BA Refuses to Help AA

[Thomas_Cook_757-200]

Hi,
British Airways has turned down an extraordinary plea from US bankers to bail out its informal partner, American Airlines.
The request, at a meeting of BA investors at their London headquarters last Wednesday, comes as loss-making American Airlines teeters on the brink of filing for Chapter 11 bankruptcy protection after the slump in demand for air travel.
The request by the US bankers was rejected by BA chief executive Rod Eddington. A BA spokesman said: 'We have a £2bn war chest in place and want to concentrate on running our business. We cannot fritter it away bailing out ailing airlines.'

Well done BA,

If they started helping other airlines they would bring BA down with them!

Thanks

Thomas_Cook_757-200

Source - This Is London

[Nicki Mks]

Two thoughts on this story:

* Remember what happened to Sabena and Swissair?
* Virgin turns out to be right after all with her No way BA/AA

Grtz,

Nicki

[tommyalf]

Where's BA going to get the money to bail out AA? BA isn't doing that great either. Wasn't there a news story a few weeks ago about Qantas investing in AA? What happened to that? The industry is simply too big and needs to cut back. AA has 5 hubs, is that really needed? Sadly the STL hub is probably not needed, but any loses from TWA LCC can be written off for the next five years so STL may very well remain. AA bit off more then they can chew and now their paying the price. Their only hope right now is that UAL will collapse, which is more likely then ever.

[Southwest737]

Where's BA going to get the money to bail out AA? BA isn't doing that great either. Wasn't there a news story a few weeks ago about Qantas investing in AA? What happened to that? The industry is simply too big and needs to cut back. AA has 5 hubs, is that really needed? Sadly the STL hub is probably not needed, but any loses from TWA LCC can be written off for the next five years so STL may very well remain. AA bit off more then they can chew and now their paying the price. Their only hope right now is that UAL will collapse, which is more likely then ever.

I Absolutley agree with everything you have said!!! However, I think MIA is more likely to be dropped as an American Hub before they consider dropping STL as a hub. Also, how does having alot of hubs raise or lose money for airlines?

[tommyalf]

I Absolutley agree with everything you have said!!! However, I think MIA is more likely to be dropped as an American Hub before they consider dropping STL as a hub. Also, how does having alot of hubs raise or lose money for airlines?

MIA won't be dropped, the Latin America market is one of the most profitable in American's route network. I'm sure AA would love to stop construction on their new JFK terminal. At this point they certainly don't need a hub at JFK but I guess there committed to construction contracts at this point.

[FlyingTexan]

* Virgin turns out to be right after all with her No way BA/AA

You beat me to that punch line, Nicki.


Axe the Miami operation? NO way, AA won’t do that. MIA is a fortress for AMR. Just look at all the Heavy traffic to all of the Americas, transcons, Caribbean service, and nonstops to other line stations like New Orleans, Atlanta, Houston, Nashville, Cleveland, Detroit, Raleigh, Charlotte, etc.

[Richard]

BA has no obligation to AA whatsoever partner or not. Besides, BA has itself to worry about. If AA is in trouble, then reforms must be carried out.

[Nicki Mks]

Actually, it was just a joke. I always found that slogan on the flying ladies pretty funny...

Grtz,

Nicki

[aerpix]

I voted for NO, as I believe that BA have their own problems to get fixed, and can not really afford bailing out another carrier. BTW, has nothing to do with the SR/SN case, SR was not brought down by SN alone. Neither was SN brought down by SR alone, just to put the records straight, but this should not be an SR/SN discussion here.

Having a lot of hubs indeed is a question of operating costs, and getting rid of unprofitable hubs makes sense. I do not believe, however, that the MIA hub is unprofitable. I would rather say that this is one of the strongest AA have. So AA must go through the same processes as others have to, i.e. get smaller, stronger and leaner. There is no way around this, except probably Chapter 7 .

Regards,
Peter

[LH 340-600]

Why should BA pay for AA?
AA lost the money. It is their own fault. If AA dies BA will also be in trouble because they will have to look for a new partner in the USA. But it is better for the hole industry if BA will not help AA.
I think that a least one of the big Airlines will quiet operation within a year. Then the other carriers will be ready to take over routes and get into better positions than they are now (hopefully)

[Nicki Mks]

Of course you're right aerpix, the BA/AA case is totally different from the SN/SR one. All I wanted to say is that partnership doesn't meen fraternity... That is something those two have in common.

Grtz,

Nicki