AirwaysDC9
Posts: 199
Joined: Tue May 25, 1999 11:30 am

Your Opinion: Will The UAL/US Airways Merger Go?

Sat Sep 02, 2000 2:11 am

Ok, lets review what we know so far.
Despite what the newsmedia will have us believe there are really only 2 things that need to occur for the US Airways/United merger to be successful.

1. US Airways stockholders must vote for the transaction at their meeting in September. (In my opinion this will surely happen)

2. The US Department of Justice is in the process of conducting a review of the proposed transaction to determine whether or not it meets current anti-trust requirements. If it does not, the DOJ can negotiate with United to correct those problems prior to completing the transaction.

2.5 Ok I lied. There is one more tiny little thing that I dont believe makes much of a difference, but I'll include it to be thorough. The US Department of Transporation and the European Union must approve US Airways international route authority transfers. I dont believe this is a problem because I believe United would eliminate those routes if necessary to complete the transaction.

Now, that being said lets review what the newsmedia has claimed could STOP the transaction.

1. The fear of the industry consolidating into the "Big 3" would make the DOJ stop the transaction.

Sorry folks, I dont buy this one. Joel Klein, addressing the Commerce Committee, told the representatives that he would have to view each merger on its own merits. To kill a corporate transaction because of what "might" happen is unacceptable. If they want that much control they need to re-regulate the airlines.

2. The United Pilots would put a stop to the merger.

A week ago I would have said this might be a possibility - not because they have any LEGAL ground to do so - but because work actions might have been sustained too long for United to be a viable purchaser. As much as we might hate to admit it - we're labor and we have little right to tell management how to run their airlines. United is rumored to have offered the UAL pilots some significant gains to get them "onboard". Time will tell whether that is the case or not.

3. Congress will stop the merger.

Nope, Congress has no power to do this. They can attempt to sway the decision of Mr. Klein and the DOJ, but most of the "foot stomping" we have seen on tv is simply representives watching out for special interest groups (I/E McCain = America West, the rep from Washington State = Boeing) or simply trying to get their face on TV in an election year. Their only hope would be to reregulate the airlines and THAT isnt going to happen again.

4. United's recent service problems will kill the merger.

Nope, the DOJ knows that temporary service disruptions related to contract negotiations are temporary. They have happened to every airline in the industry as a result of the railway labor act drawing out airline negotiations for unrealistic periods of time. There is no basis in this to stop the merger regardless of what USA Today (McNews) thinks.

5. State Attorney General's will sue the DOJ to stop the merger.

Possible, but unlikely. They're all talk right now. Try and convince the taxpayers to pay for this lawsuit and you'll find out how little they care. Fact is, as long as it doesnt disrupt the Disney vacation, most folks dont even know this is happening.

6. This merger will reduce competition and raise prices!

hmmmm nope. Fraid not. Right now there are 7 large major airlines in the United States. Yes, 7! Southwest is now larger than TWA and, in total passengers carried, they are even larger than US Airways. Dont let those guys fool you, they're a major airline in every sense of the word! They just do business a little bit different than everyone else. (at least until Herb leaves).
The Fact is that the major network airlines (minus Southwest) dont compete in price. That is why they follow each others leads each summer during the 'price wars'. Chances are if you want to go from Boston to Los Angeles, you're going to pay roughly the same price on any of the major network airlines. If they dont compete in price now - they sure wont "start" when one player leaves the field. As far as competition, how many car companies are in the US? How many oil companies? 6 large competitors (and numerous secondary competitors) is MORE than enough in a deregulated industry. Should a massive consolidation begin, the government will simply ease the cabotage laws and allow foreign carriers intercoastal trading rights. I dont believe it'll ever get that far. Southwest will continue to depress yields and increase traffic throughout the US for the foreseeable future. AirTran is becoming quite the low fare powerhouse. Jetblue, Spirit, America West, Vanguard, ATA, Sun Country, and other low fare carriers are profitable and competing vigorously in the US domestic markets with United, American, Delta, Northwest, Southwest, Continental, Transworld, Frontier, Alaska, Hawiian, etc.... Just how much competition do you NEED???

