Virgin America Announces Layoffs if Merger Approved

enilria · Tue Aug 30, 2016 1:46 am

In all my years I have never seen any company announce layoffs that take place only if a merger is approved before it has been approved. The article also explicitly says that the carriers are already working on who will be in what job post-merger. I thought this type of coordination was expressly forbidden until approved? If I was DOT/DOJ I would take this negatively.

Virgin America said it will cut about 225 management jobs starting in October, following the anticipated closing of Alaska Air Group's $4 billion purchase of the Bay Area-based airline. The job cuts represent about 8 percent of Virgin America's workforce.

"As is common with mergers and acquisitions, a number of duplicate roles were discovered among the back-office management staff," Alaska Air spokeswoman Bobbie Egan said Monday. "Since we announced our intention to merge with Virgin America, we have been committed to preserving the jobs of all customer-facing and frontline Virgin America teammates, as well as a number of management employees."

So far, Alaska has extended job offers to more than 300 Virgin America management employees, Egan said.

http://www.bizjournals.com/sanfrancisco ... ?ana=yahoo

enilria · Tue Aug 30, 2016 1:57 am

Here's a political question. Why should the govt ever approve a merger of two profitable companies that are ongoing entities that by their own admission will result in a loss of jobs? What exactly is the overall benefit of a merger that has no clear gain to either the employees or customers? Surely we don't think AS will have lower fares than VX, it's no more likely than WN having lower fares than Air Tran did. Yes, it benefits the shareholders of VX and maybe AS. Is that enough when you have this few airlines left?

United1 · Tue Aug 30, 2016 2:03 am

[quote="enilria". The article also explicitly says that the carriers are already working on who will be in what job post-merger. I thought this type of coordination was expressly forbidden until approved? If I was DOT/DOJ I would take this negatively.
[/quote]

Fairly common for two merging companies to set up what in essence is a burn room...reps from both companies sign all sorts of non-disclosure agreements as well as a termination contact with a generous severance package that goes into effect if the merger is not approved.

enilria · Tue Aug 30, 2016 2:08 am

United1 wrote:
[quote="enilria". The article also explicitly says that the carriers are already working on who will be in what job post-merger. I thought this type of coordination was expressly forbidden until approved? If I was DOT/DOJ I would take this negatively.

Fairly common for two merging companies to set up what in essence is a burn room...reps from both companies sign all sorts of non-disclosure agreements as well as a termination contact with a generous severance package that goes into effect if the merger is not approved.[/quote]
I thought they had been pretending to not be in communication with each other about anything?

JHwk · Tue Aug 30, 2016 2:18 am

You can't make any changes until a merger is approved, but if you are doing things right you have a detailed execution plan worked out for once you get approval.

If denied approval, those plans cannot be acted on. There are also rules as to how the knowledge gained in the process can be used.

Typically there is limited planning also happening should a merger not be approved.

Not doing both would handicapp either the merged entity or the constituent companies depending on outcome, especially when you consider how long these things can take!

michman · Tue Aug 30, 2016 2:46 am

enilria wrote:
Here's a political question. Why should the govt ever approve a merger of two profitable companies that are ongoing entities that by their own admission will result in a loss of jobs? What exactly is the overall benefit of a merger that has no clear gain to either the employees or customers? Surely we don't think AS will have lower fares than VX, it's no more likely than WN having lower fares than Air Tran did. Yes, it benefits the shareholders of VX and maybe AS. Is that enough when you have this few airlines left?

Good lord, it's called efficiency. Why should an airline, or any other business, employ people that it doesn't need? Ultimately, it ends up reflecting in the price you pay for goods and services. I don't understand how you can say that doesn't benefit consumers. Do you also cry over the fact that we now employ way fewer autoworkers, travel agents, etc. due to automation?

deltal1011man · Tue Aug 30, 2016 2:52 am

enilria wrote:
Here's a political question. Why should the govt ever approve a merger of two profitable companies that are ongoing entities that by their own admission will result in a loss of jobs? What exactly is the overall benefit of a merger that has no clear gain to either the employees or customers? Surely we don't think AS will have lower fares than VX, it's no more likely than WN having lower fares than Air Tran did. Yes, it benefits the shareholders of VX and maybe AS. Is that enough when you have this few airlines left?

I agree.

We need to undo all the consolidation and just for the fun of it send EVERYONE back to bankruptcy. That was a real win for the employees the first or second time around!

GMAFB. A few hundred jobs being cut to stabilize the industry even more is not a bad thing for employees at AS/VX or any other airline.

enilria · Tue Aug 30, 2016 2:59 am

deltal1011man wrote:
GMAFB. A few hundred jobs being cut to stabilize the industry even more is not a bad thing for employees at AS/VX or any other airline.

