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Merger: AA, US Outcome If DL/NW, UA/CO Merge?  
User currently offlineIliriBDL From Germany, joined May 2007, 1205 posts, RR: 14
Posted (6 years 8 months 2 weeks 2 days 11 hours ago) and read 15417 times:

So it looks like the DL/NW deal is done and the merger will happen. Many are saying that would trigger a UA/CO merger and my question here is lets say those deals get done, what do you guys think would happen with American Airlines, US Airways, Southwest Airlines, and the rest? Do you see any other mergers happening within the year or you believe that the rest will stay put and continue their service.


delta.com
141 replies: All unread, showing first 25:
 
User currently offlinePilotboi From United States of America, joined Sep 2007, 2366 posts, RR: 9
Reply 1, posted (6 years 8 months 2 weeks 2 days 10 hours ago) and read 15390 times:

There must be like 4 other threads discussing this, but I just have one thing to say...US just finished merging with America West, so they don't need to do anything right now.

User currently offlineCIDflyer From United States of America, joined Apr 2005, 2362 posts, RR: 3
Reply 2, posted (6 years 8 months 2 weeks 2 days 10 hours ago) and read 15358 times:

it will be interesting to see what AA and US do. Will they decide to link up? Aside from the huge labor problems these two seem to have, their route structure doesn't really overlap too much. AA would be a major player in the important and large northeast market. LGA would probably be the main place where they overlap. CLT would be a good addition to the AA system for a southeast hub, where they have been fairly weak since the RDU closure back in the 90s. CLT rivals ATL as a major financial center in the SE and would be a good southeast hub for AA. AA would also gain the shuttle and a good presence at DCA. The questions remain would they retain a large presence at delay prone PHL? I could see them downsizing that a little, but it is still too big of a market to ignore. BOS would be sizeable but recently they have been downsizing there so would they decide to keep it? In regards to PHX, it would make a good western hub for them, but competition with low fare SWA is fierce there, question would be would they decide to keep the PHX hub or relocate those assets to LAX? Either way could be a way to build up the west coast again. I have a feeling though that these two have a lot more issues to deal with currently than trying to pull off a major merger.

As for Southwest, they could attempt a merger or buyout of AirTran.

[Edited 2008-04-13 18:25:04]

[Edited 2008-04-13 18:25:40]

User currently offlineSTT757 From United States of America, joined Mar 2000, 16907 posts, RR: 51
Reply 3, posted (6 years 8 months 2 weeks 2 days 10 hours ago) and read 15323 times:

I think CO may make a deal with AA to help offset the costs of a UAL takeover. AA is never going to be allowed to takeover UAL, so perhaps they could help CO digest UAL with an asset purchase. CO perhaps let's AA have UAL's NRT's rights and or gates at LAX in exchange for AA taking on some risk (debt) in the deal.

With regards to US, I can see WN being interested in acquiring US to make them their new ATA. US and WN are already big in PHL, PHX, LAS, BWI. WN could take over much of the domestic flying, US handles the International traffic.



Eastern Air lines flt # 701, EWR-MCO Boeing 757
User currently offlineWESTERN737800 From United States of America, joined Feb 2008, 693 posts, RR: 2
Reply 4, posted (6 years 8 months 2 weeks 2 days 10 hours ago) and read 15252 times:

Hopefully US and AA do nothing. With AA's merger record (Air Cal, Reno Air, and TW) it seems like they just tear things apart. With all of the US/AWA merger trouble thats been discussed on here I dont think they need any more problems. I think a combines US and AA would have disgruntled labor groups and a fleet nightmare.


Bring back Western Airlines!
User currently offlineKC135TopBoom From United States of America, joined Jan 2005, 12181 posts, RR: 51
Reply 5, posted (6 years 8 months 2 weeks 2 days 9 hours ago) and read 15089 times:

With the completion of the DL/NW merger, and if there is a CO/UA merger, US could be back in Bankruptcy (3) to be able to stay in business.

US may not be able to compete, except at CLT and PHX.

I doubt AA or WN could be hurt much with the mergers at DL/NW and CO/UA.

The biggest hurt would go to Airbus if all this happens.

[Edited 2008-04-13 19:31:33]

User currently offlineCommavia From United States of America, joined Apr 2005, 11979 posts, RR: 62
Reply 6, posted (6 years 8 months 2 weeks 2 days 9 hours ago) and read 15047 times:

I have long contended that the best thing for AA to do - at least in the shortrun - was nothing.

From a competitive standpoint, there isn't much of a threat that a combined DL-NW will pose to AA that it doesn't already face from both independently. And if they want to go merge - and take on all of the enormous costs, time and energy, plus management focus, that it requires - then let them do it.

AA has far bigger issues to deal with like labor costs and union contracts, and fuel costs, to be dealing with a merger. They should focus on running a profitable airline rather than spending billions integrating another airline that would - in the long-run - add very little value to AMR or its customers.

AA is already the world's largest airline (at least for now). The global AA network is already massive and expansive, and already serves most of the major markets around the world that travelers want/need to get to. Internationally, the only real hole in the network is - obviously - Asia. But as I've long said, AA need not spend billions buying another airline when they could spend far, far less setting up an Asian operation of their own in-house that would be more closely tied to their own network and strategic direction. Domestically, the only places where AA could afford to grow are out west, where it could easily pursue some sort of closer relationship (perhaps equity holding, but definitely not merger) with Alaska/Horizon, and in the East - where it could pick up a great hub in the south at CLT, plus a market-leading position in lots of high-yielding business markets in the Northeast, from US. There again - no need to spend billions on merging with another airline just to get the 2 or 3 pieces that they may actually want.

