SA7700
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US Airways / American Settle Anti-Trust Suit (Part 2)

Wed Nov 13, 2013 1:47 pm

Dear members,

Please feel free to continue your posting in part 2, which was started after part 1 was archived due to its length. Part 1 can be found here:

US Airways / American Settle Anti-Trust Suit (Part 1) (by stlgph Nov 12 2013 in Civil Aviation)


Please stay within the forum rules-and regulations. Enjoy the forums!


Regards,

SA7700
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seatback
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Wed Nov 13, 2013 2:16 pm

It would be interesting to know what the new AA's market share will be in cities across the system (i.e. CVG, SDF, RIC etc..) Is that info available yet?
 
panampaul
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Wed Nov 13, 2013 2:28 pm

Going back to a question in Part 1 of this thread, I have to puzzle about the fact that Justice says it got everything it wanted.

This is underscored by what Justice announced, such as

Quote:
William Baer, assistant attorney general for the antitrust division, told reporters on Tuesday that the settlement as a “game changer” and “opens up the marketplace as never before,” adding that it would “disrupt today’s cozy arrangements” among the nation’s largest airlines. It will also give consumers “more competitive” fares and greater choice when planning air travel. The divestitures, he noted, are the largest ever in an airline merger.

In the same article, Doug Parker is quoted as saying that the stipulations are "pretty modest." So how can Justice even begin to make this claim - or is it just trying to save face?

From DOJ: American-US Airways Settlement to Lead to Lower Fares and More Choice for Consumers

....
 
silentbob
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Wed Nov 13, 2013 2:48 pm

Quoting PanAmPaul (Reply 2):
In the same article, Doug Parker is quoted as saying that the stipulations are "pretty modest." So how can Justice even begin to make this claim - or is it just trying to save face?

Both sides are trying to save face. It's certainly more than US/AA wanted to give up in DCA, but it also does little to address the HHI issues that the DoJ used as a major tenet of their case. In short, neither side got what they wanted and gave up more than they thought they should.
 
Cubsrule
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Wed Nov 13, 2013 3:07 pm

Quoting silentbob (Reply 3):
It's certainly more than US/AA wanted to give up in DCA, but it also does little to address the HHI issues that the DoJ used as a major tenet of their case.

It doesn't address much of anything. Gate access does nothing for HHI, and maintaining historical service levels actually WORSENS the HHI problem.
I can't decide whether I miss the tulip or the bowling shoe more
 
panampaul
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Wed Nov 13, 2013 3:38 pm

Quoting silentbob (Reply 3):
In short, neither side got what they wanted and gave up more than they thought they should.

I am not convinced that Doug Parker at US thinks so. His comments seemed very smug, while the DOJ comments were very business like.
 
PHLBOS
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Wed Nov 13, 2013 3:46 pm

Quote from the previous thread regarding PHL:

PHL - Given that most of the domestic carriers not US or AA are in D and E, makes me wonder where any gate they give up here would go? What I do expect is that domestic flights that currently operate on AA from A East will be moved to B and C, and then they have access to the AA gates which could be used for international arrivals as well. So they gain int'l capable gates in this.

I mentioned this in one of the earlier lawsuit threads; PHL isn't busting at the seams for gate-space anymore and US is presently using some of their A gates for domestic routes (one can get the gate info. from http://www.phl.org and see for themselves). Since all PHL's AA routes only serve their hubs (DFW, MIA & ORD) and have redundant service w/US; those flights will likely be the first ones eliminated.

Additionally, the Director of the DOA, Mark Gale while he supports the AA/US merger, he is on record wanting more international service out of PHL regardless of which carrier flies them. Should push come to shove and AA/US is indeed hogging some of those A-East/West gates for their domestic routes; Gale may have something to say about that when it comes time for those gate leases to be renewed. One needs to remember that the days of 30-year gate leases are gone; all the remaining gate leases of that term length expired a few years ago.
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ckfred
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Wed Nov 13, 2013 3:46 pm

Quoting silentbob (Reply 3):
Both sides are trying to save face. It's certainly more than US/AA wanted to give up in DCA, but it also does little to address the HHI issues that the DoJ used as a major tenet of their case. In short, neither side got what they wanted and gave up more than they thought they should.

One thing that I learned while practicing law is that if both parties feel like they gave up too much to settle, then the settlement is probably fair. It might even be close to what a verdict would have been at trial.

If AA/US gave up more slots at DCA and LGA than it really felt was reasonable, and if DOJ believes that the settlement still left some competition issues unresolved, then the outcome is probably as good as can be expected, short of one side or the other getting a complete win at trial.

But, I'm still curious as to one thing. I just read this morning's Chicago Tribune, and it claims that AA/US have to give up 2 gates on Concourse L at ORD. To me, that makes no sense, US has gates E7, F8, and F10. At some point, US is going to vacate those gates, as operations merge with AA in Terminal 3.

