MD80Ttail
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AA & DL failed to capitalize fully TW & PA

Sun Feb 11, 2018 2:54 pm

Marketing at AA and DL failed to fully capitalize on their aquisitions of TW and PA. Both companies were going away sooner or later. I was surprised their marketing departments didn’t try to brand their premium products using some nostalgia. I.e. Clipper Class perhaps for DL first class product. Both AA and DL assimilated their purchases but seems like failed to fully capitalize.

DL is particularly bad at this. When buying Western many failures here as well.

Thoughts?
 
AAvgeek744
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Re: AA & DL failed to capitalize fully TW & PA

Sun Feb 11, 2018 3:47 pm

MD80Ttail wrote:
Marketing at AA and DL failed to fully capitalize on their aquisitions of TW and PA. Both companies were going away sooner or later. I was surprised their marketing departments didn’t try to brand their premium products using some nostalgia. I.e. Clipper Class perhaps for DL first class product. Both AA and DL assimilated their purchases but seems like failed to fully capitalize.

DL is particularly bad at this. When buying Western many failures here as well.

Thoughts?


Delta + Western was one of the smoothest mergers there have been. As for Pan Am, it was near death before DL took over the TATL routes, They opted out of the Latin America routes because it was obvious they couldn't make it work.
 
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hOMSaR
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Re: AA & DL failed to capitalize fully TW & PA

Sun Feb 11, 2018 3:51 pm

Delta didn't buy PA. They bought some of PA's assets prior to PA shutting down, but they never bought the airline, nor its branding (which is now owned by a railroad in the northeast).

As for either carrier "capitalizing" on the marketing/branding of PA/TW, both of those carriers either died or were near dead when taken over (in the case of TW). The "branding" didn't help those carriers survive, so why should the stronger carriers worry about it? In both cases, they bought the assets of the dying carrier (and in DL's case, not even all of them) in order to get access to planes, markets, etc. They didn't care about the weak brand.

Who, other than a small number of aviation fans, actually cares about the nostalgia of the old carriers? What passenger in 2018 would even know what "Clipper Class" is even a reference to?
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jmscsc
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Re: AA & DL failed to capitalize fully TW & PA

Sun Feb 11, 2018 4:18 pm

Why would DL or AA, strong airlines at that time, want to "capitalize on the acquisitions" of PA and TW, two dying airlines, who couldn't market themselves anymore? That doesn't make any sense.
 
bfitzflyer
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Re: AA & DL failed to capitalize fully TW & PA

Sun Feb 11, 2018 4:46 pm

I would argue that Delta's JFK Hub is how they capitalized on acquiring PA assets. It jump started significant European expansion out of JFK that we still see today.
 
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STT757
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Re: AA & DL failed to capitalize fully TW & PA

Sun Feb 11, 2018 4:51 pm

MD80Ttail wrote:
Marketing at AA and DL failed to fully capitalize on their aquisitions of TW and PA. Both companies were going away sooner or later. I was surprised their marketing departments didn’t try to brand their premium products using some nostalgia. I.e. Clipper Class perhaps for DL first class product. Both AA and DL assimilated their purchases but seems like failed to fully capitalize.

DL is particularly bad at this. When buying Western many failures here as well.

Thoughts?


DL did not acquire Pan Am, they purchased Pan Am's Frankfurt hub, the Trans-Atlantic routes from JFK and the Shuttle. However Pan Am continued to operate after the sale, Pan Am went back to their origins and moved back to Miami where they continued to operate their Latin American routes as well as a couple Trans-Atlantics. They also continued to operate Latin America routes from Kennedy Later when DL reneged on a promised infusion of cash Pan Am shut down. When Pan Am went into final liquidation is when their final ops.

In terms of Pan Am I would think more of Pan Am was acquired by UA than DL. UA got Pan Am's Pacific ops, Heathrow routes and Latin America routes.
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atypical
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Re: AA & DL failed to capitalize fully TW & PA

Sun Feb 11, 2018 5:13 pm

AA had two TW acquisitions. First was LHR route authorities and second was TW assets in BK. 9-11 happened shortly before the completed acquisition of assets and AA was hemorrhaging money. They were concerned with survival while absorbing TW at the same time, capitalization was clearly way down on the list of priorities.
 
MD80Ttail
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Re: AA & DL failed to capitalize fully TW & PA

Sun Feb 11, 2018 5:47 pm

Both PA and especially TWA were seeing a rennasasance at the time of their shut down / aquisitions. PA made substianial strides and performance had improved substantially before Lockerbie and then the Gulf War.

TW had strong load factors and would have been solidly profitable if not for the Caribou deal. Caribou was a low bleed. TW had even made the gutsy move to open a small hub / major focus city at ATL. Rising fuel costs from the Gulf War didn’t help.

I would argue both airlines were in better shape with better outlooks than at anytime in the previous 5 years and probably in the 10 years prior.

The comment only aviation buffs know of PA and TW while true today was absolutely NOT true at the time of the demise of both airlines. Both brands had amazingly strong name recognition worldwide. They both were one of the top most recognizable companies in the world in both name and logo. These are facts. Perhaps once could argue they were like Sears, Kenmore and Kmart—everyone knows them but they were underperforming in twilight years.

I would argue their notoriety was even greatly with business travelers, travelers in general and with people world wide. I remember reading something written by Bob Crandel at AA and he said on many occasions it was the norm to be introducing himself to foreign officials trying to negotiate a new route for AA and he would say he was president of American Airlines and the response universally was which one, Pan Am or TWA. You can’t buy this kind of recognition.

In fact, I would bet my bottom dollar most Americans could easily name PA and TW but most didn’t know who SW was at the time.

Western and DL May have been a smooth merger. I agree. That was the point of my post. It’s been missed.

I do believe from a marketing standpoint....not the nuts and bolts of asset acquisitions and mergers....these airlines missed opportunities to benefit from PA and TWs notoriety. The assets were great ap it what was missed bc the full potential was not capitalized on.

Both PA and TW were dead and in life support. Yes DL bought PA assets and both airlines misled the other...but DL could have easily purchased the logo if marketing had realized a use for it and I think they should have. US didn’t take advantage of PSA on the west coast and DL should have leveraged Western more on the west as well.
 
afcjets
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Re: AA & DL failed to capitalize fully TW & PA

Sun Feb 11, 2018 5:49 pm

STT757 wrote:

In terms of Pan Am I would think more of Pan Am was acquired by UA than DL. UA got Pan Am's Pacific ops, Heathrow routes and Latin America routes.


Not all at once though. United acquired Pan Am's Pacific routes in the Spring of 1985.

In late 1990, Pan Am attempted to raise cash by selling their LHR routes to UA, and a few weeks later TW did the same thing by selling theirs to AA. Both deals came with joint marketing, scheduling and FF benefits.

DL took over the Shuttle flights in 9/91 and then the remaining TATL routes in November, and PA shut down completely on 12/4/91.

PA's creditors sold the Latin American routes to both AA and UA, and while AA had served a few non-hub domestic and Caribbean routes from MIA before EA went out of business earlier in the year and added a few more after, the former PA routes are what really caused their MIA hub to take off. United barely flies into MIA at all now, even domestically.
 
DfwRevolution
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Re: AA & DL failed to capitalize fully TW & PA

Sun Feb 11, 2018 6:05 pm

MD80Ttail wrote:
Marketing at AA and DL failed to fully capitalize on their aquisitions of TW and PA. Both companies were going away sooner or later. I was surprised their marketing departments didn’t try to brand their premium products using some nostalgia. I.e. Clipper Class perhaps for DL first class product. Both AA and DL assimilated their purchases but seems like failed to fully capitalize.


There wasn't any nostalgia because the PanAm and TWA brands were toxic. Nobody associated PanAm or TWA with premium products. Everyone associated PanAm and TWA with fatal accidents, terrorism, and aging unreliable planes.
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777PHX
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Re: AA & DL failed to capitalize fully TW & PA

Sun Feb 11, 2018 6:38 pm

DfwRevolution wrote:
MD80Ttail wrote:
Marketing at AA and DL failed to fully capitalize on their aquisitions of TW and PA. Both companies were going away sooner or later. I was surprised their marketing departments didn’t try to brand their premium products using some nostalgia. I.e. Clipper Class perhaps for DL first class product. Both AA and DL assimilated their purchases but seems like failed to fully capitalize.


There wasn't any nostalgia because the PanAm and TWA brands were toxic. Nobody associated PanAm or TWA with premium products. Everyone associated PanAm and TWA with fatal accidents, terrorism, and aging unreliable planes.


Pretty much.

TWA was still suffering from the stigma of TW800. Why would AA want to put its brand anywhere near that?
 
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Re: AA & DL failed to capitalize fully TW & PA

Sun Feb 11, 2018 6:51 pm

bfitzflyer wrote:
I would argue that Delta's JFK Hub is how they capitalized on acquiring PA assets. It jump started significant European expansion out of JFK that we still see today.


Before the PA asset acquisition, there was no JFK hub. The acquisition is what created and started the JFK hub. As stated above, Delta acquired the JFK TATL assets November 1, 1991, and that is when the JFK hub started. Before that, JFK was just a spoke city.

I still have the Delta timetable from November 1, 1991. Interesting how those original routes ouf of JFK looked back then, compared to today. Delta has come a LONG way.
 
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Re: AA & DL failed to capitalize fully TW & PA

Sun Feb 11, 2018 6:58 pm

I think the fog of memory may make people yearn for a TWA and Pan Am that was nowhere to be found when the brands disappeared. More than half of Americans are younger than 37, so Pan Am wouldn’t resonate for them.

At one time, Pan Am and TWA were great airlines, unfortunately they were run into the ground.
 
airlinedork
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Re: AA & DL failed to capitalize fully TW & PA

Sun Feb 11, 2018 7:10 pm

MD80Ttail wrote:
Marketing at AA and DL failed to fully capitalize on their aquisitions of TW and PA. Both companies were going away sooner or later. I was surprised their marketing departments didn’t try to brand their premium products using some nostalgia. I.e. Clipper Class perhaps for DL first class product. Both AA and DL assimilated their purchases but seems like failed to fully capitalize.

DL is particularly bad at this. When buying Western many failures here as well.

Thoughts?


DL failed b/c they didn't brand themselves after a failing brand? Are you serious?

Should DL also have resurrected NW WBC at some point, b/c clearly DL is failing right now.

DL is successful b/c of it's strategic opportunities and acquisitions. Branding during these times was executed perfectly, with the acquiring carrier's brand carrying on (unlike UA's merged livery which has pissed almost everyone off). Using prior acquired brands will confuse the customer and the general public. The only people who would not be confused are the minuscule fraction of the population here on A.net.
 
MD80Ttail
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Re: AA & DL failed to capitalize fully TW & PA

Sun Feb 11, 2018 8:19 pm

I never suggested DL or AA should rebrand themselves. Some folks read what they want in these posts not what was written.

The discussion I attempted to frame was was both DL and AA missed some opportunities.

The assets were digested and merged well more or less. That wasn’t the point of my discussion. The reasons for PA and TW failures are much more complicated than I can surmise in a paragraph or three. To think simply they failed as brands is completely shortsighted and dead wrong. Decades of decisions, lack of competition before deregulation, politics and oh there were politics coupled with bad business decisions all led to the their downfalls. Caribou was a slow bleed for TW and really the final nail. Accidents don’t resonate long term with the public. They just don’t. I have an advanced degree in Public Relations and have studied the effects of accidents and negative publicity short and long term. Short term there is a very temporary drop off in reservations but long term they usually increase. Yes, increase. That’s a whole another topic and gets into a lot of psychology and analytics. Nobody banged up more planes in a 5-7 year period than US and they actually doubled down on advertising etc and brilliantly used the exposure from the accidents to their advantage. Accidents and bodies, while unfortunate, generate publicity you simply can’t afford to buy. Smart companies use this to their advantage. Exxon, Tylonal, Union Carbide Andy I could go on and on. US truly had mavericks in their PR departments during their “crash a plane every 10 months or so” period.

Getting out of the weeds....

The only reason the public doesn’t know of TW and PA as a brand today is because they went away. In the 90s EVERYONE knew the brand. Reality of marketing is a well known brand even with warts is much better than no brand at all. DL and AA had missed opportunities.

Nowhere have I said they should have rebranded themselves in the image of TW or PA. That would have been foolish. I believe each airline would have been served well to find ways to integrate some of the nostalgia of PA and TW into their operations. They could have benefited from the notieriety the brands bring. DL missed the boat on the west coast with Western and especially missed the boat with NW. NW in Japan had tremendous credibility as a brand and trust amongst the Japanese. This just isn’t my thinking, it’s well recognized DLs rebrand on Japan and Asian flights missed many of the same opportunities.

So again, to be clear, I’m never suggested rebranding DL or AA. I do think they could have managed the TW and PA brands in such a way to get more than just nuts and bolts assets. These companies were pioneers in aviation and in the 90s still meant something to the traveling public. They meant a lot. DL and AA could have made a lot more money off names if utilized creatively.
 
BostonBeau
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Re: AA & DL failed to capitalize fully TW & PA

Sun Feb 11, 2018 8:58 pm

I never understood AA's purchase of the BOS-LHR route from TWA, and then gradually surrendering it to British Airways. They started out with I think 3 B777s a day (or it may have been two B777s in the evening and a B767 for the morning flight). Then it was three A300s. Then three 757s. Then (poof) nothing from AA. It bothers me that US airlines seemingly have lost the willingness to compete. Screw joint ventures...let's up the service, frequencies, and equipment and BEAT the competition.
 
