Jetblue and American?

[Lake Alice]

The airline industry is awaiting another major consolidation. American Airlines, a subsidiary of AMR Corp. (AAMRQ) is evaluating its merger proposal with the fifth largest U.S. airline US Airways Group Inc. (LCC).

Now, according to Reuters, four other candidates - JetBlue Airways Corp. (JBLU), Alaska Air Group (ALK), Frontier Airlines, a subsidiary of Republic Airways Holdings (RJET) and a privately held Virgin America have expressed interest to be the merger partner.

After seven months into bankruptcy restructuring, the third largest U.S. air carrier has improved its revenue and reduced costs to a certain extent. The company is progressing well with the labor union negotiations aimed at generating more than $1 billion in annual cost reductions.

Now, American Airlines together with its creditors will carefully review all the strategic alternatives that could make the airline even stronger. The team would evaluate synergies, costs, and tax and capital structure that would be generated from each merger.

JetBlue and Alaska have wide networks on the East and West Coast, respectively. The merger with these two carriers do not appear lucrative as American Airlines already has partnerships with them, providing services in cities like New York and Los Angeles. *****

American Airlines could get a strong foothold in Denver by merging with Frontier. However, United and Southwest already have a strong presence in the city, which is not large enough to support the three major airlines. The next alternative, Virgin America is struggling with losses and has a huge debt in its balance sheet. As result, American Airlines may scrap this option altogether.***** *****

So, we see American Airlines-US Airways as the hottest pair in the industry as it will be in the best interest of the customers. Two months ago, the three labor unions of American Airlines supported a merger with US Airways.

The combination would be strong enough in scope and size to compete with their larger rivals, United Continental Holdings Inc. (UAL) and Delta Airlines Inc. (DAL). In fact, the combination would create an airline identical to the largest U.S. air carrier, United Continental, in terms of revenue and traffic, and would be better than the second largest airline, Delta.

This is an opportune moment for American Airlines to regain its lost profits and operational efficiency. As United and Delta will be long-term beneficiaries following the merger actions on both capacity and cost fronts, we believe American Airlines will also emerge as a successful candidate by balancing its debt level and lowering costs.

American Airlines currently has a Zacks #2 (Buy) Rank for the short term (1–3 months).
Read the Full Research Report on RJET
Read the Full Research Report on LCC
Read the Full Research Report on JBLU
Read the Full Research Report on DAL
Read the Full Research Report on UAL
Read the Full Research Report on AAMRQ
Read the Full Research Report on ALK
Zacks Investment Research


More From Zacks.com
Read the analyst report on RJET,LCC,JBLU,DAL,UAL,AAMRQ,ALK

 

[linepilot]

The only thing we can be sure of is that jetblew lies and the 5 docs are an embarrassing exposure of this pilot groups rear end without the lube.

Reap what you sow silly lambs.

Good time for some chest pain for those of you who can't stomach another job search.

 

[n757st]

The last best hope for representation is about to start, hopefully the result is different.

 

[J32driver]

The last best hope for representation is about to start, hopefully the result is different.

A drive is more than 30 days away. There is a very real chance that we are going to be too late.

 

[Smarta$$]

A drive is more than 30 days away. There is a very real chance that we are going to be too late.

Hilarious.

 

[n757st]

Hilarious.

Why is it hilarious? He has a point, as even if the campaign started tomorrow and 99% were on board it still takes a while to get cards in, count cards, file for an election, have an election, etc.

 

[Smarta$$]

Why is it hilarious? He has a point, as even if the campaign started tomorrow and 99% were on board it still takes a while to get cards in, count cards, file for an election, have an election, etc.

Because I think it is extraordinarily unlikely, and believe he is either delusional, unable to engage in complex thought, or fear mongering.

We will know in 30 days if he is full of #hit.

You have to impossibly gullible to believe news reports of this nature and not understand that these companies all have nefarious motives. That is before we even discuss journalistic inaccuracies.

I generally support ALPA. But I won't be dishonest.

 

[Smarta$$]

Further more, American is in NO position to acquire anyone in a hostile fashion while in bankruptcy. Can't be done. And I have ZERO reason to believe JetBlue is a willing participant.

