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LAXintl
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DOJ Approves AS/VX merger

Tue Dec 06, 2016 6:55 pm

DOJ and airlines have reached a settlement to clear the way for a merger.

Biggest concession is that AS will be required to "implement limited changes" to its codeshare agreement with American Airlines.

Justice Department Clears Alaska Air Group's Acquisition of Virgin America
https://newsroom.alaskaair.com/2016-12- ... in-America

=

I'm sure more details will be forthcoming
From the desert to the sea, to all of Southern California
 
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mercure1
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 6:57 pm

Now time to find out details what Alaska plans for Virgin America really are. Fleet, routes, staff, product, airports etc.
mercure f-wtcc
 
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LAXintl
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 7:00 pm

Interesting also not a peep about the Delta relationship.
From the desert to the sea, to all of Southern California
 
tortugamon
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 7:00 pm

The DOJ actually stated "today's announcement ensures that Alaska has the incentive to take the fight to [AA]". Enilria, it sure does seem like our take on this was the right direction. Happy to see this outcome. Time to move forward.

https://twitter.com/DanLinden/status/806208194662060033

Alaska must significantly scale back its codeshare with AA.

tortugamon
Last edited by tortugamon on Tue Dec 06, 2016 7:03 pm, edited 1 time in total.
 
commavia
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 7:05 pm

"The majority of Alaska and American codeshare flights will remain intact. The DOJ did not require changes to any other agreements between Alaska and American, including interline or reciprocal loyalty agreements, or any of Alaska's other airline partnerships."

Awesome - just as many of us speculated, I'm glad to hear that the "majority" of AA/Alaska codeshares will remain. I will be interested to hear more details about precisely what the DOJ is requiring - although I think it's fairly likely to be generally along the lines of what has been discussed here for months, namely removing codeshares on overlapping routes and in overlapping markets.
 
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 7:10 pm

Wow... I guess the idea this could hold over to a new administration helped move it along. ;). Seriously, this is good news.

Lightsaber
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commavia
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 7:10 pm

Well that didn't take long ...

Alaska has filed a presentation with the SEC updating on the deal.

Specifics on the AA concessions:

* Total estimated revenue impact to Alaska is $15-20M/year net (in markets representing total of $60M/year revenue)
* AA and Alaska cannot "market each others' flights on non-stop overlapping markets" (33 markets affected)
* AA can't sell "Alaska flights from AA hubs, and vice versa" (9 markets affected)
* Alaska "can't sell AA flights from LAX to AA's other hubs" (3 markets affected)
* Of the 45 markets affected, 8 account for >2/3 of the revenue impact

As said - pretty much exactly what many of us had speculated.
 
winginit
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 7:13 pm

commavia wrote:
* AA and Alaska cannot "market each others' flights on non-stop overlapping markets" (33 markets affected)


I'll be curious as to what percentage of passengers exchanged between the two carriers fall within those 33 markets. I'll bet it's more than half.
 
wnflyguy
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 7:14 pm

Guessing this means AS is staying in DAL?

Flyguy
Last edited by wnflyguy on Tue Dec 06, 2016 7:16 pm, edited 1 time in total.
my post are my opinion only and not those of southwest airlines and or airtran airlines.
 
toobz
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 7:15 pm

lol just like Enilria and most people said... codeshares were obviously the holdup. According to the insider that was not the issue
Last edited by toobz on Tue Dec 06, 2016 7:32 pm, edited 1 time in total.
 
commavia
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 7:20 pm

winginit wrote:
I'll be curious as to what percentage of passengers exchanged between the two carriers fall within those 33 markets. I'll bet it's more than half.


I suspect you're right, although the way the presentation in Alaska's SEC filing reads, it doesn't seem as though AA and Alaska have to forgo exchanging all of those passengers - rather, they just have to stop selling those passengers on the other airlines' flights. In other words, if an AA passenger was flying LAX-SEA on an Alaska-operated/AA-coded flight, A will only be able to sell that passenger the AA flights in the local city pair going forward, but if that same AA passenger was flying LAX-SEA-ANC, AA can still sell that with AA operating LAX-SEA and Alaska SEA-JNU, and thus the "exchange" could still theoretically happen.
 
