Please elaborate what you are referring to. I'm not sure you understand how chapter 11 bankruptcy works. Taxpayers don't foot the bill, liabilities are reduced on the backs of creditors, suppliers, and labor, but the taxpayer does not have bill for bankruptcies. If you are thinking of the auto industry (GM & Chrysler) they received bailouts that had nothing to do with their bankruptcy cases, they just occurred at the same the time. Given the financial crisis the economy was and how bad the situation was govt officials determined that without a bailout the automakers would not successfully reorganize in bankruptcy court and would be liquidated. Because of the wide ranging impact that would have the goverment decided to step in and provide the bailout funds, but I believe the taxpayer didn't get hurt by that decision because I am almost certain they are making a profit off that investment. The only time in recent memory that I am aware of DL or any other airline received funds from taxpayers was after 9/11 when the entire industry received a bailout and certainly that was not a DL screwup.

Topic: RE: DL Interested In Acquiring AMR?
Username: doraku
Posted 2012-01-16 14:54:07 and read 7705 times.

The industry has to reach a feasibility point where it can sustain profits under current (and future) economic conditions, in which we should expect fuel prices to increase. Mergers are an easy way to reduce competition while still maintaining service. There is bound to be some reduction, but that should result in higher earning potential for the remaining carriers. I don't think it is unreasonable to assume more consolidation will occur. The fact that AMR is in Ch. 11 only makes them more attractive to participate in the next round, assuming they can effectively cut enough of their cost structure.

In the end, the airlines benefit. Employees face integration challenges, reduction of workforce, and possibly more pay-cuts. Customers will likely pay more for tickets as competition is reduced, but could see improved service from the remaining carriers as they return to profitability and are able to invest in hard/soft product improvements.

It's not personal, it's business. And no matter what anyone wants to see happen, it will come down to what is good for business.

Topic: RE: DL Interested In Acquiring AMR?
Username: UALWN
Posted 2012-01-16 15:01:26 and read 7664 times.

Quoting XT6Wagon (Reply 240):
China buys 51% of your airlines. You do something China doesn't like, suddenly all your airlines no long serve your nation at all. Now replace "China" with any nation with deep pockets. Do you want the UAE to own your airlines? Russia?

However, foreign ownership is not limited in other industries that seem at least as "strategically important" as air transportation: banking, energy, pharmaceuticals, automotive...

Topic: RE: DL Interested In Acquiring AMR?
Username: AAIL86
Posted 2012-01-16 15:21:37 and read 7589 times.

Quoting MasseyBrown (Reply 250):
The United States used to apply that theory to ocean shipping also, but gave it up as too expensive (you could say that the unions priced themselves almost completely out of that market). It turned out that in the last few wars the US had no trouble chartering enough foreign sealift to meet its requirements. The same could probably be true for airlift.

What you are perhaps forgetting is that the US merchant marine was never really dominant during the 20th century, especially in terms of passenger operators - (although it was previously a fair bit larger on the cargo side). On the passenger side, the foreign operators dominated the vast majority of US bound traffic (think Cunard, White Star, Hapag-Lloyd, Italian Line, NHK, etc). A number of factors were the cause of this- not just union interference. Furthermore, aviation has a domestic component role - that during the age of steam was fulfilled by railroads. So I just don't buy that as a valid apples-to-apples comparison.

Quoting DeltaMD90 (Reply 247):
The industry was (and maybe still is) way too populated. Would you rather the companies merge and reduce capacity to a reasonable level or have a company completely shut down? Or we keep them all and cycle them all through ch 11 because they can't make money. Having a bunch of airlines making money while offering cheaper airfares is completely unrealistic

Agree. Let's merge Delta and AA- keep's Delta's lower operating costs and dump CVG, MSP and SLC in favor of AA's better positioned hubs at ORD and LAX (true hub possible). As for the carrier's final name- American -after all- we are in what country? (although we'll let the DL fanboys can keep the Delta livery- I like it   )

Topic: RE: DL Interested In Acquiring AMR?
Username: tharanga
Posted 2012-01-16 15:25:24 and read 7574 times.

