BA787
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Will AA Merge With BA?

Sun Jun 04, 2006 12:09 am

I know this has been about a lot but I am intrigued Any info will be well recieved cheers t.c.
 
SA7700
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 12:12 am

One word comes up in my mind: anti-trust. I don't see this happening.


Rgds

SA7700
When you are doing stuff that nobody has done before, there is no manual – Kevin McCloud (Grand Designs)
 
BA787
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 12:14 am

Quoting SA7700 (Reply 1):
anti-trust

dont understand my friend am new to this and only 14 yrs of age
 
m180up
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 12:25 am

Quoting SA7700 (Reply 1):
anti-trust.

regulations by goverments about monopoly, correct me if i'm mistaken
Werner from SAL
 
BA787
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 12:27 am

Quoting M180up (Reply 3):
regulations by goverments about monopoly, correct me if i'm mistaken

Thanks M180up  Embarrassment
 
SP90
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 12:31 am

Anti-trust = monopoly or unfair business practices

Why would BA and AA merging bring up anti-trust charges? There are lots of other airlines out there.

Taking it a step further, why merge the airlines within Oneworld, Skyteam and Star Alliance? So instead of having all these smaller airlines, you would have three big ones.
 
MaxQ2351
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 12:34 am

A "trust" is like a monopoly. Most countries have laws in place to prevent corporate monopolies. Why I'd almost be certain a AA-BA merger would not be allowed is because AA and AA Eagle are almost as large as all of the other oneworld alliance members combined. If AA and BA merged, they'd be unstoppable. It's not like AA hasn't been able to pull this off in the past before....where did they get the nickname of the "sky nazis"?!?! They're ruthlessly and exceedingly efficient at eliminating competition. Everyone who had a good life and career at Air Cal, Reno Air, TWA (the list goes on), found themselves on the streets after AA set their sights on them. If AA and BA merged, only the government could stop them......so the government prevents such monopolies in advance with the "anti-trust" laws as mentioned above.

-Max
The 777-200LR......2 engines 4 longer haul
 
BA787
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 12:38 am

Quoting MaxQ2351 (Reply 6):
so the government prevents such monopolies in advance with the "anti-trust" laws as mentioned above.

Dont ya just love Tony Blair and George Bush for being so awkward. I think mergers are the right way to go to prevent bankruptcies. Seing as Britain ajnd American are all ready in bed together why wont they let the airlines merge i wonder. lol  Wink
 
m180up
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 12:46 am

Quoting BA787 (Reply 7):
I think mergers are the right way to go to prevent bankruptcies

or for more banktrupcies to take place, as smaller carriers wouldn't survive the competition of such a big airline
Werner from SAL
 
vinniewinnie
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 12:46 am

As soon as an open-sky agreement is agreed on, expect new talks to start again!

They have tried and failed before due to their dominance on the London to America market! If they give in on the regulators prerequisites, they will certainly merge! They are meant to be together!  Wink
 
BA787
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 12:50 am

I hope it doesnt go the same way as the other America-Britain pacts. Iraq springs to mind
 
wrighbrothers
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 12:53 am

Quoting BA787 (Reply 2):
and only 14 yrs of age

Join the club !

I don't think it will happen soon, they just aren't compatable, the American company won't want to be controled, they'd want to be the one making the big decisions.
Their are also some other things that I can't think of right now

Wrighbrothers
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ordpia
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 12:53 am

Quoting BA787 (Reply 7):
Dont ya just love Tony Blair and George Bush for being so awkward. I think mergers are the right way to go to prevent bankruptcies. Seing as Britain ajnd American are all ready in bed together why wont they let the airlines merge i wonder. lol

It has nothing to do with George Bush or Tony Blair. The US has had "The Sherman Antitrust Act" in place since 1890 when it was enacted because the Standard Oil Company had a majority control of the oil in the US thus allowing them to control prices (this might be a bit confusing given the current situation with OPEC but, as OPEC is a cartel, made up of several companies and countries they are legal). And as far as the whole Bush thing goes his policy is quite pro-business, which is why I like him as my company has gone through record profits since his election and my stock options make me smile, Its not simply up to him to allow such an action to take place, it would require the other two branches of the government (judicial and legislative) along the same lines as the UA - US merger, also there is one larger problem besides it creating an antitrust issue and that is the fact that the US does not allow for foreign ownership above a certain percentage of a US carrier, a la the current Virgin America situation. Sorry if this is a bit wordy but hopefully it helps.
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BA787
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 12:54 am

Im glad there are other people of my age here

Quoting Wrighbrothers (Reply 11):
Join the club !

lol
i hope it does happen soon even tho u r probably right
 
BA787
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 12:57 am

Sorry ORDOPIA
[quote=ORDPIA,reply=12]It has nothing to do with George Bush or Tony Blair.[/quote/]

was a joke though but that reply was very helpful cheers tc
 
lincoln
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 1:02 am

Quoting BA787 (Reply 7):
Dont ya just love Tony Blair and George Bush for being so awkward.

At least in the US, antitrust laws date to the early 1900s, and it can be argued that antitrust laws are a very un-Republican (the US political party that President Bush belongs to, not the mode of governent) regulation on and interference with business.

For a more indepth overview of Antitrust concerns, see the Wikipedia article at http://en.wikipedia.org/wiki/Anti-trust

I'm not totally convinced that an AA-BA merger would raise antitrust concerns... there may be a few aspects and the combined airline may be forced to divest certain assets (LHR landing slots, routes, etc) to preserve compensation, but I think on the antitrust front it could happen.

I DON'T think it could happen, however, because of the laws in the US preventing foreign ownership of a domestic airline... Unless AA purchased BA (assuming the UK doesn't have similar laws)... and even then there are regulatory hurdles.

Lincoln
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BA787
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 1:04 am

coul the airlines not purchase 50% of each other or is that not allowed either Will oneworld ever encourage merging of its airlines
 
m180up
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 1:04 am

Quoting ORDPIA (Reply 12):
US does not allow for foreign ownership above a certain percentage of a US carrier

So they will definitely have to find a way to overcome this, but I don't think it will be allowed, does anyone knows the rules on great britain, let's say AA takes over BA, what are the rules of ownership of an airline in hte UK?
Werner from SAL
 
EddieDude
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 1:17 am

Quoting SP90 (Reply 5):
Why would BA and AA merging bring up anti-trust charges? There are lots of other airlines out there.

The North Atlantic market, specifically the U.S.-U.K. market would be dominated by the resulting company to such an extent that rivals such as UA, VS, etc. would be de facto displaced from it.

Quoting BA787 (Reply 7):
mergers are the right way to go to prevent bankruptcies

U.S. regulators may allow a merger that would otherwise concentrate the market beyond the acceptable thresholds if one of the parties is in imminent risk of bankruptcy or winding-up in case the merger is not accomplished. But that is a different story.

There is one more reason why a BA-AA merger has many obstacles. U.S. laws have restrictions on foreign investment in the airline industry. Therefore, BA shareholders would have to be happy with a small percentage of the surviving entity's capital stock or a very complicated ownership structure would have to be implemented.
Next flights: MEX-LAX AM 738, LAX-PVG DL 77L, SHA-PEK CA 789, PEK-PVG CA A332, PVG-ORD MU 77W, ORD-MEX AM 738
 
BA787
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 1:19 am

Quoting EddieDude (Reply 18):
UA, VS, etc. would be de facto displaced from it

I like that idea Richard Branson irritates me
 
MaxQ2351
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 1:27 am

Quoting BA787 (Reply 19):
I like that idea Richard Branson irritates me

Haha me too...... I'm personally diehard pro-AA, they're my fave airline by a long margin, and I rather like BA too, so I would be all for a merger between the two even though that would be rather unlikely, as deliniated by everyone above. It would be a glorious day though if BA and AA could team up against Branson and systematically eradicate him from the market!!!

Now, for all you pro-VS people out there, bring on the  flamed  !!!

-Max
The 777-200LR......2 engines 4 longer haul
 
Ken777
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 1:28 am

I doubt if a merger is in the interests of either company. BA is doing far better than AA financially and won't want the burden. Neither company will want to give up LHR slots for it to happen.

What I do see is an anti-trust relief that will allow code sharing on flights over the Atlantic as well as both working together in areas of purchasing, maintenance, etc. In this area I think the governments have a responsibility to ensure that AA & BA are not disadvantaged when compared to the competition and the Bush Administration has been rather poor in this regard - as well as other issues.
 
ordpia
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 1:29 am

Quoting BA787 (Reply 16):
coul the airlines not purchase 50% of each other or is that not allowed either Will oneworld ever encourage merging of its airlines

Unfortunatly even this would be impossible as the current law which dates to 1940 only allows for 25% foreign investment in a US airline. There are also similar laws in the UK, as well as the say that the E.U. would have. The E.U. has been making themselves somewhat protected recently in regards to foreign investment.