If I'm not mistaken, on L Virgin America has one gate, Jet Blue has one gate, and Spirit has two gates. So, if Spirit moved to the US gates in Terminal 2, it would have a 3rd gate, while Virgin and Jet Blue could each add a gate on L.
 
seatback
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Wed Nov 13, 2013 3:47 pm

It would also be interesting to know what the DOJ's original proposal was, and how the negotiations went behind the scenes. We have to assume that the DOJ asked for more than what was finally agreed upon.
 
nutsaboutplanes
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Wed Nov 13, 2013 4:27 pm

Toward the end of the previous thread, there were questions about US Airways being able o broker deals for slots which may include JFK slots from B6. I want to be clear that ALL slots are not eligible but a portion of them are. I do not know the exact numbers but am 100% certain that some may be brokered by current holder (US Airways).
American Airlines, US Airways, Alaska Airlines, Northwest Airlines, America West Airlines, USAFR
 
LittleFokker
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Wed Nov 13, 2013 4:28 pm

I apologize if this was brought up in an earlier merger thread already, but at DFW, I believe US uses 4 gates at E. Can US's traffic be merged successfully into A, B, and C, or will AA need to use E?
"All human activities are doomed to failure." - Jean Paul Sartre
 
seatback
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Wed Nov 13, 2013 4:42 pm

Quoting LittleFokker (Reply 10):
I apologize if this was brought up in an earlier merger thread already, but at DFW, I believe US uses 4 gates at E. Can US's traffic be merged successfully into A, B, and C, or will AA need to use E?

DFW will be like many markets where there will be right-sizing of frequency. AA already operates 9 flights to PHX and 6 each to CLT and PHL. There's probably no need for too much additional capacity between DFW and PHX/CLT/PHL.

So DFW should be able to absorb US' flights...same said for ORD, MIA & JFK.
 
adam42185
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Wed Nov 13, 2013 4:57 pm

I wonder what the reasoning behind requiring US/AA to give up 2 gates at BOS was, considering the #1 carrier out of BOS is B6 anyways...? To allow more room for UA at Terminal B perhaps?
 
user444555
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Wed Nov 13, 2013 5:19 pm

Quoting LittleFokker (Reply 10):

I apologize if this was brought up in an earlier merger thread already, but at DFW, I believe US uses 4 gates at E. Can US's traffic be merged successfully into A, B, and C, or will AA need to use E?

There should be enough room at A, C, and D. AA has spare gates on C and possibly A they do not regularly use that could be used on a full time basis. I think more AA dedicated gates in the D terminal might open up once the new international AE gates open up in Terminal B (soon to have customs connections to D). AE uses about 2 or 3 gates in D. AA will probably need some more D gates anyway with the new HKG and PVG service next year.

As someone else mentioned, not all current flights may be flown later. I would not expect them to be cut in half, but there might be a reduction.
 
user444555
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Wed Nov 13, 2013 5:24 pm

Quoting ckfred (Reply 7):
But, I'm still curious as to one thing. I just read this morning's Chicago Tribune, and it claims that AA/US have to give up 2 gates on Concourse L at ORD. To me, that makes no sense, US has gates E7, F8, and F10. At some point, US is going to vacate those gates, as operations merge with AA in Terminal 3.

If I'm not mistaken, on L Virgin America has one gate, Jet Blue has one gate, and Spirit has two gates. So, if Spirit moved to the US gates in Terminal 2, it would have a 3rd gate, while Virgin and Jet Blue could each add a gate on L.

It would seem to make more sense for AA to keep the L gates, but maybe this was a way for the DOJ to get even more gates out of AA/US. I doubt they will keep the F gates, but they might and let AE use them. AE is mostly in terminal G but they spill over into H. I think it would be more convenient for pax and the lcc's if one of them moved and got an extra gate, and let AA keep more in L. I wonder what the reasoning behind this is, or if AA can find a work around with the DOJ if B6, VX, or NK said they wanted to move.
 
apodino
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Wed Nov 13, 2013 5:32 pm

Quoting LittleFokker (Reply 10):
I apologize if this was brought up in an earlier merger thread already, but at DFW, I believe US uses 4 gates at E. Can US's traffic be merged successfully into A, B, and C, or will AA need to use E?

Although the entire airport is linked on the secure side by SkyLink, I don't expect that US will hang on to the E gates post merger. In fact, since DFW is in the middle of the TRIP project, moving US out will allow the contractors to finish E on an accelerated timeline since there will be no airlines displaced when the project gets to the high E gates.

Quoting adam42185 (Reply 12):
I wonder what the reasoning behind requiring US/AA to give up 2 gates at BOS was, considering the #1 carrier out of BOS is B6 anyways...? To allow more room for UA at Terminal B perhaps?

Merger or not, UA was always going to get a certain number of gates. I don't think Massport will allow UA to get them unless they use them (Gate Squatting in Terminal C is part of why they have to run a split operation now, since the gates they had that would have been used post merger, ended up being taken back and given to B6. What I think may be happening here is Massport is trying to get even more gate space for B6, which is why in an earlier thread I suggested WN may be moving. WN only need about 3 or 4 gates in BOS, and given where B6 is, I don't see WN trying to grow BOS much beyond what they already have. Terminal B would be a perfect fit for them becuase B37 will be linked on the secure side now to the rest of the B gates. So WN gets 37 and the two gates being vacated by AA. VX stays at 38. AC stays at 1-3, and then AA and UA can figure out how to divy the remaining gates up.

Quoting ckfred (Reply 7):

But, I'm still curious as to one thing. I just read this morning's Chicago Tribune, and it claims that AA/US have to give up 2 gates on Concourse L at ORD. To me, that makes no sense, US has gates E7, F8, and F10. At some point, US is going to vacate those gates, as operations merge with AA in Terminal 3.

Somebody mentioned this in an earlier thread. I wonder if there is some shoddy reporting going on here. Obviously E7, F8, and F10 are going away. Delta will probably get E7. The question is who gets F8 and F10?

Quoting ckfred (Reply 7):
If I'm not mistaken, on L Virgin America has one gate, Jet Blue has one gate, and Spirit has two gates. So, if Spirit moved to the US gates in Terminal 2, it would have a 3rd gate, while Virgin and Jet Blue could each add a gate on L

Virgin isn't going to need an additional gate for a long time, unless they decide to add some sort of eastern hub, which I don't see anytime soon. Ditto with B6 but in reverse. NK would really be the carrier interested in growing in ORD. There is a ton of counter space in T2 though that goes unused. and it will increase after the merger. Assuming that AA is not going to gain real estate in L from an airline moving to T2, what one scenario could be would be for both VX and B6 to move to T2, one gaining F8, and one F10. Then DL would gain E7. NK would then be able to gain two gates in L, for a total of 4 gates. T2 certainly has the counter space for both B6 and VX.
 
brilondon
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Wed Nov 13, 2013 6:17 pm

Quoting PanAmPaul (Reply 2):

In the same article, Doug Parker is quoted as saying that the stipulations are "pretty modest." So how can Justice even begin to make this claim - or is it just trying to save face?

From DOJ: American-US Airways Settlement to Lead to Lower Fares and More Choice for Consumers

This is the same mentality that believed that DL would keep MEM mainline flights and not reduce it to a focus city, so I don't see how they can say that with any authority or conviction unless they are stupid. It is basic economics and marketing; fewer suppliers means higher prices, it is not difficult to see that. Three years is a blink of an eye when you are merging two large companies. Now I don't believe in governments messing about in private business and they should just let the consumer have the final say on the price and the products and services offered by the supplier. They will ultimately determine if this new company is going to fly, pun intended.

[Edited 2013-11-13 10:21:13]
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Indy
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Wed Nov 13, 2013 8:13 pm

This is a very dark day for the American consumer. The DOJ completely failed to do its job. Consumers will look back on this moment as one of the biggest mistakes in commercial aviation. The government should have drawn the line in the sand and blocked this merger. This merger was nothing more than an anti-competitive move. Using the logic of others on here we must now allow DL and UA to merge because US and AA were allowed to merge.

Bad. Very bad. Higher fares or poorer quality service coming to an airport near you.
Indy = Indianapolis and not Independence Air
 
FWAERJ
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Wed Nov 13, 2013 8:38 pm

Quoting Indy (Reply 17):
Using the logic of others on here we must now allow DL and UA to merge because US and AA were allowed to merge.

The goal of AA/US was to level the playing field by bringing AA up to par with DL and UA.

There will be no DL/UA merger like you think. With AA/US, all three remaining legacies plus WN are now at critical mass needed for sustainable profitability.
"Did he really need the triple bypass? Or was it the miles?"
 
SouthernDC9
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Wed Nov 13, 2013 8:47 pm

So I fancy myself quite the airline geek and DCA is "my" airport (I can walk there from my place) so I really thought I knew the whole slot thing, but I was not aware of the "commuter slot" distinction (if I'm understanding it correctly) - and AA seems to be saying that's the bulk of what they will have to give up... So would WN (or JetBlue or NK or Allegiant) be unable to bid on any such slots since they don't have the correct planes? Or could WN fly a 737 on a "commuter" slot?

And would Allegiant seriously try to go after any of the DCA slots? With their set up wouldn't their market basically be elementary/middle/high school tour groups flying to DC? Would AA/US want Allegiant to come in because the threat of their taking away business traffic would be minimal?
What does AA/US merger mean for CLT/JFK/PHX/North America/Southern Hemisphere/God's Plan for the Universe
 
aaexecplat
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Wed Nov 13, 2013 9:00 pm

Quoting FWAERJ (Reply 18):
The goal of AA/US was to level the playing field by bringing AA up to par with DL and UA.

There will be no DL/UA merger like you think. With AA/US, all three remaining legacies plus WN are now at critical mass needed for sustainable profitability.

That is crazy talk. There is no even playing field. As soon as one of those three makes another acquisition (AS or HA), is it open season again? Just for fairness' sake? The playing field was just fine. AA and Us had been doing better as standalone companies than the merged UA. Quite a bit better as a matter of fact. Size alone does not equate profitability. Again, something that the quarterly earnings reports of AS and HA make quite clear. The only think this merger does is to increase prices, slash capacity and jobs, and increase the barrier of entry for new airlines.

It is patently absurd to think this merger was about stimulating fair competition in any way...
 
silentbob
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Wed Nov 13, 2013 9:01 pm

Quoting ckfred (Reply 7):
One thing that I learned while practicing law is that if both parties feel like they gave up too much to settle, then the settlement is probably fair. It might even be close to what a verdict would have been at trial.

I tend to agree with the idea that it's fair for the same reasoning.

Quoting PanAmPaul (Reply 5):
I am not convinced that Doug Parker at US thinks so. His comments seemed very smug, while the DOJ comments were very business like.

Parker has to confidently state that it will not have a negative impact on the merged operation, anything else is unacceptable to shareholders. Reading anything more into that is more a matter of having a predisposition towards liking or hating someone or their company.

