This merger would be horrible for fares on the BOS/NYC-Florida routes.

cv5880 wrote:

Again following 9/11 and the recession that followed bankrupted AA, UA, TW, NW, US, and CO. That round of consolidation was to save the industry. The fortress hubs that exists today should not be the justification for this merger approval. What happened in the past should not be used to justify this merger. JetBlue has fortress hubs at BOS, JFK, and FLL. JFK is a slot controlled airport so competition is constrained there. JetBlue is part of a defeacto merger with AA in the form of the NE Alliance and AS NW alliance. Allowing B6 ad NK to merge along with the AA alliances does present a competitive problem. JetBlue is not in dire straits financially! They are trying to grab assets on the cheap with NK.

Continental never filed for bankruptcy after 9/11. Continental did file for bankruptcy twice before 9/11 (September 24, 1983 and December 3, 1990). Continental was actually the first major carrier to return to profitability (both quarterly and yearly) after 9/11.

arfbool wrote:

I don't understand all the comments saying this merger in particular needs to be blocked. What about all the other mergers that were permitted in the last 20 years that were also obviously bad for consumers for the same reasons? I assume people with these perspectives agree with people like Elizabeth Warren and want all the major airlines broken up into smaller airlines. If you have a principle, abide by it. Don't cherry pick which airlines you like for growth and which ones you want to see destroyed.

What???? Who is cherry picking? Do you belive goverments canlnot change their policies.? (Why have elections?). Never mind the differences in the economy and the aviatiin industry over time? right? Who is promoting the idea of breaking up airlines? You are arguing against a strawman.

STT757 wrote:

cv5880 wrote:

Again following 9/11 and the recession that followed bankrupted AA, UA, TW, NW, US, and CO. That round of consolidation was to save the industry. The fortress hubs that exists today should not be the justification for this merger approval. What happened in the past should not be used to justify this merger. JetBlue has fortress hubs at BOS, JFK, and FLL. JFK is a slot controlled airport so competition is constrained there. JetBlue is part of a defeacto merger with AA in the form of the NE Alliance and AS NW alliance. Allowing B6 ad NK to merge along with the AA alliances does present a competitive problem. JetBlue is not in dire straits financially! They are trying to grab assets on the cheap with NK.

Continental never filed for bankruptcy after 9/11. Continental did file for bankruptcy twice before 9/11 (September 24, 1983 and December 3, 1990). Continental was actually the first major carrier to return to profitability (both quarterly and yearly) after 9/11.

Also, neither did TWA. Both their Chapter 11 filings were way before 9/11 and the Chapter 7 bankruptcy that went with their acquistion by AA came before 9/11.

BB78710 wrote:

FiscAutTecGarte wrote:

Would the previously proposed Frontier Spirit merger have received as much scrutiny as this proposed JetBlue Spirit merger?

I don't think it would have because a Spirit/Frontier merger would have created a an even larger ULCC which would have been great for competition and keeping fares low. Whereas according to the DOJ a JetBlue/Spirit merger would in fact eliminate a ULCC from the market and raise fares which according to the DOJ JetBlue would need to raise its fares to cover their losses from the merger.

The DOJ also stated JetBlue has moved away from being a disrupter in the market and instead has chosen to align itself with AA with the NEA. As a result of the NEA they are no longer a competitor with AA in the Northeast an area in particular where JetBlue has stated they need Spirit to help them compete.

Ok well how is B6 supposed to be a disruptor in the northeast when the DOJ allowed United and Delta to consolidate and grab massive market share in the region and has since stunted any attempt by any other airline to really grow equally to challenge them? I mean they only made CO/UA give up a whopping 18 slots in EWR out of the 400 they had and allowed Delta to take all but 45 or so slots for Delta in LGA having go from 50ish slots to a whopping 220 slots. The DOJ is going to have alot to answer to alot foment the environment were in today. And this argument about ULCC's bringing low fares, from the same administration that the POTUS himself in the SOTU said to crackdown on airline fees. Many studies show when you fly an ULCC your paying the same if not a nominal slight decrease after all is said and done with all the hidden fees they impose. The very thing this precious admin has said they want to crack down on. Lets see how many lawsuits has spirit and Frontier had in the last few years for bad practice in false advertisement and transparency on their fares? https://legalnewsline.com/stories/62941 ... -customers
https://topclassactions.com/lawsuit-set ... deceptive/
These are just a few examples. Jetblue hasn't had this and has been fair with their customers relatively speaking. You think Jetblue will not challenge this "We need ULCC competition". ULCC have been a scam beginning from the Lorenzo days deceiving the flying public. We all know in the end they nickle and dime the public for crap service. If the goverment is really looking out for the interest of the flying puiblic and not address this then they are being disingenuous, and you bet Jetblue will hold their feet to the fire. What jetblue would bring in all would be a good thing for the market.

BB78710 wrote:

FiscAutTecGarte wrote:

Would the previously proposed Frontier Spirit merger have received as much scrutiny as this proposed JetBlue Spirit merger?

The DOJ also stated JetBlue has moved away from being a disrupter in the market and instead has chosen to align itself with AA with the NEA. As a result of the NEA they are no longer a competitor with AA in the Northeast an area in particular where JetBlue has stated they need Spirit to help them compete.

*cue the end of the NEA*

A red flag is JetBlue's plan to remove Spirit's high density configuration, resulting in less seats as a result

I wonder two things
1. Could JetBlue have left seating configuration details out of its merger plan, and then made the seating configuration decisions well after the merger is passed?

2. To get the merger approved, at this point-beyond slot or gate concessions, could JetBlue actually adopt a high density seating configuration by leaving the Spirit seats mostly in tact, and offer a new discounted economy fare for those seats on its non BOS/business routes.

Not really sure how any of B6’s hubs count as fortress hubs. I’ve only ever thought of fortress hubs as those airports where one airline is completely and massively dominant and there is no carrier providing any real modicum of competition. I wouldn’t even count ATL as a fortress hub due to WN’s presence which, while not nearly at the DL level, isn’t just a dozen or two flights to other large operations in its network.

For B6, JFK is a hub or focus city for multiple carriers. Ditto BOS and FLL.

The following airports are what I suspect qualify as fortress hubs. I put some down as maybes as I might be a little off on some of them due to high international traffic or me lowballing the level of competition the dominant carrier has.

Also, this list doesn’t treat markets where there are two or more airports (Chicago, Dallas, New York, San Francisco, Washington, D.C., etc.) with significant commercial service as single markets. I’m focusing on the airports as individual entities here.

Definites:

American: CLT, DFW
Delta: MSP, SLC
Southwest: BWI, DAL, HOU, MDW
United: IAH

Maybes:

American: MIA, PHL
Delta: DTW
United: EWR, IAD, SFO

Using your figures B6/AA the NE Alliance control 56.3% of JFK (DL 35.5%), and 49.5% BOS (DL at 26.4% and UA 10.5%). Remember UA can't get into JFK because is is slot controlled. Other airlines have built 'fortress hubs' over time and at great expense.

Poorpilot wrote:

Pi7472000 wrote:

VS11 wrote:

"(Reuters) - The U.S. Department of Justice is expected to file an antitrust lawsuit to block JetBlue Airways Corp's $3.8 billion takeover of low-cost rival Spirit Airlines Inc as soon as Tuesday, Bloomberg News reported on Monday."

U.S. DOJ may sue to block JetBlue's $3.8 billion Spirit deal
https://finance.yahoo.com/news/u-doj-ma ... 38704.html

This is great news!! Hopefully the merger will be blocked! That would be good news for consumers and the public.

Really? How?

How would it not?!? This merger will cause a huge increase in airfares and decrease choice and competition. This merger is only beneficial for making more profits for JetBlue. The public and the people will not benefit at all. I am glad the Biden administration is saying enough to airline mergers. Trump would have allowed this merger to move through with zero issue. JetBlue would eliminate an ULCC that provides great competition. I never fly Spirit, but they act a great competitor and have helped to keep prices in check.

Abeam79 wrote:

BB78710 wrote:

FiscAutTecGarte wrote:

Would the previously proposed Frontier Spirit merger have received as much scrutiny as this proposed JetBlue Spirit merger?

I don't think it would have because a Spirit/Frontier merger would have created a an even larger ULCC which would have been great for competition and keeping fares low. Whereas according to the DOJ a JetBlue/Spirit merger would in fact eliminate a ULCC from the market and raise fares which according to the DOJ JetBlue would need to raise its fares to cover their losses from the merger.

The DOJ also stated JetBlue has moved away from being a disrupter in the market and instead has chosen to align itself with AA with the NEA. As a result of the NEA they are no longer a competitor with AA in the Northeast an area in particular where JetBlue has stated they need Spirit to help them compete.

Ok well how is B6 supposed to be a disruptor in the northeast when the DOJ allowed United and Delta to consolidate and grab massive market share in the region and has since stunted any attempt by any other airline to really grow equally to challenge them? I mean they only made CO/UA give up a whopping 18 slots in EWR out of the 400 they had and allowed Delta to take all but 45 or so slots for Delta in LGA having go from 50ish slots to a whopping 220 slots. The DOJ is going to have alot to answer to alot foment the environment were in today. And this argument about ULCC's bringing low fares, from the same administration that the POTUS himself in the SOTU said to crackdown on airline fees. Many studies show when you fly an ULCC your paying the same if not a nominal slight decrease after all is said and done with all the hidden fees they impose. The very thing this precious admin has said they want to crack down on. Lets see how many lawsuits has spirit and Frontier had in the last few years for bad practice in false advertisement and transparency on their fares? https://legalnewsline.com/stories/62941 ... -customers
https://topclassactions.com/lawsuit-set ... deceptive/
These are just a few examples. Jetblue hasn't had this and has been fair with their customers relatively speaking. You think Jetblue will not challenge this "We need ULCC competition". ULCC have been a scam beginning from the Lorenzo days deceiving the flying public. We all know in the end they nickle and dime the public for crap service. If the goverment is really looking out for the interest of the flying puiblic and not address this then they are being disingenuous, and you bet Jetblue will hold their feet to the fire. What jetblue would bring in all would be a good thing for the market.

The market and competitive situation is not static, you can't simply say "current merger X should be allowed because others were in the past" when the market, state of competition, and airline finances are completely different. If anything the proposed B6/NK merger wreaks of the WN and AirTran merger experience which the DOJ is not keen to repeat. ULCC's do drive down fares overall, even if occasionally ULCC's are higher or comparable to a legacy carrier, the legacy carriers fares are often lower only because of the presence of the ULCC.

https://papers.ssrn.com/sol3/papers.cfm ... id=3016047

https://www.nytimes.com/2017/09/01/busi ... rices.html

https://knowledge.wharton.upenn.edu/art ... t-airline/

Abeam79 wrote:

Ok well how is B6 supposed to be a disruptor in the northeast when the DOJ allowed United and Delta to consolidate and grab massive market share in the region and has since stunted any attempt by any other airline to really grow equally to challenge them? I mean they only made CO/UA give up a whopping 18 slots in EWR out of the 400 they had and allowed Delta to take all but 45 or so slots for Delta in LGA having go from 50ish slots to a whopping 220 slots. The DOJ is going to have alot to answer to alot foment the environment were in today. And this argument about ULCC's bringing low fares, from the same administration that the POTUS himself in the SOTU said to crackdown on airline fees. Many studies show when you fly an ULCC your paying the same if not a nominal slight decrease after all is said and done with all the hidden fees they impose. The very thing this precious admin has said they want to crack down on. Lets see how many lawsuits has spirit and Frontier had in the last few years for bad practice in false advertisement and transparency on their fares? https://legalnewsline.com/stories/62941 ... -customers
https://topclassactions.com/lawsuit-set ... deceptive/
These are just a few examples. Jetblue hasn't had this and has been fair with their customers relatively speaking. You think Jetblue will not challenge this "We need ULCC competition". ULCC have been a scam beginning from the Lorenzo days deceiving the flying public. We all know in the end they nickle and dime the public for crap service. If the goverment is really looking out for the interest of the flying puiblic and not address this then they are being disingenuous, and you bet Jetblue will hold their feet to the fire. What jetblue would bring in all would be a good thing for the market.

I appreciate your impassionate argument as the DOJ has allowed even larger mergers to happen in the past.
However, the reality is this is a much different environment and B6's argument from the beginning never really made sense because like the DOJ states they are no longer the disruptor they once were and claim to still be. Also savvy fliers can actually fly on a ULCC for far cheaper than they can on B6, AA, UA, DL or WN. And as far as slots EWR isn't slot controlled any longer B6 is free to add as many flights as they wish to and from EWR the problem is they don't have the planes to do so, the same is true at BOS. Where B6 and all airlines are truly restricted is at both JFK and LGA (in the Northeast) and in the mid-Atlantic DCA but DCA isn't some place where we've seen B6 fight for additional slots.

After reading the DOJ's argument I think one of the problems B6 has is they want to have their cake and eat it too. B6 states we need this merger to compete against AA, DL, UA and WN, perhaps the DOJ could understand their plight, the problem is the NEA with AA which covers not just routes contained within the Northeast but also routes from the Northeast to Mid-Atlantic, South, and Midwest. B6 argument that they are competing against AA becomes laughable when both B6 and AA continue to expand their NEA. You can't expect the DOJ to believe the argument of competition when you've aligned yourself with AA via the NEA in some of the most populated areas of the country.

According to the DOJ this isn't about competition this is about destroying a competitor because it is the fastest way for B6 to grow but that growth/merger comes at great expense which would force B6 to raise their fares just to cover the cost of the merger, which in turn would hurt low and middle class American looking for cheap affordable tickets.

<< According to the DOJ this isn't about competition this is about destroying a competitor because it is the fastest way for B6 to grow but that growth/merger comes at great expense which would force B6 to raise their fares just to cover the cost of the merger, which in turn would hurt low and middle class American looking for cheap affordable tickets.>>

Can someone shed light on the legal principles at play here? Let’s take it as a given that merger mania in the airline industry has not been beneficial to consumers generally by reducing competition. In the absence of a violation of antitrust law, so what? Are antitrust laws violated because a merger results in higher prices potentially to consumers? I comprehend the policy rationale behind the government’s concerns. But what are the legal basis? That’s what’s determinative in court.

BB78710 wrote:

Abeam79 wrote:

Ok well how is B6 supposed to be a disruptor in the northeast when the DOJ allowed United and Delta to consolidate and grab massive market share in the region and has since stunted any attempt by any other airline to really grow equally to challenge them? I mean they only made CO/UA give up a whopping 18 slots in EWR out of the 400 they had and allowed Delta to take all but 45 or so slots for Delta in LGA having go from 50ish slots to a whopping 220 slots. The DOJ is going to have alot to answer to alot foment the environment were in today. And this argument about ULCC's bringing low fares, from the same administration that the POTUS himself in the SOTU said to crackdown on airline fees. Many studies show when you fly an ULCC your paying the same if not a nominal slight decrease after all is said and done with all the hidden fees they impose. The very thing this precious admin has said they want to crack down on. Lets see how many lawsuits has spirit and Frontier had in the last few years for bad practice in false advertisement and transparency on their fares? https://legalnewsline.com/stories/62941 ... -customers
https://topclassactions.com/lawsuit-set ... deceptive/
These are just a few examples. Jetblue hasn't had this and has been fair with their customers relatively speaking. You think Jetblue will not challenge this "We need ULCC competition". ULCC have been a scam beginning from the Lorenzo days deceiving the flying public. We all know in the end they nickle and dime the public for crap service. If the goverment is really looking out for the interest of the flying puiblic and not address this then they are being disingenuous, and you bet Jetblue will hold their feet to the fire. What jetblue would bring in all would be a good thing for the market.

I appreciate your impassionate argument as the DOJ has allowed even larger mergers to happen in the past.
However, the reality is this is a much different environment and B6's argument from the beginning never really made sense because like the DOJ states they are no longer the disruptor they once were and claim to still be. Also savvy fliers can actually fly on a ULCC for far cheaper than they can on B6, AA, UA, DL or WN. And as far as slots EWR isn't slot controlled any longer B6 is free to add as many flights as they wish to and from EWR the problem is they don't have the planes to do so, the same is true at BOS. Where B6 and all airlines are truly restricted is at both JFK and LGA (in the Northeast) and in the mid-Atlantic DCA but DCA isn't some place where we've seen B6 fight for additional slots.

After reading the DOJ's argument I think one of the problems B6 has is they want to have their cake and eat it too. B6 states we need this merger to compete against AA, DL, UA and WN, perhaps the DOJ could understand their plight, the problem is the NEA with AA which covers not just routes contained within the Northeast but also routes from the Northeast to Mid-Atlantic, South, and Midwest. B6 argument that they are competing against AA becomes laughable when both B6 and AA continue to expand their NEA. You can't expect the DOJ to believe the argument of competition when you've aligned yourself with AA via the NEA in some of the most populated areas of the country.

