Moderators: jsumali2, richierich, ua900, PanAm_DC10, hOMSaR

 
commavia
Posts: 11489
Joined: Mon Apr 25, 2005 2:30 am

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 2:56 am

Quoting LAXdude1023 (Reply 38):
This all said Im all for a merger. I think it will give the combined airline a great network presence and fix the gaping holes in the current AA network (sans Asia, but AA made progress recently there). Selfishly, as a DFW resident, I would be happy about the extra jobs and the boost to the current hub here. Empathetically, I feel for our friends in Arizona because they will be the one taking it in the shorts over a AA/US merger.

I generally agree. The combined airline would have an impressive network that is essentially at parity with Delta in terms of scope, breadth and access, with only a few exceptions in areas that are structurally inaccessible for geographic or competitive reasons, with or without a merger (namely: the west coast and mountain west, and Asia). But in the south, upper midwest, and east coast, and internationally to Europe and of course Latin America, the "new AA" would have an extremely impressive network. The thought of being able to earn and burn AAdvantage miles to all those new places in the east is appealing.

My only apprehension is, both for practical and sentimental reasons, with Parker getting his hands on something that was in many ways already quite successful, and heading in a very positive direction, and screwing it up. I hope he doesn't force the vastly inferior SHARES or USAirways' other inferior internet/IT infrastructure onto the combined airline. I hope he doesn't degrade AAdvantage, which is one of the best FF programs in the industry. I hope he doesn't reverse the generally excellent course AA's onboard product seems to be going in - with lots of new planes, improved amenities and IFE, upgraded premium meals, etc. I hope he doesn't mess with some of AA's more historic "legacy" vestiges (like longstanding flight numbers, etc.).

Quoting EricR (Reply 39):
I would like to clear up one item. Parker doesn't "desperately need" this merger far more than American. US is very profitable (more so than AA) and US's stock has been one of the best airline stocks this year. US has been, and will continue to be, fine on its own.

I disagree.

I think Parker is desperate - thus his attempt in the last five years to merge with everybody who would listen (and some who wouldn't). It's not because he's some grand financial visionary boldly advocating for consolidation when nobody else was. Hardly - several other major mergers were proposed or enacted before he even closed on his first merger. The real reason he was so desperate to merge with Delta, then United, and now with AA, is because he sees the writing on the wall.

A large portion of the profits his airline is now producing are predicated on labor costs well below the "industry standard" AA's unions have been so focused on. He has been benefiting now for years from labor costs produced by two bankruptcies and union in-fighting. I suspect even he has been somewhat surprised at how long he's been able to keep this game up, but I think he knows that sooner or later the reality is going to hit.

As Parker has alluded to himself, a large portion of his network is built upon these lower labor costs and when they go up, a large portion of USAirways' network is not going to work anymore. His only hope is to try and substantially boost revenue to cover that labor cost jump, and since there is no real way for USAirways to achieve that organically, the only alternative is to attempt to do it via a merger and all the "synergies."

Quoting EricR (Reply 39):
He did a far better job from a business standpoint than Arpey or Horton.

Well of course he did. He had the enormous benefit of two bankruptcies that dramatically lowered his costs, and yet he still got to claim the moral high ground (although his unions never bought it) that he wasn't there for either of those bankruptcies.

If AMR had gone through two bankruptcies in the last decade, I'm sure it, too, would be producing profits these days, as evidenced by the fact that in several recent quarters AMR has produced operating margins close to USAirways', but without the benefit of much of the restructuring of bankruptcy.

Quoting Beardown91737 (Reply 50):
Many corporations have a majority of their operations outside HQ.

Outside of purely operational functions like airports and maintenance, airlines typically have traditionally only had a single function not centrally located at the headquarters location, and that was reservations call centers. Beyond that, airlines in the modern era seldom have multiple core administrative functions spread among multiple cities simply because it's inefficient and economically unjustifiable. Even in cases when airlines say they are going to do so (typically for political, rather than financial, reasons), they ultimately end up consolidating anyway (witness: Delta's progressive pull down of Northwest's former Eagan campus). This merger would be no different. There would be absolutely no reason for a "new AA" to essentially keep two headquarters offices when there is already one facility large enough to handle it all.

Quoting Beardown91737 (Reply 50):
Like they did with United? If there were an internet in 1980, someone could have used the congressional delegation formula to predict that United and Delta would have HQ in Los Angeles (and US in San Diego).

Huh? The combined airline would be headquartered in Fort Worth, Texas and branded "American."

Parker has already agreed to that.

[Edited 2012-12-07 19:31:03]
 
usairways85
Posts: 4198
Joined: Fri Nov 16, 2001 11:59 am

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 2:58 am

Quoting kaitak (Reply 7):
Good to hear that this is moving forward; I always thought that AA would welcome US; after all, it's an airline that makes AA look very good indeed.

From the perspective of the top tier AA elites they probably have a different opinion

Quoting commavia (Reply 24):
somebody who views AA as the superior airline in a wide variety of areas including most aspects of hard and soft product, ground and onboard service, frequent flyer program, and IT/systems, that to me is a good thing. The combined company would have an expanded network with improved access to the northeast and to some extent Europe. I just hope that if Parker does get his hands on one of the largest and most storied brands in the industry he doesn't royally screw it up by imposing cheapened and suboptimal service or systems (SHARES) onto the "new AA."

I agree here, but just look at the UA/CO merger. Without going off on a tangent a lot of paxs blame Smisek for taking what should have been delivered on a silver platter and f'ing it all up.
 
southwest737500
Posts: 611
Joined: Tue Mar 15, 2011 11:49 pm

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 3:03 am

US please look at how great your airline is, your doing great financially, you don't need to merge just build on what you have

Oh yeah and the US livery is awesome
Next flight: TUL-ATL-CLT CRJ900 and MD88
 
User avatar
mayor
Posts: 6218
Joined: Sun Mar 09, 2008 3:58 pm

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 3:25 am

Quoting Beardown91737 (Reply 50):
I never saw the need to keep Delta since it describes where DL served before deregulation.

