Slot Swap

[700UW]

Good post Jim!

 

[WorldTraveler]

Do you lay awake at night dreaming this stuff up?

The DOJ, under the Clayton act, has jurisdiction on anti-trust matters. Not the DOT. That is obvious. IF the DOJ decides that the slot swap, as structured, is anti-competitive it will sue the carriers, not the DOT. Just like when it announced that it would bring suit to stop/amend the UA/US merger, just like with the NW acquisition of the "golden share" in CO, just like when EA proposed selling gates at PHL to US, just like with EA's proposal to sell slots/gates at DCA to US.

It is amusing the way airlines claim that the DOT doesn't have anti-trust jurisdiction - until the DOJ exerts it's anti-trust jurisdiction. Then it's the DOJ that's "trying to re-regulate the airlines through the back door" instead of staying out of airlines' business and letting the DOT handle it.

Jim

your position is as theoretical as the airlines' positions until the DOJ chooses to block the slot transaction.
Every other case involved mergers or the airlines chose to back off w/o challenging the DOJ's right to intervene.
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Until they choose to block the transaction, DL and US' position is what stands. DL and US agreed to drop their lawsuit in return for the ability to move forward with the slot transaction - and the DOT did not get what it wanted. No branch of the US government obtained what it wanted in entirety. If there were clear laws that gave them the right to impose government conditions, they would not have negotiated - nor should they have.
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None of the cases you cite have resulted in a suit by the airlines regarding the question of legality to transfer slots which is what DL and US chose to initiate - supported by the entire Air Transport Association and much of the rest of the industry - in order to protect the airlines' right to exchange landing slots.
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When the DOJ files suit against this transaction and succeeds in obtaining they want, let me know and we'll go with your theory.

 

[BoeingBoy]

your position is as theoretical as the airlines' positions until the DOJ chooses to block the slot transaction.

What??? I didn't say a word about whether the DOJ would ultimately file suit or not or what the outcome might be if it did. I was merely correcting your fantasies that 1 - the DOJ doesn't have jurisdiction over anti-trust and 2 - that DOJ would sue the DOT and not the airlines if they did have anti-trust concerns.

Every other case involved mergers or the airlines chose to back off w/o challenging the DOJ's right to intervene.

Or you can go that route - claim in one post that the DOJ doesn't have jurisdiction, then when called on it say that the DOJ has a "right to intervene." Remember the Indian saying in the old time westerns - "White man speak with forked tongue."

Jim

 

[WorldTraveler]

What??? I didn't say a word about whether the DOJ would ultimately file suit or not or what the outcome might be if it did. I was merely correcting your fantasy that the DOJ doesn't have jurisdiction over anti-trust.



Or you can go that route - claim in one post that the DOJ doesn't have jurisdiction, then when called on it say that the DOJ has a "right to intervene." Remember the old time westerns - "White man speak with forked tongue."

Jim

You are apparently failing to grasp the concept that in US law there are checks and balances that can be brought by US citizens (which includes US airlines) and by other branches of government - and which are settled by another branch of government.
Any party can say they have power... which the DOJ has done before in slot transactions. But there has never been a case that has challenged the federal government's ability to impose economic restrictions on slot transactions... and that is precisely what US and DL chose to do - again supported by virtually the entire airline industry.
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Because the DOT chose to negotiate an agreement rather than impose their own requirements and they did not change any of the basic tenets of slow operations - which are that slots are the property of the airlines who can receive compensation for their use by other airlines - the status quo remains unchanged.
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Once again, when a case arises in which the US government - any branch of it - succeeds at blocking the airlines' ability to exchange slots, let me know. Until then, there is clearly a lack of clarity in the law which DL and US successfully exploited - again with the support of the majority of the airline industry - to DL and US' benefit. And the government has NOT succeeded at imposing its desires.

 

[FWAAA]

As you know, it has been a key legal question in this slot transaction that the government does not have the legal right to block or amend a slot transfer on the basis of economic or competitive reasons....and responsibility for managing slots lies with the DOT, not the DOJ.

You're rather adept at parroting the legal arguments made by DL and US counsel, but that has nothing to do with the identity of the parties if DOJ chooses to exercise its jurisdiction (unlawful as DL and US and you might think).

Thus, any challenge by the DOJ to the transaction would be to the DOT, not the airlines, in a slot transaction.

Siimply False. The DOJ doesn't sue other government agencies if it believes that two airlines are violating the Clayton Act. It would file suit against the airlines.

Do you lay awake at night dreaming this stuff up?

The young man has a very vivid imagination, although I assume that it is assisted by various posters who can be found on airliners.net

The DOJ, under the Clayton act, has jurisdiction on anti-trust matters. Not the DOT. That is obvious. IF the DOJ decides that the slot swap, as structured, is anti-competitive it will sue the carriers, not the DOT. Just like when it announced that it would bring suit to stop/amend the UA/US merger, just like with the NW acquisition of the "golden share" in CO, just like when EA proposed selling gates at PHL to US, just like with EA's proposal to sell slots/gates at DCA to US. The suits were, or would have been, against the carriers - NOT the DOT.

