Financially, what would AA loose if they called off the NEA?

With JetBlue now purchasing Spirit, could AA now want out of the NEA deal, but use a loosing court case as justification to avoid financial penalties? Could it be a bit of an underhanded way to prevent JetBlue from purchasing Spirit?

IADCA wrote:

runway23 wrote:

IADCA wrote:

If the finder of fact determines that AA and B6 have in fact coordinated to reduce output or divide markets - and there is at least some evidence that they have, starting with AA's decision to cut routes like JFK-LAS - that's it. They lose. As a matter of law, per se violations are not subject to any balancing test. No matter why you do them and who else might benefit, they are illegal.

To balance the argument there are of course many new markets AA entered that they wouldn't have otherwise. AA could probably prove that regardless of the NEA they would have discontinued JFK-LAS at one point, in fact it was already a route with an unstable history.

I do wonder if the biggest thing playing at this point against AA in the judge's mind is that AA leadership is inept/incompetent. Isom, Raja and Parker really haven't helped the cause with their remarks. It really seems AA's lawyers have done a poor job at briefing and roleplaying this before the court case. Really makes me wonder what other gems will come up before this finishes.

At this point AA really is telegraphing that they are a poorly run airline and the judge might ultimately believe that, on the balance of odds, they have to resort to illegal competitive tactics to be able compete. I do hope NEA survives, but the more I read the less I see AA/B6 winning this.

I mean, yeah, they have to prove that their New York route cuts were independent decisions, not pursuant to any agreement with B6. It's really about the documents on that score, and I have no clue on that front.

I think the government has to prove there was collusion not AA/B6 having to prove there was not. The onus is on the DOJ.

runway23 wrote:

To balance the argument there are of course many new markets AA entered that they wouldn't have otherwise. AA could probably prove that regardless of the NEA they would have discontinued JFK-LAS at one point, in fact it was already a route with an unstable history.

LOL. It's far easier to demonstrate restraint of trade with BOS-LGA -- a route with a 60-year history dating back through the AA Shuttle, US Shuttle, Trump Shuttle, and Eastern Shuttle. But AA dropped it in favor of B6 taking over the route.

ScottB wrote:

runway23 wrote:

To balance the argument there are of course many new markets AA entered that they wouldn't have otherwise. AA could probably prove that regardless of the NEA they would have discontinued JFK-LAS at one point, in fact it was already a route with an unstable history.

LOL. It's far easier to demonstrate restraint of trade with BOS-LGA -- a route with a 60-year history dating back through the AA Shuttle, US Shuttle, Trump Shuttle, and Eastern Shuttle. But AA dropped it in favor of B6 taking over the route.

What portion of that 60 year period saw BOS-LGA served frequently by more than two airlines, though?

My guess is that without the NEA, one of the three carriers would have thrown in the towel eventually — and AA seems the most likely.

dtremit wrote:

ScottB wrote:

runway23 wrote:

To balance the argument there are of course many new markets AA entered that they wouldn't have otherwise. AA could probably prove that regardless of the NEA they would have discontinued JFK-LAS at one point, in fact it was already a route with an unstable history.

LOL. It's far easier to demonstrate restraint of trade with BOS-LGA -- a route with a 60-year history dating back through the AA Shuttle, US Shuttle, Trump Shuttle, and Eastern Shuttle. But AA dropped it in favor of B6 taking over the route.

What portion of that 60 year period saw BOS-LGA served frequently by more than two airlines, though?

My guess is that without the NEA, one of the three carriers would have thrown in the towel eventually — and AA seems the most likely.

Then I suppose only two carriers is enough for “competition” on any route. The NEA should be considered anti-competitive in nature and between B6 and AA, let the strongest survive on routes that compete with two or more carriers…

dtremit wrote:

What portion of that 60 year period saw BOS-LGA served frequently by more than two airlines, though?

My guess is that without the NEA, one of the three carriers would have thrown in the towel eventually — and AA seems the most likely.

Every bit of this is entirely irrelevant. While the Shuttles aren't the huge moneymakers they once were, they are still critical to winning lucrative corporate contracts in NYC/WAS/BOS. Pre-Covid, B6 was prepared to launch a near-Shuttle service between BOS & LGA with 10 daily round-trips -- because they needed to check that box to win travel contracts in Boston and New York. I don't think AA would have walked away from BOS-LGA absent the NEA precisely because they needed that route to stay relevant in NYC & BOS. If the government manages to have the NEA struck down, it's exceedingly likely AA will return to LGA-BOS.

And in any event, if competitors independently exit markets of their own accord, that's perfectly fine under the law. When erstwhile competitors start divvying up routes, it's not fine.

dtremit wrote:

ScottB wrote:

runway23 wrote:

To balance the argument there are of course many new markets AA entered that they wouldn't have otherwise. AA could probably prove that regardless of the NEA they would have discontinued JFK-LAS at one point, in fact it was already a route with an unstable history.

LOL. It's far easier to demonstrate restraint of trade with BOS-LGA -- a route with a 60-year history dating back through the AA Shuttle, US Shuttle, Trump Shuttle, and Eastern Shuttle. But AA dropped it in favor of B6 taking over the route.

What portion of that 60 year period saw BOS-LGA served frequently by more than two airlines, though?

My guess is that without the NEA, one of the three carriers would have thrown in the towel eventually — and AA seems the most likely.

Not to mention Acela. I don’t understand why anyone flies to Boston from NYC now anyway. DC? Sure. Makes sense but I’ve never understood why you’d drive to LGA, get there, at least, 30-60 minutes early, fly, then end up at Logan when Acela seems so much easier

dfwfanboy wrote:

dtremit wrote:

ScottB wrote:

LOL. It's far easier to demonstrate restraint of trade with BOS-LGA -- a route with a 60-year history dating back through the AA Shuttle, US Shuttle, Trump Shuttle, and Eastern Shuttle. But AA dropped it in favor of B6 taking over the route.

