G500
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FT "Alliances In Doubt If DL Buys American"

Tue Jan 17, 2012 2:41 pm

Just read a very interesting article on the Financial Times about the possibility of DL buying American and what it would mean to the airline alliances.

One RBS analyst claims Delta would strongly consider switching from Skyteam to Oneworld due to BA's strong position at London's LHR airport...

My question is- could one airport alone be enough of an incentive to make an airline switch allainces?

At present DL has strong positions at AMS and CDG. I'd stay where I'm at
 
LAXtoATL
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RE: FT "Alliances In Doubt If DL Buys American"

Tue Jan 17, 2012 4:32 pm

Quoting g500 (Thread starter):
My question is- could one airport alone be enough of an incentive to make an airline switch allainces?

With limited knowledge of the inner workings of the alliances, I would guess no. My understanding of the alliances, especially the JVs some of which are quite broad and complex would carry more weight in the decision. Also, in a proposed tie-up of DL/AA, they would gain access to LHR with AA's slots anyway so they really wouldn't need an alliance for that it would come down to which is the better partner IAG or AF/KL, and all things being equal I would assume the relationship and business ties between DL and AF over the last decade or so would easily carry the day.
 
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RE: FT "Alliances In Doubt If DL Buys American"

Tue Jan 17, 2012 5:18 pm

My first thoughts were: "Someone has realized that AA leaving OneWorld would kill the alliance."

Adding ORD and DFW to Skyteam would make the alliance amazingly strong. The purchase of AA by DL would also re-inforce the NRT hub.

My thoughts is that with IT's 'financial issues,' there isn't a strong reason to switch alliances for global connections.

Quoting g500 (Thread starter):
One RBS analyst claims Delta would strongly consider switching from Skyteam to Oneworld due to BA's strong position at London's LHR airport...

Why would DL abandon their AMS and CDG connections over LHR?

Quoting LAXtoATL (Reply 1):
all things being equal I would assume the relationship and business ties between DL and AF over the last decade or so would easily carry the day.

  

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RE: FT "Alliances In Doubt If DL Buys American"

Tue Jan 17, 2012 5:55 pm

Quoting g500 (Thread starter):
One RBS analyst claims Delta would strongly consider switching from Skyteam to Oneworld due to BA's strong position at London's LHR airport...

My question is- could one airport alone be enough of an incentive to make an airline switch allainces?

In a word, no. But LHR is only part of the puzzle. Look at the whole of the alliances instead:

Star Alliance: Adria, Aegean, Air Canada, Air China, Air New Zealand, ANA, Asiana, Austrian, Blue1, bmi, Brussels Airlines, Croatia Airlines, Egyptair, Ethiopian, LOT, Lufthansa, SAS, Singapore, South African, Spanair, Swiss, TAM, TAP, Thai, Turkish, United, US Airways

Oneworld: American Airlines, British Airways, Cathay Pacific, Finnair, Iberia, Japan Airlines, LAN, Malev, Mexicana, QANTAS, Royal Jordanian, S7 Airlines

SkyTeam: Aeroflot, AeroMexico, Air Europa, Air France, Alitalia, China Airlines, China Eastern, China Southern, Czech Airlines, Delta, Kenya Airways, KLM, Korean Air, TAROM, Vietnam Airlines


Personally, I think SkyTeam is - and long has been - the wastebasket alliance. They were the last to set up shop, and they had to make do with what was left.

A move to oneworld would give Delta a better position in LHR, HKG, Australia and the Middle East, strengthen the NRT hub, maintain coverage in Russia and allow for a similar amount of coverage in Europe going forward, though through different hubs.

Quoting g500 (Thread starter):
At present DL has strong positions at AMS and CDG. I'd stay where I'm at

No, Delta has strong partners at AMS and CDG. They could just as easily have strong partners at LHR and MAD instead. If you have to connect via a European hub anyway, most people do not care all that much which hub it is. (Though a lot of people will go to great lengths to avoid connecting at CDG).

Quoting lightsaber (Reply 2):
Adding ORD and DFW to Skyteam would make the alliance amazingly strong. The purchase of AA by DL would also re-inforce the NRT hub.

