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US Airways taking a big step towards merging with bankrupt American Airlines unions for -- American's pilots flight attendants and mechanics all agreeing.
To plan to create the nation's largest airline but it's not a done deal yet.
What could a mega merger looked like and what would -- mean for ticket prices Kyle Harrington.
Is the founder and partner of -- capital management -- from San Diego I tell -- to see you.
I felt good to see you don't first of all why is it that American Airlines is struggling is it unions is a big executive salaries as -- mismanagement of funds what's the deal.
It's all of the above -- fell you know I mean.
You know it doesn't help when you get rising oil prices to throw it in the mix I think what's happening now -- -- were having healthy conversation we're having.
A healthy narrative.
By discussing consolidation.
And and trying to cut cost to make it.
-- expensive or reasonably inexpensive for us to fly across country or fly across the world so.
The conversations healthy but you gotta be careful do you have.
You have but continental with -- united now you have American Airlines talking with US -- yet dealt the with delta would north.
I don't know -- you've got four major airlines now three years ago you had eight major airlines.
Correct so if you get too small.
Then they can quote their price to the consumer -- -- you want to have healthy competition and have enough airlines out there where there -- there having price battles to keep the costs down it's hard to do that with rising oil prices.
I -- -- tell you something you know I -- I hear your point about the rising oil prices the folks at home sitting don't think oil spoil.
You guys need to manage your budgets better let's look at some of those big executive salaries and I'm sure there's some new stuff muddying the waters there.
-- -- union busting just talking the facts here so here's the deal but people wanna know you can streamline whatever you're talking about -- -- -- bottom line is houses and affect -- ticket prices are already I can't buy a ticket.
Really it's hard and -- -- -- you know four years in advance.
And if you wanna bring them like well that's gonna cost you -- you know really yeah this is gonna mean for extra distance to plug Osi spoke out of the Bentley this -- -- In fact be RFL -- like I think I've said this historically on the shot not on other parts of Fox News.
Is that I think you're gonna see a lot of people staying close to home so they're gonna be driving vs flying.
Because I don't see the prices coming down any time soon as a result of oil prices but I do believe that it is healthy.
To have a discussion about how to cut expenses executive compensation whenever -- -- unions involved they get a little nervous they'll what they'll because.
He got 55 think the unions representing about 55000 employees in this if if -- 5000 in this merger.
He wouldn't we just need to take precedent -- profitability and I think the pressure is on these airlines.
To streamlining consolidate but again we don't want one airline or two airlines standing because then they're gonna.
They're going to -- they're gonna be able to supply prices that we might not be able to afford.
Two of the gloss over -- American Tom Horton says listen give as the shot we can do this on our own team he doesn't seem to want the merger.
You mentioned unions.
As you know America west and US airwaves that they merged in 2005 that was seven years ago but guess what even now Kyle.
The pilots and the flight attendants are still working on the pre merger contracts because they can't figure this thing out so.
And this is where it.
This is where the red tape comes in I mean you gotta cut out any I think union involvement and you really got to streamline.
And work on the income statement but I'd like again -- they'll these -- healthy conversations.
Unfortunately we have rising oil prices so it it muddies the water a little bit.
We've seen this in the banking industry right we saw a major banking mergers take place over the course of the last ten years.
Hopefully we'll see some more helping banks and some more help the airlines.
Post these talks are not saying the merger is mandatory.
I'm saying that the narrative is important.
And we have to see how it shakes out.
I hear what you're telling me -- and let's hope it means better prices for the consumers Kyle.
Harrington always good to see you thanks very much thank you what felt sorry Kyle by the way if this US Airways and American Airlines force.
-- merger happens in this would be just the latest merger.
Reshaping the airline industry over the past few decades here is 95 united bought pan am specific routes from.
The struggling airline for 750.
Million dollars but by 1991.
Pan am declare bankruptcy.
And ceased all operations 2000.
United -- US -- less than a year later American merged with TWA.
And it more recently you comment in this in 2008 delta and northwest merged and you remember this -- guys in 2010 the big.
Continental and united came together and the latest mega.
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