My vote right now is about 70/40 FOR the merger. I dont believe that the government will be able to find enough network overlap to deny this transaction. Regardless of what the newsmedia claims, Mr. Klein may ONLY look at the legal implications of this SINGLE transaction.

Ok...I've opened myself up to it, let the flaming begin!
 
Guest

RE: Your Opinion: Will The UAL/US Airways Merger Go?

Sat Sep 02, 2000 2:18 am

Perfect summary. I believe that the mergers look good for most people. UA/US, AA/NW, and DL/CO. When the merger talk first came out, I thought it could never happen. But after reading many articles about them, I thought that competition would not suffer too much. Great post.

AA737-800
 
Peter
Posts: 549
Joined: Mon Jun 05, 2000 6:08 am

RE: Your Opinion: Will The UAL/US Airways Merger Go?

Sat Sep 02, 2000 2:18 am

I doubt it will happen, though I sort of hope it does.
 
AirwaysDC9
Posts: 199
Joined: Tue May 25, 1999 11:30 am

RE: Your Opinion: Will The UAL/US Airways Merger Go?

Sat Sep 02, 2000 2:21 am

Peter,
Its no fun unless you give the REASONS why you doubt it will happen.

Lets hear it? Was there something I neglected to cover in my summary?
 
Cody
Posts: 2172
Joined: Tue May 18, 1999 12:16 pm

RE: Your Opinion: Will The UAL/US Airways Merger Go?

Sat Sep 02, 2000 2:22 am

For the sake of the consumers.....let's hope not. imagine the problems United had last month. Now triple them. That's what it would have been like if the merger went through.
 
Peter
Posts: 549
Joined: Mon Jun 05, 2000 6:08 am

RE: Your Opinion: Will The UAL/US Airways Merger Go?

Sat Sep 02, 2000 2:33 am

Sorry. I don't think that most people want an airline that would be the size of United/US Airways. I also saw somthing on C-Span that looked like it was some government comittee that was talking about United/US Airways. They seemed to be very against, not just the merger, but the whole US aviation system in general, even going to the point to sugest reregulation, saying that it would work better than the system now. With congress feeling like that, I doubt it will happen. I know that congress can not directly affect if the merger is allowed, but I think that it will be taken into consideration when the final desicion is made by DOJ.

On the pilot problems that United has been having recently, I know that most airlines have those some time, but imagin if it had happened to an airline that is the size of United/US. That would be really bad.
 
redngold
Posts: 6673
Joined: Wed Mar 22, 2000 12:26 pm

RE: Your Opinion: Will The UAL/US Airways Merger Go?

Sat Sep 02, 2000 2:41 am

Thumbs down.

I just don't like it. No reason other than I'm afraid of monopolies and fare-fixing.

redngold
Up, up and away!
 
mbmbos
Posts: 2565
Joined: Sat May 27, 2000 4:16 am

RE: Your Opinion: Will The UAL/US Airways Merger Go?

Sat Sep 02, 2000 2:58 am

One comment about overlapping networks...

I've read several remarks on this forum about how UA and US don't have many overlapping point-to-point routes, but I think that's a pretty narrow way to analyze their competitive effect should they be merged.

A complete analysis of markets served should be performed before coming to any conclusions. For example, in some ways it doesn't matter that UA doesn't fly between Boston and Pittsburgh, and Pittsburgh and San Diego. But it does matter if the combined UA/US carrier dominates the Boston-San Diego market because they offer the greatest number of seats and frequencies regardless which hubs they funnel passengers through.

I've read that the overall market share of the merged airline would reach 35%. Over one third of domestic traffic would belong to the new United! That disturbs me. What proportion of the business travelever market share does the UA/US merger garner? I suspect that it's even higher.

There is a marketshare threshold, that once surpassed, renders it impossible for competitors to seriously contend in the market. This is particularly true when you consider the capital outlay necessary to compete in the airline industry. We have seen hints of that with Delta, Continental and Northwest going with Business Class as their top class on European flights. UA and AA have already won the race for the title of "world class contenders" from the U.S. Are we going to cede the rest of the full-fare market to them?

You can't look at UA and US's route map and bless the deal based on a lack of overlapping routes.
 
AFa340-300E
Posts: 2115
Joined: Tue May 18, 1999 3:49 am

RE: Your Opinion: Will The UAL/US Airways Merger Go?

Sat Sep 02, 2000 3:30 am

Hello,

Your summary covers all I can think about for now. Good work!

However, IMO the trouble when you have 6 airlines, and one of them much larger than the others, then the global trend will be to grow and therefore to merge, in order to survive as a competitor of this airline.
Should the DOJ not allow the US/UA merger because of what *might* happen?
Yes I think so. Because in this case, one hardly sees why other carriers wouldn't merge.

As far as I'm concerned, I think we shouldn't make a confusion between a regulated industry, and an industry lead by some rules.

Allowing foreign carriers for cabotage would be a liberal decision. But definitely not the solution if you have already the US industry centered around the 'Big Three'.
Let's give an example:
Airline X from Europe operates LGW-JFK-PIT with a 777-200ER. On the LGW-JFK, nothing unusal so far.
But with the JFK-PIT: here come the troubles; the aircraft wasn't cleaned up properly in JFK for stop-over time reasons, the aircraft is maybe not the best choice for the sector, Y from the US will offer large discounts because its has the size and the financial structure to do so.

Large companies generate economies of scale and many advantages the customers can benefit of. However, when they become too large, then quite many advantages for the customers may disappear very quickly.

Just my opinion...

Best regards,
Alain Mengus
 
rominato
Posts: 258
Joined: Sat Nov 27, 1999 12:18 pm

RE: Your Opinion: Will The UAL/US Airways Merger Go?

Sat Sep 02, 2000 3:31 am

I sort of hope not... largely because it seems like most mergers or buyouts don't really hold what was there before. That is to say... Reno went into American, and now how many of Reno's old routes are still in effect? How about Western? PSA? Hughes Airwest? Republic had pretty extensive converage briefly, and then retrenched aquite a bit before going into Northwest. Pan Am taking over National didn't do a whole lot for them...

I'd hate to see United absorb US Air, just to see the routes drastically cut back in the forthcoming years.
 
ILUV767
Posts: 3035
Joined: Mon May 29, 2000 2:21 pm

RE: Your Opinion: Will The UAL/US Airways Merger G

Sat Sep 02, 2000 3:49 am

Lets hope this will go through!

PAX, will get to where they want to go, easily.

United, is a bunch of airlines combined. Thats why it is called United. It began back in the early days of aviation when Boeing Air Transport, Varney Airlines, and National Air Transport. Later UA aquired Capital Airlines, and Pan Am, now they are going after US Airways. There are just being United like. Trying to Unite!

Go U N I T E D  
 
UALfa@jfk
Posts: 303
Joined: Sun May 28, 2000 10:02 am

RE: Your Opinion: Will The UAL/US Airways Merger Go?

Sat Sep 02, 2000 5:22 am

Great work Airwaysdc9!!! Absolutely well thought out and expressed. And you've hit just about every point I've been wanting to make here but never would because of my sheer laziness, indifference and the energy it takes to convince the many know-it-all naysayers in this forum.

I'm one of the few at UA who's literally indifferent to the deal. (My lack of seniority notwithstanding).

I'm convinced it'll go through, but with a lot of resistance with fellow UA employees. In a nutshell, I don't know why so many people here think the deal is "as dead as a doornail" (as someone put it). From my understanding from Rona Dutta, it seems more and more likely that the DOT WILL approve it, especially with the recent progress witht he pilots' negotiation.

I can't wait for this thing to hurry up and get approved. If for anything, to rub it in all the doubters' faces @ airliners.net.

