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Will AA Merge With BA?  
User currently offlineBA787 From United Kingdom, joined Jun 2006, 2596 posts, RR: 7
Posted (8 years 3 months 2 weeks 5 days 22 hours ago) and read 9194 times:

I know this has been about a lot but I am intrigued Any info will be well recieved cheers t.c.

56 replies: All unread, showing first 25:
 
User currently offlineSA7700 From South Africa, joined Dec 2003, 3431 posts, RR: 25
Reply 1, posted (8 years 3 months 2 weeks 5 days 22 hours ago) and read 9186 times:
AIRLINERS.NET CREW
HEAD MODERATOR

One word comes up in my mind: anti-trust. I don't see this happening.


Rgds

SA7700



When you are doing stuff that nobody has done before, there is no manual – Kevin McCloud (Grand Designs)
User currently offlineBA787 From United Kingdom, joined Jun 2006, 2596 posts, RR: 7
Reply 2, posted (8 years 3 months 2 weeks 5 days 22 hours ago) and read 9186 times:

Quoting SA7700 (Reply 1):
anti-trust

dont understand my friend am new to this and only 14 yrs of age


User currently offlineM180up From El Salvador, joined May 2006, 403 posts, RR: 5
Reply 3, posted (8 years 3 months 2 weeks 5 days 22 hours ago) and read 9136 times:

Quoting SA7700 (Reply 1):
anti-trust.

regulations by goverments about monopoly, correct me if i'm mistaken



Werner from SAL
User currently offlineBA787 From United Kingdom, joined Jun 2006, 2596 posts, RR: 7
Reply 4, posted (8 years 3 months 2 weeks 5 days 22 hours ago) and read 9124 times:

Quoting M180up (Reply 3):
regulations by goverments about monopoly, correct me if i'm mistaken

Thanks M180up  Embarrassment


User currently offlineSP90 From United States of America, joined May 2006, 388 posts, RR: 0
Reply 5, posted (8 years 3 months 2 weeks 5 days 22 hours ago) and read 9097 times:

Anti-trust = monopoly or unfair business practices

Why would BA and AA merging bring up anti-trust charges? There are lots of other airlines out there.

Taking it a step further, why merge the airlines within Oneworld, Skyteam and Star Alliance? So instead of having all these smaller airlines, you would have three big ones.


User currently offlineMaxQ2351 From , joined Dec 1969, posts, RR:
Reply 6, posted (8 years 3 months 2 weeks 5 days 22 hours ago) and read 9075 times:

A "trust" is like a monopoly. Most countries have laws in place to prevent corporate monopolies. Why I'd almost be certain a AA-BA merger would not be allowed is because AA and AA Eagle are almost as large as all of the other oneworld alliance members combined. If AA and BA merged, they'd be unstoppable. It's not like AA hasn't been able to pull this off in the past before....where did they get the nickname of the "sky nazis"?!?! They're ruthlessly and exceedingly efficient at eliminating competition. Everyone who had a good life and career at Air Cal, Reno Air, TWA (the list goes on), found themselves on the streets after AA set their sights on them. If AA and BA merged, only the government could stop them......so the government prevents such monopolies in advance with the "anti-trust" laws as mentioned above.

-Max


User currently offlineBA787 From United Kingdom, joined Jun 2006, 2596 posts, RR: 7
Reply 7, posted (8 years 3 months 2 weeks 5 days 22 hours ago) and read 9059 times:

Quoting MaxQ2351 (Reply 6):
so the government prevents such monopolies in advance with the "anti-trust" laws as mentioned above.

Dont ya just love Tony Blair and George Bush for being so awkward. I think mergers are the right way to go to prevent bankruptcies. Seing as Britain ajnd American are all ready in bed together why wont they let the airlines merge i wonder. lol  Wink


User currently offlineM180up From El Salvador, joined May 2006, 403 posts, RR: 5
Reply 8, posted (8 years 3 months 2 weeks 5 days 21 hours ago) and read 9033 times:

Quoting BA787 (Reply 7):
I think mergers are the right way to go to prevent bankruptcies

or for more banktrupcies to take place, as smaller carriers wouldn't survive the competition of such a big airline



Werner from SAL
User currently offlineVinnieWinnie From United States of America, joined Nov 2005, 790 posts, RR: 0
Reply 9, posted (8 years 3 months 2 weeks 5 days 21 hours ago) and read 9033 times:

As soon as an open-sky agreement is agreed on, expect new talks to start again!

