US/AA merger settlement imminent!

[WorldTraveler]

My guess is that AA employs more TWA workers than DL does PA workers. Didn't think I was "Raging" about it, just threw it out there, seems to be a touchy subject with you. The fact is that when DL merged with both Pan Am and NWA smaller cities saw less service from the new DL than they did when all three were in business, now you are claiming that DL is the champion of small cities. We all know that DL does not care about small cities, they want to retain the competitive edge you have been bragging about on this forum for some time. Maybe the DOJ believes you are right, DL does still have a competitive edge, so they certainly don't need more, you are right, the government is not in the job of picking winners and losers but rather to insure that the competition continues in perpetuity and that's why carriers that are considered disadvantaged in those markets are being offered those assets.

Justice and equality, please, you have admitted time and time again how even if AA didn't divest DL was still a superior company than AA.

Bob,
you see to be rather chatty with me of late... we've gone months without talking and now we're regular pen pals.

I'm honored.

DL DID NOT MERGER WITH PAN AM. Full stop. It was an asset acquisition. There was never any promise or expectation that DL would take all employees - and they did not.

Grasp that fact, please.

I simply intend for the discussion to be accurate, Bob. When you refer to the DL-PA transaction as a merger, that is factually incorrect - and yes, I will respond.

There was no merger integration rules because DL selected who it wanted to hire which is exactly what it was entitled to do.

Champion of small cities and DL superior to AA? Really, Bob.

can you find where I used those words? Of course you can't.

Wt you have to remember that when delta brought pan am it did hurt them my dad was one of many delta employees who had to move to keep job or take furlough he told our fam that in 1994 he went from orf to dca I do knw from a friend of mine whose dad worked for delta said that pa european ops hurt dl but the bombing of flight 103 also sealed the fate of pan am

 
yep it sure did. PA was a financial disaster, DL didn't react fast enough, and it isn't an exaggeration to say that the PA acquisition nearly took DL down.

You also know full well that the PA acquisition took place right as the Gulf War was breaking out and on the heels of German reunification. A big part of the PA European operation was based at Berlin and DL never took that over.

I'm still not sure why people on here wants to keep bringing up Pan Am other than to try to find mud of some kind to throw at DL.
The much discussed 7.5 came because DL had to dramatically cut costs to turn the company around which they did - and it was also the beginning of the turnaround for DL post Pan AM.

Exactly.

Somewhere on this site is a list of the small cities that have been dropped since the NW/DL merger.

but you can't think of them.


we can, however, think of the abandoned hubs by AA and US... those come to mind much easier... and the list might actually be longer, too.

 

[Bob Owens]

Champion of small cities and DL superior to AA? Really, Bob.

can you find where I used those words? Of course you can't.

Don't need to find where you used those words because I never said that you used those words. Those are words that I picked to describe your positions and here is what you wrote as far as Delta and small cities;
 

The role that DL said it wanted to play in the slot divestiture process is to ensure that small cities retain service to DCA.
 

Sure sounds like you are portraying delta as a selfless defender of small cities to me.
 
As far as DL being superior to AA are you actually denying that you have not been saying that?

 

[Kev3188]

but you can't think of them.

Off the top of my head:

BTM, TVF, ATY, BRD, INL, GLH, DVL, HIB, APN, FOD, PLN, IMT, PIR, SUX, PIB, BJI

There's more. I'm sure they'd come to me if I put my mind to it.

Doesn't matter though; I'm simply responded to what Bob has posted.
 
 

Don't need to find where you used those words because I never said that you used those words. those are words that I picked to describe your positions and here is what you wrote as far as Delta and small cities;
 
As far as DL being superior to AA are you actually denying that you have not been saying that?

He will if it fits today's narrative, Bob.

 

[eolesen]

If you stop engaging the troll he will go away! If you block him and his posts, I promise your enjoyment of this board will increase 10 fold.

Indeed, being a smoke-free building can be a wonderful thing...

Ironic that WT doesn't like to have PA brought up, which were ~22 years ago, but wants to discuss hub closures which were ~20 years ago, yet also won't discuss small cities which lost service in the past 8 years....

Selectively drawing and moving the date cut-off to serve a narrative is indeed a convenient tactic...

On an employee basis, I suspect TW's acquisition (it was not a merger, either) wound up with more employees transferring over because the planes came with the deal.

In the UA acquisition of routes, only a minimum of airplanes came along, thus fewer employees.

DL took over 100 airplanes from PA.

AA took over 200.

Do the math.

 

[swamt]

Very good points made.  Now that you brought them out, it sort of makes sense now.  Below is an article that he just hates to read because it speaks the truth of what is about to happen with the merger:-
 
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Why the DOJ Wants to Clip Delta's Wings
By Adam Levine-Weinberg

 

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November 17, 2013 | Comments (4)

Delta Air Lines (NYSE: DAL  ) isn't very happy with the Department of Justice right now. The DOJ is requiring AMR (NASDAQOTH: AAMRQ  ) and US Airways (NYSE: LCC  ) to give up slots and/or gates at seven different airports around the country as part of their merger. Most notably, they must divest slots covering 44 round-trip flights at Reagan Airport near Washington, D.C.