       
 
AirwaysDC9
Posts: 199
Joined: Tue May 25, 1999 11:30 am

RE: Your Opinion: Will The UAL/US Airways Merger Go?

Sat Sep 02, 2000 5:29 am

UALFa,
The trick on "Airliners.net" is to sift through the teenagers who post emotion - and find the adults who post fact and opinion based on fact. ;o)

I look forward to flying with you as we - together - create the largest airline in history.

Crossing my fingers....
 
ctbarnes
Posts: 3269
Joined: Thu Mar 30, 2000 2:20 pm

RE: Your Opinion: Will The UAL/US Airways Merger Go?

Sat Sep 02, 2000 6:11 am

I'm not sure I can point to one airline merger yet that has benefited the traveling public. It's the same old story: promises are offered of lower fares and greater efficiency which never materiaize (in fact fares go up as the number of competitors drops; Since 1994 fares measured in cents per passenger mile have steadily risen even though fuel prices have dropped), chaos ensues as airlines try to rationalize everything from seniority lists to corporate cultures to CRS's meaning service deteriorates badly, and then gets cut back even further as airlines try to stem huge losses caused by higher than expected costs trying to merge the two carriers.

As airlines get bigger they become more powerful and have more weight to throw around to chase competitiors out of their hubs by locking up landing slots, offering incentives to travel agents for preferential bookings and temporarily slashing prices to drive out a compeititor only to raise them again once the competitor leaves.

Finally, the DoJ is looking very carefully not just at this merger proposal but at the industry as a whole. In fact the airline industry is their biggest concern after Microsoft. They are already suing to block a proposed partial merger between Continental and Northwest, and are also suing American for preditory pricing at their Dallas hub.

I really hope this deal doesn't go through. The travelling public have seen it all before, and yet again they are the ones who are ultimately going to suffer if this merger happens. This is not doomsaying. This is what has happened in the past. If this does go through, I don't think this one will be any different.

Charles

P.S. UALfa: I seem to remember we argued this to a draw last May if I'm not mistaken. It'll be interesting to see what actually happens.
The customer isn't a moron, she is your wife -David Ogilvy
 
Matt D
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RE: Your Opinion: Will The UAL/US Airways Merger Go?

Sat Sep 02, 2000 6:28 am

70/40 for it huh?
Does that mean that the there are more than 2 possible outcomes to this scenario?
(70+40=110)
Either it will go through or it will not go through.
What's the third possibility?
 
Flaps
Posts: 1170
Joined: Sat Feb 05, 2000 1:11 pm

RE: Your Opinion: Will The UAL/US Airways Merger Go?

Sat Sep 02, 2000 7:05 am

Excellent post and thread. Many good points made by all. I have been looking at this deal from every angle since it was announced and after a very thorough analysis I can honestly say that I cannot make up my mind if I am for or against.

The potential of this deal is incredible and I am intoxicated by the possibilities. Having lived through the USAir/Piedmont merger though I still bear a few scars. A number of these folks still cant get along after more than 10 YEARS. UA and US have each suffered through serious labor/management conflicts. Throw in a labor vs labor conflict and you could have a recipe for disaster.

Airways makes a great point with regard to the DOJ and Congress. Although a number of government agencies have serious concerns about the merger, they don't have all encompassing power to stop it. The criteria are clear and straight forward and the precedents have already been set (TWA/Ozark and Northwest/Republic being the best examples). The deal wont require very much in the way of concessions to clear the anti-trust hurdles. I would say its 60/40 or even 70/30 that it will pass. A more relative question might be the chances of this being a successful merger once it takes effect.

Will it be approved? 70/30 yes.
Will it be successfully implemented? 70/30 no.

All of the labor groups and management will have to be on board and on the same page, working together to pull this off. Reviewing the history of these groups with both companies I just dont see that happening. Maybe I'm a little jaundiced from having been in this business all my life but thats my .02 from the trenches.
 
ctbarnes
Posts: 3269
Joined: Thu Mar 30, 2000 2:20 pm

RE: Your Opinion: Will The UAL/US Airways Merger Go?

