Southwest Purchase of Airtran and US/DL Slot Swap

[hp_fa]

Very true. Parker's modus operandi invovles using the bankrupcty courts for aquisitions. I'll bet he's trying to convince AA to file very soon, so he can make his move. I know people are saying no way will AA ever merge with US, but it's making more and more sense every day.

Wrong. Parker had nothing to do with either US Air or US Airways BK between 2002-2005. There was no pre-packaged BK in place when US went into bankruptcy the second time. AWA came into the picture when liquidation was close to occurring.

Now the AA acquisition of TWA was a method of using the bankruptcy court for an acquisition.

 

[gaucho99]

Now that Southwest has announced it's purchase of Airtran the DOT should back off and allow, the DL/US slot swap deal to proceed as planned, now that WN has gained access into DCA. That may or may not happen. But if it does, I'd be interested to know what happens with the extra Sao Paulo route authority that I assume would still be in the deal. Would US return the route that it's leasing to UAL, run a second Sao Paulo or include Buenos Aires instead from DL? Never a dull moment in this business!

US does not need DL to give us access to Buenos Aires. Although Argentina is a restricted market, there are unclaimed frequencies that we could apply for right now. We just need the aircraft to do it.

 

[Piedmont1984]

I believe new legislation in now in effect which restricts how a pre-packaged bankruptcy can decimate the pensions and contracts of the employees. So I'm not sure AA can utilize that option as a prelude to a merger with LCC.

OTOH, if a certain CEO gets another DUI conviction while in Dallas, we will know that something for sure is afoot.

 

[Travelpro72]

Wrong. Parker had nothing to do with either US Air or US Airways BK between 2002-2005. There was no pre-packaged BK in place when US went into bankruptcy the second time. AWA came into the picture when liquidation was close to occurring.

Now the AA acquisition of TWA was a method of using the bankruptcy court for an acquisition.

Wait, wasn't HP approached by US after their first bankruptcy only for Parker to tell them NO because their costs were still too high? I thought US went back into bankruptcy if for nothing else....gut the contracts. Hmmmmm

 

[hp_fa]

Wait, wasn't HP approached by US after their first bankruptcy only for Parker to tell them NO because their costs were still too high? I thought US went back into bankruptcy if for nothing else....gut the contracts. Hmmmmm

Agreed as far as US going through BK to gut the contracts, but that wasn't Parker's doing and, as you said, Parker seemingly had told US Airways "no" earlier.

I'd give a longer answer but I sense a mod stopping by and saying we are wandering too far from the topic and I don't want to be the one that get's the thread closed.

 

[ChockJockey]

I'd give a longer answer but I sense a mod stopping by and saying we are wandering too far from the topic and I don't want to be the one that get's the thread closed.

I can help.

Does the fact that NW's getting 18 slots at EWR per UA/CO merger change any of the dynamics? These plus what AirTran has out of LGA gives them about 45 slots out of the NY area.

 

[hp_fa]

 

[FutureUScapt]

Not surprisingly, I agree with FWAAA except that I would add a second reason to the market share issue. US and DL wanted to hand pick who would get the divested slots and especially at DCA prevent any one carrier from getting many of the slots being divested - seriously, how much does US compete with WestJet, for example. The purpose of the blind auction was to prevent that.

To allow the deal to go forward now, even as amended, would allow the very things the DOT objected to.

Jim

Unfortunately, I agree with both you and FWAAA because as you point out, this doesn't change anything as it relates to market share and the number of slots held.

To be fair, you can't sit here and decry what US and DL tried to do without acknowledging that the decision the DOT handed down was downright abominable. The parameters they set all but required WN to be a recipient of these slots and their analysis is severely lacking. They throw out numbers sighting "concerns" of uncompetitiveness yet are unable to provide evidence that going from 50% to 55% of the market share now gives an entity the ability to engage in anti-competitive activity.

But the piece of "logic" that hands down takes the cake is found in the DOT's rejection of the DL/US revised proposal, where they somehow determine that B6's entrance into the market makes the matter worse, because the would-be 2nd largest carrier is now smaller, in spite of the obvious fact that an LCC would be entering a key corridor where there was no previous LCC competition (either DCA-BOS or DCA-NYC; B6 hadn't publicly announced their routes at this point). How they could even keep a straight face while writing that is beyond me.

 

[Travelpro72]

Now look at the landscape. Look at the size of....
Delta at JFK and LGA combined
AA at JFK and LGA combined
CO&UA at EWR, LGA and JFK to a degree
Throw in WN now with their BWI "hub" and what they will have at EWR. Why isn't it a concern to anyone the SERIOUS overlap of WN and Airtran in BWI? I say give DL and US the swap and be done with it.

 

[BoeingBoy]

Why isn't it a concern to anyone the SERIOUS overlap of WN and Airtran in BWI?

Because anyone can serve BWI anytime they want, maybe?

Jim

 

[BoeingBoy]

The parameters they set all but required WN to be a recipient of these slots and their analysis is severely lacking.

Or AS, HA, VX, F9, B6, FL...

Jim

 

[FWAAA]

I'm not saying that US and AA are going to hook up, but the possibility is often mentioned online. Given the strength of a combined US + AA at LGA, I assume that the feds would demand that a combined AA/US divest some LGA slots. Probably not as likely at DCA as AA has a very small presence there, especially after having traded some DCA slots to B6 for some B6 JFK slots earlier this year.

 

[Travelpro72]

Because anyone can serve BWI anytime they want, maybe?

Jim

I guess your right but it seems like a pretty big presence there coupled with Airtran serving DCA along with IAD.

 

[BoeingBoy]

The DOT has long held that BWI and DCA/IAD are separate markets, citing WN/FL's presence at BWI as not affecting fares at Washington much if any. US/DL effectively admitted as much by wanting to keep WN out of DCA. Besides, the WN/FL merger will not increase the amount of low fare service at DCA or Washington, but rather just consolidate the existing service.

Jim

 

[cynic]

I can help.

Does the fact that NW's getting 18 slots at EWR per UA/CO merger change any of the dynamics? These plus what AirTran has out of LGA gives them about 45 slots out of the NY area.

What US and DL should have learned from CO/UA at EWR is that they only have to lease the slots, not sell them. The slots that WN got were leased, not sold.