Metrojet732
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AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 2:51 am

First of all, be kind to me. I’m new here. I’ve been a A.net fan for years and finally decided to join. Sorry if this was brought up already but anywho, with all the talk about A- AA and jetBlue merging n B- AA and US merging. Take away all the problems at with unions and what not. Just for fun, what would a AA, B6 and US merger look like?? Would it be possible??
 
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enilria
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 2:59 am

Too big. Too much Northeast service. Not going to happen. To me, route network is the most important factor in a merger and labor is probably second. On both of those counts US is inferior to AA/IAG and B6 is vastly superior. The problem is that US wants to buy and B6 wants to sell (not buy) and AA can't buy a bag of dirt.
 
BD338
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 3:07 am

What is the fascination on a.net with AA and B6 merging? The product offering is so different that I don't get why they would ever want to merge with each other. The B6 culture, service and differential offering (all coach with extra room seats etc.) would probably disappear overnight. AA and B6 have different business models serving different passenger profiles. I don't (and hopefully won't) see it happening...unless AA & B6 looks like B6  
 
BOStonsox
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 3:11 am

   First of all, welcome to a.net!

I do not see what US offers that will help either carrier, aside from the CLT hub. They will not keep PHL if they have BOS and JFK. PHX will have to battle with DFW and LAX.

Hubs would be DFW, ORD, MIA, JFK, CLT, BOS, LAX, and SJU. Focus cities would be MCO, PHL, and PHX.
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DeltaMD90
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 3:24 am

Quoting BD338 (Reply 2):
What is the fascination on a.net with AA and B6 merging?

I'm with you on this one... EXCEPT for the US/DL debacle years ago. In fact, I have a "Keep Delta My Delta!" button right next to me. THAT is why I'm certain Parker will make a bid (even if he is not successful)
Ironically I have never flown a Delta MD-90 :)
 
Byrdluvs747
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 4:42 am

Quoting BD338 (Reply 2):
What is the fascination on a.net with AA and B6 merging?

The fascination is that B6 and AA fit together better than AA and US. In fact, I would argue that a AA B6 merger/partnership is critical to AA regaining its NYC luster. B6's slots are far more valuable than any US assets. PHL, PHX, CLT are not needed by AA.
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Squid
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 4:51 am

Well, I could see AA merging, but in my opinion it will be with US, not B6. The likelihood of a merger with all three is not likely. Merging just two airlines together is hard enough. Also, B6 would not be a good merger candidate with AA because AA's costs are too high to make B6 route network profitable, and I think it will still be too high after bankruptcy. Their costs will be much lower and more in-line with Delta and United, but I think they will still be much higher than Jet Blues right now. If AA mere to merge with B6, they would get a brand new terminal and many landing slots, but many of those routes would get the ax. That's not to say that AA couldn't make use of those gates, planes and slots in a more profitable way, but in my opinion, AA would be better off focusing on their current corporate contracts and utilizing their current gates and slots to focus on their O&D and their Trans-Atlantic network and then just strengthening their relationship with JetBlue. I myself see more value in a merger with US alone, as it would give AA the PHL hub, which has cheaper airport fees, less competition, US's corporate travel contracts, and with some long term investment, has room to grow as PHL the city grows. PHL is a high yield market, maybe not as much as NYC, but because of the lower fees and fewer competitors, is much more viable as a NE hub and Trans-Atlantic gateway. I think with Delta already firmly entrenched in JFK and LGA, and jetBlue serving many domestic markets that AA could not do profitably, and UAL already entrenched in EWR, PHL is the most logical choice for a NE hub. Also CLT after some right sizing, will give AA a true presence in the SE since Nashville, Memphis, Greensboro, and Raleigh-Durham are not viable hub options, IAD is taken and Jacksonville is too close to MIA, and New Orleans is too close to DFW and neither of these would make good hubs anyway. Also, AA upon leaving bankruptcy is not going to be in a position to launch a new hub anyway, they however would inherit a fully operational hub in CLT from a merger. The real question after a merger with US Airways would be what would happen to PHX. I personally believe it would be downgraded to a focus city, and AA would transfer most of the connection through LAX, and let SWA have PHX. The PHX economy is a tourist/snow-bird (retirement) destination, and doesn't have many large companies that keeps the yield higher from business travel. It does get quite a few conventions, but even that isn't enough to sustain a hub for an airline like AA.

One thing that many people don’t seem to understand or talk about much when contemplating the likelihood of a merger with US Airways is the economies of scale that AA will definitely need in order to compete long-term. Something they wouldn’t really get from a merger with B6. That is why I really think a merger with US Airways, either while in bankruptcy, or soon after leaving is inevitable. It really would solve many of their problems they are dealing with right now.

Well that's my two cents anyway. By the way, welcome to Anet!
 
BD338
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 5:07 am

Quoting Byrdluvs747 (Reply 5):

Quoting BD338 (Reply 2):
What is the fascination on a.net with AA and B6 merging?

The fascination is that B6 and AA fit together better than AA and US. In fact, I would argue that a AA B6 merger/partnership is critical to AA regaining its NYC luster. B6's slots are far more valuable than any US assets. PHL, PHX, CLT are not needed by AA.


Ok, so it is a pure asset grab and nothing to do with B6 as an airline.