Quoting LAXtoATL (Reply 252):
The only time in recent memory that I am aware of DL or any other airline received funds from taxpayers was after 9/11 when the entire industry received a bailout and certainly that was not a DL screwup.

I agree with most of what you wrote, but check the facts here - I don't think DL received any bailout after 9/11. The list of airlines that did is smaller than you might expect - somebody double check, but I think it was HP, World, ATA, US and a couple random others. I don't think Delta even applied for the help. The government probably made money on the HP bailout, too; I don't know about the others.

So yeah - I don't see the basis for the statement that Delta's bankruptcy was somehow financed by taxpayers.

Topic: RE: DL Interested In Acquiring AMR?
Username: CIDFlyer
Posted 2012-01-16 15:31:47 and read 7573 times.

I really hope for a US/AA tie up. As it is I split my flying between AA and DL and have miles with both, but especially out here in the midwest and my airport in particular, AA/DL would give us one less airline, and all we would be left with is UA and DL(AA) for legacies and G4 for the vacation destinations. Not a lot of options. That would be the case at a lot of heartland markets. I like having 3 big majors.

Topic: RE: DL Interested In Acquiring AMR?
Username: luckyone
Posted 2012-01-16 15:33:12 and read 7549 times.

Quoting Cubsrule (Reply 242):

Quoting luckyone (Reply 241):
They have multiple.

"Sure, but they are inferior. Isn't that the whole point?"

They aren't inferior. They serve the same destinations, plus a few. Isn't that the point?

Topic: RE: DL Interested In Acquiring AMR?
Username: SEPilot
Posted 2012-01-16 15:46:47 and read 7511 times.

Quoting Ken777 (Reply 245):
My preference is to have more competitors, not fewer. I don't believe that UA and CO, or DL & NW, should have been allowed to merge. It is less competitive, generates fewer jobs, which means lower tax revenues at all levels. And it certainly doesn't produce better (or cheaper) products for the consumers.

This is very shortsighted and misses the point. With too many competitors where we need airlines with essentially nationwide coverage you get cutthroat competition (which has essentially existed since deregulation) and nobody is healthy. In an industry that requires as much capital as an airline there is a limit to how many healthy players you can have at one time. I think three or four nationwide carriers is about all the market can support and keep them healthy; the fact that ALL of them (except WN, which only became nationwide relatively recently) have gone through bankruptcy at least once says that something is wrong with the system, not the players. And re-regulation is NOT the answer; regulation set up the chaos we have now. If it had never existed we would have a (relatively) stable situation with 3 or 4 nationwide healthy airlines. And as to who should merge with or acquire AA, the logical choice is US; however from what I understand about US they have had severe indigestion with several of their mergers, and are still not recovered. Trying to merge with AA, with its very different culture, would probably end up being fatal for both. I am extremely dubious about the prospect. As the DL, I do think the resultant airline would be too big.

[Edited 2012-01-16 15:49:32]

Topic: RE: DL Interested In Acquiring AMR?
Username: LAXtoATL
Posted 2012-01-16 16:04:33 and read 7448 times.

Quoting tharanga (Reply 256):
I agree with most of what you wrote, but check the facts here - I don't think DL received any bailout after 9/11. The list of airlines that did is smaller than you might expect - somebody double check, but I think it was HP, World, ATA, US and a couple random others. I don't think Delta even applied for the help. The government probably made money on the HP bailout, too; I don't know about the others.

So yeah - I don't see the basis for the statement that Delta's bankruptcy was somehow financed by taxpayers.

I am almost certain that Delta received bailout money after 9/11. I will have to fact check (or someone else that knows off the top of their head) but I seem to remember all the big airlines were represented when they went to congress to ask to for the bailout. It was necessary to keep the industry afloat at a time when travel was greatly reduced because of the attacks as well as huge increase in costs because of new rules and regulations applied. Given how airlines operate on razor thin profits it easy to see how they would need assistance given how fast and how much travel demand was reduced at that time.

