EyeInTheSky
Veteran
Okay, I'll take a "stab" at it. Because there was US Airways news on CBS that night? 🙂
Us Airways Sees Jetblue, America West As Models
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EyeInTheSky said:
You may not like W, but you cannot blame him for the state of US Airways. Kerry wanted US Airways to "go away" during the merger years, and under the Bush administration the ATSB guaranteed the loan the allowed US to come out of Chapter 11 the first time, and is the source of cash that allows US to operate right now.
ITRADE
Veteran
/index.php...33&#entry100533
"Can you believe that I found the Quote from John Kerry, on an old USAirways Today! It was dated Monday Dec 11, 2000 and it states these exact words, 'US Sen. John Kerry says a US Airways bankruptcy, which could result in the loss of 45,000 jobs and service to many small and medium communities, is an acceptable alternative to the proposed merger between US Airways and United'. "
"Can you believe that I found the Quote from John Kerry, on an old USAirways Today! It was dated Monday Dec 11, 2000 and it states these exact words, 'US Sen. John Kerry says a US Airways bankruptcy, which could result in the loss of 45,000 jobs and service to many small and medium communities, is an acceptable alternative to the proposed merger between US Airways and United'. "
ITRADE
Veteran
Actually, here's a few more articles for Sentrido to digest:
"Airline Financial News
Monday, December 18, 2000
Vol. 18, Issue: 50
Kerry Says Demise Of US Airways Better Than Merger With United
Sen. John Kerry (D-MA) urged top government officials on Dec. 7 to reject the proposed merger between United Airlines (UAL) and US Airways (U), arguing that if a failure to merge causes the demise of US Airways, that would be better for the country than combining the two carriers.
Kerry also emphasized that if the government approves the merger, it would be hard not to approve follow-up merger proposals by other carriers. The likely result, he said, is that the so-called Big Six airlines would be reduced to the Big Three, substantially decreasing competition.
The senator made these points in identical letters to Rodney Slater, head of the Department of Transportation (DOT), and A. Douglas Melamed, acting assistant attorney general at the Department of Justice (DOJ).
One of the lessons learned from deregulation is that the mere threat of competition will not keep prices low, according to Kerry. He said that actual competition, often in the form of a new entrant or low-cost carrier such as Southwest Airlines (LUV), provides the only real check on pricing. He pointed out that fares on routes served by Southwest average 47 percent less than comparable routes, saving consumers billions of dollars a year. Although low fare carriers have demonstrated some success in keeping prices in check in certain markets, communities served by hub airports have consistently experienced higher prices, according to the letter.
DOT and DOJ will likely look into whether there would be a negative impact on competition if the merger request is denied. Kerry pointed out that there has been some speculation that if it is not allowed to merge with United, US Airways will not survive. He said it is important to note that despite the speculation, when the CEO of US Airways testified before the Commerce Committee, he did not assert that this merger was necessary for the company's ultimate survival. Furthermore, he said that even if US Airways did have to undergo reorganization in bankruptcy, a number of airlines have been in the same position and have remained competitive in the marketplace.
Worst-Case Scenario Not That Bad
Even in the worst-case scenario, if US Airways were to shut its doors permanently, the country would be left with five major carriers instead of six. But, unlike the situation that would arise if United and US Airways were to merge, a US Airways' departure from the marketplace likely would not trigger additional mergers, according to Kerry.
Moreover, he emphasized that US Airways' routes, slots, gate leases and other assets might be divided up between the remaining carriers or sold to a new entrant, spurring more, rather than less competition in the airline industry.
"Because of the serious public policy implications and the likely negative impact it would have on consumers, I believe that allowing this merger to proceed is contrary to the public interest and inappropriate at this time," the letters to the two agencies said.
