A settlement between US and UsAirways and AMR

[767one]

They're all reserved for Southwest, no doubt.  Oh, they will let JetBlue, Spirit, Frontier, etc. have a few as a token gesture of "fairness," but most of these assets will go to Southwest, the "upstart, low-cost" carrier, "new entrant".

Careful how you speak about the not so low cost carrier or the men in black might come to visit you!

Bob

 

[nevergiveup]

Do you think WT knows what D-e-l-t-a stands for? (hint.....Tampa area).....knock on wood!

 

[robbedagain]

Mike33 im not askin a question but that conference n the forbes article sure made it clear that dl n ua need not apply bec fed regulators say they wont get any united had no comment on it. As for me all I care about is a pay check every 2 weeks

 

[flyer63]

you wait and see the outrage when AA/US slash service to dozens of cities and that service is not replaced by low fare carriers.... you can bet your bottom dollar that DL knows exactly what it needs to do to make sure some of those slots end up with DL.you personally may not have been up in arms that DL might have ratted out AA/US but there were plenty of people who were.Whether they referenced the emails or not, AA/US is divesting more slots and more gates than has ever been required of any US airline merger. If the emails didn't make a difference, I'm not sure what you think did.Bottom line remains that if all of these gates and slots end up in the hands of low fare carriers, new AA's future is a whole lot grimmer than you and a lot of others would like to believe.AA and US' CASM is 7% higher than WN's and more than double digit % higher than B6 and that gap will grow.AA and US are highly susceptible to low fare competition and it will only grow as the Wright Amendment restrictions fall and AA/US' costs go up.Yes, AA/US have to comply with the law because they agreed to a merger which many of us said from the beginning made no sense and would require some of the largest divestitures and we were right. Having those assets now be used against AA/US is the absolute worst case scenario that AA/US could have imagined but they were too far into the process to turn around and walk away.

You forget to realize that AMR with its fleet modernization will be substantially lowering its costs.

 

[WorldTraveler]

except that other carriers are modernizing their fleets as well... but they also have plans to use the thousands of extra mechanics that are needed where AA/US are promising to retain employees when they know full well they can't keep the same number of employees and get rid of hundreds of older aircraft.

Further, new AA's debt levels in order to have that new fleet will be the highest the US industry has ever seen. As much as you want to believe that operational costs will go down, all-in costs will likely be higher because of the huge debt levels that AA will have.

AA/US also promised wage increases in order to get the deal done. whatever they save in operational costs will be more than offset by higher labor costs and debt service.

And it also doesn't change that AA and US' costs right now are already higher than DL's.

 

[767one]

except that other carriers are modernizing their fleets as well... but they also have plans to use the thousands of extra mechanics that are needed where AA/US are promising to retain employees when they know full well they can't keep the same number of employees and get rid of hundreds of older aircraft.

Further, new AA's debt levels in order to have that new fleet will be the highest the US industry has ever seen. As much as you want to believe that operational costs will go down, all-in costs will likely be higher because of the huge debt levels that AA will have.

AA/US also promised wage increases in order to get the deal done. whatever they save in operational costs will be more than offset by higher labor costs and debt service.

And it also doesn't change that AA and US' costs right now are already higher than DL's.

With the US management in charge the costs will always be higher because that is how they keep employee pay lower.....the old "unique airline" arguement. Before the merger the mantra was not big enough to compete. Can't wait to see what the new mantra will be to keep employee wages down. Anybody want to bet on whether or not upper management gets some sort of extra compensation soon?

Cheers,

Bob

 

[traderjake]

 I can guarantee you that DL will end up w/ slots from the DCA divestitures.

 
I can guarantee you the DOJ wont give Delta back the slots they gave up to get slots in LGA. 
 
Tell us again how those internal emails are going to be the kiss of death for the merger.

 

[WorldTraveler]

you just gave up 44 flights/day at DCA and 12 at LGA.

Would you like to tell us how many more slots that is that any other airline merger?

I'm not sure what you thought but 56 flight per day at key airports is a pretty hefty payment for emails and anything else.

And it still comes down to that every slot pair that isn't given to DL is a slot pair that ends up in the hands of a low fare competitor who will use bigger aircraft and compete in bigger markets.

But since you're the biggest airline in the world, you can handle it now, right?

 

[700UW]

DL will not get one slot from the divestiture, the DOJ has made that quite clear.
 
Spin that.

 

[Jester]

and how many articles have we said during this whole antitrust case which have said that the DOJ was incorrect in its assessment of the lawsuit from the beginning despite the fact that I and others said that there would be massive divestitures?

As I said, the DOJ argument was silly outside of the slot restricted airports... how did this settlement address the HHI issue in the lack of competition between various combination of cities? What happened to OGG-TPA, LIH-STL, ELP-FAT, CMH-PSP, etc. routes and the near post-merger "monopolistic" control on these routes which were much of the basis for this lawsuit? Did someone from the DOJ learn that competitor aircraft assets could be moved as revenue opportunities present themselves? How did this settlement address this "key issue" of the DOJ complaint? Not even a mention! It was all about slot restricted airports, and why most of the DOJ bluster was nonsense!

 

[robbedagain]

700 I asked wt that same question bout those slots n the fact the doj made quite clear that dl and ua wont gt any there a forbes article as well that titled NOTE TO DELTA DELTA N UNITED DONT NEED TO APPLY BEC THEY WONT GET ANY the emails apparently did nothingnto prevent the doj from makin the settlement either

 

[MetalMover]

except that other carriers are modernizing their fleets as well... but they also have plans to use the thousands of extra mechanics that are needed where AA/US are promising to retain employees when they know full well they can't keep the same number of employees and get rid of hundreds of older aircraft.

Further, new AA's debt levels in order to have that new fleet will be the highest the US industry has ever seen. As much as you want to believe that operational costs will go down, all-in costs will likely be higher because of the huge debt levels that AA will have.

AA/US also promised wage increases in order to get the deal done. whatever they save in operational costs will be more than offset by higher labor costs and debt service.

And it also doesn't change that AA and US' costs right now are already higher than DL's.

WT fails to mention how often Delta gives raises to its mechanics when they merely get a whiff that a union drive might be started.

 

[MetalMover]

someone gets it.

As much as the AA/US fanclub would like to believe otherwise, the DL-US slot deal gave DL a huge win over US... even before yesterday. DL gained 3X more slots at LGA than US gained at DCA and DL patiently waited and helped push the deal thru the DOJ knowing that US would never be able to become larger at DCA after the slot deal. That is exactly what happened.

IIRC, DL traded away 42 slot pairs at DCA and AA/US will now have to divest 44 actual flights (above the leased slots) which could be used by low fare carriers.
Perhaps there will be people who will realize that service to small and medium sized cities will be sacrificed in order to provide LFC access to DCA. Maybe it will happen but too late... only weakens AA/US' position on the east coast since DL serves many of those same cities not only from LGA but also from its other eastern US hubs. AA/US will be reducing the number of hubs it serves from some small cities which will weaken its overall east coast presence in those east coast cities.

Despite their bravado, AA/US execs are either scared to death or deeply in denial about the effect that allowing low fare carriers to control 15% of AA/US flights (and even more seats) in a market where the LFCs have little incentive to deeply discount because there is no carrier to push their fares down. All they need to do is price lower than AA/US which shouldn't be hard to do since they have costs 10% or more lower than AA/US.

Yes, DL outsmarted US with the slot deal and now AA-US is trying to put the best face forward as the government pushes thru a plan that is seeing the biggest wealth transfer to low fare carriers from network carriers the industry has ever seen. With AA/US costs mid-tier even among network carriers, AA/US is very poorly prepared to withstand the onslaught.

But we don't have to worry about any of that today, right? This is the day and week and month to celebrate getting the deal done and savor the promises that have been made regarding pay raises whether they will ever materialize or not. The reality of the future will take care of itself - in the future.

Gee I thought WT dedicated ALL his anti AA/US rhetoric over on the AA board...But I see he is making friends over here as well.

 

[MetalMover]

you just gave up 44 flights/day at DCA and 12 at LGA.

Would you like to tell us how many more slots that is that any other airline merger?

I'm not sure what you thought but 56 flight per day at key airports is a pretty hefty payment for emails and anything else.

And it still comes down to that every slot pair that isn't given to DL is a slot pair that ends up in the hands of a low fare competitor who will use bigger aircraft and compete in bigger markets.

But since you're the biggest airline in the world, you can handle it now, right?

Maybe Eric holder will go after Delta and their monopolies and file antitrust chafes against the mighty untouchable Delta!

 

[WorldTraveler]

how wonderful....
we are arguing about whether DL will get a slot or not while the US fan club tries to look past the fact that 44 flights/day by competitors will be launched in the hub that US execs called their highest margin hub.

If you would rather have 44 flights/day from low fare competitors, I'm sure that can be arranged.

All of those fantasies that you have of how great AA/US will be able to stand up to competition fail to consider that DCA and DFW will both be inheriting substantial competition in just a few months after the merger closes.

Metal,
again you can't handle that DL has managed to become the most profitable airline in the US, does it in some of the most competitive markets in the US, and still manages to pay its employees far better than the industry average.