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 7:20 pm

tortugamon wrote:
The DOJ actually stated "today's announcement ensures that Alaska has the incentive to take the fight to [AA]". Enilria, it sure does seem like our take on this was the right direction. Happy to see this outcome. Time to move forward.

https://twitter.com/DanLinden/status/806208194662060033

Alaska must significantly scale back its codeshare with AA.

tortugamon

I don't know how "in the know" people thought code share wasn't part of the issue.
 
sxf24
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 7:27 pm

enilria wrote:
I don't know how "in the know" people thought code share wasn't part of the issue.


The agreement regarding codeshares does not confirm that codeshares were the issue. The extensive negotiations that delayed the announcement indicate that a lot of back and forth between the DOJ and AS. I know that more onerous requests, including asset divestitures, were on the table. Clearly, the negotiations led to a different outcome.

If DOJ only took issue with AA codeshares, the approval would have been announced months ago.
 
winginit
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 7:32 pm

commavia wrote:
winginit wrote:
I'll be curious as to what percentage of passengers exchanged between the two carriers fall within those 33 markets. I'll bet it's more than half.


I suspect you're right, although the way the presentation in Alaska's SEC filing reads, it doesn't seem as though AA and Alaska have to forgo exchanging all of those passengers - rather, they just have to stop selling those passengers on the other airlines' flights. In other words, if an AA passenger was flying LAX-SEA on an Alaska-operated/AA-coded flight, A will only be able to sell that passenger the AA flights in the local city pair going forward, but if that same AA passenger was flying LAX-SEA-ANC, AA can still sell that with AA operating LAX-SEA and Alaska SEA-JNU, and thus the "exchange" could still theoretically happen.


That's my understanding as well, but that's still a massive hit for all O&Ds involving segments where AS has far greater capacity when compared to AA (LAXSEA and LAXPDX come to mind)
 
dc10lover
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 7:32 pm

I bet AS will close the DAL operation. Use the jets on other routes. Possibly cancel Airbus orders.
Why endure the nightmare and congestion of LAX when BUR, LGB, ONT & SNA is so much easier to fly in and out of. Same with OAK & SJC when it comes to SFO.
 
commavia
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 7:35 pm

ScottB wrote:
The only off-base guesses were really that DOJ was going to be dumb enough to take ending the DL code share as a "concession" or that AS would be forced to give up gates at DAL.


... or that Alaska would be forced to end the codeshare with Alaska in its entirety, as was also speculated by some of the alleged soothsayers.

Frankly, ultimately, this is pretty much exactly what was to be expected. As always seemed counter-productive (and frankly anti-consumer) to many of us, forcing Alaska to completely discontinue its relationship with AA would have actually reduced customer choice in hundreds of city pair markets where only one of the airlines is present. As they did when they were discussed weeks and months ago, these concessions seem entirely reasonable to me. In the context of the combined size and network breadth of both airlines, it's no longer really necessary for them to be codesharing on each others' flights DFW-PDX, ORD-SEA, LAX-DCA, etc.

With respect to the Delta codeshare, I suspect - guess on my part - that the reason this ended up not figuring into the final agreement with the DOJ is that Alaska was able to persuasively argue that this relationship was on borrowed time and coming to an end relatively soon, anyway.
 
commavia
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 7:37 pm

winginit wrote:
That's my understanding as well, but that's still a massive hit for all O&Ds involving segments where AS has far greater capacity when compared to AA (LAXSEA and LAXPDX come to mind)


True, although this opens up the possibility - precisely as the DOJ wants, I'm sure - for one or both airlines to increase their coverage of some of these markets. AA has been placing its code on Alaska's LAX-SEA/PDX flights for well over a decade and has been flying both routes for several months. If AA believes there is O&D traffic to be profitably had in these city pairs that can no longer spill onto Alaska's capacity, there is obviously nothing stopping AA from adding seats. Indeed, it would not at all surprise me to see AA add one additional daily flight on each route (bringing SEA to 5x daily and PDX 4x).
 
