As US Airways shares rally, AMR merger may be more likely, Bloomberg reports

nobody is connecting the gun running exercise with the DOJ's antitrust activities except for those who want to argue that the DOJ is being unfair to AA-US.

If AA-US could demonstrate that the DOJ's actions are unfair and unjust to US, then Congress would have no problem putting the political pressure on the DOJ to reverse its actions.

Since not one report has come out that the DOJ is reconsidering based on political pressure from Congress, then it just might be that the DOJ's actions to AA/US really is about justifiable business and antitrust reasons and not just because they are trying to pick favorites.

The fact that people here and elsewhere argued that HHI wasn't ever used in other mergers despite the fact that it has been should be evidence that there are a lot of efforts to paint the DOJ as the bad guys without using real facts.

Jamie Baker who is one of the veteran analysts of the airline industry has noted that the majority of antitrust people outside of the airline industry have said that they do see justifiable reasons why the DOJ got involved in the AA/US merger while a majority of people in the airline industry do not see those same reasons.

Being able to examine one's self and hear the legitimate criticisms that others have about a person is very hard to do - and few reach a point where they are able to do think that way.

The merger can happen when AA/US mgmt., the boards, and creditors all recognize that there are legitimate reasons for the DOJ's position and propose solutions that correct them.

Just as one example, WN and FL did not at the time of the merger and still do not control more than 10% of the slots at any slot-controlled airport. At the time of the merger, DL-NW combined controlled only about 25% of the slots at DCA and LGA; the slot deal - which took two years for approval, only resulted in DL controlling about 48% of the slots at LGA, the largest slot holding or percentage at any of the airports. UA was a fraction of the size of CO at EWR and UA still had to give up all of its own pre-merger slots. UA at EWR and US at DCA would have similar percentages of slots without divestitures.

Those are real and justifiable reasons that along with the email and capacity reduction and fare increase communications conveniently get lost when AA/US supporters try to argue about how unfair the DOJ is being toward AA/US.
 
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nobody is connecting the gun running exercise with the DOJ's antitrust activities except for those who want to argue that the DOJ is being unfair to AA-US.

If AA-US could demonstrate that the DOJ's actions are unfair and unjust to US, then Congress would have no problem putting the political pressure on the DOJ to reverse its actions.

Since not one report has come out that the DOJ is reconsidering based on political pressure from Congress, then it just might be that the DOJ's actions to AA/US really is about justifiable business and antitrust reasons and not just because they are trying to pick favorites.

The fact that people here and elsewhere argued that HHI wasn't ever used in other mergers despite the fact that it has been should be evidence that there are a lot of efforts to paint the DOJ as the bad guys without using real facts.

Jamie Baker who is one of the veteran analysts of the airline industry has noted that the majority of antitrust people outside of the airline industry have said that they do see justifiable reasons why the DOJ got involved in the AA/US merger while a majority of people in the airline industry do not see those same reasons.

Being able to examine one's self and hear the legitimate criticisms that others have about a person is very hard to do - and few reach a point where they are able to do think that way.

The merger can happen when AA/US mgmt., the boards, and creditors all recognize that there are legitimate reasons for the DOJ's position and propose solutions that correct them.

Just as one example, WN and FL did not at the time of the merger and still do not control more than 10% of the slots at any slot-controlled airport. At the time of the merger, DL-NW combined controlled only about 25% of the slots at DCA and LGA; the slot deal - which took two years for approval, only resulted in DL controlling about 48% of the slots at LGA, the largest slot holding or percentage at any of the airports. UA was a fraction of the size of CO at EWR and UA still had to give up all of its own pre-merger slots. UA at EWR and US at DCA would have similar percentages of slots without divestitures.

Those are real and justifiable reasons that along with the email and capacity reduction and fare increase communications conveniently get lost when AA/US supporters try to argue about how unfair the DOJ is being toward AA/US.

Am I to understand that you would expect congress to do anything much less the right thing? I don't care what party they are from. If there was a two hole outhouse in their building most of them would mess their drawers while making the decision about which hole to use and then blame the mess on the other party!!

All the best,

Bob
 
Gun running by the Obama DOJ is a demonstation of it's corruption.

Now they wants to pick winners and loses in the airlines just like Obama admistration does in every other industry.
He took a lesson out of the Reagan Playbook, Iran-Contra mean anything to you?

"I cant remember" Reagan said, and Ollie North took the fall, I saw the weapons being offloaded a US vessel onto an Iranian Vessel when I was in the Middle East in 1982.
 
Am I to understand that you would expect congress to do anything much less the right thing? I don't care what party they are from. If there was a two hole outhouse in their building most of them would mess their drawers while making the decision about which hole to use and then blame the mess on the other party!!

All the best,

Bob

Bob,
while it might be popular to think that the US government including Congress can do nothing right, the reality is considerably different.

