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sxf24
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Sat Sep 25, 2021 2:23 pm

tphuang wrote:
sxf24 wrote:
tphuang wrote:

That's quite naiive point to make. If they are not in a partnership, AA would have no incentive to lease B6 that many slots. Maybe 20 slot pairs combined. Certainly not the 40 at LGA + however many it ends up in JFK they will end up doing

What do you mean B6 could have built a more diverse network from day 1? Have you taken a look at its network out of JFK with 170 flights? It has a huge network for the # of slots it has serving basically every market that makes sense from JFK. The fact is you cannot compete for NYC corporate contracts with just JFK slots. You need LGA network also. AA lacked enough JFK slots and B6 had almost no LGA slots. That's why the 2 of them need to have a partnership to offer # of flights necessary to be competitive with DL.

Do you think B6 offering 15 flights a day on JFK-ORD can compete against a rival carrier offering 15 flights a day on LGA-ORD?

This is about providing real competition in NYC to DL and UA rather than having 2 airlines with clear holes in their network.

On top of that, this is not just about the slots for B6. It's about access to AA customers and AA's network.


Your complaints seem to be about the development and competitiveness of B6’s network, not the benefit to consumers. The DOJ’s argument is that more competitors = lower prices and the data backs that up. While increasing B6’s network breadth also helps - acknowledged by the DOJ in their discussion of the “JetBlue effect” - the cooperation between AA and B6 could raise prices since they are less motivated to compete on city pairs from NYC and BOS.

I think the two perspectives are consumers benefit from more airlines competing or consumers should be grateful to fly B6 at a higher price.


Not really, you made the accusation that B6 didn't chose to build a more diverse network at JFK, when the reality is that it a has very diverse network. As diverse as you can get from JFK for 170 slots. Now, you are changing the argument.

Also, you have to actually show this merger is producing fewer competitors. Again, they were only competitors to each on LGA-BOS, JFK-LAX/SFO/PHX/AUS/LAS pre-COVID. Even if you go by the argument that those routes are seeing 1 fewer competitor (which is a hard one to make given lack of coordination on pricing on these routes). And if you take a look at JFK-LAX, they don't codeshare all their flights, since they have a lot of duplicating times n their flight. Even if you accept that premise, the 2 airlines have now added LGA-DEN/CHS/IAH/MCI/MSY/JAX/SAV/SRQ/PWM and JFK-DEL/TLV/SCL/MDE/CLO/MCI/MKE/PVR/YVR + about 8 or 9 EWR routes that neither served pre-COVID. On top of that, B6 has added service to AA's MIA hub and LHR as further competition that goes against this theory "virtual merger". The J prices on JFK-LHR market has already seen dramatic downward affect.

The benefits of all these new markets far outweights from additional competition far outweighs the few routes that might see 1 less competition. Again, we haven't seen any abnormal capacity reduction on those JFK transcon markets from either airline.

If you want to make the argument that NEA is leading to less competition, you have to prove it. It's hard to prove because we are actually seeing far more competition.


I think you’re confusing my position with the DOJ’s argument. As I’ve pointed out before, this shouldn’t be personal.

I would strenuously disagree that B6 is unable to diversify its JFK or BOS network. They’ve choose depth, not breadth. They also carry more domestic passengers than any other airline at those airports, which makes it hard to argue they’re in a disadvantaged position.

It’s also intellectually false to only look at nonstop markets. AA operates competing connecting hubs and the DOJ argues the NEA diminishes motivation to offer lower fares on itineraries connecting in PHL, CLT, etc.
 
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Midwestindy
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Sat Sep 25, 2021 3:53 pm

sxf24 wrote:
tphuang wrote:
sxf24 wrote:

Your complaints seem to be about the development and competitiveness of B6’s network, not the benefit to consumers. The DOJ’s argument is that more competitors = lower prices and the data backs that up. While increasing B6’s network breadth also helps - acknowledged by the DOJ in their discussion of the “JetBlue effect” - the cooperation between AA and B6 could raise prices since they are less motivated to compete on city pairs from NYC and BOS.

I think the two perspectives are consumers benefit from more airlines competing or consumers should be grateful to fly B6 at a higher price.


Not really, you made the accusation that B6 didn't chose to build a more diverse network at JFK, when the reality is that it a has very diverse network. As diverse as you can get from JFK for 170 slots. Now, you are changing the argument.

Also, you have to actually show this merger is producing fewer competitors. Again, they were only competitors to each on LGA-BOS, JFK-LAX/SFO/PHX/AUS/LAS pre-COVID. Even if you go by the argument that those routes are seeing 1 fewer competitor (which is a hard one to make given lack of coordination on pricing on these routes). And if you take a look at JFK-LAX, they don't codeshare all their flights, since they have a lot of duplicating times n their flight. Even if you accept that premise, the 2 airlines have now added LGA-DEN/CHS/IAH/MCI/MSY/JAX/SAV/SRQ/PWM and JFK-DEL/TLV/SCL/MDE/CLO/MCI/MKE/PVR/YVR + about 8 or 9 EWR routes that neither served pre-COVID. On top of that, B6 has added service to AA's MIA hub and LHR as further competition that goes against this theory "virtual merger". The J prices on JFK-LHR market has already seen dramatic downward affect.

The benefits of all these new markets far outweights from additional competition far outweighs the few routes that might see 1 less competition. Again, we haven't seen any abnormal capacity reduction on those JFK transcon markets from either airline.

If you want to make the argument that NEA is leading to less competition, you have to prove it. It's hard to prove because we are actually seeing far more competition.


It’s also intellectually false to only look at nonstop markets. AA operates competing connecting hubs and the DOJ argues the NEA diminishes motivation to offer lower fares on itineraries connecting in PHL, CLT, etc.


You might want to look a little more closely at the DOJ's argument about that:
https://drive.google.com/file/d/1Qg1AuX ... _OUmp/view

Image

What are these 98 connecting itineraries that would be most impacted, you may ask? Well....the DOJ lays them out, and well....let's just say they aren't large connecting markets by any stretch of the imagination.

ACK & MVY are over half of the markets outlined and combined they barely have 100k passengers a year, and B6 doesn't even their fly there year-round!!!

Image
Image

If B6+AA's alliance is a plot to drive up fares in certain markets, I sure hope they could do a lot better than "dominating" 32% of the "massive" market of San Juan to Albuquerque.

I for one am very glad the DOJ is looking out for those 0.342 people who are flying Nantucket to Portland each day, I certainly wouldn't want their prices to potentially go up. Even if it might be at the expense of 1000s of people per day elsewhere seeing a decrease in prices. *sarcasm off*
 
MohawkWeekend
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Sat Sep 25, 2021 5:08 pm

That is a good recap. It points out why Warren Buffett swore off investing in airlines until they became oligopolies .

Here is why IMO history may be going to repeat itself. In the 2000's once one airline filed bankruptcy and found bankers to fund operations, it put every other airline behind the 8 ball. Pretty hard to compete when the next guys isn't paying all his debt and dumping his pension liabilities. Cut some wages too. Pretty much all the airlines save SW and a few of the ULCC's are now loaded with debt. Operating costs especially wages and the cost of employee benefits have gone up a lot. And unfunded airline pension liabilities are large.

Which gets back to the Government taking a stricter negative view of consolidation. The current model of airlines being "too big to fail" IMO can be answered by this - if B6 and AS quit flying tomorrow, the country would be ok. If UA and AA did we wouldn't. The Country should not be in that position.
 
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diverdave
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Sat Sep 25, 2021 6:47 pm

jfklganyc wrote:
Then lets break up United at EWR right?

Because they are well over 60 percent.

If you’re using for percentages to justify DOJ action, the DOJ must break up UA at EWR as well.


In response to your demands to break up UA at Newark, we could start with the fact nobody is being broken up. Not UA, not DL, not WN, not AA, and not B6.

Nor has anybody asked for UA at EWR to be broken up. What is being reviewed is a partnership that IMO should not have been allowed.

jfklganyc wrote:
How else is B6 supposed to compete with DL and UA in NY?