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 7:40 pm

dc10lover wrote:
I bet AS will close the DAL operation. Use the jets on other routes. Possibly cancel Airbus orders.


Where will AS get aircraft quickly enough to pull this all off if they reject the Airbus order?
 
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 7:42 pm

No statement regarding on the Delta codeshare, but as has been said in previous threads, this is likely to go away. I think "the fat lady has sung".
 
tortugamon
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 7:45 pm

Here is AS's presentation on the agreement. They agreed to notify DOT if they sell/trade slots/gates that VX received from AA/US merger. 6%/$320 Million (and decreasing) of AS' revenue has come from codeshare.

Good detail here:

http://phx.corporate-ir.net/phoenix.zht ... Vic2lkPTU3

tortugamon
 
winginit
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 7:48 pm

Wow. In reading through the documentation here Alaska really was a bit loose in what they put in emails while mulling over this acquisition. At the bottom of the release by the DOJ mandating the two carriers scale back codeshare you can find several supplementary documents to include the complaint and the explanation.

Section B of the complaint titled "The Codeshare Relationship Incentivizes Alaska to Cooperate Rather than
Compete with American" has some really interesting tidbits - most notably - under point 23:

When Alaska was weighing whether to acquire Virgin, for
example, a senior Alaska executive recognized that “LAX . . . expansion may be
counterproductive to our relationship with AA.”


Seriously?! No wonder the DOJ was alarmed.
Last edited by winginit on Tue Dec 06, 2016 7:50 pm, edited 1 time in total.
 
tortugamon
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 7:50 pm

If they keep DAL does this mean that AA can code share on AS fligths to/from DAL? That is an interesting dynamic. I imagine the hub clause is airport specific not city specific.

Yes, I do think AS/VX will keep DAL. Silly not to.

tortugamon
 
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 7:53 pm

Not many complaints about Obama's DOJ compared to other merger/regulation topics so I assume this is a good decision? I need to know whether to thank or hate Obama again.
 
winginit
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 7:56 pm

commavia wrote:
winginit wrote:
That's my understanding as well, but that's still a massive hit for all O&Ds involving segments where AS has far greater capacity when compared to AA (LAXSEA and LAXPDX come to mind)


True, although this opens up the possibility - precisely as the DOJ wants, I'm sure - for one or both airlines to increase their coverage of some of these markets. AA has been placing its code on Alaska's LAX-SEA/PDX flights for well over a decade and has been flying both routes for several months. If AA believes there is O&D traffic to be profitably had in these city pairs that can no longer spill onto Alaska's capacity, there is obviously nothing stopping AA from adding seats. Indeed, it would not at all surprise me to see AA add one additional daily flight on each route (bringing SEA to 5x daily and PDX 4x).


You're exactly right. As I read more that's laid out by the DOJ in Section 3 of their complaint against the acquisition:

Although the codeshare agreement effectively extends Alaska’s geographic reach
– potentially strengthening Alaska’s ability to compete against other carriers like Delta and
United – it also creates an incentive for Alaska to cooperate rather than compete with its larger
partner, American. Specifically, Alaska may choose not to launch new service on routes served
by American, or it may opt to compete less aggressively on the routes that both carriers serve, to
avoid upsetting American and jeopardizing the partnership. Alaska may also decide to rely on
the codeshare relationship in lieu of entering routes already served by American because doing
so allows it to offer its customers the benefits of an expanded network without undertaking the
risk and expense of offering its own competing service. As a result of these incentives, Alaska
and American often behave more like partners than competitors.
 
commavia
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 7:57 pm

winginit wrote:
Section B of the complaint titled "The Codeshare Relationship Incentivizes Alaska to Cooperate Rather than
Compete with American" has some really interesting tidbits - most notably - under point 23:


Section 32 is also quite notable:

"As part of Alaska’s early analysis of a possible acquisition of Virgin, Alaska executives developed a plan for post-merger changes to Virgin’s service that specifically called for reducing – and in some instances completely eliminating – service on many of the routes where Virgin and American compete today, including routes that are among the most heavily traveled in the country."

