As US Airways shares rally, AMR merger may be more likely, Bloomberg reports

[robbedagain]

fwaa youre right theres always been ample opportunity for the drunken donkeys to actually grow us and to build ny but they of course forgot to leave their stalls to do soo and in doing so us is where us is at.... on the other hand with those leaked internal memos i wonder how the judge will rule if the doj brings it up and if the airlines want to keep it quiet etc.. also i wonder if an agreement would be something to the tune of this... keep the advantage fares give up slots ex some or all of aa and some of us and the doj approves

 

[jimntx]

So should the DOJ be free to change its mind at will on how mergers are approved? Are they being strong armed by Southwest, United, and Delta?

One of the things you should be proudest of is the inability of anyone to "strong-arm" the U.S. DOJ. Almost no one employed there with the exception of the Attorney-General and his immediate reports is a political appointee. Whether you like their actions or not, these are people dedicated to a career in the enforcement of Federal law as passed by the U.S. Congress and signed into law by the President of the United States.

Don't you think it sounds just a little paranoid to even imply that WN, UA, and DL are trying to prevent this merger? If anything, I would guess they are front-line cheerleaders FOR the merger. If the merger goes through, there are going to be slots opening up at DCA with no further effort on their part. Otherwise, they might have to wait for years to get more flights into/out of DCA.

And, given DP's on the record comments and writing that he intended to reduce capacity to push up fares (by definition anti-competitive), I would guess that the DOJ is going to be watching the actions of the "new" AA for years to come even if a judge peremptorily dismisses the current suit and allows the merger to go through instantaneously. That's going to make the "new" AA less nimble and able to course-correct than DL or UA when economic or other factors affect the business.

 

[nevergiveup]

One of the things you should be proudest of is the inability of anyone to "strong-arm" the U.S. DOJ. Almost no one employed there with the exception of the Attorney-General and his immediate reports is a political appointee. Whether you like their actions or not, these are people dedicated to a career in the enforcement of Federal law as passed by the U.S. Congress and signed into law by the President of the United States.

Don't you think it sounds just a little paranoid to even imply that WN, UA, and DL are trying to prevent this merger? If anything, I would guess they are front-line cheerleaders FOR the merger. If the merger goes through, there are going to be slots opening up at DCA with no further effort on their part. Otherwise, they might have to wait for years to get more flights into/out of DCA.

And, given DP's on the record comments and writing that he intended to reduce capacity to push up fares (by definition anti-competitive), I would guess that the DOJ is going to be watching the actions of the "new" AA for years to come even if a judge peremptorily dismisses the current suit and allows the merger to go through instantaneously. That's going to make the "new" AA less nimble and able to course-correct than DL or UA when economic or other factors affect the business.

As DAL strangles LGA. DCA city pairings get reduced. What a wonderful world!

 

[LD3]

There are gates for any airline that wants to fly into CLT.

CLT even has a flight from InselAir.

Wow, 1x a week service to Curaco...be real

 

[USA320Pilot]

PilotAction Merger News for US Airways & American Airlines: September 23, 2013

Is the Justice Department Picking on American, US Airways?

See Story: http://wallstcheatsheet.com/stocks/is-the-justice-department-picking-on-american-us-airways.html/?ref=YF


American Airlines and US Airways Extend Merger Agreement

See Story: http://www.prnewswire.com/news-releases/american-airlines-and-us-airways-extend-merger-agreement-224848162.html


AMR, US Air Extend Merger Termination Date

CHICAGO (WSJ.com) - American Airlines parent AMR Corp. and US Airways Group, Inc. said Monday they agreed to extend the termination date of their merger agreement by a month to Jan. 18 to allow for a trial in which they intend to challenge U.S. Justice Department objections to the deal.

As expected, the pair pushed back the outside date by which either party may terminate the agreement, which had been Dec. 17. They notified the Securities and Exchange Commission on Monday that if there is an unfavorable ruling by the U.S. District Court judge in Washington, D.C. who will hear the case, the two may terminate the merger agreement five days after the judge enters a final, but appealable, order enjoining the combination. If the judge rules in their favor on or before Jan. 17, the companies said, either side could terminate the accord on the 15th day following that order. The trial is slated to begin Nov. 25.

Tom Horton, AMR's chief executive officer, and Doug Parker, CEO of US Airways, said in a statement that both airlines' boards and management teams remain committed to completing the transaction and the extension of the merger termination date reflects that. "Our focus is on mounting a vigorous defense and winning our court case so the new American can enhance competition, provide better service to our customers and create more opportunities for our employees," they said.

The proposed stock-swap combination is AMR's plan to emerge from bankruptcy-court protection. AMR creditors, US Airways shareholders, both airlines' boards and most of their unions and European Union regulators have approved that path to exit. But the Justice Department on Aug. 13 surprised nearly everyone by challenging the transaction, saying it would raise fares and fees, rob consumers of choices and essentially create an oligopoly in which the top four U.S. airlines would control more than 80% of domestic capacity.

US Airways and AMR disagree, and have questioned why the Justice Department is attempting to stop their combination when the agency has allowed four other large airline mergers since 2005. Without a merger, American and US Airways contend they won't be able to scale up to provide a counter-weight to United Continental Holdings and Delta Air Lines Inc., two companies that have bulked up through recent mergers and now are far larger than American in traffic.


American Airlines, US Airways extend deadline to complete merger

The two airlines also said they’ve formally dropped the letter of agreement with AMR CEO Tom Horton that would have paid him nearly $20 million after the merger was completed and he stepped down from his position as CEO.