If anyone knows the actual %age in the UK law it would be much appreciated.

Welcome to a.net BA787
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Joost
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 1:32 am

To answer in a bit more detail: in the current agreements, a BA-AA merger will not happen.

Have you heard of the Bermude II treaty? In a nutshell, it means that only 2 American and 2 British carriers can fly from Heathrow to the USA. Currently, these are American Airlines and United Airlines, and British Airways and Virgin Atlantic. This is also the reason why BMI or Continental don't serve LHR.

BA and AA together would have considerably more than 50% of the USA-London Heathrow market when merged, with very limited options for competition (only US and VS).

The American an European governments forbid AA and BA to do codesharing / revenue sharing on LHR-USA. You can see that even as they are both in OneWorld, they can not codeshare: yes, BA and AA compete with each other on LHR-ORD, whilst working together on MAN-JFK. Strange situation, I agree, but that's how it works.
 
SA7700
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 1:48 am

Quoting BA787 (Reply 2):
dont understand my friend am new to this and only 14 yrs of age

I'm sorry that I did not clarify the concept of anti-trust at first. As Max pointed out, a BA-AA merger would become an unstoppable "beast".

Quoting SP90 (Reply 5):
Why would BA and SA)">AA merging bring up anti-trust charges? There are lots of other airlines out there.

Taking it a step further, why merge the airlines within Oneworld, Skyteam and Star Alliance? So instead of having all these smaller airlines, you would have three big ones.

If I remember correctly, BA and American alone have about 40% of the UK-USA market share; which is quite significant in my humble opinion. Should BA-AA be allowed to merge, their sheer economies of scale would crush the "competition" in no time.

Simply merging airlines, within the big three alliances would be catastrophic. Should it ever be allowed, basically an oligopoly would be created. An oligopoly is a market which is dominated by a small number of sellers (oligopolists). Oligopolistic competition can give rise to a wide range of different outcomes. In some situations, the firms may collude to raise prices and restrict production in the same way as a monopoly.

Less airlines = less competition = higher fares

As matter of interest - SA and LH has recently been fined $8.24 and $1.27 million respectively, by the Competitions Commission of South Africa, for anti-competitive behavior.

The Competition Commission has fined South Africa's national carrier, SA R55m. Only five months ago, SA paid another fine of R45m for competition irregularities.

The latest fine came after the commission and SAA concluded a consent agreement concerning a number of complaints against the airline.

An investigation was conducted by the commission into various bilateral agreements between SAA and Lufthansa that deal with their relationship in respect of code share flights, which they both operate between Cape Town, Johannesburg and Frankfurt.

The commission found that the bilateral agreements created a platform for SAA and Lufthansa to collude and that the airlines had used the opportunity to fix the selling price of air tickets on these flights


Here is a link to the entire article:

http://www.moneyweb.co.za/shares/industrials/420054.htm

http://www.moneyweb.co.za/specials/corp_gov/467380.htm

Rgds

SA7700
When you are doing stuff that nobody has done before, there is no manual – Kevin McCloud (Grand Designs)
 
Avatordon
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 1:49 am

So long as there is no Open Skies treaty between the US & UK, which means no anti-trust immunity, ain't gonna happen. Besides, AA is a **very** aggressive competitor - oneworld or codeshare agreements notwithstanding. They are out for number one - themselves - and don't play well w/others. This isn't necessarily a bad thing, just the nature of the beast. Besides, their track record of mergers - each and every carrier they acquired- Air Cal, Reno and TWA - was systematically dismantled - isn't the best. Only TransCaribbean seems to have been a good fit.
 
BA787
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 1:51 am

Any rules restricting BA workijng with oneworld. Could oneworld set up a comapny in the US and then buy AMR and BA lol then merge all of oneworld into 1 world conquering airline
 
wrighbrothers
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 1:57 am

Quoting BA787 (Reply 26):
Any rules restricting BA workijng with oneworld. Could oneworld set up a company in the US and then buy AMR and BA lol then merge all of oneworld into 1 world conquering airline

Their aren't any rules as far as I'd know, but I doubt airlines like CX and IB would be happy about being absorbed into one airline, to defeat one airline.
The last time British airlines partnered up (not as a one airline though), was when the tried to oust Sky-tran , it it ended up a horrible mess

And of-course, once One world do it, who's to say Star alliance wouldn't do the same to outs BA or AA ?