IPFreely
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Re: AA & DL failed to capitalize fully TW & PA

Sun Feb 11, 2018 9:15 pm

MD80Ttail wrote:
I was surprised their marketing departments didn’t try to brand their premium products using some nostalgia. I.e. Clipper Class perhaps for DL first class product. Both AA and DL assimilated their purchases but seems like failed to fully capitalize.


Promoting brands associated with failure, like PanAm and TWA, is an unusual strategy to say the least. Are you also surprised that no car manufacturer has capitalized by reviving names like Edsel, Cimarron, or Pinto, no drink manufacturer has introduced another Pepsi Crystal or Pepsi AM, Microsoft hasn't named another operating system "Vista 2", and Apple hasn't named another product "Lisa 2"?



MD80Ttail wrote:
DL is particularly bad at this. When buying Western many failures here as well.


Can you elaborate on what these many failures were?
 
MD80Ttail
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Re: AA & DL failed to capitalize fully TW & PA

Sun Feb 11, 2018 9:22 pm

777PHX wrote:
MD80Ttail wrote:
I never suggested DL or AA should rebrand themselves. Some folks read what they want in these posts not what was written.

The discussion I attempted to frame was was both DL and AA missed some opportunities.

The assets were digested and merged well more or less. That wasn’t the point of my discussion. The reasons for PA and TW failures are much more complicated than I can surmise in a paragraph or three. To think simply they failed as brands is completely shortsighted and dead wrong. Decades of decisions, lack of competition before deregulation, politics and oh there were politics coupled with bad business decisions all led to the their downfalls. Caribou was a slow bleed for TW and really the final nail. Accidents don’t resonate long term with the public. They just don’t. I have an advanced degree in Public Relations and have studied the effects of accidents and negative publicity short and long term. Short term there is a very temporary drop off in reservations but long term they usually increase. Yes, increase. That’s a whole another topic and gets into a lot of psychology and analytics. Nobody banged up more planes in a 5-7 year period than US and they actually doubled down on advertising etc and brilliantly used the exposure from the accidents to their advantage. Accidents and bodies, while unfortunate, generate publicity you simply can’t afford to buy. Smart companies use this to their advantage. Exxon, Tylonal, Union Carbide Andy I could go on and on. US truly had mavericks in their PR departments during their “crash a plane every 10 months or so” period.

Getting out of the weeds....

The only reason the public doesn’t know of TW and PA as a brand today is because they went away. In the 90s EVERYONE knew the brand. Reality of marketing is a well known brand even with warts is much better than no brand at all. DL and AA had missed opportunities.

Nowhere have I said they should have rebranded themselves in the image of TW or PA. That would have been foolish. I believe each airline would have been served well to find ways to integrate some of the nostalgia of PA and TW into their operations. They could have benefited from the notieriety the brands bring. DL missed the boat on the west coast with Western and especially missed the boat with NW. NW in Japan had tremendous credibility as a brand and trust amongst the Japanese. This just isn’t my thinking, it’s well recognized DLs rebrand on Japan and Asian flights missed many of the same opportunities.

So again, to be clear, I’m never suggested rebranding DL or AA. I do think they could have managed the TW and PA brands in such a way to get more than just nuts and bolts assets. These companies were pioneers in aviation and in the 90s still meant something to the traveling public. They meant a lot. DL and AA could have made a lot more money off names if utilized creatively.


So, if you already know everything and disagree with everyone here, why did you create this thread in the first place?

I wish this garbage website had an ignore function so I could just skip over the shit posts from low value posters who just want to see themselves post.


I can help you out with that. When you see a low value post you have the freedom of choice to not read and not participate. I know what happens in Swan Lake too but I still enjoy the ballet. I have been reading this forum for maybe 15 years now and have a handful of posts. I have been published in actual textbooks and industry publications. A nice salary has been earned for my musings.

Please feel free to not read. Not participate. Perhaps I should have asked a more proper question. When do you think the last MD80 rev flight will happen? Why doesn’t Boeing just retool and make more 757s. Perhaps those are higher value.

Expression of ideas is art. Expression of ideas is a God given freedom everyone should enjoy. I guess you don’t go to many museums either? Take care my friend and have a nice day.

When do you think the last MD80 flight will happen? I’m going to go with DL w a MD88 MCO-ATL 2029.
 
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william
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Re: AA & DL failed to capitalize fully TW & PA

Sun Feb 11, 2018 9:22 pm

Didn't Delta renege on a deal to give PA a cash infusion leading PA to shut down? I remember this.
 
MD80Ttail
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Re: AA & DL failed to capitalize fully TW & PA

Sun Feb 11, 2018 9:30 pm

william wrote:
Didn't Delta renege on a deal to give PA a cash infusion leading PA to shut down? I remember this.


Yes and no. Yes but the agreement was predicated on half truths and outright lies from PA about their cash flow and losses. PA wasn’t transparent when the deal was as negotiated and the accountents found that out quickly. A desperation move on the part of PA to strike a “Friday night deal”so to speak and publicize the heck out it hoping when DL realized how bad the situation truly was at PA w the publicity they would have stayed the course and followed through.

A great example of the marketing department almost pulling off a game of chess.
Last edited by MD80Ttail on Sun Feb 11, 2018 9:32 pm, edited 1 time in total.
 
AAvgeek744
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Re: AA & DL failed to capitalize fully TW & PA

Sun Feb 11, 2018 9:32 pm

MD80Ttail wrote:
I never suggested DL or AA should rebrand themselves. Some folks read what they want in these posts not what was written.

The discussion I attempted to frame was was both DL and AA missed some opportunities.

The assets were digested and merged well more or less. That wasn’t the point of my discussion. The reasons for PA and TW failures are much more complicated than I can surmise in a paragraph or three. To think simply they failed as brands is completely shortsighted and dead wrong. Decades of decisions, lack of competition before deregulation, politics and oh there were politics coupled with bad business decisions all led to the their downfalls. Caribou was a slow bleed for TW and really the final nail. Accidents don’t resonate long term with the public. They just don’t. I have an advanced degree in Public Relations and have studied the effects of accidents and negative publicity short and long term. Short term there is a very temporary drop off in reservations but long term they usually increase. Yes, increase. That’s a whole another topic and gets into a lot of psychology and analytics. Nobody banged up more planes in a 5-7 year period than US and they actually doubled down on advertising etc and brilliantly used the exposure from the accidents to their advantage. Accidents and bodies, while unfortunate, generate publicity you simply can’t afford to buy. Smart companies use this to their advantage. Exxon, Tylonal, Union Carbide Andy I could go on and on. US truly had mavericks in their PR departments during their “crash a plane every 10 months or so” period.