"How else"? I don't understand your point as B6 already does compete with DL and UA in NY, and in fact seems fairly prosperous.

Again, DoT has allowed the world's largest airline to partner up with the largest carrier at SEA, BOS, and JFK. The big four US airlines are dominant enough as it is, and hopefully this administration will not allow them to grow by acquisition or partnerships.

David
 
trueblew
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Sat Sep 25, 2021 7:17 pm

superjeff wrote:
In the 2000's, you have every one of the legacies filing bankruptcy - EVERY one. And, please understand, a Chapter 11 bankruptcy actually usually totally wipes out the shareholders of these publicly held companies. They are not something you dive into willy nilly.


Just as a point of correction, not every legacy has filed bankruptcy in the 2000s. Alaska and Hawaiian are two of the remaining five legacies which have not to my knowledge gone through reorganization this century.
 
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Polot
Posts: 12175
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Sat Sep 25, 2021 7:30 pm

trueblew wrote:
superjeff wrote:
In the 2000's, you have every one of the legacies filing bankruptcy - EVERY one. And, please understand, a Chapter 11 bankruptcy actually usually totally wipes out the shareholders of these publicly held companies. They are not something you dive into willy nilly.


Just as a point of correction, not every legacy has filed bankruptcy in the 2000s. Alaska and Hawaiian are two of the remaining five legacies which have not to my knowledge gone through reorganization this century.

HA was in chapter 11 bankruptcy from May 2003-spring 2005.
 
MohawkWeekend
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Sat Sep 25, 2021 7:38 pm

By 2000, SW might not have been a legacy but they were pretty big.

When researching that I came across a interesting website that has an animated chart of US airlines size by year. Someone did alot of work.
https://americanbusinesshistory.org/ame ... ed-charts/
 
trueblew
Posts: 298
Joined: Thu Nov 15, 2018 10:16 pm

Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Sat Sep 25, 2021 7:57 pm

Polot wrote:
trueblew wrote:
superjeff wrote:
In the 2000's, you have every one of the legacies filing bankruptcy - EVERY one. And, please understand, a Chapter 11 bankruptcy actually usually totally wipes out the shareholders of these publicly held companies. They are not something you dive into willy nilly.


Just as a point of correction, not every legacy has filed bankruptcy in the 2000s. Alaska and Hawaiian are two of the remaining five legacies which have not to my knowledge gone through reorganization this century.

HA was in chapter 11 bankruptcy from May 2003-spring 2005.


Thanks for the correction. I used https://en.wikipedia.org/wiki/List_of_airline_bankruptcies_in_the_United_States to fact check before my post so now I'm doubting myself regarding Alaska.
 
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Polot
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Sat Sep 25, 2021 8:11 pm

trueblew wrote:
Polot wrote:
trueblew wrote:

Just as a point of correction, not every legacy has filed bankruptcy in the 2000s. Alaska and Hawaiian are two of the remaining five legacies which have not to my knowledge gone through reorganization this century.

HA was in chapter 11 bankruptcy from May 2003-spring 2005.


Thanks for the correction. I used https://en.wikipedia.org/wiki/List_of_airline_bankruptcies_in_the_United_States to fact check before my post so now I'm doubting myself regarding Alaska.

AS has never gone through bankruptcy, although they got pretty close in the 70s.
 
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jfklganyc
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Sat Sep 25, 2021 8:31 pm

diverdave wrote:
jfklganyc wrote:
Then lets break up United at EWR right?

Because they are well over 60 percent.

If you’re using for percentages to justify DOJ action, the DOJ must break up UA at EWR as well.


In response to your demands to break up UA at Newark, we could start with the fact nobody is being broken up. Not UA, not DL, not WN, not AA, and not B6.

Nor has anybody asked for UA at EWR to be broken up. What is being reviewed is a partnership that IMO should not have been allowed.

jfklganyc wrote:
How else is B6 supposed to compete with DL and UA in NY?


"How else"? I don't understand your point as B6 already does compete with DL and UA in NY, and in fact seems fairly prosperous.

Again, DoT has allowed the world's largest airline to partner up with the largest carrier at SEA, BOS, and JFK. The big four US airlines are dominant enough as it is, and hopefully this administration will not allow them to grow by acquisition or partnerships.

David


They do not compete with DL and UA in NY.

They are a niche LCC operation that can never compete for corporate travelers in NY because they could never acquire the amount of slots held by United or Delta. They could never offer 50 flights a day to Europe or LGA shuttles to ORD or DFW. They could never give United a run on SFO or LAX out of EWR as the gates and landing times aren’t available.

They are permanently relegated to a lower tier status in the NYC market due to restricted entry by the government agency that controls the airports. So, they have partnered their slots with another lower tier partner and they achieve the breadth and scope needed to compete with DL and UA.

This partnership is really about NYC. If the partnership isnt allowed to continue, why should UA continue to control 60+percent of the traffic at a NYC airport? Because they always had it? This action shows that all prior approvals are under review and subject to reversal.

Break up the UA hub.

Review and challenge the Delta/US Air slot swap.

After all, we are now erasing established approval in the name of market share parity and connection pricing.

Let’s review the whole limited entry NYC market. Level the playing field.
 
tphuang
Posts: 6637
Joined: Tue Mar 14, 2017 2:04 pm

Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Sun Sep 26, 2021 11:27 am

Midwestindy wrote:
sxf24 wrote:
tphuang wrote:

Not really, you made the accusation that B6 didn't chose to build a more diverse network at JFK, when the reality is that it a has very diverse network. As diverse as you can get from JFK for 170 slots. Now, you are changing the argument.

Also, you have to actually show this merger is producing fewer competitors. Again, they were only competitors to each on LGA-BOS, JFK-LAX/SFO/PHX/AUS/LAS pre-COVID. Even if you go by the argument that those routes are seeing 1 fewer competitor (which is a hard one to make given lack of coordination on pricing on these routes). And if you take a look at JFK-LAX, they don't codeshare all their flights, since they have a lot of duplicating times n their flight. Even if you accept that premise, the 2 airlines have now added LGA-DEN/CHS/IAH/MCI/MSY/JAX/SAV/SRQ/PWM and JFK-DEL/TLV/SCL/MDE/CLO/MCI/MKE/PVR/YVR + about 8 or 9 EWR routes that neither served pre-COVID. On top of that, B6 has added service to AA's MIA hub and LHR as further competition that goes against this theory "virtual merger". The J prices on JFK-LHR market has already seen dramatic downward affect.

The benefits of all these new markets far outweights from additional competition far outweighs the few routes that might see 1 less competition. Again, we haven't seen any abnormal capacity reduction on those JFK transcon markets from either airline.

If you want to make the argument that NEA is leading to less competition, you have to prove it. It's hard to prove because we are actually seeing far more competition.


It’s also intellectually false to only look at nonstop markets. AA operates competing connecting hubs and the DOJ argues the NEA diminishes motivation to offer lower fares on itineraries connecting in PHL, CLT, etc.


You might want to look a little more closely at the DOJ's argument about that:
https://drive.google.com/file/d/1Qg1AuX ... _OUmp/view

What are these 98 connecting itineraries that would be most impacted, you may ask? Well....the DOJ lays them out, and well....let's just say they aren't large connecting markets by any stretch of the imagination.

ACK & MVY are over half of the markets outlined and combined they barely have 100k passengers a year, and B6 doesn't even their fly there year-round!!!

If B6+AA's alliance is a plot to drive up fares in certain markets, I sure hope they could do a lot better than "dominating" 32% of the "massive" market of San Juan to Albuquerque.

I for one am very glad the DOJ is looking out for those 0.342 people who are flying Nantucket to Portland each day, I certainly wouldn't want their prices to potentially go up. Even if it might be at the expense of 1000s of people per day elsewhere seeing a decrease in prices. *sarcasm off*


This kind of stuff is truly embarrassing for DOJ. Everyone knows that B6 does very little connection traffic out of JFK. ACK/MVY aren't even served outside of summer month.

