U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > U.S. Forums > Texas > Dallas
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 01-30-2012, 12:15 PM
 
Location: Dallas, TX
5,681 posts, read 9,675,206 times
Reputation: 1889

Advertisements

Quote:
Originally Posted by justme02 View Post
I can tell you with a pretty good certainty the HQ will be in Fort Worth.

Ive been to both facilities and the Fort Worth facilities are leaps and bounds larger and further ahead of the Phoenix facilities. I have spoken with a couple of people close to the matter and even the US Airways middle management is under the impression that should a merger come about the HQ will be in Fort Worth. Ive also spoken with some people at AA who say that should a merger come about the American name must remain the HQ must be in Fort Worth.

Doug Parker (the current CEO of US Airways) actually came from American before joining America West (which became US Airways). Also its important to note that when US was courting Delta during their Chapter 11 he stated several times that the HQ would be in Atlanta. So he is very open to the HQ not being in Arizona.
Good to know!
Reply With Quote Quick reply to this message

 
Old 02-11-2012, 08:24 AM
 
Location: Rocky Mountain Xplorer
956 posts, read 1,248,545 times
Reputation: 684
COMMENTARY Every major American airline has filed for bankruptcy protection, some more than once. Even successful regional carriers like Southwest Airlines (LUV) and JetBlue (JBLU) have had a tough time making money lately. The entire industry's a mess, with one notable exception: Alaska Airlines (ALK).


Alaska boasts the highest earnings per share of any airline and its stock is up 80 percent over the past five years, a period when the S&P 500 and just about every airline stock was down. But that wasn't always the case. The company's extraordinary turnaround, executed by CEO Bill Ayer, should be taught in business schools and required reading for every current and aspiring executive.
Here's how one man transformed Alaska Airlines, from a Wall Street Journal interview:
No status quo

Ayers knew that to transform the company, he had to throw out all the old rules about how airlines should be run and start from scratch. He also knew that Southwest had fundamentally changed the industry with substantially lower costs and ticket prices.
So he abandoned the old ways of debt-leveraged growth, spending to chase new markets and market share, and mega-mergers and alliances, and decided to focus primarily on profitability.
Follow the leader
Following Southwest's lead and employing some relatively commonplace management practices -- except in the airline industry, of course -- Ayers hosted brainstorming sessions with executives from other industries and came up with a new metric for success: cost per available seat mile, a measure of business efficiency.
He set an aggressive goal and, although he had no idea how to achieve it, he also knew that nothing would change without it. Over time, he began streamlining operations: outsourcing some functions and negotiating new union contracts to lower operating costs. While none of that was popular, it was better than the alternative -- bankruptcy.

A profitable culture
It took quite a few years, but Ayers eventually got all the key stakeholders to buy into a culture based on long-term profitability. A critical incentive was the inclusion of all employees in a bonus plan based primarily on earnings, but also including customer satisfaction and safety. There's nothing new about profit sharing, but it wasn't exactly commonplace in the airline industry.
He also took extraordinary measures to lower maintenance costs and improve on-time performance -- without sacrificing safety, of course. Today, Alaska Airlines is at or near the top in every industry metric and it's even growing, albeit profitably and at its own measured pace. Capacity is up 27 percent since Ayer took over as CEO and the Seattle-based company employs 11,807 people. In an era when jobs are precious, corporate profitability is under fire, and CEOs are vilified, here's proof of the inextricable link between jobs, profits and a leader who understands that you can't have one without the other. And what surprises me the most is that Alaska didn't have to look very far for its turnaround specialist. Ayer has been with the company for 30 years. Go figure.

In an era when jobs are precious, corporate profitability is under fire, and CEOs are vilified, here's proof of the inextricable link between jobs, profits and a leader who understands that you can't have one without the other. And what surprises me the most is that Alaska didn't have to look very far for its turnaround specialist. Ayer has been with the company for 30 years. Go figure.