Quoting Squid (Reply 6):
The real question after a merger with US Airways would be what would happen to PHX. I personally believe it would be downgraded to a focus city, and AA would transfer most of the connection through LAX, and let SWA have PHX. The PHX economy is a tourist/snow-bird (retirement) destination, and doesn't have many large companies that keeps the yield higher from business travel. It does get quite a few conventions, but even that isn't enough to sustain a hub for an airline like AA.

I could see a large focus city serving major business centers, there is enough business traffic to serve major cities but the likes of Flagstaff and Yuma would probably lose out.
 
HPRamper
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 5:18 am

Quoting BOStonsox (Reply 3):
They will not keep PHL if they have BOS and JFK. PHX will have to battle with DFW and LAX.

The PHL market is nearly 1.5 million more people than BOS, growing slightly faster, and is leeched from by other airports less than BOS is. PHL is the #5 MSA in the country, BOS is #10. I don't think there is any benefit to serving BOS over PHL.

Quoting BD338 (Reply 7):
I could see a large focus city serving major business centers, there is enough business traffic to serve major cities but the likes of Flagstaff and Yuma would probably lose out.

Cities like Flagstaff and Yuma would most likely keep service to PHX. It would be a regional focus, so air routes in the Southwest and some of the southern Mountain states where connecting at LAX would make little sense would still connect at PHX. It would look like the western version of DCA or LGA.
 
Squid
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 5:21 am

Quoting HPRamper (Reply 8):
Cities like Flagstaff and Yuma would most likely keep service to PHX. It would be a regional focus, so air routes in the Southwest and some of the southern Mountain states where connecting at LAX would make little sense would still connect at PHX. It would look like the western version of DCA or LGA.

I agree, and AA would fly 737's and A320 several times daily into LAX, DFW and ORD.
 
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stasisLAX
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 5:58 am

Quoting Squid (Reply 6):
The PHX economy is a tourist/snow-bird (retirement) destination, and doesn't have many large companies that keeps the yield higher from business travel. It does get quite a few conventions, but even that isn't enough to sustain a hub for an airline like AA.

PHX is a popular vacation location (especially for golfers) and does indeed have a number of large corporations doing business here - Banner Health Systems, Intel, Freeport-McMoran, and Honeywell have well over 10,000 employees based in PHX, and the Apollo Group, JP Morgan Chase, Wells Fargo, and American Express all have very large presences (7000+ employees) in the Valley of the Sun.

Quoting HPRamper (Reply 8):
Cities like Flagstaff and Yuma would most likely keep service to PHX. It would be a regional focus, so air routes in the Southwest and some of the southern Mountain states where connecting at LAX would make little sense would still connect at PHX. It would look like the western version of DCA or LGA.

Agree completely. I'd add Tucson, El Paso, and ABQ to that regional network as well.
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smoot4208
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 6:06 am

Quoting Squid (Reply 6):
I myself see more value in a merger with US alone, as it would give AA the PHL hub, which has cheaper airport fees, less competition, US's corporate travel contracts, and with some long term investment, has room to grow as PHL the city grows. PHL is a high yield market, maybe not as much as NYC, but because of the lower fees and fewer competitors, is much more viable as a NE hub and Trans-Atlantic gateway. I think with Delta already firmly entrenched in JFK and LGA, and jetBlue serving many domestic markets that AA could not do profitably, and UAL already entrenched in EWR, PHL is the most logical choice for a NE hub.

That is absolutely correct. I believe long term, DL will lose out in LAX and AA will gain. In the LGA/JFK market, I think Dl will win out, and AA will lose. Everything said above is why PHL would be the logical hub. JFK, LGA, and PHX would all be reduced. And people need to stop thinking AA/B6 is feasible. AA's cost structure wouldn't work on many of the B6 routes. US President Scott Kirby repeatedly states the same thing that a US merger with say F9, B6, NK, or AS would not be effective because the other airlines are too small so synergies wouldn't be there, and cost structures are different.
 
BOStonsox
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 6:11 am

Quoting HPRamper (Reply 8):
The PHL market is nearly 1.5 million more people than BOS, growing slightly faster, and is leeched from by other airports less than BOS is. PHL is the #5 MSA in the country, BOS is #10. I don't think there is any benefit to serving BOS over PHL.

The MSA has a few flaws when it comes to using it for air markets. Also, their boundaries are county lines, which can be problematic. For example, PVD has its own MSA, which can include populations that are just as likely to use either airport (especially those in Bristol County, MA). CSAs are more useful with international gateways if there is only one. BOS's CSA is #5 while PHL's is #8.

But even then, it's O&D that matters in the end. Even if PHL has more O&D in domestic traffic, it certainly doesn't beat BOS in international traffic.
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Squid
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 6:44 am

Quoting BOStonsox (Reply 12):
But even then, it's O&D that matters in the end. Even if PHL has more O&D in domestic traffic, it certainly doesn't beat BOS in international traffic.

That may be true, but BOS is saturated with international service from many foreign carriers and PHL is much less so. AA would immediately inherit those flights whereas AA in BOS would have to instigate a massive affront to get those foreign carriers to retreat or scale back.

Also, BOS is not that ideally situated for a major hub. Sure it can support a big regional operation with some long-haul trans-cons, but not much more. PHL, because of its location, is much better positioned for connecting traffic, internationally, as well as domestically along the eastern sea-board. Furthermore, although JetBlue has be very successful in their JFK and BOS operations, they rely much more heavily on O&D than US Airways does with PHL which is evident alone just by the size of these operations alone. I don't have the numbers in front of me, but I would guess that US Airways in PHL is bigger than B6 in JFK and BOS combined, and they probably garner a higher yield per seat average as well.

If AA is to save ORD for the long term, they would be better off with merging with US Airways over jetBlue too. There are many smaller cities in the SE and around the DC area that AA does not serve. This is not something they would gain from a merger with jetBlue. Furthermore, it would save and possibly even grow ORD as those passengers could be routed through ORD when flying into smaller cities throughout the upper mid-west. Same thing for the PHX/LAX operation. There are many cities scattered throughout the Southwest that AA doesn't serve that would be brought into the AA network, adding even more connection possibilities. AA already serves most of the same cities that jetBlue serves, even many of the same routes. The routes that AA doesn't serve isn't because of a lack of gate space or landing slots in BOS or JFK, it's because they can't make money as most of those flights are vacation travelers into the Caribbean. BOS has room to grow if AA chose to do so, but they don't, and the only thing they would gain from jetBlue at JFK would be landing slots and the elimination of a low-cost competitor. Other than that, they would get a bunch of lights into Florida.

It looks good on paper, but in reality doesn’t add much value to AA
 
MAH4546
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 6:53 am

Quoting smoot4208 (Reply 11):
And people need to stop thinking AA/B6 is feasible. AA's cost structure wouldn't work on many of the B6 routes

Yes, it would, because when AA and B6 merge, you eliminate the reason it doesn't work: B6.

Not only that, but B6 and AA pilots for comparable equipment currently make nearly identical hourly rates, but AA pilots have far more benefits (many of which will be drastically reduced with Chapter 11) and work less monthly hours.

I've said this opinion before and stand by it: AA and B6 will merge.
a.
 
Squid
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 7:08 am

Quoting mah4546 (Reply 14):
Yes, it would, because when AA and B6 merge, you eliminate the reason it doesn't work: B6.

JetBlue's biggest competitor is not another airline, it is their own customers because most of them are price sensitive leisure travelers, and if their ticket prices rise too much, then they cannot fill the plane. jetBlue still has a relatively young work force, something not enjoyed at AA. There is more too it than pilot wages and benefits, you have to look at the overall operation. Even before jetBlue really blew up in size, AA was beginning to retreat from many of their NYC-Florida markets. And one could even argue that after deregulation, that was Easterns biggest problem was they were too dependent on vacation travelers that are extremely price sensitive. AA can merge with B6, and eliminate a low cost competitor, but that doesn't mean that AA can then jack up fares and expect to still fill the planes. And AA will have to raise the fairs because their costs will not be comparable with jetBlue's. The only way AA could make a merger with jetBlue viable would be to operate it as a separate subsidiary; something along the lines of Song at Delta, and Ted at United. And we all saw how well that worked out.
 
MAH4546
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 7:14 am

Quoting Squid (Reply 15):
it is their own customers because most of them are price sensitive leisure travelers,

Not true. jetBlue has actually been a great case study in the business world of how to attract premium passengers with an affordable pice. Furthermore, the Caribbean holiday markets are not price sensitive outside of AUA/MBJ/PUJ/NAS. It is actually a very premium market, with high fares and high room rates.
a.
 
747400sp
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 7:20 am

Quoting BD338 (Reply 2):
What is the fascination on a.net with AA and B6 merging? The product offering is so different that I don't get why they would ever want to merge with each other. The B6 culture, service and differential offering (all coach with extra room seats etc.) would probably disappear overnight. AA and B6 have different business models serving different passenger profiles. I don't (and hopefully won't) see it happening...unless AA & B6 looks like B6




I have to agree. Look, we already lost one airline that gave you good comfort at a low price to WN, lets not lose another one to AA.
 
smoot4208
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 7:22 am

Quoting mah4546 (Reply 16):
Not true. jetBlue has actually been a great case study in the business world of how to attract premium passengers with an affordable pice.

My company is based in Boston, and is not allowed to fly WN, FL, or B6 because they don't offer any business product (I would actually have to pay out of pocket if I choose to fly one of those carriers. Even though B6 offers the most destinations from BOS, US and DL are still our preferred carriers.

Quoting Squid (Reply 15):
JetBlue's biggest competitor is not another airline, it is their own customers because most of them are price sensitive leisure travelers, and if their ticket prices rise too much, then they cannot fill the plane

Exactly. Which is why B6 has often been one of the last airlines to go along with a fare increase. On top of that business travelers prefer LGA over JFK. This is why B6 doesn't really serve many business destinations from B6, unless that destination also has significant leisure travel like ORD, SFO, and LAX
 
Byrdluvs747
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 7:30 am

Quoting BD338 (Reply 7):
Ok, so it is a pure asset grab and nothing to do with B6 as an airline.

If the two are actually merged then yes. B6's domestic ops could free up many of AA's slots for more TATL operations. If B6 were kept as a seperate carrier(which AMR could do post BK), then the B6 brand still retains value. This is why B6 is worth more to AA than US.

Quoting smoot4208 (Reply 11):
Everything said above is why PHL would be the logical hub. JFK, LGA, and PHX would all be reduced.

