Will Parker negotiate

[roabilly]

[background=rgb(250, 250, 250)]There is no timeline on a DOJ decision. And, it's a misnomer that the corporate transaction requires DOJ and/or DOT approval. The DOJ and DOT's Anti-trust Divisions cannot approve or disapprove a merger. If the regulators want to see two companies not complete a corporate combination then the Feds must file a lawsuit to stop the merger from proceeding, but that is rarely done. In my opinion, what we are witnessing is public lobbying and third-party comments by the parties because Doug Parker is pushing back against any DCA slot sales because he does not want to see fare destabilization in US Airways' most profitable airport. In addition, we are also witnessing politicians in the Federal and State governments lobby for their own special interests, but, in my opinion, none of these actions will stop the merger from proceeding or closing on or about September 1st.[/background]

[background=rgb(250, 250, 250)]Why? Big business and big money want to see the deal to proceed as indicated by AMR & US Airways' equity price and option activity. If you look at US Airways' Call Option Volume and Put/Call Ratio traders expect a large move in the derivatives underlying security in the near-term.[/background]

[background=rgb(250, 250, 250)]Will the merger proceed? Maybe, maybe not, but the financial markets are bullish on the securities, the two companies are nearing the end of the regulatory review, it appears there is high stakes poker to eliminate or limit DCA slot divestiture, and AMR's POR Confirmation Hearing is scheduled to be held on August 15th, which is slightly more than 6 weeks away.[/background]

[background=rgb(250, 250, 250)]USA320Pilot [/background]

I agree 320...

What we are witnessing are the “politics”— not actual business acumen! Every Special Interest Group in every state will have something to say regarding the merger, but ultimately it WILL be competed. There may be a few modifications here and there because of these politics, but it will nevertheless be consummated!

 

[ChockJockey]

19 attorney generals are now investigating the merger. My belief is this is far from a done deal

State Attorney Generals have no authority or jurisdiction over the merger.

Attorneys general.

 

[nycbusdriver]

makes you wonder why they did the big slot deal with DL ... seems like that was all for a waste of capital.

Same reason Wolfe did the multibillion buyback of stock. Stupidity.

Can you imagine the LGA powerhouse AA would be with the US (now Delta) terminal and all those slots? Of course, that would still have been dependent on a management vision not being laser-focused on Ma and Pa Kettle.

 

[jimntx]

It still is!

Well, yes, but that's not it's official name. Now, it's Ronald Reagan National Airport.

 

[jimntx]

I think that you have overlooked the UA/CO combo at EWR....

No, I didn't. I didn't say just "slot-controlled" airports. Senator Leghorn does not have to fly out of EWR, and EWR is not operated by the Federal Department of Transportation. Big difference there.

It's why I said DCA is a special case. There are parameters that apply only to DCA and to no other airport in the U.S. And, underlying those parameters is the politics involved.

 

[700UW]

DCA is not operated by the Federal Government.

On June 7, 1987, Washington Dulles International and Washington National Airports were transferred to the Airports Authority under a 50-year lease authorized by the Metropolitan Washington Airports Act of 1986, Title VI of Public Law 99-500. All property was transferred to the Airports Authority and the Federal government holds title to the lease. Prior to the transfer, the airports were owned and operated by the Federal Aviation Administration in the U.S. Department of Transportation.

http://www.metwashairports.com/263.htm

They are operated by the Metropolitan Washington Airport Authority.

 

[ggiby]

No, but then neither UAL nor SW controlled over half the slots in a slot-restricted airport at the time of their mergers. Specifically, they did not control over half the slots at DCA. Give it a rest. DCA is a special case. Always has been. Always will be. Remember it used to be called National airport?

No other airport in the U.S. is directly controlled by the U.S. government. So, your question regarding Parker and negotiation is moot. The government does not have to negotiate with Parker or anyone else. If the DOJ decides that slots must be surrendered to the government, slots will be surrendered, or the merger will not go through. End of discussion.

Every member of Congress thinks that there should be non-stop service from DCA to East Podunk, Wherever. (Which just coincidentally happens to be where that particular Congressman lives. Trust me. That route has national security level importance. It's just a coincidence that Senator Foghorn Leghorn happens to live there. )

If you had be present at both the House, and Congress committee hearings, that would be a correct statement! Each state had reasons for wanting to keep service to their home state. They like to get home quick, and non stop! And would prefer National Airport over IAD, except for our VA Senator.... of course he is protecting IAD..... but our representatives use DCA..... The VA Senator wants to protect Va's investment in the improvements made their.

 

[jimntx]

DCA is not operated by the Federal Government.

They are operated by the Metropolitan Washington Airport Authority.

How cute! I find that level of naivete refreshing in someone your age. And, Congress (aka, the Federal Government) never interferes with the Airport Authority or lets politics determine the outcome of any issues.

And, the members of the Board of Directors for the Airport Authority are appointed by...(according the the Airport Authority's own website...wait for it)

The President of the United States
The Governor of Virginia
The Governor of Maryland
The Mayor of Washington, D.C.

Whew! No politics involved there.

 

[USA320Pilot]

States join US antitrust review of US Airways/American merger

It's not unusual for states to join a federal merger review. By doing so, officials can look out for their state's interests and take part in meetings and depositions conducted by the Justice Department. The states and the airlines signed a confidentiality agreement covering the review.

http://www.eastvalleytribune.com/money/article_24e3a0fe-e2e1-11e2-920d-001a4bcf887a.html


State AGs scrutinize US Airways-American Airlines merger

Officials of U.S. cities and states have conflicting worries about the merger, which would create the world’s largest airline. Past airline mergers have been followed by service cutbacks and shrinking jobs in some cities, despite promises from airline executives as they were lobbying for their deals. Each merger results in a state losing its airline headquarters, as Houston experienced when hometown carrier Continental Airlines Inc. merged with Chicago-based United Airlines Inc. in 2010. In the case of the proposed merger, the new company would have its headquarters in Fort Worth, with Phoenix suburb Tempe, home of US Airways, losing out.

http://www.dallasnews.com/business/airline-industry/20130701-state-ags-scrutinize-us-airways-american-airlines-merger.ece


Texas attorney general joins DOJ investigation into American-US Airways merger

The merger is expected to close in September but still needs government regulatory approval. The shareholders of US Airways are expected to vote on the merger at their shareholder meeting on July 12.

http://blogs.star-telegram.com/sky_talk/2013/07/texas-attorney-general-joins-doj-investigation-into-american-us-airways-merger.html

 

[USA320Pilot]

According to the East Valley Tribune, located in AZ, each State AG signed a confidentiality agreement with AMR and LCC covering their anti-trust review. I believe it's likely the state governments are politicking for their constituents and looking out for their state's interests. Previous mergers have seen companies rationalize their networks and reduce capacity to raise RASM to combat uncontrollable rising costs. Airports such as SJC, MEM, CVG, LAS, BNA, and PIT come to mind. In the case of AZ they're concerned about losing the CHQ operation in Tempe.

As the East Valley Tribune said, "It's not unusual for states to join a federal merger review. By doing so, officials can look out for their state's interests and take part in meetings and depositions conducted by the Justice Department."

700UW is right in that State AG's "have no authority or jurisdiction over the merger."

I believe the anti-trust review is about two things: Doug Parker trying to limit slot divestitures at the second most profitable hub in the U.S. and State AG's looking out for their interests by taking part in the DOJ's anti-trust meetings and depositions.

Finally, Doug Parker is doing exactly what those interested in the long-term interest of the New American Airlines want him to do -- take actions to improve the new company's profitability.

 

[PullUp]

Back during the proposed US/UAL merger that ultimately failed, the concern by the regulators was the domination of the "DC metro area market" by US and UAL. The "metro" area included Dulles, Baltimore, and National.
Utilizing the governments own argument in the present circumstance, the DOJ's alleged concerns have no merit as Southwest dominates BWI, and UAL dominates Dulles, offering the good citizens of the "DC metro area" ample competition.
I think there is a case to be made that US/AA should not have to give up any slots in DC.
Southwest has enough market penetration in the "DC metro area".

 

[USFlyer]

Unfortunately, the Government is rarely consistent in how it applies its analyses. The DCA argument can go both ways, depending on which combination of statistics and precedents you look at. If the DCA divestitures being requested end up being something that AA-US cannot accept, the next step is for the DOJ to sue to block the merger. Then, what happens will be up to a judge, which could be anyone's game at that point. My guess is everyone -- DOJ and AA-US -- will want to avoid this, so there will likely be some negotiated solution that makes no one happy but saves the expense of court proceedings.

 

[USA320Pilot]

[background=rgb(250, 250, 250)]One more point...[/background]

[background=rgb(250, 250, 250)]The 19 State Attorney Generals that have signed confidentiality agreements with AMR and US Airways are Arkansas, Arizona, California, Washington DC, Florida, Iowa, Illinois, Minnesota, Mississippi, Nebraska, New York, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, Wisconsin and West Virginia. Many of these states are concerned about losing non-stop service to DCA, facilities in their states, and employment, which affects business and taxes. And, some of these states have seen airline industry consolidation negatively affect their constituents in the past, which they obviously do not want to see happen again. [/background]

[background=rgb(250, 250, 250)]As the East Valley Tribune said, "It's not unusual for states to join a federal merger review. By doing so, officials can look out for their state's interests and take part in meetings and depositions conducted by the Justice Department."[/background]

[background=rgb(250, 250, 250)]As the regulatory review draws to a close I believe you are seeing interested parties lobby for their own special interests whether it be to keep a corporate presence in their home states, non-stop service to DCA, try to preventing maintenance facility closure (PIT & TUL for example), or the two companies competitors attempting to capitalize on the corporate transaction to try to obtain additional assets. [/background]

 

[DCaf]

Well, yes, but that's not it's official name. Now, it's Ronald Reagan National Airport.

Actually Jim, it's Ronald Reagan Washington National Airport.

 

[jimntx]

Let's just call it Ham-and-Cheese-Sandwich Airport. It doesn't change the fact that you can not say that the rules are being applied differently in the same situation as other mergers. DCA is a special case. You can protest all you want that US, AA, or both are being treated unfairly compared to other mergers. See if that stops the DOJ investigations one day earlier.