This suit will probably go on for a while and DOJ's suit is going to look worse, because AA/B6 have talked about adding a lot more connection codeshares. I'm sure this item will speed that up. Just all the new connections to DEL/TLV/ATH alone will provide a lot of additional competition on 1-stops. And B6 can also make the argument that the additional slots allow them to offer a lot of new 1-stop connection to LHR/LGW through JFK, which is not part of NEA.

sxf24 wrote:
I would strenuously disagree that B6 is unable to diversify its JFK or BOS network. They’ve choose depth, not breadth. They also carry more domestic passengers than any other airline at those airports, which makes it hard to argue they’re in a disadvantaged position.

What are you talking about? In their November schedule, they are serving about 80 markets with 170 flights a day out of JFK. That's barely 2 flights a day per market. That's about as efficient usage of JFK slots as it gets. They are not wasting any slots on obvious within perimeter squatting flights like AA & DL. How do they add more markets without additional slots?

jfklganyc wrote:
They do not compete with DL and UA in NY.

They are a niche LCC operation that can never compete for corporate travelers in NY because they could never acquire the amount of slots held by United or Delta. They could never offer 50 flights a day to Europe or LGA shuttles to ORD or DFW. They could never give United a run on SFO or LAX out of EWR as the gates and landing times aren’t available.

They are permanently relegated to a lower tier status in the NYC market due to restricted entry by the government agency that controls the airports. So, they have partnered their slots with another lower tier partner and they achieve the breadth and scope needed to compete with DL and UA.

This partnership is really about NYC. If the partnership isnt allowed to continue, why should UA continue to control 60+percent of the traffic at a NYC airport? Because they always had it? This action shows that all prior approvals are under review and subject to reversal.

Break up the UA hub.

Review and challenge the Delta/US Air slot swap.

After all, we are now erasing established approval in the name of market share parity and connection pricing.

Let’s review the whole limited entry NYC market. Level the playing field.


Exactly, people don't seem to realize how monopolized NYC market is by the big 3. B6 was only able to achieve 3rd place in market share due to AA wasting 1/3 of its slots on 44/50 seaters to small markets. It had already expanded as much as it could.

At the end of they day, if DOJ said no schedule coordination at some large BOS markets or BOS as a whole, I'm sure AA/B6 will still agree to do it. 1 single large competitor will provide far more competition across the board vs 2 medium sized players.

DL/US slot swap was very anti-competitive. Review that swap and force DL and AA divest more slots at LGA and DCA.

For all the talk about trying to increase competition, why only issue 8 pairs of runway times at EWR after NK had already won the lawsuit? Why not add 30?
 
sxf24
Posts: 1285
Joined: Wed Aug 15, 2007 12:22 pm

Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Sun Sep 26, 2021 2:05 pm

jfklganyc wrote:
diverdave wrote:
jfklganyc wrote:
Then lets break up United at EWR right?

Because they are well over 60 percent.

If you’re using for percentages to justify DOJ action, the DOJ must break up UA at EWR as well.


In response to your demands to break up UA at Newark, we could start with the fact nobody is being broken up. Not UA, not DL, not WN, not AA, and not B6.

Nor has anybody asked for UA at EWR to be broken up. What is being reviewed is a partnership that IMO should not have been allowed.

jfklganyc wrote:
How else is B6 supposed to compete with DL and UA in NY?


"How else"? I don't understand your point as B6 already does compete with DL and UA in NY, and in fact seems fairly prosperous.

Again, DoT has allowed the world's largest airline to partner up with the largest carrier at SEA, BOS, and JFK. The big four US airlines are dominant enough as it is, and hopefully this administration will not allow them to grow by acquisition or partnerships.

David


They do not compete with DL and UA in NY.

They are a niche LCC operation that can never compete for corporate travelers in NY because they could never acquire the amount of slots held by United or Delta. They could never offer 50 flights a day to Europe or LGA shuttles to ORD or DFW. They could never give United a run on SFO or LAX out of EWR as the gates and landing times aren’t available.

They are permanently relegated to a lower tier status in the NYC market due to restricted entry by the government agency that controls the airports. So, they have partnered their slots with another lower tier partner and they achieve the breadth and scope needed to compete with DL and UA.

This partnership is really about NYC. If the partnership isnt allowed to continue, why should UA continue to control 60+percent of the traffic at a NYC airport? Because they always had it? This action shows that all prior approvals are under review and subject to reversal.

Break up the UA hub.

Review and challenge the Delta/US Air slot swap.

After all, we are now erasing established approval in the name of market share parity and connection pricing.

Let’s review the whole limited entry NYC market. Level the playing field.


The DOJ's action is not about leveling the playing field, it's about providing the greatest benefit to consumers. In the DOJ's opinion, having fewer large airlines is not beneficial to consumers.

This focus on B6 really skews your view on reality. Slot swaps, sales and leases are acceptable and the DOJ suggested that would have been a more appropriate path for AA and B6.

tphuang wrote:
Midwestindy wrote:
sxf24 wrote:

It’s also intellectually false to only look at nonstop markets. AA operates competing connecting hubs and the DOJ argues the NEA diminishes motivation to offer lower fares on itineraries connecting in PHL, CLT, etc.


You might want to look a little more closely at the DOJ's argument about that:
https://drive.google.com/file/d/1Qg1AuX ... _OUmp/view

What are these 98 connecting itineraries that would be most impacted, you may ask? Well....the DOJ lays them out, and well....let's just say they aren't large connecting markets by any stretch of the imagination.

ACK & MVY are over half of the markets outlined and combined they barely have 100k passengers a year, and B6 doesn't even their fly there year-round!!!

If B6+AA's alliance is a plot to drive up fares in certain markets, I sure hope they could do a lot better than "dominating" 32% of the "massive" market of San Juan to Albuquerque.

I for one am very glad the DOJ is looking out for those 0.342 people who are flying Nantucket to Portland each day, I certainly wouldn't want their prices to potentially go up. Even if it might be at the expense of 1000s of people per day elsewhere seeing a decrease in prices. *sarcasm off*


This kind of stuff is truly embarrassing for DOJ. Everyone knows that B6 does very little connection traffic out of JFK. ACK/MVY aren't even served outside of summer month.

This suit will probably go on for a while and DOJ's suit is going to look worse, because AA/B6 have talked about adding a lot more connection codeshares. I'm sure this item will speed that up. Just all the new connections to DEL/TLV/ATH alone will provide a lot of additional competition on 1-stops. And B6 can also make the argument that the additional slots allow them to offer a lot of new 1-stop connection to LHR/LGW through JFK, which is not part of NEA.


I'm confused about the shifting messaging. B6 doesn't offer connections but now it will? Providing connections on highly-competitive international markets is beneficial to consumers?

tphuang wrote:
sxf24 wrote:
I would strenuously disagree that B6 is unable to diversify its JFK or BOS network. They’ve choose depth, not breadth. They also carry more domestic passengers than any other airline at those airports, which makes it hard to argue they’re in a disadvantaged position.

What are you talking about? In their November schedule, they are serving about 80 markets with 170 flights a day out of JFK. That's barely 2 flights a day per market. That's about as efficient usage of JFK slots as it gets. They are not wasting any slots on obvious within perimeter squatting flights like AA & DL. How do they add more markets without additional slots?


B6 is the second largest slot holder at JFK by a substantial margin. They are either a well-run airline with a competitive network, or they're not.

tphuang wrote:
jfklganyc wrote:
They do not compete with DL and UA in NY.

They are a niche LCC operation that can never compete for corporate travelers in NY because they could never acquire the amount of slots held by United or Delta. They could never offer 50 flights a day to Europe or LGA shuttles to ORD or DFW. They could never give United a run on SFO or LAX out of EWR as the gates and landing times aren’t available.

They are permanently relegated to a lower tier status in the NYC market due to restricted entry by the government agency that controls the airports. So, they have partnered their slots with another lower tier partner and they achieve the breadth and scope needed to compete with DL and UA.

This partnership is really about NYC. If the partnership isnt allowed to continue, why should UA continue to control 60+percent of the traffic at a NYC airport? Because they always had it? This action shows that all prior approvals are under review and subject to reversal.

Break up the UA hub.

Review and challenge the Delta/US Air slot swap.

After all, we are now erasing established approval in the name of market share parity and connection pricing.

Let’s review the whole limited entry NYC market. Level the playing field.


Exactly, people don't seem to realize how monopolized NYC market is by the big 3. B6 was only able to achieve 3rd place in market share due to AA wasting 1/3 of its slots on 44/50 seaters to small markets. It had already expanded as much as it could.

At the end of they day, if DOJ said no schedule coordination at some large BOS markets or BOS as a whole, I'm sure AA/B6 will still agree to do it. 1 single large competitor will provide far more competition across the board vs 2 medium sized players.

DL/US slot swap was very anti-competitive. Review that swap and force DL and AA divest more slots at LGA and DCA.

For all the talk about trying to increase competition, why only issue 8 pairs of runway times at EWR after NK had already won the lawsuit? Why not add 30?


The DOJ said in the complaint that a slot transfer (sale or lease) would be permissible as AA would not have influence on B6's network or pricing, thus providing more benefit to consumers.

While I know that maximizing asset utilization with little buffer is a core part of B6's operations, I think the US government would generally believe that creating more slots/slot equivalents at EWR or another constrained airport to help reduce prices would be a net-negative for consumers.
 
splitterz
Posts: 203
Joined: Sat Apr 09, 2011 2:40 am

Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Sun Sep 26, 2021 2:17 pm

jfklganyc wrote:
diverdave wrote:
jfklganyc wrote:
Then lets break up United at EWR right?

Because they are well over 60 percent.

If you’re using for percentages to justify DOJ action, the DOJ must break up UA at EWR as well.


In response to your demands to break up UA at Newark, we could start with the fact nobody is being broken up. Not UA, not DL, not WN, not AA, and not B6.

Nor has anybody asked for UA at EWR to be broken up. What is being reviewed is a partnership that IMO should not have been allowed.

jfklganyc wrote:
How else is B6 supposed to compete with DL and UA in NY?


"How else"? I don't understand your point as B6 already does compete with DL and UA in NY, and in fact seems fairly prosperous.

Again, DoT has allowed the world's largest airline to partner up with the largest carrier at SEA, BOS, and JFK. The big four US airlines are dominant enough as it is, and hopefully this administration will not allow them to grow by acquisition or partnerships.

David


They do not compete with DL and UA in NY.

They are a niche LCC operation that can never compete for corporate travelers in NY because they could never acquire the amount of slots held by United or Delta. They could never offer 50 flights a day to Europe or LGA shuttles to ORD or DFW. They could never give United a run on SFO or LAX out of EWR as the gates and landing times aren’t available.

They are permanently relegated to a lower tier status in the NYC market due to restricted entry by the government agency that controls the airports. So, they have partnered their slots with another lower tier partner and they achieve the breadth and scope needed to compete with DL and UA.

This partnership is really about NYC. If the partnership isnt allowed to continue, why should UA continue to control 60+percent of the traffic at a NYC airport? Because they always had it? This action shows that all prior approvals are under review and subject to reversal.

Break up the UA hub.

Review and challenge the Delta/US Air slot swap.

After all, we are now erasing established approval in the name of market share parity and connection pricing.

Let’s review the whole limited entry NYC market. Level the playing field.


Your bias is coming through. B6 was and is a market disruptor. Their business model got them where they are at currently and they reached stagnation in some areas. Partnering with AA is an 'easy' out for them to compete more effectively with UA/DL.

By that logic about 60% for UA's EWR hub, why stop there. Break up any fortress hub. What's B6's market share at JFK and BOS? What about other more heavily entrenched airports across the country? MIA for AA?

This alliance is a virtual merger and should be stopped IMO.
 
73X
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Sun Sep 26, 2021 3:01 pm

It’s very hard to argue that B6 doesn’t compete with UA and DL in the NYC market when UAL pulled out of JFK in 2014 Specifically because it couldn’t compete with JetBlue. The Truth is nobody has enough gates/slots to have a fortress hub in NYC. It’s designed that way on purpose. B6 will be just fine without the codeshare and will likely grow in EWR regardless.
 
tphuang
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Mon Sep 27, 2021 12:05 am

sxf24 wrote:
I'm confused about the shifting messaging. B6 doesn't offer connections but now it will? Providing connections on highly-competitive international markets is beneficial to consumers?


When you have 300 flights between B6/AA, there is a lot more connection opportunities than 170 flights. AA has added quite a few international routes which will need feeds.

It's quite well know that pre-COVID, B6 did very little connection at JFK. It was a very O&D focused operations outside of a few short haul routes (BTV/ACK/MVY/SYR/ROC). That's when when you see that DOJ report, the only connections they could find are ACK/MVY.

Please stop pretending that you don't understand the concept that an operation with more flights can also connect more.

tphuang wrote:
sxf24 wrote:
I would strenuously disagree that B6 is unable to diversify its JFK or BOS network. They’ve choose depth, not breadth. They also carry more domestic passengers than any other airline at those airports, which makes it hard to argue they’re in a disadvantaged position.

What are you talking about? In their November schedule, they are serving about 80 markets with 170 flights a day out of JFK. That's barely 2 flights a day per market. That's about as efficient usage of JFK slots as it gets. They are not wasting any slots on obvious within perimeter squatting flights like AA & DL. How do they add more markets without additional slots?


B6 is the second largest slot holder at JFK by a substantial margin. They are either a well-run airline with a competitive network, or they're not.

Again, what are you talking about? You said they chose depth, not breadth. There is just no proof of that. They had a network that made sense for 170 slots a day. It was a profitable network. But if they cna get to well over 200 flights a day and connect to Aa, they will be able to offer a lot more.

More importantly, the issue was always their lack of slots at LGA.

Why do you keep ignoring the fact that LGA is the preferred airport for within perimeter traffic? How many business travelers do you think are flying to ORD out of JFK vs LGA?

The DOJ said in the complaint that a slot transfer (sale or lease) would be permissible as AA would not have influence on B6's network or pricing, thus providing more benefit to consumers.

While I know that maximizing asset utilization with little buffer is a core part of B6's operations, I think the US government would generally believe that creating more slots/slot equivalents at EWR or another constrained airport to help reduce prices would be a net-negative for consumers.


That's nonsense, a viable competitor to UA at EWR would be very positive for consumers. NK/B6 have all been desperate to provide more competition to UA at EWR if they could get their hands on more gates and more runways times during peak hours.

If DOJ favors competition, it should force EWR to make more gates in the new terminal A available for LCCs and more prime time runways times. It should make more gates available to LCCs at LAX. It should make more slots available to LCC/ULCCs at LGA/JFK/DCA. And on the NEA front, it can also request for AA/B6 to give up a couple of gates for other LCCs/ULCCs.

Nothing has been worse for competition than the LGA & DCA slot trade.

And if we want to go further at anti-competitive behaviour, AC/UA JV, IAG/AA JV, DL/KL/AF/VS JV are some of the most anti-competitive JVs that were allowed. At a minimum, these airilines should be forced to give up more slots for competition at airports like LHR/AMS.
 
tphuang
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Mon Sep 27, 2021 12:09 am

73X wrote:
It’s very hard to argue that B6 doesn’t compete with UA and DL in the NYC market when UAL pulled out of JFK in 2014 Specifically because it couldn’t compete with JetBlue. The Truth is nobody has enough gates/slots to have a fortress hub in NYC. It’s designed that way on purpose. B6 will be just fine without the codeshare and will likely grow in EWR regardless.


EWR is clearly a fortress hub for UA.

In NYC market, you cannot compete for large corporate contracts without LGA slots. B6 has a very large and competitive leisure network out of JFK. It needs AA partnership and LGA slots to compete for corporate contracts. That should be obvious.

When people say that B6 can't compete with UA/DL in NYC market, they are talking about across the whole spectrum. B6 can compete against legacy airlines in BOS, because it does not have the same LGA slot constraint. That's why it did far better with corporate contracts out of Boston than NYC during pre-COVID time.

The NEA should solve that issue by making both B6 & AA more competitive in NYC.
 
sxf24
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Mon Sep 27, 2021 12:27 am

tphuang wrote:
sxf24 wrote:
I'm confused about the shifting messaging. B6 doesn't offer connections but now it will? Providing connections on highly-competitive international markets is beneficial to consumers?


When you have 300 flights between B6/AA, there is a lot more connection opportunities than 170 flights. AA has added quite a few international routes which will need feeds.

It's quite well know that pre-COVID, B6 did very little connection at JFK. It was a very O&D focused operations outside of a few short haul routes (BTV/ACK/MVY/SYR/ROC). That's when when you see that DOJ report, the only connections they could find are ACK/MVY.

Please stop pretending that you don't understand the concept that an operation with more flights can also connect more.

tphuang wrote:
What are you talking about? In their November schedule, they are serving about 80 markets with 170 flights a day out of JFK. That's barely 2 flights a day per market. That's about as efficient usage of JFK slots as it gets. They are not wasting any slots on obvious within perimeter squatting flights like AA & DL. How do they add more markets without additional slots?


B6 is the second largest slot holder at JFK by a substantial margin. They are either a well-run airline with a competitive network, or they're not.

Again, what are you talking about? You said they chose depth, not breadth. There is just no proof of that. They had a network that made sense for 170 slots a day. It was a profitable network. But if they cna get to well over 200 flights a day and connect to Aa, they will be able to offer a lot more.

More importantly, the issue was always their lack of slots at LGA.

Why do you keep ignoring the fact that LGA is the preferred airport for within perimeter traffic? How many business travelers do you think are flying to ORD out of JFK vs LGA?

The DOJ said in the complaint that a slot transfer (sale or lease) would be permissible as AA would not have influence on B6's network or pricing, thus providing more benefit to consumers.

While I know that maximizing asset utilization with little buffer is a core part of B6's operations, I think the US government would generally believe that creating more slots/slot equivalents at EWR or another constrained airport to help reduce prices would be a net-negative for consumers.


That's nonsense, a viable competitor to UA at EWR would be very positive for consumers. NK/B6 have all been desperate to provide more competition to UA at EWR if they could get their hands on more gates and more runways times during peak hours.

If DOJ favors competition, it should force EWR to make more gates in the new terminal A available for LCCs and more prime time runways times. It should make more gates available to LCCs at LAX. It should make more slots available to LCC/ULCCs at LGA/JFK/DCA. And on the NEA front, it can also request for AA/B6 to give up a couple of gates for other LCCs/ULCCs.

Nothing has been worse for competition than the LGA & DCA slot trade.

And if we want to go further at anti-competitive behaviour, AC/UA JV, IAG/AA JV, DL/KL/AF/VS JV are some of the most anti-competitive JVs that were allowed. At a minimum, these airilines should be forced to give up more slots for competition at airports like LHR/AMS.


Maybe the DoJ should dissolve every other airline and give the assets to B6. That’d really allow them to do more.
 
73X
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Mon Sep 27, 2021 2:54 am

tphuang wrote:
73X wrote:
It’s very hard to argue that B6 doesn’t compete with UA and DL in the NYC market when UAL pulled out of JFK in 2014 Specifically because it couldn’t compete with JetBlue. The Truth is nobody has enough gates/slots to have a fortress hub in NYC. It’s designed that way on purpose. B6 will be just fine without the codeshare and will likely grow in EWR regardless.


EWR is clearly a fortress hub for UA.

In NYC market, you cannot compete for large corporate contracts without LGA slots. B6 has a very large and competitive leisure network out of JFK. It needs AA partnership and LGA slots to compete for corporate contracts. That should be obvious.

When people say that B6 can't compete with UA/DL in NYC market, they are talking about across the whole spectrum. B6 can compete against legacy airlines in BOS, because it does not have the same LGA slot constraint. That's why it did far better with corporate contracts out of Boston than NYC during pre-COVID time.

The NEA should solve that issue by making both B6 & AA more competitive in NYC.


A fortress hub is more than 70% of the market. UAL has never come close to that. During the pandemic JB more than doubled its flights from EWR and added a pilot base. LGA slots are important but they are not the end all be all in NYC. If so, AAL wouldn’t be struggling as much as they are. JB even has more gates in LGA than United does. I just don’t see the argument that this is really necessary for them to thrive in NYC.
 
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Midwestindy
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Mon Sep 27, 2021 4:10 am

73X wrote:
tphuang wrote:
73X wrote:
It’s very hard to argue that B6 doesn’t compete with UA and DL in the NYC market when UAL pulled out of JFK in 2014 Specifically because it couldn’t compete with JetBlue. The Truth is nobody has enough gates/slots to have a fortress hub in NYC. It’s designed that way on purpose. B6 will be just fine without the codeshare and will likely grow in EWR regardless.


EWR is clearly a fortress hub for UA.

In NYC market, you cannot compete for large corporate contracts without LGA slots. B6 has a very large and competitive leisure network out of JFK. It needs AA partnership and LGA slots to compete for corporate contracts. That should be obvious.

When people say that B6 can't compete with UA/DL in NYC market, they are talking about across the whole spectrum. B6 can compete against legacy airlines in BOS, because it does not have the same LGA slot constraint. That's why it did far better with corporate contracts out of Boston than NYC during pre-COVID time.

The NEA should solve that issue by making both B6 & AA more competitive in NYC.


A fortress hub is more than 70% of the market. UAL has never come close to that. During the pandemic JB more than doubled its flights from EWR and added a pilot base. LGA slots are important but they are not the end all be all in NYC. If so, AAL wouldn’t be struggling as much as they are. JB even has more gates in LGA than United does. I just don’t see the argument that this is really necessary for them to thrive in NYC.


I disagree with tphuang a lot, but he is right here:

Any argument that EWR isn't a fortress hub is a bit disingenuous, they controlled 2/3rds of traffic pre-covid, which I'd argue is pretty darn close to 70%.

There are dozens of articles referring to EWR as such, even if it might not fit the "technical" description.

"Newark Airport is United's fortress of solitude"
https://www.forbes.com/sites/michaelgol ... 6ca166976b

"United Airlines is facing competition from another discount airline at its fortress hub at Newark Liberty International"
https://www.northjersey.com/story/news/ ... /94876094/

"They had retreated to their fortress hub at Newark, where they operated with higher margins than New York competitors"
https://viewfromthewing.com/united-airl ... next-year/
 
73X
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Mon Sep 27, 2021 4:28 am

Semantics. ATL is a fortress hub, CLT is a fortress hub. EWR? Not even close. It’s not about UAL. JB is making the argument that they can’t grow without this agreement despite the fact that they have been growing the whole time. They nearly tripled their flights out of EWR during the pandemic.
 
klwright69
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Mon Sep 27, 2021 12:04 pm

I don't know why there is any interest in UA at EWR in this discussion. UA is small at LGA and JFK so it balances out. UA already was already scrutinized when it merged with CO. UA already gave up some footprint at EWR just to get their merger approved. That ship has sailed. Everyone knows this. There was no slot swap. CO merged and is gone and that can't be undone. Some people in this forum love to remind us that EWR isn't in NYC anyway. when it's convenient. UA at EWR is a hub but not a fortress at this point. B6 has a footprint there now as others keep saying correctly.
 
MohawkWeekend
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Mon Sep 27, 2021 12:14 pm

klwright69 wrote:
I don't know why there is any interest in UA at EWR in this discussion. UA is small at LGA and JFK so it balances out. UA already was already scrutinized when it merged with CO. UA already gave up some footprint at EWR just to get their merger approved. That ship has sailed. Everyone knows this. There was no slot swap. CO merged and is gone and that can't be undone. Some people in this forum love to remind us that EWR isn't in NYC anyway. when it's convenient. UA at EWR is a hub but not a fortress at this point. B6 has a footprint there now as others keep saying correctly.



The DOJ pretty much rubber stamped all mergers from 1990 to 2015. There were several Senators who were against this and all the other consolidation. And now they have the Presidents ear. The won't undo the mergers but you are seeing a push back now. And IMO the majors don't have the leverage they had before - they are beholden to the Government for the bailout and will need massive government aid to de carbonize.
 
