Which brings me to address the competitive situation with DL and UA. If there is a merger then despite all the b/s spewed by certain members here that keep chanting "it will never work, so don't even try" I say go jump in the lake. The future has not been written and to have the audacity to say a US/AA merger cannot work is just plain wrong. The naysayers keep making the same mistake...they keep underestimating just how much damage a well executed competitive response to DL and UA could really do. To think for one second that the new AA will just wither on the vine is wishful dreaming. Just refer to the Kevin Mitchell, Business Travel Coalition review on why it would be bad for the other carriers if US/AA combine for a starting reference point to just how big of a negative effect this combination would have on all the other airlines.
In my mind DL would probably be so affected by all of this that their entire model would have to be rethought. DL became the behemoth that it is because of NW. But they basically ceded the hometown advantage (the entire USA) by ignoring the importance of strong hubs. NW never, and I repeat never had the strongest best hubs. The new AA will not have any hubs (except for PHX) that are expendible in a merger. And will hang onto all the hubs because their all best in class in one way or another. So while DL is busy killing off MEM, MSP, and CVG, the new AA will not have nearly as much need to close PHL, CLT, DCA, ORD, DFW, LAX, and MIA as they are superior in everyway to other hubs like EWR and IAD. Take a look at the NYC market. The naysayers have said that the market was given away because AA and US can't compete. Does anyone know just how many departures a combined US/AA will have out of LGA and JFK. The biggest loser to the new airline will be Jetblue. And DL will be the highest cost producer in the short term out of NYC, not a good place to be. So the point is...do not think that AA/US will not do better together than all of the other most recent combined airlines. It just might be that the new AA will have the best of all worlds because it has the advantage of seeing where the other two megas have staked their claims and all their resources and can now out maneauver them.
No one knows just how much influence a combined AA/US will have over the financial future of the other two megas. But judging from the saber rattling going on me thinks other airline (DL) people are very very concerned and would rather not see this combination ever happen.
ok ... we need to have a toe to toe moment.
Just because AA and US want and need to succeed hardly means they will.
And as much as you think that AA and US will all of a sudden become a competitive force because of a merger, a merger does not automatically end years of multiple carriers focusing their attention on attacking AA and US networks.
It just happened to be WN for the first half of the decade of the 2000s and it is DL now.
You are truly clueless if you don't recognize that NW's (and now DL's) dual hub strategy in the midwest gives it a larger share of the midwest market than any other airline... and that will remain unchanged in an AA-US merger, regardless of what you want to believe and others say.
MSP and DTW are unchallenged hubs; Chicago is the hub to 3 carriers. DL's revenues in the midwest are far larger than any other carrier's because of the ability to serve so many cities east and west thru MSP and DTW as well as south thru ATL.
There simply is no match. Chicago is an important local market but it is highly competitive and thus not a great place to have to hub in.
The fact that DL and NW both have hubs in cities where they dominate the market is far more important than the fact that their hubs are in large cities.
DL hasn't lost anything in any coastal cities- it and NW were always outclasses on the coasts by AA and UA. That is probably why it is all the more significant that DL has knocked off AA as the largest carrier in both NYC and BOS and most other east coast cities except for MIA. There are a smaller and smaller number of east coast cities where US is still the dominant carrier; Parker wants to get the merger done before everyone realizes that NYC is the top market in most E coast cities and US just gave all of those cities to DL in the slot swap.
Where do you come up with statements like "DL will be the highest cost producer?" No one has ever said that in any published forum because it is simply not true. DL and US have had similar costs, both lower than AA and UA. US' costs are low because of low labor costs - which will rise. AA is not going to have labor costs that would be lower than DL's; the closest comparison they made was in their BK filing in which they said they would have costs 1% lower than DL's. 1%. and that was before DL bought the refinery... which will likely bring down DL's SYSTEM costs by 2-3%, before DL announced its fleet restructuring which could cut DL's CASM by another 2-3%....
Low labor costs don't matter if you continue to lose revenue share.
I'd be happy to see US and AA succeed... but you and others continue to hold onto the hope that it will all work out just because we're entitled and we want it bad enough.
And you still seem to think that DL and WN who are in very good shape are just going to sit still and let AA/US grow and make this merger work... and even though UA is still working thru their merger, they are not about ready to roll over either.
It is time to quit hoping AA/US will work out and deal with the real facts that say it will be a very, very high hill for them to climb in order to ensure they will...