You have to be an absolute fool to find that article credible.

 

[Flyby1206]

It will be a race to see if AA can get out of BK before we get a vote here at JB. Even if the campaign started today it would be months before an actual vote took place. The campaign cant technically start until August, so add 6+months onto that.

 

[tzskipper]

Further more, American is in NO position to acquire anyone in a hostile fashion while in bankruptcy. Can't be done. And I have ZERO reason to believe JetBlue is a willing participant.

You have to be an absolute fool to find that article credible.

It would be all about who brings money to the table. If the institutional investors in JBLU choose to participate in recapitalizing/investing in AA as part of the BK process, JBLU could easily be merged with AA as a result with the "new" owners in a position to profit (IPO) when AA eventually goes public again.

Follow the money. The size of the airline does not matter.

S

 

[n757st]

Because I think it is extraordinarily unlikely, and believe he is either delusional, unable to engage in complex thought, or fear mongering.

We will know in 30 days if he is full of #hit.

You have to impossibly gullible to believe news reports of this nature and not understand that these companies all have nefarious motives. That is before we even discuss journalistic inaccuracies.

I generally support ALPA. But I won't be dishonest.

This is not fear mongering. American has stated they like what they see in JetBlue, we give American a fighting chance to stay competitive in the ny market, and our stock is in the toilet. Don't think for a second anyone is saying American will purchase us in 30 days, but also don't think ALPA could be elected in 30 days. This is a long process, a long time when we as pilots, who have the most to lose in a transaction, are completely unprotected. Do I think American will buy us? Not in banckruptcy, but do I think we could merge? Yes. All it would take is American offering our investors 3 billion worth of the new company (doubling our investors money) and designating Dave as horton's successor to get this ball running.

I don't have a nefarious motive, but I'm also not blind to the peril in this industry. Even if american said tomorrow that they are merging with airways, such an announcement could send a tidalwave through the industry, triggering additional consolidation. We are a good company that has a good product in the largest and most restricted aviation market in the world... Don't think just because our elt says that we want to be organic in an email that we will be wearing a blue shirt even 2 years from now. Our buisness being as good as it is makes us a target, that is not fear mongering, that's just how it is.

Also smarta$$, we didn't make up the article, the wall street journal, Reuters, ny post, the times, etc are all reporting american's intentions. You have a belief that our elt will continue the organic path, but our elt hasn't done so much as put out a press release, a company statement, or even an email to express their resistance to this notion. Alaska already has done this, why hasn't JetBlue?

Lastly, give me a bit more credit. How many fear mongering posts have you seen from me? Im a pretty straight shot guy that doesn't criticize the business practices of this company. If it makes sense for American, and makes sense for our shareholders there is nothing to stop this from being a possibility.

 

[n757st]

Further more, American is in NO position to acquire anyone in a hostile fashion while in bankruptcy. Can't be done. And I have ZERO reason to believe JetBlue is a willing participant.

You have to be an absolute fool to find that article credible.

You have to be an absolute fool to think JetBlue has no reason to be an active participant. Enough money and anything is possible.

We just paid close to 100 million on 16 slots... JetBlue has 160 JFK slots, 16 lga, 17 DCA, a 1 billion dollar terminal in JFK, 10+billion dollars worth of jets, a *who knows how much* subsidiary called live tv, and the elimination of the lowest cost operator in NYC. That's worth a lot of money to any airline in the nation.

 

[Smarta$$]

My comments were not really directed at you, I was answering your question about the other guys post.

It is not easy to take over a company or our size (not airline, company in general) without us being willing. You clearly think we are willing, I do not. We will just have to agree to disagree on that one.

But, we will know in 30 days if he has a "very real chance" of being completely wrong.

I agree, we are NOT protected. However, I am of the opinion that no employees are protected in America today, just the rich.

I do consider you level headed and intelligent, but I do have to point out the obvious. The news article originated from Reuters. They are a news source for other news papers, so others just reprint what they say or use them as a source. So it doesn't matter how many papers print it, it doesn't make it more valid. Also, the report said that all 5 airlines expressed interest, yet Alaska came out (aparently) and said that wasn't true. So, why should I believe that the other airlines expressed interest? Why didn't JetBlue respond? Maybe they like the rumor. Maybe just don't give a ********************. Maybe it helps JB stock price to leave the rumor unanswered. Maybe it negatively affects a competitor. Maybe they just don't feel compelled to make a statement either way...

