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U.S. Anti Trust Suit: AMR/LCC - Part 5  
User currently offlineSA7700 From South Africa, joined Dec 2003, 3431 posts, RR: 26
Posted (1 year 1 month 2 weeks 6 days 18 hours ago) and read 20517 times:
AIRLINERS.NET CREW
HEAD MODERATOR

Dear members,

Due to the fact that part IV has become quite long, part 5 has been created. Please feel free to continue your discussion on this topic here. Part IV can be found here:

U.S. Anti Trust Suit: AMR/LCC - Part IV (by avek00 Aug 23 2013 in Civil Aviation)


Regards,

SA7700


When you are doing stuff that nobody has done before, there is no manual – Kevin McCloud (Grand Designs)
281 replies: All unread, showing first 25:
 
User currently onlinejetblastdubai From United States of America, joined Aug 2013, 735 posts, RR: 0
Reply 1, posted (1 year 1 month 2 weeks 6 days 16 hours ago) and read 20356 times:
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++++"The problem with this is that UA wasn't forced to give up any gates at ORD as a condition of its merger with CO"++++

Did DL give up any slots or gates when they merged with NW?
Did WN give up anything when they acquired Air Tran?



A good landing is one you can walk away from. A great landing is when you can re-use the aircraft.
User currently onlineCubsrule From United States of America, joined May 2004, 23155 posts, RR: 20
Reply 2, posted (1 year 1 month 2 weeks 6 days 16 hours ago) and read 20337 times:

Quoting jetblastdubai (Reply 1):
Did DL give up any slots or gates when they merged with NW?

Perhaps most relevantly to this discussion, they gave up gates at both CLT and ORD.



I can't decide whether I miss the tulip or the bowling shoe more
User currently onlinejetblastdubai From United States of America, joined Aug 2013, 735 posts, RR: 0
Reply 3, posted (1 year 1 month 2 weeks 6 days 16 hours ago) and read 20254 times:
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Quoting Cubsrule (Reply 2):
Perhaps most relevantly to this discussion, they gave up gates at both CLT and ORD.

Were they forced to or did they just not need them anymore? I'm pretty sure DL didn't want to split their ORD operation between the E gates and the L gates.



A good landing is one you can walk away from. A great landing is when you can re-use the aircraft.
User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Reply 4, posted (1 year 1 month 2 weeks 6 days 12 hours ago) and read 19988 times:

AA and US have posted their rebuttals to the DOJ. If you want to read them you can here

http://aviationblog.dallasnews.com/2...f-its-merger-with-us-airways.html/

and here

http://aviationblog.dallasnews.com/2...erger-with-american-airlines.html/


User currently offlinecommavia From United States of America, joined Apr 2005, 11754 posts, RR: 62
Reply 5, posted (1 year 1 month 2 weeks 6 days 12 hours ago) and read 19953 times:

Quoting user444555 (Reply 4):
AA and US have posted their rebuttals to the DOJ. If you want to read them you can here

Fascinating reading. I think the following is remarkably telling ...

Illustrating how little high HHIs reveal about the competitiveness of a market, most of these one-stop routes will remain very competitive after the merger:

AA’s and US’s small shares. On almost half of the routes, either AA or US flies less than 10% of the passengers on the route.
Postmerger competition. Almost 90% of the passengers on these routes will continue to be served by at least 3 airlines after the merger.
LCC competition. About 85% of passengers on these routes will continue to be served by one of the LCCs. Since LCCs fly 40% of domestic airline passengers in the US, the notion that LCC competition and potential entry are not the dominant
competitive fact in the industry is out of touch with market realities.
No barriers. Virtually none of the routes have any barriers to new entry.


User currently onlineCubsrule From United States of America, joined May 2004, 23155 posts, RR: 20
Reply 6, posted (1 year 1 month 2 weeks 6 days 11 hours ago) and read 19903 times:

Quoting commavia (Reply 5):
Illustrating how little high HHIs reveal about the competitiveness of a market, most of these one-stop routes will remain very competitive after the merger:

No, what it illustrates is how remarkably concentrated the airline industry already is. Now, there's a fair retort to that--that the airline industry is structurally different from any other industry--but to argue in an abstract way that a "big" market (CHI-WAS, NYC-SFL, LAX-SFO) is competitive with only 5 or fewer competitors is not something we'd see in most other industries.



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlinenutsaboutplanes From United States of America, joined Jul 2010, 506 posts, RR: 8
Reply 7, posted (1 year 1 month 2 weeks 6 days 11 hours ago) and read 19856 times:

The AA response seems a little snarky while the US response appears more civilized and professional in my opinion.


American Airlines, US Airways, Alaska Airlines, Northwest Airlines, America West Airlines, USAFR
User currently offlinenwcoflyer From United States of America, joined Jun 2003, 692 posts, RR: 14
Reply 8, posted (1 year 1 month 2 weeks 6 days 10 hours ago) and read 19764 times:

Quoting nutsaboutplanes (Reply 7):
The AA response seems a little snarky while the US response appears more civilized and professional in my opinion.

Agreed- I found both to be very fascinating and informative. As a US employee, I am very biased. That being said, I feel like the jury really isnt out in this merger and we very well may succeed. I believe this isn't an open and close case like many on both sides believe. My personal opinion is I hope we succeed as this merger would create a huge network and job stability for many of us (hopefully) that we have been longing for. This industry is tumultuous. I would like to be afforded the same opportunity as my friends at UA and DL (especially DL) have.



The New American is arriving.
User currently offlinePanAmPaul From United States of America, joined Jan 2013, 242 posts, RR: 0
Reply 9, posted (1 year 1 month 2 weeks 6 days 9 hours ago) and read 19633 times:

Quoting nwcoflyer (Reply 8):
I believe this isn't an open and close case like many on both sides believe.

Truer words have never been spoken in this thread. Well put.


User currently offlinePanAmPaul From United States of America, joined Jan 2013, 242 posts, RR: 0
Reply 10, posted (1 year 1 month 2 weeks 6 days 8 hours ago) and read 19632 times:

AA and US also said on Tuesday that they would seek to extend the deadline for the merger beyond Dec. 17th. according to several reports in the media.

American, US Airways to Seek Extension for Merger Deadline, Defend Plans in Court Filings

"American Airlines and US Airways, whose planned merger has been delayed by the Department of Justice antitrust lawsuit that was filed last month, said on Tuesday that neither party currently plans to abandon their support for the merger. The two airlines also defended their merger in separate court filings that are a response to the DOJ suit.

The two airlines told members the creditors’ committee for American Airlines parent AMR Corp. that they plan to ask their boards of directors to extend the merger termination date beyond its current expiration,..."


User currently offlinemichman From United States of America, joined Dec 2006, 527 posts, RR: 0
Reply 11, posted (1 year 1 month 2 weeks 6 days 7 hours ago) and read 19570 times:

Quoting Cubsrule (Reply 6):
No, what it illustrates is how remarkably concentrated the airline industry already is. Now, there's a fair retort to that--that the airline industry is structurally different from any other industry--but to argue in an abstract way that a "big" market (CHI-WAS, NYC-SFL, LAX-SFO) is competitive with only 5 or fewer competitors is not something we'd see in most other industries.

Compared to what industries? How many different overnight package delivery options do you have between these city pairs? I'd argue that the passenger transport options are far more competitive than the package delivery options. The reality is that anti-trust law has never been as trivial and simple as many cast it here. It's not as simple as just "reducing competition". Many mergers also help produce efficiencies which are beneficial to consumers which is why anti-trust law focuses more on market concentration issues. M&A activity is a part of a free market, and I'd argue a state where all such activity is banned is more akin to a centrally controlled economy that a true capitalistic free market.


User currently offlineHPRamper From United States of America, joined May 2005, 4078 posts, RR: 8
Reply 12, posted (1 year 1 month 2 weeks 6 days 4 hours ago) and read 19467 times:

Quoting michman (Reply 11):
Compared to what industries? How many different overnight package delivery options do you have between these city pairs? I'd argue that the passenger transport options are far more competitive than the package delivery options.

Other industries are far less competitive. How about cable and internet companies? In many parts of the country, you only have access to one - you have zero choice and the company has 100% of the pricing power yet the government is just fine with that. Utilities are even worse.


User currently offlinecommavia From United States of America, joined Apr 2005, 11754 posts, RR: 62
Reply 13, posted (1 year 1 month 2 weeks 6 days 3 hours ago) and read 19453 times:

Quoting nutsaboutplanes (Reply 7):
The AA response seems a little snarky while the US response appears more civilized and professional in my opinion.

Funny - I actually thought just the opposite. I thought both airlines' responses were thorough and aggressive, though.

Quoting nwcoflyer (Reply 8):
That being said, I feel like the jury really isnt out in this merger and we very well may succeed. I believe this isn't an open and close case like many on both sides believe.

  

I completely agree. This appears likely headed to trial, and both sides have been posturing and positioning as such - the truth is that I doubt either side is quite as certain of its case as both sides are leading on.

Quoting PanAmPaul (Reply 10):
AA and US also said on Tuesday that they would seek to extend the deadline for the merger beyond Dec. 17th. according to several reports in the media.

So there we have it. Both sides are all in on the merger.

Quoting michman (Reply 11):
Compared to what industries?

Exactly. Having 4 national (and global) competitors, plus another 4-5 primarily regional competitors seems quite reasonable, and still plenty competitive, to me.


User currently offlineapodino From United States of America, joined Apr 2005, 4288 posts, RR: 6
Reply 14, posted (1 year 1 month 2 weeks 6 days 2 hours ago) and read 19375 times:

I have been reading a lot about how the DOJ is only looking at the domestic impact and not the impact on US carriers flying internationally. What they make the point of...and rightly so....is that if this merger isn't allowed....AA and US are going to have their clock cleaned on lucrative international routes....which will harm both carriers long term and could lead to a situation where DL and UA are the only two carriers in many markets competing against foreign carriers...which would not be in the best interest of the US long term.

Interesting arguments to say the least...but you wonder why DOJ seems to be ignoring this aspect of the merger and only focusing on domestic stuff?


User currently onlineCubsrule From United States of America, joined May 2004, 23155 posts, RR: 20
Reply 15, posted (1 year 1 month 2 weeks 6 days 2 hours ago) and read 19372 times:

Quoting michman (Reply 11):
Compared to what industries?

Gas stations, car dealers, car manufacturers, handymen, clothing stores, etc. I didn't say it was the only concentrated industry, but it's very concentrated.

Quoting michman (Reply 11):
Many mergers also help produce efficiencies which are beneficial to consumers which is why anti-trust law focuses more on market concentration issues.

I agree, and the HHI is the tool we use to focus on concentration. Commavia seems to be arguing--but I don't intend to put words in his mouth--that HHI is a poor measure of concentration in the airline industry.



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlinecommavia From United States of America, joined Apr 2005, 11754 posts, RR: 62
Reply 16, posted (1 year 1 month 2 weeks 6 days 2 hours ago) and read 19365 times:

Quoting Cubsrule (Reply 15):
Commavia seems to be arguing--but I don't intend to put words in his mouth--that HHI is a poor measure of concentration in the airline industry.

I'm not arguing it - the airlines seem to be arguing it, or at least arguing that it is - as they put it - only a "point of departure" for analysis of market concentration and merger effects on the market, but not the end-all-be-all "final analysis" of such transactions. I tend to subscribe to the airlines' assertion, as I think there are many other dynamics at play in airline mergers that are simply not captured in a simple HHI calculation. The airlines allude to some of these dynamics in their filings.


User currently onlineCubsrule From United States of America, joined May 2004, 23155 posts, RR: 20
Reply 17, posted (1 year 1 month 2 weeks 6 days 1 hour ago) and read 19335 times:

Quoting commavia (Reply 16):
I tend to subscribe to the airlines' assertion, as I think there are many other dynamics at play in airline mergers that are simply not captured in a simple HHI calculation.

I do too. The trouble is that competition law generally does not.



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlinegegarrenton From United States of America, joined Aug 2012, 211 posts, RR: 0
Reply 18, posted (1 year 1 month 2 weeks 6 days 1 hour ago) and read 19337 times:

Quoting HPRamper (Reply 12):
Utilities are even worse.

That's why they are..... wait for it...


Regulated!!!


User currently offlinecommavia From United States of America, joined Apr 2005, 11754 posts, RR: 62
Reply 19, posted (1 year 1 month 2 weeks 6 days 1 hour ago) and read 19331 times:

Quoting Cubsrule (Reply 17):
I do too. The trouble is that competition law generally does not.

The airlines and their lawyers seem to very strongly feel differently - asserting multiple times that HHI is not the only analysis factor consistent with the DOJ's merger evaluation guidelines.


User currently onlineCubsrule From United States of America, joined May 2004, 23155 posts, RR: 20
Reply 20, posted (1 year 1 month 2 weeks 6 days 1 hour ago) and read 19291 times:

Quoting commavia (Reply 19):
The airlines and their lawyers seem to very strongly feel differently - asserting multiple times that HHI is not the only analysis factor consistent with the DOJ's merger evaluation guidelines.

They need to read the guidelines and the case law. Until there's a case that says that--and I'm not aware of one--it's more of a prayer than anything else. The statistics that IADCA posted on DOJ's winning streak in a couple of the other threads are instructive in this regard.

Again, I sympathize with their argument about what the law should be. Unfortunately, it's not what the law is.



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlineosubuckeyes From United States of America, joined Mar 2004, 769 posts, RR: 0
Reply 21, posted (1 year 1 month 2 weeks 5 days 23 hours ago) and read 19015 times:

Very interesting responses from both airlines. Both airlines have a full paragraph about offering more choices to customers through growth and that creates competition, but under one company instead of two, which basically means customers will pay more for those choices and growth. I found the US response to be more cordial, but still aggressive. The AA response while having some very valid points was very aggressive and condescending towards the DOJ almost with a tone that they know nothing about the airline industry.

Both complaints talked about 12 years of losses of Billions, yet almost every airline has had that. I agree with the volatility of the industry but look at US the past 5 or so years, and even AA is starting to post profits in bankruptcy.

The most interesting statement I thought in both complaints was "Indeed, across the industry, the low cost carriers offer strong competitive choices built on diverse business models, and play the role of industry “maverick” in a way that no legacy airline ever has or could." I feel that this statement kind of represents the age old question in the airline industry. Should we afford legacy carriers the luxury of chapter 11 and mergers in order to avoid a significant change in market forces?

The other interesting thing is that the US complaint did not say much about the HHI evaluation and the AA complaint really bashed it and almost questioned the status quo of the use of the measure in the industry.

Overall I think both arguements focused on the merits of the merger and downplayed the concerns just like the DOJ focused on the competitive concerns of the merger and downplayed the merits.

Quoting HPRamper (Reply 12):
Utilities are even worse.

Utilities are regulated for the most part so there is no competition by design. Mainly due to the infrastructure that has to exist and be maintained. Similarly,the same can be said to some extent about cable and internet, but as technology has advanced it may be time for that to be less regulated.

Quoting commavia (Reply 16):
I tend to subscribe to the airlines' assertion, as I think there are many other dynamics at play in airline mergers that are simply not captured in a simple HHI calculation.

Some of those dynamics are hard to measure. Additionally, non-price competition can be inhibited by pricing power in markets. I would not be surprised at all if the DOJ argues in court that the larger combined carrier has less of an incentive to differentiate themselves because they have marketplace and pricing power. The HHI calculation has been a major part of many merger evaluations over the years and certainly ties into all if not most anti-competitive arguments.


User currently offlineavek00 From United States of America, joined Oct 2004, 4406 posts, RR: 19
Reply 22, posted (1 year 1 month 2 weeks 5 days 20 hours ago) and read 18263 times:

Quoting commavia (Reply 13):
This appears likely headed to trial

I wouldn't reach that conclusion just yet. The lawyers on both sides probably don't yet have enough of a grasp of the likelihood of success at trial -- and the feasibility of likely settlement options -- to make a judgment call on whether to cajole a settlement or push forward to the courtroom. That judgment call is built from interviewing potential witnesses, depositions, further examination of potential helpful and harmful evidence, research into precedent, and gentle inquiries to outside entities on whether they will play ball on proposals a party might seek to float. Remember, although the parties have been dealing with each other for months, it was through the prism of an antitrust regulatory review, not the lens of an adversarial proceeding.

Quoting commavia (Reply 16):
I tend to subscribe to the airlines' assertion

Your point gets to why I'm very eager to see if DOT wades into the case, and if so, how they posture. In major airline transactions, DOJ usually sticks to strict antitrust analysis, while DOT is empowered to weigh a broader set of considerations (while also undertaking its own competitive analysis).

DOT can weigh in with a brief embracing DOJ's antitrust analysis as a necessary evolution of competitive review in the now-highly concentrated airline marketplace, and reaffirm the real risks of further harm to the consumer in the form of poorer service and higher fares. Or, DOT can take the case out of the frying pan and into the fire by distancing itself from DOJ's analysis, and asserting that even if the merger is violative of antitrust law, the request for an injunction should be denied given longstanding US policy favoring consolidation as the best means to restructure a vital industry, and given the possibility of fashioning tailored structural and conduct remedies to specific problems raised by the merger instead of a draconian denial.


Long story short, this case hasn't even begun to get interesting yet.

[Edited 2013-09-11 11:53:50]


Live life to the fullest.
User currently offlineProst From United States of America, joined Oct 2012, 1068 posts, RR: 1
Reply 23, posted (1 year 1 month 2 weeks 5 days 19 hours ago) and read 18184 times:

jetBlue's ceo wants the combined AA/US to divest all of AA's DCA slots.

http://www.bloomberg.com/news/2013-0...gton-slots-jetblue.html?cmpid=yhoo


User currently offlinelightsaber From United States of America, joined Jan 2005, 13302 posts, RR: 100
Reply 24, posted (1 year 1 month 2 weeks 5 days 19 hours ago) and read 18107 times:
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Quoting Prost (Reply 23):

jetBlue's ceo wants the combined AA/US to divest all of AA's DCA slots.

Oh... that's just being snarky..

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlineProst From United States of America, joined Oct 2012, 1068 posts, RR: 1
Reply 25, posted (1 year 1 month 2 weeks 5 days 19 hours ago) and read 18287 times:

I wonder if this will sour the codeshare relationship out of JFK?

User currently onlinejetblastdubai From United States of America, joined Aug 2013, 735 posts, RR: 0
Reply 26, posted (1 year 1 month 2 weeks 5 days 19 hours ago) and read 18254 times:
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Quoting Prost (Reply 23):
jetBlue's ceo wants the combined AA/US to divest all of AA's DCA slots.

And JetBlue probably wants all the slots given to them.



A good landing is one you can walk away from. A great landing is when you can re-use the aircraft.
User currently offlineaaexecplat From United States of America, joined Sep 2009, 636 posts, RR: 4
Reply 27, posted (1 year 1 month 2 weeks 5 days 18 hours ago) and read 18544 times:

Quoting Cubsrule (Reply 15):
I agree, and the HHI is the tool we use to focus on concentration. Commavia seems to be arguing--but I don't intend to put words in his mouth--that HHI is a poor measure of concentration in the airline industry.
Quoting commavia (Reply 16):
I'm not arguing it - the airlines seem to be arguing it, or at least arguing that it is - as they put it - only a "point of departure" for analysis of market concentration and merger effects on the market, but not the end-all-be-all "final analysis" of such transactions. I tend to subscribe to the airlines' assertion, as I think there are many other dynamics at play in airline mergers that are simply not captured in a simple HHI calculation. The airlines allude to some of these dynamics in their filings.

I note with great interest that the airlines had zero problems with DOJ using HHI in prior mergers when the analysis came out favorably for them. Now all of a sudden, the analysis is fatally flawed and should be thrown out in favor of a different set of rules. Got to love hypocrisy.


User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Reply 28, posted (1 year 1 month 2 weeks 5 days 18 hours ago) and read 18431 times:

Quoting aaexecplat (Reply 27):
I note with great interest that the airlines had zero problems with DOJ using HHI in prior mergers when the analysis came out favorably for them. Now all of a sudden, the analysis is fatally flawed and should be thrown out in favor of a different set of rules. Got to love hypocrisy.

I could be wrong, and if I am I am sure someone here will tell me, but in the previous mergers what I read was the DOJ looked mostly, if not entirely, at overlapping nonstops. Now they are looking at HHI changes on competing connecting flights, which would probably have raised huge objections to UA and DL and possibly WN also. The legacies compete with connecting service to almost all major to medium cities so the DOJ did not just move the goalposts, they moved the stadium. This is an enormous paradigm shift and I think the main reason why so many analysts were surprised by the suit. If this is correct I have to disagree that AA and US are being hypocritical. The rules were changed completely.

Some have pointed out the DOJ hinted at changing the the measuring stick from nonstop to connecting, but as far as I know this is the first time the DOJ actually got out the ruler and started whacking knuckles. There is a big difference between talking about whacking your knuckles and doing it, just ask UA WN and DL. So no, I do not think AA and US are being hypocritical, but I also do not think they were blindsided. I think they saw this coming from the DOJ and were not surprised like the analysts were. I would still think the same thing if AA and US already merged and the rules were changed for UA and CO (if they had not merger already.) This is a huge change. I am not a lawyer but I would assume the DOJ is mostly free to change their definition of anti-competitive, and it will be for the court and lawyers to decide if the change was warranted.

[Edited 2013-09-11 13:58:17]

[Edited 2013-09-11 14:26:57]

User currently onlineCubsrule From United States of America, joined May 2004, 23155 posts, RR: 20
Reply 29, posted (1 year 1 month 2 weeks 5 days 17 hours ago) and read 18389 times:

Quoting user444555 (Reply 28):
So no, I do not think AA and US are being hypocritical, but I also do not think they were blindsided.

Not hypocritical but somewhat misleading. Their problem isn't with HHI per se but rather with what we are measuring with HHI. The trouble is that so much traffic is connecting that there's a pretty good argument that DOJ has it right here but had it wrong in the past--that's what forces them to make the "HHI is bad" argument.



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Reply 30, posted (1 year 1 month 2 weeks 5 days 17 hours ago) and read 18357 times:

Quoting Cubsrule (Reply 29):
Not hypocritical but somewhat misleading. Their problem isn't with HHI per se but rather with what we are measuring with HHI. The trouble is that so much traffic is connecting that there's a pretty good argument that DOJ has it right here but had it wrong in the past--that's what forces them to make the "HHI is bad" argument.

I see your point, but I am not even sure I would say either is being misleading in general. They were going under the assumption that the DOJ would still be looking at nonstops, and from what I understand, AA/US had less overlap there than DL/NW in 2008. If AA and US claim to be surprised about the suit, yes I think they are misleading about that part. Reuters had at least two articles about how the negotiations grew hostile and heated toward the end. I think they knew it was coming, but with the deadline so close they had to keep pushing on like everything was going fine. I am not a lawyer but I would assume the DOJ can change its mind about what is good and bad or how much competition is too little, and the judge will decide if it gets that far. I am thinking there is at least a chance for a settlement. I would like to know what the DOJ is asking for, if anything. They might just keep telling AA and US to make an offer and then keep saying no.

[Edited 2013-09-11 14:35:42]

[Edited 2013-09-11 14:36:03]

[Edited 2013-09-11 15:17:08]

User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Reply 31, posted (1 year 1 month 2 weeks 4 days 23 hours ago) and read 17972 times:

http://www.streetinsider.com/General...udge+says+-+Bloomberg/8683447.html

Bankruptcy judge approves exit plan and merger. Now it's up to the courts in DC unless there is a settlement with the DOJ.

[Edited 2013-09-12 09:01:54]

User currently offlineckfred From United States of America, joined Apr 2001, 5276 posts, RR: 1
Reply 32, posted (1 year 1 month 2 weeks 4 days 22 hours ago) and read 17937 times:

Quoting nwcoflyer (Reply 8):
I believe this isn't an open and close case like many on both sides believe.

Well said. While the government has historically has done well in anti-trust suits, either winning at trial or reaching a settlement that achieves much of what DOJ wanted (think of the break-up of AT&T), this is one of the weaker cases I've seen the government bring in a long time.

Yet, it's not an easy win for AA and US. They still have to show that the merger will not have the effects that the government alleges or demonstrate how the merged carrier can better compete with UA, DL, and even WN.

I believe this case could settle at any time, from tomorrow until the case goes to the jury. It all comes down to what DOJ wants to achieve, and what Doug Parker and his team can live with, in order to get the merger done.

The fact that US and AA were able to retain anti-trust counsel quickly and have them ready to discuss the case with the press so soon after the suit was filed tells me that they saw this coming, probably a week or two before the suit was filed.

We don't know what the sticking point is with the negotiations. DOJ and AA/US could be far apart in the number of slots to be given up at DCA, or how a sale would be handled. They could also be very close, but neither side wants to budge off its number.

But, as both sides get closer to being ready for trial, one side or the other (or even both) may start to feel uneasy about its chances at trial.


User currently offlinejfklganyc From United States of America, joined Jan 2004, 3562 posts, RR: 5
Reply 33, posted (1 year 1 month 2 weeks 4 days 22 hours ago) and read 17852 times:

Quoting Prost (Reply 25):
I wonder if this will sour the codeshare relationship out of JFK?

They dont codeshare out of JFK


User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Reply 34, posted (1 year 1 month 2 weeks 4 days 20 hours ago) and read 17714 times:

I really don't know if or where AA and B6 codeshare, but according to B6's Web site there is some sort of agreement out of JFK. Maybe it is just a FF agreement.

http://www.jetblue.com/airline-partners/

"Make convenient connections between 26 domestic JetBlue markets and 15 international destinations served by American Airlines from New York's JFK and Boston's Logan airports. Customers can earn TrueBlue points (jetblue.com/aa) or American AAdvantage miles when flying on any of the JetBlue or American flights that are part of the agreement."


User currently offlinetommytoyz From Tonga, joined Jan 2007, 1353 posts, RR: 5
Reply 35, posted (1 year 1 month 2 weeks 4 days 18 hours ago) and read 17562 times:

US and AA can not explain how AS has thrived without BK all these years, despite everything they claim. AS flies internationally too. The reason for many BKs is self inflicted. AS proves this, as does WN and others.

It's funny to me that the legacies never blame themselves, always others and fail to mention how other competitors were able to avoid the mistakes, such as selling fuel hedges when fuel prices were very cheap, making a bad speculative bet on the direction of fuel prices. And may more.

AA's explanation reads like a meandering story of a competing view of the world, rather than thoughtful legal arguments. More like a rant that the DOJ has it all wrong. Why? I am still waiting for them to point that out. Look at this feable attempt to confuse two issues (conflate):

For instance, the Complaint focuses heavily on the existence of “more than 1,000” overlapping routes between the two airlines with high HHI numbers. But the number of nonstop and connecting overlaps in this merger is comparable to those transactions that the DOJ only recently agreed would increase competition. Of the 623 domestic nonstop routes currently flown by American and US Airways, the two airlines directly compete on only 17, and DOJ’s list includes only 14. Moreover, most of those overlaps are also served nonstop by other airlines, including Southwest ....

- However, DOJ is talking about 1,000 routes, not necessarily nonstop routes.

If this is the best they have, it's not much, IMHO.


User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Reply 36, posted (1 year 1 month 2 weeks 3 days 17 hours ago) and read 17083 times:

It's official for the bankruptcy judge. He approved the merger pending the resolution of the DOJ antitrust suit. Horton has asked the AMR board to remove his severance from the exit plan. I think he will get something later, just my opinion on how these things work. But I think it is an indication that it's not only Parker who wants this merger done, it's also Horton.

You can read more about it and see the official decision here

http://aviationblog.dallasnews.com/2...airlines-reorganization-plan.html/


User currently offlineECAMActions From , joined Dec 1969, posts, RR:
Reply 37, posted (1 year 1 month 2 weeks 1 hour ago) and read 16225 times:

Hearing rumors a settlement is being discussed but the parties want to see how the hearing in 2 weeks goes before they give in to something they think they don't have to.

Like I've been saying, this merger is going to happen one way or another.


User currently offlineGSPSPOT From United States of America, joined Sep 2003, 3082 posts, RR: 2
Reply 38, posted (1 year 1 month 2 weeks ago) and read 16186 times:

Quoting apodino (Reply 14):
Interesting arguments to say the least...but you wonder why DOJ seems to be ignoring this aspect of the merger and only focusing on domestic stuff?

True... If this merger doesn't go thru and either or both airlines end up liquidating, I blame this administration's DOJ completely and so should affected employees IMO.



Finally made it to an airline mecca!
User currently offlineECAMActions From , joined Dec 1969, posts, RR:
Reply 39, posted (1 year 1 month 2 weeks ago) and read 16170 times:

Quoting GSPSPOT (Reply 38):
True... If this merger doesn't go thru and either or both airlines end up liquidating, I blame this administration's DOJ completely and so should affected employees IMO.

Dont' forget that the doj also chose to ignore jetblue and swa in therir flawed use of the HHI.

Anyone with any idea of how this industry works knows the doj is very very weak and will lose if it goes before the judge. The doj at this point is trying to figure out how to settle and save face.


User currently offlinemilemaster From United States of America, joined Mar 2001, 1071 posts, RR: 2
Reply 40, posted (1 year 1 month 1 week 6 days 12 hours ago) and read 15843 times:

Interesting take from JP Morgan analyst:

http://www.thestreet.com/story/12039...tt_html_pla5&cm_ven=EMAIL_ttt_html

"JP Morgan analyst Jamie Baker upgraded both Delta (DAL) and US Airways to outperform, and also raised estimates for both carriers, saying that "firm revenue per available seat mile and retreating oil bode well for 3Q13 earnings." He also said that US Airways and American could form a working relationship, including the move of US Airways from the Star alliance to the Oneworld alliance, even if the Justice Department succeeds in blocking the merger.

Baker ascribed a 50-50 probability to the completion of the merger between US Airways and American. He said he doesn't expect a negotiated settlement, meaning the decision on a merger rests with U.S. District Court Judge Colleen Kollar-Kotelly, who has scheduled a hearing for Nov.25.

Why 50-50? Because while nearly every single person in the airline industry believes a merger is likely, "when it comes to antitrust experts, we have yet to find any that believe the airlines face anything but a steep, uphill battle, with most citing probabilities below 40%," Baker said. "We agree with the former, but we simply cannot ignore the latter, so let's call it 50-50."


User currently offlinenutsaboutplanes From United States of America, joined Jul 2010, 506 posts, RR: 8
Reply 41, posted (1 year 1 month 1 week 6 days 11 hours ago) and read 15764 times:

Quoting tommytoyz (Reply 35):
US and AA can not explain how AS has thrived without BK all these years, despite everything they claim. AS flies internationally too. The reason for many BKs is self inflicted. AS proves this, as does WN and others.

Comparing AA to AS is not realistic. These are two vastly different business models with two completely different sized companies. AS flies to Mexico and Canada While operating one hub with about 150 daily departures out of SEA and a number of small focus cities while AA is a global network carrier with several mega hubs and numerous focus cities.

AS has a different history. They have grown much slower and have only really expanded since the late 90's and they serve a very narrow portion of the domestic US market. Due to their small size, nimbleness and lack of investment in facility infrastructure, they can move capacity very easily and very aggressively ie movement from Mexico flying to Hawaii flying.

I think you can compare B6 and WN to AS but not AA, DL , UA or US.

[Edited 2013-09-17 20:12:51]


American Airlines, US Airways, Alaska Airlines, Northwest Airlines, America West Airlines, USAFR
User currently offlineDLPMMM From United States of America, joined Apr 2005, 3594 posts, RR: 10
Reply 42, posted (1 year 1 month 1 week 6 days 8 hours ago) and read 15558 times:

Quoting milemaster (Reply 40):

Thanks for that post...very interesting!

I can't remember when there was such a dichotomy of views in such a situation!

The industry experts believing it is in essence a "done deal" while the lawyers (such as Cubsrule) feeling it will be a tough "up hill slog" (ill note that lawyers never say anything is ever more than "likely or unlikely").

It should be noted that while DOJ has had a strong track record in the past in litigation, they have been much more aggressive and even "radical" in the past year or so in their stances... I think in this case, they bit off more than they can legally chew....particularly with this judge and with a Federal Bankruptcy Judge in the mix as well.

I'll act like a lawyer and just say...we will see  


User currently offlinewashingtonflyer From Bouvet Island, joined Sep 2013, 499 posts, RR: 0
Reply 43, posted (1 year 1 month 1 week 6 days 4 hours ago) and read 15429 times:

It's an interesting thing. Our firm had its monthly attorney luncheon this past Thursday. Owing to the interest in the DC area to the merger, the firm put on a moot court involving 1) a partner who had formerly been a deputy GC at an airline (I won't say which, but it is neither AA nor US) serving as counsel to the airlines, and 2) the head of the antitrust practice serving as counsel to the government. A three-attorney panel (including one partner who won a case at the Supreme Court recently) served as the deliberative body.

Quite lively; quite informative. But, in a 3-0 decision, the panel sided with the government.

YMMV.


User currently offlineECAMActions From , joined Dec 1969, posts, RR:
Reply 44, posted (1 year 1 month 1 week 6 days ago) and read 15239 times:

Quoting milemaster (Reply 40):
Why 50-50? Because while nearly every single person in the airline industry believes a merger is likely, "when it comes to antitrust experts, we have yet to find any that believe the airlines face anything but a steep, uphill battle, with most citing probabilities below 40%," Baker said. "We agree with the former, but we simply cannot ignore the latter, so let's call it 50-50."

The "anti-trust experts" don't really understand the airline industry. They compare this merger to other mergers but they ignore how badly the hhi was used in this case.

It's way above 50% that this merger will pass. Anyone who think otherwise suffers from willful ignorance.

There isn't one piece of paper out there that shows the DOJ has a strong slam dunk case. There is nothing that doj found in their investigation that show this merger is illegal. They cherry picked data from a flawed use of the hhi and found some e-mail they used as character assassination. None of which can be used in court.

[Edited 2013-09-18 07:34:22]

User currently onlineCubsrule From United States of America, joined May 2004, 23155 posts, RR: 20
Reply 45, posted (1 year 1 month 1 week 6 days ago) and read 15195 times:

Quoting ECAMActions (Reply 44):
The "anti-trust experts" don't really understand the airline industry. They compare this merger to other mergers but they ignore how badly the hhi was used in this case.

But the judge is more of an "anti-trust expert" than someone who "really understands the airline industry," right?