Quoting FWAERJ (Reply 18):
The goal of AA/US was to level the playing field by bringing AA up to par with DL and UA.

You will have four airlines with 15-20% market share, that seems pretty fair.
 
VC10DC10
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Wed Nov 13, 2013 9:13 pm

Quoting SouthernDC9 (Reply 19):
So I fancy myself quite the airline geek and DCA is "my" airport (I can walk there from my place) so I really thought I knew the whole slot thing, but I was not aware of the "commuter slot" distinction (if I'm understanding it correctly) - and AA seems to be saying that's the bulk of what they will have to give up... So would WN (or JetBlue or NK or Allegiant) be unable to bid on any such slots since they don't have the correct planes? Or could WN fly a 737 on a "commuter" slot?

My understanding is that "commuter" slots can only be used by aircraft with a certain number of seats (76 maximum, I believe). However, it is also my understanding that AA/US has committed to retaining all of its commuter slots at DCA and will only be selling conventional air carrier slots.
 
panampaul
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Wed Nov 13, 2013 9:42 pm

Quoting aaexecplat (Reply 20):
There is no even playing field. As soon as one of those three makes another acquisition (AS or HA), is it open season again? Just for fairness' sake? The playing field was just fine. AA and Us had been doing better as standalone companies than the merged UA. Quite a bit better as a matter of fact. Size alone does not equate profitability. Again, something that the quarterly earnings reports of AS and HA make quite clear. The only think this merger does is to increase prices, slash capacity and jobs, and increase the barrier of entry for new airlines.

To put it more succintctly, there will NEVER truly be a level playing field. This is esp. important to consider as airlines partner instead of merge and as airlines such as Etihad and Emirates invest in airlines around the world.
 
MAH4546
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Wed Nov 13, 2013 10:04 pm

Phoenix doesn't have three years after all:

In fact, it may be much shorter than three years. The settlement allows the New American to break its promise to maintain service levels at its hubs and cancel those flights to smaller cities if it feels that there has been a material adverse change, "in demand, the competitive environment, or New American's cost to comply." This so-called MAC clause is extremely vague and can be triggered at the sole discretion of management. So say oil prices go above $100 a barrel -- that could possibly be a trigger as it impacts the "cost to comply." Say Southwest starts a new route to Phoenix -- that could constitute a change in the "competitive environment" of the entire hub.

Source: http://finance.fortune.cnn.com/2013/...13/usairways-american-merger-fail/
a.
 
FWAERJ
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Wed Nov 13, 2013 10:05 pm

Quoting silentbob (Reply 21):
You will have four airlines with 15-20% market share, that seems pretty fair.

Even after AA/US is closed, the airline industry in the US will be far fairer than the cellphone/mobile industry in the US, another industry that gets flack for "a lack of competition".

The US airline industry will have four tier-1 carriers (AA, UA, DL, WN) with about a 17% share each (68% of the market). Add in the two largest tier-2 carriers (B6, AS) and that number rises to about 85% between the six largest US airlines. The rest is mostly ULCCs like NK, F9, and G4 (the exception to the ULCC model being VX), which also happens to be the fastest-growing part of the US domestic air travel market.

In the US cellphone industry, there are two tier-1 carriers: AT&T and Verizon; with Ma Bell having a 32% share, the "Can You Hear Me Now" guy having 36%, or a 68% combined share between AT&T and Verizon. The next-biggest two cellphone carriers, Sprint and T-Mobile/MetroPCS, only have about 15% and 12% share, with regionals like U.S. Cellular fighting over the 5% crumbs. And you wonder why your bill is so high!

Basically, 4 airlines with 68% of the market is a better situation than a duopoly in cellphones with the same percentage of the market.

[Edited 2013-11-13 14:08:58]

[Edited 2013-11-13 14:16:22]
"Did he really need the triple bypass? Or was it the miles?"
 
hivue
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Wed Nov 13, 2013 10:19 pm

Quoting PanAmPaul (Reply 5):
Quoting silentbob (Reply 3):
In short, neither side got what they wanted and gave up more than they thought they should.

I am not convinced that Doug Parker at US thinks so. His comments seemed very smug, while the DOJ comments were very business like.

DOJ originally wanted no merger at all. They did not get that. However, once the administration got involved, what DOJ wanted changed to bending with the political winds. As this tended to coincide with what AA and US wanted, you could say that everyone got what they wanted.
"You're sitting. In a chair. In the SKY!!" ~ Louis C.K.
 
ripcordd
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Wed Nov 13, 2013 10:21 pm

Quoting Indy (Reply 17):

Indy, are you worried that you might have to actually pay the airline what it costs them to fly plus a profit to get from point a to point b? These mergers are all due to the fact we as americans don't like paying what we should to fly. The airlines have taken wage reductions and BK to subside the flying of it's customers after they do they that and still cant manage a profit next step is a merger. One less Airline more control of the number of seats in a market more pricing power to drive a profit. The DOJ should have never stepped in at all it was a waste and the only reason they stepped is because of WN/B6 paid lobbyists to lobby the DOJ into stepping in. You call it Anti-Competitive Airlines call trying pull in profit year after year. You don't like so called poor service don't fly them
 
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par13del
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Wed Nov 13, 2013 10:57 pm

Quoting FWAERJ (Reply 18):
With AA/US, all three remaining legacies plus WN are now at critical mass needed for sustainable profitability.