It would make SkyTeam strong in the US. In the rest of the world, it would still be the wastebasket alliance. I still say a combined DL/AA would be much better off in oneworld than in SkyTeam.
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RE: FT "Alliances In Doubt If DL Buys American"

Tue Jan 17, 2012 6:09 pm

Again, I see far more benefit to DL staying in Skyteam and pulling AA out of OneWorld.

Quoting flyingalex (Reply 3):
It would make SkyTeam strong in the US. In the rest of the world, it would still be the wastebasket alliance.

Skyteam is strong in the US, China, and Russia.
I agree Skyteam is weak in Australia, the mid-east, South America, and India.
The mid-east could be fixed with either QR or EY. That would help India somewhat too.
In some ways that would be enough for Australia.

Thanks to all of the Chinese airlines and Korean air, it is a very strong alliance in Asia.
KL and AF make it strong in Europe. I do not see BA/IB being a superior fit for DL. In
particular for connections to Africa that DL uses to 'seed' non-stop demand.

OneWorld lost Mexicana, so that weakened them. (Why did you list a non-flying airline?)
IT is in financial trouble, so I do not see them adding much value in India.

If AA is bought by DL and pulled out of OneWorld, game over for JAL and BA would be weakened.
All the sudden all of that feed to BA's LHR operations would become feed for DL at JFK, ATL, ORD, DFW, and probably LAX.

Quoting flyingalex (Reply 3):
strengthen the NRT hub

Not much. JAL's connetions at NRT are too infrequent. ICN's growth, as well as PEK, PVG, and HKG, have severely reduced the value of NRT. It is not the 'powerhouse hub' it was in the 1980s. Split hubs are not well liked by passengers and they have voted with their money.

I see equal value in DL maintaining ownership of their NRT hub.

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RE: FT "Alliances In Doubt If DL Buys American"

Tue Jan 17, 2012 6:11 pm

Quoting flyingalex (Reply 3):
It would make SkyTeam strong in the US. In the rest of the world, it would still be the wastebasket alliance. I still say a combined DL/AA would be much better off in oneworld than in SkyTeam.

Don't confuse nice seats and ammenities with coverage which SkyTeam EASILY trumps oneworld. The better question is whether IAG would dump oneworld for Skyteam thus making the world a two alliance system.
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RE: FT "Alliances In Doubt If DL Buys American"

Tue Jan 17, 2012 6:19 pm

Quoting lightsaber (Reply 4):
I agree Skyteam is weak in Australia, the mid-east, South America, and India.

Skyteam may be weak in some of these areas, but Delta has strong bilateral deals with Virgin (Australia) and GOL (Brazil - South America's biggest market) that mitigate any Skyteam weakness there....

In general, I believe they will stick with ST, because the CDG/AMS/FCO triumvirate offers far better network connectivity than LHR/MAD. DL-AA will not need BA's LHR connectivity as CDG/AMS/FCO fulfill that mission far better than LHR alone....LHR is attractive for its O&D premium traffic, and with AA's significant number of slots there, a combined DL-AA would be a decent-sized player in the LHR transatlantic market even without BA.
 
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RE: FT "Alliances In Doubt If DL Buys American"

Tue Jan 17, 2012 6:23 pm

Quoting TeamInTheSky (Reply 5):
Don't confuse nice seats and ammenities with coverage which SkyTeam EASILY trumps oneworld. The better question is whether IAG would dump oneworld for Skyteam thus making the world a two alliance system.

I wouldn't say "easily" considering OW's strength at key markets like LHR, HKG, NRT, SYD, etc.
 
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RE: FT "Alliances In Doubt If DL Buys American"

Tue Jan 17, 2012 6:24 pm

Sky team is the most powerful alliance in Russia, Ukraine and Central Asia it is also the most powerful alliance in all of China.

What does LHR give to loose thAt.

there is no alliance that can come close to that.

I do not understand why DElta would think of giving up. On sky team for one world.

One world is the most powerful alliance in the caribbean, London and Miami and Hong Kong

What else do they have?
 
