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Topic: AA/AS Merger Vs. AA/B6 Merger
Username: martinrpo1
Posted 2013-01-14 09:50:02 and read 9862 times.

Let us suppose AA rejects the merger with US Airways and emerges from CH11 in pretty good shape. What would be a better merger in future: Alaska-American or JetBlue-American?

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: LAXdude1023
Posted 2013-01-14 09:55:23 and read 9832 times.

I think both AS and B6 would fight with every ounce of their being to not merge with AA.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: chepos
Posted 2013-01-14 09:59:18 and read 9791 times.

Well I would venture to say AS will not be merging with anyone, God knows why this is brought up so often.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: jfk777
Posted 2013-01-14 10:05:36 and read 9748 times.

Quoting chepos (Reply 2):
Well I would venture to say AS will not be merging with anyone, God knows why this is brought up so often.

Alaska would only be good for an airline wanting feed in Seattle for west coast and SEA feed, DL would be better then AA. AS loves being independent.

Quoting LAXdude1023 (Reply 1):
I think both AS and B6 would fight with every ounce of their being to not merge with AA.

The Jetblue / AA marriage seems to get speculated about often, they do two very different things. AA doesn't want to fly people from NYC to Florida, Puerto Rico or the Dominican Republic any more. They want an international operation with Transcon flights at JFK. AA probably is better with Usairways and its Charlottle hub, the future does seem to have AA 777 from CLT to GRU, LHR and NRT.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: xjramper
Posted 2013-01-14 10:17:32 and read 9637 times.

How about no merger? People have this mindset that there has to be a merger. Of the airlines that are left as stand alone, there really isn't a good proposal left. USAir really has nothing to offer on the international front that AA doesn't already occupy or had and dropped. B6 has a great chunk of flying out of a leisure-heavy market, which will provide absolutely nothing in terms of yield. And AS isn't going to merge with anyone anytime soon.

Quite honestly, I see AA emerging as stand alone and staying that way.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: BoeingGuy
Posted 2013-01-14 10:21:35 and read 9610 times.

Quoting jfk777 (Reply 3):
Alaska would only be good for an airline wanting feed in Seattle for west coast and SEA feed, DL would be better then AA. AS loves being independent.

Oh not this s**t again.  

AS would be good for an airline wanting feed in SEA, but the rest of the route system would probably not be useful to DL. Does DL really want to serve Adak, Prudhoe Bay and stuff like SJC-LIH or BLI-OGG? At best, DL would parse off most of AS's route structure.

Just what AS Mileage Plan members need too - being part of an airline that is the biggest joke for lack of availability of frequent flier awards (DL, a.k.a. the bait-and-switch frequent flier program).

AS loves being independent because they feel it's the best choice for their shareholders, employees and customers. I still don't see why some people think it written in stone that it's inevitable or mandatory that AS must merge with someone. Did someone pass a law stating that, and I missed it?

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: stlgph
Posted 2013-01-14 10:24:08 and read 9564 times.

jetblue -
current senior management: no American
largest shareholder? Lufthansa. view? no American


Alaska -
current senior management: no American
largest shareholders? Blackrock, Par Capital Management, Vanguard Group. view? no American.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: etops1
Posted 2013-01-14 10:24:19 and read 9564 times.

Quoting xjramper (Reply 4):

Yeah well , what you see and what reality is are two very different things . AA will combine with US . It really doesn't matter who likes it or not .

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: AA94
Posted 2013-01-14 10:27:33 and read 9532 times.

Quoting xjramper (Reply 4):
How about no merger? People have this mindset that there has to be a merger. Of the airlines that are left as stand alone, there really isn't a good proposal left. USAir really has nothing to offer on the international front that AA doesn't already occupy or had and dropped. B6 has a great chunk of flying out of a leisure-heavy market, which will provide absolutely nothing in terms of yield. And AS isn't going to merge with anyone anytime soon.

Quite honestly, I see AA emerging as stand alone and staying that way.

        

AA doesn't need to merge with anyone, and if they're going to any merging at all, it's going to be with US. I think that neither AA and B6/AS really want to merge with each other, so they won't.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: enilria
Posted 2013-01-14 10:28:00 and read 9529 times.

Quoting martinrpo1 (Thread starter):
Let us suppose AA rejects the merger with US Airways and emerges from CH11 in pretty good shape. What would be a better merger in future: Alaska-American or JetBlue-American?
Quoting LAXdude1023 (Reply 1):

I think both AS and B6 would fight with every ounce of their being to not merge with AA.

I think neither want to merge, but at the right price it isn't their decision.

I think B6 is much more likely because DL would attempt to outbid AA for AS, but really can't do anything to stop B6-AA. I'm not sure whether DL is actually better off with AA and B6 merging. It would eliminate price pressure.

Quoting chepos (Reply 2):
Well I would venture to say AS will not be merging with anyone, God knows why this is brought up so often.

Because everybody is merging. There are fewer and fewer airlines.

Quoting xjramper (Reply 4):

How about no merger? People have this mindset that there has to be a merger.

I don't want a merger. The FL-WN merger was the worst one yet in terms of fare impact. The reality is, though, the more everybody merges the more money they all make. Less competition, more profit.

Quoting xjramper (Reply 4):
Quite honestly, I see AA emerging as stand alone and staying that way.

Very unlikely. It will either be a merger or a virtual merger. AA has to have more critical mass. DL and UA are too far ahead of them and are pounding on them in LAX and NYC. AA is moving backwards and did not get costs down to levels that will allow them much of an advantage if any in their labor deals. I think we will see a deal of some sort. It may be as little as US joining OW or B6 being a very tightly integrated partner.