Quoting STT757 (Reply 3):
I think CO may make a deal with AA to help offset the costs of a UAL takeover. AA is never going to be allowed to takeover UAL, so perhaps they could help CO digest UAL with an asset purchase. CO perhaps let's AA have UAL's NRT's rights and or gates at LAX in exchange for AA taking on some risk (debt) in the deal.

I think this is the most likely outcome, if such a CO-UA deal is to occur.

AA and CO could split up United into pieces, with each taking things of strategic importance to them. The only issue that I think may arise here is that there isn't really much that United has that AA wants, overall, that CO would likely let them have if it held the lead in the deal. To me, the assets of prime strategic value to AA - the hubs in ORD, DEN and LAX, plus the slots at Narita and the rights in China - are pretty much all things CO would want. They'd likely let AA have LAX - and focus on SFO - and maybe also let them have some of the Narita slots. But the real cash cows AA would want - like ORD (which the government would resist anyway on market share concentration grounds) and the China rights - CO would clearly want.

Quoting STT757 (Reply 3):
With regards to US, I can see WN being interested in acquiring US to make them their new ATA. US and WN are already big in PHL, PHX, LAS, BWI. WN could take over much of the domestic flying, US handles the International traffic.

I highly doubt WN - or anyone - would want to go anywhere near the chaotic Frankenstein mess that US with a ten foot pole. WN is much smarter than that. With all of the time and energy they'd waste just trying to get the US house in order, they could have already set up a new airline to operate these flights for them, or for that matter just started doing it in-house themselves, probably at far lower cost. There is simply no need to spend billions buying another airline with lots and lots of things you either have no interest in that don't fit your business model (Northeast Shuttle, LGA/DCA slots, 2-class airplanes, etc.) and things you don't need anyway (hubs in PHX and LAS) just so you can get an airline with an overwater certification. It would just be a total waste.

If the impending and apparently soon-to-be-announced DL-NW deal does, indeed, spark off a new round of industry consolidation, I think that the most likely outcome for US - by far - would be some sort of a break-up. US is an example of an airline where its whole is worth less than the sum of its parts, and some parts are worth far, far more than others.

PHL is an absolutely insane operational mess, but it does cater to one of the largest and highest-yielding business markets in America, which might be hard for some other airline to resist.

CLT, similarly, is large and growing urban center with huge high-yielding business demand from the banking and finance sector.

PHX and LAS are worthless to just about any legacy airline - as they are Southwest territory.

The Northeast would be worth lots and lots to another airline without competitive issues who might be able to get in there - if DL merges with NW, and CO with UA, that leaves AA is pretty much the only buyer of most of the Northeast assets who wouldn't face a major regulatory hurdle.


User currently offlineAirFrnt From United States of America, joined Jul 2004, 2830 posts, RR: 42
Reply 7, posted (6 years 8 months 2 weeks 2 days 9 hours ago) and read 15044 times:

I think there is a non-trivial chance that WN buys a defunct F9. I think you may see a surprise bid by AA for a CO merger given the extreme disadvantage it might put AA at. I do think it's very likely that the end condition is three established legacies, several smaller LCC carriers playing a regional role.

User currently offlineFriendlySkies From United States of America, joined Aug 2004, 4120 posts, RR: 5
Reply 8, posted (6 years 8 months 2 weeks 2 days 9 hours ago) and read 14992 times:



Quoting Commavia (Reply 6):
AA and CO could split up United into pieces

Why does everyone assume UA will allow itself to be split up? Granted, Tilton hasn't been exactly quiet about his desire for merging, but at the same time, I really don't think he just wants to dump the company in any way he can. UA is also sitting on a mountain of cash.

I mean, if we're just going to speculate...why couldn't UA and AA split up CO?


User currently offlineKC135TopBoom From United States of America, joined Jan 2005, 12181 posts, RR: 51
Reply 9, posted (6 years 8 months 2 weeks 2 days 9 hours ago) and read 14990 times:



Quoting AirFrnt (Reply 7):
I think there is a non-trivial chance that WN buys a defunct F9.

I don't. WN only wants some DEN gates, not the Airbuses.


User currently offlineAirFrnt From United States of America, joined Jul 2004, 2830 posts, RR: 42
Reply 10, posted (6 years 8 months 2 weeks 2 days 9 hours ago) and read 14961 times:



Quoting KC135TopBoom (Reply 9):
I don't. WN only wants some DEN gates, not the Airbuses.

WN has explicitly stated that they do not feel it is a problem to go from a "non-boeing fleet to a all-boeing fleet" for any company purchases.


User currently offlineSTT757 From United States of America, joined Mar 2000, 16907 posts, RR: 51
Reply 11, posted (6 years 8 months 2 weeks 2 days 9 hours ago) and read 14943 times:



Quoting FriendlySkies (Reply 8):
I mean, if we're just going to speculate...why couldn't UA and AA split up CO?

Out of the three it is widely accepted that CO has the superior management team, which pretty much puts CO in the drivers seat.