It is amusing the way airlines claim that the DOT doesn't have anti-trust jurisdiction - until the DOJ exerts it's anti-trust jurisdiction. Then it's the DOJ that's "trying to re-regulate the airlines through the back door" instead of staying out of airlines' business and letting the DOT handle it.

Jim

Completely correct and well said. BoeingBoy 1, WT 0.

 

[BoeingBoy]

You are apparently failing to grasp the concept that in US law there are checks and balances that can be brought by US citizens (which includes US airlines) and by other branches of government - and which are settled by another branch of government.
Any party can say they have power... which the DOJ has done before in slot transactions. But there has never been a case that has challenged the federal government's ability to impose economic restrictions on slot transactions... and that is precisely what US and DL chose to do - again supported by virtually the entire airline industry.

You're finally right about one thing - anyone can claim anything. (I'm a billionaire, BTW.) But DOJ anti-trust jurisdiction is backed up with federal law, which may have something to do with no one challenging it before. Just because US & DL said they were going to challenge it doesn't mean that they would have prevailed. And really, are you so naive as to think that "supported by virtually the entire airline industry" - meaning the ATA which isn't "the entire airline industry - carries any weight? The airlines are famous (or infamous) for wanting the government to stay out of their business until they want the government to do something, then they're just as adamant that the government should be involved.

Jim

 

[Iclubbabyseals]

The airlines are famous (or infamous) for wanting the government to stay out of their business until they want the government to do something, then they're just as adamant that the government should be involved.

Not just airlines, but, most any corporation.

 

[BoeingBoy]

Not just airlines, but, most any corporation.

True, although I rarely see the public pom-pom waving like the ATA. But maybe that's because I just pay more attention to the airlines than other industries.

Jim

 

[WorldTraveler]

Not just airlines, but, most any corporation.

except that in this case the airlines - not just ALL of the network airlines but most of the industry except for WN which has very few slots - want the airlines to stay out of the issue of slot controls.
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The issue is not whether the DOJ has authority over antitrust but whether exchange of slot controls is something over which the government has ANY economic issues.
And that is the point which DL and US - with the support of most of the rest of the airline industry - has any right to intervene in slot transactions.
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And you do realize that if the case went to court, the DOT's perceived authority over economic regulation of slots might well have ended so the DOT had every reason to keep the case out of court, which meant the DOJ didn't get a chance to intervene at all.
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Despite all the bravada with which you want to argue who is right or not, arguments about what the DOJ or DOT could have done are moot until they actually do something with regard to a pure slot transaction.
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You may recall that we have argued about points of law on this thread before but it really hasn't changed that the slot transaction IS moving forward, as I have said several times before that it would.
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Once again, when the DOJ successfully stops this transaction or they succeed in doing the same with a similar transaction, then the point can be made... but that hasn't happened and your arguments about what the DOT or DOJ can do are rather hollow in light of the fact that the transaction IS moving forward. For now, the same internationally accepted principles regarding slot transactions being private transactions remain in force.
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IN the meantime, carriers are quickly lining up to participate in the auction.

 

[BoeingBoy]

IN the meantime, carriers are quickly lining up to participate in the auction.

Would that be the auction that you claim the DOT doesn't have the authority to hold? Simply amazing that carriers, who are so uniformly against government intervention in their business, are quickly lining up for something as clearly illegal as a slot auction required by DOT...

Jim

 

[WorldTraveler]

Would that be the auction that you claim the DOT doesn't have the authority to hold? Simply amazing that carriers, who are so uniformly against government intervention in their business, are quickly lining up for something as clearly illegal as a slot auction required by DOT...

Jim

Yes! You have it.
It is precisely because the whole process is undefined and the government is willing to risk the possibility of losing its voice in the process, that the airlines – all of them – are willing to do whatever they can to take advantage of all the gray.
WN as a non slot holder decided that it was worth its while to cry loud and long – and lo and behold they got a wad of slots at EWR from the CO/UA merger and can only wish they could get all that will become available between DL and US.
AA, B6, and others have engaged in slot transactions because it was best for them to do what they can to change their networks.
And then DL and US pulled off the biggest slot transaction becaues they will still receive 85% of what the other is willing to swap in order to strengthen their networks at one city and pull down poorly used slots at the other.
It is all a big game by business to hold the government hostage – shall we say – or perhaps the better word is blackmail – so the airlines can continue to do what they want to do anyway – and the government has no choice but to wink or it runs the risk of having ALL of its power with regard to slot transactions pulled away.
No one said this was the best thing but only that everyone is using the lack of clarity in the process for the most they can.
If either side decided to push for true clarity, either side could lose it all.
In that type of game theory, the drive to lose less results in a continued lack of clarity.

 

[BoeingBoy]

Gotta love it. The DOJ doesn't have jurisdiction...neither does the DOT...but it's a gray area so no one wants to test it...

I've heard of shifting sands. I've seen shiftless people. But you change stories like socks.

Jim

 

[john john]

Jim who owns the slots ?

 

[phllax]

Are the current Republic owned slots the ones originally sub-leased from Northwest/Delta after Eastern's demise and NW's failed attempt at a DCA focus city in the early 90's?

 

[cynic]

Jim who owns the slots ?