Perhaps it was because that Delta was a more well known brand, compaired to US.

Quoting commavia (Reply 52):
The real reason he was so desperate to merge with Delta, then USAirways, and now with AA, is because he sees the writing on the wall.

The order should be USAirways, Delta and now AA. US Air was already "merged" (so to speak) with America West when they went after Delta.

Quoting commavia (Reply 52):
(witness: Delta's progressive pull down of Northwest's former Eagan campus).

All DL promised was that no FRONTLINE jobs would be lost, particularly at MSP. HQ jobs are NOT frontline.
"A committee is a group of the unprepared, appointed by the unwilling, to do the unnecessary"----Fred Allen
 
commavia
Posts: 11489
Joined: Mon Apr 25, 2005 2:30 am

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 3:31 am

Quoting mayor (Reply 55):
The order should be USAirways, Delta and now AA. US Air was already "merged" (so to speak) with America West when they went after Delta.

My typo - I meant United, not USAirways.
 
CGKings317
Posts: 87
Joined: Mon Nov 21, 2005 6:38 pm

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 3:32 am

Doesn't this merger, if ultimately approved by the creditors, also require DOJ approval? If it does, is it necessarily a foregone conclusion that DOJ will approve of this?

~CGKings317  
I love ✈ & volcanoes but the 2 of them dont get along, just ask KLM867 & PH-BFC
 
incitatus
Posts: 3392
Joined: Wed Feb 09, 2005 1:49 am

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 3:47 am

Quoting EricR (Reply 39):
However, Parker "wants" this merger because he believes that one of the few ways to make this industry profitable is via consolidation.

With labor costs in parity with other airlines US is not a viable entity. US's days as it is today are numbered - merger or no merger.
I do not consume Murdoch products including the Wall Street Journal
 
LAXdude1023
Posts: 6226
Joined: Thu Sep 07, 2006 3:16 pm

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 4:14 am

Quoting southwest737500 (Reply 54):

I know what you're thinking: that a merger will harm the CLT hub. I might be inclined to share your concern if I lived out there. Don't worry too muc though, CLT is still going to be a large hub. You'll just see a scale back on secondary Europen and Caribbean destinations.

Quoting Pu (Reply 51):

I do agree on some levels. The strategy seems to have been to focus only on NRT, LHR, Latin America, and the Premium market. Sticking hard to that allowed AA to be left behind on several levels. I'm hoping a merger with US will broaden their focus and get them to have a focus on other secondary markets.

Quoting Beardown91737 (Reply 50):


Wishful thinking. The whole operation will be at DFW. It's already been confirmed.
FOR THE LOVE OF GOD BRING BACK THE PAYWALL!!!!
 
JBirdAV8r
Posts: 3468
Joined: Sun Jun 24, 2001 4:44 am

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 4:24 am

Quoting commavia (Reply 52):

My only apprehension is, both for practical and sentimental reasons, with Parker getting his hands on something that was in many ways already quite successful, and heading in a very positive direction, and screwing it up. I hope he doesn't force the vastly inferior SHARES or USAirways' other inferior internet/IT infrastructure onto the combined airline. I hope he doesn't degrade AAdvantage, which is one of the best FF programs in the industry. I hope he doesn't reverse the generally excellent course AA's onboard product seems to be going in - with lots of new planes, improved amenities and IFE, upgraded premium meals, etc. I hope he doesn't mess with some of AA's more historic "legacy" vestiges (like longstanding flight numbers, etc.).

I enjoy reading many of your posts because you often raise cogent points that really get my wheels turning. However, I think your rationale for worrying about the "desperate" Parker wantonly destroying American's high standard of service is definitely weighted more towards the sentimental side.

I'm not sure why there is little love for Doug Parker here, but the man is not an idiot; he's one of the most talented airline CEOs out there. He's not going to change things just for the sake of change. If it works, he'll keep it; if it doesn't, expect them to change. What works for US Airways doesn't necessarily work for a combined US Airways/American...that should be pretty straightforward.

Besides, it's not like US Airways is appreciably worse (or even that different) from its legacy peers. Perhaps I'm a rube that can't tell a Filet-O-Fish from lobster, but to me, US does a great job. Their Envoy product is quite impressive and, to me, it seems it can hold its own with just about any airline on the routes they serve.

Quoting incitatus (Reply 58):
With labor costs in parity with other airlines US is not a viable entity. US's days as it is today are numbered - merger or no merger.

I generally agree with the latter, but I'm not quite so doom-and-gloom on the former. As it stands now but with all labor costs at parity, it would be much less profitable and much more vulnerable to demand shocks and cost fluctuations...which needs to change, definitely, but I don't think US is a dead duck without a merger in the near-to-mid term.
I got my head checked--by a jumbo jet
 
AA94
Posts: 761
Joined: Fri Aug 19, 2011 1:37 am

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 4:33 am

Quoting LAXdude1023 (Reply 38):
3) We already know the Unions want a merger and management doesnt and they will fight tooth and nail to get what they want.

They did at one point, but with contracts getting figured out, do the unions still need a merger? The merger with US was the APA bargaining chip, but since they've since worked out their differences, is it really necessary? In my eyes, AA employees wanted a merger to spite management, not to actually merge with another airline.

Quoting kevindca (Reply 49):
Personally, I think this merger would be a disaster for both companies. The nightmare of trying to integrate these companies is not worth the debatable benefits.

  
Especially because the benefits are arguably scaled more towards the US side, not the AA side. AA premium pax and elites will lose big time.

Quoting Pu (Reply 51):
To my mind US+AA adds very little competitive advantage beyond what AA already has in capturing the most premium fliers. Its no accident US chose the stock symbol LCC, and to me AA+US only adds value to a LCC-style, minimal service, non-premium-product airline business plan. I don't think Parker is going to change his style: cut costs, cut premium service....and gain the ability to earn profits on cheap fares.