B6 doesn't want a deal, but it wants slots and gates in NYC/DCA. This is the price for that.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: xjramper
Posted 2013-01-14 10:31:14 and read 9483 times.

Quoting etops1 (Reply 7):
Yeah well , what you see and what reality is are two very different things . AA will combine with US . It really doesn't matter who likes it or not .

Did I miss something? Please link it here so we can see that it is official.

Otherwise, unless you are Tommy Horton or Dougie Parker and/or a member of the internal board, what you are writing here is only what you "see" as well.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: etops1
Posted 2013-01-14 10:39:50 and read 9415 times.

Quoting xjramper (Reply 10):

I am writing what I know .. You can bet on that  

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: ripcordd
Posted 2013-01-14 10:45:44 and read 9382 times.

enilria, I think AA leads LAX or they are a very close#2 and with lower labour costs than DL & UA and new code sharing allowed and 90 seater coming I don't see their position changing too much in LA.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: dabpit
Posted 2013-01-14 11:11:21 and read 9248 times.

Just throwing this out there (it would never happen in my opinion) but what about AA/VX?

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: Roseflyer
Posted 2013-01-14 11:35:50 and read 9140 times.

The only way AS would merge would be through a hostile takeover. ALK stock is valued at over 3 Billion. The company is worth more than US Airways (LCC). Jetblue is worth about half that of Alaska.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: DeltaMD90
Posted 2013-01-14 11:41:13 and read 9089 times.

Aw no not this thread again! Sigh...

Anyway, I don't think AS is going anywhere... if AA tries to merge DL will do everything they can to block them, and if DL tries to merge, AA will do the same.

As for B6, I'm not sure how much competition concerns would be raised, but I would imagine that B6 is strong enough to put up a good fight, especially in AA's current, lowly existance

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: bobloblaw
Posted 2013-01-14 11:45:38 and read 9068 times.

AA cant operate B6 routes at B6 fares and make money. Raising fares would shrink the markets and result in overcapacity.

I see youre a kid, so Ill go easy on you.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: stlgph
Posted 2013-01-14 11:50:17 and read 9015 times.

Quoting dabpit (Reply 13):
AA/VX?

VX and anybody? No.
VX is worth some planes sitting around if the carrier's to go out of business.

VX already flies among heavily competitive routes and offers a "sexy" in flight service that the loyal fliers will expect and want if someone was to "merge" with them, which they won't get.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: luv2fly
Posted 2013-01-14 11:52:58 and read 9000 times.

Why do people think that AS and B6 need to merge to remain viable! And VX why would anyone want a few planes that operate on heavily traveled routes.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: BoeingGuy
Posted 2013-01-14 11:54:52 and read 8988 times.

Quoting DeltaMD90 (Reply 15):
Anyway, I don't think AS is going anywhere... if AA tries to merge DL will do everything they can to block them, and if DL tries to merge, AA will do the same.

Yep. I think AS has very skillfully positioned themselves to remain independent with some very strategic moves.

Not only are they in bed with several members from both One World and Sky Team, who would fight to avoid the other from locking them up as you state, but they'd also lose the code share revenue from the other alliance partnerships. If DL bought them, DL would lose the substantial code share revenue that AS gets from AA and also QF and LA. If AA buys them, they lose AS's code share revenue from DL, KE, AF and KL. And they might lose FI and EK partnerships also.

AS bought by AA or DL loses value immediately for reasons stated above. Plus, how much does AA or DL really want to serve all those state of Alaska cities?

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: Stitch
Posted 2013-01-14 11:55:43 and read 8989 times.

AS offers little to AA other than making SEA a new hub, and I don't see AA interested in having a hub in SEA. Didn't they pretty much shut down Air California and Reno Air when they took them and their SJC hub over?

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: Roseflyer
Posted 2013-01-14 12:01:49 and read 8930 times.

Quoting bobloblaw (Reply 16):
AA cant operate B6 routes at B6 fares and make money. Raising fares would shrink the markets and result in overcapacity.

According to figure 11 on this presentation, AA's 738s have almost the exact same CASM as B6's A320s.

http://planestats.com/Files/20110203...Economic_Analysis_APC_included.pdf

Here's an excerpt:

American’s success in bringing down the cost of operating the 737-800 is the result of three important changes in its 737-800 fleet. First, over the last two years American increased the 737-800 fleet by 91%, from 77 to 147 aircraft, and as the fleet has grown rapidly, its Direct CASM has decreased. A higher proportion of lower seniority pilots are likely flying the aircraft; the newest aircraft have no maintenance cost yet; and over 50% of the fleet have the newest, most fuel efficient engines. Second, American is retrofitting the 737-800 fleet and adding an average of 12 seats per aircraft. Finally, American changed the mission of the 737-800 fleet, deploying the aircraft in longer haul markets, which increased the stage length 11%. The combined power of these levers is well known and traditionally used by value carriers in their growth phase, but rare among network carriers.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: B6JFKH81
Posted 2013-01-14 12:57:05 and read 8691 times.



Upper leadership has made it quite clear that we're not interested in getting into bed with AA or any other carrier:

http://www.youtube.com/watch?v=yOM6csohc5c

http://www.bloomberg.com/news/2012-0...-more-airport-access-correct-.html

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: enilria
Posted 2013-01-14 13:08:44 and read 8637 times.