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RE: FT "Alliances In Doubt If DL Buys American"

Tue Jan 17, 2012 6:31 pm

Quoting TeamInTheSky (Reply 5):
better question is whether IAG would dump oneworld for Skyteam thus making the world a two alliance system.

I believe that if AA is removed from OneWorld that a significant strength of OneWord, its America connections (North, Central, and South) is 'broken.'

Without AA:
QF's LAX hub is broken and DL would then have the opportunity to grow quickly to Australia.
BA would remain strong to many US destinations, but would suddenly lack connections to central America that were competitive. Without AA at MIA (and LAX and DFW and...), IAG's whole South/Central American strategy is broken. Could IB's MIA hub survive without AA?    I have my doubts. Some vestigue would remain, but it would loose a tremendous amount of revenue.

Quoting panamair (Reply 6):
Skyteam may be weak in some of these areas, but Delta has strong bilateral deals with Virgin (Australia) and GOL (Brazil - South America's biggest market) that mitigate any Skyteam weakness there....

You have a good point.

Am I the only one who played too many strategy games as a child? If JAL, AA, or IAG leaves OneWorld, the alliance is in deep trouble. If DL asks 'how do I make the most money and cripple my competition,' the answer is 'remove AA from OneWorld.' Obviously new partnerships would be formed. But if DL joined OW, they suddenly loose connections in estabilished markets (Africa, no way IAG could make up for AF/KLM fully) but do gain in growing markets (notably, the mid-east).

Mexican's bankrupcy didn't shift routes to just AA. F9, DL, WN's F9 division, and AeroMexico also grabbed pieces the market. (Plus, some of the market is just gone in this economy.)

IMHO, the lower risk and higher reward strategy is to bring AA over to Skyteam. Skyteam should continue to pursue other regional partners, in particular the mid-east and India. IIRC, only China's market is outgrowing the mid-east (O&D, I'm not talking airline location).

Note: I think anti-trust will block DL (or UA) from acquiring AA. Just my 'twocents.'

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RE: FT "Alliances In Doubt If DL Buys American"

Tue Jan 17, 2012 6:31 pm

Again, don't underestimate the advantages of the relationships DL has now. DL + AF/KL isn't just a codeshare, I'd say it is one of the strongest airline relationships in the industry. They have a joint venture, AF/KL actually gives up routes for DL to fly (for various reasons,) DL flies extra planes when there are strikes at AF, etc. Before all the mergers, you had DL and AF cooperating, and NW and KL cooperating. DL and NW merged, while AF and KL merged. It is a match made in heaven.

Sure, (and IMO)

AF@CDG >>> BA@LHR

Same with ORD btw

MSP + DTW + no competition there + frequent fliers and facilities in these 2 cities >>>> ORD - competition from UA and WN

Size of markets and partners isn't everything. Look at AA @ MIA, DFW, JFK, ORD, and LAX with JL, BA, etc... they're doing not so well. Many factors go into it

What I can see though (and haven't seen too many people talk about it) is perhaps oneworld and ST merging, with a few carriers maybe jumping into Star. There would then be 2 strong alliances, vs 3 (the 2 weaker-ish ones and Star.) But who knows, I doubt this bid will even happen.
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RE: FT "Alliances In Doubt If DL Buys American"

Tue Jan 17, 2012 6:42 pm

Quoting TeamInTheSky (Reply 5):

Don't confuse nice seats and ammenities with coverage which SkyTeam EASILY trumps oneworld. The better question is whether IAG would dump oneworld for Skyteam thus making the world a two alliance system.

