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Topic: AA CEO To Make Merger Decision Soon
Username: allegiantflyer
Posted 2013-01-03 19:44:14 and read 26620 times.

In these articles they talk about how AA CEO Tom Horton is about to make a merger decision in the next few weeks. He doesnt know when though,but it could be soon. This should be an interesting result and i can not wait to hear the Decisions in the upcoming weeks

http://www.dallasnews.com/business/a...will-come-in-a-matter-of-weeks.ece

http://www.star-telegram.com/2013/01...ness-briefs-american-airlines.html

Topic: RE: AA CEO To Make Merger Decision Soon
Username: JFKPurser
Posted 2013-01-03 19:59:01 and read 26535 times.

He's actually not making the decision. The UCC is. Horton just wants the world to believe the choice to merge with US will be his. It won't be.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: UA787DEN
Posted 2013-01-03 20:10:58 and read 26444 times.

About time. I'm not surprised. This will start a war of merge vs. Don't merge.

And while the UCC might ultimately make this decision, a CEO might have a wee bit of (attempted) input.

Interesting if the expiration date of the non-disclosure agreement will slow or increase the speed of things, or let us know any info. I somehow doubt it.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: dcann40
Posted 2013-01-03 20:42:05 and read 26241 times.

Quoting JFKPurser (Reply 1):
He's actually not making the decision. The UCC is. Horton just wants the world to believe the choice to merge with US will be his. It won't be.

Your post makes it sound as if the decision to merge has been made. It hasn't been (if the decision to merge had been made, it would also have been announced).

M&A is a very complicated affair and nothing is certain until the deal closes.

It's possible that a merger could take place while AA is in BK but, with every day that passes, that becomes less likely.

The UCC isn't looking to get the maximum value based on today, it has to be forward looking as well.

Given AA's newfound strength in the past nine months, the UCC may very well decide that it supports the company's emergence from BK as a standalone entity. Or not.

I take it that most people on this board don't have any kind of M&A background. While my airline background is nonexistent (as an employee), my M&A background is quite strong.

The only deal that's a done deal is one that has been signed by both parties. Anything else is speculation, even if a merger is announced.

P.S. The articles cited in the OP don't really give any indication that CEO Horton feels he is controlling the decision. It's his job as CEO to tell employees what he did, including saying that a decision is expected in a matter of weeks. That's not the same thing as what one poster here characterized as trying to make it seem as if he is controlling the decision. Horton's not stupid, in fact he seems to be a good manager. It would be foolhardy for him to say otherwise.

[Edited 2013-01-03 20:44:26]

Topic: RE: AA CEO To Make Merger Decision Soon
Username: PHX787
Posted 2013-01-03 20:45:13 and read 26228 times.

Quoting UA787DEN (Reply 2):
And while the UCC might ultimately make this decision, a CEO might have a wee bit of (attempted) input.

Stupid question- What's UCC? BK court?

I highly doubt this is going to happen. Too much going on with both sides right now. Good try but no dice. Thankfully.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: Deltal1011man
Posted 2013-01-03 20:55:29 and read 26139 times.

Quoting dcann40 (Reply 3):

Your post makes it sound as if the decision to merge has been made. It hasn't been (if the decision to merge had been made, it would also have been announced).

Not at all. JFK is right. Horton isn't making the decision. period.


Horton does however wish he was nearly as powerful as he makes himself out to be.  Yeah sure

[Edited 2013-01-03 20:56:14]

Topic: RE: AA CEO To Make Merger Decision Soon
Username: dcann40
Posted 2013-01-03 20:56:03 and read 26124 times.

Quoting PHX787 (Reply 4):
Stupid question- What's UCC? BK court?

Not a stupid question. It's the Unsecured Creditors Committee.

AA employees know this term because keep hearing it in a variety of venues with the intent that they should believe somehow that the UCC will somehow look past all of the significant disadvantages of a merger led by LCC (and there are many, all to AA's detriment). Even AA's FA union signs its messages "AA+US - Our Future Depends On It," in an attempt to get more people to drink the Kool-Aid. The UCC doesn't drink this beverage. Their job is to look out for themselves and it's become increasingly clear that having AA emerge from BK in tact will create more value to the unsecured creditors, even in the short term.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: etops1
Posted 2013-01-03 21:06:13 and read 26035 times.

In the mean time AA FA's union signs the MOU to merge .
APFA Signs MOU
APFA has agreed to a Memorandum of Understanding (MOU), clarifying several points contained within the Bridge Agreement the union signed with US Airways last Spring. This MOU further illuminates the financial benefits of a merger to AMR’s creditors. APFA is currently operating under a judicially-enforceable non-disclosure agreement (NDA) with regards to merger discussions, which means that as long as this restriction is in place, we are not able to divulge specific details of the MOU.

AmericanAirlines + US Airways
"Our Future Depends On It"

Topic: RE: AA CEO To Make Merger Decision Soon
Username: BarryH
Posted 2013-01-03 21:08:30 and read 26012 times.

Quoting JFKPurser (Reply 1):
He's actually not making the decision. The UCC is. Horton just wants the world to believe the choice to merge with US will be his. It won't be.

You're right, he's obviously an egomaniac. The use of the word "we" is just a smoke screen.  

“As you know, we continue the process we embarked upon months ago to carefully assess how we can deliver the greatest value for our stakeholders and the best outcome for our people and customers,” Horton wrote.

“Together with our Board, and the Creditors’ Committee, we asked our unions and those of US Airways to join the discussions underway in order to better evaluate the potential benefits, costs and risks of a potential merger,” his letter said.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: JFKPurser
Posted 2013-01-03 21:26:34 and read 25875 times.

Quoting UA787DEN (Reply 2):
And while the UCC might ultimately make this decision, a CEO might have a wee bit of (attempted) input.

The only thing left for Horton to do at this point is stand in the room in front of them and beg.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: Acey559
Posted 2013-01-03 21:47:11 and read 25750 times.

I'd look for some kind of news on January 9th. A merger wouldn't at all surprise me. I was very skeptical at first and still hope it doesn't happen, but I think the writing could be on the wall for this.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: mah4546
Posted 2013-01-03 21:55:17 and read 25720 times.

Quoting etops1 (Reply 7):
APFA has agreed to a Memorandum of Understanding (MOU), clarifying several points contained within the Bridge Agreement the union signed with US Airways last Spring. This MOU further illuminates the financial benefits of a merger to AMR’s creditors. APFA is currently operating under a judicially-enforceable non-disclosure agreement (NDA) with regards to merger discussions, which means that as long as this restriction is in place, we are not able to divulge specific details of the MOU.

Do you have a new job lined up? US employees will probably be the first to go, and be fired in greater number overall. Or do they not discuss the job cuts and have you convinced there won't be any? I guess they can't discuss that under the MOU?

Topic: RE: AA CEO To Make Merger Decision Soon
Username: BarryH
Posted 2013-01-03 22:37:14 and read 25483 times.

Quoting etops1 (Reply 7):
APFA has agreed to a Memorandum of Understanding (MOU),

They, like the pilots, have signed an MOU with themselves. Said MOU also gets them better terms than what's in the existing contract accepted under bankruptcy. Not really a hard agreement to get behind, no? They also signed an agreement with the CEO of a competing airline that wasn’t in a position to provide assurances of anything since US’ roll in AA’s bankruptcy is that of a subordinated debt holder through a desperate purchase of third-party debt to get closer to the process. Signing NDA’s and exchanging confidential financial data is a double-edged sword. People can look great in clothes but not so much when their naked. So there’s been lots of signing going on but none that points to a deal in bankruptcy being a sure thing.


MOU's being signed will only be exciting when the two US pilot union's and AFA sign the same documents the AA unions do. The rest is pure showmanship. I’ve heard nothing official or leaked from the multiple US unions regarding the AA union’s MOU’s which I’m guessing means they’re not ready to pop the champagne corks yet. There could be breakthrough that includes both US and AA's pilots unions or the face-to-face meetings could have driven them in to opposing camps. We here don't know and it's fun to take positions as an arm chair quarterback but nothing publically available (yet) points to a foregone conclusion either way.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: F9animal
Posted 2013-01-03 22:49:04 and read 25432 times.

I am not excited to see a merger. I like US the way it is... And I prefer to see AA come out of bk healthy. But, in regards to a merger and the workers of both airlines involved. Doug Parker is very committed to keeping employees employed. I went through the US/HP merger. Most of us at US feared we were going to get screwed. Parker assured us he would do everything possible to avoid cuts in staff. Guess what? He did just that. I have high respect for Parker. He somehow turned US and HP into a profitable and healthy company. While it was a far from perfect merger, it has proven successful.

If AA and US merge, I will be saddened. I love both airlines. It really bums me that we have lost so many great named airlines lately with mergers. No more Northwest. No more Continental. No more America West. No more TWA. Now we migh not have US Airways. Less options for the people to choose. Kinda sucks!

Topic: RE: AA CEO To Make Merger Decision Soon
Username: BarryH
Posted 2013-01-03 22:58:45 and read 25396 times.

Quoting F9animal (Reply 13):
Doug Parker is very committed to keeping employees employed.

Doug will do just fine for himself no matter what happens to the combined carrier once the deal's signed. So will the Executive Committee. No one running a billion dollar company got there by being purely benevolent. Similar largesse by AA's management led by Carty sent the union's over the edge. If the merger ends up borked and Doug parachutes out all the AA union's will have done is traded one villain for another and gained a huge mess to clean up in the process. The grass isn't always greener on the other side; sometimes it's just different.

"A few weeks ago I wrote a piece about what Doug Parker stood to gain if US Airways is allowed to buy American Airlines. At the time, I only had access to Doug's public salary info. But with special thanks to a little birdie at headquarters, I've learned a few more juicy details of just why Doug is pushing so hard for this merger. Even if Doug walks out on his job within two years after a merger, he will receive "change in control" payments worth about $18 million.

And it's not just Doug - the cronies all stand to gain from this. The top five executives would rake in about $40 million in gains."

http://firedougparker.org/

P.S. - The site being quoted isn't necessarily the most objective but change of control bonuses are pretty typical so while not verifiable publically the claims seem plausible.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: F9animal
Posted 2013-01-03 23:06:30 and read 25356 times.

Interesting information there. But, wouldnt Parker have been in a similar financial position after the US merger? I am not cheerleading Parker. I just respect him because he kept his word. And I can name very very few airline CEOs that have kept their word. Do you think Parker would jump ship and run with the money? I am not so sure he is like that. He seems to really enjoy being where he is.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: BarryH
Posted 2013-01-03 23:17:26 and read 25320 times.

Quoting F9animal (Reply 15):
I am not so sure he is like that. He seems to really enjoy being where he is.

Running a combined AA/US is very different than a primarily U.S. carrier. The bankruptcy process is what it is. There are certain avenues that are followed and there's always a bunch of pissed off people involved in the process because they've lost a ton and all bankruptcy does is decide how much. Twice now, with DL and AA, Parker's done an end-run around the process and has come across as a petulant child both times. Nothing he did in either case could have changed the process and it doesn't reflect well on his business maturity and instill confidence in him running a combined company. While his DUI after the DL deal officially disappeared is "human," CEO's of billion dollar companies give up the right to do stupid things that mere mortals get to do. That didn't/doesn't reflect well on his credentials either.

Any opinions any of us have of either Parker or Horton are based on hearsay so it’s hard to really assess their mettle. You’d hope that the Board’s of both US and AA aren’t stupid though and that the CEO they’ve chosen to support is competent, qualified, and the best choice to return shareholder value. But if you look at HP Board’s can be pretty stupid themselves sometimes.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: commavia
Posted 2013-01-04 03:15:04 and read 24072 times.

Quoting F9animal (Reply 13):
Doug Parker is very committed to keeping employees employed.

Oh please. This merger is going to lead to thousands of layoffs. It's inevitable.

Quoting F9animal (Reply 13):
I have high respect for Parker. He somehow turned US and HP into a profitable and healthy company.

Yes, he has managed to "somehow" turn US and HP into a "profitable" company ... in large part by doing, ironically enough, what AA's unions so hate AA management for having allegedly done in the last decade.

You can't make this stuff up!   

Topic: RE: AA CEO To Make Merger Decision Soon
Username: YYZBound
Posted 2013-01-04 04:33:40 and read 23509 times.

Quoting dcann40 (Reply 6):
Even AA's FA union signs its messages "AA+US - Our Future Depends On It," in an attempt to get more people to drink the Kool-Aid. The UCC doesn't drink this beverage.

AA's F/A union, as well as the other two...are part of the UCC actually

Topic: RE: AA CEO To Make Merger Decision Soon
Username: JoePatroni707
Posted 2013-01-04 04:47:50 and read 23369 times.

Quoting commavia (Reply 17):
This merger is going to lead to thousands of layoffs. It's inevitable.

Probably well north of 10,000. From what I understand he will not offer a job to any current member of AA management from Horton on down to front line supervisors, plus there will be redundancies in cities like PHX, SAN, DEN , SJC where US has a larger presence thatn AA and the current USAir staff could easily handle the extra volume making AA employees surplus. Dougs primary obligation will be to protect jobs of USAir employees. So be careful of what you wish for AA peeps.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: jfklganyc
Posted 2013-01-04 05:17:10 and read 23092 times.

Quoting mah4546 (Reply 11):
Do you have a new job lined up? US employees will probably be the first to go, and be fired in greater number overall. Or do they not discuss the job cuts and have you convinced there won't be any? I guess they can't discuss that under the MOU?

Dude, I know you don't like losing your beloved AA, but don't do this to somebody.

I remember when Eagle was being spun off from AA (never happened) 5 years ago. I was an Eagle employee and was very worried. The flaming statements on here didn't help.

If that peresons job is really in jeopardy (which you certainly don't know about), they don't need you rubbing it in their faces.

And one more point, remember the company that is Bankrupt and the company that is taking over when you make statements like that

Topic: RE: AA CEO To Make Merger Decision Soon
Username: SeeTheWorld
Posted 2013-01-04 05:22:09 and read 23014 times.

Quoting dcann40 (Reply 6):
AA employees know this term because keep hearing it in a variety of venues with the intent that they should believe somehow that the UCC will somehow look past all of the significant disadvantages of a merger led by LCC (and there are many, all to AA's detriment). Even AA's FA union signs its messages "AA+US - Our Future Depends On It," in an attempt to get more people to drink the Kool-Aid. The UCC doesn't drink this beverage. Their job is to look out for themselves and it's become increasingly clear that having AA emerge from BK in tact will create more value to the unsecured creditors, even in the short term.

Since you know M&A and not airlines, you sure are coming across like you know exactly what should happen - no merger. I believe they are going to merge, regardless of the downsides and upsides of either option, because my 25 years of airline experience regarding scope and scale suggest that the pain of merging is better in the long term for competing with UA and DL and in the global airline industry. But, the UCC will decide, and their are nine voting groups .... just like the Supreme Court ... 5 votes wins ....

Topic: RE: AA CEO To Make Merger Decision Soon
Username: AAIL86
Posted 2013-01-04 05:26:21 and read 22962 times.

Quoting commavia (Reply 17):

Yes, he has managed to "somehow" turn US and HP into a "profitable" company ... in large part by doing, ironically enough, what AA's unions so hate AA management for having allegedly done in the last decade.

Yep. Horton has been president for two years and CEO for only 13 months. In reality, Horton has never been given a chance to do things his own way. I'm no great defender of TH, but someone's going to be in charge - that's the reality of how human institutions work. I'd give DP a 6 month honeymoon before that sour taste puckers up again ...

Quoting JoePatroni707 (Reply 19):
Probably well north of 10,000. From what I understand he will not offer a job to any current member of AA management from Horton on down to front line supervisors, plus there will be redundancies in cities like PHX, SAN, DEN , SJC where US has a larger presence thatn AA and the current USAir staff could easily handle the extra volume making AA employees surplus. Dougs primary obligation will be to protect jobs of USAir employees. So be careful of what you wish for AA peeps.

