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AA/US Merger=Fare Hikes + US Future?  
User currently offlineSWALUV From United States of America, joined Apr 2012, 113 posts, RR: 0
Posted (2 years 4 months 1 day 11 hours ago) and read 7737 times:

Hey Everyone,

Found this on USA Today: http://travel.usatoday.com/flights/s...rn/54473796/1?loc=interstitialskip

Found this in particular very interesting.

" If the airlines merge, the combined carrier would be called American Airlines and be based in American's home of Fort Worth, according to Capt. Dave Bates, president of the Allied Pilots Association."

Also:

""US Airways is in a position where if it doesn't merge, it's going to die,""

Do we think he has a point here that if US doesn't merge, they will go belly up?

FYI sorry if this is a re-post checked the blue button but it said everything was fine.

[Edited 2012-04-23 12:15:14]

20 replies: All unread, jump to last
 
User currently offlineseatback From United States of America, joined Mar 2002, 764 posts, RR: 0
Reply 1, posted (2 years 4 months 1 day 10 hours ago) and read 7619 times:

Quoting SWALUV (Thread starter):
""US Airways is in a position where if it doesn't merge, it's going to die,""

Do we think he has a point here that if US doesn't merge, they will go belly up?

Pretty blunt talk.

No matter what Doug Parker says, US needs this merger far more than AA does.


User currently offlineEricR From United States of America, joined Jul 2010, 1904 posts, RR: 1
Reply 2, posted (2 years 4 months 1 day 10 hours ago) and read 7613 times:

Comments like the one Joshua Shank makes in the article stating that it US does not merge, then it will die leads me to the conclusion that many of these columnists/analysts, etc. do not fully understand the industry that they are reporting on. Does he honestly believe that in order to be a profitable, viable carrier that US has to merge?

A merger with AA definitely strengthens US, but to say it will die without a merger is way overblown. If this is the case, then all carriers outside of DL, UA, WN are doomed.


User currently offlinedeltaflyertoo From United States of America, joined Nov 2000, 1647 posts, RR: 1
Reply 3, posted (2 years 4 months 1 day 10 hours ago) and read 7486 times:

I'm glad you posted this, I was just going to ask the same. I too don't get why US would go belly up. Debt and past issues and union stuff aside, lets say they had zero debt, and took delivery of the A350s and really beefed up Int'l service from PHL to like Asia and Middle East, etc. and even joined say One World Combined w/ position and CLT and DCA how could that not be viable?OR lets say US merged w/ B6 and got solid JFK presence.

Me thinks if US went belly up it would be do to another downturn in economy and too much debt and union issues which are irrelevant to a merged industry. Its my opinion only that only DL really has strong east coast/southeast presence, any biz fliers who need to go anywhere in world could do so on an expanded US without having to transition out west.

Also, can someone explain why it would not be beneficial to say put US and B6 in OneWorld? Why is it better to have them merged as a mega carrier?


User currently offlineripcordd From United States of America, joined Apr 2000, 1159 posts, RR: 1
Reply 4, posted (2 years 4 months 1 day 9 hours ago) and read 7375 times:

maybe this is just talk to get USAIR unions to go along with the plan?

User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17428 posts, RR: 46
Reply 5, posted (2 years 4 months 1 day 9 hours ago) and read 7335 times:

Quoting EricR (Reply 2):
Does he honestly believe that in order to be a profitable, viable carrier that US has to merge?

It either has to get a revenue premium, which will come from a merged network, or lower costs to match the revenue discount, due to an inferior network.



E pur si muove -Galileo
User currently offlineMaverick623 From United States of America, joined Nov 2006, 5592 posts, RR: 6
Reply 6, posted (2 years 4 months 1 day 8 hours ago) and read 7228 times:

Quoting SWALUV (Thread starter):

""US Airways is in a position where if it doesn't merge, it's going to die,""

        

Has someone told this doofus that it's not 2005 anymore?