EDIT: I did a little quick research and I found quoted amounts that AA, UA, and CO received from the bailout. While I couldn't confirm DL received a payout I did see where they mentioned Leo Mullin was present when the airline execs when to lobby congress. There were two parts to the bailout, a $5billion cash payout and a $10billion loan program. The loan program was set up for airlines that were desperate and needed additional help and that part of the program is probably the one that few airlines participated in but the $5billion cash payout was a compensatory payment to the airlines for direct losses incurred due to the grounding of the entire system as a result of the terrorist attacks. Those funds did not have to be paid back and were (if memory serves me correctly) distributed based on size with $4.5B split amongst the pax carriers and $0.5B for the cargo carriers. So, without finding any direct quote confirming that Delta did receives funds from the airline bailout of 2001, I am almost certain (99.9%) that they did in fact get their share - probably about $600-700m based on the amounts quoted for AA, UA, and CO.

[Edited 2012-01-16 16:15:39]

[Edited 2012-01-16 16:16:31]

Topic: RE: DL Interested In Acquiring AMR?
Username: tharanga
Posted 2012-01-16 17:14:03 and read 7251 times.

Quoting LAXtoATL (Reply 260):
I am almost certain that Delta received bailout money after 9/11.

Keep checking. The airlines all went to lobby for the bailouts, but the media didn't do as good a job of reporting on what actually happened afterwards. Don't look for the money that was allocated at first - look at the money that was actually given out.

For example, I am fairly certain that United applied for a bailout, and was rejected by the Air Transportation Stabilization Board, which was set up to administer the bailouts.

The bailouts came with various strings attached, which may have kept airlines from applying if they could help it.

[Edited 2012-01-16 17:23:04]

Topic: RE: DL Interested In Acquiring AMR?
Username: Cubsrule
Posted 2012-01-16 17:43:44 and read 7161 times.

Quoting luckyone (Reply 258):
Isn't that the point?

No. Why would I fly BNA-ATL-SAN when I can fly BNA-DFW/IAH/HOU/PHX-SAN and be there an hour quicker?

Topic: RE: DL Interested In Acquiring AMR?
Username: jetlanta
Posted 2012-01-16 20:15:27 and read 6750 times.

Quoting LAXtoATL (Reply 260):
EDIT: I did a little quick research and I found quoted amounts that AA, UA, and CO received from the bailout. While I couldn't confirm DL received a payout I did see where they mentioned Leo Mullin was present when the airline execs when to lobby congress. There were two parts to the bailout, a $5billion cash payout and a $10billion loan program. The loan program was set up for airlines that were desperate and needed additional help and that part of the program is probably the one that few airlines participated in but the $5billion cash payout was a compensatory payment to the airlines for direct losses incurred due to the grounding of the entire system as a result of the terrorist attacks. Those funds did not have to be paid back and were (if memory serves me correctly) distributed based on size with $4.5B split amongst the pax carriers and $0.5B for the cargo carriers. So, without finding any direct quote confirming that Delta did receives funds from the airline bailout of 2001, I am almost certain (99.9%) that they did in fact get their share - probably about $600-700m based on the amounts quoted for AA, UA, and CO.

Delta did get compensated for the Feds shutting down the business for a few days. They did not participate in the loan program.

Its easy to forget that not only did the industry shutdown for a few days, but revenues plummeted over 30% overnight. In addition, airlines were immediately saddled with dramatically higher security costs. The entire national air transportation network was in danger of collapse. That is why airlines were given a subsidy. It wasn't even very controversial at the time.

Topic: RE: DL Interested In Acquiring AMR?
Username: United1
Posted 2012-01-16 20:22:49 and read 6702 times.

Quoting jetlanta (Reply 263):
Delta did get compensated for the Feds shutting down the business for a few days. They did not participate in the loan program.

IIRC I think of the majors only US and F9 were part of the loan program....

Topic: RE: DL Interested In Acquiring AMR?
Username: luckyone
Posted 2012-01-16 20:26:57 and read 6685 times.

Quoting Cubsrule (Reply 262):
No. Why would I fly BNA-ATL-SAN when I can fly BNA-DFW/IAH/HOU/PHX-SAN and be there an hour quicker?