Stabilize the industry? ROTFL. We are at the highest sustained profitability level in the history of the airline business. Any more stabilizing and you can move to the Soviet Union.

ytib · Tue Aug 30, 2016 3:09 am

Layoffs commonly require 60 days notice to state/local authorities to comply with laws.

IPFreely · Tue Aug 30, 2016 3:33 am

enilria wrote:
Why should the govt ever approve a merger of two profitable companies that are ongoing entities that by their own admission will result in a loss of jobs?

Because the government does not own either company and has no reason, authority, or right to tell the owners of the two companies how to run their businesses.

enilria wrote:
What exactly is the overall benefit of a merger that has no clear gain to either the employees or customers?

More efficiency, benefits of scaling fixed costs to a larger operation, and ultimately more profit for the people who own the companies.

There is nothing going on here that doesn't happen with every acquisition in any industry in the US.

747megatop · Tue Aug 30, 2016 3:46 am

michman wrote:
enilria wrote:
Here's a political question. Why should the govt ever approve a merger of two profitable companies that are ongoing entities that by their own admission will result in a loss of jobs? What exactly is the overall benefit of a merger that has no clear gain to either the employees or customers? Surely we don't think AS will have lower fares than VX, it's no more likely than WN having lower fares than Air Tran did. Yes, it benefits the shareholders of VX and maybe AS. Is that enough when you have this few airlines left?

Good lord, it's called efficiency. Why should an airline, or any other business, employ people that it doesn't need? Ultimately, it ends up reflecting in the price you pay for goods and services. I don't understand how you can say that doesn't benefit consumers. Do you also cry over the fact that we now employ way fewer autoworkers, travel agents, etc. due to automation?

Well, competition does certainly play a key role in reflecting the price you pay for goods and services. But, without competition, the "efficiency" directly translates to fat bonuses and paychecks for the top rung of the upper management.

DocLightning · Tue Aug 30, 2016 4:13 am

IPFreely wrote:
Because the government does not own either company and has no reason, authority, or right to tell the owners of the two companies how to run their businesses.

As I sit here on my laptop marveling at the awesome naiveté of your comment, there are about a hundred thousand people in relatively flimsy aluminum tubes flying over the nation right now at nearly the speed of sound some 6-8 miles in the air. If I described this scene to someone who had lived in 1816, they would have been horrified at such a dangerous tableau.

And precisely because the FAA tells the operators of these flimsy, winged aluminum tubes how to run their business, every last one of these people is likely to get to their respective destinations safe and sound.

In addition, one of the roles of government is to protect the public and there is a reason why there are anti-trust laws in place.

Now, I admit that if the DOJ refused to allow this merger go through in the wake of AA/US, UA/CO, WN/FL and NW/DL, it would be an act of immense hypocrisy on their part. But part of the entire anti-trust legal arrangement is that such considerations are to be taken into account before the decision to grant antitrust immunity.

MSPNWA · Tue Aug 30, 2016 4:16 am

I'm very surprised they're announcing this before hand. It's only ammunition for the regulators against the tie-up. Makes no sense to me.

jmc1975 · Tue Aug 30, 2016 4:46 am

[quote="enilria"] I thought this type of coordination was expressly forbidden until approved? If I was DOT/DOJ I would take this negatively.
[/i]
Who gives a crap what they think? Remember the baseless shenanigans they pulled with US/AA?

b747400erf · Tue Aug 30, 2016 4:53 am

225 management jobs, more bloated overpaid executives, and people complain about ground workers, pilots, and FA's being greedy and making too much! Unbelievable!

N809FR · Tue Aug 30, 2016 4:57 am

MSPNWA wrote:
I'm very surprised they're announcing this before hand. It's only ammunition for the regulators against the tie-up. Makes no sense to me.

Call me crazy but what if AS got cold feet and wanted to have the merger blocked and not back out on their own accord? Give them a reason to not approve it, so to speak.

DocLightning · Tue Aug 30, 2016 5:16 am

IPFreely wrote:
On the other hand, airlines have myriads of functions that have no safety impact. Such as AS or VX having duplicate ad agencies, duplicate law firms on retainer, duplicate meteorologists in different locations, duplicate call centers in different locations, duplicate accounting firms, and the list goes on and on. And you believe the government should prevent them from merging, or if they merge, prevent them from combining these functions and eliminating duplication?

I believe that the government should have prevented the last round of mergers for precisely the reason that they reduce competition and reduce jobs. But since they did, then AS/VX should be allowed to go ahead and I agree, it makes sense to eliminate redundant jobs.

I'm just angry that the government allowed this nonsense at all.

IPFreely · Tue Aug 30, 2016 5:22 am

DocLightning wrote:
I believe that the government should have prevented the last round of mergers for precisely the reason that they reduce competition and reduce jobs. But since they did, then AS/VX should be allowed to go ahead and I agree, it makes sense to eliminate redundant jobs.

I'm just angry that the government allowed this nonsense at all.

Perhaps you should consider moving to a non-capitalist nation.

grbauc · Tue Aug 30, 2016 5:23 am

Government has a responsibility to the public interest. The governments Should not be in the business of running businesses to keep people employed at all costs. That's bad business. I kind of agree I really don't get the announcement? Are they required to make such a announcement. And has mentioned up tread Is it management jobs that would be redo-nit.

This thought process that Government has to create jobs with every action that's approved is crazy and with the winds of Socialism so strong its not surprisings. Here's a Question yes maybe they will be laying off folks but making a stronger competitor in the long run could and they can be adding jobs in the near future. Heck they might be laying some off and hiring others has the merger plays out.

azjubilee · Tue Aug 30, 2016 5:26 am

enilria wrote:
In all my years I have never seen any company announce layoffs that take place only if a merger is approved before it has been approved. The article also explicitly says that the carriers are already working on who will be in what job post-merger. I thought this type of coordination was expressly forbidden until approved? If I was DOT/DOJ I would take this negatively.

Should they just pretend there will be no negative fallout like all the other mergers? At least they're being forthright and not stringing people along keeping their hopes alive that they'll have a chair to sit on when the music stops.

grbauc · Tue Aug 30, 2016 5:27 am

IPFreely wrote:
DocLightning wrote:
I believe that the government should have prevented the last round of mergers for precisely the reason that they reduce competition and reduce jobs. But since they did, then AS/VX should be allowed to go ahead and I agree, it makes sense to eliminate redundant jobs.

I'm just angry that the government allowed this nonsense at all.

Perhaps you should consider moving to a non-capitalist nation.

I agree airfares are has low has they have been for years and we have healthy airlines (that can change in a hurry) then we've seen in a long long time.

http://www.theatlantic.com/business/archive/2013/02/how-airline-ticket-prices-fell-50-in-30-years-and-why-nobody-noticed/273506/

There are many sad stories to tell about the U.S. economy in the last 30 years, but here's a happy story for everybody (except the airlines), from radical capitalists to the most liberal consumer advocates. Getting government out of the business of regulating the skies has led to a remarkable collapse in airline prices.

airzona11 · Tue Aug 30, 2016 5:29 am

enilria wrote:
Here's a political question. Why should the govt ever approve a merger of two profitable companies that are ongoing entities that by their own admission will result in a loss of jobs?

That would assume there is no need for human capital efficiency. Airlines aren't a jobs program. This also assumes that over time both airlines would be able to grow sustainably and as the airline industry has shown, the odds are greater than not that VX will be a wikipedia entry under "airlines no longer in operation." That also is looking at the merger in a vacuum at a single point in time. With a stronger network, larger scale, more passengers, more destinations, AS/VX can expand internationally, East Coast, etc. The government should not be in the business of picking winners and losers. It also is not the surviving company saying, "we are merging and cutting 200 jobs" it is VX. Announcing this before hand - I think this is a disgruntled VX employee or team taking a shot at AS bc their ride has come to an end.

The government does find itself in a messy situation, at what point does it stop approving mergers, at what point can barriers to entry be lowered to allow innovative startups to enter, there are many examples. It all stems from airlines being heavy regulated. It is the nature of the beast.

Yes there is safety in regulation from the FAA. The FAA has done extraordinary things for safety and advancing aviation. Then there is TSA, it has grown and expanded enormously only to have airports outsourcing to private contractors or airlines paying for different technologies to actually improve speed and safety at security check points.

atypical · Tue Aug 30, 2016 6:42 am

IPFreely wrote:
Because the government does not own either company and has no reason, authority, or right to tell the owners of the two companies how to run their businesses.

False on all counts. The only way this would be a true statement would be if the US has no laws with regards to any business. Here specifically these companies don't exist without the government. The government sets the framework in which companies are built upon. Companies have no purpose or existence outside of some government. Hence a government can state with legal certainty what reason, authority, and right it has to tell two companies what to do, when it does.

I am not indicating if this is a good or bad thing, I am only stating this exists and nothing else.