"PHX is Phoenix, PDX is the other city" -777Way
User currently offlinejoeljack From United States of America, joined Feb 2005, 937 posts, RR: 0
Reply 7, posted (2 years 4 months 1 day 8 hours ago) and read 7188 times:

Myself and many others I know in the midwest, MCI, DSM and OMA fly US Airways as loyal Star Alliance fliers. (ie United fliers). If US buys AA and goes into Oneworld, all those fliers are going to be pushed away from US and back to UA. This will benefit UA and US will loose many passengers. My brother-in-law was very excited for a new OMA-CLT connection and has several flights booked already on them. He is loyal to Star and will go back to UA if US leaves star.

I think that US would benefit by joining AA but would benefit even more by keeping with *Alliance. This will really put the hurts on Delta too if this happens.


User currently offlineDLD9S From United States of America, joined Jun 2006, 260 posts, RR: 0
Reply 8, posted (2 years 4 months 1 day 8 hours ago) and read 7164 times:

Quoting joeljack (Reply 7):
This will benefit UA and US will loose many passengers. My brother-in-law was very excited for a new OMA-CLT connection and has several flights booked already on them. He is loyal to Star and will go back to UA if US leaves star.

It could also be said that they will gain every single AAdvantage and oneworld member traveling in the USA. Instead of competing with UA for the Star Alliance passenger, they will have access millions of new loyal oneworld customers.



717 727 737 747 757 767 777 DC9 DC10 M80 M90 M11 L10 AB6 333 340 319 320 321 ARJ CRJ EM2 EMJ SF3 146 100 BE1...
User currently offlineConcordski From United States of America, joined Sep 2008, 88 posts, RR: 0
Reply 9, posted (2 years 4 months 1 day 7 hours ago) and read 6962 times:

The best part is how Doug claims a merger will mean half the number of cut jobs. I really can't recall a merger where redundant departments got kept around and bases maintained the same number of employees. Large synergies from mergers happen from removing such positions. I could only imagine that a merged AA/US would result in more job losses than AA plans alone.

[Edited 2012-04-23 15:58:58]

User currently offlinePHX787 From Japan, joined Mar 2012, 7401 posts, RR: 17
Reply 10, posted (2 years 4 months 1 day 5 hours ago) and read 6772 times:

With every airline consolidation, fees, ticket costs, and pretty much everything else will go nowhere but up. Less competition in the mainline market = more room for airlines to charge more to make more profit. THIS is the very reason why this merger, along with DL/NW and UA/CO and even WN/FL have made me a very livid traveler over the last 4 or 5 years. I've seen nothing but money flow out of my pockets to cover costs that weren't originally around before, and my bi-monthly trips back to the tristate becoming more and more expensive (if fares out of CVG weren't already atrocious already.)


Ranting aside, to answer the OP question, yes. Nowhere but up will these prices go, unfortunately. We need to see another so-called "Mainline" enter the picture to control these outrageous costs.



次は、渋谷、渋谷。出口は、右側です。電車とホームの間は広く開いておりますので、足元に注意下さい。
User currently offlineHPRamper From United States of America, joined May 2005, 4055 posts, RR: 8
Reply 11, posted (2 years 4 months 1 day 2 hours ago) and read 6524 times:

Quoting Concordski (Reply 9):
The best part is how Doug claims a merger will mean half the number of cut jobs. I really can't recall a merger where redundant departments got kept around and bases maintained the same number of employees. Large synergies from mergers happen from removing such positions. I could only imagine that a merged AA/US would result in more job losses than AA plans alone.

Not if stations that AA has outsourced or plans to outsource are brought back in house.

There are a lot of stations where we might end up seeing not only a static level of staffing but a net job gain.


User currently offlineMaverick623 From United States of America, joined Nov 2006, 5592 posts, RR: 6
Reply 12, posted (2 years 4 months 1 day 2 hours ago) and read 6485 times:

Quoting HPRamper (Reply 11):

Not if stations that AA has outsourced or plans to outsource are brought back in house.

There are a lot of stations where we might end up seeing not only a static level of staffing but a net job gain.