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STT757
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Mon Sep 27, 2021 12:18 pm

With regards to United at Newark, that was built organically by PeoplExpress and Continental during a time when there were no slots and anyone else could have done similar. United's NY area presence was small when they merged with Continental, but even still they voluntarily (not compelled) divested all of United's EWR slots to Southwest. The merger did not contribute to any United growth or competitive advantage in the market.

B6 can divest all of their LaGuardia slots, or perhaps American divest all of their Kennedy slots. They could even lease the slots, that way if the partnership were to dissolve they could pull their slots back.
 
slcdeltarumd11
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Mon Sep 27, 2021 12:20 pm

This is also 2019 data. Year to date JetBlue is way down in Burlington vermont BTV. A city that shows on they list alot. They used to fly 3-4 times a day to jfk. Since covid it's been once daily emb190. Their seats and percentage in those markets is going to be way down in 2020 or 2021.
 
TigerFlyer
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Mon Sep 27, 2021 1:31 pm

DOJ's case seems pretty weak. It consists of a bunch of hyperbole and stale quotes from Doug Parker favoring consolidation (at a time when it was needed) and is very weak on facts and analysis. The definition of monopoly behavior is to use market power to reduce output and raise fares. That is not what's happening. B6 and AA have substantially increased capacity and nonstop service points out of NYC and BOS by repurposing small Eagle jets with B6 mainline. That's good, not bad for consumers. Moreover, the commitment to meet capacity growth targets is enshrined in the DOT settlement agreement more than a year ago. If DOJ had objections, it should have spoken up then. They should move along. These are not the droids they're looking for.

If DOJ has specific concerns, it should address them through less restrictive means like carve-outs for transcon and TATL mint routes that compete with AA. A misguided and unsubstantiated frontal assault on the alliance is in no one's interests including the carriers, the traveling public, and the communities that have benefited from new and better service.
 
flyboy2181
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Mon Sep 27, 2021 1:57 pm

I don’t believe Delta or United would want this merger to stop. Higher fares and better capacity discipline benefits all airlines.

Also, AA and JB knew would be investigated after the announcement. So of course they loaded up routes and cut fares. Remember everything right now is being subsidized by the taxpayers. How many airline CEOs say they aren’t going to close a base during a merger only to close a base after the merger.
 
superjeff
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Mon Sep 27, 2021 2:39 pm

flyboy2181 wrote:
I don’t believe Delta or United would want this merger to stop. Higher fares and better capacity discipline benefits all airlines.

Also, AA and JB knew would be investigated after the announcement. So of course they loaded up routes and cut fares. Remember everything right now is being subsidized by the taxpayers. How many airline CEOs say they aren’t going to close a base during a merger only to close a base after the merger.



this is NOT a merger. It is an alliance. It gives AA and B6 better access to a greater network of routes without the expense of building one over time. It may or may not work out and it may or may not last - there was a limited relationship between AA and B6 in the past, and before the current arrangement, also between AA and AS.

I personally think that the airlines (and fares) should be subject to regulation, but I also realize that horse got out or the barn in 1978 here in the U.S. This arrangement makes AA more competitive with DL an d UA in the Northeast, and makes B6 more competitive with DL and UA in the rest of the country.
 
alfa164
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Mon Sep 27, 2021 5:13 pm

tphuang wrote:
This kind of stuff is truly embarrassing for DOJ. Everyone knows that B6 does very little connection traffic out of JFK. ACK/MVY aren't even served outside of summer month.


That is by their own choice; there is nothing that prevents them from using JFK as a connecting point. They apparently believe BOS is better for that role, but the fact that they made that decision themselves is no reason to whine about JFK having little such traffic.

tphuang wrote:
sxf24 wrote:
I would strenuously disagree that B6 is unable to diversify its JFK or BOS network. They’ve choose depth, not breadth. They also carry more domestic passengers than any other airline at those airports, which makes it hard to argue they’re in a disadvantaged position.

What are you talking about? In their November schedule, they are serving about 80 markets with 170 flights a day out of JFK. That's barely 2 flights a day per market. That's about as efficient usage of JFK slots as it gets. They are not wasting any slots on obvious within perimeter squatting flights like AA & DL. How do they add more markets without additional slots?


If AA is "within perimeter squatting", why should they be rewarded with a new way to virtually add to their portfolio? Let them use their own slots more efficiently - if, indeed, "AA" and "efficiently" can be used in the same sentence - rather than creating an virtual partnership with the airline who flies the most domestic flights out of JFK.


73X wrote:
It’s very hard to argue that B6 doesn’t compete with UA and DL in the NYC market when UAL pulled out of JFK in 2014 Specifically because it couldn’t compete with JetBlue. The Truth is nobody has enough gates/slots to have a fortress hub in NYC. It’s designed that way on purpose. B6 will be just fine without the codeshare and will likely grow in EWR regardless.


As they are doing now.


tphuang wrote:
EWR is clearly a fortress hub for UA.


If EWR is a "fortress hub", it is only because other airlines have decided they want it that way. As your own beloved B6 has shown, there is no barrier to increasing flights at EWR, so the only reason another airline can't succeed there must be based on that airlines inferior ability to sell itself to potential customers.


trueblew wrote:
I don't see this codeshare agreement raising fares so much as affecting purchasing decisions by travelers in BOS/NYC.


This is not just a "codeshare" agreement; this proposal includes revenue sharing - a first, so far as I know, in the domestic market - which offers every incentive to those carriers to raise fares.
 
Dieuwer
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Mon Sep 27, 2021 5:29 pm

So, if DOJ wins then AA and B6 will demand ALL joint ventures involving US-based airliners be dissolved? I see a SCOTUS fight coming...
 
73X
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Mon Sep 27, 2021 5:41 pm

[*]
Dieuwer wrote:
So, if DOJ wins then AA and B6 will demand ALL joint ventures involving US-based airliners be dissolved? I see a SCOTUS fight coming...


These things never get that far. DOJ is looking for a concession. JB and AA will give up some slots at JFK and the agreement will remain.
 
HunterATL
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Mon Sep 27, 2021 6:48 pm

Dieuwer wrote:
So, if DOJ wins then AA and B6 will demand ALL joint ventures involving US-based airliners be dissolved? I see a SCOTUS fight coming...


No, they can't demand anything.

Congress sets public policy, and Congress specifically decided that joint ventures between U.S. carriers and foreign airlines could be exempt from compliance with the Sherman and Clayton Acts if certain conditions are met pursuant to 49 U.S.C. §§ 41308-41309. DOT has sole jurisdiction to determine if a proposed joint venture meets the requirements for immunization, and if it so grants, the joint venture is no longer subject to compliance with American antitrust laws. Further, in certain circumstances, DOT is required to grant immunity without discretion.

An immunized international joint venture by definition cannot violate the Sherman or Clayton Acts, and, accordingly, DOJ has nothing to investigate and no statutory scheme to enforce. Congress, however, has refused to grant DOT or DOJ the authority to exempt domestic alliances from compliance with the antitrust laws. Present Congressional policy is to subject all domestic alliances and joint ventures to the antitrust laws with two different enforcement mechanisms: one through application and review by DOT of the agreement and one through judicial enforcement by DOJ.

With respect to international jvs, the most AA and B6 could do is ask for a re-review of the grants of antitrust immunity by DOT. However, nothing in the statutory provisions specifically permits re-review once immunity has been granted. This is one reason why DOT has begun requiring applicants to agree to annual reviews of their joint venture with expiration dates for some grants of immunity. Whether these conditions are permissible under Congress's statutory scheme has never been litigated.

