A settlement between US and UsAirways and AMR
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WorldTraveler
Corn Field
- Dec 5, 2003
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I suspect he would have anyway... he is a very level-headed and decent man.
I'm not so sure about the rest of you (the sleeping part anyway).
BTW, since the topic of the thread is the merger agreement, I want to make very certain that you are aware that I am taking bets that the settlement agreement will be revised. We do all realize that the Justice Dept. can be sued since that is exactly what AA and US were doing up until a week ago, right?
I am willing to bet that the settlement agreement will be revised to remove the preferential bidding position for B6 and WN and to allow any carrier to bid on the assets.
Are you willing to bet that I am wrong?
I'm not so sure about the rest of you (the sleeping part anyway).
BTW, since the topic of the thread is the merger agreement, I want to make very certain that you are aware that I am taking bets that the settlement agreement will be revised. We do all realize that the Justice Dept. can be sued since that is exactly what AA and US were doing up until a week ago, right?
I am willing to bet that the settlement agreement will be revised to remove the preferential bidding position for B6 and WN and to allow any carrier to bid on the assets.
Are you willing to bet that I am wrong?
Beancounter
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- Jun 28, 2009
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WT,WorldTraveler said:
You were already wrong about our merger and haven't admitted to it..... and I'm sure won't.
It's not so funny now is it?
http://www.fool.com/investing/general/2013/11/17/why-the-dojs-clipping-deltas-wings.aspx
Stop wasting your time here and get to the petition writing.
For the record, I hope you guys have a chance at bidding for those slots, I like Delta. I'd put your chance of success at 60%
Bean
Beancounter said:WT,
You were already wrong about our merger and haven't admitted to it..... and I'm sure won't.
It's not so funny now is it?
http://www.fool.com/investing/general/2013/11/17/why-the-dojs-clipping-deltas-wings.aspx
Stop wasting your time here and get to the petition writing.
For the record, I hope you guys have a chance at bidding for those slots, I like Delta. I'd put your chance of success at 60%
Bean
[SIZE=14pt]The only funny thing is your lack of the facts. WT, in opposition to my own opinion, said the merger would eventually go through. Look back a few weeks ago, I asked him point blank and he told me it was going to happen. Right here on this forum. I have to wonder why any of you would care either way who gets the slots. There are a million arguments both ways as to how who and who getting them would affect the new AMR. Me, I could care less. Not my job description, nor area of expertise to comment either way. Like I said before, I want Delta to excel, to the point they give their pilots another raise. And how about you stop wasting our time here, and get to the collecting of cards. Otherwise you should go silent and study up on history, at least on this fourm. RR[/SIZE]
Beancounter
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- Jun 28, 2009
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It was in reference to a discussion I had with him where he opined that it was not as good as a 60% chance. Thanks for the laugh and your arrogant input though.Reed Richards said:
Bean
Beancounter
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Kev3188
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Beancounter
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It takes him a while to come up with the replies, they're pasted from Word. It's another thing him and WT have in common.Kev3188 said:
Bean
Good read on the merger:-
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Why the DOJ Wants to Clip Delta's Wings
By Adam Levine-Weinberg | More Articles | Save For Later
November 17, 2013 | Comments (4)
Delta Air Lines (NYSE: DAL ) isn't very happy with the Department of Justice right now. The DOJ is requiring AMR (NASDAQOTH: AAMRQ ) and US Airways (NYSE: LCC ) to give up slots and/or gates at seven different airports around the country as part of their merger. Most notably, they must divest slots covering 44 round-trip flights at Reagan Airport near Washington, D.C.
AMR and US Airways need to give up slots and gates in order to merge (Photo: AMR)
Delta would love to bid for slots at Reagan Airport, as well as some of the other gate space becoming available. However, the DOJ seems intent on limiting the sales to low-cost carriers, in an attempt to boost competition. That leaves Delta out in the cold.
Delta has been very vocal about its belief that it should be allowed to bid on an equal footing with low-cost carriers. However, its protests are unlikely to succeed. More than anything else, the DOJ is worried about the growing oligopoly of "The Big Three": American, Delta, and United Continental (NYSE: UAL ) . Transferring slots within that oligopoly would not solve the problem.
Delta's demands
After the merger settlement was announced on Tuesday, Delta put out a press release saying that it looked forward to bidding for the slots that would be divested, particularly at Reagan Airport . As it became more clear that the DOJ wasn't interested in bids from legacy carriers, Delta put out a second, more combative press release on Wednesday.
The DOJ doesn't want to let Delta buy slots at Reagan Airport (Photo: Delta Air Lines)
This time, Delta stated that it wanted to bid for gates at Love Field in Dallas as well as slots at Reagan Airport. The company also noted that it would be able to serve small- and medium-sized cities from Reagan Airport, as it operates smaller regional aircraft, unlike the low cost carriers . These cities might otherwise lose service to Reagan Airport when American makes the necessary flight cuts there.
On Thursday, Delta was at it again, with a press release announcing new service at Love Field that will start next October, when restrictions on long-haul flights will be lifted. Delta plans to add 18 daily nonstops, including enhanced service to Atlanta, and new service to New York, Detroit, Minneapolis/St. Paul, and Los Angeles. There's just one catch: Delta will need to bid for and win access to the gates American is giving up !
Nice try, but no luck
On Thursday, a senior official in the DOJ's antitrust division threw cold water on the idea that Delta and United could qualify to bid for slots and gates. DOJ lawyers think that the legacy carriers are already tacitly "coordinating" when it comes to setting fares, fees, and schedules. By contrast, the low-cost carriers have shown more of an inclination to compete in those respects.
Residents of the small cities that could lose direct service to Reagan Airport may want Delta to come in and restore that service. However, by definition, those would be routes where Delta would face no competition -- and in turn, Delta would not be using those slots to compete with American. (Thus, you could see why American might be eager to sell slots to Delta, if given the opportunity.)
By contrast, a low-cost carrier like Southwest Airlines (NYSE: LUV ) would be likely to add flights to larger cities that have no competition today. Dallas, Cleveland, Charlotte, and Hartford are some of the larger metro areas where a single legacy carrier has a monopoly on service to Reagan Airport. Stiffer competition on high-traffic routes like these is what regulators are really hoping for.
Delta has a better shot at getting a spot at the table for the Love Field gates. There, it plans to serve high-traffic routes, where it would compete against American's flights from nearby Dallas-Fort Worth International Airport (and possibly Southwest flights from Love Field).
Still, with the exception of Los Angeles, Delta already flies from Dallas-Fort Worth to all the cities it listed for its Love Field expansion. So while a Delta Love Field expansion would give travelers a new option, it wouldn't increase the number of airlines flying from the Dallas-Fort Worth area to Atlanta, Detroit, New York, or Minneapolis.
Foolish conclusion
Delta is doing everything in its power to get a seat at the table as American and US Airways dispose of assets to satisfy regulatory concerns. However, the DOJ seems dead set on ensuring that the assets up for sale go to low cost carriers.
The DOJ's stubbornness is understandable: after all, one of its complaints has been that the legacy carriers are tacitly coordinating to avoid sparking fare wars. Since the DOJ's mandate is to protect consumer interests, it makes sense to get slots and gates into the hands of the airlines that will compete most vigorously. Right now, only low cost carriers fit the bill.
Email Print 8 .
The Motley Fool
Recs
0
Why the DOJ Wants to Clip Delta's Wings
By Adam Levine-Weinberg | More Articles | Save For Later
November 17, 2013 | Comments (4)
Delta Air Lines (NYSE: DAL ) isn't very happy with the Department of Justice right now. The DOJ is requiring AMR (NASDAQOTH: AAMRQ ) and US Airways (NYSE: LCC ) to give up slots and/or gates at seven different airports around the country as part of their merger. Most notably, they must divest slots covering 44 round-trip flights at Reagan Airport near Washington, D.C.
AMR and US Airways need to give up slots and gates in order to merge (Photo: AMR)
Delta would love to bid for slots at Reagan Airport, as well as some of the other gate space becoming available. However, the DOJ seems intent on limiting the sales to low-cost carriers, in an attempt to boost competition. That leaves Delta out in the cold.
Delta has been very vocal about its belief that it should be allowed to bid on an equal footing with low-cost carriers. However, its protests are unlikely to succeed. More than anything else, the DOJ is worried about the growing oligopoly of "The Big Three": American, Delta, and United Continental (NYSE: UAL ) . Transferring slots within that oligopoly would not solve the problem.
Delta's demands
After the merger settlement was announced on Tuesday, Delta put out a press release saying that it looked forward to bidding for the slots that would be divested, particularly at Reagan Airport . As it became more clear that the DOJ wasn't interested in bids from legacy carriers, Delta put out a second, more combative press release on Wednesday.