Sat Sep 02, 2000 7:14 am

Flaps:

I don't think you're jauniced at all. I think you paint a very sober picture of what is likely to happen if the merger goes through.

United's public relations have already taken a hit this summer with all the problems related to the pilot's slowdown, delays, etc. A badly-handled merger will only serve to make things worse. And there's nothing passengers will be able to do but complain!

Charles
The customer isn't a moron, she is your wife -David Ogilvy
 
D L X
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RE: Your Opinion: Will The UAL/US Airways Merger Go?

Sat Sep 02, 2000 7:57 am

Well, you all know what I think.

Antitrust anyone? The DOJ will stop this for many reasons. This recent problem of UA is actually quite important in the decision as it proves one fact quite clearly: UA can't manage an airline that big, and a 50-60% larger airline carrying 33% of the domestic market would have a crippling effect on the flying public should this happen again, or even worse, should a strike occur.

With 7 major airlines (8 depending on whom you ask), there is plenty of capacity to take up the slack should one be disabled. An impaired UA/US combination is so huge, there is not enough slack to cover the mess.

If the DOJ allows UA/US to merge, then they would have to allow AA/NW, and DL/CO of course. But, there's a better example of why UA/US won't be approved. NW/CO was a similar deal that fell flat on its face at the hands of the DOJ that simply said "I don't think so." The precedent has been set folks, this deal is dead.

 
Guest

RE: Your Opinion: Will The UAL/US Airways Merger Go?

Sat Sep 02, 2000 8:03 am

As you probably know already, I oppose the merger. Whether or not the merger goes through is another question.
However, after reading your post I came to disagree with a few of your points.

1. About Congress not having the power to stop the merger.
You are correct in saying Congress has no direct power, but were incorrect about the "foot stomping." Senator McCain is not looking out for the Phoenix-based America West, he is looking out for his constituents of Arizona and the people of the United States as a ranking member of the transportation committee. The same is true with the congressman from Washington.

2. The DOJ's approval of the merger.
The duty for the Dept. of Justice (as well as any other govt agency) is to look after the nation's people. As for reviewing mergers, they should look at the individual airlines. However, the review includes the possible effects of the merger on competition (hence the reason why they even review mergers). The possible effect of the UA/US merger inspiring other airlines to merge WILL play a role in the decision.

3. United's recent problems won't plague the merger.
I agree with you mostly on this point, but I believe that Rodney Slater and the DOT will not let this summer's "slip-up" pass on through.

4. Competition
The merger WILL decrease competition and can spur on higher fares and lower customer service. It's simple logic. Yes, (if it goes through) the merger would decrease the number of major airlines to 6, but what about AA/NW and DL/CO? Then we'd be down 3 conglomerates and TWA. The airlines do follow each other when they cut fares, but what about raising the fares? With fewer airlines, this would be very easy. Just take a look back in time about 120 years ago when railroads would merge and raise rates. Now, we have more laws to prevent enormous rate increases, but they wouldn't stop the "big 3." Also with a much larger UA, I don't see how the merger would improve service. The world's largest airline struggles enough as it is right now to provide good service and proper customer care (DOT and other reports).

I won't give you any grief about the 70/40 deal because we're only human and we all mess up .

In response to IFLY767's post, yes United is bunch of airlines, but from what I've seen so far from the acquisitions, I'm not that impressed.

All in all, I hope and I think that the UA/US merger will not go through.

Colin Scott
Wilmington, NC
usairwys4lyfe@hotmail.com
 
The777Man
Posts: 5911
Joined: Sun Jul 04, 1999 4:54 am

RE: Your Opinion: Will The UAL/US Airways Merger Go?