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlineECAMActions From , joined Dec 1969, posts, RR:
Reply 46, posted (1 year 1 month 1 week 6 days ago) and read 15174 times:

Quoting Cubsrule (Reply 45):
But the judge is more of an "anti-trust expert" than someone who "really understands the airline industry," right?

She's a judge.


User currently onlineCubsrule From United States of America, joined May 2004, 23155 posts, RR: 20
Reply 47, posted (1 year 1 month 1 week 6 days ago) and read 15163 times:

Quoting ECAMActions (Reply 46):
She's a judge.

Of course. But she almost certainly has more competition law experience than experience with the airline industry, and I think we can all agree that experience with cases involving the airline industry (e.g. Spirit v. DoT) wouldn't necessarily help a judge understand competition law in the airline industry.



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlinemiaami From United States of America, joined Jul 2007, 594 posts, RR: 0
Reply 48, posted (1 year 1 month 1 week 5 days 23 hours ago) and read 15165 times:

AA sending charters to DC with employees on board, taking their case to Congress.

http://aviationblog.dallasnews.com/2...s-with-merger-on-their-minds.html/

[Edited 2013-09-18 08:02:31]

User currently offlinepar13del From Bahamas, joined Dec 2005, 7397 posts, RR: 8
Reply 49, posted (1 year 1 month 1 week 5 days 23 hours ago) and read 15051 times:

Quoting apodino (Reply 14):
What they make the point of...and rightly so....is that if this merger isn't allowed....AA and US are going to have their clock cleaned on lucrative international routes....which will harm both carriers long term and could lead to a situation where DL and UA are the only two carriers in many markets competing against foreign carriers...which would not be in the best interest of the US long term.

The US Government has already done all that is required in nation to nation access on international travel, any nation that wants access to the USA must also provide access to American carriers, how much more regulation / legislation do you want the US Government to attempt to apply to foreugn nations?

This case like it or not is all about domestic travel / conditions in the USA, where foreign travel is concerned it most likely is to include additional pax numbers but nothing to assist a US Carrier in better competing with foreign carriers.

Caveat being we do know that DL wants to get preferred financing for it's a/c purchases similar to what foreign carriers get to purchase American products, problem with that is that neither Airbus or Boeing want such financing on their own truf.
Consider all EU carriers purchasing Boeing and all American carriers purchasing Airbus  


User currently offlinesilentbob From United States of America, joined Aug 2006, 2128 posts, RR: 1
Reply 50, posted (1 year 1 month 1 week 5 days 23 hours ago) and read 15026 times:

Quoting ECAMActions (Reply 44):
The "anti-trust experts" don't really understand the airline industry. They compare this merger to other mergers but they ignore how badly the hhi was used in this case.

I think you address the biggest issue in the differences of opinion on this topic. Most, if not all, of the lawyers seem to take the government case at face value and assume all of the facts are correct as well as in the correct context. As the saying goes; "There are three kinds of lies. Lies, damned lies and statistics."

I still believe that the totality of the evidence will result in a verdict for the airlines, assuming the case makes it to that point. A settlement is still far more likely, in my opinion.


User currently offlineIADCA From United States of America, joined Feb 2007, 1328 posts, RR: 8
Reply 51, posted (1 year 1 month 1 week 5 days 22 hours ago) and read 14993 times:

Quoting ECAMActions (Reply 44):
The "anti-trust experts" don't really understand the airline industry. They compare this merger to other mergers but they ignore how badly the hhi was used in this case.

I'm an antitrust lawyer who has litigated antitrust cases in the airline industry. I have definite views on the merits of this case that I'm not willing to express in a public forum. I also have other views, learned through professional experience as well as academic background, of the intersection of Wall Street views of merger valuations and expectations with the agencies' views, some of the people involved in this case, the use and misuse of HHI in network-effects markets, and numerous other things that might be helpful to this forum. However, I'm just not going to post anything at all here until you stop spewing your completely uninformed speculation. That might be too bad for the rest of the people here, but it's just not worth it with you polluting the thread with completely unsupported speculation. For example, you earlier claimed that there would be an amended complaint filed to lead to a settlement. There is literally no logical reason you would amend a complaint just to settle it in this situation. Further, they did amend the complaint: to add another plaintiff and change some of the HHI numbers. You've made numerous factual misstatements over the course of your posts, which you fail to acknowledge or correct. You don't know what you're talking about here and pretend that you do, so just please stop.

I wish I could apologize for sounding like a jerk here, but that's just not going to happen. You consistently belittle any views opposing your own with no reason for doing so or any factual basis. It detracts from the discussion, some of which would be quite productive without your interruptions.

Quoting silentbob (Reply 50):
Most, if not all, of the lawyers seem to take the government case at face value and assume all of the facts are correct as well as in the correct context.

I don't. Most private-sector antitrust lawyers spent a lot of their time trying to disprove various allegations of regulatory agencies, so we tend to take the DOJ's allegations with a grain of salt.

[Edited 2013-09-18 09:37:50]

User currently offlineSooner787 From United States of America, joined Jul 2013, 334 posts, RR: 0
Reply 52, posted (1 year 1 month 1 week 5 days 22 hours ago) and read 14905 times:

Perhaps if AA/US agree to base their new HQ in Chicago like UA/CO did

this suit will magically disappear.   


User currently offlinecaribbean484 From Trinidad and Tobago, joined Jan 2007, 2639 posts, RR: 2
Reply 53, posted (1 year 1 month 1 week 5 days 22 hours ago) and read 14881 times:

Quoting IADCA (Reply 51):

IADCA I like your views on this subject matter and would appreciate a more insightful view from someone who has experience on this matter. I am no attorney rather a manager and these antitrust cases always intrigues me in Business law. So your continued contributions are welcomed by me and I am sure many others.
Please ignore ECAMActions as he is continuously posting his opinions and making them factual then belittles those who he thinks has "No airline experience".



All ah we is one family
User currently offlineECAMActions From , joined Dec 1969, posts, RR:
Reply 54, posted (1 year 1 month 1 week 5 days 22 hours ago) and read 14856 times:



Quoting IADCA (Reply 51):
I'm just not going to post anything at all here until you stop spewing your completely uninformed speculation. That might be too bad for the rest of the people here, but it's just not worth it with you polluting the thread with completely unsupported speculation

Good.



Many people on here claimed there was "No Way" the judge would settle for a nov trial date... she did.
Many people on here also claimed that AA would walk away at the first chance... they aren't and want to extent the dec 17 date further into the future.
Many people on here claim that there won't be a settlement... a mediator is being assigned this week to deal with the aa/doj settlement negotiations.

I've been proven correct on all my predictions. This merger WILL happen.

[Edited 2013-09-18 09:58:29]

User currently offlineECAMActions From , joined Dec 1969, posts, RR:
Reply 55, posted (1 year 1 month 1 week 5 days 22 hours ago) and read 14853 times:

Quoting silentbob (Reply 50):
I still believe that the totality of the evidence will result in a verdict for the airlines, assuming the case makes it to that point. A settlement is still far more likely, in my opinion.

It's insulting that this even needs to be settled. Why should AA/US give up anything when DAL, UA and SWA were allowed to move along with no concessions other than a handful of useless ewr slots?

This is so infuriating from this corrupt government and it shows they don't understand the airline industry. They will force AA to give in all their pre-merger slots at dca and it will be given to a jetblue or swa.

I personally hope that DP doesn't negotiate and takes it straight to trial. I want to the doj to be beaten in court without getting any concessions.


User currently onlineCubsrule From United States of America, joined May 2004, 23155 posts, RR: 20
Reply 56, posted (1 year 1 month 1 week 5 days 21 hours ago) and read 14829 times:

Quoting ECAMActions (Reply 54):
Many people on here claim that there won't be a settlement... a mediator is being assigned this week to deal with the aa/doj settlement negotiations.

These days, mediation is all but mandatory in federal court--whether there is hope of settlement or not.



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlineIADCA From United States of America, joined Feb 2007, 1328 posts, RR: 8
Reply 57, posted (1 year 1 month 1 week 5 days 21 hours ago) and read 14803 times:

Quoting ECAMActions (Reply 54):
Many people on here claimed there was "No Way" the judge would settle for a nov trial date... she did.
Many people on here also claimed that AA would walk away at the first chance... they aren't and want to extent the dec 17 date further into the future.
Many people on here claim that there won't be a settlement... a mediator is being assigned this week to deal with the aa/doj settlement negotiations.

I've been proven correct on all my predictions. This merger WILL happen.

That's just untrue. I don't think anyone, much less "many people" said "no way" to November. Besides, your prediction was that "there will be a trial before the end of the year," which was correct but hardly unforeseeable. And there's no "no way" on the other side. A good number of people, myself included, seemed to hold the view that both the November 2 and March whatever dates were unreasonable. The judge split the difference, taking account for her schedule. What's so novel about that? People were surprised by November, yes, but a lot of guesses were for December.

I don't think many people on here said AA would walk away at the first chance. Your "prediction" wasn't a prediction at all, given that the airlines said from the very start that they intended to fight.

As for the mediator, that's an absolutely common step in federal antitrust litigation. But I guess your knowledge of the airline industry told you that as well.

Do we really need people to start listing all the things you've said on here that are simply factually wrong, insulting to people, or both?

[Edited 2013-09-18 10:24:13]

User currently offlineECAMActions From , joined Dec 1969, posts, RR:
Reply 58, posted (1 year 1 month 1 week 5 days 21 hours ago) and read 14777 times:

Quoting IADCA (Reply 57):
That's just untrue. I don't think anyone, much less "many people" said "no way" to November. Besides, your prediction was that "there will be a trial before the end of the year," which was correct but hardly unforeseeable. And there's no "no way" on the other side. A good number of people, myself included, seemed to hold the view that both the November 2 and March whatever dates were unreasonable. The judge split the difference, taking account for her schedule. What's so novel about that? People were surprised by November, yes, but a lot of guesses were for December.

Backtrack much?
there were dozens of people saying this was over and the judge would never agree to a novemeber trial date.

Giving AA a trial date 2 weeks later than they wanted and 3 months earlier than what the doj wanted is HARDLY "splitting the difference".

The majority were spelling the end for this merger when it was filed. They used the "done deal" of a late trial date as the reason for AA to use to walk away.

They have all been proven DEAD WRONG.

[Edited 2013-09-18 10:26:43]

User currently offlinewashingtonflyer From Bouvet Island, joined Sep 2013, 499 posts, RR: 0
Reply 59, posted (1 year 1 month 1 week 5 days 21 hours ago) and read 14774 times:

ECAMActions is a one trick pony who likely registered at the behest of USAPA or APA to simply preach the party gospel - the facts be damned.

One trick pony.


User currently offlineECAMActions From , joined Dec 1969, posts, RR:
Reply 60, posted (1 year 1 month 1 week 5 days 21 hours ago) and read 14764 times:

Quoting washingtonflyer (Reply 59):

and my "trick" has been correct on all counts and predictions. Many just don't understand the airline industry, and a law degree doesn't mean much in this case.


User currently offlinemiaami From United States of America, joined Jul 2007, 594 posts, RR: 0
Reply 61, posted (1 year 1 month 1 week 5 days 21 hours ago) and read 14722 times:

Labor adding their voices on the matter

http://www.bloomberg.com/news/2013-0...ial-on-merger-suit.html?cmpid=yhoo

http://youtu.be/plH-qdTAq2M

[Edited 2013-09-18 10:40:49]

User currently offlineIADCA From United States of America, joined Feb 2007, 1328 posts, RR: 8
Reply 62, posted (1 year 1 month 1 week 5 days 21 hours ago) and read 14748 times:

Quoting ECAMActions (Reply 58):
Backtrack much?
there were dozens of people saying this was over and the judge would never agree to a novemeber trial date.

Giving AA a trial date 2 weeks later than they wanted and 3 months earlier than what the doj wanted is HARDLY "splitting the difference".

The majority were spelling the end for this merger when it was filed. They used the "done deal" of a late trial date as the reason for AA to use to walk away.

They have all been proven DEAD WRONG.

Dude: I directly quoted you. Now go find dozens of posts saying the judge would "never agree to a november trial date." Go find them. As for the scheduling, it seems the judge decided March was unreasonable - which it was, and multiple people said so at the time. She apparently took account of a trial she had scheduled in January and scheduled a trial date. The date she chose was between that January trial and the early November date. Yes, it was a win for American, and you were correct in guessing "by the end of the year," so congratulations. But here's the thing: you're not actually contributing anything. You're just guessing at stuff. You've been right on the literal one thing so far that was actually a prediction (and not as bold one as you seem to think), with the jury out on your prediction of settlement by the end of this month.

Also, I don't think there's so much "no way" on the settlement, or at least that's not my take. My take is that the DOJ filed a complaint that reads like one they actually intend to litigate. So far they're doing that. It's difficult to settle merger cases where there really aren't a ton of potential divestitures, but it can be done. It all depends what the parties are willing to give up.


User currently offlinewashingtonflyer From Bouvet Island, joined Sep 2013, 499 posts, RR: 0
Reply 63, posted (1 year 1 month 1 week 5 days 21 hours ago) and read 14686 times:

As they say, a broken clock is guaranteed to be right twice a day.

User currently offlineosubuckeyes From United States of America, joined Mar 2004, 769 posts, RR: 0
Reply 64, posted (1 year 1 month 1 week 5 days 21 hours ago) and read 14691 times:

Quoting ECAMActions (Reply 60):
and a law degree doesn't mean much in this case

Pretty sure a law degree matters in court. Doesn't matter how much one knows about the airline industry anti-trust law is about ensuring that businesses act in a way that doesn't eliminate competition and screw the consumer. Maybe you should read up on anti trust law before you bash people who may not be in the industry. There are many things about the airline industry that are unique there are many aspects of the economics that transcend across to other industries which many people know and have experience in.

I am going to go out on a limb and predict that we could have a resolution to this case sometime between tomorrow and early December.

In all seriousness, based on a few different things I don't think the DOJ settles unless there is a shift in the thinking in the department that none of us would know about anyway.


User currently offlineckfred From United States of America, joined Apr 2001, 5276 posts, RR: 1
Reply 65, posted (1 year 1 month 1 week 5 days 21 hours ago) and read 14698 times:

Quoting tommytoyz (Reply 35):
US and AA can not explain how AS has thrived without BK all these years, despite everything they claim. AS flies internationally too. The reason for many BKs is self inflicted. AS proves this, as does WN and others.

It's funny to me that the legacies never blame themselves, always others and fail to mention how other competitors were able to avoid the mistakes, such as selling fuel hedges when fuel prices were very cheap, making a bad speculative bet on the direction of fuel prices. And may more.

What got most of the legacies in trouble were contracts that were based, in part of pay scales and work rules dating back to the days of regulation. Another issue was the very low leisure fares and very high walk-up fares. Between the recession of 2000-01 and 9/11, businesses balked at the business model.

As someone else said, you really can't compare AS to the legacies. Besides being a smaller carrier with only one large hub, it also serves a lot of cities in Alaska with limited competition. Legacy flying to Anchorage is mainly during the cruise season, and none of the legacies serve Juneau.

By the same token, even though Southwest is unionized, they have employee contracts that are far more favorable to management.

Quoting ECAMActions (Reply 55):
It's insulting that this even needs to be settled. Why should AA/US give up anything when DAL, UA and SWA were allowed to move along with no concessions other than a handful of useless ewr slots?

This is so infuriating from this corrupt government and it shows they don't understand the airline industry. They will force AA to give in all their pre-merger slots at dca and it will be given to a jetblue or swa.

I personally hope that DP doesn't negotiate and takes it straight to trial. I want to the doj to be beaten in court without getting any concessions.

As a lawyer, I can tell you that there are two main reasons why you settle, despite having a very good case. First, you simply want to be done with the case. Even though they have a November trial date, every day that US and AA don't merge costs them money. And, they have lawyers on the clock and various executives and managers involved in the discovery process. They would be better served doing work for the company, rather than work for the suit.

Second, there is no such thing as a sure-fire winner in court. I've seen plenty of cases, both civil and criminal, that appeared to be easy wins for one side, and that side either lost completely or got a verdict that was far from expected.

A jury trial is always a crap shoot.

Further, even though lawyers do a good job of trying to weed out potentially biased jurors, they do manage to slip through the selection process and wind up on a jury. A lot of appeals have involved jurors who lied about issues of potential bias.

And let's face it, anti-trust is a very abstract area of the law. It's hard for the average person to get his or her arms around those issues.

That's why, despite DL/NW and UA/CO making very few concessions, it would be a good idea for AA/US to talk about DCA slots and other issues to settel this case.


User currently offlineECAMActions From , joined Dec 1969, posts, RR:
Reply 66, posted (1 year 1 month 1 week 5 days 21 hours ago) and read 14686 times:

Quoting IADCA (Reply 62):

You haven't been paying attention then. I've made a few predictions and they have become true and i'm confident the rest will also come true give or a take a few weeks on my timing.

Don't try and split hairs with me.


User currently offlineIADCA From United States of America, joined Feb 2007, 1328 posts, RR: 8
Reply 67, posted (1 year 1 month 1 week 5 days 20 hours ago) and read 14673 times:

Quoting ECAMActions (Reply 66):
You haven't been paying attention then. I've made a few predictions and they have become true and i'm confident the rest will also come true give or a take a few weeks on my timing.