What portion of that 60 year period saw BOS-LGA served frequently by more than two airlines, though?

My guess is that without the NEA, one of the three carriers would have thrown in the towel eventually — and AA seems the most likely.

Not to mention Acela. I don’t understand why anyone flies to Boston from NYC now anyway. DC? Sure. Makes sense but I’ve never understood why you’d drive to LGA, get there, at least, 30-60 minutes early, fly, then end up at Logan when Acela seems so much easier

I'd rather take Acela and avoid traffic, delays and/or cancellations for a number of reasons. I can work and make calls without all the hassle.

av8tiongeek wrote:

dfwfanboy wrote:

dtremit wrote:

What portion of that 60 year period saw BOS-LGA served frequently by more than two airlines, though?

My guess is that without the NEA, one of the three carriers would have thrown in the towel eventually — and AA seems the most likely.

Not to mention Acela. I don’t understand why anyone flies to Boston from NYC now anyway. DC? Sure. Makes sense but I’ve never understood why you’d drive to LGA, get there, at least, 30-60 minutes early, fly, then end up at Logan when Acela seems so much easier

I'd rather take Acela and avoid traffic, delays and/or cancellations for a number of reasons. I can work and make calls without all the hassle.

They both have their merits. Anecdotally, my brother-in-Law who travels to NYC constantly for meetings does both but seems to fly more for whatever reason. Although he bemoaned B6’s decision to leave the Marine Terminal.

dfwfanboy wrote:

dtremit wrote:

ScottB wrote:

LOL. It's far easier to demonstrate restraint of trade with BOS-LGA -- a route with a 60-year history dating back through the AA Shuttle, US Shuttle, Trump Shuttle, and Eastern Shuttle. But AA dropped it in favor of B6 taking over the route.

What portion of that 60 year period saw BOS-LGA served frequently by more than two airlines, though?

My guess is that without the NEA, one of the three carriers would have thrown in the towel eventually — and AA seems the most likely.

Not to mention Acela. I don’t understand why anyone flies to Boston from NYC now anyway. DC? Sure. Makes sense but I’ve never understood why you’d drive to LGA, get there, at least, 30-60 minutes early, fly, then end up at Logan when Acela seems so much easier

Why does it make more sense for DC? BOS and DCA are equidistant from NYC for the most part.

maverick4002 wrote:

dfwfanboy wrote:

dtremit wrote:

What portion of that 60 year period saw BOS-LGA served frequently by more than two airlines, though?

My guess is that without the NEA, one of the three carriers would have thrown in the towel eventually — and AA seems the most likely.

Not to mention Acela. I don’t understand why anyone flies to Boston from NYC now anyway. DC? Sure. Makes sense but I’ve never understood why you’d drive to LGA, get there, at least, 30-60 minutes early, fly, then end up at Logan when Acela seems so much easier

Why does it make more sense for DC? BOS and DCA are equidistant from NYC for the most part.

I think he means DCA-BOS.... which if we had real high speed rail would negate that air route, but we don't.

usflyer msp wrote:

IADCA wrote:

runway23 wrote:

To balance the argument there are of course many new markets AA entered that they wouldn't have otherwise. AA could probably prove that regardless of the NEA they would have discontinued JFK-LAS at one point, in fact it was already a route with an unstable history.

I do wonder if the biggest thing playing at this point against AA in the judge's mind is that AA leadership is inept/incompetent. Isom, Raja and Parker really haven't helped the cause with their remarks. It really seems AA's lawyers have done a poor job at briefing and roleplaying this before the court case. Really makes me wonder what other gems will come up before this finishes.

At this point AA really is telegraphing that they are a poorly run airline and the judge might ultimately believe that, on the balance of odds, they have to resort to illegal competitive tactics to be able compete. I do hope NEA survives, but the more I read the less I see AA/B6 winning this.

I mean, yeah, they have to prove that their New York route cuts were independent decisions, not pursuant to any agreement with B6. It's really about the documents on that score, and I have no clue on that front.

I think the government has to prove there was collusion not AA/B6 having to prove there was not. The onus is on the DOJ.

Proof of a Sherman Act violation requires a "combination, contract, or conspiracy" between competitors. In other words, an agreement. But everyone already agrees that such an agreement exists: it's called the NEA. There is a signed document (actually several) that created it. The requirement to prove an agreement is already satisfied. Everyone admits that there is an agreement.

After making that agreement, AA and B6 both took actions - such as AA cutting JFK-LAS, a route on which it overlaps with B6 - that are completely legal decisions if made independently, but are illegal if made pursuant to an agreement. What DOJ has to prove there is just that the action was taken because of an agreement with B6, not that the parties specifically agreed to eliminate that route.

That proof doesn't have to be by direct evidence; it can be entirely circumstantial. As a functional matter, the problem is that cutting that route doesn't seem to make a lot of sense in any other context. The circumstantial evidence (especially the timing of several similar actions that don't make a lot of sense except if done pursuant to an agreement) is probably enough to satisfy that burden as a matter of law (i.e., enough to withstand an appeal) even without additional documentary evidence. The standard here is "more probable that not;" it's not a criminal case, and the standard of proof is much lower.

That's why functionally - even though not as a matter of law - the onus is on AA to explain away things like that. Now, maybe they can do it: perhaps they were losing a ton of money on JFK-LAS and would have cut that and routes like JFK-SAT (on which B6 was the only other nonstop competitor) anyway.

DOJ has been doing terribly recently in trying to block mergers. My read of this so far is that they're doing a terrible job at this trial too. But the facts and law when combined aren't great for AA and B6.

David Fintzen is really being put on the spot this morning.

maverick4002 wrote:

dfwfanboy wrote:

dtremit wrote:

What portion of that 60 year period saw BOS-LGA served frequently by more than two airlines, though?

My guess is that without the NEA, one of the three carriers would have thrown in the towel eventually — and AA seems the most likely.

Not to mention Acela. I don’t understand why anyone flies to Boston from NYC now anyway. DC? Sure. Makes sense but I’ve never understood why you’d drive to LGA, get there, at least, 30-60 minutes early, fly, then end up at Logan when Acela seems so much easier

Why does it make more sense for DC? BOS and DCA are equidistant from NYC for the most part.

It should actually be the opposite. Acela is more competitive against flight times NYC-Washington vs NYC to Boston. Acela is bogged down in 55mph zones from GCT to HVN, has numerous slow downs over the bridges in CT and finally only really gains speed in Rhode Island. Acela takes 3.5 hours to Boston, flight times are less then an hour. Between DCA and NYC Acela has higher frequency vs the Boston route and at only 2.5 hours is much more competitive vs flight times.

Sorry, I meant Penn station to South station, not GCT.

Vasu Raja again had some frank comments in his testimony on Thursday.
He came out and said they commercial deals like NEA and JVs with BA were built around business and logistic needs, not the customer
.

Testifying with unusual candor during the Justice Department’s antitrust trial seeking to block American’s partnership with JetBlue Airways Corp. on Thursday, American’s chief commercial officer, Vasu Raja, said customers were an afterthought compared to the business and logistics of airline tie-ups, such as its trans-Atlantic partnership with British Airways Plc.

“We hadn’t positioned it from the point of view of the customer,” Raja told a federal court in Boston, continuing his testimony from last week. “If you check in on British Airways and it’s an AA flight and you want to pick your seat, that can’t be done” from British Air’s own website, he said.

Raja said he was “embarrassed to admit” American’s customers cannot get boarding passes from a partner airline’s website or app if they are flying on American. He also said his airline and British Air alternated their flights from New York airports, a move that “looks great on paper,” but effectively means that customers can’t easily switch flights if they show up early at the airport.

https://www.bloomberg.com/news/articles ... omer-first

LAXintl wrote:

Vasu Raja again had some frank comments in his testimony on Thursday.
He came out and said they commercial deals like NEA and JVs with BA were built around business and logistic needs, not the customer
.

Testifying with unusual candor during the Justice Department’s antitrust trial seeking to block American’s partnership with JetBlue Airways Corp. on Thursday, American’s chief commercial officer, Vasu Raja, said customers were an afterthought compared to the business and logistics of airline tie-ups, such as its trans-Atlantic partnership with British Airways Plc.

“We hadn’t positioned it from the point of view of the customer,” Raja told a federal court in Boston, continuing his testimony from last week. “If you check in on British Airways and it’s an AA flight and you want to pick your seat, that can’t be done” from British Air’s own website, he said.

Raja said he was “embarrassed to admit” American’s customers cannot get boarding passes from a partner airline’s website or app if they are flying on American. He also said his airline and British Air alternated their flights from New York airports, a move that “looks great on paper,” but effectively means that customers can’t easily switch flights if they show up early at the airport.

https://www.bloomberg.com/news/articles ... omer-first

For someone who has been touted as the Great Oracle of American Airlines, paving the way for innovative new routes and experimentation, and growing a "modern" airline, he sounds like a bit of a hack.

That's just kind of a galling statement to make in an antitrust case. "We don't take into account the customer, so we'd like it if you don't as well."

I don't like the NEA, while it kept the E190s flying, the cost in labor relations was real and tangible, and it empowered a competitor that, in days past, was a credible threat in BOS, JFK, and SJU, but I didn't think the DOJ had a credible case in it being a de facto merger. I really think they could lose this one on the basis of AA's testimony alone.

The Robin Hayes statements were good in comparison to this stuff. "No competition is wonderful for our profits," and "we really don't care about the customer, why do you?" sort of strains the credulity of your lawyers, even if they're really great.

N757ST wrote:

maverick4002 wrote:

dfwfanboy wrote:

Not to mention Acela. I don’t understand why anyone flies to Boston from NYC now anyway. DC? Sure. Makes sense but I’ve never understood why you’d drive to LGA, get there, at least, 30-60 minutes early, fly, then end up at Logan when Acela seems so much easier

Why does it make more sense for DC? BOS and DCA are equidistant from NYC for the most part.

It should actually be the opposite. Acela is more competitive against flight times NYC-Washington vs NYC to Boston. Acela is bogged down in 55mph zones from GCT to HVN, has numerous slow downs over the bridges in CT and finally only really gains speed in Rhode Island. Acela takes 3.5 hours to Boston, flight times are less then an hour. Between DCA and NYC Acela has higher frequency vs the Boston route and at only 2.5 hours is much more competitive vs flight times.

Apologies
Meant dca-bos flying vs Acela. Flying makes sense then to me.

IADCA wrote:

DOJ has been doing terribly recently in trying to block mergers. My read of this so far is that they're doing a terrible job at this trial too. But the facts and law when combined aren't great for AA and B6.

IADCA, thanks for very accurate and great contributions to the topic. Per se violations are enough to kill the NEA, and rule of reason will either result in more remedies down the road or even very hefty settlements.

It would really take a serious anti-talent by the DoJ to screw up such an easy case. All they need to do is look at the routes offered/flown, capacity, service quality, shares, air fares and ancillary revenue before and after the NEA and find more than enough examples to win the case. Vasu's testimonies are a great example of a horribly unprepared witness who absolutely does not understand the amount of damage he caused. How is this guy in this high of a position?!? Or he is just arrogant. No idea... He is an absolute train rack.

dfwfanboy wrote:

dtremit wrote:

ScottB wrote:

LOL. It's far easier to demonstrate restraint of trade with BOS-LGA -- a route with a 60-year history dating back through the AA Shuttle, US Shuttle, Trump Shuttle, and Eastern Shuttle. But AA dropped it in favor of B6 taking over the route.

What portion of that 60 year period saw BOS-LGA served frequently by more than two airlines, though?

My guess is that without the NEA, one of the three carriers would have thrown in the towel eventually — and AA seems the most likely.

Not to mention Acela. I don’t understand why anyone flies to Boston from NYC now anyway. DC? Sure. Makes sense but I’ve never understood why you’d drive to LGA, get there, at least, 30-60 minutes early, fly, then end up at Logan when Acela seems so much easier

Price first, parking second. No really good cheap places to park when taking the train to NYC from Boston. Acela doesn't offer much gain in time, a much worse ride, but they charge a lot for it. Airfares when bought ahead are pretty cheap.

As for the number of airline, really they all serve the route, albeit not at shuttle frequency. UA serves Newark, the others serve JFK and LGA. I don't think that is really going to work as an argument.

"Raja said he was “embarrassed to admit” American’s customers cannot get boarding passes from a partner airline’s website or app if they are flying on American. "

Is this the case with DL/AF/KL and UA/LH as well? Can customers get boarding passes on partners flights?

cloudboy wrote:

dfwfanboy wrote:

dtremit wrote:

What portion of that 60 year period saw BOS-LGA served frequently by more than two airlines, though?

My guess is that without the NEA, one of the three carriers would have thrown in the towel eventually — and AA seems the most likely.

Not to mention Acela. I don’t understand why anyone flies to Boston from NYC now anyway. DC? Sure. Makes sense but I’ve never understood why you’d drive to LGA, get there, at least, 30-60 minutes early, fly, then end up at Logan when Acela seems so much easier

Price first, parking second. No really good cheap places to park when taking the train to NYC from Boston. Acela doesn't offer much gain in time, a much worse ride, but they charge a lot for it. Airfares when bought ahead are pretty cheap.

As for the number of airline, really they all serve the route, albeit not at shuttle frequency. UA serves Newark, the others serve JFK and LGA. I don't think that is really going to work as an argument.

The Route 128/Westwood garage is a GREAT spot to park for Acela trips to NYC. Just did a 5 day trip to the city and left my car there. $31 for 5 days of parking (Sun-Thurs). Can't beat that anywhere.

However, I will say that train prices are typically higher than airfare prices in the days before the trip. The Acela between NYC and BOS is also PAINFULLY slow. Two hours from NYC to just past New Haven is not idea. Between that, collecting miles, and getting SkyClub access (vs. nothing on train), I prefer to fly.

BEG2IAH wrote:

IADCA wrote:

DOJ has been doing terribly recently in trying to block mergers. My read of this so far is that they're doing a terrible job at this trial too. But the facts and law when combined aren't great for AA and B6.

IADCA, thanks for very accurate and great contributions to the topic. Per se violations are enough to kill the NEA, and rule of reason will either result in more remedies down the road or even very hefty settlements.

It would really take a serious anti-talent by the DoJ to screw up such an easy case. All they need to do is look at the routes offered/flown, capacity, service quality, shares, air fares and ancillary revenue before and after the NEA and find more than enough examples to win the case. Vasu's testimonies are a great example of a horribly unprepared witness who absolutely does not understand the amount of damage he caused. How is this guy in this high of a position?!? Or he is just arrogant. No idea... He is an absolute train rack.

Such a predictable a.net response. The DOT authorized aa and b6 to coordinate slots and now everyone is using the post authorization changes to prove anti-competitiveness. Let’s hope the courts know the poor logic of that.

Maybe before dot authorized aa and b6 to change their networks to optimize slots, you’d have a point but DOJ’s case is pretty weak, evidenced by the first company/airline taking them to actual court. Has DOJ ever won a case in the last 20 years via court vs settling in this industry? That alone should say a lot.
This case honestly just reeks of political posturing from the administration.

dfwfanboy wrote:

Maybe before dot authorized aa and b6 to change their networks to optimize slots, you’d have a point but DOJ’s case is pretty weak, evidenced by the first company/airline taking them to actual court.
This case honestly just reeks of political posturing from the administration.

DoT authorized it, but the DoJ is now challenging the AA/B6 anticompetitive behavior. The fact that DoT authorized the NEA earlier during a different administration does not necessarily make it a weaker case for the DoJ.

dfwfanboy wrote:

Such a predictable a.net response. The DOT authorized aa and b6 to coordinate slots and now everyone is using the post authorization changes to prove anti-competitiveness. Let’s hope the courts know the poor logic of that.

The fact that the DOT authorized the NEA doesn't necessarily make it legal.

capejet wrote:

Is this the case with DL/AF/KL and UA/LH as well? Can customers get boarding passes on partners flights?

Yes. If you were to see the boarding passes collected on a UA flight, you would often see boarding pass stock for that flight from all over the Star Alliance using codeshare flight numbers. So many people connect onto SMF via SFO from India that it was not uncommon in my gate agent days to see more boarding passes from LH, LX and AI (along with US for a while) on those flights than UA.

cloudboy wrote:

dfwfanboy wrote:

dtremit wrote:

What portion of that 60 year period saw BOS-LGA served frequently by more than two airlines, though?

My guess is that without the NEA, one of the three carriers would have thrown in the towel eventually — and AA seems the most likely.

Not to mention Acela. I don’t understand why anyone flies to Boston from NYC now anyway. DC? Sure. Makes sense but I’ve never understood why you’d drive to LGA, get there, at least, 30-60 minutes early, fly, then end up at Logan when Acela seems so much easier

Price first, parking second. No really good cheap places to park when taking the train to NYC from Boston. Acela doesn't offer much gain in time, a much worse ride, but they charge a lot for it. Airfares when bought ahead are pretty cheap.

As for the number of airline, really they all serve the route, albeit not at shuttle frequency. UA serves Newark, the others serve JFK and LGA. I don't think that is really going to work as an argument.

If the Acela wasn't completive it wouldn't be this expensive. The current Acela's are running pretty close to full capacity. So if you live near JFK, LGA it's kinda make sense to fly. Parking at an airport is not that cheap either. I will say the airline shuttles couldn't kill off Amtrak or the Acela so there is a market for this train segment. Plus you get way better views on the ground and still be productive as well.
Why complete in this market when 80% of the people drive between NYC and BOS. AA now can use it's resources on other routes if it choses to do so.

Chasensfo wrote:

capejet wrote:

Is this the case with DL/AF/KL and UA/LH as well? Can customers get boarding passes on partners flights?

Yes. If you were to see the boarding passes collected on a UA flight, you would often see boarding pass stock for that flight from all over the Star Alliance using codeshare flight numbers. So many people connect onto SMF via SFO from India that it was not uncommon in my gate agent days to see more boarding passes from LH, LX and AI (along with US for a while) on those flights than UA.

Printed boarding passes are one thing, and BA and AA can and do issue these. The comment was in relation to mobile boarding passes, and I don’t think UA-LH or DL-AF etc have that functionality either?

enterusername wrote:

TYWoolman wrote:

In a nut shell...two airlines that rigorously compete against each other don't form an alliance. And two airlines that do form an alliance will have embarked on an inevitable downhill trend to compete less and less with each other all the while distorting the competitive dynamic for the remaining players that in turn must operate under their own limitations absent comparatively similar strategic options.

AA has had an illustrious history in NY and has set precedent for itself that it can hold its own. The NEA is a defector merger, allowing AA to utilize a lower-cost model in certain markets only to be able to dump capacity elsewhere. B6 has also proven success in NY and is poised to gain more slots with NK. Should be a no-go.

Not at all. AA and their US Airways brethren realized they cant compete in NYC. AA was a bit player after the late 90s pulldown of JFK and the post merger airline was a fraction of the size of UA, B6 or DL.

Let's face it, AA + B6 is still a distant 3rd in NYC scope, but at least they are relevant in size compared to UA/DL. B6 nor AA can be anywhere near competitive in size vs UA/DL separately.

AA was NOT a fraction of the size of United or Delta, Not Now not then nor at any time!! This is and was a SCHEME! A good one I might add but nothing more than a Scheme. if B^ can keep this up? Then they should forego their merger. and let American take them over. Anybody who falls for this? I've got a Bridge to sell you..

I am wagering a guess that IATCI (interline thru check in) is not compatible with most airlines apps & websites offering online check-in.

And just to add a tidbit: The DOT's jurisdiction over mergers terminated effective December 31, 1988, after which time the Division assumed sole responsibility for airline merger review.

Source: https://www.justice.gov/atr/department-justice-2
A little dated but nicely illustrates the process.

BEG2IAH wrote:

dfwfanboy wrote:

Maybe before dot authorized aa and b6 to change their networks to optimize slots, you’d have a point but DOJ’s case is pretty weak, evidenced by the first company/airline taking them to actual court.
This case honestly just reeks of political posturing from the administration.

DoT authorized it, but the DoJ is now challenging the AA/B6 anticompetitive behavior. The fact that DoT authorized the NEA earlier during a different administration does not necessarily make it a weaker case for the DoJ.

Your comment assumes DOJ had no idea what DOT was doing in the previous administration, which is a bit silly

[quote="BEG2IAH"]And just to add a tidbit: The DOT's jurisdiction over mergers terminated effective December 31, 1988, after which time the Division assumed sole responsibility for airline merger review.

Source: https://www.justice.gov/atr/department-justice-2
A little dated but nicely illustrates the process.[/quote]








Fun link
But useless since DOT was recognized by all parties as the authority to approve the NEA.
Of course DOJ can still sue
But they must feel a bit silly internally suing When they’ve allowed massively larger local market share dominance across the nation. It’s not a great precedent when you allow local market share dominance for aa and dl a few years back but now seem to care about market share at 50%.

dfwfanboy wrote:

It’s not a great precedent when you allow local market share dominance for aa and dl a few years back but now seem to care about market share at 50%.

Without re-litigating whether the big 3 mergers should have been allowed, I can’t think of a single market that one of the big 3 dominates as a result of their merger, such as where the two merger partners each had 33% market share and the combined carrier now has 66%. The fortress hubs today were fortress hubs then, and I can’t think of any where the other merger partner also had a large presence. The only one which comes to mind is DFW where US Airways were the second largest carrier before the merger, but that’s not really saying much as they had something like 20 daily flights compared to 700. The point is that while the big 3 mergers reduced competition nationwide, they didn’t really have much impact in any one market viewed in isolation. That’s quite different to the NEA.

RyanairGuru wrote:

dfwfanboy wrote:

It’s not a great precedent when you allow local market share dominance for aa and dl a few years back but now seem to care about market share at 50%.

Without re-litigating whether the big 3 mergers should have been allowed, I can’t think of a single market that one of the big 3 dominates as a result of their merger, such as where the two merger partners each had 33% market share and the combined carrier now has 66%. The fortress hubs today were fortress hubs then, and I can’t think of any where the other merger partner also had a large presence. The only one which comes to mind is DFW where US Airways were the second largest carrier before the merger, but that’s not really saying much as they had something like 20 daily flights compared to 700. The point is that while the big 3 mergers reduced competition nationwide, they didn’t really have much impact in any one market viewed in isolation. That’s quite different to the NEA.

Except neither AA or B6 alone were the largest or second largest in NYC. Together they are about the same size as UA and DL. Nowhere near a 66% market share.

BOS is a little bit of a different story. Pre-NEA AA was a shell of it's former self which made them a distant third behind B6 and DL. Yes AA and B6 combined are now a significant number one, but their isn't the same barriers to entry in BOS that their are in the three NYC airports. An easy remedy for this problem is giving a few gates.

dfwfanboy wrote:

Fun link
But useless since DOT was recognized by all parties as the authority to approve the NEA.
Of course DOJ can still sue
But they must feel a bit silly internally suing When they’ve allowed massively larger local market share dominance across the nation. It’s not a great precedent when you allow local market share dominance for aa and dl a few years back but now seem to care about market share at 50%.

What part of the term "concurrent jurisdiction" is hard for you to understand? It is hardly unusual in agency practice - especially as it regards antitrust - to have multiple federal agencies to deal with (for example, FCC, DoD, FDA, and so on, depending on the industry). Every antitrust lawyer in the world knows that if you rely on the signoff of one agency in these situations while the other explicitly tells you it's still investigating - as was the case here - you're in for a world of hurt.

Also, a merger or application for immunity that creates a 50% market share will get challenged in almost any transaction in any industry - ironically except the TATL joint ventures that DOT actually does have the authority to approve without needing to also wait for DOJ. And part of the reason here, which isn't going to help your point, is that the Department of Transportation is widely regarded as being absolutely incompetent at anything involving antitrust laws.

RyanairGuru wrote:

dfwfanboy wrote:

It’s not a great precedent when you allow local market share dominance for aa and dl a few years back but now seem to care about market share at 50%.

Without re-litigating whether the big 3 mergers should have been allowed, I can’t think of a single market that one of the big 3 dominates as a result of their merger, such as where the two merger partners each had 33% market share and the combined carrier now has 66%. The fortress hubs today were fortress hubs then, and I can’t think of any where the other merger partner also had a large presence. The only one which comes to mind is DFW where US Airways were the second largest carrier before the merger, but that’s not really saying much as they had something like 20 daily flights compared to 700. The point is that while the big 3 mergers reduced competition nationwide, they didn’t really have much impact in any one market viewed in isolation. That’s quite different to the NEA.

Not a Merger, but delta purchased its way to a leading slot position in lga and jfk (and the DOJ propped up Delta’s LGA position even more during the aa/US merger by forcing divestitures that made delta even more of a first place at lga) and DOJ was fine with it, including an LGA position similar to the problem DOJ has with the NEA in Boston. Now they care?

IADCA wrote:

dfwfanboy wrote:

Fun link
But useless since DOT was recognized by all parties as the authority to approve the NEA.
Of course DOJ can still sue
But they must feel a bit silly internally suing When they’ve allowed massively larger local market share dominance across the nation. It’s not a great precedent when you allow local market share dominance for aa and dl a few years back but now seem to care about market share at 50%.

What part of the term "concurrent jurisdiction" is hard for you to understand? It is hardly unusual in agency practice - especially as it regards antitrust - to have multiple federal agencies to deal with (for example, FCC, DoD, FDA, and so on, depending on the industry). Every antitrust lawyer in the world knows that if you rely on the signoff of one agency in these situations while the other explicitly tells you it's still investigating - as was the case here - you're in for a world of hurt.

Also, a merger or application for immunity that creates a 50% market share will get challenged in almost any transaction in any industry - ironically except the TATL joint ventures that DOT actually does have the authority to approve without needing to also wait for DOJ. And part of the reason here, which isn't going to help your point, is that the Department of Transportation is widely regarded as being absolutely incompetent at anything involving antitrust laws.

Is it your norm to personally attack before saying anything?

You act as though DOJ has to rule on the NEA before it goes into effect. They don’t. If they want to sue, they can and did under their authority. But they don’t have the authority to approve or disapprove something like the NEA. They have the ability to sue within their antitrust jurisdiction and most companies settle with DOJ when they think they’ll lose based on precedent. It’s a bit difficult to find the case precedent where DOJ would win this, which aa and b6 seem to know.

dfwfanboy wrote:

IADCA wrote:

dfwfanboy wrote:

Fun link
But useless since DOT was recognized by all parties as the authority to approve the NEA.
Of course DOJ can still sue
But they must feel a bit silly internally suing When they’ve allowed massively larger local market share dominance across the nation. It’s not a great precedent when you allow local market share dominance for aa and dl a few years back but now seem to care about market share at 50%.

What part of the term "concurrent jurisdiction" is hard for you to understand? It is hardly unusual in agency practice - especially as it regards antitrust - to have multiple federal agencies to deal with (for example, FCC, DoD, FDA, and so on, depending on the industry). Every antitrust lawyer in the world knows that if you rely on the signoff of one agency in these situations while the other explicitly tells you it's still investigating - as was the case here - you're in for a world of hurt.

Also, a merger or application for immunity that creates a 50% market share will get challenged in almost any transaction in any industry - ironically except the TATL joint ventures that DOT actually does have the authority to approve without needing to also wait for DOJ. And part of the reason here, which isn't going to help your point, is that the Department of Transportation is widely regarded as being absolutely incompetent at anything involving antitrust laws.