Eastern Air lines flt # 701, EWR-MCO Boeing 757
User currently offlineDeltaflyertoo From United States of America, joined Nov 2000, 1663 posts, RR: 1
Reply 12, posted (6 years 8 months 2 weeks 2 days 9 hours ago) and read 14895 times:



Quoting CIDflyer (Reply 2):
Aside from the huge labor problems these two seem to have, their route structure doesn't really overlap too much. AA would be a major player in the important and large northeast market. LGA would probably be the main place where they overlap. CLT would be a good addition to the AA system for a southeast hub, where they have been fairly weak since the RDU closure back in the 90s. CLT rivals ATL as a major financial center in the SE and would be a good southeast hub for AA. AA would also gain the shuttle and a good presence at DCA. The questions remain would they retain a large presence at delay prone PHL? I could see them downsizing that a little, but it is still too big of a market to ignore. BOS would be sizeable but recently they have been downsizing there so would they decide to keep it? In regards to PHX, it would make a good western hub for them, but competition with low fare SWA is fierce there, question would be would they decide to keep the PHX hub or relocate those assets to LAX? Either way could be a way to build up the west coast again

A link up between AA and US is unlikely. You make some valid points regarding no route overlap and additions of presence, but the reality is US, MOST of US routes, hubs and customers, are all low yield. By merging w/ US, AA is up against WN big time, would probably have to bring US labor costs up a little (if not equal to AA's) and along w/ PHX and whatever is left of LAS being pathetically low yield, it would be a nightmare for AA. YES CLT, PHL (partially now being pressuured w/ WN) and LGA/DCA slots would be nice, but wouldn not be offset by the disadvantages of what I just wrote above, UNLESS instead of merging AA acquired US and then dumped everything but CLT, parts of PHL and the slots at LGA and DCA.

Quoting STT757 (Reply 3):
I think CO may make a deal with AA to help offset the costs of a UAL takeover. AA is never going to be allowed to takeover UAL, so perhaps they could help CO digest UAL with an asset purchase. CO perhaps let's AA have UAL's NRT's rights and or gates at LAX in exchange for AA taking on some risk (debt) in the deal.

Well the whole point of UAL+CO is to create an airline where the other guy is not strong. CO is HUGe to Europe and in the NYC area-and weak on nonstops from the US to Asia. UAL is HUGE to Asia and a little weak on the Europe. Giving away NRT slots would defeat the purpose of a UAL+CO merger.


User currently offlineCommavia From United States of America, joined Apr 2005, 11979 posts, RR: 62
Reply 13, posted (6 years 8 months 2 weeks 2 days 9 hours ago) and read 14875 times:



Quoting FriendlySkies (Reply 8):
Granted, Tilton hasn't been exactly quiet about his desire for merging, but at the same time, I really don't think he just wants to dump the company in any way he can.

That's precisely the message he's been sending to the world: somebody take this off my hands so I can get it with my golden parachute.

Quoting Deltaflyertoo (Reply 12):
Well the whole point of UAL+CO is to create an airline where the other guy is not strong. CO is HUGe to Europe and in the NYC area-and weak on nonstops from the US to Asia. UAL is HUGE to Asia and a little weak on the Europe. Giving away NRT slots would defeat the purpose of a UAL+CO merger.

Not necessarily if it greases the wheels and gets the deal done faster and easier.

Plus, throwing a few Narita slots - the slots, mind you, just the slots - at AA would be chump change. CO doesn't need nor want every single bit of UA's network.


User currently offlineSTT757 From United States of America, joined Mar 2000, 16907 posts, RR: 51
Reply 14, posted (6 years 8 months 2 weeks 2 days 8 hours ago) and read 14790 times:



Quoting Deltaflyertoo (Reply 12):
Giving away NRT slots would defeat the purpose of a UAL+CO merger.

Not at all, CO would still gain all those nonstops to China from IAD, ORD, SFO. And CO can utilize SFO as an West Coast EWR, combined with CO's 787s on order and they can connect many Cities in Asia nonstop straight to SFO. Allowing for more connections than going via NRT, kind of like how DL gave up on the FRA hub in favor of routing all their traffic through ATL, CVG and JFK.



Eastern Air lines flt # 701, EWR-MCO Boeing 757
User currently offlineBAW716 From United States of America, joined Nov 2003, 2028 posts, RR: 27
Reply 15, posted (6 years 8 months 2 weeks 2 days 8 hours ago) and read 14731 times:

I'll keep this short (prior to other contrary posts...)

If DL and NW do the deed...and Delta is the surviving carrier, NW will lose its Golden Chit. DL and AF/KL will do a deal that will make them a global powerhouse in SkyTeam.

CO and UA will merge, with CO being the surviving carrier...and CO will go to STAR (not without a fight from SkyTeam though). CO will do what UA could not with STAR and LH will not be as dominant a force in the alliance as they are today (don't get me wrong...I actually like LH...it's just that CO won't come into STAR without a whole lot of guarantees...).

USAirways...nobody on the horizon for them...unless of course, they do a deal with CO as being the two US players in STAR Alliance and get the anti-trust immunity to coordinate their schedules, fares, etc...unlikely, but one never knows??

AA could be the big loser...nobody for them either...and that is BAD news, because AA going up against CO with UAs Pacific Routes and Delta, with NWs Pacific routes, it's going to be a rough ride for the 'boys in Dallas.

However, if there is one airline that can survive on its own (beside Southwest, which could survive almost anything), it's AA. They could go back to BA and put together a stronger co-op deal than before and with European Open Skies...they just might be able to pull it off this time.