Except that US has been on an outsourcing/furlough spree of its own lately. Throw an RJ or two a week instead of a mainline plane seems to be all it's taking to whack staffing. PHX has only hired off the street once in the last 4 years (the rest have been filled by transfers and furloughs), and I rarely see postings for outstations (maybe 2 or 3 a year).



"PHX is Phoenix, PDX is the other city" -777Way
User currently offlineouboy79 From United States of America, joined Nov 2001, 4581 posts, RR: 23
Reply 13, posted (2 years 4 months 1 day 1 hour ago) and read 6458 times:

Quoting Maverick623 (Reply 6):
Has someone told this doofus that it's not 2005 anymore?

Or 1989...1991...1993...1994...1997...2002...errr you get the idea. LOL The Energizer Bunny of the industry.


User currently offlineHPRamper From United States of America, joined May 2005, 4055 posts, RR: 8
Reply 14, posted (2 years 4 months 1 day 1 hour ago) and read 6433 times:

Quoting Maverick623 (Reply 12):
Except that US has been on an outsourcing/furlough spree of its own lately. Throw an RJ or two a week instead of a mainline plane seems to be all it's taking to whack staffing. PHX has only hired off the street once in the last 4 years (the rest have been filled by transfers and furloughs), and I rarely see postings for outstations (maybe 2 or 3 a year).

A merger would instantly reverse that trend. Take airport X where US and AA both operate only four or five flights daily. Probably outsourced. Combine those ops and you have a station that falls above the threshold for staffing with mainline.

Those aren't exact numbers, just an example. I do think the synergy thing will be real between AA and US - moreso than was the case with US/HP who didn't overlap nearly as much.


User currently offlinedeltaflyertoo From United States of America, joined Nov 2000, 1647 posts, RR: 1
Reply 15, posted (2 years 4 months 1 day ago) and read 6264 times:

Quoting PHX787 (Reply 10):
With every airline consolidation, fees, ticket costs, and pretty much everything else will go nowhere but up. Less competition in the mainline market = more room for airlines to charge more to make more profit. THIS is the very reason why this merger, along with DL/NW and UA/CO and even WN/FL have made me a very livid traveler over the last 4 or 5 years.

You're joking right? You may not have a solid perspective on the industry like others do so let me inform you. You say make more profit, are you aware that for most part none of the airlines except WN ever make profit? This past year has been decent despite high oil prices do to some consolidation and capacity withdraw. But even then, that profit, i.e. Delta's, whatever WN had in 2011 and US' is considered nothing by Wall Street compared to other Fortune 500 peers in other industries.

The past 30 something years more often than not has seen rock bottom fares (most fares never even adjusted for inflation) major loses (tens of billions) by all the major carriers so that you can fly cheap-all at the expense of laid off workers, furloughed pilots and CSRs who are paid peanuts. You are right, fares will go up, but remember too you are buying a ticket to fly almost speed of sound at 40,000 feet, a feat unimaginable just 100 to 90 years ago, to do it right and turn even a basic profit (that again isn't even that signficant) fares and capacity can't go on like it has. If people can't afford it, they won't afford it, but those who will, in turn will support the growing health of the industry.


User currently offlinefxramper From United States of America, joined Dec 2005, 7247 posts, RR: 85
Reply 16, posted (2 years 4 months 1 day ago) and read 6244 times:
Support Airliners.net - become a First Class Member!

Would love to see AS merge with AA and destroy your thread.   

User currently offlineMSYPI7185 From United States of America, joined Oct 2007, 710 posts, RR: 0
Reply 17, posted (2 years 4 months 23 hours ago) and read 6033 times:

Quoting HPRamper (Reply 14):
A merger would instantly reverse that trend. Take airport X where US and AA both operate only four or five flights daily. Probably outsourced. Combine those ops and you have a station that falls above the threshold for staffing with mainline.

Those aren't exact numbers, just an example. I do think the synergy thing will be real between AA and US - moreso than was the case with US/HP who didn't overlap nearly as much.