DOT has found that in the absence of competition, a major carrier is able to charge fares that exceed its fares in non-hub markets of comparable distance and density by 40 percent, or at least $100 to $150 per round trip. Kerry stressed that dominant carriers in hub airports have many tools to drive out potential competitors. When a new entrant comes into a market, the incumbent carrier can, in the short term, increase capacity and lower prices to match the new competition. With the incumbent already able to offer better service such as frequent flier miles and preferable departure times, it is not long before the new carrier is unable to compete.
"Very often, the new carrier withdraws from the market, and the incumbent is then free to raise prices and decrease capacity to the previous level," Kerry said. "A merger of two major airlines would create a dominant carrier with even more resources at hand, magnifying its ability to engage in predatory practices at hub airports and reducing further the chances that new competition would be successful."
If the proposed United/US Airways merger is approved, the new airline would immediately become the dominant carrier. At this time, Kerry pointed out, United is the largest airline in the market, with a national market share of 20.6 percent, and US Airways is the sixth largest, with a national share of 6.8 percent. A merger of the two would create a company that would account for about 27.4 percent of departures nationwide.
By comparison, Delta, the number two carrier based on departures, accounts for 14.2 percent of the departures nationwide. A merger that creates an airline that is almost twice the size of its nearest competitor likely will trigger a round of additional mergers to enable other carriers to compete on more equal footing with the new United. ?
--------------------------------------------------
Winston-Salem Journal
Wednesday, December 13, 2000
WINSTON-SALEM JOURNAL; D
SENATOR ANGERS US AIRWAYS WORKERS; JOHN KERRY OPPOSES MERGER WITH UNITED AIRLINES
By Kevin Begos JOURNAL WASHINGTON BUREAU
Local US Airways workers are furious over recent statements by Sen. John Kerry, D-Mass., in opposition to a proposed merger between United Airlines and US Airways.
Kerry, who is a member of the Senate Commerce, Science, and Transportation Committee, sent a letter on Dec. 5 to Rodney Slater, the secretary of the U.S. Department of Transportation.
Buried amid three pages on deregulation, markets and consumers was a zinger of a sentence that nervous employees pounced on as insensitive, but Kerry's staff said was being distorted for political reasons and taken out of context.
"Finally, even if US Airways were to shut its door permanently, the country would indeed be left with five instead of six major carriers," Kerry wrote.
The comments come at a delicate time, because many think that the Department of Justice will deliver a ruling on the $11.6 billion proposed merger before a new administration takes office next month.
The Justice Department can approve or deny the merger, and attorneys general from a number of states are also considering lawsuits.
Political support in North Carolina has been firm, with the entire congressional delegation coming out in favor, with the exception of Democratic Sen. John Edwards, who has expressed concerns but not outright opposition.
US Airways employs more than 2,000 people in the Triad area, and Kerry's comments didn't go over well, said John Moore, executive vice president of Local 3640, Communications Workers of America.
"We thought it was very cold-hearted of him to make a statement like that," said Moore, who works for US Airways.
"If he were to speak to some people in North Carolina, he would have an earful."
Moore said that there's no glossing over the possible loss of livelihood for local workers.
"To lose these jobs, if US Air would go bankrupt, it would be detrimental to the entire city," he said. "It was a statement we didn't take kindly to, we really didn't like, and we feel offended."
Rep. Richard Burr, R-5th, issued a press release Monday blasting Kerry's comments. Burr supports the proposed merger.
"Kerry's assertion that the consumer would benefit if US Airways were to go under is irrational and irresponsible," Burr said, claiming that the opposition stemmed from Kerry's bad experiences at Boston's Logan airport. Burr used words like "unconscionable" and "convoluted logic" to describe Kerry's letter.
Kerry fired back a release yesterday, accusing Burr of playing loose with facts for political gain.
"It's easy to distort a 1,500 word letter in a 50 word press release, and Richard Burr has mastered that art in his permanent and self-serving campaign for higher office," said David Wade, Kerry's communications director. "His constituents deserve better. John Kerry never argued that it's good for consumers for US Airways to go out of business, nor did he suggest dismantling an airline based on anything going on at Logan Airport. Mr. Burr's statement is just patently false."
