scotron11
Posts: 1181
Joined: Tue Feb 10, 2004 4:54 pm

BA & AA: Full Blown Merger Possible?

Fri Nov 25, 2005 4:26 pm

OnLine Jamaica Observer? reports that Willie Walsh wants a closer alliance with AA under the proposed US-EU open skies deal.

Proposals include:

Co-ordinating all passenger/cargo between US-EU, leading to joint operations in some markets.

Joint sales and marketing, extensive code-sharing, and full reprocity between their FF programs.

Both airlines to retain their own identities, but their is talk of a combined brand for certain routes. Both want to operate as one entity across the Atlantic. This would see a BA flight operated with AA metal and onward within US.

Asked about a full merger, Walsh said "That is a completely different agenda. The first stage is to move to a closer relationship."

Industry observers place a value of £5Billion ($8.5B) on the merger, creating the largest passenger airline in history. While there are 30 airlines UK-US, there are 80 overall EU-US. And even although AA/BA marketshare UK-US is 60%, their EU-US marketshare is only 35%.

What a beauty if this did happen. Thing is, would the respective authorities allow it?
 
Zone1
Posts: 894
Joined: Sun Jan 09, 2005 4:47 am

RE: BA & AA: Full Blown Merger Possible?

Fri Nov 25, 2005 4:43 pm

I doubt it. If they can't get monopolistic immunity for an alliance, there is no way they could get approval for a merger. Further, a foreign company cannot own a US airline outright. I don't know if the UK has the same type of laws, though.
/// U N I T E D
 
scotron11
Posts: 1181
Joined: Tue Feb 10, 2004 4:54 pm

RE: BA & AA: Full Blown Merger Possible?

Fri Nov 25, 2005 5:02 pm

Quoting Zone1 (Reply 1):

I don't know if the UK has the same type of laws, though

There are no laws that I know of that would prevent foreign ownership of a UK airline. SQ owns 49% of VS and LH & SK own almost 50% of BD.

If this EU-US open skies deal does take-off (no pun), and the US does relax foreign ownership rules, then I don't see why it cannot happen. Of course, you will have your protesters, most notably VS, but on alliance terms, I would bet that STAR would have more marketshare transatlantic than BA/AA.
 
centrair
Posts: 2845
Joined: Thu Jan 13, 2005 3:44 pm

RE: BA & AA: Full Blown Merger Possible?

Fri Nov 25, 2005 5:11 pm

Quoting Scotron11 (Reply 2):
If this EU-US open skies deal does take-off (no pun), and the US does relax foreign ownership rules, then I don't see why it cannot happen.

Please let this happen. PLEASE!!!!!!!!!!
I would love to see KL/AF buy up more or a huge part of NW.

AA/BA would be awsome.
Yes...I am not a KIX fan. Let's Japanese Aviation!
 
atmx2000
Posts: 4301
Joined: Wed Oct 13, 2004 4:24 pm

RE: BA & AA: Full Blown Merger Possible?

Fri Nov 25, 2005 5:30 pm

Quoting Scotron11 (Reply 2):
If this EU-US open skies deal does take-off (no pun), and the US does relax foreign ownership rules, then I don't see why it cannot happen. Of course, you will have your protesters, most notably VS, but on alliance terms, I would bet that STAR would have more marketshare transatlantic than BA/AA.

If you are talking about alliances, why would you not include the other European One World members?

I think the key thing is the importance of US-UK traffic. I just don't see BA/AA deals being approved as long as they have such a commanding position in this important market.

Quoting Centrair (Reply 3):
I would love to see KL/AF buy up more or a huge part of NW.

Wouldn't the Japanese government have something to say about this? I would imagine it would given NW's privileged position in Japan.
ConcordeBoy is a twin supremacist!! He supports quadicide!!
 
BCAL
Posts: 2925
Joined: Mon Jun 28, 2004 10:16 pm

RE: BA & AA: Full Blown Merger Possible?

Fri Nov 25, 2005 5:43 pm

Oh dear! Once Sir Bearded hears of this, something big will hit the fan at the VS Headquarters! No doubt VS will again bring out their slogan 'No Way BA/AA'. Perhaps BA should respond 'VS/SQ so why not BA/AA?'

 duck 
MOL on SRB's latest attack at BA: "It's like a little Chihuahua barking at a dying Labrador. Nobody cares."
 
backfire
Posts: 3467
Joined: Fri Oct 06, 2006 8:01 am

RE: BA & AA: Full Blown Merger Possible?