Quoting ripcordd (Reply 12):
nilria, I think AA leads LAX or they are a very close#2 and with lower labour costs than DL & UA and new code sharing allowed and 90 seater coming I don't see their position changing too much in LA.

I get that, but DL is growing. They just added LAX-SEA. DL has a target on AA there.

Quoting dabpit (Reply 13):

Just throwing this out there (it would never happen in my opinion) but what about AA/VX?

It could happen as a VX liquidation strategy. Don't think it means much in the scheme of things.

Quoting bobloblaw (Reply 16):
AA cant operate B6 routes at B6 fares and make money. Raising fares would shrink the markets and result in overcapacity.

All true, but owning the slots at JFK is valuable to rebuild a hub there.

Quoting Stitch (Reply 20):
AS offers little to AA other than making SEA a new hub,

For one thing it completely orphans DL's SEA transpac aspirations and generally denies DL a lot of market strength in the West.

Bottom line: I think AS stays neutral until there is a management change or Wall Street pressure, but I think AA and B6 start code sharing and do a LGA slot deal.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: Stitch
Posted 2013-01-14 13:51:06 and read 8488 times.

Quoting enilria (Reply 23):
For one thing it completely orphans DL's SEA transpac aspirations and generally denies DL a lot of market strength in the West.

Even without AS, DL could still keep SEA as an international gateway, like UA does. And UA has significantly scaled back their feeder ops into SEA over the years.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: NWAROOSTER
Posted 2013-01-14 14:18:22 and read 8614 times.

I CAN'T think of of one GOOD reason Alaska Airlines would merge with American Airlines or US Airways.
It would be just plain STUPID. Pun intended.   

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: JoePatroni707
Posted 2013-01-14 14:27:56 and read 8560 times.

Quoting dabpit (Reply 13):
Just throwing this out there (it would never happen in my opinion) but what about AA/VX?

How about we just hire some of their flight attendants, they have some hotties!

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: ckfred
Posted 2013-01-14 14:36:41 and read 8633 times.

Quoting etops1 (Reply 7):
Yeah well , what you see and what reality is are two very different things . AA will combine with US . It really doesn't matter who likes it or not .

So, you're privy to the conversations between senior AMR management and the major creditors of AMR/AA? If AA merges with US, it's because the creditors believe that a merger will make their stock worth more in the long term, meaning they can cash out for more money.

If the creditors believe that AA, with its lower cost structure and orders for A320 family, 738s, 777s, and 787s, can grow without the need for combining with another carrier, then there won't be a deal with US, particularly if they are uncertain that the actual combining of the two carriers, such as reservation systems, operating procedures, and union seniority lists, can be done smoothly.

Considering that US had troubles, when combining with HP, that could be weighing on the decision of the creditors.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: brilondon
Posted 2013-01-14 14:52:44 and read 8539 times.

Quoting stlgph (Reply 17):
VX and anybody? No.
VX is worth some planes sitting around if the carrier's to go out of business.

VX already flies among heavily competitive routes and offers a "sexy" in flight service that the loyal fliers will expect and want if someone was to "merge" with them, which they won't get.

What would AA gain by merging with VX? Are you sure you don't mean VS?

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: chepos
Posted 2013-01-14 14:56:23 and read 8516 times.

We should review history a bit, let's see AA purchases B6 and we see them do what has always happened in the past when they purchase someone. They use the JFK slots the rest goes by the wayside. No, they will not be keeping a SJU focus city and flying 7 flights a day between JFK and SJU, AA is not interested in this type of market. I'm not sure why a.netters would want AA to purchase anyone. To think AA would incorporate the B6 model into the AA operation is hilarious. Ask anyone from TWA how that worked out for them.
I thought people liked B6, why would you want to see them disappear?

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: BD338
Posted 2013-01-14 15:17:49 and read 8401 times.

For the sake of innovative service, care about the customer (and not just the FF or J/F person) attitude and friendly helpful service I hope neither AS or B6 combine with anyone (except maybe themselves!). It seems to be an a.net pasttime to pair these two off with A.N Other airline, and I don't know why.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: flyby519
Posted 2013-01-14 15:24:01 and read 8394 times.

Quoting brilondon (Reply 28):
What would AA gain by merging with VX?
VX could be quite a jewel if SFO turns into a slot controlled airport:

CrankyFlier just posted an article about the problems with SFO and possibility of being slot controlled in the future.

[Edited 2013-01-14 15:24:27]

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: BoeingGuy
Posted 2013-01-14 15:26:12 and read 8349 times.

Quoting enilria (Reply 23):
Bottom line: I think AS stays neutral until there is a management change or Wall Street pressure

Agreed, but why would Wall Street pressure AS to combine with someone? As the old saying goes, "It ain't broke." What would a merger and the subsequent gutting of AS's route structure that WOULD occur benefit Wall Street or AS's shareholders?

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: flyby519
Posted 2013-01-14 15:27:46 and read 8357 times.

Quoting BoeingGuy (Reply 32):
Agreed, but why would Wall Street pressure AS to combine with someone? As the old saying goes, "It ain't broke." What would a merger and the subsequent gutting of AS's route structure that WOULD occur benefit Wall Street or AS's shareholders?

By that logic then US should just keep trucking along without any pressure from wall street. They have had great financial success over the past few years as an independent carrier.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: BoeingGuy
Posted 2013-01-14 15:46:09 and read 8255 times.

Quoting flyby519 (Reply 33):
By that logic then US should just keep trucking along without any pressure from wall street. They have had great financial success over the past few years as an independent carrier.