Hmmm ... interesting. I could take a wild guess what some of those routes are "where Virgin and American compete today," and Alaska contemplated reducing capacity post-merger. Overall, agree - pretty incredible what Alaska executives were saying in emails.
 
winginit
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 8:14 pm

sxf24 wrote:
The agreement regarding codeshares does not confirm that codeshares were the issue.


The DOJs formal complaint (here) against the acquisition absolutely does confirm that codeshares were the primary issue. period.
 
us330
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 8:19 pm

dc10lover wrote:
I bet AS will close the DAL operation. Use the jets on other routes. Possibly cancel Airbus orders.


Why would they? DAL gives them access to LGA, and increased access to DCA.
 
alasizon
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 8:29 pm

tortugamon wrote:
If they keep DAL does this mean that AA can code share on AS fligths to/from DAL? That is an interesting dynamic. I imagine the hub clause is airport specific not city specific.

Yes, I do think AS/VX will keep DAL. Silly not to.

tortugamon


According to the PFJ:

“Alaska/American Overlap Routes” means any routes between two cities in the United States on which Alaska and American both provide nonstop scheduled air passenger service. For purposes of this definition only, the city that an airport serves will be determined by the City Market ID assigned to each airport by the U.S. Department of Transportation in the Airline Origin and Destination Survey (“DB1B”), and airports with the same City Market ID will be considered to serve the same city, except the following airports will not be considered to serve the same city as any other airport:
(1) Los Angeles International Airport and
(2) Norman Y. Mineta San Jose International Airport.
The routes covered by this definition may change over the term of this Final Judgment as Alaska and American adjust their respective schedules. The Alaska/American Overlap Routes as of December 6, 2016 are listed in Appendix A for illustrative purposes.


And Appendix A gives us:
Image

And Appendix B (VX-AA overlap) gives us:
Image
Last edited by alasizon on Tue Dec 06, 2016 8:36 pm, edited 2 times in total.
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Sooner787
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 8:29 pm

us330 wrote:
dc10lover wrote:
I bet AS will close the DAL operation. Use the jets on other routes. Possibly cancel Airbus orders.


Why would they? DAL gives them access to LGA, and increased access to DCA.


The VX flights are quite popular with our clients , including many clients who are Plat/Exec Plat with AA.

I'm hoping VX/AS keeps their service at Love. Heck, AS only has 1 gate at DFW , they'll have 2 at DAL
 
IPFreely
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 8:39 pm

EA CO AS wrote:
Yes, there were some concerns about codesharing, but as you've already seen in the info provided by AS, the codeshare changes required were easily addressed, and were quite minimal in the grand scheme of things.


Based on the info provided by AS I suspect the code share issue was worked out in the first day or two of discussions. It was clearly not the reason approval took a few weeks longer than initially expected. Good job and thanks again.
 
commavia
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 8:43 pm

alasizon wrote:
According to the PFJ:


Yep. The PFJ spells it out perhaps most clearly of all - sixty days after merger close, Alaska will be prohibited from:

* Codesharing with AA on any overlapping routes
* Place its code on any AA flights from/to ANC, SEA, PDX or SFO
* Carry AA's code on any Alaska flights from/to CLT, ORD/MDW, DFW/DAL, FLL, JFK/LGA, MIA, PHX or DCA
* Place its code on any AA flights, or carry AA's code on any Alaska flights, between LAX and ANC, SEA, PDX, SFO, CLT, ORD/MDW, DFW/DAL, FLL, JFK/LGA, MIA, PHX or DCA
 
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enilria
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 8:51 pm

commavia wrote:
alasizon wrote:
According to the PFJ:


Yep. The PFJ spells it out perhaps most clearly of all - sixty days after merger close, Alaska will be prohibited from:

* Codesharing with AA on any overlapping routes
* Place its code on any AA flights from/to ANC, SEA, PDX or SFO
* Carry AA's code on any Alaska flights from/to CLT, ORD/MDW, DFW/DAL, FLL, JFK/LGA, MIA, PHX or DCA
* Place its code on any AA flights, or carry AA's code on any Alaska flights, between LAX and ANC, SEA, PDX, SFO, CLT, ORD/MDW, DFW/DAL, FLL, JFK/LGA, MIA, PHX or DCA

This is pretty extensive, not a tweak. Not sure what limiting ANC/SEA/SFO from AA code sharing once you go beyond overlapping routes is supposed to accomplish?
 
phxsanslcpdx
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 8:53 pm

Interesting reading, and it seems like probably a good compromise that provides most passengers with decent options while encouraging AA and Alaska to compete more vigorously.

