South West wants D.C. slots!
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SharoninSAT
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MetalMover
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Let's start with the FACT that the judge is a SHE!WNMECH said:
Seriously, you are absolutely right.. The judge will decide. Not the DOJ, not US, not AA, and certainly not any of us who post here.
As Sharon has already posted, but I would like to add: LET'S GET IT STARTED IN HERE:
Southwest Airlines wants to tell judge why American Airlines and US Airways should give up slots in Washington and New York
By Terry Maxon
tmaxon@dallasnews.com
5:25 pm on November 7, 2013 | Permalink
Southwest Airlines asked permission Thursday to file a “friend of the court” request in the American Airlines-US Airways antitrust case, saying it wants to tell the judge about how it needs more takeoff and landing slots at Reagan National Airport near Washington, D.C., and New York’s LaGuardia Airport.
U.S. District Judge Colleen Kollar-Kotelly quickly approved Southwest’s request, adding its name to a long list of parties that want to weigh in as amici curiae, or friends of the court.
In essence, Southwest said it cannot bring the benefit of low-fare competition to markets out of Reagan National and LaGuardia unless it has enough takeoff and landing rights, and it doesn’t have enough of those “slots.”
Said Southwest in its filing:
Southwest can provide unique information and perspective on how the proposed merger between US Airways and American Airlines would likely affect competition, and particularly how the impact of the proposed merger on service at DCA and LGA should be viewed under Section 7 of the Clayton Act.
An important component of the defendants’ defense is the competitive discipline that Southwest’s low priced fares bring to the marketplace. US Airways says in its answer that the Complaint “ignore the most meaningful competitive development in the airline industry since deregulation: the emergence of low cost carriers,” emphasizing that Southwest “is now the country’s largest domestic airline.”
Southwest will discuss the competition that it provides to constrain fares of legacy carriers and enhance the benefits that passengers enjoy as a result. Southwest will explain how its entry into markets has reduced competing fares and stimulated new passenger traffic, and it can provide the unique perspective of how it could—if it were to obtain additional slots—provide an important competitive restraint on a merged US Airways and American Airlines at DCA and LGA.
Even with the limited service it provides at DCA and LGA, Southwest has already brought pro-competitive effects at those airports. Southwest will explain how — without a significant divestiture of slots at each of these airports in conjunction with the merger – the increased concentration of slots in the hands of the merged airline would substantially lessen competition.
Those anti-competitive effects could be mitigated only if a significant number of slots were divested to Southwest so it could bring the Southwest Effect to more routes served from DCA and LGA. To effectively mitigate those anticompetitive effects, Southwest will explain why a divestiture of slots must be to a LCC like Southwest, which has a nationwide low fare network that would deliver the competitive benefits of slot divestiture to the greatest number of cities and passengers throughout the country.
DCA is Reagan National. LGA is LaGuardia.
Judge Kollar-Kotelly has set a Nov. 15 deadline for all amici curiae briefs to be in. She’ll have to give Southwest the okay before it can submit a brief.
Southwest and JetBlue Airways have made no secret that they would like the Justice Department to tie approval of the American-US Airways merger to the divestiture of takeoff and landing slots at the Washington airport, one of several major airports where the federal government rations the number of takeoffs and landings.
While JetBlue focuses its New York operations mostly on New York Kennedy, Southwest also wants slots to grow its tiny LaGuardia operations.
US Airways holds about 56 percent of the Reagan slots. With American’s portfolio, the share held by the post-merger airline would control more than two thirds of the airport’s takeoff and landing rights.
Southwest said the U.S. Department of Justice, which filed the lawsuit to block the merger of American and US Airways, had no objection to the carrier’s request to file a brief. The states that joined the lawsuit on the side of DOJ and the airlines had no objection to its filing a brief, Southwest stated.
Keep reading for the filing.
MOTION FOR LEAVE TO FILE AMICUS CURIAE BRIEF BY SOUTHWEST AIRLINES CO.