According to the DOJ this isn't about competition this is about destroying a competitor because it is the fastest way for B6 to grow but that growth/merger comes at great expense which would force B6 to raise their fares just to cover the cost of the merger, which in turn would hurt low and middle class American looking for cheap affordable tickets.

Spot on. The arguments that B6 makes supporting its acquisition of NK are a further insight into why JetBlue make no sense. From an economic standpoint, B6 is trying to pay a huge premium for NK and will then inherit a fleet of planes that it will spend a huge amount of money retrofitting to the B6 standard. Putting the NEA aside for a moment, B6 has critical mass at JFK and BOS and had it before the NEA. To argue that it needs to compete with the US3 + WN is a hard pill to swallow when it optimizes slots alongside AA at JFK, DCA, LGA, and BOS. The overlap between B6 and NK isn't massive, but it is not insignificant in specific places, including Florida (and routes to/from Florida and the Mid-Atlantic and Northeast). Concentrated operations in NY and BOS come with pros and cons, the biggest problem of which is the operational challenges that come with some of those airports but there is a lot more JetBlue can do to make its operation run smoother and more reliably than it has, and a merger and the years and layers of integration there won't help it.

A link to the press conference videos and announcements are below, MA, NY, and DC have also joined to oppose the merger.

https://www.justice.gov/opa/video/justi ... ion-spirit

The B6/NK merger is a repeat of what AS did with VX. Following the merger AS has dumped the Airbuses (proudly all Boeing) and has dropped most if not all routes VX was flying. What the merger accomplished was to eliminate a competitor in the California (North Bay) market that AS wanted to grow in.

AAplat4life wrote:

<< According to the DOJ this isn't about competition this is about destroying a competitor because it is the fastest way for B6 to grow but that growth/merger comes at great expense which would force B6 to raise their fares just to cover the cost of the merger, which in turn would hurt low and middle class American looking for cheap affordable tickets.>>

Can someone shed light on the legal principles at play here? Let’s take it as a given that merger mania in the airline industry has not been beneficial to consumers generally by reducing competition. In the absence of a violation of antitrust law, so what? Are antitrust laws violated because a merger results in higher prices potentially to consumers? I comprehend the policy rationale behind the government’s concerns. But what are the legal basis? That’s what’s determinative in court.

Sections IV - VII in particular of the filing lay out the government's legal rationale, they are arguing that the merger violates antitrust law: "Each relevant market described in the preceding paragraph satisfies the
hypothetical monopolist test, as defined in the Merger Guidelines and constitutes a line of
commerce as that term is used in Section 7 of the Clayton Act, 15 U.S.C. § 18...This acquisition violates Section 7 of the Clayton Act and should be
enjoined."

https://storage.courtlistener.com/recap ... 67.1.0.pdf

cv5880 wrote:

The B6/NK merger is a repeat of what AS did with VX. Following the merger AS has dumped the Airbuses (proudly all Boeing) and has dropped most if not all routes VX was flying. What the merger accomplished was to eliminate a competitor in the California (North Bay) market that AS wanted to grow in.

With the exception of the JFK and DAL stuff, Alaska definitely hasn't dropped "most if not all" of what VX was flying. AS/VX tried to add some things after the merger was announced like SFO- MSY/ RDU / IND that they axed, but those weren't part of the legacy VX network anyway. VX only had 50 some planes when the merger was announced that were disproportionately used on transcons and they only served pretty major markets. They were a small airline, their route map at the time of the merger is linked. The number of total destinations served from SFO today is higher than it was on VX in 2016.

http://departedflights.com/VX092816.html

AAplat4life wrote:

<< According to the DOJ this isn't about competition this is about destroying a competitor because it is the fastest way for B6 to grow but that growth/merger comes at great expense which would force B6 to raise their fares just to cover the cost of the merger, which in turn would hurt low and middle class American looking for cheap affordable tickets.>>

Can someone shed light on the legal principles at play here? Let’s take it as a given that merger mania in the airline industry has not been beneficial to consumers generally by reducing competition. In the absence of a violation of antitrust law, so what? Are antitrust laws violated because a merger results in higher prices potentially to consumers? I comprehend the policy rationale behind the government’s concerns. But what are the legal basis? That’s what’s determinative in court.

The legal standard is that a merger is illegal when "the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly." That's the text of the Clayton Act, which is the portion of the US antitrust laws that governs the substantive evaluation of mergers. There's a lot of caselaw layered on top of that over the years, but the basic standard hasn't changed in a century.

Higher prices to consumers is the most classic example of a harm that would result from a substantial lessening of competition. So would be output reduction (meaning in airline terms fewer seats). But to answer your question directly, yes: if the government is able to persuasively show a judge that your proposed merger is going to raise prices to consumers in a properly-defined antitrust market, you're going down.

cv5880 wrote:

The B6/NK merger is a repeat of what AS did with VX. Following the merger AS has dumped the Airbuses (proudly all Boeing) and has dropped most if not all routes VX was flying. What the merger accomplished was to eliminate a competitor in the California (North Bay) market that AS wanted to grow in.

I actually disagree with this. B6 wants to grow, and fast. They *need* pilots and FA’s, they *need* gate agents, and they *need* to get out of the northeast. Of course cuts will happen, but it’s absolutely not just wiping out a competitor.

Please keep the thread on topic. Trolling posts or posts not attempting to engage in a productive discussion will be removed.

✈️ atcsundevil

Sources other than a 12+ year old book referenced in a Wikipedia page discuss fortress hubs in terms of one carrier holding >= 70% market share at a given airport. On that basis, I think it's fair to say B6 does not have any fortress hubs and I for one hope we can move on from this point very soon. There are far more important points in this discussion than whether B6 has or doesn't have fortress hubs and frankly I think the original point has been lost now anyway.

You have a non ULLC taking out the largest ULLC and there will be a major redistribution of flights/assets. That’s the bottom line- you can’t argue that. B6 will not sustain the NK focus cities nor business model going forward, and will drive up fares on those routes. Period.

You're only half right. A major redistribution of Spirit's assets is not, in and of itself, anticompetitive and wouldn't necessarily meet the legal test that IADCA has outlined to us.

I read the filing earlier and, while not an expert in how things work in the USA, to me it reads like a submission you write when you have to, but would rather not, write a submission. Using NK's own F9-merger-era language against B6/NK, writing in great detail about the Spirit effect but making only passing, unsubstantiated remarks about the JetBlue effect, and blatantly misquoting the two carriers' operational data seems to me to be an invitation for B6 and NK to rebut in such a way that the DoJ can't adequately respond. Personal opinion only, of course.

Speaking only for DAL AS has dropped service LGA, DCA, and LAX. The east coast routes were reduced from 319's/738's to E175's before being eliminated. They do have one flight a day to SFO (VX) and SEA. So you are technically right they have not eliminated all pre merger VX routes. The reduction of service to DAL is what allowed DL to get a dedicated gate.

WkndWanderer wrote:

cv5880 wrote:

The B6/NK merger is a repeat of what AS did with VX. Following the merger AS has dumped the Airbuses (proudly all Boeing) and has dropped most if not all routes VX was flying. What the merger accomplished was to eliminate a competitor in the California (North Bay) market that AS wanted to grow in.

With the exception of the JFK and DAL stuff, Alaska definitely hasn't dropped "most if not all" of what VX was flying. AS/VX tried to add some things after the merger was announced like SFO- MSY/ RDU / IND that they axed, but those weren't part of the legacy VX network anyway. VX only had 50 some planes when the merger was announced that were disproportionately used on transcons and they only served pretty major markets. They were a small airline, their route map at the time of the merger is linked. The number of total destinations served from SFO today is higher than it was on VX in 2016.

http://departedflights.com/VX092816.html

Huh?
BOS-LAX gone
MCO-LAX-gone
FLL-SFO gone
JFK-LAS gone

plus BOS-SFO down to once per day from a peak of 3X

N717TW wrote:

WkndWanderer wrote:

cv5880 wrote:

The B6/NK merger is a repeat of what AS did with VX. Following the merger AS has dumped the Airbuses (proudly all Boeing) and has dropped most if not all routes VX was flying. What the merger accomplished was to eliminate a competitor in the California (North Bay) market that AS wanted to grow in.