        

Quoting commavia (Reply 52):
I think Parker is desperate - thus his attempt in the last five years to merge with everybody who would listen (and some who wouldn't). It's not because he's some grand financial visionary boldly advocating for consolidation when nobody else was. Hardly - several other major mergers were proposed or enacted before he even closed on his first merger. The real reason he was so desperate to merge with Delta, then United, and now with AA, is because he sees the writing on the wall.

  

Quoting CGKings317 (Reply 57):
Doesn't this merger, if ultimately approved by the creditors, also require DOJ approval? If it does, is it necessarily a foregone conclusion that DOJ will approve of this?

Yes, a merger would require DOJ approval. I think that there's a fairly good chance that they would approve it. It's certainly not as potentially monopolizing as some of the other mergers in the recent years (and they all got approved).
 
BOS2LAF
Posts: 353
Joined: Wed Sep 22, 2004 8:21 am

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 4:46 am

Quoting SPREE34 (Reply 45):
Laws have been passed concerning seniority integrations.

  

And said laws were passed largely as a result of the brutal rape of the TW workforce in that merger.
 
dcann40
Posts: 129
Joined: Wed Sep 12, 2012 2:38 pm

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 5:01 am

Remember, people thought that the AT&T/T-Mobile merger would proceed without a hitch as well.

We all know how that turned out.

The combination suggested by the merger is a combination of last resort. There are no other legacy carriers that are not jumbo-sized (i.e. UA and DL) who can merge with either party. That doesn't mean they should.
 
Byrdluvs747
Posts: 2546
Joined: Thu Jul 15, 2004 5:25 am

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 5:40 am

Oh, how soon people forget the past. I'll never forget his attempt to charge for water.

All of you who are praising this merger will be cursing it once Parker begins his nickel & diming campaign. With reduced competition, I guarantee he will "enhance" AAdvantage to the point it resembles DL's SkyPeso program.

This merger with Parker in control is a disaster for AA frequent flyers.
The 747: The hands who designed it were guided by god.
 
rj777
Posts: 1811
Joined: Sat Dec 02, 2000 1:47 am

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 6:10 am

Although a lot of people think it's almost a certainty, considering everything that's happened with the unions and all, until we see the thread that says "OFFICIAL: AA & US to Merge" everything is all speculation and no real fact. However, my opinion is that it will happen.
 
dcann40
Posts: 129
Joined: Wed Sep 12, 2012 2:38 pm

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 7:19 am

Quoting Byrdluvs747 (Reply 64):
Oh, how soon people forget the past. I'll never forget his attempt to charge for water.

I readily admit, I forgot that. But just ask the FAs over at US what they think of him versus the FAs at AA? Odd circumstance of the grass is always greener.
 
BDL757
Posts: 234
Joined: Thu Apr 12, 2012 1:49 am

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 7:32 am

Quoting Pu (Reply 51):

I agree with what you're saying. American is/was known for promoting its' classiness and upscale service particularly on trans-cons and international flights. They have recently announced the new first and business class seats as well as improved meal service. While I don't think that US Airways has as bad service as some on here think, they definitely are not on the same level as AA. It will be interesting to see if US standards will be brought up to AA standards which would cost a lot of $$$!
 
etops1
Posts: 854
Joined: Mon Nov 14, 2005 12:26 pm

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 7:34 am

All I see on here is a bunch of US haters as usual who don't know jack of what they are talking about . This merger is a done deal wether you guts like it or not .
 
LAXdude1023
Posts: 6226
Joined: Thu Sep 07, 2006 3:16 pm

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 8:21 am

Quoting etops1 (Reply 68):

Then you need to open your eyes. There's quite a few "Keep US my US" people on here.
FOR THE LOVE OF GOD BRING BACK THE PAYWALL!!!!
 
flyguy89
Posts: 3321
Joined: Tue Feb 24, 2009 6:43 pm

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 8:32 am

Refreshing to see a formal proposal finally on the table after all the speculation.

I doubt Mr. Parker will be able to woo AA's creditors in the short term with his merger proposal...why accept what's probably a low-ball offer when you're in bankruptcy when you know if you wait until after bankruptcy you can get a better deal? AA certainly isn't over the barrel here like they were a year ago.

In the long-term I still see this merger happening, just probably not on Mr. Parker's terms.

Quoting etops1 (Reply 68):
This merger is a done deal wether you guts like it or not .

Oh? Spoken with any of the AA creditors or the DOJ recently? I'm sure it's as much a done deal as Parker's attempted merger with DL  
 
Byrdluvs747
Posts: 2546
Joined: Thu Jul 15, 2004 5:25 am

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 9:13 am

Quoting dcann40 (Reply 66):
But just ask the FAs over at US what they think of him versus the FAs at AA?

Are you saying the US FA's like Parker? I have talked to many FA's who have less than stellar things to say about him.

Quoting dcann40 (Reply 66):

I readily admit, I forgot that.

Don't forget the wine service using plastic cups in F.

Quoting etops1 (Reply 68):
All I see on here is a bunch of US haters as usual who don't know jack of what they are talking about .

I've been flying HP out of PHX since the mid 80's and know first hand the "greatness" of Doug Parker's decisions. He leans towards "fees for everything" and giving less to customers while charging more for it.
The 747: The hands who designed it were guided by god.
 
Beardown91737
Posts: 896
Joined: Wed Jun 15, 2011 10:56 pm

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 9:19 am

Quoting commavia (Reply 52):
Huh? The combined airline would be headquartered in Fort Worth, Texas and branded "American."

1. I knew that. My post that you quoted was about how you said the TX congressional delegation is telling Parker in 'no uncertain terms' that the HQ had to stay in TX. Did that happen with the UA/CO merger? If it did, it didn't work.
2. If it is all about congressional delegation size... California has the biggest (and craziest).

Quoting LAXdude1023 (Reply 59):
Wishful thinking. The whole operation will be at DFW. It's already been confirmed.

Missed that. I thought it was just the HQ.

Anyway, I still want to keep US in Star.

