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A combined AMR (AAMRQ.PK) and U.S. Airways (LCC) would reportedly be valued at over $8B, putting...

A combined AMR (AAMRQ.PK) and U.S. Airways (LCC) would reportedly be valued at over $8B, putting it on a par with Delta Airlines. AMR CEO Tom Horton yesterday said the carrier will decide soon whether to merge with U.S. or try to exit bankruptcy protection as an independent carrier. The company is also open to receiving private-equity financing or other external funding.
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Comments (9)
  • MexCom
    , contributor
    Comments (3054) | Send Message
     
    Unless they make good on their previous bonds issued they'd only be able to lease aircraft and will only be able to fly if jet fuel prices remain low. You got to be crazy to buy their bonds.
    11 Dec 2012, 06:41 AM Reply Like
  • Tack
    , contributor
    Comments (13579) | Send Message
     
    Call me happily nuts. I bought their exchanged-traded debt at $6, and now it's $16.80.

     

    http://bit.ly/12iTTXF
    11 Dec 2012, 08:22 AM Reply Like
  • Michael Bryant
    , contributor
    Comments (5619) | Send Message
     
    Impressive. But after going up that much, I wouldn't buy the bonds now.
    11 Dec 2012, 08:51 AM Reply Like
  • Tack
    , contributor
    Comments (13579) | Send Message
     
    MB:

     

    Yes, the big gains have been had. Based on estimates of 70% recovery for bond holders, that would place the referenced issue at $17.50.
    11 Dec 2012, 09:02 AM Reply Like
  • Michael Bryant
    , contributor
    Comments (5619) | Send Message
     
    If (LCC) buys (AAMRQ.PK), buy LCC stock.
    11 Dec 2012, 08:52 AM Reply Like
  • Michael Bryant
    , contributor
    Comments (5619) | Send Message
     
    Based on capacity, (AAMRQ.PK) was the (GM) of the US Airline industry. It had the largest market share at 37%.
    11 Dec 2012, 08:55 AM Reply Like
  • Pony01
    , contributor
    Comments (253) | Send Message
     
    This is all a bunch of crap! American has to merge. Stand-alone American will not last long in the global marketplace. The play is UAL or DAL stock calls (or puts if you think there won't be a merger). Only benefit is macro on reducing industry capacity (i.e. seats available for sale). Micro, USAIR is a profitable airline, however, they are paying it's east pilots bankruptcy wages from 2005 - well below industry standards with no seniority list. American pilots are an eclectic bunch and believe they will receive a better deal from USAIR. If history is any guide...Two marginally profitable carriers will become one large marginally profitable carrier.
    11 Dec 2012, 10:45 AM Reply Like
  • Tack
    , contributor
    Comments (13579) | Send Message
     
    pony:

     

    American pilots just signed a new agreement with American. So much for holding out for USAir.

     

    USAir fears a streamlined American, and that's why they've pandered to all the unions so vigorously for a merger. It's anything but clear that a merger is going to occur.
    11 Dec 2012, 10:54 AM Reply Like
  • Pony01
    , contributor
    Comments (253) | Send Message
     
    Tack,
    Ultimately, I think a merger will happen for the macroeconomic reasons explained earlier and I applaud the pilots at American for not being badgered by American management/bankruptcy stakeholders by turning down the first ridiculous contract. I was talking more about the stock play - calls/puts - on an eventual merger (or non merger).
    I'm really not sure a stand-alone American can prosper in the medium to long term. They're too "Easternlike" - management that is.
    12 Dec 2012, 09:31 AM Reply Like
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