Don't try and split hairs with me.

Maybe I missed them. If so, please feel free to put them together in a post, or point everyone to them and we can see how much they've contributed. I doubt I'm the only person who's missed them in the sea of 5 threads on this topic (I vaguely seem to recall something about the BK judge approving the plan, so maybe that's 2, but again, what was the alternate to that? That the BK judge would just sit infinitely around for no reason other than a decision that was make-or-break on its own?).

And let me be clear: it's fine to make predictions, even guesses. But please don't make guesses based on little more than gut feeling and general knowledge that's largely irrelevant to this process, pretend that's some actual authority, denigrate other people who post things to the contrary, and generally be a jerk about a ton of things. I realize you think you know a lot about the airline industry and that that dictates this case and trumps the opinions of people who don't, especially lawyers. But have you considered that this case is being tried by lawyers and decided by a lawyer with no particularized prior knowledge of the airline industry?

In the meantime, where are the dozens of people saying the judge would "never" agree to a November trial date?

[Edited 2013-09-18 11:47:48]

User currently offlinewashingtonflyer From Bouvet Island, joined Sep 2013, 499 posts, RR: 0
Reply 68, posted (1 year 1 month 1 week 5 days 20 hours ago) and read 14628 times:

Quoting ckfred (Reply 65):
A jury trial is always a crap shoot.

Further, even though lawyers do a good job of trying to weed out potentially biased jurors, they do manage to slip through the selection process and wind up on a jury. A lot of appeals have involved jurors who lied about issues of potential bias

This is a bench trial, not a jury trial.


User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Reply 69, posted (1 year 1 month 1 week 5 days 17 hours ago) and read 14410 times:

For those who are interested. Here are some stories on the AA/US employees and their lobbying efforts.

I guess the flight attendants met with Baer today and they said it was a friendly meeting. Maybe they should have let them handle the pre-litigation negotiations.

http://aviationblog.dallasnews.com/2...ployees-rally-at-u-s-capitol.html/

http://aviationblog.dallasnews.com/2...ought-to-stop-airline-merger.html/

http://aviationblog.dallasnews.com/2...ought-to-stop-airline-merger.html/


User currently offlineByrdluvs747 From United States of America, joined Jul 2004, 2381 posts, RR: 1
Reply 70, posted (1 year 1 month 1 week 5 days 16 hours ago) and read 14331 times:

Quoting user444555 (Reply 69):
For those who are interested. Here are some stories on the AA/US employees and their lobbying efforts.

And yet the Eagle employees in the second picture are not too happy with the merger.



The 747: The hands who designed it were guided by god.
User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Reply 71, posted (1 year 1 month 1 week 5 days 16 hours ago) and read 14337 times:

I appreciate IADCA's opinions especially because he is an antitrust attorney. I would like to read his opinions also. While I am pro-merger, I find ECAMA's posts to be frustrating at times. Just as I think there is no way that the anti-merger folks can predict a long and successful future for AA and US should they not merge, some of ECAMA's posts come across as opinions he attempts to state as facts. He has made some successful predictions, but I don't think anyone knows for sure how this will end. I think he would face less resistance if he phrased his opinions as opinions and stopped discounting lawyers and the DOJ. Both airlines deserve their day in court, but I do not think it is correct to say that the judge will decide this case based on what the airline industry thinks is correct.

I would prefer a settlement to a court fight. I agree with those who say there is always a real risk in going to court. I think the airlines are open to settling, but after Baer made his statement that he will listen but he only sees a full injunction as a remedy, I wonder if the DOJ will settle. I find it difficult to think that he will be able to settle without it looking like the DOJ lost after that comment. Many have talked about the comments Parker and Kirby made that they probably should not have said. I think Baer should have been more careful also, unless he really has no intention to settle. Normally when the DOJ gets a settlement that usually counts as a win for the DOJ from what I have seen. In this case it might not. This is where the pressure from Congress and maybe labor pressing Obama might help. If Baer can get the airlines to agree to something draconian even if it is for a short time, he could probably say that AA and US only wanted to give up DCA slots and look what I got out of them. Again, these are only my opinions. I don't know if there will be a settlement or who will win at trial. The main thing I want is for the airlines to get a fair day in court if it gets that far. But they should because I hear their legal team is excellent. I also hear the federal mediators do a very good job as some of you mentioned. If there is a possible settlement, they will work hard to find it.

I support the merger, but I think there is a possibility it might not happen. Almost all, if not all, industry analysts thought this was a done deal. None expected the tectonic shift in the way the DOJ used the HHI. I think most of them are still in shock. The person who posted the Jamie Baker quotes showed how confused analysts are by this.

I think a merger is the best outcome for consumers because it will bring a 4th major competitor with close to an equal scale to UA WN and DL. I think there is a real risk that either AA or US will shrink or worse absent a merger leaving consumers much worse off than with a merger. I am the kind of person who buys extended warranties and although I am not happy about paying more, I would rather pay a little extra and feel more secure about the future. I look at this from that kind of perspective if that makes any sense. I think it is better to pay a little more (if prices do rise a little) but have a more stable industry, and I believe that will only come with more real competition at the top of the airline food chain. I think, and this is just my observation, that most people, even those who oppose the merger do not dispute that this merger will make both companies stronger in the end. One thing is certain, if US or AA exits the market, things will get much worse for consumers, even if it is just temporary.

I also think it will be a shame for employees and creditors if it does not happen. Who knows what will happen to creditors and if AA pensions are terminated instead of frozen, taxpayers (aka passengers and consumers) will end up paying for part of it. And for employees, this is the first time I can remember that a merger was so driven by employees. It will be sad for them if all that effort was for nothing.

As Byrdluv mentions, AE employees might be the only notable exception to my point regarding employee support.

[Edited 2013-09-18 15:22:42]

[Edited 2013-09-18 15:27:16]

User currently offlineECAMActions From , joined Dec 1969, posts, RR:
Reply 72, posted (1 year 1 month 1 week 5 days 16 hours ago) and read 14270 times:

Quoting Byrdluvs747 (Reply 70):

Honestly they are Regional contractor employees. It sucks they will lose their jobs but the FFD model is what it is.


User currently offlinegegarrenton From United States of America, joined Aug 2012, 211 posts, RR: 0
Reply 73, posted (1 year 1 month 1 week 5 days 15 hours ago) and read 14236 times:

Quoting ECAMActions (Reply 60):
and a law degree doesn't mean much in this case.

Did you just say a law degree doesn't matter much in court? LOL!!!


User currently offlinemiaami From United States of America, joined Jul 2007, 594 posts, RR: 0
Reply 74, posted (1 year 1 month 1 week 5 days 15 hours ago) and read 14218 times:

Interesting article

http://centreforaviation.com/analysi...on-showdown-with-the-us-doj-129062


User currently offlineetops1 From United States of America, joined Nov 2005, 1100 posts, RR: 1
Reply 75, posted (1 year 1 month 1 week 5 days 15 hours ago) and read 14210 times:


We did our part in lobbying and Rallying for our merger today . It truly was a historic moment . Let AA/US Compete Together !
Big version: Width: 960 Height: 717 File size: 186kb


[Edited 2013-09-18 16:37:45]

User currently offlinetommytoyz From Tonga, joined Jan 2007, 1353 posts, RR: 5
Reply 76, posted (1 year 1 month 1 week 5 days 15 hours ago) and read 14176 times:

Quoting ECAMActions (Reply 44):
The "anti-trust experts" don't really understand the airline industry.

Since AA went BK and US BK twice - do they themselves understand the airline industry? It seems not with that track record of failure. And before you say AA and US are different, AA and US should have done things differently rather than the actions that brought them down.

They have only themselves to blame for their failures. Even if they liquidate, others will fill their shoes, so I don't even see that as an argument for anything.


User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Reply 77, posted (1 year 1 month 1 week 5 days 15 hours ago) and read 14117 times:

Quoting etops1 (Reply 75):
I did my part in lobbying and Rallying for our merger today . It truly was a historic moment . Let AA/US Compete Together !

Good job and good luck!


User currently offlinejpetekyxmd80 From United States of America, joined Jul 2003, 4390 posts, RR: 27
Reply 78, posted (1 year 1 month 1 week 5 days 15 hours ago) and read 14149 times:

I just have one question for the whole "Let Us Compete. Together." crowd.

AA was the worlds largest airline, by a considerable margin, for a sizable chunk of the 2000s. How did that whole economy of scale work out for you then?

Having some merger to form a new world's largest airline (again. for the 3rd,4th? time in the last 15 years) is necessary to compete with other large carriers? I think the whole thing is a giant fallacy. AA is plenty big to compete almost anywhere with any US carrier, and the bankruptcy process has put costs in line or beneath others, and an order sheet to achieve pretty much any size they want.

Asia, currently an important region, and in the future a critical region for a US carrier, AA is getting killed by the competition and bleeding money. What does US offer to this situation? NOTHING.



The Best Care in the Air, 1984-2009
User currently offlineByrdluvs747 From United States of America, joined Jul 2004, 2381 posts, RR: 1
Reply 79, posted (1 year 1 month 1 week 5 days 15 hours ago) and read 14116 times:

Quoting ECAMActions (Reply 72):
Honestly they are Regional contractor employees. It sucks they will lose their jobs but the FFD model is what it is.

Yet Eagle is still owned by AMR. But nevermind that as long as mainline employees are happy.

Quoting user444555 (Reply 71):
I think a merger is the best outcome for consumers because it will bring a 4th major competitor with close to an equal scale to UA WN and DL.

Equal scale to WN? Even without the merger AA serves three times more destinations than WN, and many of them can't be served by WN since they have no regional ops.

If the merger goes through there really will only be three major carriers. From a global perspective WN is a regional carrier serving the US only and plays no part in any international equation.



The 747: The hands who designed it were guided by god.
User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Reply 80, posted (1 year 1 month 1 week 5 days 15 hours ago) and read 14087 times:

Quoting tommytoyz (Reply 76):
Since AA went BK and US BK twice - do they themselves understand the airline industry? It seems not with that track record of failure. And before you say AA and US are different, AA and US should have done things differently rather than the actions that brought them down.

They have only themselves to blame for their failures. Even if they liquidate, others will fill their shoes, so I don't even see that as an argument for anything.

Can you explain the logic in your example? AA was around for, I don't know for sure, but about 70, maybe more, years and filed bankruptcy once. Out of their decades-long history, they have spent almost two years in bankruptcy (and would have exited last month without DOJ intervention). This sounds more like a company that did rather well most of the time. I think they did not always make the best decisions but I am far from perfect and have made mistakes. I think most of us have and understand this. AA filed bankruptcy in November 2011 after a money losing year. Had they paid the same price for fuel in 2011 that they paid in 2010, AA would have had a profitable year. So using your example, maybe we should blame OPEC or more aptly Wall Street speculators?

And from my understanding of antitrust law and bankruptcy, a company's potential exit from the market is a mitigating circumstance and I believe it is called the 'failing firm' defense. I am not saying either firm will fail, but I don't know that either won't. What I am saying is it is certainly a valid argument, but more so in chapter 7 cases.


User currently offlinegegarrenton From United States of America, joined Aug 2012, 211 posts, RR: 0
Reply 81, posted (1 year 1 month 1 week 5 days 15 hours ago) and read 14078 times:

Quoting jpetekyxmd80 (Reply 78):
I just have one question for the whole "Let Us Compete. Together." crowd.

AA was the worlds largest airline, by a considerable margin, for a sizable chunk of the 2000s. How did that whole economy of scale work out for you then?

Having some merger to form a new world's largest airline (again. for the 3rd,4th? time in the last 15 years) is necessary to compete with other large carriers? I think the whole thing is a giant fallacy. AA is plenty big to compete almost anywhere with any US carrier, and the bankruptcy process has put costs in line or beneath others, and an order sheet to achieve pretty much any size they want.

This is pretty much the crux of the whole thing. I fully believe AA can compete more effectively alone than with US. If you need to proof to puncture that fallacy, look at UA's dismal performance.


User currently offlinejpetekyxmd80 From United States of America, joined Jul 2003, 4390 posts, RR: 27
Reply 82, posted (1 year 1 month 1 week 5 days 15 hours ago) and read 14077 times:

I had to laugh at that employee video.

" Flexibility for the consumer. Lookin' out for their best interest. I think it would create a lot more opportunity".

Uh. What the hell is that supposed to mean?



The Best Care in the Air, 1984-2009
User currently offlinepar13del From Bahamas, joined Dec 2005, 7397 posts, RR: 8
Reply 83, posted (1 year 1 month 1 week 5 days 15 hours ago) and read 14074 times:

Quoting jpetekyxmd80 (Reply 78):
AA was the worlds largest airline, by a considerable margin, for a sizable chunk of the 2000s. How did that whole economy of scale work out for you then?

Is there any particular reason why you want to inject reality into this situation? 
On a serious note, because they were so large and thought they were successful they gave away the barn whenever they could as the concept of a rainy day did not exist. Certainely they did not have the technical expertise like UA to identify the loop holes that the politicians left in the chpt.11 process. Next pride kicked in so while all around them utilized the economic tools identified by UA, they went another way, we give them vredit foe that but morals does not pay the bills or generate income.

Now on this one quoted below I whole heartedly agree.

Quoting tommytoyz (Reply 76):
They have only themselves to blame for their failures.


User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Reply 84, posted (1 year 1 month 1 week 5 days 15 hours ago) and read 14074 times:

Quoting Byrdluvs747 (Reply 79):
Equal scale to WN? Even without the merger AA serves three times more destinations than WN, and many of them can't be served by WN since they have no regional ops.

If the merger goes through there really will only be three major carriers. From a global perspective WN is a regional carrier serving the US only and plays no part in any international equation.


Your post sounds a lot like the DOJ complaint. The main factor airlines use in judging size is not destinations served, but Revenue Passenger Miles or RPM's. And going by that accepted industry standard, I have read that WN is the largest domestic airline and has been for at least a few years. The DOJ's downplaying of WN's importance in the market looks to be one of the major issues of this fight if you read the AA and US rebuttals. I agree with their point of view here. And don't forget that WN now serves Intl destinations through a subsidiary and at some point will serve them using WN metal.

To say that WN does not belong in the top 4 UA DL WN and AA/US should they merge, is completely inaccurate IMO.

[Edited 2013-09-18 17:00:08]

User currently offlineRyanairGuru From Australia, joined exactly 8 years ago today! , 5769 posts, RR: 5
Reply 85, posted (1 year 1 month 1 week 5 days 15 hours ago) and read 14080 times:

IADCA, thank you for your continued contributions to this thread. I for one appreciate them immensely, and it is a shame that the actions of some posters means that we can not have a real discussion about the topic at hand.

I'll just say one thing, you must be a very patient man!

Quoting etops1 (Reply 75):
We did our part in lobbying and Rallying for our merger today

Congratulations. And it is nice to see AA and US crew intermingling, I didn't realise that it was a joint rally.



Worked Hard, Flew Right
User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Reply 86, posted (1 year 1 month 1 week 5 days 15 hours ago) and read 14067 times:

Quoting gegarrenton (Reply 81):
This is pretty much the crux of the whole thing. I fully believe AA can compete more effectively alone than with US. If you need to proof to puncture that fallacy, look at UA's dismal performance.

This is an honest question, not cynical, but how would you judge DL and WN's post-merger performance? UA seems to be the poster-child for what not to do in a merger, but if 2 out of 3 big merger's went better not worse, why assume that AA/US won't do the same? They already have enormous (while not unanimous) employee support so I think they were one step ahead before the DOJ intervened.

[Edited 2013-09-18 17:03:19]

User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Reply 87, posted (1 year 1 month 1 week 5 days 14 hours ago) and read 14049 times:

Quoting RyanairGuru (Reply 85):

IADCA, thank you for your continued contributions to this thread. I for one appreciate them immensely, and it is a shame that the actions of some posters means that we can not have a real discussion about the topic at hand.

I'll just say one thing, you must be a very patient man!

Quoting etops1 (Reply 75):
We did our part in lobbying and Rallying for our merger today

Congratulations. And it is nice to see AA and US crew intermingling, I didn't realise that it was a joint rally.


User currently offlinegegarrenton From United States of America, joined Aug 2012, 211 posts, RR: 0
Reply 88, posted (1 year 1 month 1 week 5 days 14 hours ago) and read 14043 times:

Quoting user444555 (Reply 86):
This is an honest question, not cynical, but how would you judge DL and WN's post-merger performance? UA seems to be the poster-child for what not to do in a merger, but if 2 out of 3 big merger's went better not worse, why assume that AA/US won't do the same. They already have enormous (while not unanimous) employee support so I think they were one step ahead before the DOJ intervened.

Well, WN performed better before, so we can certainly toss that in. DL certainly benefited from the merger with NW, no question. But that was more from the improved leadership that took over.

At the end of the day, well run companies do well, poorly run ones do not. And that's about it. When you reference 70 years of AA history, they were very well run. And not the biggest.


User currently offlinegegarrenton From United States of America, joined Aug 2012, 211 posts, RR: 0
Reply 89, posted (1 year 1 month 1 week 5 days 14 hours ago) and read 14028 times:

Quoting RyanairGuru (Reply 85):
IADCA, thank you for your continued contributions to this thread. I for one appreciate them immensely, and it is a shame that the actions of some posters means that we can not have a real discussion about the topic at hand.

