N79969 From , joined Dec 1969, posts, RR:
Reply 6, posted (12 years 5 months 2 weeks 6 days 3 hours ago) and read 4516 times:
I think you might be onto something. Perhaps it is just a coincidence but this announcement was preceded by American's plea to employees to help save the company. AA might have read the tea leaves wrong and predicted that the DoT would block this agreement thus enabling them to continue a bit longer in the status quo. This is speculation though...it is hard to say. I'm sure AA will issue a press release sometime if it disagrees with the DoT decision.
The implementation of this agreement might seriously affect AA revenues.
ConcordeBoy From , joined Dec 1969, posts, RR:
Reply 7, posted (12 years 5 months 2 weeks 6 days 3 hours ago) and read 4523 times:
I'd say that after this alliance cleared the DOJ, it was virtually assured to get final clearance.
There is one thing however... this alliance is sure to have hefty restrictions in Texas, Ohio, and New York. For all we know, the airlines might find them unacceptable and reject it a la AA/BA. Doubt it though
Sllevin From United States of America, joined Jan 2002, 3376 posts, RR: 5
Reply 13, posted (12 years 5 months 2 weeks 6 days 2 hours ago) and read 4443 times:
This could end up being great news for AA if DL drags the CO/NW frequent flyer packages into the toilet with them.
CO and NW elites sure aren't going to be interested in flying in the back of the bus domestically. After all, it's already very hard to get standard awards out of CO/NW -- the tradeoff being free domestic upgrades.
It's also only possible to upgrade Europe on full Y fares (Asia on M fares as well) -- again, the tradeoff is free domestic upgrades.
You yank the upgrades and go with the Delta "we don't want your stinkin non-Y fares anyways" and you'll have a mass exodus of customers to AA, who is the only carrier to have offered (albeit small) improvements to their FF programs this year.
Me, I'm caught in the crossroads. I made the move to NW; already have flown/booked close to 40,000 miles this year already. But now I'm thinking maybe I'll switch back to racking up miles on AA (and holding my PLT status) just in case DL hoses the whole thing.
N79969 From , joined Dec 1969, posts, RR:
Reply 14, posted (12 years 5 months 2 weeks 6 days 2 hours ago) and read 4440 times:
Do you have a link by chance?
I think there is a misunderstanding judging by some posts. This approval was granted by the US Dept. of Transportation (DOT) and not the Justice Department (DOJ). As far as I know, the USDOJ has not blessed this agreement nor has it made public comments to the DOT. Someone correct me if I am wrong.
DeltAirlines From United States of America, joined May 1999, 8946 posts, RR: 11
Reply 15, posted (12 years 5 months 2 weeks 6 days 2 hours ago) and read 4416 times:
I do remember the DOJ giving it the green light in late November, IIRC.
As a DL and CO flyer, I am quite happy at this news. It enables me to get OnePass miles (I think I am going to ditch DL now, with CO/NW having the better program) on my legs to EWR, and it opens up a new range of frequency for me, and better connections (I can now make many Northeastern connections without going to ATL or CVG).
TWFirst From Vatican City, joined Apr 2000, 6346 posts, RR: 51
Reply 16, posted (12 years 5 months 2 weeks 5 days 23 hours ago) and read 4346 times:
WASHINGTON -- The government on Friday approved an alliance between Delta, Northwest and Continental airlines that will allow them to sell seats on each others' flights if they agree to rules aimed at keeping air travel competitive.
Low-fare airlines lobbied against the deal, calling it a virtual merger among the third-, fourth- and fifth-largest U.S. carriers. Eight state attorneys general also opposed the agreement because they said it could stifle competition, raise prices and hurt service.
The agreement, called a code-sharing alliance, allows the airlines to offer more destinations without flying more planes and offer reciprocal perks such as frequent flier miles.
The proposed rules also limit the number of flights the airlines may share and forbid the airlines from agreeing on fares, capacity or changes in routes. They also require the airlines to give up leases on some airport gates which are used less than six times a day.
Regulators, struggling with the decision, delayed the ruling four times since the carriers applied for their approval on Aug. 23. It was approved conditionally on Friday by the transportation and justice departments.
Major airlines, which have lost billions of dollars since the Sept. 11 terrorist attacks in New York and Washington, are looking for ways to better compete with the low-fare airlines.
A code-sharing deal approved in October allowed bankrupt airlines United Airlines and US Airways to share passengers on 192 daily flights.
Bigo747 From , joined Dec 1969, posts, RR:
Reply 20, posted (12 years 5 months 2 weeks 5 days 19 hours ago) and read 4174 times:
-The carriers are prohibited from codesharing on each other's flights where they offer competing nonstop service, such as between hubs. It was not immediately clear how many flights this would affect.
-At their hub airports and at Boston the carriers must, at the airport authority's request, return gates that are used less than six times per day. Some other airports in this provision include Houston, Cincinnati, Detroit and Dallas. This condition, to which the airlines have agreed, was put in place to help low-fare airlines and new entrants gain access to bigger airports.
-Delta can place its code on no more than 650 each of Continental's and Northwest's flights, while Continental and Northwest each may place their codes on no more than 650 Delta flights.
-The carriers cannot offer joint bids to corporate customers and travel agencies unless asked to do so. Some travel organizations feared the three, acting as a group, could offer better deals for corporate travel contracts than could an individual airline.
Ladevale From , joined Dec 1969, posts, RR:
Reply 21, posted (12 years 5 months 2 weeks 5 days 18 hours ago) and read 4147 times:
727lover claims - "While I disagree with this decision, it is nice to see AA out in the cold."