Sat Sep 02, 2000 10:14 am

I don't think it will go through because of anti-trust concerns and the precedent set by DOJ killing the NW/CO merger/buy. I also think it's a bad deal for consumers, for United shareholders (taking on much more debt) and for United Airlines employees. The777Man
Boeing 777s flown: UA, TG, KE, BA, CX, NH, JD, JL, CZ, SQ, EK, NG, CO, AF, SV, KU, DL, AA, MH, OZ, CA, MS, SU, LY, RG, PE, AZ, KL, VN, PK, EY, NZ, AM, BR, AC, DT, UU, OS, AI, 9W, KQ, QR, VA, JJ, ET, TK, PR, BG, T5, CI, MU and LX.. Further to fly.. LH 777
 
AirwaysDC9
Posts: 199
Joined: Tue May 25, 1999 11:30 am

RE: Your Opinion: Will The UAL/US Airways Merger Go?

Sat Sep 02, 2000 4:43 pm

Ok so you caught me on the math. Its 70/30.

DLX, I still dont believe that the DOJ has the right to sue based on what "may happen". I also disagree that if this merger is completed they "have to" approve DL/CAL, NWA/AMR. As competition is decreased it will be harder and harder to pass the DOJ's tests.

Consolidation is coming folks. If it isnt THIS merger it'll be another one.
 
D L X
Posts: 11628
Joined: Thu May 27, 1999 3:30 am

RE: Your Opinion: Will The UAL/US Airways Merger Go?

Sat Sep 02, 2000 9:28 pm

There's that word again! "Right" You would be surprised how few "rights" you have in the US. However, it is in the constitution what the Executive Branch can do. (Remember that the DOJ is a cabinet position, and is really an arm of the White House.) Their job is to sue when they feel any federal level action is deemed to be detrimental to the country's citizenship. A DOJ suit does not necessarily mean that the thing they are suing over will be negated, although the chances are quite high that it will.

How would it be even close to fair if US/UA was approved, although similar deals, NW/CO, AA/NW, DL/CO, would be scrapped? Especially considering that it would be US/UA that causes the need of the other mergers. In this case, either they merger or they lose tremendous amounts of business. So you see, even just letting one merger occur is detrimental to competition.
 
Guest

RE: Your Opinion: Will The UAL/US Airways Merger Go?

Sat Sep 02, 2000 10:48 pm

I hope this merger doesn't go through, United has enough problems with it's pilots and mechanics. Plus, they need to get their schedules straightened out so they won't be so late all the time. I love the US Airways logo or color scheme on a 737 & Airbus 320/330, I hate to see it go.
 
USAFHummer
Posts: 10261
Joined: Thu May 18, 2000 12:22 pm

RE: Your Opinion: Will The UAL/US Airways Merger Go?

Sun Sep 03, 2000 1:23 am

One aspect, which in the long run won't really matter, that no one has covered here, but which matters most to me is the service these airlines offer. I don't really care about the politics of this, but I pray that the merger goes through, because even though I am a PHL based traveler, I think US Airways' service needs much to be improved. I have flown fairly extensively on them and I find that the FA's are unfriendly, their coach seats very uncomfortable, the $5 dollar that they have for headphones nuts (not sure if they still have this, haven't flown cross-country in a while), while on United, whom I have only flown twice, most recently this past July, PHL-DEN-COS, then Jackson Hole, DEN, PHL, their service was astounding! Their FA's were friendly, On both PHL-DEN, and DEN-PHL, they offered me TWO drinks instead of US's one, even on longer flights they only gave you one. I love the fact that UA lets you listen in on ATC, and the fact that if the merger goes through, it will make travel out west , in the Pacific, and in Asia a lot simpler, and on fairly new, and larger aircraft, compared to the largest US Airways plane being the A330, United has the 747-400, and the 777.

This merger is a must for the ordinary consumer
I hope it goes through.

G.R.
Chief A.net college football stadium self-pic guru
 
USAFHummer
Posts: 10261
Joined: Thu May 18, 2000 12:22 pm

RE: Your Opinion: Will The UAL/US Airways Merger Go?