I'm not sure why you would either...if you could. But the fact is you can't.
-The only 1-hour advantage anybody has is WN with the the once daily nonstop between the two cities (which leaves at an awful time for the time conscious business traveler). But you didn't mention nonstops...you mentioned connections...
-The fastest total routing through ATL adds a whopping 20 minutes to the fastest total travel times of the routes you mention
-Is actually three (3) minutes faster than the fastest time via IAH, and almost an hour faster than via PHX on US
-The rest of the total travel times are within minutes of each other across the board...
-In summary...Delta's hubs are completely competitive and the total time traveled is a wash or a time advantage in some cases through Delta's hubs. Your argument is biased and baseless, and not supported by facts. Have a nice day.

[Edited 2012-01-16 20:31:41]

Topic: RE: DL Interested In Acquiring AMR?
Username: packcheer
Posted 2012-01-16 20:37:23 and read 6643 times.

Think about this from the other side.

If AA is in a position to be taking bids (depending on how the Chapter 11 stuff starts working out), I don't see how the government can say no.

If DL makes the best bid for it, why not?

The government allows monopolies in other areas. Utilities are able to legally control markets in some cities.

What's to say that DL can't control NY? There would still be other players at LGA and JFK, as well as EWR that hosts a major UA hub as an alternative. By the way, NY transit serves EWR.


I'd say it's not as far fetched as some of you would believe.

Topic: RE: DL Interested In Acquiring AMR?
Username: MasseyBrown
Posted 2012-01-16 21:28:52 and read 6471 times.

Quoting AAIL86 (Reply 255):
What you are perhaps forgetting is that the US merchant marine was never really dominant during the 20th century, especially in terms of passenger operators - (although it was previously a fair bit larger on the cargo side).

You are correct that the US Merchant marine was not dominant except for a few years after a couple of wars; but the USGovt subsidized the merchant marine enough to support certain combinations of war plans. That domestically owned and operated lift was what was given up as unaffordable.

The same thing could happen in aviation and fewer airline competitors will help get us to that position.

[Edited 2012-01-16 21:30:52]

Topic: RE: DL Interested In Acquiring AMR?
Username: beardown91737
Posted 2012-01-16 21:44:16 and read 6430 times.

Quoting packcheer (Reply 266):
Utilities are able to legally control markets in some cities.

That was because of the need for wires or pipes to be laid to provide service. Having competing pipes and wires duplicating and crisscrossing each other would be unworkable.

This has changed a bit since the 1980s, starting with long distance service.

Topic: RE: DL Interested In Acquiring AMR?
Username: mikey72
Posted 2012-01-17 02:50:16 and read 6196 times.

Andrew Lobbenberg, analyst at RBS, says a Delta-AMR group would be tempted to have a transatlantic joint venture with IAG rather than Air France-KLM, partly because of BA’s strong position at London’s Heathrow airport, Europe’s most important gateway to the US.

It's amazing at the moment how every few weeks something new crops up to throw a spanner in the works.

Topic: RE: DL Interested In Acquiring AMR?
Username: TeamInTheSky
Posted 2012-01-17 03:45:12 and read 6085 times.

Quoting LAXdude1023 (Reply 243):
I can tell you as a DFW area resident, I would much rather see AA fall into the hands of US than DL assuming that AA gets bought out.

Why?

-US needs DFW much more than DL does. As a result, DFW would maintain its status as is and would probably even grow. DL on the other hand has hubs all over the places that serve similar purposes. As a result DFW's service would probably be to the O&D markets (the major US cities, smaller midwestern cities, CDG, LHR, FRA, and NRT with AMS thrown in for connections). DFW would probably lose almost all of its service to South American and AM would come into 7-10 Mexico markets. If US gets a hold of DFW on the other hand, DFW will still be the international mega hub that it is.

-The HQ and all the jobs. If US gets a hold of AA, more than likely the HQ would still be in Fort Worth because the facilities are so much larger and better equiped than what US has in PHX. Also because DFW would more than likely maintain its size, the airport would not see a great reduction of jobs. If DL gets a hold of DFW, naturally the HQ would remain in Atlanta and because DFW would be downsized somewhat, jobs would be lost at the airport.