They have tried and failed before due to their dominance on the London to America market! If they give in on the regulators prerequisites, they will certainly merge! They are meant to be together!  Wink


User currently offlineBA787 From United Kingdom, joined Jun 2006, 2596 posts, RR: 7
Reply 10, posted (8 years 3 months 2 weeks 5 days 21 hours ago) and read 9026 times:

I hope it doesnt go the same way as the other America-Britain pacts. Iraq springs to mind

User currently offlineWrighbrothers From United Kingdom, joined Jul 2005, 1875 posts, RR: 9
Reply 11, posted (8 years 3 months 2 weeks 5 days 21 hours ago) and read 9016 times:

Quoting BA787 (Reply 2):
and only 14 yrs of age

Join the club !

I don't think it will happen soon, they just aren't compatable, the American company won't want to be controled, they'd want to be the one making the big decisions.
Their are also some other things that I can't think of right now

Wrighbrothers



Always stand up for what is right, even if it means standing alone..
User currently offlineORDPIA From United States of America, joined Jan 2006, 140 posts, RR: 1
Reply 12, posted (8 years 3 months 2 weeks 5 days 21 hours ago) and read 9016 times:

Quoting BA787 (Reply 7):
Dont ya just love Tony Blair and George Bush for being so awkward. I think mergers are the right way to go to prevent bankruptcies. Seing as Britain ajnd American are all ready in bed together why wont they let the airlines merge i wonder. lol

It has nothing to do with George Bush or Tony Blair. The US has had "The Sherman Antitrust Act" in place since 1890 when it was enacted because the Standard Oil Company had a majority control of the oil in the US thus allowing them to control prices (this might be a bit confusing given the current situation with OPEC but, as OPEC is a cartel, made up of several companies and countries they are legal). And as far as the whole Bush thing goes his policy is quite pro-business, which is why I like him as my company has gone through record profits since his election and my stock options make me smile, Its not simply up to him to allow such an action to take place, it would require the other two branches of the government (judicial and legislative) along the same lines as the UA - US merger, also there is one larger problem besides it creating an antitrust issue and that is the fact that the US does not allow for foreign ownership above a certain percentage of a US carrier, a la the current Virgin America situation. Sorry if this is a bit wordy but hopefully it helps.



Concorde 146 727 737 73G 742 744 752 753 762 763 772 773 300 319 320 321 343 346 CRJ ERJ ATR ATP CL604 LJ45 LJ60 BD700
User currently offlineBA787 From United Kingdom, joined Jun 2006, 2596 posts, RR: 7
Reply 13, posted (8 years 3 months 2 weeks 5 days 21 hours ago) and read 8987 times:

Im glad there are other people of my age here

Quoting Wrighbrothers (Reply 11):
Join the club !

lol
i hope it does happen soon even tho u r probably right


User currently offlineBA787 From United Kingdom, joined Jun 2006, 2596 posts, RR: 7
Reply 14, posted (8 years 3 months 2 weeks 5 days 21 hours ago) and read 8987 times:

Sorry ORDOPIA
[quote=ORDPIA,reply=12]It has nothing to do with George Bush or Tony Blair.[/quote/]

was a joke though but that reply was very helpful cheers tc


User currently offlineLincoln From United States of America, joined Nov 2004, 3887 posts, RR: 8
Reply 15, posted (8 years 3 months 2 weeks 5 days 21 hours ago) and read 8957 times:

Quoting BA787 (Reply 7):
Dont ya just love Tony Blair and George Bush for being so awkward.

At least in the US, antitrust laws date to the early 1900s, and it can be argued that antitrust laws are a very un-Republican (the US political party that President Bush belongs to, not the mode of governent) regulation on and interference with business.

For a more indepth overview of Antitrust concerns, see the Wikipedia article at http://en.wikipedia.org/wiki/Anti-trust

I'm not totally convinced that an AA-BA merger would raise antitrust concerns... there may be a few aspects and the combined airline may be forced to divest certain assets (LHR landing slots, routes, etc) to preserve compensation, but I think on the antitrust front it could happen.