Fri Nov 25, 2005 6:04 pm

Jamaica appears a little behind the times...these comments from Walsh were reported weeks ago.


There are too many obstacles to a BA/AA merger. The EU competition authorities and the US DOJ would require a complete stripdown of their operation, at least until the London Heathrow access issue is resolved.

Besides - who would own the merged company? BA can't be seen to be in control of a US carrier, because of the ownership restrictions, and AA ownership of a merged entity won't sit well with BA (or anyone else, I'd have thought...)
 
Trvlr
Posts: 4251
Joined: Thu Feb 17, 2000 9:58 am

RE: BA & AA: Full Blown Merger Possible?

Fri Nov 25, 2005 7:02 pm

This is almost exactly what Northwest and KLM have done for years in the transatlantic market.

Hopefully the new agreement will lead to a restructuring of airline ops at Heathrow and catalyze a closer association between AA and BA. With every other major US and European airline involved in an antitrust-immune relationship, there's very little reason why AA and BA should not be allowed the same.

Aaron G.
 
Qantasclub
Posts: 729
Joined: Wed Nov 19, 2003 2:48 pm

RE: BA & AA: Full Blown Merger Possible?

Fri Nov 25, 2005 7:16 pm

Quoting Centrair (Reply 3):
AA/BA would be awsome

How would coupling BA with an airline that provides one of the lowest standards of inflight service be an awesome thing? I pray that this never EVER happens and that AA will eventually fold like it deserves to.
Long Haul is the only way to go
 
Trvlr
Posts: 4251
Joined: Thu Feb 17, 2000 9:58 am

RE: BA & AA: Full Blown Merger Possible?

Fri Nov 25, 2005 7:41 pm

Quoting Qantasclub (Reply 8):
How would coupling BA with an airline that provides one of the lowest standards of inflight service be an awesome thing? I pray that this never EVER happens and that AA will eventually fold like it deserves to.

AA isn't going to fold, and furthermore it's not like BA has a better partner in the States. Which airline, in your opinion, would be better? Even if they weren't already taken, AA's slight service deficiencies compared to the likes of Continental are clearly made up for by network reach and financial stability. Also keep in mind that flatbed biz seats comparable to BA's (perhaps even after the latter's upgrade) will come online next year. Seat pitch is also not horrendous--especially compared to, say, Qantas's 744ERs (14 hours in those things is killer!)

However, more broadly I do agree with you--I'd much rather fly BA across the Atlantic than AA. Especially if they do SAN-LHR again post-787.

As a oneworld Sapphire, I'll certainly be glad when AA and BA link up.

Aaron G.
 
User avatar
ClassicLover
Posts: 3954
Joined: Tue Mar 09, 2004 12:27 pm

RE: BA & AA: Full Blown Merger Possible?

Fri Nov 25, 2005 8:12 pm

Quoting Qantasclub (Reply 8):
How would coupling BA with an airline that provides one of the lowest standards of inflight service be an awesome thing? I pray that this never EVER happens and that AA will eventually fold like it deserves to.

I don't see why it shouldn't. Everyone screams monopoly, but it's not like there aren't other airlines flying the Atlantic. If they were the only two, I could understand it, but they're not.

It would save them both a lot of money to do that, and if any aircraft are freed up, they can expand elsewhere in their networks.

Trent.
I do quite enjoy a spot of flying - more so when it's not in Economy!
 
bobnwa
Posts: 4472
Joined: Fri Dec 22, 2000 12:10 am

RE: BA & AA: Full Blown Merger Possible?

Fri Nov 25, 2005 9:19 pm

Quoting Centrair (Reply 3):
Please let this happen. PLEASE!!!!!!!!!!
I would love to see KL/AF buy up more or a huge part of NW.

KL/AF currently own zero part of Northwest and Northwest own zero part of KL/AF.
 
commavia
Posts: 9807
Joined: Mon Apr 25, 2005 2:30 am

RE: BA & AA: Full Blown Merger Possible?

Fri Nov 25, 2005 10:47 pm

I think that a "merger" in the way that most industry observers have come to know is unlikely. The two are almost certainly not going to merge into a single airline, with a single management team, a single fleet, a single name or logo, etc. What is, however, very likely is that if the two are finally given the freedom afforded by anti-trust immunity to work together closely, their level of cooperation is going to dramatically increase.