Wingtips56 · Tue Aug 30, 2016 7:17 am

My thought on this entire discussion is focusing on the point of Enliria's initial post; being concerned that the coordination between the airlines is premature in view of the deal not yet being approved by the Feds. (The companies involved have approved it.) I don't think it had to do with the issue of the layoffs itself: of course redundancies need to be addressed. My thought on the initial point is based on the usual anti-trust concerns that airlines can't talk to each other, but that's about collusion on pricing and manipulating the market. I don't think that prohibition applies in this case to personnel and management issues, and therefore it's OK under the law because it is a pending business transaction. Talk about pricing strategies, though, and that's where the restrictions lie.
I am, though, in agreement with those who are surprised at a public announcement on proposed layoffs, particularly if it would appear in the public eye to be a detrimental to getting approval. But I doubt this number of overlapping management heads is what the Feds would fixate on. It's the fairness in the marketplace that is what's reviewed, opposing monopolies on routes, etc.
While again I am surprised at the publicly announced headcount reduction, I'm not surprised that the groundwork is being done. Maybe they expect approval and close of escrow (or whatever applies) quickly and need to hit the ground running -- and it could also be a factor of having to issue the WARN notices for the 60-day termination rule. And perhaps a humane treatment factor: when AA took over AirCal, we Air Californians were on pins and needles, unable to make decisions about our futures for many months, wondering if we'd still have jobs or not. If you are getting the sack, it's handy to know before you close escrow on that new house or buy that car of your dreams.

Aaron747 · Tue Aug 30, 2016 7:30 am

IPFreely wrote:
Perhaps you should consider moving to a non-capitalist nation.

Oh for crimony...

Are you seriously having us believe that you believe the United States is a free market domain? Aside from more egregious examples that begin with hot-button issues like housing policy and foreign policy/defense contracting, let's just start somewhere really really really simple:

https://www.ftc.gov/tips-advice/competi ... trust-laws

oldannyboy · Tue Aug 30, 2016 7:35 am

enilria wrote:
Here's a political question. Why should the govt ever approve a merger of two profitable companies that are ongoing entities that by their own admission will result in a loss of jobs? What exactly is the overall benefit of a merger that has no clear gain to either the employees or customers? Surely we don't think AS will have lower fares than VX, it's no more likely than WN having lower fares than Air Tran did. Yes, it benefits the shareholders of VX and maybe AS. Is that enough when you have this few airlines left?[/quote

]

You are VERY right. This is one GOOD question we should always ask the powers that be... Who f*****g cares about shareholders, if all other parties (travelling public, employees, the industry overall) only have to loose in a merger? Shareholders should make a profit when and if a company is well run and manages to turn a profit, if not, tough s"""t. I never really understood the logic of mergers of perfectly viable, independent, fully functioning (and as you say: profitable) companies. I guess the market should indeed be regulated and /or be controlled by the state to some minor degree.....

B727skyguy · Tue Aug 30, 2016 7:40 am

IPFreely wrote:
On the other hand, airlines have myriads of functions that have no safety impact. Such as AS or VX having duplicate ad agencies, duplicate law firms on retainer, duplicate meteorologists in different locations, duplicate call centers in different locations, duplicate accounting firms, and the list goes on and on. And you believe the government should prevent them from merging, or if they merge, prevent them from combining these functions and eliminating duplication?

I have read that VX outsources all of their call center operations to Xerox. No reservations employees need to fear for their jobs, because there are no Virgin America reservations staff.

oldannyboy · Tue Aug 30, 2016 7:41 am

IPFreely wrote:
DocLightning wrote:
I believe that the government should have prevented the last round of mergers for precisely the reason that they reduce competition and reduce jobs. But since they did, then AS/VX should be allowed to go ahead and I agree, it makes sense to eliminate redundant jobs.

I'm just angry that the government allowed this nonsense at all.

Perhaps you should consider moving to a non-capitalist nation.

Perhaps DocLighting is actually right?? Maybe?
Do you have a rough idea of just how many jobs have been lost in the industry just due to all these latest totally unnecessary mergers, that theoretically serve the purpose of "consolidating" competition?? Have you realized that ticket prices on some segments that now have ZERO competition have seen increases of up to 50%??

oldannyboy · Tue Aug 30, 2016 7:51 am

Additionally, let's also remember the more obvious obstacles this merger is facing before becoming the resounding success that Alaska is hoping it will be..
1) different fleets
2) different work ethos/mentality
3) different onboard service
4) the issue of using an Alaska name on west-to-east routes?
5) killing a perfectly successful brand (Virgin America) for no reason

Passedv1 · Tue Aug 30, 2016 11:21 am

DocLightning wrote:
IPFreely wrote:

And precisely because the FAA tells the operators of these flimsy, winged aluminum tubes how to run their business, every last one of these people is likely to get to their respective destinations safe and sound.

I started laughing...and then I realized you are serious.

Thank god for the FAA!

Seriouslly, i'll cut you a little slack because I think there are certain aspects in the way our aviation laws and regulations are setup that the FAA does actually contribute to the overall safety of the system.

That being said, the continued improvement of the airline industries phenomonal safety rate is mostly due to improvements in technology and training. Developments that came from the industry itself. Furthermore, the vast majority of airline flying is done above and beyond any standards set by the FAA. I'm about to take a jet to Maui today. The regulations require me to know where the jet is within 10 miles at all times...I will know where it is within about 120 feet. The radar I will use today to circum-navigate those tropical storms turning east of the islands is a multi-scan radar system that does some computer magic to make sure i dont try to top a cell that is growing so rapidly that it will be above me by the time I get there....none of which are required to be on the airplane by the FAA.

I won't even get into the various stories of the FAA getting in the way of safety development.

Anyway...

jetwet1 · Tue Aug 30, 2016 11:53 am

b747400erf wrote:
225 management jobs, more bloated overpaid executives, and people complain about ground workers, pilots, and FA's being greedy and making too much! Unbelievable!

It will be HR, IT and training staff that get termed, along of course with a few executives who's position is duplicated, but by the numbers, it won't be upper management that take it in the neck, it will be low level paycheck to paycheck people.

DarkSnowyNight · Tue Aug 30, 2016 1:34 pm

jetwet1 wrote:
b747400erf wrote:
225 management jobs, more bloated overpaid executives, and people complain about ground workers, pilots, and FA's being greedy and making too much! Unbelievable!

It will be HR, IT and training staff that get termed, along of course with a few executives who's position is duplicated, but by the numbers, it won't be upper management that take it in the neck, it will be low level paycheck to paycheck people.

Middle and line level management are generally by far, the hardest working, least appreciated folks in the industry, yes. You can probably add a lot of Station Managers/Superivors to this list as well. It's a very common misconception we seem to have that all mgmt positions involve wearing monocles and twirling mustaches while our heroes work the trenches and we count our millions, but for the most part, this is simply not the case.

IPFreely wrote:

The owners of AS and VX are making a business deal. No government involvement needed unless they are breaking the law. Which they aren't.

I don't think Compliance means what you think it does there, John Stossel. There all manner of things the govt has every right and obligation to get involved with. Everything from HR to Operations and Planning and a hundred other things must have approval (as in beyond a rubber stamp and a wink) at the federal, state, and local levels for this to be a go. Who do think assigns those gates anyway?

ILNFlyer · Tue Aug 30, 2016 2:01 pm

JHwk wrote:
You can't make any changes until a merger is approved, but if you are doing things right you have a detailed execution plan worked out for once you get approval.

If denied approval, those plans cannot be acted on. There are also rules as to how the knowledge gained in the process can be used.

Typically there is limited planning also happening should a merger not be approved.

Not doing both would handicapp either the merged entity or the constituent companies depending on outcome, especially when you consider how long these things can take!

Precisely.

DTWPurserBoy · Tue Aug 30, 2016 2:19 pm

Typically, during the merge process the personnel records are opened and examined. Some may have negative performance reports, excessive absences or their position just become redundant. A f/a supervisor can only handle a certain number of people efficiently. You typically see station management, maintenance management and some training staff removed. Sometimes they leave everyone in place and the acquiring carrier puts their own management in place for a while to observe the "old" management and then decisions are made on who to release. Generally all management have to reinterview for their positions and some are just not considered compatible with the new regime and are not offered a chance to stay on. A LOT of mistakes get made at this point. The wrong people are retained and some really good people are dismissed. But the good ones always seem to find a job with another airline but it will probably mean relocating.

bourbon · Tue Aug 30, 2016 3:16 pm

b747400erf wrote:
225 management jobs, more bloated overpaid executives, and people complain about ground workers, pilots, and FA's being greedy and making too much! Unbelievable!

Very good chance those "management jobs" make under 100k a year. They could work in maintenance planning, logistics, and IT.

milemaster · Tue Aug 30, 2016 4:26 pm

I hate to see people lose their jobs, but this happens in pretty much every merger in every industry you care to mention. The VX team is full talented folks and no doubt will find opportunity at another airline.

That said, this merger is certainly the dumbest in the chain we've seen in the last decade. It is not pro-consumer in terms of choice, fare impact, or service levels. This thing is going to bite AS pretty hard over the next 36-48 months.

rcair1 · Tue Aug 30, 2016 6:28 pm

enilria wrote:
Here's a political question. Why should the govt ever approve a merger of two profitable companies that are ongoing entities that by their own admission will result in a loss of jobs? What exactly is the overall benefit of a merger that has no clear gain to either the employees or customers? Surely we don't think AS will have lower fares than VX, it's no more likely than WN having lower fares than Air Tran did. Yes, it benefits the shareholders of VX and maybe AS. Is that enough when you have this few airlines left?

The government is not in the business of maintaining or guaranteeing jobs or controlling fares (not that they don't mess with stuff that is not their business). The only reason they should care is if we believe this will create a monopoly, which is hardly the case.

DocLightning wrote:
IPFreely wrote:
Because the government does not own either company and has no reason, authority, or right to tell the owners of the two companies how to run their businesses.

As I sit here on my laptop marveling at the awesome naiveté of your comment, there are about a hundred thousand people in relatively flimsy aluminum tubes flying over the nation right now at nearly the speed of sound some 6-8 miles in the air. If I described this scene to someone who had lived in 1816, they would have been horrified at such a dangerous tableau.

And precisely because the FAA tells the operators of these flimsy, winged aluminum tubes how to run their business, every last one of these people is likely to get to their respective destinations safe and sound.

Why do you think a merged AS/VX will be less safe than them separately? In fact, there could be an argument that the FAA could better manage safety regulation with fewer airlines.

ytib wrote:
Layoffs commonly require 60 days notice to state/local authorities to comply with laws.

Not in most places - unless they are union based and that is not the law, that is the contract. These jobs are likely not union.

ACDC8 · Tue Aug 30, 2016 6:35 pm

rcair1 wrote:

ytib wrote:
Layoffs commonly require 60 days notice to state/local authorities to comply with laws.

Not in most places - unless they are union based and that is not the law, that is the contract. These jobs are likely not union.

https://en.wikipedia.org/wiki/Worker_Ad ... local_laws

iamlucky13 · Tue Aug 30, 2016 6:35 pm

enilria wrote:
In all my years I have never seen any company announce layoffs that take place only if a merger is approved before it has been approved.

Assuming it actually wasn't discussed in previous mergers and you weren't simply paying less attention in the past than you are today, then others were probably keeping quiet, or perhaps even lying about job losses to avoid negative press. There's almost never a merger that doesn't result in "redundancies." Fortunately for the pilots, cabin crew, mechanics, etc, most redundancies tend to occur in management and related functions. Fortunately for those unfortunate latter categories, their skills are usually less specialized and more readily adapted to other industries than the hands-on aspects of flying and supporting aircraft.

I'm honestly relieved they're being forthright about this. Pretending there will be no negative side-effects while making arrangements to lay off people is a terrible form of dishonesty.

enilria wrote:
Why should the govt ever approve a merger of two profitable companies that are ongoing entities that by their own admission will result in a loss of jobs? What exactly is the overall benefit of a merger that has no clear gain to either the employees or customers?

Anti-trust regulators don't regulate employment. That's the Department of Labor. Labor laws protect against unjust termination, but redundancy, such as due to a merger is not unjust cause.

Anti-trust regulators ensure adequate levels of competition exist. The minimum level of competition in any given industry or location is not absolutely defined, so it definitely has a political element to it. Sometimes also a significant loss of competition is allowed if other major concessions are made in disadvantaged markets, like price caps or contractual obligations to provide a certain minimum level of service unless and until another competitor enters that market.

You have to keep in mind, once the first mega-merger between Delta and Northwest was approved in much less stable times for airlines, a whole round of mergers was inevitable to rebalance the market against the resulting juggernaut. Given the smaller sizes and fairly limited overlap of Alaska and Virgin, I'd guess the conditions placed on this merger will be pretty minimal compared to past mergers.

enilria wrote:
Stabilize the industry? ROTFL. We are at the highest sustained profitability level in the history of the airline business. Any more stabilizing and you can move to the Soviet Union.

Soviet Union? That's backwards. In the Soviet Union, the activities of businesses were radically more regulated, not less regulated. Rather than restrictions on consolidation as we have in the US, they had forced consolidation in order to eliminate small businesses that could be seeds of capitalism and competition against the planned bureaus. This was a significant factor behind the perennial consumer goods shortages and limited choices that plagued the USSR. It also fed the monetary overhang that contributed heavily to the inflation that racked the former Soviet economies after the breakup.

iamlucky13 · Tue Aug 30, 2016 6:38 pm

ACDC8 wrote:
rcair1 wrote:

ytib wrote:
Layoffs commonly require 60 days notice to state/local authorities to comply with laws.

Not in most places - unless they are union based and that is not the law, that is the contract. These jobs are likely not union.

https://en.wikipedia.org/wiki/Worker_Ad ... local_laws

Note that there is a minimum number of layoffs or workforce percentage before notification is required. Small numbers of layoffs are not covered, which is why many of us, myself included, have experience with layoffs that had far less warning.

william · Tue Aug 30, 2016 7:53 pm

deltal1011man wrote:
enilria wrote:
Here's a political question. Why should the govt ever approve a merger of two profitable companies that are ongoing entities that by their own admission will result in a loss of jobs? What exactly is the overall benefit of a merger that has no clear gain to either the employees or customers? Surely we don't think AS will have lower fares than VX, it's no more likely than WN having lower fares than Air Tran did. Yes, it benefits the shareholders of VX and maybe AS. Is that enough when you have this few airlines left?

