Discussion Point: Could an AA-BA Merger Ever Happen? Ever?

2 comments

1. Strategically, this would make so much sense for both AA and IAG. Not only that, it would put serious pressure on the Star Alliance partners because they have to suffer all the frictions of an alliance, rather than full merger.

   In addition, AA’s financial position is perilous. It has to do something in the medium term to resolve this. Clearly some of its problems lie with its cost base, and a merger won’t tackle that, but others have to do with its route network and fleet. US is the only sizeable US airline left to merge with and I don’t suppose that it’s a very attractive proposition to AA.

   Having said all of that, I cannot see the Congress changing that law. Democrats hate big business and won’t go out of their way to help. Republicans hate foreigners and so won’t want them involved in the ownership of AA. Both parties are essentially protectionist. I suspect that they would rather see AA go bust than merge with an Anglo-Spanish carrier.

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2. It’s not if it could happen it’s when will it happen, may not be in the near term with America’s protectionist policies but at some point that will change. Global pressure and AA’s need to survive will influence the people and government to change the rules. It’s the one and last global industry that hasn’t consolidated globally.

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