According to who, the investors at each or the government agencies who allowed the consolidation and elimination of competition?

Quoting silentbob (Reply 21):
You will have four airlines with 15-20% market share, that seems pretty fair.

What does fair have to do with business in a capitalist system?

Quoting ripcordd (Reply 27):
Indy, are you worried that you might have to actually pay the airline what it costs them to fly plus a profit to get from point a to point b?

So NK, AS and others are transporting pax at a loss, unless you mean the legacies.
 
aaexecplat
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Wed Nov 13, 2013 11:08 pm

Quoting Mah4546 (Reply 24):
Phoenix doesn't have three years after all:

It never did. This was clear from the get go. If DOJ had extracted an ironclad guarantee, the merger would have been called off. This merger only makes sense if massive amounts of cheap capacity can be trimmed to make up for the immediate increases in labor costs.

Quoting ripcordd (Reply 27):
Indy, are you worried that you might have to actually pay the airline what it costs them to fly plus a profit to get from point a to point b? These mergers are all due to the fact we as americans don't like paying what we should to fly. The airlines have taken wage reductions and BK to subside the flying of it's customers after they do they that and still cant manage a profit next step is a merger. One less Airline more control of the number of seats in a market more pricing power to drive a profit. The DOJ should have never stepped in at all it was a waste and the only reason they stepped is because of WN/B6 paid lobbyists to lobby the DOJ into stepping in. You call it Anti-Competitive Airlines call trying pull in profit year after year. You don't like so called poor service don't fly them

Ah ya. The good ol' "it's all the passengers' fault" for not making donations to employees so they can have a cushier life. The funny thing is that you will get your wish. If fares rise faster than wages and discretionary income, the legacies will either lose fliers to LCCs or they will lose them to video conferencing. Net result is the same.
 
panampaul
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Thu Nov 14, 2013 5:14 am

Quoting FWAERJ (Reply 25):
Even after AA/US is closed, the airline industry in the US will be far fairer than the cellphone/mobile industry in the US, another industry that gets flack for "a lack of competition".

The US airline industry will have four tier-1 carriers (AA, UA, DL, WN) with about a 17% share each (68% of the market). Add in the two largest tier-2 carriers (B6, AS) and that number rises to about 85% between the six largest US airlines. The rest is mostly ULCCs like NK, F9, and G4 (the exception to the ULCC model being VX), which also happens to be the fastest-growing part of the US domestic air travel market.

In the US cellphone industry, there are two tier-1 carriers: AT&T and Verizon; with Ma Bell having a 32% share, the "Can You Hear Me Now" guy having 36%, or a 68% combined share between AT&T and Verizon. The next-biggest two cellphone carriers, Sprint and T-Mobile/MetroPCS, only have about 15% and 12% share, with regionals like U.S. Cellular fighting over the 5% crumbs. And you wonder why your bill is so high!

Basically, 4 airlines with 68% of the market is a better situation than a duopoly in cellphones with the same percentage of the market.

This is an excellent analogy and I believe it continues in looking at the disruption T-Mobile is trying to cause with its "uncarrier" programs, including what I consider to be a remarkable change: free data roaming in 100 foreign countries (albeit on a slow data service, not 4G) as well as no more subsizied phones.

The second tier airlines, while many believe they offer an innovative product, haven't really innovated in years.

What I think will be very interesting will be looking not only at what AA does as the world's largest airline but also at what the tier two players do in the coming 18-24 months. Maybe someone will become the unairline.
 
crAAzy
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Thu Nov 14, 2013 9:39 am

Quoting user444555 (Reply 13):

There should be enough room at A, C, and D. AA has spare gates on C and possibly A they do not regularly use that could be used on a full time basis. I think more AA dedicated gates in the D terminal might open up once the new international AE gates open up in Terminal B (soon to have customs connections to D). AE uses about 2 or 3 gates in D. AA will probably need some more D gates anyway with the new HKG and PVG service next year.

As someone else mentioned, not all current flights may be flown later. I would not expect them to be cut in half, but there might be a reduction.

I'm not sure that all this discussion is about with US/AA at DFW. It has already been stated in previous posts several times before that US is moving from it's 3 E gates into 2 of AA's end C gates.

[Edited 2013-11-14 01:40:13]
 
brilondon
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Thu Nov 14, 2013 10:31 am

Quoting Mah4546 (Reply 24):
Quoting crAAzy (Reply 31):
I'm not sure that all this discussion is about with US/AA at DFW. It has already been stated in previous posts several times before that US is moving from it's 3 E gates into 2 of AA's end C gates.

This is a great statement and so true, they will be integrated into the AA system and you won't know after all said and done where they will be located but this is A-Net so anything can be a big deal. Some people are fixated on the most inane details they fail to see the big picture. Really who cares where the US flights will be going at DFW, a huge bastion of AA and Eagle. They will just get mixed in with the others and become one of many.
Rush for ever; Yankees all the way!!
 
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RWA380
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Thu Nov 14, 2013 12:35 pm

Quoting adam42185 (Reply 12):
To allow more room for UA at Terminal B perhaps?

I thought the LCCs like B6 and WN were going to get first shot at everything? Really, did the government get out of the business of telling airlines what to do in 1978? Because it sure looks like certain airlines were given a lot of the proceeds from this un believable divestiture of assets.

Quoting seatback (Reply 11):

So DFW should be able to absorb US' flights...same said for ORD, MIA & JFK

I would imagine at much smaller stations, the combined carrier will likely be able to reduce gates even if by 1 or 2, as schedules are combined and streamlined. Places like SEA & PDX for example.

[Edited 2013-11-14 04:57:04]
Next Flights: PDX-HNL-OGG-LIH-PDX On AS, WP & HA
 
AAplat4life
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Thu Nov 14, 2013 12:54 pm

Quoting Indy (Reply 17):
This is a very dark day for the American consumer. The DOJ completely failed to do its job. Consumers will look back on this moment as one of the biggest mistakes in commercial aviation. The government should have drawn the line in the sand and blocked this merger. This merger was nothing more than an anti-competitive move. Using the logic of others on here we must now allow DL and UA to merge because US and AA were allowed to merge.

The government needed a legal basis for blocking the merger. This is not Putin's Russia, and our judicial system still acts with some degree of autonomy. The anti-trust case against the merger was considered by many to be weak, particularly given how easily the other two mega airline mergers went through. Now perhaps one could argue that the Bush Administration DOJ fell down on the job in those cases. Perhaps, but the Obama DOJ was simply stretching matters to assert that AA and US were competitive in so many markets. This is borne out by the fact that only successful parts of the government's case was the divestiture of slots at DCA and to a much lesser degree LGA.

Quoting apodino (Reply 15):
omebody mentioned this in an earlier thread. I wonder if there is some shoddy reporting going on here. Obviously E7, F8, and F10 are going away. Delta will probably get E7. The question is who gets F8 and F10?

Quoting ckfred (Reply 7):
If I'm not mistaken, on L Virgin America has one gate, Jet Blue has one gate, and Spirit has two gates. So, if Spirit moved to the US gates in Terminal 2, it would have a 3rd gate, while Virgin and Jet Blue could each add a gate on L

Virgin isn't going to need an additional gate for a long time, unless they decide to add some sort of eastern hub, which I don't see anytime soon. Ditto with B6 but in reverse. NK would really be the carrier interested in growing in ORD. There is a ton of counter space in T2 though that goes unused. and it will increase after the merger. Assuming that AA is not going to gain real estate in L from an airline moving to T2, what one scenario could be would be for both VX and B6 to move to T2, one gaining F8, and one F10. Then DL would gain E7. NK would then be able to gain two gates in L, for a total of 4 gates. T2 certainly has the counter space for both B6 and VX.

I am not sure which gates US leases at ORD. I thought that it was leasing gates from United and not the City of Chicago, but these things are often convoluted. So after the merger, I'm going to have to assume that AA is not going to have gates to trade in T-2 in exchange for more space in the L Concourse in T-3. The City should ensure that these gates in T-2 will be used by a carrier such as B6 or move VX into T2.

AA's can easily absorb its loss of two gates in L. Flights to CLT, PHL and PHX will be rationalized, and will probably see A321 aircraft (which we already see from US). On AA currently, the CLT and largely the PHL routes are on AE, and the PHX flights are still the gas guzzling MD80.

It is unfortunate that AA has never been able to get ahold of L and turn it into something interesting, such as international departures. That is the past, and the City is not going to allow this to happen. The O'Hare mater plan is to build a western terminal, demolish L and expand T3 international flights to where the back-up power plant is currently located closer to T5 (which would be slightly unfortunate from an architectural perspective because the power plant is stunning). The airlines (UA , AA and DL) are baulking at this. But if the big boys want more gates, they'll have to agree to an expansion. After all the demand is still there at O'Hare. We don't see the new low cost carriers express much desire to fly into Midway and compete against Southwest.
 
Flytravel
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Thu Nov 14, 2013 1:22 pm

Quoting AAplat4life (Reply 34):
We don't see the new low cost carriers express much desire to fly into Midway and compete against Southwest.

Frontier and Sun Country fly into MDW. Frontier goes directly against WN on DEN-MDW and Sun Country against WN on MSP-MDW. Frontier also has MDW-TTN/MDW although it's not directly competing against WN's PHL-MDW/EWR.

WN competes against the legacies at ORD and whether a smaller carrier goes to MDW/ORD likely wouldn't make significant difference. It's not like NK deciding BWI over IAD.

Maybe Frontier could move from MDW to ORD though since it's Apple Vacations flights are there if there are synergies to be achieved. MDW is closer to the Loop ($20 less by cab fare, and fewer stops on El) but ORD has more hotel choices around it and accomodates the Chicagoland suburbs better, so it's a wash in that aspect. The rental cars at MDW now require a shuttle to a rental car center and aren't located in garage itself so that convenience (if it is really a convenience) is now gone.
 
ripcordd
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Thu Nov 14, 2013 2:00 pm

Quoting aaexecplat (Reply 29):

I don't think the airlines asking for donations they just want to be paid what it costs plus a little profit.
Read this and tell me what you think you should be paying for a ticket
http://www.theatlantic.com/business/...-and-why-nobody-noticed/273506/...
 
brilondon
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Thu Nov 14, 2013 3:53 pm

Quoting Flytravel (Reply 35):
Maybe Frontier could move from MDW to ORD though since it's Apple Vacations flights are there if there are synergies to be achieved. MDW is closer to the Loop ($20 less by cab fare, and fewer stops on El) but ORD has more hotel choices around it and accomodates the Chicagoland suburbs better, so it's a wash in that aspect. The rental cars at MDW now require a shuttle to a rental car center and aren't located in garage itself so that convenience (if it is really a convenience) is now gone.


