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AA/US To Make Concession To US DOJ  
User currently offlineLAXintl From United States of America, joined May 2000, 25532 posts, RR: 50
Posted (1 year 2 months 1 week 4 hours ago) and read 21041 times:

Reportedly, AA and US Airways are about to hold meetings with the US DOJ where they will offer antitrust concessions.

It believed the concessions will focus on concerns over the combined positions of the carriers at Washington Reagan National.

Meetings with DOJ comes on heels of the airlines offering to vacate pair of LHR slots to allow competitors to launch PHL service.

One person familiar of the meetings dubbed the talks as "the end game", that could shape the details of the world's largest airline merger.


AMR, US Airways Offer Antitrust Concessions
http://goo.gl/NkQSvY

=


From the desert to the sea, to all of Southern California
110 replies: All unread, showing first 25:
 
User currently offlinejustplanenutz From United States of America, joined Feb 2006, 526 posts, RR: 1
Reply 1, posted (1 year 2 months 1 week 4 hours ago) and read 20771 times:

Swap 10-12 slots at DCA for a like number at JFK with B6 and call it day!

User currently offlineckfred From United States of America, joined Apr 2001, 5251 posts, RR: 1
Reply 2, posted (1 year 2 months 1 week 1 hour ago) and read 19928 times:

Here's my question about the LHR slots. Who wants to start service on PHL-LHR? I know that Delta was ramping up service in MIA, but I think they wound up codeshare with Virgin Atlantic.

But, considering how close JFK is, why would Delta have any interest.

This makes even less sense for UA, with EWR and and IAD also quite close.

Besides its hub at PHL, the route made sense for US, since a number of European members of Star serve LHR. Virgin Atlantic doesn't belong to a hub. So would this route really make sense for them?


User currently offlinepar13del From Bahamas, joined Dec 2005, 7298 posts, RR: 8
Reply 3, posted (1 year 2 months 1 week 1 hour ago) and read 19903 times:

Quoting ckfred (Reply 3):
So would this route really make sense for them?

I suspect its not about the route but appearing to give something up, better to give up something that you can easily kill the competiton versus something of true value.
Now if the politicians and the airports would allow the slots to be used for any airport pair with the same time slot...............


User currently offlinejetblueguy22 From United States of America, joined Nov 2007, 2800 posts, RR: 4
Reply 4, posted (1 year 2 months 1 week 1 hour ago) and read 19848 times:
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Quoting ckfred (Reply 3):
Here's my question about the LHR slots. Who wants to start service on PHL-LHR? I know that Delta was ramping up service in MIA, but I think they wound up codeshare with Virgin Atlantic.

I could see someone grabbing the route. I agree that UA is probably out, but I could see DL taking them. Is it a pair as in two roundtrips or just one? Perhaps a VS/DL pair of flights if there really are two.
Pat



You push down on that yoke, the houses get bigger, you pull back on the yoke, the houses get bigger- Ken Foltz
User currently offlinejumpjets From United Kingdom, joined Apr 2012, 838 posts, RR: 0
Reply 5, posted (1 year 2 months 1 week 1 hour ago) and read 19826 times:

Quoting ckfred (Reply 3):
Besides its hub at PHL, the route made sense for US, since a number of European members of Star serve LHR.

Given that the Star traffic is likely to dry up maybe it makes less sense for US/AA to continue their A333 to LHR which may be why they are seemingly willing to surrender the slot to a rival to keep the EU happy.

Any residual US traffic that doesn't need an onward connection with Star could potentially be absorbed if the BA68 were to be upguaged from a 3 class 767 to a high density 3 class 772 - it does after all leave PHL only 45 minutes after the current US flight, so no great inconvenience to the traveller.


User currently onlinejfk777 From United States of America, joined Aug 2006, 8390 posts, RR: 7
Reply 6, posted (1 year 2 months 1 week 1 hour ago) and read 19637 times:
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Quoting jumpjets (Reply 5):
Given that the Star traffic is likely to dry up maybe it makes less sense for US/AA to continue their A333 to LHR which may be why they are seemingly willing to surrender the slot to a rival to keep the EU happy

US/AA will continue to fly to LHR from PHL, its the major USair hub, the slot used may not be the current one US uses. Any one thinking that the new AA will Not fly fro PHL to LHR should re-evaluate that thought. Now its very possible the new AA will give up a slot or two at LHR to smooth over the UA and DL concerns. The old AA and BA have an ocean of LHR slots, one wil be found for AA to fly to LHR from PHL along with existing BA service. This will not be an only BA flown route, if that were to happen then AA could tell BA to stop flying to DFW and give that route to AA.


User currently offlineFWAERJ From United States of America, joined Jun 2006, 3756 posts, RR: 2
Reply 7, posted (1 year 2 months 1 week ago) and read 19520 times:

I have a hunch that any slots divested at DCA will go to WN, which has been screaming that they need more DCA slots as of late. There is precedent: look at the UA/CO merger... the party that got all the divested EWR slots was WN.

PHL-LHR seems like a logical fit for either DL or VS (maybe even a mix).

I also expect US to divest their leases for three T2 gates at ORD to NK in exchange for AA getting NK's two gates on T3 Concourse L (isn't at least one widebody-capable?) so more oneworld partners, BA in particular, can move departures to T3. NK is gate-constrained at ORD and could combine the three US gates with the City's unused Gate E8 for four gates total. As for domestic AA flights at ORD: AA's gates at T3 have enough slack to pick up all US flights and handle a major expansion at the same time.



"Did he really need the triple bypass? Or was it the miles?"
User currently offlinecommavia From United States of America, joined Apr 2005, 11712 posts, RR: 62
Reply 8, posted (1 year 2 months 1 week ago) and read 19401 times:

No shocking news here - precisely as expected. It was obvious AA/US were going to have to give something up - no matter how much Parker and Horton didn't think they should have to. I (and others) thought their arguments were reasonable - but of course it seems obvious they'll ultimately have to divest at least some slots.

Quoting ckfred (Reply 2):
Here's my question about the LHR slots. Who wants to start service on PHL-LHR? I know that Delta was ramping up service in MIA, but I think they wound up codeshare with Virgin Atlantic.

But, considering how close JFK is, why would Delta have any interest.

Delta/Virgin seems to me to be the only plausible alternative, but even there, I, too, question how well they might do in the market. I certainly don't think they could support more than a 763. But honestly, even that seems somewhat like a stretch to me given how much stronger AA/BA will be at both ends of the route.

Quoting FWAERJ (Reply 7):
I have a hunch that any slots divested at DCA will go to WN, which has been screaming that they need more DCA slots as of late. There is precedent: look at the UA/CO merger... the party that got all the divested EWR slots was WN.

True. It is likely Southwest will be a big recipient - although I find that ironic considering that Southwest itself is now such a massive airline and hardly in need of much competitive help. Plus, it's also somewhat notable that DCA is likely to lose nonstop service in some small-/medium-sized and/or limited-entry markets in order to gain more 737s to Florida.

Quoting FWAERJ (Reply 7):
I also expect US to divest their leases for three T2 gates at ORD to NK in exchange for AA getting NK's two gates on T3 Concourse L (isn't at least one widebody-capable?) so more oneworld partners, BA in particular, can move departures to T3. NK is gate-constrained at ORD and could combine the three US gates with the City's unused Gate E8 for four gates total. As for domestic AA flights at ORD: AA's gates at T3 have enough slack to pick up all US flights and handle a major expansion at the same time.

  

It would be great for AA and its JV partners to be able to consolidate international departures in T3.


User currently offlinejustplanenutz From United States of America, joined Feb 2006, 526 posts, RR: 1
Reply 9, posted (1 year 2 months 1 week ago) and read 19326 times:

Quoting commavia (Reply 8):

So, if given the choice, who would AA rather divest DCA slots to-WN or B6? Gotta be B6 because WN would wind up flying DCA-DAL on a bunch of them as soon as Wright goes away.


User currently offlinejfklganyc From United States of America, joined Jan 2004, 3508 posts, RR: 5
Reply 10, posted (1 year 2 months 1 week ago) and read 19250 times:

B6 won't swap anything.

They'll get slots in DCA without doing anything but showing up to the table.

Its a different game now


User currently offlinesilentbob From United States of America, joined Aug 2006, 2112 posts, RR: 1
Reply 11, posted (1 year 2 months 6 days 23 hours ago) and read 19152 times:

Quoting par13del (Reply 3):
I suspect its not about the route but appearing to give something up, better to give up something that you can easily kill the competiton versus something of true value.

Like the CO/UA merger, it looks like US/AA is proposing a solution up front instead of waiting to see what the government forces on them. If their proposal is reasonable, and addresses specific competition issues, it will be hard to justify more significant divestitures.

Quoting FWAERJ (Reply 7):

I have a hunch that any slots divested at DCA will go to WN, which has been screaming that they need more DCA slots as of late.

I think US would try to guide the slots where they want them, much like UA did with the EWR divestitures, but I do not think they want WN to have them. If they go to bid, it will be interesting to see if WN is finally willing to pay for the slots.

Quoting justplanenutz (Reply 1):
Swap 10-12 slots at DCA for a like number at JFK with B6 and call it day!

That is a very interesting suggestion.


User currently offlineLDVAviation From United States of America, joined Dec 2008, 1082 posts, RR: 5
Reply 12, posted (1 year 2 months 6 days 22 hours ago) and read 18738 times:

Quoting jfklganyc (Reply 10):
B6 won't swap anything.

They'll get slots in DCA without doing anything but showing up to the table.

Its a different game now

If JetBlue wants all the slots for itself, it will work out a swap or long term lease with AA before there is even the possibility of an auction.

If JetBlue can content itself with a few slots, it will just show up at the table.

Whatever the case, it will have to pay for the slots.


User currently offlineJoePatroni707 From United States of America, joined Dec 2012, 493 posts, RR: 0
Reply 13, posted (1 year 2 months 6 days 22 hours ago) and read 18715 times:

I am some what surprised that JFK (NYC) was not mentioned. Although US did give up some slots earlier at LGA, the combined AA/US will be a big force at JFK/LGA...

User currently offlineusflyer msp From United States of America, joined May 2000, 2125 posts, RR: 0
Reply 14, posted (1 year 2 months 6 days 22 hours ago) and read 18591 times:

Quoting JoePatroni707 (Reply 13):
I am some what surprised that JFK (NYC) was not mentioned. Although US did give up some slots earlier at LGA, the combined AA/US will be a big force at JFK/LGA...

...yet still significantly smaller than DL, which is why NYC slots are not an issue in this merger...


User currently offlineMah4546 From Sweden, joined Jan 2001, 32884 posts, RR: 71
Reply 15, posted (1 year 2 months 6 days 22 hours ago) and read 18596 times:

Quoting JoePatroni707 (Reply 13):
I am some what surprised that JFK (NYC) was not mentioned. Although US did give up some slots earlier at LGA, the combined AA/US will be a big force at JFK/LGA...

Since the combined carrier will only be 2nd at LGA and 3rd at JFK (in other words, nothing changes from AA's current position), there is no conditions under which slots can be taken away from it whatsoever. It keeps every slot.



a.
User currently offline727LOVER From United States of America, joined Oct 2001, 6456 posts, RR: 20
Reply 16, posted (1 year 2 months 6 days 22 hours ago) and read 18557 times:

Quoting justplanenutz (Reply 9):
So, if given the choice, who would AA rather divest DCA slots to-WN or B6? Gotta be B6 because WN would wind up flying DCA-DAL on a bunch of them as soon as Wright goes away.

If that is the case, AA should work out a deal and just sell the slots to B6



Listen Betty, don't start up with your 'White Zone' s*** again.
User currently offlineRWA380 From United States of America, joined Feb 2005, 3303 posts, RR: 5
Reply 17, posted (1 year 2 months 6 days 21 hours ago) and read 17873 times:

Quoting FWAERJ (Reply 7):
I have a hunch that any slots divested at DCA will go to WN
Quoting commavia (Reply 8):
True. It is likely Southwest will be a big recipient - although I find that ironic considering that Southwest itself is now such a massive airline and hardly in need of much competitive help.

