The New U.S. Air/American Airlines Is At Full Throttle And Ready For Take Off.

May 05, 2012 3:51 PM ETAAL
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DVCAZ's Blog
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Contributor Since 2012

I never gave much thought to investing as much as I did to my love of Travel History such as being a design student who totally blindsided my college professor by writing, as my final paper, "The History of Passenger Accommodation in Commercial Aviation". Boeing was also surprised but willing to allow me access to their library archives. The Smithsonian also gave gave me full access. I was told, by the S.A.&S. "No one has ever asked for that material before.". In the preceding years I had mostly strung news ideas until one day when I got wind of AMR on the verge of posting a huge loss and the move to purchase "Fleet Compatible" Airbus Jets that would position them them in a great place for Doug Parker's inevitable move. And so, after six months of watching it has played out, day by day just as history suggested it would. Now I am eager to see how the rest of the story plays out and what it will mean to investors and the aviation sector.

Doug Parker is one very sharp guy. He has been carefully putting together plans for the takeover/merger of American Airlines for some time. Taking his time, crafting things like rising in customer service ratings, getting the support of AMR's unions, gathering numbers that show this combination will be successful financially. The stock is on the rise again as the news has just broken that A.A. & U.S. Airways pilots have also joined with AMR's three other unions and come to an agreement that combining the two is what they want. Don't let this ship sail without you. The official statement is so close its like a protracted Christmas Eve for investors. I figured out this was going to happen when AMR posted its huge loss but also bought "Fleet Compatible" Airbus Jets, back then the U.S. Air stock was just $4.00 a share and today it is: US Airways Group, Inc. (LCC)-NYSE
$10.66 12:40PM EDT and steadily moving up.

In 2005 when America West took over U.S. Air the U.S. Air stock took just 33 days to go from $19.00 a share to a peak of $61.00. This event will be filled with adjectives in the media. Brian Williams may have the intro to his NBC Evening News interrupted again.

My guess is that within three weeks of an official announcement the stock will well past the 2005 peak of just $61.00. The sky's the limit. The prices will be rolling upwards like a Vegas Slot Machine out of control.

No doubt that news such as: "A combined US Airways-American Airlines would be able to better compete with United-Continental and Delta Airlines. Cost savings would be significant. In addition, American Airlines is strong in areas that US Airways is not. Also of great significance is that union leaders support a merger for American, according to a USA Today article." Small Cap Network April 23, 2012

And..."Can The US Airways-American Merger Make You Money?" - YES- Investment Underground May 2nd 2012

Such consistently positive news, that outweighs the skeptics, is only helping to move this deal along faster and faster. Kudos to U.S. Airways C.E.O. Doug Parker for not just the skill with which he has put this together but also for, unlike AMR's plan; saving thousands of jobs. Not only will the name American Airlines be saved but so will thousands of jobs. That's worth cheering about.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Additional disclosure: When I did the math on the news of American Airlines huge loss, that had not even hit the wires, combined with the purchase of 300+ Airbus jets I used my "News Stringer" investigatory skills to pursue the story. When it was finally clear that I was right my parents gave me a small share of U.S. Air Stock. As a former employee and long time friend of an America West/U.S. Airways employee I have met, briefly, with Doug Parker and found him to be the smartest guy in the room who just blends right in. I hope to fllow the new American Airlines as it finds its footing and write about what events along the bumpy road ahead means for investors.

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