Sun Sep 03, 2000 1:36 am

One aspect, which in the long run won't really matter, that no one has covered here, but which matters most to me is the service these airlines offer. I don't really care about the politics of this, but I pray that the merger goes through, because even though I am a PHL based traveler, I think US Airways' service needs much to be improved. I have flown fairly extensively on them and I find that the FA's are unfriendly, their coach seats very uncomfortable, the $5 dollar that they have for headphones nuts (not sure if they still have this, haven't flown cross-country in a while), while on United, whom I have only flown twice, most recently this past July, PHL-DEN-COS, then Jackson Hole, DEN, PHL, their service was astounding! Their FA's were friendly, On both PHL-DEN, and DEN-PHL, they offered me TWO drinks instead of US's one, even on longer flights they only gave you one. I love the fact that UA lets you listen in on ATC, and the fact that if the merger goes through, it will make travel out west , in the Pacific, and in Asia a lot simpler, and on fairly new, and larger aircraft, compared to the largest US Airways plane being the A330, United has the 747-400, and the 777.

This merger is a must for the ordinary consumer
I hope it goes through.

G.R.
Chief A.net college football stadium self-pic guru
 
HyperMike
Posts: 968
Joined: Sun Dec 05, 1999 7:03 am

RE: Your Opinion: Will The UAL/US Airways Merger Go?

Sun Sep 03, 2000 9:37 am

Let's face it, the DOJ doesn't care who flies what type of planes. That's just for the aviation enthusiasts. They don't really care who is friendly or not. That's for the business traveller.

Being from Pittsburgh, I believe that this merger is good. US Airways has been hinting for several years about relocating some of its PIT operations to another airport. When you look at it, PIT is an inexpensive place for a hub (labor is cheap here) but at the same time, this city just doesn't have the O&D to support a hub. United, realizing that they've just about run out of room at ORD, sees PIT as a great location for a hub. O&D may not be quite so important to United since labor is so inexpensive here.

Ultimately, though, I believe that the deciding factor will be the November election. If Gore wins, his DOJ will not allow the merger. If Bush wins, I believe his DOJ will bless the merger. Can I just point out that US Airways really kissed some tail during the Republican convention?
 
AirwaysDC9
Posts: 199
Joined: Tue May 25, 1999 11:30 am

RE: Your Opinion: Will The UAL/US Airways Merger Go?

Mon Sep 04, 2000 12:13 am

Dont fool yourself Mike, United really kissed some tail at the Democratic national convention. Both airlines contributed a half million dollars to each of the Democratic and Republican Natl Convention.

Its a done deal. (and thank GOD for the people of Pittsburgh! A US Airways bankruptsy in this town would have an economic impact greater than that of the steel-mill closings!)
 
HyperMike
Posts: 968
Joined: Sun Dec 05, 1999 7:03 am

RE: Your Opinion: Will The UAL/US Airways Merger Go?

Mon Sep 04, 2000 12:29 am

Airwaysdc9,

I agree that United pumped a lot of money into the DNC. But I'm not one to trust Gore. I don't think he believes big business is good, and I think the democrats will stop the merger.
 
AirwaysDC9
Posts: 199
Joined: Tue May 25, 1999 11:30 am

RE: Your Opinion: Will The UAL/US Airways Merger Go?

Mon Sep 04, 2000 1:56 am

Mike,
My question then, for you is, HOW?

Not by any legal means. My summary above pointed out one important detail. If this goes by the letter of the law only ONE MAN will decide the fate of the merger. Klein. The democrats and republicans can scream and yell all they want, this is a business transaction in an unregulated industry. As long as it passes the litmus test and is found not to be in violation of antitrust laws - guess what, it HAS to pass. United attorneys are working with the DOJ now to alleviate what few qualms they have (hub to hub competition, and DC Air's supposed reliance on United), and once that is through - they may not LIKE it, but they dont have any legal recourse to STOP it.

-Mike
 
HyperMike
Posts: 968
Joined: Sun Dec 05, 1999 7:03 am

RE: Your Opinion: Will The UAL/US Airways Merger Go?

