Focusing on whether someone has been asked repeatedly by me and others to use proper punctuation and capitalization is only a feeble side show for some to use to try to cover because most of those who have chosen to belittle me do so because each of you have been proven wrong on one or more key basic business principle of the airline industry which I have highlighted. Those issues include but are not limited to the lack of unionization success at DL or the fact that AA and US have made major strategic mistakes that have allowed other carriers including DL to grow.
Belittling me because some people can’t intelligently participate in the conversation is not going to make this board any more friendly and it certainly won’t solve the real issues that some people want to discuss and are capable of doing so.
I get the loyalty that some people have to their employer and their ideals… but this is an open website that includes perspectives from all over the world and the industry. If some people can’t handle perspectives that shake their pride in their employer or their personal goals or beliefs, they quite frankly should not participate.
There are people on here who get it and talk about the issues that matter to the industry. I participate because of those people. When they are all gone, I will stop.
I am happy that AA and US employees and supporters have a new chance to compete. I wish each of you well. But it also doesn’t change that there are key strategic problems that AA and US each had and which the merger doesn’t solve.
AA/US not only have not resolved several key strategic errors that each made over the past decade but they also are not resolving some of the most fundamental factors that have shaped the airline industry since deregulation:
- AA and UA are higher cost airlines than the rest of the industry and they have also been higher cost airlines than DL. It doesn’t matter what business you are in'; it is very difficult for one company to sell a product at a higher cost than a competitor and be successful. US is giving up its cost advantage in order to merge with AA which is not the lowest cost network carrier even coming out of BK. The merger and merger related promises and pay raises will cost hundreds of millions of dollars that will take years to correct if that can even be done.
- AA and UA’s network has been focused on the largest markets in the US and the world. All of the other legacy airlines had/have route networks that are much less focused on the largest cities for hubs. Competition is strongest in the largest markets – that is exactly where low cost carriers have grown most aggressively. It is much harder to operate in a hub that has multiple competitors and where the hub carrier does not have a dominant position.
- DL has defended its core markets far better than AA and UA and DL maintains higher market shares in its markets than AA and UA. Nonetheless, DL’s markets have abundant direct low fare carrier competition which makes it very hard for AA or UA to push into DL’s markets with AA and UA’s higher costs than it does for DL to push into AA or UA’s markets which are both larger and where DL has lower costs than AA and UA.
- There are a significant number of key industry markets that DL doesn’t serve but AA and UA do. There are relatively few large markets which DL serves but which AA and UA can serve without also pushing against not only lower cost DL but also low cost carriers.
As much as some resist hearing it, the industry fundamentals continue to favor DL expanding its network into AA and UA’s key markets than it does for AA or UA to expand its network into DL markets.
History shows that is exactly what has happened since deregulation and the trend shows no sign of abating.
Those facts aren’t personal and they aren’t meant to offend anyone. But they are industry realities.
Those industry realities will come into play in every competitive challenge that takes place between the big three whether it be in LAX or Latin America or NYC or Dallas.
