Delta, TPG Assessing Bids for AMR

Discussion in 'American Airlines | AAdvantage' started by zpaul, Jan 12, 2012.  |  Print Topic

  1. zpaul

    zpaul Gold Member

    Messages:
    1,071
    Likes Received:
    2,816
    Status Points:
    1,445
    Well, this is interesting. Really never thought about Delta coming into the picture.

    http://online.wsj.com/article/SB10001424052970204542404577156842920091500.html

    Delta Air Lines Inc. and private equity firm TPG Capital are separately assessing possible bids for American Airlines parent AMR Corp., with hopes that AMR's troubles present another opportunity for airline consolidation, people familiar with the matter said.
    AMR filed for bankruptcy court protection in late November and is in the midst of restructuring its debt and cutting labor costs after it. Any bid for AMR likely would come several months from now. AMR could use the bankruptcy process to shed a trove of obligations that a buyer might be hesitant to assume.
     
    karung99, jbcarioca and TheBeerHunter like this.
  2. Lantean

    Lantean Silver Member

    Messages:
    24
    Likes Received:
    18
    Status Points:
    110
    this is so scary... let's hope that it never happens. not only i'd suck for us travelers, but it would most likely be the end of oneworld... delta blows. :mad: :eek: :(
     
    ceieoc, FriendlySkies, jsm and 7 others like this.
  3. Albert C. Rollins

    Albert C. Rollins Silver Member

    Messages:
    20
    Likes Received:
    22
    Status Points:
    110
    I can't say a merger/buyout with Delta is bad, my few flights with them have been very positive, however, the SKYPESOS, now that's another issue. Delta does provide some of the Asian Network that seems to be lacking for AA, it also adds another European hub, aside from LHR. There are many variables in the picture, and with the way that the current economic situation is, who knows what might happen.
     
  4. DestinationDavid
    Original Member

    DestinationDavid Milepoint Guide

    Messages:
    6,846
    Likes Received:
    12,715
    Status Points:
    11,770
    For those who do not subscribe, if you Google the article you can link through and read the whole thing.

    If DL acquires AA I'd be switching to UA so fast your wig would spin.
     
  5. TheBeerHunter
    Original Member

    TheBeerHunter Silver Member

    Messages:
    834
    Likes Received:
    1,398
    Status Points:
    845
    Of course who knows how it will turn out -- but at the very least, if a merger were to happen, it would take a while (a long while, looking at UA/CO and NW/DL) for systems and frequent flyer programs to merge...if that's any consolation...
     
    karung99 and jbcarioca like this.
  6. MSPeconomist
    Original Member

    MSPeconomist Gold Member

    Messages:
    58,563
    Likes Received:
    98,528
    Status Points:
    20,020
    My first reaction was amazement that anyone would believe that another airline merger could receive regulatory approval, but then I started to think in terms of the criteria that have been applied recently for approvals. It's hard to think of many city pairs served by non stops where DL and AA compete, such as MSP-ORD, but where there is no service by other carriers, for instance UA in this case, or Southwest between MSP and MDW. I guess the MIA flights to DL hubs and focus cities are likely examples, but with Florida being leisure, there must be LCC alternatives. AA hubs like LAX, NYC, BOS tend to be large enough and rich enough markets to draw lots of competitors automatically, which could be part of AA's problem in addition to the extent of it's network and it's cost structure.

    Another issue is the different cultures, including the extent of unionization. DL is barely past a rough merger. I hope we don't have to suffer through another one.
     
    TheBeerHunter, jbcarioca and zpaul like this.
  7. LarryInNYC

    LarryInNYC Gold Member

    Messages:
    1,384
    Likes Received:
    2,797
    Status Points:
    1,445
    Saw "TPG", thought you meant Brian from The Points Guy.
     
  8. zpaul

    zpaul Gold Member

    Messages:
    1,071
    Likes Received:
    2,816
    Status Points:
    1,445
    I like Delta; as you see in my signature I'm not unfamiliar with them, though here are my disclaimers: I have only flown them internationally (or connecting to/from an international flight), I have never flown in back, I entered the SM program as Gold Medallion and never dropped below that level, and I have only tried to redeem my SkyMiles once, with great success. From an in-flight perspective, as limited as it is, I like them.

    I have never looked in to SkyMiles very far, even though I have status - it was my company's airline and so all of my tickets were in paid J so no need to use miles to upgrade or for flights. Now I'm in OW country so earning on AA makes a lot more sense for me, but I won't cry if this develops.
     
    jbcarioca likes this.
  9. jbcarioca
    Original Member

    jbcarioca Gold Member

    Messages:
    17,507
    Likes Received:
    57,455
    Status Points:
    20,020
    1) It seems wildly improbable that such a bid could pass antitrust scrutiny;
    2) :eek::eek::eek:;
    3) Were this to happen there would be massive layoffs and duplications to remove, which makes it less probable;
    4) This would be like UA/CO except that this one would not be seamless and simple like that one.:rolleyes:
    5) This will be the only way I will make 12,000,000 miles in a single program. Lessee..TWA+PanAm+NW+AA=DL, if I count them all???
    6) Have they learned nothing from NW?
     
  10. tondoleo
    Original Member

    tondoleo Gold Member

    Messages:
    16,063
    Likes Received:
    100,905
    Status Points:
    20,020
    Texas Pacific Groups principals were involved in turning Continental around. They also have had a large financial interest in RyanAir.
     
    jbcarioca, TheBeerHunter and zpaul like this.
  11. karung99
    Original Member

    karung99 Gold Member

    Messages:
    4,978
    Likes Received:
    19,562
    Status Points:
    10,695
    I hope this is NOT going to happen, I just start my AA convert and it is scary to think that this is going to be Delta :(
    It is a good bargaining tool for other to entertain
     
  12. karung99
    Original Member

    karung99 Gold Member

    Messages:
    4,978
    Likes Received:
    19,562
    Status Points:
    10,695
    CO/UA is NOT merger.. it is CO maskering UA :(
     
  13. DeacFlyer1
    Original Member

    DeacFlyer1 Silver Member

    Messages:
    807
    Likes Received:
    718
    Status Points:
    675
    I completely agree, but this article seems to imply Delta has at least given the anti-trust issue some thought:

    "Delta has conducted an antitrust analysis on a possible tie-up with AMR and concluded that with some concessions, such a deal has a good chance of getting approval from regulators, according to The Journal."

    http://aviationblog.dallasnews.com/archives/2012/01/wsj-reports-delta-and-tpg-capi.html
     
    jbcarioca, LETTERBOY and zpaul like this.
  14. MSPeconomist
    Original Member

    MSPeconomist Gold Member

    Messages:
    58,563
    Likes Received:
    98,528
    Status Points:
    20,020
    The RyanAir link scares me.
     
  15. tondoleo
    Original Member

    tondoleo Gold Member

    Messages:
    16,063
    Likes Received:
    100,905
    Status Points:
    20,020
    Don't worry. You won't be charged for emotions.
     
    ChicagoEric, PanAm, zpaul and 4 others like this.
  16. MSPeconomist
    Original Member

    MSPeconomist Gold Member

    Messages:
    58,563
    Likes Received:
    98,528
    Status Points:
    20,020
    This is perfectly possible. Read my post above in this thread. Antitrust policy in the USA depends crucially on how markets are defined. A famous example is IBM several decades ago, when the standard was defined as the market for scientific mainframe computers, so that most of the name brands that one can recall were not their competitors according to this standard.

    For airline cases, USA policy analyzes how many carriers provide nonstop service between city pairs. Our regulators do not consider a connecting flight to compete with a nonstop. The procedure will start by counting the number of city pairs where both AA and DL currently offer nonstop service and asking whether any other carriers provide nonstop or direct service to the same city pairs. In such markets where the merger will eliminate such competition between DL and AA and where there is no other current competing service, the new proposed airline might be asked to make gate space and slots available to a competitor if they are important markets or if there are many such problematic city pairs. When you look at the networks of various airlines, you see that it is not at all a tough standard.
     
    zpaul, jbcarioca and Tenmoc like this.
  17. MSPeconomist
    Original Member

    MSPeconomist Gold Member

    Messages:
    58,563
    Likes Received:
    98,528
    Status Points:
    20,020
    How can we be sure in this industry? I'm sure airlines would like to be able to charge the passenger when a FA smiles, with limited fee waivers for elites.
     
  18. DeacFlyer1
    Original Member

    DeacFlyer1 Silver Member

    Messages:
    807
    Likes Received:
    718
    Status Points:
    675
    LETTERBOY, zpaul and jbcarioca like this.
  19. TheBeerHunter
    Original Member

    TheBeerHunter Silver Member

    Messages:
    834
    Likes Received:
    1,398
    Status Points:
    845
    Those credit card referrals are really lucrative, you know.
     
  20. TheBeerHunter
    Original Member

    TheBeerHunter Silver Member

    Messages:
    834
    Likes Received:
    1,398
    Status Points:
    845
    LETTERBOY, zpaul, jbcarioca and 2 others like this.
  21. mowogo
    Original Member

    mowogo Gold Member

    Messages:
    7,078
    Likes Received:
    12,942
    Status Points:
    12,520
    DL really has some of the best service and inflight product of any domestic airline. The problem with DL has always been the SkyPesos problem. A merger with AA would probably require major slot and gate sales at JFK, LGA, and LAX. MSP would probably see some downsizing as DL could extract higher rates out of ORD than at MSP, even with the competition from UA (The fact that the Shuttle has grown to include ORD should tell you enough right there).
     
    TrippePanAM, LETTERBOY and zpaul like this.
  22. TheBeerHunter
    Original Member

    TheBeerHunter Silver Member

    Messages:
    834
    Likes Received:
    1,398
    Status Points:
    845
    I think that's what most of us are shuddering over!
     
  23. MSPeconomist
    Original Member

    MSPeconomist Gold Member

    Messages:
    58,563
    Likes Received:
    98,528
    Status Points:
    20,020
    Of course it would be natural or AA and US to consider a merger, although US made a mess of its last merger. It cannot be good for US to be in *A now that UA and CO are merging. Moving into one world and aligning with AA would make the USA carriers more balanced among the three alliances. As it is now, it would be tough for either AA or US to do well alone as small legacy carriers with somewhat limited overseas networks of their own. Merge or discover a good niche seems to be the blueprint for their futures.
     
    LETTERBOY, zpaul and jbcarioca like this.
  24. Tenmoc
    Original Member

    Tenmoc Gold Member

    Messages:
    31,882
    Likes Received:
    212,880
    Status Points:
    20,020
    i just dont see this happening.
     
    Skye1, FriendlySkies, jsm and 4 others like this.
  25. rwoman
    Original Member

    rwoman Gold Member

    Messages:
    5,617
    Likes Received:
    13,489
    Status Points:
    11,070
    AA has good things and DL has good things... I spend a lot of time on their planes across the Pond. Done right, it could be a nice blend, but I think union issues would create done headaches...

    I'd rather see DL than US...
     
    zpaul and jbcarioca like this.

Share This Page