Airline stocks down sharply - DOJ reportedly to block AMR/LCC

[WorldTraveler]

US airline stocks are down sharply on word that the US Justice Dept. will sue to block AMR/LCC based on anticompetitive concerns.

At this hour, LCC stock is down about 9%, DAL, UAL, ALK are down about 5%.

Delaying or block consolidation is not only seen as a negative to LCC but also for other carriers under the assumption that capacity would come out of a restructured US airline system.

 

[AANOTOK]

And this word is from where?

 

[WorldTraveler]

I am looking at marketwatch.
http://www.marketwatch.com/story/newsviewer

also on WSJ's breaking news banner
"U.S. Justice Department files suit to challenge US Airways-American Airlines merger, saying proposed $11 billion deal would lessen competition."

 

[700UW]

Funny how they let UA/CO and DL/NW merge, I doubt they will succeed.

 

[autofixer]

Parker obviously did not grease the proper palms.

 

[WorldTraveler]

Funny how they let UA/CO and DL/NW merge, I doubt they will succeed.

it's probably worth waiting to see the specifics of why the DOJ is proceeding. It could well be related to DCA which is where the problem was expected to be all along.
If AA-US aren't willing to give up the slots the DOJ requires, this is the step the DOJ can take.

 

[Pi brat]

it's probably worth waiting to see the specifics of why the DOJ is proceeding. It could well be related to DCA which is where the problem was expected to be all along.
If AA-US aren't willing to give up the slots the DOJ requires, this is the step the DOJ can take.

The WSJ quotes Holder as saying it is an overall problem, over 1,000 routes. Unreal. We need a little more government intervention.

 

[AANOTOK]

.....and this


Bloomberg Reporting DoJ Said to Plan Suit to Block Merger Between AMR and US Airways

[background=rgb(255, 255, 255)]
Read more: http://www.benzinga.com/news/13/08/3834894/bloomberg-reporting-doj-said-to-plan-suit-to-block-merger-between-amr-and-us-airw#ixzz2brPnL0Ii[/background]​

 

[nycbusdriver]

Funny how they let UA/CO and DL/NW merge, I doubt they will succeed.

And, of course, SW went through with acquiring AirTran without a hitch, also.

It's selective enforcement.

They'd probably let UA and DL merge unhindered before they will allow AA/US.

 

[Pi brat]

And, of course, SW went through with acquiring AirTran without a hitch, also.

It's selective enforcement.

They'd probably let UA and DL merge unhindered before they will allow AA/US.

Got to take care of the Chicago boys!

 

[nycbusdriver]

If the merger gets nixed, US should pull service from all those small cities out of DCA just for grins.

 

[700UW]

http://finance.yahoo.com/news/u-sues-block-amr-us-144911711.html

 

[WorldTraveler]

There actually are very objective methods used to measure market concentration and it is likely all documented in the DOJs case when it becomes public.
Their concern about 1000 routes probably means they have identified a set of markets in which the two were already fairly strong independently and will only get stronger. Remember that the DOJ looks at markets and not just nonstop routes. It is very possible that part of the problem could also be the US southwest where AA has a large presence via DFW and US has similar strength via PHX.

It is also very possible to meet DOJ requirements.... they usually tell you exactly what the problem is. The question is whether the value of the combined company is high enough in order to get the DOJ's approval - or if it is better for both companies just to walk away as happened with UA/US.

Market concentration is a function of when the merger is being proposed. The industry was obviously less concentrated at the time the round of megamergers started (DL-NW and then UA-CO).

DL-NW also had one of the smallest amounts of overlap on their networks even before the merger.

 

[freedom]

The government is threating our future!!!!!!!!!!!!!!

we CANNOT allow this merger to be stopped !!!!! Every single US airways employee's future is now at stake , and your families as well ...

we should be prepared to do whatever it takes to make the government cry uncle ....

 

[freedom]

LETS PROTEST !!!!!!!!!!!!!!!

PROTEST PROTEST PROTEST !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!