Delta's involvement in American?
08-13-2012, 11:48 AM
#1
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Delta's involvement in American?
Originally Posted by Scottsman
British Airways mulls American Airlines bid
Published on Monday 13 August 2012 00:00
British Airways parent International Airlines Group (IAG) may consider taking a stake in its Oneworld Alliance partner American Airlines, a move that could block any takeover of American by IAG rival Delta.
An IAG spokeswoman yesterday said: “We would consider taking a stake in American Airlines if that is something that American would welcome.”
Published on Monday 13 August 2012 00:00
British Airways parent International Airlines Group (IAG) may consider taking a stake in its Oneworld Alliance partner American Airlines, a move that could block any takeover of American by IAG rival Delta.
An IAG spokeswoman yesterday said: “We would consider taking a stake in American Airlines if that is something that American would welcome.”
Over on the DAL side, rumors keep coming up that we're interested in Miami, Dallas and the shiny Terminal in Kennedy.
IMHO that scenario is unlikely due to the anti-trust concerns. At most, in my opinion, Delta wants the parts that American might have to divest in a merger.
American, if properly managed, is a powerhouse. American, if merged, is "excess capacity."
Not trying to start a rumor (I know nothing). Just wanting to compare what the American side might be hearing.
08-13-2012, 12:03 PM
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Anyone who thinks the AA network will be fragmented to other carriers is smoking some seriously good stuff.
Im guessing IAG wants to buy a chunk of AA to keep Parker in check. Not saying IAG doesnt want an AA/US merger, but I dont think they are crazy about Parker running the show.
Im guessing IAG wants to buy a chunk of AA to keep Parker in check. Not saying IAG doesnt want an AA/US merger, but I dont think they are crazy about Parker running the show.
08-13-2012, 12:20 PM
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Who in their right mind would buy current common stock. The only thing they would do is put up cash using the LHR routes as collateral.
How about DAL buying all of AMR and then dealing with whatever the regulators throw their way?
How about DAL buying all of AMR and then dealing with whatever the regulators throw their way?
08-13-2012, 12:40 PM
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I've not heard anything about American being broken up.
At Delta our CEO states, "capacity reductions are our leverage." Whoever merges with American is going to get more pilots than flying. JMHO.
ACL and I differ on one angle of this rumor. If American were a target, the timing of the Delta contract makes no sense. ALPA will want a JPWA in exchange for agreement to a merger protocol.
Last edited by Bucking Bar; 08-13-2012 at 01:20 PM.
08-13-2012, 02:51 PM
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American has such an expansive and complete network that if they merge with anyone other than US, there will have to divest to avoid monopolistic pricing power in the resulting markets.
I've not heard anything about American being broken up.
At Delta our CEO states, "capacity reductions are our leverage." Whoever merges with American is going to get more pilots than flying. JMHO.
ACL and I differ on one angle of this rumor. If American were a target, the timing of the Delta contract makes no sense. ALPA will want a JPWA in exchange for agreement to a merger protocol.
I've not heard anything about American being broken up.
At Delta our CEO states, "capacity reductions are our leverage." Whoever merges with American is going to get more pilots than flying. JMHO.
ACL and I differ on one angle of this rumor. If American were a target, the timing of the Delta contract makes no sense. ALPA will want a JPWA in exchange for agreement to a merger protocol.
Who knows, the whole industry is a mess.
08-13-2012, 03:20 PM
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It doesn't ensure the lowest price but makes the future more predictable, in particular in light of how Delta has been using collars.
To boot, hedges aren't a one time deal but a continuous process. Taking a spot check isn't an effective way of measuring the efficacy of a hedging strategy as is evident in the Q2 results...
Why wouldn't a corporation apply the same strategy to other aspects of the business, say a pilot contract?
Cheers
George
08-13-2012, 03:43 PM
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The price for Delta to buy AA as a whole is much more than the value Delta ultimately wants from AA (MIA/DFW).
08-13-2012, 04:41 PM
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The DOT only cares about slot restricted markets, and in particular NYC. The only carrier AA could realistically merge with that might require a small divestiture of slots would be jetblue.
The price for Delta to buy AA as a whole is much more than the value Delta ultimately wants from AA (MIA/DFW).
The price for Delta to buy AA as a whole is much more than the value Delta ultimately wants from AA (MIA/DFW).
IMO, fragmentation doesn't work to well for ANY of the parties concerned and the only two viable options for AA are US Airways and Jet Blue.
08-13-2012, 05:13 PM
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One would also have to consider the residual. In the hypothetical case of Delta or anyone else cherry picking the premo assets of AA, the rest would likely be worth nothing to no one. Thus, the price of the cherries would cost more then purchasing the whole pie and after giving a portion of the ripest cherries away to appease regulators, it would be one expensive pie indeed for only some of the ripest cherries.
IMO, fragmentation doesn't work to well for ANY of the parties concerned and the only two viable options for AA are US Airways and Jet Blue.
IMO, fragmentation doesn't work to well for ANY of the parties concerned and the only two viable options for AA are US Airways and Jet Blue.
The scenario you list would have assets divested as well. LCC, B6 and AMR assets or AMR, B6 and LCC assets is a real possibility too. Anyway we cut it, we as employees are probably along for the ride.
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