Moreover, immunity from antitrust laws for international joint ventures is specifically required by many foreign countries as a prerequisite for an open-skies agreement with the United States. For example, Japan demanded and received assurances that ANA and JAL would be permitted to have joint ventures with U.S. carriers if Japan agreed to an open-skies relationship and the opening of Haneda to U.S. airlines. The same was true of the bilaterals with the Netherlands and France before the present EU agreement, and the EU specifically required the U.S. to agree to continue to permit joint ventures with European carriers. The UK required the same as part of its support for the EU bilateral and the new tripartite agreement between the U.S., EU, and UK. If DOT were to re-review and reject the present joint ventures with European and Japanese carriers or to alter them materially, for example, it would destabilize the present bilaterals and could easily result in withdrawal of those agreements by foreign governments.

Similarly, DOT has specifically stated repeatedly that present U.S. policy is to reward countries that agree to open skies with joint ventures for those nations' airlines. In other words, jvs are used by the Department of State and DOT as an incentive for open-skies agreements. The U.S. is not about to change that policy knowing full well that U.S. carriers' access to foreign markets is a negotiated privilege, not some inalienable right, which foreign governments could revoke at any time.

In summary, Congress has specifically enacted two different public policies with two different statutory schemes: one for domestic alliances which does not permit or allow antitrust immunity and one for international joint ventures which does permit, indeed require under certain circumstances, the grant of immunity from the Sherman and Clayton Acts. DOJ's lawsuit does not signal a change in Congressional policy, merely a determination by one agency that it identified an antitrust violation and that it has the jurisdiction to enforce judicially the antitrust laws with respect to that violation.
 
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qf789
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Tue Sep 28, 2021 3:27 am

Please just discuss the topic and leave the personal comments towards other users and the flamebait out of the discussion
 
MIflyer12
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Tue Sep 28, 2021 1:15 pm

tphuang wrote:
EWR is clearly a fortress hub for UA.


No, it isn't, because passengers can readily find other carriers and comparable set of non-stop destinations (more, actually) at JFK and LGA. UA may lead Newark but it doesn't dominate NYC. For 2019, UA carried 23.6% of NYC traffic -- and DL carried 23.6%. See the PANYNJ data.

https://www.panynj.gov/airports/en/stat ... ities.html

tphuang wrote:
Exactly, people don't seem to realize how monopolized NYC market is by the big 3.


It was just under 60.0% for 2019 - about the same as nationwide. Same PANYNJ data.
 
SESGDL
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Tue Sep 28, 2021 3:02 pm

tphuang wrote:
Midwestindy wrote:
sxf24 wrote:

It’s also intellectually false to only look at nonstop markets. AA operates competing connecting hubs and the DOJ argues the NEA diminishes motivation to offer lower fares on itineraries connecting in PHL, CLT, etc.


You might want to look a little more closely at the DOJ's argument about that:
https://drive.google.com/file/d/1Qg1AuX ... _OUmp/view

What are these 98 connecting itineraries that would be most impacted, you may ask? Well....the DOJ lays them out, and well....let's just say they aren't large connecting markets by any stretch of the imagination.

ACK & MVY are over half of the markets outlined and combined they barely have 100k passengers a year, and B6 doesn't even their fly there year-round!!!

If B6+AA's alliance is a plot to drive up fares in certain markets, I sure hope they could do a lot better than "dominating" 32% of the "massive" market of San Juan to Albuquerque.

I for one am very glad the DOJ is looking out for those 0.342 people who are flying Nantucket to Portland each day, I certainly wouldn't want their prices to potentially go up. Even if it might be at the expense of 1000s of people per day elsewhere seeing a decrease in prices. *sarcasm off*


This kind of stuff is truly embarrassing for DOJ. Everyone knows that B6 does very little connection traffic out of JFK. ACK/MVY aren't even served outside of summer month.

This suit will probably go on for a while and DOJ's suit is going to look worse, because AA/B6 have talked about adding a lot more connection codeshares. I'm sure this item will speed that up. Just all the new connections to DEL/TLV/ATH alone will provide a lot of additional competition on 1-stops. And B6 can also make the argument that the additional slots allow them to offer a lot of new 1-stop connection to LHR/LGW through JFK, which is not part of NEA.

sxf24 wrote:
I would strenuously disagree that B6 is unable to diversify its JFK or BOS network. They’ve choose depth, not breadth. They also carry more domestic passengers than any other airline at those airports, which makes it hard to argue they’re in a disadvantaged position.

What are you talking about? In their November schedule, they are serving about 80 markets with 170 flights a day out of JFK. That's barely 2 flights a day per market. That's about as efficient usage of JFK slots as it gets. They are not wasting any slots on obvious within perimeter squatting flights like AA & DL. How do they add more markets without additional slots?

jfklganyc wrote:
They do not compete with DL and UA in NY.

They are a niche LCC operation that can never compete for corporate travelers in NY because they could never acquire the amount of slots held by United or Delta. They could never offer 50 flights a day to Europe or LGA shuttles to ORD or DFW. They could never give United a run on SFO or LAX out of EWR as the gates and landing times aren’t available.

They are permanently relegated to a lower tier status in the NYC market due to restricted entry by the government agency that controls the airports. So, they have partnered their slots with another lower tier partner and they achieve the breadth and scope needed to compete with DL and UA.

This partnership is really about NYC. If the partnership isnt allowed to continue, why should UA continue to control 60+percent of the traffic at a NYC airport? Because they always had it? This action shows that all prior approvals are under review and subject to reversal.

Break up the UA hub.

Review and challenge the Delta/US Air slot swap.

After all, we are now erasing established approval in the name of market share parity and connection pricing.

Let’s review the whole limited entry NYC market. Level the playing field.


Exactly, people don't seem to realize how monopolized NYC market is by the big 3. B6 was only able to achieve 3rd place in market share due to AA wasting 1/3 of its slots on 44/50 seaters to small markets. It had already expanded as much as it could.


That is literally the opposite of the definition of the word monopoly. Most markets would give anything to have 3 almost equally sized carriers all with a significant presence. You in the same paragraph stated that the big 3 monopolize NYC but then follow that with B6 (not a part of the big 3) actually being larger than one of the big 3 that "monopolizes" NYC. Please make it make sense.

Objectively, it's unfortunate that this discussion is pro-alliance/anti-alliance based almost solely upon which carrier is a person's favorite.

Being both an aviation fan and a consumer, I would love to see many of the recent alliances that have started over the last decade or so dissolved, both internationally and domestically. Carriers these days don't compete the way they used to, and airlines are skirting the line of collusion with some of these recent alliances. I'm still shocked that so many continue to fall for the "alliances are good for competition" drivel that is brought up time and time again. It's the same thing as "we're not going to shut down any hubs" that somehow happens, every, single, time, but people continue to fall for it.

Jeremy
 
MohawkWeekend
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Tue Sep 28, 2021 3:07 pm

Looking at the report, in 2019 AA, UA and DL carried 65,409,541 passengers out of 86,482,926 or 76% of all DOMESTIC passengers who the ULCC/B6/SW competes for.

So tphuang's argument is sound.
 
Abeam79
Posts: 411
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Tue Sep 28, 2021 3:09 pm

73X wrote:
[*]
Dieuwer wrote:
So, if DOJ wins then AA and B6 will demand ALL joint ventures involving US-based airliners be dissolved? I see a SCOTUS fight coming...


These things never get that far. DOJ is looking for a concession. JB and AA will give up some slots at JFK and the agreement will remain.

They already did that with the agreement they made with the DOT! They can’t just keep moving goal posts after agreement has been made. This doj ruling is shameful muscling already fully vetted agreements after the fact. Especially with weak evidence. Cause on the contrary the data shows it’s been more competitive. If they have to give up more slot, I can’t imagine it would be much more, but again, the court may see the NEA has made a more competitive landscape and may not even require it.
 
dfwfanboy
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Tue Sep 28, 2021 3:37 pm

SESGDL wrote:
It's the same thing as "we're not going to shut down any hubs" that somehow happens, every, single, time, but people continue to fall for it.

Jeremy

Which hub did AA/US close?
Given the topic pertains to AA and the gist of your comment is whether airlines keep promises (legally to the DOT in this case, not just consumers), apparently, it’s relevant to note that AA hasn’t shut down a hub since merger, only Delta and United did that.
 
