Re: AA take over UA?

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At 11:32 AM 8/27/2004, Bahadir Acuner wrote:
>This is a nightmare for a UA 1K with 400,000 miles in last 3 years.
>First of all, United is more innovative, has a much better product and
>better equipment. United's customer service, on board service, domestic and
>international service is way ahead of DAArk side.
>
>In terms of compatibility between airlines, there is almost none! Their 767s
>and 777s that look like common fleets share different engines (P&W on UA and
>RR on AA). This is the case with 757s are as well.
>
>United has huge fleet of Airbus narrow body aircraft, AA doesn't. UAL has
>classic 737s, AA doesn't.
>
>In terms of unions ALPA and APA are two different pilot unions.
>
>Absolutely this person doesn't know what he/she is talking about. The minute
>AA buys UA, they will have to park all the Airbus aircraft and that will do
>numbers on the values of the birds which will not go well with creditors.
>
>So, in a nutshell, there is more chance of Southwest ordering A380s than
>this happening.
>
>BAHA
>Fan of great service on United
Whilst disagreeing with BAHA on the service levels (I find them far less
different than he does) I fully agree this was one serious dope smoking
exercise.

Beyond all the issues BAHA mentioned, you've plenty more.

AA and UA have totally incompatible alliance structures. (One world Vs. Star)
Nobody on either side of the Atlantic would let a merged AA/UA keep their
collective position in LHR. Nobody is going to allow a single monster US
carrier to keep its position in the two dominant European alliances.

You'd have similar, although less extreme overlap in NRT, and you'd have the
minor problem of one entity suddenly controlling absurd amounts of traffic
at ORD,
huge amounts at SFO, big slabs at LAX, and a huge chunk of the US
transcontinental
market out of LAX, JFK, SFO,BOS,IAD. etc. Not likely to be popular with
anti-trust
folks anywhere.

You'd also have massive messiness with DEN and DFW. They overlap a fair bit
in cachements, but you can't afford to walk away from either, so you get to
keep
both.

Some of the fleet issues BAHA mention are underpinned by some very
different approaches
to the whole notion of being a large carrier. AA doesn't have 747s by
intent. It has an overall
approach to international stuff that's been less driven by big airplanes,
and historical
roots than UALs. (To an extent, UAL still has international structural
hangovers which go back all the
way to the Pan Am purchases)  I don't know that you'd simply axe the airbus
narrowbody fleet,
but sooner or later, you'd have to make sense of two very different small
airplane fleets.
(AA's got all those Super-80s, and the bigger 737s, UA's got bigger A32Xs
and smaller 737s)

Further, the money story doesn't make sense. AA buying UAL won't make the
pension liability
issues at UA go away. It won't make most of the UAL non debt liabilities go
away.  Being more
monolithic won't fix yield problems caused by low fare competition. Being
bigger won't fix historical
issues having to do with having many more senior, expensive employees than
the startups.

Mark this one off as just silly.

- David

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