With the exception of the JFK and DAL stuff, Alaska definitely hasn't dropped "most if not all" of what VX was flying. AS/VX tried to add some things after the merger was announced like SFO- MSY/ RDU / IND that they axed, but those weren't part of the legacy VX network anyway. VX only had 50 some planes when the merger was announced that were disproportionately used on transcons and they only served pretty major markets. They were a small airline, their route map at the time of the merger is linked. The number of total destinations served from SFO today is higher than it was on VX in 2016.

http://departedflights.com/VX092816.html

Huh?
BOS-LAX gone
MCO-LAX-gone
FLL-SFO gone
JFK-LAS gone

plus BOS-SFO down to once per day from a peak of 3X

and some Hawaii services

phluser wrote:

A red flag is JetBlue's plan to remove Spirit's high density configuration, resulting in less seats as a result

I wonder two things
1. Could JetBlue have left seating configuration details out of its merger plan, and then made the seating configuration decisions well after the merger is passed?

2. To get the merger approved, at this point-beyond slot or gate concessions, could JetBlue actually adopt a high density seating configuration by leaving the Spirit seats mostly in tact, and offer a new discounted economy fare for those seats on its non BOS/business routes.

Depending on the argument one wishes to support, seat densification is presented as an anti consumer, comfort depriving, commoditization of airline travel. Or, it is presented as the enlightened way to allow air travel for everyone. Paying for only what you want, no need to pay for all that other stuff. It’s the ultimate freedom for the consumer. Both are part hogwash, part truth. But, I am pretty tired of reading these tired arguments over, and over. The only person you are convincing is yourself.

11C wrote:

phluser wrote:

A red flag is JetBlue's plan to remove Spirit's high density configuration, resulting in less seats as a result

I wonder two things
1. Could JetBlue have left seating configuration details out of its merger plan, and then made the seating configuration decisions well after the merger is passed?

2. To get the merger approved, at this point-beyond slot or gate concessions, could JetBlue actually adopt a high density seating configuration by leaving the Spirit seats mostly in tact, and offer a new discounted economy fare for those seats on its non BOS/business routes.

Depending on the argument one wishes to support, seat densification is presented as an anti consumer, comfort depriving, commoditization of airline travel. Or, it is presented as the enlightened way to allow air travel for everyone. Paying for only what you want, no need to pay for all that other stuff. It’s the ultimate freedom for the consumer. Both are part hogwash, part truth. But, I am pretty tired of reading these tired arguments over, and over. The only person you are convincing is yourself.

You're definitely right that the argument cuts both ways. But to actually answer the questions:

1) Yes. A frequent part of counseling clients who are preparing for a merger that is likely to get scrutiny is to make sure their documents are as bland as possible. Putting out a merger plan that expressly eliminates one of the competing products isn't that. That's never a good place to start in defending a merger.

2) That wouldn't make any difference at this point. There's no way you could write that remedy - and DOJ strongly disfavors conduct remedies these days, even more than it is avoiding divestitures - in a way that would get approval from DOJ to be included in a settlement agreement. The seat-density ship has sailed.

BB78710 wrote:

Abeam79 wrote:

Ok well how is B6 supposed to be a disruptor in the northeast when the DOJ allowed United and Delta to consolidate and grab massive market share in the region and has since stunted any attempt by any other airline to really grow equally to challenge them? I mean they only made CO/UA give up a whopping 18 slots in EWR out of the 400 they had and allowed Delta to take all but 45 or so slots for Delta in LGA having go from 50ish slots to a whopping 220 slots. The DOJ is going to have alot to answer to alot foment the environment were in today. And this argument about ULCC's bringing low fares, from the same administration that the POTUS himself in the SOTU said to crackdown on airline fees. Many studies show when you fly an ULCC your paying the same if not a nominal slight decrease after all is said and done with all the hidden fees they impose. The very thing this precious admin has said they want to crack down on. Lets see how many lawsuits has spirit and Frontier had in the last few years for bad practice in false advertisement and transparency on their fares? https://legalnewsline.com/stories/62941 ... -customers
https://topclassactions.com/lawsuit-set ... deceptive/
These are just a few examples. Jetblue hasn't had this and has been fair with their customers relatively speaking. You think Jetblue will not challenge this "We need ULCC competition". ULCC have been a scam beginning from the Lorenzo days deceiving the flying public. We all know in the end they nickle and dime the public for crap service. If the goverment is really looking out for the interest of the flying puiblic and not address this then they are being disingenuous, and you bet Jetblue will hold their feet to the fire. What jetblue would bring in all would be a good thing for the market.

I appreciate your impassionate argument as the DOJ has allowed even larger mergers to happen in the past.
However, the reality is this is a much different environment and B6's argument from the beginning never really made sense because like the DOJ states they are no longer the disruptor they once were and claim to still be. Also savvy fliers can actually fly on a ULCC for far cheaper than they can on B6, AA, UA, DL or WN. And as far as slots EWR isn't slot controlled any longer B6 is free to add as many flights as they wish to and from EWR the problem is they don't have the planes to do so, the same is true at BOS. Where B6 and all airlines are truly restricted is at both JFK and LGA (in the Northeast) and in the mid-Atlantic DCA but DCA isn't some place where we've seen B6 fight for additional slots.

After reading the DOJ's argument I think one of the problems B6 has is they want to have their cake and eat it too. B6 states we need this merger to compete against AA, DL, UA and WN, perhaps the DOJ could understand their plight, the problem is the NEA with AA which covers not just routes contained within the Northeast but also routes from the Northeast to Mid-Atlantic, South, and Midwest. B6 argument that they are competing against AA becomes laughable when both B6 and AA continue to expand their NEA. You can't expect the DOJ to believe the argument of competition when you've aligned yourself with AA via the NEA in some of the most populated areas of the country.

According to the DOJ this isn't about competition this is about destroying a competitor because it is the fastest way for B6 to grow but that growth/merger comes at great expense which would force B6 to raise their fares just to cover the cost of the merger, which in turn would hurt low and middle class American looking for cheap affordable tickets.

We’ll the DOJ made the claim without any evidence so that’s for a judge to decide but they haven’t provided any. And it seems it doesn’t hold water. Look at the fares how much they dropped in the recent adds by JetBlue, so not sure how the DOJ can defend said claim..
Also again, back to my point, ulcc usually don’t offer cheaper fares, after all the nickel and dimming your not saving much
https://www.marketplace.org/2019/05/15/ ... rline/amp/
Robert Mann, an airline industry analyst, agreed that if you value basic transportation and you carry everything you’re going to take with you, then these ultra low-cost carriers can represent a “tremendous deal.”
“If you compare this Spirit price to the cheapest available flight on basic economy at American Airlines, for the same route and time period, you’ll find you’ll actually end up paying more with the ultra low-cost carrier.”
“ A basic economy trip on American Airlines will cost $392.61 — about $30 less than the Spirit flight. Unlike Spirit, you’re allowed one free carry-on, in addition to a personal item.

Robert Mann pointed out that you aren’t always guaranteed a cheap ticket on an ultra low-cost carrier.”
I also myself and many I know have personal albeit anecdotal account for this. And again, they have been sued many times in the past few years for their malfeasance in pricing against the public. You can reference those links in my prior post.
As far as Newark, technically it is slot controlled, but not in traditional slots but in runway departure slots to control the congestion of aircraft are queued into takeoff positions so so you can’t just “add as much flying in Newark if they want”.
The doj is also shortsighted on the complainant in which no one is addressing, is that since the pandemic we had 2 more major ulcc start up (Avelo , breeze)and another 2 growing massively (allegiant, sun country) and the standard one, (frontier) with size able aircraft order, so after the JetBlue spirit merger the market will have twice as many more ulcc than before the proposed merger was announced. We will now have 5 serious ulcc players in the market now vs the only 2 just a few years ago. The ulcc space is actually growing in competition. This is fact, in which the doj hasn’t even as much as addressed in the complaint. The idea the ulcc space will shrink is a red herring, it’s actually going to grow, and JetBlue has already offered assets to allow that. And this is the main part of their fight against the doj, the doj isn’t even addressing this. Showing an even weaker case, like the previous 4/5 cases they filed and why they lost them.

Abeam79 wrote:

Ok well how is B6 supposed to be a disruptor in the northeast when the DOJ allowed United and Delta to consolidate and grab massive market share in the region and has since stunted any attempt by any other airline to really grow equally to challenge them? I mean they only made CO/UA give up a whopping 18 slots in EWR out of the 400 they had and allowed Delta to take all but 45 or so slots for Delta in LGA having go from 50ish slots to a whopping 220 slots.

