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Does WN-FL Approval Guaranty US-AA Approval?  
User currently offlinebillreid From Netherlands, joined Jun 2006, 1015 posts, RR: 0
Posted (2 years 4 months 1 week 2 days 10 hours ago) and read 2911 times:

Quote from Reuters:
Under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act, companies must not complete a merger until the U.S. Federal Trade Commission and Department of Justice determine that the transaction will not hurt competition.

The WN-FL merger may be one of the most obvious mergers to hurt competition. The competitive environment at MDW and similar at BWI both major focus cities for WN has become fortress hubs thanks to the DOJ. Te DOJ must have been aware of WN's previous takeover of ATA at MDW also an elimination of competition. This followed by closing of more than 20 cities even though WN stated in their filing they would grow shows a strong pattern. WN has significantly reduced capacity in many markets served out of those cities, and is massively down in cities like TPA who was down over 48,000 pax on FL/WN in April alone, and the rumor is that they will be announcing the reduction of another 10-12 daily flights there.
www.tampaairport.com/about/facts/act...ports/2012/marketshare_apr2012.pdf
The figures at RSW are even more staggering.
Their merger appears to hurt the public in over 50 cities with fewer flights and increased fares.


That being said, it is what it is. Is there any chance what-so-ever that the government could say "no" to US-AA.
And if there were to say no, would that not lead to a massive law suit against the government for fraud and coruption. In granting WN-FL.


Some people don't get it. Business is about making MONEY!
8 replies: All unread, jump to last
 
User currently offlinepoLot From United States of America, joined Jul 2011, 2255 posts, RR: 1
Reply 1, posted (2 years 4 months 1 week 2 days 10 hours ago) and read 2854 times:

Quoting billreid (Thread starter):
Te DOJ must have been aware of WN's previous takeover of ATA at MDW also an elimination of competition.

Southwest never took over ATA and their eventual shutdown was largely out of WN's control.

Quoting billreid (Thread starter):
And if there were to say no, would that not lead to a massive law suit against the government for fraud and coruption. In granting WN-FL.

Can you prove that their was corruption involved in the WN/FL decision? Nothing you have said so far gives proof of corruption.

[Edited 2012-06-12 18:38:44]

User currently offlineCubsrule From United States of America, joined May 2004, 23148 posts, RR: 20
Reply 2, posted (2 years 4 months 1 week 2 days 10 hours ago) and read 2811 times:

Quoting billreid (Thread starter):
The WN-FL merger may be one of the most obvious mergers to hurt competition.

Because there are no barriers to entry at BWI or MDW, the government doesn't see it that way. I'm sympathetic to your view, but I can't argue with a straight face that WN/FL was handled any differently than UA/CO or DL/NW.



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlinetexan From New Zealand, joined Dec 2003, 4280 posts, RR: 52
Reply 3, posted (2 years 4 months 1 week 2 days 10 hours ago) and read 2749 times:

Quoting billreid (Thread starter):
The WN-FL merger may be one of the most obvious mergers to hurt competition.

I agree in general because mergers between two competing companies who operate in the same area in any industry hurt competition. But I disagree with your point that WN/FL hurts competition because of their perceived dominance at a secondary airport where all other airports in the regions they serve have hub carriers with a larger share of the market (UA/AA in Chicago, UA/US in D.C. plus US just up the road in Philly).

The WN/FL merger does not indicate how any future merger would work. It depends on a few things: political pressures, the HHI (an arbitrary b.s. measurement), the markets impacted, and so on. Given the way the DOJ has analysed mergers over the past decade or so, I would be surprised if a proposed AA/US merger was struck down. But I would not be surprised if major concessions had to be made in key areas in order for approval to go ahead.

But the government could say no. Part of it again relies on the HHI. If the government decides that local markets define the HHI and not the aviation system in general, the combination of AA/US would raise significant antitrust concerns in multiple markets. There is nothing corrupt or fraudulent about that. And there again is no comparison with WN/FL. It is just a readjustment of procedures. While the entity could challenge that determination in court, it would likely take too long and be too costly to justify a suit appealing the determination.