I agree.

We need to undo all the consolidation and just for the fun of it send EVERYONE back to bankruptcy. That was a real win for the employees the first or second time around!

I disagree, capacity control is not a new religion. The CEOs could have used the same discipline when there were 7 majors, they just chose not to and sacrificed at the altar of market share, and we know how that ended.

GMAFB. A few hundred jobs being cut to stabilize the industry even more is not a bad thing for employees at AS/VX or any other airline.

alfa164 · Tue Aug 30, 2016 9:24 pm

enilria wrote:
Here's a political question. Why should the govt ever approve a merger of two profitable companies that are ongoing entities that by their own admission will result in a loss of jobs? What exactly is the overall benefit of a merger that has no clear gain to either the employees or customers? Surely we don't think AS will have lower fares than VX, it's no more likely than WN having lower fares than Air Tran did. Yes, it benefits the shareholders of VX and maybe AS. Is that enough when you have this few airlines left?

DOJ approval is required - in theory - to determine whether the merger will have a negative effect on competition; they do not look into the efects on employees or employment.

That being said, most recent mergers were justified by the fragile economic situation of the affected carriers; most were either going into, already in, or just recovering from bankruptcy. That seeming "loosened" the DOJ's attitude toward the reduced competition (they were also mostly approved during the more pro-business, less-consumer oriented Bush administration) . An AS-VX takeover does not have that excuse. It will be interesting to see how the current DOJ feels.

BobPatterson · Tue Aug 30, 2016 9:40 pm

DocLightning wrote:
As I sit here on my laptop marveling at the awesome naiveté of your comment..............

Please permit a bit of levity, Doc........but can you tell us how you manage to type while sitting on your laptop?

32andBelow · Tue Aug 30, 2016 9:44 pm

oldannyboy wrote:
Additionally, let's also remember the more obvious obstacles this merger is facing before becoming the resounding success that Alaska is hoping it will be..

5) killing a perfectly successful brand (Virgin America) for no reason

They have made a profit what 2 quarters in their history? Quite the definition of successful.

deltal1011man · Tue Aug 30, 2016 9:47 pm

enilria wrote:
deltal1011man wrote:
GMAFB. A few hundred jobs being cut to stabilize the industry even more is not a bad thing for employees at AS/VX or any other airline.

Stabilize the industry? ROTFL. We are at the highest sustained profitability level in the history of the airline business. Any more stabilizing and you can move to the Soviet Union.

Once again. You either 1) don't know/understand this industries history 2) don't care because it doesn't prove your political point.

Cover your ears and scream "I can't hear you" all you want but only a complete fool would think the numbers the industry is seeing will continue. Its and up and down industry. The down is coming. Its not IF its WHEN.

Something will happen that will cause the industry to go into a downward cycle. The more stability the industry has NOW the better off those employees you are trying to speak for will be in the downward cycle.

So again I will say, losing 200 employees is a hell of a lot better than the thousands another round of bankruptcies will produce. I personally hope the industry consolidates more. (but i'm actually effected by negatives in the industry, you aren't.

)

deltal1011man · Tue Aug 30, 2016 9:54 pm

DocLightning wrote:

I believe that the government should have prevented the last round of mergers for precisely the reason that they reduce competition and reduce jobs. But since they did, then AS/VX should be allowed to go ahead and I agree, it makes sense to eliminate redundant jobs.

I'm just angry that the government allowed this nonsense at all.

Do you have data that shows consolidation has reduced jobs overall.

I know it hasn't at DL. I don't believe it has at AA either.

DocLightning wrote:

And precisely because the FAA tells the operators of these flimsy, winged aluminum tubes how to run their business, every last one of these people is likely to get to their respective destinations safe and sound. .

You mean the same FAA that it takes 1 sometimes 2.....hell sometimes 3 or 4 flaming holes in the ground to get to act? The one that is so amazingly understaffed they can't do things like over see that proper maintenance is being done by 3rd party vendors in the US much less the vendors outside of the US? That FAA?

thats a good one Doc. :lol:

32andBelow · Tue Aug 30, 2016 9:57 pm

deltal1011man wrote:
enilria wrote:
deltal1011man wrote:
GMAFB. A few hundred jobs being cut to stabilize the industry even more is not a bad thing for employees at AS/VX or any other airline.

Stabilize the industry? ROTFL. We are at the highest sustained profitability level in the history of the airline business. Any more stabilizing and you can move to the Soviet Union.