The merger between Continental and United didn't result in an increase in market concentration at EWR. The 18 slots that were given up to WN were the sum total of slots held by pre-merger UA, so post-merger UA had the same number of slots as pre-merger CO. Plus that was a win in the government's view as it allowed a new entrant at EWR with a track record for more disruptive pricing than the legacies.

The DL-US slot swap was allowed precisely because of the slot divestitures, and to be honest, the statistics bear out that the slot swap was a win for customers. Passenger totals at LGA increased by 29% between 2011 and 2019 -- in part due to larger aircraft being used, and in part due to slot divestitures to new/limited entrants. WN increased LGA passengers by 56% over that timespan compared to WN+FL in 2011 (in part due to LGA slots divested during the AA-US merger). B6 grew passengers by 50% at LGA during that period. WS gained access to LGA thanks to divested slots (and no, I don't think they should be allowed to partner with DL using divested slots).

Abeam79 wrote:

BB78710 wrote:

Abeam79 wrote:

Ok well how is B6 supposed to be a disruptor in the northeast when the DOJ allowed United and Delta to consolidate and grab massive market share in the region and has since stunted any attempt by any other airline to really grow equally to challenge them? I mean they only made CO/UA give up a whopping 18 slots in EWR out of the 400 they had and allowed Delta to take all but 45 or so slots for Delta in LGA having go from 50ish slots to a whopping 220 slots. The DOJ is going to have alot to answer to alot foment the environment were in today. And this argument about ULCC's bringing low fares, from the same administration that the POTUS himself in the SOTU said to crackdown on airline fees. Many studies show when you fly an ULCC your paying the same if not a nominal slight decrease after all is said and done with all the hidden fees they impose. The very thing this precious admin has said they want to crack down on. Lets see how many lawsuits has spirit and Frontier had in the last few years for bad practice in false advertisement and transparency on their fares? https://legalnewsline.com/stories/62941 ... -customers
https://topclassactions.com/lawsuit-set ... deceptive/
These are just a few examples. Jetblue hasn't had this and has been fair with their customers relatively speaking. You think Jetblue will not challenge this "We need ULCC competition". ULCC have been a scam beginning from the Lorenzo days deceiving the flying public. We all know in the end they nickle and dime the public for crap service. If the goverment is really looking out for the interest of the flying puiblic and not address this then they are being disingenuous, and you bet Jetblue will hold their feet to the fire. What jetblue would bring in all would be a good thing for the market.

I appreciate your impassionate argument as the DOJ has allowed even larger mergers to happen in the past.
However, the reality is this is a much different environment and B6's argument from the beginning never really made sense because like the DOJ states they are no longer the disruptor they once were and claim to still be. Also savvy fliers can actually fly on a ULCC for far cheaper than they can on B6, AA, UA, DL or WN. And as far as slots EWR isn't slot controlled any longer B6 is free to add as many flights as they wish to and from EWR the problem is they don't have the planes to do so, the same is true at BOS. Where B6 and all airlines are truly restricted is at both JFK and LGA (in the Northeast) and in the mid-Atlantic DCA but DCA isn't some place where we've seen B6 fight for additional slots.

After reading the DOJ's argument I think one of the problems B6 has is they want to have their cake and eat it too. B6 states we need this merger to compete against AA, DL, UA and WN, perhaps the DOJ could understand their plight, the problem is the NEA with AA which covers not just routes contained within the Northeast but also routes from the Northeast to Mid-Atlantic, South, and Midwest. B6 argument that they are competing against AA becomes laughable when both B6 and AA continue to expand their NEA. You can't expect the DOJ to believe the argument of competition when you've aligned yourself with AA via the NEA in some of the most populated areas of the country.

According to the DOJ this isn't about competition this is about destroying a competitor because it is the fastest way for B6 to grow but that growth/merger comes at great expense which would force B6 to raise their fares just to cover the cost of the merger, which in turn would hurt low and middle class American looking for cheap affordable tickets.

We’ll the DOJ made the claim without any evidence so that’s for a judge to decide but they haven’t provided any.

They're not required to provide evidence in a complaint. That's what the discovery process is for. The complaint just provides the allegations: sure, the allegations must be plausible and supported by sufficient facts to support a finding of plausibility (that's the Twombly/Iqbal standard), but you don't need to actually provide the evidence until you get to the summary judgment stage (and ultimately, trial). And like it or not, the DOJ did cite pretty liberally from the parties' own documents provided in the HSR process, in addition to public statements, when drafting this complaint.

Nor does the DOJ have to win on every one of its allegations in this complaint in order to win the case. People shouldn't lose sight of that. This isn't a criminal case. The standard isn't "beyond a reasonable doubt." It's "more probable than not." 50%+1 iota on the government's side means it wins.

Finally, I don't think the argument you provided cuts the way you think it does. You've basically admitted that the purpose of this transaction is to eliminate the largest player in a fast-growing segment that threatens non-ULCC airlines. And on your citation of Mr. Mann, you neglect the critical fact: majors only introduced Basic Economy because of competition from large, scaled-up ULCCs that were actually big enough to threaten their revenue streams. The ULCC model - and Spirit in particular - almost inarguably brought prices down overall.

Yes, this is not a slam-dunk case for DOJ. But it's a much better one as a matter of antitrust law than many of the pro-airline folks on here seem to admit, and - unlike previous administrations - this DOJ seems willing to go to trial with non-slam-dunk Clayton Act cases.

With the DoJ officially opposing the B6/NK merger, now you wonder if the F9/NK merger is back on again. People think F9/NK could affect Florida but even the combined F9/NK have to face AA, DL and WN, all of which have a huge presence in Florida.

N717TW wrote:

WkndWanderer wrote:

cv5880 wrote:

The B6/NK merger is a repeat of what AS did with VX. Following the merger AS has dumped the Airbuses (proudly all Boeing) and has dropped most if not all routes VX was flying. What the merger accomplished was to eliminate a competitor in the California (North Bay) market that AS wanted to grow in.

With the exception of the JFK and DAL stuff, Alaska definitely hasn't dropped "most if not all" of what VX was flying. AS/VX tried to add some things after the merger was announced like SFO- MSY/ RDU / IND that they axed, but those weren't part of the legacy VX network anyway. VX only had 50 some planes when the merger was announced that were disproportionately used on transcons and they only served pretty major markets. They were a small airline, their route map at the time of the merger is linked. The number of total destinations served from SFO today is higher than it was on VX in 2016.

http://departedflights.com/VX092816.html

Huh?
BOS-LAX gone
MCO-LAX-gone
FLL-SFO gone
JFK-LAS gone

plus BOS-SFO down to once per day from a peak of 3X

Isn’t one of the reason for these cuts the fact that AS joined OW, making them not competitive considering AA operates in the same exact markets?

RayChuang wrote:

With the DoJ officially opposing the B6/NK merger, now you wonder if the F9/NK merger is back on again. People think F9/NK could affect Florida but even the combined F9/NK have to face AA, DL and WN, all of which have a huge presence in Florida.

I don't think the DOJ's opinion on an F9/NK merger differ from a B6/NK merger. If B6/NK doesn't get approved (hypothetically), the chances of F9/NK getting approved are not much better, if not worse.

AC4500 wrote:

RayChuang wrote:

With the DoJ officially opposing the B6/NK merger, now you wonder if the F9/NK merger is back on again. People think F9/NK could affect Florida but even the combined F9/NK have to face AA, DL and WN, all of which have a huge presence in Florida.

I don't think the DOJ's opinion on an F9/NK merger differ from a B6/NK merger. If B6/NK doesn't get approved (hypothetically), the chances of F9/NK getting approved are not much better, if not worse.

I would beg to differ. The chief argument DOJ has against B6/NK is that eliminates a lot of the ULCC segment by taking its biggest player and moving it into the non-ULCC part of the industry. That argument doesn't work in F9/NK. DOJ would be left with a somewhat natural whipsaw of an argument against that combination: they'd almost have to argue that that combined carrier would (1) squash the rest of the ULCCs and/or (2) raise its fares to something closer to the majors (or shift away from the unbundled model). Neither one of those carries much water, at least intuitively.

And "approval" isn't the standard here: the burden of proof is on the government to prove to a judge that B6/NK is illegal.

Finally, F9/NK couldn't get "back on" unless and until the B6/NK agreement is formally terminated, either by the parties or by being enjoined by a judge.

A few things that stand out in the government’s filing document.