Getting out of the weeds....

The only reason the public doesn’t know of TW and PA as a brand today is because they went away. In the 90s EVERYONE knew the brand. Reality of marketing is a well known brand even with warts is much better than no brand at all. DL and AA had missed opportunities.

Nowhere have I said they should have rebranded themselves in the image of TW or PA. That would have been foolish. I believe each airline would have been served well to find ways to integrate some of the nostalgia of PA and TW into their operations. They could have benefited from the notieriety the brands bring. DL missed the boat on the west coast with Western and especially missed the boat with NW. NW in Japan had tremendous credibility as a brand and trust amongst the Japanese. This just isn’t my thinking, it’s well recognized DLs rebrand on Japan and Asian flights missed many of the same opportunities.

So again, to be clear, I’m never suggested rebranding DL or AA. I do think they could have managed the TW and PA brands in such a way to get more than just nuts and bolts assets. These companies were pioneers in aviation and in the 90s still meant something to the traveling public. They meant a lot. DL and AA could have made a lot more money off names if utilized creatively.


I would disagree. By the 90's. both PA and TW were falling behind. Their best decade in the jet age were definitely the 1970's, when there was much less competition. By the 80's, Wall Street greed took over TWA. Possibly the most ill conceived merger ever was what started PA down when they acquired National. AA nor DL had any direct effect on those two iconic airlines going down.
 
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william
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Re: AA & DL failed to capitalize fully TW & PA

Sun Feb 11, 2018 10:09 pm

MD80Ttail wrote:
william wrote:
Didn't Delta renege on a deal to give PA a cash infusion leading PA to shut down? I remember this.


Yes and no. Yes but the agreement was predicated on half truths and outright lies from PA about their cash flow and losses. PA wasn’t transparent when the deal was as negotiated and the accountents found that out quickly. A desperation move on the part of PA to strike a “Friday night deal”so to speak and publicize the heck out it hoping when DL realized how bad the situation truly was at PA w the publicity they would have stayed the course and followed through.

A great example of the marketing department almost pulling off a game of chess.


The marketing worked, I remember Delta getting torched publicly for reneging on their agreement to with the cash infusion. There are quite a few ex Pan Am employees that still hold some hard feelings for Delta. The cash infusion must not had been iron clad.

UA is the one that squandered Pan Am's Latin routes they aquired. AA's Latin presence comes from the Eastern purchase.
 
DfwRevolution
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Re: AA & DL failed to capitalize fully TW & PA

Sun Feb 11, 2018 10:16 pm

AAvgeek744 wrote:
By the 80's, Wall Street greed took over TWA.


What does this even mean? Do you think TWA's surviving competitors like AA and DL were immune from "Wall Street greed" themselves? Of course not. As publicly-traded firms, AA and DL were under equally intense pressure to deliver returns to their investors. The only difference is that AA and DL made faster and deeper changes post-deregulation. PanAm and TWA didn't.

Investors have no obligation to preserve a firm as a going concern. If the firm management is perpetually unable to deliver value, then sale or shutdown is a perfectly legitimate option for the investors.
I have a three post per topic limit. You're welcome to have the last word.
 
questions
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Re: AA & DL failed to capitalize fully TW & PA

Sun Feb 11, 2018 10:43 pm

AAvgeek744 wrote:

Delta + Western was one of the smoothest mergers there have been. As for Pan Am, it was near death before DL took over the TATL routes, They opted out of the Latin America routes because it was obvious they couldn't make it work.


Why could DL not make those routes work?
 
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atypical
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Re: AA & DL failed to capitalize fully TW & PA

Mon Feb 12, 2018 12:12 am

DfwRevolution wrote:
AAvgeek744 wrote:
By the 80's, Wall Street greed took over TWA.


What does this even mean? Do you think TWA's surviving competitors like AA and DL were immune from "Wall Street greed" themselves? Of course not. As publicly-traded firms, AA and DL were under equally intense pressure to deliver returns to their investors. The only difference is that AA and DL made faster and deeper changes post-deregulation. PanAm and TWA didn't.

Investors have no obligation to preserve a firm as a going concern. If the firm management is perpetually unable to deliver value, then sale or shutdown is a perfectly legitimate option for the investors.


Wall Street greed in the personification of Carl Icahn. No airline could have survived what he did to TWA. At one time TWA was the largest stockholder in Texaco and Pennzoil. He used TWA cash flow to enrich himself and bleed the airline dry. If I saw Icahn dying on the street I'd kick him in the teeth and let someone else clean up the trash.
 
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EA CO AS
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Re: AA & DL failed to capitalize fully TW & PA

Mon Feb 12, 2018 12:30 am

MD80Ttail wrote:
In the 90s EVERYONE knew the brand. Reality of marketing is a well known brand even with warts is much better than no brand at all.


A few things; first off, in the 90s, the only thing people knew about the PA/TW brands is that they were old airlines that nobody flew anymore. Maybe their parents or grandparents did, once, in the 60s or 70s, but that was it. And unlike how "all publicity is good publicity" today, when it comes to airlines, bad publicity is, well, BAD. So tying any part of your successful (AA/DL) airline to a failed or failing (PA/TW) one is like trying to enhance someone's ability to swim by throwing them a cinder block.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
jfk777
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Re: AA & DL failed to capitalize fully TW & PA

Mon Feb 12, 2018 12:44 am

william wrote:
MD80Ttail wrote:
william wrote:
Didn't Delta renege on a deal to give PA a cash infusion leading PA to shut down? I remember this.


Yes and no. Yes but the agreement was predicated on half truths and outright lies from PA about their cash flow and losses. PA wasn’t transparent when the deal was as negotiated and the accountents found that out quickly. A desperation move on the part of PA to strike a “Friday night deal”so to speak and publicize the heck out it hoping when DL realized how bad the situation truly was at PA w the publicity they would have stayed the course and followed through.

A great example of the marketing department almost pulling off a game of chess.


The marketing worked, I remember Delta getting torched publicly for reneging on their agreement to with the cash infusion. There are quite a few ex Pan Am employees that still hold some hard feelings for Delta. The cash infusion must not had been iron clad.

UA is the one that squandered Pan Am's Latin routes they aquired. AA's Latin presence comes from the Eastern purchase.


Just because UA doesn;t fly to South America from Miami and JFK doesn;t mean they squandered he PA Latin routes, many of thise flights were moved to ORD and Dulles. Today UA flies to from ORD to GRU( not AA the king of Latin flights) plus Houston, Newark and Washington Dulles to Sao Paulo. Newark and houston to EZE plus many many flights from EWR & IAH to too many Latin cities to name. UA is thriving south of Miami very nicely.
 
grbauc
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Re: AA & DL failed to capitalize fully TW & PA

Mon Feb 12, 2018 12:59 am

atypical wrote:
AA had two TW acquisitions. First was LHR route authorities and second was TW assets in BK. 9-11 happened shortly before the completed acquisition of assets and AA was hemorrhaging money. They were concerned with survival while absorbing TW at the same time, capitalization was clearly way down on the list of priorities.



