I smell a merger brewing with AA/ US Airways
 

Recent activities at US Airways lends belief to the possibility of a merger between American and US Airways. Here are the reasons that support this belief:

- US Airways has traded a majority of their slots at LGA in exchange for more slots at DCA. This puts Airways in a dominant position at DCA. American has the majority of slots at LGA. That said, a merger would put the new company with the majority of slots in the nations three largest markets; New York, Washington, and Philadelphia.

- US Airways lacks hubs in the midwest. American has midwest hubs at DFW and ORD. American lacks hubs in the west (minus LAX) and central east coast. US Airways has PHX, LAS, and CLT. A merger would put the new company with hubs spaced stategically across the country in the biggest markets.

- American has shed almost all of their turboprops, and now US Airways is following suit by downsizing the Dash 8 fleet.

- Finally, there have been numerous meetings between Doug Parker and Gerard Arpey, some public, some not. Some flight crews have spotted Doug Parker on DFW flights.

These items do seem to point at the possibility of a merger or aquisition. Stay tuned.

I seriously doubt it- the labor waters are too poisoned as is, adding the APA to the mix will only make it worse. My thoughts regarding the Doug visits to DFW are simply a plea to sell something to AMR to get enough cash to make it through the winter. In all likelihood, LCC will be sold in pieces. CLT isn't much of an O&D hub because CLT isn't much of a city size-wise. Phoenix is one of the most depressed cities in the country right now as well as Las Vegas. The only value of USAirways to AMR would probably be DCA, possibly the rusting town of PHL, if LUV doesn't completely take that over.

New York, yes......Washington and Philadelphia, no. They are not the three largest markets. That said, you may be right......if so, god help the AA pilots! I wouldn't want to be thrown into a pilot group that included US Air pilots, they have their heads up their ass and I can only imagine what ridiculous demands they would make for that seniority list!

Something is going on.... This is a hot topic on our union message board. Many of us keep hearing some "Big" announcement in October//

Oh no........

AA:eek:

Ill buy that...I think its only a matter of "when" not if regarding UA/CO. The same could be said for AA/US but, my God would that be an ugly marriage.

Best of luck to you guys at AA, I think you should staple the US pilots to the bottom and give the America West guys some kind of ratio!

Little off topic...

I was in an AA chief pilots office and he was on a phone call while I was in there. It was a conference call for a tentative agreement with AA managers. It had all CP's from the AA domiciles and some committee people. He said "you didnt hear anything!" (uh huh ok!) SO something is in the works...

Not sure how great this would be at all. I "personally" do not say anything but bad juju in this.

In awe of the DAL/NWA "merger".. They created a true global powerhouse. They did with dignity and respect for each other and their co-workers.

Good luck to us all, this next year will see a dynamic shift in what this industry will look like.

AA

With the current hopeless disarray at U, I would think it a disasterous move for a full blown marraige. Perhaps an agreement for a succesion of one-night stands is in the works to both carriers benefit.

Should both parties agree to proceed with the nuptuals (I know the bride in PHX is DESPERATE), then I would think a MAJOR gutting of U would be necessary. Fleet commanality is poor and labor integration will be horrendous, but it could be a way to tap into addional feed to bypass the scope issue.

How would the current CBA handle all their 70 (and some 90) seaters ?

If they had to whack most of U's larger RJ's in addition to the above issues, I cannot see what's left that lends itself to a merger.

Good question!

The E-190s are currently at mainline Usair, so I presume that would transfer over to us. However their numerous feed contracts with other airlines flying 70 and 90 seat jets... Bad for us at AA, and bad for you at AE.

AA

The term "turd sandwich" comes to mind. Merging APA with USAPA/West ALPA is not a recipe for labor success.

Understatement of the year.........:cool:

AA

I don't have any "inside" info like the other insiders around here, but taking a step back and asking the question "why?" leads me to easily conclude this will never happen. AMR doesn't have the money, LCC is toxic and has never found a way to make money (even the west side just managed to scrape by for two decades with a bankruptcy and defacto bankruptcy with the ATSB in its portfolio).
If anything happens between the two companies I suspect it would be an asset transfer. The only problem, it is hard to find an "asset" in anything from USAir.

Another reason I forgot to mention: AMR desperately wants APA to relinquish scope, which fortunately, APA has not ceded ground to. A merger or aquisition of US Airways would give AMR the scope relief they want.

As far as the labor side, yes, it would be a god forsaken turd pile of a mess, especially knowing how numbskulled these US Airways East pilots are. If a deal were to occur, it might go down as an aquisition to keep the Airways pilots from screwing up the integration. I just hope that if any of this does comes to fruition that they will integrate PSA/ Piedmont into American Eagle using the ALPA merger policy for seniority integration.

Is there anyhting in your contract that would either pevent or complicate this issue ?

I'm not an advocate of US Airways by any means. I'd much rather be working at AMR. However, before making comments regarding the "toxicity" and poor asset of US Airways, keep in mind that they are the only legacy to turn a profit last quarter.

No,

Buying Usairways does not relinquish SCOPE, or make our SCOPE clause disappear. However I am not sure of the feeder ramifications.

Eaglefly,

While I feel I have a fairly solid understanding of our SCOPE clause, I am not sure. I am hesitant to say something and it be incorrect. I posed the question to a few others at AA that can hopefully reference the contract.

What about Eagle?

AA

Personally, I think this is a VERY expensive and risky way to deal with AA scope. It would seem to be akin to buying the entire McDonalds conglomerate just to get their secret recipe for 'special sauce'.

