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[BLOCKQUOTE][BR]----------------[BR]On 9/25/2002 11:59:06 AM AAmech wrote:[BR][BR]I would agree with the frequency part of the argument if it was like double that of a so-called New Entrant, but most of the time it was only a flight or two. And even then in AA's case they aparently can show those flights drew enough consumer demand to justify to extra flights. [BR]If I was Carty and the DOJ offered to settle for no more flights than the competition, I would give it a serious look. But even then it opens a whole new can of worms. Who is a New Entrant? How would these rules apply to someone like WN? Would they be forbidden from offering $19.00 fares or increased freq's when flying against B6? The potential cures could be worse than the supposed disese![BR][BR]----------------[BR][BR]A couple of differences. Vanguard tried an MCI-ICT-DFW trip for a reduced fare. AA bumped up frequencies to DFW out of MCI and added frequencies (and jets) out of ICT. Vanguard quit the ICT-DFW market and AA made ICT pretty much an Eagle city again. They eventually shut down Vanguard on MCI-DFW, and when they did, those added frequencies just couldn't be justified...despite the fact that there were now fewer seats in the market with Vanguard's retreat. [BR][BR]Southwest is a different animal. When JetBlue started LGB to OAK service, Southwest was already running 57 flights between the LA area and Oakland. They didn't add any, hell, they didn't need too add any. And now that JetBlue has announced a cutback in their 9 daily flights, Southwest is still running their 57 flights. Charging $19 is a purely competitive move. [BR][BR]AA added about 5 daily departures to DFW out of MCI, and they didn't really need to do that...Vanguard only ran something like 3 flights a day, (early morning, noon, and late afternoon). AA had flights almost hourly - they already had a tremendous advantage in the convenience department, yet they added even more flights. Had they only matched the fares, I don't think the DOJ would have batted an eye. [BR][BR]Interesting thing though, if AA could prove that there was consumer demand for the lower fare flights, why would they have pulled the aircraft out of a market and raised fares to a point where demand dropped? Using the latest 10Q numbers, AA had CSM's of 11.8 cents. Wichita to DFW would have cost about $38 per ASM to operate. Had AA offered a $200 round trip on an MD80, they would have made money on a half full flight. Right now, it costs almost $400 to fly on an RJ. Wichita was BEGGING for low fare service - hell, that's why they had their senator modify the Wright Ammendment to include Kansas as a state that could fly into Love Field...they wanted Southwest, but they would fly whoever offered a fair price. Vanguard offered it, but as AA found, people went with AA because they matched the fare and were a known product. [BR][BR]Sure enough, $50 to Wichita was a money losing fare, but I believe that AA could have easily proven that while they weren't making money at that fare, neither was their competitor, so how can matching fares be construed as being predatory? [/BLOCKQUOTE]