Sponsor Message:
Civil Aviation Forum
My Starred Topics | Profile | New Topic | Forum Index | Help | Search 
American Attacks DL-JL Venture (Part 2)  
User currently offlineManuCH From Switzerland, joined Jun 2005, 3011 posts, RR: 46
Posted (4 years 10 months 5 days 2 hours ago) and read 10176 times:
AIRLINERS.NET CREW
HEAD MODERATOR

Please continue discussion in this thread. The link to the previous part can be found here:

American Attacks DL-JL Venture (by NYCAdvantage Nov 8 2009 in Civil Aviation)


Never trust a statistic you didn't fake yourself
230 replies: All unread, showing first 25:
 
User currently offlineAirNz From , joined Dec 1969, posts, RR:
Reply 1, posted (4 years 10 months 5 days 1 hour ago) and read 10170 times:



Quoting WorldTraveler (Reply 265):
as a problem is because $50 or even $20M is not free market access.

Sorry, but this is getting more and more bizarre! You are now claiming that even if slots were $50 it still isn't free market access! I'm sorry, but it's fundamental and self-explanatory that Free Market access means ACCESS to it is available to anyone......not that the cost of going to it is free. You seemingly don't even know what the phrase means despite repeatedly arguing it as your myoptic-focused agenda. Please explain to me what free market access actually means to you.


User currently offlineLAXtoATL From United States of America, joined Oct 2009, 1594 posts, RR: 2
Reply 2, posted (4 years 10 months 5 days 1 hour ago) and read 10135 times:

Quoting AirNz (Reply 1):
I'm sorry, but it's fundamental and self-explanatory that Free Market access means ACCESS to it is available to anyone......not that the cost of going to it is free. You seemingly don't even know what the phrase means

Sorry my friend, but you do not understand what Free Market Access means. The key word in your sentence is "anyone". Anyone can not obtain slots simply because they want them or because they have the cash. Because any transactions involving LHR slots are private party transactions (not open market), if the airlines holding the slots do not want to provide them to another airline that will be offering competiting service they do have to sell to that airline regardless of the cash the airline is offering. There is no guarantee that slots can be purchased and there is market price.

I do not know how well you are familiar with the ATL airport and Southwest's desire to start operations there (but the Americans here will get the analogy). Based on your argument that anybody can obtain slots at LHR for the price, would mean that SW not only has been able but actually has been operating at ATL for the past decade. Although ATL is not slot restricted, it is gate restricted. DL controls a majority of the gates at the airport, but they control more than they actually need (utilization of gates could be higher). So, SW just offers DL money (which they have more than enough to pay above market rates - rates which are established by the city of Atlanta) to sublease the gates and they have access! Simple. But that is not reality in ATL (just like it is at LHR), DL is never going to provide access to SW regardless of the fact that they could make a profit by subletting gate space they dont need.

No matter what your personal feelings are about particular airlines, somethings are simply facts. You might believe that AA/BA should have ATI regardless of the situation at LHR and that is fair, but to argue that LHR is an airport with open access is just NOT TRUE. Although all three airports have different restrictions, the unarguable truth is that LHR, NRT, and ATL do not have open acess. And this benefits the incumbant airlines and it is why regulators look at these situations. What's even more odd is there are some people on here who are arguing that LHR isn't slot restricted because it is similar to NRT which is slot restricted (thats the same argument the kid in school uses when he gets in trouble - "well, Billy did it too") - that doesn't make LHR not slot restricted it makes both airports slot restricted!

(Disclaimer: Before someone tries to correct me on ATL, I am aware that any airline can obtain access to gate use at ATL (which does make it different from LHR & NRT). I do know there is a law that requires the airport to provide shared gate access for any airline which wishes to operate there. However, it does not quarantee a sufficient amount of gate space for an airline to operate enough flights to make it a financially viable operation. (SW cannot effeciently operate a handful of daily flights and be competitive against DL)

[Edited 2009-11-17 12:46:41]

[Edited 2009-11-17 12:48:29]

User currently offlineSbworcs From United Kingdom, joined Oct 2005, 844 posts, RR: 5
Reply 3, posted (4 years 10 months 5 days 1 hour ago) and read 10125 times:

I posted this at the bottom of the last thread but am repeating here as I would like some response.

Quoting WorldTraveler (Reply 265):
Since nothing is set in stone, including when HND will be useable for TPAC flights, it is VERY premature to be arguing that there is no reasonable access for new TPAC flights or carriers.

And the demand for intercontinental flights from NRT will fall because of HND's opening.

Yet you have used it several times as an argument FOR your case? Surely if VERY premature to argue that there is no reasonable access the counter is also true?

Quoting WorldTraveler (Reply 265):
$20M is not free market access.

It is market access at a price that the market has set - The free market working as designed



The best way forwards is upwards!
User currently offlineJr From United States of America, joined May 1999, 968 posts, RR: 6
Reply 4, posted (4 years 10 months 5 days ago) and read 10096 times:

Some general comments...

Free market as stated is primarily the access to the market is free to anyone. Does not necessarily mean that anyone and everyone can access everything in the market. Welcome to capitalism, money talks and sometimes bs walks. You need the money to buy, and you need the business model to sustain use of what you bought, and if you can generate consistent revenue thereafter, you are not going to sell to a new entrant 10 years down the line who didn't have the resources or wanted to take the risk you did today.

Free market is not necessarily a fair market. Capitalism does favor those that have survived the risks to start up and build success. Incumbents build their presence with measured risks along the way, and somewhere they had to start at ground zero, no matter how the market was at that point.

The strong survive, and some times much coveted "slots" do become available, and when they do open up, the access to them should be free and unrestricted . Just because a new hit movie is free for anyone to purchase tickets to doesn't guarantee you a "slot" or ticket to the show. Are you going to accuse the movie producers of defying free market principles because they scored a big hit in the market?

While I agree that a free market does invariably builds monopolistic structures that hurt consumer interests, (and it is absolutely fair to address competition and lay ground rules for anti predatory behavior in a free market) the resources in a market can't be simply taken for granted and thrown around.

Free markets and slot rights are more complicated than a simple discussion thread on a forum. AA can throw as many rocks as they want to. But in the end JAL is free to make its decision the way it wants to.



I've flown on 9V-SPK.
User currently onlineLAXdude1023 From India, joined Sep 2006, 7603 posts, RR: 24
Reply 5, posted (4 years 10 months 5 days ago) and read 10073 times:



Quoting LAXtoATL (Reply 2):
I do not know how well you are familiar with the ATL airport and Southwest's desire to start operations there (but the Americans here will get the analogy). Based on your argument that anybody can obtain slots at LHR for the price, would mean that SW not only has been able but actually has been operating at ATL for the past decade. Although ATL is not slot restricted, it is gate restricted. DL controls a majority of the gates at the airport, but they control more than they actually need (utilization of gates could be higher). So, SW just offers DL money (which they have more than enough to pay above market rates - rates which are established by the city of Atlanta) to sublease the gates and they have access! Simple. But that is not reality in ATL (just like it is at LHR), DL is never going to provide access to SW regardless of the fact that they could make a profit by subletting gate space they dont need.

So...DL should be forced to give up gates to Southwest? Those arguing that AA and BA should not have ATI could argue the same thing under the same principles.