Do you mean in the US or across the world? If in the US, then Skyteam gets a very slight edge (I guess you can say the same about Mexico). If worldwide, then I have no idea how you can possibly say that Skyteam "EASILY" trumps OW. ST has virtually no coverage in South America, Australia, and New Zealand - and those are big markets. The only advantage that ST has is in Africa. But even that isn't a big advantage, because BA provides relatively decent coverage across the continent, enhanced by its Comair subsidiary in JNB. if you're travelling within Africa, then yes, KQ does provide good coverage, but that is a relatively small market for now. The point is, is that with OW you can fly pretty much from anywhere to anywhere on good carriers relatively seamlessly, even to places without less coverage. SCL to PVG? Done. CPT to DME? Done. AKL to JNB? Done. And you can't say the same thing about ST. For example, where I live in AMS, you can't even get to most parts of Australia or New Zealand on ST without either flying on MH, taking a double connecting on CZ, or going out of the way on KE with a poorly timed connection. You also can't even get to many places in South America. And none of the above actually about the quality of the airlines in each alliance. But that's a separate matter.
 
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RE: FT "Alliances In Doubt If DL Buys American"

Tue Jan 17, 2012 6:42 pm

Quoting lightsaber (Reply 4):
OneWorld lost Mexicana, so that weakened them. (Why did you list a non-flying airline?)

Because the oneworld website still does:

http://www.oneworld.com/

See the banner graphic at the top.
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kiwiandrew

RE: FT "Alliances In Doubt If DL Buys American"

Tue Jan 17, 2012 6:51 pm

Quoting crosswinds21 (Reply 11):
ST has virtually no coverage in South America, Australia, and New Zealand - and those are big markets

South America is a big market. But Australia and New Zealand ? I don't think so.

BTW, if you want to talk about big markets with virtually no coverage what about OW in China? Or do you think those big markets in Australia and New Zealand are enough to convince DL not to worry about the small matter of China?
 
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RE: FT "Alliances In Doubt If DL Buys American"

Tue Jan 17, 2012 7:53 pm

Quoting crosswinds21 (Reply 11):
ST has virtually no coverage in South America, Australia, and New Zealand - and those are big markets. The only advantage that ST has is in Africa.

What he says...

Quoting kiwiandrew (Reply 13):
South America is a big market. But Australia and New Zealand ? I don't think so.

BTW, if you want to talk about big markets with virtually no coverage what about OW in China? Or do you think those big markets in Australia and New Zealand are enough to convince DL not to worry about the small matter of China?

Its interesting reading this thread. I find that people spend a lot more time analyzing their favorite alliance and not so much analyzing the others. ST gets a bad rap for quality, but it is clear that it is far better positioned in most of the world's largest growth markets, including China. ST also is now better positioned in the U.S. domestic market, and has better connectivity across the North Atlantic. OW's great strengths are Latin America, A fantastic HKG hub (and airline) and a strong (but diminishing) O&D market in LHR.

BUT...the question is silly in the first place. SkyTeam and oneworld won't survive in their current forms if DL/AA merge. The surviving alliance structure will be in a position to cherry pick the which members it wants. And I still think that there is a likelihood that IAG would join AF/KL in a larger alliance (one that likely would necessitate the dismantling of the transatlantic joint ventures). DL/AA would start competing again with BA/IB/AF/KL, which would compete with each other as well. In other words, mergers would create the consolidation that alliances can never fully accomplish.

But they could all be in the same alliance, in order to compete with Star. There are no anti-trust issues with regular alliance membership.
 
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RE: FT "Alliances In Doubt If DL Buys American"

Tue Jan 17, 2012 7:57 pm

Quoting DeltaMD90 (Reply 10):
Again, don't underestimate the advantages of the relationships DL has now. DL + AF/KL isn't just a codeshare, I'd say it is one of the strongest airline relationships in the industry.

I don't.   

Quoting flyingalex (Reply 12):
Because the oneworld website still does:

Maybe its because I'm an engineer and I have to live in the real world, but not only is Mexicana not flying, but what was their market has been eaten up by competitors. If Mexicana restarted, it would be as a new airline with an old name a la PanAm and the numerous Zombie airlines that followed it.

Quoting kiwiandrew (Reply 13):
BTW, if you want to talk about big markets with virtually no coverage what about OW in China?

Agreed. I do not see the advantage of DL giving up China's partners. JAL is a competitor versus KE complimens, etc. In Asia, DL would loose too much switching to OneWorld.