Agreed on the 10,000+ number, and that AA could lose many higher level management positions (level 6ish and above).
From purely a practical standpoint, it won't be that easy to clean out middle management, because then they'd have to train new people to take over most of those jobs. Given the size differences between AA and US, even if DP is in charge and he brings over every single member of US' management - there won't be enough heads to run the show ...

Topic: RE: AA CEO To Make Merger Decision Soon
Username: Longhornmaniac
Posted 2013-01-04 05:28:44 and read 22930 times.

Quoting jfklganyc (Reply 20):

He's not being malicious, but if I understand him correctly, he (like many others, including myself) is growing very tired of the willful ignorance of so many front line employees regarding this situation. DP has done a great job of BSing to the applicable unions, and they are the only ones that can't seem to see right through it.

  

Cheers,
Cameron

Topic: RE: AA CEO To Make Merger Decision Soon
Username: rwy04lga
Posted 2013-01-04 05:33:28 and read 22886 times.

Quoting F9animal (Reply 13):
we have lost so many great named airlines

No mention of PanAm? But you include America West in the great name category???

Quoting commavia (Reply 17):
Oh please. This merger is going to lead to thousands of layoffs. It's inevitable.

That's what was said to the NW people...what happened??

Topic: RE: AA CEO To Make Merger Decision Soon
Username: YYZBound
Posted 2013-01-04 05:39:46 and read 23330 times.

According to A.netters this merger sounds like the apocalypse.

The Mayan calendar said the same thing

As an AA FA..who did NOT drink the kook aid.....I will openly say I don't want a merger....BUT, I have NO control over what happens.

None of us do  

Topic: RE: AA CEO To Make Merger Decision Soon
Username: dcann40
Posted 2013-01-04 05:48:42 and read 23188 times.

Quoting SeeTheWorld (Reply 21):
Since you know M&A and not airlines, you sure are coming across like you know exactly what should happen - no merger.

My opinion is simply that there is a chance it will happen - and a chance it won't but that it's becoming somewhat unlikely that a merger will happen during BK.

What will be telling is what happens following any kind of merger announcement, if there is one. That is all.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: allegiantflyer
Posted 2013-01-04 06:41:02 and read 22911 times.

Quoting JoePatroni707 (Reply 19):
This merger is going to lead to thousands of layoffs. It's inevitable.

All layoffs would have to be on the US side of the merger,AA employees cant because of the lawsuit from what happened with TWA

Topic: RE: AA CEO To Make Merger Decision Soon
Username: ripcordd
Posted 2013-01-04 06:57:38 and read 22611 times.

Layoffs will be done by doh.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: dcann40
Posted 2013-01-04 06:59:12 and read 22588 times.

Quoting allegiantflyer (Reply 27):
All layoffs would have to be on the US side of the merger,AA employees cant because of the lawsuit from what happened with TWA

Please explain and do you mean this impacts every last AA employee?

Topic: RE: AA CEO To Make Merger Decision Soon
Username: BD338
Posted 2013-01-04 07:17:29 and read 22321 times.

Quoting AAIL86 (Reply 22):
Agreed on the 10,000+ number, and that AA could lose many higher level management positions (level 6ish and above).

Is that on top of the AA layoffs in BK? How many did UA/CO and DL/NW layoff after their mergers? I don't recall that level.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: ripcordd
Posted 2013-01-04 07:25:17 and read 22175 times.

Yes they figure they would have around 10k to many with the 2 companies merged. But I'm sure a lot will leave with a nice buyout

Topic: RE: AA CEO To Make Merger Decision Soon
Username: B727FA
Posted 2013-01-04 08:02:33 and read 21613 times.

Quoting allegiantflyer (Reply 27):

Quoting JoePatroni707 (Reply 19):
This merger is going to lead to thousands of layoffs. It's inevitable.

All layoffs would have to be on the US side of the merger,AA employees cant because of the lawsuit from what happened with TWA

Huh? That statement shows a serious lack of knowledge regarding labor law.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: ripcordd
Posted 2013-01-04 08:19:24 and read 21412 times.

Its half right there is a new law because of the buyout of TWA by AA but it now goes by DOH

Topic: RE: AA CEO To Make Merger Decision Soon
Username: JoePatroni707
Posted 2013-01-04 08:41:54 and read 21077 times.

Quoting allegiantflyer (Reply 27):
All layoffs would have to be on the US side of the merger,AA employees cant because of the lawsuit from what happened with TWA

That statement makes no sense at all. It would go strictly by seniority for front line employees. For managers (if any from AA survive which I doubt they will, thats the main reason the unions are so behind this deal) its strictly a popularity contest.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: milemaster
Posted 2013-01-04 08:44:25 and read 21005 times.

There sure is a lot of projection going on with this discussion.

My .02 on the matter is that this merger has an extreme probability of happening in 2013. Regardless of whether it's US taking over AMR or AMR as the acquiring party after BK, it's happening, and it's bad news for consumers which is why I am not particularly thrilled about it either way. The only people who should be amped about it are the ones who think they're going to profit from it. I can tell you that's sure not going to be us passengers who have to fly a lot and pay for it.

The logic of "this merger has to happen to effectively compete with UA and DL" is really ignoring a lot of realities simply because of the "Legacy" designation of the AA and US brands. Where does it end? Will DL need to go shopping for another airline once AA merges with US? B6, AS, WN, etc all doomed to fail also if they don't merge? After all, they also compete with DL/UA/AA.

I fly both AA & US frequently today for different reasons/purposes and see few synergies where this merger is going benefit anyone but shareholders. I will say that when this merger does happen, it's looking more and more like AMR is going to go it alone and go after US later.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: superjeff
Posted 2013-01-04 08:53:44 and read 20945 times.

Quoting BarryH (Reply 14):
Doug will do just fine for himself no matter what happens to the combined carrier once the deal's signed. So will the Executive Committee. No one running a billion dollar company got there by being purely benevolent. Similar largesse by AA's management led by Carty sent the union's over the edge. If the merger ends up borked and Doug parachutes out all the AA union's will have done is traded one villain for another and gained a huge mess to clean up in the process. The grass isn't always greener on the other side; sometimes it's just different.

"A few weeks ago I wrote a piece about what Doug Parker stood to gain if US Airways is allowed to buy American Airlines. At the time, I only had access to Doug's public salary info. But with special thanks to a little birdie at headquarters, I've learned a few more juicy details of just why Doug is pushing so hard for this merger. Even if Doug walks out on his job within two years after a merger, he will receive "change in control" payments worth about $18 million.

Don't forget the obvious here. The acquirer WOULD BE US, not AA. US may keep the AA name, but management would be US - You can argue about which airline has more comfy seats, cleaner airplanes, or better service, but US is the acquirer. If there is a merger, I'd bet on Doug Parker still being around, even if the combined company is called "American."

Topic: RE: AA CEO To Make Merger Decision Soon
Username: USAirways757
Posted 2013-01-04 09:27:25 and read 20516 times.

Sorry for going off topic here, but where would US's PIT maintenance programs go? Would they stay in PIT or go to Tulsa?

Topic: RE: AA CEO To Make Merger Decision Soon
Username: Drmlnr1
Posted 2013-01-04 09:28:19 and read 20503 times.

AA IMO will emerge as a stand alone carrier because they have become stronger. And with the delivery of their first 77W and soon the arrival of their first A320 family aircraft, they have forged a path to become profitable.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: pnwtraveler
Posted 2013-01-04 09:56:49 and read 20139 times.

Quoting F9animal (Reply 13):
If AA and US merge, I will be saddened. I love both airlines. It really bums me that we have lost so many great named airlines lately with mergers. No more Northwest. No more Continental. No more America West. No more TWA. Now we migh not have US Airways. Less options for the people to choose. Kinda sucks!

That is true in that a number of US Legacies have now gone. Eastern, Pan Am, Braniff and others. Without these consolidations though in the US Market, a number of those Legacies will go under and won't be around anyways. It would likely be more efficient for AA to go under and US buy the pieces they want from the creditors, sign employees under a cheaper contract as new employees vs. retaining seniority and benefits however that will be adjusted. So while a solid AA on its own might be best for employees, a merger is a middle ground to total loss of job. I am sure that some of the efficiency gained by the merger will be loss of overlapping jobs, maybe not as dire as some are predicting if the new entity is much stronger after the merger.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: kgaiflyer
Posted 2013-01-04 10:10:53 and read 20052 times.

Quoting superjeff (Reply 36):
Don't forget the obvious here. The acquirer WOULD BE US, not AA. US may keep the AA name, but management would be US - You can argue about which airline has more comfy seats, cleaner airplanes, or better service, but US is the acquirer. If there is a merger, I'd bet on Doug Parker still being around, even if the combined company is called "American."

Funny story.

I was on US245 (PHX-YYC) yesterday morning. One of the FAs was in the aisle hawking the USAir bank card. We engaged in conversation (for instance, I still have my old NWA bank card--never converted it to DL).

The FA commented, "Then you'd better get ours with all its deals and advantages. They'll be gone when we become American Airlines."

I wonder what she knows that the rest of us don't?  

Topic: RE: AA CEO To Make Merger Decision Soon
Username: WALmsp
Posted 2013-01-04 10:40:59 and read 19548 times.

Quoting F9animal (Reply 13):
If AA and US merge, I will be saddened. I love both airlines. It really bums me that we have lost so many great named airlines lately with mergers. No more Northwest. No more Continental. No more America West. No more TWA. Now we migh not have US Airways. Less options for the people to choose.

I have no personal stake in either carrier and unlike many of the posters on this forum, I do not know the intricacies and potential synergies of each carrier's operations. My sole reason for opposing the merger is the continuing decrease in the number of carriers. I like variety; I like options. As F9animal stated, both of these are going away. I was born and raised around Western Airlines and I have so many fond memories of the multitude of different airlines. My model collection reflects that, as the vast majority of my models constitute airlines that no longer exists.

I realize that in today's business world, my argument is irrelevant. I'm just tired of all the consolidation.

Quoting milemaster (Reply 35):
The logic of "this merger has to happen to effectively compete with UA and DL" is really ignoring a lot of realities simply because of the "Legacy" designation of the AA and US brands. Where does it end? Will DL need to go shopping for another airline once AA merges with US? B6, AS, WN, etc all doomed to fail also if they don't merge? After all, they also compete with DL/UA/AA.

Agreed. It is not necessary for everyone to become larger by consolidation in order to survive and succeed.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: AA767400
Posted 2013-01-04 10:41:38 and read 19565 times.

Quoting etops1 (Reply 7):
In the mean time AA FA's union signs the MOU to merge

I read that the other day. Question is, how does AFA/IAM play into this? What's their view on the merger? How do the US FAs feel about this merger? Are they informed of the MOU which would be implemented?

Quoting mah4546 (Reply 11):
Do you have a new job lined up? US employees will probably be the first to go, and be fired in greater number overall. Or do they not discuss the job cuts and have you convinced there won't be any? I guess they can't discuss that under the MOU?

You've said some pretty sinister things on here before, but this tops all. First of all - You, nor any other person on here know the numbers. Yes, there will be lay offs, but not necessarily his. A merged AA+US will see layoffs, but overall, that number will be reduced by buyouts and such. Implying that someone will be unemployed is rude, and shows hatred.

APFA/APA are in favor of a merger, and their dislike for management is evident. However, now that they both have contracts in place, AA can move forward with many aspects. Whether they merge or not, this portion as been accomplished.

For the record - I oppose this merger. It looks like a logistical nightmare. Particularly the ongoing US+HP union debate.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: HPRamper
Posted 2013-01-04 10:55:52 and read 19382 times.

Quoting dcann40 (Reply 6):
AA employees know this term because keep hearing it in a variety of venues with the intent that they should believe somehow that the UCC will somehow look past all of the significant disadvantages of a merger led by LCC (and there are many, all to AA's detriment). Even AA's FA union signs its messages "AA+US - Our Future Depends On It," in an attempt to get more people to drink the Kool-Aid.

The Kool-Aid comes in more than one flavor.

Quoting commavia (Reply 17):
Yes, he has managed to "somehow" turn US and HP into a "profitable" company ... in large part by doing, ironically enough, what AA's unions so hate AA management for having allegedly done in the last decade.

Yet the US unions don't have the same animosity toward Parker. I think that's because 1. Most of the West union members received raises....and 2. Without the merger, 100% of the East employees would have been without a job.

When AA entered bankruptcy the unions were a lot more concerned about the possibility of liquidation so Parker looked like the white knight yet again. Now that AA has regained some stability, the merger looks less necessary and thus less attractive.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: PRAirbus
Posted 2013-01-04 11:04:54 and read 19290 times.

Wish AA would tie up w/B6 and avoid the hassle of US/AA dramatic merger!  .

Topic: RE: AA CEO To Make Merger Decision Soon
Username: ckfred
Posted 2013-01-04 11:09:05 and read 19258 times.

Quoting JFKPurser (Reply 1):
He's actually not making the decision. The UCC is. Horton just wants the world to believe the choice to merge with US will be his. It won't be.

It all depends on who is running AA/AMR, when the company exits Chapter 11. It seems very likely that US will not merge with AA, before it exits bankruptcy. Assuming that the shareholders of the new AA/AMR retain Horton and his management team, the Horton will have a lot of say as to whether AA does eventually merge with US (or any other carrier).

Remember that no one thought Glenn Tilton would survive Chapter 11 as CEO of UA. Yet, he stuck around for exit from Chapter 11, the IPO, and negotiating the merger with CO.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: AAIL86
Posted 2013-01-04 11:09:10 and read 19249 times.

Quoting BD338 (Reply 30):
Is that on top of the AA layoffs in BK? How many did UA/CO and DL/NW layoff after their mergers? I don't recall that level.

Well it probably won't all be "layoffs". When someone in management loses their job, its strictly a termination with no recall rights. Also, many jobs will simply be lost to attrition because of redundant departments, etc. I'd except total employment at the combined carrier to be at least 10% lower at the merged one.

Quoting superjeff (Reply 36):
Don't forget the obvious here. The acquirer WOULD BE US, not AA. US may keep the AA name, but management would be US - You can argue about which airline has more comfy seats, cleaner airplanes, or better service, but US is the acquirer. If there is a merger, I'd bet on Doug Parker still being around, even if the combined company is called "American."

It remains to be seen who the aqquiring carrier would be. Even so, a company's culture is made up the people employeed there - and the majority of employees would come from American - even DP himself - who was in AA management for several years.

Quoting kgaiflyer (Reply 40):

The FA commented, "Then you'd better get ours with all its deals and advantages. They'll be gone when we become American Airlines."

I wonder what she knows that the rest of us don't?

She doesn't know any more then we do. In general, front line employees don't have inside information - especially about something this big.

Quoting milemaster (Reply 35):
it's happening, and it's bad news for consumers which is why I am not particularly thrilled about it either way.

Agreed. Airfares will go up considerably as a result....

Topic: RE: AA CEO To Make Merger Decision Soon
Username: dcann40
Posted 2013-01-04 11:24:23 and read 19086 times.

Quoting HPRamper (Reply 43):
When AA entered bankruptcy the unions were a lot more concerned about the possibility of liquidation so Parker looked like the white knight yet again.

I cannot see how anyone viewed AA's trip to bankruptcy court as even being remotely close to the possibility of liquidation.

AA was unique among airline bankruptcies in that it did NOT require DIP financing. Instead, it went into BK with $4 billion+ in cash on hand. That does not in any way look like a Chapter 7 candidate to me, nor did it to anyone else.

Any talk of liquidation was scaremongering.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: Maverick623
Posted 2013-01-04 11:26:33 and read 19074 times.