Is there room and would that work with the F9 business model?
Rush for ever; Yankees all the way!!
 
user444555
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Thu Nov 14, 2013 4:29 pm



Quoting user444555 (Reply 13):
Quoting LittleFokker (Reply 10):

I apologize if this was brought up in an earlier merger thread already, but at DFW, I believe US uses 4 gates at E. Can US's traffic be merged successfully into A, B, and C, or will AA need to use E?

There should be enough room at A, C, and D. AA has spare gates on C and possibly A they do not regularly use that could be used on a full time basis. I think more AA dedicated gates in the D terminal might open up once the new international AE gates open up in Terminal B (soon to have customs connections to D). AE uses about 2 or 3 gates in D. AA will probably need some more D gates anyway with the new HKG and PVG service next year.

As someone else mentioned, not all current flights may be flown later. I would not expect them to be cut in half, but there might be a reduction.
Quoting crAAzy (Reply 31):
I'm not sure that all this discussion is about with US/AA at DFW. It has already been stated in previous posts several times before that US is moving from it's 3 E gates into 2 of AA's end C gates.

Someone asked the question, and I answered it. I am assuming they had not read the previous threads, but my response was to a previous question.

[Edited 2013-11-14 08:31:21]
 
user444555
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Thu Nov 14, 2013 4:42 pm

Quoting brilondon (Reply 32):
This is a great statement and so true, they will be integrated into the AA system and you won't know after all said and done where they will be located but this is A-Net so anything can be a big deal. Some people are fixated on the most inane details they fail to see the big picture. Really who cares where the US flights will be going at DFW, a huge bastion of AA and Eagle. They will just get mixed in with the others and become one of many.

Someone wanted to know about DFW and asked the question. Several other airports have been discussed in this thread and I don't see why asking about DFW is an issue. The original question even included an apology by the original poster (not me) if the question was already raised. I have not read all the threads on a.net and don't expect others will either, but I do not think questions should be discouraged or referred to as not seeing the big picture. I enjoy the discussions.

[Edited 2013-11-14 09:05:23]
 
USAirALB
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Thu Nov 14, 2013 4:48 pm

From the Charlotte Observer:

E135/E140/E145/E70/E75/E90/CR2/CR7/CR9/717/732/733/734/735/73G/738/739/752/753/762/772/77W/319/320/321/333/343
 
ckfred
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Thu Nov 14, 2013 6:03 pm

Quoting Indy (Reply 17):

This is a very dark day for the American consumer. The DOJ completely failed to do its job. Consumers will look back on this moment as one of the biggest mistakes in commercial aviation. The government should have drawn the line in the sand and blocked this merger. This merger was nothing more than an anti-competitive move. Using the logic of others on here we must now allow DL and UA to merge because US and AA were allowed to merge.

Bad. Very bad. Higher fares or poorer quality service coming to an airport near you.

Except there was a distinct chance that DOJ would lose at trial. Then, AA and US could have kept every gate and every slot. Lawyers settle cases, because the believe that the chance of losing at trial is high enough to take a settlement, even if the settlement seems bad.

I'm sure that what AA/US agreed to give us is more than they were proposing before DOJ filed suit. But, there was also a good chance that DOJ would win.

Finally, what would you say, if US or AA wound up in Chapter 7 several years later, because one or the other couldn't compete effectively with UA and DL? Then, you would have UA, DL, the surviving legacy, and probably WN carving up the pieces out of a bankruptcy auction.
 
michman
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Thu Nov 14, 2013 6:19 pm

Quoting AAplat4life (Reply 34):
Now perhaps one could argue that the Bush Administration DOJ fell down on the job in those cases.

Exactly how was the Bush DOJ responsible for allowing UA-CO merger?? Or Southwest and Airtran for that matter?

Top
 
user444555
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Sun Nov 17, 2013 4:59 pm

http://aviationblog.dallasnews.com/2...-get-dallas-love-field-gates.html/

DL wants AA's Love Field gates to fly to major cities. I think AA would rather let WN have them. WN has said they want them also. They are supposed to give preference to a LCC and if AA has any say, I think they would rather sell them to WN. The last time I was at Love, the gates in question were not connected to WN's other gates secureside. I do not know if the renovation changed this and it has been a while since I was there.
 
airliner371
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Sun Nov 17, 2013 8:21 pm

Quoting user444555 (Reply 43):
I do not know if the renovation changed this and it has been a while since I was there.

Once the construction is done, all the gates will be in one concourse.
 
commavia
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Sun Nov 17, 2013 8:58 pm

Quoting LittleFokker (Reply 10):
I apologize if this was brought up in an earlier merger thread already, but at DFW, I believe US uses 4 gates at E. Can US's traffic be merged successfully into A, B, and C, or will AA need to use E?

As already mentioned, yes, the present US schedule could pretty easily fit into AA's existing A/C/D operation. In the interim, US will apparently move from E to C, and then once the integration is ultimately complete - in a few years - you won't even be able to distinguish the PMAA vs PMUS operations besides perhaps the aircraft (any A320 flight would be PMUS, for example).