Until something happens, I am right and the chicken littles are wrong, because I believe the status quo will remain and they are predicting a change to the status quo...

However, anything is possible...

 

[1.3XVso]

My comments were not really directed at you, I was answering your question about the other guys post.

It is not easy to take over a company or our size (not airline, company in general) without us being willing. You clearly think we are willing, I do not. We will just have to agree to disagree on that one.

But, we will know in 30 days if he has a "very real chance" of being completely wrong.

I agree, we are NOT protected. However, I am of the opinion that no employees are protected in America today, just the rich.

I do consider you level headed and intelligent, but I do have to point out the obvious. The news article originated from Reuters. They are a news source for other news papers, so others just reprint what they say or use them as a source. So it doesn't matter how many papers print it, it doesn't make it more valid. Also, the report said that all 5 airlines expressed interest, yet Alaska came out (aparently) and said that wasn't true. So, why should I believe that the other airlines expressed interest? Why didn't JetBlue respond? Maybe they like the rumor. Maybe just don't give a ********************. Maybe it helps JB stock price to leave the rumor unanswered. Maybe it negatively affects a competitor. Maybe they just don't feel compelled to make a statement either way...

Until something happens, I am right and the chicken littles are wrong, because I believe the status quo will remain and they are predicting a change to the status quo...

However, anything is possible...

Juiiiiiiice!

 

[$$$4nothin]

Juiiiiiiice!

Yup. Any one that doesn't bash the company, think the sky is falling, and think we will all be on the street tomorrow must drink the juice. That must be it.

 

[n757st]

Yup. Any one that doesn't bash the company, think the sky is falling, and think we will all be on the street tomorrow must drink the juice. That must be it.

No, I rarely bash the company, but I believe in pilot protection and I want a CBA. There are some levelheaded guys around us... (not line)

 

[J32driver]

We will know in 30 days if he is full of #hit.

Critical thinking skills escaping you again, huh?

Look at my post... read it SLOWLY... repeat it a couple of times. Maybe you will understand it.

It says... a new union drive is more than 30 days away. If it takes more 30 days to START a drive... how long until a vote? 60 days... 90 days? I don't know. But... I do know that 3 months is a long time to be humming around with your junk flapping in the wind like we don't have a care in the world.

Do I think AA can grab us if we don't want them too? No. Can we get tied up if jetBlue is willing? Oh, heck yeah! B6 "Pravda" has been very aggressive about putting new articles to rest in the past. Yet... this time... nothing but crickets so far.

What do I REALLY think is going to happen? I think it has been made very apparent that we are a target for AA after they emerge. I think both Delta and Southwest have a vested interest in making sure that AA doesn't get us. Where we wind up... I have no clue. But... I'm 100% sure that we are involved in the chess game.

Ya know... if you would ratchet down the smarta$$ attitude (see what I did right there) you might be able to have a productive, adult conversation sometime. Until then... just go get the walk around while I continue to sip on my coffee.

 

[CapnVegetto]

Could AA merge with us? I have believed for the longest time that it is the most likely scenario, with WN coming in second.

We are the foreign exchange student with big tits at the dance right now. New(er) airplanes, tons of NYC slots, and a JFK operation that would give AA a hardon bigtime.

I don't believe a damn thing of what the ELT says about organic growth and all that crap. Barger can spout off till the cows come home about not wanting to merge, but it's not up to him. It's up to the money behind him. I can promise you, if JP and the BOD stand to make a couple billion dollars, they are NOT going to say no. They would be stupid if they did.

Nothing happens quickly in this business. The reality may very well be that AA isn't interested in us, Alaska, Frontier, or anybody. They may simply be trying to put out this press release to drive up LCC's participation and the payout they get from merging with them. Negotiation 101: Show potential suitors that they have competition.