Of course, my crystal ball is just as murky as the next guy's...

baw716



David L. Lamb, fmr Area Mgr Alitalia SFO 1998-2002, fmr Regional Analyst SFO-UAL 1992-1998
User currently offlineCommavia From United States of America, joined Apr 2005, 11979 posts, RR: 62
Reply 16, posted (6 years 8 months 2 weeks 2 days 8 hours ago) and read 14674 times:



Quoting BAW716 (Reply 15):
AA could be the big loser...nobody for them either...and that is BAD news, because AA going up against CO with UAs Pacific Routes and Delta, with NWs Pacific routes, it's going to be a rough ride for the 'boys in Dallas.

Again, I could be wrong, and certainly there are many who share the same view as you - but I just don't see it.

I simply fail to see how other major carriers merging is going to be that massive of a competitive threat to AA. Sure, it's now going to mean one competitor flying to Asia and Europe versus two flying mainly to one or the other each.

But this whole argument that these combined airlines will be able to use their combined market share and network penetration to gain competitive advantage over other airlines just hasn't worked out in the past - it just simply hasn't happened.

AA has an excellent and well-balanced network as it is - like you said, if any of the legacy airlines could survive on their own, it probably would be AA.

As I see it, the only real gaps and opportunities for growth are (in no particular order):

1) Asia/Pacific
2) Northeast (New York/Boston/Washington)
3) Southeast
4) West

All four of the above could easily be taken care of without much hassle and for far, far less than AA would pay buying and digesting another massive airline, along with all of its hassles and problems.

As I outlined in another thread, my rough calculations estimate that, for a total sticker price of about $4-5 billion, AA could:

1) buy a few slots at Narita, plus buy or lease some 777s and 777LRs, and set up its own operation with nonstop flights from LAX and ORD to major markets in Asia (most all of which, except China and Japan, are already Open Skies)
2) buy requisite slots and gates to expand their presence in the Northeast corridor (LGA and DCA especially)
3) take over US' CLT hub and gain a foothold in the rapidly-growing Atlantic Southeast region at the only viable alternative regional hub to ATL, and back-up and support the MIA hub
4) deepen and strengthen the alliance with AS/QX to bolster AA's presence up and down the West Coast

Again, by my estimates, this all could be done and accomplished in far less time, and for far, far less money, then if AA were to go out and buy an entire other airline (a la DL-NW, or perhaps CO-UA) for just the few parts it actually wants/needs.


User currently offlineAvek00 From United States of America, joined Oct 2004, 4417 posts, RR: 19
Reply 17, posted (6 years 8 months 2 weeks 2 days 8 hours ago) and read 14660 times:



Quoting BAW716 (Reply 15):
CO and UA will merge, with CO being the surviving carrier...

Honestly, if it's a merger of "whole" carriers, CO would not be in control much beyond in name only. Sure, Kellner et. al. might run the combined airline, but the numbers game makes it plainly evident that United's ways of doing things would generally win out.



Live life to the fullest.
User currently offlineCommavia From United States of America, joined Apr 2005, 11979 posts, RR: 62
Reply 18, posted (6 years 8 months 2 weeks 2 days 8 hours ago) and read 14649 times:



Quoting Avek00 (Reply 17):
Sure, Kellner et. al. might run the combined airline, but the numbers game makes it plainly evident that United's ways of doing things would generally win out.

I'd doubt it, since Continental is - without question, indisputably - the better-run company with the far, far better "ways of doing things" in terms of fiscal stewardship and sound management.

If anything, I suspect it would be the other way around: the United name would be retained, but based in Houston and run by Continental's present (extremely talented and competent) management.


User currently offlineUnited1 From United States of America, joined Oct 2003, 6132 posts, RR: 9
Reply 19, posted (6 years 8 months 2 weeks 2 days 7 hours ago) and read 14615 times:



Quoting STT757 (Reply 11):
Out of the three it is widely accepted that CO has the superior management team, which pretty much puts CO in the drivers seat.

Be careful in that assumption, while CO has a great management team, CO is half the size that UA is and if AF gets involved in the DL/NW tie up it is almost certain that LH will jump into play. With LHs backing UA could very easily become the acquiring carrier. While I feel (and have said in the past) that this will be a merger of equals if LH gets in the mix anything is possible. One thing is for sure UAs and COs interests will both be protected and I don't think that means splitting up either company. Heck I even think CLE could stick around as a hub its well positioned to act as a reliever hub for ORD, EWR and IAD.

While I firmly believe that Tilton and Co. need to step aside it has nothing to do with them being incompetent, in fact I believe they did a bang up job of bringing the carrier through BK. However at this point they need to go simply because they carry with them all the associated baggage that happened during BK (pensions, wage cuts, layoffs) a new upper management team, with a more developed vision, would be a great boost to labor relations. Lets face it I the biggest problem with morale at UA right now is that the company is stagnant, even a small aircraft order and a few new routes would be a great boost.

Anyrate just the ramblings of a 29yo.....later y'all



Semper Fi - PowerPoint makes us stupid.
User currently offlineBAW716 From United States of America, joined Nov 2003, 2028 posts, RR: 27
Reply 20, posted (6 years 8 months 2 weeks 2 days 7 hours ago) and read 14604 times:



Quoting Commavia (Reply 16):
But this whole argument that these combined airlines will be able to use their combined market share and network penetration to gain competitive advantage over other airlines just hasn't worked out in the past - it just simply hasn't happened.

AA has an excellent and well-balanced network as it is - like you said, if any of the legacy airlines could survive on their own, it probably would be AA.

That's why I said it...if any US carrier could survive on its own...it's AA.

Of course, they're Texans...

Quoting Commavia (Reply 18):
'd doubt it, since Continental is - without question, indisputably - the better-run company with the far, far better "ways of doing things" in terms of fiscal stewardship and sound management.

If anything, I suspect it would be the other way around: the United name would be retained, but based in Houston and run by Continental's present (extremely talented and competent) management.

I agree, but the guys in Houston aren't going to let the Continental name go away.

Oh yeah, and these guys, they're Texans too.

I'm not from Texas...but I've sure known my share of 'em...they don't give up without a fight. Ever.

baw716



David L. Lamb, fmr Area Mgr Alitalia SFO 1998-2002, fmr Regional Analyst SFO-UAL 1992-1998
User currently offlineAvek00 From United States of America, joined Oct 2004, 4417 posts, RR: 19
Reply 21, posted (6 years 8 months 2 weeks 2 days 7 hours ago) and read 14594 times:



Quoting BAW716 (Reply 20):
I agree, but the guys in Houston aren't going to let the Continental name go away.

Much as I love CO, Kellner et. al. would be downright foolish to give up the United brand name and it's tie to Rhapsody in Blue.



Live life to the fullest.
User currently offlineUnited1 From United States of America, joined Oct 2003, 6132 posts, RR: 9
Reply 22, posted (6 years 8 months 2 weeks 2 days 7 hours ago) and read 14577 times:



Quoting BAW716 (Reply 20):
Oh yeah, and these guys, they're Texans too.

Actually Larry is from South Carolina  Smile



Semper Fi - PowerPoint makes us stupid.
User currently offlineMasseyBrown From United States of America, joined Dec 2002, 5604 posts, RR: 7
Reply 23, posted (6 years 8 months 2 weeks 2 days 7 hours ago) and read 14569 times:



Quoting Commavia (Reply 18):
If anything, I suspect it would be the other way around: the United name would be retained, but based in Houston and run by Continental's present (extremely talented and competent) management.

It does seem inevitable, though, that CO's panache will be overwhelmed by the huge mass of the UA component until the crowd-pleasing style can be retaught and relearned by the combined company in the new environment. The risk is that it cannot be retaught - old United dog, new tricks, etc. - and that some new lesser standard of service will prevail, costing the company its yield premiums and high-fare business.



I love long German words like 'Freundschaftsbezeigungen'.
User currently offlineLAXdude1023 From India, joined Sep 2006, 7812 posts, RR: 25
Reply 24, posted (6 years 8 months 2 weeks 2 days 7 hours ago) and read 14522 times:



Quoting Commavia (Reply 18):
If anything, I suspect it would be the other way around: the United name would be retained, but based in Houston and run by Continental's present (extremely talented and competent) management.



Quoting BAW716 (Reply 15):
I'll keep this short (prior to other contrary posts...)

If DL and NW do the deed...and Delta is the surviving carrier, NW will lose its Golden Chit. DL and AF/KL will do a deal that will make them a global powerhouse in SkyTeam.

CO and UA will merge, with CO being the surviving carrier...and CO will go to STAR (not without a fight from SkyTeam though). CO will do what UA could not with STAR and LH will not be as dominant a force in the alliance as they are today (don't get me wrong...I actually like LH...it's just that CO won't come into STAR without a whole lot of guarantees...).

USAirways...nobody on the horizon for them...unless of course, they do a deal with CO as being the two US players in STAR Alliance and get the anti-trust immunity to coordinate their schedules, fares, etc...unlikely, but one never knows??

AA could be the big loser...nobody for them either...and that is BAD news, because AA going up against CO with UAs Pacific Routes and Delta, with NWs Pacific routes, it's going to be a rough ride for the 'boys in Dallas.

However, if there is one airline that can survive on its own (beside Southwest, which could survive almost anything), it's AA. They could go back to BA and put together a stronger co-op deal than before and with European Open Skies...they just might be able to pull it off this time.

Of course, my crystal ball is just as murky as the next guy's...

baw716

For the most part I think this is a pretty accurate assesment. I do think AA will be fine one way or another. I really dont think the combined carriers are going to be that damaging to them. Even if it makes AA the smallest of the three. CO is smaller than AA, UA, DL, and NW and I would venture to say they are very successful.

Quoting Commavia (Reply 16):
1) buy a few slots at Narita, plus buy or lease some 777s and 777LRs, and set up its own operation with nonstop flights from LAX and ORD to major markets in Asia (most all of which, except China and Japan, are already Open Skies)
2) buy requisite slots and gates to expand their presence in the Northeast corridor (LGA and DCA especially)
3) take over US' CLT hub and gain a foothold in the rapidly-growing Atlantic Southeast region at the only viable alternative regional hub to ATL, and back-up and support the MIA hub
4) deepen and strengthen the alliance with AS/QX to bolster AA's presence up and down the West Coast

One thing that I think is very important is for AA to get more routes to China for sure. At some point AA needs to be flying: LAX-PVG/PEK and (probably next on the list) DFW-PVG (I believe this could be a big one for them). Im sure AA will also try and expand ORD-Asia at some point.

I would love to see AA get a better foothold in the Southeast, but I dont know if AA could just "take over" CLT. I wish they could. I would love to see it. Even though CLT rivals ATL for the Business center of the Southeast, could AA do this with RDU?

AA already has a good relationship with AS, is there more they could do without buying into them?



