cactiboss

I hate to burst you guys bubble but it will be Usair taking over. I had the pleasure of speaking with a west guy that is a sme involved in the process, here is what he had to say. The UCC as is their fiduciary responsibility want a complete amr plan to compare against Parker's plan. Amr's plan will have to include finalized labor deals, whether abrogated by the courts or voted on by rank and file to be compared with Parker's (or anyone else's offer). As I assumed the more expensive the labor deal the worse Horton's plan will look. The UCC is in constant contact with Parker and has been told Parker's offer will be "substantial", no details have been shared for competitive reasons but the expectation is that once labor costs are locked in and horton's plans finalized, Parker will submit his competing plan to the UCC. Again the word "substantial" was used when describing Parker's expected offer to the UCC. As you guys speak of numbers don't forget Parker's plan would make AA the #1 airline in the entire east coast by a wide margin (not just the NYC area), #1 in the midwest, #3 in the west and the largest airline in the world.

Flyby1206

If DL or UA take B6, then they would have to divest such a large % of the JFK slots that it might not make sense. What is the point of buying B6 if you dont get the JFK presence? The only ones who could buy B6 without having to divest too much would be AA or WN.

I think WN would love to have the NYC presence that B6 does, but it offers much more value to an international carrier like AA. The int'l connecting pax could fuel serious growth for someone with a global presence.

My numbers were from 2011, and DL was just closing up the deal with U for the LGA slots, so I dont doubt your numbers as more current. I agree with you that DL wants to own NYC and the Caribbean as well, and they have plenty of slots/aircraft to do it themselves. Not to mention the DOT would require a massive divestiture of B6 slots in a takeover, which would almost certainly go to either AA or LCCs like WN/VX/F9/NK.

Flyby1206

US+AA wouldnt be close to #1 in NYC unless you are counting PHL as part of that. You are also making the assumption that AA+US would mean every route currently operated by both would still be profitable after the massive payraises Parker is promising.

Look at NWA/DAL and the fallout in CVG/MEM...

cactiboss

I didn't mean #1 in NYC I meant #1 on the east coast as whole and by a wide margin. You are underestimating the value of all the other east coast centers where aa would be #1 besides NYC and the effect that would have on combined revenues.

Flyby1206

I think DCA is a great business market, and the CLT hub is valuable to the AA network as a connection hub for the southeast, but both of those are limited to domestic service. I cant see any major international presence out of CLT beyond a few token flights to LHR and maybe MAD. 50/50 split between AA/US and BA/IB metal.

PHL serves as an international hub for US, but I dont think it will make the cut as a major part of the AA international network. Again, I could see token international flights to Europe hubs, and decent value in PHL as a domestic connect point for people in the northeast. PHL can support flights to places like PWM/MHT/ALB/etc, while JFK slots need to create more revenue. JFK will remain the international focus, with only domestic service to primary airports (LAX/MIA/etc).

I am not discounting the network that US brings to the table, but I dont think it can support the financial promises that Parker is making.

eaglefly

Not sure what "bubble" you think you're bursting, but regarding a U/AA merger, most here know Parker & Co. will be running the combined carrier. Horton will likely be his defacto boss as head of the entire One World network. You say the Parker and the UCC are in "constant contact" regarding a "substanttial offer", yet also note it requires "locked-in" labor costs. That means labor isn't part of that nexus and in fact, are NOT players but bystanders. His "labor" will be you and me and if the TA passes, you will then just join the rest of us bystanders under a CBA that will make your knees buckle with horror.

The combined carrier, if it were to stay its merged size would allow for 600 large 79-seat E-jets and another 450 or so code-share jets by other carriers with any size jet. More then likely the combined carrier will just melt at or faster then the rate of attrition and stabilize with 400-500 E-jets and 3-350 code-shares. Likewise, I hate to burst your bubble, but that's plenty enough for Jet Blue, Alaska and a host of others to expand and capitalize on and that stagnation when added with a decade under an agreement that Parker will make good use of, will make you yearn for the good old days of today, even under USAPA.

lakehouse

I think USAIR needs AA, however long term AA does not need USAIR. AA can find partners and jump on chances.

USAIR will be nothing more than an odd puzzle pieces, looks like Southwest, but smells like Panam and TWA. They are mainly domestic with cheap labor is my point, with a few international routes.

cactiboss

The "bubble" that you guys are in when you say amr will exit bankruptcy prior to the merger, the "bubble" where you guys are saying amr will buy b6.

So which is it? will Parker by amr or does this "deal" horton has with the pilot's torpedo the deal? Make up your minds That's absolutely correct, no one knows what Horton's plan will look like yet. Will it be the latest offer, will it be abrogated contracts? We don't know so we (and ucc) can't compare.
But labor costs definitely are, and until we know what those will be, Horton's plan cannot be compared against parkers
Of the merger happens, our contract will be the pre-negotiated term sheet, not the contract you are voting on now.

eaglefly

Generally agreed, that's another reason I put U at the top of the AA merger list.

Not at the top of the likelyhood list a SWA/B6 hookup is, but SWA has gone after some obscure carriers for their own interests.

eaglefly

You're convinced a U merger will happen prior to AA C11 emergence ?

OK, but I don't see that bubble myself as the most likely. Unless Parker was lying, he sees it after C11 emergence as well. As for B6 ? Possible, but less likely.....that's someone else's bubble.

Horton has no deal with the pilots yet. 9 weak BOD members isn't the same. Other then that, I can't make up my mind as to what you're talking about here.

If the TA fails, no one knows what will happen and my guess is no one will want to invest big $$$ putting hope on a so far weak/absent POR by AMR. Any imposed work orders cannot remain in perpituity and thus the future carrier cannot go forward with any certainties and without certainties, it really can't go forward very well. A bad place to be for any company clawing its way out of C11 or any management trying to convince others their POR is the best.

Exactly. A judges abrogation of our CBA results in a work order allowing AMR to make up its own work rules/pay, etc. Again, that cannot remain in perpituity and unless and until a CONSENSUAL labor agreement providing a stable determination of labor costs for a reasonable period of time exists, it's a rudderless quagmire that technically can be disregarded and AA can exit, but realistically cannot. All the players are then hamstrung as some of the players aren't sure what their cards are.


I'm sorry to be the bearer of bad tidings, but that's incorrect. If our TA is ratified it will give current management the exact stability they can make their "plan" with (POR) and since they get preference by the court, will easily exit BK in control. If that happens, the CLA that APA negotiated with Parker is null, void and of no further force and effect. In other words, it's deader then dog****. The APA and our TA/CBA will be the surviving aspects of the merge and you are screwed. Parker gets a better deal then he had with the APA and just like Beverly Goulet promised, AMR will get more favorable labor concessions then the APA/Parker deal. Good for everyone but us.

Welcome to our nightmare.

Then again, perhaps Parker out of the goodness of his heart and historical concern for pilots will give more money then he doesn't have to ?

Aren't you one of the chaps who says he's a swell guy and can be trusted to do the honorable thing ?

Uh, huh.........that's what I thought.

Do you find it odd that Parker is now perfectly happy with AMR's exclusivity extention and has said to his employees that the merger is still very much on track and will commence "upon AA's emergence from bankruptcy" (to which the then backpeddled his arse off) ?

I don't find those realities odd at all............not from a guy who might be getting a better deal then he thought he would. Could be, AA pilots are being played by those that they were playing. If only they can get this TA through, it all falls into place.