These two airlines are an excellent fit, linking together the world's largest air market, the United States, and the world's largest international airport, Heathrow, together into a single network that will effectively blanket the globe. If American and British Airways are finally freed to "merge," as some have suggested, it would undoubtebly create one of the most attractive networks on earth for customers, and bring about arguably the most powerful and influential airline network in the history of aviation, based around the north Atlantic.

I ultimately expect:

*an equity swap (each buys a stake in the other, seats on respective boards, etc.)
*joint pricing and marketing -- this one is key, they will be able to competitively price their product jointly, without huge fare differences
*scheduling coordination -- the two airlines will be able to discuss scheduling and ensure that their flights don't overlap
*back-office functions -- eventually, the two may combine some back-office functions to realize certain synergies, like fuel buying, joint procurement, etc.
*ground handling -- likely, if this deal goes through, one of the first changes would be that AA would immediately take over ground handling for all BA flights in North America, and likewise for AA in Europe with BA handling
 
scotron11
Posts: 1181
Joined: Tue Feb 10, 2004 4:54 pm

RE: BA & AA: Full Blown Merger Possible?

Fri Nov 25, 2005 11:36 pm

Quoting Commavia (Reply 12):

*back-office functions -- eventually, the two may combine some back-office functions to realize certain synergies, like fuel buying, joint procurement, etc.

Why not aircraft as well? Apart from the A320/321s, BA & AA are mostly Boeing, aren't they?

I remember flying on a GF L-1011 LHR-JFK when they had the code-share w/TWA. So why not the same with BA/AA? Get some 744s into AA without them having to "buy" them!
 
ozglobal
Posts: 2524
Joined: Tue Nov 09, 2004 7:33 am

RE: BA & AA: Full Blown Merger Possible?

Fri Nov 25, 2005 11:49 pm

Quoting Trvlr (Reply 9):
AA's slight service deficiencies

ROFL, If you compare to Continential OK, but who's doing that. We mean compared to good airlines.

Quoting Trvlr (Reply 9):
Also keep in mind that flatbed biz seats comparable to BA's (perhaps even after the latter's upgrade) will come online next year. Seat pitch is also not horrendous--especially compared to, say, Qantas's 744ERs (14 hours in those things is killer!)

QF's old business class seat have disappeared and all been replaced by SkyBed, even, last of all, on trans-pacific, where they don't really try due to market dominance.

As far as I understand, AA's new 'lie flat' business seats are not horizontal flat beds like BA's current, soon to be superseded J class. AA's 'new' J will be pre-BA's soon to be 'old' J class....

If I flew AA transatlantic after buying a BA ticket, I'd demand a refund...
When all's said and done, there'll be more said than done.
 
User avatar
ODwyerPW
Posts: 971
Joined: Thu Dec 09, 2004 6:30 am

RE: BA & AA: Full Blown Merger Possible?

Sat Nov 26, 2005 2:40 am

Foreign ownership of airlines is a strange problem.

I live in Upstate New York. Do you know that a British Company (National Grid) owns the Power Generation at NIAGARA FALLS and most of the Power Distribution throughout Western and Upstate NY? They may even own and operate some of the Nuclear Plants along Lake Ontario.

Anyway, if the US would allow foreign ownership/domination of something as key as POWER GENERATION and TRANSPORT INFRASTRUCTURE in one of our Key States (no disrepect to those of you who live in the other 49), why are they concerned with air transportation. Oh wait, it has to do with National Security doesn't it? Sheesh.
learning never stops.
 
Ken777
Posts: 9064
Joined: Thu Mar 11, 2004 5:39 am

RE: BA & AA: Full Blown Merger Possible?

Sat Nov 26, 2005 3:07 am

I don't see a full merger, but would be very happy to see anti-trust restrictions removed. Code sharing would be a critical issue for me as it would open up the market and give me more options.

As for back office options I would be all for that, but the problem in this area is that airlines speed far too much time developing new policies that restrict pax and there is more money to be saved by eliminating these policies than by combining the existing policies and restricting of two airlines.

There would probably be money saved by combining maintenance when possible (especially in the area of parts management), but there would be greater savings if the aircraft purchasing was at an alliance level when possible - such as a joint 787 purchase. The alliances have been rather poor about taking advantage of this potential.
 
vs25
Posts: 64
Joined: Thu Jun 17, 2004 1:53 am

RE: BA & AA: Full Blown Merger Possible?