Sorry man, I got nothing against DL, but no way on earth do I want to see DL get ahold of AA. Yes indeed, I would much rather see US with AA if it has to be that way.
Quoting Ken777 (Reply 245):

I wouldn't be at peace if the company disappears. That basically means that thousands of taxpayers are going onto the unemployment roll and the taxpayers will pick up the tab. As well as the tab for covering retirement plan debts.
Quoting STT757 (Reply 246):
Texas Pacific Group partnering with US Airways might be a good deal for AA, the combined carrier would form under the AA brand with headquarters in Texas. However it would have US management, which many believe to be highly effective.

I think the economic reality is that there will be job loses. That is the harsh truth when a firm goes bankrupt. Now I can completely understand your point LAXDude being a Dallas resident and wanting to keep DFW strong, but the O&D demand alone will always make DFW a "hub" for someone. But if US does take over, those jobs you are saying DFW will keep will be lost in Pheonix. It would make no sense for PHX to remain a major hub for US with them aquiring LAX and DFW.

While I have extremely high regard for Texas Pacific Group and agree they are one of the best outfits out there, I wouldn't kid myself into thinking that there will not be extreme bloodletting if they are the ones to take over. TPG is a private equity firm that is focused on ROI. So if they do get a piece, they will want to make AA the most profitable possible, which means probably the most significant loss of jobs will come from a private equity firm taking over.

Quoting Ken777 (Reply 245):

My preference is to have more competitors, not fewer. I don't believe that UA and CO, or DL & NW, should have been allowed to merge. It is less competitive, generates fewer jobs, which means lower tax revenues at all levels. And it certainly doesn't produce better (or cheaper) products for the consumers.

Well I think we all have a lot of preferences that are regrettably not the reality of the situation. And I also would point out that 6 firms making 50 million or three firms generating 100 million garner about the same tax revenue for all. If anything it pushes those three firms into the highest margial tax bracket generating more revenue. And look at from this standpoint, all of Europe has really 3 legacy carrier groups, China has 3 major legacy airlines (with Hu and CX not being included), India has 3 major international carriers. Regardless of preference, the reality is that 4 might just be too many in todays economic environment.

Topic: RE: DL Interested In Acquiring AMR?
Username: ual777uk
Posted 2012-01-17 03:57:25 and read 6088 times.

Quoting BobLoblaw (Reply 229):
Because a US/AA tie up doesnt result in as much market concentration as a DL/AA tie up does. Also with US/AA the AA name and brand stays.

I just wonder if DL did get AA, what name would survive. My money is on AA. I might add that I dont think for one minute it will happen.

Topic: RE: DL Interested In Acquiring AMR?
Username: LAXtoATL
Posted 2012-01-17 04:03:19 and read 6068 times.

Quoting tharanga (Reply 261):
Keep checking. The airlines all went to lobby for the bailouts, but the media didn't do as good a job of reporting on what actually happened afterwards. Don't look for the money that was allocated at first - look at the money that was actually given out.

For example, I am fairly certain that United applied for a bailout, and was rejected by the Air Transportation Stabilization Board, which was set up to administer the bailouts.

The bailouts came with various strings attached, which may have kept airlines from applying if they could help it.

Checked and confirmed. As I mentioned before there were two parts to the bailout and I think you are confusing the second part (the loan program) as the entire program. The loan program was the only part that was administered by the Air Transportation Stabilization Board. Delta definitely took their part of the $5B direct cash payout from their 2001 annual report...

'We have recognized $634 million in compensation under the
Stabilization Act, $556 million of which was received in 2001. For additional
information about the Stabilization Act and the compensation payable to us under
that statute, see Note 2 of the Notes to the Consolidated Financial Statements.'

Topic: RE: DL Interested In Acquiring AMR?
Username: STT757
Posted 2012-01-17 04:58:02 and read 5981 times.

Quoting tharanga (Reply 248):
Quoting packcheer (Reply 266):
What's to say that DL can't control NY?

UA had to divest every single one of their EWR slots to gain approval for their merger with CO, and UA only had 18 daily flights at EWR. There's no way DL can acquire the LGA and JFK slots, the lease on T-8 at JFK is not subject to regulatory approval.

Topic: RE: DL Interested In Acquiring AMR?
Username: NYCAdvantage
Posted 2012-01-17 05:22:39 and read 5908 times.

