D L X
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Posts: 11701
Joined: Thu May 27, 1999 3:30 am

DOJ Vs CO/NW Means DOJ Vs US/UA

Thu Oct 26, 2000 1:51 am

Here's some reading for you all.

http://dailynews.yahoo.com/h/nm/20001025/bs/airlines_northwest_dc_2.html

I would say that this could serve as a message to US/UA as well. This suit was begun over two years ago, and is just now going to trial. I think that would also say that the US/UA merger could not be completed before 2001 like the proponents are trying to do. 2003 may be the earliest, provided that they can convince the DOJ that they're not destroying competition. Good luck!
 
Guest

RE: DOJ Vs CO/NW Means DOJ Vs US/UA

Thu Oct 26, 2000 4:04 am

What do you think would happen if UA/US was blocked/abandoned and AA attempted to acquire US? The situation is similar, second largest(instead of largest - UA) carrier with limited presence in the NE trying to acquire instant major player status in the cash reservoir Northeast by purchasing an exaggeratedly crippled US. Obviously AA's presence in the NE in is larger than that of UA but overall not that much greater.

Lance
 
D L X
Topic Author
Posts: 11701
Joined: Thu May 27, 1999 3:30 am

RE: DOJ Vs CO/NW Means DOJ Vs US/UA

Thu Oct 26, 2000 11:47 am

Actually, I think UA's got a larger presence in the NE with their IAD 'hub.' I think the message from the DOJ is quite clear that if you are in the top 6, you needn't bother trying to merge with another top 6 player.
 
DCA-ROCguy
Posts: 3903
Joined: Fri Apr 21, 2000 5:03 am

RE: DOJ Vs CO/NW Means DOJ Vs US/UA

Thu Oct 26, 2000 2:14 pm

That sounds about right to me DLX. It's pretty clear that the big 6 arrangement has brought high fares and bad service to much of the country. If US wants to merge, they'd better not set their sights higher than TWA, and that's an unlikely pairing anyway. DOJ also initiated the predatory-pricing suit against AA re Vanguard at DFW last spring. They're not in a mood to endorse any more market concentration for the greedy oligopoly.

And in case AirwaysDC9 is reading, no Southwest does not make "the big 6" a "big 7" even though it's as big as US. Southwest is not part of the "big 6" cartel--rather it practices a just volume-low fare business philosophy that is in opposition to the cartel's margin-gouging philosophy. They're the party crasher.

Jim K.
Need a new airline paint scheme? Better call Saul! (Bass that is)
 
D L X
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Joined: Thu May 27, 1999 3:30 am

RE: DOJ Vs CO/NW Means DOJ Vs US/UA

Thu Oct 26, 2000 3:44 pm

I've thought about this a good bit. I think that a combo like TWA-US would actually stimulate competition because it would have a direct effect on AA and UA, and to a lesser extent, DL and NW in the transcon market. TW and US have practically no overlap, with the exception of flights between St Louis and the US hubs. I think that should this merger be put on the table, the DOJ may actually allow it.

Look at the current price of TWA: around $150 Million. Hell, maybe I'LL buy them in 2003.   Seriously, the end of 2002 is going to be hot with offers to buy. US along with maybe AS and HP would be in prime position to merge with them at that point.

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