I think you nailed it for AA.. Its easier to keep some stuff and try new stuff they acquired from TW when there in the positive but in tuff times not so much.
 
jfk777
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Re: AA & DL failed to capitalize fully TW & PA

Mon Feb 12, 2018 1:00 am

TWA ended because of Carl Icahn, everything that happened there was Icahn related, remember that the other bidder for TWA was Frank Lorenzo( Darth Vader) himself so they sold to the nice New York Wall Street dude. So they thought.

Pan AM had many events which led to its demise including buying National Airlines and having too many 747's. Many political events both domestic and foreign hurt Pan AM, deregulation was enemy number one with Delta and all these domestic airlines suddenly flying to London, Paris and FRA. Years of loses led to selling the building in New York then the Intercontinental Hotels and then the Asia routes and then Heathrow. I had great hopes for a merger with Northwest in 1989. Sadly Lockerbie and the War in Iraq were the final nails on the coffin.

IF there had been no Pan AM there would be no Emirates, what PA was gave vision to something which no one thought we would ever see. Could Juan Trippe have imagined an airline with 100 747's ( ok A380) ? Probably not.
Last edited by jfk777 on Mon Feb 12, 2018 1:04 am, edited 1 time in total.
 
deltal1011man
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Re: AA & DL failed to capitalize fully TW & PA

Mon Feb 12, 2018 1:09 am

MD80Ttail wrote:
Marketing at AA and DL failed to fully capitalize on their aquisitions of TW and PA. Both companies were going away sooner or later. I was surprised their marketing departments didn’t try to brand their premium products using some nostalgia. I.e. Clipper Class perhaps for DL first class product. Both AA and DL assimilated their purchases but seems like failed to fully capitalize.

DL is particularly bad at this. When buying Western many failures here as well.

Thoughts?

As said, Delta didn't get the naming rights for Pan Am. IIRC they had the right to use the Pan Am name on routes to and from Europe for a limited amount of time and Delta decided PA was such a basket case they wanted to move everything to the Delta brand right away.
Also as others have said, why in the world is it a good idea to take branding from a failing airline and apply it to the airline buying its assets? And for Delta, why would they spend even more money on Pan Am for naming rights/copyrights?

M&As aren't for airline geeks to be able to "look back". M&A is about synergies and as little confusion as possible.
 
stlgph
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Re: AA & DL failed to capitalize fully TW & PA

Mon Feb 12, 2018 2:45 am

MD80Ttail wrote:
Marketing at AA and DL failed to fully capitalize on their aquisitions of TW and PA. Both companies were going away sooner or later. I was surprised their marketing departments didn’t try to brand their premium products using some nostalgia. I.e. Clipper Class perhaps for DL first class product. Both AA and DL assimilated their purchases but seems like failed to fully capitalize.

DL is particularly bad at this. When buying Western many failures here as well.

Thoughts?


You're absolutely right. American Airlines miserably failed in promoting stellar, award winning service on board a Boeing 717, 8 times a day between St. Louis and Cedar Rapids.
if assumptions could fly, airliners.net would be the world's busiest airport
 
rbavfan
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Re: AA & DL failed to capitalize fully TW & PA

Mon Feb 12, 2018 2:47 am

hOMSaR wrote:
Delta didn't buy PA. They bought some of PA's assets prior to PA shutting down, but they never bought the airline, nor its branding (which is now owned by a railroad in the northeast).

As for either carrier "capitalizing" on the marketing/branding of PA/TW, both of those carriers either died or were near dead when taken over (in the case of TW). The "branding" didn't help those carriers survive, so why should the stronger carriers worry about it? In both cases, they bought the assets of the dying carrier (and in DL's case, not even all of them) in order to get access to planes, markets, etc. They didn't care about the weak brand.

Who, other than a small number of aviation fans, actually cares about the nostalgia of the old carriers? What passenger in 2018 would even know what "Clipper Class" is even a reference to?


I remember clipper class and does my mother, father and many family members that have flown for years. And no we did not work for an airline.
 
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millionsofmiles
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Re: AA & DL failed to capitalize fully TW & PA

Mon Feb 12, 2018 2:50 am

In 2013, when I was speaking at an orientation of new-hire flight attendants, I made mention of Eastern Air Lines. All I got was blank looks. It was at that moment that I realized that the grand old airline names of the past do, indeed, belong to the past. I have a special fondness for TWA as I took my first flight on that iconic airline at age 5. Unfortunately, history and nostalgia do not translate into profits in the airline industry.
 
rbavfan
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Re: AA & DL failed to capitalize fully TW & PA

Mon Feb 12, 2018 2:52 am

MD80Ttail wrote:
Both PA and especially TWA were seeing a rennasasance at the time of their shut down / aquisitions. PA made substianial strides and performance had improved substantially before Lockerbie and then the Gulf War.

TW had strong load factors and would have been solidly profitable if not for the Caribou deal. Caribou was a low bleed. TW had even made the gutsy move to open a small hub / major focus city at ATL. Rising fuel costs from the Gulf War didn’t help.

I would argue both airlines were in better shape with better outlooks than at anytime in the previous 5 years and probably in the 10 years prior.

The comment only aviation buffs know of PA and TW while true today was absolutely NOT true at the time of the demise of both airlines. Both brands had amazingly strong name recognition worldwide. They both were one of the top most recognizable companies in the world in both name and logo. These are facts. Perhaps once could argue they were like Sears, Kenmore and Kmart—everyone knows them but they were underperforming in twilight years.

I would argue their notoriety was even greatly with business travelers, travelers in general and with people world wide. I remember reading something written by Bob Crandel at AA and he said on many occasions it was the norm to be introducing himself to foreign officials trying to negotiate a new route for AA and he would say he was president of American Airlines and the response universally was which one, Pan Am or TWA. You can’t buy this kind of recognition.

In fact, I would bet my bottom dollar most Americans could easily name PA and TW but most didn’t know who SW was at the time.

Western and DL May have been a smooth merger. I agree. That was the point of my post. It’s been missed.

I do believe from a marketing standpoint....not the nuts and bolts of asset acquisitions and mergers....these airlines missed opportunities to benefit from PA and TWs notoriety. The assets were great ap it what was missed bc the full potential was not capitalized on.

Both PA and TW were dead and in life support. Yes DL bought PA assets and both airlines misled the other...but DL could have easily purchased the logo if marketing had realized a use for it and I think they should have. US didn’t take advantage of PSA on the west coast and DL should have leveraged Western more on the west as well.