Stewed...Lewd...Crude...Irreverent...Belligerent
25 BAW716 : I don't think so. First, AS is a very independent carrier. I don't think they'd go with anyone willingly...right now they have it too good: Strong ma
26 Post contains images Aaway : Regarding AA, as I've stated previously (though Commavia has been the leading advocate), I too believe there are too many internal distractions for AA
27 CALPSAFltSkeds : While everyone talks of cost savings and synergy between carriers in a merger, with today's $100+/barrel oil and an economy that may be headed downwar
28 Njdevilsin03 : Kinda confused still...If UA and Co merge which name will remain will it be Continental after the merger or united?
29 Jetdeltamsy : Well. That may be your spin on things. But if DL/NW and UA/CO happens, USAir will have to do something or end up the smallest and weakest LCC out the
30 BAW716 : An excellent question. I would answer this way: It depends on who you talk to... AS of and by itself has the largest west coast presence of any airli
31 PavlovsDog : I can see US Airways being the target of a private equity fund takeover since, as mentioned, the sum of it's parts is worth more than the whole. The c
32 XJETFlyer : I can see several things happening if CO does a merge also and all this happens. I think we will see a major airline crash for sure now. This is not g
33 Post contains images CV880 : And a big battle with labor as a 'chaser'...[Edited 2008-04-14 00:38:26]
34 Lufthansa : I doubt the folks in texas would really have the final say. I'd say some folks up in Manhattan that work in glass towers for big banks and investment
35 StarGoldLHR : Contented Airlines ? maybe. More importantly will it be a Star Alliance Continental or a Sky Team United ? I know which way I would want it to be.
36 UAL777UK : I am sure LH is sitting on the sidelines waiting to see what UA and CO do. They are "very close" to UA, they could help UA buy CO, with Tilton and his
37 Lufthansa : This is EXACTLY what I think will happen. The UA name is too big to many places for them to pick CO despite what the CO lovers on here may be wishing
38 Par13del : Interesting reading, however, I tend to take things slowly, so lets look beyond the merger to the merger itself, as in DL and NW, what happens, all ta
39 Warszawa : Unicon Dental Ucon Co-United Conted Counted Tinted The possibilities are endless.
40 DC8FanJet : You can be certain that LH isn't going to allow AF/KL/DL/NW hook-up go unchallenged, and LH has a large war chest right now, over $2b profit last yea
41 Hiflyer : The problem with a lot of this speculation is that it is granted that someone wants AA....and no US major does. AA has has a pretty solid rep of screw
42 Falcon84 : US could be in big trouble. Despite the merger with HP, they still don't have the size and muscle, especially on the international front, to compete w
43 Commavia : Absolutely. If AMR wanted to, they could start a tender offer to buy a substantial minority stake in AAG today if they wanted to. They could pick up
44 EMB170 : Others on this forum have it correct...AA doesn't need to merge with anyone right now. Tactically, it makes more sense for AA to focus on their own op
45 EXAAUADL : I think AA should do nothing and let the others implode......NW/DL will be so focused on the merger they will allow service to slip and will ignore th
46 EXAAUADL : I think that is basically right and the precedent was UA/US. AA positioned itself not to merger with another carrier in response to UA/US but to take
47 Commavia : Agreed. I have long said that CLT has - by far - the strongest fundamentals of all of US' hubs. PHL is a mess, and PHX and LAS are low-yielding hubs
48 EMB170 : I maintain they'd want some of it. I agree that US's management of PHL is horrendous and that AA would be foolhardy to undertake the same scale of op
49 LAXdude1023 : I too think the UA name will remain. Its just too widely know. However, I think Larry and the boys will be running the show from Houston. Since most
50 Commavia : I just don't see it. The PHL-Northeast market is now being swamped by Southwest in the major markets, and many of the smaller markets can just as eas
51 Avek00 : Sure, I very much see CO management in the driver's seat, but they would soon encounter numerous "Brick Walls by United", as UA's corporate culture a
52 Catdaddy63 : I doubt we will see AA do much anytime soon. If some of these other merger ideas come to fruition, AA might be interested in purchasing some bones. If
53 Commavia : I sincerely hope that's not the case, because CO is one of the best-run airlines in America (and the world) these days. But - you raise a very good a
54 LAXdude1023 : AA's pilots should be able to make an exception. They have before. I realize their not very flexable, but give that PVG is the only other destination
55 Commavia : But that would mean meeting Gerard Arpey half way, which is out of the question seeing as he is a an incompetent, lying, murderer.
56 Davidlc3 : One thing I'm not ready (or may have just overlooked ) is the future of IAD in a CO/UA merger. CO's EWR is far and above superior to UA's IAD yet are
57 EMB170 : [quote=Commavia,reply=50]The PHL-Northeast market is now being swamped by Southwest in the major markets, and many of the smaller markets can just as
58 Commavia : LAX yes, but I see no reason for AA to have any interest in IAD. Possible, I suppose, as a good balance with JFK a few hundred miles north, but I jus
59 MasseyBrown : I think IAD is big enough and important enough to coexist with EWR, even if they are just 200 or so miles apart. It also offers the benefit of room f
60 EXAAUADL : That was tried once before in 1989, and indeed the folks in TX had the final say, not manhattan yeah, like the good culture of CO wont be totally des
61 Kiwiandrew : who moved GUM to the South Pacific ? So far as I am aware COs South Pacific network consists of a twice weekly GUM-CNS flight - I am not sure how one
62 Kanebear : Perhaps under Bethune things were that way but Kellner and co have a very different style. Still very astute management but very dialled back on rhet