I'll just say one thing, you must be a very patient man!

I agree as well, many thanks!


User currently offlinepar13del From Bahamas, joined Dec 2005, 7397 posts, RR: 8
Reply 90, posted (1 year 1 month 1 week 5 days 14 hours ago) and read 13963 times:

Quoting user444555 (Reply 86):
but if 2 out of 3 big merger's went better not worse,

When US did their merger they were pretty big then so 2 out of 4, at least the US merger does not reflect well on labour integration.


User currently offlinetommytoyz From Tonga, joined Jan 2007, 1353 posts, RR: 5
Reply 91, posted (1 year 1 month 1 week 5 days 14 hours ago) and read 13952 times:

Quoting user444555 (Reply 80):
Can you explain the logic in your example?

BK= Business failure. Is that so hard to understand?

And it doesn't matter what they did over the past 70 years. Xerox also filed for BK after many past memorable successes. Those days are gone. Presently, AA is a failed business. I hope you don't think otherwise.

Besides in most of those past years, the airline industry was heavily regulated, as in the opposite of deregulation. There was no open competition for the most part of their history.

Quoting jpetekyxmd80 (Reply 78):
AA was the worlds largest airline, by a considerable margin, for a sizable chunk of the 2000s. How did that whole economy of scale work out for you then?

Exactly, apparently size makes no difference as it was goof enough for a business failure at AA and at the smaller US. While others ate their lunch, like WN, Jetblue, AS and others.


User currently offlinetommytoyz From Tonga, joined Jan 2007, 1353 posts, RR: 5
Reply 92, posted (1 year 1 month 1 week 5 days 14 hours ago) and read 13934 times:

Quoting gegarrenton (Reply 88):
At the end of the day, well run companies do well, poorly run ones do not. And that's about it. When you reference 70 years of AA history, they were very well run. And not the biggest.

Well said. In my opinion the companies that went BK deserved it, it was the bad decisions on their part that brought them there. Europe had a similar shake out and is still having one. It's an ongoing process that really never ends. It's all about the quality of management that decides the fate of the company.


User currently offlinewashingtonflyer From Bouvet Island, joined Sep 2013, 499 posts, RR: 0
Reply 93, posted (1 year 1 month 1 week 5 days 14 hours ago) and read 13927 times:

Quoting gegarrenton (Reply 88):
Well, WN performed better before, so we can certainly toss that in. DL certainly benefited from the merger with NW, no question. But that was more from the improved leadership that took over.

Yep, as we watch WN slowly dismantle the FL hub in Atlanta...15% reduced flying already...I am sure the consumer is very happy.


User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Reply 94, posted (1 year 1 month 1 week 5 days 13 hours ago) and read 13873 times:

Quoting par13del (Reply 90):
When US did their merger they were pretty big then so 2 out of 4, at least the US merger does not reflect well on labour integration.

I picked a point where the DOJ said the 'problems' started. If you want to include arbitrary additional points then I am not sure where you would stop. AA/TW? WN/Morris? US/Piedmont? But if you want to include US/HP I would say that your arguments on labor show Parker learned a valuable lesson by getting most, but not all, labor groups on board beforehand. But you could argue that was a lesson he learned when he tried to take over DL also.


User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Reply 95, posted (1 year 1 month 1 week 5 days 13 hours ago) and read 13859 times:

Quoting gegarrenton (Reply 88):
Well, WN performed better before, so we can certainly toss that in. DL certainly benefited from the merger with NW, no question. But that was more from the improved leadership that took over.

Can you provide examples rather than generalizations about WN? From everything I read the WN/Airtran merger went rather smoothly as far as mergers go and a subsequent post by someone else seemed to agree with that point. They had a problem with an Airtran union, but it looks like that will be resolved. But even if you exclude WN, which I think is incorrect, Parker has been way ahead of where DL was on integration 6-7 months after DL's merger was announced. I cannot predict the future but I think that puts them more in line with DL and less with UA.


User currently offlinemiaami From United States of America, joined Jul 2007, 594 posts, RR: 0
Reply 96, posted (1 year 1 month 1 week 5 days 13 hours ago) and read 13849 times:

Quoting washingtonflyer (Reply 93):

Yep, as we watch WN slowly dismantle the FL hub in Atlanta...15% reduced flying already...I am sure the consumer is very happy.

Didn't seem to bother the DOJ that WN wiped out a LCC competitor.


User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Reply 97, posted (1 year 1 month 1 week 5 days 13 hours ago) and read 13845 times:

Quoting tommytoyz (Reply 91):
Quoting user444555 (Reply 80):
Can you explain the logic in your example?

BK= Business failure. Is that so hard to understand?

And it doesn't matter what they did over the past 70 years. Xerox also filed for BK after many past memorable successes. Those days are gone. Presently, AA is a failed business. I hope you don't think otherwise.

Besides in most of those past years, the airline industry was heavily regulated, as in the opposite of deregulation. There was no open competition for the most part of their history.

Quoting jpetekyxmd80 (Reply 78):
AA was the worlds largest airline, by a considerable margin, for a sizable chunk of the 2000s. How did that whole economy of scale work out for you then?

Exactly, apparently size makes no difference as it was goof enough for a business failure at AA and at the smaller US. While others ate their lunch, like WN, Jetblue, AS and others.

You sound angry and I think it is undeserved. Yes I understand AA entered bankruptcy. Please do not ever insinuate I am incapable of understanding a simple concept. I think it is obvious from my posts that I understand what bankruptcy means. Corporations are run by people. People make mistakes, with the exception of you evidently. Our great nation has been around for more than 200 years, and we made mistakes. Our credit has been downgraded. The City of Detroit filed bankruptcy. To say that makes failures of any of those people who made those decisions is ridiculous. It is just as ridiculous as your statement.

And if AA is a 'failed' company then the DOJ should quickly move to settle because a failed company exiting the market will cost consumers far more than a merger. I mentioned that in my post but you 'failed' to refute it here.

When logic leaves a discussion, it is a good time for me to go also. There are many other people posting here who I can have a respectful discussion with to answer people who cannot.


User currently offlineECAMActions From , joined Dec 1969, posts, RR:
Reply 98, posted (1 year 1 month 1 week 5 days 12 hours ago) and read 13774 times:

Quoting jpetekyxmd80 (Reply 78):
I just have one question for the whole "Let Us Compete. Together." crowd.

AA was the worlds largest airline, by a considerable margin, for a sizable chunk of the 2000s. How did that whole economy of scale work out for you then?

Having some merger to form a new world's largest airline (again. for the 3rd,4th? time in the last 15 years) is necessary to compete with other large carriers? I think the whole thing is a giant fallacy. AA is plenty big to compete almost anywhere with any US carrier, and the bankruptcy process has put costs in line or beneath others, and an order sheet to achieve pretty much any size they want.

Asia, currently an important region, and in the future a critical region for a US carrier, AA is getting killed by the competition and bleeding money. What does US offer to this situation? NOTHING.

It was a different time in 2000s no airline was making money. The shock of 9/11 and capacity excess made it impossible.

Now that the industry has cut the fat out of their airlines you need to match your competitors route for route and perk for perk.

AA can't compete being at a distant 3rd. They will not be able to go after DAL or UAL in any market. US fills a major gap in europe and the Northeast that AA could never do on it's own.

Pay attention, this is basic stuff.

Quoting gegarrenton (Reply 81):
This is pretty much the crux of the whole thing. I fully believe AA can compete more effectively alone than with US. If you need to proof to puncture that fallacy, look at UA's dismal performance.

Based on what? How can they compete, just because you say so? Its obvious they can't, and brining up ua's failures does not mean anything. We are talking about AA and US not UA and CAL. DAL and NW did it the best, why not compare them to AA/US?

[Edited 2013-09-18 19:09:00]

Quoting jpetekyxmd80 (Reply 82):

I had to laugh at that employee video.

" Flexibility for the consumer. Lookin' out for their best interest. I think it would create a lot more opportunity".

Uh. What the hell is that supposed to mean?

Means exactly what he said it means genius. The industry will go from 2 global airlines to 3. This is pretty basic stuff.


[Edited 2013-09-18 19:10:13]

Didn't seem to bother the DOJ that WN wiped out a LCC competitor.

Of course SWA doesn't count per the flawed DOJ complaint.

As far as the DOJ is concerned SWA is working under a different set of rules. This will be main point the airlines' fight against the doj in court. It shows just how flawed the doj analysis was and why everyone is so shocked they even bothered to file.

Of course there are many who view the industry in time frame of only 2 years. It doesn't matter than AA has lost 13 billion in the past 10 years all that matters is that now they made money 1 fiscal quarter.

It's really sad that the people who are against this merger are the same ones who complain about lousy service. They expect a 200 round trip ticket to Orlando to visit mickey mouse. Those kinds of people are not what drives this industry. This industry is driven by the high dollar business travelers which AA has lost and US has no hope of ever getting.


[Edited 2013-09-18 19:15:44]

User currently onlineCubsrule From United States of America, joined May 2004, 23155 posts, RR: 20
Reply 99, posted (1 year 1 month 1 week 5 days 12 hours ago) and read 13752 times:

Quoting ECAMActions (Reply 98):
Means exactly what he said it means genius. The industry will go from 2 global airlines to 3. This is pretty basic stuff.

Help me out with how this merger makes AA "more global." It adds roughly 6 destinations, all but two of which are in western Europe.



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlineECAMActions From , joined Dec 1969, posts, RR:
Reply 100, posted (1 year 1 month 1 week 5 days 12 hours ago) and read 13759 times:

Quoting Cubsrule (Reply 99):
Help me out with how this merger makes AA "more global." It adds roughly 6 destinations, all but two of which are in western Europe.

Uh it opens up the largest European network of any US airlines to them. It also allows the to have the east coast feed to the west to be able to fly to grow in Asia. They will also use that east coast feed to go to Africa.


User currently offlineECAMActions From , joined Dec 1969, posts, RR:
Reply 101, posted (1 year 1 month 1 week 5 days 12 hours ago) and read 13740 times:

I have to ask, why is it the doj's responsibility to protect the low yield consumer minority? Airlines don't run on their revenue. It's just extra cream off the top for them.

This doj doesn't understand the industry as well as the rest of the people against this merger. It's obvious to any industry insider the merger is the only option for AA and US. It will also put AA on the same level playing field to compete with DAL and UAL.

The doj's analysis has been blow to heck. They used the HHI in a way they have never used before to say that less than 5% of the markets will be less competitive (wrongly btw) all the while willfully ignoring SWA the 3rd largest airline in the US and leaving out the rest of the LCCs. Some of whom will double in the next 5 years.

Its obvious to anyone who has any experience in this industry that if this goes to trial the airlines absolutely destroy the DOJ. This is why there will be a settlement before the end of oct. You can quote me on that.


User currently onlineCubsrule From United States of America, joined May 2004, 23155 posts, RR: 20
Reply 102, posted (1 year 1 month 1 week 5 days 12 hours ago) and read 13780 times:

Quoting ECAMActions (Reply 100):
Uh it opens up the largest European network of any US airlines to them.

UA and DL might have something to say about that assertion. Remind me how many daily flights US has to MXP, STR and CPH.

Quoting ECAMActions (Reply 98):
Didn't seem to bother the DOJ that WN wiped out a LCC competitor.

If there's not a lot of overlap, wiping out a competitor isn't illegal. You might argue that it should be, but that's not the law. If Wegman's wants to buy Ralph's and shut it down, that doesn't violate competition law.



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlineECAMActions From , joined Dec 1969, posts, RR:
Reply 103, posted (1 year 1 month 1 week 5 days 12 hours ago) and read 13767 times:

Quoting Cubsrule (Reply 102):
If there's not a lot of overlap, wiping out a competitor isn't illegal. You might argue that it should be, but that's not the law. If Wegman's wants to buy Ralph's and shut it down, that doesn't violate competition law.

The us/aa merger has the least overlap of any merger in the past 20 years. There is another hole the logic of many.


User currently offlineProst From United States of America, joined Oct 2012, 1068 posts, RR: 1
Reply 104, posted (1 year 1 month 1 week 5 days 12 hours ago) and read 13750 times:

Quoting ECAMActions (Reply 98):
Means exactly what he said it means genius. The industry will go from 2 global airlines to 3. This is pretty basic stuff.

Would it be possible to be more civil in your discourse? Everybody on this forum has an interest in aviation. We all have differing views, but sarcastic comments like this are not civil discourse.


User currently offlineECAMActions From , joined Dec 1969, posts, RR:
Reply 105, posted (1 year 1 month 1 week 5 days 12 hours ago) and read 13723 times:

Quoting Prost (Reply 104):

When you've explained and showed the facts over and over against and people choose to ignore reality what do you do?


User currently offlineLAXtoATL From United States of America, joined Oct 2009, 1606 posts, RR: 2
Reply 106, posted (1 year 1 month 1 week 5 days 12 hours ago) and read 13706 times:

Quoting ECAMActions (Reply 101):
It's obvious to any industry insider the merger is the only option for AA and US.

Interesting since less than a year a go AA itself said they were better off as a stand alone carrier. So, it might not be so obvious to the insiders at American, you know the insiders that are running the company. You really need to stop exaggerating. Yes, the merger is probably (and do mean probably and far from a certainty) the best option for AA and US but it definitely isn't the only option.

Quoting ECAMActions (Reply 101):
Its obvious to anyone who has any experience in this industry that if this goes to trial the airlines absolutely destroy the DOJ.

Only problem with this statement is that no one in the airline industry will have anything to say about the outcome if this goes to trial. A trial will handled by lawyers and a judge!

Im no lawyer, but considering the DOJ's track record at trial and considering the fact that they hand pick their own cases to pursue I would bet the DOJ will win if this goes to trial. They might not but anybody betting against them would be making a fool's bet.

Quoting ECAMActions (Reply 101):
This is why there will be a settlement before the end of oct.

If the airlines are going to destroy the DOJ at trial, why would they bother settling? You settle to hedge your bets, no need to hedge your bets if you have a sure thing.


User currently offlineRyanairGuru From Australia, joined exactly 8 years ago today! , 5769 posts, RR: 5
Reply 107, posted (1 year 1 month 1 week 5 days 12 hours ago) and read 13706 times:

Quoting ECAMActions (Reply 105):
When you've explained and showed the facts over and over against and people choose to ignore reality what do you do?

If you legitimately believe that you are right, but others disagree, then you can do one of two things:

(1) Take a deep breathe and say it again, laying out your supporting evidence, in a reasonable manner

(2) Shrug your shoulders and ignore them

Either one of these does not require resorting to cheap insults.



Worked Hard, Flew Right
User currently onlineCubsrule From United States of America, joined May 2004, 23155 posts, RR: 20
Reply 108, posted (1 year 1 month 1 week 5 days 12 hours ago) and read 13705 times:

Quoting ECAMActions (Reply 103):
The us/aa merger has the least overlap of any merger in the past 20 years. There is another hole the logic of many.

By what measures do AA/US have less overlap than DL/NW or UA/CO?

Quoting ECAMActions (Reply 101):
It's obvious to any industry insider the merger is the only option for AA and US.

Maybe so, but it's usually not the job of competition law to keep companies in business.

Quoting ECAMActions (Reply 98):
As far as the DOJ is concerned SWA is working under a different set of rules.

I think it's exactly the same set of rules, though I'm not convinced it's the right set of rules for reasons I will outline. WN and FL both impose(d) fare discipline on the legacies. Merging didn't change to amount of discipline much but, significantly, it will raise fares in a lot of markets, especially east coast-Florida where there was a lot of overlap (BWI hub and ATL hub along with all sorts of p2p service that was arguably substitutable).

US supposedly imposes a lot more fare discipline on the other legacies than does AA. The trouble is that it's not really discipline because the other legacies don't match.



I can't decide whether I miss the tulip or the bowling shoe more
User currently offlineECAMActions From , joined Dec 1969, posts, RR:
Reply 109, posted (1 year 1 month 1 week 5 days 12 hours ago) and read 13697 times:

Quoting LAXtoATL (Reply 106):
Im no lawyer, but considering the DOJ's track record at trial and considering the fact that they hand pick their own cases to pursue I would bet the DOJ will win if this goes to trial. They might not but anybody betting against them would be making a fool's bet.

This doj is anti-business and doesn't have a good track record as the past doj's. Most things don't go to trial they either settle or the parties walk away. The doj had hoped that they would walk away with their ridiculous desire for a trial in 7 months. That didn't happen, if it goes to trial it will end up the PeopleSoft trial. That trial also used e-mails and statements from managers and didn't have many hard facts, the doj lost that big time. This case is very similar to that, the doj failed to produce many tangible facts and is pinning their case on e-mail from years ago by a few people.

That is why I bet they settle, it's the only way the doj can claim a safe victory.


User currently offlineLAXtoATL From United States of America, joined Oct 2009, 1606 posts, RR: 2
Reply 110, posted (1 year 1 month 1 week 5 days 12 hours ago) and read 13652 times:

Quoting ECAMActions (Reply 105):
When you've explained and showed the facts over and over against and people choose to ignore reality what do you do?

What you consider to be facts most people call opinions and in most cases ill-informed opinions.

Like this priceless gem...

Quoting ECAMActions (Reply 60):
and a law degree doesn't mean much in this case.

