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What Would Happen “IF” AA Demised?

Fri Feb 18, 2011 3:09 pm

I was wondering what would happen to its assets, routes, especially to Latin America? How would OneWorld make up for the hole, etc.. Plus with all the labor and customer service challenges, what are the chances of this really happening in the mid/long term? What do you think…?
AA will Rise Again!
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RE: What Would Happen “IF” AA Demised?

Fri Feb 18, 2011 3:27 pm

And "what if" the River Nile turned to fondue?

"What if" Lady Gaga were elected President of the USA?

What reasons or events have placed it in your head that American Airlines (AA?) would ever cease flying?
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RE: What Would Happen “IF” AA Demised?

Fri Feb 18, 2011 3:30 pm

Few predictions:

B6 would attempt to pick up a LOT of AA assets: JFK, LAX, even DFW. MIA to latin america I could see Delta and United fighting it out respectively. I could also see US eyeing down DFW assets as well. We're talking about a total longshot though. I would expect AA to merge with either B6 or US before they go belly up.
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RE: What Would Happen “IF” AA Demised?

Fri Feb 18, 2011 3:34 pm

From a RDU point of view..

US will up DCA to 7x mix mainline/RJ
DL will up LGA to 8x mainline
DL will up MIA to 2x daily MD88/RJ
WN/B6 will add 1x FLL service
WN will introduce DAL service (3x)
CO will up ORD 7x daily mainline/RJ
DL will initiate LHR 1x 763
DL will initiate CDG 1x 752
Aiming High and going far..
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RE: What Would Happen “IF” AA Demised?

Fri Feb 18, 2011 3:36 pm

Ive thought about that most of the planes have one landing gear in the desert anywayI would think the super 80,s would be scrapped 767,s,most of their fleet has some age.

I dont know of a us carrier that would jump in and take those latin america routes, Dallas would be impacted severely I dont know who would replace it, as when Dl pulled out it was a major blow. Miami should be fine as they have a variety of carriers serviceing it..

Id hate to loose a big legacy like this but with the co /ua and dl/nw mergers and Wn in their backyard it may be good for the industry as a whole, but not for the employees
i can see for 80 miles
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RE: What Would Happen “IF” AA Demised?

Fri Feb 18, 2011 3:40 pm

What kind of topic is this? What "if"? Pick on UAL/CON or DL, they are the largest airlines now...
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RE: What Would Happen “IF” AA Demised?

Fri Feb 18, 2011 4:03 pm

Unless the economic cycle takes a severe and unexpected turn for the worse or jet fuel goes to $6/gallon, AA is not in any immediate danger of liquidation.

AA is consolidating resources in its core, mature markets at a time when DL and UA are moving aggressively to expand into new markets with far greater long term growth potential. The risk for AA is not that its existing base will collapse, but rather that it is not positioning itself to benefit from economic growth going forward.

In the mid to long term, who knows. There are signs that that base may be eroding--not catastrophically, but certainly at a level that warrants long term concern. DL is doing some very aggressive things to improve its corporate travel share in several of AA's traditionally strong markets. That is starting to reflect in comparative unit revenue trends. UA will do the same and is starting from arguably a better revenue baseline than DL did. Let's see where that goes and how AA responds.

This industry is a circus of the bizarre. You never know what will happen next. But for the moment, it seems apparent that AA's current strategy--consolidate to the cornerstone markets, focus international networks on partner hubs in mature economies, and rely mostly on those partners for network access to emerging and/or secondary markets--that's unlikely to work in the long term and eventually something will have to change.

[Edited 2011-02-18 08:07:43]
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RE: What Would Happen “IF” AA Demised?

Fri Feb 18, 2011 4:06 pm

Quoting JetJeanes (Reply 4):
Ive thought about that most of the planes have one landing gear in the desert anywayI would think the super 80,s would be scrapped 767,s,most of their fleet has some age.

I respectfully disagree. I see DL cherry-picking the MD80s to fill in some of the gaps from retiring DC-9s and lack of MD90s on the used market.

Besides, this thread is idle speculation. It would take an enormous catastrophic event to take out AA. The government would bail them out cititng " a too big to let fail" excuse.
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RE: What Would Happen “IF” AA Demised?

Fri Feb 18, 2011 4:09 pm

AA ordering 2 777-300ER is a statement of things to come. They are not "just" ordering 2 of those 777 leviathons , 20 or 30 will be more like it. Dubai, South Africa or who knows will be added to teh map.
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RE: What Would Happen “IF” AA Demised?

Fri Feb 18, 2011 5:24 pm

Scenario 1:
TPG Capital and US duke it out in bankruptcy court to buy the whole thing.
Whoever wins, all contracts are sure to be re-negotiated on better terms (from the winner's POV).
TPG will keep the fleet, route structure and brand essentially intact, with the exception of MD80s, a large chunk of which will be sold to DL or parked, as fast as leased 737NGs can be found. TPG will eventually sell off Frontier and its fleet in pieces and close DEN to focus on American.
US will rebrand the whole operation, keep alive the 738 order and park two MD80s for every new A32x/738. PHL will be downgraded to a focus city, if that, to the benefit of JFK. Several LHR slots will be sold, either to BA or UA and a new attempt will be made to swap slots at LGA for DCA. SJU will become just another station.
American Eagle operations will remain mostly unchanged and will go with the winner.

Scenario 2
If no one comes up with enough money to satisfy the court, the company will be broken up.
B6 will take over domestic operations at JFK and several 738s and 752s until replacement A32xs can be sourced.
US will take over LAX, LGA, TPAC routes and several 738s, 752s, 75Ls, 763s and 772s.
B6 and US will fight over DFW, the winner grabbing even more 738s and 752s.
DL will make a play for MIA and LATAM routes but without much conviction, the main intent being to force UA to spend more to get it than if they were unopposed. DL will take some international ops out of JFK along with some 763ERs and 772s and whatever MD80 it needs with the rest either scrapped or sold to African or Asian LCCs. DL may take over the 738s yet to be delivered to replace its A320s, which could end up with B6.
UA will take a few 772s and whatever it feels it needs out of ORD. Depending on the timing, it might take on a few 763ERs if they are cheap as a stop-gap measure until its 787s start arriving.
If there are any left, FX will get the remaining 772s for freighter conversion.
BA, DL and UA will fight over the LHR slots, each walking away with some.
American Eagle will be broken up, the biggest chunk operating regional flights for whoever takes DFW.

Biggest loser: ORD, SJU, BOS
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RE: What Would Happen “IF” AA Demised?

Fri Feb 18, 2011 9:54 pm

What would happen?
UA and DL would pick up some of their planes, raise fares and make a forturne, thats what.
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