Quoting southwest737500 (Reply 54):
the US livery is awesome

  
135 hrs PIC (mostly PA-28) - not current. Landings at MDW, PIA, JAN.
 
commavia
Posts: 11489
Joined: Mon Apr 25, 2005 2:30 am

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 12:12 pm

Quoting JBirdAV8r (Reply 60):
the man is not an idiot; he's one of the most talented airline CEOs out there. He's not going to change things just for the sake of change. If it works, he'll keep it; if it doesn't, expect them to change. What works for US Airways doesn't necessarily work for a combined US Airways/American...that should be pretty straightforward.

I hear you that he's a smart guy and he isn't going to "change things just for the sake of change."

But I also hear (or rather, see) in my head the comments that were made by the USAirways (east) employees back in 2006-2007 about how the America West management and employees arrogantly forced "hear-in-the-desert," "regional airline" thinking onto the new USAirways regardless of whether it actually made sense or not. The attitude then, according to some USAirways employees, was that Tempe knew all the answers and because USAirways was bought they clearly didn't know what they were doing. I also remember the chaos it caused for several years.

I am concerned because, if that is true, I believe doing that again at AA would be a disaster. AA is one of the oldest and most institutionally "experienced" airlines in the U.S. - it's culture is also one of the most institutionally arrogant. Not to mention - it's double the size of USAirways. And AA does a lot of things "right" and does a lot of things far better than USAirways. Thus, as I said, why I am at least happy that the headquarters would be in Fort Worth - I'm hoping it allays some of that from happening.

Quoting Beardown91737 (Reply 72):
My post that you quoted was about how you said the TX congressional delegation is telling Parker in 'no uncertain terms' that the HQ had to stay in TX. Did that happen with the UA/CO merger? If it did, it didn't work.

No, to my knowledge that did not happen with UA/CO. In that instance, the entire thing was approached differently in D.C. Parker has been out shopping this around Capitol Hill for months and months, since long before any actual proposal was on the table. I do not believe that was the case with UA/CO.
 
AAplat4life
Posts: 328
Joined: Thu Jun 23, 2011 11:14 am

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 1:24 pm

Quoting phxa340 (Reply 13):
US Airways is bringing no cash to the table. It will be a 100% stock transaction. If Parker thinks the combined company will be valued at 8 billion he is dreaming. Far from a done deal ... Especially in current market conditions considering this is an all stock transaction

First, we do not know what Parker is bringing to the table yet or what AMR is offering as a stand-alone entity. Chance are that the secured creditors will get some cash and debt in whatever form AMR emerges from bankruptcy.

Also, the issue is not whether the combined company will be valued at $8B, but what AMR is valued as a stand-alone entity. We can go online and see what the market value is of Delta, United and US, but not AMR because its stock is just trading at a speculative liquidation value (the stock will probably be cancelled and new stock will be issued to the creditors and US shareholders. The current AMR shareholders will receive nothing.) We know right now that the market cap of US is about $2B. United is close to $7B and Delta about $8.5B. So if Horton thinks that the AMR side should get 80% and the US side 20%, he is putting a value on AMR as a stand alone entity at about $6B. With all due respect, under the circumstances, I would say that Horton is the one who is dreaming here.

Although I agree with you that this is not a done deal, the pressure to get the deal done right now is on the side of Parker.
 
micstatic
Posts: 784
Joined: Fri Jul 20, 2001 10:07 pm

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 1:36 pm

I'm mixed on this merger. The last few rounds of mergers have eliminated enough capacity to make the current carriers profitable. I'm wondering if a tie-up between US/AA would leave the US airline industry with monster carriers in United, Delta, and AA thus causing fares to skyrocket. While we still have Southwest and several boutique carriers, I would think the barriers to entry would be high for another carrier to come in and offer reasonable competition to keep the others in check. Further, I actually like the USAirways of 2012. In particular I like the fact that they serve some small markets (IE HVN), and I like having the ability to buy up to first class at a reasonable price. On the flip side, I've found American has become very stale. Their employees seem bitter, and their management has lacked creativity compared to other carriers. With that being said, I'm also in favor of long term stability in the airline industry. Guess we will have to sit back and watch it play-out.
S340,DH8,AT7,CR2/7,E135/45/170/190,319,320,717,732,733,734,735,737,738,744,752,762,763,764,772,M80,M90
 
BE77
Posts: 360
Joined: Fri Nov 02, 2007 2:15 am

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 3:29 pm

Quoting N766UA (Reply 17):
If you'd told me 10 years ago that in a decade only United, USAir, and Delta would exist, I'd tell you you were nuts...

And if you were a bit older, you would have thought the same about TWA, Braniff, PanAm, (and CP and WardAir for us canoeheads). Not being cynical, but I wonder which, if any, of the airlines today will still be around in 10 years!

Quoting Viscount724 (Reply 47):
AA was American Airways until 1934

Good point / catch.

Not much detailed analysis yet on the likelyhood of success from the financial press, and even though it's been expected for quite some time it seems like no one was really ready for it when it did happen...hmmm...that's a recurring theme for Dec 7...were the US Airways lawyers humming Tora Tora Tora on their way into the court room?
Tower, Affirmitive, gear is down and welded
 
EricR
Posts: 1226
Joined: Mon Jul 26, 2010 4:15 pm

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 3:46 pm

Quoting micstatic (Reply 75):
The last few rounds of mergers have eliminated enough capacity to make the current carriers profitable. I'm wondering if a tie-up between US/AA would leave the US airline industry with monster carriers in United, Delta, and AA thus causing fares to skyrocket. While we still have Southwest and several boutique carriers, I would think the barriers to entry would be high for another carrier to come in and offer reasonable competition to keep the others in check..

I think the latest rounds of consolidation have helped, but I think restructuring labor costs in BK combined with relatively low oil prices contributed a lot to improving the bottom lines for all airlines. I would not attribute consolidation as the only reason.

Also, the whole consolidation theory in my opinion is only an interim solution. It will help the legacy carriers establish mass to compete against low cost/low fare carriers. However, the threat of new, lower cost / low fare entrants remains.