Stewed...Lewd...Crude...Irreverent...Belligerent
User currently offlineLAXtoATL From United States of America, joined Oct 2009, 1594 posts, RR: 2
Reply 6, posted (4 years 10 months 4 days 23 hours ago) and read 10037 times:



Quoting LAXdude1023 (Reply 5):
So...DL should be forced to give up gates to Southwest? Those arguing that AA and BA should not have ATI could argue the same thing under the same principles.

Yes, the situations are very similiar from a competitive / access standpoint. That is why I brought it up for an analogy. However, there is no issue of ATI in the ATL situation. In ATL, because the airport is controlled by the city, in theory the local gov't has the ability to strip DL of gates (which are on short term lease and not permanent grant) and provide entrance to SW, however given the coziness of DL and the city of Atlanta chances of that happening are slim and none.


In conclusion: No amount of money will get DL to sublease gates at ATL to SW, just like no amount of money will get AA to sell LHR slots to DL or BA to sell LHR slots to VS. THERE IS NO MARKET PRICE!


User currently offlineJetlanta From United States of America, joined Jul 2001, 3297 posts, RR: 35
Reply 7, posted (4 years 10 months 4 days 23 hours ago) and read 10015 times:



Quoting LAXtoATL (Reply 2):
(Disclaimer: Before someone tries to correct me on ATL, I am aware that any airline can obtain access to gate use at ATL (which does make it different from LHR & NRT). I do know there is a law that requires the airport to provide shared gate access for any airline which wishes to operate there. However, it does not quarantee a sufficient amount of gate space for an airline to operate enough flights to make it a financially viable operation. (SW cannot effeciently operate a handful of daily flights and be competitive against DL)

I get where you are going here, but WN can indeed obtain access to ATL. The airport has been offering them options for quite a while. The fact that WN cannot operate efficiently with only a handful of flights is true, and an indictment of Southwest, not ATL.


User currently onlineMAH4546 From Sweden, joined Jan 2001, 32781 posts, RR: 72
Reply 8, posted (4 years 10 months 4 days 23 hours ago) and read 10015 times:



Quoting LAXtoATL (Reply 6):

In conclusion: No amount of money will get DL to sublease gates at ATL to SW, just like no amount of money will get AA to sell LHR slots to DL or BA to sell LHR slots to VS. THERE IS NO MARKET PRICE!

There is no market price if AA is the only seller and DL is the only buyer.

Guess what? That's not the case! In fact, once again, for the nth time I will remind people that Air France is using two daily ATRs on LHR-CDG on slots formerly used to fly LHR-USA in the DL/AF/NW alliance.

DL/AF has the slots they need to add more Heathrow flights and has made the choice not to.



a.
User currently offlineCubsrule From United States of America, joined May 2004, 23010 posts, RR: 20
Reply 9, posted (4 years 10 months 4 days 22 hours ago) and read 9965 times:



Quoting LAXtoATL (Reply 2):
Because any transactions involving LHR slots are private party transactions (not open market), if the airlines holding the slots do not want to provide them to another airline that will be offering competiting service they do have to sell to that airline regardless of the cash the airline is offering. There is no guarantee that slots can be purchased and there is market price.

I guess I'm not clear on what you advocate. If BA and AA relinquish slots, there still will not be open market slot transactions. Does that means that BA and AA should never get ATI? And, continuing down that path, it seems that ATI should never be approved because there is not an open market for slots at any European or Asian airport.

Where does this stop?

Quoting LAXtoATL (Reply 6):
In ATL, because the airport is controlled by the city, in theory the local gov't has the ability to strip DL of gates (which are on short term lease and not permanent grant)

...within the bounds of the leases. They can't just strip the gates because they want to.



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlineLAXtoATL From United States of America, joined Oct 2009, 1594 posts, RR: 2
Reply 10, posted (4 years 10 months 4 days 22 hours ago) and read 9949 times:



Quoting Jetlanta (Reply 7):
I get where you are going here, but WN can indeed obtain access to ATL. The airport has been offering them options for quite a while. The fact that WN cannot operate efficiently with only a handful of flights is true, and an indictment of Southwest, not ATL.

The point is SW definitely wants to have an operation at ATL, but they cannot get the necessary gates to operate the number of flights they would like no matter how much money they have to offer (and money is no object to them).

As to your indictment of SW: SW nor any airline is going to be successful operating a handful of flights from ATL without a hub on the other end. DL would run them out with the quickness, remember when JetBlue tried ATL-LAX (or was it LGB, it was so short lived I cant even remember which airport it was). FL is successful because of the scope of their operation, DL cannot bully them, and every other airline has a hub on the other end of the route.

Quoting MAH4546 (Reply 8):
There is no market price if AA is the only seller and DL is the only buyer.

This statement alone means there is no open market and no market price for those slots.
By definition if there is an open market and market driven price - any buyer can offer the market price to the seller and obtain the good. That is the deifinition of a free and open market. In a free market, any buyer has the EXACT same opportunity to purchase as any other buyer. The fact that an airline has to find an ally to purchase from in and of itself says there is no open market. At least in the ATL situation, in theory there is an open market in that any airline at any time can gain access, in practice however it too is not open because an airline can not obtain sufficient access to be competitive.

Quoting MAH4546 (Reply 8):
DL/AF has the slots they need to add more Heathrow flights and has made the choice not to.

Your thinking is so narrow minded. Could US, AA, BA, VS, etc get the same access to these AF slots as you are suggesting DL has? Remember when you are discussing economic concepts like free markets the world is bigger than AA & DL.


User currently onlineMAH4546 From Sweden, joined Jan 2001, 32781 posts, RR: 72
Reply 11, posted (4 years 10 months 4 days 22 hours ago) and read 9941 times:

Quoting LAXtoATL (Reply 10):

Your thinking is so narrow minded. Could US, AA, BA, VS, etc get the same access to these AF slots as you are suggesting DL has?

Virgin Atlantic has so many slots it does not need right now, that they are being leased out to Aer Lingus.

bmi has put some of its slots on sale, and nobody has made an offer, and bmi recently lowered the value of the slots.

There are more than enough slots to go around.

AF could sell those slots to another carrier if it chose to, but AF/KL, who pool their LHR slots to share with DL since they share profits on LHR-U.S. flights, obviously believes there is long-term value in them. The beauty of the free market which you absolutely fail to grasp.

[Edited 2009-11-17 15:54:25]


a.
User currently offlineLAXtoATL From United States of America, joined Oct 2009, 1594 posts, RR: 2
Reply 12, posted (4 years 10 months 4 days 22 hours ago) and read 9939 times:



Quoting Cubsrule (Reply 9):
I guess I'm not clear on what you advocate. If BA and AA relinquish slots, there still will not be open market slot transactions. Does that means that BA and AA should never get ATI? And, continuing down that path, it seems that ATI should never be approved because there is not an open market for slots at any European or Asian airport.

Where does this stop?

Once again I am not arguing my position of LHR in any context as it relates to ATI. I am simply stating that access to LHR is severly restricted to new or increased access - that statement is stand alone and does not reflect any situations at other airports. The argument from others as it pertains to ATI and the relinquishing of LHR slots is that those slots would truly be available on the open market. (for those who do not seem to understand what an open market actually is)

As I have stated to you previously, my personal take on AA/BA ATI is to allow it with the a few carveouts and I have no position on the slots one way or the other.

Quoting Cubsrule (Reply 9):
...within the bounds of the leases. They can't just strip the gates because they want to.

Did you really need to tell me this? Do you think I don't understand how leases work? But as I am sure you are aware that lease was just renewed, and DL's gates could have been reduced but as I stated from a practical standpoint DL nor the City of Atlanta will be giving any gates to SW at ATL unless DL de-hubs ATL (which ain't happenin).


User currently offlineLAXtoATL From United States of America, joined Oct 2009, 1594 posts, RR: 2
Reply 13, posted (4 years 10 months 4 days 21 hours ago) and read 9917 times:



Quoting MAH4546 (Reply 11):
AF could sell those slots to another carrier if it choose to. The beauty of the free market.

You are still trying to substitute your opinion for what an actual free market is. We all know that AF COULD sell their slots to BA (who by the way is TRYING to obtain slots as we speak), but we know they WILL NEVER sell their slots to BA. Since you already said those same AF slots are available to DL (an ally not a competitor by the way) if DL wanted them, you cannot say that is a free market! In this case DL would have access to something BA doesn't, I'm sorry but no matter how you twist it there is no free market for LHR slots! As long as certain airlines have access that other airlines do not.


User currently offlineCubsrule From United States of America, joined May 2004, 23010 posts, RR: 20
Reply 14, posted (4 years 10 months 4 days 21 hours ago) and read 9893 times:



Quoting LAXtoATL (Reply 12):
Once again I am not arguing my position of LHR in any context as it relates to ATI. I am simply stating that access to LHR is severly restricted to new or increased access - that statement is stand alone and does not reflect any situations at other airports.

But you don't know that. It could be that an open market would have the same results. There's no way to know. It's all hypothetical.

Quoting LAXtoATL (Reply 12):
and DL's gates could have been reduced

Unless you've seen the leases, I'm not sure you can assert this.



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlineLAXtoATL From United States of America, joined Oct 2009, 1594 posts, RR: 2
Reply 15, posted (4 years 10 months 4 days 20 hours ago) and read 9872 times:



Quoting Cubsrule (Reply 14):
But you don't know that. It could be that an open market would have the same results. There's no way to know. It's all hypothetical.

Once agin you aren't reading what I writing. Whether or not an open market would change the dynamics or not is irrelevant to what I am saying - LHR is not an open market right NOW and access IS restricted. As I mentioned in my previous post if you had read - my comments on LHR are stand alone. You keep trying to qualify my statements and compare it to something else. Other airports are irrelevant to anything I have asserted as well as this new hypothetical of what LHR would look like in an open market. I am not arguing a point of view of how LHR should operate simplying stating the facts of the current situation.

Quoting Cubsrule (Reply 14):
Unless you've seen the leases, I'm not sure you can assert this.

This is how I know you just want to say something in rebuttal without even thinking through your statements. I have seen the leases, but that is irrelevant. When I lease expires, the terms of said lease are no longer relevent! There is no lease that says when this lease expires you must sign a new lease with me for the same number of gates. So when they signed the new lease gates could have been reduced (or added for that matter) and I do not have to see a lease to know that, hell the city could have opted not to sign a new lease with Delta and take all their gates back. FYI, the city did include a utilization clause in the new lease (not that I think they would actually enforce it but it is in there).


User currently offlineCubsrule From United States of America, joined May 2004, 23010 posts, RR: 20
Reply 16, posted (4 years 10 months 4 days 20 hours ago) and read 9834 times:



Quoting LAXtoATL (Reply 15):
There is no lease that says when this lease expires you must sign a new lease with me for the same number of gates.

Leases can have renewals that self-execute (that may not be the right term of art; I don't do property law) with price to be determined at the time of renewal, effectively limiting renewal negotiations to price. There's no legal reason that gate lease renewals could not be set up like that and, in fact, it would seemingly benefit both the airport and the airlines to negotiate on price only at some points in the life cycle of the lease.

If these leases don't do that, it's a moot point, but it's certainly possible.

Quoting LAXtoATL (Reply 15):
LHR is not an open market right NOW and access IS restricted.

Maybe it's a bit of an esoteric argument, but I'm just wondering where it gets us if a restricted access market behaves exactly as an open market would. It is restricted access, and in that sense your assertion would be correct, but the practical effect of that fact is nothing.



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlineCommavia From United States of America, joined Apr 2005, 11629 posts, RR: 61
Reply 17, posted (4 years 10 months 4 days 19 hours ago) and read 9779 times:

Two relevant articles from the world outside of A.net ...

On the slot situation at Heathrow

As the article clearly indicates, there are tons of slots available at Heathrow for the right price (incidentally, a price substantially below where it was 18 months ago) and yet, still, there are no takers.

On a hypothetical TPG/AMR deal for JAL

All I can say is that a $1B number is well above what I was anticipating as an offer from AMR and/or TPG. Hypothetically, if this were to actually go as a real proposal, coupled with AMR's previous discussion, that could be around $1.3B for JAL. Interesting...


User currently offlineLDVAviation From United States of America, joined Dec 2008, 1068 posts, RR: 4
Reply 18, posted (4 years 10 months 4 days 18 hours ago) and read 9720 times:



Quoting Commavia (Reply 17):
All I can say is that a $1B number is well above what I was anticipating as an offer from AMR and/or TPG. Hypothetically, if this were to actually go as a real proposal, coupled with AMR's previous discussion, that could be around $1.3B for JAL. Interesting...

That's a lot of money, enough to scare off Delta. It helps to have friend's in Forth Worth.

Now, here's the important question: What were Tom Horton (AA CFO) and the principals at TPG taking about before the conversation turned to JAL?


User currently offlineAaway From United States of America, joined Oct 2003, 1523 posts, RR: 14
Reply 19, posted (4 years 10 months 4 days 16 hours ago) and read 9677 times:

Quoting Commavia (Reply 17):
On a hypothetical TPG/AMR deal for JAL

All I can say is that a $1B number is well above what I was anticipating as an offer from AMR and/or TPG. Hypothetically, if this were to actually go as a real proposal, coupled with AMR's previous discussion, that could be around $1.3B for JAL. Interesting...



Quoting LDVAviation (Reply 18):
That's a lot of money, enough to scare off Delta...

Looks like DL/Skyteam are responding:

Delta, SkyTeam Ready $1 Billion JAL Offer Rivaling American Bid Share Business
By Chris Cooper

Nov. 18 (Bloomberg) -- Delta Air Lines Inc. and SkyTeam alliance partners have prepared a $1 billion offer to Japan Airlines Corp. to lure the carrier from an alliance with American Airlines, according to a plan handed to reporters at a Delta event in Tokyo today.


Whomever shows the most restraint and doesn't react to the 'head fake' comes out ahead in the long run.

[Edited 2009-11-17 21:24:34 by aaway]


With a choice between changing one's mind & proving there's no need to do so, most everyone gets busy on the proof.
User currently offlineDeltAirlines From United States of America, joined May 1999, 8902 posts, RR: 12
Reply 20, posted (4 years 10 months 4 days 16 hours ago) and read 9666 times:



Quoting LAXtoATL (Reply 10):
The point is SW definitely wants to have an operation at ATL, but they cannot get the necessary gates to operate the number of flights they would like no matter how much money they have to offer (and money is no object to them).

