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IAG Eyes AMR Minority Stake-Supports US Air Merger  
User currently offlinerising From United States of America, joined May 2010, 260 posts, RR: 1
Posted (1 year 11 months 1 week 3 days 5 hours ago) and read 10332 times:

No surprise here.

International Airlines Group is looking at purchasing a minority stake in AMR Corporation. The deal would allow for IAG and AMR to "expand their commercial partnership and ensure the US carrier remains part of Oneworld, the global airline alliance."

IAG Chief Willie Walsh was also quoted as supporting an AMR Corporation/US Airways Group combination.

We have seen similar events in the past, some have panned out, others have not. Lufthansa was considering purchasing a stake in UAL Corporation earlier in the decade. We also saw the race to cement a deal with JAL via a minority stake. Be curious to see how this one pans out.


http://www.ft.com/cms/s/0/41dc82c0-d...dc-00144feab49a.html#axzz22m5BaawD


If it doesn't make sense, it's because it's not true.
34 replies: All unread, showing first 25:
 
User currently onlinetimboflier215 From United Kingdom, joined May 2005, 1322 posts, RR: 1
Reply 1, posted (1 year 11 months 1 week 3 days 5 hours ago) and read 10293 times:

Quoting rising (Thread starter):
IAG Chief Willie Walsh was also quoted as supporting an AMR Corporation/US Airways Group combination.

Not a surprise - from an IAG/Oneworld point of view, and AA/US tie up would knock a competitor out of Star, and increase the connectivity options in the world's most important air travel market.

From an AA point of view though, I am yet to be convinced such a merger makes any sense.


User currently offlineTWA85 From United States of America, joined Feb 2012, 220 posts, RR: 0
Reply 2, posted (1 year 11 months 1 week 2 days 23 hours ago) and read 9547 times:

Quoting timboflier215 (Reply 1):
Not a surprise - from an IAG/Oneworld point of view, and AA/US tie up would knock a competitor out of Star, and increase the connectivity options in the world's most important air travel market.

From an AA point of view though, I am yet to be convinced such a merger makes any sense.

Agreed! IAG simply wants to protect their intersts in the Oneworld Trans-Atlantic JSA. As for AA, A merger with US, has its pro's and its con's. The bigger question is, does it make sense now or later?


User currently offlineLHRFlyer From United Kingdom, joined Apr 2010, 810 posts, RR: 1
Reply 3, posted (1 year 11 months 1 week 2 days 21 hours ago) and read 9223 times:

The Financial Times has been carefully selective in quoting Willie Walsh.

What the Financial Times didn't say is that IAG is not actively looking to acquire a stake in American Airlines (or JAL) at the moment but they remain open to it.

The example Willie Walsh cited about Delta and GOL actually reinforces the point. GOL is not in an alliance but Delta's stake enabled it to partner with GOL. AA and IAG is a different story. AA and BA and Iberia are already involved in deep co-operation with membership of Oneworld and the transatlantic joint-venture. There is little to be gained beyond this through a minority stake.


User currently offlinemikey72 From United Kingdom, joined Oct 2009, 1780 posts, RR: 2
Reply 4, posted (1 year 11 months 1 week 2 days 12 hours ago) and read 8589 times:

People are now questioning whether IAG's interest in acquiring a stake in AA complicates QF's potential plans with EK due to QF's cooperation with AA ?

Help somone ?

  



Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
User currently offlineRWA380 From United States of America, joined Feb 2005, 3085 posts, RR: 5
Reply 5, posted (1 year 11 months 1 week 2 days 11 hours ago) and read 8461 times:

If AA and US hook up, it will be a much different route map 3 years from merger day, expect some hub reductions that won't be popular with everyone, just like the rest of the past mergers.
IE...MEM, CVG, STL, MCI, PIT and more, just an unfortunate reality of doing business in a merger frenzied industry.

[Edited 2012-08-07 02:24:13]


Rule number One, NEVER underestimate the other guys lack of class - In honor of Mayor - Rob Ford
User currently offlineBurkhard From Germany, joined Nov 2006, 4378 posts, RR: 2
Reply 6, posted (1 year 11 months 1 week 2 days 11 hours ago) and read 8420 times:

There goes the cash Iberia has collected over decades to have a UK based investor invest in a bankrupt US enterprise - and then UK and US complain about underfinancing of Spanish Economy... While it is likely to happen I think it would be better invested in Spain.