From a customer standpoint, AA is a much better all around product for business travelers and FFs. But from a business standpoint, the AA model (and UA/DL) is not the best model. Costs in the industry are too high to provide all the frills that the big 3 provide - and they realize this - hence the reason why their business models have migrated more towards the LCC model over the years.

If the merger goes through, Parker will most likely make changes to the AA organization that may appear less from a customer standpoint, but needs to happen from a business standpoint. For example, do you really need an F cabin when business class is almost on par?

Quoting incitatus (Reply 58):

Are you assuming that the labor rates at other airlines remain constant?
 
AAIL86
Posts: 466
Joined: Wed Feb 09, 2011 6:00 am

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 4:04 pm

Quoting Beardown91737 (Reply 72):

1. I knew that. My post that you quoted was about how you said the TX congressional delegation is telling Parker in 'no uncertain terms' that the HQ had to stay in TX. Did that happen with the UA/CO merger? If it did, it didn't work.
2. If it is all about congressional delegation size... California has the biggest (and craziest).
Quoting Beardown91737 (Reply 72):
Missed that. I thought it was just the HQ.

As you should know - Parker has already officially proposed that the headquarters would remain in Fort Worth. What, you think someone from AA is now going to suggest keeping it in Tempe instead? DFW will also remain the largest hub because its the right business decision...

Quoting Pu (Reply 51):
Its no accident US chose the stock symbol LCC, and to me AA+US only adds value to a LCC-style, minimal service, non-premium-product airline business plan. I don't think Parker is going to change his style: cut costs, cut premium service....and gain the ability to earn profits on cheap fares.

I disagree with you there. Parker and gang had no choice but to pursue the current strategy with US Airways. They are based in second-tier cities for the most part, and so it would have been absolute folly to chase the same business plan as UA or AA might. Parker and his team at US realized they held the reins to a mule and not a thoroughbred (no disrespect intended), and so they built a business plan accordingly. Love US or hate US, they've been successful. A merger with AA and the changed dynamic of the combined carrier would present an opportunity to chase a different business plan...
" Travel is fatal to prejudice, bigotry, and narrow-mindedness ... Broad, wholesome, charitable views of men and things cannot be acquired by vegetating in one little corner of the earth all one's lifetime. ” - Mark Twain, 1869
 
User avatar
einsteinboricua
Posts: 8636
Joined: Thu Apr 15, 2010 4:11 pm

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 4:09 pm

Quoting etops1 (Reply 68):
All I see on here is a bunch of US haters as usual who don't know jack of what they are talking about . This merger is a done deal wether you guts like it or not .

It's only an offer. If a car salesman makes you an offer for a car, does it mean that it's already sold?
"You haven't seen a tree until you've seen its shadow from the sky."
 
avek00
Posts: 3256
Joined: Mon Oct 25, 2004 5:56 am

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 4:13 pm

AMR gets little of value from a merger with US Airways, and is better off building strengths at existing hubs rather than tosing a billion dollars down the drain to merge and integrate a carrier that operates at a substantial revenue disadvantage to legacy peers.

1. US has a sizeable TATL network, but it is NOT very strong, by any means. For starters, look at how much of that flying is purely seasonal, reliant upon tourist traffic. Second, US has been repeatedly refused acceptance into the Star A++ JV because including its flights in the mix would result in substantial revenue dilution for the other partners. And third, note that US has not made any plans to update its TATL 757s/767s to a competitive product in either cabin.

2. AA's Latin America network is best grown in the cities where it is currently concentrated -- MIA, JFK, and DFW. AA has room to expand its flying at all three of those hubs.

3. PHX isn't a great hub today (in part because there's too much WN flying there), and would likely be a financially disastrous hub under the merged carrier's cost structure. PHX also does nothing to further AA's efforts to expand Transpacific flying.

4. JFK can serve connecting passengers very well as soon as AA firmly commits to building out its hub facility there to its full potential. Slots will not pose a major issue at JFK, since the only timeframes that ae truly congested are the departure/arrival banks for TATL flights.

5. US' fleet is OK for what it does -- and with the possible exception of the A330s, does little for the route network of American. US' 767s -- and many of its 757s -- are in need of retirement. Most of the Airbus equipment is young, but then again, a spend of hundreds of millions of dollars, over several years, would be required to make the US Airbus fleet match/mimic the planned AA Airbus fleet. And Delta has been there, done that with using MD-80s on the Shuttle, and quickly discovered that they're too fuel-inefficient for very short runs.

And on top of all this, airline mergers bring about 1-2 years of operational infirmity and confusion all the way from the management ranks to the front-line employees, and that's in a best case scenario (and neither AA nor US management have a good track record in making mergers work well). Be careful what you wish for.
Live life to the fullest.
 
AA94
Posts: 761
Joined: Fri Aug 19, 2011 1:37 am

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 4:17 pm

Quoting Byrdluvs747 (Reply 71):
I've been flying HP out of PHX since the mid 80's and know first hand the "greatness" of Doug Parker's decisions. He leans towards "fees for everything" and giving less to customers while charging more for it.

Agreed.

Quoting AAIL86 (Reply 78):
I disagree with you there. Parker and gang had no choice but to pursue the current strategy with US Airways. They are based in second-tier cities for the most part, and so it would have been absolute folly to chase the same business plan as UA or AA might. Parker and his team at US realized they held the reins to a mule and not a thoroughbred (no disrespect intended), and so they built a business plan accordingly. Love US or hate US, they've been successful. A merger with AA and the changed dynamic of the combined carrier would present an opportunity to chase a different business plan...

.. and good for him. But who says that Parker's business plan is right for AA? It clearly isn't. AA is a different airline than US is, and that's what worries a lot of us. The AA FFs and elites are at risk of being totally alienated by Parker because of his "dynamic" business goals. US is not the right airline to merge with AA, and Parker is not the right person to lead the charge.