Once again. You either 1) don't know/understand this industries history 2) don't care because it doesn't prove your political point.

Cover your ears and scream "I can't hear you" all you want but only a complete fool would think the numbers the industry is seeing will continue. Its and up and down industry. The down is coming. Its not IF its WHEN.

)

The New method of scheduling capacity for demand has greatly increased the chances for success.

deltal1011man · Tue Aug 30, 2016 10:05 pm

32andBelow wrote:
deltal1011man wrote:
enilria wrote:
Stabilize the industry? ROTFL. We are at the highest sustained profitability level in the history of the airline business. Any more stabilizing and you can move to the Soviet Union.

Once again. You either 1) don't know/understand this industries history 2) don't care because it doesn't prove your political point.

Cover your ears and scream "I can't hear you" all you want but only a complete fool would think the numbers the industry is seeing will continue. Its and up and down industry. The down is coming. Its not IF its WHEN.

)

The New method of scheduling capacity for demand has greatly increased the chances for success.

I don't disagree to a point.

The balance sheets of all the of the big US airlines are still ugly. Some better than others but still not really what anyone wants them to be. If the next down turn comes soon all three could very well end up back in the red even with the pricing power they have in the market place.

32andBelow · Tue Aug 30, 2016 10:07 pm

deltal1011man wrote:
32andBelow wrote:
deltal1011man wrote:
Once again. You either 1) don't know/understand this industries history 2) don't care because it doesn't prove your political point.

Cover your ears and scream "I can't hear you" all you want but only a complete fool would think the numbers the industry is seeing will continue. Its and up and down industry. The down is coming. Its not IF its WHEN.

)

The New method of scheduling capacity for demand has greatly increased the chances for success.

I don't disagree to a point.

The balance sheets of all the of the big US airlines are still ugly. Some better than others but still not really what anyone wants them to be. If the next down turn comes soon all three could very well end up back in the red even with the pricing power they have in the market place.

Definately, We just are not talking about losing 50K in one domestic DC-10 with 7 passengers.

grbauc · Tue Aug 30, 2016 10:16 pm

iamlucky13 wrote:
enilria wrote:
In all my years I have never seen any company announce layoffs that take place only if a merger is approved before it has been approved.

Assuming it actually wasn't discussed in previous mergers and you weren't simply paying less attention in the past than you are today, then others were probably keeping quiet, or perhaps even lying about job losses to avoid negative press. There's almost never a merger that doesn't result in "redundancies." Fortunately for the pilots, cabin crew, mechanics, etc, most redundancies tend to occur in management and related functions. Fortunately for those unfortunate latter categories, their skills are usually less specialized and more readily adapted to other industries than the hands-on aspects of flying and supporting aircraft.

I'm honestly relieved they're being forthright about this. Pretending there will be no negative side-effects while making arrangements to lay off people is a terrible form of dishonesty.

That's true and refreshing I didn't think of that. Rare if so.

enilria wrote:
Why should the govt ever approve a merger of two profitable companies that are ongoing entities that by their own admission will result in a loss of jobs? What exactly is the overall benefit of a merger that has no clear gain to either the employees or customers?

Anti-trust regulators don't regulate employment. That's the Department of Labor. Labor laws protect against unjust termination, but redundancy, such as due to a merger is not unjust cause.

Anti-trust regulators ensure adequate levels of competition exist. The minimum level of competition in any given industry or location is not absolutely defined, so it definitely has a political element to it. Sometimes also a significant loss of competition is allowed if other major concessions are made in disadvantaged markets, like price caps or contractual obligations to provide a certain minimum level of service unless and until another competitor enters that market.

You have to keep in mind, once the first mega-merger between Delta and Northwest was approved in much less stable times for airlines, a whole round of mergers was inevitable to rebalance the market against the resulting juggernaut. Given the smaller sizes and fairly limited overlap of Alaska and Virgin, I'd guess the conditions placed on this merger will be pretty minimal compared to past mergers.

And I think they have played out pretty good for the industry.

enilria wrote:
Stabilize the industry? ROTFL. We are at the highest sustained profitability level in the history of the airline business. Any more stabilizing and you can move to the Soviet Union.

Soviet Union? That's backwards. In the Soviet Union, the activities of businesses were radically more regulated, not less regulated. Rather than restrictions on consolidation as we have in the US, they had forced consolidation in order to eliminate small businesses that could be seeds of capitalism and competition against the planned bureaus. This was a significant factor behind the perennial consumer goods shortages and limited choices that plagued the USSR. It also fed the monetary overhang that contributed heavily to the inflation that racked the former Soviet economies after the breakup.

Very sad after all those years that that Russia has taken the path they did. I wonder if the US could of helped more.

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