I have never seen anywhere in the media that Wall Street or anyone else thinks that AS needs to be taken over. Am I missing anything? Who would benefit?

Anyone with even the slightest knowledge of the industry knows that it would be a total bloodbath. Most of AS's routes would be gutted.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: Roseflyer
Posted 2013-01-14 15:47:16 and read 8264 times.

Quoting flyby519 (Reply 33):
Quoting BoeingGuy (Reply 32):
Agreed, but why would Wall Street pressure AS to combine with someone? As the old saying goes, "It ain't broke." What would a merger and the subsequent gutting of AS's route structure that WOULD occur benefit Wall Street or AS's shareholders?

By that logic then US should just keep trucking along without any pressure from wall street. They have had great financial success over the past few years as an independent carrier.

Of the major airlines, Alaska has the highest profit margin by far. Their profit margin is almost double their nearest competitor. They are very highly valued based on market cap too. They aren't going to be forced to combine with anyone by wall street.

http://skift.com/2012/12/17/delta-is...ne-but-it-is-the-king-of-bag-fees/

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: dabpit
Posted 2013-01-14 15:54:46 and read 8213 times.

Quoting brilondon (Reply 28):

I do mean VX

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: dabpit
Posted 2013-01-14 15:58:55 and read 8204 times.

Quoting flyby519 (Reply 31):

Do you happen to still have the link for that?

Quoting JoePatroni707 (Reply 26):

Agreed  

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: brilondon
Posted 2013-01-14 15:59:38 and read 8184 times.

Quoting dabpit (Reply 36):
I do mean VX

Understood.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: flyby519
Posted 2013-01-14 16:01:30 and read 8192 times.

Quoting dabpit (Reply 37):
Do you happen to still have the link for that?

Sure

http://crankyflier.com/2013/01/14/sf...CrankyFlier+%28The+Cranky+Flier%29

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: lucky777
Posted 2013-01-14 16:41:14 and read 8095 times.

Quoting etops1 (Reply 11):
I am writing what I know .. You can bet on that

Your a junior flight attendant at US Airways...you have as much access to inside information as does the green vest dumping the lavs on the midnight shift.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: BarryH
Posted 2013-01-14 17:11:42 and read 7889 times.

Quoting stlgph (Reply 6):
Alaska -
current senior management: no American
largest shareholders? Blackrock, Par Capital Management, Vanguard Group. view? no American.

Once again, purely financial deals are being emotionalized. Every public company is for sale - for a price. AS management is put there by the Board which is put there by the shareholders. If someone offers a premium of 25% of today's stock price to purchase the company then it gets considered. To not consider it is a guaranteed shareholder suit. Whether it happens or not depends on whether a stand-alone AS could provide a similar or better return for shareholders within a reasonable amount of time. Management's "feelings" are 100% irrelevant. And the companies you've listed collectively own less than 17% of AS which isn't a lot in a proxy fight.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: ckfred
Posted 2013-01-14 17:35:32 and read 7796 times.

Quoting chepos (Reply 29):
We should review history a bit, let's see AA purchases B6 and we see them do what has always happened in the past when they purchase someone. They use the JFK slots the rest goes by the wayside. No, they will not be keeping a SJU focus city and flying 7 flights a day between JFK and SJU, AA is not interested in this type of market. I'm not sure why a.netters would want AA to purchase anyone. To think AA would incorporate the B6 model into the AA operation is hilarious. Ask anyone from TWA how that worked out for them.
I thought people liked B6, why would you want to see them disappear?

Why do people think that AA buys an airline to run it out of business?

Why did AA get rid of the SJC hub the first time, after buying Air Cal? Because Southwest entered the West Coast market. After WN came in, AA bailed on much of the former Air Cal routes system, just as US bailed on much of the former PSA route system. DL downsized a lot of flying along the coast, focusing on traffic through the old Western hub at SLC. Only UA tried to keep it's West Coast operation, and creating Shuttle by United to compete.

Why did AA get rid of the SJC hub the second time, after buying Reno Air? A lot of the tech and internet corporate travel dried up in 2000. Tech went bust after Y2K, since both business and individual consumers stopped buying computer software and hardware. When the internet bubble burst, corporate travel went bust. A friend of mine at AA said that internet company executives had been flying first class on very short notice. But, when the bubble burst, they just stopped flying, as the IPO money ran out?

Why did AA do a slow downsize of the TWA hub at STL? Blame it on 9/11. In the summer of 2000, summer storms made flying in and out of ORD a disaster. AA was constantly delayed, both by storms and by passengers running over from UA, because of cancellations caused by the pilot sick-out. Having another hub 300 miles away made a lot of sense, especially since the slot restrictions at ORD had been eliminated. Airlines were adding flights with no idea how often flights would be delayed, and the ORD expansion plan was just being created (and getting mired in court battles).

9/11 threw a monkey wrench, since it caused a significant downturn in traffic, and reducing the traffic volume at ORD until about 2004.

The other reason AA bought TWA was for European route authorities, which became worthless after the Open Skies agreement between the U.S. and the E.U.

If AA wanted to get rid of competition, all it had to do was dump extra seats into a market and match fares, as it did when Vanguard started flying DFW-MCI. Why spend money to buy a carrier, when AA could run it out of business for much less.

After all, TWA would have filed for bankruptcy, regardless of AA.

Now, that's not to say that if AA bought B6, it wouldn't cut back on flying to Florida and other leisure destinations out of JFK and BOS, and instead focus on feeder traffic both for trans-con routes and flying to Europe.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: etops1
Posted 2013-01-14 17:47:33 and read 7765 times.