N79969 claims - "The implementation of this agreement might seriously affect AA revenues."
Dear Airliners.net friends, what little perspective have you? Perhaps you need a little history lesson in order to understand how this is eventually going to play out.
In the mid-to late eighties when many of today's international alliances began forming, British Airways was the one European carrier that everyone coveted. But British Airways wasn't interested in forming an alliance of equals.
Neither for that matter was American Airlines. Bob Crandall lobbied against the concept of codesharing arrangements and anti-trust immunity between US and foreign carriers. He thought it would have anti-competitive effects and that over time it would mean that US carriers would end up flying to fewer international destinations. How right he was.
Though BA was not interested in forming an alliance of equals - it was after all carrying on the tradition of colonial Britain - it did show some interest in acquiring a controlling stake in a failing US carrier. US laws, of course, prohibited BA from taking more than a 25% stake. That didn't stop BA, however, from buying a stake in USAir and setting up the terms of its investment so that BA ended up virtually managing USAir's capacity over the Atlantic.
In doing so, BA matched what the flagship carrier of another traditional colonial power, KLM, did when it bailed out another failing US Carrier, Northwest. As we know from what happened, the arrangement between BA and USAir never evolved into a modern international alliance, the one between KLM and Northwest did after the former sold back its equity stake.
While this was all happening, Lufthansa took a more conservative approach. Leery of actually taking a stake in a US carrier, it opted to form a codeshare relationship with United. United may not have been Lufthansa's preferred codeshare partner at the time. There is much to suggest in fact that even today its corporate culture and management style is much more akin to that of AA's and that the two of them would have ended up working better together or that the relationship might have been in the end more equitable. Whatever the case, AA was not very receptive to any airline's overtures at the time. United was and so Lufthansa found a gullible partner in them.
As I said, if everyone had to pick all over again, BA would have been their preferred European partner. The reasons for this are many: The US and Britain are close political allies. Because of that trade relations between the two countries are very favorable. The two countries also share a common language, making commerce between them even more favorable. Even at the time when codeshare relationships were first allowed, LHR was already the most popular European destination of US carriers as judged by the number of US-UK flights there. Open skies agreements between the US and other European countries have done nothing really to change the preeminence of the US's relationship with Britain.
In a strange turn of events, however, the favored belle of the ball would end up without a US partner. After BA terminated its relationship with USAir, for reasons I won't discuss now, there were no attractive or receptive US partners left. BA had no interest in coming to the financial rescue of another US Carrier (e.g., Continental) and it no longer had an interest in working with a US carrier whose corporate culture differed so much from its own (e.g., Delta).
Eventually, Crandall softened his stance toward codeshare relationships. He probably had advance warning that United was going to formalize its codeshare relationship with its various international partners through the Star marketing scheme. Not wanting to be left out, even if he knew that any code-share relationship with the kind of depth that were blessed with anti-trust immunity would eventually limit AA's own expansion opportunities, he eventually approached BA and the two found common ground thanks in large part due to the mutual connection they both had, namely Qantas. Long before Star or oneworld were even a reality, AA had limited codeshare relationships with both Qantas and Singapore. (There is another interesting story here. How is it that Qantas ended up in oneworld and Singapore did not? Why is it that Cathay was actively recruited to join oneworld whereas Singapore, which already had a codeshare relationship with American at the time, was in no polite terms shunned?)
I am telling this story for a reason, of course. History teaches us that despite not jumping on the alliance or codeshare bandwagon like other carriers did in the mid- to late- eighties, AA ended up doing pretty well for itself. There are without a doubt more prestigious carriers in oneworld than there are in Star.
So, if you have been following along, you should have already figured out that much the same scenario is playing itself out today. Except in the domestic arena, it is, of course, not BA that everyone covets and fears. It is Southwest. It is not unforeseen that AA would establish some kind of codeshare relationship with a true low-cost carrier. It would be the most imaginative idea yet. If that is where all the traffic has gone or is going, then, how is a codeshare relationship with a non-LCC going to help you to get it back.
We'll have to wait and see if AA is as daring as I think they can be. In the meantime, what I think we will see is a deeper relationship with an LCC hybrid, Alaska. Now that Northwest and Continental can codeshare with Delta through SLC, Alaska may find greater cause to form an exclusive relationship with American. AA's pilots have already given AA management permission to discuss codeshare arrangements with other airlines. If it is going to happen, we will hear about it very soon.
Whatever the case, don't cry for AA. It is not just history that is on AA's side. The conditions placed on the NW/CO/Delta alliance will stymie the ability of these airlines to hurt AA or UA/US in any significant way. Read them for yourself. They are quite tricky and clever. One wonders if AA's lawyers recommended the provision that 60% of codeshare flights have to go to underserved, small cities as defined by the DOT. Moreover, the provision that NW/CO/Delta cede any underutilized gates just gives the LCC's more incentive to enter markets where Northwest, Delta or Continental are currently dominant. Let the games begin. But remember history always repeats itself.
AA767400 From United States of America, joined Jan 2001, 2416 posts, RR: 27
Reply 23, posted (12 years 5 months 2 weeks 5 days 18 hours ago) and read 4134 times:
Amen! All of a sudden there is a CO/NW/DL codeshare, and everyone
else is gone? Please, I mean come on, this is too much codesharing.
I think CO/NW was enough, but, speaking of codeshares, what is going to happen with the AA/BA codeshare?