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Fallen American Airlines could be next to merge ... with JetBlue?
According to a Forbes blog post, analysts from Morningstar believe that American Airlines "needs to make a big splash" to remain a player in an increasingly competitive market. The post continues:
So, who's the right partner for American? The analysts at Morningstar are looking at JetBlue, especially given the latter's "lighter cost structure." Notes founder of Training the Street and former M&A investment banker Scott Rostan, "Three dominoes have fallen – Delta/Northwest, UAL/Continental and Southwest/AirTran." He sees Alaska, Frontier and JetBlue as likely to make some noise."Once the industry's largest carrier, [American Airlines] is now the third-largest...and any scale advantage it may have garnered is gone," the Morningstar analysts write. "Ironically, AMR is at a substantial disadvantage, given that it steered clear of bankruptcy during the recession," [Basili] Alukos and [Adam] Fleck say, pointing out that American's labor rate is the industry's highest on an equivalent basis.
[photo by Andrew Morrell Photography via Flickr]