One questionable inclusion, to me, is Anchorage. I think it's a significant stretch to say that AA's summer PHX-ANC competes with Alaska's winter ANC-PHX route. My understanding is that, if the scheduling stays the same, savvy passengers can still get miles regardless of their preferred airline, but they can't buy the ticket from their preferred airline if the other's operating the route at the time. This really seems more like adding a slight inconvenience to passengers/encouraging some to give up if they don't find a routing they like right away, than actually offering anything pro-competitive. Walling off LAX-ANC is a bit more understandable (they do offer competing nonstops in the summer), but I doubt AA's going to be rushing into ANC to increase its frequency, so it also doesn't look particularly pro-competitive.

How does the removal of code-sharing impact corporate reservations systems? If a hypothetical AA corporate client wants to send folks between DAL and DCA, will the systems find their way onto Alaska? Or would it be blocked as an unserved route?
 
commavia
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 8:55 pm

enilria wrote:
This is pretty extensive, not a tweak. Not sure what limiting ANC/SEA/SFO from AA code sharing once you go beyond overlapping routes is supposed to accomplish?


It is extensive in terms of volume, but not really network breadth or depth. AA and Alaska will still be fully able to leverage each others' networks for the purposes for which they are obviously most uniquely valuable, which is accessing city pairs that neither can effectively serve independently. Precisely as many of us speculated, what they will now be prohibited from doing, effectively, is codesharing between each other's hubs. But pretty much all of the codesharing behind and beyond each others hubs - so all the AA/AS* to points in the eastern U.S. over DFW/ORD, etc., and all the AS/AA* to points in the western U.S. and Alaska over SEA/PDX, will be unaffected.
 
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EA CO AS
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 9:00 pm

enilria wrote:
you've said everything wasn't an issue, and back in September you said you knew what the issue was but couldn't say.


Not true; I was stating that the reasons cited by you (quoting erroneous news sources) were off-base, specifically, divestiture of assets including gates, slots, or giving up one or more codeshare partners entirely.

The limitation asked for and agreed to was hub-to-hub codeshares, with AA only. Small potatoes compared to the other things being guessed at, including that the DOJ would try to scuttle the deal entirely. But obviously I couldn't go into that until DOJ signed off.
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Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
FSDan
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 9:21 pm

How does the codeshare concession affect LAX? It's a little less clear there since it's a sort of hub for both airlines. Do AA and AS currently codeshare on routes like LAX-STS and LAX-LTO? If so, do these count as "AS routes from an AA hub", or will AA still be able to place their code on these? It would seem a bit odd if AA can codeshare on those since it would take away incentives for them to open these new markets and compete.
This is my signature until I think of a better one.
 
tortugamon
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 9:27 pm

commavia wrote:
"As part of Alaska’s early analysis of a possible acquisition of Virgin, Alaska executives developed a plan for post-merger changes to Virgin’s service that specifically called for reducing – and in some instances completely eliminating – service on many of the routes where Virgin and American compete today, including routes that are among the most heavily traveled in the country."

Wow! Not sure how any one can read this stuff and not see how this codeshare agreement could have been seriously detrimental to competition and consumers. Even AS admits it. The emails to the board indicating similar views was a real bone head move by the execs.

This will no doubt be discussed in B-school

usxguy wrote:
wow, you need some help.

Agreed, said poster is very off base. Enjoy the vaca but stick around.

alasizon wrote:
According to the PFJ:

Thanks for this. That is a pretty exhaustive list. This codeshare restriction is very far reaching then. That is a ton of important city pairs that are eliminated.

winginit wrote:
The DOJs formal complaint (here) against the acquisition absolutely does confirm that codeshares were the primary issue. period.

