This is why a US/AA merger wont work
 

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. :confused: 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.

...or you could be a Jetblue pilot that just wants to see a codeshare in JFK.

Flyby1206 Status: [x] Told; [ ] Not Told

There have to be some tangible benefits of a merger beforehand, and I have yet to hear anyone make a case for it. Yes, US/AA will benefit the industry as a whole, by reducing capacity (PHL/DCA/CLT/PHX bye bye) and gaining pricing power... but how will that benefit labor at all?

It is really ridiculous to think that US has its cost advantage because it is saving pencils and paperclips in the office, as opposed to wage scales that are drastically lower than competition. US pilot costs per block hour are $100-300 million behind AA, DL, UA, WN, HA, AS.

You are correct there, my guess is PHX gone completely, and PHL cut in half. Some DCA slots traded/sold away. CLT is a useful domestic hub for the AA network, I will give you that, but I wouldnt hold my breath for CLT-HKG flying. JFK/LGA is slot restricted so limited growth there, ORD will see larger RJs, LAX will grow in a few years when they finish the TBIT, DFW has space to grow, but nothing AA cant do themselves.

Again, I reference the 25April-2012 conference call transcript where Kirby is touting the US/AA merger, but using metrics from UAL/CAL and DAL/NWA in his justification. That is a serious Apples-Oranges comparison:

US Airways Group's CEO Discusses Q1 2012 Results - Earnings Call Transcript - Seeking Alpha

How much of the US network wont be viable with increased costs? Honestly very little. And there is a looong gap between AA/US and a DAL, UAL type network.

We are all biased. I want to see AA suceed and grow and someday get hired to fly for them. That would be great. You, are seeing red and unable to think clearly after the actions by Horton and Co, so willing to jump at any chance to jab at them without thinking of the consequences.


I'd be fine if I never had to fly through JFK again in my life. We already have a ridiculous number of codeshares with other airlines, and the only thing that means for jetblue is that we will never do those routes.

Flyby.... What you are not realizing is that Horton absolutely WANTS a merger with USAirways - but he wants one only after exiting BK.

So, if given the choice - since we WILL eventually merge - I'd much rather do it on Parker's terms than Horton's.

In the end, AA will not survive as an independent. Neither will US. They both need each other. It will happen.

I know Horton has said he isnt opposed to mergers in general once they clear bankruptcy, but didnt know his feelings on US in particular. If that is the case (he wanting US post BK) then I can understand the support from AA unions at this time.

Im sure it will be a mess either way, but I truly hope for the best for everyone involved.

Toad [ x ]

What any of these people are stating publicly you should take with a very small grain of salt. This won't be the first time corporate leaders have stated one thing then turned around a few days, weeks, months later and done the exact opposite. Statements these guys make to the press are intentionality designed to have intentional consequence. Corporate execs aren't like politicians in that sense that they can say anythig with only "political consequences." For execs it's about stock/stake holder confidence and the "lawsuit" and "even "criminal" culpability is immensely more of a driving force in their work vs. that of a politician. These guys rarely say anything even 20% let alone 100% true. Everything they state to the press was pre-planned.

IMHO this whole merger has been a Parker/Horten plan for a while now. In fact I think the DAL slot swap was done for US to divest out of the NYC market to remove what would have been the only real anti-trust issue for this merger. My opinion, post merger PHX will stay, PHL and DFW are toast as hubs. But I have nothing but a gut opinion driving that feeling, no analysis to offer.

This is such short-sighted thinking. So, you're saying to the team whom you're not willing to give a chance, -no way-, while running to the arms of a midnight partner who promises the moon but hasn't extended those promises to his own team.

You're an AA pilot, and you're suggesting that you want to be paid well, not endure any pain, and by the way, get rid of the leadershipnteam I currently work for! I really love the loyalty exhibited on this AA forum.

I can take it from the US guys. For them it "appears" to be only upside from where they currently are, but for the AAer's here, this cutting off your head and upper torso to prove to management how wrong they are is pure lunacy.