American Airlines need merger to maintain X Factor

The pressure is on for American Airlines to make powerful airline friends in order to build up its X-factor and get ahead of competitors.

Experts have said the former largest airline worldwide needs a merger partner in order to maintain a competitive edge particularly after the United Airlines merger with Continental Airlines and Southwest Airlines intentions to buy AirTran, Reuters reported.

RW Mann & Company Airline Consultant Robert Mann said the airline can no longer hold claim to having the broadest route networks leaving them an undesirable option to the biggest market for airlines, business travellers.

“By contrast, I think you’ll see United and Continental, as well as Northwest and Delta, have relatively favourable stories to tell in acquiring revenue in the markets that they extensively serve,” Mr Mann said.

While outside opinions have the airline facing a low future, American has rebutted claims the company needs a merger and said size is not always important.

American Airlines –

“Network breadth is important, and we have that in abundance,” American Airlines Vice President Beverly Goulet said.

“We can go to virtually any corporate account and offer them convenient access to all the markets that are important to them.”

According to experts despite American Airlines hesitation to merge the market for possible alliances is slim with the best possible options already signed or in talks with other airlines leaving “all the good pieces taken off the board”, Mr Mann stated.

Furthermore, American could face further difficulties achieving merger with high labour costs and open union contracts.

Ms Goulet said that while American Airlines has not moved to mergers as yet it definitely acknowledges the benefits of an alliance and will continue to research options.  

Source = e-Travel Blackboard: N.J
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