Absolutely, without a doubt.

IPFreely wrote:
Based on the info provided by AS I suspect the code share issue was worked out in the first day or two of discussions. It was clearly not the reason approval took a few weeks longer than initially expected. Good job and thanks again.

This is what denial looks like. I can't believe anyone could read the suit and conclude that there is anything else they considered other than the AA code share. I was shocked at just how dominant it was. It was literally the entire case. But then again, I imagine you didn't read it otherwise this dribble would not get posted.

enilria wrote:
This is pretty extensive, not a tweak.

Absolutely.

EA CO AS wrote:
Not true; I was stating that the reasons cited by you (quoting erroneous news sources) were off-base, specifically, divestiture of assets including gates, slots, or giving up one or more codeshare partners entirely.

Sure you were. ;)

tortugamon
 
dmorbust
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 9:35 pm

commavia wrote:
enilria wrote:
This is pretty extensive, not a tweak. Not sure what limiting ANC/SEA/SFO from AA code sharing once you go beyond overlapping routes is supposed to accomplish?


It is extensive in terms of volume, but not really network breadth or depth. AA and Alaska will still be fully able to leverage each others' networks for the purposes for which they are obviously most uniquely valuable, which is accessing city pairs that neither can effectively serve independently. Precisely as many of us speculated, what they will now be prohibited from doing, effectively, is codesharing between each other's hubs. But pretty much all of the codesharing behind and beyond each others hubs - so all the AA/AS* to points in the eastern U.S. over DFW/ORD, etc., and all the AS/AA* to points in the western U.S. and Alaska over SEA/PDX, will be unaffected.


The codeshare limitations affect $60 million out of the $190 million in AA codeshare revenue, so yes it is rather significant and I agree with enilria that barring news of anything else, this was clearly what took longest to negotiate between AS and the DOJ. Even if AS projects they can re-capture $40-$45 million of that revenue, that is still a $15-$20 million hit - and I would bet those numbers are optimistic projections by AS.
 
sxf24
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 9:38 pm

winginit wrote:
sxf24 wrote:
The agreement regarding codeshares does not confirm that codeshares were the issue.


The DOJs formal complaint (here) against the acquisition absolutely does confirm that codeshares were the primary issue. period.


This is the final document. You have no visibility into earlier discussion or interim conclusions. Period.
 
dmorbust
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 9:39 pm

tortugamon wrote:
IPFreely wrote:
Based on the info provided by AS I suspect the code share issue was worked out in the first day or two of discussions. It was clearly not the reason approval took a few weeks longer than initially expected. Good job and thanks again.

This is what denial looks like. I can't believe anyone could read the suit and conclude that there is anything else they considered other than the AA code share. I was shocked at just how dominant it was. It was literally the entire case. But then again, I imagine you didn't read it otherwise this dribble would not get posted.
tortugamon


Completely agree
 
Passedv1
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Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 9:39 pm

NameOmitted wrote:
dc10lover wrote:
I bet AS will close the DAL operation. Use the jets on other routes. Possibly cancel Airbus orders.


Where will AS get aircraft quickly enough to pull this all off if they reject the Airbus order?


Defer MAX deliveries further at least until the FAA finalizes it's classic&NG&MAX operator training requirement and delay retirement of the 400's. That should be more than enough.
 
b6sea
Posts: 569
Joined: Mon Aug 22, 2005 5:44 pm

Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 9:45 pm

We can fight about this all we want, but I read just this morning that an analyst had it on good authority that the DL codeshare would be completely eliminated. Even the best information from analysts and news sources was pure speculation it seems.

Glad to see this is finally over, need to read through the documents more closely before I make any comments that are too specific.

Congrats to AS on receiving approval!
 
User avatar
11725Flyer
Posts: 1264
Joined: Mon May 30, 2016 4:51 pm

Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 9:50 pm

IPFreely wrote:
EA CO AS wrote:
Yes, there were some concerns about codesharing, but as you've already seen in the info provided by AS, the codeshare changes required were easily addressed, and were quite minimal in the grand scheme of things.


