APFA Special Hotline: August 19, 2013

[eolesen]

Note to swamt: And, the DFW rumor is why I've always said that WN is run by airline people and the rest of us are run by accountants. There is enormous cost associated with starting up an international operation from scratch in an airport. As DFW already has a going international operation with Customs and Immigration and International security procedures, why should WN duplicate any of that cost at Love? The increased landing fees would surely be amortized by the absence of start-up costs.

1) WN *was* run by airline people. There's a school of thought that says that's changed a lot. My interactions have always been with lifer's (i.e. started on the front line and moved into HDQ), but there are more and more outside hires there. Quite a few former AA'ers, in fact...

2) There cannot be international service at Love Field. That's part of the latest compromise which revokes the previous compromise... DAL is not only going to be gate limited, but they also will be effectively a domestic-only airport. They can't have a FIS for commercial passenger service (not sure if corporate or cargo are limited or not, but that's irrelevant to the discussion). The only way around that *might* be pre-clearance at the foreign station, but I suspect someone would file lawsuits if that ever was to be, since the intent of that was to protect DFW as the international gateway while allowing DAL to remain open for domestic services.

3) Thanks for bringing up the consolidation in the oil industry. Good parallel, and they have a lot more vertical integration issues, in that they do the exploration, production, and retail sales. If the DOJ really wanted to take on an oligopoly, it would be the petroleum industry. Maybe this is the warm-up act...

 

[Topcat187]

Funny that you mentioned the W/A. Here are some rumors flying around the hangars: Repost:- BTW; Heard some very interesting "rumor" the other day. SWA is examining the costs related with starting flts from DFW. Yes I said DFW. We all know that SWA would have to give up gate for gate from Love Field to DFW if they do, BUT, they are not restricted from doing so. Matter fact I was told they are looking at using "international flights only" from DFW as this would more than pay for the off-set. On a side note; also heard SWA may have found a loop hole where they may not have to give up any gates at Love as this would be "international gates" at DFW not domestic gates as the W/A calls for a 1 for 1 in gates, and this would be not be same gate for same gate. Time frame I was told was hopefully using DFW by 1st or 2nd quarter of 2015, has something to do with the expiration of the W/A. Just wondering if this will have something to do with some concessions or divestures at DFW for the AA/US merger. Very interesting to say the least. Bad timing for AA to have to worry about fighting against the W/A again, but it looks like they are going to have to. This would be the best time for SWA to slip into DFW as AA is focusing on the merger and coming out of BK. It would be 1 gate for now until results are seen then grow as needed. We were all told that SWA would benefit from this merger as they have from past mergers, just never thought we would consider DFW so soon, but I guess this would be the best time, and SWA has already experienced other big airports. I have not been able to confirm this since I heard it late last week. But you know how rumors are, hell, we were never able to confirm the AT purchase rumors. When I know more I will post...

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So if SWA were to use DFW for international flts only, how are they going to get connecting passengers to DFW?

 

[jimntx]

1) WN *was* run by airline people. There's a school of thought that says that's changed a lot. My interactions have always been with lifer's (i.e. started on the front line and moved into HDQ), but there are more and more outside hires there. Quite a few former AA'ers, in fact...

Well, maybe it ain't the "good ole days" (formerly known as these trying times in which we live), but WN is still more sensibly run than most airlines. Maybe those former AA'ers are smart airline people who just couldn't take the baloney decisions coming out of Centerport (and still coming out) that are based on someone's hotshot idea and not based in reality.

2) There cannot be international service at Love Field. That's part of the latest compromise which revokes the previous compromise... DAL is not only going to be gate limited, but they also will be effectively a domestic-only airport. They can't have a FIS for commercial passenger service (not sure if corporate or cargo are limited or not, but that's irrelevant to the discussion). The only way around that *might* be pre-clearance at the foreign station, but I suspect someone would file lawsuits if that ever was to be, since the intent of that was to protect DFW as the international gateway while allowing DAL to remain open for domestic services.

So, WN starts international service from DFW, and runs busses from DFW to DAL for connecting passengers. Imagine the local business they will get when people find out they can park at DAL (cheaper and closer to home), check their bags at DAL, and ride the bus directly to their departure terminal at DFW. For that matter when the DART rail line reaches DFW, getting there won't be that much of a hassle anymore. When I was based at STL, I was amazed at how many passengers used the light rail system (the line terminated at the Main Terminal and had a stop at the East Terminal (WN operation).)

And, let's not forget that the Wright Amendment in its original state was designed to protect DFW (both domestic and international) in perpetuity. Changes can always be made.