63 Jfk777 : IF NW/DL & CO/UA merge they would have to sell something to make the mergers go through. AA would be the natural buyer of these assets, slots & landi
64 Ken777 : If there is a DL/NW deal going through I think that AA will probably use it as leverage to get what they really want - AA/BA ATI. The DL/NW merger wou
65 SPREE34 : Why? If it's about those Boeing "handshake" or "gentleman's agreement" deals you can forget them. These mergers would bring large fleets of both type
66 EMB170 : Wow, tricky point here. IAD and EWR both have their reasons for being...EWR being an international airport that serves the largest commercial center
67 Cubsrule : That doesn't sound like much change from where either city is currently. Would BRU stay because of Washington-E.U. traffic? I would think so. If so,
68 Gigneil : Here's the thing with Dulles vs EWR: Newark sucks. Not because of CO or the airport itself, but the reality is that the weather, the traffic condition
69 XJETFlyer : Is it me or does it seem AA will be the loser if all this happens. Where does AA stand right now. Customers are unhappy. What about their a/c? Are the
70 Avek00 : Thing is, a merger will likely cause DL and CO to both lose that focus, since the money and manpower that could be spent on innovation and product en
71 B707forever : If my friend who works for AA over 35 years is correct, they are in for a very very tough 6 months, minimum. He's fearful the airline won't survive t
72 Tango-Bravo : Since the pending DL/NW and possible CO/UA mergers will (yes, will) result in longterm (at least 2-3 years) of operational and customer service dysfu
73 Gigneil : I don't necessarily agree. I believe there are probably a number of sacrifices made to optimize connecting traffic at that hub. NS
74 Cubsrule : Great point. I think those frontline employees that care deeply are still out there (I've seen them). Management needs to find a way to encourage it.
75 Allstarflyer : I checked for Frontier's name in this thread and couldn't find it - I'm surprised, because I keep reading that US is merge-happy - I wouldn't be surpr
76 Rockinflyer : As for a UA/CO merger, I can only hope the United brand disappears completely. The only logical thing would be to keep it all Continental. As for WN,
77 PlanesNTrains : How would this mitigate the issues of runway layout or weather problems? As it is, if they pulldown any capacity there appears to be a desire for at
78 FriendlySkies : Why is that the only logical thing?
79 Commavia : I think arguments could be made for both brands. Continental is stronger in some places, while United is stronger in some places. It would happen. It
80 Gigneil : Lots of ways. Reduced traffic has a positive effect on airport performance, especially as a result of weather. If capacity at EWR is reduced, or even
81 Allstarflyer : It would help in terms of volume, at least. For other carriers to increase capacity, CO may have to give up gate space for others to expand, and who
82 Halls120 : Yes, the EWR CO terminal is nice. But add some bad weather and NYC ATC operating at capacity, all you have is a nice terminal and 2 to 3 hour delays.
83 PlanesNTrains : I don't disagree with any of the comments, but I just wonder how realistic it would be to expect a Continental pulldown to not result in other carrie
84 Rockinflyer : Sorry, but flying as much as I have, UA has always been a mess. I know its a personal thing, but I can honestly say I have NEVER had so much as just
85 Allstarflyer : Honestly, I don't either, but that's why I said . . . . . . it's just that I envision EWR having issues like ORD - not enough gates for everyone who
86 FriendlySkies : Oh I see...so because you had a few bad experiences on UA, CO's brand is obviously worth more. Enjoy flying Delta.
87 Allstarflyer : Agreed on CO being much more efficient but UA has solid in-flight experience, IMO. I think there's plenty more that UA can bring to the table besides
88 Continental180 : agreed. Flew United once, and will never fly them again, unless continental mergers..Continental on the other hand, as newark being my main airport,
89 MoMan : I don't understand your point that AA needs to grow in the southeast. Heck, they have a mega-hub in MIA that serves many cities in the southeast. Pic
90 Continental180 : i mean, exactly, its 50/50.....if you go to Asia, you got United. if you go to europe, you got continental..if you go to latin america, its continent
91 Gigneil : The thing is, it isn't even close to 50/50. United is a massively larger airline that covers more of the population than CO, with hubs really just in
92 777law : This may be repetitive since I have not read the entire thread, but my understanding is that a UA - CO deal would have Kellner & Co. running the airl
93 Continental180 : old managment team. before Larry and his team came in...which they have turned it around.... that is a fact.
94 MoMan : I'm not sure that too many people consider the Continental of today the same as in the 1980s and early 1990s, especially with Gordo and his big mouth
95 Gigneil : Facts and perception have nothing to do with each other. NS
96 Commavia : CLT serves a market MIA can't: smaller communities in the southeast that are reliant on only two major alternatives today: Delta and USAirways. MIA i
97 MoMan : While I agree with you, I do NOT believe that AA can become a viable competitior in the South. First, what demand there is already is handled by Delt
98 Commavia : Perhaps we're talking about different markets. I'm not talking about Southwest flights to Jackson and Raleigh and Jacksonville. I'm talking about mar
99 Tak : I agree!!! I think an interesting question is what pieces will US and AA try to poach to satisfy anti-trust regulations. I bet US and AA are making t
100 Gigneil : I don't think there will be any divestitures necessary. Not enough overlap. Antitrust divestitures require that no competitor be able to enter the mar
101 MoMan : My belief is that Delta has a decent lock on those markets, many served by turboprop or RJ aircraft. US is a decent competitor and AA would certainly