The DOJ doesn't want to let Delta buy slots at Reagan Airport (Photo: Delta Air Lines)
This time, Delta stated that it wanted to bid for gates at Love Field in Dallas as well as slots at Reagan Airport. The company also noted that it would be able to serve small- and medium-sized cities from Reagan Airport, as it operates smaller regional aircraft, unlike the low cost carriers . These cities might otherwise lose service to Reagan Airport when American makes the necessary flight cuts there.
On Thursday, Delta was at it again, with a press release announcing new service at Love Field that will start next October, when restrictions on long-haul flights will be lifted. Delta plans to add 18 daily nonstops, including enhanced service to Atlanta, and new service to New York, Detroit, Minneapolis/St. Paul, and Los Angeles. There's just one catch: Delta will need to bid for and win access to the gates American is giving up !
Nice try, but no luck
On Thursday, a senior official in the DOJ's antitrust division threw cold water on the idea that Delta and United could qualify to bid for slots and gates. DOJ lawyers think that the legacy carriers are already tacitly "coordinating" when it comes to setting fares, fees, and schedules. By contrast, the low-cost carriers have shown more of an inclination to compete in those respects.
Residents of the small cities that could lose direct service to Reagan Airport may want Delta to come in and restore that service. However, by definition, those would be routes where Delta would face no competition -- and in turn, Delta would not be using those slots to compete with American. (Thus, you could see why American might be eager to sell slots to Delta, if given the opportunity.)
By contrast, a low-cost carrier like Southwest Airlines (NYSE: LUV ) would be likely to add flights to larger cities that have no competition today. Dallas, Cleveland, Charlotte, and Hartford are some of the larger metro areas where a single legacy carrier has a monopoly on service to Reagan Airport. Stiffer competition on high-traffic routes like these is what regulators are really hoping for.
Delta has a better shot at getting a spot at the table for the Love Field gates. There, it plans to serve high-traffic routes, where it would compete against American's flights from nearby Dallas-Fort Worth International Airport (and possibly Southwest flights from Love Field).
Still, with the exception of Los Angeles, Delta already flies from Dallas-Fort Worth to all the cities it listed for its Love Field expansion. So while a Delta Love Field expansion would give travelers a new option, it wouldn't increase the number of airlines flying from the Dallas-Fort Worth area to Atlanta, Detroit, New York, or Minneapolis.
Foolish conclusion
Delta is doing everything in its power to get a seat at the table as American and US Airways dispose of assets to satisfy regulatory concerns. However, the DOJ seems dead set on ensuring that the assets up for sale go to low cost carriers.
The DOJ's stubbornness is understandable: after all, one of its complaints has been that the legacy carriers are tacitly coordinating to avoid sparking fare wars. Since the DOJ's mandate is to protect consumer interests, it makes sense to get slots and gates into the hands of the airlines that will compete most vigorously. Right now, only low cost carriers fit the bill.
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,721
can you let me know what part of the merger I was wrong about?WT,
You were already wrong about our merger and haven't admitted to it..... and I'm sure won't.
It's not so funny now is it?
http://www.fool.com/investing/general/2013/11/17/why-the-dojs-clipping-deltas-wings.aspx
Stop wasting your time here and get to the petition writing.
For the record, I hope you guys have a chance at bidding for those slots, I like Delta. I'd put your chance of success at 60%
Bean
unless I said flat out there is a 100% chance the merger will not happen, then I have not been wrong.
You do understand the theory of probability, don't you?
And, yes, Reed is right that I have also repeatedly said that there is very little legal basis for saying that the DOJ could block a transaction.
IN almost every civil transaction, there is a sufficient remedy that can be found.
Let's also keep in mind that AA/US involves far larger divestitures than any merger has ever faced. There is a reason why AA/US resisted the DOJ's demands.... they are giving away 56 slot pairs at prime airports and opening up those markets dramatically to low fare competition as has never been done in the industry.
As much as you and others want to downplay that, the results of what AA/US agreed to will be obvious in less than a couple years - well before new AA has a single operating certificate. Prices will fall and consumers will have many more choices.
Nearby hubs at BWI for WN and IAD for UA could very well be impacted.
The settlement is huge in terms of reshaping the east coast - which is exactly what the DOJ said they wanted to do.
traderjake
Veteran
robbedagain
Veteran
Wn is already a major player along the east along w b6 dl n us and to an extent ua.. once the slot divestures are done the new aa will still be the nbr 1 at dca but I dont think it will be as bad as u seem to make it out to be... us defended phl when wn moved in well they pulled out of a few places from phl thats just 1 example