In what world is it a fact that a LAW degree doesn't mean much in a LEGAL case?

I know you are all knowing when it comes to the aviation industry*, but you should take a couple minutes and educate yourself about some basics in law... like for instance the fact that a law degree is necessary to practice law in this country! Airline professionals will not be arguing this case at trial or even during settlement negotiations. Its probably why the airline execs at AA and US chose to hire outside legal counsel to handle this case for them. Fortunately, unlike you they were smart enough to realize that a law degree means everything in this case!

*sarcastic comment


User currently offlineLAXtoATL From United States of America, joined Oct 2009, 1606 posts, RR: 2
Reply 111, posted (1 year 1 month 1 week 5 days 11 hours ago) and read 13629 times:

Quoting ECAMActions (Reply 109):
This doj is anti-business and doesn't have a good track record as the past doj's.

Whether the DOJ is ant-business or pro-business is irrelevant to there chances of success at trial.

As for your comment about the DOJ's track record, please provide the stats you are using to base that comment on.
Since you say you provide facts. Please educate us with facts. What is the success rate of the DOJ under this administration? and the success rate under the previous two administrations?

Quoting ECAMActions (Reply 109):
Most things don't go to trial they either settle or the parties walk away.

The reason most cases are settled or the parties walk away is because of the DOJ's track record at trial!

Its not because the DOJ necessarily has the best lawyers, but they do have good ones and when you can pick the cases you want to pursue the odds of success will always be in your favor.

Quoting ECAMActions (Reply 109):
The doj had hoped that they would walk away with their ridiculous desire for a trial in 7 months.

This statement is just absurd! If they have no case and presumably AA and US know it, why would they walk away from a sure thing whether it is 3 months, 7 months, or even 2 years???


User currently offlineRyanairGuru From Australia, joined exactly 8 years ago today! , 5769 posts, RR: 5
Reply 112, posted (1 year 1 month 1 week 5 days 11 hours ago) and read 13613 times:

Quoting ECAMActions (Reply 101):
This is why there will be a settlement before the end of oct. You can quote me on that.

Hmmmmm, I missed this comment

If I had the time and inclination I will go back and find the statement you made 2 weeks ago when you said that it would definitely be settled by the end of September, in fact you said that they were pretty much at an agreement and were just waiting for the finishing touches to the drafting.

  



Worked Hard, Flew Right
User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Reply 113, posted (1 year 1 month 1 week 5 days 11 hours ago) and read 13596 times:

Quoting Prost (Reply 104):
Would it be possible to be more civil in your discourse? Everybody on this forum has an interest in aviation. We all have differing views, but sarcastic comments like this are not civil discourse.

More civility on both sides would be good. I agree with you that ECAMA's post come across as condescending, and although I support the merger, as he seems to, I think he is turning off more people than changing minds. And some of his statements are shocking, like this one

Quoting ECAMActions (Reply 101):
I have to ask, why is it the doj's responsibility to protect the low yield consumer minority? Airlines don't run on their revenue. It's just extra cream off the top for them.

Of course the DOJ is concerned, or should be concerned, about all passengers, not just rich passengers or business travelers, and I would rather not read comments like that. Whether or not the DOJ's action is justified can be debated, but not just for business travelers at the expense of others.


User currently offlineECAMActions From , joined Dec 1969, posts, RR:
Reply 114, posted (1 year 1 month 1 week 5 days 11 hours ago) and read 13598 times:

Quoting LAXtoATL (Reply 111):
The reason most cases are settled or the parties walk away is because of the DOJ's track record at trial!

Not true, the Doj usually plays the waiting game, most people don't want to waste the time and money to fight it.
The settlement is a sure way to not have to deal with anymore doj chaos.

Quoting AA_EXP09;21462580:
I am not protecting the competition.
I am about protecting low fares for consumers.
The merger would cause fares to rise, which is bad for all but the airlines.

Cost and time.

[Edited 2013-09-18 20:23:38]

User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Reply 115, posted (1 year 1 month 1 week 5 days 11 hours ago) and read 13596 times:

Quoting Cubsrule (Reply 102):
Quoting ECAMActions (Reply 100):
Uh it opens up the largest European network of any US airlines to them.

UA and DL might have something to say about that assertion. Remind me how many daily flights US has to MXP, STR and CPH.

I thought that was incorrect also. US flies to a lot more cities in Europe than AA does, but I think DL still wins. But Cubsrule, I read an AA/US press release that says US will add 9 cities in Europe/Middle East alone. I don't know all of them, but there are evidently more than 6. Some AA has served before (BRU, MUC), some TWA served (TLV), and some I think are new (VCE).

I think the merger is highly complementary in Europe. BA says they support it, and I guess it is in their best interest to have a stronger US partner, but the next time they reshuffle the JBA revenues, it will probably cost BA some money, and IB, too.

I will see if I can find a list of EU cities.

US's route map on their site is not user friendly. At least not on my monitor, so I looked on Wikipedia. They list

AMS, ATH, BRU, GLA, LIS, MUC, OSL, TLV, VCE. AA serves BCN, CDG, DUB, FCO, FRA, LHR, MAD, MAN, MXP, HEL (seasonal), ZRH. I think US serves most or all of those so this about doubles AA's EU flights if approved.

[Edited 2013-09-18 20:55:33]

[Edited 2013-09-18 20:56:20]



[Edited 2013-09-18 21:00:20]

User currently offlineECAMActions From , joined Dec 1969, posts, RR:
Reply 116, posted (1 year 1 month 1 week 5 days 11 hours ago) and read 13594 times:

Quoting RyanairGuru (Reply 112):
you said that it would definitely be settled by the end of September

never said definitely, I said it could come as early as the end of this month. Given the setbacks for the doj, I can stil see this.


User currently offlineIADCA From United States of America, joined Feb 2007, 1328 posts, RR: 8
Reply 117, posted (1 year 1 month 1 week 5 days 11 hours ago) and read 13551 times:

Quoting ECAMActions (Reply 116):
never said definitely, I said it could come as early as the end of this month. Given the setbacks for the doj, I can stil see this.

Here is your post, #154 in thread III on this topic, dated 8/21/2013:

Quoting ECAMActions (Reply 154):

Good analysis. I've said from the start these doj cases involving airlines aren't as cut and dry as others. These cases are much more political in nature as you can see by the few amount of states that filed with the doj and which states decided to join.

I expect this to be resolved at the earliest before the end of THIS week and at the latest before the end of September. If by the end of September we don't hear anything further expect this to go to trial.

So you're altering your prediction by changing to a "settle by end of October" position. That's fine, but just calling it like it is.

[Edited 2013-09-18 20:59:26]

User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Reply 118, posted (1 year 1 month 1 week 5 days 10 hours ago) and read 13512 times:

I did not want to edit my post again but I think US still serves LGW, but that adds another airport, not a city. I also saw another thread on here about AA and TLV. Evidently there was a dispute between AA and the Israeli government about pensions and there are questions as to whether AA can fly there again until it is resolved, and whether this will apply to the new AA if allowed to merge.

User currently offlineXT6Wagon From United States of America, joined Feb 2007, 3418 posts, RR: 4
Reply 119, posted (1 year 1 month 1 week 5 days 10 hours ago) and read 13476 times:

Quoting miaami (Reply 96):
Didn't seem to bother the DOJ that WN wiped out a LCC competitor.

WN aquired someone they had trivial overlap in services. They aquired a small airline largely serving a single Airport. The end destinations for the flights were mostly airports WN didn't serve, and the Hub is one WN didn't serve AT ALL.

If B6 and AS agreed to merge, I can't see anyone caring at all. (I also don't see them merging, its just an example people).

The problem with the US and AA merger is that both sides have said they could survive on their own. Both operate massive routemaps covering the whole US. Past merger history has shown that just looking at specific city pairs is not going to show the impact on the market post merger. These all combine to make the US and AA merger look like a nightmare from a market perspective.

And for the people complaining about dropped service when WN aquired FL, you have NO IDEA just how brutal the pull down post merger will be for US+AA. Higher fares, and lower avaliblity will be the trend. Double so as US sees labor costs explode, and both sides donate extensive and massive histories of labor trouble. Which will be dialed up to 11 with staff cuts due to "overlap" and "redundancy"

Frankly I don't see the upside for US here. I see the upside for AA executives and creditors since they are getting piles of US money shoveled at them so they sit down, shut up, and enjoy the ride.


User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Reply 120, posted (1 year 1 month 1 week 5 days 9 hours ago) and read 13433 times:

Quoting XT6Wagon (Reply 119):
Frankly I don't see the upside for US here. I see the upside for AA executives and creditors since they are getting piles of US money shoveled at them so they sit down, shut up, and enjoy the ride.

The creditor's attorneys started the ride by getting the AA unions to meet with Parker. I am not sure what upside Parker sees in this for US other than what he has stated already, but he has been talking about it since soon after AA filed. As for AA execs, Horton was/is going to recommend the board remove his $20 mil bonus from the deal. This deal was actually bringing an end to the labor trouble for most AA and US labor groups, AE excluded so far.

You are right that I have no idea what will happen post-merger. If someone really does, I would like to find out how he or she knows.


User currently offlinesilentbob From United States of America, joined Aug 2006, 2128 posts, RR: 1
Reply 121, posted (1 year 1 month 1 week 5 days 8 hours ago) and read 13341 times:

Quoting IADCA (Reply 51):
I don't. Most private-sector antitrust lawyers spent a lot of their time trying to disprove various allegations of regulatory agencies, so we tend to take the DOJ's allegations with a grain of salt.

I should have qualified that, most of the lawyers interviewed (as well as those posting here) have stated that they believe the DOJ would win. It also seemed like your posts following shortly after the filing also showed a pretty strong belief that the DOJ would succeed.

Quoting jpetekyxmd80 (Reply 78):
Asia, currently an important region, and in the future a critical region for a US carrier, AA is getting killed by the competition and bleeding money. What does US offer to this situation? NOTHING.

Feed from the east coast that currently uses the other star alliance partner in the US.

Quoting Byrdluvs747 (Reply 79):
From a global perspective WN is a regional carrier serving the US only and plays no part in any international equation.

Domestically, WN is the largest airline and they will be serving international destinations in the very near future. To discount that the way you have is simply dishonest.

Quoting jpetekyxmd80 (Reply 78):
AA was the worlds largest airline, by a considerable margin, for a sizable chunk of the 2000s. How did that whole economy of scale work out for you then?

AA didn't file for bankruptcy like everyone else did. Their costs didn't get reduced by 20% or more, yet they still didn't file for bankruptcy for another decade, competing the whole time against major airlines with significantly lower cost structures. It sure seems like their economy of scale helped them out quite a bit.

Quoting ECAMActions (Reply 105):
When you've explained and showed the facts over and over against and people choose to ignore reality what do you do?

'
Accept that the majority of your "facts" are opinions and that other people are able to hold differing opinions. If you're unable to do that, perhaps you should turn off the computer. Or simply play a nice game of freecell, I find that relaxing.


User currently offlineandy33 From United Kingdom, joined Sep 2009, 310 posts, RR: 0
Reply 122, posted (1 year 1 month 1 week 5 days 7 hours ago) and read 13299 times:

Quoting user444555 (Reply 118):
I did not want to edit my post again but I think US still serves LGW, but that adds another airport, not a city

No, US has moved all its "London" operations to LHR. None of the major US airlines now uses LGW.

Just to add a point, since the US-EU Open Skies agreement, there is nothing to stop any US airline that has ETOPS approval from operating from the US to any EU airport it can get slots at. Obviously adding an established route with existing customers by merging with its operator is a lot easier than starting from scratch. Most of the European cities that US serves but AA doesn't aren't slot constrained. Some of them will have to become entirely O&D dependent at the European end as such feed as there is now comes from Star Alliance airlines (ATH & BRU for example), so the routes may not be as viable in the future as they are now.


User currently offlineLAXtoATL From United States of America, joined Oct 2009, 1606 posts, RR: 2
Reply 123, posted (1 year 1 month 1 week 5 days 3 hours ago) and read 13189 times:

Quoting LAXtoATL (Reply 111):
Quoting ECAMActions (Reply 109):
This doj is anti-business and doesn't have a good track record as the past doj's.

...

As for your comment about the DOJ's track record, please provide the stats you are using to base that comment on.
Since you say you provide facts. Please educate us with facts. What is the success rate of the DOJ under this administration? and the success rate under the previous two administrations?

I notice you responded to another part of my post, but yet you completely ignored this.
Is it because you overlooked it? or realized you had no way to respond without admitting you had idea of what the track record of the doj is and you just decided to make the statement because it sounded good and you figured it would make you look like you knew what you were talking about? Well, turns out it makes you look just the opposite and the reason so many people on this site have difficulty taking anything you say serious.


User currently offlinegegarrenton From United States of America, joined Aug 2012, 211 posts, RR: 0
Reply 124, posted (1 year 1 month 1 week 5 days ago) and read 13054 times:

Quoting user444555 (Reply 95):
Can you provide examples rather than generalizations about WN?

I am not making any comment on the smoothness of their integration. I am saying the performed fine financially before they merged.

http://financials.morningstar.com/ratios/r.html?t=LUV


User currently offlinegegarrenton From United States of America, joined Aug 2012, 211 posts, RR: 0
Reply 125, posted (1 year 1 month 1 week 5 days ago) and read 13026 times:

Quoting RyanairGuru (Reply 112):
If I had the time and inclination I will go back and find the statement you made 2 weeks ago when you said that it would definitely be settled by the end of September, in fact you said that they were pretty much at an agreement and were just waiting for the finishing touches to the drafting.

Yeah, I considered it myself, but really don't have the time or inclination to sift through all the rest of his nonsense.


User currently offlinegegarrenton From United States of America, joined Aug 2012, 211 posts, RR: 0
Reply 126, posted (1 year 1 month 1 week 5 days ago) and read 13014 times:

Quoting silentbob (Reply 121):
r simply play a nice game of freecell, I find that relaxing.

Yes!

I have a free cell window open at all times.


User currently offlineckfred From United States of America, joined Apr 2001, 5276 posts, RR: 1
Reply 127, posted (1 year 1 month 1 week 5 days ago) and read 12991 times:

Quoting washingtonflyer (Reply 68):
This is a bench trial, not a jury trial.

And it's still a crap shoot. If you read appellate opinions, you will find that trial judges do make mistakes, either before trial with the granting or denying of motions, or during trial by allowing or excluding exhibits and testimony into evidence.


User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Reply 128, posted (1 year 1 month 1 week 4 days 23 hours ago) and read 12950 times:

Quoting gegarrenton (Reply 124):
Quoting user444555 (Reply 95):
Can you provide examples rather than generalizations about WN?

I am not making any comment on the smoothness of their integration. I am saying the performed fine financially before they merged.

http://financials.morningstar.com/ra...t=LUV

And WN is not making money now? I thought we were discussing how well mergers were done and I am confused. Even with their problems, even UA made $469 million in Q2 this year despite their problems merging. I am not sure about the point you are trying to make.


User currently offlinewashingtonflyer From Bouvet Island, joined Sep 2013, 499 posts, RR: 0
Reply 129, posted (1 year 1 month 1 week 4 days 23 hours ago) and read 12942 times:

Quoting ckfred (Reply 127):
And it's still a crap shoot. If you read appellate opinions, you will find that trial judges do make mistakes, either before trial with the granting or denying of motions, or during trial by allowing or excluding exhibits and testimony into evidence.

Always is.

Here's a question since I'm not well versed in antitrust practice: what is the tendency of the DOJ after an adverse decision by the trial court. They (obviously) have the right to appeal, but do they exercise that right? I'm going to assume that the defendants would automatically appeal any final decision that is adverse to their goals.


User currently offlinegegarrenton From United States of America, joined Aug 2012, 211 posts, RR: 0
Reply 130, posted (1 year 1 month 1 week 4 days 23 hours ago) and read 12935 times:

Quoting gegarrenton (Reply 81):
I fully believe AA can compete more effectively alone than with US.
Quoting user444555 (Reply 128):
I am not sure about the point you are trying to make.


User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Reply 131, posted (1 year 1 month 1 week 4 days 23 hours ago) and read 12940 times:

Quoting andy33 (Reply 122):
No, US has moved all its "London" operations to LHR. None of the major US airlines now uses LGW.

Just to add a point, since the US-EU Open Skies agreement, there is nothing to stop any US airline that has ETOPS approval from operating from the US to any EU airport it can get slots at. Obviously adding an established route with existing customers by merging with its operator is a lot easier than starting from scratch. Most of the European cities that US serves but AA doesn't aren't slot constrained. Some of them will have to become entirely O&D dependent at the European end as such feed as there is now comes from Star Alliance airlines (ATH & BRU for example), so the routes may not be as viable in the future as they are now.

I think you are right it would be mostly O&D. I would say mostly but not entirely. I still know people who have cross-alliance itins. It is becoming less common but it still happens. I think DL serves both of those cities. If they are Star hubs they seem to do OK.

Thanks for correcting me about LGW. They still had it listed in Wikipedia. I could not get all the EU cities to show on the US site. Do you know if they bought their slots maybe from a Star partner, or if they are using another carrier's slots they will have to return if/when they leave Star?