Quoting lucky777 (Reply 40):

Whatever Lucky , I know a lot more than you think . But I don't have to come on here and prove it to you . Guess we shall see if I was right or wrong .

[Edited 2013-01-14 17:52:53]

[Edited 2013-01-14 17:53:49]

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: brons2
Posted 2013-01-14 18:09:03 and read 7502 times.

Quoting enilria (Reply 9):
It may be as little as US joining OW

This, and I think they should explore a wide ranging partnership before undertaking a full-on merger. Sort of like CO and UA did before their merger.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: hereandthere41
Posted 2013-01-14 19:31:06 and read 6798 times.

Quoting ripcordd (Reply 12):

UA/UAX is significantly larger than #2 AA/Eagle at LAX......approximately 210 daily departures vs. 123. AA is barely larger than WN at LAX.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: LAXdude1023
Posted 2013-01-14 19:34:54 and read 6766 times.

Quoting etops1 (Reply 43):
Whatever Lucky , I know a lot more than you think .


You might think you do, but if youre an FA, you dont know anything the rest of us dont.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: stlgph
Posted 2013-01-14 20:08:35 and read 6515 times.

Quoting BarryH (Reply 41):
And the companies you've listed collectively own less than 17% of AS which isn't a lot in a proxy fight.

But by default, they're still the largest shareholders.

Quoting BarryH (Reply 41):
Management's "feelings" are 100% irrelevant.

incorrect.



A legalized "consideration of sale" is far different than a "we want to sell."

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: jfklganyc
Posted 2013-01-14 20:26:58 and read 6418 times.

If AA wanted a JFK hub they would have had one.

They were larger 10 years ago at JFK than they are now

They build a billion dollar terminal, only to stop it half-built with a temporary wall. Where in the entire world have you heard of a hub airline with hub terminal do this? Nowhere.

They bought TWA, which even at their smallest at the end, had 40 or 50 flights a day at JFK, Terminal 5 and a hangar...made use of nothing, even if most of it was old crap. About the only thing AA has from TWA at JFK is an employee lot near the now demolished TWA hangar.

During the DL and B6 build up at JFK...AA actually shrank! They grew DFW and MIA instead.

Truth is, after watching DL and B6 reallocate their flights at JFK, I am starting to think that the airport just isn't a viable full blown hub with LGA up the road. Cities like ORD, CLE, DTW, ATL, CLT, RDU, etc can not be served profitably on a high frequency basis. It is an international hub with a bank or two of afternoon/evening domestic feed PLUS long haul out of LGA perimeter domestic flying PLUS some high frequency leisure market.


So with that thought:

1. How many more European long hauls does AA want at JFK? Can you envision another 10 Euro cities from JFK? I can't.

2. How much more feed at JFK for AA? Perhaps some upstate/NE cities. A few more midwest cities. There are a few holes: PDX, some smaller California markets, DEN, SLC, ATL, MSY. What are we looking at here? Maybe 30 more domestic flights...and that's a stretch.

3. How many high frequency leisure routes does AA want to operate out of JFK? Zero.


What the heck does AA want with another 160 JFK slots?

When push comes to shove, I don't even know if B6 wants all of them

And what else does B6 have?

BOS? US/DL/AA showed us what they think of BOS.

FLL? With MIA a few miles away?

SJU? That worked for AA

LGB? That will be gone before the first plane is painted.

More Airbuses? Maybe

The 190? High CASM. Land and it breaks.


I honestly dont see it happening

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: BarryH
Posted 2013-01-14 21:20:43 and read 6072 times.

Quoting stlgph (Reply 47):
incorrect.

Horton didn't "feel" a merger in bankruptcy was in AA's best interest. How did that work out? NDA's were signed and it's being thoroughly vetted. Ayer and Tildon may "feel" AS' best future prospects are to go it alone. But if a credible offer is made for the company that values it at a premium to its market cap that offer will be considered. And then it's up to Ayer and Tildon to convince the shareholders that whatever the two of them think is best (financially) will make the shareholders more money over time than whatever offer is being made by third parties. Senior management isn’t a dictatorship that gets to unilaterally declare “this is best.” They answer to the shareholders and decisions they make aren’t personal; they are to serve the interests of shareholders. So while they may not like a merger it’s their responsibility to evaluate one if an offer’s received. And if they and the Board reject an offer the shareholders deem beneficial there will be a proxy fight and there will be a merger anyway. Alaska's homespun culture is cute and cuddly but their still a public company and not exempt from the unhappy things that occur in the harsh reality of business. That's just how it works.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: yeelep
Posted 2013-01-14 21:35:14 and read 6006 times.

Quoting BarryH (Reply 49):

If your'e going to drop names, at least get them right. Write on the blackboard 100 times,Tilden.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: XT6Wagon
Posted 2013-01-14 21:54:34 and read 5916 times.

AS survives on its Focus. Merging with AA would remove the focus and basicly gut the value of AS. The other majors (and WN) would quickly tear the guts out of AS's existing network, rendering AA no farther ahead in these markets than they are today. Not to mention I doubt Horizon would be worth flying under AA's watchful eye. I think we all know the state of the various regional airlines other than Horizon. I'm not sure Horizon will continue to survive with its extra service, but I hope so.

Jetblue I know less about, but I assume it would be much of the same where the current route structures would crumble without a management focused tightly on the markets and customers served, and as the current customer base scatters to the other airlines.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: EA CO AS
Posted 2013-01-14 22:03:10 and read 5893 times.