Quoting flyguy89 (Reply 70):
Oh? Spoken with any of the AA creditors or the DOJ recently? I'm sure it's as much a done deal as Parker's attempted merger with DL  

  

Quoting BDL757 (Reply 67):
I agree with what you're saying. American is/was known for promoting its' classiness and upscale service particularly on trans-cons and international flights. They have recently announced the new first and business class seats as well as improved meal service. While I don't think that US Airways has as bad service as some on here think, they definitely are not on the same level as AA. It will be interesting to see if US standards will be brought up to AA standards which would cost a lot of $$$!

Agreed. While AA has had some rough years, it finally seems like they're getting themselves together. They're working on their finances, they've got new agreements with their labor, and they're looking to make significant upgrades to the passenger experience in all cabins on nearly every route. AAdvantage is a spectacular FF program. It hasn't always been meadows and rainbows, but AA has built themselves a nice FF base with very happy elite fliers (or that's my observation).

I think it would be a shame to see all this hard work go to waste. It's the uncertainty that scares me. I'm not sure if Doug Parker really realizes what AA is all about and what the fliers expect. I'd hate to see all this progress totally undone. Perhaps I'm being over dramatic here, but what sticks out in my mind is the LCC-style service that US provides. AA is an entirely different animal.

Not saying that one is necessarily "better" or "worse," but the business strategies are not parallel.
 
User avatar
mayor
Posts: 6218
Joined: Sun Mar 09, 2008 3:58 pm

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 4:20 pm

Quoting etops1 (Reply 68):
This merger is a done deal wether you guts like it or not .

This merger (only an offer) is about as much of a done deal, at this point, as when US went after DL. Was THAT a done deal? Hardly.
"A committee is a group of the unprepared, appointed by the unwilling, to do the unnecessary"----Fred Allen
 
AAIL86
Posts: 466
Joined: Wed Feb 09, 2011 6:00 am

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 5:00 pm

Quoting AA94 (Reply 81):
But who says that Parker's business plan is right for AA? It clearly isn't. AA is a different airline than US is, and that's what worries a lot of us. The AA FFs and elites are at risk of being totally alienated by Parker because of his "dynamic" business goals.

I didn't endorse Parker's plan at all. There's no bigger AA cheerleader then I am, having worked there for 8 years and am now a very regular customer with elite status. As far as what plan should be followed - I spent years there watching ultra-conservative management decisions erode the company's industry leadership position. Granted, Horton and his team have been much more aggressive - and glad to see it. But is it a case of too-little too late as a stand alone carrier? Why not consider what US brings to the table?

Quoting AA94 (Reply 81):
AA is a different airline than US is, and that's what worries a lot of us.

DL and NW were about as different as carriers in the same country could get. One flew 40 747s to the Pacific and the other was a heavily domestic carrier with an emphasis on the US southeast and Europe. Just because AA and US are very different at present does not mean that a future combination is doomed to failure. May the best plan win....
" Travel is fatal to prejudice, bigotry, and narrow-mindedness ... Broad, wholesome, charitable views of men and things cannot be acquired by vegetating in one little corner of the earth all one's lifetime. ” - Mark Twain, 1869
 
User avatar
pu
Posts: 1364
Joined: Sat Dec 03, 2011 1:08 am

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 5:07 pm

Quoting avek00 (Reply 80):

US has a sizeable TATL network

Which could be duplicated anytime by AA if it was so valuable; and AA already has the better TATL hub. Much of US in Europe was tried and rejected by AA already. The US feed to LH isn't going to work across high priced LHR.

US brings a lot of low RASM customers. Their route structure and hubs are built on this fact, but US brings nothing I can see that AA can't duplicate on its own.




Pu
 
flyingbobcat787
Posts: 1
Joined: Wed Nov 28, 2012 2:47 am

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 5:29 pm

Also do not forget that US made an offer for Delta and we all know how that one ended as well
 
LAXdude1023
Posts: 6226
Joined: Thu Sep 07, 2006 3:16 pm

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 6:18 pm

Quoting Pu (Reply 85):

I would argue that what US brings to the table that AA cannot get on its own is two fold:

1) The PHL and CLT local markets. Both of these US has hostage and both are valuable in different ways (PHL is very large and has a large Europe O&D component and CLT has very high fares as well as good O&D to London and Germany).

2) A Southern and Northeast hub. PHL is the only way AA can have an answer to EWR and CLT is the only way AA can answer ATL. Obviously PHL isn't EWR and CLT isn't ATL, but they are valuable markets.

Those things AA cannot gain on their own.
FOR THE LOVE OF GOD BRING BACK THE PAYWALL!!!!
 
AirframeAS
Posts: 9865
Joined: Thu Feb 05, 2004 3:56 pm

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 6:18 pm

Quoting etops1 (Reply 68):
This merger is a done deal wether you guts like it or not .

They said the exact same thing when US went after DL, and look what happened to that now.

This is a proposal, not a "done deal". Two totally different things.

IMO, If this merger does happen, IF it does happen, I hope it is without Doug Parker, period.

Quoting micstatic (Reply 75):
I'm mixed on this merger.

+1 here, as well.
A Safe Flight Begins With Quality Maintenance On The Ground.
 
BarryH
Posts: 65
Joined: Sat Sep 29, 2012 6:00 am

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 6:29 pm

Consider these points:

- AA retrenched while others grew primarily because their cost structure was so out of whack they couldn't effectively compete. With higher labor costs, lower productivity, inability to expand code sharing, and improperly sized aircraft for certain markets they had no choice but to focus on higher yielding markets (the Cornerstone Strategy) to compensate.

- AA has some pre-bankruptcy assets that are quite valuable. Tight JBA's, LHR slots, visibility and customer loyalty in high-yielding markets, the industry's preeminent frequency program, prominence in Latin America, and large orders for new aircraft on a desirable schedule at favorable terms.

- AA, at their worst, remained competitive and viable because the value of their franchise allowed them to.

