DOJ - Merger Poll

[ChockJockey]

Pretty self-explanatory. Have fun.

 

[ContUNITEus]

Interesting to see the ratio of US employees vs yay votes. It is obvious that this poll is not objective. It is expected that most US employees, as well as a great amount of AA employees would say that the DOJs 'arguments are weak and their motives are questionable.'

 

[necigrad]

Part of the reason for that (IMO) is that th eUS employees have been hearing these things from Parker that the DOJ say are bad for years. Just about every one of the DOJ arguments are based on comments, beliefs, and opinions expressed by Parker and Kirby. We've heard them for several years. The HP folks even longer. This is important because the statements in question applied just as much to the UA/CO and DL/NW mergers as they do AA/US. The only difference is that now the people saying them are trying to merge. That, IMO, is 'weak and questionable' on the DOJs part.

 

[wopr21]

Just to be pessimistic here for a moment.
All that we have been promised within contracts( raise's, 3 %) etc have all failed.
All that we were told that " We have a very strong case, there is no way we can loose", We have lost.

The outcome of this merger?....well...with the trends of the past I give it a 100% chance of success.

 

[jimntx]

Part of the reason for that (IMO) is that th eUS employees have been hearing these things from Parker that the DOJ say are bad for years. Just about every one of the DOJ arguments are based on comments, beliefs, and opinions expressed by Parker and Kirby. We've heard them for several years. The HP folks even longer. This is important because the statements in question applied just as much to the UA/CO and DL/NW mergers as they do AA/US. The only difference is that now the people saying them are trying to merge. That, IMO, is 'weak and questionable' on the DOJs part.

Big Difference: In UA/CO merger the motive was stated and can be easily applied that merging with Continental gave United entrée into Central and South America without having to acquire infrastructure, routes, and airplanes from scratch. In DL/NW merger the same could be said for DL and the Orient. And, neither merger involved much in the way of overlapping domestic routes except for the major cities that we all fly to.

The stated (by DP no less) motivation for this merger is to reduce capacity and raise fares. The boy should have kept his mouth shut.

 

[WorldTraveler]

yep... and it also doesn't change that neither DL/NW or WN/FL controlled more than 30% of the slots at any slot-controlled airport at the time of the mergers.
CO controlled about 2/3 of the slots at EWR and UA ended up giving up every one of the slots it brought to the merger.

US/AA's combined DCA slot portfolio will be comparable to CO's at EWR.

Success and failure in this merger can be defined many different ways. If success for the DOJ means the merger does not go thru, then I don't think too many people would argue with that. You can fix almost any civil legal problem with some sort of action. The merger can be saved with a certain amount of concessions including significant divestitures of DCA slots.

There have been several reports that have shown that airline industry employees including execs have had a much higher estimation of the outcome of the lawsuit than have had analysts for other industries.

 

[700UW]

Everyone at EWR was only 18, you make it sound like it was a huge number, and UA is leasing the slots to WN, so WN is paying UA for the use of them.

 

[WorldTraveler]

The DOJ and DOT made it clear that UA could not grow any larger than CO was at EWR as of the time of the merger; thus, they gave up 100% of the EWR slot assets that UA brought to the table.

We have no idea what percent the DOJ sees as the max for AA/US at DCA but since they required divestitures at LGA even though DL never had more than 50% of the slots, the likelihood is high that AA/US will have to give up at least half and possible more of AA's 50 or so flights/day at DCA.

The DOJ has also said that airlines cannot be forced to give away their slots; UA is leasing them to WN while the LGA and DCA slots that were divested under the DL/US slot deal were sold. Either way, there was compensation for the seller.

The problem for US is that they can either gain more money by selling slots which can be used for mainline service at DCA by low fare carriers or they can sell the regional carrier slots which provide service to so many of the smaller cities. The smaller city slots will get virtually no money for US because the only viable bidders are DL and UA and UA will be excluded in aobut half of the markets because they serve the same cities from IAD. Thus, there is a real chance that US will be forced to practically give away a big chunk of its regional carrier slots, most likely proportionately to DL even though DL swapped those DCA slots for 125 unrestricted slots at LGA.

Whether it is a lease or a sale, if US is required to give up control, they will get little money for the regional carrier slots (or slots that are used to small cities, more appropriately) but they will also lose very little pricing power in the largest markets from DCA OR they will have to give up slots to the largest markets but will gain some compensation for giving up those slots.

The economics will most certainly favor giving up slots to small cities even if it means getting nothing for the slots if US is given a choice as to how to reduce its overall DCA presence.

 

[ContUNITEus]

Big Difference: In UA/CO merger the motive was stated and can be easily applied that merging with Continental gave United entrée into Central and South America without having to acquire infrastructure, routes, and airplanes from scratch. In DL/NW merger the same could be said for DL and the Orient. And, neither merger involved much in the way of overlapping domestic routes except for the major cities that we all fly to.

The stated (by DP no less) motivation for this merger is to reduce capacity and raise fares. The boy should have kept his mouth shut.

u hmmm, United was once huge in South America. They gave it all up, they were also huge in Europe prior to the merger and also ceded most of those routes to competitors.

 

[ContUNITEus]

Sorry about the typos. Fuckung android system has issues.

 

[WorldTraveler]

UA was outclasses in size by AA when UA tried to turn Pan Am's MIA-based Latin America network into a competitive tool against AA.
AA had enough of a head start and PA was dysfunctional enough that UA could no longer pour money into Latin America anymore.
CO's Houston and NY based Latin America system is great but UA lost - probably permanently - the opportunity to compete it the top US-Latin America market.

It also highlights why strategic failures and giving up key markets have long-term competitive effects that can never be overcome. US has pulled back from many key industry markets including NYC and the west coast because they didn't have the size to slug it out with bigger carriers. AA lost enormous ground in NYC and even with the merger will likely never be the #1 or 2 that is necessary to win in a market; when have you seen the #3 company in a market win for the long term esp. in a network based business like airlines are?

The biggest factor that is now determining the ability to survive long-term in key markets is cost. UA now has a 10% cost disadvantage to DL and a little less to US, a little more to WN. AA is a little better off than UA but both AA and UA are just as vulnerable to competitive pressures as they have been for most of deregulation - just as DL and WN have sights on building out their global and domestic route systems, respectively. Those who are so quick to push for the AA/US merger might realize the advantages that US is giving up and the long-term implications that has for their future.

Remember, the investors will have won and cashed out from the merger long before employees can.