Quoting BarryH (Reply 41):
Quoting stlgph (Reply 6):Alaska -
current senior management: no American
largest shareholders? Blackrock, Par Capital Management, Vanguard Group. view? no American.
Once again, purely financial deals are being emotionalized. Every public company is for sale - for a price. AS management is put there by the Board which is put there by the shareholders. If someone offers a premium of 25% of today's stock price to purchase the company then it gets considered. To not consider it is a guaranteed shareholder suit.

While you're absolutely correct that the BOD has a fiduciary responsibility to the shareholders to review any offer, they're not obligated to accept one, regardless of the terms.

Quoting BarryH (Reply 49):
Senior management isn’t a dictatorship that gets to unilaterally declare “this is best.”

  

That's where you're off-base. While not an absolute "dictatorship" as you put it, senior management is empowered by the BOD (and in turn, by the shareholders) to make what they feel are the best decisions for all stakeholders, including employees and customers. If enough shareholders feel their interests are not being met, they have the option to vote out the BOD and by extension, change senior management.

But make no mistake, senior management and the BOD make the decisions, not the shareholders.

[Edited 2013-01-14 22:08:07]

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: PassedV1
Posted 2013-01-15 03:33:55 and read 5073 times.

Wow, "this one again"...no kidding.

I don't believe that an AA/AS merger/acquisition is out of the question. Although Alaska's market cap of 3.0 Billion seems high to us non-corporations...it is really not a lot of money in the corporate finance game. You also have to offset that number agains the fact that Alaska has over 1.0 Billion in cash 30+ unencumbered Jets that could easily be turned into a few hundred million cash. Alaska already has several hundred million dollars in lines of credit and a mileage plan that itself could fetch a millions as colatoral, add these up and before you know it, not only is it feasable that somebody could afford to buy Alaska, it might even be possible they could buy Alaska for "no money down." That being said, the "enterprise value" (market cap+debt-cash) is probably a more accurate predictor of what the eventual purchase price of Alaska Airlines would be...4.3Billion, plus a premium on top of that...5-6B?

AA has no reason to buy AS? Well the big glaring reason I see for AA to buy AS is to instantly solve AA's "MD80 problem". No need to wait for the airplanes from Boeing, finance them, or hire/train new pilots, with the purchase of AS, AA could retire it's MD80 fleet virtually overnight. Would it be worth it to buy Alaska just for the airplanes and crews..I don't know..If the purchase price of AS airlines is 6B, divided by 124 airplanes Alaska has operating, I get 48.2 Million per airplane. Fully crewed...with trained technicians, parts, hangers, even simulators.

Why would DL buy AS...because AA tried to...see above.

I haven't looked at it at all...but i'm guessing a similar argument could be made for B6.

[Edited 2013-01-15 03:34:58]

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: BD338
Posted 2013-01-15 06:28:29 and read 4237 times.

Quoting PassedV1 (Reply 53):
Well the big glaring reason I see for AA to buy AS is to instantly solve AA's "MD80 problem". No need to wait for the airplanes from Boeing, finance them, or hire/train new pilots, with the purchase of AS, AA could retire it's MD80 fleet virtually overnight. Would it be worth it to buy Alaska just for the airplanes and crews..I don't know..If the purchase price of AS airlines is 6B, divided by 124 airplanes Alaska has operating, I get 48.2 Million per airplane. Fully crewed...with trained technicians, parts, hangers, even simulators.

so you propose shutting down an entire airline just so you can get 124 various sized and aged 737s to replace 210 MD-80s?

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: bobloblaw
Posted 2013-01-15 07:21:02 and read 3935 times.

AS has many very loyal flyers who would not necessarily extend their loyalty. I also think that politicians from Alaska might try to scuttle any buyout of AS. Also as some poster above mentioned , AS has a very high market cap. They would be tough to buy.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: Roseflyer
Posted 2013-01-15 08:33:02 and read 3524 times.

Quoting BarryH (Reply 41):
Once again, purely financial deals are being emotionalized. Every public company is for sale - for a price. AS management is put there by the Board which is put there by the shareholders. If someone offers a premium of 25% of today's stock price to purchase the company then it gets considered. To not consider it is a guaranteed shareholder suit. Whether it happens or not depends on whether a stand-alone AS could provide a similar or better return for shareholders within a reasonable amount of time. Management's "feelings" are 100% irrelevant. And the companies you've listed collectively own less than 17% of AS which isn't a lot in a proxy fight.

Very true that for the right price the company is for sale. However with a market cap over $3 Billion, no one has that type of money to buy AS. They are way too highly valued for a hostile takeover. Companies do hostile takeovers of companies not doing well financially and with low stock prices. AS is soaring which makes the odds of a takeover basically impossible.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: EA CO AS
Posted 2013-01-15 11:02:53 and read 3023 times.

Quoting PassedV1 (Reply 53):
I don't believe that an AA/AS merger/acquisition is out of the question.

I do.

But the main reason here never seems to get emphasized enough; AS provides critical, profitable feed to both AA and DL. If either carrier tried to upset that balance by attempting a takeover, it would not only trigger a competitive response from the other, but it would also immediately render what they buy (AS) less-profitable as the losing carrier would pull their connecting codeshare customers.

Neither the BODs at AA or DL would likely see a compelling financial argument that has them try to buy AS knowing doing so would immediately reduce the value of what they just paid a healthy premium for.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: dabpit
Posted 2013-01-15 11:22:10 and read 2976 times.