 

Pure nonsense!! There is nothing logical about PHL replacing JFK as a hub. JFK is OW's(AA,AB,BA,IB,JL,CX,AY) northeast hub and should be AA's priority. Other than AA and BA, no other OW member airlines fly to PHL. PHL's role would resemble LGA more than JFK. O&D TATL traffic and northeast connections that don't need to touch NYC should be PHL's role.

Quoting smoot4208 (Reply 11):
And people need to stop thinking AA/B6 is feasible. AA's cost structure wouldn't work on many of the B6 routes.

And people need to stop elevating US' importance in relation to AA.

Newsflash! AA is in BK to reduce their costs. Most likely, they will look to strip out the union contract elements that prevent AMR from operating multiple carriers with multiple agreements at different costs.

B6 is of more strategic importance to AA(and OW) than US, and a AA/B6 merger would go a long way to reversing the JFK mistakes AA made in past... plain and simple.
The 747: The hands who designed it were guided by god.
 
Squid
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 7:39 am

Quoting mah4546 (Reply 16):
with an affordable pice

Right, you just said it yourself. AA needs many business passengers to pay $800 + on their flights to make them profitable, and most people going on vacation will not pay that much.

I hate to keep beating this horse but I guess the best way to explain this would be to look at the NYC market from a historical perspective. Before jetBlue, JFK was a rather sleeply place until after dinner when all the Trans-Atlantic flights departed. They had trans-con's and a few regional domestic flights, but it was not a saturated market by any stretch. EWR was growing like gang-busters after Continental acquired People Express and realized that they didn't have to actually concentrate on LGA to capture the NYC passenger. However other than Continental at EWR, the majority of NYC passengers flying domestically flew out of LGA. And much like today, LGA was a saturated airport, but back then most airlines flew much bigger planes primarily into their major hubs. It was normal to see United, AA, TWA, Northwest, Delta, and USAir DC-10s, L1011's, 767's, 757's, and 727's to ORD, SJU, MIA, DTW, MCO, PIT, CLT, and DFW. Actually seeing anything smaller than a DC-9 was rare. Back then, low fare vacation travelers on their way to the islands or to Florida flew out of LGA on a big jet into a hub and transferred flights. This allowed the major airline to keep their yields higher by weaving low fare passengers in with the high paying business passengers.

Then jetBlue came along a saw an opportunity in NYC. They realized that they could utilize the underserved JFK, and together with their much lower costs due to being a brand new airline, they could actually capture many of those vacation travelers and they wouldn’t mind driving out to JFK to save a few bucks and to avoid a transfer. It didn't take long to see what happened. Today, the biggest plane one see's at LGA is a 757, but it's more likely to be a 737, A320, or a regional jet. jetBlue changed the game in NYC, and although they do attract business passengers, they don't garner the higher yields that are necessary to sustain the major airline at the same capacity. With time, jetBlue's costs will rise, just like they did at Southwest, and if they are still in business in 30 years, I have a hunch that they will not offer many of the same flights unless somehow Orlando or Tampa becomes a major business destination or they are able to grow fast enough and bring in new hires fast enough to spread their costs out.

Would eliminating jetBlue help AA out? Absolutely, it would help all of the airlines out, but I don't believe that United or Delta would be rushing in with larger AC or more frequencies to fill the vacuum created to Orlando. More seats would be offered, but not many in order to drive their yields up, thus many people would either be driving to Florida or not going.
 
Squid
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 8:03 am

Quoting Byrdluvs747 (Reply 19):
Pure nonsense!! There is nothing logical about PHL replacing JFK as a hub. JFK is OW's(AA,AB,BA,IB,JL,CX,AY) northeast hub and should be AA's priority. Other than AA and BA, no other OW member airlines fly to PHL. PHL's role would resemble LGA more than JFK. O&D TATL traffic and northeast connections that don't need to touch NYC should be PHL's role.

Right, and no one is advocating that AA dismantle what they have in JFK. But bringing US into AA would greatly benefit AA over B6 as it would allow AA to continue a partnership with B6, leaving B6 to serve the lower yielding markets, give AA US Airways corporate contracts out of PHL, and extend their reach into the South East where they lack a real presence. If someone flew trans-Atlantic on AA to Columbia South Carolina, they would have to back track all the way to Dallas, or fly another airline. And even if AA were to merge with B6, I cannot see them adding many of those smaller cities out of JFK just to feed a few OW partner's flights. But a passenger could fly into CLT or PHL and make one connection, or they may have to make two a go through London then CLT or PHL. But at least they aren't back tracking all the way to Dallas to get there. Using B6 as a stand-alone airline frees AA up from having to serve many lower yielding market's themselves.
 
slvrblt
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 9:06 am

Quoting mah4546 (Reply 14):
Yes, it would, because when AA and B6 merge, you eliminate the reason it doesn't work: B6.

Not only that, but B6 and AA pilots for comparable equipment currently make nearly identical hourly rates, but AA pilots have far more benefits (many of which will be drastically reduced with Chapter 11) and work less monthly hours.

I've said this opinion before and stand by it: AA and B6 will merge.

Interesting. Personally, I think the merger bug at AA was somewhat tempered after the outbreaks of fever we had with Reno Air and TWA. Those were mostly geared toward getting our size bulked up. I understand that - but to go thru that again? Even due to the BK? I don't see it.
BUT - you have been right on a lot of things before, MAH4546, so I will also say this: From my own observation, I've also long suspected there is some internal connection there at B6 with AA going on that's far more than what we see on the surface. They're a good, solid, quality carrier for the niche that they have, too. NK they're not, thank god. Merger? or, more a Oneworld joint-business venture like AA/BA/IB/JL? Time will tell...............
..everything works out in the end.
 
Delta777Jet
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 9:41 am

What do you guys always think a merger between B6 and AA would be good ! The fantastic B6 product and culture would disappear within a minute! See QQ (Reno Air) and TWA. Both good airline, nice product and good culture gone with the wind and totally wasted by AA.

AA needs to get new planes, a decent service level and they have to get rid of the always moaning flight attendants which I have expirienced lots of times in Business Class from Europe to the USA.

They need:

A fresh new product with some frills to be distinguished to other legacy carriers
Motivated crew (at least they have to show they are motivated)
New fresh planes (even though I like the Mad Dog's who wants to fly with them also they take to much fuel)
New young and fresh managment

... they they will be top noch again !  

Good Luck AA
B-717/722/737-200/300/400/500/600/700/800/900/B-747-100/200/400/SP/8i/B-752/3/B-762/3/4/B-772/LR/300ER/B-788/DC-10-10/30/L-1011-1/500/MD-81/82/83/90/A-319/320/321/AB6/312/313/332/333/342/343/346/359/388/TU154/IL-18/ATR-42/72/DH4/DH3/E145/E170/190/CR2/7/9
 
oneskyjet
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 10:45 am

"What is the fascination on a.net with AA and B6 merging? The product offering is so different that I don't get why they would ever want to merge with each other. The B6 culture, service and differential offering (all coach with extra room seats etc.) would probably disappear overnight. AA and B6 have different business models serving different passenger profiles. I don't (and hopefully won't) see it happening...unless AA & B6 looks like B6"

=JFK
 
LAXtoATL
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 1:20 pm

Food for thought...

I just read an article (sorry don't have a link - but I'm sure its in any number of public records) that mentioned that AA's new CEO Tom Horton has merger experience and was integral in the merger that built the new AT&T. It could be relevent that the board chose him because of this experience or it could have simply been the fact that he was next in line when Arpey retired regardless of his past experience as they didn't want to have to do a search and deal with the bankruptcy (they can always search for a new CEO later or he could be their long-term choice as well). Anyway, even if his selection has nothing to do with his merger experience, he does have it and might make him more open to merger discussions in the future even if they were not already being considered.
 
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STT757
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 1:37 pm

One has to consider what they would have to give up in order to get an AA+B6 merger approved. CO/UA had to give up every single UA slot at EWR, and 3 gates, to get the merger approved. UA had a very small presence at EWR, yet every single one of their slots and three gates had to be divested. To get AA+B6 approved they would be giving up a significant amount of slots at JFK and LGA, plus gates.

I don't feel an AA+B6 merger would do enough to increase their market share in the NYC market to make it worth the expense. The obvious beneficiary of slot/gate divestures at JFK would be DL.
Eastern Air lines flt # 701, EWR-MCO Boeing 757
 
jfk777
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 1:58 pm

Quoting Squid (Reply 6):
If AA mere to merge with B6, they would get a brand new terminal and many landing slots, but many of those routes would get the ax.

AA has their own New JFK terminal 8 which soon could have British Airways after BA's terminal 7 lease ends in 2015.


IF US/AA were to merge, Philadelphia would be a major hub for the combined airline. To merge these two and kill PHL in its current form is killing 40% of Usairways. JFK and PHL will have to work together with CLT and ORD to distribute the European flights and connections. Such a merger has lots of "if" events, so it will be quite a while before we know how the AA BK looks.
 
staralliance85
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 1:58 pm

AA cannot buy anyone right now! If they merge with B6 it will be at least two more years. I selfishly do not want AA to merge with B6 because B6 is too good to be true and AA will ruin it! If B6 is looking to merge, I hope it is with VX or AS.

However, if the unfortunate happens I see these benefits for a AA/B^ merger.

- AA/B6 will be #1 at JFK occupying T8 and T5, leaving DL a distant #2.

- They would dominate Florida traffic (MIA, FLL and MCO as their main hubs)

- They would dominate Caribbean Flights.

- Stronger California prescence (LAX and LGB).

1. AA needs to get their act together first. Of the major US airlines, AA offers one of the worst products (aircrafts and customer service) in the industry. They are almost lowering themselves to Spirit's standards. While UA is rolling out their new 787, AA is still flying antiques in the air.

- Lower labor costs. For the older and more disgruntle employees AA should offer early retirement packages. They really need to weaken the powers of the unions as well.

- Toss MD80s and 767-200s

- Update cabin interiors

- Lift Employee morale. There are too many disgruntle employees at AA which leads to them offering terrible customer service. AA needs to coach their employees on how to deliver excellent customer service plus offer incentives for success. AA needs a Gordon Bethune to shape up the employees.

2. While in CH11 Doug Parker is going to make an attempt to buy AA. In my opinion, this is the best option for both AA and US. The two remaining major non-merged airlines should unite together. However, it will be a task for Parker to lift employee morale at US/AA because there are a good number of disgruntle employees at US.
brad Fitzpatrick
 
commavia
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 2:04 pm

Quoting STT757 (Reply 26):
To get AA+B6 approved they would be giving up a significant amount of slots at JFK and LGA, plus gates.

I am not convinced of that.

Quoting STT757 (Reply 26):
The obvious beneficiary of slot/gate divestures at JFK would be DL.

I'm not sure how you figure. Delta is now the largest airline at JFK and LaGuardia - any hypothetically divested AA/JetBlue slots certainly wouldn't be going to them. I suspect regulators would require any divested slots be redistributed in much the manner as with the LaGuardia/Reagan slot swap just concluded - open bidding, with dominant incumbents excluded. I suppose you could argue that Delta might benefit a bit from a slight fragmentation in competitors' slot holdings, but overall, from a slot holding and network point of view, Delta would definitely not be a beneficiary of a stronger competitor with a larger JFK slot holding.
 
flyby519
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 2:06 pm

US needs AA
AA doesnt need US

Doug Parker has been desperate for any legacy merger so they can gain some international presence, but nobody wants to bite. Beyond the US Shuttle service I dont see much value in their hubs/service.

AA+B6 makes much more sense. AA has a relatively good long haul product and brand name, and B6 has a very popular domestic brand and product. The two brands can focus on their strengths.

AA- 777, 787, 757/767, 737
B6- A319/320/321
AE- ATR, E145, CR7/9, E190

[Edited 2011-12-01 06:11:44]
These postings or comments are not a company-sponsored source of communication.
 
richierich
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 2:14 pm

Quoting Metrojet732 (Thread starter):
First of all, be kind to me. I’m new here. I’ve been a A.net fan for years and finally decided to join. Sorry if this was brought up already but anywho, with all the talk about A- AA and jetBlue merging n B- AA and US merging. Take away all the problems at with unions and what not. Just for fun, what would a AA, B6 and US merger look like?? Would it be possible??

Sure! And why not have Wendy's, Burger King and Hardees/Carl's merge too! The simple answer is anything is possible in this industry, and there are always surprises and curveballs. But a three-way merger between three majors? I don't think so. I'm not sure I even like the odds of any of those two airlines merging in the next five years.

Welcome to a.net., where you definitely have to have a thick skin! Hopefully you can learn to not take anything too personally...!
None shall pass!!!!
 
masseybrown
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 2:27 pm

While you're buying and selling JetBlue, keep in mind Lufthansa's 20% stockholding. LH could easily acquire another 5% and be in a good position to block any B6 merger they don't like.
 
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STT757
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 2:29 pm

Quoting jfk777 (Reply 27):
AA has their own New JFK terminal 8 which soon could have British Airways after BA's terminal 7 lease ends in 2015.

There's nothing solid regarding that, they've only mentioned that is a goal. However if they were to bring BA and IB into T-8 they would need to complete T-8, to complete it by 2015 they would need to start within a year. That's not happening in the current climate and AA in bankruptcy.

Quoting jfk777 (Reply 27):
JFK and PHL will have to work together

*If* DL would go for it, AA should trade their JFK slots (plus T-8) to DL for their LGA slots. AA could then concentrate on offering O&D business travelers in NYC LGA plus Trans-Con from JFK. Let their Oneworld Partners handle the international traffic from NY.

That would make PHL AA's main Northeast hub with LGA as a major business operation. They would offer their own premium trans-Con from JFK, plus offer FF opportunities to fly OneWorld Internationally and B6 and Domestically from JFK.
Eastern Air lines flt # 701, EWR-MCO Boeing 757
 
elmothehobo
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 2:42 pm

Quoting MasseyBrown (Reply 32):
LH could easily acquire another 5% and be in a good position to block any B6 merger they don't like.

I would wager the other way around, Lufthansa is considering selling their stake in JetBlue.

http://www.airlinenewseurope.com/201...-lufthansa-ceo-not-ruling-out.html
 
masseybrown
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 2:54 pm

Quoting elmothehobo (Reply 34):
I would wager the other way around, Lufthansa is considering selling their stake in JetBlue.

They probably began those considerations the day they bought the shares.   LH can afford to wait for a better offer than today's market price.

If, however, they saw any deal as a threat to themselves or Star, they could make things difficult and expensive.
 
mogandoCI
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 3:05 pm

Quoting Delta777Jet (Reply 23):
The fantastic B6 product and culture would disappear within a minute!

Exactly. Only BOS is meaningful. MCO is tourism, FLL overlaps MIA, B6 JFK + AA JFK would be forced to divest a lot of slots, a LGB overlaps LAX.

B6 is also not a fit into a global alliance. No premium product, no lounges, rev-based loyalty program and cost-based redemption, no tiers/status. I can imagine the look on one's face when they fly BA Club World from Heathrow to JFK then transferred onto jetBlue's "Even more Legroom" seat to Jacksonville....
 
HPRamper
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 3:14 pm

Quoting staralliance85 (Reply 28):
They would dominate Florida traffic (MIA, FLL and MCO as their main hubs

Three hubs in one state is way too redundant. MCO would not be a hub, FLL probably would not be any more than a focus if not reduced entirely to a spoke.

Quoting staralliance85 (Reply 28):
They would dominate Caribbean Flights

Which would be nice, and let's not forget the combined presence in Central America which B6 has been expanding in leaps and bounds.