Completely wrong and not analogous to this topic at all. Southwest could enter Atlanta - there are plenty of city-owned gates available throughout the day, notably on Concourse E. Thing is, there are times where E is filled (primarily 4-7 p.m.; and Delta is making use of all its gates on T-D at those times...) and they're not interested in paying the (much higher) rent for these gates. If Southwest truly wanted to be in Atlanta no matter the cost, they could be. Likewise, they could most likely sublease a gate from someone not named Delta or AirTran and pay for it - the cost is probably too high to them to run a profitable operation.

Quoting Aaway (Reply 19):

Whomever shows the most restraint and doesn't react to the 'head fake' comes out ahead in the long run.

Can't say I disagree. The Asian market is just getting caught up to what the US has had for several decades and the European market has had for the past decade - significant LCC presence. Add in the fact that Haneda might open up to long-haul traffic again and we could be looking at a paradigm shift in air travel out of Tokyo by 2020.


User currently offlineDeltaL1011man From United States of America, joined Sep 2005, 9421 posts, RR: 14
Reply 21, posted (4 years 10 months 4 days 16 hours ago) and read 9645 times:

Quoting LDVAviation (Reply 18):
That's a lot of money, enough to scare off Delta. It helps to have friend's in Forth Worth.

Ahhh not so fast. http://www.bloomberg.com/apps/news?p...hyTlRG7k&pos=4

What worries me about this, AA(Mostly TPG) is putting up 1B. Skyteam is putting up 1B, It must be nice for someone to do your dirty work for you. Delta needs to go out and find a TPG of there own, or make JL believe it was TPG who brought RW into Midwest and Delta was against it.      

Anyways, What a waste of money by both(all) airlines/groups. Why don't they just go out back and set 1B on fire and save the grade A.  

[Edited 2009-11-17 21:54:32 by deltaL1011man]


yep.
User currently offlineOP3000 From United States of America, joined Jun 2009, 1764 posts, RR: 2
Reply 22, posted (4 years 10 months 4 days 15 hours ago) and read 9634 times:

Haven't seen it posted on here - DL is said to offer a US $1 billion package to JL:

http://www.bloomberg.com/apps/news?pid=20601087&sid=a2XmhyTlRG7k&pos=6

$500 million in share purchases (by DL and/or other SkyTeam partners), $300 million in sales guarantees for lost revenue from dropping oneworld, and $200 million in financing.

Whereas AMR/TPG are said to be willing to buy $300 worth in shares.

Lets see if AA is willing to go to the mat on this one.


User currently offlineLDVAviation From United States of America, joined Dec 2008, 1068 posts, RR: 4
Reply 23, posted (4 years 10 months 4 days 15 hours ago) and read 9616 times:



Quoting DeltaL1011man (Reply 21):
Ahhh not so fast. http://www.bloomberg.com/apps/news?p...hyTlRG7k&pos=4

What worries me about this, AA(Mostly TPG) is putting up 1B. Skyteam is putting up 1B, It must be nice for someone to do your dirty work for you. Delta needs to go out and find a TPG of there own, or make JL believe it was TPG who brought RW into Midwest and Delta was against it.      

Anyways, What a waste of money by both(all) airlines/groups. Why don't they just go out back and set 1B on fire and save the grade A.  

Delta is not putting up 1 Billion dollars.

Delta's proposed investment is $700 million. That's $500 million in an equity investment and $200 million in an asset-backed investment.

The 1 Billion number comes from adding $300 million in guarantees for any sales JAL loses as a result of leaving oneworld and $20 million to cover the costs/penalties for leaving oneworld.

So, comparing apples to apples, this is how the two offers compare:

AA/TPG

$1 Billion in an equity investment (TPG private placement)
$300 million in an equity investment (AA cash)

Total = $1.3 Billion


Delta

$500 million in an equity investment (Delta and Skyteam partners)
$200 million in an asset-backed investment. (The assets would be JAL's, I presume)

Total = $700 million

If I were evaluating both proposals, the total value of the AA proposal would be something like $1.6 billion, the extra $300 million coming from Delta's own estimation of oneworld sales. By comparison, the total value of the Delta deal would be something less than the $700, because $200 million of it is really a loan secured by JAL's own assets.


User currently offlineLDVAviation From United States of America, joined Dec 2008, 1068 posts, RR: 4
Reply 24, posted (4 years 10 months 4 days 15 hours ago) and read 9612 times:



Quoting Aaway (Reply 19):
Looks like DL/Skyteam are responding:

Delta, SkyTeam Ready $1 Billion JAL Offer Rivaling American Bid Share Business
By Chris Cooper

Nov. 18 (Bloomberg) -- Delta Air Lines Inc. and SkyTeam alliance partners have prepared a $1 billion offer to Japan Airlines Corp. to lure the carrier from an alliance with American Airlines, according to a plan handed to reporters at a Delta event in Tokyo today.

Whomever shows the most restraint and doesn't react to the 'head fake' comes out ahead in the long run.

The smart play already goes to AA. I have to think Delta was completely caught by surprise with AA's bringing TPG into this.

The smartest move Arpey made a couple of years ago was to lure Tom Horton back to AA. He's been working his magic on AA's balance sheet for a couple of years. It was his idea to buy more 737's from Boeing with AA's improved credit and then once on property to borrow against them for increased liquidity. Now, he called some buddies and came up with $1 Billion dollars of non-AA money to make this deal possible.

Tom Horton is a financial genius.


25 Byrdluvs747 : I would not be surprised if AA has another investor waiting in ambush should DL try to bid further.
26 Post contains links OP3000 : AF CEO confirms they are working with DL on a JL bid, as is CZ. No mention of KE. http://bloomberg.com/apps/news?pid=20601087&sid=aTLx8Lj4twZ4&pos=7 A
27 Post contains links NYCAdvantage : So JL may have only enough cash to fund ten more days of operation, could be allowed to go bankrupt if a rescue package does not emerge quickly. and p
28 DeltaL1011man : hang on. I didn't see anything that said AA and TPG would go with 1.3B. I saw "AA has said" But I see DL's Pres/CFO saying it will be 1B and I see TP
29 Post contains links NYCAdvantage : At least the NYT is reporting,that after DL and its alliance partners offered $1 billion in aid to Japan Airlines on Wednesday, a proposal that AA qu
30 Post contains links MAH4546 : Qantas, Cathay and British Airways are all likely to have some role. http://www.bloomberg.com/apps/news?pid=20601080&sid=abxM_ZSkf9PY Qantas has alre
31 United1 : I agree with you that if all DL does is match AAs offer JL is going to stay right where they are on Oneworld. DL is going to have to come up with an
32 Incitatus : The perception that this is no-lose deal for DL is starting to fade - DL would win by either getting JL or getting OW to plomp a bundle of cash into
33 OA412 : There's no guarantee of that. Throwing money at JL (whether it be from DL or AA) is no guarantee that they will significantly revamp the way in which
34 MAH4546 : Exactly. Not sure why the sarcastic face. That is the reason, and I don't blame Delta for doing it. It's the same reason AA is fighting to keep JAL,
35 DeltaL1011man : WT that you? Sounds just like him.
36 OA412 : No I never said that AA can't protect itself and I certainly have no problem with them doing so. I just disagree with the notion that AA/JL will cert
37 MAH4546 : I actually totally forgot about UA/CO/NH, but pending JAL's ability to regain health, I'd still give AA/JL the edge. I'd also expect to see a combine
38 United1 : A combined AA/JL would be slightly larger then UA/CO/NH however both would fairly easily dwarf DL on its own....there is a reason why DL is pushing s
39 DeltaL1011man : Seeing that AA has not came out with an offer, why wouldn't DL wait? So far we have He said she said for an AA offer and DL just put there (first) on
40 MAH4546 : "He said, she said," is irrelevant. AMR/TPG is going to officially best DAL's offer, so the ball will soon be back in Delta's court.[Edited 2009-11-1
41 NYCAdvantage : Agreed, But there is something that bother me here, as I digested the offer that DL laid on the table and the answer that AA put immediately, somethi
42 PIEAvantiP180 : You guys are forgeting the big picture. Because JAL stock has taking a dive in the last couple of days thair market cap is only now 3B dollars. Under
43 NYCAdvantage : Yes, but remember the money offered is a package, Like SkyTeam alliance partners offered as much as $1 billion in incentives SkyTeam airlines may inv
44 Jfk777 : Japan isn't the BIG DOG in Asia it was at the time of Pan AM. While Japan is stil big there are other equally BIG DOGs in Asia today. Many of today's
45 Cubsrule : In a larger sense that's true, but with respect to air travel demand to and from the United States specifically, Japan is still very much the big dog
46 MAH4546 : But the beauty of it all is that we are at 1.3B, and only about 24% of it is AA's money. Getting TPG involved was genius on AA's part.
47 NYCAdvantage : You are right, What I said was an observation of what you said before, and how things are unfolding, that in reality they have to be careful how they
48 Panamair : Question to all that I haven't seen addressed: what is TPG going to get out of this for the US$1B it supposedly is willing to put down? TPG is not stu
49 Post contains links NYCAdvantage : AA says offer for JL is at advanced Stage..... http://www.bloomberg.com/apps/news?pid=20601101&sid=acr56SzTeS0M
50 OA412 : Agreed. Obviously TPG is not a charity (neither of course are the airlines involved) and I assume that they expect a decent ROI. So like you say, wha
51 OP3000 : " target=_blank>http://www.bloomberg.com/apps/news?p...TeS0M From the article, the highest bid is apparently now up to $1.47B: People familiar with t
52 Post contains links NYCAdvantage : well the way this is going up, I wonder how much more will SkyTeam will up their offer now that R. Anderson said that Sky Team alliance of global car
53 WorldTraveler : Quoting Commavia (Reply 17): As the article clearly indicates, there are tons of slots available at Heathrow for the right price (incidentally, a pric
54 LDVAviation : Oh, we've noted them all right. Did you? According to AA: JAL generates $500 million annually from its membership in oneworld. AA estimates that a jo
55 Jetlanta : I don't care whose numbers any of these are, they are simply not believable. The idea that an AA/JL partnership is realistically capable of generatin
56 United1 : Why is it preposterous? I'm not saying that it isn't but what facts do you use to come to your conclusion?
57 Jetlanta : The primary reason airlines partner is to maximize revenue. They do this by adding incremental traffic to their own network. The carrier that can pro
58 WorldTraveler : extraordinarily well put, Jetlanta. The data is overwhelmingly there that JAL has the opportunity to make a very significant decision that will make o
59 LAXtoATL : I too am of the belief that AA/BA will/should be approved with carveouts. However, based on my own criteria I thought those markets should be (MIA-LH
60 NYCAdvantage : AA brought them as an Investor, All AA may get here is what they want, first a guarantee that if TPG gets the deal done, JL stays in Oneworld, and se
61 Jetlanta : And if you want to know why the oneworld partners don't care to invest (even if they cold afford it), see my previous point:
62 NYCAdvantage : A balance view of the situation from me is, That It is amazing that JL still is a partner of Oneworld, They are happy with AA and that is it. I guess
63 Post contains links MasseyBrown : This thread is fun to read, but it's impossible for outsiders like me to compare with any precision the two proposals based on available facts. The ne
64 NYCAdvantage : From a business view I can say, If I was running JL, and I was starting from Zero, I would be easy to pick DL's SkyTeam, they show me more interest a
65 Jetlanta : Yeah, I think that is exactly the point. The cash & investment value to JAL is only part of the equation, and certainly a one time gain. I think AA's
66 Post contains links Cjpark : http://www.atimes.com/atimes/Japan/KK20Dh01.html Here is a link to a article that details the Japanese Govt dilemma concerning JALs problem.
67 WorldTraveler : AA clearly is bringing TPG in BECAUSE there is a fear AA can't do the deal on their own and the oneworld airlines are not interesting in helping out.
68 LAXtoATL : I still don't follow your logic. With so many competitors in the NYC-LHR market, how can AA/BA manipulate the market? There is no way they could lowe
69 WorldTraveler : A few extra AA or BA flights can do lots of damage to the relatively few number of extra seats offered by other carriers, esp. to carriers that might
70 MAH4546 : Again, there is a third carrier on the MIA-MAD route starting in March: Air Europa.
71 LAXtoATL : I still don't understand your logic. First of all, with all the flights currenly operated between NYC-LHR when exactly would AA/BA be offering these
72 LAXtoATL : You have mentioned this before. It really doesn't change my personal opinion on whether the route should be carved out, however I believe it will mak
73 Commavia : I guess what confuses me is why the DoT should impose carve-outs on AA and BA just because, in a few markets, they're the only airlines flying nonsto
74 NYCAdvantage : DL can bring all the cash with Skyteam and raise the price, by doing that they may even get TPG blown out of the water, But my question to you is how
75 Jfk777 : JAL needs to hire an expatriot CEO like Rod Eddington or Bob Crandall who has no fiefdom to answer to or political allegance. A senior airline manager
76 LAXtoATL : They should! And as far as I know it is carved out. If I am mistaken on this fact... My opinion wouldn't change that these type of routes should be e