Now, post-bankruptcy:

- With more efficient aircraft, the ability to apply the correct ship to the mission (expanded code sharing, lower cost regional partnering, large RJ's), lower raw labor costs, higher employee productivity (union and non), labor harmony (for a while), their yields will go up dramatically. Higher yields and lower costs fuel expansion and also allow maintaining marginal routes to bolster competitive position (EG: Spirit in DFW) or because they feed key international markets.

- The byproduct of the bankruptcy will be a "new AA" both cosmetically and structurally. Growth opportunities are virtually limitless and what's known as the "Cornerstone Strategy" basically become dots that can be connected with any combination of new AA flying, new code sharing opportunities, and efficient regional feed. All of which grow revenue, yield, profitability, and free cash flow for investment.

- The economy won't stay the way it is today forever. Because of the aforementioned assets, AA and their JBA partners are strongly positioned to take advantage of resurgence in the economy. AA's upside potential is greater than UA's and DL's and based on timing AA's in a better position to lock in future opportunities at a lower cost than both of them who inherited their assets via combination, not negotiation.

So doing the math of Parker's proposal he valued US at $2.5B and AA at $5.5B. The stakeholders aren't idiots. If via a stand-alone plan AA becomes a $8B company in two-years post-bankruptcy they'd be fools to let it go for $5.5B because Parker's itching to merge. Someday Parker's going to have to deal with his own labor cost issues and provide competitive pay to the pilots and flight attendants. Those costs are going to depress the value of US (especially because they have so much low-yielding flying) while AA's value is appreciating. Simply put, by waiting, AA's stakeholders can get more of a return by strengthening the value of their existing AA investment and waiting for US's value to become depressed. Also keep in mind that with all Parker's grand standing about the need for consolidation the financial benefits of an AA/US merger would help DL and UA just as much and increase the pressure on a AA/US combination financially while their immobilized for two years dealing with the merger. With everything AA's just gone through they'll be getting stronger and more financially viable each day. Which direction does anyone see a stand-alone US going? And that my friends is why Parker's so desperate to merge. US is the odd man out and can't compete with the new-AA, UA, or DL. I definitely think a merger will occur. But it will be the new-AA picking up a distressed US for a song at some point in the future. Not Parker shopping for a bargain and salvation on the court house steps.
 
AAIL86
Posts: 466
Joined: Wed Feb 09, 2011 6:00 am

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 6:56 pm

[quote=BarryH,reply=90]Consider these points:

An excellent analysis, thanks. I wonder if the BK court and creditors will see it this way?
" Travel is fatal to prejudice, bigotry, and narrow-mindedness ... Broad, wholesome, charitable views of men and things cannot be acquired by vegetating in one little corner of the earth all one's lifetime. ” - Mark Twain, 1869
 
strandedinbgm
Posts: 250
Joined: Wed Jul 11, 2007 2:58 am

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 6:57 pm

Dear Lord, please do everything in your power to not let this happen.
It's 737s, 747s and 380s. Not 737's, 747's and 380's. Learn to use the apostrophe for crying out loud.
 
AA94
Posts: 761
Joined: Fri Aug 19, 2011 1:37 am

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 6:58 pm

Quoting avek00 (Reply 80):

  
Well stated on all points.

Quoting AAIL86 (Reply 84):
I didn't endorse Parker's plan at all. There's no bigger AA cheerleader then I am, having worked there for 8 years and am now a very regular customer with elite status. As far as what plan should be followed - I spent years there watching ultra-conservative management decisions erode the company's industry leadership position. Granted, Horton and his team have been much more aggressive - and glad to see it. But is it a case of too-little too late as a stand alone carrier? Why not consider what US brings to the table?

Sorry if it came off as saying that you endorsed Parker's plan - not my intent. And while I agree with your points about AA's previously conservative management, that is precisely my concern. I believe that AA is about to come into its own, and I believe that Parker will waste no time in undoing the progress of years past.

Quoting AAIL86 (Reply 84):
DL and NW were about as different as carriers in the same country could get. One flew 40 747s to the Pacific and the other was a heavily domestic carrier with an emphasis on the US southeast and Europe. Just because AA and US are very different at present does not mean that a future combination is doomed to failure. May the best plan win....

I agree, but the type of flying you describe above with regards to DL/NW is complementary. DL was the yin to NW's yang. The combination of those two carriers gave DL a strong global network, and now look where they are. In my opinion, DL and NW were more of a natural fit with complementary networks. AA and US don't fit together that easily.

Quoting BarryH (Reply 90):


  
 
User avatar
pu
Posts: 1364
Joined: Sat Dec 03, 2011 1:08 am

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 7:07 pm

Quoting LAXdude1023 (Reply 88):

1) The PHL and CLT local markets. .......

2) A Southern and Northeast hub. ......

On the face of it, yes, I agree these are things US brings to the table. But certainly nothing else.

AA made a serious effort at RDU. It doesn't work with a premium service focused airline. Although conventional wisdom on a.net is that a hub in this region is what is needed, United makes half a billion a quarter profit without one because north-south flying is low yielding ....and east-west flying is so high yielding it justifies 3 class service. So a SE hub brings nothng to AA's model, but if the new AA model is the US model, it works great.

CLT and PHL local markets? Ok, fine, if you think that helps justify a merger, ok.

Essentially my point is that old Allegheny and Piedmont markets are appealing mainly to an Allegheny and Peidmont type airline, (aka US) and not to an airline who partners with BA and CX in pursuit of global premium fliers.

Actually, I think Parker's model is proven and could work very nicely imposed onto AA, but I don't see AA's model being workable on US, which IIRC is not even allowed to participate in the *A JV because their yields are so low.




Pu
 
Cubsrule
Posts: 14847
Joined: Sat May 15, 2004 12:13 pm

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 7:09 pm

Quoting Pu (Reply 94):
AA made a serious effort at RDU. It doesn't work with a premium service focused airline.