Southwest Airlines Co. (“Southwest”) respectfully moves this Court for permission to file a brief amicus curiae that will address the likely competitive effects of the merger between US Airways Group Inc. (“US Airways”) and AMR Corporation (“American Airlines”).
Southwest has sought the consent of the parties to this litigation to file a brief amicus curiae on the merits. The United States, the plaintiff States, US Airways and American Airlines have all given their consent.1
INTEREST OF THE AMICUS
Southwest is the preeminent low cost carrier (“LCC”) in the United States. Southwest’s headquarters are at 2702 Love Field Drive in Dallas, Texas. Since it began operations in 1971 Southwest has grown from a small intra-state carrier serving three Texas cities to become today the largest domestic airline measured by the number of passengers carried. Southwest was the original LCC in this country, and its popularity and growth over time created the foundation for the broader LCC segment of the airline industry, as other carriers in recent years have tried to follow in Southwest’s footsteps to offer their own brands of low cost service. Southwest provides service in competition with legacy carriers, such as US Airways and American Airlines, but at significantly lower costs and fares. Typically, when Southwest begins providing low cost service on a particular route lacking LCC competition, not only do passengers enjoy Southwest’s lower fares, but Southwest’s entry drives down the fares of competing legacy carriers. In response to the lower fares, the number of passengers traveling on the route increases significantly. This pro-competitive effect of offering lower fares and stimulating new traffic is so well documented that it has been dubbed “The Southwest Effect”2 by the U.S. Department of Transportation.
The pro-competitive effect of Southwest’s entry and service is effective, however, only when Southwest has the ability to enter a particular market. While Southwest serves over 90 destinations in the United States, it has extremely limited access to Reagan National Airport serving Washington DC (“DCA”) and LaGuardia Airport in New York City (“LGA”) due to severe entry restrictions. Service to those airports is significantly limited by the allocation of take-off and landing slots, and Southwest has been able to obtain only a very small number of slots at those two airports. Because the merger would concentrate slots at DCA and LGA in a combined airline that would restrict the availability of slots to Southwest and other LCCs that could provide meaningful competition, Southwest can provide the Court with a unique and important perspective on the legal and competitive implications of the merger for air service at those airports.
II. ARGUMENT
An amicus curiae “does not represent the parties but participates only for the benefit of the Court.” Hard Drive Prods., Inc. v. Does 1-1,495, 892 F. Supp. 2d 334, 337 (D.D.C. 2012) (internal quotation marks omitted); United States v. Microsoft Corp., No. Civ.A.98-1232, 2002 WL 319366, at *2 (D.D.C. Feb. 28, 2002). It is solely within the Court’s discretion to determine “the fact, extent, and manner” of participation by the amicus. Microsoft Corp., 2002 WL 319366, at *2. Amicus participation should be permitted, among other reasons, when an amicus “‘has unique information or perspective that can help the court beyond the help that the lawyers for the parties are able to provide.’” Jin v. Ministry of State Sec., 557 F. Supp. 2d 131, 137 (D.D.C. 2008) (quoting Ryan v. Commodity Futures Trading Comm’n, 125 F.3d 1062, 1064 (7th Cir. 1997
Southwest can provide unique information and perspective on how the proposed merger between US Airways and American Airlines would likely affect competition, and particularly how the impact of the proposed merger on service at DCA and LGA should be viewed under Section 7 of the Clayton Act. An important component of the defendants’ defense is the competitive discipline that Southwest’s low priced fares bring to the marketplace. US Airways says in its answer that the Complaint “ignore the most meaningful competitive development in the airline industry since deregulation: the emergence of low cost carriers,” emphasizing that Southwest “is now the country’s largest domestic airline.” (Defendant US Airways’ Group, Inc.’s Answer to Am. Compl. 2, Sept. 9, 2013 [Dkt. 79]). Southwest will discuss the competition that it provides to constrain fares of legacy carriers and enhance the benefits that passengers enjoy as a result. Southwest will explain how its entry into markets has reduced competing fares and stimulated new passenger traffic, and it can provide the unique perspective of how it could—if it were to obtain additional slots—provide an important competitive restraint on a merged US Airways and American Airlines at DCA and LGA. Even with the limited service it provides at DCA and LGA, Southwest has already brought pro-competitive effects at those airports. Southwest will explain how — without a significant divestiture of slots at each of these airports in conjunction with the merger – the increased concentration of slots in the hands of the merged airline would substantially lessen competition. Those anti-competitive effects could be mitigated only if a significant number of slots were divested to Southwest so it could bring the Southwest Effect to more routes served from DCA and LGA. To effectively mitigate those anticompetitive effects, Southwest will explain why a divestiture of slots must be to a LCC like Southwest, which has a nationwide low fare network that would deliver the competitive benefits of slot divestiture to the greatest number of cities and passengers throughout the country.