     

Just recently MSY was contracted out due to the number of RJ flown into MSY. Now several months later the RJ's are not nearly as many and more mainline flying is back. Should the AA merger happen then there will be many who were displaced/furloughed would in turn get their jobs back. This would happen even if the same number of RJ were still in the market. I can see where there would be fewer layoffs, and some ability to expand the network.

This merger I believe is a win win for both US and AA. Both bring things to the merger that the other lacks. It is not a oneway street. If the merger fails to happen US will be fine, not to say things wont be difficult. If AA is successful during BK they should be OK also, but I happen to believe both are better off together than not.

MD


User currently offlineghifty From United States of America, joined Jul 2010, 891 posts, RR: 0
Reply 18, posted (2 years 4 months 22 hours ago) and read 5874 times:

Quoting fxramper (Reply 16):
Would love to see AS merge with AA and destroy your thread.

   And leave US to "die"? Say it ain't so! I love AS and hate US!

Quoting SWALUV (Thread starter):
" If the airlines merge, the combined carrier would be called American Airlines and be based in American's home of Fort Worth, according to Capt. Dave Bates, president of the Allied Pilots Association."

Does Capt. Bates actually have control over that.. or can he only lobby?

Quoting SWALUV (Thread starter):
US Airways is in a position where if it doesn't merge, it's going to die,

I've been assuming that US has been in a decent, if not good, position for the past few years..



Fly Delta Jets
User currently offlinemop357 From United States of America, joined Mar 2007, 85 posts, RR: 0
Reply 19, posted (2 years 4 months 15 hours ago) and read 4745 times:

Quoting PHX787 (Reply 10):
With every airline consolidation, fees, ticket costs, and pretty much everything else will go nowhere but up. Less competition in the mainline market = more room for airlines to charge more to make more profit. THIS is the very reason why this merger, along with DL/NW and UA/CO and even WN/FL have made me a very livid traveler over the last 4 or 5 years. I've seen nothing but money flow out of my pockets to cover costs that weren't originally around before, and my bi-monthly trips back to the tristate becoming more and more expensive (if fares out of CVG weren't already atrocious already.)

About 10 years ago (2002) the average price of gas was $1.25. Here in NYC its $4.15. That's more than triple. I am just glad the price of tickets haven't tripled as well. The cost of that gas has to come from somewhere. I have seen NYC to LAX as low as $280 during certain times of the year. I think that is incredible to get a round trip flight across the country for that price. Not to mention the pilots and flight attendants have to be paid and fuel cost.


User currently offlineAv8rDAL From United States of America, joined Jan 2004, 462 posts, RR: 1
Reply 20, posted (2 years 4 months 14 hours ago) and read 4410 times:

Quoting mop357 (Reply 19):
About 10 years ago (2002) the average price of gas was $1.25. Here in NYC its $4.15. That's more than triple. I am just glad the price of tickets haven't tripled as well. The cost of that gas has to come from somewhere. I have seen NYC to LAX as low as $280 during certain times of the year. I think that is incredible to get a round trip flight across the country for that price. Not to mention the pilots and flight attendants have to be paid and fuel cost.

In the domestic market with influence from LCC's like WN, F9, FL, G4, etc... yes, you can expect to find some bargains.

But 10 years ago I went to Europe (ATL-FRA on Delta) and the ticket cost for early June was $480 roundtrip. I booked 2 weeks in advance. I even flew CLT to MUC for less than $300 in 2004 on LH. Right now, I see early June transatlantic from ATL going for ~$1500 roundtrip.

There is no doubt that costs have increased in the last 10 years. But with the mergers and bankruptcies removing players from the market, carriers can be better stewards to their shareholders and actually be profitable.

A newly merged, reinvented, and more profitable airline is a more expensive way to travel for the consumer. But, using DL as an example, at least we see the return of free alcohol in TATL economy class, the introduction of premium economy, really nice IFE throughout the plane, inflight WiFI, etc.

Investment in new products make the experience a bit nicer for all customers in return...



Maintain thine airspeed, lest the Earth rise up and smite thee.
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