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RE: FT "Alliances In Doubt If DL Buys American"

Tue Jan 17, 2012 8:21 pm

The only thing that SA)">DL cares is US to South Amerca and US to Australia. They could not give two bits on why someone cant get there from europe or asia to either of those destinations on their partner airlines on one or three conections. So saying that ST lacks coverage to thise two parts of the world is moot to SA)">DL. If they take over SA)">AA who is to say that LANTAM wont choose ST instead of SA)">OW or SA. And SA)">DL is already securing its position in South America with investments in Aeromexico and GOL. Plus if they get SA)">AA MIA operation then your South America wories are over, not just for US originating pax but all the ones AF,KL, and AZ can funnel thru there. As for Australia, if SA)">AA goes alot of Quantas feed at LAX would sudenly belong to SA)">DL and with significant share of LAX market they can cover Australia and NZ with their own metal.
 
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RE: FT "Alliances In Doubt If DL Buys American"

Tue Jan 17, 2012 8:21 pm

Quoting lightsaber (Reply 9):
But if DL joined OW, they suddenly loose connections in estabilished markets (Africa, no way IAG could make up for AF/KLM fully) but do gain in growing markets (notably, the mid-east).

Correct if you mean India with Middle East (though one can wonder how long Kingfisher will be around), but other than that ME and SV provide ample Middle Eastern coverage (though I don't think many will conenct on SV).
 
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RE: FT "Alliances In Doubt If DL Buys American"

Tue Jan 17, 2012 8:37 pm

Quoting lightsaber (Reply 15):
Maybe its because I'm an engineer and I have to live in the real world, but not only is Mexicana not flying, but what was their market has been eaten up by competitors. If Mexicana restarted, it would be as a new airline with an old name a la PanAm and the numerous Zombie airlines that followed it.

There were several attempts to try and get them flying again, and I haven't kept up with Mexicana's tale of woe in recent months. For my list, I just opened the three alliance websites and typed the airlines listed, presuming that that information ought to be accurate. Who knew oneworld doesn't keep up with its housekeeping?

Quoting kiwiandrew (Reply 13):
BTW, if you want to talk about big markets with virtually no coverage what about OW in China?
CX and Dragonair (which is a oneworld affiliate) have numerous destinations on the Chinese mainland. Yes, they don't have a domestic Chinese partner (yet, Hainan has often been rumoured to be in the pipeline), but that doesn't matter quite as much for Delta as long as second-tier destinations in China can still be reached from the US, via NRT or HKG or elsewhere.

Quoting crosswinds21 (Reply 11):
And none of the above actually about the quality of the airlines in each alliance. But that's a separate matter.

This is a point I'd like to stress. Delta has tried to improve its own image and product. Lie-flat seats, a push towards better service, etc. Given some of the basket cases they're forced to work with in SkyTeam, they may prefer the more premium-oriented carriers in oneworld.


In the end, I think our discussion will be academic anyway though. I doubt Delta's bid for AA comes from an actual desire to buy their competitor. I think it is a strategic business move, which 1.) allows them to look at their competitor's books during the due diligence process and thereby glean valuable intelligence on cost structures, revenue streams, and other details and 2.) puts them in a position to bid up the price an acquiring entity has to pay for AA. A higher acquisition price reduces the amount of money the investor has available modernising the company, which gives DL additional breathing room in the future.

And that doesn't even take into account any possible antitrust issues of a DL/AA merger.

[Edited 2012-01-17 12:55:21]
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RE: FT "Alliances In Doubt If DL Buys American"

Tue Jan 17, 2012 8:42 pm

Quoting jetlanta (Reply 14):
SkyTeam and oneworld won't survive in their current forms if DL/AA merge. The surviving alliance structure will be in a position to cherry pick the which members it wants.

There is the key. I agree with you 100%. I happen to think the advantage would be with Skyteam; but the reality is that DL/AA would be able to dictate the terms of an alliance and who was allowed to play. The 'cast off' airlines would have a very tough time in the USA.

Quoting LJ (Reply 17):
Correct if you mean India with Middle East (though one can wonder how long Kingfisher will be around), but other than that ME and SV provide ample Middle Eastern coverage (though I don't think many will conenct on SV).

