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American Needs Merger Flight Plan
Now that it is in bankruptcy court, American Airlines' flight plan is unclear. But the airline industry's final destination is pretty much mapped out. Airlines are in the latter stages of a wave of consolidation that, if you are going to put a date on it, began when American's parent AMR Corp. bought TWA out of bankruptcy in 2001. Capacity and costs have been shed, and the number of carriers has dwindled. In the final stage, there will be only a handful of major carriers that… (online.wsj.com) Más...
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Now how can american be struggling that is being in bankruptcy. people are saying they are trying to get a merger deal with usairways. usairways has already merged with america west plus if this merge is done american will lose there best aircraft like the md80 (maddog)who ever runs american needs to step up and get things straight.
Are you being sacarstic when saying that if American and US Airways merge the former will lose the best aircraft like the MD80. This is a gas guzzling monster and according to an American captain whose name I can´t be revealed for obvious raesons is a piece of s%&·t which can not compare to the Boeing 737 and Airbus 320 series quality-wise and performance-wise.
The proper spelling is $#!+
:-)
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Expecting the executives that got American into its problems to fix them is a little like watching politicians (mostly lawyers) promise to fix Washington or GM or health care or whatever else they touch.
Forget about Delta or United...they are already too big and they are dealing with their own consolidation problems after huge mergers and trust me they have plenty on their plates. Remember that this AMR bankruptcy or truly should be call reorganization it is only about cost, US Airways...although the only apparently big out there won't give AMR any additional revenue/strategic hub. AMR already clearly stated that they are selling American Eagle so buying a bunch of regional routes won't be that smart decision and the only interesting market that US Airways could put in the table is what used to be American West. American could accomplish the same by buying Frontier Airlines with a relatively young fleet and with direct impact on the Denver West Coast area. As for the Megatropolis...Don't forget that AAL already is codesharing with Jetblue...I wouldn't be surprise. If I was AMR CEO my goal was going to be a brother presence and BA is the ultimate prize...so, With a new cost structure in the US, buying Frontier and BA american will be once again the largest airline of the world. With 3 Trillion in cash on their Balance Sheet it is doable...but the question here is do they have the balls?
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Now that it is in bankruptcy court, American Airlines' flight plan is unclear. But the airline industry's final destination is pretty much mapped out.
Airlines are in the latter stages of a wave of consolidation that, if you are going to put a date on it, began when American's parent AMR Corp. bought TWA out of bankruptcy in 2001. Capacity and costs have been shed, and the number of carriers has dwindled. In the final stage, there will be only a handful of major carriers that control networks extensive enough to attract the high-paying business travelers necessary to compete profitably.
[airherd0208] Associated Press
If that is where the game is headed, AMR's position if it emerges from bankruptcy as a stand-alone airline, rather than merging with another, looks weak.
The way the company has framed it, cost problems lay at the heart of its troubles. Because all the other major U.S. airlines have gone bankrupt over the past decade, they have shed labor and benefit expenses that AMR has continued to bear. Last week, it laid out a plan to restructure debt and leases, cut 13,000 jobs and terminate pensions, saying this would save $2 billion annually. AMR also said that by renewing its fleet, improving productivity and customer service, and increasing departures at its five main markets, it would increase revenue by $1 billion annually by 2017. Problem solved.
But AMR's ability to jettison all of its pensions is questionable, given that Delta Air Lines merely froze its plans for flight attendants and ground personnel when it restructured. And AMR's promise to increase revenue is like a New Year's resolution to lose 20 pounds—rousing stuff, but hard to pull off. The company's major problem, notes Wolfe Trahan analyst Hunter Keay, is that without a strong Pacific business linked to the fast-growing Asian market, it lacks the type of network needed to win back the business travelers it has lost.
AMR's other possibilities are a merger with Delta or US Airways Group, both of which are considering a bid.
Buying AMR would give Delta a huge hold on the New York market, a hub in Chicago and a strong Latin American network. If regulators approved the deal—no sure thing—the resulting airline would surpass United Continental and become the largest airline in the world by passengers, with a globe-spanning network that could yield substantial profits.
The strategic benefits of AMR merging with US Airways aren't as clear, and AMR CEO Tom Horton has thrown cold water on it. US Airways' Phoenix hub would mesh well with AMR's Latin American business, and AMR's membership in the Oneworld global marketing alliance would be a plus. Most important for US Airways, a merger avoids the difficult situation of getting squeezed between United Continental and a combined Delta and AMR. But the combined airline would still lack a strong Pacific business.
The holy grail of consolidation—a globe-spanning airline from the combination of players in several countries—may never come. But the stage where there are just a few major U.S. carriers tapped into global networks almost certainly will. The remaining legacy carriers will either find a way to fit into that picture, or fall off the map.