Of course, those of you that think a union is going to be ironclad protection are dreaming. All you have to do is look at history to know that is not true. At least, though, if we have a seat at the table, and a CBA, we have Allegheny/Mohawk and McB on our side. Right now we have jack squat. Best case scenario right now: A staple with fences. All you senior captains that think a CBA is your ticket to the left seat of a 767 in a couple of years are smoking crack. The best thing you can hope for, even with a union, is a little bit of integration with the MD80/737 guys at AA. You'll be lucky if the APA acquiesces you that.

Of course, the best case scenario with a union is not much better, we just basically guarantee that we get on the seniority list. I'm OK with that. The YOUNGEST pilot on AA's list right now is 36 years old. With McB legislation and a union we will be merged and placed AHEAD of all the AA furloughs. Without a CBA, we have NOTHING. It is completely uncharted territory. There is no way in hell we will all be dumped tomorrow if it happens, that is completely impractical for the company. But there isn't anything that will keep them from dumping us in the future if they deem it more cost efficient. I really don't think that will happen, but anything is possible.

 

[Flyby1206]

Being bought/merged or remaining independent we still need a CBA and have to stay on that track. We cant control what AA does, or what the JB BOD does. We can only control our efforts towards a CBA.

 

[CapnVegetto]

Being bought/merged or remaining independent we still need a CBA and have to stay on that track. We cant control what AA does, or what the JB BOD does. We can only control our efforts towards a CBA.

Exactly. There is no sense bitching about it, or worrying about it. There is not a damn thing in the universe we can do except vote in a union and see what happens.

 

[Smarta$$]

Critical thinking skills escaping you again, huh?

Look at my post... read it SLOWLY... repeat it a couple of times. Maybe you will understand it.

It says... a new union drive is more than 30 days away. If it takes more 30 days to START a drive... how long until a vote? 60 days... 90 days? I don't know. But... I do know that 3 months is a long time to be humming around with your junk flapping in the wind like we don't have a care in the world.

Do I think AA can grab us if we don't want them too? No. Can we get tied up if jetBlue is willing? Oh, heck yeah! B6 "Pravda" has been very aggressive about putting new articles to rest in the past. Yet... this time... nothing but crickets so far.

What do I REALLY think is going to happen? I think it has been made very apparent that we are a target for AA after they emerge. I think both Delta and Southwest have a vested interest in making sure that AA doesn't get us. Where we wind up... I have no clue. But... I'm 100% sure that we are involved in the chess game.

Ya know... if you would ratchet down the smarta$$ attitude (see what I did right there) you might be able to have a productive, adult conversation sometime. Until then... just go get the walk around while I continue to sip on my coffee.

Typical, another 150-250k JetBlue captain bitching about his lot in life...

 

[Lake Alice]

Typical, another 150-250k JetBlue captain bitching about his lot in life...

If he/she wants to bitch about their lot in life who cares provided they are helping work towards a CBA.


Once the announcement is made regarding the T/E it will be too late for us. We will be stuck fighting for our futures based on the 20 or so PEA's floating around.

 

[Smarta$$]

I think you mean IF the announcement is made.

 

[B6Busdriver]

I think you mean IF the announcement is made.

No. It's when.

 

[Smarta$$]

No. It's when.

OK. When will that be? Or are you just going to make an impossibly vague and ominous statement that can never be dis-proven because time goes on indefinitely? Oh, just a little longer, and my prediction will come true.......

 

[Lake Alice]

I'm not stirring the pot or knocking anyone else for not thinking the same thing. For me it's a matter of when. I don't believe for a second Barger or Joel Peterson are in it for the long haul. Go look up peterson and his company's. He's a heck of a business man and his business is building companies to be later sold. JetBlue continues to operate independently solely because his hands are deep in our pockets.
Barger is a business man as well. Look at his track record. For twelve years he helped convince pilots to work more than any other carrier while accepting substantially less. He wants an airline to run and will do so at any cost.

If American or any other airline offers peterson the amount of money he expects we are done. If Barger has the opportunity to run a larger airline we are done.

The only thing that gives us a fighting chance is a CBA.

Look at the location of our airline, the terminal, the slots and the newer aircraft. We have a target so large on our backs a baby could hit it.

It would be great to retire from the same company but lets be realistic. The chances of that happening in a blue uniform becomes increasingly smaller by the day.