Quoting flyby519 (Reply 39):
Sure

Thank you

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: BoeingGuy
Posted 2013-01-15 11:40:13 and read 2942 times.

Quoting EA CO AS (Reply 57):
But the main reason here never seems to get emphasized enough; AS provides critical, profitable feed to both AA and DL. If either carrier tried to upset that balance by attempting a takeover, it would not only trigger a competitive response from the other, but it would also immediately render what they buy (AS) less-profitable as the losing carrier would pull their connecting codeshare customers.

Neither the BODs at AA or DL would likely see a compelling financial argument that has them try to buy AS knowing doing so would immediately reduce the value of what they just paid a healthy premium for.

Yep, as I've stated before, AS has brilliantly positioned themselves to stay independent by moves like that. Also, I suspect that AA or DL would find it's not worth all the trouble in inheriting stuff like all those State of Alaska routes.

Trains Magazine recently had a very good article about how the Kansas City Southern has remained independent in the face of all the railroad mega-mergers and it reminds me a lot of AS. AS and KCS have a lot in common.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: PassedV1
Posted 2013-01-15 12:07:07 and read 2897 times.

Quoting EA CO AS (Reply 57):
But the main reason here never seems to get emphasized enough; AS provides critical, profitable feed to both AA and DL. If either carrier tried to upset that balance by attempting a takeover, it would not only trigger a competitive response from the other, but it would also immediately render what they buy (AS) less-profitable as the losing carrier would pull their connecting codeshare customers.

Sort of an airline style, Mutually Assured Destruction. I hope it works with airlines as well it has worked with Nuclear Missles.

Quoting BD338 (Reply 54):
so you propose shutting down an entire airline just so you can get 124 various sized and aged 737s to replace 210 MD-80s?

So an airline buying an airline with the INTENTION of eventually shutting down has never been done before? Also keep in mind that under my proposed, I think plausible (I don't think it's likely) scenario, there would still be an Alaska Airlines, at least for awhile, we would just have a new "hub" in ORD and a lot less flying out of ANC.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: enilria
Posted 2013-01-15 12:32:54 and read 2843 times.

Quoting Stitch (Reply 24):
Even without AS, DL could still keep SEA as an international gateway, like UA does. And UA has significantly scaled back their feeder ops into SEA over the years.

IMHO it would doom DL's efforts there. UA is a much stronger brand in the Asian point of sale than DL. I think DL desperately needs the feed in SEA.

Quoting NWAROOSTER (Reply 25):

I CAN'T think of of one GOOD reason Alaska Airlines would merge with American Airlines or US Airways.

But I can think of plenty of reasons why AA or DL would merge with AS.

Quoting BoeingGuy (Reply 32):
Agreed, but why would Wall Street pressure AS to combine with someone?
Quoting BoeingGuy (Reply 34):
I have never seen anywhere in the media that Wall Street or anyone else thinks that AS needs to be taken over. Am I missing anything? Who would benefit?

Because if AA or DL were to make a bid...or more likely both made a bid, it would be very hard to simply say no. Wall Street would virtually force them to take it unless they felt it undervalued.

Quoting brons2 (Reply 44):
This, and I think they should explore a wide ranging partnership before undertaking a full-on merger. Sort of like CO and UA did before their merger.

Makes you wonder why US hasn't at least started talking more about OW. It was mentioned once a few months ago.

Quoting jfklganyc (Reply 48):
If AA wanted a JFK hub they would have had one.

They were larger 10 years ago at JFK than they are now

Just because they have lost at JFK doesn't mean they don't want it back. Reality is a cruel teacher, but hope springs eternal.

Quoting PassedV1 (Reply 53):
I don't believe that an AA/AS merger/acquisition is out of the question.

I think if AA were healthy it makes as much sense as a DL deal.

Quoting bobloblaw (Reply 55):
AS has many very loyal flyers who would not necessarily extend their loyalty. I also think that politicians from Alaska might try to scuttle any buyout of AS. Also as some poster above mentioned , AS has a very high market cap. They would be tough to buy.

I think what happens, and I've said this before, is that the operation North of SEA essentially stays Alaska Airlines under a long term exclusive alliance with the rest. The remainder merges into AA or DL. The SEA-ANC route would probably be a little blurry, maybe a JV. The reasons for this are numerous. 1) The legacies don't want the operational hassles of Alaska flying, 2) the politics of buying it and taking it apart are dangerous, 3) it's important to the SEA "hub", but the Northern operation really adds nothing to the AA/DL network, 4) such a plan would be superior with regulators and politicians and would help either AA or DL to win the war for AS, and 5) acquiring AS is really about Transpacific and LAX for AA or DL. AS has a decent position in L.A. and a very good spot in SEA. PDX is superfluous. My guess is that at some point the company gets split up. It also allows the AS management to stay employed and proclaim that they did their best to keep the company independent while pocketing a huge chunk of money from the split and retaining the part of the airline that is basically a total monopoly with huge profit margins.

[Edited 2013-01-15 12:34:07]

[Edited 2013-01-15 12:35:26]

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: BoeingGuy
Posted 2013-01-15 13:03:55 and read 2776 times.

Quoting enilria (Reply 61):
Because if AA or DL were to make a bid...or more likely both made a bid, it would be very hard to simply say no. Wall Street would virtually force them to take it unless they felt it undervalued.

