The following statement about consolidation and the potential impact on US comes right out of US' most recent annual report
"Additionally, as mergers and other forms of industry consolidation, including antitrust immunity grants take place, we might or might not be included as a participant. Depending on which carriers combine and which assets, if any, are sold or otherwise transferred to other carriers in connection with such combinations, our competitive position relative to the post-combination carriers or other carriers that acquire such assets could be harmed. In addition, as carriers combine through traditional mergers or antitrust immunity grants, their route networks will grow and that growth will result in greater overlap with our network, which in turn could result in lower overall market share and revenues for us. Such consolidation is not limited to the U.S., but could include further consolidation among international carriers in Europe and elsewhere."
Jim, what percentage of the marketshare does DL now have at LGA?
Also, what percentage does US & AA have respectively at DCA at this time?
With all of the consolidation that has/is taking place, there are less airlines which leads to an increase in markershare per airline at any given city.
I know that UA/CO gave some up at EWR to pacify SWA, but I believe that they still have in the area of 60% there. Any given airline is going to be the dominating carrier in a particular city.
wings,
since your question remains unanswered, I'll address it.
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The DOJ has been far less concerned about marketshare than access to limit access airports after a merger.
With respect to slot holdings post slot swap, DL now holds about 47% of the slots at LGA, US holds right at 50% at DCA, and UA has 70% of the slots at EWR, the highest percentage of slots at a slot controlled airport... although note that CO already held close to that amount and they ended up losing a fairly high percentage of the slots UA already held at EWR- don't remember the actual number of premerger UA flights at EWR (and don't have time to look it up) but UA divested 18 flights at EWR.... so the primary issue is with access by other carriers post merger.
AA and DL each have about 15% of the slots at DCA - very likely far in advance of what the DOJ would allow.
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Thus, it is likely true that there would likely be no issues w/ US/AA in NYC, but since US is already at the 50% max as a result of the slot deal and which was of concern to the DOJ, it is highly unlikely that US would be able to retain any slots from AA at DCA, meaning US would likely have to fund AA's entire operation at DCA using slots US already holds.
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But let's look at the question of revenue share- which is a different metric and more meaningful than slot holdings or flights because it reflects the ability of companies to maximize the revenue production ability of their flights... carrying people and operating flights are secondary to generating revenue
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IN NYC (the 3 major airports), based on the latest DOT data, UA has about a 30% revenue share followed by DL at 23, AA at 16%, and B6 at 12%. It isn't known how DL's revenue share will increase based on the slot swap but it is very likley they will pick up a couple more share points - 25% is not at all unreasonably. Thus, AA plus B6 could still surpass DL even after the slot swap but US/AA does little to improve the combined airline's position in NYC relative to UA and DL.
IN New England, AA/US combined could surpass DL as the largest revenue carrier by about 20%.
In the Southeast, which includes the Carolinas down to Florida, DL has a 31% share..... UA/CO has about 17%. AA/US would have about 26% since AA and US are fairly similarly sized (AA being slightly larger in revenue because of the higher value MIA hub).
In the southwest, UA/CO and AA are tied for #1 right now so adding US in would give AA/US the lead.
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In the midwest, the Rockies, and on the west coast (CA, OR, WA), AA/US would still be number 3 behind UA and DL (in all 3 regions).... some people don't realize that DL has the largest revenue share in the midwest at 31% because of the strength of PMNW's dual hubs and DL is about 25% larger than AA on the west coast even though AA is larger at LAX.
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Thus, AA/US would combined be stronger on the east coast as a region and there is increased strength in several regions - but neither airline adds much to the other in some of the most competitive markets - NYC, CHI, or LAX.
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Because AA/US are not strong in the same cities....the question then becomes whether a merger that increases presence in a region is really worth it if it still does not push AA/US to become the largest carrier in a city or region....
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And talking about combined market shares for AA/US is meaningless unless you consider that some capacity will have to come out of the combined entity in order to bring AA/US' RASM up to par with DL and UA since US has repeatedly noted that it has a revenue disadvantage.