Wade said that US Airways never mentioned the possibility of going out of business if the merger isn't approved during Commerce Committee hearings.
"This megamerger would only give consumers fewer choices, higher fares and even worse customer service while making it harder and harder for working families to win decent wages," Wade said. "That is precisely what Sen. Kerry aims to avoid."
Burr disagreed that the merger would be bad for consumers, and came back to the issue of timing. "I think for a member of Congress to weigh in on the issue, it should have been done much earlier," he said.
"Airline Financial News
Monday, December 18, 2000
Vol. 18, Issue: 50
Kerry Says Demise Of US Airways Better Than Merger With United
Sen. John Kerry (D-MA) urged top government officials on Dec. 7 to reject the proposed merger between United Airlines (UAL) and US Airways (U), arguing that if a failure to merge causes the demise of US Airways, that would be better for the country than combining the two carriers.
Kerry also emphasized that if the government approves the merger, it would be hard not to approve follow-up merger proposals by other carriers. The likely result, he said, is that the so-called Big Six airlines would be reduced to the Big Three, substantially decreasing competition.
The senator made these points in identical letters to Rodney Slater, head of the Department of Transportation (DOT), and A. Douglas Melamed, acting assistant attorney general at the Department of Justice (DOJ).
One of the lessons learned from deregulation is that the mere threat of competition will not keep prices low, according to Kerry. He said that actual competition, often in the form of a new entrant or low-cost carrier such as Southwest Airlines (LUV), provides the only real check on pricing. He pointed out that fares on routes served by Southwest average 47 percent less than comparable routes, saving consumers billions of dollars a year. Although low fare carriers have demonstrated some success in keeping prices in check in certain markets, communities served by hub airports have consistently experienced higher prices, according to the letter.
DOT and DOJ will likely look into whether there would be a negative impact on competition if the merger request is denied. Kerry pointed out that there has been some speculation that if it is not allowed to merge with United, US Airways will not survive. He said it is important to note that despite the speculation, when the CEO of US Airways testified before the Commerce Committee, he did not assert that this merger was necessary for the company's ultimate survival. Furthermore, he said that even if US Airways did have to undergo reorganization in bankruptcy, a number of airlines have been in the same position and have remained competitive in the marketplace.
Worst-Case Scenario Not That Bad
Even in the worst-case scenario, if US Airways were to shut its doors permanently, the country would be left with five major carriers instead of six. But, unlike the situation that would arise if United and US Airways were to merge, a US Airways' departure from the marketplace likely would not trigger additional mergers, according to Kerry.
Moreover, he emphasized that US Airways' routes, slots, gate leases and other assets might be divided up between the remaining carriers or sold to a new entrant, spurring more, rather than less competition in the airline industry.
"Because of the serious public policy implications and the likely negative impact it would have on consumers, I believe that allowing this merger to proceed is contrary to the public interest and inappropriate at this time," the letters to the two agencies said.
DOT has found that in the absence of competition, a major carrier is able to charge fares that exceed its fares in non-hub markets of comparable distance and density by 40 percent, or at least $100 to $150 per round trip. Kerry stressed that dominant carriers in hub airports have many tools to drive out potential competitors. When a new entrant comes into a market, the incumbent carrier can, in the short term, increase capacity and lower prices to match the new competition. With the incumbent already able to offer better service such as frequent flier miles and preferable departure times, it is not long before the new carrier is unable to compete.
"Very often, the new carrier withdraws from the market, and the incumbent is then free to raise prices and decrease capacity to the previous level," Kerry said. "A merger of two major airlines would create a dominant carrier with even more resources at hand, magnifying its ability to engage in predatory practices at hub airports and reducing further the chances that new competition would be successful."