Sat Nov 26, 2005 3:11 am

There should be no reason (apart from a monopoly) to stop BA and AA merging and becoming 1 airline with all the benefits that would bring to the customer and to the shareholder. Foriegn ownership rules are market disorting. Why should airlines be singled out for protection and not other industries?

Lets go for BA/AA/Qantas - a truely global airline with an extensive network and vast economies of scale. A consistent product (eventually) across all the fleet.
 
TWAAF9
Posts: 87
Joined: Fri Nov 26, 2004 4:47 am

RE: BA & AA: Full Blown Merger Possible?

Sat Nov 26, 2005 3:20 am

Quoting Qantasclub (Reply 8):
How would coupling BA with an airline that provides one of the lowest standards of inflight service be an awesome thing? I pray that this never EVER happens and that AA will eventually fold like it deserves to.

I don't understand how some always equate AA with poor service standards. I've flown them extensively (both as revenue and non-rev) across the US and over the Atlantic in all classes of service and have never found their product to be particularly lacking anything. Same for BA, UA, and VS.

Would AA's service be more palatable if the staff literally kissed your ass once onboard?
Ahh, the power of SABRE...
 
AJRfromSYR
Posts: 439
Joined: Tue May 17, 2005 6:03 am

RE: BA & AA: Full Blown Merger Possible?

Sat Nov 26, 2005 3:28 am

Quoting Qantasclub (Reply 8):
How would coupling BA with an airline that provides one of the lowest standards of inflight service be an awesome thing? I pray that this never EVER happens and that AA will eventually fold like it deserves to.

Never heard of DaimlerChrysler?
-AJR-
 
bmacleod
Posts: 2543
Joined: Sat Aug 25, 2001 3:10 am

RE: BA & AA: Full Blown Merger Possible?

Sat Nov 26, 2005 3:37 am

I'd like to see a 744 in BA/AA colors....  sarcastic 

With an all-Boeing fleet (A300s being only exception), and the largest airline in the world, I always wondering why AA never even thought of ordering the 744.
"What good are wings without the courage to fly?" - Atticus
 
User avatar
EA CO AS
Posts: 13501
Joined: Wed Nov 14, 2001 8:54 am

RE: BA & AA: Full Blown Merger Possible?

Sat Nov 26, 2005 4:32 am

Quoting Bmacleod (Reply 20):
I always wondering why AA never even thought of ordering the 744.

Because it's too big for their needs. The 772 is a better fit for them.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
atmx2000
Posts: 4301
Joined: Wed Oct 13, 2004 4:24 pm

RE: BA & AA: Full Blown Merger Possible?

Sat Nov 26, 2005 5:52 am

Quoting Bmacleod (Reply 20):
I always wondering why AA never even thought of ordering the 744.

Because the US population is widely spread out and would object to being hurded a thousand miles or so into a very small number of mega-airports in order to fly to international destinations in jumbos. And because US authorities favored competition in the domestic market, there are not many large markets that could support a jumbo being that are dominated by a single carrier. If you can't dominate your market like an LH, AF or BA can, a jumbo is a big risk with its higher trip costs. Also, you don't need a jumbo if you can get enough slots at your prime international destinations and domestic hubs.
ConcordeBoy is a twin supremacist!! He supports quadicide!!
 
User avatar
mariner
Posts: 18261
Joined: Fri Nov 23, 2001 7:29 am

RE: BA & AA: Full Blown Merger Possible?

Sat Nov 26, 2005 6:02 am

Quoting Atmx2000 (Reply 22):
If you can't dominate your market like an LH, AF or BA can, a jumbo is a big risk with its higher trip costs. Also, you don't need a jumbo if you can get enough slots at your prime international destinations and domestic hubs.

Then again, the US majors - following that business model - are all up the financial creek.

So maybe - just maybe - there is a better model than the one they have been following?

cheers

mariner
aeternum nauta
 
kanebear
Posts: 852
Joined: Tue May 28, 2002 12:06 am

RE: BA & AA: Full Blown Merger Possible?

Sat Nov 26, 2005 6:32 am

AA and BA want nothing more than the ability to do a full-on marketing lashup along the lines of NW/KL. Both NW and KL brand their J class as World Business Class, etc etc. They coordinate on routes, and so on. No reason whatsoever that BA/AA shouldn't be able to do this once the EU and US have open skies.

As for AA being a bad airline, they're not CX but they're quite good. The J product needs an overhaul desperately but it's getting one. As for AA going away, you should be wishing for the demise of ALL US carriers, since not a one is measurably better.
 
atmx2000
Posts: 4301
Joined: Wed Oct 13, 2004 4:24 pm

RE: BA & AA: Full Blown Merger Possible?

Sat Nov 26, 2005 6:47 am

Quoting Mariner (Reply 23):
Then again, the US majors - following that business model - are all up the financial creek.

The US majors are up a financial creek because of an excessive focus on the domestic market with higher cost service that has led to them getting undercut by nimbler competition with lower costs who happen to fly small jets.

Quoting Mariner (Reply 23):
So maybe - just maybe - there is a better model than the one they have been following?

Well it no doubt was helpful for BA, AF, and LH that their respective governments pursued policies for most of their lives that protected both their international and domestic markets by restricting both foreign and domestic competition and by limiting gateways to their countries to a very select few airports and cities, thus allowing them the luxury of flying big jets because the home market can't escape the country and go to many distant spots except by going through the flag carrier's super hub.

And may I remind you that the European model of flying big jets was tried in this country with airlines like Pan Am and TWA that flew from a few gateway cities, but neither of them are around still. The model that BA, AF, and LH have used work fine when the government has effectively given them a guaranteed market but doesn't work so well when working in a huge competitive market.
ConcordeBoy is a twin supremacist!! He supports quadicide!!
 
Trvlr
Posts: 4251
Joined: Thu Feb 17, 2000 9:58 am

RE: BA & AA: Full Blown Merger Possible?

Sat Nov 26, 2005 7:22 am

Quoting OzGlobal (Reply 14):
ROFL, If you compare to Continential OK, but who's doing that. We mean compared to good airlines

Can you name a "good airline" that even comes close to the network reach of American, especially in the US market?

Quoting AJRfromSYR (Reply 19):
Never heard of DaimlerChrysler

Funny thing is, Chrysler's the one making profits now!! Big grin

Quoting OzGlobal (Reply 14):
QF's old business class seat have disappeared and all been replaced by SkyBed, even, last of all, on trans-pacific, where they don't really try due to market dominance.

I should have clarified. I meant Qantas' Y product. I've heard Qantas J is quite good now.

Quoting OzGlobal (Reply 14):
As far as I understand, AA's new 'lie flat' business seats are not horizontal flat beds like BA's current, soon to be superseded J class. AA's 'new' J will be pre-BA's soon to be 'old' J class....

I'm pretty sure that the new seats actually will have a horizontal "lie flat" design. However, there don't seem to be any pictures out there yet. For all we know, the seat design may not even be totally finalized yet.

Aaron G.
 
wdleiser
Posts: 865
Joined: Thu Apr 22, 2004 9:32 am

RE: BA & AA: Full Blown Merger Possible?

Sat Nov 26, 2005 8:49 am

IF (I EMPHASIZE IF) AA and BA are allowed to have closer relations or even merge, do any of you think UA and LH should be allowed to merge or have closer relations, or is that unacceptable because BA and AA are bigger and better?

The problem with allowing them to merge would be just that, every US airline will look to merge with a European or Asian Carrier.
 
Trvlr
Posts: 4251
Joined: Thu Feb 17, 2000 9:58 am

RE: BA & AA: Full Blown Merger Possible?

Sat Nov 26, 2005 8:59 am

Quoting Wdleiser (Reply 27):
IF (I EMPHASIZE IF) AA and BA are allowed to have closer relations or even merge, do any of you think UA and LH should be allowed to merge or have closer relations, or is that unacceptable because BA and AA are bigger and better?

The thing is, NW/KL/AF/DL and UA/LH etc already have closer relations than AA/BA enjoy at the present time. The only real "advantage" the latter pair has over the other two at this point is Heathrow access.

Otherwise, I am of the opinion that the press, and even some airline CEOs, talk a lot about "mergers" without really meaning anything substantial. A real, full-blown merger between international carriers is a long way off, in my opinion. AF/KL is the only one that comes close at this point, and even then the airlines are retaining their separate identities, as well as some key decision-making powers (fleet planning, etc).

Aaron G.
 
User avatar
mariner
Posts: 18261
Joined: Fri Nov 23, 2001 7:29 am

RE: BA & AA: Full Blown Merger Possible?

Sat Nov 26, 2005 9:00 am

Quoting Atmx2000 (Reply 25):
The US majors are up a financial creek because of an excessive focus on the domestic market

That may indeed be true. There is more to it, I think.