Consider just a few of the following that have relevance to this discussion:

The US still has the world's largest economy and the US dollar is the primary currency used in international finance transactions.

The US has the world's largest and most efficient multi-modal transportation system.

The US is still the preferred destination for visitors and immigrants from around the world who want to be a part of a country where there is more economic opportunity for more people than in any other country in the world.

Is everything perfect about the US? Far from it.

But even with the current challenges the US faces, it is still the country that sets an example for much of the world and its people.

It is the job of all Americans to continue to keep making the United States one of the world's greatest civilizations despite her flaws - which are really our own since we are the USA.

merger or not, there will be far more security and prosperity for us as Americans than there will be for the vast majority of the world's population. It doesn't take too many weeks outside of the US to realize that the US, with all of its flaws, is not near as bad as a lot of Americans want to make it out to be.
 
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Gun running by the Obama DOJ is a demonstation of it's corruption.

Now they wants to pick winners and loses in the airlines just like Obama admistration does in every other industry.

Given the lies involved in the Iran-Contra affair, the lies told in the leadup to the Iraq war, the American soldiers electrocuted in shoddily built showers (built on a no-bid contract by D. Cheney's former companies), not to mention the deliberate looking the other way by the Bush administration on the illegal actions of certain big Wall Street firms (the collapse of which produced the last recession), do you really want to go there?
 
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Jamie Baker who is one of the veteran analysts of the airline industry has noted that the majority of antitrust people outside of the airline industry have said that they do see justifiable reasons why the DOJ got involved in the AA/US merger while a majority of people in the airline industry do not see those same reasons.

...

Just as one example, WN and FL did not at the time of the merger and still do not control more than 10% of the slots at any slot-controlled airport. At the time of the merger, DL-NW combined controlled only about 25% of the slots at DCA and LGA; the slot deal - which took two years for approval, only resulted in DL controlling about 48% of the slots at LGA, the largest slot holding or percentage at any of the airports. UA was a fraction of the size of CO at EWR and UA still had to give up all of its own pre-merger slots. UA at EWR and US at DCA would have similar percentages of slots without divestitures.

Those are real and justifiable reasons that along with the email and capacity reduction and fare increase communications conveniently get lost when AA/US supporters try to argue about how unfair the DOJ is being toward AA/US.

The very nature of the airline industry is one of mobility, and usually the only restrictions of those are of geo-political lines on a map or some government granted authority based upon limitations at a given airport. People who are outside of the industry are viewing this merger as being anti-competitive because they are looking at issues of saturation or control of any given city pairing, while people in the industry know there are relatively few barriers to entry into most new markets, as aircraft assets can be moved to maximize profit should an opportunity present itself. The airline industry is not like a grocer or fast food restaurant or hotels where long-term leases are required, not to mention, extensive construction/remodeling of a location... it is a serious commitment of financial resources, whereas airlines may enter new markets (or leave) with relatively few, if any, long-term costs.

The DOJ actions are about DCA and NYC because all other airports do not have slot restrictions as any airline may enter into the market, but the DOJ wants to start high and then settle on some lower agreement. Doug Parker's emails suggest to me that he knows already US is already being bullied around by the much larger DL and UA in triple point offers and such promotions lead to an irrational, if not, an anti-competitive course the industry has already taken with two prior DOJ approved mergers. He knows if the US/AA is approved then the combined company would be an equal and why he believes such unprofitable promotions in order to gain market share would end.
 
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actually, airlines do generally sign long-term leases for airport space and aircraft are long-lived assets. It is correct that airplanes can be moved around and it is cheaper to walk away from a market and leave the buildings vacant than to fly and lose money but the network carriers who are long-term network focused cannot easily move their networks around. US could not have shut PIT w/o being in BK unless they carried a huge financial burden for years.

US and Parker may feel that they are being picked on by DL and UA but US has been undercutting those carriers in their own hubs in order to generate enough traffic for US to survive. That is the whole crux of Advantage fares and it was a fair strategy that HP used years ago.
The DOJ's problem is that US has used that strategy for years to grow and now says it wants to eliminate it which would hurt consumers.

There is nothing wrong with an airline or any company changing strategies. The problem is that AA and US execs have both said what they intend to do as a result of the merger - and THAT is what has created problems. The DOJ should not have ever been given the opportunity to know that Parker didn't like DL's triple mileage strategy or that the Advantage Fares made no sense and couldn't be sustained if the carriers merged. Don't try to place the blame on the DOJ or US' competitors because Parker and co. said things that no exec should say in public or even put in writing given that the US government has demonstrated it can read anything you write. Let's not forget that Parker had the gall to send the email to DL execs who in turn informed Parker that they would turn the email over to their chief counsel. The chances are real high that DL did send the email to the DOJ because if they didn't DL's backside oculd be on the line. Pressing that little send key has cost Parker far more heartache than anyone here could possibly know and it was all completely avoidable.

