Odds and Ends: COPA, Aeromexico, GOL for MAX

The Wall Street Journal reported late today that COPA, Aeromexico and GOL are lining up for the Boenig 737 MAX.

The WSJ article is subscription-only but perhaps it will show up on Google News, as some do.

COPA was one of the original airline “commitments” for the MAX last year, which we reported. We reported that Aeromexico had been expected to announce MAX and 787 orders at the Farnborough Air Show, as its absence was a disappointment to expectations.

GOL, of Brazil, is a long-standing 737 operator but Airbus made a strong push to win this business.

The Seattle Times reported that United Airlines, which last week announced orders for 100 MAXes and 50 737-900ERs, has options that could mean 310 orders from Boeing. United also settled its compensation issues with Boeing over the 787 delays.

US Airways’ CEO talks AMR, industry conditions at National Press Club

US Airways CEO Doug Parker spoke today on the effort to merge with American Airlines and of industry conditions.

This is a running tally of the comments and Q&A.

Parker:

• Was introduced as a good poker player, citing Herb Kelleher. Parker responds: I’m not particularly good. Herb is just very bad.
• Our country needs a practical and sustainable airline policy.
• Team at US Airways is doing a phenominal job. Producing record revenues, yields, strong load factors, new records in every operating measure. Credit goes to 32,000 employees. I can’t thank them enough.
• You might ask if US Airways is doing so well on its own, why talk so much about mergers? We don’t need to merge but we owe it to employees and other stakeholders to become as strong and as viable as possible.
• Previous mergers have led to increased traffic, cost reductions, better competition.
• Employees will have better opportunities.
• American Airlines sat out these mergers and have missed opportunities. It is not the largest airline in the world anymore or even close to it. Delta and United have surpassed it.
• Finally American resorted to bankruptcy. Bankruptcy does allow airlines to negotiate to contracts, renegotiate and terminate contracts and debt. Bankruptcy cannot fix a revenue problem or network deficiencies through organic growth.
• American can fix these only through merger with US Airways. American’s Cornerstone strategy doesn’t regain previous strength. There is a big hole on the Eastern seaboard.
• American is steadily losing share to Delta and United. It can only be gained back by merging with US Airways which is strong on east coast.
• Merger will enable both airlines to become stronger. Networks are complimentary and little overlap, so no need to scale back services.
• A new American would be able to provide connecting services through Philadelphia, Washington and Charlotte rather than backtracking through Chicago, which passengers won’t do.
• American is now in fourth or fifth place in most regions. A combined carrier would become first or second in most areas.
• Almost all analysts concluded American’s Cornerstone strategy won’t fix problems.
• Why isn’t it happening? Timing is everything. We believe a merger should happen within bankruptcy to avoid many costs that would occur outside bankruptcy.
• US Airways is here now and ready to do this now. There is no guarantee it will be later. We believe the action for merger is now. We want a fair chance to present our plan.
• We are certain any objective analysis will conclude merger with US Airways is best for the bankruptcy process.
• According to American, the bankruptcy process is because of the unions–they are the “offenders.” My experience with these unions in supporting the merger is to the contrary.
• The compensation gap between the US Airways proposal and the American proposal is not that large. The unions understand the future for American is a strong carrier.
• Everyone knows what the right answer is. The public has a lot at stake in the outcome. There are 100,000 jobs at stake here.