Conclusion
Southwest respectfully requests that this Court permit it to submit a brief amicus curiae on the merits of this matter, on such terms established by the Court.
Dated: November 7, 2013
Respectfully submitted, /s/ Alden L. Atkins
1 Southwest is mindful of the admonition the Court has made to other amici to limit their discussion to facts available to the parties. Southwest will comply with that instruction and will rely upon facts already in the record. Southwest understands that the United States has produced approximately 150,000 Southwest documents to Defendants in this litigation that Southwest had previously produced to the government, and Southwest has produced more documents in response to subpoenas from Defendants in this litigation. In addition, a senior Southwest representative was deposed in this litigation.
2 Randall D. Bennett & James M. Craun, U.S. Dep’t of Transp., The Airline Deregulation Evolution Continues: The Southwest Effect (May 1993); see also U.S. Gov’t Accountability Office, GAO-10-778T, Airline Mergers: Issues Raised by the Proposed Merger of United and Continental Airlines 6 (2010) (“over the last decade, airfares have generally declined (in real terms), owing largely to the increased presence of low-cost airlines, such as Southwest Airlines, in more markets and the shrinking dominance of a single airline in many markets”); Austan Goolsbee & Chad Syverson, How Do Incumbents Respond to the Threat of Entry? Evidence from Major Airlines, 123 Q.J. of Econ. 1611 (Nov. 2008); Sholnn Freeman, Southwest Airlines Feeling Squeezed out at National Airport, Wash. Post, Mar. 23, 2010, available at http://www.washingtonpost.com/wp-dyn/content/article/2010/03/22/AR2010032203312.html; Marco Santana, Southwest Effect Slashes Des Moines Prices, Des Moines Reg., Sept. 27, 2013, available at http://www.iowadot.gov/aviation/news/pdfs/Southwest%20effect%20slashes% 20Des%20Moines%20prices.pdf.
Southwest Airlines wants to tell judge why American Airlines and US Airways should give up slots in Washington and New York
By Terry Maxon
tmaxon@dallasnews.com
5:25 pm on November 7, 2013 | Permalink
Southwest Airlines asked permission Thursday to file a “friend of the court” request in the American Airlines-US Airways antitrust case, saying it wants to tell the judge about how it needs more takeoff and landing slots at Reagan National Airport near Washington, D.C., and New York’s LaGuardia Airport.
U.S. District Judge Colleen Kollar-Kotelly quickly approved Southwest’s request, adding its name to a long list of parties that want to weigh in as amici curiae, or friends of the court.
In essence, Southwest said it cannot bring the benefit of low-fare competition to markets out of Reagan National and LaGuardia unless it has enough takeoff and landing rights, and it doesn’t have enough of those “slots.”
Said Southwest in its filing:
Southwest can provide unique information and perspective on how the proposed merger between US Airways and American Airlines would likely affect competition, and particularly how the impact of the proposed merger on service at DCA and LGA should be viewed under Section 7 of the Clayton Act.