I assume by SW you mean Southwest (WN?)
 
rbavfan
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Re: AA & DL failed to capitalize fully TW & PA

Mon Feb 12, 2018 3:07 am

DfwRevolution wrote:
AAvgeek744 wrote:
By the 80's, Wall Street greed took over TWA.


What does this even mean? Do you think TWA's surviving competitors like AA and DL were immune from "Wall Street greed" themselves? Of course not. As publicly-traded firms, AA and DL were under equally intense pressure to deliver returns to their investors. The only difference is that AA and DL made faster and deeper changes post-deregulation. PanAm and TWA didn't.

Investors have no obligation to preserve a firm as a going concern. If the firm management is perpetually unable to deliver value, then sale or shutdown is a perfectly legitimate option for the investors.


Carl Icahn and his greedy sell off assets & then file bankruptcy is what killed off TWA. He got a great bankruptcy deal to sell something like half the seats available through is travel service, at a price he could pic. He caused planes to leave with large loads of underpriced tickets. He should have got the same treatment as Frank Lorenzo.

Icahn systematically sold TWA's assets to repay the money he borrowed to purchase the company, which was described as "asset stripping." In 1988, Icahn took TWA private, gaining a personal profit of $469 million, and leaving TWA with a debt of $540 million.
 
rbavfan
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Re: AA & DL failed to capitalize fully TW & PA

Mon Feb 12, 2018 3:13 am

atypical wrote:
DfwRevolution wrote:
AAvgeek744 wrote:
By the 80's, Wall Street greed took over TWA.


What does this even mean? Do you think TWA's surviving competitors like AA and DL were immune from "Wall Street greed" themselves? Of course not. As publicly-traded firms, AA and DL were under equally intense pressure to deliver returns to their investors. The only difference is that AA and DL made faster and deeper changes post-deregulation. PanAm and TWA didn't.

Investors have no obligation to preserve a firm as a going concern. If the firm management is perpetually unable to deliver value, then sale or shutdown is a perfectly legitimate option for the investors.


Wall Street greed in the personification of Carl Icahn. No airline could have survived what he did to TWA. At one time TWA was the largest stockholder in Texaco and Pennzoil. He used TWA cash flow to enrich himself and bleed the airline dry. If I saw Icahn dying on the street I'd kick him in the teeth and let someone else clean up the trash.


And I would gladly watch you do it and never see a thing officer! There will be a special place in hell for him.
 
MIflyer12
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Re: AA & DL failed to capitalize fully TW & PA

Mon Feb 12, 2018 3:23 am

MD80Ttail wrote:
william wrote:
Didn't Delta renege on a deal to give PA a cash infusion leading PA to shut down? I remember this.


Yes and no. Yes but the agreement was predicated on half truths and outright lies from PA about their cash flow and losses. PA wasn’t transparent when the deal was as negotiated and the accountents found that out quickly. A desperation move on the part of PA to strike a “Friday night deal”so to speak and publicize the heck out it hoping when DL realized how bad the situation truly was at PA w the publicity they would have stayed the course and followed through.

A great example of the marketing department almost pulling off a game of chess.


Pan Am did not prevail in court in a damages suit against Delta.

Five days after the shutdown, Pan Am filed a $2.5 billion lawsuit against Delta, claiming that Delta illegally backed away from its commitment to finance its bankruptcy emergence. Anton offered depositions and testimony. In 1994, Delta won the court battle when U.S. District Court Judge Robert Patterson ruled Delta was not liable.

This has been settled for two decades.

https://www.forbes.com/sites/tedreed/20 ... 23dd5e1f6b
 
LovePrunesAnet
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Re: AA & DL failed to capitalize fully TW & PA

Mon Feb 12, 2018 3:24 am

EA CO AS wrote:
MD80Ttail wrote:
In the 90s EVERYONE knew the brand. Reality of marketing is a well known brand even with warts is much better than no brand at all.


A few things; first off, in the 90s, the only thing people knew about the PA/TW brands is that they were old airlines that nobody flew anymore. Maybe their parents or grandparents did, once, in the 60s or 70s, but that was it. And unlike how "all publicity is good publicity" today, when it comes to airlines, bad publicity is, well, BAD. So tying any part of your successful (AA/DL) airline to a failed or failing (PA/TW) one is like trying to enhance someone's ability to swim by throwing them a cinder block.


agreed.
perhaps the original poster yearns for the olden times when Pan Am and TWA were relevant and well thought of brands. But that was not the final 10 years of their lives. Outdated, unsafe, irrelevant dinosaurs are adjectives that I think MOST people actually had of the two failng airlines. The fact that someone with advanced degrees in PR and being quoted in media and so on thinks nostalgiacly doesnt make keeping toxic failing brands alive is questionable at best, but I'm chalking it up to perhaps remembering the 60's and 70s as taking place in the 80's and early 90's.
 
IPFreely
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Re: AA & DL failed to capitalize fully TW & PA

Mon Feb 12, 2018 3:30 am

MD80Ttail wrote:
...I would argue both airlines were in better shape with better outlooks than at anytime in the previous 5 years and probably in the 10 years prior...

...Both PA and TW were dead and in life support....


We see a lot of arguments at a.net but I've never seen anyone argue with themselves in the same post this well. Good job.
 
IPFreely
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Re: AA & DL failed to capitalize fully TW & PA

Mon Feb 12, 2018 3:49 am

LovePrunesAnet wrote:
perhaps the original poster yearns for the olden times when Pan Am and TWA were relevant and well thought of brands. But that was not the final 10 years of their lives. Outdated, unsafe, irrelevant dinosaurs are adjectives that I think MOST people actually had of the two failng airlines. The fact that someone with advanced degrees in PR and being quoted in media and so on thinks nostalgiacly doesnt make keeping toxic failing brands alive is questionable at best, but I'm chalking it up to perhaps remembering the 60's and 70s as taking place in the 80's and early 90's.


Completely agree -- the time when Pan Am and TWA were relevant and respected brands would have been in the 60's and 70's, before deregulation. Any business frequent flyers from that era who would have held those brands in high regard are long retired or long gone. The Pan Am and TWA after deregulation were known for old decrepit planes, poor customer service, terrible management, and financial failure. That's the Pan Am and TWA that today's frequent flyers are old enough to remember -- and definitely not a brand or image that AA, DL, or any airline wants associated with them. Not that they want to confuse or complicate anything with multiple brands anyway. Song by Delta and Ted by United were failures and those names did not have the reputation of failure would have accompanied any integration of TWA or Pan Am brands into AA or DL. All three of the US majors can trace their roots back to multiple failed airlines of the past and all three are rightly, clearly, and concisely branded as AA, DL, and UA...period. An advanced degree in PR is great but it is no substitute for practical experience and common sense.
 
commavia
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Re: AA & DL failed to capitalize fully TW & PA

Mon Feb 12, 2018 3:50 am

atypical wrote:
AA had two TW acquisitions. First was LHR route authorities and second was TW assets in BK. 9-11 happened shortly before the completed acquisition of assets and AA was hemorrhaging money. They were concerned with survival while absorbing TW at the same time, capitalization was clearly way down on the list of priorities.