Is it your norm to personally attack before saying anything?

You act as though DOJ has to rule on the NEA before it goes into effect. They don’t. If they want to sue, they can and did under their authority. But they don’t have the authority to approve or disapprove something like the NEA. They have the ability to sue within their antitrust jurisdiction and most companies settle with DOJ when they think they’ll lose based on precedent. It’s a bit difficult to find the case precedent where DOJ would win this, which aa and b6 seem to know.

The DOT is responsible for regulating airlines. The DOJ is responsible for anti-trust matters for the aviation industry, and the DOT defers to them in those matters. As a matter of policy, the DOT technically has the ability to stop transactions if it deems that such action is ‘in the public interest’. However, like many things in government & law, there are technicalities and there are established norms. For many reasons, some of them very good, the DOT has not used its power to stop airline transactions for antitrust reasons. One reason is to abstract the industry from whiplash as the policies of different administrations can change significantly from election to election. Instead, the norm has been that the DOJ challenges anti-trust matters in court. The DOJ does not have the ability to unilaterally act on anti-trust matters; it must make its case in court or negotiate a settlement, typically in the form of concessions.

tlecam wrote:

For many reasons, some of them very good, the DOT has not used its power to stop airline transactions for antitrust reasons. One reason is to abstract the industry from whiplash as the policies of different administrations can change significantly from election to election.

I'm not sure where you came up with that idea. Congress removed domestic airline merger review from the DOT more than thirty years ago. Power rests solely with the DOJ.

https://www.justice.gov/atr/department-justice-2

The DOT still reviews international anti-trust-immunized joint-venture applications.

MIflyer12 wrote:

tlecam wrote:

For many reasons, some of them very good, the DOT has not used its power to stop airline transactions for antitrust reasons. One reason is to abstract the industry from whiplash as the policies of different administrations can change significantly from election to election.

I'm not sure where you came up with that idea. Congress removed domestic airline merger review from the DOT more than thirty years ago. Power rests solely with the DOJ.

https://www.justice.gov/atr/department-justice-2

The DOT still reviews international anti-trust-immunized joint-venture applications.

Mergers are only one type of transaction. However, I should have said “some transactions.”

BEG2IAH wrote:

IADCA wrote:

DOJ has been doing terribly recently in trying to block mergers. My read of this so far is that they're doing a terrible job at this trial too. But the facts and law when combined aren't great for AA and B6.

IADCA, thanks for very accurate and great contributions to the topic. Per se violations are enough to kill the NEA, and rule of reason will either result in more remedies down the road or even very hefty settlements.

It would really take a serious anti-talent by the DoJ to screw up such an easy case. All they need to do is look at the routes offered/flown, capacity, service quality, shares, air fares and ancillary revenue before and after the NEA and find more than enough examples to win the case. Vasu's testimonies are a great example of a horribly unprepared witness who absolutely does not understand the amount of damage he caused. How is this guy in this high of a position?!? Or he is just arrogant. No idea... He is an absolute train rack.

Part of the DOT allowing the NEA to happen was a required annual increase in ASMs offered by the 2 companies. So capacity has been increasing, service quality has increased with the elimination of most 50 seat jet operations. jetblue has used the newly available slots to increase the amount of routes served, some which directly compete against Delta on routes that they had a monopoly on. Airfares have increased industry wide, there’s a point if NYC/BOS fares have increased more then the national increase.

When are we expecting a decision?

Detroit313 wrote:

When are we expecting a decision?

Trial will resume on Tuesday 10/11/2022. Here is the link to the Scheduling Order: https://www.courtlistener.com/docket/60 ... group-inc/

Post-trial briefs and proposed findings of fact and conclusions of law to be filed three weeks after bench trial's conclusion. The judge might rule in November at the earliest, but it could take a while.

And speaking of differences in opinions between DoT and DoJ, here is what DoT is saying now: https://www.law360.com/articles/1536674 ... -challenge

Fair use excerpt:
Days after a JetBlue attorney asserted in opening arguments for the government's effort to break up their Northeast Alliance that the DOT "reached a very different judgment" than what drove the DOJ to file suit in Massachusetts federal court, the DOT issued a full-throated denial of any differences of opinion between the two agencies.

"There is no divergence between the Department of Transportation and the Department of Justice when it comes to promoting competition in the airline industry and protecting consumers. DOT will continue to work closely with the DOJ as it works to resolve the ongoing antitrust and competition concerns regarding the Northeast Alliance," the DOT said in a statement Friday.

The DOT went on to argue that the suggestion by the airlines that it came to a different conclusion than the DOJ on the Northeast Alliance's antitrust implications "is not true."

https://thepointsguy.com/news/american- ... tfrQW3zfm0

American CEO was quested as saying “isn’t sure if Mint is lie flat or not”.

strfyr51 wrote:

AA was NOT a fraction of the size of United or Delta, Not Now not then nor at any time!! This is and was a SCHEME! A good one I might add but nothing more than a Scheme. if B^ can keep this up? Then they should forego their merger. and let American take them over. Anybody who falls for this? I've got a Bridge to sell you..

Let's just use facts here.