Texan



"I have always imagined that Paradise will be a kind of library."
User currently offlineCubsrule From United States of America, joined May 2004, 23148 posts, RR: 20
Reply 4, posted (2 years 4 months 1 week 2 days 10 hours ago) and read 2732 times:

Quoting texan (Reply 3):
If the government decides that local markets define the HHI and not the aviation system in general, the combination of AA/US would raise significant antitrust concerns in multiple markets.

Anywhere besides NYC and WAS?



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlineusflyguy From United States of America, joined Jan 2012, 1016 posts, RR: 0
Reply 5, posted (2 years 4 months 1 week 2 days 9 hours ago) and read 2661 times:

Quoting billreid (Thread starter):
The competitive environment at MDW and similar at BWI both major focus cities for WN has become fortress hubs thanks to the DOJ

You are kidding, right? FL had 18 flights a day at MDW and like 60 flights a day at BWI... BWI being an airport with more than enough space for new flights from other carriers.

How is IAH, EWR or CLE different for UA/CO? EWR and IAH Have the highest average fares in the country.

MSP, DTW, SLC for NWA/DL? If those aren't fortress hubs (no secondary airports), then MDW and BWI definitely aren't.



My post is my ideas and my opinions only, I do not represent the ideas or opinions of anyone else or company.
User currently offlineHPRamper From United States of America, joined May 2005, 4073 posts, RR: 8
Reply 6, posted (2 years 4 months 1 week 2 days 9 hours ago) and read 2525 times:

Quoting Cubsrule (Reply 4):
Anywhere besides NYC and WAS?

NYC wouldn't even be an issue considering a combined US and AA would still be what, #3 in the market? They would just divest a few more slots at LGA, happily. DCA would be the only legitimate concern.


User currently offlineQANTAS747-438 From United States of America, joined Jan 2001, 1969 posts, RR: 2
Reply 7, posted (2 years 4 months 1 week 2 days 8 hours ago) and read 2483 times:

Quoting billreid (Thread starter):
The WN-FL merger may be one of the most obvious mergers to hurt competition. The competitive environment at MDW and similar at BWI both major focus cities for WN has become fortress hubs thanks to the DOJ. Te DOJ must have been aware of WN's previous takeover of ATA at MDW also an elimination of competition. This followed by closing of more than 20 cities even though WN stated in their filing they would grow shows a strong pattern. WN has significantly reduced capacity in many markets served out of those cities, and is massively down in cities like TPA who was down over 48,000 pax on FL/WN in April alone, and the rumor is that they will be announcing the reduction of another 10-12 daily flights there.

Sorry, but is this a bash on WN or a question about US/AA?



My posts/replies are strictly my opinion and not that of any company, organization, or Southwest Airlines.
User currently onlineatcsundevil From United States of America, joined Mar 2010, 1216 posts, RR: 2
Reply 8, posted (2 years 4 months 1 week 2 days 6 hours ago) and read 2252 times:

Quoting billreid (Thread starter):
This followed by closing of more than 20 cities even though WN stated in their filing they would grow shows a strong pattern.

Some of the cities cut were because of redundancies. For example, serving PHF no longer made sense with WN at ORF and AT at RIC. Why serve three airports within a 50 mile radius? The merged carrier will also dump the 717, so I imagine the cities that were cut could have been in anticipation of the 717 fleet retirement.

Quoting billreid (Thread starter):
Is there any chance what-so-ever that the government could say "no" to US-AA.

Sure, there's a chance. Will they? It's anyone's best guess. DOJ approval will be a big hurdle particularly because US has already had a big merger in the past decade -- a merger that still is not fully completed. I'm not even going to bother speculating because there are so many complexities and intangibles surrounding a hypothetical merger that there's no point in trying to guess. It will almost certainly face far more scrutiny than US/HP, DL/NW, UA/CO, or WN/AT. There are some people in Tempe with a mountain of a task ahead of them.

Quoting billreid (Thread starter):
And if there were to say no, would that not lead to a massive law suit against the government for fraud and coruption. In granting WN-FL.

Not sure how fraud or corruption played into the WN/FL merger.. If anything, the merger had to be approved because of the UA/CO merger to balance things out. I'm definitely not a WN fan, but the merger seemed pretty fair to me and good for the industry. Allegations of fraud and/or corruption need a little bit of supporting evidence -- I have yet to see any.


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