It was actually arguably three.

At approximately the same time as AA announced the acquisition of Eastern's Latin America routes - in December 1989 - it also announced a separate, $195M transaction with TWA to acquire CHI-LON route authority, along with gates, hangars and other assets at ORD. Then, one year later in December 1990, AA reached agreement on the second, $445M transaction with TWA to acquire route authorities to LHR from JFK, EWR, ORD, BOS, LHR and PHL, and to LGW from BWI and STL, along with associated assets at both LON airports. And then finally, almost exactly a decade later, AA announced in January 2001 the acquisition of substantially all of the remainder of TWA's assets concurrent with TWA's bankruptcy filing.

MD80Ttail wrote:
Both PA and especially TWA were seeing a rennasasance at the time of their shut down / aquisitions.


No they weren't. With all due respect to the thousands of hardworking and dedicated employees that did their best and labored under deteriorating conditions at both companies for a long time, the reality is that by the time of their liquidations, both companies were financial basket cases with little hope of survival. Both were irreparably harmed by extremely visible and tragic crashes shortly before, but frankly both were far more ravaged by decades of gross mismanagement and poor decision making. I will certainly recognize that, from the standpoint of improving its operations and modernizing its fleet, TWA was, indeed, on the upswing by 2001. Unfortunately, however, that wasn't anywhere close to being sufficient to turn around the company's economic fortunes.

BroadwayLimited wrote:
I still have the Delta timetable from November 1, 1991. Interesting how those original routes ouf of JFK looked back then, compared to today. Delta has come a LONG way.


Indeed. The transatlantic franchise - both at JFK and writ large - that Delta has created, largely built on that original Pan Am asset purchase, is immensely impressive.

BostonBeau wrote:
I never understood AA's purchase of the BOS-LHR route from TWA, and then gradually surrendering it to British Airways. They started out with I think 3 B777s a day (or it may have been two B777s in the evening and a B767 for the morning flight). Then it was three A300s. Then three 757s. Then (poof) nothing from AA. It bothers me that US airlines seemingly have lost the willingness to compete. Screw joint ventures...let's up the service, frequencies, and equipment and BEAT the competition.


Not quite.

The BOS-LHR route actually started with a single daily DC10. The route subsequently transitioned to 767s before shifting, in mid-1997, to the 3-class A300 which then operated the route double daily (eastbound 156 in the morning, 108 in the evening) up until the route moved to the 777 around 2000. It was then double daily 777 for several years - punctuated by a brief period with a third 777. As competition intensified, and the economic conditions across the Atlantic and for AA deteriorated, the route then began downgauging to 767s and then eventually to 757s before ending in favor of BA. It's not really much about competing vs not competing - BA has long dominated the market, and with a revenue-sharing JV, there was no longer much need for AA to fly additional capacity on top of BA.
 
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cougar15
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Re: AA & DL failed to capitalize fully TW & PA

Mon Feb 12, 2018 4:11 am

highly recommended reading for anyone on the PanAM side of this subject is the book ´Skygods´, it´s an eye opener on the whole saga that was PAA.
some you lose, others you can´t win!
 
commavia
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Re: AA & DL failed to capitalize fully TW & PA

Mon Feb 12, 2018 4:27 am

commavia wrote:
It was actually arguably three.

At approximately the same time as AA announced the acquisition of Eastern's Latin America routes - in December 1989 - it also announced a separate, $195M transaction with TWA to acquire CHI-LON route authority, along with gates, hangars and other assets at ORD. Then, one year later in December 1990, AA reached agreement on the second, $445M transaction with TWA to acquire route authorities to LHR from JFK, EWR, ORD, BOS, LHR and PHL, and to LGW from BWI and STL, along with associated assets at both LON airports. And then finally, almost exactly a decade later, AA announced in January 2001 the acquisition of substantially all of the remainder of TWA's assets concurrent with TWA's bankruptcy filing.


Correction (can no longer edit the original post) ... it was actually arguably four.

At the same time as AA concluded the larger deal for TWA's LHR route authorities in December 1990, it also reached agreement with TWA on another, smaller, transaction covering slots and gates at ORD, facilities at various U.S. airports and other marketing agreements. This was also essentially simultaneous with yet another, even smaller, deal with Eastern to acquire NYC-YUL authority, LGA slots and selected airport facilities around the U.S. So all told, in the span of essentially one year, AA made five deals collectively worth just under $1.2B with two of its financially struggling competitors.
Last edited by commavia on Mon Feb 12, 2018 4:28 am, edited 1 time in total.
 
airlinedork
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Re: AA & DL failed to capitalize fully TW & PA

Mon Feb 12, 2018 4:28 am

william wrote:
MD80Ttail wrote:
william wrote:
Didn't Delta renege on a deal to give PA a cash infusion leading PA to shut down? I remember this.


Yes and no. Yes but the agreement was predicated on half truths and outright lies from PA about their cash flow and losses. PA wasn’t transparent when the deal was as negotiated and the accountents found that out quickly. A desperation move on the part of PA to strike a “Friday night deal”so to speak and publicize the heck out it hoping when DL realized how bad the situation truly was at PA w the publicity they would have stayed the course and followed through.

A great example of the marketing department almost pulling off a game of chess.


The marketing worked, I remember Delta getting torched publicly for reneging on their agreement to with the cash infusion. There are quite a few ex Pan Am employees that still hold some hard feelings for Delta. The cash infusion must not had been iron clad.

UA is the one that squandered Pan Am's Latin routes they aquired. AA's Latin presence comes from the Eastern purchase.


DL did save 5,700 PA jobs. DL pulled it's funding when it realized PA lied about their cash burn, which was substantially greater than what was promised by the PA executives during the negotiations which, had DL continued to infuse cash, PA never would have survived regardless, and may have taken down DL with it. The PA Executives lied to its own employees and DL. Its really unfortunate, and many PA Employees who lost their jobs still blame DL, which is unfair.
 
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EA CO AS
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Re: AA & DL failed to capitalize fully TW & PA

Mon Feb 12, 2018 4:54 am

cougar15 wrote:
highly recommended reading for anyone on the PanAM side of this subject is the book ´Skygods´, it´s an eye opener on the whole saga that was PAA.


Agreed, it's a phenomenal book for anyone interested in Pan Am, and sadly, their demise.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
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EA CO AS
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Re: AA & DL failed to capitalize fully TW & PA

Mon Feb 12, 2018 4:56 am

millionsofmiles wrote:
In 2013, when I was speaking at an orientation of new-hire flight attendants, I made mention of Eastern Air Lines. All I got was blank looks.