77 WorldTraveler : geographically, there are many connecting options for MIA-MAD over hubs in the US and Europe. I don't know the percentage of traffic that is carried
78 NYCAdvantage : Agreed. Ok, But there are two things here that need to be address, Management still there and they claim to be the one making the decision, I know it
79 LAXtoATL : That is the entire point of carveouts in ATI. Carveouts are used to preserve competition. If the market can sustain two and only two competitors, the
80 DeltaL1011man : Here is the best part of this thread. Everyone (sav WT,Me and Jet) seem to think AA has got DL on its knees because they got TPG. 1) Like WT said, TP
81 LAXtoATL : Although I have not voiced my opinion on TPG's involvement (mainly because I don't know a lot about TPG), but I am of like mind as you on the topic.
82 NYCAdvantage : This is a quote from R. Anderson, "He said neither Delta nor its SkyTeam partners are interested in a board seat or management representation at JAL.
83 MAH4546 : And the problem with that is...? Basically, TPG gets to fix the mess that is JAL, take the big risk, AA has some help and minimal investment, and JL
84 Panamair : But it could lessen the chances of success of a TPG/AA bid because this would mean JAL (and the government) having to give up some amount of control
85 Commavia : Wait - I'm confused - so if JAL were to sell a stake to AMR or Delta, that wouldn't be giving some control to a foreign entity? What country are AMR
86 LAXdude1023 : I dont recall reading that. Do you have a link?
87 WA707atMSP : It was mentioned in a Wall Street Journal article within the last two weeks. I'm a member of the "pro AA" faction here, but sadly, I've resigned myse
88 AAExecPlat : This whole process is getting a bit silly. For the life of me, I can't figure out why anyone would want to throw 1.3b at JAL, especially if there's no
89 LAXtoATL : Interesting that you bring this up. I read an article (I think Friday) that quoted a member of the Japanese gov't saying they had not received any pr
90 WA707atMSP : Japanese approval of a DL/JAL alliance is pretty much a given. US approval, however, will be a real challenge. The US government has no interest in w
91 LAXdude1023 : I realize its less than ideal, but they need to be knocking on China Easterns door right now and kissing their a** to join OneWorld. Reguardless, the
92 Luckyone : Unless I'm mistaken it's the DOT that approves these deals, not the DOJ. If I am not mistaken then I don't know why people get so hung up on the DOJ.
93 LAXtoATL : The element you are leaving out is Open Skies. The Japanese and US are already discussing this. Unless you think the Japanese gov't is stupid, there
94 LAXtoATL : Interesting idea. This idea was proposed by a AA FF who prefers connecting thru HKG anyway. Could someone with Operational expertise detail the feasi
95 Cubsrule : DoT approves ATI. People are getting hung up on it because of the assumption that the Obama DoT will be more receptive to Justice's arguments than th
96 MasseyBrown : TPG likes to invest in distressed companies; they consider themselves experts at turn-arounds, making capital gains as the equity of the company rise
97 PIEAvantiP180 : WA707atMSP "2. Throw up as many regulatory obstacles as they can, to delay implementation of the deal as long as possible. All of the arguments DL has
98 LAXtoATL : thnx for the info
99 MAH4546 : There absolutely is: no Open Skies. Until there is U.S.-Japan Open Skies, no airline pairs, regardless of AA/JL, DL/JL, UA/CO/NH or whoever, should b
100 MasseyBrown : If this has already been asked and answered, I apologize. What is the combined share of the US-Japan market held by Japan and Delta? By United and All
101 LAXtoATL : I do not have any reliable numbers for you, but I vaguely remember reading somewhere that both JL&DL and UA&NH would control 40-something% of the US-
102 LAXtoATL : I am still waiting for someone to confirm whether or not ATL-CDG is carved out of AF/DL's ATI. Surely someone reading this thread must know.
103 United1 : Its not carved out....
104 Jetlanta : But Mark, NO ONE is asking for ATI absent of Open Skies. The U.S. and Japan are expected to agree to Open Skies, perhaps before the end of 2009. In f
105 LAXtoATL : Thanks for that. In the meantime, I received a response from a friend. I was told that the route was carved out of their initial ATI, but just recent
106 MAH4546 : I understand nobody is asking that. I am not making a "point." I am responding to the individual poster, nothing more, nothing less.
107 NYCAdvantage : Once again, I am not disputing that the old administration showed some preference towards DL, But I have not read anything on this new Japanese admin
108 LAXtoATL : Huh?[Edited 2009-11-23 17:28:53]
109 NYCAdvantage : What I mean is like LH investment in B6, something like that, that way they would still have someone there to code share, is still better than nothin
110 DLPMMM : Everybody keeps jumping on the top line dollar amounts, but there are 2 sides to every equation. What percentage of equity are both the DL group and t
111 Post contains links NYCAdvantage : American has said they, and private-equity partner TPG, are willing to inject an undisclosed amount of money into JAL. If only we knew how much… ht
112 Post contains links NYCAdvantage : Maybe this is Irrelevant to the Japanese Government and JL deal, but still in don't think TPG nor AA need it this, Australian tax authorities have lau
113 Post contains links EddieDude : I found this on the news today and thought it was an interesting read. The most interest aspect of this editorial is how the AA-DL vying for JL will (
114 Post contains links MAH4546 : Looks like oneWorld is offering a $1.8B package and has put out an official release: http://finance.yahoo.com/news/onewor...lue-prnews-618510472.html?
115 PIEAvantiP180 : The 1.8B offer includes 700M that the deal will generate over 10 years. The direct offer is only for 1.1B
116 PIEAvantiP180 : American Airlines said on Thursday that the total financial benefit from its backing would be equivalent to $1.8 billion when factoring in an estimate
117 DL Widget Head : 1.8B after applying the fuzzy math. Nice try AA but not good enough. If JAL looks at their long term interests, then DL and Sky make the most sense.
118 MAH4546 : You do realize Delta applied its own "fuzzy math," right? I'm sure an airline's long-term interest lies in becoming second fiddle to another carrier
119 DL Widget Head : I would hope that the JL decision makers and Japanese government officials will be able to see through AA's erroneous scare tactics about JL becoming
120 MAH4546 : It has been pretty clear from the start that JAL wants to stay with AMR, but the very influential Japanese government wants to look at all options an
121 LAXdude1023 : I didnt realize you were the Japanese government. They might very well choose DL, but the Japanese are highly unpredictable. Their culture is so diff
122 Panamair : I don't know how you're getting your numbers, but for next week, for example, counting weekly nonstop transatlantic flights, I get approximately: DL:
123 Post contains links NYCAdvantage : agreed, http://us.rd.yahoo.com/finance/exter...B840-289991936760%7d&siteid=yhoof2 I said it before and I will say it again this thing is going to go
124 Post contains links MAH4546 : http://www.anna.aero/2009/11/27/uk-a...le-to-seasonality-on-routes-to-us/ Though it appears they did not combine DL-NW as they should have.
125 MAH4546 : If AA loses the deal, they need to expand Asia with their own metal pronto. *Move the 2nd DFW-NRT to SFO or LAX. *Re-enter KIX and NGO, possibly usin
126 LAXdude1023 : For the most part I agree. A couple of thoughts: 1) Can AA really succeed in the LAX-China market? The Chinese carriers fares are dirt cheap. Can AA'
127 Jetlanta : Delta has an exclusive deal with AS to feed international flights. AS cannot provide codeshare connections to AA in international markets.
128 MAH4546 : Maybe it would be time to re-introduce an Asia-configured sub-fleet, removing half the F cabin, adding a row in J, and adding plenty of rows in Y. Or
129 Cubsrule : Interestingly, though, AS can apparently provide codeshare connections to AA partners who may have ATI with AA in the not-so-distant future, like BA.