If the proposed United/US Airways merger is approved, the new airline would immediately become the dominant carrier. At this time, Kerry pointed out, United is the largest airline in the market, with a national market share of 20.6 percent, and US Airways is the sixth largest, with a national share of 6.8 percent. A merger of the two would create a company that would account for about 27.4 percent of departures nationwide.
By comparison, Delta, the number two carrier based on departures, accounts for 14.2 percent of the departures nationwide. A merger that creates an airline that is almost twice the size of its nearest competitor likely will trigger a round of additional mergers to enable other carriers to compete on more equal footing with the new United. ?
--------------------------------------------------
Winston-Salem Journal
Wednesday, December 13, 2000
WINSTON-SALEM JOURNAL; D
SENATOR ANGERS US AIRWAYS WORKERS; JOHN KERRY OPPOSES MERGER WITH UNITED AIRLINES
By Kevin Begos JOURNAL WASHINGTON BUREAU
Local US Airways workers are furious over recent statements by Sen. John Kerry, D-Mass., in opposition to a proposed merger between United Airlines and US Airways.
Kerry, who is a member of the Senate Commerce, Science, and Transportation Committee, sent a letter on Dec. 5 to Rodney Slater, the secretary of the U.S. Department of Transportation.
Buried amid three pages on deregulation, markets and consumers was a zinger of a sentence that nervous employees pounced on as insensitive, but Kerry's staff said was being distorted for political reasons and taken out of context.
"Finally, even if US Airways were to shut its door permanently, the country would indeed be left with five instead of six major carriers," Kerry wrote.
The comments come at a delicate time, because many think that the Department of Justice will deliver a ruling on the $11.6 billion proposed merger before a new administration takes office next month.
The Justice Department can approve or deny the merger, and attorneys general from a number of states are also considering lawsuits.
Political support in North Carolina has been firm, with the entire congressional delegation coming out in favor, with the exception of Democratic Sen. John Edwards, who has expressed concerns but not outright opposition.
US Airways employs more than 2,000 people in the Triad area, and Kerry's comments didn't go over well, said John Moore, executive vice president of Local 3640, Communications Workers of America.
"We thought it was very cold-hearted of him to make a statement like that," said Moore, who works for US Airways.
"If he were to speak to some people in North Carolina, he would have an earful."
Moore said that there's no glossing over the possible loss of livelihood for local workers.
"To lose these jobs, if US Air would go bankrupt, it would be detrimental to the entire city," he said. "It was a statement we didn't take kindly to, we really didn't like, and we feel offended."
Rep. Richard Burr, R-5th, issued a press release Monday blasting Kerry's comments. Burr supports the proposed merger.
"Kerry's assertion that the consumer would benefit if US Airways were to go under is irrational and irresponsible," Burr said, claiming that the opposition stemmed from Kerry's bad experiences at Boston's Logan airport. Burr used words like "unconscionable" and "convoluted logic" to describe Kerry's letter.
Kerry fired back a release yesterday, accusing Burr of playing loose with facts for political gain.
"It's easy to distort a 1,500 word letter in a 50 word press release, and Richard Burr has mastered that art in his permanent and self-serving campaign for higher office," said David Wade, Kerry's communications director. "His constituents deserve better. John Kerry never argued that it's good for consumers for US Airways to go out of business, nor did he suggest dismantling an airline based on anything going on at Logan Airport. Mr. Burr's statement is just patently false."
Wade said that US Airways never mentioned the possibility of going out of business if the merger isn't approved during Commerce Committee hearings.
"This megamerger would only give consumers fewer choices, higher fares and even worse customer service while making it harder and harder for working families to win decent wages," Wade said. "That is precisely what Sen. Kerry aims to avoid."
Burr disagreed that the merger would be bad for consumers, and came back to the issue of timing. "I think for a member of Congress to weigh in on the issue, it should have been done much earlier," he said.