I just had this last week when explaining to a group of new employees the difference between relatively good labor/management relations (AS) and extremely poor ones (EA). As you experienced, I had to explain how 42,000 jobs and over 300 aircraft were eventually out of work because of the egos of two or three guys who wanted to win at all costs, consequences be damned.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
JRL3289
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Re: AA & DL failed to capitalize fully TW & PA

Mon Feb 12, 2018 5:17 am

MD80Ttail wrote:
TW had strong load factors and would have been solidly profitable if not for the Caribou deal. Caribou was a low bleed. TW had even made the gutsy move to open a small hub / major focus city at ATL. Rising fuel costs from the Gulf War didn’t help.


Not sure that I follow this. The Gulf War was in 1991. The Karabu deal was in 1993 following Icahn's exit. The ATL buildup started in 1992 and was gone by 1994. The three are note at all related. The only thing that would have played into TWA's downfall was the Karabu deal, but even then it was able to survive for eight years despite it. TWA failed because its central hub was located in a stagnate, medium-sized metropolitan area and its secondary hub lacked the critical mass required to maintain a competitive advantage. TWA attempted to shrink to profitability and as a result ceded marketshare and relevance to competitors. The fact that it ceded so much competitive territory negated any brand relevance it had in the past.

To be sure, arguably AA wasn't able to extract the full value of purchasing TWA assets in bankruptcy. Though it wasn't for lack of trying; it was because of bad timing. There's not much to be done with a reliever hub in STL when traffic declines post-9/11 other than to shutter it and redeploy assets to higher-yielding hubs at DFW and ORD. There was nothing to salvage or retain at that point - brand-wise or operationally. The best AA could have done - and what it did - was to migrate loyal TWA customers over to AA.
 
MD80Ttail
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Re: AA & DL failed to capitalize fully TW & PA

Mon Feb 12, 2018 6:03 am

IPFreely wrote:
MD80Ttail wrote:
...I would argue both airlines were in better shape with better outlooks than at anytime in the previous 5 years and probably in the 10 years prior...

...Both PA and TW were dead and in life support....


We see a lot of arguments at a.net but I've never seen anyone argue with themselves in the same post this well. Good job.



Nothing I stated is contradictory. Both statements are true and congruent. I don’t understand the difficulty in comprehending what is a very simple concept, what is true and based on facts.

Both TW and PA were seeing what I would call a resurgence before “the end”. Both airlines were seeing positive indicators and results before 800, Lockerbie and the Gulf War.

Both airlines had made major improvements and were in better positions than they had been in the past 10 years before their demise. Both airlines....but mostly TW...had made gusty calls and taken risks. Planes were full, gas was cheap, travel to Europe was was strong at record levels and things were improving. Compared to the previous 5-10 years performance both TW and PA were improving. Simply stated, things were looking up.

Both airlines, although in critical shape, were making improvements and seeing positive results. Both airlines were dead and on life support after Lockerbie, 800 and the Gulf War. They were too weak and too fragile due to many years of bad management to continue to exist as separate brands.

Both of my statements have merit and are not contradictory. They were in better shape than they had been in precious years until “bad” things happened. That’s not arguing against myself.
 
MD80Ttail
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Re: AA & DL failed to capitalize fully TW & PA

Mon Feb 12, 2018 6:11 am

rbavfan wrote:
DfwRevolution wrote:
AAvgeek744 wrote:
By the 80's, Wall Street greed took over TWA.


What does this even mean? Do you think TWA's surviving competitors like AA and DL were immune from "Wall Street greed" themselves? Of course not. As publicly-traded firms, AA and DL were under equally intense pressure to deliver returns to their investors. The only difference is that AA and DL made faster and deeper changes post-deregulation. PanAm and TWA didn't.

Investors have no obligation to preserve a firm as a going concern. If the firm management is perpetually unable to deliver value, then sale or shutdown is a perfectly legitimate option for the investors.


Carl Icahn and his greedy sell off assets & then file bankruptcy is what killed off TWA. He got a great bankruptcy deal to sell something like half the seats available through is travel service, at a price he could pic. He caused planes to leave with large loads of underpriced tickets. He should have got the same treatment as Frank Lorenzo.

Icahn systematically sold TWA's assets to repay the money he borrowed to purchase the company, which was described as "asset stripping." In 1988, Icahn took TWA private, gaining a personal profit of $469 million, and leaving TWA with a debt of $540 million.


I know both Ichan and Lorenzo are not popular. Both were and are brilliant businessmen. They both kept TW and EA alive for years when both would have failed much earlier. The real death to EA was greedy unions—they got what they deserved.

TW only survived as long as it did bc of Ichan. Same with EA. Lorenzo saved CO by drastically lowering CASM, getting rid of greedy union contracts and asset realization / reallocation. What Lorenzo did with Texas Air, Peoples Express, NY Air and CO was simply brilliant.
 
MD80Ttail
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Re: AA & DL failed to capitalize fully TW & PA

Mon Feb 12, 2018 6:19 am

JRL3289 wrote:
MD80Ttail wrote:
TW had strong load factors and would have been solidly profitable if not for the Caribou deal. Caribou was a low bleed. TW had even made the gutsy move to open a small hub / major focus city at ATL. Rising fuel costs from the Gulf War didn’t help.


Not sure that I follow this. The Gulf War was in 1991. The Karabu deal was in 1993 following Icahn's exit. The ATL buildup started in 1992 and was gone by 1994. The three are note at all related. The only thing that would have played into TWA's downfall was the Karabu deal, but even then it was able to survive for eight years despite it. TWA failed because its central hub was located in a stagnate, medium-sized metropolitan area and its secondary hub lacked the critical mass required to maintain a competitive advantage. TWA attempted to shrink to profitability and as a result ceded marketshare and relevance to competitors. The fact that it ceded so much competitive territory negated any brand relevance it had in the past.

To be sure, arguably AA wasn't able to extract the full value of purchasing TWA assets in bankruptcy. Though it wasn't for lack of trying; it was because of bad timing. There's not much to be done with a reliever hub in STL when traffic declines post-9/11 other than to shutter it and redeploy assets to higher-yielding hubs at DFW and ORD. There was nothing to salvage or retain at that point - brand-wise or operationally. The best AA could have done - and what it did - was to migrate loyal TWA customers over to AA.


All three were related due to negatively effecting TW. TW had 800, Gulf War dramatically increased fuel costs and softened international travel and if this wasn’t enough Karabu was a bad deal for TW (but hella great deal for Ichan). I’m not sure how you can think all of these were not related. All occurred in a short 3-4 year period. Yes TW survived eight years in spite of Karabu....which if memory serves affected flights through STL only.

TW had all these negatives happen in a relatively short period of time. All were instrumental in what happened to finalize the end.

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Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos