US/AA merger settlement imminent!

[Bob Owens]

if arrogance comes from making money and running a decent operation, then DL is guilty.You're feeble attempts at trying to frame this as DL lost because of their arrogance is nothing but amusing.DL's arrogance comes at winning in the marketplace and won't change whether they bid on the assets or not.Sure, the assets will help DL keep coming but they won't make or break anything.And it also won't change that all of the strategic challenges that AA faces aren't affected one bid regardless of who wins the bidding process.It also doesn't change that AA is hanging on by its fingernails in NYC, DL is pushing hard on the west coast, and are making a full out push for LHR. DL's success in NYC-MIA where they now have 40% of the market provides more than enough evidence that DL can challenge AA's monopoly.And, again, DL's original intention was to pick up slots to serve small/medium size cities. If you and AA/US mgmt. thinks that locking DL out of DCA, LGA, and DAL in order to allow B6 and WN to have all 56 of the slots and gates, then you and AA deserve everything that will be coming your wAAy - and it will be anything but pretty.And as much as you want to believe that the Obama administration is free to do whatever it wants with no one to stop them, there is yet one more headline saying about the administration overstepping its legal authority = this time the EPA.I know the difference between the legal and governmental systems in the US and third-world countries. The US is not in the same class for now. For a whole lot of reasons, of which the settlement agreement might or might not be just one part - you can be thankful.

pretty much everything you wrote supports not allowing DL to get any of the slots AA will have to give up.

 

[Bob Owens]

Politics were a piece of it, certainly. The Obama Administration has gone thru a rash of bad press in the past couple months, starting with the IRS scandal, NSA scandal, and now Obamacare collapsing under its own weight.If the DOJ lost in court, it would be yet another trophy on the shelf for those who like to point to the ruling party's ineptitude.As for the last part... screwing DL?OldGuy and I rarely agree on much, but there may be more than a shred of truth in that thought.WT's sycophantic behavior aside for a moment, I've noticed a certain arrogance taking over at DL, similar to what happened during Harding Lawrence's tenure at Braniff, and how AA dealt with the DOT/DOJ during the early 90's (anyone remember when AA couldn't seem to get any Japan route authorities, or how long they were locked out of China?).If that arrogance has seeped into the way the government affairs folks communicate with DOT and DOJ, then specifically locking out DL from any windfalls is not out of the question. Certainly, the DOT/DOJ wouldn't bend over backward to accommodate them unless it were a situation where there were no other bidders...Since this is now a smoke-free environment for me, I'm sure I won't miss much when WT shows up with a few puffs of DLflection.

like the arrogance of AA saying they were giving Horton the $20 million despite the governments objections?

 

[WorldTraveler]

pretty much everything you wrote supports not allowing DL to get any of the slots AA will have to give up.

except whether its arrogance from DL or AA, there is a rule of law involved.

There is no magic formula that says how much AA should have been required to divest. I noted from my earliest post on the subject that it was huge.
Remember that there were people who were certain that AA wouldn't have to give up any slots at LGA.

With the settlement, AA had to give up 12 actual operating slot pairs to end up with about 33% of LGA slots. DL only had to give up 16 in order to get almost 50% of the slots.

I don't know of any merger case that has involved divestitures from the 2nd largest player in a market, do you?

But the size of the divestitures - which everyone seems to think are just fine as long as they exclude DL - are determined in some black box at the DOJ which AA tried to look into but was summarily slammed on the hand - and then immediately quick asking.

OTOH, there are very clear laws about regulation of prices of the domestic market. the DOJ's attempt to limit the participation of DL and UA (yes, UA is impacted as well) is picking and choosing of competitors for the purpose of determining pricing in the marketplace.

That is not legal and all of the charges of arrogance don't or won't make it right.

Again, my assertion remains that the settlement agreement will end up in court if it is not altered to remove the clauses about preferential and excluded bidding.
Those that are certain that it will not change are welcome to bet against me.
So far, no one has accepted the challenge - which says that perhaps they aren't as certain of their positions as they think.

BTW, E's little diatribe about arrogance doesn't seem to account for the fact that UA was excluded as well.

I guess it is their pathetic operation that knocked them out of the running, E? or was it the fact that UA made the mistake of moving their HDQ to CHI? And DL never had any real roots in Texas since they had no presence to the west, right?

 

[swamt]

pretty much everything you wrote supports not allowing DL to get any of the slots AA will have to give up.

Exactamendo!

 

[robbedagain]

Im not a bettin man wt... but given that ur a huge fan of delta n a former employer of them I have to wonder why youre way more pro delta n the hell w every other airline.. thats how I see it from your posts... may be u can clear it up. I searched for any kind of court challenge from delta found none yet...

 

[cltrat]

neither UA or DL has any shot at getting those DCA slots, hide and watch.

 

[WorldTraveler]

I said before that there is no lawsuit. Yet.

What you and others don't seem to want to accept that there is no legal basis for the preferential bidding for B6 and WN that the DOJ established.

AA and US didn't file suit with the DOJ the moment the first negotiations started and neither did DL.

It doesn't change that the Justice Dept. can be sued and other courts do overturn even Justice dept. actions. That is exactly what AA/US intended to go to trial over.

The US domestic airline industry was deregulated in 1978. The Federal government cannot set fares or take actions that show preference for one carrier over another solely on the basis of price.

If you don't believe me, then you can either wait for a revised settlement or a lawsuit.

And as much as you and others seem to think that it is great news that the DOJ is keeping DL on the sidelines, you might not be quite as thrilled when the DOJ takes its next action and it singles out new AA or any other airline. The DOJ could equally decide that WN's dominance of Love Field requires that maximum fares be established. Somehow I don't think swamt would be thrilled. It could very well happen, esp. if the next administration decides to whipsaw back from who the golden child of this year was. (whover that might be). Spirit might be able to convince the DOJ that Spirit deserves AA's terminal at ORD because they can provide better value to consumers.

Absent a settlement, there will be a suit because if the DOJ is allowed to begin pricing regulation this year, next year it will be something else and before long there is no free market in the airline industry in the US again.

 

[traderjake]

Absent a settlement, there will be a suit because if the DOJ is allowed to begin pricing regulation this year, next year it will be something else and before long there is no free market in the airline industry in the US again.

 
When DOJ helps Delta they're doing their job.
 
When they don't help Delta it's because they're doing something illegal.
 
Sorry but Delta is not getting back the slots they gave up to get the LGA slots.

 

[eolesen]

WT's missing the point that's fairly evident when you read between the lines of the settlement agreement.

As I'm reading it, it's AA who decides who they want to sell the divested assets to. There's nothing specifying the methods used in how AA is to divest, i.e. there was no auction mandated which would force AA to accept the highest bidder. They could in theory accept a friendlier lower bid, and forward that decision to DOJ for review.

DOJ's only role here would be in approving/disapproving a transaction *after* AA had come to terms of a sale.

So, WT can fret about lawsuits, and about what the DOT/DOJ is legally authorized to do.

The fact remains that they're just two agencies with the power to take action to prevent oligopolies from being strengthened, and that includes blocking mergers and commercial transactions.

Given how much of the market is already concentrated in the hands of DL, AA, and UA, blocking oligopolies would appear to be the only justification needed to deny DL access to the assets being disposed of, be it gates or slots.

That's my interpretation of why they didn't give DL the same first right of refusal that which they did with both WN and B6 for slots they were subleasing.

But hey, DL's "Winning!" attitude might prevail. Or, they could wind up like Charlie Sheen in this case.

Either way, AA appears to decide whose money they take.

 

[robbedagain]

E on the swa forum swamt pointed out that dl could have filed a brief by nov 15 but they opted not to... dl thinks the bidding should go to all airlins if thats the case then may be the new aa can bid for their own slots 🙂

 

[MetalMover]

except whether its arrogance from DL or AA, there is a rule of law involved.

There is no magic formula that says how much AA should have been required to divest. I noted from my earliest post on the subject that it was huge.
Remember that there were people who were certain that AA wouldn't have to give up any slots at LGA.

With the settlement, AA had to give up 12 actual operating slot pairs to end up with about 33% of LGA slots. DL only had to give up 16 in order to get almost 50% of the slots.