Based on the info provided by AS I suspect the code share issue was worked out in the first day or two of discussions. It was clearly not the reason approval took a few weeks longer than initially expected. Good job and thanks again.


When you have IPFreely cheering you on, you know you're in trouble.
 
User avatar
SANFan
Posts: 5110
Joined: Sun Aug 06, 2006 10:10 am

Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 9:56 pm

I really think it's time to drop the "You said", "He said", "I said" debate and get on with the many decisions that AAG now faces and the questions that we here on A.net have about the results of the decisions.

What routes will AAG start/end, what stations will be kept or dropped, what features of VX will be retained or dropped, the timetable of integration of Virgin into Alaska, staffing consolidation, etc?

And above all else, when will the "Merger" a/c be towed out of the hanger and start making the network rounds? (I wonder if Virgin has a similar painted Airbus to fly around its routes?)

I think the fun is just starting -- let's move on!

BTW, congrats to AAG!

bb
 
User avatar
BobPatterson
Posts: 3416
Joined: Thu Nov 26, 2015 7:18 am

Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 10:03 pm

IPFreely wrote:
EA CO AS wrote:
Yes, there were some concerns about codesharing, but as you've already seen in the info provided by AS, the codeshare changes required were easily addressed, and were quite minimal in the grand scheme of things.


Based on the info provided by AS I suspect the code share issue was worked out in the first day or two of discussions. It was clearly not the reason approval took a few weeks longer than initially expected. Good job and thanks again.


IPFreely, it's really time for you to give it up.

The DOJ lawsuit/settlement involves just two very basic items, code sharing and potential divestiture of assets (gates, slots). If there were any other issues they would have been discussed and provided for in (made a part of) the proposed settlement. There are no hand-shake agreements, no "we'll trust you to do some other things," involved. The only way DOJ and the courts can enforce agreements upon issues of substance is to make them part of an approved settlement.

All of your long, multi-postings, repetitive litany against Enilria and others, are refuted by the DOJ documents released today. You were wrong. Why not admit it?
Facts are fragile things. Treat them with care. Sources are important. Alternative facts do not exist.
 
ScottB
Posts: 6641
Joined: Fri Jul 28, 2000 1:25 am

Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 10:06 pm

commavia wrote:
With respect to the Delta codeshare, I suspect - guess on my part - that the reason this ended up not figuring into the final agreement with the DOJ is that Alaska was able to persuasively argue that this relationship was on borrowed time and coming to an end relatively soon, anyway.


I doubt that Alaska argued at all against ending the Delta code share unless doing so would have subjected AAG to a substantial financial penalty payable to Delta.

IPFreely wrote:
Based on the info provided by AS I suspect the code share issue was worked out in the first day or two of discussions. It was clearly not the reason approval took a few weeks longer than initially expected.


I doubt that's the case at all given that the AA code share is pretty much the only subject of the proposed final judgment *and* that DOJ got to the point of actually drafting and filing a complaint along with that final judgment. DOJ actually has sued to enjoin the merger; they're just also filing the proposed relief which will allow the merger to go forward at the same time -- so that they have a court judgment which will enshrine the terms of the antitrust decree. If they had come to a quick agreement on limiting the code share, I think it's unlikely that they'd be well past a two-month delay in receiving clearance for the merger to proceed.

commavia wrote:
Hmmm ... interesting. I could take a wild guess what some of those routes are "where Virgin and American compete today," and Alaska contemplated reducing capacity post-merger. Overall, agree - pretty incredible what Alaska executives were saying in emails.


I agree, that's pretty unbelievable and very amateurish given that DOJ will routinely request emails from company executives if Hart-Scott-Rodino review proceeds to the so-called "second request" stage.
 
Sooner787
Posts: 2566
Joined: Thu Jul 18, 2013 1:44 am

Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 10:08 pm

dc10lover wrote:
I bet AS will close the DAL operation. Use the jets on other routes. Possibly cancel Airbus orders.



If your scenario plays out, this effects Delta's lawsuit against the city of Dallas for gate space at Love Field.