130 DFWEagle : What on earth are you talking about? Any Alaska flights carrying the “AA” code can certainly be used to connect to AA international markets when
131 MAH4546 : Yes, they absolutely can, on AA*-coded AS flights. Or are all those international passengers that AA feeds to AS and visa-versa at MIA "illegal?" And
132 DFWEagle : ??? AA.com is letting me book GEG-LAX-LHR and SEA-LAX-NRT etc. using AS domestic and AA international.
133 Cubsrule : It's puzzling. The agreement between AS and DL was trumpeted as exclusive for international codeshare and, in fact, some sources (e.g. the Oneworld o
134 Jetlanta : Not true. At least Trans-Pacific. From Delta President Ed Bastian's Online Employee Chat on November 11:
135 MAH4546 : So please explain to me why I can go to AA.com, and book ASAA flights to Tokyo. Clearly this "exclusivity" has yet to come.
136 Jetlanta : Not sure. Maybe some glitches. Maybe there is a phase-out period. I'm just the messenger.
137 MAH4546 : Or, more likely, the "exclusivity" relates to codeshare on trans-Pacific operations and not feed. So, in other words: a big deal out of nothing. And,
138 DFWEagle : Yes, it is true. Try it for yourself.
139 DFWEagle : Alaska also recently became a oneworld global explorer partner for round the world travel.
140 Jetlanta : I'm not sure Mark. My sense is that it IS a bigger deal than that. I'll try to find out more. It could be that the existing agreement with AA had to
141 Post contains links OP3000 : Apparently there is now momentum for US-Japan Open Skies to be signed by the end of the year, as early as next week: http://www.bloomberg.com/apps/new
142 MAH4546 : That would not, however, explain why Alaska joined oneWorld's Global Explorer Program a few months ago, allowing easy oneWorld connections on ASAA/JL
143 Jetlanta : The Delta deal was announced in November of 2008. True, but even more true for Delta. Particularly given its recent and future actions to make SEA a
144 MAH4546 : Just like JAL and Aer Lingus with oneWorld? Just like Mexicana chose Star Alliance? Just like Continental with SkyTeam? Sorry, it might be "accurate,
145 Post contains links NYCAdvantage : Now That we have Open Skies between US- Japan, and with all the pressure on JL to choose a partner and knowing that the Japanese government have a big
146 LAXtoATL : " target=_blank>http://search.japantimes.co.jp/cgi-b....html I agree with you that a paid consultant for AA should not be talking like that at this c
147 Cubsrule : ...and probably was before open skies too. It's obvious (and not really debatable) that DL/JL will/would be more problematic than AA/JL.
148 Post contains links MAH4546 : It's interesting, but not surprising, that Delta supposedly tried to derail Open Skies from happening. http://www.bloomberg.com/apps/news?pid=20601101
149 LAXtoATL : It is not that obvious to me. I don't think DOT or DOJ is going to base their decision on the fact that AA would be in trouble, SkyTeam and StarAllia
150 Cubsrule : Compare the relative sizes of DL and AA at NRT (and, indeed, in Asia writ large). That should make it pretty obvious. That doesn't mean that DoT woul
151 LAXtoATL : First of all, I am pretty sure that the rest of Asia would not even be factored into the decision. I think they only thing they will be looking at is
152 MAH4546 : And how is that? Narita slots are more restrictive than Heathrow slots because there is no free market to trade and sell them. No new Narita slots ar
153 Cubsrule : That's precisely my point. The existence of formidable competitors is insufficient. Your argument is essentially that two wrongs make a right. That a
154 LAXtoATL : I think you need to back track and see what I responding to. Cubsrule said that using my logic AA/BA should have been approved by now, my point was t
155 Cubsrule : So how are JL/DL and AA/BA different? Both have a "slot situation." That is where you have lost me.
156 MAH4546 : I disagree there. Slots were a good negotiating point, but I believe that ATI was not approved because of lack of Open Skies. I guess we'll see wheth
157 LAXtoATL : But regardless of whether JL was granted ATI with DL or AA, there would be a formidable competitor in the form of Star Alliance. (Its just AA would n
158 Cubsrule : If they flat reject AA/BA (as opposed to approving it with many restrictions), I don't see how they can justify not pulling the other two TATL ATIs.
159 MAH4546 : Which is exactly why AA/JL makes more sense. There will be three formidable competitors as opposed to two. DL would be a very strong #3, as opposed t
160 LAXtoATL : Well, it is highly unlikely that they would reject it outright. There will be some restrictions no matter what, the question is how many and to what
161 Cubsrule : How, exactly, is the situation different from Japan? You say (correctly I think) that the unavailability of LHR slots precludes a liberal ATI award t
162 MAH4546 : I bet AA/BA's lawyers already have the petition ready to call for dissolution of the other two ATI alliances if AA/BA is rejected. The process is ini
163 LAXtoATL : Makes more sense for AA. Unfortunately, if JL decides to partner with DL there will no longer be a JL/AA option. The question is only whether or not
164 Cubsrule : We don't reach this question prior to answering the question I posed earlier:
165 LAXtoATL : No. No. I said it prevented (not preventing) the previous the AA/BA applications. I believe the current application will be approved. As for the slot
166 Cubsrule : You can't just assume away the slot issues because of open skies. Imagine a situation where UA bought up every US-NRT slot (something the agreement w
167 LAXdude1023 : You seem to be forgetting that the last time they were denied, LHR was closed completely to everyone but BA, VS, AA and UA. Now CO, DL, and US fly th
168 LAXtoATL : The US and Japan just negotiated Open Skies. The sticking point: slots at HND & NRT. The slot issue has been resolved to the US' satisfaction. Eventh
169 LAXtoATL : No I am not. That is precisely my point! Cubsrule is the one forgetting that or trying to forget that and suggest there is some other reason they wer
170 NYCAdvantage : That is the one thing that helps Delta the most, If they ever ask DL to hand in slots in exchange for ATI I am sure that they will not hesitate to gi
171 Cubsrule : Where have I done any such thing? Again, with a (prospective) market for NRT slots, you can't just make that assumption and be done with it. See my p
172 LAXtoATL : I will not imagine anything that foolish! The Open Skies agreement, the JL restructuring plan, the ATI applications, will all be completed in a coupl
173 MAH4546 : From a public benefit perspective, AA/JL makes more sense. I'm not talking about what DL, JAL or AA think, I'm talking about what benefits the consum
174 Cubsrule : I don't think Japan particularly cares whether any carrier gets ATI. They just want investment in JL, and for that to happen all that they need at a
175 LAXtoATL : I am not sure any airline would be asked to give up any slots for ATI (at least nothing significant). What purpose would it serve? I do not seen any
176 NYCAdvantage : Mark, I agree with you 100%, But don't you start feeling there is something else than money or even slots involved here, AA code share with them alre
177 LAXtoATL : But as I point out the DOT won't be basing their decison on what makes more sense for the traveling public. The party that gets to decide what makes
178 Cubsrule : Doesn't that statement presuppose that JL cannot be profitable without ATI? If Japan's government cared about ATI for the sake of ATI, open skies wou
179 MAH4546 : You take things way out of context. All that was pointing out was that AA/JL will gain approval in a much more swift manner, because AA/JL is better
180 LAXtoATL : Here is where we disagree, either combination would be approved with little fuss. The fact that AA keeps screaming otherwise does not make it so, in
181 MAH4546 : I agree that JAL/DAL should be approved with little fuss, but it won't be. Too much concentration of slots and - unlike Heathrow - no open market for
182 Cubsrule : Absent almost equal stupidity, DL and AMR should want to do the same thing. There is absolutely no reason for any party to do it any other way.
183 MasseyBrown : Today's WSJ has a Japan-North America pie chart showing that a Delta-Japan Airlines combination would offer 52% of the capacity in that market. I don