Quoting staralliance85 (Reply 28):
Stronger California prescence (LAX and LGB

LGB would probably be closed, possibly even as a station, with a hub so close at LAX.

Quoting staralliance85 (Reply 28):
Lift Employee morale. There are too many disgruntle employees at AA which leads to them offering terrible customer service. AA needs to coach their employees on how to deliver excellent customer service plus offer incentives for success. AA needs a Gordon Bethune to shape up the employees.

Lifting morale of an employee group is tough with such a senior workforce. Even if the culture changes from the top down, it will take years for it to filter through the workforce as senior employees retire.

Quoting commavia (Reply 29):
I suspect regulators would require any divested slots be redistributed in much the manner as with the LaGuardia/Reagan slot swap just concluded - open bidding, with dominant incumbents excluded.

I agree. It would be interesting to see who would bid, as the major legacies would all appear to be locked out, and US seems to want to avoid NYC. Perhaps AS would be a bidder. I really do not see WN being interested in JFK.

Quoting flyby519 (Reply 30):
Doug Parker has been desperate for any legacy merger so they can gain some international presence, but nobody wants to bite. Beyond the US Shuttle service I dont see much value in their hubs/service.

Parker isn't so concerned about the international presence - that will come with more aircraft deliveries. He just knows that when it comes to a legacy-type airline, being smallest often means being swamped by the big boys. There is strength in size, as long as it doesn't mean being spread too thin.

Quoting richierich (Reply 31):
Sure! And why not have Wendy's, Burger King and Hardees/Carl's merge too!

If they combined the menus and didn't cut anything, that would be incredible   
 
seatback
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 3:15 pm

Quoting BOStonsox (Reply 3):
I do not see what US offers that will help either carrier, aside from the CLT hub. They will not keep PHL if they have BOS and JFK. PHX will have to battle with DFW and LAX.

AA doesn't want BOS. They should want PHL with a huge local market and established hub and customer base, PHL would compliment JFK nicely.

Quoting HPRamper (Reply 8):

The PHL market is nearly 1.5 million more people than BOS, growing slightly faster, and is leeched from by other airports less than BOS is. PHL is the #5 MSA in the country, BOS is #10. I don't think there is any benefit to serving BOS over PHL.

Completely agree! All reasons to keep an established hub.

Quoting mah4546 (Reply 14):
I've said this opinion before and stand by it: AA and B6 will merge.

AA will realize they need to recapture NYC, and the best way to do that is with B6. However, considering US, I would have thought they would have considered that by giving up their LGA slots, they'd be less attractive to AA down the road.

Quoting staralliance85 (Reply 28):

- AA/B6 will be #1 at JFK occupying T8 and T5, leaving DL a distant #2.

The sole motivation for AA.

Quoting staralliance85 (Reply 28):
1. AA needs to get their act together first. Of the major US airlines, AA offers one of the worst products (aircrafts and customer service) in the industry. They are almost lowering themselves to Spirit's standards. While UA is rolling out their new 787, AA is still flying antiques in the air.

Statements like this always crack me up. It goes to show that most of the comments are based on emotion rather than fact! Every legacy carrier has roughly the same level of customer service. Just flew AA to DFW from IND...service was fine and basic...nothing exceptional.

BTW, I didn't know UA was rolling out their 787's...I'll run out to the airport to try to see it! No matter what, AA will never measure up to UA and Star Alliance in your eyes.
 
LAXtoATL
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 3:16 pm

Quoting commavia (Reply 29):
I am not convinced of that.

I am convinced. Any AA/B6 would certainly see not-insignificant divestiture of slots. They might not be forced to give up gates - but I doubt they would need all the real estate the have at JFK anyway.

Quoting commavia (Reply 29):
I'm not sure how you figure. Delta is now the largest airline at JFK and LaGuardia - any hypothetically divested AA/JetBlue slots certainly wouldn't be going to them. I suspect regulators would require any divested slots be redistributed in much the manner as with the LaGuardia/Reagan slot swap just concluded - open bidding, with dominant incumbents excluded. I suppose you could argue that Delta might benefit a bit from a slight fragmentation in competitors' slot holdings, but overall, from a slot holding and network point of view, Delta would definitely not be a beneficiary of a stronger competitor with a larger JFK slot holding.

Now this I completely agree with. DL certainly would not be allowed to pick up any more slots in the transaction. However, I'm not sold on fragmentation benefiting DL, I think they would prefer a duopoly with a single carrier as oppose to a bunch of competitors (and I do realize that when I say duopoly that UA is very much in the picture but I was limiting my comment to the specific airports where slots would be an issue). That being said, it just made me think, would they consider NYC as a whole or zero in on individual airports like they did with the LGA/DCA slat swap - because if they do that while Delta still wouldn't be the beneficiary of any slots AA/B6 could be required to give up more than if they considered LGA/JFK together (AA/B6 would have a much higher concentration of slots at JFK vs JFK/LGA)
 
ripcordd
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 3:20 pm

They are in BK court to reduce their costs prob around B6 levels. And everyone here is saying that AA will ruin B6 I hardly think so I think they want to tie up with them to finally put themselves ahead of everyone else in terms of pass comfort. An AA & B6 merger would look like B6 today with a first class seats on their plane thats all that will change. B6 will not get into bed with AA and let AA take away from everything they stand for.
Staralliance85....Yes UA is rollingout the 787 but again so will AA dont be so bias. If you fly on a plane with no uniforms you wouldnt be able to tell the difference btwn UA/AA/DL they all have their good days and bad days. One reason to tie up with B6 to set themselves above everyone else.
 