An important component of the defendants’ defense is the competitive discipline that Southwest’s low priced fares bring to the marketplace. US Airways says in its answer that the Complaint “ignore
Southwest will discuss the competition that it provides to constrain fares of legacy carriers and enhance the benefits that passengers enjoy as a result. Southwest will explain how its entry into markets has reduced competing fares and stimulated new passenger traffic, and it can provide the unique perspective of how it could—if it were to obtain additional slots—provide an important competitive restraint on a merged US Airways and American Airlines at DCA and LGA.
Even with the limited service it provides at DCA and LGA, Southwest has already brought pro-competitive effects at those airports. Southwest will explain how — without a significant divestiture of slots at each of these airports in conjunction with the merger – the increased concentration of slots in the hands of the merged airline would substantially lessen competition.
Those anti-competitive effects could be mitigated only if a significant number of slots were divested to Southwest so it could bring the Southwest Effect to more routes served from DCA and LGA. To effectively mitigate those anticompetitive effects, Southwest will explain why a divestiture of slots must be to a LCC like Southwest, which has a nationwide low fare network that would deliver the competitive benefits of slot divestiture to the greatest number of cities and passengers throughout the country.
DCA is Reagan National. LGA is LaGuardia.
Judge Kollar-Kotelly has set a Nov. 15 deadline for all amici curiae briefs to be in. She’ll have to give Southwest the okay before it can submit a brief.
Southwest and JetBlue Airways have made no secret that they would like the Justice Department to tie approval of the American-US Airways merger to the divestiture of takeoff and landing slots at the Washington airport, one of several major airports where the federal government rations the number of takeoffs and landings.
While JetBlue focuses its New York operations mostly on New York Kennedy, Southwest also wants slots to grow its tiny LaGuardia operations.
US Airways holds about 56 percent of the Reagan slots. With American’s portfolio, the share held by the post-merger airline would control more than two thirds of the airport’s takeoff and landing rights.
Southwest said the U.S. Department of Justice, which filed the lawsuit to block the merger of American and US Airways, had no objection to the carrier’s request to file a brief. The states that joined the lawsuit on the side of DOJ and the airlines had no objection to its filing a brief, Southwest stated.
Keep reading for the filing.
MOTION FOR LEAVE TO FILE AMICUS CURIAE BRIEF BY SOUTHWEST AIRLINES CO.
Southwest Airlines Co. (“Southwest”) respectfully moves this Court for permission to file a brief amicus curiae that will address the likely competitive effects of the merger between US Airways Group Inc. (“US Airways”) and AMR Corporation (“American Airlines”).
Southwest has sought the consent of the parties to this litigation to file a brief amicus curiae on the merits. The United States, the plaintiff States, US Airways and American Airlines have all given their consent.1
INTEREST OF THE AMICUS
Southwest is the preeminent low cost carrier (“LCC”) in the United States. Southwest’s headquarters are at 2702 Love Field Drive in Dallas, Texas. Since it began operations in 1971 Southwest has grown from a small intra-state carrier serving three Texas cities to become today the largest domestic airline measured by the number of passengers carried. Southwest was the original LCC in this country, and its popularity and growth over time created the foundation for the broader LCC segment of the airline industry, as other carriers in recent years have tried to follow in Southwest’s footsteps to offer their own brands of low cost service. Southwest provides service in competition with legacy carriers, such as US Airways and American Airlines, but at significantly lower costs and fares. Typically, when Southwest begins providing low cost service on a particular route lacking LCC competition, not only do passengers enjoy Southwest’s lower fares, but Southwest’s entry drives down the fares of competing legacy carriers. In response to the lower fares, the number of passengers traveling on the route increases significantly. This pro-competitive effect of offering lower fares and stimulating new traffic is so well documented that it has been dubbed “The Southwest Effect”2 by the U.S. Department of Transportation.