Quoting F9animal (Reply 13):
Doug Parker is very committed to keeping employees employed

  

Doug Parker is committed to making money for himself and for the company (in that order). If you think you're more than an item on the balance sheet, you're sorely mistaken.

Quoting allegiantflyer (Reply 27):
All layoffs would have to be on the US side of the merger,AA employees cant because of the lawsuit from what happened with TWA

So you're saying that AA was deemed wrong for doing what they did to TWA, and then say they MUST do the same to US?

 
Quoting kgaiflyer (Reply 40):
I wonder what she knows that the rest of us don't?

Absolutely nothing.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: JoePatroni707
Posted 2013-01-04 11:28:24 and read 19024 times.

Quoting AAIL86 (Reply 46):
its strictly a termination with no recall rights.

and depending on the level of manager could be as little as two weeks pay total severance

Topic: RE: AA CEO To Make Merger Decision Soon
Username: kgaiflyer
Posted 2013-01-04 11:30:38 and read 19008 times.

Quoting AA767400 (Reply 42):
Quoting mah4546 (Reply 11):Do you have a new job lined up? US employees will probably be the first to go, and be fired in greater number overall. Or do they not discuss the job cuts and have you convinced there won't be any? I guess they can't discuss that under the MOU?

You've said some pretty sinister things on here before, but this tops all. First of all - You, nor any other person on here know the numbers. Yes, there will be lay offs, but not necessarily his. A merged AA+US will see layoffs, but overall, that number will be reduced by buyouts and such. Implying that someone will be unemployed is rude, and shows hatred.

It happens on A.net.

A correlate would be the financiers who proudly state they were the first to see a stock rise or fall.

Another example -- remember the flack when Independence Air went under in 2006? A.netters were positively gloating over how the company was made up of losers -- they needed to be taught a lesson -- creditors needed to "cherry pick" their assets.

Of course, the Independence Air employees who were on A.net at that time were probably quite hurt by the rhetoric.

[Edited 2013-01-04 11:44:29]

Topic: RE: AA CEO To Make Merger Decision Soon
Username: kgaiflyer
Posted 2013-01-04 11:34:40 and read 18939 times.

Quoting Maverick623 (Reply 48):
Quoting kgaiflyer (Reply 40):I wonder what she knows that the rest of us don't?

Absolutely nothing.

I think you're right.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: BarryH
Posted 2013-01-04 11:42:01 and read 18931 times.

Quoting superjeff (Reply 36):
Don't forget the obvious here. The acquirer WOULD BE US, not AA. US may keep the AA name, but management would be US - You can argue about which airline has more comfy seats, cleaner airplanes, or better service, but US is the acquirer. If there is a merger, I'd bet on Doug Parker still being around, even if the combined company is called "American."

You can caps lock all you like but at the end of the day AA is the stronger of the two entities. And as time elapses US, because of reasons mentioned a couple of posts above, will continue to weaken (lose value) while AA post-bankruptcy will appreciate. What you espoused is Doug's view of the world and he's been pretty clear about it. What happens between AA and US is neither in Parker or Horton's hands anymore. Some of us that have done M&A have been pretty candid about the best course for AA's stakeholders. Exiting bankruptcy alone and allowing US to deal with its liquidity issues, labor strife, and yield issues from LLC exposure will allow it to be picked up for 25-50% less than its current valuation. A merger will get done but, if rational logic is followed, it will look very different than you described. And a lot of us are going by what’s available publically. I’m sure AA’s Board, management, and stakeholders got a much grittier view of US’s current financial condition and prospects based on the due diligence done under the NDA. The last public report of the merger financials had US valuing itself at $3B and AA valuing them at $2B. That’s a spread of 33% which means if AA holds fast US’ shareholders have to decide if their willing to take that much of a haircut. This isn’t a football game with fans rooting for their individual teams; it’s a $8ishB deal that will be decided with Spock-like clinicality. And whether US buys AA or AA buys US this merger is going to be a cluster to implement and not look at all like what the idealists on both sides are visualizing. Acrimony+acrimony doesn’t equal bliss.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: YYZBound
Posted 2013-01-04 11:55:06 and read 18726 times.

Got a question to put out there that several of us were pondering...and I'll preface this by saying I am neither a businessman nor a lawyer, so go easy on me  

Regarding the outstanding binding arbitration issue of the US east and west pilots....if AA were to be the acquiring carrier, could that be used as a strategy to 'nullify' the binding arbitration between the two groups of the other carrier?

Again I genuinely don't know the answer...be kind...

Topic: RE: AA CEO To Make Merger Decision Soon
Username: BarryH
Posted 2013-01-04 12:24:47 and read 18439 times.

Quoting YYZBound (Reply 53):
Regarding the outstanding binding arbitration issue of the US east and west pilots....if AA were to be the acquiring carrier, could that be used as a strategy to 'nullify' the binding arbitration between the two groups of the other carrier?

In theory, there would be a newly written CBA covering all the combined entities pilots. The fun starts with expectations of getting "more" both in dollars and work rules than what the highest of three existing CBA's (AA's) provides. Then there's the combined seniority list, fencing of hubs to protect flying for each of the three current unions, aircraft type pay differentials, and the list goes on forever. Short of handing the pilots the checkbook I can't see how the combination of three militant unions is going to be easy, fast, or cost effective. Add to that the only one union will represent the pilots going forward which, based on number of pilots, I'm assuming will be APA who hasn't been historically kind to AA's aquisition partners. What management needs to compete and what the pilots think is "fair" are oceans apart. I think a lot of AA pilots that accepted the recent contract did so only because they thought it was a stepping stone to the "real" contract gotten using the combination as leverage. Fun times ahead.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: TVNWZ
Posted 2013-01-04 12:31:29 and read 18414 times.

Quoting BarryH (Reply 52):

Post of the thread. This is absolute truth.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: dcann40
Posted 2013-01-04 13:11:32 and read 17972 times.

Quoting BarryH (Reply 52):
You can caps lock all you like but at the end of the day AA is the stronger of the two entities.

What I don't understand is why the unions want their members to believe US is stronger? Except for possibly wishing to make it personal ("we hate Horton" etc.), it is not in the best interest of their members.

Of course, the union movement is typically far interested in general in the best interests of the union versus the membership and this has been the case for many decades.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: flyby519
Posted 2013-01-04 13:18:47 and read 17887 times.

Quoting dcann40 (Reply 56):
What I don't understand is why the unions want their members to believe US is stronger? Except for possibly wishing to make it personal ("we hate Horton" etc.), it is not in the best interest of their members.

Of course, the union movement is typically far interested in general in the best interests of the union versus the membership and this has been the case for many decades.

Im thinking it is a combination of emotional "we hate Horton" sentiments, as well as the promises made by Doug Parker for extravagant work rules/pay through the Conditional Labor Agreement that APA agreed to with US. Whether Parker can actually keep his promises is still to be seen.

[Edited 2013-01-04 14:17:43]

Topic: RE: AA CEO To Make Merger Decision Soon
Username: JoePatroni707
Posted 2013-01-04 14:26:51 and read 17334 times.

My feeling is that AA will emerge on its own. IF there is a merger AA will stand and wait till US is on the brink, then go in for the kill. Just like it did with TWA. The UCC is well aware that USAir still does not have its own house in order and if they give Doug Parker control, the newly merged company would likely be back in the courtroom within 18-24 month.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: B727FA
Posted 2013-01-04 14:52:34 and read 17098 times.

Quoting AAIL86 (Reply 46):
Quoting kgaiflyer (Reply 40):

The FA commented, "Then you'd better get ours with all its deals and advantages. They'll be gone when we become American Airlines."

I wonder what she knows that the rest of us don't?

She doesn't know any more then we do. In general, front line employees don't have inside information - especially about something this big.

Easy on the FA, she was making conversation and a bit of a joke about the situation. I say it was a pretty clever line, "get ours now (like a souvenir) and you'll have it to show people later."

Topic: RE: AA CEO To Make Merger Decision Soon
Username: etops1
Posted 2013-01-04 15:06:36 and read 16973 times.

Quoting JoePatroni707 (Reply 58):

That's where your soo entirely wrong buddy . But it's ok . It's your opinion .

Topic: RE: AA CEO To Make Merger Decision Soon
Username: LAXdude1023
Posted 2013-01-04 15:12:17 and read 16910 times.

For the record, I am for this merger but I have concerns and have named them before (the frequent flyer program and the labor integration). Should those hold up, I look forward to the larger network and the 330's. I feel bad for Phoenix, the state of Arizona, and those who are going to be caught off guard the reality of this situation vs. the perception.

Quoting JFKPurser (Reply 9):
Quoting JoePatroni707 (Reply 19):

Marshall McLuhan wrote a book called "The Medium is the Message". In my opinion, the same principle can be applied here.

Quoting Maverick623 (Reply 48):
Doug Parker is committed to making money for himself and for the company (in that order). If you think you're more than an item on the balance sheet, you're sorely mistaken.

Absolutely, but Parker shouldnt be demonized for it. The purpose of a company is to maximize value, not to make everyone happy. However, finding ways to make your employees happy can motivate them to work harder for the company.

Quoting HPRamper (Reply 43):
The Kool-Aid comes in more than one flavor.

Indeed it does. The problem is that almost everyone involved seems to be drinking a kool aid of some flavor.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: LAXdude1023
Posted 2013-01-04 15:13:37 and read 16916 times.

Quoting etops1 (Reply 60):
That's where your soo entirely wrong buddy . But it's ok . It's your opinion .

To be frank etops, you have no idea. None of us do, so you might as well stop pretending like you know something the rest of us dont.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: deltaffindfw
Posted 2013-01-04 15:48:30 and read 16580 times.

USAPA has unanimously voted in favor of the MOU. Interesting that US Airways and AA made a joint statement - the companies - not the unions!

http://aviationblog.dallasnews.com/2...-agreement-in-case-of-merger.html/

In a joint statement soon afterwards, American and US Airways management praised the decisions by USAPA and earlier by the Allied Pilots Association to adopt the MOU:

“American Airlines and US Airways, with participation of committee counsel for the Unsecured Creditors Committee, are pleased that they have completed discussions with the Allied Pilots Association and US Airline Pilots Association intended to develop a framework for the terms of employment for pilots, as well as a process for pilot integration, in the event of a merger between AA and US during restructuring.

“This memorandum of understanding was approved by the Allied Pilots Association’s Board of Directors and by USAPA’s Board of Pilot Representatives. This memorandum of understanding will assist all of the stakeholders, including the Boards of AMR and US Airways, in making an informed decision as to whether a merger should ultimately be pursued.

“The MOU is one of several elements to be considered before a decision on a merger can be made. Details regarding the MOU are still covered by the terms of a non-disclosure agreement so they cannot be further disclosed at this time.”

Topic: RE: AA CEO To Make Merger Decision Soon
Username: rj777
Posted 2013-01-04 15:51:21 and read 16547 times.

Looks like the writing is on the wall. But let's not forget about the DOJ.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: par13del
Posted 2013-01-04 16:10:30 and read 16357 times.

Quoting BarryH (Reply 54):
In theory, there would be a newly written CBA covering all the combined entities pilots. The fun starts with expectations of getting "more" both in dollars and work rules than what the highest of three existing CBA's (AA's) provides. Then there's the combined seniority list, fencing of hubs to protect flying for each of the three current unions, aircraft type pay differentials, and the list goes on forever.

You are talking about labour and their "issues" to protect their turf, those making the decisions on mergers are looking at financial numbers, the cost of funding those labour issues will be factored in to the final numbers and if positive, away they go.

Labour will be responsible for resolving their issues, management will be happy to do the Pontious Pilot thing, as in what is presently taking place at US between East and West, even the courts have not been able to resolve the issue.
So in the long scheme of things, labour who have the least power - non-pilots - will be given take it or leave it contracts and the pilots will sort themselves out while they continue to fly new routes, new planes and make money for the owners in the interim, however long that last, based on US merger, that could be a long time.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: JoeCanuck
Posted 2013-01-04 16:17:00 and read 16318 times.

Quoting deltaffindfw (Reply 63):

If I understand it, none of this has been voted on by the various union members...just the leadership. My guess is that the various MOU's also don't cover who will lose their jobs, (I reckon those would be 'NO' votes), and as rj777 mentions, the DOJ will no doubt get involved, (Delta and United will no doubt push for it, as will any smaller airlines which might get smothered by the new entity), for anti-trust implications.

While none of these are necessarily deal breakers, (not that a deal has actually been reached), but they all have to be dealt with and they all take time. History is strewn with 'dead certain' mergers which, in the end, never did see the light of day.

Do the unions have to agree to contracts before the merger or will they be essentially forced to go along regardless?

Topic: RE: AA CEO To Make Merger Decision Soon
Username: etops1
Posted 2013-01-04 17:02:11 and read 16015 times.

The only group that has to vote on it is USAPA .

Topic: RE: AA CEO To Make Merger Decision Soon
Username: dcann40
Posted 2013-01-04 17:04:57 and read 16006 times.

Quoting JoeCanuck (Reply 66):
Do the unions have to agree to contracts before the merger or will they be essentially forced to go along regardless?

It is prudent in such transactions to get the unions to agree to terms prior to any deal and LCC is an excellent example of not doing this and seeing how badly things turn out.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: dcann40
Posted 2013-01-04 17:11:00 and read 15974 times.

Quoting deltaffindfw (Reply 63):
In a joint statement soon afterwards, American and US Airways management praised the decisions by USAPA and earlier by the Allied Pilots Association to adopt the MOU:

Interestingly enough, it was technically not a joint statement in terms of how the news release was issued. The statement was issued by US alone. The only "about" section in the release was about US.

Yes it says "joint statement" but companies that typically issue a joint statement will also have contact info for media and and about section for each party.

Just looks odd to me.

[Edited 2013-01-04 17:17:11]

Topic: RE: AA CEO To Make Merger Decision Soon
Username: BarryH
Posted 2013-01-04 19:04:23 and read 15225 times.

Quoting dcann40 (Reply 69):
Interestingly enough, it was technically not a joint statement in terms of how the news release was issued. The statement was issued by US alone. The only "about" section in the release was about US.

Here's the exact statement from the press release.

"American Airlines and US Airways, with participation of committee counsel for the Unsecured Creditors Committee, are pleased that they have completed discussions with the Allied Pilots Association and US Airline Pilots Association intended to develop a framework for the terms of employment for pilots, as well as a process for pilot integration, in the event of a merger between AA and US during restructuring. This memorandum of understanding was approved by the Allied Pilots Association's Board of Directors and by USAPA's Board of Pilot Representatives. This memorandum of understanding will assist all of the stakeholders, including the Boards of AMR and US Airways, in making an informed decision as to whether a merger should ultimately be pursued. The MOU is one of several elements to be considered before a decision on a merger can be made. Details regarding the MOU are still covered by the terms of a non-disclosure agreement so they cannot be further disclosed at this time. "

There are a couple of things that are weird. Like you said, it's from US only but leads with "American Airlines." US is in no way authorized to speak for AA or any of the committees participating in the bankruptcy. They aren't even part of the bankruptcy except at arm’s length because of the debt they bought. It also has no quotes from anyone or even mentions a name which, when a press release is issued, isn't typical. And typically joint press releases have both parties contact info which this one doesn’t.

It does say that both APA and USAPA signed the same agreement which is definitely good news for a combination. I guess how excited we should be depends on how detailed the MOU is and whether what's contained in it is reasonable. If it's hollow and has platitudes like "we agree to work together" it's not going to be very helpful. Similarly, if it's a list of demands like across the board pay increases equal to 15% more than the current AA contract and the elimination of all outsourced flying and code sharing then they are father away rather than closer. If it uses the current AA contract as a foundation and just expands it to US and all the pilots are fine with that then it could be considered a breakthrough. Until we know more details it's hard to understand what it means to in regards to moving closer or further away from a combination in bankruptcy.