Quoting Atmx2000 (Reply 25):
Well it no doubt was helpful for BA, AF, and LH that their respective governments pursued policies for most of their lives that protected both their international and domestic markets by restricting both foreign and domestic competition and by limiting gateways to their countries to a very select few airports and cities, thus allowing them the luxury of flying big jets because the home market can't escape the country and go to many distant spots except by going through the flag carrier's super hub.

I was thinking more of now, not then. I note that United (and other US majors) have said that their International routes, and especially Asia/Pacific, are where they are making money.

And, at least in the case of United, I believe it is Asia/Pacific where they are flying the 747-400's.

Quoting Atmx2000 (Reply 25):
And may I remind you that the European model of flying big jets was tried in this country with airlines like Pan Am and TWA that flew from a few gateway cities, but neither of them are around still.

You may indeed remind me, although I had remembered. I also remember that Pan Am had virtually no domestic network until they bought National, and even then, it wasn't much of one.

As for TWA - I assume that it isn't just a matter of big or small aircraft - that the company has to be well-managed as well.

Quoting Atmx2000 (Reply 25):
The model that BA, AF, and LH have used work fine when the government has effectively given

I don't recall mentioning BA, AF or LH. I don't think they are the only models just coz they fly some Big Planes. Virgin, for example, only flies Big Planes and has zero feed. This is airline heresy to some.

My point is only that the present business model of the US majors is - effectively and with many exceptions - the one laid down by Mr. Crandall.

It may be been a great model for one airline then. I suggest that doesn't mean it is the only model for all US airlines all the time.

I suggest. That is all.

cheers

mariner
aeternum nauta
 
Qantasclub
Posts: 729
Joined: Wed Nov 19, 2003 2:48 pm

RE: BA & AA: Full Blown Merger Possible?

Sat Nov 26, 2005 9:02 am

Quoting TWAAF9 (Reply 18):
I don't understand how some always equate AA with poor service standards.

That's because where you come from, it's pretty much the norm. You should fly domestically within Australia or fly long haul on SQ or CX. It's a different world.
Long Haul is the only way to go
 
atmx2000
Posts: 4301
Joined: Wed Oct 13, 2004 4:24 pm

RE: BA & AA: Full Blown Merger Possible?

Sat Nov 26, 2005 10:04 am

Quoting Mariner (Reply 29):
That may indeed be true. There is more to it, I think.

Yeah, the fact that the LCC model has taken off, combined with the fact some of these new carriers have a nicer product because they have new airplanes with nice amenities like PTVs, not to amention younger, more energetic less worn out staff.

Also the home market is also competitive for international flights except where a US carrier has special privileges like UA and NW in NRT and AA and UA (well they don't use it well) at LHR. But the primary effect there has been on the need to build the domestic feed to bring passengers into hubs used for international flights.

Quoting Mariner (Reply 29):
I was thinking more of now, not then. I note that United (and other US majors) have said that their International routes, and especially Asia/Pacific, are where they are making money.

And, at least in the case of United, I believe it is Asia/Pacific where they are flying the 747-400's.

And AA is making money flying international routes with 777s and 767s. And apparently CO is making money flying international routes with 757s, 767s, 777s. I'm not sure who isn't making money overall flying international routes. That's why I suggest the problem is on the domestic side. Moreover, those flying 747s are worse off than those not flying 747s in the US market. I don't think that is particularly meaningful though because each carrier operates in different markets.

Quoting Mariner (Reply 29):
You may indeed remind me, although I had remembered. I also remember that Pan Am had virtually no domestic network until they bought National, and even then, it wasn't much of one.

As for TWA - I assume that it isn't just a matter of big or small aircraft - that the company has to be well-managed as well.



Quoting Mariner (Reply 29):
I don't recall mentioning BA, AF or LH. I don't think they are the only models just coz they fly some Big Planes. Virgin, for example, only flies Big Planes and has zero feed. This is airline heresy to some.

No, I mentioned BA, AF and LH. Then you quoted my remarks, and said something snarky about US carriers having a model that isn't profitable and maybe there being another way, which, in that context, some might consider as suggesting that those EU carriers have the right model for the US market. If you meant otherwise, I apologize for not interpreting your comments correctly.

As for Virgin, they primarily fly out of the London area, one the largest O&D markets in the world. Moreover a very large portion of the population of the UK lives close enough to London that using ground transportation to get to the airports Virgin flies from would not be too cumbersome. Contrast this to the US where population centers are spread much further apart, and with large numbers of people living far away from the old gateway cities. The Virgin model would work in maybe two or three cities in the US, but their operations in any one of those cities would likely not be as large as their operation in the London market without a domestic feed.

