This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Does US Airways Have AMR in Checkmate?

CHARLOTTE, N.C. ( TheStreet) -- Let's just say it up front: A merger between US Airways (LCC) and AMR (AAMRQ.PK)seems likely to happen.

Two revealing events occurred last week. On Wednesday, I flew to an AMR media event in Dallas to hear what the airline had to say as it battles a takeover. The primary message was that in 2014, two years from now, AMR will start to alter seating configurations on its widebody aircraft and add more lie-flat seats.

Two days later, AMR said it would explore the possibility of a merger while still in bankruptcy, reversing its previous position at the behest of its creditors.

Lie-flat seats are great. In fact, United (UAL - Get Report) said Thursday that it has lie-flat seats on almost 80% of its international fleet. I just don't think the distant promise of lie-flat seats can slow the momentum of the thundering herd from Tempe.

I began to cover American in its Miami hub in 1990, right after legendary CEO Bob Crandall made one of the best deals in aviation history, buying Eastern's Latin American routes from Miami for about $320 million. I began to cover US Airways in its Charlotte hub in 1996, soon after legendary CEO Steve Wolf arrived to fix the airline and merge with somebody -- anybody. He succeeded on the first count and nearly succeeded on the second.

Theoretically, knowing where the airlines have been, should help me to figure out where they are going.

Reviewing AMR's history since 1990, it was for a time the greatest airline in the world. Crandall ordered planes, pioneered frequent flyer programs, reservations systems and yield management, and expanded in South America and Europe. He retired in 1998. AMR completed mergers with Reno Air in 1999 and TWA in 2001. Both failed. When bankruptcy threatened in 2003, AMR veered away, seeking the moral high ground favored by president Gerard Arpey. Then AMR disclosed it had executive retention packages and bankruptcy-proof pensions. This enraged employees and forced the resignation of CEO Don Carty. Arpey became CEO.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
LCC $0.00 0.00%
DAL $45.09 -2.00%
UAL $57.21 -0.14%
AAPL $110.39 -1.70%
FB $88.13 -2.00%

Markets

Chart of I:DJI
DOW 16,372.89 +21.51 0.13%
S&P 500 1,949.34 +0.48 0.02%
NASDAQ 4,732.1760 -17.8030 -0.37%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs