Making the Case for an AMR/US Airways Merger
Also at media day, Andrew Nocella, senior vice president, marketing and planning, spoke about US Airways' strong presence in the East.
"US Airways serves more cities in the east than any other carrier, with above average frequency levels," he said. His charts showed that US Airways serves about 65 "spokes," or smaller cities that connect to hubs, in the East, while Delta serves about 63, United serves about 55 and American serves about 30.
Additionally, US Airways has about 650 daily departures in the East, while Delta has about 700, United has about 440 and American has about 200.A recent report by JPMorgan (JPM) analyst Jamie Baker makes the same point: AMR is weak in the East, compared to its two rivals, because it cannot gather passengers in small cities. It has neither the aircraft nor the hubs to serve those cities. Baker also described himself as "underwhelmed" by American management's plan to boost revenue by $1 billion annually. But Virasb Vahidi, American chief commercial officer, has said a planned aircraft order and proposed changes in the pilot contract would enable increased revenue because American could serve new markets with more aircraft types and could boost flying to smaller cities by flying more regional jets. That would reduce its weakness in smaller eastern cities, although, without Charlotte, American would still lack a hub that is well-positioned to serve them. >To contact the writer of this article, click here: Ted Reed >To follow the writer on Twitter, go to http://twitter.com/tedreednc. >To contact the writer of this article, click here: Ted Reed >To submit a news tip, email: firstname.lastname@example.org. Follow TheStreet on Twitter and become a fan on Facebook.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV