Concessions on routes likely Washington, Charlotte, Dallas

[usa1]

Concessions on routes likely to get U.S. Air-AMR off the ground

WASHINGTON/ATLANTA (Reuters) - US Airways and American Airlines are likely to win approval to create the world's biggest carrier, with regulators expected to focus on concessions to preserve competition in Washington, Charlotte, Dallas and other airports where they are dominant, antitrust experts say.

http://finance.yahoo.com/news/concessions-routes-likely-u-air-061210188.html

 

[usa1]

This guys says PHX and PHL to see cuts also.

http://www.bizjourna...ays-merger.html

 

[usa1]

Chicago may escape drawbacks of American-US Airways merger

[background=rgb(250, 250, 250)]
With less competition, airline mergers typically result in higher ticket prices and fewer choices for consumers, critics say.[/background][background=rgb(250, 250, 250)]
But if American Airlines and US Airways announce a deal as expected — possibly as soon as this week — Chicago travelers would be largely shielded from those downsides, experts say.[/background][background=rgb(250, 250, 250)]
http://www.chicagotribune.com/business/ct-biz-0213-airlines-merger-20130213,0,118371.story[/background]

 

[algflyr]

Concessions on routes likely to get U.S. Air-AMR off the ground

WASHINGTON/ATLANTA (Reuters) - US Airways and American Airlines are likely to win approval to create the world's biggest carrier, with regulators expected to focus on concessions to preserve competition in Washington, Charlotte, Dallas and other airports where they are dominant, antitrust experts say.

http://finance.yahoo...-061210188.html

They would REQUIRE reductions in CLT? I can understand slot controlled airports like New York and Washington to allow other carriers more access to compete. But any carrier can fly to CLT...

 

[cltrat]

They would REQUIRE reductions in CLT? I can understand slot controlled airports like New York and Washington to allow other carriers more access to compete. But any carrier can fly to CLT...

lol every media stooge is an avation expert these days

 

[usa1]

They would REQUIRE reductions in CLT? I can understand slot controlled airports like New York and Washington to allow other carriers more access to compete. But any carrier can fly to CLT...

CLT is adding a lot of new gates .... right. So anyone can get some ... right?

 

[FWAAA]

They would REQUIRE reductions in CLT? I can understand slot controlled airports like New York and Washington to allow other carriers more access to compete. But any carrier can fly to CLT...

Gates, not slots. Doesn't US currently have a lock on just about every gate at CLT? As asinine as it sounds, it's possible that government lawyers might demand that US-AA relinquish some CLT real estate to low-fare entrants. That's what government antitrust lawyers tend to do when airlines merge.

I posted a link to a news story a while back that quoted (I think it was Jerry Orr) someone as saying that WN wanted more gates at CLT. Well, there you go. Someone from the Justice Dep't might just tell Doug Parker that in addition to some DCA slots and real estate, some gates and ticket counter space at CLT must be auctioned off to the new entrants.

 

[algflyr]

Well I didn't think about the gates... Sounds like other airlines should ask the airport to build more... Lol. Where do the gates come from at a place like LGA if we have to give up some slots? Would we also have to give up LGA gates??

 

[FWAAA]

Well I didn't think about the gates... Sounds like other airlines should ask the airport to build more... Lol. Where do the gates come from at a place like LGA if we have to give up some slots? Would we also have to give up LGA gates??

Ordinarily, if you're forced to give up slots at a slot-controlled airport, you also have to give up gates and counter space and back-room space as well so the new user can use the slots. That's what I see happening at DCA as the combined airline would hold more than 60% of the DCA slots and I don't see the government permitting that.

Good news about LGA is that thanks to Parker's ill-concevied LGA slot giveaway, the combined airline will have just over 30% of the LGA slots compared to DL's approx 45% holdings, so there shouldn't be any forced divestitures at LGA. During that saga, it became clear that the DOJ thought that 50% was the max amount of slots that either carrier should hold, and US has 50% of the DCA slots right now.

A few years ago, I believe that B6 wanted to enter ORD and the government granted B6 some new entrant slot exceptions. Problem was, none of the established airlines would lease B6 any space, and since AA and UA weren't involved with any mergers at the time, there was no mechanism for the government to force them to make some gates available to B6. Since then, the recession caused AA and UA to contract plus the DL-NW merger opened up some gates, giving B6 an opening at ORD.

I think Orr is building some new space at CLT but given the dominance of US at CLT, the G could require that US auction off some additional gates and other real estate to whichever pesky new entrant wants it.

 

[usa1]

Good news about LGA is that thanks to Parker's ill-concevied LGA slot giveaway, the combined airline will have just over 30% of the LGA slots compared to DL's approx 45% holdings, so there shouldn't be any forced divestitures at LGA. During that saga, it became clear that the DOJ thought that 50% was the max amount of slots that either carrier should hold, and US has 50% of the DCA slots right now.

Parker's been planning this merger for a long time .... hence the LGA/DCA swap. I mention it on here when it happened.

 

[FWAAA]

Parker's been planning this merger for a long time .... hence the LGA/DCA swap. I mention it on here when it happened.

If the slot swap was in preparation for a merger, then Parker is an idiot.

The slot giveaway will result in the combined airline being much smaller at LGA than it would have been if he'd been more patient and the combined airline being just slightly larger at DCA than it would have been if he'd been more patient.

The net effect of the slot swap was to make DL substantially stronger at LGA and to make US marginally stronger at DCA.

Overall, not a good result.

 

[wings396]

I have a question that you may be able to answer with the LGA swap deal. With the combination of AA & US, how much of the marketshare do they have if you include LGA, JFK, & EWR? Could the combination of all 3 put them on level with the others, and would it have been too much had Parker not scaled back LGA?

 

[FWAAA]

I have a question that you may be able to answer with the LGA swap deal. With the combination of AA & US, how much of the marketshare do they have if you include LGA, JFK, & EWR? Could the combination of all 3 put them on level with the others, and would it have been too much had Parker not scaled back LGA?

The reason I keep harping on the slot swap is that had Parker waited, the combined US-AA would have more than 50% of the slots, and would have to divest some as part of the merger, leaving US-AA with about the same dominant position as Delta now holds. Instead, US-AA will have just over 30% of the slots compared to DL's approx 45%. See why the slot swap was a piss-poor deal? Because Parker gave away 130-some LGA slots in exchange for just 42 DCA slots, he permanently crippled the combined US-AA in NYC.

But how about DCA? Had Parker waited, and merged with AA, the combined US-AA would have about the same number of slots as US alone now holds, which is approx 50% of the DCA slots. So had idiot Parker not handed DL that huge gift, US-AA would have half the slots at LGA and half the slots at DCA. AA is currently the second largest carrier at DCA behind US.

That's why Parker didn't possibly give away those LGA slots in prep for a merger with AA. Without the slot swap, US-AA would be the biggest airline at LGA and the biggest airline at DCA. Instead, with the swap, US-AA is a distant second at LGA and the biggest at DCA.

If you don't believe me, then consider why WT was so adamant that the slot swap must happen - it wasn't because he was rooting for US; it was because he knew that it would cement DL as the dominant carrier at LGA.

About the other airports, DL is bigger at JFK than AA yet was allowed to obtain almost half the LGA slots, so AA's JFK presence wouldn't have mattered. AA is tiny at EWR, so that wouldn't have mattered.

Simply put, Parker was played the way Merv Griffin was played by Donald Trump many years ago; Anderson hoodwinked Parker out of a very valuable LGA franchise in exchange for a mere 42 DCA slots plus $65 million. Parker may have his moments of genius, but that slot swap was more of the drunken dumb@ss we saw in January, 2007.

The amazing thing is that the abused-spouse-style employees of LCC continue to spout the Stepford Wives-like mantra that the slot swap was a good thing. "but Doug loves us and wouldn't do anything to hurt us." I realize that Parker make some of you wet, but the slot swap was a huge blunder if he did it with an eye toward merging with AA.

 

[FrugalFlyerv2.0]

Ordinarily, if you're forced to give up slots at a slot-controlled airport, you also have to give up gates and counter space and back-room space as well so the new user can use the slots. That's what I see happening at DCA as the combined airline would hold more than 60% of the DCA slots and I don't see the government permitting that.

Back in 2000/2001 when the UA-US merger was conceived, wasn't there some sort of a 'deal' where in order to not surrender too many DCA slots, the new UA-US would share the Shuttle with AA? (or some other crazy scheme where the BET guy would get a start up but still be somehow related to UA-US?)

What I'm trying to ask, I guess, is there a way where if the AA-US merger goes through now, is there some sort of a way AA-US could to a certain degree choose who they want to divest the DCA slots to? Hopefully to a competitor that would be acceptable to both the Gov and AA-US?

 

[Kev3188]

lol every media stooge is an avation expert these days

We're in the wrong gig, man...