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Fed Judge To Consider Delaying UA/CO Merger  
User currently offlineFlighty From United States of America, joined Apr 2007, 8565 posts, RR: 2
Posted (4 years 2 weeks 7 hours ago) and read 6570 times:

SAN FRANCISCO(AP) -- A federal judge is considering whether to delay the merger of Continental Airlines Inc. and United Airlines Inc. while an antitrust lawsuit is pending.

http://www.nytimes.com/aponline/2010...-US-Airline-Merger-Lawsuit.html?hp

This would be interesting. You could certainly pull some numbers together to show that this merger will increase prices. It is intriguing that, even if the DOJ takes no actions, there is still a process to explore anti-trust avenues that are written in law.

It probably won't amount to anything. A ruling is expected before Oct 1. But hopefully the judge will think carefully about whether such a mega-merger follows the spirit and prescriptions of the law. I am not so sure.

14 replies: All unread, jump to last
 
User currently offlineikramerica From United States of America, joined May 2005, 21534 posts, RR: 59
Reply 1, posted (4 years 2 weeks 6 hours ago) and read 6449 times:

This article is a bit misleading in that it implies that the judge is leaning towards delay.

What is actually happening is that the judge is REQUIRED to "mull" over the case because it can't be ignored any longer. He now has to get off his butt and either dismiss the suit or stay the merger. My guess is he will dismiss the suit, as I can't see how the San Francisco plaintiffs can claim they are harmed when CO has almost no presence in California other than a few hub flights, flights that don't overlap UA's network beyond a few flights to New York. On that route, there is no shortage of competition, with AA, B6, DL and VX also in the market with non-stops and a very low price compared to other routes.



Of all the things to worry about... the Wookie has no pants.
User currently offlinePlanesNTrains From United States of America, joined Feb 2005, 5590 posts, RR: 29
Reply 2, posted (4 years 2 weeks ago) and read 5958 times:

If the industry was making money hand over fist, I might tend to wonder if we need to continue the consolidation trend. But until that happens, it's hard for me to fault the airlines for doing what they feel they need to do.

-Dave



Next Trip: SEA-ABQ-SEA on Alaska
User currently offlinenorcal From United States of America, joined Mar 2005, 2459 posts, RR: 5
Reply 3, posted (4 years 1 week 6 days 18 hours ago) and read 5675 times:

Quoting PlanesNTrains (Reply 2):
If the industry was making money hand over fist, I might tend to wonder if we need to continue the consolidation trend. But until that happens, it's hard for me to fault the airlines for doing what they feel they need to do.

Brilliant comment and to the point   


User currently offlineSonomaFlyer From United States of America, joined Apr 2010, 1817 posts, RR: 0
Reply 4, posted (4 years 1 week 6 days 12 hours ago) and read 4651 times:
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The suit is absurd and will be dismissed by the judge after a suitable period of "reflection." As stated above, CA passengers can't make a cognizable claim they are harmed by the merger given the limited presence of CO in the state.

The combined airline will have a substantial presence and impact in California. I think SFO and LAX stand to benefit from the combined airline rather than be harmed as the suit claims.


User currently offlineEricR From United States of America, joined Jul 2010, 1904 posts, RR: 1
Reply 5, posted (4 years 1 week 6 days 12 hours ago) and read 4589 times:

Quoting Flighty (Thread starter):
This would be interesting. You could certainly pull some numbers together to show that this merger will increase prices.

Yes, but this is probably the number 1 objective of the recent round of mergers. The intent was to reduce capacity to help drive yields higher and increase profitability (or in the case of some airlines, become profitable).


User currently onlinekiwiandrew From New Zealand, joined Jun 2005, 8572 posts, RR: 13
Reply 6, posted (4 years 1 week 6 days 11 hours ago) and read 4397 times:
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Quoting PlanesNTrains (Reply 2):
If the industry was making money hand over fist, I might tend to wonder if we need to continue the consolidation trend. But until that happens, it's hard for me to fault the airlines for doing what they feel they need to do.

I couldn't agree more , all this talk of airlines being able to gouge passengers is nonsense , if there are reasonable increases in fares pax and airlines will survive , if this or any other airline tries unreasonable increases it will not take pax long to realise that there are plenty more fish in the sea , there are plenty of other airlines out there to keep the new UA honest . The market ( ie the fare-paying pax ) will soon determine what is reasonable , but in the meantime this might correct the imbalance where currently in general in the US it it the pax who are gouging the airlines . I am sure that those fliers who are used to travelling on below cost fares will howl and moan at any increases , no matter how small they may be , but the truth is that the industry as it currently stands in the US is unsustainable and has been for years .

Quoting ikramerica (Reply 1):
My guess is he will dismiss the suit, as I can't see how the San Francisco plaintiffs can claim they are harmed when CO has almost no presence in California other than a few hub flights, flights that don't overlap UA's network beyond a few flights to New York. On that route, there is no shortage of competition, with AA, B6, DL and VX also in the market with non-stops and a very low price compared to other routes.