The pro-competitive effect of Southwest’s entry and service is effective, however, only when Southwest has the ability to enter a particular market. While Southwest serves over 90 destinations in the United States, it has extremely limited access to Reagan National Airport serving Washington DC (“DCA”) and LaGuardia Airport in New York City (“LGA”) due to severe entry restrictions. Service to those airports is significantly limited by the allocation of take-off and landing slots, and Southwest has been able to obtain only a very small number of slots at those two airports. Because the merger would concentrate slots at DCA and LGA in a combined airline that would restrict the availability of slots to Southwest and other LCCs that could provide meaningful competition, Southwest can provide the Court with a unique and important perspective on the legal and competitive implications of the merger for air service at those airports.
II. ARGUMENT
An amicus curiae “does not represent the parties but participates only for the benefit of the Court.” Hard Drive Prods., Inc. v. Does 1-1,495, 892 F. Supp. 2d 334, 337 (D.D.C. 2012) (internal quotation marks omitted); United States v. Microsoft Corp., No. Civ.A.98-1232, 2002 WL 319366, at *2 (D.D.C. Feb. 28, 2002). It is solely within the Court’s discretion to determine “the fact, extent, and manner” of participation by the amicus. Microsoft Corp., 2002 WL 319366, at *2. Amicus participation should be permitted, among other reasons, when an amicus “‘has unique information or perspective that can help the court beyond the help that the lawyers for the parties are able to provide.’” Jin v. Ministry of State Sec., 557 F. Supp. 2d 131, 137 (D.D.C. 2008) (quoting Ryan v. Commodity Futures Trading Comm’n, 125 F.3d 1062, 1064 (7th Cir. 1997
Southwest can provide unique information and perspective on how the proposed merger between US Airways and American Airlines would likely affect competition, and particularly how the impact of the proposed merger on service at DCA and LGA should be viewed under Section 7 of the Clayton Act. An important component of the defendants’ defense is the competitive discipline that Southwest’s low priced fares bring to the marketplace. US Airways says in its answer that the Complaint “ignore
Conclusion
Southwest respectfully requests that this Court permit it to submit a brief amicus curiae on the merits of this matter, on such terms established by the Court.
Dated: November 7, 2013
Respectfully submitted, /s/ Alden L. Atkins
1 Southwest is mindful of the admonition the Court has made to other amici to limit their discussion to facts available to the parties. Southwest will comply with that instruction and will rely upon facts already in the record. Southwest understands that the United States has produced approximately 150,000 Southwest documents to Defendants in this litigation that Southwest had previously produced to the government, and Southwest has produced more documents in response to subpoenas from Defendants in this litigation. In addition, a senior Southwest representative was deposed in this litigation.
2 Randall D. Bennett & James M. Craun, U.S. Dep’t of Transp., The Airline Deregulation Evolution Continues: The Southwest Effect (May 1993); see also U.S. Gov’t Accountability Office, GAO-10-778T, Airline Mergers: Issues Raised by the Proposed Merger of United and Continental Airlines 6 (2010) (“over the last decade, airfares have generally declined (in real terms), owing largely to the increased presence of low-cost airlines, such as Southwest Airlines, in more markets and the shrinking dominance of a single airline in many markets”); Austan Goolsbee & Chad Syverson, How Do Incumbents Respond to the Threat of Entry? Evidence from Major Airlines, 123 Q.J. of Econ. 1611 (Nov. 2008); Sholnn Freeman, Southwest Airlines Feeling Squeezed out at National Airport, Wash. Post, Mar. 23, 2010, available at http://www.washingtonpost.com/wp-dyn/content/article/2010/03/22/AR2010032203312.html; Marco Santana, Southwest Effect Slashes Des Moines Prices, Des Moines Reg., Sept. 27, 2013, available at http://www.iowadot.gov/aviation/news/pdfs/Southwest%20effect%20slashes% 20Des%20Moines%20prices.pdf.
MetalMover
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And they want LGA slots....I guess SWA will expect to go right to the front of the line for takeoff when planes are stacked up back to the terminal.eolesen said:
Jacobin777
Senior
Looks like WN is helping the DOJ out. <_<eolesen said:
MetalMover
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So SWA is for the merger if they get DCA and LGA slots,,,And against the merger if they don't get them...?