Quoting BobLoblaw (Reply 119):
A breakup of AA with most assets going to Delta isnt going to happen. US has no incentive to help DL take over parts of AA since (Unlike AA helping UA take over US in 2000) US can take over ALL of AA without any regulatory problems. Delta cant.

US wants to grow, and sure they could go alone and Propose a good deal to take all, But I feel Boeing will be the first one to oppose and then the work forces, mingle AA Allied to who ever US has and you may find an alternative to jet fuel. I think greed could be the undo of any deal either by DL or US I feel if they work together they may have abetter chance.

Quoting ual777uk (Reply 271):
I just wonder if DL did get AA, what name would survive. My money is on AA.

if that ever happened, Say goodbye to Skyteam and hello to Oneworld, hmm I don't think so.

Quoting LAXtoATL (Reply 272):
'We have recognized $634 million in compensation under the
Stabilization Act, $556 million of which was received in 2001. For additional
information about the Stabilization Act and the compensation payable to us under
that statute, see Note 2 of the Notes to the Consolidated Financial Statements.'

I think you are right, I found this check page 8
http://www.laane.org/downloads/ShortchangedStudy.pdf

Topic: RE: DL Interested In Acquiring AMR?
Username: NYCAdvantage
Posted 2012-01-17 05:26:18 and read 5889 times.

Quoting STT757 (Reply 273):
UA had to divest every single one of their EWR slots to gain approval for their merger with CO, and UA only had 18 daily flights at EWR. There's no way DL can acquire the LGA and JFK slots, the lease on T-8 at JFK is not subject to regulatory approval.

Agree, I Wonder if this ever happens, If DL divest all of AA slots at LGA plus some of their own slots, could they keep all of AA slots at JFK?

[Edited 2012-01-17 05:33:11]

Topic: RE: DL Interested In Acquiring AMR?
Username: Cubsrule
Posted 2012-01-17 05:43:28 and read 5834 times.

Quoting luckyone (Reply 265):
I'm not sure why you would either...if you could. But the fact is you can't.

Maybe we ought to ask a different question: why would DL want to carry me more miles at a lower average fare than every other reporting airline (with an average fare around $207, DL was the LFC in BNASAN in Q410)? Other things being equal, that means DL makes less money.

Topic: RE: DL Interested In Acquiring AMR?
Username: STT757
Posted 2012-01-17 05:47:11 and read 5875 times.

Quoting NYCAdvantage (Reply 275):
Agree, I Wonder if this ever happens, If DL divest all of AA slots at LGA plus some of their own slots, could they keep all of AA slots at JFK?

They might try that to win approval, or just auction off the AA JFK and LGA slots to the highest bidder. It worked out well with the slot swap auction, they received some strong bids.

Topic: RE: DL Interested In Acquiring AMR?
Username: LAXtoATL
Posted 2012-01-17 06:04:01 and read 5839 times.

Quoting NYCAdvantage (Reply 275):
I Wonder if this ever happens, If DL divest all of AA slots at LGA plus some of their own slots, could they keep all of AA slots at JFK?

That is interesting. It certainly would be great for DL, they would be able to build a true a hub at JFK and use LGA for strictly for O&D. Giving up all of AA's LGA slots should appease regulators and competitors, plus DL could divest some of their own LGA slots as well as I doubt they would need as large of a portfolio at LGA if they had a true hub at JFK. So it wouldn't be so much about DL gaining slots in NYC, but more about them exchanging LGA slots for JFK. However, under this scenario, UA would hub and dominate EWR, DL would hub and dominate JFK (B6 would still maintain a large presence), but someone would certainly step in at LGA to set-up a hub with all the new slots available and I would have to assume that would be WN. So, while Delta might get the hub they want at JFK, would DL and UA really want WN entrenched in the market, although with B6 already entrenched in the market, would Southwest's presence even be that big of deal?

Topic: RE: DL Interested In Acquiring AMR?
Username: Cubsrule
Posted 2012-01-17 06:20:18 and read 5781 times.

Quoting LAXtoATL (Reply 278):
So, while Delta might get the hub they want at JFK, would DL and UA really want WN entrenched in the market, although with B6 already entrenched in the market, would Southwest's presence even be that big of deal?