[Edited 2013-09-19 08:34:49]

User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Reply 132, posted (1 year 1 month 1 week 4 days 23 hours ago) and read 12870 times:

Quoting gegarrenton (Reply 130):
Quoting gegarrenton (Reply 81):
I fully believe AA can compete more effectively alone than with US.
Quoting user444555 (Reply 128):
I am not sure about the point you are trying to make.

I was asking about how well the integrations went overall, but that is my fault for not asking a more specific question. However, par13del also seemed to understand my question, and again UA made $469 million in the Q2 2013, which USA Today reports is a 38% increase over the same quarter the year before. I have read about a lot of problems regarding their integration but mostly regarding problems with the integration itself. So if you are not talking about that, and are talking about profits, UA seems to be doing rather well and maybe can be added to the list of successful mergers from a business standpoint?

quote=user444555,reply=86]Quoting gegarrenton (Reply 81):
This is pretty much the crux of the whole thing. I fully believe AA can compete more effectively alone than with US. If you need to proof to puncture that fallacy, look at UA's dismal performance.[/quote]

Quoting gegarrenton (Reply 88):
Quoting user444555 (Reply 86):
This is an honest question, not cynical, but how would you judge DL and WN's post-merger performance? UA seems to be the poster-child for what not to do in a merger, but if 2 out of 3 big merger's went better not worse, why assume that AA/US won't do the same. They already have enormous (while not unanimous) employee support so I think they were one step ahead before the DOJ intervened.

Well, WN performed better before, so we can certainly toss that in. DL certainly benefited from the merger with NW, no question. But that was more from the improved leadership that took over.

[

[Edited 2013-09-19 08:54:52]

[Edited 2013-09-19 08:55:30]

[Edited 2013-09-19 08:57:44]

User currently offlineIADCA From United States of America, joined Feb 2007, 1328 posts, RR: 8
Reply 133, posted (1 year 1 month 1 week 4 days 22 hours ago) and read 12885 times:

Quoting silentbob (Reply 121):
I should have qualified that, most of the lawyers interviewed (as well as those posting here) have stated that they believe the DOJ would win. It also seemed like your posts following shortly after the filing also showed a pretty strong belief that the DOJ would succeed.

I think that's a fair assessment of the general legal view. My posts may have come off as more "pro-DOJ" initially than they were intended to be, as I was trying to counteract an initial chorus of posters who claimed the government had just brought a completely ridiculous case. I do think the complaint itself - again, the complaint itself, not necessarily the allegations backing it - comes off as being a strong one, but as I've also noted, we can't see what is or is not behind it in a lot of places. I've subsequently posted a couple things noting some good arguments the airlines have (including agreeing with one of your arguments, I believe). I think the DOJ's record of winning either settlements (which typically are fairly counted as "wins" for the DOJ, but here probably could not be), the parties abandoning the transaction, or winning at trial speaks for itself in terms of raw likelihood of success in general - but not necessarily this case.

This case is different in a couple regards. It's pretty atypical that merging parties have more than one or two non-laughable arguments about market definition, which is quite often what these cases turn on. Here, the parties have two (nonstop vs. connecting and WN). That doesn't mean those arguments are winners, but they only need to persuade the judge with one of them and the DOJ won't meet its burden of proof. On the other hand, those are some really mind-numbingly bad executive statements cited in the complaint, and the DOJ has more than one theory of harm - they use both coordinated interaction in some places and unilateral action in others.

Quoting silentbob (Reply 121):
AA didn't file for bankruptcy like everyone else did. Their costs didn't get reduced by 20% or more, yet they still didn't file for bankruptcy for another decade, competing the whole time against major airlines with significantly lower cost structures. It sure seems like their economy of scale helped them out quite a bit.

This previous-BK point will be an interesting fight between the two sides of this case. On the one hand, their larger size may have saved them from doom, at least until they came up against newly-huge UA-CO and DL-NW in addition to B6 and WN. On the other hand, if they now get the benefit of similar cost reductions, the question becomes why they think they can't compete now. against B6 and WN (presumably based on cost factors) and UA and CO (presumably on size and network-reach factors). On the former point, AA is a bit hemmed in: the only reason they couldn't compete against B6 and WN is costs, and if they can't get their costs under control through BK, that's an argument that the company should fail, not merge. On the latter, the problem is that once you're already a huge, non-bankrupt airline, you're going to have to convince the court that you need the merger to put together a sufficient network to compete with the others. The other two carriers seem to be growing organically internationally (and were pre-merger separately as well, at least in the case of both UA and CO, which were announcing new international destinations pre-merger), so why can't AA or US? Both have significant widebody order backlogs, and AA has a large narrowbody one as well - and yes, I know a lot of that is for replacement, but still. I think that the barriers to expansion are larger than the regulators typically credit (it's not ALL about slots and gates), but that's a fight that they'll have to fight.

Quoting washingtonflyer (Reply 129):
Always is.

Here's a question since I'm not well versed in antitrust practice: what is the tendency of the DOJ after an adverse decision by the trial court. They (obviously) have the right to appeal, but do they exercise that right? I'm going to assume that the defendants would automatically appeal any final decision that is adverse to their goals.

They typically don't. The antitrust statutes are so vague and there's so little controlling caselaw that most cases turn on factual findings by the trial judge, which of course receive a lot of deference on appeal. But there's not a lot of recent practice in this regard, so take this with a grain of salt. And you're right about the parties: a large number do appeal.

Quoting XT6Wagon (Reply 119):
WN aquired someone they had trivial overlap in services. They aquired a small airline largely serving a single Airport. The end destinations for the flights were mostly airports WN didn't serve, and the Hub is one WN didn't serve AT ALL.

They had a large overlap at BWI. And FL had 138 aircraft at merger time (52 73G and 86 717), all mainline-size. That's around 10-15 planes larger than AS is today, and AS is a pretty sizeable carrier, particularly on the West Coast.

Quoting ECAMActions (Reply 109):
This doj is anti-business and doesn't have a good track record as the past doj's.

Take a deep breath and read this again: DOJ beat Apple at trial in the e-books conspiracy case in July of this year. They have literally never lost a merger case during the Obama administration. There's a chart here: http://www.justice.gov/atr/public/workload-statistics.html. You can CTRL+F for "merger cases" and it will be the first thing that comes up.

Quoting ECAMActions (Reply 109):
the PeopleSoft trial.

Was in 2006, lost by the previous administration's DOJ.

And while that case was based on executive statements, it has little else in common with the current one. Perhaps most notably, it was in the Northern District of California, where the DOJ has had much less success than the D.D.C. There were also major potential competitors that had not entered the market yet, it was a single-product market with a very strange (almost unbelievable) definition, and there was no evidence of anything other than intense competition with SAP, the other large remaining market player. Also notably, that case was a hostile takeover, which begs this question: if a merger is so likely to create an uncompetitive market favorable to the merged company (and its nominal competitors), why were one company's shareholders resisting?

Quoting etops1 (Reply 75):
We did our part in lobbying and Rallying for our merger today . It truly was a historic moment . Let AA/US Compete Together !

Nice job. You guys look sharp and represent the industry very well.

Quoting ECAMActions (Reply 98):
It was a different time in 2000s no airline was making money. The shock of 9/11 and capacity excess made it impossible.

For you to crow about DOJ ignoring WN as a competitive force and then say this is intellectually inconsistent. WN was consistently profitable over the 2000s, and B6 made a profit more years than not while simultaneously expanding rapidly.

Quoting ECAMActions (Reply 98):
They will not be able to go after DAL or UAL in any market. US fills a major gap in europe and the Northeast that AA could never do on it's own.

Regarding the northeast, AA serves it primarily through a hub at JFK with westbound travelers routed through ORD. UA serves it primarily through EWR, with westbound travelers routed through ORD. DL serves it primarily through JFK, with westbound travelers routed through DTW and MSP. That's all pretty much the same: a slot-controlled New York area hub and a midwest set-up as well. US would add...Philly? DCA? CLT? I mean, they just swapped a ton of slots at LGA to DL, so they no longer have that. PHL isn't slot controlled, and AA fairly recently traded away slot pairs at DCA to B6 for some at JFK, so lack of slots there isn't really a valid complaint. Gate space is more of an issue. But is it really a serious argument that AA can't serve the Northeast without an additional hub when everyone else does?
And, perhaps worst for this argument, it's pretty rich for an airline to pull down a large focus city in BOS - which has no slot controls and thus can be re-entered at any time - and then claim that they can't serve the Northeast without a merger.

If your complaint is about southbound flow - IAD for UA, DCA and CLT for US, ATL for DL - it's a little better, but there's still the fact that AA shut down an RDU focus city, which is located in a CSA of around 2 million people; CLT's CSA, home of the US mega-hub, is a bit less than 2.5. And for anything going to anywhere south of Florida, they've got MIA (and recall that they had SJU as well and shut it down).

Generally speaking, it's a rough argument for an airline to openly and loudly follow a Cornerstone strategy around 5 cities and then complain that they can't compete in some areas.

As for Europe, a lot of people have already gone over this, but I'd add that if you have an antitrust-immunized joint venture with BA that uses hubs at JFK and LHR and you claim you need an airline with less than 30 widebodies (10 of which are 762s, of which AA is dumping their own fleet), a hub in PHL, and no ATI JV with a European carrier to compete, then it strikes me that something is wrong that won't be remedied with a merger.

[Edited 2013-09-19 09:29:43]

User currently offlinegegarrenton From United States of America, joined Aug 2012, 211 posts, RR: 0
Reply 134, posted (1 year 1 month 1 week 4 days 22 hours ago) and read 12805 times:

Quoting user444555 (Reply 132):
I was asking about how well the integrations went overall, but that is my fault for not asking a more specific question

We are talking at cross purposes here. I wasn't answering a question you posited, I was clarifying a statement I made that you asked me to clarify. I say AA doesn't need a merger to thrive. You asked about WN post merger, my response is they were fine pre merger, so I am happy to throw that in as it's support my position AA doesn't need a merger as airlines that are well managed will thrive regardless.


User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Reply 135, posted (1 year 1 month 1 week 4 days 22 hours ago) and read 12763 times:

Quoting gegarrenton (Reply 134):
Quoting user444555 (Reply 132):
I was asking about how well the integrations went overall, but that is my fault for not asking a more specific question

We are talking at cross purposes here. I wasn't answering a question you posited, I was clarifying a statement I made that you asked me to clarify. I say AA doesn't need a merger to thrive. You asked about WN post merger, my response is they were fine pre merger, so I am happy to throw that in as it's support my position AA doesn't need a merger as airlines that are well managed will thrive regardless.

I asked a question and when you responded to my question I don't think it was illogical to think your reply was an answer to my question, and not a clarification of your previous statement. Next time I ask a question I will try to remember this to avoid further unclear exchanges. I will withdraw the question since it seems to be problematic to answer, and I will state my opinion. From what I have read, even though airline mergers are notoriously difficult, the DL/NW and WN/FL mergers have gone relatively smoothly whereas UA/CO has had major integration turbulence. That said a 3% passenger unit revenue growth by UA in Q1 of 2013 (AA's was 1.3 although they were and are still in bankruptcy of course) and a large Q2 2013 profit by UA seem to indicate they may be turning an important corner. I wish them the best, and AA/US also in their merger efforts.


User currently offlinegegarrenton From United States of America, joined Aug 2012, 211 posts, RR: 0
Reply 136, posted (1 year 1 month 1 week 4 days 22 hours ago) and read 12727 times:

Quoting user444555 (Reply 135):
I asked a question and when you responded to my question I don't think it was illogical to think your reply was an answer to my question, and not a clarification of your previous statement. Next time I ask a question I will try to remember this to avoid further unclear exchanges. I will withdraw the question since it seems to be problematic to answer, and I will state my opinion. From what I have read, even though airline mergers are notoriously difficult, the DL/NW and WN/FL mergers have gone relatively smoothly whereas UA/CO has had major integration turbulence. That said a 3% passenger unit revenue growth by UA in Q1 of 2013 (AA's was 1.3 although they were and are still in bankruptcy of course) and a large Q2 2013 profit by UA seem to indicate they may be turning an important corner. I wish them the best, and AA/US also in their merger efforts.

That's all fine and well, but why would you tack on to a statement I made about AA not needing a merger with a question that has nothing to do with it?


User currently offlineandy33 From United Kingdom, joined Sep 2009, 310 posts, RR: 0
Reply 137, posted (1 year 1 month 1 week 4 days 21 hours ago) and read 12696 times:

Quoting user444555 (Reply 131):

I think you are right it would be mostly O&D. I would say mostly but not entirely. I still know people who have cross-alliance itins. It is becoming less common but it still happens. I think DL serves both of those cities. If they are Star hubs they seem to do OK.

Thanks for correcting me about LGW. They still had it listed in Wikipedia. I could not get all the EU cities to show on the US site. Do you know if they bought their slots maybe from a Star partner, or if they are using another carrier's slots they will have to return if/when they leave Star?

The last US flight at LGW was the CLT service, which only moved in March this year. The slots it uses at LHR come from OneWorld, ones that AA/BA were forced to make available to gain approval of their joint venture. Unbelievable!

At ATH, DL has domestic feed from OA, which codeshares on most of its flights. However the chance of OA surviving in its present form past the year end is minimal. Either it will be sold to A3, (EU approval permitting, we'll know within the next 4 weeks) or be shut down by its owners. A3 is determinedly *A.


User currently offlinecaribbean484 From Trinidad and Tobago, joined Jan 2007, 2639 posts, RR: 2
Reply 138, posted (1 year 1 month 1 week 4 days 21 hours ago) and read 12680 times:

Quoting IADCA (Reply 133):

IADCA this is why I like your views in this case, it brings a number of different direction the case can go, thank you.

Quoting IADCA (Reply 133):
And, perhaps worst for this argument, it's pretty rich for an airline to pull down a large focus city in BOS - which has no slot controls and thus can be re-entered at any time - and then claim that they can't serve the Northeast without a merger.

Quite right, I mean AA totally gutted BOS when B6 came in, and lets not forget JFK to the Caribbean where AA has cut so many services from its once mighty days of A300 flying to B6.
To say that they cannot service the Northeast is being a bit out there, when they made a business decision to cut as much and focus on their 5 corner strategy.



All ah we is one family
User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Reply 139, posted (1 year 1 month 1 week 4 days 21 hours ago) and read 12660 times:

Quoting gegarrenton (Reply 136):
Quoting user444555 (Reply 135):
I asked a question and when you responded to my question I don't think it was illogical to think your reply was an answer to my question, and not a clarification of your previous statement. Next time I ask a question I will try to remember this to avoid further unclear exchanges. I will withdraw the question since it seems to be problematic to answer, and I will state my opinion. From what I have read, even though airline mergers are notoriously difficult, the DL/NW and WN/FL mergers have gone relatively smoothly whereas UA/CO has had major integration turbulence. That said a 3% passenger unit revenue growth by UA in Q1 of 2013 (AA's was 1.3 although they were and are still in bankruptcy of course) and a large Q2 2013 profit by UA seem to indicate they may be turning an important corner. I wish them the best, and AA/US also in their merger efforts.

That's all fine and well, but why would you tack on to a statement I made about AA not needing a merger with a question that has nothing to do with it?

I posted the exchange that led to my question. If I were not hesitant to ask you another question, I would ask what is wrong with that, but instead I will explain my opinion.

I don't see anything wrong with showing that you made a statement which led to my question. Then when I asked my question, you said you clarified your statement (which I logically, but in this case, incorrectly thought was an attempt to answer my question, again my mistake). Since you did not answer my question, I withdrew it and stated my opinion. That is my answer to your question. I am not trying to be argumentative, but I don't see anything wrong with thinking you were answering my question or posting the history of this exchange.


User currently offlineHPRamper From United States of America, joined May 2005, 4078 posts, RR: 8
Reply 140, posted (1 year 1 month 1 week 4 days 20 hours ago) and read 12616 times:

Quoting IADCA (Reply 133):
US would add...Philly? DCA? CLT? I mean, they just swapped a ton of slots at LGA to DL, so they no longer have that. PHL isn't slot controlled, and AA fairly recently traded away slot pairs at DCA to B6 for some at JFK, so lack of slots there isn't really a valid complaint. Gate space is more of an issue. But is it really a serious argument that AA can't serve the Northeast without an additional hub when everyone else does?

Sure AA can serve the Northeast, but with PHL is can serve the Northeast better.

EWR can effectively handle traffic flows that begin and end within the region. DL is far larger at both JFK and LGA than AA, and it uses those as a dual-hub serving those same intra-regional flows. AA has (relatively) small presences at JFK and LGA and therefore has to focus on the domestic O&D aspect while ceding most other traffic to DL and UA.

PHL allows AA to capture the intra-regional traffic while also letting JFK and LGA ops focus even more on O&D. It's a win all around. Market share isn't everything of course, but especially in premium markets across the Northeast, it's something.


User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Reply 141, posted (1 year 1 month 1 week 4 days 20 hours ago) and read 12594 times:

Quoting andy33 (Reply 137):
The last US flight at LGW was the CLT service, which only moved in March this year. The slots it uses at LHR come from OneWorld, ones that AA/BA were forced to make available to gain approval of their joint venture. Unbelievable!



At ATH, DL has domestic feed from OA, which codeshares on most of its flights. However the chance of OA surviving in its present form past the year end is minimal. Either it will be sold to A3, (EU approval permitting, we'll know within the next 4 weeks) or be shut down by its owners. A3 is determinedly *A.


Thanks for explaining that. I was not sure about OA's alliance, but I think they were supposed to join Star and that was not completed. OW definitely needs help in Central Europe and the Balkans. Had Malev initially joined OW, they might have fared better. I think there was just too much competition from OS and LH in Central Europe for them to be in Star. They left too late. I hope AB can turn things around. The EY investment helps but might throw a wrench in AB's OW status when EY joins Skyteam. AB might be stuck in OW for a while though.

Do you think the EU would allow AB to switch to Skyteam? That would really make them huge all the way from Bulgaria to France (excluding Austria and Poland). I am not sure the EU would allow it, and since AB says we are staying in OW for now, maybe they agree.

OW is a little dysfunctional in Central Europe and with their Middle East alliances. EY is supposed to join Skyteam and owns a large part of AB. QF dropped BA for EK (no alliance but also now flies to AA's megahub at DFW), and QRis joining OW next month. I would think they could have planned things out a little more, but maybe they could not for antitrust or other reasons.

I love England but LHR I would much rather connect at CDG or FRA. LHR seems to also be a victim of poor planning going back to T4. With all those internal buildings, between the terminals, I would have thought the emphasis for any redesign would have put more focus on centralization. T5 is beautiful but taking a bus to connect from AA, even though it is not a long ride, is not convenient. I would almost rather connect from AA to AF at CDG or AA to LH at FRA.

[Edited 2013-09-19 11:19:04]



That is quite a coincidence about the slots. Also, how BA owned a stake in US in the 90's and fed traffic to them. Now the prodigal child is trying to return home but might not be able to. Regardless of what happens in the merger, I think they will join Oneworld, I hope it is part of the new AA.

[Edited 2013-09-19 11:20:35]

[Edited 2013-09-19 11:21:12]

User currently offlineIADCA From United States of America, joined Feb 2007, 1328 posts, RR: 8
Reply 142, posted (1 year 1 month 1 week 4 days 20 hours ago) and read 12563 times:

Quoting HPRamper (Reply 140):
Sure AA can serve the Northeast, but with PHL is can serve the Northeast better.

Of course, but so could anybody if they had more hubs. I mean, would you let DL merge with US based on such a claim? They could serve the heck out of the Northeast if they had PHL! Also note that this argument is a little silly; I haven't seen anyone from the carriers actually argue this - it's entirely an a.net back-and-forth.

Quoting HPRamper (Reply 140):
DL is far larger at both JFK and LGA than AA, and it uses those as a dual-hub serving those same intra-regional flows. AA has (relatively) small presences at JFK and LGA and therefore has to focus on the domestic O&D aspect while ceding most other traffic to DL and UA.
AA mainline has 16.5% of the traffic at JFK, which is smaller than DL mainline (22.9%) and both are dwarfed by B6 (38.4%). At LGA, DL's got a larger mainline share than AA, but there is a ton of regional carrier data that's just lumped together in what I can see. Yes, DL's bigger, and UA is far bigger at EWR as well, but AA doesn't help themselves by referring to JFK as a hub (and part of their much-discussed Cornerstone strategy) and LGA as a focus city. And if they really wanted to grow those places, AA could acquire more slots; as DL, B6, and US have all shown, you can acquire slots if you're willing to give up something of value in exchange - like a lot of money.

And, at least in LGA, I'd suspect the vast majority of money to be made there is domestic O&D. There's not much reason connecting there is much different for a passenger than connecting at JFK. At JFK, the biggest problem for both AA and DL is B6, not each other.

Also, if the debate here is really about connecting traffic over JFK and LGA, that still doesn't explain away why AA needs to merge to gain a hub in PHL (outside the Northeast) after dismantling BOS (in the Northeast). I understand the argument relating to BOS less-than-ideal location, but PHL isn't ideal either.

Quoting HPRamper (Reply 140):
PHL allows AA to capture the intra-regional traffic while also letting JFK and LGA ops focus even more on O&D. It's a win all around. Market share isn't everything of course, but especially in premium markets across the Northeast, it's something.

Intra-regional to where? ORD covers everything west, and MIA covers everything south beyond a point. Yes, there's a bit of a hole in Southeast-to-Northeast connections, but other carriers have regional connection holes as well domestically, and that's hardly a reason to allow an otherwise anticompetitive merger (I'm taking the DOJ view here for argument's sake, without endorsing it) when there is nothing legally preventing AA from setting up a connecting hub literally anywhere in the Northeast or mid-Atlantic except JFK, LGA, EWR, and DCA. It's not the job of competition law to rescue ineffective competitors from their own commercial flaws.

[Edited 2013-09-19 12:00:14]

User currently offlinepanamair From United States of America, joined Oct 2001, 4931 posts, RR: 25
Reply 143, posted (1 year 1 month 1 week 4 days 19 hours ago) and read 12530 times:
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Quoting ECAMActions (Reply 100):
Uh it opens up the largest European network of any US airlines to them

Largest European network? US serves around 16 European cities during summer peak (AA is already at 12 European destinations), compared to 27 for Delta metal, and around 23-24 for UA metal.

Capacity wise (in '000s ASMs), for the first 8 months of 2013:

Delta: 32,434,644
United: 31,546,447
AA: 14,586,332
US: 9,528,138


User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Reply 144, posted (1 year 1 month 1 week 4 days 19 hours ago) and read 12512 times:

Quoting IADCA (Reply 142):
Intra-regional to where? ORD covers everything west, and MIA covers everything south beyond a point. Yes, there's a bit of a hole in Southeast-to-Northeast connections, but other carriers have regional connection holes as well domestically, and that's hardly a reason to allow an otherwise anticompetitive merger (I'm taking the DOJ view here for argument's sake, without endorsing it) when there is nothing legally preventing AA from setting up a connecting hub literally anywhere in the Northeast or mid-Atlantic except JFK, LGA, EWR, and DCA. It's not the job of competition law to rescue ineffective competitors from their own commercial flaws.


I cannot think of any cities with adequate gate space for AA to organically create a hub, much less a sizeable focus city, unless terminal space is added on the East Coast. They could grow again in BOS, but I think the merger might solve the BOS problem by making AA larger than B6 there. They will grow in BOS as a merged carrier already. I don't know about BWI, but I cannot think of any other East Coast airport with enough existing gate space for AA to create hub. Can they do it at BWI? I have not been there in years. But RDU, CLT, IAD (maybe enough for a focus city), and PHL don't have the gate space. Maybe ATL if WN draws it down more or PIT but even LCC could not make PIT work.


User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Reply 145, posted (1 year 1 month 1 week 4 days 19 hours ago) and read 12510 times:

Quoting panamair (Reply 143):
Largest European network? US serves around 16 European cities during summer peak (AA is already at 12 European destinations), compared to 27 for Delta metal, and around 23-24 for UA metal.

Capacity wise (in '000s ASMs), for the first 8 months of 2013:

Delta: 32,434,644
United: 31,546,447
AA: 14,586,332
US: 9,528,138

I agree DL and UA are both larger competitors than US is to Europe, but it looks like US will add 9 European destinations to AA's if this is correct. Some or all of these could be flown by AA on its own, except maybe TLV, should it choose to fly them. My apologies if the Wiki info is out of date, but an AA press release also says US will add 9 'new' EU destinations and there are 9.

"US's route map on their site is not user friendly. At least not on my monitor, so I looked on Wikipedia. They list

AMS, ATH, BRU, GLA, LIS, MUC, OSL, TLV, VCE. AA serves BCN, CDG, DUB, FCO, FRA, LHR, MAD, MAN, MXP, HEL (seasonal), ZRH. I think US serves most or all of those so this about doubles AA's EU flights if approved."


User currently offlineIADCA From United States of America, joined Feb 2007, 1328 posts, RR: 8
Reply 146, posted (1 year 1 month 1 week 4 days 19 hours ago) and read 12454 times:

Quoting user444555 (Reply 144):
I cannot think of any cities with adequate gate space for AA to organically create a hub, much less a sizeable focus city, unless terminal space is added on the East Coast. They could grow again in BOS, but I think the merger might solve the BOS problem by making AA larger than B6 there. They will grow in BOS as a merged carrier already. I don't know about BWI, but I cannot think of any other East Coast airport with enough existing gate space for AA to create hub. Can they do it at BWI? I have not been there in years. But RDU, CLT, IAD (maybe enough for a focus city), and PHL don't have the gate space. Maybe ATL if WN draws it down more or PIT but even LCC could not make PIT work.

Sure, but the relevant analysis here is what happens without the merger versus what happens with it, so the point about BOS, while well-stated, just doesn't apply; if they could grow again without the merger, then the post-merger size is no defense to an attack on the merger.

It's inherently a guessing game what they would do without a merger. My bet is actually that they probably would stand pat. But we're really in the weeds here, anyway. Here's the question for the court: is the merger likely to substantially lessen competition in any relevant market? This has essentially boiled down to whether consumers are harmed by the merger. Perhaps slightly-better coverage in the Northeast is a consumer benefit, but perhaps loss of two weaker legacy competitors in the region (with presumed lower fares, although whether this actually happens is debatable) more than offsets it for the consumer. That's for the court to judge, not me. The point is that stating that "we need another hub to compete on the same scale" is irrelevant; competition law protects consumers, not competitors (and anyway, if serving the Northeast is so important, why did US pull down LGA so much in favor of DCA?).

As for your argument about gate space, I agree. I think it would be tough competitively to build a hub in any of these places. They'd either have to go with PIT (or try RDU again), spend a bunch of money buying out gate leases somewhere, or even pay for a new terminal somewhere. But again, if they're not commercially strong enough to do so, that's not the court's problem, nor is it the consumer's.


User currently offlineoc2dc From United States of America, joined Feb 2013, 403 posts, RR: 0
Reply 147, posted (1 year 1 month 1 week 4 days 18 hours ago) and read 12381 times:

Quoting user444555 (Reply 115):
AMS, ATH, BRU, GLA, LIS, MUC, OSL, TLV, VCE. AA serves BCN, CDG, DUB, FCO, FRA, LHR, MAD, MAN, MXP, HEL (seasonal), ZRH. I think US serves most or all of those so this about doubles AA's EU flights if approved.

US doesn't serve OSL...Also, you can add SNN to the list of cities served.

Combined, they may be able to open up additional European cities...I am saying this b/c US codeshares on UA flights to Europe. Now they can compete against UA.



I'm not complaining, I'm critiquing...
User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Reply 148, posted (1 year 1 month 1 week 4 days 17 hours ago) and read 12309 times:

Quoting user444555 (Reply 115):
AMS, ATH, BRU, GLA, LIS, MUC, OSL, TLV, VCE. AA serves BCN, CDG, DUB, FCO, FRA, LHR, MAD, MAN, MXP, HEL (seasonal), ZRH. I think US serves most or all of those so this about doubles AA's EU flights if approved.

Quoting oc2dc (Reply 147):
US doesn't serve OSL...Also, you can add SNN to the list of cities served.

Combined, they may be able to open up additional European cities...I am saying this b/c US codeshares on UA flights to Europe. Now they can compete against UA.


Thanks for the correction. As I mentioned in my post, I got the information from wikipedia, and I again apologize if there were inaccuracies. But if you subtract OSL and add SNN, that still leaves 9 cities US serves that AA does not with its own metal. And an AA press release says US serves 9 cities in Europe that AA does not. If that is correct, it about doubles the number of destinations (not flights) which is a large increase in TATL destinations. Some have mentioned there may be other intl destinations US serves that AA does not, but I don't know them, and the US website does not make them easy to find.


User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Reply 149, posted (1 year 1 month 1 week 4 days 17 hours ago) and read 12301 times:

Quoting IADCA (Reply 146):
It's inherently a guessing game what they would do without a merger. My bet is actually that they probably would stand pat. But we're really in the weeds here, anyway. Here's the question for the court: is the merger likely to substantially lessen competition in any relevant market? This has essentially boiled down to whether consumers are harmed by the merger. Perhaps slightly-better coverage in the Northeast is a consumer benefit, but perhaps loss of two weaker legacy competitors in the region (with presumed lower fares, although whether this actually happens is debatable) more than offsets it for the consumer. That's for the court to judge, not me. The point is that stating that "we need another hub to compete on the same scale" is irrelevant; competition law protects consumers, not competitors (and anyway, if serving the Northeast is so important, why did US pull down LGA so much in favor of DCA?).

As for your argument about gate space, I agree. I think it would be tough competitively to build a hub in any of these places. They'd either have to go with PIT (or try RDU again), spend a bunch of money buying out gate leases somewhere, or even pay for a new terminal somewhere. But again, if they're not commercially strong enough to do so, that's not the court's problem, nor is it the consumer's.

I agree the DOJ's concern is competition, not AA's or US's previous drawdowns. I just wanted to make the point that even if AA can buy slots, or wants to expand at a non slot-controlled airport, they really can't except for the places mentioned and I wold cross RDU off the list. I was in there a few years ago, and DL had taken over most of the common terminal. Someone else told me that WN had its own terminal but that it was using most of it. I never flew WN there so I don't know for sure. I really appreciate your input here and you ability to look at both sides. I am guessing BWI is full also since you did not mention it.


User currently offlinewashingtonflyer From Bouvet Island, joined Sep 2013, 499 posts, RR: 0
Reply 150, posted (1 year 1 month 1 week 4 days 15 hours ago) and read 12181 times:

Depends on what you want to do - expand service or build a hub. Most east coast airports that I go through (save for places like PHL, DCA, and the New York airports) have available gates.

I was at BWI just the other day and there are swaths of gates in D that go basically unused or are used for three flights a day.

Enough gates for a hub? Probably not, but there is a lot more to making a hub work than simply having enough gates. PIT proves that in spades.


User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Reply 151, posted (1 year 1 month 1 week 4 days 15 hours ago) and read 12150 times:

Quoting washingtonflyer (Reply 150):

Depends on what you want to do - expand service or build a hub. Most east coast airports that I go through (save for places like PHL, DCA, and the New York airports) have available gates.

I was at BWI just the other day and there are swaths of gates in D that go basically unused or are used for three flights a day.

Enough gates for a hub? Probably not, but there is a lot more to making a hub work than simply having enough gates. PIT proves that in spades.

This was mainly IADCA and HPRamper's exchange that I jumped into, but I think they were talking about hubs or focus cities. Thanks for answering the question about BWI. I echoed your sentiment about PIT in my post. It has many gates, but if US could not make it work with lower labor costs, I doubt AA would fare well, and with US supposedly joining OW no matter what, it would not make sense for AA to try. IMO all the major East coast airports either are full slotwise or gatewise with the exceptions we mentioned. I would even go as far to say gates are scarce at almost all major airports because you are correct about needing a swath of gates in the same area to support connecting flights. That is hard to come by in major airports.

I am not sure PHX has to worry about AA/US cutting flights there. I would be more worried about LAX. T4 is full and I often have to wait for a gate there on the tarmac. US is moving to T3 but that is still a long ways and a TSA checkpoint from T4. AA could not make it work after purchasing TW and I don't think they can do it now.


User currently offlinewashingtonflyer From Bouvet Island, joined Sep 2013, 499 posts, RR: 0
Reply 152, posted (1 year 1 month 1 week 4 days 14 hours ago) and read 12210 times:

Ya, honestly I can't think of but a couple of airports in the entirety of the USA that I feel could support a hub that isn't already hubbed. Issues of gate/facility availability, geographic limitations, or metropolitan area issues affect basically most cities in the country. Places like MCI, PIT, and STL just don't have the demographic bases to support a hub.

SAN, I think, does have the demographic base, but it has horrible geography and is facility constrained - something that is HIGHLY UNLIKELY to change (unless the Marines leave MCRD).

I think if you expanded properly and had the fortitude to do it, SJC, BWI, and LAS are the only cities where a hub could be built out. But, all three cities have significant LCC presence - hence the need for the "fortitude".

SJC is a goldmine of wealth but needs to be expanded (and, from I remember, cannot be expanded that much).
LAS has -huge- O/D traffic and available gate space but stiff presence from WN.
BWI has a decent population base of its own (Baltimore) and can poach passengers from DC's northern suburbs. It also has open gates. But, BWI has become a bastion for WN. Again - fortitude....


User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Reply 153, posted (1 year 1 month 1 week 4 days 14 hours ago) and read 12204 times:

Quoting washingtonflyer (Reply 152):
SAN, I think, does have the demographic base, but it has horrible geography and is facility constrained - something that is HIGHLY UNLIKELY to change (unless the Marines leave MCRD).

I think if you expanded properly and had the fortitude to do it, SJC, BWI, and LAS are the only cities where a hub could be built out. But, all three cities have significant LCC presence - hence the need for the "fortitude".

SJC is a goldmine of wealth but needs to be expanded (and, from I remember, cannot be expanded that much).
LAS has -huge- O/D traffic and available gate space but stiff presence from WN.
BWI has a decent population base of its own (Baltimore) and can poach passengers from DC's northern suburbs. It also has open gates. But, BWI has become a bastion for WN. Again - fortitude....

I agree with everything. AA's weakest weak spot could be the NW but AS has SEA and DL is growing there, and DL is big in PDX and has a hub in SLC. SFO has UA and a growing VX, not to mention WN at OAK and SJC. I think WN might have their own terminal at SJC also but yeah AA gave up most if its gates there also. Good points and thanks for the info.