I'm sure DL would love to get their hands on 2 gates , and WN would be happy to be rid of DL "squatting"
on one of their gates at DAL
 
tortugamon
Posts: 6795
Joined: Tue Apr 09, 2013 11:14 pm

Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 10:11 pm

sxf24 wrote:
The DOJs formal complaint (here) against the acquisition absolutely does confirm that codeshares were the primary issue. period.
This is the final document. You have no visibility into earlier discussion or interim conclusions. Period.

I find it difficult to believe that the DOJ chose not to discuss their primary issue in the complaint, if as you suggested, it wasn't the code share with AA.

dmorbust wrote:
The codeshare limitations affect $60 million out of the $190 million in AA codeshare revenue, so yes it is rather significant and I agree with enilria that barring news of anything else, this was clearly what took longest to negotiate between AS and the DOJ. Even if AS projects they can re-capture $40-$45 million of that revenue, that is still a $15-$20 million hit - and I would bet those numbers are optimistic projections by AS.

Agreed, and I think it is also important to consider the AA reaction to this development as well. I fully expect them to launch new services to try to capture some of the business they are going to lose from the loss of the AS code share. Its not like they are going to stand still. That's the beauty of the agreement is taking a partner and turning them into competitors: Its not just AS that now needs to go it alone (on these routes) but AA will as well.

Good news for the consumers on the West Coast and (maybe especially) Dallas. And good for AAG. They are worthy competitors and I don't doubt they will be successful; something I wasn't sure about with VX.

tortugamon
 
User avatar
enilria
Posts: 9620
Joined: Fri Feb 22, 2008 7:15 pm

Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 10:23 pm

ScottB wrote:
I agree, that's pretty unbelievable and very amateurish given that DOJ will routinely request emails from company executives if Hart-Scott-Rodino review proceeds to the so-called "second request" stage.

Agreed
commavia wrote:
Yep. The PFJ spells it out perhaps most clearly of all - sixty days after merger close, Alaska will be prohibited from:

* Codesharing with AA on any overlapping routes
* Place its code on any AA flights from/to ANC, SEA, PDX or SFO
* Carry AA's code on any Alaska flights from/to CLT, ORD/MDW, DFW/DAL, FLL, JFK/LGA, MIA, PHX or DCA
* Place its code on any AA flights, or carry AA's code on any Alaska flights, between LAX and ANC, SEA, PDX, SFO, CLT, ORD/MDW, DFW/DAL, FLL, JFK/LGA, MIA, PHX or DCA
EA CO AS wrote:
enilria wrote:
you've said everything wasn't an issue, and back in September you said you knew what the issue was but couldn't say.


Not true; I was stating that the reasons cited by you (quoting erroneous news sources) were off-base, specifically, divestiture of assets including gates, slots, or giving up one or more codeshare partners entirely.

The limitation asked for and agreed to was hub-to-hub codeshares, with AA only. Small potatoes compared to the other things being guessed at, including that the DOJ would try to scuttle the deal entirely. But obviously I couldn't go into that until DOJ signed off.

That goes far beyond hub to hub.

Also, my original post where I asked EA CO AS what was in fact the real issue that he said he knew about in the original thread was deleted for no apparent reason from this thread, but is quoted here by him with no answer to that part of the question. Deleting my post, but allowing an edited quote of my post violates site policy. Ridiculous.
 
winginit
Posts: 2555
Joined: Sat Feb 23, 2013 9:23 pm

Re: DOJ Approves AS/VX merger

Tue Dec 06, 2016 10:23 pm

sxf24 wrote:
This is the final document. You have no visibility into earlier discussion or interim conclusions. Period.


So you mean to tell me you believe that the formal complaint and explanation documents put forth by the DOJ for the sole intention of informing the public as to why they objected to the acquisition and demanded concessions wouldn't address the primary concerns or conclusions? Is that what you mean to argue here? There were some massive obstacles that the DOJ felt weren't relevant to include in their follow up documentation that took up most of the approval delay process here that were remedied but not included in the post-approval reports? Are you serious? That goes for EA CO AS and IPFreely as well, who seem to be in the denial phase of denial. Enjoy your vacation gents, we'll see you back here when this has all blown over.

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