Mon Sep 04, 2000 4:43 am

As DLX pointed out earlier, the DOJ is an arm of the Executive branch, led by none other than the president. It's too late for Clinton to make this decision because United could come back and claim that they weren't given an adequate hearing.
 
D L X
Posts: 11628
Joined: Thu May 27, 1999 3:30 am

RE: Your Opinion: Will The UAL/US Airways Merger Go?

Mon Sep 04, 2000 12:32 pm

Yup. DOJ = Executive Branch = POTUS calling the shots. Who's the real Attorney General? Currently, it is Bill Clinton. (Of sorts...) How would you like an Executive Order breathing down your back saying "You WILL compete; you will NOT conglomerate!" Want to find out how much power the President has? Ask the AA pilots that "struck" a couple years back.

Another way to think about the DOJ is the federal version of the county or state prosecutor's office. Think about it. Do courts sue? No. Lawyers sue, and the courts judge the merits of the suit. The DOJ does its research and decides to "arrest" a company and bring trial against them for whatever reason, and the federal court system listens to them and their bad-a$$ lawyers duke it out with the company's bad-a$$ lawyers, and eventually decide what's right.

UA wants to have this deal closed by 2001. The only way this deal leaves the courts by 2001 is in a bodybag. In the least, a successful merger may take years of proving their case to the courts. Look at Microsoft for an example of how long big corporate court cases last. (And they still aren't done yet, even though a ruling has been handed down.)
 
AirwaysDC9
Posts: 199
Joined: Tue May 25, 1999 11:30 am

RE: Your Opinion: Will The UAL/US Airways Merger Go?

Mon Sep 04, 2000 4:17 pm

Well DLX, for the future of US Airways, I hope that you're wrong.

But I'm not too worried about it. This is a done deal.
 
Guest

I Hope So!

Mon Sep 04, 2000 5:19 pm

Probably not, but I hope so, because I think there are too many airlines in the world. 
 
ORD Boy 2
Posts: 298
Joined: Fri Aug 25, 2000 12:25 pm

RE: Your Opinion: Will The UAL/US Airways Merger Go?

Tue Sep 05, 2000 8:55 am

The merger will be approved
ORD Boy 2
 
D L X
Posts: 11628
Joined: Thu May 27, 1999 3:30 am

RE: Your Opinion: Will The UAL/US Airways Merger Go?

Tue Sep 05, 2000 9:00 am

I see you have been snagged hook, line, and sinker by the spin that US for some reason needs this merger. You are an employee, right?

ORD Boy 2, why do you think that? I can give (and have given) many reasons why it will not be approved.
 
tupolev154b2
Posts: 1269
Joined: Mon Jun 26, 2000 9:01 am

RE: Your Opinion: Will The UAL/US Airways Merger Go?

Tue Sep 05, 2000 9:10 am

I hope not.

I think it is plain wrong for a large airline to gobble up a smaller one before the smaller one has a chance to grow.

But hey, in the airline industry ethics don't necessarily play.
 
D L X
Posts: 11628
Joined: Thu May 27, 1999 3:30 am

RE: Your Opinion: Will The UAL/US Airways Merger Go?

Tue Sep 05, 2000 9:30 am

Well, I wouldn't agree with that logic either. US Airways has in one form or another been around for more than 60 years. In that time, it has grown quite a bit, some internally, some through acquisitions. Disallowing UA to buy US on that grounds would be rather hypocritical considering US was allowed to do the same thing many times in history.

The key issue is that US is a mighty big airline (#10 in the WORLD by RPKs), bigger than most European carriers, and all Asian, African, Australian, and South American carriers. In the USA, US is still quite a dominant airline for half the country's population. UA being the largest airline in the country and the world, would find it very hard to merge with pretty much any airline without facing very serious competitive (anti-trust) issues. For instance, did you know that US and UA currently share 100% of several markets in the country? PHL-SFO, PIT-DEN, BOS-IAD, and others?

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