WN didn't tell the DOJ that they intended to close a dozen or more FL cities but that is exactly what they have done. If Parker and co. had whispered to each other across bathroom stalls, the merger would be approved by now.
 
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actually, airlines do generally sign long-term leases for airport space and aircraft are long-lived assets. It is correct that airplanes can be moved around and it is cheaper to walk away from a market and leave the buildings vacant than to fly and lose money but the network carriers who are long-term network focused cannot easily move their networks around. US could not have shut PIT w/o being in BK unless they carried a huge financial burden for years.

US and Parker may feel that they are being picked on by DL and UA but US has been undercutting those carriers in their own hubs in order to generate enough traffic for US to survive. That is the whole crux of Advantage fares and it was a fair strategy that HP used years ago.
The DOJ's problem is that US has used that strategy for years to grow and now says it wants to eliminate it which would hurt consumers.

There is nothing wrong with an airline or any company changing strategies. The problem is that AA and US execs have both said what they intend to do as a result of the merger - and THAT is what has created problems. The DOJ should not have ever been given the opportunity to know that Parker didn't like DL's triple mileage strategy or that the Advantage Fares made no sense and couldn't be sustained if the carriers merged. Don't try to place the blame on the DOJ or US' competitors because Parker and co. said things that no exec should say in public or even put in writing given that the US government has demonstrated it can read anything you write. Let's not forget that Parker had the gall to send the email to DL execs who in turn informed Parker that they would turn the email over to their chief counsel. The chances are real high that DL did send the email to the DOJ because if they didn't DL's backside oculd be on the line. Pressing that little send key has cost Parker far more heartache than anyone here could possibly know and it was all completely avoidable.

WN didn't tell the DOJ that they intended to close a dozen or more FL cities but that is exactly what they have done. If Parker and co. had whispered to each other across bathroom stalls, the merger would be approved by now.
Perhaps the DOJ should break up WN.
 
Another myth from WT. Do you honesty believe that DL and/or UA don't or won't bully US around? Maybe I'm missing something, but isn't that the basis of true competition? Maybe in a fantasy world the airlines would play nice together, but we don't live in one. You do recall when a large portion of DL's recovery plan was the demise of US, don't you? Hell all of the fare wars of the past 25 years were to put a hurtin on your competition in order to weaken them. It's been a game of who can afford to lose more money over a given period of time. I think that we all know that AA did all they could to kill BN a bit faster.
 
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Another myth from WT. Do you honesty believe that DL and/or UA don't or won't bully US around? Maybe I'm missing something, but isn't that the basis of true competition? Maybe in a fantasy world the airlines would play nice together, but we don't live in one. You do recall when a large portion of DL's recovery plan was the demise of US, don't you? Hell all of the fare wars of the past 25 years were to put a hurtin on your competition in order to weaken them. It's been a game of who can afford to lose more money over a given period of time. I think that we all know that AA did all they could to kill BN a bit faster.
I don't think I said anywhere that DL and UA don't bully US or each other or anyone else. You are absolutely right about the nature of competition.

My statement was and is that US is not the innocent damsel that you would like us to think she is. US' business plan has been built around having low labor costs in order to offer fares that are below other carriers, including undercutting those carriers in their own hubs.

The fact that US execs turned around and said they want all of the competitive monkey business between airlines to end and then sent the email to a competitor's exec is precisely why the deal is delayed.

The point as much as you want to try to evade it is that Parker opened his mouth and if he had just kept it quiet the merger would be approved.

In the privacy of US/AA's offices, Parker could then do what he thought they needed to do and no one would know anything different or any of the gory details.
 
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I don't think any airline could survive true competition. I mean dog-eat-dog, no-holds-barred, let-the-chips-fall-where-they-may competition. All of us, WN included, need our little pockets of exclusivity that generate enough income to pay the bills while the executives are running their little prestige, "I head up an International airline" vanity routes that lose money--like the LAX trans-Pacific, or Chicago-Delhi flights.
 
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I don't think I said anywhere that DL and UA don't bully US or each other or anyone else. You are absolutely right about the nature of competition.

My statement was and is that US is not the innocent damsel that you would like us to think she is. US' business plan has been built around having low labor costs in order to offer fares that are below other carriers, including undercutting those carriers in their own hubs.

The fact that US execs turned around and said they want all of the competitive monkey business between airlines to end and then sent the email to a competitor's exec is precisely why the deal is delayed.

The point as much as you want to try to evade it is that Parker opened his mouth and if he had just kept it quiet the merger would be approved.

In the privacy of US/AA's offices, Parker could then do what he thought they needed to do and no one would know anything different or any of the gory details.
Nobody brainwashes their employees better than Delta. They are a snake disguised as a puppy! Everyone loved them until EAL went away and the Atlanta customers found out the hard way!
 
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