American Airlines worried after United-Continental merger


AMR Corp.’s American Airlines, may pursue alliances to win more passengers as competitors’ merger expunge its previous size advantage, analysts said.


U.S Airways Group Inc. and JetBlue Airways Corp., the sixth and seventh largest airlines in the U.S., are possible alliances for AMR Corp.


Alliances such as AMR’s Oneworld allowed members to sell seats on each other’s planes, a benefit in an industry where the size of airlines’ networks draws in corporate fliers. 


American, currently the second-biggest carrier in the U.S. would become number three under new merger between United Airlines and Continental Airlines that was announced today.


“American helped originate the whole idea of alliances and partnerships,” stated George Van Horn, an analyst. “If somebody should be good at it, you could make the argument they should be.”


AMR was under pressure previous to the merger between United and Continental.


AMR is the only major U.S. airline that may lose money in 2010; it also has the lowest margins and highest costs among its peers, according to Jamie Baker, a JPMorgan Chase &Co. analyst.


AMR is also working with JetBlue on a slot exchange at New York’s Kennedy airport and signed a contract to allow travelers who are flying to the U.S. on American to be booked on JetBlue domestic flights.


“There is a potential that that relationship could be expanded,” stated spokesman Bryan Baldwin of New York based JetBlue.


“We are open to having that conversation, but we have no specific plans at this moment," Baldwin continued.



Source: Bloomberg


Photo: Wikimedia

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