I believe that AF/KLM already has excellent mid-east coverage, so perhaps I'm taking too much of a US/European view. I wasn't thinking regional as much as direct connections.

SV is going to have trouble gaining connections due to certain cultural restrictions. I know of too many executives that travel with their wives. Those wives *expect* to be catered to and treated as an equal. Hence why Skyteam needs QR or EY. Oh wait... so does OneWorld. Due to TK, *A is situated very well IMHO.

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RE: FT "Alliances In Doubt If DL Buys American"

Tue Jan 17, 2012 8:43 pm

Quoting flyingalex (Reply 3):
It would make SkyTeam strong in the US. In the rest of the world, it would still be the wastebasket alliance.

And the same argument can be made about oneworld's 'world strength' if AA were no longer a member.

I think the bigger question would be rather Delta is willing to part with it's Air France-KLM joint venture, I wouldn't anticipate it being allowed at the same level if Delta were to gobble up more US and European capacity.
 
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RE: FT "Alliances In Doubt If DL Buys American"

Tue Jan 17, 2012 8:50 pm

If this does actually happen, and UA/CO is in Star and AA/DL goes to ST (or OW for that matter,) I see US becoming extremely important for that 3rd alliance. Think about it, they are considered the 2nd rate US airline in Star, but they could be the premier airline with a lot of importance if they pick up the 3rd alliance. I think this will happen anyway, but it would be US+AA=AA in OW, just my opinion. If DL is lucky, they might be able to snag something, but I think their only victory will be making Parker pay a bit more for AA
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kiwiandrew

RE: FT "Alliances In Doubt If DL Buys American"

Tue Jan 17, 2012 9:18 pm

Quoting DeltaMD90 (Reply 21):
If DL is lucky, they might be able to snag something, but I think their only victory will be making Parker pay a bit more for AA

To be honest, I think that is all they are really aiming for. Obviously, they would love to get their hands on MIA if they thought they realistically could, but I can't see AA being carved up, and I can't see a DL/AA combo going ahead.
 
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RE: FT "Alliances In Doubt If DL Buys American"

Tue Jan 17, 2012 9:21 pm

Quoting kiwiandrew (Reply 23):
To be honest, I think that is all they are really aiming for. Obviously, they would love to get their hands on MIA if they thought they realistically could, but I can't see AA being carved up, and I can't see a DL/AA combo going ahead.

I completely agree with both of you. T-8 at JFK and MIA would give them the two things they really want.
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RE: FT "Alliances In Doubt If DL Buys American"

Tue Jan 17, 2012 10:33 pm

*Preparing the flamesuit*

Is it remotely possible that if DL bought AA (or hooked up on a AF/KL style partnership), for SkyTeam and oneworld to merge into one alliance? With many of the major capitals in Europe and Asia, this new alliance would be better suited against Star Alliance. Since this would only be cooperation between airlines, I would not see any regulatory hurdles to be cleared (or am I wrong)?
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RE: FT "Alliances In Doubt If DL Buys American"

Tue Jan 17, 2012 11:03 pm

Quoting einsteinboricua (Reply 24):
Since this would only be cooperation between airlines, I would not see any regulatory hurdles to be cleared (or am I wrong)?

The regulatory problem isn't the alliance itself, but the government-blessed joint ventures that get antitrust immunity that are spun out of these alliances. In transatlantic, for example, OneWorld+SkyTeam could result in one joint venture including DL, AF, KL, AZ, AA, BA, and IB (and perhaps BD). I doubt that would pass regulatory muster on either side of the pond... and these joint ventures are incredibly important to carriers wanting the benefits that alliances and cooperation can bring.
 
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RE: FT "Alliances In Doubt If DL Buys American"

Tue Jan 17, 2012 11:10 pm

One more reason this will never happen. It would need EU approval not just DOT/DOJ. No way the EU is going to allow BA/AA/DL in one alliance for UK or AA/DL/AF for France traffic.

If this goes through, I can see the day maybe in 2020 when the US govt breaks up DL and UA ala ATT in 1984.
 
