imkeww
Posts: 676
Joined: Sat Apr 28, 2001 1:48 am

Why Does Service Matter In The UA/US Merger?

Fri May 18, 2001 1:03 am

The notion that the UA/US merger will be reviewed based on the operational performance of the two companies is erroneous.

Government authorities will review it based on competitive and employment issues.

Reviewing mergers based on a company's service is to take on a bias using subjective perception of an airline.

When the Feds rule, service will not have played a factor into their decision. While "United cannot keep its house in check", and that certainly cannot HELP the merger, the merger will not be rejected simply for this.
 
DCA-ROCguy
Posts: 3903
Joined: Fri Apr 21, 2000 5:03 am

RE: Why Does Service Matter In The UA/US Merger?

Fri May 18, 2001 1:44 am

As far as I know, Sherman Antitrust Act guidelines do not provide for a merger to be rejected simply due to the operational incompetence of the management of the senior partner. From my family's own extensive experience of the two airlines, though, the idea of Keystone Kops of Elk Grove getting their hands on US Airways' far superior ground level operation is frightening.

Fortunately, UA isn't getting US, at least not this year. We know you like this merger, Imkeww, but it's not happening. The substantial consumer and labor issues aside, the deal is no longer in United's interest. Goodwin would have to be insane to pay $60 per share for an airline that's around $27 per share these days. Not to mention a UA F/A revolt.

Of course, what am I talking about...sanity has never stopped Jim Goodwin from making boneheaded major mistakes before (eg caving to pilot terrorism last summer). But this one would top them all; UA is probably just waiting for the August 1 walk-away date.

Justice doesn't like this merger at all...they would have approved it by now if they did. They more or less waved AA-TW through to the second window, handed them their burgers, and sent them on their way. The "Bush hasn't appointed the staff yet" argument put out by UA isn't credible. They're filibustering, and UA is waiting for the walk-away date.

Jim
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