Agree with everything you say. Didn't mean for my post to contradict you or yours. You are correct that it is the closest 2 airports out there. And yes WN is very excited to grow the N-Tex traffic, and, they have had, what, 7-8 years to plan for it and adjust flights and aircraft to accomplish this growth to start in Oct of next year. Most people think WN didn't really want to wait the 7 years that they had to wait, but, this is what gave WN all the time in the world to study, learn, re-adjust and implement what will happen after the W/A goes away. It won't happen over night but I do see it being more like DEN or maybe BWI. Remember too that WN will not be able to grow as fast as they wish due to the lack of Boeing to produce aircraft fast enough. This is why WN is still hunting for used A/C to make up for it. It will be very interesting and fun to watch (at least for me) as we have been waiting for this for many years, can only hope it is done correctly and flourish into huge growth and profitability for SWA.
American Airlines and US Airways reportedly seek merger extension
- Thread starter Hatu
- Start date
Thx for the input FWAAA, I did not realize they have said it before. But I don't follow the court filings, I just read the media quotes here and there. And your right you took my post correctly as I thought is was a move closer in the direction of a merger. Do you all think there will be some sort of settlement prior to the court date? Or will it more than likely come out of or thru the courts? Just curious...
jimntx
Veteran
My two cents (which is probably worth about 0.0003 cents. Remember I'm a flight attendant. I'm paid to be cute, not smart.) is that the merger will probably happen (about 55/45 in favor), but...
The concessions that will make the DOJ happy will NOT make LCC, AMR, or the "new" AA happy. And, I suspect that they will be such that the merger may no longer make financial sense to anyone--least of all, to DP and LCC.
The concessions will have to be "paid for" one way or another. AMR executives (and I'm sure they have DP in intensive tutoring sessions right now) see employee concessions as a never-ending stream of money to pay for other things. Do any of us want to go down that road again?
The concessions that will make the DOJ happy will NOT make LCC, AMR, or the "new" AA happy. And, I suspect that they will be such that the merger may no longer make financial sense to anyone--least of all, to DP and LCC.
The concessions will have to be "paid for" one way or another. AMR executives (and I'm sure they have DP in intensive tutoring sessions right now) see employee concessions as a never-ending stream of money to pay for other things. Do any of us want to go down that road again?
WorldTraveler
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given other alternatives for AA or US absent a merger, neither side has said they want to back away from the detail.
Odds are high that they will cough up what the DOJ tells them to which is why the DOJ and AA/US are in a staring match across the table.
swamt,
WN will make whatever network changes they have to make in order to generate the maximum amount of revenue in the fastest possible time.
It is possible doing so might require them to slow down the growth of DAL but I suspect they can find other markets that are less strategically necessary for the short term and which may not generate the level of returns that DAL could generate.
Remember that Wright falls in October, well after the peak summer travel season but 4+ months before the peak spring break season which typically generates high demand to leisure destinations.
Odds are high that they will cough up what the DOJ tells them to which is why the DOJ and AA/US are in a staring match across the table.
swamt,
WN will make whatever network changes they have to make in order to generate the maximum amount of revenue in the fastest possible time.
It is possible doing so might require them to slow down the growth of DAL but I suspect they can find other markets that are less strategically necessary for the short term and which may not generate the level of returns that DAL could generate.
Remember that Wright falls in October, well after the peak summer travel season but 4+ months before the peak spring break season which typically generates high demand to leisure destinations.
johnny kat
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jimntx:
The concessions will have to be "paid for" one way or another. AMR executives (and I'm sure they have DP in intensive tutoring sessions right now) see employee concessions as a never-ending stream of money to pay for other things. Do any of us want to go down that road again?
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Short answer: NO
Long Answer: I believe this merger gets done at any cost. And I am going to go out on limb here and assert that the new American Airlines, regardless of concessions at DCA and elsewhere, will most likely target WN. Parker seems to understand how to beat WN at their own game. History has shown that US has been very effective in stopping WN in their tracks as compared to other airlines (see PHL).
And of course we all know he has done it by concentrating resources into a few cities and on the backs of labor. When this is all said and done the employees at the new AA will still be footing the bill.
WN will have a bit of a disadvantage with much, much higher labor costs and lack of first class cabins, amenities and route map to do too much damage to AA. Even with promised raises for the workgroups, there will still be a large difference in labor costs at the two airlines. There will be layoffs at AA to compensate for the size difference between the new company and other airlines.
There will be a blood bath when the new AA turns its sites on WN as the other two megas have their own growth plans stunted because they have to compete with the fallout of all out war between AA and WN. Just my two euros.
The concessions will have to be "paid for" one way or another. AMR executives (and I'm sure they have DP in intensive tutoring sessions right now) see employee concessions as a never-ending stream of money to pay for other things. Do any of us want to go down that road again?
____________________________________________________________________
Short answer: NO
Long Answer: I believe this merger gets done at any cost. And I am going to go out on limb here and assert that the new American Airlines, regardless of concessions at DCA and elsewhere, will most likely target WN. Parker seems to understand how to beat WN at their own game. History has shown that US has been very effective in stopping WN in their tracks as compared to other airlines (see PHL).
And of course we all know he has done it by concentrating resources into a few cities and on the backs of labor. When this is all said and done the employees at the new AA will still be footing the bill.
WN will have a bit of a disadvantage with much, much higher labor costs and lack of first class cabins, amenities and route map to do too much damage to AA. Even with promised raises for the workgroups, there will still be a large difference in labor costs at the two airlines. There will be layoffs at AA to compensate for the size difference between the new company and other airlines.
There will be a blood bath when the new AA turns its sites on WN as the other two megas have their own growth plans stunted because they have to compete with the fallout of all out war between AA and WN. Just my two euros.
Jacobin777
Senior
From what I've been able to gather the DOJ isn't interested in a settlement which AA+US would offer. IIRC, the DOJ's offer is too much for AA+US as well.
I'm hoping this goes to court and the DOJ+states prevail.
WorldTraveler
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Jacobin,
you could well get what you want.
It has Always been possible that the price to get the merger passed would be more than what AA and US were willing to pay, esp. regarding DCA. If AA/US were forced to divest even 20 slot pairs at DCA - 40% of what AA brings to the table but on par with what UA gave up at EWR (even though 18 slot pairs was 100% of UA's premerger schedule at EWR), the economics of DCA might not work any more - and with it a big chunk of new AA's east coast network.
It is also possible that there are likely pricing and network related requirements that the DOJ wants as well.
Somebody's Christmas will be what they want - the question is whose.
you could well get what you want.
It has Always been possible that the price to get the merger passed would be more than what AA and US were willing to pay, esp. regarding DCA. If AA/US were forced to divest even 20 slot pairs at DCA - 40% of what AA brings to the table but on par with what UA gave up at EWR (even though 18 slot pairs was 100% of UA's premerger schedule at EWR), the economics of DCA might not work any more - and with it a big chunk of new AA's east coast network.
It is also possible that there are likely pricing and network related requirements that the DOJ wants as well.
Somebody's Christmas will be what they want - the question is whose.
johnny kat
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We all know for sure that Delta will not be getting the Christmas present they want. Either way DL gets more competition. In the form of a newly merged AA or two competitors that will not go away peacefully. A lone American means fare wars for the industry and a way for WN to further crater DL's market plans. DL and UA will go head to head with four competitors instead of three. With one of the four having labor costs much, much lower. The pilots at US have given Parker the ace in the hole. AA with the huge order book assures fare wars. Jingle bells and let the games begin. It is going to be a bumpy flight. None of the people who post here are going to be happy with the gift they receive.
Jacobin777
Senior
Make a lot of money if you know whose? 😉
This is much more complicated than just giving up slots IMHO. The DOJ has also basically stated that they believe they made a mistake letting some of the other mergers go through.
IMHO, the argument of "A and B did it so why can't we do it" doesn't hold too much water. Each merger is different however with each merger, cities have lost services and jobs have been lost as well.
Maybe someone can show me where:
1)Any of the 3 prior mergers were cities didn't see a downguage in service
2)Jobs were not only not lost but gained?
To me:
1)The creditors are in it for a "quick buck"
2)Most of the unions, especially the pilots union want the merger because of pay increase
3)Parker wants it so he can be "head honcho"
4)Horton will (eventually) get a major payday.
5)Other misc. items not mentioned
I still don't see where the cost savings will be w/out firing people and I don't see Parker & Co. running AA the way it should be run. He's already on record of bestializing services.
If Parker & Co. get to run the show, within a few years, there will be within a few years many angry employees and pax.
johnny kat
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Well what we've seen at US is the advent of the ultra cheap product. But the company can still boast that US offers the same product offerings of the others and still charge for it. Same goes for what the employees can expect. But yet US is still in the same league as DL and UA. WN is the most likely target to be undermined by the strategy. If I am a corporate traveler in a market that is served by US or WN I would take the chintzy US first class seat with more leg room on a brand new airbus and a mileage program that will put me most anywhere on the planet than be crammed into the WN 737 without any chance of upgrade for about the same price. Just saying.
N288AA
Member
Read my lips... as an AA employee....none of the above....we are not gonna work for Horton.....
jimntx
Veteran
We'll see. As far as I can see, there is no way that DP can deliver on the promises he made to the AA unions unless the government gives him a license to print money. AA employees are probably not going to stand for another round of concessions, and if you apply AA pay rates to the vaunted LCC profitable quarters, the profits evaporate.
robbedagain
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although many analysts agree that the settlement is not likely... stranger things have happen... but as other posters have point out ual/co should of never been allowed now aa n us want to know who the doj interviewd prior and why they waited soo long to block it.. now it could be me but i would of suspected that the doj purposely waited til after everyone else gave their approval just to block it regardless of the emails i just find it strange that the doj had 8 plus months during which time they could have actually talked to us n aa and may be it would of been different
The government waited until everyone had approved the merger before filing suit because the government doesn't usually give advisory opinions. The government waits until a transaction is going to happen before it shows its cards. The government isn't going to file a suit for an injunction while approvals are still pending. In this case, since AA is in Ch 11, there were multiple approvals that aren't found in a typical merger.
US and AA signed the merger agreement in February, 2013, and the suit was filed in August, 2013. By my calendar, that's six months, not eight.