AMR and US Airways need to give up slots and gates in order to merge (Photo: AMR)
Delta would love to bid for slots at Reagan Airport, as well as some of the other gate space becoming available. However, the DOJ seems intent on limiting the sales to low-cost carriers, in an attempt to boost competition. That leaves Delta out in the cold.
Delta has been very vocal about its belief that it should be allowed to bid on an equal footing with low-cost carriers. However, its protests are unlikely to succeed. More than anything else, the DOJ is worried about the growing oligopoly of "The Big Three": American, Delta, and United Continental (NYSE: UAL  ) . Transferring slots within that oligopoly would not solve the problem.
Delta's demands
After the merger settlement was announced on Tuesday, Delta put out a press release saying that it looked forward to bidding for the slots that would be divested, particularly at Reagan Airport . As it became more clear that the DOJ wasn't interested in bids from legacy carriers, Delta put out a second, more combative press release on Wednesday.

The DOJ doesn't want to let Delta buy slots at Reagan Airport (Photo: Delta Air Lines)
This time, Delta stated that it wanted to bid for gates at Love Field in Dallas as well as slots at Reagan Airport. The company also noted that it would be able to serve small- and medium-sized cities from Reagan Airport, as it operates smaller regional aircraft, unlike the low cost carriers . These cities might otherwise lose service to Reagan Airport when American makes the necessary flight cuts there.
On Thursday, Delta was at it again, with a press release announcing new service at Love Field that will start next October, when restrictions on long-haul flights will be lifted. Delta plans to add 18 daily nonstops, including enhanced service to Atlanta, and new service to New York, Detroit, Minneapolis/St. Paul, and Los Angeles. There's just one catch: Delta will need to bid for and win access to the gates American is giving up !
Nice try, but no luck
On Thursday, a senior official in the DOJ's antitrust division threw cold water on the idea that Delta and United could qualify to bid for slots and gates. DOJ lawyers think that the legacy carriers are already tacitly "coordinating" when it comes to setting fares, fees, and schedules. By contrast, the low-cost carriers have shown more of an inclination to compete in those respects.
Residents of the small cities that could lose direct service to Reagan Airport may want Delta to come in and restore that service. However, by definition, those would be routes where Delta would face no competition -- and in turn, Delta would not be using those slots to compete with American. (Thus, you could see why American might be eager to sell slots to Delta, if given the opportunity.)
By contrast, a low-cost carrier like Southwest Airlines (NYSE: LUV  ) would be likely to add flights to larger cities that have no competition today. Dallas, Cleveland, Charlotte, and Hartford are some of the larger metro areas where a single legacy carrier has a monopoly on service to Reagan Airport. Stiffer competition on high-traffic routes like these is what regulators are really hoping for.
Delta has a better shot at getting a spot at the table for the Love Field gates. There, it plans to serve high-traffic routes, where it would compete against American's flights from nearby Dallas-Fort Worth International Airport (and possibly Southwest flights from Love Field).
Still, with the exception of Los Angeles, Delta already flies from Dallas-Fort Worth to all the cities it listed for its Love Field expansion. So while a Delta Love Field expansion would give travelers a new option, it wouldn't increase the number of airlines flying from the Dallas-Fort Worth area to Atlanta, Detroit, New York, or Minneapolis.
Foolish conclusion
Delta is doing everything in its power to get a seat at the table as American and US Airways dispose of assets to satisfy regulatory concerns. However, the DOJ seems dead set on ensuring that the assets up for sale go to low cost carriers.
The DOJ's stubbornness is understandable: after all, one of its complaints has been that the legacy carriers are tacitly coordinating to avoid sparking fare wars. Since the DOJ's mandate is to protect consumer interests, it makes sense to get slots and gates into the hands of the airlines that will compete most vigorously. Right now, only low cost carriers fit the bill.

 

[WorldTraveler]

good points, E.

But where did I say that I didn't want to discuss Pan Am? One quotation should be enough.

I have simply said that DL offered positions to more Pan Am people than any airline did and the PA case was taken to court based on charges that DL pulled out without fulfilling its contractual obligations. The PA creditors lost. DL was under no obligation to keep new PA alive... DL invested in them based on a conditional requirement for PA to demonstrate that it could operate the remaining Latin America division on a standalone basis. PA didn't do that, DL refused to invest more money, and PA was shutdown.

Those are facts that need to be included in the discussion.

And of course the irony is that the failure of PA in Latin America led to UA's purchase of PA's Latin America division which itself failed to compete against AA and which has led to AA's dominance in the region.

Hard to understand how AA people in particular want to keep gloating about a transaction that eventually led to AA's increased position in the region. The same thing didn't happen in either Asia or Europe with PA's asset acquisitions.


I've repeatedly said that the issue with AA and US' hub closures - some of which go back 20 years but others have been since 9/11 are because AA lost control of the local market in those cities, not because AA made the decision that their assets could be redeployed more profitably elsewhere.