I DON'T think it could happen, however, because of the laws in the US preventing foreign ownership of a domestic airline... Unless AA purchased BA (assuming the UK doesn't have similar laws)... and even then there are regulatory hurdles.

Lincoln



CO Is My Airline of Choice || Baggage Claim is an airline's last chance to disappoint a customer || Next flts in profile
User currently offlineBA787 From United Kingdom, joined Jun 2006, 2596 posts, RR: 7
Reply 16, posted (8 years 3 months 2 weeks 5 days 21 hours ago) and read 8942 times:

coul the airlines not purchase 50% of each other or is that not allowed either Will oneworld ever encourage merging of its airlines

User currently offlineM180up From El Salvador, joined May 2006, 403 posts, RR: 5
Reply 17, posted (8 years 3 months 2 weeks 5 days 21 hours ago) and read 8942 times:

Quoting ORDPIA (Reply 12):
US does not allow for foreign ownership above a certain percentage of a US carrier

So they will definitely have to find a way to overcome this, but I don't think it will be allowed, does anyone knows the rules on great britain, let's say AA takes over BA, what are the rules of ownership of an airline in hte UK?



Werner from SAL
User currently offlineEddieDude From Mexico, joined Nov 2003, 7582 posts, RR: 42
Reply 18, posted (8 years 3 months 2 weeks 5 days 21 hours ago) and read 8898 times:

Quoting SP90 (Reply 5):
Why would BA and AA merging bring up anti-trust charges? There are lots of other airlines out there.

The North Atlantic market, specifically the U.S.-U.K. market would be dominated by the resulting company to such an extent that rivals such as UA, VS, etc. would be de facto displaced from it.

Quoting BA787 (Reply 7):
mergers are the right way to go to prevent bankruptcies

U.S. regulators may allow a merger that would otherwise concentrate the market beyond the acceptable thresholds if one of the parties is in imminent risk of bankruptcy or winding-up in case the merger is not accomplished. But that is a different story.

There is one more reason why a BA-AA merger has many obstacles. U.S. laws have restrictions on foreign investment in the airline industry. Therefore, BA shareholders would have to be happy with a small percentage of the surviving entity's capital stock or a very complicated ownership structure would have to be implemented.



Next flights: MEX-GRU (AM 77E), GRU-GIG (JJ A320), SDU-CGH (G3 73H), GRU-MEX (JJ A332).
User currently offlineBA787 From United Kingdom, joined Jun 2006, 2596 posts, RR: 7
Reply 19, posted (8 years 3 months 2 weeks 5 days 21 hours ago) and read 8890 times:

Quoting EddieDude (Reply 18):
UA, VS, etc. would be de facto displaced from it

I like that idea Richard Branson irritates me


User currently offlineMaxQ2351 From , joined Dec 1969, posts, RR:
Reply 20, posted (8 years 3 months 2 weeks 5 days 21 hours ago) and read 8842 times:

Quoting BA787 (Reply 19):
I like that idea Richard Branson irritates me

Haha me too...... I'm personally diehard pro-AA, they're my fave airline by a long margin, and I rather like BA too, so I would be all for a merger between the two even though that would be rather unlikely, as deliniated by everyone above. It would be a glorious day though if BA and AA could team up against Branson and systematically eradicate him from the market!!!

Now, for all you pro-VS people out there, bring on the  flamed  !!!

-Max


User currently offlineKen777 From United States of America, joined Mar 2004, 8278 posts, RR: 8
Reply 21, posted (8 years 3 months 2 weeks 5 days 21 hours ago) and read 8842 times:

I doubt if a merger is in the interests of either company. BA is doing far better than AA financially and won't want the burden. Neither company will want to give up LHR slots for it to happen.

What I do see is an anti-trust relief that will allow code sharing on flights over the Atlantic as well as both working together in areas of purchasing, maintenance, etc. In this area I think the governments have a responsibility to ensure that AA & BA are not disadvantaged when compared to the competition and the Bush Administration has been rather poor in this regard - as well as other issues.


