D
DallasConehead
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Isn't it sad, politicians put everything on hold so they can get cheaper seats in and out of DC.
Word is AA/US have settled with the DOJ
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MetalMover
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Well, there you have it folks, the oracle of Delta has spoken.WorldTraveler said:
Hey WT, since you can predict the future, would you mind giving me the numbers for the MegaMillions lottery?
WorldTraveler
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I don't do lotteries....
but I will say what should be obvious... AA mismanaged its network for years in the name of avoiding BK and has watched its presence in key markets shrink. US was overwhelmed by both larger competitors and by LFCs which forced US into niche hubs around the country.
Now, AA and US thought they could merge and create enough mass to overcome the 10 years of competitive losses they have suffered. The DOJ has just handed AA/US' competitors license to do more damage to AA/US than any competitor could hope to obtain in their wildest dreams.
If you want to believe that AA/US together will be all they have advertised to you they will be, then I certainly don't want to be the one to bust your bubble. But I will tell you that the basic fundamentals of making this merger work are now harder than any other competitor has ever faced.
- AA/US still have significant strategic shortcomings including in NYC and Asia.
- there are still massive labor integration challenges ahead including thousands - if not tens of thousands - or excess employees
- the usual customer service and technology issues.
- debt levels and financial commitments that are the largest in the industry by a very wide margin
- and costs that are significantly higher than other competitors including the low fare carriers as well as DL who will be increasing their presence in AA/US markets.
If you don't want to see the enormous challenge ahead of you, then you probably should keep your eyes closed. But for anyone who wants to see it, this merger and the settlement it took to get it approved present challenges which appear impossible to overcome in totality.
but I will say what should be obvious... AA mismanaged its network for years in the name of avoiding BK and has watched its presence in key markets shrink. US was overwhelmed by both larger competitors and by LFCs which forced US into niche hubs around the country.
Now, AA and US thought they could merge and create enough mass to overcome the 10 years of competitive losses they have suffered. The DOJ has just handed AA/US' competitors license to do more damage to AA/US than any competitor could hope to obtain in their wildest dreams.
If you want to believe that AA/US together will be all they have advertised to you they will be, then I certainly don't want to be the one to bust your bubble. But I will tell you that the basic fundamentals of making this merger work are now harder than any other competitor has ever faced.
- AA/US still have significant strategic shortcomings including in NYC and Asia.
- there are still massive labor integration challenges ahead including thousands - if not tens of thousands - or excess employees
- the usual customer service and technology issues.
- debt levels and financial commitments that are the largest in the industry by a very wide margin
- and costs that are significantly higher than other competitors including the low fare carriers as well as DL who will be increasing their presence in AA/US markets.
If you don't want to see the enormous challenge ahead of you, then you probably should keep your eyes closed. But for anyone who wants to see it, this merger and the settlement it took to get it approved present challenges which appear impossible to overcome in totality.
nycbusdriver
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Jacobin777 said:
Why do you think it will take that long? 6 months....max.
MetalMover
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When did you become the expert on everything AA related?WorldTraveler said:
You seem the to be the only one here getting so bent out of shape with the merger settlement that you are predicting nothing but dire results.
Why don't you do us all a favor, and go back the the Delta board and disappear for a while and come back if your Nostradamic gloom and doom predictions come to fruition.
What you think or say has no more validity than what anyone else thinks or says. I don't know when you became the final say.
Consultants and analysts and people like you are fancy spin doctors. No one is always right. You are no exception!
You win, WT..Delta is the best airline in the history of aviation and for eons to come..
We get it..you win!
robbedagain
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The new aa will control 57 percent at dca slightly more than the current usairways 55 slots held
WorldTraveler
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I'm not bent out of shape with the merger settlement.
I have said for years... perhaps you have missed it - that AA and US have both made major strategic failures over the past ten years that have weakened themselves.
They now want to merger as if that will undo all of the damage they have suffered.
AA/US labor supported this merger merely out of the hope that they would win a payback at some point.
Despite the fact that the merger settlement is cutting out millions of dollars in revenues and introducing vast amounts of new competition, AA/US leaders are saying that the merger benefits will be the same as before.
Validity is determined by proven results.
When you can come back here in a couple years after the WA falls, after DCA is opened to scores of new flights from competitors, after Open Skies in Latin America arrive, after the DL-VS joint venture has a chance to provide meaningful competition to AA/BA in the NYC-LHR market, then we can talk about who wins or not.
But the notion that this merger is suddenly going to wipe away all of this structural disadvantages AA and US eac h had before is more than a little fanciful.
I'm sure you will let me know if I was wrong. And I welcome you to do so.
robbed,
the number of slots is meaningless given that there will be significant new competition and vast restrictions about where AA/US have to fly and with what types of aircraft both at DCA and other hubs. Also, it is certain that low fare carriers will use large aircraft than US and AA have used which means that the percentage of SEATS will be a lot lower. Remember all those arguments that Parker made about US using smaller aircraft in order to serve smaller markets?
Now AA/US will have to use their slots a whole lot more efficiently against low fare carriers. Fares and profitability will fall.
DL and UA don't have those types of restrictions nor did they have to divest assets of that magnitude in their best hubs in order in order to get their mergers approved.