In an era when jobs are precious, corporate profitability is under fire, and CEOs are vilified, here's proof of the inextricable link between jobs, profits and a leader who understands that you can't have one without the other. And what surprises me the most is that Alaska didn't have to look very far for its turnaround specialist. Ayer has been with the company for 30 years. Go figure.
Leadership lessons from Alaska Airlines - CBS News
************************************************** *****************
When American emerges Chapter 11, why not emulate the "Alaskan Model", which is be a single-hub carrier and not be concerned with competing with the global mega-carriers ? It seems to have been very successful for the Seattle-based carrier.
Reply With Quote Quick reply to this message
 
Old 02-11-2012, 01:00 PM
 
13,180 posts, read 12,694,787 times
Reputation: 4531
Quote:
Originally Posted by justme02 View Post
There is more to this than meets the eye. Think about it this way, what does US have that Delta would want?

Not Charlotte, they have Atlanta
Not Philly, their New York hubs are already larger internationally
Not Phoenix, US margins there are some of the lowest in the industry.

The only thing DL might potentially want is their operation in DC. But much of that would get forced out in concessions if this happened.

This revelation coming out from Delta makes me even more sure of my original theory. Delta isnt trying to merge with anyone. They are trying to stir the pot for two reasons:

1) Drive the prices for AA or US up and make it more complicated for those two to merge if they choose. Plus it also makes AA more unsure about being alone.

2) In the shake up, there is a chance an asset or two might pop loose and DL would be well prepared to grab it.

Personally, I think its a brilliant move by Delta, but US and AA probably also see through it. Even then, there isnt anything wrong with exploring possibilities. However, DL knows they have nothing to loose. At the very least, they have just made it more complicated for AA and US.

Another thing to put into perspective is that given the amount of cash AA has on hand, it would be virtually impossible for AA to be unwantedly taken over. Not to mention AA is vastly important for British Airways. They will stop at nothing to help AA with whatever it needs. Then there is TPG who has a working relationship with AA. To be perfectly frank, DL has no chance with AA unless AA lets it.

Personally, I see US, TPG, and BA potentially working together. US has sent representatives to London to pitch to BA why US would be a good match for AA. That means two things:

1) US would leave the Star Alliance at the drop of a hat to merge with AA
2) US is appealing to the best of AA's friends so their intentions are somewhat friendly.

All in all, Delta has nothing to loose. US and AA have everything to gain. A US/AA merger would be a very strong airline and the largest in the world. If I were Delta, I would be trying to muddy the waters too.
Delta wants AA's Dallas Operation, their Chicago Operation, the Miami hub to Latin America, the LHR routes, and the Transcon operation from JFK to LAX/SFO. And AA is not in any position do anything about it. I don't think many people understand what bankruptcy means. AA management can't dictate the terms any longer. AA will go to the highest bidder in terms of who gives the creditors the best deal.

Last edited by padcrasher; 02-11-2012 at 01:12 PM..
Reply With Quote Quick reply to this message
 
Old 02-11-2012, 05:28 PM
 
7,292 posts, read 8,128,081 times
Reputation: 5381
Quote:
Originally Posted by padcrasher View Post
Delta wants AA's Dallas Operation, their Chicago Operation, the Miami hub to Latin America, the LHR routes, and the Transcon operation from JFK to LAX/SFO. And AA is not in any position do anything about it. I don't think many people understand what bankruptcy means. AA management can't dictate the terms any longer. AA will go to the highest bidder in terms of who gives the creditors the best deal.
AA does not necessarily need any bidder.
Reply With Quote Quick reply to this message
 
Old 02-11-2012, 05:54 PM
 
Location: Willowbend/Houston
13,403 posts, read 20,296,728 times
Reputation: 10181
Quote:
Originally Posted by padcrasher View Post
Delta wants AA's Dallas Operation, their Chicago Operation, the Miami hub to Latin America, the LHR routes, and the Transcon operation from JFK to LAX/SFO. And AA is not in any position do anything about it. I don't think many people understand what bankruptcy means. AA management can't dictate the terms any longer. AA will go to the highest bidder in terms of who gives the creditors the best deal.
Thats way off base.

First off, I can tell you with certainty DL has no interest in Chicago. AA's Chicago operation is much lower yielding than DL's Minneapolis and Detroit hubs. No does AA have anything at San Francisco that DL would be interested in. There is probably not even that much interest in Dallas or LA (other than eliminating a competitor). What DL really wants from AA is MIA, the JFK terminal, and LHR slots. However, DL's bid would probably involve breaking up the carrier which as I will outline below will not fly with the creditors.

No recent Chapter 11 filing by an airline has resulted in the carrier going to the highest bidder. Not only this but AA is much stronger than any of the other carrier that went through at the time they went through. DL and US were on the verge of collapse. US Airways had to beg their employees to work for free for 2 days so they could stay afloat. AA doesnt have it nearly that bad.

1) AA entered BK with 4.1 billion dollars in cash. Its going to be almost impossible for AA to be taken over with that amount of cash because their creditors see it as a huge net.

2) 3 of the 9 seats on the creditors board are labor unions who are well aware that a takeover would cost them way more than a loss of pension that they are likely to get anyway in BK court. Another is Boeing who knows that a hostile merger will mean they lose a customer.

3) IAG (the parent of British Airways and Iberia) is going to be a huge player in this process. They know if they lose AA, they lose all feed in North America. That is something they will not live with. They have already pledged anything AA needs to keep them intact.

4) TPG is in the workings as well. TPG has a history with AA and is HQ'ed in Fort Worth. I have a source with them who has assured me that they would not do anything that would allow the DFW hub to be compromised.

You are right about one thing, AA management does not have total control, but they do have some control. The control lies with the creditors. But the majority of these creditors know that having AA bought out in a hostile way or having AA broken up is definitely not in their best interest. EDS is right, AA does not need a bidder. They may merge, but it will probably come after Chapter 11 and not during very similar to what Delta did.
Reply With Quote Quick reply to this message
 
Old 02-11-2012, 07:30 PM
 
13,180 posts, read 12,694,787 times
Reputation: 4531
Quote:
Originally Posted by justme02 View Post
Thats way off base.

First off, I can tell you with certainty DL has no interest in Chicago. AA's Chicago operation is much lower yielding than DL's Minneapolis and Detroit hubs. No does AA have anything at San Francisco that DL would be interested in. There is probably not even that much interest in Dallas or LA (other than eliminating a competitor). What DL really wants from AA is MIA, the JFK terminal, and LHR slots. However, DL's bid would probably involve breaking up the carrier which as I will outline below will not fly with the creditors.

No recent Chapter 11 filing by an airline has resulted in the carrier going to the highest bidder. Not only this but AA is much stronger than any of the other carrier that went through at the time they went through. DL and US were on the verge of collapse. US Airways had to beg their employees to work for free for 2 days so they could stay afloat. AA doesnt have it nearly that bad.

1) AA entered BK with 4.1 billion dollars in cash. Its going to be almost impossible for AA to be taken over with that amount of cash because their creditors see it as a huge net.

2) 3 of the 9 seats on the creditors board are labor unions who are well aware that a takeover would cost them way more than a loss of pension that they are likely to get anyway in BK court. Another is Boeing who knows that a hostile merger will mean they lose a customer.

3) IAG (the parent of British Airways and Iberia) is going to be a huge player in this process. They know if they lose AA, they lose all feed in North America. That is something they will not live with. They have already pledged anything AA needs to keep them intact.

4) TPG is in the workings as well. TPG has a history with AA and is HQ'ed in Fort Worth. I have a source with them who has assured me that they would not do anything that would allow the DFW hub to be compromised.

You are right about one thing, AA management does not have total control, but they do have some control. The control lies with the creditors. But the majority of these creditors know that having AA bought out in a hostile way or having AA broken up is definitely not in their best interest. EDS is right, AA does not need a bidder. They may merge, but it will probably come after Chapter 11 and not during very similar to what Delta did.
What "creditor's board" are your referring to? No labor reps are part of any creditors board. There is no creditors board. AA management is seeking their concessions as part of one plan ( of likely several) to present to the bankruptcy judge. He'll decide what is in the best interest of the debtors, not some loyalty to Dallas or AA employees.

It's not only about average yields in ORD. AA is able to obtain a premium on yields compred to other airlines there, , and of course the volume of originating passengers in ORD is 2nd or 3rd in the Country.

Last edited by padcrasher; 02-11-2012 at 07:45 PM..
Reply With Quote Quick reply to this message
 
Old 02-12-2012, 08:20 AM
 
Location: Willowbend/Houston
13,403 posts, read 20,296,728 times
Reputation: 10181
Quote:
Originally Posted by padcrasher View Post
What "creditor's board" are your referring to? No labor reps are part of any creditors board. There is no creditors board. AA management is seeking their concessions as part of one plan ( of likely several) to present to the bankruptcy judge. He'll decide what is in the best interest of the debtors, not some loyalty to Dallas or AA employees.
That's not correct. There is very much a creditors committee and it does indeed include the unions. AA has exclusive rights for 18 months in chapter 11 as long as they present a plan. Im done explaining this over and over, so Im going to let the articles below do the talking:

American Airlines Creditors Committee Includes Unions, Bondholders

British Airways Holds Keys to AMR - WSJ.com

AMR’s Horton Willing to Weigh Acquisitions After Bankruptcy Exit - Businessweek
Reply With Quote Quick reply to this message
 
Old 02-12-2012, 08:02 PM
 
Location: Rocky Mountain Xplorer
956 posts, read 1,248,545 times
Reputation: 684
Top American officials visited Los Angeles last week to tell reporters that, once the airline emerges from bankruptcy, it plans to add up to 20% more flights from its five most important hubs: New York, Los Angeles, Chicago, Dallas-Ft. Worth and Miami.
The airline officials also unveiled plans to order enough new planes over the next five years to transform one of the industry’s oldest fleets of jets to the newest.
“At the end of the day, our plans will allow us to return to the top of the heap,” said Kevin Cox, American’s vice president of state and community affairs.
American Airlines vows to bounce back from bankruptcy - latimes.com
***************************
No doesn't look like the guys at American have any interest in emulating the
"Alaska Model" because it seems they want to continue to be the big-shots of old and increase fleet size so they can expand market share which all means they are going to go deeper into debt and thereby operate more leveraged than ever.
Reply With Quote Quick reply to this message
 
Old 02-13-2012, 06:21 AM
 
Location: Willowbend/Houston
13,403 posts, read 20,296,728 times
Reputation: 10181
Quote:
Originally Posted by JimBaker488 View Post
***************************
No doesn't look like the guys at American have any interest in emulating the
"Alaska Model" because it seems they want to continue to be the big-shots of old and increase fleet size so they can expand market share which all means they are going to go deeper into debt and thereby operate more leveraged than ever.
An Alaska style network is not for American. They would have to shut down 3.5 hubs to emulate it. That wont work.

Alaksa has very low costs and an entirely North American network. But American's problem (for the most part) is not their route network. DFW and MIA are goldmines. They struggle in Chicago but once they get larger regional jets, that will help tremendously. Lower costs will allow them to expand in New York as well.

When I say that costs are their problem, it's primarily the bang for their buck they are getting from the union employees, not the hourly rates. The productivity is very low. However BK will fix that.
Reply With Quote Quick reply to this message
 
Old 02-13-2012, 06:45 AM
 
13,180 posts, read 12,694,787 times
Reputation: 4531
Quote:
Originally Posted by justme02 View Post
That's not correct. There is very much a creditors committee and it does indeed include the unions. AA has exclusive rights for 18 months in chapter 11 as long as they present a plan. Im done explaining this over and over, so Im going to let the articles below do the talking:

American Airlines Creditors Committee Includes Unions, Bondholders

British Airways Holds Keys to AMR - WSJ.com

AMR’s Horton Willing to Weigh Acquisitions After Bankruptcy Exit - Businessweek
I stand corrected. Though remain doubtful this minority union representation on the creditors board does much to effect the decision of the board.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:


Options
X
Data:
Loading data...
Based on 2000-2016 data
Loading data...

123
Hide US histogram

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > U.S. Forums > Texas > Dallas
Follow City-Data.com founder on our Forum or

All times are GMT -6.

© 2005-2018, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top