Quoting user444555 (Reply 14):
It would seem to make more sense for AA to keep the L gates, but maybe this was a way for the DOJ to get even more gates out of AA/US. I doubt they will keep the F gates, but they might and let AE use them.

Agreed. Giving up the T2 gates would be more logical.

Quoting apodino (Reply 15):
Although the entire airport is linked on the secure side by SkyLink, I don't expect that US will hang on to the E gates post merger. In fact, since DFW is in the middle of the TRIP project, moving US out will allow the contractors to finish E on an accelerated timeline since there will be no airlines displaced when the project gets to the high E gates.

  

Getting US out of the E satellite actually makes things easier for the airport and allows them to accelerate the TRIP'ing of E if they want to, since it gives them more flexibility to move more airlines into the satellite and out of the main terminal while their areas are being worked on.

Incidentally, side note: the TRIP modernization continues to come along, and I continue to be extremely impressed by the changes I see at DFW in the areas that have gotten the renovations (even just partially so far). I'm biased, of course, but I think DFW was already one of the nicer larger hubs in the U.S. and I think after TRIP the customer experience will be truly near the top among major U.S. hubs.

Quoting Indy (Reply 17):
This merger was nothing more than an anti-competitive move.

It was. And that's what was needed. This industry has suffered from excess competition for far too long. It's taken 35 years since deregulation for the industry to finally get to a point of relative competitive balance and supply/demand equilibrium where the benefits of deregulation begin to accrue not just to passengers but also to employees and shareholders. U.S. passengers have essentially been the only stakeholder to actually benefit from deregulation to date - with fares falling by over 40% since 1980. Now it's some other stakeholders' turn to see a bit of the benefit.

Quoting Indy (Reply 17):
Bad. Very bad. Higher fares or poorer quality service coming to an airport near you.

Fares will be higher because they should be, and frankly would have been with or without a merger.

Airlines have to make money, and they have to make enough money to deliver value to their shareholders commensurate with the risk those shareholders are taking, and at least competitive with the returns those shareholders could get from investing in other companies/sectors.

As for quality, I see the trend in the industry going in exactly the opposite direction from what you suggest. Pretty much all indications appear to me to suggest that now that America's major airlines are earning a decent return, they are finally, for the first time in decades, beginning to differentiate themselves based on service and product again and not just on price. Thus witness the massive investment AA, Delta and United are making in their fleets, for example, or in customer-facing technology to speed through the airport or operations technology to improve reliability, etc. These investments will pay off in the long run - not just for airlines, but for their customers, too - and they would not be possible without the cash flow that airlines are finally starting to generate.

Quoting FWAERJ (Reply 25):
Even after AA/US is closed, the airline industry in the US will be far fairer than the cellphone/mobile industry in the US, another industry that gets flack for "a lack of competition".

  

Exactly.

How many big airlines does America really need? 5? 10? 20?

The answer to that question of course depends on what the ultimate objective is.

If the intended outcome is ever-lower fares for consumers, and all of the requisite instability, tumult, bankruptcies, declining service, and on and on that this necessitates, then of course the more competitive carriers the better.

If the goal, instead, is to have a stable industry that charges fares high enough to deliver a reasonable return to shareholders, and is thus able to attract said shareholders willing to bankroll investments in new planes, upgraded amenities, improved service, etc., then I think four big nationwide U.S. airlines plus several smaller regional carriers is probably about the right amount.

[Edited 2013-11-17 13:02:10]
 
AirCalSNA
Posts: 314
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Sun Nov 17, 2013 9:12 pm

Quoting michman (Reply 42):
Exactly how was the Bush DOJ responsible for allowing UA-CO merger?? Or Southwest and Airtran for that matter?

By not filing suit to stop the mergers ... which should have been done.
 
airliner371
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Sun Nov 17, 2013 9:22 pm

Quoting AirCalSNA (Reply 46):
By not filing suit to stop the mergers ... which should have been done.

Obama was in place for the 2010/2011 mergers of UA/CO and WN/FL.
 
panampaul
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Wed Nov 20, 2013 6:37 pm

It looks like things at US are now moving ahead as planned (although perhaps a few months later).

US will leave *A on March 1 and join OW a month later

I find the gap odd. If I recall, there was a next-day transition in some past mergers WRT loyalty / frequent flyer programs. Anyone have any insight as to why there might be a 30-day delay?

US Airways to Leave Star Alliance March 1, Join Oneworld One Month Later

Quote:
US Airways plans to leave Star Alliance, an airline alliance that includes United Airlines and Lufthansa, on or about March 1, 2014 and will become a member of the oneworld alliance approximately one month later, according to two people familiar with the matter....

...
 
user444555
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RE: US Airways / American Settle Anti-Trust Suit (Part 2)

Wed Nov 20, 2013 8:21 pm

http://aviationblog.dallasnews.com/2...y-to-discuss-antitrust-trial.html/

There is a hearing going on this afternoon at the bankruptcy court regarding the private settlement. No updates so far. I am wondering what the private attorneys hope to gain from this. Surely they are not doing this for free, but if they get paid then they will look like opportunists, which is what I think they are. If they DOJ and the states settled, I think they will have a tough time stopping the merger. It would be great if they did not get anything at all. Does anyone know why they are doing this? Is there personal gain involved or are they just really concerned for consumers, which I highly doubt?