Flying WN from LGA versus schlepping to JFK or EWR just to fly a legacy seems like a pretty easy choice to me if schedules are comparable.

Topic: RE: DL Interested In Acquiring AMR?
Username: yellowtail
Posted 2012-01-17 07:02:30 and read 5655 times.

Quoting LAXtoATL (Reply 278):
So it wouldn't be so much about DL gaining slots in NYC, but more about them exchanging LGA slots for JFK. However, under this scenario, UA would hub and dominate EWR, DL would hub and dominate JFK (B6 would still maintain a large presence), but someone would certainly step in at LGA to set-up a hub with all the new slots available and I would have to assume that would be WN.

UA in control at EWR, DL at JFK and US/AA and WN at LGA seems like a perfectly viable situation for me and I would suspect would pass regulatory approval.

I know some DL folks and they want MIA bad...real bad.....

Topic: RE: DL Interested In Acquiring AMR?
Username: CALPSAFltSkeds
Posted 2012-01-17 08:24:30 and read 5458 times.

Quoting yellowtail (Reply 280):
UA in control at EWR, DL at JFK and US/AA and WN at LGA seems like a perfectly viable situation for me and I would suspect would pass regulatory approval.

Not saying this is good or bad, but such a change could fundamentally change NYC air service.

Just think of what would happen if LGA goes to WN. All those DL/AA RJs going to places like LGA-CRW,XNA,RDU, BGR, BHM, CHS, CAE, GRR, PWM, SAV flown by AA/DL would be gone - moved to JFK?

WN would add lots of total seats at LGA vs. RJs and provide more seats to many markets DL/AA/US served/serve. Smaller cities would probably not be added by WN, rather serve existing markets.

Beside mostly hub services by UA,DL/AA, US, could LGA turn into a more typical WN operation like BWI minus some of the long hauls, (frequency, lots of connecting traffic and lots of through flights with people connecting or staying on board through LGA).

At JFK, would DL/AA move those LGA services to JFK, then consolidate many flights by upgauging to stay within slot limits?

Would the net of this be a yield drop - maybe on the WN flown ciities, but maybe not on the smaller cities WN wouldn't serve - those cities may have fewer flights from NYC.

Topic: RE: DL Interested In Acquiring AMR?
Username: LAXtoATL
Posted 2012-01-17 08:26:37 and read 5456 times.

Quoting Cubsrule (Reply 279):
Flying WN from LGA versus schlepping to JFK or EWR just to fly a legacy seems like a pretty easy choice to me if schedules are comparable.

In that scenario DL would still have a large O&D operation at LGA, so you wouldn't have to schlep to JFK or EWR just to fly a legacy. I would expect expect Delta to continue to serve all the large O&D and business markets from LGA, and use JFK for all connections and international and some overlap to the large business markets.

Quoting yellowtail (Reply 280):
I know some DL folks and they want MIA bad...real bad.....

That goes without saying. Any airline that didn't want MIA needs to have their head examined!

Topic: RE: DL Interested In Acquiring AMR?
Username: PIEAvantiP180
Posted 2012-01-17 08:42:40 and read 5390 times.

I don't think that DL would have to give up every slot they aquired at JFK/LGA. I bet that a divestiture in the range of 60-70% at each airport would suffice. That will leave DL with about 30-40 slots at each airport to grow a lil and take over some of the destinations that they don't fly like AA does about 8 daily to YYZ from LGAand DL don't and to grow a lil in others. At JFK they will need the slots to grow more internationally. If this deal does happen ORD is a goner and NYC will definitely have to be beefed up to asia with all the corporate traffic the two would have. They can transfer AA flights to asia to JFK. 777 flying from ORD would be used for JFK-PVG,PEK and I'm sure HKG,BOM,DEL would be in the works to compete with UA hub out of EWR. DTW hub to asia would handle the asia traffic flows out of the midwest that was left by the ORD pull down.

Topic: RE: DL Interested In Acquiring AMR?
Username: b727fa
Posted 2012-01-17 08:56:45 and read 5338 times.

Quoting LDVAviation (Reply 22):
Clever move by Delta. They are trying to entice US Airways to make a bid. They want to muddle the process.