1. Spirit is “expected to continue to expand at a quick pace.” What’s the definition of “quick”? Between Airbus delivery delays and pilot attrition and recruitment I find that hard to believe. This is not Spirits fault, but it’s the reality of the airline industry right now. The ULCC model works best when the airline is expanding rapidly. This equates to low maintenance costs and very low (relatively speaking) employee cost (especially pilots). This isn’t the case for Spirit anymore. This idea of “expand at a quick pace” is obviously unrealistic to anyone who has anything to do with the current airline industry.

2. The government just yesterday spoke about “junk fees” when referring to the airlines. They then state on the same day “Spirit has forced larger airlines, particularly the already-low-cost JetBlue, to compete for customers by introducing unbundled, customizable ticket options” i.e junk fees. Which one is it?

3. They also say “The deal also would eliminate half of the ultra-low-cost capacity in the United States.” I’m not sure this is statistically accurate or not, but it’s misleading at best. That ULCC capacity is not gone forever. The capacity could be backfilled by the other 3 or 4 newer and cheaper ULCC (Breeze, Avelo, Allegiant, etc.).

The government is essentially saying that the status quo is good enough. The industry is looking good with 4 airlines commanding 80% of the market and everyone else can fight over the scraps. Both sides can make an argument, you can’t argue that what’s going on right now is good for anyone other than the big 4.

Mikeer50 wrote:

A few things that stand out in the government’s filing document.

1. Spirit is “expected to continue to expand at a quick pace.” What’s the definition of “quick”? Between Airbus delivery delays and pilot attrition and recruitment I find that hard to believe. This is not Spirits fault, but it’s the reality of the airline industry right now. The ULCC model works best when the airline is expanding rapidly. This equates to low maintenance costs and very low (relatively speaking) employee cost (especially pilots). This isn’t the case for Spirit anymore. This idea of “expand at a quick pace” is obviously unrealistic to anyone who has anything to do with the current airline industry.

2. The government just yesterday spoke about “junk fees” when referring to the airlines. They then state on the same day “Spirit has forced larger airlines, particularly the already-low-cost JetBlue, to compete for customers by introducing unbundled, customizable ticket options” i.e junk fees. Which one is it?

3. They also say “The deal also would eliminate half of the ultra-low-cost capacity in the United States.” I’m not sure this is statistically accurate or not, but it’s misleading at best. That ULCC capacity is not gone forever. The capacity could be backfilled by the other 3 or 4 newer and cheaper ULCC (Breeze, Avelo, Allegiant, etc.).

The government is essentially saying that the status quo is good enough. The industry is looking good with 4 airlines commanding 80% of the market and everyone else can fight over the scraps. Both sides can make an argument, you can’t argue that what’s going on right now is good for anyone other than the big 4.

I don't know how you square your first point with a conclusion that the government believes the status quo is good enough. If it believed it were good enough, point #1 wouldn't be in the complaint because they wouldn't care about expansion. And anyway, it's irrelevant whether the status quo is good enough as opposed to merely being a less-bad option: the argument here is between a world with this deal and a world without it.

Point #3 may not be true, but it comes from Spirit's own document - even pasted right into the complaint - so it's hard for them to back off. That slide is a gift to DOJ.

Your point #2 is a good one.

Finally, there's one more thing that lawyers will appreciate about this complaint as being almost funny if it weren't in a serious document: the government actually attempts to use an attempted settlement offer against the party that made it, which is specifically and unambiguously barred by the Federal Rules of Evidence.

IADCA wrote:

Mikeer50 wrote:

A few things that stand out in the government’s filing document.

1. Spirit is “expected to continue to expand at a quick pace.” What’s the definition of “quick”? Between Airbus delivery delays and pilot attrition and recruitment I find that hard to believe. This is not Spirits fault, but it’s the reality of the airline industry right now. The ULCC model works best when the airline is expanding rapidly. This equates to low maintenance costs and very low (relatively speaking) employee cost (especially pilots). This isn’t the case for Spirit anymore. This idea of “expand at a quick pace” is obviously unrealistic to anyone who has anything to do with the current airline industry.

2. The government just yesterday spoke about “junk fees” when referring to the airlines. They then state on the same day “Spirit has forced larger airlines, particularly the already-low-cost JetBlue, to compete for customers by introducing unbundled, customizable ticket options” i.e junk fees. Which one is it?

3. They also say “The deal also would eliminate half of the ultra-low-cost capacity in the United States.” I’m not sure this is statistically accurate or not, but it’s misleading at best. That ULCC capacity is not gone forever. The capacity could be backfilled by the other 3 or 4 newer and cheaper ULCC (Breeze, Avelo, Allegiant, etc.).

The government is essentially saying that the status quo is good enough. The industry is looking good with 4 airlines commanding 80% of the market and everyone else can fight over the scraps. Both sides can make an argument, you can’t argue that what’s going on right now is good for anyone other than the big 4.

I don't know how you square your first point with a conclusion that the government believes the status quo is good enough. If it believed it were good enough, point #1 wouldn't be in the complaint because they wouldn't care about expansion. And anyway, it's irrelevant whether the status quo is good enough: the argument here is between a world with this deal and a world without it.

Point #3 may not be true, but it comes from Spirit's own document - even pasted right into the complaint - so it's hard for them to back off. That slide is a gift to DOJ.

Your point #2 is a good one.

Finally, there's one more thing that lawyers will appreciate about this complaint as being almost funny if it weren't in a serious document: the government actually attempts to use an attempted settlement offer against the party that made it, which is specifically and unambiguously barred by the Federal Rules of Evidence.

I see what you mean about my first point. I was just trying to illustrate that the government seems out of touch with the reality of the current situation. Relative to their previous expansion, Spirit will by no means be expanding at a quick pace.

Question, does it seem lazy and disingenuous to use Spirits words against the merger in such a way. That slide was made during a contentious hostile takeover attempt. Shouldn’t the validity of the slide at least be questioned and the information substantiated before the government uses the information in a legal document. The information Spirit and Frontier provided during their merger attempt is obviously biased (true or not) and an attempt to sway stockholders.

Lastly, I noticed that a judge was assigned the case. It seems like it’s not the judge the government wanted. Do you find it telling that the government wanted the NEA judge to handle the case? Thanks!

Mikeer50 wrote:

Question, does it seem lazy and disingenuous to use Spirits words against the merger in such a way. That slide was made during a contentious hostile takeover attempt. Shouldn’t the validity of the slide at least be questioned and the information substantiated before the government uses the information in a legal document. The information Spirit and Frontier provided during their merger attempt is obviously biased (true or not) and an attempt to sway stockholders.

Lastly, I noticed that a judge was assigned the case. It seems like it’s not the judge the government wanted. Do you find it telling that the government wanted the NEA judge to handle the case? Thanks!

On the first question, no. It's not disingenuous. It would have been ridiculous not to use that document. A party's own words are powerful evidence. It forces Spirit to either admit that it was telling the truth previously or instead claim that document is BS, which means taking the exact opposite position. That's a pretty serious credibility issue: you're asking the court to believe you were lying before but telling the truth now, when you now have every incentive to lie. Yes, there is important context for the statements in that document, but it's an unqualified set of statements that cuts diametrically against what they want to claim now.

Put it this way: when I saw that slide in the complaint, I literally laughed. If you're at DOJ, it's hard to imagine a better document coming from the parties. It admits that the merger would (1) raise prices; (2) eliminate a maverick competitor; and for the icing on the cake, cause "lasting negative impacts on consumers." And because it's a party's own document and a statement against interest, it's automatically admissible into evidence. In all my years of arguing in favor of transactions on behalf of merging parties, that would be one of the 2 or 3 greatest-hits worst documents I've ever seen.

On the judge bit, not necessarily. Having the same judge (and clerks) just means you would have a judge and clerks with recent experience with antitrust issues and the industry, meaning there's less of an education hurdle to get over. Antitrust is complicated, and so is the airline industry. I'm not sure the parties would have been upset if they got the same judge as the NEA case for the same reason, especially given that I think the government's case was stronger in that one than it is in B6/NK and that DOJ didn't do a very good job in that trial.

lesfalls wrote:

N717TW wrote:

WkndWanderer wrote:

With the exception of the JFK and DAL stuff, Alaska definitely hasn't dropped "most if not all" of what VX was flying. AS/VX tried to add some things after the merger was announced like SFO- MSY/ RDU / IND that they axed, but those weren't part of the legacy VX network anyway. VX only had 50 some planes when the merger was announced that were disproportionately used on transcons and they only served pretty major markets. They were a small airline, their route map at the time of the merger is linked. The number of total destinations served from SFO today is higher than it was on VX in 2016.

http://departedflights.com/VX092816.html

Huh?
BOS-LAX gone
MCO-LAX-gone
FLL-SFO gone
JFK-LAS gone

plus BOS-SFO down to once per day from a peak of 3X

Isn’t one of the reason for these cuts the fact that AS joined OW, making them not competitive considering AA operates in the same exact markets?

