US/DL Overlap Issues

[whlinder]

USA Today:

According to a USA TODAY analysis of airline data from Back Aviation Solutions, a merged carrier would have 50% or more of the scheduled capacity in 111 markets in the USA. That's up from 55 markets for US Airways and 31 markets for Delta. Both carriers are strong in the East and South, so not surprisingly, many of the communities that would see the biggest loss of choice are there, too.

The analysis follows a bid Wednesday by US Airways to acquire Delta Air Lines for $4 billion in cash and for stock valued at about $4.7 billion. US Airways is seeking to acquire its bigger rival out of Chapter 11 bankruptcy. If successful, the merged airline would eclipse American as the world's largest.

Delta management has been resistant to any takeover bid, and says it prefers to emerge from bankruptcy reorganization next year as an independent carrier. Delta CEO Gerald Grinstein had previously rejected two private approaches from his counterpart at US Airways, Doug Parker.

The proposed deal would require approval from the bankruptcy court, federal antitrust officials and US Airways shareholders.

The USA TODAY analysis combines the number of seats currently offered by both carriers at airports across the country to identify areas of greatest impact. US Airways officials have said that the "New Delta" would trim current capacity by about 10%. It also plans to divest one of two Boston-New York-Washington, D.C., shuttles operated by US Airways and Delta.

According to the analysis:

•Six Eastern airports that now have competition would be served exclusively by the combined airline: Wilmington and Fayetteville, N.C.; Florence, S.C.; Huntington, W.Va.; Lynchburg, Va.; and Augusta, Ga.

U.S. airports where Delta and US Airways each has less than half the capacity, but where the combined airline would have more than 50%

Airport Delta US Airways Combined

Asheville, N.C 41% 35% 77%

Wilkes-Barre, Pa. 26% 48% 74%

Chattanooga, Tenn. 43% 28% 71%

Charleston, S.C. 37% 34% 71%

Charleston. W.Va. 28% 39% 67%

Savannah, Ga. 48% 18% 67%

State College, Pa. 23% 44% 66%

Binghamton, N.Y. 17% 49% 66%

Roanoke, Va. 25% 38% 63%

Greensboro, N.C. 30% 31% 62%

Huntsville, Ala. 42% 19% 61%

Bangor, Maine 39% 21% 60%

Erie, Pa. 15% 44% 58%

Reagan Washington, D.C. 15% 43% 58%

Columbia, S.C. 34% 24% 58%

Mobile, Ala. 44% 14% 58%

Pensacola, Fla. 48% 9% 57%

Myrtle Beach, S.C. 21% 36% 57%

Lexington, Ky. 44% 12% 56%

Greenville, S.C. 31% 25% 56%

Portland, Maine 24% 32% 55%

Allentown, Pa. 18% 35% 53%

Knoxville, Tenn. 34% 19% 52%

Richmond, Va. 25% 26% 51%

Harrisburg, Pa. 16% 34% 50%

Note: Based on scheduled seats on flights departing each airport this month. Does not take into account anticipated cutbacks by a merged airline. Source: USA TODAY analysis of OAG data provided by Back Aviation Solutions.

So am I to believe that the DOJ/DOT will have issues with this merger because 6 tiny markets will go from 2 carriers to 1, 24 small to mid-sized at best markets will have 1 carrier with more than 50% of the seats, and one airport in a major metro area will have its largest carrier go from 43% to 58%? (Nevermind that there are two other airports with major hub operations in that market, one of which is the most successful low-fare carrier in the country.)

If the DOJ/DOT has issues with that, that's ridiculous IMHO.

If cheap fares and multiple service options to those 30 towns is more important than allowing the industry to rationalize itself to allow for sustained profitability, then the government needs to subsidize the industry.

 

[pilot]

I believe the anit-trust matters refer to employees trusting management. Of course, I might be mistaken.

pilot

 

[Flying Titan]

Pretty good article from 11/17 USA Today. The newspaper hired Back Aviation Solutions to do an analysis of what impact a merger would have.

It found six airports in the southeast that are only served by US and DL (fewer than I expected). Obviously, this means that these airports would go down to just one carrier unless another airline decides to launch service there. It also shows that there are 25 airports in the east and south where the new airline would have more than 50% market share (also fewer than I expected).

USA Today article: "US Airways, Delta deal would cut options"

 

[whlinder]

I didn't see this thread and posted my comments on potential anti-trust issues here:

http://www.usaviation.com/forums/index.php...st&p=431551

Hopefully the mods will merge it into this topic.