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

[traderjake]

Only someone who views his own company as the bottom of the barrel that needs special treatment in order to survive would keep up a "we're being picked on by the big boys" mantra.

The manta is "we're being picked on by government crooks".

If you want to claim that the gun runners aren't picking winners and losers, be my guest.

While you're at it you can defend the Obamacare exemptions.

 

[767one]

Bob,
while it might be popular to think that the US government including Congress can do nothing right, the reality is considerably different.

Consider just a few of the following that have relevance to this discussion:

The US still has the world's largest economy and the US dollar is the primary currency used in international finance transactions.

The US has the world's largest and most efficient multi-modal transportation system.

The US is still the preferred destination for visitors and immigrants from around the world who want to be a part of a country where there is more economic opportunity for more people than in any other country in the world.

Is everything perfect about the US? Far from it.

But even with the current challenges the US faces, it is still the country that sets an example for much of the world and its people.

It is the job of all Americans to continue to keep making the United States one of the world's greatest civilizations despite her flaws - which are really our own since we are the USA.

merger or not, there will be far more security and prosperity for us as Americans than there will be for the vast majority of the world's population. It doesn't take too many weeks outside of the US to realize that the US, with all of its flaws, is not near as bad as a lot of Americans want to make it out to be.

WT,

I'm not ready to move out of the US...yet, but I am sick and tired of the boys and girls in Washington trying to make the other party look bad instead of doing what is right. It seems to me that they spend more time in recess or R&R than taking care of business. If their pension was backed by the PBGC we might see retirement security as more of an issue.

Regards,

Bob

 

[WorldTraveler]

no disagreement, Bob.

My only objection is that it is a stretch to say that the US government can't do anything right so their decision on this case has to be wrong.

IF they are shown to be wrong, then it should be done on the basis of the facts of this case and not what they have done elsewhere, esp. since most of the examples that have been provided have nothing to do with antitrust enforcement.

 

[767one]

no disagreement, Bob.

My only objection is that it is a stretch to say that the US government can't do anything right so their decision on this case has to be wrong.

IF they are shown to be wrong, then it should be done on the basis of the facts of this case and not what they have done elsewhere, esp. since most of the examples that have been provided have nothing to do with antitrust enforcement.

WT,

Ok, on occasions they actually do something right or at least partly right. I will give you that. I guess my frustration level is a bit high because I don't see why men who are supposed to be at least of average intelligence can't come up with a budget. I guess sooner or later they will figure it out....I hope.Somehow for all my life and my parents lives we have managed to keep our expenses less than our expenditures......maybe we are doing it wrong and all those who owe a bundle of debt they can never hope to repay are doing it properly.

Tomorrow we are off to Arlington to have my parents service and have them interred in the Columbarium.

All the best,

Bob

 

[traderjake]

My only objection is that it is a stretch to say that the US government can't do anything right so their decision on this case has to be wrong.

IF they are shown to be wrong, then it should be done on the basis of the facts of this case and not what they have done elsewhere, esp. since most of the examples that have been provided have nothing to do with antitrust enforcement.

My objection is the DOJ is judging this merger by a different set of standards than the previous two.

"If this were not the same DOJ who turned a blind eye at voter intimidation and whose leader balked at answering questions about investigations of reporters, you might be able to take them at their word. It is also the same DOJ who allowed numerous other airline mergers in the past few years as well, without much criticism. (The lawsuit also uses those past mergers as proof that the new airline would raise prices)."

http://www.conservativedailynews.com/2013/08/holders-doj-says-youre-grounded/

 

[Jester]

actually, airlines do generally sign long-term leases for airport space and aircraft are long-lived assets. It is correct that airplanes can be moved around and it is cheaper to walk away from a market and leave the buildings vacant than to fly and lose money but the network carriers who are long-term network focused cannot easily move their networks around. US could not have shut PIT w/o being in BK unless they carried a huge financial burden for years.

...

WN didn't tell the DOJ that they intended to close a dozen or more FL cities but that is exactly what they have done. If Parker and co. had whispered to each other across bathroom stalls, the merger would be approved by now.