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RE: FT "Alliances In Doubt If DL Buys American"

Wed Jan 18, 2012 1:29 am

The wastebasket, etc. comments get old. All they really do is highlight the fact that many posters often forget running an airline is a business.

Re: lightsaber's comment areas of weakness: while IT may be mooted to join OW, even if it does manage to survive, it won't be joining anytime soon. Among the GOI's varied protect AI pronouncements they've said no Indian airline may enter an alliance until AI. And given AI's progress on that front...let's just say everyone is weak in India.

Meanwhile SkyTeam is dominant in China. It will be dominant in Indonesia. It is dominant in Russia. It is dominant in Africa. It is on par, or slightly larger that the other two Alliances TATL. It's one area of weakness is South America (which one assumes is why Delta is actively courting GOL).

One World will dominate South America. And that's about it.

While Hong Kong is a great city, and not a bad hub for SE Asia, it is terrible for China (JAL might be better if it ever gets its act together and can grow into China). It will one day have the number 2 airline in Russia, but S7 will be permanently disadvantaged to SU. It has nothing in Africa, and even without KQ, SkyTeam has a much greater number of African destinations.

I think as a business decision, the choice for Delta would be pretty clear...

Not that I think it will happen, or if it does I agree with Jetlanta; JVs will be a thing of the past.

[Edited 2012-01-17 17:50:11]
 
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RE: FT "Alliances In Doubt If DL Buys American"

Wed Jan 18, 2012 1:35 am

I just hope to god it doesn't come down to DL buying AA but if they do then I like to see DL to go down the tube..
 
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DeltaMD90
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RE: FT "Alliances In Doubt If DL Buys American"

Wed Jan 18, 2012 1:46 am

Quoting aircanada014 (Reply 28):

I just hope to god it doesn't come down to DL buying AA but if they do then I like to see DL to go down the tube..

That is a very thoughtful comment for the thousands of employees that have absolutely no say in this merger. Thanks!
Ironically I have never flown a Delta MD-90 :)
 
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RE: FT "Alliances In Doubt If DL Buys American"

Wed Jan 18, 2012 1:59 am

Quoting einsteinboricua (Reply 24):
Is it remotely possible that if DL bought AA (or hooked up on a AF/KL style partnership), for SkyTeam and oneworld to merge into one alliance? With many of the major capitals in Europe and Asia, this new alliance would be better suited against Star Alliance. Since this would only be cooperation between airlines, I would not see any regulatory hurdles to be cleared (or am I wrong)?

Alliances, even without trying to merge the antitrust-immunized joint ventures together, are still subject to antitrust and competition laws. Despite all the network-effects and other pro-competitive benefits you could cite for a mega-alliance without immunity, it would still be a tough sell. It would also be pretty problematic in terms of a lot of the non-European members that presumably would not be particularly keen to be dragged into a shotgun alliance marriage by, essentially, the financial struggles of AA. Also, as a functional matter, competition authorities would likely force the merged airline to choose an alliance, partly to prevent this (the Brazilian antitrust authority conditioned LAN/TAM approval on picking an alliance). The competition authorities, especially the DOJ and DG-COMP, have quite a close eye on competition among the three major alliances.

Merging the alliances would be a lot more than just merging DL and AA, and there would be

Quoting BobLoblaw (Reply 26):
One more reason this will never happen. It would need EU approval not just DOT/DOJ. No way the EU is going to allow BA/AA/DL in one alliance for UK or AA/DL/AF for France traffic.

In addition to China, Japan, Russia, Brazil, and multiple other jurisdictions in which it would likely need to be filed. Japan in particular might have some issues, particularly if the merged entity were slated to come out of oneworld.
 
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RE: FT "Alliances In Doubt If DL Buys American"

Wed Jan 18, 2012 9:18 am

This thread will be locked for further contributions as there is a double thread open on the same topic. As the other thread has garnered more replies thus far, it will be retained. Any posts added after the thread lock will be removed for housekeeping purposes only.


Possible DL/AA - Which Alliance?


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