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Dick Nicklas
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Ten brands that may disappear in 2013

9:56 AM ET, 10/05/2012 - MarketWatch Databased News

Each year, 24/7 Wall St. identifies 10 important American brands that it predicts will disappear within a year. This year's list reflects the brutally competitive nature of certain industries and the reason companies cannot afford to fall behind in efficiency, innovation or financing.

American Airlines, in 24/7 Wall St.'s view, will disappear in 2013 because of its inefficiency. It was the premier carrier in the United States for almost 30 years -- surviving through periods when most other carriers went bankrupt. However, it lost its critical advantage of scale when Northwest merged with Delta and Continental merged with United . Within two years, American became a midsized carrier.

American’s parent AMR filed for Chapter 11 bankruptcy in Nov. 2011. The airline itself still operates largely as it did prior to the filing, but with some of the advantages the bankruptcy of a parent brings. Labor costs will be cut, along with debt service and lease obligations for airplanes. AMR says it plans to emerge from Chapter 11 as a viable airline. But that will not happen. US Airways (NYSE: LCC) already has made it clear that it wants to buy American’s assets. As soon as the rumors of a potential buyout started in April, some of American’s largest unions said they backed such a plan as a way to protect jobs. Earlier this month, US Airways CEO Doug Parker announced his desire to merge the two airlines. With US Airways probably willing to give AMR’s creditors a good deal to get American’s assets, the potential deal received tremendous support from bondholders and analysts. US Airways has much to gain from this transaction, as its position in the carrier market has been eroded by the mergers of Northwest and Delta and the later combination of United and Continental.

[ 10-05-2012, 07:48: Message edited by: Dick Nicklas ]

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