Why? Anyone with any foresight knows that most of AS's network would be gutted in just a few years. Neither DL or AA (or US for that matter) has ever kept up and down west coast routes when they've bought west coast airlines. History has shown that some non-stop routes are discontinued when the merged airline can start routing traffic through hubs (e.g. MSP-HNL). In other words why would DL want to fly SEA nonstop to SAT, AUS, MCO, STL and PHL when they can instead route that traffic through SLC, MSP or ATL? I'm sure neither AA or DL wants AS's niche Hawaii routes or some of their Mexico routes. I doubt either wants to compete with WN on west coast routes.

So AA or DL is going to buy out AS to gain maybe a few routes like SEA-BOS or SEA-EWR that might remain.

I still don't see the point of DL or AA buying an airline with a route structure that isn't anywhere near their core competencies. What benefit would it be to Wall Street or AS's shareholders to be bought out and for sure gutted within a few years. It might a very short term boost but I don't see any long-term benefit to anyone.

Quoting enilria (Reply 61):
AS has a decent position in L.A.

What? DCA and some Mexico routes? Add in YVR, ANC, SEA and PDX. I'm sure AA would love all those SEA and west coast routes that don't fit in their network just to get LAX-DCA.

Quoting enilria (Reply 61):
ut the Northern operation really adds nothing to the AA/DL network,

Again, as stated above, what would add to AA/DL network? SEA-AUS (oh wait, AA had it and discontinued it) - same with SEA-STL, SEA-BOS, SJC-HNL, SJC-OGG and most west coast routes are all things AA didn't keep want to keep previously. I'm some cases AA would be inheriting routes that they TWICE discontinued previously (e.g. SEA-SJC and SEA-SNA). I'm sure DL is chomping at the bit for PDX-LIH, SJC-LIH, BLI-OGG, SJC-GDL and SEA-SNA - NOT!

Other than maybe a few executives, I haven't see a convincing argument as to anybody that would gain over AA or DL buying AS, rather than just continuing to enjoy the extensive code-share benefits that each reaps without gaining all the hassles and routes that don't fit in their network. The travels would lose. The AS employees would certainly lose. The on-line communities would lose. I'll bet AS's shareholders would lose in the long run. What's left?

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: BarryH
Posted 2013-01-15 13:54:29 and read 2716 times.

Quoting EA CO AS (Reply 52):
But make no mistake, senior management and the BOD make the decisions, not the shareholders.

Funny. All it takes is 51% of the shareholders to oust a Board and subsequently management by the reconstituted Board if they feel their best interests aren't being served. Carl Ichan's made a gazillion dollars by rallying shareholders against existing Board's and management that were performing questionably. The airline industry doesn't work any differently than any other business owned by shareholders.

http://en.wikibooks.org/wiki/US_Corporate_Law/Shareholders

P.S. – Getting financing for a company with a $3B market cap isn’t any harder than one with a $1B market cap. It all comes down to how much the investment is expected to appreciate post-acquisition and what the risks are to achieving that appreciation. And AA isn’t the only prospective merger/acquisition/investment suitor for AS. These conversations apply to anything that could change their current status as a stand-alone public company.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: LAXdude1023
Posted 2013-01-15 14:06:06 and read 2691 times.

Quoting BarryH (Reply 63):
P.S. – Getting financing for a company with a $3B market cap isn’t any harder than one with a $1B market cap. It all comes down to how much the investment is expected to appreciate post-acquisition and what the risks are to achieving that appreciation. And AA isn’t the only prospective merger/acquisition/investment suitor for AS. These conversations apply to anything that could change their current status as a stand-alone public company.

Youre starting to sound like Doug Parker.

If you want to know what its like to see a whole airline workforce rise against a potential takeover, look at Delta circa 2006.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: brilondon
Posted 2013-01-15 15:32:56 and read 2611 times.

Quoting BoeingGuy (Reply 59):
Trains Magazine recently had a very good article about how the Kansas City Southern has remained independent in the face of all the railroad mega-mergers and it reminds me a lot of AS. AS and KCS have a lot in common.

Great comparison. I had to go, well not had but decided to re-read the article on KCS, and definitely saw the comparison with the AS situation.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: PRAirbus
Posted 2013-01-16 06:37:34 and read 2325 times.

AA/B6 merger would work; AA gets bigger in NY and recuperates the Caribbean/SJU. Wasn't there a codeshare agreement being worked on between AA/B6???? Now that AA has more codeshare/scope flexibility I've heard rumors of a possible deep cooperation of AA and B6.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: chepos
Posted 2013-01-16 07:01:13 and read 2294 times.

[quote=PRAirbus,reply=66]AA gets bigger in NY and recuperates the Caribbean/SJU[/quote

SJU would be dropped faster than STL, a SJU focus city no longer makes sense for AA (not with MIA arond the corner). PSE-JFK/MCO and BQN-MCO/JFK would be dropped as well, at both of these airports AA has tried a couple of times to make it work. Dropping them both in less than a year.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: PRAirbus
Posted 2013-01-16 07:04:44 and read 2286 times.

Well, CHEPOS might be right about SJU especially when PRico's tourism is in deep crisis but people need to fly to/from SJU otherwise SWA would've dropped SJU after acquiring AirTran.

Topic: RE: AA/AS Merger Vs. AA/B6 Merger
Username: chepos
Posted 2013-01-16 07:36:51 and read 2252 times.

SJU is now low cost territory, if B6 disappears I would expect WN/FL to cover the loss (or even NK). Yields to SJU are not good, very little premium traffic and Puerto Ricans are no longer willing to pay a premium just to fly on a plane that says AA. The days of an AA focus city there are long gone, no matter how you slice or dice it. AA would have no problem routing pax through MIA/JFK/ORD and DFW from SJU.


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