Excellent point , in fact California is probably one of the States likely to be least affected adversely by the merger ( actually , apart from Ohio or possibly Hawai'i I am hardpressed to think of any state likely to be adversely affected by this merger as there is so little overlap between the two networks )



Moderation in all things ... including moderation ;-)
User currently offlineABQopsHP From United States of America, joined May 2006, 853 posts, RR: 3
Reply 7, posted (4 years 1 week 6 days 11 hours ago) and read 4245 times:

In the other thread, regarding the Shareholders approving the merger, I noticed a few making comments about this being bad for customers and employees all around. Funny......this is exactly how the "Free market" works. There sometimes is consolidation in the market place. The customers in California and the Bay area, have more than one airline to choose from. I know UA is dominant at SFO, but so is DL at MSP, there are ways to get around that. Im sure there are some on here who will point out to me a market where UA is the sole carrier. But if there is another carrier at the other end, then a combination of carriers to get you to your destination works, and sometimes at a lower fare.
JD CRPXE

[Edited 2010-09-18 15:10:22]


A line is evidence that other people exist.
User currently offlinebrilondon From Canada, joined Aug 2005, 4251 posts, RR: 1
Reply 8, posted (4 years 1 week 6 days 11 hours ago) and read 4197 times:

If the U.S. market were limited to a couple of airlines I would think that the Government would act to stop this merger but they gave up the right to do so when they deregulated the industry. this is the end result of the lack of regulation and I don't think that an judiciary or government agency should have the right to stop this merger.


Rush for ever; Yankees all the way!!
User currently offlineGlobalCabotage From United States of America, joined Nov 2009, 602 posts, RR: 0
Reply 9, posted (4 years 1 week 6 days 8 hours ago) and read 3506 times:

Another judge making a mockery of the legislative process. Get rid of these bums. We've seen elections overturned (will of the voters by some legislative judge). Come on America, no more judgeships for life via appointment. Let's vote them in and vote them out if the act like a--holes! We do it with other politicians every two years, why not judges that are acting like politicians.

User currently offlineFlighty From United States of America, joined Apr 2007, 8565 posts, RR: 2
Reply 10, posted (4 years 1 week 6 days 7 hours ago) and read 3331 times:

Quoting brilondon (Reply 8):
I would think that the Government would act to stop this merger but they gave up the right to do so when they deregulated the industry.

Actually, the antitrust laws are still in effect, so...

Quoting brilondon (Reply 8):
I don't think that an judiciary or government agency should have the right to stop this merger.

OK, well, the govt still has some requirements (actually it's their job) to carry out certain inspections and judgments. Additionally, if a business deal violates, say, the Civil Rights Act, then your normal federal judge has tremendous power to bring to bear on it.

Quoting GlobalCabotage (Reply 9):
Another judge making a mockery of the legislative process.

What? How does the legislative process relate to a corporate merger? Just trying to understand what your post is saying. But evidently you don't like judges?


User currently offlineCubsrule From United States of America, joined May 2004, 23058 posts, RR: 20
Reply 11, posted (4 years 1 week 6 days 7 hours ago) and read 3266 times:

Quoting GlobalCabotage (Reply 9):
Another judge making a mockery of the legislative process.

Even if he were to stay the merger, where, exactly does that power come from?

Let me answer that question for you in your words: the legislative process. It's from Congress.



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlineLAXintl From United States of America, joined May 2000, 25512 posts, RR: 50
Reply 12, posted (4 years 2 days 15 hours ago) and read 2568 times:

Judge clears way for merger.

Quote:
Continental, United merger shouldn't be blocked - judge

A San Francisco district judge denied a preliminary injunction brought by plaintiffs who sued UAL Corp. arguing UAL’s merger with Continental Airlines Inc. would reduce competition in the airline industry.

Judge Richard Seeborg filed a motion on Sept. 27 that stated “the plaintiffs have not demonstrated in any way that they themselves will suffer any specific harm.”

Full story;
http://www.bizjournals.com/houston/stories/2010/09/27/daily16.html



From the desert to the sea, to all of Southern California
User currently offlineikramerica From United States of America, joined May 2005, 21534 posts, RR: 59
Reply 13, posted (4 years 2 days 12 hours ago) and read 2358 times:

Quoting LAXintl (Reply 12):
Judge clears way for merger.

Yep, this was a given. Had the judge seen anything of merit, he would have acted much sooner. But he was required to waste the court's time (and the people's money) to consider it before the final merger no matter how little merit it had. And he agreed with me that plaintiffs in San Francisco would be hard pressed to show any harm to them. Cleveland? Sure, but not SFO.



Of all the things to worry about... the Wookie has no pants.
User currently offlineCubsrule From United States of America, joined May 2004, 23058 posts, RR: 20
Reply 14, posted (4 years 2 days 7 hours ago) and read 2158 times:

Quoting ikramerica (Reply 13):
But he was required to waste the court's time (and the people's money) to consider it before the final merger no matter how little merit it had.

What alternative do you suggest?



I can't decide whether I miss the tulip or the bowling shoe more
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