Anything is possible, I suppose, but additonal clues to that would be in the APA's CBA language regarding mergers/acquisitions and feeder stipulations.

By using the US Airways operating certificate, they are subject to the current labor contract for that certificate, which allows scope to other regional carriers. They can use the RJ's already in use at Airways to fly routes.

Boy, that's a tough one.

Depends on what AA wants to keep on the U feed side and whom. They could sell or transfer a part of our ops to say RAH (Wexford ?) and set up a complex whipsaw scenario against any feeder that wants to continue suckling the AMR nipple, including us.

The possibilities are numnerous and the plan could be complex, with Eagle coming out fairly well or gutted. Our CBA (and us) are small potatoes in any wedding like this and it would be the mainline difficulties (or benefits) IMO that would carry the concept.

Of course, I'd have bet my flightkit that AMR would have never bought TWA and I was wrong.

I did not realize you had our CBA in hand and know this for fact.. I am trying to find the "language".

AA

NO kidding, that is what scares me... I would say this would be a good time for our two groups to get together and brainstorm, or we may be picked off one at a time.

AA

I see what you are saying, there isn't much choice left. If UAL and CO get together, well, guess what Aprey- you're stuck with the ugly chick. I do think the labor situation wouldn't be that hard to deal with by purchasing pieces of the company, perhaps avoiding even taking a single pilot with the transaction. BTW, LCC only had a paper profit, operationally it was a loss last quarter.

Maybe or maybe not, but would they WANT to ?

IMO, U has too many players that overcomplicate their feed and many of them aren't pirticularly desirable. Many of them operate 50-seaters as well. I'd bet at least SOME of them would survive and I would think Eagle would to, but might be whipsawed or partially transferred into a much smaller provider.

I'd look for a final solution should this whole possibility occur, that would include 2 or at most 3 feeders, each handling feed at every hub and forced to beg for scraps every 4 years.

AMR acts in its own best interest and yearns for the days of yesteryear (the '90's) where regional carriers were forced to live on their knees to see the next contract.

In order to use U's certificate, wouldn't that have to be the survivng carrier ?

I can't see AMR dumping the AA brand name, no matter how bad they want scope relief.

Our guys have been pitching that for years to the APA with unmentionable results..................I'm not holding my breath there.

Your scope does not cover US Airways' contract. They will use the Airways certificate to operate the flights.

Profit is profit, no matter which way you look at it. Anyway that is a whole different subject.

So you're hypothisizing that AMR is buying U almost STRICTLY for their feeders ?

Buy U mainline assets and merge that into AA mainline (AA certificate) and sell Eagle to U to operate an independant domestic carrier operating large RJ's on the U certificate (maybe run by Parker) ?

Hmmmmmm............................

I would think most of U mainline would likely disappear over a few years along with most of their uncompatable aircraft and the surviving feeders under U (those with larger RJ's) would merge together (perhaps with Eagle) to expand into a seperate domestic carrier with hundreds of E-190 type aircraft. AA becomes a smaller (then post U merger) International, transcon, long range domestic and "special market" player and U becomes a short/medium and some long range domestic behemoth with wildly profitable 100-seaters ?

In theory, I can see how that would make AMR drool as that way AMR controls both carriers seperately and reaps the rewards for domination and competitivness in both markets, but I'm not sure what the obstacles are ?

Then it will operated as a separate company. The second one Usairways flight is operated as an AA flight, or under codeshare it falls under our SCOPE clause.

I do not see AMR purchasing Usairways to operate them as a separate company. The whole concept in acquiring and or merging is to grow the companies and expand on the synergies of each carrier. ie Delta and NWA.

Considering the cost and outcome of TWA, I do not see an outright purchase. Asset purchase potentially.

In all this the company will do what it wants and in the end we will grieve what we feel is a breach of our contract.

AA

staple lcc - labor problem solved -just kidding

You are more right than you know, those easties are that stupid, the apa would roll them with ease.

I can't believe that Arpey is stupid enough to step into that pile of festering crap called LCC. If he want's to kill American Airlines, that's one way to do it.

LCC has only a few bits and pieces that are of any value. AA does not need a totally disfunctional pilot group that makes the APA look like a model union, an incompatible fleet, bad overlap on the very few international routes that LCC flies, and zero Pacific, which AA actually needs.

In the famous words of Forest Gump...

"Stupid is as Stupid does". You know as well a I do that our industry has an incredible history of "stupid stunts".... Take logic and reason out of the equation.

AA

I don't see aa/lcc happening, nothing matches the logical merge ual/lcc, co and aa are holding their own and a merger won't help them, now ual close to bk with compatible fleets and hubs with lcc it's a matter of time and tilton coming to the realization he can't right the ship. You heard it here first.

That would make more sense, it just seems Doug P has been see in DFW lately. Would like to know why.

AA

I heard that its because Arpey wants Sully.

My guess is that it involved a lot of time on his knees begging...............Parker's probably so desperate, he's willing to agree to almost anything.

The big tunas at CP, might find a tidbit or two out of it to nibble on, but lets hope they don't get stoned on any wild ideas.

the rumor coming from alot of airways guys is that the east and west will be split and sold off to CAL and AMR. I cant remember who gets the east or the west. If AMR really wants Airways, they should just wait a year or so and buy their assets in bankruptcy court.

All of AE cp's where down in DFW for mtg's this week too.