I am curious to see what happens next. WN now has access to DCA. And, US is now a distant fourth in terms of size, with UA/CO, DL, AA and WN all much larger players now. The landscape has drastically changed since this deal was originally proposed.
I still don't like the idea of US giving up on LGA. Seems crazy that key NYC assets can't be better leveraged. One guess is reducing NYC makes US a better option for a merger down the road, since all the other players who could be merger partners already have a sizable NYC presence.
true... but LGA as well as other large coastal non-hub markets (BOS, LAX, SEA for example) are now becoming more and more like hubs. You can't survive in someone else's hub without being in the top 1-3 carriers in the market. There is not any value in trying to compete in markets like NYC-ROC/BUF/FLA if you don't have the mass to win the corporate contracts that fill the highest revenue seats in these markets.
Except not in the area where the DOT had concerns - a majority of DCA slots and half of LGA slots in the hands of a single carrier at each airport. It was that concentration of power that the DOT objected to, and with the push to relax/eliminate perimeter restrictions by some carriers (including US and DL) that domanance becomes a bigger issue.
Jim
Except that the same scenario exists in other markets including hubs. The issue is accessibility of new carriers and the acquisition of FL by WN shows that it is indeed possible to gain size through merger, the same way the network carriers gained mass in the slot controlled airports. DL and US agreed to provide access to a number of new carriers, just not the ones that wanted it (DOT) or the ones that the DOT said should be offered it (a blind process in which basically DL and US give up 20% of the slots in the deal for the DOT to redistribute as it sees fit).
The real question is how the deal itself will be amended given that US now has access to GRU via the UA slots but can't gain office and ticket counter space at GRU or an operating slot which only the Brazilian gov't can grant. Further, DL is now quite bullish on using all of its Brazil frequencies.
NRT is still a necessary part of the US network but I suspect that the terms of the contract itself will be reworked based on the changes in Brazil.
Could the federal government pass legislation permitting airlines to have more DCA beyond slots and permit current companies to transfer their current in-perimeter slots to beyond slots allowing US Airways to fly non-stop between DCA and SAN, LAX, & SFO?
Will the PANYNJ allow US Airways to transfer its JFK-PHX route authroity to LGA, which would permit US Airways to close its JFK operation and average down NYC unit costs?
Could US Airways consolidate its Mainline, Shuttle, and much of its Express operations within LGA gates 1-10 and use its 3 remote parking slots off of gate 1; along with its remote spots near the old TWA hanger, to reduce most of its $71.4 million LGA terminal lease, utiity, and maintenance expense?
Who knows what will happen, but one thing is for sure. Negotiations have been on-going for almost two years and there must have been a lot of discussions between DL, US, PANYNJ, MWAA, and the DOT.
There will be more slots added at DCA which the feds control. PANYNJ doesn't care about balancing national competition and isn't going to add slots to do so.
US will be able to gain some longhaul service at DCA but so likely will other carriers.
Part of the value of the transaction is for DL to gain access to the US terminal at LGA... US' operation can be fit at the Marine Air Terminal which will allow DL to move its Shuttle into the same facility as the rest of the operation which will allow them to provide connections to/from the Shuttle, something it cannot do now because of the separate terminal location.
While that's true, what's in it for US? Star hasn't invited US to participate in the immunized joint venture between UA/CO, LH and other Star members where those members share revenue and expenses and coordinate schedules. US is on the outside, looking in, but not invited to the antitrust immunity reindeer games.
US will hold onto Star because it is the best option for them right now.... US along w/ DL are the only carriers with a presence in the non-FL SE markets and US must hold onto that strength.
US does make money because of its unique network contributions to Star but no it does likely receive as much money or have the control that immunized carriers have.
I still believe that any further consolidation involving US will likely also involve AA but the question is whether AA can gets its costs down to levels that allow them to be a decent financial partner to anyone. IN the process of AA getting its costs down, it is possible that US could become the acquiring airline even if the AA name is ultimately kept.... ala HP.