Quite a brief they filed with the court.
Quite a brief they filed with the court.
Jacobin777
Senior
UPNAWAY said:
Basically WN is saying that AA/US will have at the very least a monopoly at these airports if the merger goes through w/out giving up slots. Surprised at LGA given DL is larger even with the hypothetical combined carrier.
This is just one of many complaints the DOJ has against the merger-hence my comment why it helps the DOJ.
jimntx
Veteran
Well, regardless of other airports, if any one believes for a second that AA/US combined was going to be allowed to control 69% of the slots at DCA, send that person my way. I have nice bridge for sale they might be interested in. 
And, considering that AA has attempted to thwart WN in every way for the last 40 years, exactly why would anyone believe that WN should be supportive of anything AA wants to do.
And, considering that AA has attempted to thwart WN in every way for the last 40 years, exactly why would anyone believe that WN should be supportive of anything AA wants to do.
WorldTraveler
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exactly, Jim.
And it also doesn't change that the whole premise of anticompetitive does not mean that what was done in previous mergers applies to this one.
Just because DL is still larger at LGA doesn't mean that there won't be anticompetitive effects by eliminating a competitor.
And for those who want to continue to talk about DL, they did divest 16 slot pairs as part of the LGA slot deal even though they did not and still do not have over 50% of the flights at LGA.
UA/CO was the only other recent merger where there was more than 50% of the slots at one airport and the DOJ held new UA to the limit of CO's slots.
And it also doesn't change that the whole premise of anticompetitive does not mean that what was done in previous mergers applies to this one.
Just because DL is still larger at LGA doesn't mean that there won't be anticompetitive effects by eliminating a competitor.
And for those who want to continue to talk about DL, they did divest 16 slot pairs as part of the LGA slot deal even though they did not and still do not have over 50% of the flights at LGA.
UA/CO was the only other recent merger where there was more than 50% of the slots at one airport and the DOJ held new UA to the limit of CO's slots.
Quote "however, not sure if the carriers could afford not to merge". US will be the loser if the merger fails, AA with its reduced labor and lease costs due to chapter 11 will be just fine. AA is big enough to stay in the top tier of major US airlines despite what some have said including the brass at US. What does US bring to AA that enhances its value? Maybe CLT but the rest of the hubs are expendable especially PHX.swamt said:
I fear the new AA will be just a larger US with less concern for the customer.US, the airline that brought you a charge for water, quickly rescinded and a fee to redeem award tickets when done by the customer on the web site called a processing fee.
While many employees are backing this merger, many of those same employees will be given pink slips due to the synergy that is being pushed by Doug Parker that includes reducing the work force. All one has to do is look at the the DL-NW merger. In the last few months, about over 500 employees have been laid off or will be shortly due to MEM being dehubbed.
JFK Fleet Service
Veteran
Is this the same Southwest that declined to purchase DCA slots not too long ago? They opted out of the bidding because they were too pricey IIRC.
Now though,they expect to be gifted slots at DCA & LGA? LGA they can pound sand,the combined entity wouldn't be the largest holder of slots there.DCA? Sell 'em to jetblew .
This plucky little upstart "Doing gods work,bringing low fares to the masses" routine of theirs is really played out.
Now though,they expect to be gifted slots at DCA & LGA? LGA they can pound sand,the combined entity wouldn't be the largest holder of slots there.DCA? Sell 'em to jetblew .
This plucky little upstart "Doing gods work,bringing low fares to the masses" routine of theirs is really played out.
SW never opted out of any bidding due to, too pricey. JB simply out bid all others involved, and in the process over paid for them.
They don't expect them to be gifted, but they do want them divested, here's the quote from the Star Telegram:
"Those anticompetitive effects could be mitigated only if a significant number of slots were divested to Southwest".
Although declining to comment on the issue, sources said both Southwest and JetBlue were currently in discussions with the US Department of Justice about acquiring flight slots in Reagan National and LaGuardia Airport in New York.