 

[Smarta$$]

I'm not stirring the pot or knocking anyone else for not thinking the same thing. For me it's a matter of when. I don't believe for a second Barger or Joel Peterson are in it for the long haul. Go look up peterson and his company's. He's a heck of a business man and his business is building companies to be later sold. JetBlue continues to operate independently solely because his hands are deep in our pockets.
Barger is a business man as well. Look at his track record. For twelve years he helped convince pilots to work more than any other carrier while accepting substantially less. He wants an airline to run and will do so at any cost.

If American or any other airline offers peterson the amount of money he expects we are done. If Barger has the opportunity to run a larger airline we are done.

The only thing that gives us a fighting chance is a CBA.

Look at the location of our airline, the terminal, the slots and the newer aircraft. We have a target so large on our backs a baby could hit it.

It would be great to retire from the same company but lets be realistic. The chances of that happening in a blue uniform becomes increasingly smaller by the day.

OK. When? If JetBlue being stand alone after 12 years isn't enough, how many years will it take for you to stop saying "any day now, its about to happen, its only a matter of when"....

Just more vague open ended noncommittal fear mongering.

I get it. Its just about to happen! Any day now! Can't be much longer! Its just a matter of when, not if!

 

[RiddleEagle18]

OK. When? If JetBlue being stand alone after 12 years isn't enough, how many years will it take for you to stop saying "any day now, its about to happen, its only a matter of when"....

Just more vague open ended noncommittal fear mongering.

I get it. Its just about to happen! Any day now! Can't be much longer! Its just a matter of when, not if!

I dont usually agree with the way lake presents his arguments(but agree with most of is principles) but this one was spot on with no emotion. If you think we arent in serious play your naive. If anything is on a timeline its just that our future will be far more clear in 2 years.

 

[Smarta$$]

I'm not stirring the pot or knocking anyone else for not thinking the same thing. For me it's a matter of when. I don't believe for a second Barger or Joel Peterson are in it for the long haul. Go look up peterson and his company's. He's a heck of a business man and his business is building companies to be later sold. JetBlue continues to operate independently solely because his hands are deep in our pockets.
Barger is a business man as well. Look at his track record. For twelve years he helped convince pilots to work more than any other carrier while accepting substantially less. He wants an airline to run and will do so at any cost.

SO, we are SOLELY independant because Joels hands are deep in our pockets? (may be true) Question is, is that now no longer true? I mean, why are we in play NOW if we are solely independant because Joel has his hands in our pocket? What is true now that wasn't true 12 months ago, or 2 months ago?

If American or any other airline offers peterson the amount of money he expects we are done. If Barger has the opportunity to run a larger airline we are done.

So being swallowed up is dependant on a good offer? Why has it not happened for 12 years? What has changed now?

The only thing that gives us a fighting chance is a CBA.

Most likely, NOTHING will protect us. No silver bullet to protect pilots flying for an airline with NO future, NO benefits, NO pay, No future career progression, NO retirements, NO heavy internationl aircraft... We have a ********************ty job at a ********************ty company. We don't deserve a fair integration right?

Look at the location of our airline, the terminal, the slots and the newer aircraft. We have a target so large on our backs a baby could hit it.

Really? I guess all of those things are new? None of that was true last year? 6 months ago? 2 years ago?

It would be great to retire from the same company but lets be realistic. The chances of that happening in a blue uniform becomes increasingly smaller by the day.

I appreciate your tone in this post Lake. It is refreshing to have an intelligent non-hyperventilating post to reply to. And I agree that a merger is possible, but these rumors have been around for years. The reasons you submit for why this is imminent, have also been true for years. Nothing is different now except American is desperate...

We have little or nothing to gain by hooking ourself to that sinking ship, and there is no reason to believe that American will be a force after bankrupty. They still will have ********************ty customer service and bitter employees. They will just be able to sell a ********************ty product cheaper than now, that won't be enough....

Again, we have to be willing to merge, and the reasons you give for us being willing, have been true for years.

 

[Lake Alice]

Actually none of us have to be willing to merge. As this is a business only the board needs to be willing. It can be argued Barger has a personal stake in Jetblue but those who make the final decision have only a financial one. The price hasn't been right in the past but the stakes are higher now than ever.