Somewhat misleading on many levels: 1) There is little contractual comparison between the city of Pittsburgh building a new airport of a single dominate carrier versus an airline starting service to Durango or Santa Barbara, 2) I never said that starting an airline was easy or inexpensive, but rather moving aircraft assets around in an existing, established airline would be relatively easy and modest in costs (consider how Allegiant Airlines starts and stops service sometimes before completing a single flight to a new market), and finally, 3) Southwest business model usually requires, at a minimum, 6 flights a day to a station, so I have serious reservations that anyone in the DOJ thought SWA was going to keep FL's stations offering service only a few times a week.

 

[Reed Richards]

Nobody brainwashes their employees better than Delta. They are a snake disguised as a puppy! Everyone loved them until EAL went away and the Atlanta customers found out the hard way!

First, I would love to be a "brainwashed Delta employee." Even a nonunion one. Not because I love Delta, but because their employees benefit from having a management that has "being the best carrier" as job one, not attacking the employees. I am sure I will get some stories to the contrary!
To be honest, I have spent 2/3 of my life in Atlanta, still have immediate family there. I grew up in a neighborhood in Stone Mountain in the 60s where we probably had 15-20 new hire pilots for DL and EAL. And by the way, in the 60s EAL was Atlanta's airline. The difference in a city like PIT or even CLT is that as a whole the citizens of Atlanta appreciate the benefits of a hub airline. PIT never appreciated Allegheny, US Air, much less US Airways. Don't even get me started on PA joining the DOJ, much less the press as of late there. They bemoan the possible loss of OCC or hanger jobs, without considering over a thousand flight employees still live there, pay taxes, and contribute to the economy. And that does not even include the empoyees in PHL! Atlanta indeed treated EAL in the 80s as a stepchild, seemed to revel in their failure, not realizing that that having two majors hub your city was a boon to competition. And I still have yet to see any employee “cheer” for US Airways, much less a new merged AMR, like WT does for DL. By the way, the reason I was never able to even interview with Delta, was my sister already worked there. Those of you hunting for jobs at DL and NWA in the 80s will understand that. RR

 

[WorldTraveler]

My objection is the DOJ is judging this merger by a different set of standards than the previous two.

"If this were not the same DOJ who turned a blind eye at voter intimidation and whose leader balked at answering questions about investigations of reporters, you might be able to take them at their word. It is also the same DOJ who allowed numerous other airline mergers in the past few years as well, without much criticism. (The lawsuit also uses those past mergers as proof that the new airline would raise prices)."

http://www.conservativedailynews.com/2013/08/holders-doj-says-youre-grounded/

except that as much as you and others keep saying that the DOJ is using a different standard, it has been shown on multiple levels that the DOJ is using the same standard it has used in other airline mergers and also in other industries for years.

The HHI concept which includes connecting markets is not being used for the first time with AA/US.

Antitrust law is based on the notion that the gov't can block a transaction based on the FINAL transaction that will affect consumer competitiveness, EVEN IF other transactions have been allowed before - because they did not result in the same concentration as subsequent merger proposals would.

AA/US will result in a slot concentration at DCA similar to what UA/CO had at EWR - and the DOJ's answer was that all of UA's premerger slots had to be divested. DCA is a smaller airport so even the 18 slots that UA gave up is a much higher percentage of the total market - and yet AA operates almost 3X more slots at DCA than UA did at EWR.

And there still is no evidence that any other airlines leaked communications (or publicly presented strategies) based on reduced capacity, higher fares, and reduced competition for customers - such as the FF bonus issue.

AA/US IS being handled in the same way as other antitrust cases, including in the airline industry, have been handled.

The judge is there to determine that and I expect there will be a lot of people here who thought the judge would be their savior and will subsequently be disappointed.

Somewhat misleading on many levels: 1) There is little contractual comparison between the city of Pittsburgh building a new airport of a single dominate carrier versus an airline starting service to Durango or Santa Barbara, 2) I never said that starting an airline was easy or inexpensive, but rather moving aircraft assets around in an existing, established airline would be relatively easy and modest in costs (consider how Allegiant Airlines starts and stops service sometimes before completing a single flight to a new market), and finally, 3) Southwest business model usually requires, at a minimum, 6 flights a day to a station, so I have serious reservations that anyone in the DOJ thought SWA was going to keep FL's stations offering service only a few times a week.