See Story: http://aviationblog.dallasnews.com/2013/09/american-airlines-us-airways-extend-deadline-to-complete-merger.html/


AA and USAIr Want More Time to Merger: here’s Why.

The airlines are doing their best to pressure the Justice Department to settle the case as early as possible. Of course, they will only take a settlement that doesn’t completely gut the new company. Experts say that the best course of action on both sides would be a settlement, where the Justice Department could claim victory and the airlines would still get their merger.

See Story: http://www.tulsaworld.com/blogs/post.aspx/AA_and_USAir_want_more_time_to_merge_Heres_why/22342


Cowen Says Overweight the Airlines: U.S. Airways-AMR Deal Likely Gets Done

See Story: http://finance.yahoo.com/news/cowen-says-overweight-airlines-u-125011512.html


American Airlines And Qatar Airways Strengthen Relationship With Reciprocal Frequent Flyer Program Agreement

See Story: http://online.wsj.com/article/PR-CO-20130923-905481.html

 

[wings396]

Fwiw, I also have one cable company with no other choices. When they came into.the area in the 1980's, they ran their lines underground with the other utilitys. To date, no other companies have been able to get their service into the area. The result has seen my very basic bill go from the $40 per month range to a whopping $135. Correct me if needed, but I think that's tripled in the last 20 years.
Please keep in mind the DOJ along with the traveling public view " harm to the consumer" as a deviation from airfares of the 1980's. They have had it too good for too long, and will go to any extent to salvage the good old days. I for one am sick of subsidizing these fares with my wages stuck in the 1980's as well. As we all know, the cost of living has moved on by a wide margin.

 

[Zone5]

although AA/US people want to believe they are being treated differently, the same methodology for measuring market concentration was used with the previous mergers.

The difference is that the market REALLY IS more concentrated now... that is what happens with mergers. That is also why the DOJ specifically stated with the DL/NW merger, that they had no obligation to treat future mergers the same way which is clearly laid out in antitrust law outside of the airline industry.

IOW, just because DL, UA, and WN all had mergers, AA/US is not equally entitled to one on the same basis.

Part of the risk of merging later in an industry is precisely what AA/US are facing. This isn't the first time that concentration has been more problematic for later mergers in an industry.... there have been many mergers in the telecom and cell phone industry but DOJ said AT&T and T-Mobile was one too many - and they shot the merger down.

Oh really! Well let's see the numbers regarding that comparison. The DOJ has refused to make that information available to AMR & LCC lawyers. Why do you suppose that is?

All the other major air travel markets in the world (Europe, the Mid-East, South America, the Far-East, Africa) have basically three major players competing with each other for international market share. How is it that the North American market should be any different? Why is a duopoly in this market, a better deal for the consumer than three viable competitive airlines, unlike the entire rest of the world markets?

The Federal Government doesn't do ANYTHING well, what makes you think that they can successfully micro manage the airline industry?


seajay

 

[nycbusdriver]

Wow, 1x a week service to Curaco...be real

Is that 1x service a business decision of that airline, or due to lack of gate space? My guess is that it's the former. If InselAir wanted to run Curacao 7 days a week, it would probably get the gate to do it. I they wanted to do it twice a day x7, they'd probably get that, too.

 

[traderjake]

One of the things you should be proudest of is the inability of anyone to "strong-arm" the U.S. DOJ.

Yeah right, we should all be proud of the DOJ running guns into Mexico to demonize the 2nd Amendament.

 

[WorldTraveler]

Oh really! Well let's see the numbers regarding that comparison. The DOJ has refused to make that information available to AMR & LCC lawyers. Why do you suppose that is?

All the other major air travel markets in the world (Europe, the Mid-East, South America, the Far-East, Africa) have basically three major players competing with each other for international market share. How is it that the North American market should be any different? Why is a duopoly in this market, a better deal for the consumer than three viable competitive airlines, unlike the entire rest of the world markets?

The Federal Government doesn't do ANYTHING well, what makes you think that they can successfully micro manage the airline industry?


seajay

The HHI calculations have been used as part of the DOJ's merger evaluation process for many years for various types of industries.

http://www.justice.gov/atr/public/201898.htm

Why should the US conform to the European configuration of 3 large airlines.... and by the way there have been a lot of European airlines that are on the ropes or have failed - and the EU is telling them it is not only not their job to prop them up but it is prohibited for governments to provide funding to sustain those airlines.


and that formula doesn't work in many countries of the world including Japan, Brazil, S. Korean or most of the countries of Asia which have only one major int'l carrier.

 

[jimntx]

Yeah right, we should all be proud of the DOJ running guns into Mexico to demonize the 2nd Amendament.

When all else fails, change the subject.

 

[traderjake]

When all else fails, change the subject.

The subject was your pride in the DOJ, no change needed.

 

[WorldTraveler]

I don't think he said he was proud of the DOJ.. just that there was indeed justification in their actions.

Of course, it will be the judge who will ultimately determine that... unless the parties agree to settle earlier which I still think is likely.

 

[traderjake]

I don't think he said he was proud of the DOJ.. just that there was indeed justification in their actions.

Gun running by the Obama DOJ is a demonstation of it's corruption.

Now they wants to pick winners and loses in the airlines just like Obama admistration does in every other industry.

 

[traderjake]

Now they wants to pick winners and loses in the airlines just like Obama admistration does in every other industry.

Now they want to pick winners and losers in the airlines just like the Obama administration does in every other industry.

(D'oh! Stupid stubby fingers!)