Quote:
My point is only that the present business model of the US majors is - effectively and with many exceptions - the one laid down by Mr. Crandall.

It may be been a great model for one airline then. I suggest that doesn't mean it is the only model for all US airlines all the time.

I suggest. That is all.

Fair enough. I do suspect if AA was the only one to follow that model, they would be in much better shape.
ConcordeBoy is a twin supremacist!! He supports quadicide!!
 
Byrdluvs747
Posts: 2377
Joined: Thu Jul 15, 2004 5:25 am

RE: BA & AA: Full Blown Merger Possible?

Sat Nov 26, 2005 10:27 am

I have said it before. I would protest on the steps of Congress to prevent the stingy British(Executive Club) from getting a hold of AAdvantage.

BA = AA - No way!  thumbsdown 
AA + BA - Ok.  thumbsup 
The 747: The hands who designed it were guided by god.
 
User avatar
mariner
Posts: 18261
Joined: Fri Nov 23, 2001 7:29 am

RE: BA & AA: Full Blown Merger Possible?

Sat Nov 26, 2005 11:27 am

Quoting Atmx2000 (Reply 31):
Then you quoted my remarks, and said something snarky about US carriers having a model that isn't profitable

Snarky? I said:

Quoting Mariner (Reply 23):
Then again, the US majors - following that business model - are all up the financial creek.

What is "snarky" about that? I thought it to be the simple truth.

It isn't a criticism of the US. It may be a criticism of a system to which the majors subscribed and which the LCC's have busted wide open.

cheers

mariner
aeternum nauta
 
vv701
Posts: 5783
Joined: Fri Aug 19, 2005 10:54 am

RE: BA & AA: Full Blown Merger Possible?

Sat Nov 26, 2005 11:52 am

Quoting Zone1 (Reply 1):
a foreign company cannot own a US airline outright. I don't know if the UK has the same type of laws

There are now no British laws about airline ownership. However when BA was privatised there was a law that stated that foreign ownership of BA was limited to 40 per cent of the Ordinary Capital.

Within 10 years - sometime in the first half of the 1990s - this 40 per cent was exceeded with nearly all the shares held by foreigners being held as ADRs in the USA. Rather than insist on a sale of shares by US owners the British government removed the limit.

Hence BA joins bmi and Virgin Atlantic - see Reply 2 - amongst 'British' companies that have very high level of overseas ownership.

This raises an interesting issue. If American institutions and private individuals collectively own more than 50 per cent of BA does that make BA an American instead of a British airline? If so and Americans own less than 75 per cent of BA then is BA breaking US laws on airline ownership!

(Smilies are much too complicated for someone like me but I am smiling at this thought even if you are not!)
 
jetdeltamsy
Posts: 2688
Joined: Tue Nov 14, 2000 11:51 am

RE: BA & AA: Full Blown Merger Possible?

Sat Nov 26, 2005 1:08 pm

I doubt this would ever happen.

The British would almost certainly balk at having their flag carrier owned by a non-British entity.

American Airlines would almost ceratinly not go along with being absorbed by another company.
Tired of airline bankruptcies....EA/PA/TW and finally DL.
 
atmx2000
Posts: 4301
Joined: Wed Oct 13, 2004 4:24 pm

RE: BA & AA: Full Blown Merger Possible?

Sat Nov 26, 2005 4:37 pm

Yes, you said:

Quoting Mariner (Reply 23):
Then again, the US majors - following that business model - are all up the financial creek.

Then you said:

Quoting Mariner (Reply 23):
So maybe - just maybe - there is a better model than the one they have been following?

So maybe, just maybe that extra little "- just maybe -" set off my snark alarm. If my snark alarm is overly sensitive and giving false positive readings, I apologize.
ConcordeBoy is a twin supremacist!! He supports quadicide!!
 
bobnwa
Posts: 4472
Joined: Fri Dec 22, 2000 12:10 am

RE: BA & AA: Full Blown Merger Possible?

Sat Nov 26, 2005 10:00 pm

Quoting Jetdeltamsy (Reply 35):
The British would almost certainly balk at having their flag carrier owned by a non-British entity.

They don't seem to mind that the Cunard line (QE2-QM2) are owned by Carnival Corp. an American company. Can't get much more British than those two ships.
 
