Can a Merger Save AMR? Investors Apparently Don’t Think So

By Avi Salzman

Thomas Horton, the president of American Airlines parent AMR (AMR), told the Times of London that he wants the company to merge with International Group, the owner of British Airways and Iberia, the New York Times reported today.

U.S. law forbids foreign companies from owning more than 25% of a U.S. airline, but Horton expects those rules to change and thinks he will see the two companies merge within his “working lifetime.”

The investment community, however, appears more skeptical. AMR, which posted weak results a couple of weeks ago, was down 2.4% this afternoon.

Can a Merger Save AMR? Investors Apparently Don’t Think So - Stocks To Watch Today - Barrons.com

Its looking more and more like AMR is "dead man walking."

I mean who knows but, international mergers!! WOW.

American Airlines Hopes for a B.A. Merger - NYTimes.com

Two words come to mind: cabotage and/or whipsaw.

Waiting for a schmuck to say, "Jetblue can buy them out!" in 5..4..3..2..1

Funny thing is AA and B6 have the same market cap right now.

Exactly, it was more sarcarsm than anything. It's all good.

I work with a bunch of AA pilots on military leave who say that a merger between the two would not be of benefit because of exactly what you said...market cap. They share too much in regards to routing, etc. There would just simply be no benefit.

Could that set a precedent for cabotage? Just wondering. I think about our once strong Merchant Marine fleet. Now most vessels carry the flag of anywhere but the US.

The problem with cabotage is that US pilots are cheaper than about any other nation which could meet the safety standards to fly in the US. We are also the only place with a pilot surplus. The way things stand now, cabotage would be carrying coals to Newcastle.

I think back to what John McCain said, right after 9-11, when United filed for bankruptcy and was talking about shutting down completely, if they didn't get the Pilot Concessions they wanted.

It was at a sidewalk news conference on some other issues, when a reporter asked him, "What about United Airlines? What happens if they shut down?"

He said, "Well, if United can't find a way to do it, we'll just have to let some forign carriers in to fill the void..."

(I'm paraphrasing here, but that's the jist of it).

The bottom line is, our Politicians will vote which ever way their "Sponsors" tell them to. There are over 45,000 registered Lobby Groups in DC, who all make huge "Campaign Contributions" ie. they pay the Congressmen and Senators to vote "Their Way".