I believe it is you who has said that AA redeployed capacity from RDU and BNA to MIA. Whether it was you or not or whether it was a true redeployment, AA created the mass at MIA that no one has been willing to challenge yet.

DL did the same thing at DFW. They only gave up about between 5 and 10 market share points in the local market but moved dozens of planes out of DFW which were largely serving connecting capacity. The capacity was redeployed in ATL and NYC where DL is now #1 in domestic markets in both cities, the market that DL was competing for with the DFW hub.

In contrast, DL's relative position at DFW has remained unchanged at #2 in the local market behind AA. AA is not the #1 carrier in all of its former hubs, including RDU which is why the buildup and additional capacity at RDU by multiple carriers is so interesting to watch.

Despite the assertion that AA will be #1 on the east coast, that isn't at all certain largely because there are so many significant markets that likely will see additional competitive capacity that, added together could easily change the order.... again, if it matters in terms of an actual number.

What does matter is that competitors aren't going to roll over and allow AA/US to increase its size in key markets relative to those competitors solely on the basis of a combined addition of the capacity each carrier had previously.

Fighting for each and every passenger is exactly what the DOJ wants - and the merger is resulting in a significant amount of new capacity in dozens of markets.

DL's press release tipping its hand that it wants to fly DAL-LAX will most certainly result in AA's decision to add new flights from LAX, right? that is exactly what consumers and the DOJ want... aggressively competition between legacy carriers - just like what DL has done in the NYC-MIA market where DL has become a significant player in a market that once was dominated by AA.

The primary reason why an addition by one legacy carrier here will not necessarily result in the same result for an another carrier in another market is because the legacy carriers now have a bigger difference in costs than they have had in a very long time. UA is at the very high end of the cost structure - and their costs will continue to rise as they settle post-merger labor contracts. ON the other end, DL has costs that are almost as low as WN's in the most recent quarter and lower than both AA and UA. DL has also said that its costs will rise far slower than either AA or UA which could mean the gap could further grow.

BTW, the same principle of free and aggressive competition applies to ideas on a forum like this. The more participants, the greater the choice of ideas being offered to consumers. The real bonus is when we have active participants of other sites choosing to come here to participate in the conversation because there are heavy hitting issues being discussed here that they don't want to miss out on. The owners of this forum can't help but he happy to see increased traffic on the site and an increase in the number of people crossing over from other sites to participate here.


Competition is great for everyone.

 

[eolesen]

Thanks for forwarding the article from Motley Fool.

It's pretty concise, and goes a few steps further than what Holly wrote in PlaneBusiness last week.

 

[700UW]

They didn't "take " them. They had to be interviewed and hired by mother deltoid.

And isn't UA the largest in the Ny area with its hub in EWR?

 

[enough already]

If you stop engaging the troll he will go away! If you block him and his posts, I promise your enjoyment of this board will increase 10 fold.

Amen! I did that a long time ago...

 

[swamt]

Thanks for forwarding the article from Motley Fool.

It's pretty concise, and goes a few steps further than what Holly wrote in PlaneBusiness last week.

Your welcome E. I also thought it was the best "explained" article I have read since the agreement was announced. I do think they could have went a few steps further and explain the options that JB would have felt, why they didn't is beyond me. The only reason Delta was used so much is directly related to all the whining and crying Delta is doing in the media. At least UAL gets it. I almost didn't pass that article on E, as I thought most have seen it already, and some people get ridiculed (from WT) for posting an article he has already read.

 

[LD3]

I was watching the Robert Crandell interview a couple of threads down the page and he see's no problems with the merger. He thinks the slot give away will not hurt the new AA as they will still have good sized ops in DCA and NY. He thinks that AA & US may have been able to compete stand alone for a few more years, but no way they would have been able to compete with UA & DL in the long run without the merger... Now I for one would listen with intent a man with more respect and experience on the tip of his little finger than our forum expert.....

 

[WorldTraveler]

Do you honestly think that Crandall is going to say that AA is getting the short end of the stick when he has pushed the merger and it appears there are no other alternatives anyway?

Crandall is gone from the scene.... all of the calls for him to return and save AA went unanswered.

You now have Parker calling the shots (or will soon). We'll be very interested in seeing how it all goes.

 

[swamt]

Do you honestly think that Crandall is going to say that AA is getting the short end of the stick when he has pushed the merger and it appears there are no other alternatives anyway?

Crandall is gone from the scene.... all of the calls for him to return and save AA went unanswered.

You now have Parker calling the shots (or will soon). We'll be very interested in seeing how it all goes.

Yes. This why the man is still respected by many.

You are gone from the scene too and not well respected at all, so pls take your own advise and move on...

 

[WorldTraveler]

and where did I see that he wasn't respected?

I simply said that he isn't about to say that the merger is not a good idea given that it is practically a done deal. He still cares about AA and it still doesn't change that there are no other viable strategic alternatives to the merger.

We also don't know (I don't anyway) know if he is any remaining financial interests in AA or AMR. If he does, he is not an unbiased bystander.

 

[LD3]

Well, I think you do not have the intellectual capabilites (that's a term you would use to call us dummies) to to tell us what Mr. Crandall means...