I was watching Doug Parker talking to a government committee on C-SPAN in the middle of the night, a few weeks back. It does not sound like US/AA is going to loose much. He told them flat out, US/AA will drop smaller city service first if they are forced to divest DCA slots, which was hard news to hear for a representative from VT, whose one and only non-stop home is on US, and she is a committee representative.

If forced to divest, the slots will not be just directed to one carrier, it sure sounded like there would be a quasi-lottery system to dole them out. According to the committee, if they are not forced to divest, the combined US/AA will have 70% of the total slots at DCA when they merge. That is a big monopoly on one of the most in demand airports in the country.

The committee is aware US considers it a connecting hub, they did not seem terribly alarmed about the situation. They had aviation experts, and numerous others to give their opinion, some who had spoken when UA and CO merged.

But whatever it takes to get this merger approved, is what it seems US/AA are willing to do. There were big differences in the number of city pairings that would be effected by the merger. US says 17 city pairs (only non-stop markets) the committee has 100s of them, but most were connecting markets.



AA AC AQ AS BD BN CO CS DL EA EZ HA HP KL KN MP MW NK NW OO OZ PA PS QX RC RH RW SA TG TW UA US VS WA WC WN
User currently offlineTWA902fly From United States of America, joined Dec 1999, 3128 posts, RR: 4
Reply 18, posted (1 year 2 months 6 days 18 hours ago) and read 16756 times:

Quoting commavia (Reply 8):
I certainly don't think they could support more than a 763. But honestly, even that seems somewhat like a stretch to me given how much stronger AA/BA will be at both ends of the route.

DL does have transatlantic configured 757s... maybe that'd do fine on PHL-LHR?

'902



life wasn't worth the balance, or the crumpled paper it was written on
User currently onlinealfa164 From United States of America, joined Oct 2012, 487 posts, RR: 0
Reply 19, posted (1 year 2 months 6 days 17 hours ago) and read 16446 times:

I suspect DL would be very interested in the slots, but not necessarily to fly PHL-LHR. If AA/US divests itself of the LHR slots (I don't believe PHL is slot-controlled, so that side is irrelevant), it could use them to open SLC-LHR - or some other surprise departure city.

User currently onlineMIflyer12 From United States of America, joined Feb 2013, 1051 posts, RR: 0
Reply 20, posted (1 year 2 months 6 days 17 hours ago) and read 16436 times:

Quoting TWA902fly (Reply 18):

DL does have transatlantic configured 757s... maybe that'd do fine on PHL-LHR?

DL does have some TATL config 757s but they also have high J and low J configs of 767-300ER that would allow them to respond to J:Y mix. DL/VS may not regard PHL as a must-have market irrespective of slots coming available opportunistically.


User currently offlineusflyer msp From United States of America, joined May 2000, 2125 posts, RR: 0
Reply 21, posted (1 year 2 months 6 days 17 hours ago) and read 16321 times:

Quoting MIflyer12 (Reply 20):
DL/VS may not regard PHL as a must-have market irrespective of slots coming available opportunistically.

I concur. DL is only able to make PHL-CDG work with a summer-only 75L flight, despite the connecting potential with AF. I highly doubt they would be able to make PHL-LHR work. VS' relatively small LHR footprint means most traffic would have be local PHL and LHR traffic; a market segment DL is not well positioned to be competitive in...


User currently offlinecommavia From United States of America, joined Apr 2005, 11712 posts, RR: 62
Reply 22, posted (1 year 2 months 6 days 11 hours ago) and read 15382 times:

Quoting RWA380 (Reply 17):
It does not sound like US/AA is going to loose much.

I agree. I just don't see the justification for regulators to confiscate a large pool of slots from AA solely on the basis of a high market share overall. That was obviously meaningless in the case of UA/CO at EWR. On a market level, AA/US only overlap in two markets out of DCA. I expect the two carriers will not have to give up more than 20 slot pairs - I actually expect even less.

Quoting RWA380 (Reply 17):
If forced to divest, the slots will not be just directed to one carrier, it sure sounded like there would be a quasi-lottery system to dole them out.

We'll see. Divested slots at LGA were forced into a blind auction system in blocks of slot pairs, but divested slots at EWR were directed to a specific recipient.

Quoting RWA380 (Reply 17):
The committee is aware US considers it a connecting hub, they did not seem terribly alarmed about the situation.

Politicians are politicians. In addition to generally being idiots, they have their own agendas which are different than regulators'. Politicians quickly grasp the potential for negative fallout if small markets they represent do, in fact, lose air service to DCA as a result of AA being forced to give up slots there. Nonetheless, it is not really politicians' call. A very large group of them wrote a letter to regulators urging them to go easy on AA/US. We'll see if it was effective. But it is still the executive branch that makes the ruling.

Quoting TWA902fly (Reply 18):
DL does have transatlantic configured 757s... maybe that'd do fine on PHL-LHR?

I think Delta wanted to keep all LHR flying on at least 767s.

Quoting alfa164 (Reply 19):
I suspect DL would be very interested in the slots, but not necessarily to fly PHL-LHR.

Well then, if recent history is an guide, these concessions would probably be far less useful to them. The PHL-LHR concessions AA/US have agreed to with the EU are likely just like those AA/BA made a few years back - they appear to be route-specific. What Delta might be able to get away with down the road is being able to use one of these confiscated AA/US PHL-LHR slot pairs to fly PHL-JFK-LHR. Not sure - it will all depend on how the language is written.


User currently offlineAAplat4life From United States of America, joined Jun 2011, 189 posts, RR: 0
Reply 23, posted (1 year 2 months 6 days 10 hours ago) and read 15160 times:

Quoting alfa164 (Reply 19):
I suspect DL would be very interested in the slots, but not necessarily to fly PHL-LHR. If AA/US divests itself of the LHR slots (I don't believe PHL is slot-controlled, so that side is irrelevant), it could use them to open SLC-LHR - or some other surprise departure city.

Somewhere I read that the will be a four year commitment for the new carrier to operate PHL-LHR. After four years, it could fly to LHR from another U.S. city.

Quoting FWAERJ (Reply 7):
I also expect US to divest their leases for three T2 gates at ORD to NK in exchange for AA getting NK's two gates on T3 Concourse L (isn't at least one widebody-capable?) so more oneworld partners, BA in particular, can move departures to T3. NK is gate-constrained at ORD and could combine the three US gates with the City's unused Gate E8 for four gates total. As for domestic AA flights at ORD: AA's gates at T3 have enough slack to pick up all US flights and handle a major expansion at the same time.

Since the US air gates in T2 are leased from UA, we'll have to see what influence the latter will use. AA is very tight at T3 and its unwillingness to pounce on its lease options at the L concourse when Delta moved out was shortsighted. Still I do think that it could easily handle the US routes into ORD, which are PHL, PHX and CLT (not surprisingly US has stood back from the Chicago-DCA market). I see the new AA management eliminating RJs on these routes (PHL and CLT on AA) and MD80s (PHL and PHX, where AA has apparently dropped the 738 in favor of the gas guzzler MD80) and turning them into near hourly service of about 10 flights a day each.


User currently offlineFWAERJ From United States of America, joined Jun 2006, 3756 posts, RR: 2
Reply 24, posted (1 year 2 months 6 days 9 hours ago) and read 14911 times:

Quoting AAplat4life (Reply 23):
AA is very tight at T3 and its unwillingness to pounce on its lease options at the L concourse when Delta moved out was shortsighted.

AA did want to exercise their Concourse L lease options to improve their international operations, but the Chicago Department of Aviation wouldn't let AA get the gates. The CDA wanted the gates to go to new (VX) or limited-access (B6, NK) carriers, which is what happened in the end (though AA got one of the six gates as a consolation prize).

Blame the CDA, not AA.



"Did he really need the triple bypass? Or was it the miles?"
User currently offlinepanamair From United States of America, joined Oct 2001, 4914 posts, RR: 25
Reply 25, posted (1 year 2 months 6 days 6 hours ago) and read 14343 times:
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Quoting commavia (Reply 22):
I think Delta wanted to keep all LHR flying on at least 767s.

True due to the J flat-bed seating requirement for LHR, but the 75Es will get flat beds starting in 2014....


User currently offlineapodino From United States of America, joined Apr 2005, 4281 posts, RR: 6
Reply 26, posted (1 year 2 months 6 days 6 hours ago) and read 14313 times:

Somebody aptly pointed out in an article that AA had PHL-LHR authority years ago after buying TWA's LHR authorities...but they never flew it. Granted the circumstances are much different now. But that is something I found interesting.


As for divestures...I believe that since the only two cities that overlap are BNA and RDU, Doug & crew are going to add up the total number of flights in each city...figure how how much frequency they want, and then subtract that number from the total. They will offer to divest those slots for sure since they really lose nothing. That however would be at most 4 or 5 slots (that is even generous). They will probably throw in a few more slots on top of that, probably at the expense of a couple of small stations (SRQ comes to mind), or just one frequency here and there on a few key routes (maybe even a Late Shuttle frequency). The question then becomes...who gets the slots? I think AA would fear WN getting their hands on slots right before the end of Wright to launch DAL service, even with BWI nearby. The only place B6 really threatens AA is JFK, even though the post merger AA will likely be the number 2 carrier in BOS behind B6. I believe B6 has a few frequencies to BOS already, so if B6 got hold of 20 slots, my guess is you would see something like maybe 2 more BOS, one or 2 JFKs, and a few MCO and FLL. None of these flights really will affect AA from a competitive standpoint except for maybe BOS. NK is a carrier that could launch a few non stops if they had some slots, but AA is not after the same clientele as NK, so I doubt NK will have much of an effect on anything in DCA, even if NK adds DFW. I believe WestJet has also been trying for a while to get DCA slots, and I don't think AA is concerned with them. VX would be a carrier that I think wouldn't hurt them either, but any slots VX gets are useless because they would want beyond perimeter slots.

If I had to venture a guess...I would say that it will be 20 slots divested, and I think it would be to AAs benefit to do whatever it takes to give them to airlines other than WN. So my guess is B6 gets 8, NK gets 8, Westjet will get 4. At least thats the way I would try to play it if I were Doug Parker


User currently offlineaacun From Mexico, joined Jan 2004, 539 posts, RR: 1
Reply 27, posted (1 year 2 months 6 days 6 hours ago) and read 14499 times:
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Quoting apodino (Reply 26):

Says who that AA didnt fly the route? i worked it a couple of times as a six day trip from Miami thru London back to Phillie and reverse.it was on a 767-200.


User currently offlineIndy From United States of America, joined Jan 2005, 4568 posts, RR: 18
Reply 28, posted (1 year 2 months 6 days 5 hours ago) and read 14112 times:

Come on DOJ... say no. This goes beyond an airport or two. Allowing this merger further increases what is becoming a very uncompetitive environment nationally. The last thing consumers need now is fewer choices and less marketplace accountability for airlines. If you are going to keep allowing these mergers then it is time to bring back airline regulation. Three massive airlines dominating this country is a very bad thing. Who here can honestly say that service has improved as a result of all these mergers? Do you feel you are treated better today than you were 10 years ago? Are prices better? Is service better? I think most of you will answer "no" to all three.


Indy = Indianapolis and not Independence Air
User currently offlineHPRamper From United States of America, joined May 2005, 4059 posts, RR: 8
Reply 29, posted (1 year 2 months 6 days 4 hours ago) and read 14035 times:

Quoting Indy (Reply 28):
Come on DOJ... say no. This goes beyond an airport or two. Allowing this merger further increases what is becoming a very uncompetitive environment nationally.

So make US and AA pay the price for what DL and UA did? I don't think that's quite fair. If you have a problem with the merger environment, make UA and DL undo their mergers.

I don't recall anybody complaining to this extent about a noncompetitive environment when DL and NW merged. Maybe a little.


User currently offlineIndy From United States of America, joined Jan 2005, 4568 posts, RR: 18
Reply 30, posted (1 year 2 months 6 days 4 hours ago) and read 13976 times:

Quoting HPRamper (Reply 29):
So make US and AA pay the price for what DL and UA did? I don't think that's quite fair. If you have a problem with the merger environment, make UA and DL undo their mergers.