User currently offlinejumpjets From United Kingdom, joined Apr 2012, 782 posts, RR: 0
Reply 7, posted (1 year 11 months 1 week 2 days 9 hours ago) and read 8230 times:

Quoting Burkhard (Reply 6):
There goes the cash Iberia has collected over decades to have a UK based investor invest in a bankrupt US enterprise

IAG is a listed company quoted on the Madrid and London stock exchanges. The largest single investor is Bankia of Spain [albeit they are likely to sell] who own 12% of IAG - nearly 3 times the next larger shareholding. To describe IAG as a UK based invrestor is not very accurate.


User currently offlineBill142 From Australia, joined Aug 2004, 8439 posts, RR: 9
Reply 8, posted (1 year 11 months 1 week 2 days 9 hours ago) and read 8151 times:

Quoting jumpjets (Reply 8):

Not to mention that IAG is domiciled in Spain and only operationally located in the UK.


User currently offlineLHRFlyer From United Kingdom, joined Apr 2010, 810 posts, RR: 1
Reply 9, posted (1 year 11 months 1 week 2 days 9 hours ago) and read 8134 times:

Quoting Burkhard (Reply 6):

Except it won't. As I said above Willie Walsh has been selectively quoted. He is never going to rule out an investment entirely but he was clear no investment is planned at the moment.


User currently offlineAAplat4life From United States of America, joined Jun 2011, 179 posts, RR: 0
Reply 10, posted (1 year 11 months 1 week 2 days 9 hours ago) and read 8064 times:

Frankly, it is far from clear that US would need IAG to do a transaction. The creditors might be willing to take all stock unless AMR puts stock and cash on the table.

User currently offlineHPRamper From United States of America, joined May 2005, 4036 posts, RR: 8
Reply 11, posted (1 year 11 months 1 week 2 days 5 hours ago) and read 6843 times:

Quoting RWA380 (Reply 5):
If AA and US hook up, it will be a much different route map 3 years from merger day, expect some hub reductions that won't be popular with everyone, just like the rest of the past mergers.
IE...MEM, CVG, STL, MCI, PIT and more, just an unfortunate reality of doing business in a merger frenzied industry.

AA/US doesn't have redundant hubs in the way DL/NW did. The only times two hubs are fairly close, one is generally an O&D type hub while the other is a connecting hub, neither of which can fill in for the other.


User currently offlinecommavia From United States of America, joined Apr 2005, 11387 posts, RR: 62
Reply 12, posted (1 year 11 months 1 week 2 days 5 hours ago) and read 6839 times:

Quoting HPRamper (Reply 12):
AA/US doesn't have redundant hubs in the way DL/NW did. The only times two hubs are fairly close, one is generally an O&D type hub while the other is a connecting hub, neither of which can fill in for the other.

... with the possible (likely?) exception of PHX.


User currently offlineflyby519 From United States of America, joined Jul 2007, 1113 posts, RR: 0
Reply 13, posted (1 year 11 months 1 week 2 days 4 hours ago) and read 6683 times:

deleted.... my apologies

[Edited 2012-08-07 09:42:26]


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User currently offlineLAXdude1023 From India, joined Sep 2006, 7481 posts, RR: 25
Reply 14, posted (1 year 11 months 1 week 2 days 3 hours ago) and read 6621 times:

Quoting Burkhard (Reply 6):
There goes the cash Iberia has collected over decades to have a UK based investor invest in a bankrupt US enterprise - and then UK and US complain about underfinancing of Spanish Economy... While it is likely to happen I think it would be better invested in Spain.

In Spain? The country whose economy is on the verge of collapse?



Stewed...Lewd...Crude...Irreverent...Belligerent
User currently offlinejumpjets From United Kingdom, joined Apr 2012, 782 posts, RR: 0
Reply 15, posted (1 year 11 months 1 week 2 days 3 hours ago) and read 6531 times:

Quoting Burkhard (Reply 6):
There goes the cash Iberia has collected over decades

..oh and I suppose investing around $1.75bn in A330s [ignoring the exercise of any options] doesn't count as using Iberia's money to develop Iberia.