It could be a way to force AMR labor to jump into the union bed that is US as the labor force at AA will not tolerate being non-union. Think of it this way: DL gets rid of a large competitor, further destabilizes US and then marches to "glory."

Topic: RE: DL Interested In Acquiring AMR?
Username: panamair
Posted 2012-01-17 09:55:07 and read 5182 times.

Quoting yellowtail (Reply 280):

UA in control at EWR, DL at JFK and US/AA and WN at LGA seems like a perfectly viable situation

DL would/should not give up LGA slots for more at JFK....LGA is much more valuable than JFK for most NYC O&D traffic. People will still be forced to use JFK anyway for transcons and transoceanic international flying, but the lucrative business traffic would prefer LGA any day over JFK for competing domestic routes. No one is swimming in profits at JFK, not JetBlue, not Delta, not American...and as long as LGA is around, JFK will always be a losing proposition in most markets where they compete with LGA....

Topic: RE: DL Interested In Acquiring AMR?
Username: jetlanta
Posted 2012-01-17 11:40:49 and read 5035 times.

Quoting panamair (Reply 285):
DL would/should not give up LGA slots for more at JFK....LGA is much more valuable than JFK for most NYC O&D traffic. People will still be forced to use JFK anyway for transcons and transoceanic international flying, but the lucrative business traffic would prefer LGA any day over JFK for competing domestic routes. No one is swimming in profits at JFK, not JetBlue, not Delta, not American...and as long as LGA is around, JFK will always be a losing proposition in most markets where they compete with LGA....

Ditto. DL would NEVER abandon LGA (to a LFC much less) in favor of JFK. It might look good on paper, but that paper clearly has no revenue data on it.

A split operation between LGA/JFK will always be a better performer and there is no way you give up that much share to a low fare competitor at LGA. It would be suicide the likes what we haven't seen since BOS.

Topic: RE: DL Interested In Acquiring AMR?
Username: nomorerjs
Posted 2012-01-17 13:48:16 and read 4859 times.

If DL takes over AA, the complex on Amon Carter will be a ghost town! Although, that nice mail/freight complex just south of India (taxi way south of terminal E) might get some use again!

Also, what's up with the US planes parked at the old E satellite? Two planes there this afternoon.

Topic: RE: DL Interested In Acquiring AMR?
Username: tharanga
Posted 2012-01-17 14:53:13 and read 4746 times.

Quoting LAXtoATL (Reply 272):
Checked and confirmed. As I mentioned before there were two parts to the bailout and I think you are confusing the second part (the loan program) as the entire program. The loan program was the only part that was administered by the Air Transportation Stabilization Board. Delta definitely took their part of the $5B direct cash payout from their 2001 annual report...

Interesting - thank you for checking into that. I must have forgotten the other part of the story - was that simply a cash grant as compensation for lost business after 9/11?

Topic: RE: DL Interested In Acquiring AMR?
Username: FlyASAGuy2005
Posted 2012-01-17 15:43:54 and read 4660 times.

Anyway, DL will be holding their Q4 podcast on 25 JAN just as an FYI. They've been tight lipped about the whole AA thing but that would be your time to hear what they have to say about it.

Back to your regularly scheduled bickering  

Topic: RE: DL Interested In Acquiring AMR?
Username: LAXtoATL
Posted 2012-01-17 18:29:51 and read 4384 times.

Quoting tharanga (Reply 288):
Interesting - thank you for checking into that.

no problem.

Quoting tharanga (Reply 288):
was that simply a cash grant as compensation for lost business after 9/11?

that is my understanding.

Topic: RE: DL Interested In Acquiring AMR?
Username: LipeGIG
Posted 2012-01-17 19:37:54 and read 4265 times.

This thread become too long.

Please continue discussions on the second part :

DL Interested In Acquiring AMR (Part 2)? (by LipeGIG Jan 17 2012 in Civil Aviation)



Any posts after this would be deleted due to a potential system lag.

Regards,
Felipe


The messages in this discussion express the views of the author of the message, not necessarily the views of Airliners.net or any entity associated with Airliners.net.

Copyright © Lundgren Aerospace. All rights reserved.
http://www.airliners.net/