I have said for years... perhaps you have missed it - that AA and US have both made major strategic failures over the past ten years that have weakened themselves.
They now want to merger as if that will undo all of the damage they have suffered.
AA/US labor supported this merger merely out of the hope that they would win a payback at some point.
Despite the fact that the merger settlement is cutting out millions of dollars in revenues and introducing vast amounts of new competition, AA/US leaders are saying that the merger benefits will be the same as before.
Validity is determined by proven results.
When you can come back here in a couple years after the WA falls, after DCA is opened to scores of new flights from competitors, after Open Skies in Latin America arrive, after the DL-VS joint venture has a chance to provide meaningful competition to AA/BA in the NYC-LHR market, then we can talk about who wins or not.
But the notion that this merger is suddenly going to wipe away all of this structural disadvantages AA and US eac h had before is more than a little fanciful.
I'm sure you will let me know if I was wrong. And I welcome you to do so.
robbed,
the number of slots is meaningless given that there will be significant new competition and vast restrictions about where AA/US have to fly and with what types of aircraft both at DCA and other hubs. Also, it is certain that low fare carriers will use large aircraft than US and AA have used which means that the percentage of SEATS will be a lot lower. Remember all those arguments that Parker made about US using smaller aircraft in order to serve smaller markets?
Now AA/US will have to use their slots a whole lot more efficiently against low fare carriers. Fares and profitability will fall.
DL and UA don't have those types of restrictions nor did they have to divest assets of that magnitude in their best hubs in order in order to get their mergers approved.
robbedagain
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Iam at us has never supported the merger wt
WorldTraveler
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except that you really don't know that nor does the difference in a couple percentage really affect buying choice anyway.700UW said:
You and others have touted for months that AA/US would be larger even though many of us said they would have to divest significant assets.
Parker and co. are now saying that the revenues will be unchanged and AA/US will still be the largest even after competitors move into what they called US' highest margin hub?
What kind of crack do you smoke if you think that you can dump thousands of seats into a market, hand even more over to competitors, and we are supposed to think that all will be just like it was before?
It also doesn't change that other competitors were making moves regardless of what happened to AA/US.
How are all of those new flights that AA is launching to Star hubs going to do from CLT after US is no longer in Star?
How much revenue loss will AA see because of the WA in Dallas? E and others think its negligible but history shows that AA isn't the dominant carrier in any single market from the combined DAL/DFW market that WN can now serve from DAL. At best AA has half of the local market.
And it also doesn't change that other carriers will be adding capacity in key AA/US markets precisely because they aren't going to allow the merger to take away any opportunities.
If you don't believe it, buckle your seat belts.
I'm getting the popcorn as I watch the theater itself turn into a slugfest....
MetalMover
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Bingo...AANOTOK said:
But then again, I am sure that the messianic Delta is immune to increased competition.
Amazing how he can predict the future.....
WorldTraveler
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except that DL's hubs are built in heavily competitive markets and DL has made gains despite that.
Don't forget that ATL has been a two hub city for decades and now WN has chosen to bring it down to the smallest 2nd carrier size ATL has seen in a very long time.
DL's presence at both LGA and JFK has happened despite heavy competition, including from AA.
SLC is stable and DL still is much larger than WN.
in complete contrast, most of AA/US' top hubs are all in markets where there is limited low fare competition... DCA, CLT, MIA, and DFW.
It is new AA that will be facing massive amounts of new competition and it will all be happening at the same time.
It is AA's creditors and US' board who are scared to death of the implications of all that new competition coming to two airlines that have a poor history of standing up to competition.
and the reason why DL is able to stand up to competition is because DL has continually focused on running the lowest cost but highest revenue operation.
Do you realize that DL receives $1.12 in domestic revenue for every $1 that DL receives?
At the same time, DL is spending 10% less than UA to generate that same revenue, 6% less than AA/US, and only 1% higher than WN?
The numbers are clearly in DL's favor when it comes to standing up to competition and for DL to be AA/US' competition just as it has been for the past ten years as DL has moved massive amounts of revenue from AA and US to DL.
It will continue.
Don't forget that ATL has been a two hub city for decades and now WN has chosen to bring it down to the smallest 2nd carrier size ATL has seen in a very long time.
DL's presence at both LGA and JFK has happened despite heavy competition, including from AA.
SLC is stable and DL still is much larger than WN.
in complete contrast, most of AA/US' top hubs are all in markets where there is limited low fare competition... DCA, CLT, MIA, and DFW.
It is new AA that will be facing massive amounts of new competition and it will all be happening at the same time.
It is AA's creditors and US' board who are scared to death of the implications of all that new competition coming to two airlines that have a poor history of standing up to competition.
and the reason why DL is able to stand up to competition is because DL has continually focused on running the lowest cost but highest revenue operation.
Do you realize that DL receives $1.12 in domestic revenue for every $1 that DL receives?
At the same time, DL is spending 10% less than UA to generate that same revenue, 6% less than AA/US, and only 1% higher than WN?
The numbers are clearly in DL's favor when it comes to standing up to competition and for DL to be AA/US' competition just as it has been for the past ten years as DL has moved massive amounts of revenue from AA and US to DL.
It will continue.
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