User currently offlineFCAFLYBOY From United Kingdom, joined Nov 2006, 586 posts, RR: 0
Reply 16, posted (1 year 11 months 1 week 2 days 2 hours ago) and read 6389 times:

Let's also not forget that IB did have some cash yes, but why?

Years and years and years of under-investing in their product, service and aircraft. If BA had been so complacent they would have billions banked by now!

I hardly think ANY of our European airlines are in a position to preach, most are bleeding millions. British or German or not!


User currently offlinejfk777 From United States of America, joined Aug 2006, 8250 posts, RR: 7
Reply 17, posted (1 year 11 months 1 week 2 days 1 hour ago) and read 6281 times:
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Quoting Bill142 (Reply 9):
Not to mention that IAG is domiciled in Spain and only operationally located in the UK.

That may have been done for legal reasons or the deal was just negociated that way. Willie Walsh is the CEO of IAG and works in London, BA is the one that runs this show. Iberia couldn't even operate their Latin American affiliates, IB is not going to teach BA anything. Iberia's "core" Latin to Europe routes are being invaded by LH and Air France, AF flies from CDG to Santiago, Chile nonstop.

The sale of TAP will have lots of negatives in Madrid, if Lufthansa gets it they will own Brazil.


User currently offlineLHRFlyer From United Kingdom, joined Apr 2010, 810 posts, RR: 1
Reply 18, posted (1 year 11 months 1 week 1 day 23 hours ago) and read 6030 times:

There is actually a lot going on behind the scenes to invest in the Iberia brand and product and the Madrid hub. Also some of the recent BA customer service initiatives, like the "Know Me" programme to equip BA cabin crew with iPads are being replicated at Iberia. It is going to take time and it's not always going to be easy, but there is huge potential for Iberia in the long term.

User currently offlinemikey72 From United Kingdom, joined Oct 2009, 1780 posts, RR: 2
Reply 19, posted (1 year 11 months 1 week 1 day 22 hours ago) and read 5899 times:

Quoting jfk777 (Reply 18):
Air France, AF flies from CDG to Santiago, Chile nonstop.

AF flies to lots of places...unfortunately they don't make any money doing it.

Quoting jfk777 (Reply 18):
The sale of TAP will have lots of negatives in Madrid, if Lufthansa gets it they will own Brazil.

LH won't buy TAP...not with the BD fiasco still raw and the books only just recovering.....aren't you over-looking Latam anyway....



Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
User currently offlineHPRamper From United States of America, joined May 2005, 4036 posts, RR: 8
Reply 20, posted (1 year 11 months 1 week 1 day 19 hours ago) and read 5605 times:

Quoting commavia (Reply 13):
... with the possible (likely?) exception of PHX.

I hope you are talking about PHX vs. DFW and not PHX vs. LAX...

I fully believe PHX will lose some connecting traffic to DFW but its huge O&D base and Southwest location will ensure it keeps running as some sort of hub, even if it's shrunk to CLE levels. It just can't be fully assimilated by other hubs.


User currently offlineMaverick623 From United States of America, joined Nov 2006, 5554 posts, RR: 6
Reply 21, posted (1 year 11 months 1 week 1 day 17 hours ago) and read 5455 times:

Quoting HPRamper (Reply 21):
but its huge O&D base

PHX is hardly a bastion of O&D. That being said, it does hold its own.... for now.

Quoting HPRamper (Reply 21):
It just can't be fully assimilated by other hubs.

Certainly not by LAX. Parker had a meeting with some PHX-area mayors and assured them that PHX would remain a hub. Then again, UA said the same things about CLE.

However, reliable scuttlebutt is that PHX will lose the Hawaiian flying to LAX, while gaining smaller routes from LAX (and maybe a few widebodies). LAX is very expensive operationally compared to PHX, but can offset that somewhat by the higher traffic flows.



