American Needs US Air Merger: Analyst
CHARLOTTE, N.C. (TheStreet) -- Despite its obvious reluctance, American (AMR) needs a merger with US Airways (LCC) so that it can compete effectively in the transatlantic market, says a veteran airline analyst.
In a recent report, Avondale Partners analyst Bob McAdoo wrote that the value of US Airways' Philadelphia hub as a collector for European traffic has been widely overlooked. In fact, McAdoo said, "by the numbers, US Airways' Philadelphia hub is the most effective collector of traffic out of the north and eastern U.S. to Europe, surpassing the productivity of even Continental's (CAL) Newark hub.
"Contrary to numerous analyst and press comments, US Airways' overall presence as an East Coast/transatlantic carrier is not meaningfully different in scope than that of Continental, Delta (DAL) or United (UAUA)," wrote McAdoo.
Philadelphia generates more European revenue each day than American's hubs at either New York Kennedy or Chicago O'Hare, and more connecting traffic per European destination that Continental at Newark, he said.From Philadelphia, US Airways serves 80 domestic cities and 17 European cities. From Washington Dulles, United serves 74 domestic cities and 10 European cities. From Newark, Continental serves 72 domestic cities and 27 European cities. From New York Kennedy, Delta serves 44 domestic cities and 26 European cities. Also from Kennedy, American serves 17 domestic cities and nine European cities.
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