Wrighbrothers
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ClassicLover
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 2:01 am

Quoting BA787 (Reply 26):
Any rules restricting BA workijng with oneworld. Could oneworld set up a comapny in the US and then buy AMR and BA lol then merge all of oneworld into 1 world conquering airline

It wouldn't happen... the Aussie's wouldn't want to lose QF to some mega airline, ditto with every other oneworld airline and their respective countries. Interesting thought though, you never know what might happen in the future!
I do quite enjoy a spot of flying - more so when it's not in Economy!
 
BA787
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 2:05 am

adfdition to my former Oneworld idea

The airlines keep their own identities but work as a whole company i.e. staff wages and bank account. BA could buy thomsonfly that would be interesting
 
ordpia
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 2:14 am

Quoting BA787 (Reply 26):
Any rules restricting BA workijng with oneworld. Could oneworld set up a comapny in the US and then buy AMR and BA lol then merge all of oneworld into 1 world conquering airline

Interesting thought, what would be possible is a group of investors setting up a firm that would buy, on the open market, a controlling stake of both companies, by doing this they could conceivably combine both AA and BA if only by corporate oversight and governance.

As to the whole Bermuda II argument, a simple(in thought not process) amendment to swap out either BA or AA and replace them with BM or CO would work.

I love hypotheticals
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Tom12
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 2:17 am

Wouldn't Dallas Law and UK Laws kinda stop such a merger?

Tom
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jetdeltamsy
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 3:11 am

Only if ownership laws change in the U.S.

One must remember that BA has a huge underfunded pension liability and AA competes in the domestic US marketplace, which is basically unprofitable.

It would be an interesting combination.
Tired of airline bankruptcies....EA/PA/TW and finally DL.
 
bmacleod
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 3:19 am

Well maybe LH and UA can merge as well (Star). Or AF and DL (Skyteam)...  rotfl   rotfl 

What would be the purpose anyway of merging the largest carriers of two countries?
"What good are wings without the courage to fly?" - Atticus
 
SPREE34
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 4:15 am

I hope not. It would probably bring down the quality of the BA product. I try to always fly BA or VS to the UK and beyond. I found IB nice as well. I haven't seen a US Carrier compare in quality of service.
I don't understand everything I don't know about this.
 
RIXrat
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 4:20 am

I like the new name. British-American. From a marketing viewpoint, it sounds better than American-British. Besides, the BA ID sign would still work. Just a fleeting thought for whenever.
 
ikramerica
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 4:26 am

Quoting SP90 (Reply 5):
Why would BA and AA merging bring up anti-trust charges? There are lots of other airlines out there.

LHR-NYC

BA-AA would dominate this market unless BII is abandoned.
Of all the things to worry about... the Wookie has no pants.
 
Tom12
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 4:28 am

I am a little confused, a merger like the HP-US merger or like the AirFrance-KLM merger?

Tom
"Per noctem volamus" - Royal Air Force Bomber Squadron IX
 
BA787
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 4:49 am

Quoting Ikramerica (Reply 36):
I am a little confused, a merger like the HP-US merger or like the AirFrance-KLM merger

if HP=America West then i mean a merger like Air France/KLM A whole company with two seperate corporate identitys
 
vv701
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 9:22 am

Quoting M180up (Reply 17):
does anyone knows the rules on great britain, let's say AA takes over BA, what are the rules of ownership of an airline in hte UK?

In general there are no rules relating to take overs or mergers in the UK. So SQ own 49 per cent of VS and LH and SK own half less one share of BD.

However when BA was privatised back in the 1980s the privatisation included a regulation that only 40 per cent of the shares could be owned by non-British shareholders. However within two or three years it became clear that over 40 per cent of BA was owned by American institutional and private investors. Confronted with three alternatives - insisting that some foreign (US) owners of BA shares sell them, forcing BA to issue more shares to British institutions or private individuals (and thus diluting the shareholding of all existing shareholders) or changing the rule, the British government did the sensible thing and abolished the restriction. So today it is possible that BA is an American airline if the nationality of an airline is a reflection of the nationality of the owners of the largest proportion of its shares. (Similarly BAA is currently fighting a hostile bid that would make the ownership of its airports including LHR, LGW and STN Spanish.)
 
floridaflyboy
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 9:29 am

Quoting BA787 (Reply 2):
dont understand my friend am new to this and only 14 yrs of age

Hey, good to see new interest I joined A.Net at 14. As for AA and BA merging, countries not connected by an alliance like the EU tend to frown on companies merging across borders, especially in the airline industry, and especially in the United States. Plus, the AA and BA fleets aren't that compatible.
Good goes around!
 
