Well this thread has lit up like a Christmas tree… I was getting worried that forums was going to dry up and blow away… thank goodness for Friday to liven up the place.
WT is no more a cheerleader for DL than you are for LCC. To read your posts is to know that LCC is the savior of AMR, and will show us how to operate in the airline business. Instead of attacking WT personally, why not come up with some data to prove him wrong? The difference between you two is that he has provided data (aka, facts) to support his positions. Why don't you do the same?
Don't bother pointing out that LCC had it's largest quarterly profit in history last quarter until you answer the question...what would that profit have been if LCC were paying industry standard wages to pilots and flight attendants (or even AA wages)? And, the phrase "largest quarterly profit in history" is a meaningless phrase until put into context. If an airline had never made a profit at all up until last quarter, and made a net profit of $1.42, it would still be the "largerst quarterly profit in company history."
Thank you, Jim.
The whole reason why I have upset so many on this and other chat forums is because I have used fact-based logic to not only know with certainty where the airline industry really is but where it is going.
It matters not one iota whether I work for the government of India or Skychefs in Honolulu if the facts are there and can be supported.
Of course, it isn't lost that Wings and others from US who support this merger have said they do so because it will increase their own retirement.
How are we supposed to take seriously someone who has openly - at least honestly - acknowledged - that this merger is about doing something positive for themselves even if it comes at the cost of others, including lower seniority peers who will very likely be laid off?
The problem or an aweful lot of people on this forum is that I have consistently made them confront the reality that what they want the airline industry to be is not supported by the facts that exist in the industry.
The simple fact is that DL went into BK with a very clear plan as to what they needed to do to turn the company around, they came out w/ that plan already very apparent and very much in process, and they moved aggressively in the next couple years to execute against that plan.
People can pick on me all they want but it won’t change the fact that DL knows exactly what it needs to do to keep building momentum and what AA/US does or does not do is not going to effect them. When you consider that DL has a laundry list of strategic initiatives in process RIGHT NOW that will blunt the ability of AA/US to gain advantages from the merger while an AA/US merger would take at least six months and probably a year before the merger can even be approved – and the real books between AA and US exchanged, it is sheer foolishness to think that AA/US will accomplish as much as Parker thinks it will.
No one has yet to demonstrate how AA/US is going to overcome the first mover advantage that DL had in merging – and why DL is not going to accomplish its strategic objectives. Considering DL has a very strong track record of achieving its financial objectives and a nearly 50% market value premium over UAL, it isn’t terribly realistic to believe that AA/US – which hasn’t even been announced, let alone approved, is going to stop DL from doing what it needs to do.
And again, I speak about DL because they are the most aggressive strategically in the industry right now. Every other airline has a plan for dealing w/ an AA/US merger. You can absolutely bet your bottom dollar.
The combined total market share in BOS may in fact be larger than 25%, as that's the mainline total marketshare, according to RITA:
No doubt, but tell me again on how we are supposed to believe that AA/US is going to become a super power at BOS when they will have to compete in just about every domestic market against B6 who happens to have the lowest CASM among large jet carriers in the US and for whom BOS is a major city where they continue to expand because of growth limitations at NYC.
But AA/US has no int’l service from BOS on its own metal, right? So everything they do will have to do in BOS will be against B6, at whose hands AA has conceded a number of markets at JFK.
BTW, surely it wasn’t lost on this crowd that the very flights to the Caribbean that AA cancelled were picked up by DL. It’s not been hard for DL, just like WN, to grow in AA and US markets – they just have to follow other low fare carriers that soften AA and US up and then move in to gain the market.
There is no point in restarting BOS-STL. We used to have 3 flights/day in each direction that were pretty much full all the time. In its infinite wisdom, the company decided to abandon that route. WN is grateful for the business. When we stopped that route, they started 3 nonstops/day STL-BOS. Evidently, the route is working quite well for them. Just like STL-MCI, STL-SEA, STL-LAS, STL-PHX...ad nauseum. And, please note, WN did not run us out of those markets. They did not start service until we abandoned those routes.
And your observation is precisely why the WSJ article misses the point, which FWAAA so adequately noted.
Airline mergers are notorious for destroying investor value because they cannot create new revenues as a result of a merger.
Mergers have to be about more than just 1 plus 1 equals 2. Mergers esp. in the airline industry have to make 1 plus 1 equal 2.X or more.
Considering not only AA’s track record w/ mergers and then adding in that AA/US won’t even be allowed to make 1 plus 1 =2 because of divestitures and new competition, no one here can quite grasp that AA/US will be a lot less than a combination of the two today.
AA/US will be approved just in time for competitors to be allowed to add a couple dozen new flights at DCA in order to get the deal through – with WN and B6 certain to be at that table, just in time for the Wright Amendment to fall at Love Field which will give WN enormous opportunities to shift high yield business traffic from DFW to DAL, and just in time for a number of key countries in Latin America to begin true Open Skies with the US, including allowing true competition in MIA-Latin America for the first time since other US carriers cannot even start new services in many of those markets right now…. Add up all of those factors and the competitive response to the merger as a whole, and it is utopian not to question if AA/US will even grow revenues above what a combination of the two today. It is VERY possible that AA/US 2 years after the merger might end up w/ lower fares and a smaller network than what they have at the time of the merger, even after adjusting for whatever the rate of capacity reduction the rest of the industry will see as well as closure of duplicate AA/US hubs.
WT is probably going to have to see a therapist when/if Deltaflot goes back to #3.
IN reality, there will be people here who will absolutely stroke out when they wake up and realize that AA/US isn’t #1 after all of the above plus strategic actions from other carriers – which haven’t even been announced, and the closure of hubs – which even the WSJ recognizes is likely.
It is Delta Air Lines. Your inability to properly acknowledge your competition highlights your inability to recognize the size of the challenge facing AA and US individually and collectively.
And once again, no one here or anywhere in the media has yet to acknowledge how much of a challenge AA/US has as the third, really fourth, of the megamergers in the US.
To somehow think that AA/US will proceed down the same path as the mergers before them is nothing short of wishful think with no basis in fact or reality.
For those who want to live that way, don’t let me or Jim or anyone else bust your bubble.
But you probably shouldn’t be participating in a chat forum with people who might tell you the whole truth either.