User currently offlineORDPIA From United States of America, joined Jan 2006, 140 posts, RR: 1
Reply 22, posted (8 years 3 months 2 weeks 5 days 21 hours ago) and read 8842 times:

Quoting BA787 (Reply 16):
coul the airlines not purchase 50% of each other or is that not allowed either Will oneworld ever encourage merging of its airlines

Unfortunatly even this would be impossible as the current law which dates to 1940 only allows for 25% foreign investment in a US airline. There are also similar laws in the UK, as well as the say that the E.U. would have. The E.U. has been making themselves somewhat protected recently in regards to foreign investment.

If anyone knows the actual %age in the UK law it would be much appreciated.

Welcome to a.net BA787



Concorde 146 727 737 73G 742 744 752 753 762 763 772 773 300 319 320 321 343 346 CRJ ERJ ATR ATP CL604 LJ45 LJ60 BD700
User currently offlineJoost From Netherlands, joined Apr 2005, 3169 posts, RR: 4
Reply 23, posted (8 years 3 months 2 weeks 5 days 21 hours ago) and read 8825 times:

To answer in a bit more detail: in the current agreements, a BA-AA merger will not happen.

Have you heard of the Bermude II treaty? In a nutshell, it means that only 2 American and 2 British carriers can fly from Heathrow to the USA. Currently, these are American Airlines and United Airlines, and British Airways and Virgin Atlantic. This is also the reason why BMI or Continental don't serve LHR.

BA and AA together would have considerably more than 50% of the USA-London Heathrow market when merged, with very limited options for competition (only US and VS).

The American an European governments forbid AA and BA to do codesharing / revenue sharing on LHR-USA. You can see that even as they are both in OneWorld, they can not codeshare: yes, BA and AA compete with each other on LHR-ORD, whilst working together on MAN-JFK. Strange situation, I agree, but that's how it works.


User currently offlineSA7700 From South Africa, joined Dec 2003, 3431 posts, RR: 25
Reply 24, posted (8 years 3 months 2 weeks 5 days 20 hours ago) and read 8760 times:
AIRLINERS.NET CREW
HEAD MODERATOR

Quoting BA787 (Reply 2):
dont understand my friend am new to this and only 14 yrs of age

I'm sorry that I did not clarify the concept of anti-trust at first. As Max pointed out, a BA-AA merger would become an unstoppable "beast".

Quoting SP90 (Reply 5):
Why would BA and SA)">AA merging bring up anti-trust charges? There are lots of other airlines out there.

Taking it a step further, why merge the airlines within Oneworld, Skyteam and Star Alliance? So instead of having all these smaller airlines, you would have three big ones.

If I remember correctly, BA and American alone have about 40% of the UK-USA market share; which is quite significant in my humble opinion. Should BA-AA be allowed to merge, their sheer economies of scale would crush the "competition" in no time.

Simply merging airlines, within the big three alliances would be catastrophic. Should it ever be allowed, basically an oligopoly would be created. An oligopoly is a market which is dominated by a small number of sellers (oligopolists). Oligopolistic competition can give rise to a wide range of different outcomes. In some situations, the firms may collude to raise prices and restrict production in the same way as a monopoly.

Less airlines = less competition = higher fares

As matter of interest - SA and LH has recently been fined $8.24 and $1.27 million respectively, by the Competitions Commission of South Africa, for anti-competitive behavior.

The Competition Commission has fined South Africa's national carrier, SA R55m. Only five months ago, SA paid another fine of R45m for competition irregularities.

The latest fine came after the commission and SAA concluded a consent agreement concerning a number of complaints against the airline.

An investigation was conducted by the commission into various bilateral agreements between SAA and Lufthansa that deal with their relationship in respect of code share flights, which they both operate between Cape Town, Johannesburg and Frankfurt.