CY 2018 for EWR, LGA, & JFK (ie, New York City's airports):
UA: 16.0m PAX; 19.0 m seats; 33.3B ASMs
DL: 15.2m Pax; 18.5m seat; 24.9B ASMs
B6: 8.8m pax; 10.6m seats; 14.0B ASMs
AA: 8.4m pax; 10.4m seats; 13.7B ASMs

CY 2010 for EWR, LGA & JFK:
UA: 12.1m pax; 15.2m seats; 27.9B ASMs
DL: 9.9m pax; 13.2m seats; 20.4B ASMs
AA: 6.7m pax; 8.5m seats; 13.9B ASMs
B6: 6.7m pax; 8.2m seats; 9.8B ASMs

That is black and white. No hyperbole. UA was 82.7% larger than AA in 2018. DL was 77.9% larger than AA in 2018. Oh look, back in 2010, UA was (checks math) 85.3% larger than AA. Yes, "combining" B6 and AA make them "bigger" than UA and DL, but by a minimal 10%. NYC was a 2 horse town for well more than a decade. AA lost its ability to compete years and years ago. AA wasnt going to ever get to the size to be competitive at NYC holistically. Just cant happen in large part because B6 grew on AA's slots of the 90s.

BEG2IAH wrote:

Detroit313 wrote:

When are we expecting a decision?

Trial will resume on Tuesday 10/11/2022. Here is the link to the Scheduling Order: https://www.courtlistener.com/docket/60 ... group-inc/

Post-trial briefs and proposed findings of fact and conclusions of law to be filed three weeks after bench trial's conclusion. The judge might rule in November at the earliest, but it could take a while.

It can take months for the judge's clerks to do their research and for the judge's ruling to be drafted and finalized. I would be surprised if there is a ruling this year.

And speaking of differences in opinions between DoT and DoJ, here is what DoT is saying now: https://www.law360.com/articles/1536674 ... -challenge

Fair use excerpt:
Days after a JetBlue attorney asserted in opening arguments for the government's effort to break up their Northeast Alliance that the DOT "reached a very different judgment" than what drove the DOJ to file suit in Massachusetts federal court, the DOT issued a full-throated denial of any differences of opinion between the two agencies.

"There is no divergence between the Department of Transportation and the Department of Justice when it comes to promoting competition in the airline industry and protecting consumers. DOT will continue to work closely with the DOJ as it works to resolve the ongoing antitrust and competition concerns regarding the Northeast Alliance," the DOT said in a statement Friday.

The DOT went on to argue that the suggestion by the airlines that it came to a different conclusion than the DOJ on the Northeast Alliance's antitrust implications "is not true."

This statement is both true and is keeping with established practice; the DOT didn't do much around anti-trust because it defers to the DOJ on anti-trust issues. The DOT did what it typically does on any number of matters that come before it. The B6 attorney knows this and in my opinion made that point to try and establish a narrative in the media, not for any salient legal rationale.

tlecam wrote:

I would be surprised if there is a ruling this year.

I would agree.

B6BOSfan wrote:

cloudboy wrote:

dfwfanboy wrote:

Not to mention Acela. I don’t understand why anyone flies to Boston from NYC now anyway. DC? Sure. Makes sense but I’ve never understood why you’d drive to LGA, get there, at least, 30-60 minutes early, fly, then end up at Logan when Acela seems so much easier

Price first, parking second. No really good cheap places to park when taking the train to NYC from Boston. Acela doesn't offer much gain in time, a much worse ride, but they charge a lot for it. Airfares when bought ahead are pretty cheap.

As for the number of airline, really they all serve the route, albeit not at shuttle frequency. UA serves Newark, the others serve JFK and LGA. I don't think that is really going to work as an argument.

The Route 128/Westwood garage is a GREAT spot to park for Acela trips to NYC. Just did a 5 day trip to the city and left my car there. $31 for 5 days of parking (Sun-Thurs). Can't beat that anywhere.

However, I will say that train prices are typically higher than airfare prices in the days before the trip. The Acela between NYC and BOS is also PAINFULLY slow. Two hours from NYC to just past New Haven is not idea. Between that, collecting miles, and getting SkyClub access (vs. nothing on train), I prefer to fly.

3hrs 30 to BOS, 2hrs 58 to PVD by rail is not that PAINFUL snd becomes an absolute delight when the BOS NYC flights are bogged down due to a thunderstorm or a few flakes of snow.

PHLspecial wrote:

cloudboy wrote:

dfwfanboy wrote:

Not to mention Acela. I don’t understand why anyone flies to Boston from NYC now anyway. DC? Sure. Makes sense but I’ve never understood why you’d drive to LGA, get there, at least, 30-60 minutes early, fly, then end up at Logan when Acela seems so much easier

Price first, parking second. No really good cheap places to park when taking the train to NYC from Boston. Acela doesn't offer much gain in time, a much worse ride, but they charge a lot for it. Airfares when bought ahead are pretty cheap.

As for the number of airline, really they all serve the route, albeit not at shuttle frequency. UA serves Newark, the others serve JFK and LGA. I don't think that is really going to work as an argument.

If the Acela wasn't completive it wouldn't be this expensive. The current Acela's are running pretty close to full capacity. So if you live near JFK, LGA it's kinda make sense to fly. Parking at an airport is not that cheap either. I will say the airline shuttles couldn't kill off Amtrak or the Acela so there is a market for this train segment. Plus you get way better views on the ground and still be productive as well.
Why complete in this market when 80% of the people drive between NYC and BOS. AA now can use it's resources on other routes if it choses to do so.

There are two train services BOS>NYP>WAS - Acela and Northeast Regional. Acela is the high speed (supposedly) service, but only gains you a half hour between Boston and New York. And the ride is much worse than the regional. Trains aren't competitive on that route - they're DOMINANT.

But they have a few drawbacks - namely they usually are a tad more expensive from Boston and considerably more from ORH. And, parking, unless you can take transit to BOS or PVD, or the 128 station is within a reasonable drive, is harder. Thus, there is room for air travel. Saying AA and B6 need to join forces to have any chance in the market isn't accurate.