American Airlines to become US Air?Back to Forum
Of course, no other European country has the equivalent of VS so saying that no other European hub could support two carriers is a ridiculous point to make as the situation cannot arise.
As before, anything is possible. It’s a pity that some people are too blinkered (and obnoxious) to see it.12 May 2012
The point is that VS relies heavily (but not exclusively) on O&D traffic from London and its model works because of the London market. Its unique existence in Europe is a symbol of how big the London market is. There’s no evidence that other hubs like FRA have the same volume of O&D traffic. Hence, why London is seen as such an important market and those who already have a strong foothold in London are highly unlikely to walk away from it.
Anything is possible. But it doesn’t mean it is probable.
It is a pity you have to resort to personal attacks on others.12 May 2012
To US Airways, the big attraction of AA would be its membership of oneworld – so they would hardly step away from such an asset.
It would also give US Airways a way out of Star Alliance, which would be very helpful for them and allow them to not be so overshadowed by United in local terms.12 May 2012
Agree US would derive advantage from OW and leaving *A, makes more sense too in terms of distribution of traffic etc. London has its strengths but things do shift and *A and FRA are in a strong position, we live in interesting times!
It occurs to me that above, the pot is calling the kettle black.12 May 2012
Think it been made clear by USAir they wish to rename them AA and join Oneworld they seem to be getting a bad deal at Star Alliance as they joined way later than UA also USAir and BA have history not sure if this is a +.
Also EU com has is looking in to Star Alliance as a cartel might be broken up soon.12 May 2012
This is great stuff, it makes the LH/IAG deal look like a Gnetlemanly agreement over Bridge. The double plays going on here are incredible. I would count my fingers if I shook hands with any of these guys. I would not want to be an unsecured creditor especially a union rep for anything. Who needs soap opera when you have this.
All the rubbish about alliances is a sideshow, it is clearly about who is going to blink and I know where my money is.
Faiit vos jeux, mesdames messieurs….12 May 2012
So, other suitors are likely to emerge from the darkness, but whom?
Obviously Delta, but are there really any others?
I don’t think airlines are a good target for private equity groups as they do not offer regular returns so that is unlikely.
Any other ideas?12 May 2012
I must say I am watching this fascinated. There are some obvious outcomes that are likely but the deal is far from done and who knows where it may all end up.
After my recent very postive experience of AA I would hate to see them dragged down to US standards.13 May 2012
The US Airways manoeuvre to try to achieve a merger with AA is solely self-seeking. They feel they are being left behind and need to do something about it.
In fact US Air is really America West which took over the airline immediately on it emerging from Chap.11 done between May and September 2005. Apparently US Air still has not sorted out the details of the merger (7 years later) so that does bode well for a clear, quick merger with AA. (Also it should be mentioned that US Air has been in Chap.11 at least twice before)
Better bets for AA would be Jetblue for routes in the East (though Lufthansa has a shareholding in JB) and /or Alaska Airlines which would provide better coverage in the west.
IAG should stay well clear as its previous experiences in United and US Air have proven. Minority shareholdings (25%) give you nothing except problems. Even SRB was not allowed to have any management say in Virgin America despite them trying to use his experience – never mind they have got on very well in spite of that.13 May 2012
I agree, a non-obvious partner might be more in order, I’ve even wondered about Virgin America, just imagine how much the aged hippy would enjoy that one though I doubt it has a starting chance. If it were to be JetBlue, I wonder how much influence LH would exert over the deal.13 May 2012
Lufthansa would probably find it has very little influence over any deal. As I said before 25% shareholdings mean very little.(BA found that out before)
If LH were interested in JB they would try to get it into Star Alliance. They have not done that in all the time of the investment. LH now has a much more attractive partner in the “new” United (i.e. with Continental).
So I see LH selling its investment quite readily. (i) to cash in(hopefully with a profit on the original investment) and (ii) to keep up its cash flow as it still has big structural problems at Austrian and Brussels Airlines.13 May 2012
Virgin America would not hook up with BA best buddy any-time soon. Virgin America are also highly unprofitable at present (break-even still two years away, high debt) so they do not have the financial clout to broker such a deal.
I believe that the US airline industry is, at present, a mess, with loads of debt, etc., and really old fleets. Something needs changing, if only the government would loosen ownership restrictions.
Now a question:
-If say BA set up a holding company in America which it capitalised with say several billion pounds, which it owned 100% but was registered in America, would it be able to take control of AA?13 May 2012