Even in small airports, network airlines sign long-term contracts or they pay higher lease rates. The reason why the ultra LCCs go in and out of markets is because they don't how much they can get out of a market... but they pay higher airport costs because of it and the network carriers and WN could not survive if they had to pay airport fees such as the ULCCs pay.

There aren't a lot of people who realistically expected WN to pull its service in FL's small cities or there would have been a whole lot of objections - which didn't happen.

WN hasn't merged enough for anyone to know what to expect - but the DOJ clearly does recognize that WN followed the same path that many of the network carriers have done after mergers - and perhaps worse since network carriers have generally maintained cities but reduced the number of flights and destinations.

The DOJ has a legitimate concern based on AA/US statements about reducing capacity and the track record that has been established by AA/US' competitors.

 

[nevergiveup]

First, I would love to be a "brainwashed Delta employee." Even a nonunion one. Not because I love Delta, but because their employees benefit from having a management that has "being the best carrier" as job one, not attacking the employees. I am sure I will get some stories to the contrary!
To be honest, I have spent 2/3 of my life in Atlanta, still have immediate family there. I grew up in a neighborhood in Stone Mountain in the 60s where we probably had 15-20 new hire pilots for DL and EAL. And by the way, in the 60s EAL was Atlanta's airline. The difference in a city like PIT or even CLT is that as a whole the citizens of Atlanta appreciate the benefits of a hub airline. PIT never appreciated Allegheny, US Air, much less US Airways. Don't even get me started on PA joining the DOJ, much less the press as of late there. They bemoan the possible loss of OCC or hanger jobs, without considering over a thousand flight employees still live there, pay taxes, and contribute to the economy. And that does not even include the empoyees in PHL! Atlanta indeed treated EAL in the 80s as a stepchild, seemed to revel in their failure, not realizing that that having two majors hub your city was a boon to competition. And I still have yet to see any employee “cheer” for US Airways, much less a new merged AMR, like WT does for DL. By the way, the reason I was never able to even interview with Delta, was my sister already worked there. Those of you hunting for jobs at DL and NWA in the 80s will understand that. RR

wouldn't we all like to work there. East Point...early 60s...main street barber shop Cokes were $.10, but no hot Fox News girls!

 

[700UW]

UA only leased 18 slots to WN at EWR.

 

[FWAAA]

UA only leased 18 slots to WN at EWR.

You've posted that repeatedly as if the transfer to WN is temporary, but that implication is completely incorrect:

The transfer of slots and other assets at Newark to Southwest, a low cost carrier that currently has only limited service in the New York metropolitan area and no Newark service, resolves the department’s principal competition concerns and will likely significantly benefit consumers on overlap routes as well as on many other routes. The slot transfer is through a lease that permanently conveys to Southwest all of Continental’s rights in the assets, in compliance with FAA rules.

http://www.justice.gov/atr/public/press_releases/2010/262002.htm

I don't know the terms of the slot lease, but the Department of Justice makes it clear that WN owns all the rights that UA held. Perhaps UA was leasing the slots from someone else and signed a very long-term assignment of its rights to WN.

 

[WorldTraveler]

UA only leased 18 slots to WN at EWR.

I'm not sure what your point is but UA only operated 18 flights/day at EWR prior to the merger... and they ended up leasing out all of those slots.


looks like FWAAA and I posted at the same time but the required divestiture at EWR for UA/CO to merge was 100% of what UA operated and on a permanent basis.

 

[FWAAA]

I'm not sure what your point is but UA only operated 18 flights/day at EWR prior to the merger... and they ended up leasing out all of those slots.

WT, I think that 700UW mistakenly believes that the EWR slot transfer to WN is somehow temporary because the slots were leased and not sold. He's repeatedly posted that they slots were leased (the implication being that they weren't permanently transferred). The Department of Justice press release I quoted above makes it clear that the EWR transfer was permanent despite being structured as a lease.

 

[nevergiveup]

Who knows better about what's happening with the merger than Wall St. The stock price of LCC certainly makes it look like a go. Prior to the UAL merger decision, it was moving the opposite direction.

 

[UPNAWAY]

It was actualy down the first hour than immediately shot up almost 60 cents, I started looking for a story about the DOJ softening??????