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FiscAutTecGarte
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Tue Sep 28, 2021 3:56 pm

B6 has alliances with allot of smaller folks... JetBlue - JetX, JetBlue - CapeAir, JetBlue - Breeze

I agree with Buffet, oligopolies on specific routes is the only way to ensure healthy airlines in most places. NYC is not that place... with at least 5 major airports in the metro area and the world to connect to, they don't need oligopolies to try to fix prices. NYC is lucrative, but you have to deal with the entrenched politicians, agencies with entirely too much power (thruway authority, port authority, etc....), mafias (still active, just operating in legitimate business), union interests, etc... Lots of things in play that favor incumbants. If you can make it there, you can make it anywhere... ;p I think the DOJ always struggles to keep entities operating in NYC in check.
 
SESGDL
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Tue Sep 28, 2021 4:46 pm

dfwfanboy wrote:
SESGDL wrote:
It's the same thing as "we're not going to shut down any hubs" that somehow happens, every, single, time, but people continue to fall for it.

Jeremy

Which hub did AA/US close?
Given the topic pertains to AA and the gist of your comment is whether airlines keep promises (legally to the DOT in this case, not just consumers), apparently, it’s relevant to note that AA hasn’t shut down a hub since merger, only Delta and United did that.


STL? SJC? RNO?

Jeremy
 
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diverdave
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Tue Sep 28, 2021 5:05 pm

FiscAutTecGarte wrote:
B6 has alliances with allot of smaller folks... JetBlue - JetX, JetBlue - CapeAir, JetBlue - Breeze


Interesting post, but I cannot find any reference to a relationship of any sort between JetBlue and Breeze. Can you provide a link? Do you maybe mean an interline agreement?

Politics is also at play here. The DoT approved this in the waning days of the last administration. IMO today's DoT would not have approved an alliance of this breadth.

Thank you,

David
 
dfwfanboy
Posts: 15
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Tue Sep 28, 2021 5:17 pm

SESGDL wrote:
dfwfanboy wrote:
SESGDL wrote:
It's the same thing as "we're not going to shut down any hubs" that somehow happens, every, single, time, but people continue to fall for it.

Jeremy

Which hub did AA/US close?
Given the topic pertains to AA and the gist of your comment is whether airlines keep promises (legally to the DOT in this case, not just consumers), apparently, it’s relevant to note that AA hasn’t shut down a hub since merger, only Delta and United did that.


STL? SJC? RNO?

Jeremy

Because AMR exists today? It doesn’t.

None of those hubs were closed since merger. Closing an unprofitable hub to stave off (unsuccessfully) Chapter 11 is one thing, closing a hub after a mega merger like DL/NW, UA/CO, or AA/US after promising consumer benefit from said merger is different.
 
MohawkWeekend
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Tue Sep 28, 2021 5:44 pm

I believe you can judge the competitiveness of these large merged companies by asking - how often is United or Delta the price leader?

I will say that when I oversaw business travel for a mid-sized company (retired in 2018), UA and DL only matched low prices. Never was the the first to lower prices. AA on the other hand was pretty aggressive with their pricing along with SW and the ULCC's.
 
sxf24
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Tue Sep 28, 2021 5:54 pm

MohawkWeekend wrote:
Looking at the report, in 2019 AA, UA and DL carried 65,409,541 passengers out of 86,482,926 or 76% of all DOMESTIC passengers who the ULCC/B6/SW competes for.

So tphuang's argument is sound.


First, I’m not sure your numbers are right since WN is the largest domestic carrier. Setting that aside, can you make the connection between total domestic traffic across the entire country and the two main centers on the NEA - BOS and NYC?

I think most people, except perhaps Doug Parker, would say the big 4 are big enough and should not be allowed to consolidate further.
 
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FiscAutTecGarte
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Tue Sep 28, 2021 6:21 pm

diverdave wrote:
FiscAutTecGarte wrote:
B6 has alliances with allot of smaller folks... JetBlue - JetX, JetBlue - CapeAir, JetBlue - Breeze


Interesting post, but I cannot find any reference to a relationship of any sort between JetBlue and Breeze. Can you provide a link? Do you maybe mean an interline agreement?

Politics is also at play here. The DoT approved this in the waning days of the last administration. IMO today's DoT would not have approved an alliance of this breadth.

Thank you,

David


Yes, I meant an Interline agreement.

I guess I thought all of these alliances were a sort of interline agreement... I will admint to not having read the full terms of the deal, nor the complaint of the DOJ.
 
MohawkWeekend
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Tue Sep 28, 2021 8:15 pm

sxf24 wrote:
MohawkWeekend wrote:
Looking at the report, in 2019 AA, UA and DL carried 65,409,541 passengers out of 86,482,926 or 76% of all DOMESTIC passengers who the ULCC/B6/SW competes for.

So tphuang's argument is sound.


First, I’m not sure your numbers are right since WN is the largest domestic carrier. Setting that aside, can you make the connection between total domestic traffic across the entire country and the two main centers on the NEA - BOS and NYC?

I just added up the numbers from the Port Authority report for traffic in 2019 from NY area airports noted in the link posted earlier and copied below. I did find one error in my numbers - the big three have 74% of the DOMESTIC NYC market.

UNITED 24,359,741. 28%
DELTA 26,758,450. 30%
JETBLUE 13,644,823. 15%
AMERICAN 14,291,350. 16%
SOUTHWEST 3,926,236. 4%
SPIRIT 2,750,795. 3%
ALASKA 2,680,657 3%
Total. 88,411,852
 
splitterz
Posts: 203
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Wed Sep 29, 2021 3:33 pm

MohawkWeekend wrote:
sxf24 wrote:
MohawkWeekend wrote:
Looking at the report, in 2019 AA, UA and DL carried 65,409,541 passengers out of 86,482,926 or 76% of all DOMESTIC passengers who the ULCC/B6/SW competes for.

So tphuang's argument is sound.


First, I’m not sure your numbers are right since WN is the largest domestic carrier. Setting that aside, can you make the connection between total domestic traffic across the entire country and the two main centers on the NEA - BOS and NYC?

I just added up the numbers from the Port Authority report for traffic in 2019 from NY area airports noted in the link posted earlier and copied below. I did find one error in my numbers - the big three have 74% of the DOMESTIC NYC market.

UNITED 24,359,741. 28%
DELTA 26,758,450. 30%
JETBLUE 13,644,823. 15%
AMERICAN 14,291,350. 16%
SOUTHWEST 3,926,236. 4%
SPIRIT 2,750,795. 3%
ALASKA 2,680,657 3%
Total. 88,411,852


With the NEA you might as well consider AA/B6 as one with 27,936,173 or 31.59 % market share.
 
MohawkWeekend
Posts: 980
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Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Wed Sep 29, 2021 5:03 pm

Maybe thats why the DOJ is against the JV........
 
JoseSalazar
Posts: 564
Joined: Mon Oct 14, 2019 3:18 am

Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Wed Sep 29, 2021 5:19 pm

MohawkWeekend wrote:
Maybe thats why the DOJ is against the JV........

I don’t see how having another partnered competitor equaling the size of the big two in NYC is bad. Instead of a two airline power house with mostly complete networks competing with two midsize competitors with incomplete networks, you get 3 competitors. Seems like that would promote, not deter, competition and be good for everyone (except the two big airlines who will have more competition).
 
MohawkWeekend
Posts: 980
Joined: Tue Jan 08, 2019 2:06 pm

Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Wed Sep 29, 2021 9:15 pm

This new Administration is very anti-oligopoly. This is just the first merger/JV they can say no to. If they could, I bet they'd make DL and UA divest a lot more assets.

Elizabeth Warren wants to fire Jerome Powell because he's let the banks get too big. Maybe the airlines are next?
 
trueblew
Posts: 298
Joined: Thu Nov 15, 2018 10:16 pm

Re: Updated: DOJ sues to block AA - B6 Northeast partnership

Sat Oct 02, 2021 5:18 pm

https://thepointsguy.com/news/delta-bos ... s-ath-tlv/

That darn NEA sure is hindering competition and limiting consumers' options. Oh, wait.

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