Oh I would love to make them undo those mergers. But because mistakes were made in the past by allowing those mergers doesn't mean the DOJ is obligated to keep making the same mistakes over and over. If that were the case, they would be required to approve every merger until we were left with one carrier. The line in the sand has to be drawn at some point. It should have been drawn a merger or two ago. It absolutely must be drawn now.



Indy = Indianapolis and not Independence Air
User currently onlineDeltal1011man From United States of America, joined Sep 2005, 9509 posts, RR: 14
Reply 31, posted (1 year 2 months 6 days 4 hours ago) and read 13851 times:

Quoting jetblueguy22 (Reply 4):
I could see someone grabbing the route. I agree that UA is probably out, but I could see DL taking them. Is it a pair as in two roundtrips or just one? Perhaps a VS/DL pair of flights if there really are two.
Pat

Thats the only way. Adding a dot to the LHR hub.

Quoting commavia (Reply 8):
Delta/Virgin seems to me to be the only plausible alternative, but even there, I, too, question how well they might do in the market. I certainly don't think they could support more than a 763. But honestly, even that seems somewhat like a stretch to me given how much stronger AA/BA will be at both ends of the route.

agreed.

Quoting Mah4546 (Reply 15):

meh and they should be giving up any damn LHR or DCA or any other slots. (and should have more DCA slots from the gosh damn slot swap.)

But thank Goodness the gov. is still trying as hard they can to 1) drive the industry in BK 2) help the largest domestic carrier....ie WN. Seems completely fair.  
Quoting commavia (Reply 22):
I think Delta wanted to keep all LHR flying on at least 767s.

lie-flat. It would have to start on a 767 but IIRC the mods on the 757 fleet to go lie-flat start next year, and could be changed to a 757 once they get the lie-flats.



yep.
User currently offlineMah4546 From Sweden, joined Jan 2001, 32884 posts, RR: 71
Reply 32, posted (1 year 2 months 6 days 4 hours ago) and read 13844 times:

Quoting apodino (Reply 26):
Somebody aptly pointed out in an article that AA had PHL-LHR authority years ago after buying TWA's LHR authorities...but they never flew it. Granted the circumstances are much different now. But that is something I found interesting.

AA flew PHLLHR with its own metal in the 1990s.

Quoting commavia:
We'll see. Divested slots at LGA were forced into a blind auction system in blocks of slot pairs, but divested slots at EWR were directed to a specific recipient.

No EWR slots were divested. UA sold its slots before DOJ got involved, AA needs to trade DCA slots for JFK slots with JetBlue ASAP and actually gain a a benefit from "divesture."



a.
User currently offlineOC2DC From United States of America, joined Feb 2013, 375 posts, RR: 0
Reply 33, posted (1 year 2 months 6 days 4 hours ago) and read 13761 times:

I'm confused about the LHR slots that they might have to give up. If I counted correctly, I believe UA has more flights to LHR than AA. 18 for UA compared to 15 for AA. Delta currently has 10 flights out of LHR but that number is slowly growing and with the new VS deal, it will grow even more...

If AA and US merge, they will only have 17 flights a day out of LHR, still trailing behind UA. Is it that necessary to shed LHR slots? It would be incredibly unorthodox for AA to not have a hub connected to LHR. Perhaps they will have to move the RDU slot to PHL?

[Edited 2013-07-27 12:22:29]


I'm not complaining, I'm critiquing...
User currently onlineMIflyer12 From United States of America, joined Feb 2013, 1051 posts, RR: 0
Reply 34, posted (1 year 2 months 6 days 4 hours ago) and read 13744 times:

Quoting Indy (Reply 30):
Oh I would love to make them undo those mergers. But because mistakes were made in the past by allowing those mergers doesn't mean the DOJ is obligated to keep making the same mistakes over and over. If that were the case, they would be required to approve every merger until we were left with one carrier. T

That shows a fundamental misunderstanding of the competitive analysis criteria for industry mergers set out by the FTC and used by the DOJ. In fact, it calls for quite the opposite of what you assert: mergers can be approved without concessions if overlap (both non-stop and single-connect city pairs) isn't detrimental to many city pairs, and importantly, a large passenger volume on those pairs.

UA + US: DOJ said it was going to sue to stop it, and the merger plan was withdrawn

DL + NW: approved without concessions

UA + CO: approved with minor concessions

WN + FL: approved without concessions

The result is more industry concentration and thus fewer competitors on the AA+US overlapping pairs. The obligation isn't for the DOJ to allow the same consolidation option to AA + US to be 'fair' to those firms; it's to assure a reasonable level of competition on the routes where a big volume of passengers fly. If anybody wants to argue that AA and US suffer by being late to the consolidation party, blame executives who mismanaged the firms strategically. This isn't a problem for the law and merger guidelines that have been in place and used consistently for well over a decade.


User currently offlineLAXintl From United States of America, joined May 2000, 25532 posts, RR: 50
Reply 35, posted (1 year 2 months 6 days 4 hours ago) and read 13722 times:

Quoting OC2DC (Reply 33):
If AA and US merge, they will only have 17 flights a day out of LHR, still trailing behind UA. Is it that necessary to shed LHR slots? It would be incredibly unorthodox for AA to not have a hub connected to LHR. Perhaps they will have to move the RDU slot to PHL?

The EU concern has to do with power of the AA-BA JV, and the loss of competition to PHL. AA/BA will become the sole carriers on the route once US is merged.

Has nothing to do with the count of individual slots, or comparing them to UA at LHR.



From the desert to the sea, to all of Southern California
User currently offlinesilentbob From United States of America, joined Aug 2006, 2112 posts, RR: 1
Reply 36, posted (1 year 2 months 6 days 3 hours ago) and read 13663 times:

Quoting Mah4546 (Reply 32):
No EWR slots were divested. UA sold its slots before DOJ got involved, AA needs to trade DCA slots for JFK slots with JetBlue ASAP and actually gain a a benefit from "divesture."

Actually, no EWR slots were completely divested. UA leased them to WN. I do agree that they need to present it as a done deal before the government makes any ruling.


User currently offlineOC2DC From United States of America, joined Feb 2013, 375 posts, RR: 0
Reply 37, posted (1 year 2 months 6 days 3 hours ago) and read 13581 times:

Quoting LAXintl (Reply 35):
The EU concern has to do with power of the AA-BA JV, and the loss of competition to PHL. AA/BA will become the sole carriers on the route once US is merged.

DL is the sole carrier on LHR-MSP/DTW and yet they are able to continue with VS without being scrutinized...



I'm not complaining, I'm critiquing...
User currently offlinenutsaboutplanes From United States of America, joined Jul 2010, 496 posts, RR: 8
Reply 38, posted (1 year 2 months 6 days 3 hours ago) and read 13544 times:

Quoting MIflyer12 (Reply 34):
This isn't a problem for the law and merger guidelines that have been in place and used consistently for well over a decade.

It most certainly is.

By allowing 6 airlines to merge in the past, the DOJ/DOT allowed the market to change. By not allowing AA and US to merge, they would place these two carriers at a severe disadvantage. I challenge anybody to find a market where an airline has completely run a muck pricing wise post-merger where price increases were NOT driven by fuel.

The DOT/DOJ have little latitude to work with here and they know it. US and AA are doing the right thing by offering a proactive plan; ultimately, they will get back everything that they lose and then some over time.



American Airlines, US Airways, Alaska Airlines, Northwest Airlines, America West Airlines, USAFR
User currently offlineRyanairGuru From Australia, joined Oct 2006, 5633 posts, RR: 5
Reply 39, posted (1 year 2 months 5 days 15 hours ago) and read 12899 times:

Quoting OC2DC (Reply 37):
DL is the sole carrier on LHR-MSP/DTW and yet they are able to continue with VS without being scrutinized

I agree in principle, and personally think that the divesture is really harsh, but I guess the difference is that VS don't fly to MSP and DTW. Therefore DL have always had a monopoly on those routes. In comparison, BA and US both currently fly LHR-PHL. With the merger they both become one and the same thing.

Is there any restriction on which slot has to be given up. Could AA and BA do a quick deal to transfer a peak-time TATL slot from AA to BA, in return for one of the less-optimal slots that BA acquired from BD which are only useful for short-haul, say 20:45 arrival, 21:50 departure, which is then graciously divested? That could be fun to watch  



Worked Hard, Flew Right
User currently offlinejumpjets From United Kingdom, joined Apr 2012, 838 posts, RR: 0
Reply 40, posted (1 year 2 months 5 days 12 hours ago) and read 12725 times:

Quoting jfk777 (Reply 6):
This will not be an only BA flown route, if that were to happen then AA could tell BA to stop flying to DFW and give that route to AA.

As I understand it AA handed over its BOS-LHR rotation to BA, so I guess where economic sense dictates this could happen on other routes - I don't know the economics of LHR-DFW to comment - it just seemed that from what other commenters have said, if US is dependent on Star connecting traffic for its LHR-PHL to be viable then pride aside, the economics might work better with increased capacity from BA.


User currently onlinejfk777 From United States of America, joined Aug 2006, 8390 posts, RR: 7
Reply 41, posted (1 year 2 months 5 days 9 hours ago) and read 12495 times:
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Quoting jumpjets (Reply 40):
As I understand it AA handed over its BOS-LHR rotation to BA, so I guess where economic sense dictates this could happen on other routes - I don't know the economics of LHR-DFW to comment - it just seemed that from what other commenters have said, if US is dependent on Star connecting traffic for its LHR-PHL to be viable then pride aside, the economics might work better with increased capacity from BA.

LHR to DFW is 1 BA 744 and 3 AA 777/767 daily, its AA's main hub. Its doubtful US depends much on Star for PHL to LHR since US has flown to PHL to LGW for years before moving to LHR, BMI is dead and US also flies nonstop from PHL to European Star hubs such as FRA & ZUR. With US merging into AA and alliances more connection will happen at LHR, but Philadelphia has been a long time route for decades to LHR. The new AA will fly its own planes from one of its hubs to LHR along side BA's own existing daily flight.


User currently offlinecommavia From United States of America, joined Apr 2005, 11712 posts, RR: 62
Reply 42, posted (1 year 2 months 5 days 9 hours ago) and read 12478 times:

Quoting jfk777 (Reply 41):
LHR to DFW is 1 BA 744 and 3 AA 777/767 daily, its AA's main hub. Its doubtful US depends much on Star for PHL to LHR since US has flown to PHL to LGW for years before moving to LHR, BMI is dead and US also flies nonstop from PHL to European Star hubs such as FRA & ZUR. With US merging into AA and alliances more connection will happen at LHR, but Philadelphia has been a long time route for decades to LHR. The new AA will fly its own planes from one of its hubs to LHR along side BA's own existing daily flight.

   Exactly.

AA handed BOS-LHR to BA for the same reason BA handed MAN-JFK to AA. It was a non-core, non-hub market for one carrier and could be served more effectively as a spoke to a hub by the other carrier. PHL-LHR doesn't fit that description. Each airline has a huge hub at one end - so it makes sense for both carriers to serve it, just as with the DFW/ORD/MIA/JFK/LAX-LHR markets, where both airlines still operate jointly alongside each other.

In fact, I expect PHL-LHR (and CLT-LHR) to see increased frequency and capacity post-merger. As connections presently focused on FRA/MUC with Lufthansa are largely shifted over LHR with BA, capacity will likely move to match. I suspect PHL-LHR and CLT-LHR will eventually get upgraded to 777s, and I also think a second daily flights on BA CLT-LHR, and a second AA flight PHL-LHR (perhaps summer seasonal) are plausible.


User currently offlinejfklganyc From United States of America, joined Jan 2004, 3508 posts, RR: 5
Reply 43, posted (1 year 2 months 5 days 9 hours ago) and read 12436 times:

Quoting MIflyer12 (Reply 34):
UA + CO: approved with minor concessions

UA handed over every single EWR slot. Not a minor concession at COs most important hub.

A slot controlled airport where one carrier owned 60% of the slots pre merger.

See a parallel to DCA?

UA/CO just did it before the govt forced them to


User currently offlineusflyer msp From United States of America, joined May 2000, 2125 posts, RR: 0
Reply 44, posted (1 year 2 months 5 days 8 hours ago) and read 12366 times:

Quoting jfklganyc (Reply 43):
UA handed over every single EWR slot. Not a minor concession at COs most important hub.

A slot controlled airport where one carrier owned 60% of the slots pre merger.

See a parallel to DCA?

UA/CO just did it before the govt forced them to

Not quite the same. UA/CO had 100% overlap on their routes from EWR while US/AA only compete on two routes at DCA. They will probably only have to divest the 7 overlapping slots because the competitive situation on the other routes will not have changed.


User currently offlinecommavia From United States of America, joined Apr 2005, 11712 posts, RR: 62
Reply 45, posted (1 year 2 months 5 days 8 hours ago) and read 12379 times:

Quoting jfklganyc (Reply 43):
UA handed over every single EWR slot. Not a minor concession at COs most important hub.

A slot controlled airport where one carrier owned 60% of the slots pre merger.

See a parallel to DCA?

UA/CO just did it before the govt forced them to

Okay, but the comparison that since UA gave up every one of their EWR slots so AA should/will be forced to do the same at DCA misses a critical point. The outcome of the UA slot sale at EWR - which was acceptable to regulators - still resulted in UA controlling more of the slots at EWR than AA will have at DCA. Let's focus on the outcome. Regulators accepted the outcome of UA controlling a substantial majority of the slots at EWR. (By the way - what is that percentage? 70%? 75%?)

Either way, I see no possible justification for confiscating all of AA's DCA slots, particularly given the fact that there is so little overlap between the two carriers. Confiscating the entirety of AA's current DCA slot holdings would have the net effect of simply forcing DCA's largest carrier, that provides the vast majority of its service to small and limited-entry markets, to stop a not-insignificant level of that unique service. And that, really, is the critical question: if the replacement of nonstop service from DCA to small markets with more 737s to Florida the public policy federal regulators want to pursue?

[Edited 2013-07-28 07:05:12]

User currently offlineFlyPNS1 From United States of America, joined Nov 1999, 6618 posts, RR: 24
Reply 46, posted (1 year 2 months 5 days 8 hours ago) and read 12234 times:

Quoting commavia (Reply 45):
And that, really, is the critical question: if the replacement of nonstop service from DCA to small markets with more 737s to Florida the public policy federal regulators want to pursue?

That's not regulators decision to make. Regulators are supposed to ensure that there is fair competition and access to public facilities.

And honestly, if WN won the slots, I doubt they'd use them all to Florida. You'll note that WN's most recent slots have gone to markets like STL and HOU. These were markets with no competition and high fares to DCA.

Quoting commavia (Reply 45):
Either way, I see no possible justification for confiscating all of AA's DCA slots, particularly given the fact that there is so little overlap between the two carriers.

I agree on this one and I don't expect the DOJ/DOT will demand that. I could see something in the ballpark of 10-20 slot pairs. US/AA could easily cough up that many slots and not hurt any small communities. Though I suspect they would still cut some small communities just to be spiteful and make a point.


User currently offlinemsp747 From United States of America, joined May 2010, 323 posts, RR: 0
Reply 47, posted (1 year 2 months 5 days 8 hours ago) and read 12191 times:

Quoting apodino (Reply 26):
So my guess is B6 gets 8, NK gets 8, Westjet will get 4

NK had slots at DCA, but abandoned them and moved its operation up to BWI. They won't have any interest in acquiring those slots

Quoting nutsaboutplanes (Reply 38):
By allowing 6 airlines to merge in the past, the DOJ/DOT allowed the market to change. By not allowing AA and US to merge, they would place these two carriers at a severe disadvantage.

  

We could argue all day whether the DL-NW merger should have happened, but it did. Then came UA-CO. So on what grounds could the government reject this deal, when it has already allowed two mega-carriers to be formed? If anything, they probably would see adding a third mega-carrier as additional competition for UA and DL, even if it meant the end of a smaller airline. If you want to stop this cycle, the DOJ needs to put its foot down if and when the new DL, UA, or AA try to swallow up another small carrier, say a B6 or AS


User currently offlineLAXintl From United States of America, joined May 2000, 25532 posts, RR: 50
Reply 48, posted (1 year 2 months 5 days 5 hours ago) and read 11934 times:

Quoting msp747 (Reply 47):
NK had slots at DCA, but abandoned them and moved its operation up to BWI.

In fairness they made some money from the asset. Southwest bought 4 slots.

Southwest Buys Spirit DCA Slots (by LAXintl Jul 3 2012 in Civil Aviation)

=



From the desert to the sea, to all of Southern California
User currently offlineSESGDL From United States of America, joined Jan 2001, 3489 posts, RR: 10
Reply 49, posted (1 year 2 months 5 days 4 hours ago) and read 11900 times:

Quoting msp747 (Reply 47):
We could argue all day whether the DL-NW merger should have happened, but it did. Then came UA-CO. So on what grounds could the government reject this deal, when it has already allowed two mega-carriers to be formed?

I keep seeing this same argument. This would then apply to every merger down the road as well. What happens if AA/DL or UA/AA or UA/DL try to merge? How but WN and the bunch? Do they again say, well DL/NW and UA/CO and AA/US were allowed to merge so it would be unfair not to let us merge? It has to stop somewhere. The AA/US merger is happening, but the government really needs to put the kibosh on any further mergers. The environment is such that carriers can operate profitably while still providing a decent amount of competition for travelers. However, any large mergers after this will be entirely anti-competitive and should be stopped, though I don't foresee that happening. I don't foresee any large mergers over the next few years, but like every industry nowadays, it will start again. And someday the juggernauts will be pleading their case that they need to merge to stay competitive, blah blah blah, and these same arguments we keep hearing now will be rehashed.

Jeremy


User currently offlinejfklganyc From United States of America, joined Jan 2004, 3508 posts, RR: 5
Reply 50, posted (1 year 2 months 4 days 23 hours ago) and read 11334 times:

Quoting commavia (Reply 45):

Okay, but the comparison that since UA gave up every one of their EWR slots so AA should/will be forced to do the same at DCA misses a critical point. The outcome of the UA slot sale at EWR - which was acceptable to regulators - still resulted in UA controlling more of the slots at EWR than AA will have at DCA. Let's focus on the outcome. Regulators accepted the outcome of UA controlling a substantial majority of the slots at EWR. (By the way - what is that percentage? 70%? 75%?)

You cant compare the actual number of slots...you need to compare percentages.

CO used to have around 60% of slots at EWR, and I would bet the combined carrier isn't at the 70% mark.

AA/US will have a much higher percentage without divestiture.


User currently offlineckfred From United States of America, joined Apr 2001, 5251 posts, RR: 1
Reply 51, posted (1 year 2 months 4 days 18 hours ago) and read 10876 times:

Quoting apodino (Reply 26):
Somebody aptly pointed out in an article that AA had PHL-LHR authority years ago after buying TWA's LHR authorities...but they never flew it. Granted the circumstances are much different now. But that is something I found interesting.

I might be wrong, but I was under the assumption, when AA bought all of TWA's authority to London (except for ORD, which it had previously purchased) the Feds ordered TWA to keep STL (since it had the major domestic hub there) and to offer to seel its PHL authority to US. The problem was that US then had to fly to LGW, because only PA, TW, BA, and Virgin had the right to fly to LHR from the U.S.

Quoting MIflyer12 (Reply 34):
Quoting Indy (Reply 30):Oh I would love to make them undo those mergers. But because mistakes were made in the past by allowing those mergers doesn't mean the DOJ is obligated to keep making the same mistakes over and over. If that were the case, they would be required to approve every merger until we were left with one carrier. T
That shows a fundamental misunderstanding of the competitive analysis criteria for industry mergers set out by the FTC and used by the DOJ. In fact, it calls for quite the opposite of what you assert: mergers can be approved without concessions if overlap (both non-stop and single-connect city pairs) isn't detrimental to many city pairs, and importantly, a large passenger volume on those pairs.

UA + US: DOJ said it was going to sue to stop it, and the merger plan was withdrawn

DL + NW: approved without concessions

UA + CO: approved with minor concessions

WN + FL: approved without concessions

The result is more industry concentration and thus fewer competitors on the AA+US overlapping pairs. The obligation isn't for the DOJ to allow the same consolidation option to AA + US to be 'fair' to those firms; it's to assure a reasonable level of competition on the routes where a big volume of passengers fly. If anybody wants to argue that AA and US suffer by being late to the consolidation party, blame executives who mismanaged the firms strategically. This isn't a problem for the law and merger guidelines that have been in place and used consistently for well over a decade.

Remember that in the practice of law, the idea is to show a similar instance in the past and how the law was applied. Clearly, US and AA can show that other large mergers were approved, based on a number of similar criteria, including size, competiting routes, etc.

DOJ can't argue that when it approved DL/NW, UA/CO, and WN/FL, there were more competitors, but becuase it effectively allowed the number of competitors to scale down, the current market concentration now precludes US and AA from merging.

By the same token, I'm sure that AA/US can find some experts in the field of anti-trust law, who can explain that because of the dominant size of the current UA and DL (as well as WN), only a competitor the size of a merged US/AA can effectively compete for corporate business.


User currently offlinesilentbob From United States of America, joined Aug 2006, 2112 posts, RR: 1
Reply 52, posted (1 year 2 months 4 days 16 hours ago) and read 10817 times:

Quoting jfklganyc (Reply 50):
You cant compare the actual number of slots...you need to compare percentages.

CO used to have around 60% of slots at EWR, and I would bet the combined carrier isn't at the 70% mark.

AA/US will have a much higher percentage without divestiture.

I will guarantee that the the threats to block the US-UA merger will be used in favor of the US-AA merger. "Last time we wanted to merge, you defined the city as IAD and DCA..."


User currently onlinejfk777 From United States of America, joined Aug 2006, 8390 posts, RR: 7
Reply 53, posted (1 year 2 months 4 days 5 hours ago) and read 10427 times:
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Quoting ckfred (Reply 51):
I might be wrong, but I was under the assumption, when AA bought all of TWA's authority to London (except for ORD, which it had previously purchased) the Feds ordered TWA to keep STL (since it had the major domestic hub there) and to offer to seel its PHL authority to US. The problem was that US then had to fly to LGW, because only PA, TW, BA, and Virgin had the right to fly to LHR from the U.S

TWA did sell USair BWI and PHL routes to LGW because AA couldn't buy them from TWA back in 1991. TWA sold AA Boston, LAX and JFK plus a separate deal earlier for Chicago to LHR. AA, lucky bastards they were, also got for "free" from PA the Miami to LHR route since United had no interest in flying it( UA did fly MIA to LHR briefly in the spring of 1991but gave it back to PA for LGW from MIA flights). Carl Icahn, the same one in the Dell computer deal today, got top dollar from Crandall for the TWA LHR slots.


User currently offlineD L X From United States of America, joined May 1999, 11383 posts, RR: 52
Reply 54, posted (1 year 2 months 4 days 4 hours ago) and read 10210 times:

Can someone help me out here with the status quo?

Other than US and BA, who flies PHL-LHR?



Send me a PM at http://www.airliners.net/aviation-forums/sendmessage.main?from_username=NULL
User currently offlineIndy From United States of America, joined Jan 2005, 4568 posts, RR: 18
Reply 55, posted (1 year 2 months 4 days 4 hours ago) and read 10105 times:

Quoting ckfred (Reply 51):
DOJ can't argue that when it approved DL/NW, UA/CO, and WN/FL, there were more competitors, but becuase it effectively allowed the number of competitors to scale down, the current market concentration now precludes US and AA from merging.

Sure they can argue it. And they would win because a judge can easily see there has to be an end to this at some point. A judge realizes that if he/she doesn't side with the DOJ that eventually there would be no competition left. At some point the mergers have to stop. Now is as good of time as any. The market conditions aren't the same as they were 10 years ago. The number of carriers are down significantly. Prices are up. Profits are up. Seats are down. A number of hubs have been closed or well into the process of closing. I'm sorry but I think this would be a relatively easy win for the DOJ...if the argument were to ever come up.



Indy = Indianapolis and not Independence Air
User currently offlineSTT757 From United States of America, joined Mar 2000, 16878 posts, RR: 51
Reply 56, posted (1 year 2 months 4 days 4 hours ago) and read 10083 times:

Quoting jfk777 (Reply 53):
AA, lucky bastards they were, also got for "free" from PA the Miami to LHR route since United had no interest in flying it( UA did fly MIA to LHR briefly in the spring of 1991but gave it back to PA for LGW from MIA flights)



AA got their MIA-London route authority from CO in 1990 (not PA), CO took over MIA-LGW from Eastern in 1986 and operated the route until 1990 when they sold the route to AA in conjunction with their purchase of Eastern's Latin Routes.

DL acquired Pan Am's MIA-London route along with DTW which I believe they later sold to NWA. DL operated a MCO-MIA-LGW route.



Eastern Air lines flt # 701, EWR-MCO Boeing 757
User currently onlineOA412 From United States of America, joined Dec 2000, 5295 posts, RR: 25
Reply 57, posted (1 year 2 months 4 days 3 hours ago) and read 9914 times:

Quoting D L X (Reply 54):
Other than US and BA, who flies PHL-LHR?

They're the only two.



Hughes Airwest - Top Banana In The West
User currently offlineusairways85 From United States of America, joined Nov 2001, 3414 posts, RR: 7
Reply 58, posted (1 year 2 months 4 days 3 hours ago) and read 9909 times:

Post merger, I'd like to see PHL-LHR at
US: 333, 763
BA: 772, 773
...for a total of 4 flts/day


User currently onlineDeltal1011man From United States of America, joined Sep 2005, 9509 posts, RR: 14
Reply 59, posted (1 year 2 months 4 days 3 hours ago) and read 9765 times:

Quoting OC2DC (Reply 37):
DL is the sole carrier on LHR-MSP/DTW and yet they are able to continue with VS without being scrutinized...

because nothing changed.

also, DL/VS are a good bit smaller than BA/AA at LHR. Its the same idea in NYC and why AA shouldn't have to give up any NYC slots. They will grow a nice chunk with US's LGA slots but will still be 100-150 slots small than Delta at LGA/JFK. Thus no slots should be given up.



yep.
User currently offlineD L X From United States of America, joined May 1999, 11383 posts, RR: 52
Reply 60, posted (1 year 2 months 4 days 3 hours ago) and read 9768 times:

Quoting OA412 (Reply 57):

Quoting D L X (Reply 54):
Other than US and BA, who flies PHL-LHR?

They're the only two.

So why would USand AA give up its authority to fly LHR-PHL 1x daily, and cede all the LHR traffic to partner BA? I would think that BA would give up one of its flights.

Help me out. What info am I missing? Is BA giving up the slot what's on the table?



Send me a PM at http://www.airliners.net/aviation-forums/sendmessage.main?from_username=NULL
User currently offlinejumpjets From United Kingdom, joined Apr 2012, 838 posts, RR: 0
Reply 61, posted (1 year 2 months 4 days 1 hour ago) and read 9566 times:

Quoting D L X (Reply 60):
So why would USand AA give up its authority to fly LHR-PHL 1x daily, and cede all the LHR traffic to partner BA

I imagine that as BA is not a party to the AA-US merger the regulators have no jurisdiction to force BA to give up one of its LHR-PHL rotations.

At a broader level however, if the regulators thought the merger caused competition issues as regards the whole BA/IB/AA etc TATL JV then I expect they would have to open a whole separate investigation and if thought necessary could impose conditions on BA in order to allow the JV to continue.

I'm no lawyer but that's my thoughts for what they are worth.


User currently onlinejfk777 From United States of America, joined Aug 2006, 8390 posts, RR: 7
Reply 62, posted (1 year 2 months 4 days ago) and read 9376 times:
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Quoting STT757 (Reply 56):
AA got their MIA-London route authority from CO in 1990 (not PA), CO took over MIA-LGW from Eastern in 1986 and operated the route until 1990 when they sold the route to AA in conjunction with their purchase of Eastern's Latin Routes.

DL acquired Pan Am's MIA-London route along with DTW which I believe they later sold to NWA. DL operated a MCO-MIA-LGW route.

All that is true but where did Eastern, Continental, or Delta fly to LHR from Miami at the time. AA was lucky because Delta couldn't fly Miami to LHR, their Miami flight was Gatwicked. AA got the Miami to LHR for "free" because AA and UA were the two US LHR airlines and AA didn't pay TWA or PA anything for that LHR slots. AA did purchase a Miami to LGW route with the entire Eastern Latin Package. SO after all that AA got their Miami flights LHR slot for FREE.


User currently offlineByrdluvs747 From United States of America, joined Jul 2004, 2361 posts, RR: 1
Reply 63, posted (1 year 2 months 4 days ago) and read 9368 times:

I don't understand why people here expect our nations capital to be treated the same as DAL, MCO, and FLL. I don't see the value of eliminating regional access to DCA for the sake of Disney runs by WN and B6.

Quoting commavia (Reply 22):
Nonetheless, it is not really politicians' call. A very large group of them wrote a letter to regulators urging them to go easy on AA/US. We'll see if it was effective. But it is still the executive branch that makes the ruling.

Congress could easily mandate that slots surrendered by AA/US be placed in a pool to be used only for regional traffic. We'll see how eager WN and B6 would be to serve those routes.

Quoting SESGDL (Reply 49):
What happens if AA/DL or UA/AA or UA/DL try to merge?

With carriers that size, market concentration comes in to play. The DOJ would block it for the same reasons they used to block the AT&T/TMobile merger. A AA/UA merger would create a monopoly in ORD, and an overwhelming dominance in almost every major city(excluding JFK, and ATL).



The 747: The hands who designed it were guided by god.
User currently offlineRyanairGuru From Australia, joined Oct 2006, 5633 posts, RR: 5
Reply 64, posted (1 year 2 months 3 days 22 hours ago) and read 9105 times:

Quoting D L X (Reply 60):
So why would US and AA give up its authority to fly LHR-PHL 1x daily, and cede all the LHR traffic to partner BA?

Good question, as I said up-thread, I think it is a poorly thought through decision

Quoting jumpjets (Reply 61):
I imagine that as BA is not a party to the AA-US merger the regulators have no jurisdiction to force BA to give up one of its LHR-PHL rotations.

I'm certainly no expert, but I'm inclined to agree: this would be binding on AA.

That's why this is such an illogical decision IMHO: it has the effect of forcing US out of the PHL-LHR market. I can't help but think that the regulators took the JV just a little too literally.

I don't think that US/AA will leave LHR (ultimately I could see two daily) but in the short term the easiest way around would be for BA to take over, for example, an AA ORD flight, and AA use that slot for PHL.



Worked Hard, Flew Right
User currently onlineairliner371 From United States of America, joined Aug 2012, 1398 posts, RR: 2
Reply 65, posted (1 year 2 months 3 days 22 hours ago) and read 9101 times:

Quoting Byrdluvs747 (Reply 63):
DCA for the sake of Disney runs by WN and B6.

If you actually look at the way WN operates from major business cities like DCA you will realize they aren't flying "Disney runs," in fact they are ending AirTran's flight to MCO in favor of HOU. If B6 gets slots, yes, they will most likely go to Florida but for WN, they will more likely go to more variety of cities like BNA, MDW, MCI, MSY and eventually DAL. While not tiny cities like AVL, they are not just Florida.



You will either love or hate the airline industry. If you love it, it will get in your blood and it will never leave.
User currently offlineIADCA From United States of America, joined Feb 2007, 1292 posts, RR: 8
Reply 66, posted (1 year 2 months 3 days 17 hours ago) and read 8778 times:

Quoting jumpjets (Reply 61):
I imagine that as BA is not a party to the AA-US merger the regulators have no jurisdiction to force BA to give up one of its LHR-PHL rotations.

At a broader level however, if the regulators thought the merger caused competition issues as regards the whole BA/IB/AA etc TATL JV then I expect they would have to open a whole separate investigation and if thought necessary could impose conditions on BA in order to allow the JV to continue.

I'm no lawyer but that's my thoughts for what they are worth.

That's pretty much it, with the exception that the addition of US to the AA/BA JV antitrust immunity setup also has to be approved, at least implicitly (and on the US side, by a different agency than the one that regulates the merger itself). It would look pretty bad for DOJ to approve the merger only to have DOT then not permit the addition of US's capacity into the JV. For issues like this, it's really much easier for the European side to take care of it as it's the same folks making both decisions.

Quoting D L X (Reply 60):

So why would USand AA give up its authority to fly LHR-PHL 1x daily, and cede all the LHR traffic to partner BA? I would think that BA would give up one of its flights.

Help me out. What info am I missing? Is BA giving up the slot what's on the table?

What you might be missing is that the JV is metal neutral, meaning of course that the revenue stream to each airline doesn't depend on whose plane actually flies it. The slot would come from one of the merging parties.


User currently offlinecjpmaestro From United States of America, joined Mar 2011, 88 posts, RR: 0
Reply 67, posted (1 year 2 months 3 days 10 hours ago) and read 8570 times:

Quoting D L X (Reply 60):

So why would USand AA give up its authority to fly LHR-PHL 1x daily, and cede all the LHR traffic to partner BA? I would think that BA would give up one of its flights.

Help me out. What info am I missing? Is BA giving up the slot what's on the table?

Correct me if I'm wrong but the way I read the article was US or BA aren't giving up their flights but there will be one added at the expense of another flight elsewhere.


User currently offlineSTT757 From United States of America, joined Mar 2000, 16878 posts, RR: 51
Reply 68, posted (1 year 2 months 3 days 9 hours ago) and read 8459 times:

Quoting jfk777 (Reply 62):
MCO-MIA-LGW route.

All that is true but where did Eastern, Continental, or Delta fly to LHR from Miami at the time. AA was lucky because Delta couldn't fly Miami to LHR, their Miami flight was Gatwicked. AA got the Miami to LHR for "free" because AA and UA were the two US LHR airlines and AA didn't pay TWA or PA anything for that LHR slots. AA did purchase a Miami to LGW route with the entire Eastern Latin Package. SO after all that AA got their Miami flights LHR slot for FREE.



They bought the rights to fly to London from Miami first from CO, at the time AA didn't have LHR rights so they had to fly to LGW. When they purchased the TWA LHR rights they were able to transfer the MIA-LGW flight to LHR, they didn't buy anything from Pan Am.

Same thing happened recently with DL. DL for all these years they operated the JFK Trans-Atlantic hub they never had rights to fly to London from New York. UA was pulling their International routes out of New York and sold their rights to New York to London to DL. Since DL didn't have rights to LHR at the time they had to fly to LGW, when LHR opened up DL moved the flight to LHR. UA got their New York - London rights back when they merged with CO.



Eastern Air lines flt # 701, EWR-MCO Boeing 757
User currently offlineVV701 From United Kingdom, joined Aug 2005, 7573 posts, RR: 17
Reply 69, posted (1 year 2 months 3 days 8 hours ago) and read 8355 times:

Quoting jfk777 (Reply 6):
This will not be an only BA flown route, if that were to happen then AA could tell BA to stop flying to DFW and give that route to AA

The AA/BA JV is "metal neutral" with shared revenue and costs. So if any changes in metal occur it will only be because the one operator has a lower cost than the other in operating that route.

Quoting alfa164 (Reply 19):
I suspect DL would be very interested in the slots, but not necessarily to fly PHL-LHR. If AA/US divests itself of the LHR slots (I don't believe PHL is slot-controlled, so that side is irrelevant), it could use them to open SLC-LHR - or some other surprise departure city.

The EC has stated that it is concerned with competition on the PHL-LHR route. It has not expressed a concern about the number of slots operated by AA/BA/IB/US at LHR. So, like with the BOS-LHR route when AA/BA/IB North Atlantic ATI was granted, the remedy slots will likely have to be returned to AA/BA if they are not used for the PHL-LHR route. Therefore the option of using the slots to operate SLC-LHR is unlikely.

Here is part of a joint AA/BA statement:


“We are pleased that as part of the approval process, the EU Commission has completed an initial market investigation and identified only one city pair that raises competitive concerns, London-Philadelphia.

“US Airways and American Airlines have provided commitments to the Commission that address those concerns, and we believe we are on track to receive clearance in Europe."


as reported here:

http://aviationblog.dallasnews.com/2...a-london-heathrow-round-trip.html/

Quoting OC2DC (Reply 33):
If AA and US merge, they will only have 17 flights a day out of LHR, still trailing behind UA. Is it that necessary to shed LHR slots?

Again the EC is concerned with competition on the PHL-LHR route. The EC does not care how many flights AA/US or UA/CO will operate into LHR.

Quoting D L X (Reply 60):
So why would USand AA give up its authority to fly LHR-PHL 1x daily, and cede all the LHR traffic to partner BA?

With a "neutral metal" policy the only consideration with shared revenue and shared costs is which airline can operate the route more economically. Where one of the two airlines has a hub at one end of the route and the other does not as was the case for AA and BA on LHR-BOS, the answer is easy. Where both have a hub on the route as is the case on PHL-LHR the margins are smaller, perhaps non-existent.


User currently offlineFlighty From United States of America, joined Apr 2007, 8568 posts, RR: 2
Reply 70, posted (1 year 2 months 3 days 8 hours ago) and read 8279 times:

Quoting cjpmaestro (Reply 67):
Help me out. What info am I missing? Is BA giving up the slot what's on the table?
Quoting VV701 (Reply 69):
Where one of the two airlines has a hub at one end of the route and the other does not as was the case for AA and BA on LHR-BOS, the answer is easy. Where both have a hub on the route as is the case on PHL-LHR the margins are smaller, perhaps non-existent.

The only problem on PHL-LHR is that there were 2 competitors before (US and BA) and now it will be a monopoly (AA and BA, which are one company).

Just giving up an expensive slot won't change that reality. I guess the only likely competition is the joint-venture Delta/Virgin/KLM/Air France. Then if they come, we can exult how competive and nice they are   Aren't we lucky... There might be 2 whole airlines on it.


User currently offlinea380787 From United States of America, joined Jul 2013, 990 posts, RR: 0
Reply 71, posted (1 year 2 months 3 days 7 hours ago) and read 8195 times:

Quoting Byrdluvs747 (Reply 63):
I don't understand why people here expect our nations capital to be treated the same as DAL, MCO, and FLL. I don't see the value of eliminating regional access to DCA for the sake of Disney runs by WN and B6.

Because you want to fly to places where want to go, not where politicians want to go. No point supporting EMB-120 service to middle-of-nowhere-ville just because one prominent Senator thinks it's best for a slot wasted like that. They're rich enough to take a cab out of IAD.

I prefer to let laissez faire do its wonders and determine what's best to fly to.


User currently offlinejfklganyc From United States of America, joined Jan 2004, 3508 posts, RR: 5
Reply 72, posted (1 year 2 months 3 days 6 hours ago) and read 8032 times:

Quoting a380787 (Reply 71):
Because you want to fly to places where want to go, not where politicians want to go. No point supporting EMB-120 service to middle-of-nowhere-ville just because one prominent Senator thinks it's best for a slot wasted like that. They're rich enough to take a cab out of IAD.

I prefer to let laissez faire do its wonders and determine what's best to fly to.

You make an excellent point.

However, slot controlled airports are all about politics.

Long story short, you can not have one airline with more than 70% control (I think it is close to 80%) at a slot controlled airport due to a merger.

Won't happen.

There will be significant slot divestitures needed to get approval for the deal.


User currently offlineckfred From United States of America, joined Apr 2001, 5251 posts, RR: 1
Reply 73, posted (1 year 2 months 3 days 5 hours ago) and read 7970 times:

Quoting Indy (Reply 55):
Prices are up. Profits are up. Seats are down. A number of hubs have been closed or well into the process of closing. I'm sorry but I think this would be a relatively easy win for the DOJ...if the argument were to ever come up.

I read in either the WSJ or the Chicago Tribune that the average fare paid in the U.S. during Q1 of 2013has increased by $1, relative to Q1 of 2012. After accounting for inflation, airfares are down from the late 1990s.

I suspect that has a lot to do with the fact that so many more business travelers fly on discounted fares. Back in the 1990s, if you didn't have a Saturday stayover, you were paying full fare.

Quoting Indy (Reply 55):
Sure they can argue it. And they would win because a judge can easily see there has to be an end to this at some point. A judge realizes that if he/she doesn't side with the DOJ that eventually there would be no competition left. At some point the mergers have to stop. Now is as good of time as any.


And DOJ might very well find a judge who rules, words to the effect, that since DOJ has been letting large mergers go since the 1980s, , as well as mergers that created fortress hubs, like TW-OZ at STL and NW-NC at MSP and DTW, DOJ can't turn 180 degrees and stop mergers that appear no worse than similar mergers in the recent past.

There are a number of pundits who thought that AT&T should have taken DOJ to court over the T-Mobile merger, since DOJ allowed Sprint-Nextel and allowed AT&T to buy Bell South, merging AT&T Wireless with Cingular.

When I took anti-trust law in law school, the prevailing thought was that if DOJ allows two competitors to merge, then other competitors can merge to form companies roughly the same size as the first combination. AA-US will be bigger than UA and DL, but not by much.

If DOJ says no to this merger, I would like my chances as the anti-trust counsel for US-AA in a court fight


User currently offlineD L X From United States of America, joined May 1999, 11383 posts, RR: 52
Reply 74, posted (1 year 2 months 3 days 5 hours ago) and read 7919 times:

Quoting a380787 (Reply 71):
Because you want to fly to places where want to go, not where politicians want to go. No point supporting EMB-120 service to middle-of-nowhere-ville just because one prominent Senator thinks it's best for a slot wasted like that. They're rich enough to take a cab out of IAD.

So, would you say that LGA should only have flights to DCA, LAX, SFO, IAH, ATL, MIA, and ORD? Because surely those would be the most lucrative routes, and no one wants to fly to BUF or ILM, right?

The point is that those flights to smaller places are also full flights. There's more than just the congressman taking those flights. Quite often those passengers are locals like me that want and need to get to a smaller city. Should we be forced to schlep to IAD? Why have you placed your value judgment of what flights are important and not important upon us?



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User currently offlineFlighty From United States of America, joined Apr 2007, 8568 posts, RR: 2
Reply 75, posted (1 year 2 months 3 days 5 hours ago) and read 7891 times:

Quoting D L X (Reply 74):
The point is that those flights to smaller places are also full flights. There's more than just the congressman taking those flights. Quite often those passengers are locals like me that want and need to get to a smaller city. Should we be forced to schlep to IAD? Why have you placed your value judgment of what flights are important and not important upon us?

 

Is a 50-seater full of Americans more important than a 150 seater full of Americans? The answer is no.


User currently offlineIndy From United States of America, joined Jan 2005, 4568 posts, RR: 18
Reply 76, posted (1 year 2 months 3 days 5 hours ago) and read 7879 times:

Quoting ckfred (Reply 73):
If DOJ says no to this merger, I would like my chances as the anti-trust counsel for US-AA in a court fight

Let me ask you this. If US and AA are allowed to merge then what happens if some day down the road DL and UA decide they need to merge to be competitive? Do you allow DL and UA to merge because you allowed US and AA to merge? Where do you draw the line? What is the criteria for being too big?



Indy = Indianapolis and not Independence Air
User currently offlineJoePatroni707 From United States of America, joined Dec 2012, 493 posts, RR: 0
Reply 77, posted (1 year 2 months 3 days 4 hours ago) and read 7980 times:

Quoting Indy (Reply 76):
Let me ask you this. If US and AA are allowed to merge then what happens if some day down the road DL and UA decide they need to merge to be competitive? Do you allow DL and UA to merge because you allowed US and AA to merge? Where do you draw the line? What is the criteria for being too big?

Dont think that will happen, this is likely the last of the "big" mergers. DL and UA are well aware that their merger would never stand a chance IF that ever even came up but it wont.

Down the line you "may" see something like an F9/B6 type of merger (again this is for the sake of argument and speculation only on the subject...NOT EVEN A RUMOR!)

But as far as the big weddings are concerned this is the last IMHO.


User currently offlineD L X From United States of America, joined May 1999, 11383 posts, RR: 52
Reply 78, posted (1 year 2 months 3 days 3 hours ago) and read 7877 times:

Quoting Flighty (Reply 75):
Is a 50-seater full of Americans more important than a 150 seater full of Americans? The answer is no.

That's a poor value judgment.

It is not true that passengers wanting to go to New York or Orlando are inherently more important than passengers wanting to go to Jackson, Mississippi. A good airport is one that serves both.



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User currently offlineHPRamper From United States of America, joined May 2005, 4059 posts, RR: 8
Reply 79, posted (1 year 2 months 3 days 3 hours ago) and read 7893 times:

Quoting Indy (Reply 76):
Let me ask you this. If US and AA are allowed to merge then what happens if some day down the road DL and UA decide they need to merge to be competitive?

Then DL and UA will be doing something terribly wrong, since with AA and US merging the big three will be roughly on par with one another size-wise.

Quoting JoePatroni707 (Reply 77):
But as far as the big weddings are concerned this is the last IMHO.

  
With everyone now on equal footing, there will be no more excuses for any of DL/UA/AA to need to merge with anyone.


User currently offlineFlytravel From United States of America, joined Dec 2009, 873 posts, RR: 0
Reply 80, posted (1 year 2 months 3 days 3 hours ago) and read 7837 times:

Quoting Byrdluvs747 (Reply 63):
Congress could easily mandate that slots surrendered by AA/US be placed in a pool to be used only for regional traffic. We'll see how eager WN and B6 would be to serve those routes.

I think B6 could be effective in connecting markets in the NE where it already services like SYR, BUF, ROC, PWM to DCA and then it'd have additional connection flow to the DCA-Florida/SJU routes it already services.

AA would probably then drop the routes to upstate NY. This is similar to US not using it's DCA slots to fly DCA-MKE when FL flies the route. Making a deal with B6 would probably be in better interest for AA than making a deal with WN. WN would fly to big markets like DAL (DCA-DAL), parallel to AA flying DCA-DFW and in general, a strong WN in DCA/BWI would be a bigger competitor to AA at DCA.

[Edited 2013-07-30 12:26:53]

User currently offlineapodino From United States of America, joined Apr 2005, 4281 posts, RR: 6
Reply 81, posted (1 year 2 months 3 days 3 hours ago) and read 7782 times:

Post Merger, we will have three Global Airlines that are US based, AA, UA, and DL. There will be slightly less competition company wise after the merger. But is competition going away entirely? Lets see what we have post merger.

Flag Carriers
AA, UA, DL

National Carriers
WN, B6, AS, HA, VX

Low Cost Carriers
G4, NK, F9

That is actually still quite a number of carriers serving the US. No its not what it once was, but it is still a healthy amount. And one thing I was thinking about too. In a lot of what I would call outstation hubs (One carrier has a hub, and its a spoke for other carriers, DTW, DFW, etc), the mergers actually increase the amount of destinations served by one carrier, so in a sense it actually improves competition on some routes. For example, MSP is a fortress hub for DL. Pre Merger, AA serves DFW, LGA, MIA, and ORD from there, and US serves PHL, CLT, PHX, and DCA. However, when the merger is complete, AA will now have service to DFW, LGA, MIA, ORD, PHL, CLT, PHX, and DCA from MSP and you could even see LAX added. 9 destinations is not a lot compared to what DL serves out of there, and I will admit that, but the merged AA is more competitve out of MSP than AA or US was alone.

I do think that the DOT/DOJ has to approve this merger...but that this would be it for the mergers. And if you actually look at the US pre deregulation, the only carriers that really flew internationally were Pan Am and TWA. Three carriers flying internationally now a days is actually more than the 70's, and it actually goes up if you count other carriers such as HA, B6, and NK flying international routes as well. That is not too shabby.


User currently offlinemsp747 From United States of America, joined May 2010, 323 posts, RR: 0
Reply 82, posted (1 year 2 months 3 days ago) and read 7521 times:

Quoting Flighty (Reply 75):
Is a 50-seater full of Americans more important than a 150 seater full of Americans? The answer is no.
Quoting D L X (Reply 78):
That's a poor value judgment.

It is not true that passengers wanting to go to New York or Orlando are inherently more important than passengers wanting to go to Jackson, Mississippi. A good airport is one that serves both

But obviously AA/US wouldn't see it that way, since those smaller cities would be the cities that lose service. Remember, it would not be the Feds who would be stripping service from cities like JAN, AVL, and OAJ. It would be US/AA saying those markets aren't worth while because they now have fewer slots and they'd rather keep service to LGA and MCO instead. This is all a bargaining tactic. US/AA is making these threats to try and scare the feds into letting them keep all their slots.


User currently offlineckfred From United States of America, joined Apr 2001, 5251 posts, RR: 1
Reply 83, posted (1 year 2 months 2 days 9 hours ago) and read 7119 times:

Quoting Indy (Reply 76):
Let me ask you this. If US and AA are allowed to merge then what happens if some day down the road DL and UA decide they need to merge to be competitive? Do you allow DL and UA to merge because you allowed US and AA to merge? Where do you draw the line? What is the criteria for being too big?

This is probably the last merger, because UA/DL would be twice the size of AA, and there would be no other large airline to merge with AA.


User currently offlineD L X From United States of America, joined May 1999, 11383 posts, RR: 52
Reply 84, posted (1 year 2 months 2 days 8 hours ago) and read 6906 times:

Quoting msp747 (Reply 82):
But obviously AA/US wouldn't see it that way, since those smaller cities would be the cities that lose service.

Well, of course! If you only have the option of serving one, you serve the bigger one. But if you have the option of serving two, you don't serve the bigger one twice.

That should be obvious, in that we don't see all the flights from hubs only going to the large cities.

Quoting ckfred (Reply 83):
This is probably the last merger, because UA/DL would be twice the size of AA, and there would be no other large airline to merge with AA.

Right. Also, mergers don't just happen because they're fun. They happen because one company can fill the holes in the other company. UA and DL wouldn't fill each others' holes.



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User currently offlineFlyPNS1 From United States of America, joined Nov 1999, 6618 posts, RR: 24
Reply 85, posted (1 year 2 months 2 days 8 hours ago) and read 6879 times:

Quoting D L X (Reply 84):
Well, of course! If you only have the option of serving one, you serve the bigger one. But if you have the option of serving two, you don't serve the bigger one twice.

But we know that's not true. Instead of applying for new slots for OKC, US could have easily just taken one of their frequencies from DCA-PHL (or DCA-MCO or DCA-BOS) and used it for DCA-OKC. But US chooses not to do this.

This indicates to be me that US believes that service to large markets is inherently much, much more valuable than smaller markets. Or US is just squatting on slots at large markets. Note that right now US has two CRJ flights on DCA-PHL that depart within 20 minutes of each other.  

So why is WN so evil for serving large markets from DCA?


User currently offlineD L X From United States of America, joined May 1999, 11383 posts, RR: 52
Reply 86, posted (1 year 2 months 2 days 7 hours ago) and read 6809 times:

Quoting FlyPNS1 (Reply 85):
But we know that's not true. Instead of applying for new slots for OKC, US could have easily just taken one of their frequencies from DCA-PHL (or DCA-MCO or DCA-BOS) and used it for DCA-OKC. But US chooses not to do this.

Bull.

We know that it IS true because US flies to 45 smaller markets from DCA. Don't cherry pick OKC.



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User currently onlineDeltal1011man From United States of America, joined Sep 2005, 9509 posts, RR: 14
Reply 87, posted (1 year 2 months 2 days 4 hours ago) and read 6589 times:

Quoting Indy (Reply 76):

no line. Its a free market or it isn't.
If DL/UA/AA want to merge and bring B6/AS and HA to the table too.....good for them, great for the stock price if they pull it off. That is all that matters.



yep.
User currently offlineusairways85 From United States of America, joined Nov 2001, 3414 posts, RR: 7
Reply 88, posted (1 year 2 months 2 days 4 hours ago) and read 6538 times:

Quoting FlyPNS1 (Reply 85):
Note that right now US has two CRJ flights on DCA-PHL that depart within 20 minutes of each other.

DCA-PHL is an interesting one. With dozens of busses and trains between DC and Philly there can't be that much O&D on DCA-PHL. None of us have the cold hard numbers but you have to wonder if US could drop DCA-PHL by at least 5 flts/day and disperse those 5 RT slots to the top 5 connections pax fly DCA-PHL-XYZ so they now have more or a new route, DCA-XYZ.


User currently offlineckfred From United States of America, joined Apr 2001, 5251 posts, RR: 1
Reply 89, posted (1 year 2 months 1 day 6 hours ago) and read 6147 times:

But, here's the $64,000 question. If DOJ decides to nix the merger, as it did with AT&T buying T-Mobile, then what happens to the merger?

If I remember correctly, DOT actually has the final say, but it's unlikely that DOT would ignore DOJ and approve the merger.

Among the questions that would arise are:

-Would US remain in Star Alliance, rather than leave for oneworld?

-How long would it take AA to create a stand-alone plan of reorganiztion to be approved by creditors and the court?

-Would Horton and company remain as the management team for AA/AE/AMR post Chapter 11?

-How will the unsecured creditors and the unions react, since they are the ones that pushed management to explore a merger with US?

-Would AMR explore any other potential mergers? Not that I see VX or B6 having any interest in merging with AA. And frankly, merging with VX (or Frontier for that matter) really doesn't enhance AA. It's weakness is in the Northeast and Southest.


User currently onlineMIflyer12 From United States of America, joined Feb 2013, 1051 posts, RR: 0
Reply 90, posted (1 year 2 months 1 day 6 hours ago) and read 6080 times:

Quoting ckfred (Reply 89):
If DOJ decides to nix the merger, as it did with AT&T buying T-Mobile, then what happens to the merger?

The DOJ doesn't nix a merger. It indicates it's ready to go to court to prevent a merger - and here's the important part - as presented. That leaves several alternatives for the firms:

- They can take their chances in court and try to demonstrate that DOJ's competition concerns are overblown

- They can modify the merger agreement to carve out assets (giving up slots could be one element of that) sufficient to overcome the objection

- They can cave and terminate their merger agreement, as happened with UA + US and AT&T + T-Mobile

Thus far, responsible people haven't talked about a scale of concessions that would compel AA + US to give up the deal. There's been no demand to terminate the TATL joint venture with BA, no demand to dismantle the MIA hub... The lawyers and bankers can find a way to get this done with DOJ that preserves the great fraction of the merger's articulated benefits. If Parker really wants to close the deal by the end of 3Q13, he's given them that instruction.


User currently offlineHPRamper From United States of America, joined May 2005, 4059 posts, RR: 8
Reply 91, posted (1 year 2 months 1 day 4 hours ago) and read 5866 times:

Quoting ckfred (Reply 89):
But, here's the $64,000 question. If DOJ decides to nix the merger, as it did with AT&T buying T-Mobile, then what happens to the merger?

I don't exactly recall the reason AT&T/T-Mobile was disallowed. I thought they would still be smaller than Verizon after the merger.

Quoting ckfred (Reply 89):
-Would US remain in Star Alliance, rather than leave for oneworld?

I think US would leave for oneworld either way. Once Star got the former CO network, there was suddenly a lot of overlap with US. Then we would probably see a AA/US umbrella codeshare.

Quoting ckfred (Reply 89):
How long would it take AA to create a stand-alone plan of reorganiztion to be approved by creditors and the court?

Not long. I thought they had already created one - the actions they have been taking in bankruptcy were going forward merger or not.

Quoting ckfred (Reply 89):
Would Horton and company remain as the management team for AA/AE/AMR post Chapter 11?

Horton, no. And company, maybe depending on who it was. If Horton stayed in charge, the airline labor groups would go into scorched earth mode imo.

Quoting ckfred (Reply 89):
-How will the unsecured creditors and the unions react, since they are the ones that pushed management to explore a merger with US?

Go immediately for another merger. DL and UA will smell blood if this merger is nixed.

Quoting ckfred (Reply 89):
Would AMR explore any other potential mergers? Not that I see VX or B6 having any interest in merging with AA. And frankly, merging with VX (or Frontier for that matter) really doesn't enhance AA. It's weakness is in the Northeast and Southest.

The only airlines that make sense are B6 and AS and neither seems interested although B6 I think is not as cold to the idea as AS. Maybe HA? That would be an interesting addition to the network and give AA an instant Pacific foothold.


User currently offlineORDBOSEWR From United States of America, joined Jun 2011, 443 posts, RR: 0
Reply 92, posted (1 year 2 months 1 day 3 hours ago) and read 5815 times:

Quoting MIflyer12 (Reply 90):
The DOJ doesn't nix a merger. It indicates it's ready to go to court to prevent a merger - and here's the important part - as presented. That leaves several alternatives for the firms:

- They can take their chances in court and try to demonstrate that DOJ's competition concerns are overblown

- They can modify the merger agreement to carve out assets (giving up slots could be one element of that) sufficient to overcome the objection

- They can cave and terminate their merger agreement, as happened with UA + US and AT&T + T-Mobile

Which the DOJ has and lost in the past. So it is not ideal to have the DOJ challenge a merger, but if the companies want to fight they can. It does take alot more time and makes it really hard to complete the merger.


User currently offlineIADCA From United States of America, joined Feb 2007, 1292 posts, RR: 8
Reply 93, posted (1 year 2 months 1 day 2 hours ago) and read 5709 times:

Quoting ORDBOSEWR (Reply 92):
Which the DOJ has and lost in the past. So it is not ideal to have the DOJ challenge a merger, but if the companies want to fight they can. It does take alot more time and makes it really hard to complete the merger.

A lot of whether they fight or not is dictated by the antitrust-risk provisions and breakup fee in the deal itself. Generally, if you see companies deciding to fight, it's an indication that the merger docs (which are typically confidential) either put a very strong onus on one company to try to force the merger through (a "hell or high water" clause), have an enormous break-up fee, or both. I have no clue what the provisions are in this one.

Quoting MIflyer12 (Reply 90):
The DOJ doesn't nix a merger. It indicates it's ready to go to court to prevent a merger - and here's the important part - as presented. That leaves several alternatives for the firms:

- They can take their chances in court and try to demonstrate that DOJ's competition concerns are overblown

- They can modify the merger agreement to carve out assets (giving up slots could be one element of that) sufficient to overcome the objection

- They can cave and terminate their merger agreement, as happened with UA + US and AT&T + T-Mobile


Just wanted to quote and back this material, which is 100% correct.

Quoting ckfred (Reply 89):
If I remember correctly, DOT actually has the final say, but it's unlikely that DOT would ignore DOJ and approve the merger.

No, DOJ has the final say on whether to challenge. Then it's up to the court, if the companies decide to fight.


User currently offlineIndy From United States of America, joined Jan 2005, 4568 posts, RR: 18
Reply 94, posted (1 year 2 months 20 hours ago) and read 5443 times:

Quoting Deltal1011man (Reply 87):
no line. Its a free market or it isn't.

Fortunately for all of us that really isn't the case. An absolutely free market would be a complete disaster. No regulations. No consumer protections. Nothing to protect against price fixing, monopolies, and any other shady form of business you can think of. Fortunately we have the DoJ to at least attempt to keep people honest. Do you want to live in a world where carriers have merged to the point where there is maybe 2 left? In a free market system that would be possible and even likely. But that is a rant for a completely different thread.



Indy = Indianapolis and not Independence Air
User currently offlineRWA380 From United States of America, joined Feb 2005, 3303 posts, RR: 5
Reply 95, posted (1 year 2 months 10 hours ago) and read 5086 times:

Quoting ckfred (Reply 89):
If DOJ decides to nix the merger

They won't end up denying US/AA merger, because any divestiture or route reduction that any government entity wants, AA/US is ready to provide.

After watching C-Span with Doug Parker testifying with the DOT or DOJ, half of the committee members were from smaller cities with their only non-stop link to DCA being flown by US, I honestly do not see US being forced to give up much.

I think all the other carriers would cry foul if they didn't give back some DCA slots. But during the 90 minutes or so I watched of this committee hearing, it seemed most people that were asked to testify, seemed to be in favor of the merger, except one Ed Begley type, thinking the merged carrier would rape the travelling public by it's market domination. I expect US will retain most of their 70% of slots at DCA. No one in congress wants to loose their n/s home.

It seemed rather obvious that US was well know, and generally liked by those involved with the process.

Quoting msp747 (Reply 82):
US/AA is making these threats to try and scare the feds into letting them keep all their slots.

I am sure that the appropriate members of the committee have been "warned" of US reaction, should they need to divest any slots. But I guarantee this point was up played by Mr. Parker several times during the proceedings.



AA AC AQ AS BD BN CO CS DL EA EZ HA HP KL KN MP MW NK NW OO OZ PA PS QX RC RH RW SA TG TW UA US VS WA WC WN
User currently offlinesuperjeff From United States of America, joined Feb 2010, 235 posts, RR: 0
Reply 96, posted (1 year 2 months 7 hours ago) and read 4944 times:
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Quoting HPRamper (Reply 29):
So make US and AA pay the price for what DL and UA did? I don't think that's quite fair. If you have a problem with the merger environment, make UA and DL undo their mergers.

I don't recall anybody complaining to this extent about a noncompetitive environment when DL and NW merged. Maybe a little.

This is political. We're talking DCA here, not DTW, CVG, MSP, etc. Personally, I think deregulation was a bad mistake in 1978, but we're stuck with it. The only answer is to vote out the culprits in Washington. All of them : -)

[quote] DCA-PHL is an interesting one. With dozens of busses and trains between DC and Philly there can't be that much O&D on DCA-PHL. None of us have the cold hard numbers but you have to wonder if US could drop DCA-PHL by at least 5 flts/day and disperse those 5 RT slots to the top 5 connections pax fly DCA-PHL-XYZ so they now have more or a new route, DCA-XYZ.

DCA-PHL is a connector between DCA and the US hub at PHL. It is not an O&D market.


User currently offlinejustplanenutz From United States of America, joined Feb 2006, 526 posts, RR: 1
Reply 97, posted (1 year 2 months 7 hours ago) and read 4924 times:



Quoting superjeff (Reply 97):
DCA-PHL is a connector between DCA and the US hub at PHL. It is not an O&D market.

I think his point is that PMAA will have other/better options to connect DCA pax than US currently does, so RJ flights to PHL will not be needed. To wit, DFW and ORD are better connectors for East/West traffic and LGA/JFK will also offer NE connections.

[Edited 2013-08-02 08:07:52]

[Edited 2013-08-02 08:08:58]

User currently offlineckfred From United States of America, joined Apr 2001, 5251 posts, RR: 1
Reply 98, posted (1 year 2 months 7 hours ago) and read 4897 times:

Quoting MIflyer12 (Reply 90):
The DOJ doesn't nix a merger. It indicates it's ready to go to court to prevent a merger - and here's the important part - as presented. That leaves several alternatives for the firms:

- They can take their chances in court and try to demonstrate that DOJ's competition concerns are overblown

I know that DOJ can't nix a merger, but going ahead and closing a merger while dealing with an anti-trust suit is an expensive, time consuming, and risky propostion. Litigation in federal court is never quick, even if both sides are moving the case quickly. Legal fees are expensive. You have company employees spending time with the court case, instead of doing productive work.

And, if the company loses, then you have to undo the merger. That may not be a big deal, since two airlines merger would probably operate as two separate carriers with a common owner, which in itself is a problem.

Quoting MIflyer12 (Reply 90):
- They can modify the merger agreement to carve out assets (giving up slots could be one element of that) sufficient to overcome the objection

US and UA tried to do that, with the creation of DC Air, owned by Robert Johnson. DC Air was going to get some of the US slots at DCA, and AA had agreed to lease some of its F100 fleet.

I don't remember of DOJ had more condtions than US/UA were willing to accept, or if DOJ flat out rejected it.

Quoting MIflyer12 (Reply 90):
Thus far, responsible people haven't talked about a scale of concessions that would compel AA + US to give up the deal. There's been no demand to terminate the TATL joint venture with BA, no demand to dismantle the MIA hub... The lawyers and bankers can find a way to get this done with DOJ that preserves the great fraction of the merger's articulated benefits. If Parker really wants to close the deal by the end of 3Q13, he's given them that instruction.

If the T-Mobile/AT&T merger hadn't been nixed, I woulnd't bother commenting. But, that is hanging out there. I think the merger gets done, but I won't be looking at using CLT as a connecting point for travel on AA, until DOJ signs off.

If DOJ raises some serious concerns, Parker and his team better give it some serious thought. Doing a deal for the sake of doing a deal is bad business. Any good busines person or corporate lawyer will tell you that the best deal many times is the one you don't do.


User currently offlineFlighty From United States of America, joined Apr 2007, 8568 posts, RR: 2
Reply 99, posted (1 year 2 months 7 hours ago) and read 4872 times:

Quoting Indy (Reply 94):
Do you want to live in a world where carriers have merged to the point where there is maybe 2 left?

False, there would be one left. 1 bank, 1 airline. 1 telephone company. You've heard of Carlos Slim? Mexican billionaire who has a telecom monopoly. $60 billion fortune or so.

In America, that guy would have $600 billion and he would pick our presidents.

Quoting ckfred (Reply 99):
If the T-Mobile/AT&T merger hadn't been nixed, I woulnd't bother commenting. But, that is hanging out there. I think the merger gets done, but I won't be looking at using CLT as a connecting point for travel on AA, until DOJ signs off.

Yes. The airline mergers (DL, UA and very substantially, WN/FL too) were eyebrow-raising. ATT/Tmobile was spiked and the govt simply showed the ATT CEO he can go touch himself in his privates if he wants. But the merger is Dead.

They are indeed constrained here by prior mergers. If AA/US is illegal, then DL and UA must be shaved down according to whatever legal standard there apparently is. As of now... AA/US has direct precedents and can't be denied that way.

But they could re-evaluate the entire airline industry if they want.


User currently offlineLAXintl From United States of America, joined May 2000, 25532 posts, RR: 50
Reply 100, posted (1 year 1 month 3 weeks 6 days 7 hours ago) and read 4328 times:

No surprise.

EU says OK to AA-US merger with condition LHR-PHL slots are made available to competitors along with requirement for AA/BA JV to offer "far-reaching feeder arrangements" to prospective new competitor.

story:
http://aviationblog.dallasnews.com/2...ican-airlines-and-us-airways.html/

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From the desert to the sea, to all of Southern California
User currently offlineMercure1 From French Polynesia, joined Jul 2008, 1550 posts, RR: 2
Reply 101, posted (1 year 1 month 3 weeks 6 days 6 hours ago) and read 4297 times:

I wonder what EU means by requirement that AA enter into "special feed traffic agreements" with any new entrant airline on Heathrow - PHL route.

User currently offlinecommavia From United States of America, joined Apr 2005, 11712 posts, RR: 62
Reply 102, posted (1 year 1 month 3 weeks 6 days 6 hours ago) and read 4359 times:

Quoting Mercure1 (Reply 101):
I wonder what EU means by requirement that AA enter into "special feed traffic agreements" with any new entrant airline on Heathrow - PHL route.

Likely similar to the conditions placed on AA/BA - they have to give competitors in those markets favorable interline access and I believe access to their FF program, if requested.


User currently onlineMIflyer12 From United States of America, joined Feb 2013, 1051 posts, RR: 0
Reply 103, posted (1 year 1 month 3 weeks 6 days 5 hours ago) and read 4357 times:

Quoting Flighty (Reply 99):
They are indeed constrained here by prior mergers. If AA/US is illegal, then DL and UA must be shaved down according to whatever legal standard there apparently is. As of now... AA/US has direct precedents and can't be denied that way.

You still don't get it.

The DOJ isn't constrained by prior mergers, as you assert, but by the decade-old DOJ/FTC horizontal merger guidelines. It actually was easier for DL and NW to merge because UA, CO, WM, FL, AA and US were still independent competitors on many non-stop and one-stop city pairs. (Among other things) the DOJ looks at where a combination of US and AA will leave many city pairs with few competitors, and that number is bigger than it was for DL + NW, not because AA + US is so vastly bigger but because a lot of consolidation has already taken place. In no way does that compel the DOJ to approve more consolidation.


User currently offlineOC2DC From United States of America, joined Feb 2013, 375 posts, RR: 0
Reply 104, posted (1 year 1 month 3 weeks 6 days 4 hours ago) and read 4341 times:

So the new AA won't be flying PHL-LHR at all? That seems pretty strange considering AA connects LHR to all of its current hubs...


I'm not complaining, I'm critiquing...
User currently offlinecommavia From United States of America, joined Apr 2005, 11712 posts, RR: 62
Reply 105, posted (1 year 1 month 3 weeks 6 days 4 hours ago) and read 4358 times:

Quoting OC2DC (Reply 104):
So the new AA won't be flying PHL-LHR at all? That seems pretty strange considering AA connects LHR to all of its current hubs...

No. AA-BA will still be offering a robust PHL-LHR schedule. In fact, I suspect the joint AA-BA PHL-LHR schedule will increase, not decrease, post-merger. However, regulators are requiring that AA-BA relinquish a LHR slot pair to facilitate a competitor entering the PHL-LHR market in competition with AA-BA should such a new entrant competitor arise.


User currently offlineFlighty From United States of America, joined Apr 2007, 8568 posts, RR: 2
Reply 106, posted (1 year 1 month 3 weeks 6 days 4 hours ago) and read 4359 times:

Quoting MIflyer12 (Reply 103):
The DOJ isn't constrained by prior mergers, as you assert, but by the decade-old DOJ/FTC horizontal merger guidelines. It actually was easier for DL and NW to merge because UA, CO, WM, FL, AA and US were still independent competitors on many non-stop and one-stop city pairs. (Among other things) the DOJ looks at where a combination of US and AA will leave many city pairs with few competitors, and that number is bigger than it was for DL + NW, not because AA + US is so vastly bigger but because a lot of consolidation has already taken place. In no way does that compel the DOJ to approve more consolidation.

Sure, I can see that reading of it. Really can. Our only dispute is over how the remedy would be built up. I maintain it would fall on all parties. You say it's the last player in, so in effect DL and UA are "grandfathered in" with their high market share, now untouchable. I would reply that violates contestability, one of the sacred elements of anti-trust. If DL and UA are indeed so large, that gets its own remedy IMO. But we'll find out.


User currently offlineLAXintl From United States of America, joined May 2000, 25532 posts, RR: 50
Reply 107, posted (1 year 1 month 2 weeks 5 days 8 hours ago) and read 3064 times:

And sounds like proposed concession To US DOJ were not enough.


AMR-US Airways Deal Blocked by U.S. in Antitrust Suit
http://www.bloomberg.com/news/2013-0...cked-by-u-s-in-antitrust-suit.html

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From the desert to the sea, to all of Southern California
User currently offlineLAXintl From United States of America, joined May 2000, 25532 posts, RR: 50
Reply 108, posted (1 year 1 month 2 weeks 5 days 7 hours ago) and read 2809 times:

Here is formal DOJ notice;

http://www.justice.gov/opa/pr/2013/August/13-at-909.html

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From the desert to the sea, to all of Southern California
User currently offlineD L X From United States of America, joined May 1999, 11383 posts, RR: 52
Reply 109, posted (1 year 1 month 2 weeks 5 days 7 hours ago) and read 2752 times:

Quoting LAXintl (Reply 107):

And sounds like proposed concession To US DOJ were not enough.

There is an ongoing thread on this topic.



Send me a PM at http://www.airliners.net/aviation-forums/sendmessage.main?from_username=NULL
User currently offlinenycdave From United States of America, joined Aug 2010, 547 posts, RR: 1
Reply 110, posted (1 year 1 month 2 weeks 5 days 6 hours ago) and read 2668 times:

Quoting ckfred (Reply 2):
Here's my question about the LHR slots. Who wants to start service on PHL-LHR?

I was thinking perhaps MT or BY might want to take a shot at expanding beyond the beach/disney getaway market to the US, and try something NYC-DC "urban" oriented... But then I remembered FR has never really stopped making noises about wanting to start TATL service. I imagine PHL would be an ideal gateway for them. I can see them selling it as "NYC/DC Area" (yes, yes, I know PHL has lots to offer on its own merits, but let's be realistic).

Love the idea of a B6/AA JFK-DCA slot swap. Love T8 and would be wonderful to see the return of more connecting service there.


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