That may be their spin. But AA had dropped JFK-LAS and BOS-SFO long before any partnership...and never operated FLL-SFO.

N717TW wrote:

lesfalls wrote:

N717TW wrote:

Huh?
BOS-LAX gone
MCO-LAX-gone
FLL-SFO gone
JFK-LAS gone

plus BOS-SFO down to once per day from a peak of 3X

Isn’t one of the reason for these cuts the fact that AS joined OW, making them not competitive considering AA operates in the same exact markets?

That may be their spin. But AA had dropped JFK-LAS and BOS-SFO long before any partnership...and never operated FLL-SFO.

True but also with B6 in the NEA AA fliers can fly them instead also over AS.

If someone has info on how much of AS’s One world’s flying base comes from AA on an average day.

In addition FLL-SFO is in the same zone as MIA-SFO which is operated with AA multiple times a day.

It really could be a mix of that (lack of frequent flyers base) and sub average product for the regions they operated to before as you said earlier.

Mikeer50 wrote:

1. Spirit is “expected to continue to expand at a quick pace.” What’s the definition of “quick”? Between Airbus delivery delays and pilot attrition and recruitment I find that hard to believe. This is not Spirits fault, but it’s the reality of the airline industry right now. The ULCC model works best when the airline is expanding rapidly. This equates to low maintenance costs and very low (relatively speaking) employee cost (especially pilots). This isn’t the case for Spirit anymore. This idea of “expand at a quick pace” is obviously unrealistic to anyone who has anything to do with the current airline industry.

Regardless of the current state of the airline industry, Spirit's own financial filings indicate an intent to "expand at a quick pace." They disclosed a fleet of 194 aircraft at YE 2022, with 109 firm orders for delivery over the subsequent five years. Even including the upcoming retirement of 31 A319s, planning to add nearly 80 aircraft over five years is pretty rapid expansion -- it's ~40% growth over five years. Maybe they can achieve that, maybe they can't -- but the company's plans as an independent concern would be to grow rapidly.

Mikeer50 wrote:

2. The government just yesterday spoke about “junk fees” when referring to the airlines. They then state on the same day “Spirit has forced larger airlines, particularly the already-low-cost JetBlue, to compete for customers by introducing unbundled, customizable ticket options” i.e junk fees. Which one is it?

The government rhetoric about "junk fees" is, for now, limited to a pretty specific situation -- charging parents to sit together with their kids under 13. I personally think many of the ULCC fees are a bait-and-switch tactic for unsophisticated travelers, but a knowledgeable passenger can score good deals if they know how to play the game.

Mikeer50 wrote:

They also say “The deal also would eliminate half of the ultra-low-cost capacity in the United States.” I’m not sure this is statistically accurate or not, but it’s misleading at best. That ULCC capacity is not gone forever. The capacity could be backfilled by the other 3 or 4 newer and cheaper ULCC (Breeze, Avelo, Allegiant, etc.).

It could be backfilled, but it might not, too. In a market like FLL, for example, there really isn't room for another ULCC to come in and replace what NK offers. NK isn't quite as large as F9 and G4 combined (measured by ASMs) but they're around 45% of the segment. Avelo and Breeze aren't big enough to have much impact, yet.

Mikeer50 wrote:

The government is essentially saying that the status quo is good enough. The industry is looking good with 4 airlines commanding 80% of the market and everyone else can fight over the scraps. Both sides can make an argument, you can’t argue that what’s going on right now is good for anyone other than the big 4.

I think the government's argument, actually, is that they feel the industry is already too concentrated. Policymakers in previous administrations made decisions which the current administration would not have supported. Unwinding the previous mergers is not something they'd be able to achieve at this point, so the only real action they can take is to block most or all future consolidation. And in this particular case, they're probably correct that allowing JetBlue to take out Spirit does eliminate a competitor which has disrupted markets to the overall benefit of consumers.

Spirit can say they are going to take delivery of 500 planes over the next 5 years. Their expansion plan is not rooted in reality. Airbus has no way of delivering the airplanes and Spirit would have no crews to fly them anyway. The government is cherry picking facts here. Every industry expert could tell them in 2 seconds this can not and will not happen.

I just thought the “junk fee” timing was funny. However, I do think the government should and will ultimately be forced to compare apples to apples. I have no idea how many people pay for the base fare and the base fare only. I would suspect that a huge percentage pay “junk fees” and that should be reconciled when comparing fares.

The new ULCC wouldn’t fill the void left behind by Spirit immediately, but they would be champing at the bit. With the divestures already offered and maybe a few more that could be negotiated the new ULCCs would have a good jumping off point. You could just as easy argue that these new entrants should be given the opportunity to grow.

The government will certainly argue that the industry is too concentrated, JetBlue agrees with them! JetBlue’s argument is that another consolidation, making it a distant 5th largest airline (9%) will help the situation not hurt it. This is obviously where people disagree and why the Biden administration is going to court. To pretend this isn’t politically motivated seems dishonest. You have Merrick Garland personally announcing an antitrust lawsuit that would create the 5th largest airline. The DOT is threatening to join the lawsuit, something that has NEVER BEEN DONE. Yes, this is a different administration, but it’s still the United States Government. Companies shouldn’t be punished simply because they are the last to the party. I don’t buy the argument that it’s different this time because it involves an ULCC. The big four mergers were far more impactful. The last THREE administrations have allowed mergers in the airline industry. Apparently past actions and precedents don’t affect this case in any way (or so I’ve been told on this website). That, in my opinion doesn’t seem right.

Mikeer50 wrote:

Spirit can say they are going to take delivery of 500 planes over the next 5 years. Their expansion plan is not rooted in reality. Airbus has no way of delivering the airplanes and Spirit would have no crews to fly them anyway. The government is cherry picking facts here. Every industry expert could tell them in 2 seconds this can not and will not happen.

I just thought the “junk fee” timing was funny. However, I do think the government should and will ultimately be forced to compare apples to apples. I have no idea how many people pay for the base fare and the base fare only. I would suspect that a huge percentage pay “junk fees” and that should be reconciled when comparing fares.

The new ULCC wouldn’t fill the void left behind by Spirit immediately, but they would be champing at the bit. With the divestures already offered and maybe a few more that could be negotiated the new ULCCs would have a good jumping off point. You could just as easy argue that these new entrants should be given the opportunity to grow.

The government will certainly argue that the industry is too concentrated, JetBlue agrees with them! JetBlue’s argument is that another consolidation, making it a distant 5th largest airline (9%) will help the situation not hurt it. This is obviously where people disagree and why the Biden administration is going to court. To pretend this isn’t politically motivated seems dishonest. You have Merrick Garland personally announcing an antitrust lawsuit that would create the 5th largest airline. The DOT is threatening to join the lawsuit, something that has NEVER BEEN DONE. Yes, this is a different administration, but it’s still the United States Government. Companies shouldn’t be punished simply because they are the last to the party. I don’t buy the argument that it’s different this time because it involves an ULCC. The big four mergers were far more impactful. The last THREE administrations have allowed mergers in the airline industry. Apparently past actions and precedents don’t affect this case in any way (or so I’ve been told on this website). That, in my opinion doesn’t seem right.

Spirit’s growth projections are based on a contracted delivery stream from Airbus.

Mikeer50 wrote:

Spirit can say they are going to take delivery of 500 planes over the next 5 years. Their expansion plan is not rooted in reality. Airbus has no way of delivering the airplanes and Spirit would have no crews to fly them anyway. The government is cherry picking facts here. Every industry expert could tell them in 2 seconds this can not and will not happen.

I just thought the “junk fee” timing was funny. However, I do think the government should and will ultimately be forced to compare apples to apples. I have no idea how many people pay for the base fare and the base fare only. I would suspect that a huge percentage pay “junk fees” and that should be reconciled when comparing fares.

The new ULCC wouldn’t fill the void left behind by Spirit immediately, but they would be champing at the bit. With the divestures already offered and maybe a few more that could be negotiated the new ULCCs would have a good jumping off point. You could just as easy argue that these new entrants should be given the opportunity to grow.

