“We believe this represents a seminal, negative event for the US airline industry, and significantly jeopardizes industry capacity discipline.”
– Jamie Baker, JP Morgan (8.13.13)
“Under the scenario where the merger doesn't go through, labor is the biggest loser given more pain that likely lies ahead from an industry that remains intensely competitive”
– Dan McKenzie, Buckingham Research (8.13.13)
“In our opinion, if the US Airways/AMR deal were to be permanently blocked, AMR would need to address its issues on the standalone basis, likely through capacity and headcount reductions. Worst case scenario, AMR would need to liquidate, resulting in significant capacity and headcount reduction.”
– Helane Becker, Cowen & Co (8.13.13)
“There was a certain logic in place when Parker proposed to the bankruptcy court that the two merge and that he be the one to run the combined company. The bondholders were behind him and he even made peace with American’s labor unions — something American couldn’t do itself. American had strong hubs but weak operations and was losing money fighting fare wars where it wasn’t strong. US Airways had strong operations and weaker hubs, and there is not a huge overlap among the two carriers’ routes. The bankruptcy court agreed. The feds did not.”
– Bill Saporito, Asst. Managing Editor, Time Magazine (8.13.13)
Consolidation has helped bring needed stability to an industry that just a few years ago was hemorrhaging money, struggling to cope with rising fuel costs, and plagued by flight cancellations, delays and spotty service. This history needs to be considered, and balanced against a desire to have more carriers.
– USA Today Editorial Board (8.13.13)
Arbitrary Nature of DOJ Position
“You’ve had an opportunity to express yourself for a year, and they come up with a veto a year later with no real concrete examples of why it’s bad. It doesn’t make any sense. It’s absolutely absurd. I don’t know what they were smoking in the back room, there’s no logic to it. If there was new information or issues had come to light, but there hasn’t been”
– Gordon Bethume, Former Chairman and CEO of Continental Airlines (8.13.13)
“If the other big mergers were approved, this one certainly should have sailed through. Overall it would have improved things for the consumer and certainly for the industry.”
– Ray Neidl, Airline Analyst at Nexa Capital (8.13.13)
“The lawsuit borders on shocking and is marvelously inconsistent in light of the two prior mega mergers.”
– George Hamlin, Aviation Consultant (8.13.13)
“If this justice department approved United-Continental, how can they say no?”
– Seth Kaplan, Airline Weekly (8.13.13)
“If they didn't want consolidation in the airline industry they never should have approved Delta/Northwest, and they should never have approved United/Continental...[The DOJ’s decision] is going to mean less competition which is a very bad thing for both the industry and consumers.”
– Bob Crandall, Former President and Chairman of American Airlines (8.13.13)
“When rejecting United-USAir in 2001, those airlines competed on 30 routes. AMR/LCC compete on 12, fewer than any other major airline merger in history... If anything, this probably creates more of a true duopoly in the business travel market between UAL and DAL.”
– Hunter Keay, Wolfe Research (8.13.13)
“I was kind of stunned by reading what sounded like a criminal indictment…I thought we were seeing some investment banker doing the (perp) walk with cuffs. It’s like Rip Van Winkle woke up. Industry consolidation has been a 10-year process. They certainly didn’t have any big objections to the last round.”
– R.W. Mann, Airline Consultant, R.W. Mann & Co (8.13.13)
“North Carolina has become a very silly state over the past several months, with state legislators who have consistently embarrassed many of its residents. Finally our state did something right. It stayed away from this ridiculous lawsuit.”
– Ted Reed, Transportation Reporter, The Street (8.13.13)
“There is more to this than preserving competition at all costs. If that were the only consideration, the antitrust enforcers should have blocked the previous mergers of United and Continental, Delta and Northwest, and Southwest and AirTran. They didn't.”
– USA Today Editorial Board (8.13.13)
