O.K. Now whats AA's move?

[MINIME]

AA goes after SWA and staples GuppyWN to the bottom of the list!

All in good taste.

 

[johnsonrod]

Just watched CNBC and one of their "expert" airline analyst guests from an outfit called Airlineforecasts suggested that American is in terrible financial shape with its large multi-billion dollar pension liability and he claimed it was heading down the path towards bankruptcy... He suggested either USAirways or Jet Blue would be good merger partners for AA (looking for potential revenue synergies in addition to cost cutting). It was a pretty gloomy outlook to say the least.

 

[AceOnTheRiver]

After I laughed I thought - Hmmmm..... SWA's national dominance and AA's "worldwide reach."

I'm sure crazier things have happened. I'll bet it's gonna suck for those boys to jerk gear for all us WN dudes.

Gup

They probably would merge Southwest and Eagle since they are both feeders and keep the mainline separate.

 

[AceOnTheRiver]

United-Continental deal may inspire American or US Airways to pair up


[SIZE=-1]12:00 AM CDT on Tuesday, May 4, 2010

[/SIZE]
[SIZE=-1]By TERRY MAXON / The Dallas Morning News
[email protected] [/SIZE]


Going into 2008, American Airlines Inc. was the largest U.S. carrier. At the end of the year, it was No. 2, behind Delta Air Lines Inc., which merged with Northwest Airlines Inc.
Now, with the proposed merger of United Airlines Inc. and Continental Airlines Inc., American is likely to find itself the nation's third-largest carrier as 2010 turns to 2011.
Monday's announcement of the United-Continental merger had industry analysts and other observers buzzing about whether Fort Worth-based American needs to find its own partner, and if so, who.
American declined to comment on whether it was pursuing a mate, as it did in 2000 when United announced a merger deal with US Airways. The United-US Airways deal fell through. However, the proposed merger prompted American to acquire Trans World Airlines Inc. a few months before the Sept. 11, 2001, terrorist attacks, which helped send the industry into a deep recession.
One problem in finding a spouse for American is that the options don't seem very attractive.
US Airways, itself a product of a 2005 merger between America West Airlines Inc. and US Airways, is the only other coast-to-coast carrier with a hub-and-spoke focus like American's.
However, the Tempe, Ariz.-based airline flies a network that won't add much to American's system.
US Airways faces tough competition with Southwest Airlines Co. at its Phoenix hub. Its Charlotte, N.C., hub resembles American's Raleigh-Durham hub, closed after big losses in the 1990s. Its Philadelphia hub serves a large city, but American concentrates its flying on New York.
American could expand its Washington National presence with a US Airways merger, but regulators would probably require it to divest operating slots at that congested airport.
Much smaller Alaska Airlines Inc. is a West Coast carrier with little national presence. Cynical historians would point out that American has twice purchased West Coast carriers – AirCal Inc. for $250 million in 1987 and Reno Air Inc. for $124 million in 1998 – and has little to show for those acquisitions.
American's other choices domestically are low-fare carriers like Southwest, AirTran Airways Inc. and JetBlue Airways Corp., a prospect that doesn't seem to excite either side of the table.
"I could be wrong," said aviation consultant Darryl Jenkins, "but I can't see current American management doing a merger right now. That would come as a big surprise to me."
Southwest chairman and CEO Gary Kelly has said repeatedly that the Dallas-based carrier is ready to make an acquisition if a real opportunity arises. But, except for a failed attempt to buy Frontier Airlines last summer, it hasn't seen a suitable opportunity.
Helping all


Speaking to reporters last week, US Airways chairman and chief executive Doug Parker said he expects that US Airways will be the next big merger partner for someone.
Parker said the U.S. market eventually will shrink to three major network carriers. With Continental and United merging, there'll be four remaining – the new United, Delta, American and US Airways.
If one of the bigger carriers merges with anyone, it won't be with one of the others, Parker said. And that leaves US Airways.
Airfarewatchdog president George Hobica said the industry may undergo further consolidation, but he's not offering any firm guesses on which airlines will partner up.
"It's impossible to predict which airlines might combine, but anything is possible: American and US Airways? American and JetBlue? Airtran and US Airways? It's anyone's guess, but it's likely that the United-Continental merger will not be the last we'll see this decade," he said in a prepared statement.
In past merger manias, the common wisdom was that carriers had to participate or risk falling behind.
But this time, analysts increasingly are concluding that even airlines left out of the dance can benefit.
The reason: Merged carriers are usually smaller than the two separate carriers, and anything that reduces capacity in the airline industry helps other carriers as well.
"Imaginations [are] likely to run, but we do not see [this] transaction as strategic checkmate that forces the hand of any other carrier," Barclays Capital analyst Gary Chase wrote in a note Monday to investors. "We think the whole industry will benefit from this transaction."
He cited American parent AMR Corp., US Airways and AirTran as the biggest beneficiaries from the reduced Continental-United capacity.
Kevin Crissey, airline analyst at UBS Securities LLC, projected that the two carriers would cut their combined domestic flying by close to 10 percent.
Crissey said that would translate into about a 2 percent reduction in industry capacity, providing a "supportive pricing environment" next year that will let airlines boost fares.
"This is good news for all of the major airlines, and we believe shares should move importantly higher," Crissey said.
Hurting American


But in a report out April 22, analyst Dan McKenzie of Hudson Securities warned that anything that makes its competitors stronger will hurt American Airlines as it sinks to No. 3.
"AMR's debt & cost structure is calibrated for a high-octane revenue engine. And while AMR's network is enviable, it would nonetheless be vulnerable to stronger competitors offering more value and thus stealing corporate clients," McKenzie wrote.
In a white paper released by consulting firm Airlineforecasts, three industry consultants warned that American and US Airways must do something to avoid eventual oblivion. Like Parker, the consultants said they believe the U.S. airline industry can support only three major network carriers.
"Our analysis of the trends over the last decade suggests that, without a new strategic direction and significant changes in the industry's structure, AA [American] and US [US Airways] will continue on the slow liquidation path to failure," the authors wrote. "Corporate, labor and government policies that ignore these trends risk reshaping the competitive landscape and America's access to the global air transport network far more adversely for stakeholders than the current consolidation trend that naturally led to mergers" for United and Continental, and Delta and Northwest, they wrote.

 

[rider850]

Team up with Ichan. That's the ticket.

 

[Diesel-9]

I would guess AMR will acquire parts (Boeing) of UsAir with other assets (AirBus) and slots sold out to the other airlines (DAL, JetBlue, Frontier, Alaska etc...)

 

[Flopgut]

Again, I'm no fan of AA...and the company became strong and proud through the hard work of labor. My comment is only as it pertains to the bigger picture of government's huge role in neutering a once strong company. They didn't go thru bankrupcy...they didn't dodge the responsibility of employee pensions thru the bankrupcy games...and look where they're at...

Very admirable that you are sticking up for AA. I don't doubt for a second you are being earnest. However, do you think govt and BK laws did more harm to AA, or did the WA do more harm? Think about it.

 

[wms]

USAir will just take their partner down with them. There is really no good partner for AA.

 

[OurMoney1]

This is how we dance for the next 3 years. USAir is gonna fail and I dont see a marriage ever with AMR. If anything they will pick the low hangin fruit. I see the landscape unchanged as this economy tuckers along for the next few years.

 

[AvroGuy]

AA goes after SWA and staples GuppyWN to the bottom of the list!

All in good taste.

I am sure that is what the AA pilots would think. I would hate to see that merger of lists.