102 ERJ170 : If AA wanted to compete or felt that they needed to compete in Southeastern US, they would not be looking at US for CLT. CLT adds no more demographics
103 Gigneil : Sorry boss, I know you love RDU. CLT is a massively better hub, a better market, a better economy, and a better location. RDU can't even begin to comp
104 ERJ170 : CLT is a massive better hub = I agree.. the infrastructure is already there.. CLT is a better market = uhmm.. that's one opinion.. CLT is a better lo
105 Gigneil : Economically they are nowhere near similar. Charlotte is one of the driving economic forces in the country and on a per capita basis far wealthier. Ch
106 ERJ170 : Median Income (CLT: $66,977 vs RDU: $70,890) Job Growth (CLT: 8.9% vs RDU:13.99%) Home price (CLT: $218K vs RDU: 226K) Population (CLT: 596K vs RDU: 3
107 XJETFlyer : CO has been on lots of covers of magazines for doing well. They are always in the news with lots of positives. UA is not better known. I think saying
108 Commavia : It really depends - it's not as cut and dry as one being definitively "better known" as a brand then the other. In some places - like Asian business
109 Ckfred : AA has not bought other carriers with the idea of tearing them apart. AA just seems to have a knack for bad timing. The Air Cal merger tanked, becaus
110 Post contains images Aaway : Well I know we agree that any prospective AA merger is fraught with high risk, given the current business climate. Additionally, it would now seem th
111 Cubsrule : Maybe west of ATL, but for markets in the Carolinas, Virginia, and Tennessee, DL and US compete fairly well (for much of Alabama, Mississippi and Lou
112 EMB170 : These are VERY valuable markets, especially with the dollar at an all time low and foreign investment in the US (and specifically the Southeast) on t
113 EMB170 : BTW, I also say that if AA chooses a dancing partner (and I don't agree they need one) that FL would make a much better partner for AA: Turn-key hub i
114 EXAAUADL : AA would drop every single one of FL routes within a year. Why would AA want to be a distant second to DL in ATL?
115 Commavia : Indeed. Delta would eat AA alive in Atlanta. The only reason AirTran has been able to survive is because they are lower-fare and lower-cost. Atlanta
116 EXAAUADL : AA would never open a hub in ATL and be gate constrained to 200+ flights per day when DL has 1000.
117 Davidlc3 : I will agree with you but also note that it does not really matter what Joe-American knows or thinks...the business community, however does matter. A
118 Jfk777 : IF AA were to go shopping then Alaska could be a great acquisition. That is a niche market with little chance of LCC entrance. AA is good in the lower
119 MAH4546 : I personally feel that AA does need to merge to becoming stronger, and am sick of how they sit and do nothing as they deal with incompetent unions (no
120 Post contains links IliriBDL : US Airways mum on Delta-Northwest merge http://www.bizjournals.com/phoenix/stories/2008/04/14/daily15.html US Airways Group Inc. declined comment Tues
121 PlanesNTrains : What would be left? And why keep it? Hopefully they'd be able to leverage the existing US market position if they cut back. Like LAX to AA? What else
122 Commavia : Okay, but if your plan for integrating US into AA is to essentially cut back on most of its major hubs - closing LAS completely and significantly cut
123 Flighty : I don't see why close PHL. PHL makes good, good money for US, and as for delays, it is probably superior to both JFK and EWR at the present time. So
124 Halls120 : The idea of any airline taking on the disaster that is US Airways PHL operation is, putting it kindly, lunacy.
125 Flighty : Why didn't they do that several years ago? Were they sleeping?
126 Cageyjames : Agreed, PHL's problem is probably more management than anything.
127 Commavia : Asked. And answered: There was no competitive need, then. But now, if AA is feeling a bit threatened by Delta-Northwest and United-Continental, but s
128 Cubsrule : I don't disagree with anything you've written here. Where does this leave PHL, though? Do they just call it quits? The ability to route a lot of dome
129 Commavia : Right there between Newark and Baltimore, still bogged down with lazy rampers, daily ATC flow delays, and horrific scheduling issues. Absolutely not.
130 Bernsa : If US sold off DCA and LGA they may as well just fold up shop now. Equivalent to them of TWA selling the TATL routes to AA.
131 Commavia : That may well be the ultimate result.
132 CIDflyer : One thing to look at the potential of success of AA in the southeast is the former Delta hub at DFW. Many small to mid sized Delta dominated cities l
133 CrAAzy : I think some people forget that AA plans on taking delivery of 23 738s next year and have some 30+ planes (mostly Super 80s) parked in the desert. I'm
134 Cubsrule : I've connected domestically at MIA, and while it's a viable option for a few cities--mostly or exclusively in Florida-- it's no good for most domesti
135 AirFrnt : The only carrier that would possibly consider buying F9 is a carrier already at DEN. WN and UA. No one else would willingly involve themselves in a L
136 EMB170 : Absolutely. I've said it many times, I'll say it again: PHL exists as a hub *because* of US. No other carrier would touch it with a 39 1/2 foot pole.
137 MoMan : Amen to this. Only rational response to their stupid overture to buy Delta. Dougie only bought US Airways because AW was at the end of their road as
138 CrAAzy : AA would be competing with two tough hub cities with ATL, NYC (JFK,EWR), and to a lesser extend IAD as an international gateway for SE traffic. Once
139 Cubsrule : MIA's location precludes that. Let's take JAX (which I would argue is about the farthest north from which MIA MIGHT be a viable connecting hub). Let'
140 Pixpixpix : deleted - wrong thread..[Edited 2008-04-17 10:11:28]
141 Post contains links Vega : IMO, it is very premature to forecast that CLT is a "crown jewel" in the US network and a major asset to entice an acquirer. CLT has a little over 1/2
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