Concorde001
Posts: 1186
Joined: Fri Jan 21, 2005 12:53 am

RE: BA & AA: Full Blown Merger Possible?

Sat Nov 26, 2005 10:11 pm

Quoting Jetdeltamsy (Reply 35):
The British would almost certainly balk at having their flag carrier owned by a non-British entity.

I don't think we mind that much. For example, look at some these quintessential British companies and their ownership :

Landrover is owned by Ford (American)
Jaguar is owned by Ford (American)
Austin Martin is owned by Ford (American)
Rover is owned by Nanjing Motors (Chinese)
Mini is owned by BMW (German)
Lotus is owned by Proton (Malaysian)
Bentley is owned by Volkswagen (German)
Rolls Royce (the car) is owned by Volkswagen (German)
Marconi (an inconic British company) is now owned by Ericsson (Swedish)
Abbey National is owned by Grupo Santander (Spanish)

I could go on and on!
 
Concorde001
Posts: 1186
Joined: Fri Jan 21, 2005 12:53 am

RE: BA & AA: Full Blown Merger Possible?

Sat Nov 26, 2005 10:17 pm

Quoting Concorde001 (Reply 38):
Austin Martin

Shoud be Aston Martin!
 
atmx2000
Posts: 4301
Joined: Wed Oct 13, 2004 4:24 pm

RE: BA & AA: Full Blown Merger Possible?

Sat Nov 26, 2005 10:27 pm

Quoting Concorde001 (Reply 38):
Austin Martin is owned by Ford (American)

Yeah, and that most excellent British Secret Agent is played by a Canadian. You, know Austin Powers.  Smile
ConcordeBoy is a twin supremacist!! He supports quadicide!!
 
thowman
Posts: 342
Joined: Tue Jul 06, 2004 6:51 am

RE: BA & AA: Full Blown Merger Possible?

Sat Nov 26, 2005 11:19 pm

I think if BA are going to merge with anyone, it is going to be IB. They already have a stake in IB and their routes complement eachother's very well.

A
 
atmx2000
Posts: 4301
Joined: Wed Oct 13, 2004 4:24 pm

RE: BA & AA: Full Blown Merger Possible?

Sat Nov 26, 2005 11:34 pm

Quoting Thowman (Reply 41):
I think if BA are going to merge with anyone, it is going to be IB. They already have a stake in IB and their routes complement eachother's very well.

A

Seems to be a logical outcome of merger mania in Europe. But perhaps they want to improve their financial situation before engage in such an endeavor.
ConcordeBoy is a twin supremacist!! He supports quadicide!!
 
ozglobal
Posts: 2524
Joined: Tue Nov 09, 2004 7:33 am

RE: BA & AA: Full Blown Merger Possible?

Sun Nov 27, 2005 1:53 am

Quoting Trvlr (Reply 26):
Quoting OzGlobal (Reply 14):
ROFL, If you compare to Continential OK, but who's doing that. We mean compared to good airlines

Can you name a "good airline" that even comes close to the network reach of American, especially in the US market?

Comparing US domestic market carriers is a different discussion. The thread is about AA/ BA and hence comparisons are on the international, not the domestic front........
When all's said and done, there'll be more said than done.
 
AJRfromSYR
Posts: 439
Joined: Tue May 17, 2005 6:03 am

RE: BA & AA: Full Blown Merger Possible?

Sun Nov 27, 2005 4:12 am

Quoting Qantasclub (Reply 30):
That's because where you come from, it's pretty much the norm. You should fly domestically within Australia or fly long haul on SQ or CX. It's a different world.

What are you trying to prove? You should fly on a BBJ, or a Golfstream, or a long haul on John Travolta's 707. It's a different world from where you come from.
-AJR-
 
jetdeltamsy
Posts: 2688
Joined: Tue Nov 14, 2000 11:51 am

RE: BA & AA: Full Blown Merger Possible?

Sun Nov 27, 2005 4:12 am

Quoting Concorde001 (Reply 38):
Quoting Jetdeltamsy (Reply 35):
The British would almost certainly balk at having their flag carrier owned by a non-British entity.

I don't think we mind that much. For example, look at some these quintessential British companies and their ownership :

Yea, but BA is your flag carrier. Maybe the average guy on the street wouldn't mind, but politicians LOVE to involve themselves with the airline industry and i think they would flip their lids. I think they would on this side of the pond as well.

Maybe not, but that's my opinion.
Tired of airline bankruptcies....EA/PA/TW and finally DL.