184 LAXtoATL : But yet you think the Japanese gov't is stupid enough to agree to Open Skies without an assurance that their struggling carriers would be granted ATI
185 Cubsrule : Again, that statement presupposes that JL cannot restructure without ATI, and I don't know that that's the case. We know that a successful rescue of
186 LAXtoATL : No it does not. It presupposes that Japan would not agree to Open Skies without getting anything in return. You can stick your head in the sand on th
187 Avek00 : Maybe because the USDOT has routinely approved ATI under circumstances that resulted in far greater market concentration than a mere 52%? The USA-Ger
188 Cubsrule : Why, then, didn't they agree to open skies a year or two years or five years ago? JL really wasn't in better shape then.
189 Avek00 : Because there was no need to consider it then, as the Japanese had previously believed JAL's problems could be solved from "within Japan". The mindse
190 Cubsrule : You said: Dealing with the pension obligation has nothing to do with ATI.
191 LAXtoATL : Cubsrule, I know that you want AA to win the JAL battle and it is causing you to wear blinders to certain facts. So let me explain it this way. I know
192 LAXtoATL : Really? You mean the same thing I already said... Are you even listening to what I am saying or just arguing to argue?
193 Cubsrule : Not really. As I have explained to you multiple times (and you have chosen to ignore), I don't much care who wins the battle. It'll clearly be easier
194 Cubsrule : Yes - if their number one problem has nothing to do with ATI, how can we so easily conclude that ATI is necessary to JL's reorganization? That's wher
195 MAH4546 : But no airport is Germany is as restricted as Narita - which is arguably the most restricted access major airport in the world because the government
196 LAXtoATL : Not only do they care, it has now been revealed by WSJ that the Japanese government will not finalize the Open Skies pact agreed to until after the U
197 Cubsrule : How is this going to work? The US says "no ATI without open skies" Japan says "no open skies without ATI" Sounds like a Catch-22 to me.
198 LAXtoATL : No catch 22 at all. Open Skies has been agreed to. The U.S. is happy. But the Japanese will not sign the formal treaty until after the U.S. makes Jap
199 MAH4546 : It's not a huge loss. Things are pretty much still staying status quo sans Haneda. Narita is still insanely restricted, and all of the U.S.-Japan out
200 Cubsrule : But without a signed open skies doc, does the US have any legal basis for approving ATI applications? DoT said, in the CO/Star case: If open skies do
201 NYCAdvantage : Well tell me if I understand their language, If JL chooses AA they will not have any problems at all in getting ATI, they would have signed no risk in
202 Cubsrule : Given the Obama adminstration's general stance on competition law issues, I don't think it's possible to read that in to what happened here. It's qui
203 NYCAdvantage : So why bother to get Open Skies in the first place then?
204 MAH4546 : The U.S. will not approve any ATI absent Open Skies, does not matter who the parties are. Of course, the "open skies" treaty we now have is nothing o
205 NYCAdvantage : Yes I understand what you are saying and agree with it, But by the Japanese government not signing the deal yet, is clearly telling you something the
206 Cubsrule : Was, not is. Japan seemingly did what the administration said was necessary for them to approve open skies agreements - whether it was enough to appr
207 LAXtoATL : Well, yes for anyone who believes that an AA/JL application would be approved while a DL/JL application would cause problems then you are understandi
208 LAXtoATL : Really? Back to that stance? No they did much more than just what was necessary to get an Open Skies agreement. They are making that Open Skies agree
209 Cubsrule : Is there a public statement somewhere to that effect? I read everything I've seen - including the WSJ article to which you referred in Reply 196 - as
210 MAH4546 : AA has this in the bag. JAL itself wants to stay with AA, and AA will up the ante significantly. Delta kind of wins too - they might get AA to spend
211 Cubsrule : You are putting words in my mouth. With respect to access to HND and NRT, the Japanese delegation did what was required to get the United States to a
212 LAXtoATL : You might be right. But I find it hard to believe given Mineta's comments. If AA has this in the bag, then what was the purpose of Mineta making the
213 LAXtoATL : I just went back to re-read Mineta's comments. Not only was his tone very critical of the Japanese government but these particular quotes stand out t
214 Jetlanta : I can assure that the Delta folks are still heavily involved at the highest levels of the company. And by that, I don't mean just upping the offer. I
215 MAH4546 : I believe the Japanese government wants to wage a bidding war between two carriers and ultimately does not care who wins. That is exactly what they a
216 Cubsrule : On the Japanese end, the differences between AA and DL are simply not large enough to justify doing anything besides following the money. With either
217 LAXtoATL : But you never addressed Mineta's comments. If you believe this is the situation then why would AA's representative criticize the Japanese officials l
218 MAH4546 : Based on statements by Michigan's governor, I don't doubt it. He doesn't know anything about airlines, he repeats what Delta tells him, just like a T
219 Post contains images OA412 :    I have yet to see a credible source that actually proves that DL attempted to thwart US-Japan Open Skies. Additionally, as you right point out,
220 LAXtoATL : No differences between DL and AA? That's funny considering that both you and AA have repeatedly saying how much more dominant DL is between US and Ja
221 MAH4546 : Yet Delta doesn't even deny AMR's comments. Their response to the accusations totally circles around the accusation. I'm not sure why its so hard to
222 LAXtoATL : Your doubt is still far from this being confirmed. Furthermore, you fail to address that no other politicians in states that DL has much deeper ties
223 LAXtoATL : Thank you for the support.
224 LAXtoATL : Actually they did. Not sure where you are getting your information, but this is Delta's official press release on Open Skies: "Delta thanks negotiato
225 MAH4546 : I'm not failing to address anything. Those facts don't change my opinion that Delta likely did not want Open Skies. Once again, nowhere has Delta den
226 Ocracoke : It doesn't always follow that way. If it did, WN would be running F9 today. Sometimes, there is more involved than just money. Saying that all JL has
227 MAH4546 : Strong #3 is screwed relative to their current position. That statement is looking at it from the perspective of the consuming public, not from the p
228 LAXdude1023 : I think so too. We are all on the edge of our seats by now. I dont share the opinion of alot of my fellow AA fandudes that this is AA's to lose. I th
229 Jetlanta : The merger was a non-cash deal and is already generating savings greater than the cash cost of implementation, so no worries there. If Delta losses t
230 Post contains links Jayeshrulz : American Attacks DL-JL Venture (Part 3) (by Jayeshrulz Dec 15 2009 in Civil Aviation) Please carry forward the thread here.
Top Of Page
Forum Index

This topic is archived and can not be replied to any more.

Printer friendly format

Similar topics:More similar topics...
DL To Sydney - Part 2 posted Fri Dec 19 2008 02:14:01 by HB-IWC
AF & DL: Joint Venture To Secure Atlantic Traffic? posted Fri Oct 28 2005 21:10:01 by Rpaillard
Korean Air To Hire 120 American Pilots, DL 747 Op. posted Wed Feb 9 2000 23:24:09 by DeltaAir
DL Summer 2010 Int'l Schedule Released - Part II posted Tue Oct 27 2009 19:41:01 by LipeGIG
Central American Thread - Part 28 posted Sun Sep 20 2009 11:56:50 by SJOtoLIR
DL In Talks To Take Stake In JL? posted Fri Sep 11 2009 04:41:23 by Kiwiandrew
DL And Virgin Blue (DJ) Seek To Form Joint Venture posted Wed Jul 8 2009 16:30:46 by DL747400
Central American Aviation Thread - Part 27 posted Mon Jun 29 2009 06:45:42 by SJOtoLIR
NW-->DL Gates Part 3 posted Sun May 3 2009 17:30:54 by FWAERJ
NW ->DL Gates Part 2 posted Sun Feb 15 2009 17:49:09 by Burnsie28