WunalaYann
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 10:17 am

Quoting SPREE34 (Reply 34):
I hope not. It would probably bring down the quality of the BA product.

I think this is a very valid point. I will not go into a discussion regarding AA's and BA's merits, but if OneWorld merged into one airline, would it mean that CX customers would get IB-like service? OneWorld boasts some of the finest airlines in the world, at least from a reputation standpoint, such as CX, BA, QF and soon JL as well. But you also find AA and IB which, shall we say, offer slightly inferior products.

What would be the new standard? Would we still have "geographical" markets, like Asia-Oceania getting the top notch service and trans-At getting, er, well, you know, trans-At service?

Or would AA suddenly turn into JL?

The same goes for Skyteam and Star Alliance. The aggregation of airlines with very different quality standards might prove very difficult to achieve.

My two cents.

Take care.
 
m180up
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 11:45 am

Quoting Joost (Reply 23):
with very limited options for competition (only US and VS).

US only serves LGW, i know you meant UA but couldnt resist  Big grin
Werner from SAL
 
notdownnlocked
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 12:41 pm

Of couse they will both merge. It will happen just as soon as Thomas Jefferson and others within the US government apologize for the Boston tea party. Retract the remains of the tea from the Boston Harbor as well US independence and then perhaps AA will be forced to merge with BA. Case solved. Such a simple solution that it's not even worth a thread here at a.net.
 
777STL
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 12:58 pm

Quoting BA787 (Reply 26):
Any rules restricting BA workijng with oneworld. Could oneworld set up a comapny in the US and then buy AMR and BA lol then merge all of oneworld into 1 world conquering airline

Oneworld is basically just an alliance. It isn't much of a corporation, if one at all. I'm not entirely familiar with the the corporate structure of Oneworld, but suffice it to say, that could never happen.

Quoting ORDPIA (Reply 30):
Interesting thought, what would be possible is a group of investors setting up a firm that would buy, on the open market, a controlling stake of both companies, by doing this they could conceivably combine both AA and BA if only by corporate oversight and governance.

Most likely only through a hostile takeover and the odds of that happening are slim to none. AA and BA, unlike many airlines out there, actually have decent management. You'd have a hard time convincing shareholders otherwise at this current point in time. Also, to be specific, you'd be attempting a takeover of AMR, not AA directly.
PHX based
 
HunUtazo
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 1:06 pm

AMR will purchase nwac..
dude
 
SPREE34
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 1:28 pm

Quoting HunUtazo (Reply 45):
AMR will purchase nwac..

What will AA pay for this with?
I don't understand everything I don't know about this.
 
HunUtazo
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 3:33 pm

ge jp etc......................,
dude
 
BA787
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 4:48 pm

Quoting WunalaYann (Reply 41):
But you also find AA and IB which, shall we say, offer slightly inferior products.

What would be the new standard? Would we still have "geographical" markets, like Asia-Oceania getting the top notch service and trans-At getting, er, well, you know, trans-At service?

Or would AA suddenly turn into JL?

The same goes for Skyteam and Star Alliance. The aggregation of airlines with very different quality standards might prove very difficult to achieve.

My two cents.

Take care.

Remember i am jus speculating if the merger took place(not likely but humour me ) i would think that the extra money brought in from profitable airlines such as CX or QF could be used to make all oneworld airlines service and quality equal  Wink
 
WunalaYann
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RE: Will AA Merge With BA?

Sun Jun 04, 2006 5:15 pm

Quoting BA787 (Reply 48):
the extra money brought in from profitable airlines such as CX or QF could be used to make all oneworld airlines service and quality equal

Considering the catastrophic state of some of the members, I doubt all the (little) money made by the most profitable airlines in the world would make a difference.

From what I have heard and gathered browsing the web and talking to people in the industry, service quality is more a question of mentality than money. I do not think that Ethiopian actually swims in cash yet they have a very good reputation for their long haul service.

On the contrary, although LH offers a good product in my opinion, they do make very substantial profits but are definitely out-ranked by other airlines when it comes to service.

Go figure.

But definitely go Asian-Gulf-Oceanian-British airlines...  Smile

Y.