 

[eolesen]

Honestly, DAL may be where their HDQ is, but it's hardly their largest or most profitable market.

Just about anyplace I can think of that would be worth serving from DFW would be just as well done from HOU or SAT and offer a lot more existing connectivity.

For them, DAL is all about the local O&D; connections are just a byproduct of scheduling, and not the goal as they are over at the DF'nW.

 

[jimntx]

When AA and USair merge the FA's get a lot of things back from their bankruptcy contract, like being able to not work at all an still be employed, 9.9% 401K match fro FA's over 50. 6.7% 401k matching for FA's 40-49. An early out package for 1500 FA's ($40k) along with a bunch of other pays such as galley pay .88 cents, expense pay, and other rule changes.

That's what DP promised; however, neither he nor anyone else has shown where the money to pay for all those bennies is going to come from. If he were paying AA rates for his pilots and flight attendants, he would not have been making the "record" profits that everyone is crowing about.

And, don't think for one minute that he will get away with providing these bennies to the AA flight attendants and not to the LCC flight attendants.

 

[etops1]

This is the response I received from PA Attorney General Kathleen Kane .

Thank you for your note regarding the decision of the office to sue to block the proposed merger of US Airways and American Airlines. Despite the representations of the airlines that this merger will be good for consumers generally and will lead to growth of air travel in Pennsylvania particularly in Philadelphia, this office has no reason to believe those representations are accurate. Attached is a copy of the complaint which details why this merger should be enjoined.

In addition, US Airways representations about the consumer benefits which will result from this transaction are identical to the representations made by Delta and Northwest in support of their merger, United and Continental and by Southwest and Airtran. All of those transactions have resulted in significant reductions in service across Pennsylvania, but especially in Philadelphia. We have no reason to believe that anything different would happen if US Airways were to merge with American.

Finally, US Airways does not have a strong track record of keeping its promises to Pennsylvania officials or its taxpayers. While the office understands that US Airways has made certain claims about the future of the airline with a merger to its employees, the overwhelming evidence shows that those claims are not accurate.

Thank you for contacting the Office of Attorney General.

The information transmitted is intended only for the person or entity to whom it is addressed and may contain confidential and/or privileged material. Any use of this information other than by the intended recipient is prohibited. If you receive this message in error, please send a reply e-mail to the sender and delete the material from any and all computers. Unintended transmissions shall not constitute waiver of any applicable attorney-client or any other applicable privilege. PA-OAG

 

[Thomas Paine]

You guys are sounding very desperate, Why?

Because they were planning on getting the raises that the APA deal would provide.

 

[Thomas Paine]

This is the response I received from PA Attorney General Kathleen Kane .

Thank you for your note regarding the decision of the office to sue to block the proposed merger of US Airways and American Airlines. Despite the representations of the airlines that this merger will be good for consumers generally and will lead to growth of air travel in Pennsylvania particularly in Philadelphia, this office has no reason to believe those representations are accurate. Attached is a copy of the complaint which details why this merger should be enjoined.

In addition, US Airways representations about the consumer benefits which will result from this transaction are identical to the representations made by Delta and Northwest in support of their merger, United and Continental and by Southwest and Airtran. All of those transactions have resulted in significant reductions in service across Pennsylvania, but especially in Philadelphia. We have no reason to believe that anything different would happen if US Airways were to merge with American.

Finally, US Airways does not have a strong track record of keeping its promises to Pennsylvania officials or its taxpayers. While the office understands that US Airways has made certain claims about the future of the airline with a merger to its employees, the overwhelming evidence shows that those claims are not accurate.

Thank you for contacting the Office of Attorney General.

The information transmitted is intended only for the person or entity to whom it is addressed and may contain confidential and/or privileged material. Any use of this information other than by the intended recipient is prohibited. If you receive this message in error, please send a reply e-mail to the sender and delete the material from any and all computers. Unintended transmissions shall not constitute waiver of any applicable attorney-client or any other applicable privilege. PA-OAG

Pretty hard to find any fault in that response.
-they caught the carrier in an obvious lie with the claim the merger would increase competition and benefit consumers
-they brought up how promises in the past were broken

 

[WorldTraveler]

that's a pretty direct response to a constituent email but it shows how much the deck is stacked against AA-US not just because of US' actions (yes, PIT is still bitter to a lot of people) but because the track record of the whole industry - and note that she includes WN who has cut service as well - does not favor believing that further cuts will not come even if there are real economic reasons for those cuts at other carriers.

remember also that AA's last acquisition - TWA - resulted in a near-complete shutdown of what was acquired. The same thing has happened before with AA's other post-deregulation acquisitions/mergersw.