Originally Posted by
Flyby1206
US Airways spokeswoman sums it up perfectly:***US cant make as much money as the other legacies because of their hub locations and routes they fly, but they stay profitable because their costs are lower than other legacies(read: labor costs).*So if Parker raises everyone's pay according to the term sheets given to AA labor, then how will PHL/DCA/CLT/PHX remain viable? They wont. And that is why UAL and DAL have both declined any attempts at a merger with US in the past. *The 1113 term sheet, and bankruptcy process in general, is a horror show. I am sure it looks tempting to have someone show you the rates/rules that Parker has given, but there isnt any way to financially support those promises he is making. *Yes, Horton is an a** and his sidekick Lorenzo lawyer is trash, but they wont be around when the bankruptcy process is over. There will be someone new, and it wont be Parker or Horton. Getting in bed with US only assures another trip through this hellish BK process in 5-7yrs.
Sounds like a strawman argument to me.
Taking a truncated clip from a U spokesperson regarding CURRENT revenue disadvantages and representing it as a non-alterable situation, you then mesh that in with supposed assumptions that was the reason why DAL or UAL didn't merge with U (irrelevent) and THEN, add that on the basis of that, the U plan by Parker cannot be profitable due to his proposed labor costs with AA PILOTS. It's a carefully clipped sentance to which you then add an assumption (UAL/DAL motives) and then place the U term sheet economics and come to a certain (but, erronous) conclusion. Additionally, her comment didn't say "LABOR cost structure". Costs come from many areas like vendor expenses and fleet costs that are dynamic.
Hardly, Q.E.D.
The reality is that an AA/U merger would result in MAJOR realignment of current hubs, fleets, routes and frequencies and thus the economic model cannot be simply debunked (or validated) on such simplistic assumptions.
Jeez flyby, I'm not surprised someone added 1+1+1 and got 2, but I'm surprised it was you.
Sounds like it's something you WANT to not occur as opposed to something that will or will not succeed on its own merits. Thus, one has to question objectivity here and suspect bias.