DLPMMM
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 3:43 pm

In the next 2 years, B6 will not be merging with AA because B6 does not want to buy AA out of Chapter 11.

AA does not have the money to buy anything.

The only possible merger here is that US will buy AA out of Chapter 11. This is a real possibility, given Parker's track record and credibility with Wall Street.

I give it about a 50/50 chance at this point.

The creditors will give any proposal by Parker and US serious consideration.

End of story.
 
seatback
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 3:54 pm

Quoting ripcordd (Reply 40):
Staralliance85....Yes UA is rollingout the 787 but again so will AA dont be so bias. If you fly on a plane with no uniforms you wouldnt be able to tell the difference btwn UA/AA/DL they all have their good days and bad days.

Completely agree. However, speaking of uniforms, AA's F/A could use updated uniforms. The different shades of navy blue is equivalent of wearing black shoes with navy blue socks...shouldn't do it!
 
staralliance85
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 4:11 pm

Quoting DLPMMM (Reply 41):

In the next 2 years, B6 will not be merging with AA because B6 does not want to buy AA out of Chapter 11.

AA does not have the money to buy anything.

The only possible merger here is that US will buy AA out of Chapter 11. This is a real possibility, given Parker's track record and credibility with Wall Street.

I give it about a 50/50 chance at this point.

The creditors will give any proposal by Parker and US serious consideration.

End of story.



Well said. 100% Agree
brad Fitzpatrick
 
ozark1
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 4:17 pm

Quoting seatback (Reply 42):
Completely agree. However, speaking of uniforms, AA's F/A could use updated uniforms. The different shades of navy blue is equivalent of wearing black shoes with navy blue socks...shouldn't do it!

I wish the company realized that this would be a TREMENDOUS morale booster for the FA's right now. Ditch that awful, scratchy, dated blue and let us wear khakis and a polo on domestic , and then have a separate, formal uniform for international. Let me tell ya, wearing a tie on an AUS-DFW leg in coach aint fun! But I will respect whatever the company decides. I'm just glad to have a job right now.
 
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DeltaMD90
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 4:45 pm

Quoting DeltaMD90 (Reply 4):
Quoting BD338 (Reply 2):
What is the fascination on a.net with AA and B6 merging?

I'm with you on this one... EXCEPT for the US/DL debacle years ago. In fact, I have a "Keep Delta My Delta!" button right next to me. THAT is why I'm certain Parker will make a bid (even if he is not successful)

Wow, what a mistake on my part! I'm surprised no one commented on it. I was talking about a US+AA merger instead of a B6+AA merger! Fail on my part...
Ironically I have never flown a Delta MD-90 :)
 
seatback
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 5:43 pm

Quoting ozark1 (Reply 44):
I wish the company realized that this would be a TREMENDOUS morale booster for the FA's right now. Ditch that awful, scratchy, dated blue and let us wear khakis and a polo on domestic , and then have a separate, formal uniform for international. Let me tell ya, wearing a tie on an AUS-DFW leg in coach aint fun! But I will respect whatever the company decides. I'm just glad to have a job right now.

This brings up a good point. Other than an increase in pay/benefits etc... what would boost the morale of employees?
 
slvrblt
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 7:15 pm

Quoting LAXtoATL (Reply 25):
I just read an article (sorry don't have a link - but I'm sure its in any number of public records) that mentioned that AA's new CEO Tom Horton has merger experience and was integral in the merger that built the new AT&T.

True. Horton was our CFO, left the company in 2006 to go to AT&T. By most reviewers, he did a pretty good job over there.
..everything works out in the end.
 
ckfred
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 7:30 pm

Does US have something that would make AA a better carrier? Yes, CLT. If you want to get to cities in northern Florida or the Southeast, ORD, DFW, and MIA really don't work that well. CLT would be ideal for connecting traffic from the Northeast and Midwest to cities in the Carolinas, Georgia, northern Florida, Alabama, and Tennessee.

But merging AA and US presents a number of challenges.

B6 would increase the AA presence at JFK and regain what used to be a very busy operation at BOS.

Will AA merge with anyone? It's too soon to tell.
 
mogandoCI
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RE: AA US & B6 Combined Merger Possible?

Thu Dec 01, 2011 7:43 pm

Quoting seatback (Reply 46):
This brings up a good point. Other than an increase in pay/benefits etc... what would boost the morale of employees?

Align senior management interests with the long term well-being of a company. Do what Steve Jobs does by having a minimal salary and the bulk of compensation in restricted long term stock options that only vest if the stock hits the trigger price.

That way, if he's doing a bad job, his options won't vest and he won't get paid jack.

But of course anyone who've seen airline stocks in the past 2 decades wouldn't agree to these terms.

Quoting ckfred (Reply 48):
B6 would increase the AA presence at JFK and regain what used to be a very busy operation at BOS.

But you'll also have to throw away B6's hubs at LGB, MCO, and FLL. Maybe it's worth it compared to regaining long term strength at JFK. I guess the E90 fleet is also highly valued.

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