"PHX is Phoenix, PDX is the other city" -777Way
User currently offlinesmi0006 From Australia, joined Jan 2008, 1524 posts, RR: 0
Reply 22, posted (1 year 11 months 1 week 1 day 15 hours ago) and read 5309 times:

Quoting mikey72 (Reply 4):
People are now questioning whether IAG's interest in acquiring a stake in AA complicates QF's potential plans with EK due to QF's cooperation with AA ?

I don't think that it will have an impact at all ( I still don't see the benifit to either QF or EK, a QR / QF tie up is far more likely, but different thread ), I feel formalised alliances are over rated on A.net. Oneworld, Skyteam and Star are only there as branding for products. The same agreements and alliance could occur behind the scenes without a 'branded' alliance. Alliance loyalties are a nice notion here on A.net. But in the real world only competition law and profit matter when it comes to alliances.


User currently offlineBeardown91737 From United States of America, joined Jun 2011, 501 posts, RR: 0
Reply 23, posted (1 year 11 months 1 week 1 day 14 hours ago) and read 5229 times:

Quoting Maverick623 (Reply 22):
PHX is hardly a bastion of O&D. That being said, it does hold its own.... for now

Other way around. PHX is the connecting hub, LAX is O&D. US has about 300 flights from PHX, and AA has about 200 from LAX.



135 hrs PIC (mostly PA-28) - not current. Landings at MDW, PIA, JAN.
User currently offlineRWA380 From United States of America, joined Feb 2005, 3085 posts, RR: 5
Reply 24, posted (1 year 11 months 1 week 1 day 11 hours ago) and read 5071 times:

Quoting HPRamper (Reply 11):

AA/US doesn't have redundant hubs in the way DL/NW did. The only times two hubs are fairly close, one is generally an O&D type hub while the other is a connecting hub, neither of which can fill in for the other.

If AA/US marry, JFK, PHL, DCA, CLT, MIA are all on the east coast, then there are the big two in the middle ORD and DFW, well placed, then there is the two out west, PHX and LAX, I'd be surprised if AA didn't dehub PHX and build LAX, and IMO, CLT would most likely suffer as well, I'd expect the combined force to keep both JFK and PHL, with a nice little domestic hub as well at DCA.

Quoting Beardown91737 (Reply 23):

Other way around. PHX is the connecting hub, LAX is O&D. US has about 300 flights from PHX, and AA has about 200 from LAX.

Exactly why I'd expect LA 9the much larger market) would be part of the new AA long after PHX is reduced down to hub flying only. Then there is the Pacific Northwest where AA is almost non-existent, maybe the AS/AA agreement will keep AA happy enough, keeping them from trying any harder up here.



Rule number One, NEVER underestimate the other guys lack of class - In honor of Mayor - Rob Ford
25 AirbusA6 : Of course, many years ago BA had a significant stake in the old US, which didn't end happily...
26 Maverick623 : Prepare to be surprised. As I said earlier, there is simply no room to "build" LAX, let alone absorb even half the traffic PHX has. If PHX does ever
27 VV701 : 24.6 per cent. But then BA started to court AA. So if AA and US do decide to cohabit, that barrier disappears. What goes around comes around?
28 Post contains links AAplat4life : It looks like Horton has soften his tone somewhat on a US merger, and they'll start talking about it in a few weeks. He hasn't ruled out remaining ind
29 avek00 : I think the softer tone is part of a masterful play to keep AMR independent -- the numbers for independent vs. merged AA will look vastly different o
30 ckfred : Once AA comes out of bankruptcy, it will be a leaner carrier with a much better cost structure. DL and UA seem to be doing quite well, post Chapter 1
31 Talaier : BA doesn't run anything because it doesn't exist anymore as a separate entity. And actually, IB has a lot to teach BA, particularly in terms of finan
32 Flighty : Those cities are notoriously price competitive. That is why no megahub other than ORD-UA has thrived in any of those glamor cities IMO. In my analysi
33 PezySPU : So is ex BA's CEO now IAG's CEO... But do tell us more about IB's expertise in finances. Looking at financial results of the two carriers, I can see
34 Post contains images Asturias : The creation of IAG lined the pocket of many an executive on both sides, but ultimately it's doing no favor for either airline, BA or IB. BAA is comp
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