EyeInTheSky
Veteran
N628AU, no I don't blame W for US Airways' problems. I do blame him for the high oil prices, which have subsequently put an already troubled industry into a nose dive. W is an oil man right? With all his knowledge of this industry why are oil prices so high under his tenure. Paul O'Neil former Treasure Secretary stated in his book "The Price of Loyalty" that oil prices would come down right before the election as Bush had a deal with the Saudi Royal Family. Again, we're starting to see that statement come into fruition. The world economy is angry at us right now. And, why is that? And, what can we do about it? Big questions indeed.N628AU said:
usair_begins_with_u
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Us Airways Sees Jetblue, America West As Customers For The Liquation Sale..
sentrido
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ITRADE
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Yah, its a political discourse. But you're not denying the fact that Kerry really wasn't that concerned if US survived or not.
Its a fact that SWA is looking at IFE... the LCCs are at rock bottom ticket prices..they can not go any lowe... they can no longer compete on price so its the amenities that they are starting to compete on. Jet blue is stealing passenger from SWA because for the same 49$ ticket jet blue will give you stuff like liveTV, XM radio....and on a long flight its great. The LCCs are starting to drive ticket sales based on amenities....
sentrido
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ITRADE said:
He was concerned enough to write a letter.Whatever thats worth. I'm not denying that Kerry thought not having the merger was better for consumers, even if USAirways failed. He did not want US Airways to "go away".And he did support the Loans that are keeping U afloat right now.I digress, sorry.My point is that its fair to critizize Kerry for not supporting the merger, I'ts nor fair to say that he "wanted U to go out of business".
L
luvn737s
Guest
USAir757 said:
Which is it? Is airline travel a commodity with no differentiation, or a premium product that commands a premium price? If it's a commodity (as I'm told over and over again it is on these boards) then the lowest cost provider that doesn't have it's certificate yanks for safety violations will set the price, regardless of where they actually fly.
BoeingBoy
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luvn,
In my opinion only, FWIW, air travel is not either although for a particular customer it can be.
All else being equal, will the once-a-year vacationer go for the lowest price - quite likely. But PineyBob is proof of the other extreme - willing to pay more for perceived value.
Not to mention that all else is seldom equal. Will that once-a-year vacationer pay some premium to fly from the local airport vs drive a couple of hours to get the cheapest ticket? Will the FF pay something more to fly on "his" or "her" airline? Etc.
What it boils down to is that each purchaser makes an individual dicision on the price/value equation.
One thing is certain, though. All else being reasonably equal, a large segment of the traveling public will decide based on price. The rest will provide some revenue premium for carriers they perceive as offering more "value".
Jim
In my opinion only, FWIW, air travel is not either although for a particular customer it can be.
All else being equal, will the once-a-year vacationer go for the lowest price - quite likely. But PineyBob is proof of the other extreme - willing to pay more for perceived value.
Not to mention that all else is seldom equal. Will that once-a-year vacationer pay some premium to fly from the local airport vs drive a couple of hours to get the cheapest ticket? Will the FF pay something more to fly on "his" or "her" airline? Etc.
What it boils down to is that each purchaser makes an individual dicision on the price/value equation.
One thing is certain, though. All else being reasonably equal, a large segment of the traveling public will decide based on price. The rest will provide some revenue premium for carriers they perceive as offering more "value".
Jim
EyeInTheSky said:
The high oil prices are affected by many factors, including:
(1) Soaring global demand, including from a red hot Chinese economy.
(2) Commodities traders speculating the price up.
(3) A recovering US economy driving more demand here at home.
(4) EPA regulations requiring cleaner burning fuel requiring oil companies to invest thier refinery technology.
If you believe Paul O'Neill, then you probably believe Terry McAuliffe saying that Karl Rove forged those National Guard records to embarass Kerry and the Dems.
Also, if O'Neill is correct, than why has there not been a major drop in prices? The 8 cent drop at the station in front of my house is not going to change anyone's voting pattern.
Light Years
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At this point "Livin On A Prayer" by Bon Jovi would be more appropriate.