I share your skepticism about whether AA "needs" CLT, but failure at RDU at a time when the region was much smaller and there was a much larger hub two hours down Interstate 85 doesn't prove anything.
I can't decide whether I miss the tulip or the bowling shoe more
 
Flighty
Posts: 9963
Joined: Thu Apr 05, 2007 3:07 am

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 7:12 pm

People need to remember this is about running a business, not running a fantasy airline for the glory of its own staff. US has proved their business skills and their problem-solving ability.

US's business is much leaner and better run at this point than AA. They are both three-star airlines.

Nobody is saying AA can't _survive_ at all on its own. Old US also could have survived on its own (if you examine US's network, you can see that easily). Point is, the agency of entrenched management is not healthy. Management is very sentimental about cost items the passenger neither sees nor gives a rat's ass about.

Doug and Scott have proved they ruthlessly serve the customer and cut costs to please investors. They don't care about the tradition at Old US or American... and neither does Wall Street. The creditors, though, hmmm..... not sure yet.
 
Cubsrule
Posts: 14847
Joined: Sat May 15, 2004 12:13 pm

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 7:14 pm

Quoting Flighty (Reply 96):
Doug and Scott have proved they ruthlessly serve the customer and cut costs to please investors.

The point is that the "ruthless service" of customers paying $200 to fly MDT-MCO isn't the same as the "ruthless service" of customers paying $3,000 to fly JFK-LAX. Do you disagree with that proposition?
I can't decide whether I miss the tulip or the bowling shoe more
 
commavia
Posts: 11489
Joined: Mon Apr 25, 2005 2:30 am

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 7:42 pm

I agree with those who believe AA does not "need" USAirways in order to be viable and successful long-term. Nonetheless, I also disagree with those who say USAirways brings nothing to the table for a hypothetical "new AA."

USAirways offers several strategically valuable assets that would be additive to an overall combined network, including:

(1) Philadelphia hub - Arguably among the best hubs in the northeast. While it is crowded, congested, and has aging facilities, that's just about every big airport in the northeast. But PHL would provide AA with an domestic and international, omni-direction, throughout-the-day hub like United has at EWR and IAD and Delta has in DTW.

(2) Charlotte hub - An excellent hub to serve the southeast and north-south traffic flows. The local market is a good one economically and demographically long-term, and it would provide AA with access to the only other viable southeastern U.S. hub besides Delta in ATL.

(3) Reagan - The slot holds at Reagan are incredibly valuable and many of those markets are extremely high-yielding with a large amount of corporate and government traffic, and a strong O&D component.

(4) Europe network - Connected to (1) above, USAirways does bring a branded network to Europe - particularly over PHL - that would bolster AA's already strong presence at LHR and CDG, and provide greater 1-stop connectivity between the eastern U.S. and Europe.
 
deltaguy767
Posts: 682
Joined: Tue Jun 14, 2005 8:32 am

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 7:53 pm

One aspect which has not been discussed is the potential pressure from Wall Street to make a deal happen. All of the bulge-bracket Investment Banks are clamoring for business in the capital markets and M&A parts of the business, both generate significant fees. Based on public disclosures, Rothschild is advising AMR and a syndicate of IB's is covering LCC (Barclays, Guggenheim etc.) and in terms of transit M&A, they are all key players. You can bet your last dollar that all of the banks (and even their competitors) have pitch-books and scenario analyses drafted and distributed to the creditors committee.

Now of course while there are plenty of motivations to either do/not do a deal in this case, the banking aspect is one that cannot be ignored. Gut feeling is that pressure to consolidate will outweigh AMR's pleas to remain solo and a deal has a strong chance of happening. As for the logistical issues (Labor, financing, infrastructure etc.) their 'smoothness' isn't really a factor, money talks louder especially when the target is in BK. If a valuation is made which shows greater returns, and higher profitability through reduced competition and greater network reach, then the creditors will play ball and deal with the teething problems down the road.

Just some perspective from a financier.
A Good Landing is one you walk away from! Any comments made on this board are my own and do not reflect the opinions or actions of my employer.
 
Flighty
Posts: 9963
Joined: Thu Apr 05, 2007 3:07 am

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 8:05 pm

Quoting Cubsrule (Reply 97):
The point is that the "ruthless service" of customers paying $200 to fly MDT-MCO isn't the same as the "ruthless service" of customers paying $3,000 to fly JFK-LAX. Do you disagree with that proposition?

Mostly I mean US serves its customers well. They are ruthless about infrastructure cost. They would see a lot behind the scenes at AA that is entirely optional, not customer facing and can be ejected.

The in-flight product need not see any impact. They should do whatever makes sense.
 
User avatar
pu
Posts: 1364
Joined: Sat Dec 03, 2011 1:08 am

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 8:09 pm

Quoting deltaguy767 (Reply 99):

Just some perspective from a financier.

Outstanding contribution, thanks for adding new thinking to those of us constrained by routes, hubs, etc.

How plausible is it that the investment banks might be able to structure a deal that would be especially attractive to the creditors cmte because it would offer a quick or guaranteed payout versus the risk of hoping a standalone AA works as AA mgmt hopes?



Pu
 
Cubsrule
Posts: 14847
Joined: Sat May 15, 2004 12:13 pm

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 8:10 pm

Quoting Flighty (Reply 100):
The in-flight product need not see any impact. They should do whatever makes sense.

Maybe not, but the inflight product at US did see impact and customers balked. Remember the charging for water debacle?
I can't decide whether I miss the tulip or the bowling shoe more
 
avek00
Posts: 3256
Joined: Mon Oct 25, 2004 5:56 am

RE: US Airways Makes Formal Merger Offer For AA

Sat Dec 08, 2012 8:13 pm

Quoting commavia (Reply 98):

A couple responses:

1. AA is still able to pursue the expansion of its footprint at Kennedy if so desired, and a nicely built out Kennedy hub trumps anything Philly brings to the table.

2. A stronger Miami hub does much more for AA than anything CLT brings to the table. As with Kennedy, the key constraint until now was AA's high cost structure and inefficient biz processes precluding growth. AMR has taken those issues off the table, so I expect substantial high-yield domestic and long haul expansion going forward.
Live life to the fullest.

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

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