American Airlines bows to the inevitable. The only remaining questions are when and with which of its rivals will the airline merge, and what will it mean for the traveling public?
After months of living in corporate denial, the owners of American Airlines finally are using the M-word.
AMR Corp., American’s parent company, announced last week that it would look at options for a merger while the airline goes through Chapter 11 bankruptcy protection.
It’s as if King Canute had waited until he was neck-deep in water to admit that his command to stop the incoming tide may need to be tweaked a little bit.
American’s high tide is one of red ink, bad luck and bad decisions. In the last decade, the airline has:
- lost enough money to equal the gross domestic product of several small developing countries.
- maintained a fleet of older, gas-guzzling aircraft in the face of sky-high fuel costs.
- alienated its labor unions to the point that they cut their own back-door deal with a rival airline.
Does that sound to you like an airline in a position to dictate terms to anybody, on anything?
Through it all, however, the folks who run American have steadfastly insisted that when the airline emerges from Chapter 11, it will still be a “stand-alone” airline.
A stand-alone airline with fewer flights, fewer routes, fewer planes…and at least 13,000 fewer employees.
Small wonder, then, that when US Airways quietly went to American’s three unions with a merger plan that promised to save a lot of those 13,000 jobs, the unions came on board faster than passengers with seats in First Class.
The fact that those same unions hold a sizable chunk of American’s unsecured debt made that deal a lot more than symbolic.
In turn, US Air has made general statements about maintaining the American Airlines brand in any future merger, much in the same way that Southwest Airlines has maintained the AirTran identity after buying up that airline.
In my admittedly casual observation of the corporate world, the only thing that seems to be truly consistent is that promises are worth the paper they’re printed on — and not much else.
To put it another way: Being the buyer gives you the right to change your mind.
You can read more about American’s announcement in this New York Times story here.
As you’ll see in the Times story, none of these developments absolutely guarantees a merger. What it does mean is that AMR has finally decided to acknowledge the proverbial handwriting on the wall, which the rest of the airline industry has been reading for the last couple of years.
The one thing that no one can say right now is what an American Airlines merger with US Air — or anyone else, for that matter — would mean for the traveling public. Would some big cities have fewer American Airlines flights? Would other locales no longer see American at all? What would happen to our frequent-flier miles?
The problem with these airline mergers, as another Times writer recently pointed out, is that the voice of the traveling consumer goes largely unheard through the whole process. The corporate powers do what they do, the federal government nods in approval, and you and I get to swallow whatever comes out.
Dont expect anything different this time around, either.
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