You guys will find this press release amusing....

http://www.nytimes.com/2001/02/17/bu...-pilots-back-sale-to-american.html

Topic: RE: AA CEO To Make Merger Decision Soon
Username: dcann40
Posted 2013-01-04 19:30:55 and read 15021 times.

Quoting BarryH (Reply 71):
Here's the exact statement from the press release.

That's the text of the statement. As i stated in my earlier post, the release was issued by US and only US was the contact. Typically, a joint statement would have all parties as a contact and an "about" section for each party.

In addition, the dateline was Tempe. When I have worked with larger corporations issuing a joint statement, there's usual a dual dateline as well.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: etops1
Posted 2013-01-04 19:49:05 and read 14925 times.

So are you saying that this release is not legit and its a lie ?

Topic: RE: AA CEO To Make Merger Decision Soon
Username: deltaffindfw
Posted 2013-01-04 19:51:45 and read 14946 times.

This IS a press release - on PR newswire. However, as stated, it is only from US, but it for some reason includes AA.

http://finance.yahoo.com/news/joint-...us-airways-american-233900936.html

[Edited 2013-01-04 19:52:35]

Topic: RE: AA CEO To Make Merger Decision Soon
Username: LAXdude1023
Posted 2013-01-04 19:54:19 and read 14913 times.

Quoting etops1 (Reply 73):
So are you saying that this release is not legit and its a lie ?

Read the statement below:

Quoting deltaffindfw (Reply 74):

This IS a press release - on PR newswire. However, as stated, it is only from US, but it for some reason includes AA.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: dcann40
Posted 2013-01-04 19:56:10 and read 14882 times.

Quoting etops1 (Reply 73):
So are you saying that this release is not legit and its a lie ?

I think my statement was in fairly clear English and stands on its own, to wit that the release itself was in fact issued only by US and not issued jointly.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: Wingtips56
Posted 2013-01-04 20:15:14 and read 14838 times.

I'm no expert, but I'm inclined to agree with Joe Patroni. AA doesn't need a white knight or cash infusion to exit Reorganization , as they have a few billion $ on hand (bankruptcy is really the wrong definition here). No Debtor in Possession with an inside track. I'm thinking AA will emerge as a stand-alone company. Especially since it appears they can pull that off much faster than a merger in BK. As a result, the air will be let out of US Airways' balloon and their inflated stock value will drop. At some point, it will be low enough that AA could then make a reverse bid, and would probably manage to win a hostile bid if it came to that. Or let US completely wither and pick through the assets. That way they don't have to merge work-forces, and don't take in incompatible fleet types and old airplanes they won't need. In a merger, I would assume all the US Airways Express carriers come along for the ride, which would just fan the "scope" flames all over again.

The AA unions are just set to be mad at management.....whoever is in charge. Fill in the blank "We hate ______". But if they don't merge, their seniority won't be diluted under the current DOH settlement rule, so it won't be so terrible for them. There are some high-time folks with US-East.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: commavia
Posted 2013-01-04 22:43:21 and read 14633 times.

It is good to see the process moving along. I look forward to this whole soap opera being concluded one way or another, and I'm hopeful that if a merger is to occur that the resulting entity becomes not just bigger, but better, as well. We shall see.

I also agree with others who haven't bought into the AA unions' sales pitch (largely hatred-fueled, in my view) that AMR somehow "needs" the merger, or won't survive without it. If Laura Glading honestly believes that, fine. I don't, and have yet to see a single thing that validates that claim. USAirways and Doug Parker "need" this merger far more than AA, which is actually heading in a very positive direction in a lot of areas without any merger. If Doug Parker somehow manages to capitalize on the AA unions' hatred of Tom Horton and the simple math that has now rendered his own unions essentially meaningless in his quest to get his "last consolidation deal" done (after being turned down multiple times), then good for him. If he gets control, I just hope he doesn't screw it up by reversing course on the major progress AA has made in several key areas in the last year, or by altering all the many things that make AA - in so many ways - a superior product/service.

I don't think there is any question that a combined company would be larger, and have a generally stronger network in some key areas. AA's recent push into new and more international markets is something that must continue, though - with or without a merger. And yes, I do feel bad for the people who will not be get to fully participate in any "upside" that may or may not materialize from this merger: namely the M&E employees who would see even more of their jobs outsourced, the more junior pilots and flight attendants who would unavoidably get laid off, and the City of Phoenix and State of Arizona, which I think would inevitably lose quite a lot.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: Maverick623
Posted 2013-01-04 23:36:51 and read 14540 times.

Quoting JoePatroni707 (Reply 58):
IF there is a merger AA will stand and wait till US is on the brink, then go in for the kill. Just like it did with TWA.

They'll be waiting for 10+ years, and that's assuming US starts going downhill tomorrow.

Quoting JoePatroni707 (Reply 58):
The UCC is well aware that USAir still does not have its own house in order

Huh? I know that pilots get a hard-on thinking that they run the show, but the truth is they don't. US is making more money with a divided workgroup than if they had been merged 4 years ago.

Remember, the East guys tried to cause a slowdown last year, and were promptly shot down by the courts.

Quoting LAXdude1023 (Reply 61):
Absolutely, but Parker shouldnt be demonized for it.

I agree, it's just a harsh reality that needed to be pointed out in a no-nonsense way.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: flyguy89
Posted 2013-01-04 23:56:14 and read 14530 times.

Quoting Maverick623 (Reply 78):
Quoting JoePatroni707 (Reply 58):
IF there is a merger AA will stand and wait till US is on the brink, then go in for the kill. Just like it did with TWA.

They'll be waiting for 10+ years, and that's assuming US starts going downhill tomorrow.

Quoting JoePatroni707 (Reply 58):
The UCC is well aware that USAir still does not have its own house in order

Huh? I know that pilots get a hard-on thinking that they run the show, but the truth is they don't. US is making more money with a divided workgroup than if they had been merged 4 years ago.

That is exactly the point of contention. US has absolutely been able to thrive with below-industry costs with the divided labor groups, but that will soon be changing and US' costs will thus be rising, a huge challenge to their network profitability....Parker knows this, and it's likely AA's creditors know this with the NDA. AA need not wait 10 years or until US is on the brink, in the mid-term future AA's value is on a sharp upward trajectory while US' value is headed downward.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: AASTEW
Posted 2013-01-04 23:58:07 and read 14540 times.

AA + US....two airlines that have had very bad mergers....cant wait to see how this mess unfolds!

AASTEW

Topic: RE: AA CEO To Make Merger Decision Soon
Username: PHX787
Posted 2013-01-05 00:08:33 and read 14546 times.

Quoting AASTEW (Reply 80):
AA + US....two airlines that have had very bad mergers....cant wait to see how this mess unfolds!

  

Guys, this is my point here.

This will not happen.

I mean, read the history of US Airways and America West Group.

It was the perfect storm for US and HP to merge. It was like the stars were perfectly aligned. US was in B and needed western US expansion in order to survive B. HP wanted more expansion and more status, and had the money to do so. Boom, merger.

Merger, and divided airline. Nobody ever seems to explain to me how East and West can actually work out with a new entity, which I am dubbing "South," because of DFW's relative location.

US was trying to get in bed with CO for the longest time, then with UA, and with DL. Nothing along any of those lines worked at all. HP attempted mergers with many airlines and talked with the likes of FL once for a merger. Nothing like that happened either.

It's all smoke and mirrors with Doug. He thrives off of the media attention, and is probably sitting back and reading these posts from right down the street from my house in Tempe, laughing his ass off.

US and AA merging is like me trying to get a job as a christian minister specializing in same-sex marriages between women........in Saudi Arabia.

It's a disaster waiting to happen. (excuse the pun above but I couldn't find anything else to describe how bad this is going to be.) Labor groups may be "agreeing" to these contracts at the moment but push is going to come to shove sooner or later, especially when US inherits all of the issues that AA has. I know of course B is supposed to remove some of these problems, but that's not going to fix everything.

Here's what needs to happen.

AA needs to emerge from B intact, by itself, develop its new image and fleet to that of a sustainable model, fix their labor issues, develop their network so it can compete better with the legacies.

US needs to organize their labor issues, complete fleet modernizations, and expand into other markets from different cities not served well from UA, AA, and DL. What could happen?

Sure the economy sucks but someone needs to get the ball rolling again.....D.P. is just the crazy s.o.b. to get it done.

Rant over.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: aaexecplat
Posted 2013-01-05 00:15:32 and read 14522 times.

Quoting dcann40 (Reply 71):
Quoting etops1 (Reply 72):
Quoting deltaffindfw (Reply 73):
This IS a press release - on PR newswire. However, as stated, it is only from US, but it for some reason includes AA.

http://finance.yahoo.com/news/joint-...us-airways-american-233900936.html

[Edited 2013-01-04 19:52:35]


As someone who has posted countless press releases on PR Newswire, allow me to simply state that press releases on PR newswire are not corporate statements released through the true press nor have they been vetted. They are simply corporate info that is often made to look more official than it really is. Anyone here on A.net can create a PR Newswire account and submit a press release stating their grandmother is ill.

Does not mean it is completely meaningless, but these releases are often misleading.

My 2 cents.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: dcann40
Posted 2013-01-05 06:17:13 and read 14255 times.

Quoting PHX787 (Reply 81):
AA needs to emerge from B intact, by itself, develop its new image and fleet to that of a sustainable model, fix their labor issues, develop their network so it can compete better with the legacies.

This seems to be what AA's plan post BK is (although I would include AA as a legacy carrier).

Quoting PHX787 (Reply 81):
US needs to organize their labor issues, complete fleet modernizations, and expand into other markets from different cities not served well from UA, AA, and DL. What could happen?

I think the first issue you mention is key but it has been unable to happen in several years of LCC's merged existence (albeit to the benefit of its botom line).

Time will tell.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: etops1
Posted 2013-01-05 08:22:32 and read 14131 times.

Letter from Tom Horton to AA employees :

I don't know if this has been posted already . If it has , my apologies ..


Dear American Team:
As we start a new year, I’d like to thank you all for capping a year of extraordinary work by delivering for our customers during our busiest season. This dedication underscores why I have so much confidence in the future of the new American.
As you know, we continue the process we embarked upon months ago to carefully assess how we can deliver the greatest value for our stakeholders and the best outcome for our people and customers. Together with our Board, and the Creditors’ Committee, we asked our unions and those of US Airways to join the discussions underway in order to better evaluate the potential benefits, costs and risks of a potential merger. All parties are operating under a confidentiality agreement, and while I cannot provide any details, I can assure you we are conducting a collaborative, fact-based analysis to determine the best plan forward for American.
As part of these joint efforts, last week APA announced that its Board voted to approve a proposed Memorandum of Understanding (MOU), which is now subject to review and approval by American, US Airways and the US Airline Pilots Association (USAPA), the union representing US Airways’ pilots. Discussions with our other unions and those of US Airways are also in progress. I have been personally involved in all deliberations regarding the overall strategic review and focused intently on creating a framework with the unions and for all our employee groups that keeps American competitive and allows us to build a successful future.
The proposed MOU will be reviewed alongside other factors under evaluation, as part of making an informed decision about whether a merger should be pursued.
I know many of you have questions about what happens next and how long this evaluation will be underway. While I cannot give you a precise date, I can tell you that we expect to bring this to conclusion within a matter of weeks. As we do, our objective is unchanged – to create the most value for our owners and the strongest possible American going forward. All of our efforts have been aimed at building on the extraordinary progress we have already made.
In just over a year, we have moved faster and performed better through our restructuring than any airline in history. Our collective efforts have created a strong foundation for the future of the new American, which is on course to become a premier global airline, equipped to compete against the best in the world. Staying laser-focused on serving our customers and running a great airline must remain our highest priority.
Thank you again for your commitment, and I look forward to sharing more information as soon as possible.
Sincerely,

Tom

[Edited 2013-01-05 08:24:45]

Topic: RE: AA CEO To Make Merger Decision Soon
Username: deltaffindfw
Posted 2013-01-05 08:44:15 and read 14032 times.

Quoting aaexecplat (Reply 82):
As someone who has posted countless press releases on PR Newswire, allow me to simply state that press releases on PR newswire are not corporate statements released through the true press nor have they been vetted. They are simply corporate info that is often made to look more official than it really is. Anyone here on A.net can create a PR Newswire account and submit a press release stating their grandmother is ill.

I guess US Airways press release page posts fake press releases too...

http://www.usairways.com/en-US/aboutus/pressroom/pressreleases.html

[Edited 2013-01-05 08:47:01]

Topic: RE: AA CEO To Make Merger Decision Soon
Username: dcann40
Posted 2013-01-05 09:04:23 and read 13921 times.

Quoting deltaffindfw (Reply 85):
I guess US Airways press release page posts fake press releases too...

http://www.usairways.com/en-US/about....html

No one implied that this release didn't emanate from US.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: AAplat4life
Posted 2013-01-05 09:05:05 and read 13956 times.

Both pilot groups appear to back the merger.

AMR creditors said that they would prefer an all stock merger proposal.

No recent anti-merger remarks from the creditors. The last one I recall was about a year ago from Boeing indicating support for AMR management.

Hedge fund investors have taken stakes in AMR bonds and other investments, and there have been reports of them pushing for the merger behind the scenes.

The analyst continue to debate whether AMR should emerge as a stand-alone carrier or do the deal with U.S. Some question the value of assets U.S. brings to the table, and many others believe that the merger is necessary to enable the carriers to compete better with United and Delta.

Delta/Northwest was probably a more successful merger than United/Continental. But Northwest has some second tier domestic assets like some claim of U.S. Aside from its Asian network, was MSP or DTW really more impressive than PHL or CLT?

Bottom line is that most of the signs point to the AA/US deal moving forward. It is just a matter of taking care of AMR management right now.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: BarryH
Posted 2013-01-05 09:27:24 and read 13895 times.

Quoting deltaffindfw (Reply 85):
I guess US Airways press release page posts fake press releases too...

The press release is authentic; the phone number listed is for US media relations. What's being questioned is why US media relations put out a press release when US itself isn't a party to the bankruptcy. APA put out a press release by themselves when they signed the MOU. USAPA logically should have put out a press release for themselves when they signed. Both are named parties in the bankruptcy process. USAPA because they were invited to participate. If AA decides to go it alone, as far as the bankruptcy process is concerned, US just fades off in to the sunset. That's why their direct and singular commentary is so odd. And just because US media relations issued a press release naming the UCC and AA doesn't mean either were party to it or happy with it. And we'll never know what (if anything) was behind it.

I'll say this. The fact that APA and USAPA signed a (theoretically) collaborative document is positive. If it's based on reasonable terms similar to what's in the recently negotiated AA contract and tackles integration issues in a similar fashion to DL/NW's MOU it makes a combination in bankruptcy more attractive. And if US' Board and shareholders accept AA's $2B valuation that too makes a merger in bankruptcy more attractive. But those are two really big "ifs."

P.S. - The problem with the MEC/LEC process is that the elected representatives are drawn from the rank and file; usually based on popularity and in AA’s case a demonstrated hatred for AA management. If they had MBA's from business schools they wouldn't be serving passengers and flying airplanes. The result is leadership in over their heads when it comes to multi-billion dollar deals based solely on financial metrics. They hire advisors but that doesn't mean they like or head what they say; especially if it mirrors what the reviled company management is saying. Sadly, any answer that involves AA's current management is probably kicked aside no matter what the consequences. So Laura still saying AA needs US to survive shouldn't surprise anyone.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: BarryH
Posted 2013-01-05 09:36:41 and read 13848 times.

Quoting AAplat4life (Reply 87):
Bottom line is that most of the signs point to the AA/US deal moving forward. It is just a matter of taking care of AMR management right now.

There are multiple camps working on different approaches. The items you mentioned are true but there's a lot going on with others jockeying for position that we don't know. Based on future appreciation in value there's a lot of money to be made for whoever financially backs AA coming out of bankruptcy. If the MOU is an outrageous list of demands that could easily clinch AA emerging alone because the AA creditors would see both the negative financial impact and angst an in-bankruptcy combination would bring. AA's stakeholders have lots of choices and the ones without any emotional ties (the unions) are going to vote for the highest reward least risk scenario. And the unions don't have enough sway based on their holdings to alter the course of decision.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: PHX787
Posted 2013-01-05 09:38:15 and read 13849 times.

Quoting dcann40 (Reply 83):
This seems to be what AA's plan post BK is (although I would include AA as a legacy carrier).

they are a legacy indeed but are lagging behind the others.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: BA0197
Posted 2013-01-05 11:57:43 and read 13608 times.

I for one hope that we come out of BK alone. AA has too much going in its favour right now, the new aircraft, the fantastic JBA with BA, the oneworld alliance, the AAdvantage Programme, the renegotiated contracts, leases etc.

Lets not take on something that can't even come up with a merged contract for its employees after (6?) years.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: cloudboy
Posted 2013-01-05 12:09:27 and read 13566 times.

So does this mean than any of the other potential merger partners have been dismissed?

In some ways reading what Horton said against what US released in their press release, it sounds like Horton isn't too sure of the merger deal and US is trying to drum up support by making it sound like it is a done deal.

The big problem here is that it is not just two businesses, but two personalities trying to negotiate. The DL/NW merger worked because they really focused on the business side of the merger, and didn't let personalities get too much in the way. Not so sure this deal is like that.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: aaexecplat
Posted 2013-01-05 12:24:22 and read 13525 times.

Quoting deltaffindfw (Reply 85):
I guess US Airways press release page posts fake press releases too...

http://www.usairways.com/en-US/aboutus/pressroom/pressreleases.html

[Edited 2013-01-05 08:47:01]

Nobody said the release was fake. What I wanted to highlight though is that this was submitted through PRNewswire instead of through the regular media channels that USAir is in contact with. And tha strikes me as odd.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: klkla
Posted 2013-01-05 12:24:25 and read 13563 times.

Quoting PHX787 (Reply 81):
t's a disaster waiting to happen. (excuse the pun above but I couldn't find anything else to describe how bad this is going to be.) Labor groups may be "agreeing" to these contracts at the moment but push is going to come to shove sooner or later, especially when US inherits all of the issues that AA has. I know of course B is supposed to remove some of these problems, but that's not going to fix everything.
Quoting BA0197 (Reply 91):
I for one hope that we come out of BK alone.

This merger has a 99% chance of happening whether it occurs in BK or not. It's going to happen!

At the end of the day this merger will simply be about getting rid of excess capacity and getting more control over pricing. It's that simple and it will be successful. AA's current management has already been told by the creditor's that they're done and like him or not Doug Parker has a successful track record.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: par13del
Posted 2013-01-05 12:42:41 and read 13518 times.

Quoting etops1 (Reply 84):
This dedication underscores why I have so much confidence in the future of the new American.
Quoting etops1 (Reply 84):
on creating a framework with the unions and for all our employee groups that keeps American competitive and allows us to build a successful future.
Quoting etops1 (Reply 84):
to create the most value for our owners and the strongest possible American going forward.
Quoting etops1 (Reply 84):
have created a strong foundation for the future of the new American,

Well his use of American means that AA will emerge from Chpt.11 as a stand alone entity, it also means that if merged in Chpt. 11 the merged carrier will be American.
However, we do know that management always advises the public that companies are in no danger while the papers are on the way to the court house for filing, so............

Topic: RE: AA CEO To Make Merger Decision Soon
Username: JoePatroni707
Posted 2013-01-05 13:24:03 and read 13449 times.

Quoting klkla (Reply 94):
This merger has a 99% chance of happening whether it occurs in BK or not. It's going to happen!

Not if AA emerges from CH11 as a stand alone carrier

Quoting klkla (Reply 94):
Doug Parker has a successful track record.

Really?? America West one of the worst airlines in history? USAir- Bottom feeder airline that has been in bankruptcy twice. The only reason they are profitable is because their employees are working at sub-industry standard wages.
If he is so successful why do his employees hate him so much? Why are the flight attendants ready to strike?


IF it does happen it will be outside of CH11 and AA will be the aquiring carrier. But again AA does not need US.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: BarryH
Posted 2013-01-05 13:30:43 and read 13427 times.

Quoting par13del (Reply 95):
However, we do know that management always advises the public that companies are in no danger while the papers are on the way to the court house for filing, so

The best predictor of the future is the past. If you take the favorable terms AA extracted out of bankruptcy and apply it to their last two years of performance they'd have delivered profits, margins, and revenue equal (or better) to their peers. If you take US' impending spike in labor costs, additional expense for refinancing a 2014 debt obligation, and mounting margin pressure from LCC competition their unusually susceptible to it's not a pretty picture.

Two intangibles:

- Labor harmony at AA for at least two years has to be worth something as they rebuild.
- UA's dominance of Star and their increased footprint in the U.S. along with what's perceived to be a better product can't be helping US from an alliance value perspective. Especially being on the outside looking in at UA’s proposed JBAs. LH just pulled first class award availability from Dividend Miles and not Mileage Plus.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: cloudboy
Posted 2013-01-05 16:59:30 and read 13164 times.

If AA were to emerge from bankruptcy first, then merge, would that make it more difficult for them to get a beneficial contract with the unions at US? AS I understand it, US still has not been able to iron out the differences between the two pilot unions for their merger with HP. How are they going to add a third in there?

Topic: RE: AA CEO To Make Merger Decision Soon
Username: PHX787
Posted 2013-01-05 17:57:33 and read 13054 times.

Quoting JoePatroni707 (Reply 96):
Quoting klkla (Reply 94):
This merger has a 99% chance of happening whether it occurs in BK or not. It's going to happen!

Not if AA emerges from CH11 as a stand alone carrier

   too much hype over nothing.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: par13del
Posted 2013-01-05 18:01:24 and read 13068 times.

Quoting BarryH (Reply 97):
If you take the favorable terms AA extracted out of bankruptcy and apply it to their last two years of performance they'd have delivered profits, margins, and revenue equal (or better) to their peers. If you take US' impending spike in labor costs, additional expense for refinancing a 2014 debt obligation, and mounting margin pressure from LCC competition their unusually susceptible to it's not a pretty picture.

Which could set up a future with a twist to match DL/NW.
If AA emerges from Chpt.11 as a stand alone entity and US stocks take a hit, US management could use the turmoil to settle contract disputes with their pilots to create a situation to force them into Chpt.11 once again to settle their cost, thus resulting in a merger with AA while US is in Chpt.11.
Its a conspiracy theory like all others  

Topic: RE: AA CEO To Make Merger Decision Soon
Username: Pu
Posted 2013-01-05 18:06:37 and read 13059 times.

One thing to consider is that if AA emerges stand alone and/or Parker's merger plan is rebuffed, what happens with US is then not strictly limited to merging with AA. Some have opined that LCC's stock price must certainly freefall without merger. If a controlling interest in LCC could be had for a billion or so, US could become an attractive target just for an asset purchase....Delta in particular covets the still notable US presence in NY and getting control of CLT would effectively lock out any competitor in a southeast hub once and for all.

My point is that as cumbersome as a pre-emergence-from-bankruptcy merger might be, people shouldn't assume that AA can then just pick up US anytime it likes post-bankruptcy, given that other airlines and Parker himself will have their own ideas at that point. If you believe AA and US must merge sooner or later, then it should be done now or the 1st day after leaving bankruptcy court.



Pu

Topic: RE: AA CEO To Make Merger Decision Soon
Username: avek00
Posted 2013-01-05 18:48:30 and read 13110 times.

Quoting klkla (Reply 94):
At the end of the day this merger will simply be about getting rid of excess capacity and getting more control over pricing. It's that simple and it will be successful.

A merger of AA and US will likely not accomplish either goal in a manner that any objective observer would define as "successful". This proposed merger is set to increase costs for the combined entity without delivering matching or greater benefit on the income side of the ledger, a frightful proposition when competing against rivals whose mergers actually delivered real synergies.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: BarryH
Posted 2013-01-05 19:33:58 and read 13034 times.

Quoting avek00 (Reply 102):
This proposed merger is set to increase costs for the combined entity without delivering matching or greater benefit on the income side of the ledger, a frightful proposition when competing against rivals whose mergers actually delivered real synergies.

I'm curious what people think the synergies are? Neither UA/CO or DL/NW dramatically reduced labor simply because flying "X" number of planes to "X' number of places takes "X" man hours whatever name is on the aircraft. There's some administrative and systems duplication that can eliminated but mostly in marketing and the highest levels of management. No airline in this economy has the luxury of fat to cut. AA especially. With union labor fixed and years of margin pressures they jettisoned what they could in non-union staff a long time ago. As for things like jet fuel and facilities "X" number of planes still burn "X" amount of fuel and park at "X" number of gates. So the percentage of labor and operational expenses necessary to manage "X" amount of flying doesn't change.

The benefit I see is re-aligning the network(s) to provide more and better feed to higher yielding international and business-oriented domestic routes. But swallowing US whole to achieve that benefit could cost more and be higher risk than AA selectively applying their own resources to accomplish the same thing. And with so much of US' flying subject to LCC pressure "synergy" isn't going to change a thing. They'll have no better pricing control but will have AA's higher labor costs which will drag down the entire entities overall financial performance. Now if the goal is to slash 25% of US' existing flying to avoid LCC competition that's a whole different story from a cost perspective. But you're not going to be able to take a primarily domestic and leisure-oriented network and combine it with a global hub-oriented network and then apply higher labor costs to both and come out better financially. That's not how "synergy" works. That would be "magic."

And for the first two years while the combination is being implemented the “consolidation” will help DL and UA’s financials more than AA/US’ as well as providing growth opportunities for the LCC’s while AA is weak and preoccupied. At 30K feet combining the two carriers looks like a no brainer. Deconstructed it’s a risky deal on multiple counts.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: dcann40
Posted 2013-01-05 20:18:41 and read 12958 times.

Quoting BarryH (Reply 103):
I'm curious what people think the synergies are?

I can think of one that UA cited, IP.

This was UA´s (brilliant?) reason for going to SHARES, which resulted in myriad problems.

There would also (eventually) only be one sales team to market to corporate customers.

As you said, at the end of the day, you have planes, people, man-hours, and most of this won´t go away. In fact, in some cases, when it does go away, it´s a bad sign as that means business is down.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: rj777
Posted 2013-01-05 21:38:24 and read 12853 times.

One of the big questions is gonna be which Alliance the combined entity will belong to: Oneworld or Star? When US Airways was pondering the merger with UA, they made the move from SkyTeam to Star. Now the question becomes:

1)With the American name staying, will the Oneworld affiliation stay?
OR
2)With US having already jumped from one alliance to another, will the stay put in Star?

Topic: RE: AA CEO To Make Merger Decision Soon
Username: etops1
Posted 2013-01-05 21:45:36 and read 12881 times.

Quoting rj777 (Reply 105):

USAirways was never in SkyTeam . US became a Star Alliance member in 2004 . It has been already said that US will switch over to ONEWORLD once they merge with AA.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: klkla
Posted 2013-01-06 08:27:12 and read 12579 times.

Quoting JoePatroni707 (Reply 96):
Not if AA emerges from CH11 as a stand alone carrier

There will be even more pressure after BK. Right now the pressure is coming form the creditor's committee. After that it will be coming from Wall Street.

Quoting BarryH (Reply 103):
I'm curious what people think the synergies are?

The ability to reduce capacity and increase prices.

Quoting BarryH (Reply 103):
Neither UA/CO or DL/NW dramatically reduced labor simply because flying "X" number of planes to "X' number of places takes "X" man hours whatever name is on the aircraft.

Labor expenses do not present the total picture. Using the DL/NW merger as an example profits were increased by reducing capacity (especially at MEM and CVG). That gave them more control over pricing and the ability to reallocate traffic to other busier hubs.

AA/US will be quick to make similar decisions. PHX will be the big loser IMO. Another big source of synergies is getting rid of redundant management/workers in support and corporate.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: par13del
Posted 2013-01-06 08:45:14 and read 12561 times.

Quoting avek00 (Reply 102):
This proposed merger is set to increase costs for the combined entity without delivering matching or greater benefit on the income side of the ledger,

Hence the reason why US also has to take another trip into Chpt.11 to reduce its cost to match that of AA.
US failed when they did not find and or manufacture a reason to enter Chpt.11 like NW and DL when AA went into Chpt.11 over a year ago, if they had done that the merger between both would have been a done deal by now.

Quoting BarryH (Reply 103):
I'm curious what people think the synergies are? Neither UA/CO or DL/NW dramatically reduced labor simply because flying "X" number of planes to "X' number of places takes "X" man hours whatever name is on the aircraft.

UA/CO and DL/NW reduced their labour cost and obligations, additionally they got scope relief which is today allowing more out-sourcing of flying, why most people think that these mergers are about combining fleets, route efficiencies etc etc etc is beyond me. In my opinion, the primary reason is to reduce labour courts, reduce the control of labour on the company, eliminate competition and force the consumers to pay higher prices thus increasing shareholders wealth.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: BarryH
Posted 2013-01-06 09:44:15 and read 12424 times.

Quoting klkla (Reply 107):
The ability to reduce capacity and increase prices.

You can raise prices, decrease capacity, and still lose money if those actions cause your load factors to drop because leisure customers don't give a crap about elite status and will bolt to another carrier for a $5 differential. But didn't Doug's initial plan call for no layoffs? If that's the case the assumption has to be that there are high yield markets that are greatly underserved to move aircraft to and away from the LCC markets. There may be some but AA/US aren't the only carriers with analysts so I'd imagine low-hanging fruit is few and far between.

Another scenario would be to pull US' flying down in markets that don't meet certain financial criteria. They could park the most inefficient aircraft (from both AA and US) and use what's left to apply the best ship for the mission driving efficiency and profitability. AA's less exposed to LCC in aggregate but, if between them, they reduced their exposure by 25% that's a ton of layoffs. So you can reduce capacity and gain some pricing control but not by the combined carrier doing the exact same things that AA and US are doing separately today. To say there's pricing control to be had without dramatically changing the network implies US is inept at yield management.

When people talk about pricing control and consolidation it presumes that with a wink and a nod every U.S. carrier is going to start to behave differently. If UA, DL, and AA/US go nuts with pricing to exert their dominance all it's going to do is create opportunities for growth for existing (and probably new) LCC's. The threshold people keep ignoring is what leisure and business travelers think is appropriate value and once the tipping point’s reached demand will start to fall (or be taken up be aggressive LCC’s).

I loved this tag from CloudBoy's post above. Primarily because it's true. And I’d add to it “especially at higher fares.”

"Six becoming three doesn't create more Americans that want to fly." -Adam Pilarski

Topic: RE: AA CEO To Make Merger Decision Soon
Username: par13del
Posted 2013-01-06 10:20:53 and read 12327 times.

Quoting BarryH (Reply 109):
If UA, DL, and AA/US go nuts with pricing to exert their dominance all it's going to do is create opportunities for growth for existing (and probably new) LCC's.

It has always been thus, look at routes where a legacy carrier has almost total exclusivity.

Quoting BarryH (Reply 109):
The threshold people keep ignoring is what leisure and business travelers think is appropriate value and once the tipping point’s reached demand will start to fall (or be taken up be aggressive LCC’s).

Yes, but that takes time, and if one via political influence can delay the entry of an LCC it allows even more time for the customer base to be bled dry.

I think the point being missed is that airline management, the boards and shareholders do not look or plan beyond the next shareholders meeting, that is the new definition of long term planning  

Topic: RE: AA CEO To Make Merger Decision Soon
Username: B727FA
Posted 2013-01-06 11:01:04 and read 12255 times.

Quoting par13del (Reply 108):
they got scope relief which is today allowing more out-sourcing of flying

Well, not really on the DL side.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: par13del
Posted 2013-01-06 11:18:48 and read 12227 times.

Quoting B727FA (Reply 111):
Well, not really on the DL side.


True CommAir is gone, Pinnacle is being resurected and DL mainline will be flying more 717's.
Hopefully the routes they choose to deploy the 717 flying will be carefully thought out, I say give everything a chance. I expect a lot of routes that were profitable outsourced to not be viable internally thus creating an opertunity for someone else.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: BarryH
Posted 2013-01-06 12:57:11 and read 12078 times.

Quoting par13del (Reply 110):
Yes, but that takes time, and if one via political influence can delay the entry of an LCC it allows even more time for the customer base to be bled dry.

Once the first domino falls and the merger's official time is not on AA/US's side. They'll be vulnerable because they’re going to be so inwardly focused on combination related issues and trying to formulate and execute the synergies they've promised that there will be opportunities for UA and DL to cherry pick their best customers. AA certainly did it to UA during their initial merger turbulence. And on the bottom end expect the LCC's to pounce on any opportunities they see. And all those things could have more or less impact depending on how rough the merger is to implement. I see this as another America West/USAir not a DL/NW in terms of smoothness. Unhappy and militant staff combined doesn’t suddenly make for one singular care free work group.

And the "I'll gladly pay you tomorrow for two hamburgers today" strategy has been a catastrophic failure for all those following it. Future revenue and margin can be speculated at untold levels but it does you no good when today's revenue and margin is what pays today's bills. Ask Eastern, Pan Am, Braniff, and, the latest, Kingfisher, about how a "promising future" flies when your creditors aren't being paid and your investor’s needs aren’t being met. And I mean the recast versions of Eastern, Pan Am, and Braniff after their assets were gutted and they made subsequent tries at reemergence. All four had what appeared to be sustainable business plans, so much so smart people put up hundreds of millions in investment. So a great "paper story" in no way guarantees a happy ending. Especially with a clock ticking.

And "political influence" is going to be a negative in this transaction because it's the last major one the DOT/DOJ will rule on and therefore could have the most impact on competition because of US' self-proclaimed roll as a LCC (their stock ticker). So of the combined assets of both carriers it'll be interesting to see the degree of divestiture the government requires to approve the deal. If it's too onerous and what's left doesn't provide the yield lift to map to the combined carriers revenue and margin prospectus government approval could scuttle the deal. If a large number of DCA, LGA, LHR, and Brazilian slots are on the table (nothing's off it with the DOT/DOJ) that could be a major hit to revenue that makes everyone think twice. And does anyone think AA and US’ competitors, both network and LLC, aren’t going to file phone book thick objections to the deal? Even if those objections are without merit? This one’s not a slam dunk by any means.

And all of this “stuff” is being weighed by the non-union creditors (the unions could care less as long as Horton’s gone) as they weigh which possible outcome (and the timing) gets them the highest return with the least and most manageable risk.

I know some of this stuff is long winded but it’ll be fun to circle back about six months in to the merger (assuming it happens in bankruptcy) to see what parts were true and what didn’t occur.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: crj900lr
Posted 2013-01-06 17:31:03 and read 11776 times.

Quoting mah4546 (Reply 11):
Do you have a new job lined up? US employees will probably be the first to go, and be fired in greater number overall. Or do they not discuss the job cuts and have you convinced there won't be any? I guess they can't discuss that under the MOU?

This all depands on the station they are working at and what the staffing requirements are. Basically neither companies employees are safe when it comes to getting the proper staffing across the system if and when the merger happens. I'm sure if there are reductions you will see it from both sides.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: etops1
Posted 2013-01-06 22:11:59 and read 11518 times.

I have 16 yrs as a FA with US . I think I will be ok with keeping my job ..

Topic: RE: AA CEO To Make Merger Decision Soon
Username: aacun
Posted 2013-01-07 07:19:03 and read 11208 times.

Quoting etops1 (Reply 115):

Yo do realize that is about the most junior seniority at AA. Except for the new hires that are coming in this month. Our most junior flight attendants have about 14-15 years.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: stlgph
Posted 2013-01-07 07:23:27 and read 11187 times.

if AA goes alone, i wouldn't be surprised to see a major investment from Emirates.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: flyby519
Posted 2013-01-07 07:34:50 and read 11165 times.

Quoting stlgph (Reply 117):

That would absolutely blow me away, but I hope it happens. Better yet, a joint bid between EK and IAG

[Edited 2013-01-07 07:40:05]

Topic: RE: AA CEO To Make Merger Decision Soon
Username: mattya9
Posted 2013-01-07 17:38:33 and read 10748 times.

Assuming this merger happens, I've been curious how the pilot groups will merge, especially since the US and HP groups still have yet to do so. Will the government step in and force everyone to get along and play nice? Or will new management get to deal with that nightmare?

OPS 5

Topic: RE: AA CEO To Make Merger Decision Soon
Username: dcann40
Posted 2013-01-07 17:54:13 and read 10693 times.

Quoting mattya9 (Reply 121):
Assuming this merger happens, I've been curious how the pilot groups will merge, especially since the US and HP groups still have yet to do so. Will the government step in and force everyone to get along and play nice? Or will new management get to deal with that nightmare?

In the back of my mind, I suspect those differences will become inconsequential given that the pilots from East and West will be dwarfed in size by the AA gang. I don't know the numbers but I am guessing that the AA pilots could swing any vote.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: mattya9
Posted 2013-01-07 18:34:42 and read 10607 times.

Quoting dcann40 (Reply 122):

So would it be safe to say the US/HP pilots will pushed to the back of the line since the AA pilot group is larger and (I'm guessing) has more seniority overall? As mentioned before, I'm really curious to see how this would play out. It seems we keep hearing about how the FA's and mechanics have come to an agreement much more than the two pilot unions (or 3 since US and HP are still separate). Would the US/HP groups be treated as one to fit in with AA? Anyone have any insight as to which direction this could/will go?

OPS 5

Topic: RE: AA CEO To Make Merger Decision Soon
Username: dcann40
Posted 2013-01-07 18:38:28 and read 10591 times.

Quoting mattya9 (Reply 123):
Would the US/HP groups be treated as one to fit in with AA? Anyone have any insight as to which direction this could/will go?

If I understand this correctly, everyone (east, west, AA) gets one vote each. So a vote is held to determine representation of the pilots and presumably the APA (AA's pilot union) wins. While I have experience in M&A, I am not a labor lawyer so I am guessing based on what I believe I understood in past instances. But this is only a guess.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: mattya9
Posted 2013-01-07 18:58:48 and read 10545 times.

Quoting dcann40 (Reply 124):

Assuming that's correct (all become part of APA), would that mean US and HP pilots are knocked to the bottom of the barrel in favor of the AA pilots who are already part of APA?

OPS 5

Topic: RE: AA CEO To Make Merger Decision Soon
Username: HPRamper
Posted 2013-01-07 19:01:41 and read 10554 times.

Quoting mattya9 (Reply 123):
So would it be safe to say the US/HP pilots will pushed to the back of the line since the AA pilot group is larger and (I'm guessing) has more seniority overall? As mentioned before, I'm really curious to see how this would play out.

Seniority has nothing to do with it. And it would be AA + PMHP which would instantly dwarf USAPA and nullify their little roadblock.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: mattya9
Posted 2013-01-07 19:11:31 and read 10601 times.

Quoting HPRamper (Reply 126):

What is PMHP? And if what dncann40 says is correct wouldn't all the pilots become part of APA after a vote?

OPS 5

Topic: RE: AA CEO To Make Merger Decision Soon
Username: jlbmedia
Posted 2013-01-07 19:24:58 and read 10559 times.

Quoting HPRamper (Reply 126):
Seniority has nothing to do with it. And it would be AA PMHP which would instantly dwarf USAPA and nullify their little roadblock

Wouldn't the US-East have the most seniority as that airline has been around (the older east Piots at least) as long as the older piolts that fly for American?

Topic: RE: AA CEO To Make Merger Decision Soon
Username: dcann40
Posted 2013-01-07 19:32:23 and read 10529 times.

Quoting mattya9 (Reply 127):
What is PMHP?

post-merger HP

Topic: RE: AA CEO To Make Merger Decision Soon
Username: AA767400
Posted 2013-01-08 10:00:33 and read 10264 times.

http://www.nbcdfw.com/news/business/...AAs-Merger-Decision-185958422.html

Another delay? Now they're saying end of January.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: YYZBound
Posted 2013-01-08 10:08:55 and read 10212 times.

I wonder if there's something going on with Emirates that is the reason for the delay

Topic: RE: AA CEO To Make Merger Decision Soon
Username: etops1
Posted 2013-01-08 10:58:34 and read 10025 times.

[quote=YYZBound,reply=131][/
Why do you think that ?

Topic: RE: AA CEO To Make Merger Decision Soon
Username: stlgph
Posted 2013-01-08 11:05:06 and read 10026 times.

Quoting etops1 (Reply 132):

It makes sense. Emirates wants to expand in the U.S. and wants more U.S. gateways and feed. They're wanting and willing to shell out the cash for 30 more A380's and probably willing to shell out another big sum to an airline that wants to play. Right now, AA wants to play.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: etops1
Posted 2013-01-08 12:04:15 and read 9871 times.

Quoting stlgph (Reply 133):

So why would that delay a merger announcement ? AA is not trying to merge with Emirates .

Topic: RE: AA CEO To Make Merger Decision Soon
Username: LAXdude1023
Posted 2013-01-08 12:11:26 and read 9862 times.

Quoting etops1 (Reply 134):
So why would that delay a merger announcement ? AA is not trying to merge with Emirates .

A merger or consideration of a merger is not something you run into without all of your facts in front of you. Only fools would do that. You have to have every possible angle in front of you. If a large co-operation with EK is in the cards, you want that known to you before making a deal.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: dcann40
Posted 2013-01-08 12:23:18 and read 9851 times.

Quoting etops1 (Reply 134):
AA is not trying to merge with Emirates .

How exactly do you know this?

Topic: RE: AA CEO To Make Merger Decision Soon
Username: dcann40
Posted 2013-01-08 12:26:52 and read 9844 times.

Quoting etops1 (Reply 134):
AA is not trying to merge with Emirates .

How exactly do you know this?

Topic: RE: AA CEO To Make Merger Decision Soon
Username: stlgph
Posted 2013-01-08 13:25:02 and read 9819 times.

Quoting etops1 (Reply 134):

I never said anything about American *merging* with Emirates.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: dcann40
Posted 2013-01-08 14:59:06 and read 9773 times.

Quoting stlgph (Reply 138):

No but one never knows what could happen next. Stranger deals have taken place.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: etops1
Posted 2013-01-08 17:25:47 and read 9562 times.

  I swear you guys are something else .. Now your think that AMR has the possibility of merging with EK?

Topic: RE: AA CEO To Make Merger Decision Soon
Username: PRAirbus
Posted 2013-01-08 17:35:09 and read 9596 times.

Prediction; AA will NOT announce any merger decision tomorrow (BOD meeting); AA will emerge from Chapter 11 "solo"! Wishful thinking: "AA merges w/B6 and recovers the Caribbean"!

Topic: RE: AA CEO To Make Merger Decision Soon
Username: YYZBound
Posted 2013-01-08 17:49:27 and read 9501 times.

Quoting etops1 (Reply 140):

Nobody here believes that. Besides, it's impossible.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: etops1
Posted 2013-01-08 19:14:33 and read 9407 times.

Quoting PRAirbus (Reply 141):

Prediction : AMR will not announce any merger decision tomorrow . They will announce it however before the end of the month and not exit BK stand alone . After AA/US merger is in full swing , you will then probably see an extensive codeshare partnership with JetBlue and maybe also Emirates .

Topic: RE: AA CEO To Make Merger Decision Soon
Username: dcann40
Posted 2013-01-08 20:02:16 and read 9271 times.

Quoting etops1 (Reply 143):
After AA/US merger is in full swing , you will then probably see an extensive codeshare partnership with JetBlue and maybe also Emirates .

Every day that passes, the merger between US and AA in BK becomes less likely.

If the merger were to happen, I doubt however that a B6 codeshare would be in the works.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: stlgph
Posted 2013-01-08 20:24:28 and read 9182 times.

Certainly an interesting turn of events.

This is definitely a catalyst in why the decision is being postponed until the end of the month.

http://www.businessweek.com/news/201...e-possibility-of-shareholder-value

Topic: RE: AA CEO To Make Merger Decision Soon
Username: rj777
Posted 2013-01-08 21:11:56 and read 9084 times.

Quoting stlgph (Reply 145):
This is definitely a catalyst in why the decision is being postponed until the end of the month.

I don't see how, especially when the article (dated today) makes no mention of a postponement. In fact, the article makes it sound like the matter WILL be decided tomorrow:

From the article:
"AMR has a board meeting scheduled for tomorrow at which it had hoped to be ready to decide whether to go ahead with a tie-up, people familiar with the matter said in December. "

Topic: RE: AA CEO To Make Merger Decision Soon
Username: dcann40
Posted 2013-01-08 21:25:40 and read 9055 times.

Quoting rj777 (Reply 146):
From the article:
"AMR has a board meeting scheduled for tomorrow at which it had hoped to be ready to decide whether to go ahead with a tie-up, people familiar with the matter said in December. "

That's quoting what someone said in December, however. And the shareholder value issue seems to have first come up afterwards.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: gigneil
Posted 2013-01-08 21:29:06 and read 9073 times.

Quoting dcann40 (Reply 136):
How exactly do you know this?

It's illegal. That's how.

NS

Topic: RE: AA CEO To Make Merger Decision Soon
Username: silentbob
Posted 2013-01-08 21:47:34 and read 9012 times.

Quoting gigneil (Reply 148):
It's illegal. That's how

Not if AMR is in control.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: JBirdAV8r
Posted 2013-01-08 21:55:36 and read 8985 times.

Quoting stlgph (Reply 145):
Certainly an interesting turn of events.

This is definitely a catalyst in why the decision is being postponed until the end of the month.

Catalyst, intentional logjam...all the same, right?

Topic: RE: AA CEO To Make Merger Decision Soon
Username: gigneil
Posted 2013-01-08 22:17:46 and read 8969 times.

Quoting silentbob (Reply 149):
Not if AMR is in control.

I haven't seen your name in a bit.

At any rate... you really think that'd work that way?

NS

Topic: RE: AA CEO To Make Merger Decision Soon
Username: BlueShamu330s
Posted 2013-01-09 02:49:39 and read 8901 times.

Quoting YYZBound (Reply 131):

I wonder if there's something going on with Emirates that is the reason for the delay

Ding ding !

I'm expecting a flurry of panicked canvassing from the US camp, akin to the days leading up to an election.

Emirates is a blind curve ball which US and Parker knew nothing about. He must be having one of those weak kneed, out of control sensations over it.

A tie-up with AA opens up the entire USA and Central America to EK. In return, Emirates could give AA the financial backing to exit chapter 11 and then go after US themselves; on their terms, in their time.

Suddenly, the table seems to have turned in AA's and Horton's favour. Parker needs this deal quickly and he will be all too aware that any tie-up between AA and EK will see his window of opportunity close very quickly.

The hunter could be about to be the hunted.   

Rgds

Topic: RE: AA CEO To Make Merger Decision Soon
Username: BNE
Posted 2013-01-09 03:21:42 and read 8852 times.

Qantas ends up with a codeshare Emirates and then Emirates ends up with a stake of American Airlines.

US Airways wants to merge with AA but with Emirates along then suddenly AA becomes stronger.

Maybe B6 will end up with the bits of US that AA don't want.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: JoePatroni707
Posted 2013-01-09 04:38:27 and read 8741 times.

Quoting gigneil (Reply 148):
It's illegal. That's how.
Quoting gigneil (Reply 148):
Not if AMR is in control.

AA does not have the money to buy Emirates. Foreign ownership laws would prohibit EK from buying more than 25% of AA.

AA just signed a code-shareing deal with QR. EK is not likely IMHO.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: avek00
Posted 2013-01-09 04:51:18 and read 8717 times.

Save a.net's remaining credibility and can the EK/AA talk for now. For a multitude of reasons, that won't happen anytime soon no matter what Tim Clark dreams up.

The shareholder value thing IS a big deal, however. Not just because shareholders might receive something, but because it underscores AMR is worth much more than the various working figures bandied about in recent months. If so, US' path to a merger wth AA will become far more difficult, as:

1. AMR creditors and shareholders will certainly want a much larger equity stake in a merged airline than US stakeholders are comfortable with;

2. The approval of existing AMR shareholders (in addition to creditors) would be required for any merger proposal; and

3. There is less incentive for AMR stakeholders to agree to any proposal that involves management control by US Airways.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: AAplat4life
Posted 2013-01-09 05:04:11 and read 8669 times.

It remains to be seen whether any residual shareholder value will have much of an impact. Many of the shares have been purchased by creditors and the amount of value is not (from what I read) expected to be significant. Most of the equity value will go to the creditors, and they will call the shots regarding the make-up of the future Board of Directors. After all, even if the shareholders get full market value, that is only about $300M in a company that is probably worth between $6.5 to $8B (without US Air).

Regarding EK, it is more of a question of keeping oneworld together for the benefits of a tie-up with EK. It is hard to see how AA can have alliances with both EK and Qatar. If the creditors are amenable to an all stock deal with US, then AMR does not need money from EK to emerge from bankruptcy. What AA needs is a better product and improved route network to compete with Delta and United.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: SeeTheWorld
Posted 2013-01-09 05:11:54 and read 8663 times.

Quoting milemaster (Reply 35):
My .02 on the matter is that this merger has an extreme probability of happening in 2013. Regardless of whether it's US taking over AMR or AMR as the acquiring party after BK, it's happening, and it's bad news for consumers which is why I am not particularly thrilled about it either way. The only people who should be amped about it are the ones who think they're going to profit from it. I can tell you that's sure not going to be us passengers who have to fly a lot and pay for it.

While consumers may pay a bit more because of a merger (and let's remember how fares have not come close to keeping up with the rate of inflation), consumers will be better off if the US (and global) airline industry were more fiscally sound. Everyone seems to make money off airlines except airlines. When airline cover their cost of capital they can invest in new aircraft, products, and services that make the flying experience so much better. Consumers will be just fine.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: stlgph
Posted 2013-01-09 05:21:38 and read 8652 times.

Quoting rj777 (Reply 146):
I don't see how,

A bankrupt company still finding shareholder value entirely changes things.

Quoting BlueShamu330s (Reply 152):
A tie-up with AA opens up the entire USA and Central America to EK. In return, Emirates could give AA the financial backing to exit chapter 11 and then go after US themselves; on their terms, in their time.

Good. Someone is on to something, however, Emirates isnt after anything to do with US Airways at this point.

Quoting BlueShamu330s (Reply 152):
Suddenly, the table seems to have turned in AA's and Horton's favour.

Not entirely. An Emirates backing is a nice deal and all but an Emirates deal will call for them to dictate a lot of "next" moves by American.
However, if Emirates is wanting to dictate too much control - then I wouldn't be surprised to see American Airlines run cozying up with US Airways.

Quoting JoePatroni707 (Reply 154):
AA does not have the money to buy Emirates. Foreign ownership laws would prohibit EK from buying more than 25% of AA.

AA is not after investing in Emirates. At all.
I would not be surprised to see Emirates buy as much of AA as they legally can.

Quoting JoePatroni707 (Reply 154):
AA just signed a code-shareing deal with QR. EK is not likely IMHO

Emirates offers far more financial support than Qatar. The deal with Qatar is a One World Alliance code sharing deal. Emirates would offer financial and management support.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: dcann40
Posted 2013-01-09 07:09:40 and read 8409 times.

Quoting LAXdude1023 (Reply 160):
It is? It looks like your typical codeshare arrangement similar to what they have with EY.

Some codeshare agreements cover just a few flights, that was really my point. This is pretty all-encompassing.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: LAXdude1023
Posted 2013-01-09 07:12:01 and read 8408 times.

Quoting dcann40 (Reply 161):
This is pretty all-encompassing.

No, it really isnt. If they announce a full network codesharing, then Ill agree. This on the other hand is very basic.

Thats why Ive said if they are trading what EK is offering for this, AA screwed up big time.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: YYZBound
Posted 2013-01-09 07:23:52 and read 8351 times.

Quoting LAXdude1023 (Reply 162):
Thats why Ive said if they are trading what EK is offering for this, AA screwed up big time.

I don't see any details about what EK is offering to compare....

Topic: RE: AA CEO To Make Merger Decision Soon
Username: JoePatroni707
Posted 2013-01-09 07:31:22 and read 8339 times.

Quoting stlgph (Reply 158):
AA is not after investing in Emirates. At all.

I never said they were. Another poster hinted at the possibiliy of an EK/AA merger.

Quoting stlgph (Reply 158):
I would not be surprised to see Emirates buy as much of AA as they legally can.

Given AA's new relationship with QR I doubt this will happen unless AA kicks QR to the curb.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: avek00
Posted 2013-01-09 07:34:00 and read 8349 times.

Quoting LAXdude1023 (Reply 162):
Thats why Ive said if they are trading what EK is offering for this, AA screwed up big time.

Emirates really isn't in the AA picture at all right now. But hey, if AMR wants to gum up an otherwise feasible standalone path out of bankruptcy through Emirati investment proposals that will get delayed, scrutinized, criticized, and potentially blocked by the US government, it's certainly free to go that route. Delta and United will laugh all the way to the bank on account of such foolishness.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: stlgph
Posted 2013-01-09 07:50:06 and read 8289 times.

Quoting avek00 (Reply 165):
Emirates really isn't in the AA picture at all right now

Incorrect.

Quoting avek00 (Reply 165):
But hey, if AMR wants to gum up an otherwise feasible standalone path out of bankruptcy through Emirati investment proposals that will get delayed, scrutinized, criticized, and potentially blocked by the US government, it's certainly free to go that route.

Also incorrect.

Quoting JoePatroni707 (Reply 164):
Given AA's new relationship with QR I doubt this will happen unless AA kicks QR to the curb.

Qatar Airways is nothing more than a OneWorld alliance code share agreement.
Emirates = serious cash infusion.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: STT757
Posted 2013-01-09 07:50:11 and read 8299 times.

Quoting avek00 (Reply 165):
Emirates really isn't in the AA picture at all right now. But hey, if AMR wants to gum up an otherwise feasible standalone path out of bankruptcy through Emirati investment proposals that will get delayed, scrutinized, criticized, and potentially blocked by the US government,

Exactly, I have one thing to say "Dubai Ports World".

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

Topic: RE: AA CEO To Make Merger Decision Soon
Username: LAXdude1023
Posted 2013-01-09 08:42:30 and read 8183 times.

Quoting avek00 (Reply 165):
Emirates really isn't in the AA picture at all right now

No way on earth you could possibly know that. None of us do.

Quoting avek00 (Reply 165):
But hey, if AMR wants to gum up an otherwise feasible standalone path out of bankruptcy through Emirati investment proposals that will get delayed, scrutinized, criticized, and potentially blocked by the US government, it's certainly free to go that route.

They would be allowed to invest up to a certain point much like LH investing in B6 or VS investing in VX. If they play by the rules, it wouldnt be a problem.

Quoting JoePatroni707 (Reply 164):
Given AA's new relationship with QR I doubt this will happen unless AA kicks QR to the curb.

You mean AA and QR's very basic codeshare? At this stage its nothing special. If they advance it to network wide coding, then Ill agree.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: stlgph
Posted 2013-01-09 08:54:10 and read 8165 times.

Quoting LAXdude1023 (Reply 168):
None of us do.

Several of us here on the forum know a few things that are going on. Some are more quiet than others.

Quoting LAXdude1023 (Reply 168):
LH investing in B6

Lufthansa is the largest shareholder in jetBlue. 46,704,967 shares ... 16.43% out

Topic: RE: AA CEO To Make Merger Decision Soon
Username: LAXdude1023
Posted 2013-01-09 09:01:16 and read 8154 times.

Quoting DLT123 (Reply 170):
It does cover all AA domestic routes plus some international routes

It covers all AA domestic routes? Im pretty sure it doesnt say that anywhere in the article.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: DLT123
Posted 2013-01-09 09:08:59 and read 8093 times.

Quoting LAXdude1023 (Reply 171):
It covers all AA domestic routes? Im pretty sure it doesnt say that anywhere in the article

I think so, yes, at least insofar as a QR passenger can connect to one.

[Edited 2013-01-09 09:10:27]

Topic: RE: AA CEO To Make Merger Decision Soon
Username: Maverick623
Posted 2013-01-09 13:35:05 and read 7824 times.

Quoting DLT123 (Reply 172):

I think so, yes, at least insofar as a QR passenger can connect to one.

That's not the same as a codeshare agreement.

An interline agreement (which is what they already had) allows either airline to sell a routing that uses both airlines, but only under their own codes. For example, before the codeshare, AA could sell the same DOH-LAX routing (using fictitious flight numbers) as QR flight 80 DOH-LHR, and AA flights 95 and 172 on the same ticket, and QR could do the same with the same flight numbers. QR would get paid for their DOH-LHR segment, and AA would get paid for the LHR-ORD and ORD-LAX segments.

Codeshare means that both airlines market the same flight under their own respective flight numbers. For example, QR can sell a DOH-LHR-ORD-LAX as QR flights 80, 7090, and 7083, while American can sell the same exact routing as AA flights 8102, 95, and 172. AA and QR would be allowed to collaborate on the fare and how much of the revenue each airline gets.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: rj777
Posted 2013-01-09 14:13:10 and read 7712 times.

So I'm assuming nothing came out of the board meeting today?

Topic: RE: AA CEO To Make Merger Decision Soon
Username: lucky777
Posted 2013-01-09 14:53:17 and read 7656 times.

Quoting rj777 (Reply 174):
So I'm assuming nothing came out of the board meeting today?

At least nothing that's been reported to the newswires. If nothing else, this delay more than likely signals that the UCC isn't sold on the LCC/AA merger as its currently constructed and they're weighing their options. My guess is Parker will somehow have to find a way to sweeten the pot in order to seal the deal.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: gigneil
Posted 2013-01-09 19:53:04 and read 7376 times.

Quoting stlgph (Reply 158):
A bankrupt company still finding shareholder value entirely changes things.

They found it on the tails of merger news.

NS

Topic: RE: AA CEO To Make Merger Decision Soon
Username: BarryH
Posted 2013-01-09 21:15:10 and read 7335 times.

Quoting lucky777 (Reply 175):
If nothing else, this delay more than likely signals that the UCC isn't sold on the LCC/AA merger as its currently constructed and they're weighing their options.

Dcann40 posted something fascinating but most everyone glossed over it discussing QR. The appreciation in bankruptcy AA's experienced screws up Parker's valuation pretty badly. Before the announcement, he thought US was worth $3B; AA thinks it's worth $2B. He thought AA was worth $5B in bankruptcy; AA thought they worth $6-7B. The further each side gets from agreeing to a common valuation the more unlikely a merger in bankruptcy becomes. And an appreciation of AA's value gives the more level-headed members of the UCC a reason to take a second-look at the stand-alone plan as it is by far the lowest risk scenario. People with no emotional ties to AA could give a crap about consolidation or a merger unless it means they'll recover more when AA's back on its feet. So the plot thickens.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: silentbob
Posted 2013-01-09 21:48:25 and read 7286 times.

Quoting gigneil (Reply 151):
I haven't seen your name in a bit.

At any rate... you really think that'd work that way?

Thanks for noticing, I've been busy and far too often it's just "more of the same" around here.

As for AMR buying Emirates; No, I don't see that happening. I was simply pointing out a way in which that merger would be possible from a legal standpoint.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: gigneil
Posted 2013-01-09 21:57:37 and read 7274 times.

Quoting silentbob (Reply 178):
Thanks for noticing, I've been busy and far too often it's just "more of the same" around here.

I use it to take my aggression out on people.

Quoting BarryH (Reply 177):
People with no emotional ties to AA could give a crap about consolidation or a merger unless it means they'll recover more when AA's back on its feet.

So, here's the thing.

The appreciation in value is primarily due to the merger ruckus.

No merger, no value.

NS

Topic: RE: AA CEO To Make Merger Decision Soon
Username: flyguy89
Posted 2013-01-09 22:06:18 and read 7276 times.

Quoting gigneil (Reply 179):

So, here's the thing.

The appreciation in value is primarily due to the merger ruckus.

No merger, no value.

Not at all, it's AA's continued impressive improvement in performance while in bankruptcy that has given credence to the original assertion that AA is worth more than what US was valuing it as. This brings us back to the question of whether or not AA's creditors are comfortable with being acquired right now (which is the proposal at the moment, that US would acquire AA) versus emerging as a stand-alone entity and being the acquirer instead.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: klkla
Posted 2013-01-09 22:35:17 and read 7216 times.

Quoting gigneil (Reply 176):
They found it on the tails of merger news.

NS

Yes they did. How convenient LOL.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: AAplat4life
Posted 2013-01-10 05:31:07 and read 7037 times.

Quoting BarryH (Reply 177):
The appreciation in bankruptcy AA's experienced screws up Parker's valuation pretty badly. Before the announcement, he thought US was worth $3B; AA thinks it's worth $2B. He thought AA was worth $5B in bankruptcy; AA thought they worth $6-7B

Parker knows a heck of a lot more than we do, as do the other players involved in the bankruptcy case. We have to assume that Parker came in with a first offer of a 30/70 split (US/AMR) knowing he has to negotiate. The response was more of a 20/80 split. If we split the difference, then a 25/75 split would value the combined entity at about $10B using a market value of US of about $2.5B. That would value AMR at about $7.5B, which may be on the high side. After all, excluding its restructuring costs, and despite all of the improvements it has been making, it remains to be seen how much profit AMR will produce.

I see the comments about AMR's stock having value as a tid bit. There may be some small amount of residual value, but most of the AMR trading price right now is pure speculation and not based on the fundamentals that otherwise drive stock prices. A better indication is based on the trading value of AMR bonds. This is key in bankruptcy. If the bonds are trading at a material discount, then the sophisticated investors (i.e., the ones who actually study the financial data) are not expecting that anything will be left for the shareholders. I don't have this data at my finger tips, but all of the recent news reports I've seen have indicated that the bondholders will not receive full payment. And some of indicated that they have doubts about AMR's managements revenue plans (and, of course, others feel that the merger carries risks and may not be a good idea). This is all going to be decided confidentially.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: stlgph
Posted 2013-01-10 06:20:56 and read 6910 times.

Quoting gigneil (Reply 179):
The appreciation in value is primarily due to the merger ruckus.

No merger, no value.

That's incorrect.
See reply 180 and then on top of that a maturing of bonds//convertible notes @ the 6.25% rate due in October 2014 has added value to the dollar, seeing a climb of 3.9%

Topic: RE: AA CEO To Make Merger Decision Soon
Username: silentbob
Posted 2013-01-10 07:32:58 and read 6767 times.

Quoting gigneil (Reply 179):
I use it to take my aggression out on people.

Reminds me of one of my favorite movie lines: "That's what the internet is for, slandering other people anonymously."

Quoting flyguy89 (Reply 180):
This brings us back to the question of whether or not AA's creditors are comfortable with being acquired right now (which is the proposal at the moment, that US would acquire AA) versus emerging as a stand-alone entity and being the acquirer instead.

I can't see how AA would be better off acquiring US after bankruptcy. At least if it happens during bankruptcy, the excess aircraft and property leases could be trimmed much more easily.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: ckfred
Posted 2013-01-10 07:52:58 and read 6709 times.

Quoting AASTEW (Reply 80):
AA + US....two airlines that have had very bad mergers....cant wait to see how this mess unfolds!

I would argue that the AA/TW merger would have worked well, but for 9/11. ORD was a mess, and having a second Midwest hub 300 miles away made a lot of sense.

What also caused problems with the merger was the Feds killing the UA/US merger. If that had gone through, UA and AA would have swapped 757s. AA would have gotten the US 757s, which had RR engines.

Further, AA bought TW to get a hold of a lot of route authority to Europe. But, with the EU/US Open Skies agreement, all of that route authority became worthless.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: dcann40
Posted 2013-01-10 09:20:02 and read 6521 times.

Quoting ckfred (Reply 185):
I would argue that the AA/TW merger would have worked well, but for 9/11. ORD was a mess, and having a second Midwest hub 300 miles away made a lot of sense.

It made a lot of sense at the time - but the people who planned the merger didn't have a crystal ball in terms of what was yet to come.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: jfklganyc
Posted 2013-01-10 09:25:58 and read 6527 times.

Actually US and HP has been quite successful.

Company is profitable. Nationwide network. Good hubs.

Pilots have to get it together. Frankly, I dont think management cares

Topic: RE: AA CEO To Make Merger Decision Soon
Username: BarryH
Posted 2013-01-10 09:53:05 and read 6424 times.

Quoting AAplat4life (Reply 182):
Parker knows a heck of a lot more than we do,

He didn't when he made the totally blind and cowboy-esque sweetheart offers to the AA unions to curry their favor when he wasn't getting the attention he wanted for his proposed merger. US has been blowing sunshine up their shareholder's and the analyst's butts for quite a while with grand tales of a promising future (having nothing to do with AA). It's going to be kind of hard for them to do a 180 and recommend they "take what they can get" if AA's offer is equitable but below the overly rosy expectations they've set. US' Board representing the best interests of their shareholders has to decide what's "fair;" not Parker personally or AA through their valuation. And ultimately US' shareholders have to vote on whatever deal's put forth. And based on US' upcoming financial "ballons" and Parker's obsession with merging rather than running US we also have no idea what the Board's view of him is right now. There's only so much political capital one has to expend.

Quote:
And some of indicated that they have doubts about AMR's managements revenue plans (and, of course, others feel that the merger carries risks and may not be a good idea). This is all going to be decided confidentially.

I think the wind's shifted for a couple of reasons. With decades of union rancor culminating in bankruptcy AA looked desperate and wounded. The non-slow down by the pilots, overt "anything but Horton" embrace of US by the unions, and rejection of the LBFO by the pilots painted a pretty grim picture. But as bankruptcies go AA's has been very effective. In (relatively) short-order they've reduced debt, gained flexibility, and have competitive CBAs in place with all their unions. Their underlying strengths and market potential were never questioned so when you overlay their prospects with the gains they've achieved they look very different from a valuation perspective than they did just months ago. That valuation with applied post-bankruptcy appreciation would logically raise the "cost" of AA in a combination. And who knows what AA's creditors got to see when US lifted up their skirt under the NDA. So you're totally right that we're not privy to core data but you can make some assumptions based on what's publically available.

And even if the merger’s announced US’ shareholders have to approve it, the majority of AA stakeholders (with voting rights) have to approve it, as does the DOT/DOJ. If stake/shareholders of AA or US think their investment’s being undervalued in a combination there could be resistance. And with this being the last mega-merger in the U.S. who knows the stance the DOT/DOJ will take. And if I were DL and UA I'd be working on O&D maps showing how AA's dominate position in Latin America will negatively impact comptetion becuase of the additional feed US would provide just to open that can of worms. So we’re a long way from the fat person singing. I’m sure we all remember the result of the UA/US merger that was announced and flamed-out with equal fanfare.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: HPRamper
Posted 2013-01-10 10:31:36 and read 6310 times.

Quoting BarryH (Reply 188):
He didn't when he made the totally blind and cowboy-esque sweetheart offers to the AA unions to curry their favor when he wasn't getting the attention he wanted for his proposed merger.

And Parker would have been publicly crucified if he'd ignored the unions as he did with his DL proposal. Appealing to the unions was an excellent move. He did not go to them first - he flirted with them and the shareholders simultaneously.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: LAXdude1023
Posted 2013-01-10 10:50:30 and read 6233 times.

Quoting BarryH (Reply 188):
He didn't when he made the totally blind and cowboy-esque sweetheart offers to the AA unions to curry their favor when he wasn't getting the attention he wanted for his proposed merger.

Actually, you have it backward. That shows he knows exactly what he was doing. He learned his lesson from the failed takeover of Delta. He realized that if he didnt have the employees on board, he was getting nowhere. He went to the employees first because he knows that AA labor hates their management and it wouldnt take much to convince them.

He did exactly what was needed to play ball. Love him or hate him, he knew exactly what he was doing.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: flyguy89
Posted 2013-01-10 11:08:47 and read 6191 times.

Quoting silentbob (Reply 184):

I can't see how AA would be better off acquiring US after bankruptcy.

There are two primary reasons why they would: 1) US' value will likely be going down with their labor costs set to rise in the near-future making them cheaper to acquirer. 2) The obvious benefits of being in the driver's seat of a transaction by being the ones doing the acquiring instead of the other way around, much more favorable terms for AA shareholders may be had.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: bobloblaw
Posted 2013-01-10 11:22:04 and read 6146 times.

I will go out on a limb and say AA will reject a merger with US.

The purpose of a merger is mostly higher unit revenue. Reduce ASMs and drive higher yield pax to your airline. I am sure AA has a RASM decrement to UA and DL now. But if AA's costs are lower, it might not matter. AA is feasible as a stand alone. The question AA asks will either DL or UA try to take over US instead. That is the only reason I could see AA taking US, would be if they think DL or UA might take them instead.

If AA's costs are now low enough, they dont need the merger.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: JoePatroni707
Posted 2013-01-10 11:22:29 and read 6157 times.

You make it sound as though the whole merger would have been more successful if AA had gotten RR powered 757s. The 757s had nothing to do with the failure of the merger. AA made a huge mistake letting those 757s go.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: BarryH
Posted 2013-01-10 12:20:53 and read 6076 times.

Quoting HPRamper (Reply 189):
And Parker would have been publicly crucified if he'd ignored the unions as he did with his DL proposal. Appealing to the unions was an excellent move. He did not go to them first - he flirted with them and the shareholders simultaneously.

A couple things:

1) During exclusivity, and early in the process, doing an end-run around the stakeholders and court by seducing a company in bankruptcy's employees is a questionable tactic at best and smarmy and unprofessional at worst. Parker basically used the AA's union’s animosity toward their employer to create a giant distraction and focus attention on his self-serving desire for a merger. At the time he did it, early in the exclusivity stage, it was more about PR and jockeying for position than anything constructive benefiting either company or their respective employees. And if I'm not mistaken US' flight attendant's and pilot's unions both made public statements as to the irony of Parker being able to strike deals with employees fairly easily as long as they aren't his own.

2) There is no way at the time he dangled carrots in front of AA's unions that he'd have had enough knowledge of AA's financial performance to understand the impact of making a fairly detailed and, based on UA's recent CBA, overly generous offer both in terms and dollars. Hence my use of the term "cowboy-esque." Telling people what they want to hear to get them to behave a certain way and dealing with the consequences later isn't a sign of professionalism, it's behavior typical of commissioned sales people.

I don't think anyone here disagrees that having the unions onboard prior to a merger is a good idea and can make or break a merger's success. Too bad that same path wasn't followed when US and HP merged.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: DLT123
Posted 2013-01-12 15:16:17 and read 5682 times.

Quoting BarryH (Reply 194):

Apparently he learned quite a bit after the first merger.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: LAXdude1023
Posted 2013-01-12 15:22:19 and read 5681 times.

Quoting bobloblaw (Reply 192):

I will go out on a limb and say AA will reject a merger with US.

Looks like your limb may be correct.

AA just asked for another extension and was joined by the UCC in doing so. That makes a merger inside BK less likely:

http://www.nbcdfw.com/news/business/...on-on-Business-Plan-186562951.html

Topic: RE: AA CEO To Make Merger Decision Soon
Username: par13del
Posted 2013-01-12 15:35:01 and read 5645 times.

Quoting LAXdude1023 (Reply 196):
AA just asked for another extension and was joined by the UCC in doing so. That makes a merger inside BK less likely:

From the article
The airline has made "significant progress" in its restructuring effort but still needs more time, the company said.

Does make you wonder what the congress had in mind when they changed the laws, with the massive financial documents involved, paperwork can always be presented to justify an extension.
Big question, are there any bills or protections AA is avoiding / receiving while in chpt.11, we know they are essentially using their own money.
If this is the 5th extension, the congress in its wisdom felt that a company should have been able to present a plan by now.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: atrude777
Posted 2013-01-12 15:40:56 and read 5628 times.

Quoting LAXdude1023 (Reply 196):
Looks like your limb may be correct.

AA just asked for another extension and was joined by the UCC in doing so. That makes a merger inside BK less likely:

I don't disagree, but how does one come to that conclusion? I could look at it from this angle, and say AA needs more time to look at the options with US Airways. If they were ready to get out of BK, they could do it right now and not need US to exit BK? Why does AA need more time, to me this just makes it even more likely of a merger, if again I was looking at it from that angle.

Quoting par13del (Reply 197):
If this is the 5th extension, the congress in its wisdom felt that a company should have been able to present a plan by now.

AA has 18 months from when they filed Bankruptcy, that's what the new laws stated. April 1st makes it Month 17th. November of 2011 was when they filed, November of 2012 is their one year, May of 2013 will mark Month 18th where AA has to have a plan of some sort, or I believe liquidate or be bought out (correct me if I am wrong)

Alex

Topic: RE: AA CEO To Make Merger Decision Soon
Username: bobloblaw
Posted 2013-01-12 15:43:47 and read 5613 times.

Quoting atrude777 (Reply 198):
May of 2013 will mark Month 18th where AA has to have a plan of some sort, or I believe liquidate or be bought out (correct me if I am wrong)

They would get a further extension. United was in BK for like 2-3 years.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: atrude777
Posted 2013-01-12 15:49:46 and read 5612 times.

Quoting bobloblaw (Reply 199):

They would get a further extension. United was in BK for like 2-3 years.

No..it is exactly why UA being in BK for 2-3 years is why the new laws have changed.

That is why Delta and NWA filed their BK during the time they did so they were not subject to the 18 month Bankruptcy Laws.

The new BK Laws state, you have up to 18 Months to file a reorganization plan, to either exit, merge or be bought out or you must face liquidation.

AA cannot ask for an extension beyond May of 2013 now due to that being Month 18.

Known as the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

Source: http://www.govtrack.us/congress/bills/109/s256

Alex

Topic: RE: AA CEO To Make Merger Decision Soon
Username: TSS
Posted 2013-01-12 22:57:52 and read 5305 times.

Quoting ckfred (Reply 185):
What also caused problems with the merger was the Feds killing the UA/US merger. If that had gone through, UA and AA would have swapped 757s. AA would have gotten the US 757s, which had RR engines.
Quoting JoePatroni707 (Reply 193):
You make it sound as though the whole merger would have been more successful if AA had gotten RR powered 757s. The 757s had nothing to do with the failure of the merger. AA made a huge mistake letting those 757s go.

Interesting. Are you suggesting that AA should have kept the ex-TWA 757s and used them as DL has as a dedicated TATL subfleet?

Topic: RE: AA CEO To Make Merger Decision Soon
Username: JoePatroni707
Posted 2013-01-13 04:30:12 and read 5186 times.

Quoting TSS (Reply 201):
Are you suggesting that AA should have kept the ex-TWA 757s and used them as DL has as a dedicated TATL subfleet?

exactly.... the only reason AA lost those airplanes was Bob Redding tried to low-ball the leasing companies on what AA was willing to pay, and they got out bid by Delta. All those airplanes were ETOPS and could have been not only used in European markets like DL, but in Latin America as well.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: commavia
Posted 2013-01-13 04:36:11 and read 5173 times.

Quoting JoePatroni707 (Reply 202):
exactly.... the only reason AA lost those airplanes was Bob Redding tried to low-ball the leasing companies on what AA was willing to pay, and they got out bid by Delta. All those airplanes were ETOPS and could have been not only used in European markets like DL, but in Latin America as well.

Absolutely not. Those planes had different engines, were leased, and were completely superfluous. What AA should have done was take some of their own enormous fleet of 757s and convert them for longhaul use sooner (as they ultimately did do after it was already largely too late to be useful for Europe). There was absolutely no need to keep that small, non-standard subfleet of 757s. As I've said before, the fact that this meme about those 757s still persists amazes me.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: JoePatroni707
Posted 2013-01-13 04:40:38 and read 5167 times.

Quoting commavia (Reply 203):
Those planes had different engines, were leased, and were completely superfluous

Drinking the coolaid I see... AA has had and will have same type aircraft with different engines before. Look at the 777 fleet, and the planned A320 fleet. Sub engine types in both.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: commavia
Posted 2013-01-13 04:51:33 and read 5126 times.

Quoting JoePatroni707 (Reply 204):
Drinking the coolaid I see

No Kool Aid, just reality. There was absolutely no reason to keep a tiny subfleet of non-standard aircraft when AA already had its own enormous fleet that was more than capable of doing the exact same job. The stupid mistake AA management made was not to get rid of the TWA 757s. That made total sense. The stupid mistake AA management made was waiting so long to get serious about a longhaul 757 operation at all.

Quoting JoePatroni707 (Reply 204):
AA has had and will have same type aircraft with different engines before. Look at the 777 fleet, and the planned A320 fleet.

It's called economies of scale. AA flies 47 777-200ERs and is probably on track to operate close to 20 777-300ERs - 20 vs 47. AA is going to be operating hundreds of A320 family aircraft. The TWA 757 fleet in question numbered only around 20, versus more than 100 mostly-standard, nAAtive 757s. 20 vs 100+. The economics speak for themselves. And not to mention, the engines weren't the only problem with those TWA 757s. They also had a different configuration, and differed from the nAAtive 757 fleet in various other technical and operational ways, which only further complicated scheduling, crewing, training, etc.

So I repeat again: given where AA was at that time, there was not a single economically justifiable reason for AA to keep that tiny subfleet of non-standard aircraft.

AA absolutely should have gotten rid of those 757s - that was the smart decision to make. Hindsight 5 years later only further proves that conclusively. However, what AA should then have done was immediately convert 20 of the nAAtive 757s (which at that point were being used inefficiently in markets like MCO, LAS, etc.) and start using them in JFK/MIA longhaul markets. AA should have done that, and they didn't, stupidly.

Topic: RE: AA CEO To Make Merger Decision Soon
Username: par13del
Posted 2013-01-13 04:54:22 and read 5131 times.

Quoting silentbob (Reply 184):
I can't see how AA would be better off acquiring US after bankruptcy. At least if it happens during bankruptcy, the excess aircraft and property leases could be trimmed much more easily.

AA is in chpt.11 now and are trimming excess a/c and property leases as fast as they can, US is not in chpt.11 so their cost cannot be trimmed if the merger is done while AA is in chpt.11.

Hence the theory that if AA emerges intact, US stocks will take a hit, US can then enter chpt.11 to trim its cost and AA could acuire US or merge with them, if this occurs within 1 year of AA emerging from chpt.11 its cost will still be as low as it can be.


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