The government will certainly argue that the industry is too concentrated, JetBlue agrees with them! JetBlue’s argument is that another consolidation, making it a distant 5th largest airline (9%) will help the situation not hurt it. This is obviously where people disagree and why the Biden administration is going to court. To pretend this isn’t politically motivated seems dishonest. You have Merrick Garland personally announcing an antitrust lawsuit that would create the 5th largest airline. The DOT is threatening to join the lawsuit, something that has NEVER BEEN DONE. Yes, this is a different administration, but it’s still the United States Government. Companies shouldn’t be punished simply because they are the last to the party. I don’t buy the argument that it’s different this time because it involves an ULCC. The big four mergers were far more impactful. The last THREE administrations have allowed mergers in the airline industry. Apparently past actions and precedents don’t affect this case in any way (or so I’ve been told on this website). That, in my opinion doesn’t seem right.

This argument is moot- if, in your words, “Spirit could order 500 planes and expect to have them delivered in 5 years”; that not being a reality, it is irregardless that the other ULCC’s would be chomping at the bit. The amount of expansion they would need to initiate, they could never grow fast enough to fill the void. The fundamental argument here is you have a non-ULCC taking out the largest ULCC and redirecting that capacity under a non-ULCC model.

Mikeer50 wrote:

The government will certainly argue that the industry is too concentrated, JetBlue agrees with them! JetBlue’s argument is that another consolidation, making it a distant 5th largest airline (9%) will help the situation not hurt it. This is obviously where people disagree and why the Biden administration is going to court. To pretend this isn’t politically motivated seems dishonest. You have Merrick Garland personally announcing an antitrust lawsuit that would create the 5th largest airline. The DOT is threatening to join the lawsuit, something that has NEVER BEEN DONE. Yes, this is a different administration, but it’s still the United States Government. Companies shouldn’t be punished simply because they are the last to the party. I don’t buy the argument that it’s different this time because it involves an ULCC. The big four mergers were far more impactful. The last THREE administrations have allowed mergers in the airline industry. Apparently past actions and precedents don’t affect this case in any way (or so I’ve been told on this website). That, in my opinion doesn’t seem right.

As an economic matter, consolidation in an already-concentrated industry almost never helps the consumer. It just makes coordination - essentially, tacit collusion - among the small number of remaining firms much easier. DOJ argues that in this complaint.

And I'm sorry you're upset that the government has adopted a different policy from different administrations. But that's life. The government can change policies, and past settlements or non-actions are not precedents. It's not just on this website. They are literally not precedents: they do not have precedential value and are entitled to no deference from any court. That's a matter of indisputable law.

You're basically arguing that all government administrations are bound by the regulatory strategies of all previous ones: frankly, that's ridiculous. You're basically arguing that unless every administration vigorously enforces every law, that law cannot be enforced again.

sxf24 wrote:

Mikeer50 wrote:

Spirit can say they are going to take delivery of 500 planes over the next 5 years. Their expansion plan is not rooted in reality. Airbus has no way of delivering the airplanes and Spirit would have no crews to fly them anyway. The government is cherry picking facts here. Every industry expert could tell them in 2 seconds this can not and will not happen.

I just thought the “junk fee” timing was funny. However, I do think the government should and will ultimately be forced to compare apples to apples. I have no idea how many people pay for the base fare and the base fare only. I would suspect that a huge percentage pay “junk fees” and that should be reconciled when comparing fares.

The new ULCC wouldn’t fill the void left behind by Spirit immediately, but they would be champing at the bit. With the divestures already offered and maybe a few more that could be negotiated the new ULCCs would have a good jumping off point. You could just as easy argue that these new entrants should be given the opportunity to grow.

The government will certainly argue that the industry is too concentrated, JetBlue agrees with them! JetBlue’s argument is that another consolidation, making it a distant 5th largest airline (9%) will help the situation not hurt it. This is obviously where people disagree and why the Biden administration is going to court. To pretend this isn’t politically motivated seems dishonest. You have Merrick Garland personally announcing an antitrust lawsuit that would create the 5th largest airline. The DOT is threatening to join the lawsuit, something that has NEVER BEEN DONE. Yes, this is a different administration, but it’s still the United States Government. Companies shouldn’t be punished simply because they are the last to the party. I don’t buy the argument that it’s different this time because it involves an ULCC. The big four mergers were far more impactful. The last THREE administrations have allowed mergers in the airline industry. Apparently past actions and precedents don’t affect this case in any way (or so I’ve been told on this website). That, in my opinion doesn’t seem right.

Spirit’s growth projections are based on a contracted delivery stream from Airbus.

Airbus is failing to achieve a delivery schedule even close to what they have contractually agreed to with the airlines.

IADCA wrote:

Mikeer50 wrote:

The government will certainly argue that the industry is too concentrated, JetBlue agrees with them! JetBlue’s argument is that another consolidation, making it a distant 5th largest airline (9%) will help the situation not hurt it. This is obviously where people disagree and why the Biden administration is going to court. To pretend this isn’t politically motivated seems dishonest. You have Merrick Garland personally announcing an antitrust lawsuit that would create the 5th largest airline. The DOT is threatening to join the lawsuit, something that has NEVER BEEN DONE. Yes, this is a different administration, but it’s still the United States Government. Companies shouldn’t be punished simply because they are the last to the party. I don’t buy the argument that it’s different this time because it involves an ULCC. The big four mergers were far more impactful. The last THREE administrations have allowed mergers in the airline industry. Apparently past actions and precedents don’t affect this case in any way (or so I’ve been told on this website). That, in my opinion doesn’t seem right.

As an economic matter, consolidation in an already-concentrated industry almost never helps the consumer. It just makes coordination - essentially, tacit collusion - among the small number of remaining firms much easier. DOJ argues that in this complaint.

And I'm sorry you're upset that the government has adopted a different policy from different administrations. But that's life. The government can change policies, and past settlements or non-actions are not precedents. It's not just on this website. They are literally not precedents: they do not have precedential value and are entitled to no deference from any court. That's a matter of indisputable law.

You're basically arguing that all government administrations are bound by the regulatory strategies of all previous ones: frankly, that's ridiculous. You're basically arguing that unless every administration vigorously enforces every law, that law cannot be enforced again.

So as someone that claims to be an expert in your field, and I’m not disputing that, what is going to be the end result here? Does jetblue merge with spirit or not?

lesfalls wrote:

N717TW wrote:

lesfalls wrote:

Isn’t one of the reason for these cuts the fact that AS joined OW, making them not competitive considering AA operates in the same exact markets?

That may be their spin. But AA had dropped JFK-LAS and BOS-SFO long before any partnership...and never operated FLL-SFO.

True but also with B6 in the NEA AA fliers can fly them instead also over AS.

If someone has info on how much of AS’s One world’s flying base comes from AA on an average day.

In addition FLL-SFO is in the same zone as MIA-SFO which is operated with AA multiple times a day.

It really could be a mix of that (lack of frequent flyers base) and sub average product for the regions they operated to before as you said earlier.

If its because of the AA/B6 JV, then that's exactly the type of collusion that would make the NEA illegal. AS isn't part of the JV, so it should be competing. Without going deep into the topic, its proof that the VX/AS merger didn't really produce the synergies one would expect in an airline merger. It was truly a play to c**k-block an aggressive B6 from jump starting a west coast franchise.

I'll admit that I'm not a fan of the NEA from both a customer perspective and as a lawyer--its literally the type of industry unionized-collusion that Teddy Roosevelt was fighting when he went trust-busting. I'm all for JBAs (the type of agreements that existed in the newspaper business for years) where back office functions are shared but the front of house competes for customers. The NEA actually does the opposite...everything in the background is different but they have agreed to not compete.
Alternatively, I am totally in favor of the NK merger for the same reason--it helps to create a more competitive environment. While I don't believe that b6 will keep all the goof-ball routes NK runs and will streamline the network to look something like the old Eastern Airlines + 1980s Pan Am minus PA's huge TATL/TPAC ops and EA's Atlanta hub, I feel having someone with enough heft to compete against DL/AA/UA and WN in the middle of the market is key. There will always be opportunistic start ups to offer stupid low fares with stupidly bad service (People's Express, Midway, ATA, Sun Country, Carnival AIrlines, Reno Air, Pan Am II, ValuJet, AirTran, Spirit, Frontier, Allegiant, Breeze, etc.). And the new ALPA contract with DL shows that a gap will only grow to create low fare opportunities.

Mikeer50 wrote:

The government will certainly argue that the industry is too concentrated, JetBlue agrees with them! JetBlue’s argument is that another consolidation, making it a distant 5th largest airline (9%) will help the situation not hurt it.

It's really hard to argue that you need to get bigger to compete with the "big 4" when you partner with one of them.