I don't know of any merger case that has involved divestitures from the 2nd largest player in a market, do you?

But the size of the divestitures - which everyone seems to think are just fine as long as they exclude DL - are determined in some black box at the DOJ which AA tried to look into but was summarily slammed on the hand - and then immediately quick asking.

OTOH, there are very clear laws about regulation of prices of the domestic market. the DOJ's attempt to limit the participation of DL and UA (yes, UA is impacted as well) is picking and choosing of competitors for the purpose of determining pricing in the marketplace.

That is not legal and all of the charges of arrogance don't or won't make it right.

Again, my assertion remains that the settlement agreement will end up in court if it is not altered to remove the clauses about preferential and excluded bidding.
Those that are certain that it will not change are welcome to bet against me.
So far, no one has accepted the challenge - which says that perhaps they aren't as certain of their positions as they think.

BTW, E's little diatribe about arrogance doesn't seem to account for the fact that UA was excluded as well.

I guess it is their pathetic operation that knocked them out of the running, E? or was it the fact that UA made the mistake of moving their HDQ to CHI? And DL never had any real roots in Texas since they had no presence to the west, right?

I don't see an complaints from UA. The way I see it is that the DOJ basically made it clear that in hindsight, approving the DL/NW and UA/CO mergers were mistakes, they are trying to ensure that the already two mega carriers don't have a chance to get even bigger ultimately affecting competition.
However, I see your point that DL being excluded might be unlawful. But, honestly WT, you're going on like DL is such a poor victim. 
This whole philosophy of DL having to control every market in every part of the country is arrogance on their part.
You might call it good business, but because of their successes and deep pockets, DL should not always automatically be the chosen one.

 

[WorldTraveler]

just because UA hasn't complained doesn't mean that they have waived their right to participate in the process.

Unlike what smamt seems to think, US airlines were not told that they had to file a brief and advise the judge or DOJ of their intent to bid on assets.
And it still doesn't change that there is no legal basis for B6 and WN to have preferential bidding rights in the process, to the exclusion of all other carriers - which extends well below just DL and UA.

If you, the DOJ, AA/US, and B6 and WN don't grasp that concept, it will become very apparent.

It also doesn't change that the DOJ's statements that LFCs are needed to provide a competitive balance is factually inaccurate and also legally indefensible in the US airline market which is deregulated and in which the government cannot pick winners and losers in the market based on price.

AA/US doesn't have the right to carve up the industry as it sees fit, which is clearly the intent it wants and what was echoed by the well-recorded statements saying that legacy carriers were not likely to win a bid regarding any assets.

Remember, though, that the whole case in the first place was because the DOJ alleged that there was excessive attempts to manipulate the market as evidenced by emails and public speeches from AA/US execs saying that competitive actions like frequent flyer promotions should not be offered and that promotional fare programs would likely be cancelled.

Remember also that the DOJ made huge statements about how they would prevent the merger and enforce antitrust law, were concerned that they could not do that after the gov't shutdown, and then rushed to come up with a settlement because they were afraid they couldn't win the case at trial which they said they intended to win.

Legal experts universally agreed that the DOJ failed to do what it said it would do in the case.

They will get the chance to redo the settlement agreement now that the government is back in session.

IN the meantime, the merger of AA and US will wait so that proper law can be applied to the case by people who know what they are doing and aren't going to allow the case to be sold to the highest bidder in a secret backroom bidding process.

the case won't be decided today... wait for more details in the days ahead.

 

[700UW]

And show us where its illegal?
 
You are stating your opinion cause deltoid wont be getting any slots.

 

[WorldTraveler]

you truly aren't aware that the US deregulated the domestic aviation market in 1978 and that the government is not allowed to take actions in the market that are based on attempting to set pricing?

 

[robbedagain]

We all knw the us aviation has been de regulated since 78.. my question to u wt is this.. lets say if this whole merger is reversed n dl n nw were mergin now n lets say nw was the biggie at dca would u be cheering n gung ho happy for it or be against it the way u are now? Again just wanting to knw how u would react if say the merger was reversed?