[Tete_de_cuvee]

Le Tigre 13/05 16:08 GMT

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.

Well that logic certainly hasn’t prevented IAG/BA doing just that – run up huge losses and debts, take out loans then buy another basket case.

As to the point about about US Airlines – methinks you need to have a look at Southwest Airlines or even Jetblue before making sweeping statements like that.

[LeTigre]

TdC, my sweeping statement was regarding legacy carriers, which I failed to indicate. Southwest are extremely unlikely to acquire AA, for sure, with all the labour costs and huge losses they have been trying to avoid for their entire history.

Regarding IAG, BA made a loss during the recession but other than that is quite profitable. Iberia is quite different and substantially more rubbish as an airline. But BA does have strong cash reserves (as far as I’m aware).

I am sure the American industry and the big three in Europe prove that the bigger you get as an airline, the more vulnerable you are on many fronts. I think the optimal size for a carrier to be profitable is probably Cathay size, big enough to service lots of destinations, small enough to keep labour costs low and a modern fleet (though obviously there are other factors).

[RichHI1]

For those who are more familiar with UK or European business methods and Union negotiations, I would suggest you do not look for the obvious. There is an old side show amusement in the US which I believe came from UK, it is called find the lady. The point of the game is to distract the mark and lull them into a false sense of security. This is what is going on here at four separate levels.
I think things will get even more interesting…

[Tete_de_cuvee]

The potential US Airways bid gathers momentum…

http://news.yahoo.com/u-airways-tpg-weigh-joint-bid-americans-parent-130715461–sector.html

http://www.foxbusiness.com/industries/2012/05/31/report-us-airways-tpg-capital-explore-joint-amr-bid/

[VintageKrug]

Quite right, Rich. This is only positioning to root out corrupt and ineffective Union influence.

AA will emerge from all this in much better shape, and without the encumbrances of Unionista influence.

¡Viva la Revolución!

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