Dtwclipper From , joined Dec 1969, posts, RR: Posted (6 years 5 months 1 day 13 hours ago) and read 1361 times:
Merger talks between Northwest Airlines and American Airlines collapsed in 2000. Will they be forced to reconsider a partnership in 2007?
Some industry watchers believe it's possible.
Bob McAdoo, an airline analyst for Prudential Equity Group, said last week he thinks both American and Continental Airlines are reluctant to embrace mergers. But he argues they may have to pair up with others if the U.S. Department of Justice approves US Airways' proposed acquisition of Delta Air Lines.
The "most likely partner for American, in our view, is Northwest, bringing Asia and cementing control of the upper Midwest for American," McAdoo wrote in a research note.
TAN FLYR From United States of America, joined Aug 2000, 1847 posts, RR: 0 Reply 1, posted (6 years 5 months 1 day 12 hours ago) and read 1286 times:
The best strategy for AA may be to let things play themselves out and pick up strategic pieces that come available. AA's history of making mergers or acquisitions work is not that good. ( yes, 9-11 spelled doom to the TWA merger).
IF, infact, either of the hotly discussed mergers (US-DL, UA-CO) occur, there will be some intergration problems beyond anything we have ever seen. Not to even discuss the total lack of that with the HP-US deal.
IF either of these take place and subsequent reduction in capacity occurs, that just helps provide a bit more pricing power to AA on any of those routes that there is no LCC competition on.
Frankly, I think this is a house of cards...there is so much energy in the LCC marketplace with Southwest, Midwest, Air Tran, J Blue, etc that few domestic markets will remain that have any "premium" on them that a merged or not merged legacy carrier can claim.
IMHO, all of them MUST continue cost containment, more efficient fleets,pension reform, etc. to continue the road to profitability.
Just in the food for thought dept, oil is creeping back up..a WSJ article in the last few days indicates $70.00 oil by the end of Q1 2007. ANY further problems with IRAN, Iraq, or any other middle east producing country, Venezuela or Nigeria can send oil to $100.00 in just a few days. At that point, all bets are off on everything. No carrier would be able to withstand those costs in today's
marketplace. Several carriers would just simply fold, period. the ones left standing would be forced to reduce schedules to a level that would be profitable or operable on limited fuel availability. We would probably see an industry more like the early 1960's in terms of ASM's and affordabilty of fares.
Such a scenerio just finally prompt congress to get off it's axx and pass ANWR drilling, Oil Shales, and drilling off more of the US coastline. Politicians tend to react when there are lots of constituients unemployed..I remember it from 1973-74..that is what prompted finally building the Alaska pipeline.
OK..So I have digressed here. my apologies! My thought as far as AA is concerned is maybe they are the smartest here by sittling back...lettting the dust settle.