The commission found that the bilateral agreements created a platform for SAA and Lufthansa to collude and that the airlines had used the opportunity to fix the selling price of air tickets on these flights


Here is a link to the entire article:

http://www.moneyweb.co.za/shares/industrials/420054.htm

http://www.moneyweb.co.za/specials/corp_gov/467380.htm

Rgds

SA7700



When you are doing stuff that nobody has done before, there is no manual – Kevin McCloud (Grand Designs)
25 Avatordon : So long as there is no Open Skies treaty between the US & UK, which means no anti-trust immunity, ain't gonna happen. Besides, AA is a **very** aggres
26 BA787 : Any rules restricting BA workijng with oneworld. Could oneworld set up a comapny in the US and then buy AMR and BA lol then merge all of oneworld into
27 Wrighbrothers : Their aren't any rules as far as I'd know, but I doubt airlines like CX and IB would be happy about being absorbed into one airline, to defeat one ai
28 ClassicLover : It wouldn't happen... the Aussie's wouldn't want to lose QF to some mega airline, ditto with every other oneworld airline and their respective countr
29 BA787 : adfdition to my former Oneworld idea The airlines keep their own identities but work as a whole company i.e. staff wages and bank account. BA could bu
30 ORDPIA : Interesting thought, what would be possible is a group of investors setting up a firm that would buy, on the open market, a controlling stake of both
31 Tom12 : Wouldn't Dallas Law and UK Laws kinda stop such a merger? Tom
32 Jetdeltamsy : Only if ownership laws change in the U.S. One must remember that BA has a huge underfunded pension liability and AA competes in the domestic US market
33 Post contains images Bmacleod : Well maybe LH and UA can merge as well (Star). Or AF and DL (Skyteam)... What would be the purpose anyway of merging the largest carriers of two count
34 SPREE34 : I hope not. It would probably bring down the quality of the BA product. I try to always fly BA or VS to the UK and beyond. I found IB nice as well. I
35 RIXrat : I like the new name. British-American. From a marketing viewpoint, it sounds better than American-British. Besides, the BA ID sign would still work. J
36 Ikramerica : LHR-NYC BA-AA would dominate this market unless BII is abandoned.
37 Tom12 : I am a little confused, a merger like the HP-US merger or like the AirFrance-KLM merger? Tom
38 BA787 : if HP=America West then i mean a merger like Air France/KLM A whole company with two seperate corporate identitys
39 VV701 : In general there are no rules relating to take overs or mergers in the UK. So SQ own 49 per cent of VS and LH and SK own half less one share of BD. H
40 Floridaflyboy : Hey, good to see new interest I joined A.Net at 14. As for AA and BA merging, countries not connected by an alliance like the EU tend to frown on com
41 WunalaYann : I think this is a very valid point. I will not go into a discussion regarding AA's and BA's merits, but if OneWorld merged into one airline, would it
42 Post contains images M180up : US only serves LGW, i know you meant UA but couldnt resist
43 Notdownnlocked : Of couse they will both merge. It will happen just as soon as Thomas Jefferson and others within the US government apologize for the Boston tea party.
44 777STL : Oneworld is basically just an alliance. It isn't much of a corporation, if one at all. I'm not entirely familiar with the the corporate structure of
45 HunUtazo : AMR will purchase nwac..
46 SPREE34 : What will AA pay for this with?
47 HunUtazo : ge jp etc......................,
48 Post contains images BA787 : Remember i am jus speculating if the merger took place(not likely but humour me ) i would think that the extra money brought in from profitable airli
49 Post contains images WunalaYann : Considering the catastrophic state of some of the members, I doubt all the (little) money made by the most profitable airlines in the world would mak
50 BA787 : which of the oneworld members are in a catastrophic state
51 DFORCE1 : We will see this happen the day Canadian Airlines is resurrected from the dead![Edited 2006-06-04 11:12:44]
52 Post contains images BA787 : I know. If it happened i would envy the Chief Executive somewhat
53 Timboflier215 : I can't see BA/AA happening. AA would have to buy out BA, because of US ownership laws. This would be extremely expensive for AA, no doubt. And I'm no
54 BA787 : The British Public didnt seem too bothered when BAA was nearly taken over bu a foreign shipping company.It might help Brit-US relations which have be
55 BHMBAGLOCK : Actually, all of the major forces behind the anti-trust movement were Republicans, Taft, Teddy Roosevelt, Sherman, and later Reagan with the ATT brea
56 Post contains images WunalaYann : IB and AA do not exactly spring to mind when someone mentions "first rate service"... See ya, Y.
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