American Airlines’ board of directors met on Wednesday but don’t expect a merger announcement quite yet.  I think there will be a merger.  Frankly, I think there is a very high chance of a merger.  But I also think that the details of the deal still have to be worked out to everyone’s satisfaction.  Tom Horton will be arguing that shareholders will get more value with a standalone exit (I’m not sure I agree here if one considers what is likely to happen with a mediocre operation over the 3 years following bankruptcy exit).  I think a better guess for an announcement will be around late January.

Delta Airlines is set to acquire regional airline Pinnacle as it is already providing its Debtor In Possession financing.  Pinnacle entered bankruptcy and Delta needed that airline to stay afloat and operating.  Whether the airline is integrated into Delta and Delta managed, I can’t say for now.  I suspect that Delta will become the majority owner and seek to install an executive to finish making Pinnacle a viable entity.  At that point, I would expect Delta to spin off Pinnacle again.

US Airways is setting new records (again) for revenue and passengers.  While they expect a $35 million hit against 4Q earnings because of Hurricane Sandy, I would expect that their earnings report for December to, once again, shock and delight investment analysts.  This is where US Airways is making its best argument for a merger with American Airlines:  Investment analysts, shareholders, etc all want this management team in charge of American Airlines because it performs and does so under the worst of network circumstances.

Delta Airlines opened up 300 flight attendant positions and got 22,000 applications for the positions.  That’s about 73.5 people per job applying.  (Take note flight attendant unions:  People want those jobs and readily accept the entry level conditions.)

Filed under: Airline News, Mergers and Bankruptcy by ajax