American Airlines / US Airways merger

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jis said:
Trogdor said:
RDU barely has any non-hub routes. In fact, once you merge the two networks, London would be the only non-hub route (and I'm almost certain that route is for some corporate contract AA has, otherwise it wouldn't make any sense at all to maintain it).
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IBM
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No, GlaxoSmithKline. They subsidize the route to connect their US headquarters in Research Triangle Park with corporate headquarters in London.
 
PRR 60 said:
Doug Parker (CEO of US and future CEO of the new AA) has been non-commital about the livery. When asked if the new AA scheme will be used for the merged carrier, he said it was among the items to be decided. I hope he decides to come up with something else, at least for the tail. It's hideous.
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Still up in the air:

http://skift.com/2013/03/26/american-airlines-new-design-not-a-done-deal-post-merger-says-incoming-ceo/

American Airlines shouldn’t let the paint dry on that new livery design: Incoming American CEO Doug Parker, who currently heads US Airways, told employees the livery issue is “one of the integration issues we need to work through…”
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Ryan said:
PRR 60 said:
Doug Parker (CEO of US and future CEO of the new AA) has been non-commital about the livery. When asked if the new AA scheme will be used for the merged carrier, he said it was among the items to be decided. I hope he decides to come up with something else, at least for the tail. It's hideous.
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Still up in the air:

http://skift.com/2013/03/26/american-airlines-new-design-not-a-done-deal-post-merger-says-incoming-ceo/

American Airlines shouldn’t let the paint dry on that new livery design: Incoming American CEO Doug Parker, who currently heads US Airways, told employees the livery issue is “one of the integration issues we need to work through…”
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Good....let's hope they come up with something better. I was about to say anything would be better, but then there's that old caveat--be careful what you wish for....so, who knows?
 
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In an unexpected move, DoJ says "NO!".

This should be interesting...

http://thepointsguy.com/2013/08/us-justice-department-suing-to-block-american-us-airways-merger/

In a surprising move today that shocked industry analysts and sent US Airways’ stock value plummeting more than 10% and American’s by as much as 30%, the US Department of Justice announced that it is suing to block the merger of US Airways with American, which had been proceeding smoothly up until this point.
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The suit says, “The merger, which would result in the creation of the world’s largest airline, would substantially lessen competition for commercial air travel in local markets throughout the United States and result in passengers paying higher airfares and receiving less service.” Though this issue is a bit murky since as this CNN Money article points out, a PricewaterhouseCoopers study found airfares have only risen 2% per year on average since 2004, and there have been several major mergers since then including those of Delta and Northwest, and the United-Continental merger.
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Domestic fares that used to cost around $250 are now running me $450 or more. Intercontinental fares that used to cost me $800-950 are closer to $1,400 today. In addition to that the fare itself covers even less of your travel related fees than it used to. So, where is this 2% nonsense coming from? I trust the airline industry about as much as I trust Fox News, so color me skeptical that these numbers are anything close to transparent. To be perfectly frank I like having more options rather than fewer and there's already been more than enough consolidation in the US air market. Most flights are full or nearly full these days with few empty seats. US and AA have different alliances with different rules that work better when they have to compete with each other.
 
Hit me with the paddles! I never thought DOJ would give it a thumbs down. I can't say I'm sorry, but it sure seemed like a done-deal.

Somebody buy Doug Parker a drink!
 
I wouldn't be too quick to think the merger is not going to happen....maybe just a bit of posturing by the DOJ to show they are 'on-the-job'.....

As Yogi would say: "It aint over, till it's over".....I believe it will happen, with perhaps AA and US throwing in a few more concessions to insure more competition.
 
Concession I would require: The merged airline cannot use the new AA livery. Having those hideous tails all over PHL would be an assault on the senses.
 
PRR 60 said:
Concession I would require: The merged airline cannot use the new AA livery. Having those hideous tails all over PHL would be an assault on the senses.
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True this and with both Airlines finishing consistently Low in Satisfaction Polls, hopefully a Merger wouldnt result in even worse Service to go along with the Hideous Makeover Paint Job on the AA Planes! :help:
 
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This merger isn't that big of a problem. The DoJ should just let it proceed. There's plenty of carriers out there to fight the new AA and it could use the combined capital for a makeover.

They should never have changed the livery. NEVER!
 
Swadian Hardcore said:
This merger isn't that big of a problem. The DoJ should just let it proceed. There's plenty of carriers out there to fight the new AA and it could use the combined capital for a makeover.
They should never have changed the livery. NEVER!
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Agreed. On both counts.....
 
There is a Steven Pearlstein column in today's Washington Post that provides some insight into the DOJ decision: Why the Justice Department blocked the American-US Airways merger. It is now up to the US Airways & American legal team to convince that he/she should overrule the DOJ to allow the merger to proceed. I have not followed the merger story or what has been going on in the airline industry closely, but the attempts to try to damper the price and city pair competition are interesting. An excerpt:

One pillar of the government’s case concerns US Airways’ current Advantage Fare program, in which it has defected from the industry practice and prices one-stop trips at a 40 percent discount from the non-stop flights offered by competitors. In a truly competitive market, of course, all carriers would do that, reflecting the significant value passengers assign to non-stop service. But the other airlines have a tacit agreement not to “undercut” each other’s non-stop fares. US Airways has refused to play along. The government cites e-mails and analyses from American and US Airways executives suggesting Advantage Fares will go the way of free baggage check once the merger is complete.
The government suit also shines a spotlight on another cute industry practice that goes by the name of “cross-market initiative.” An example: Back in 2009, US Airways lowered fares and relaxed restrictions on flights from Detroit, then a Delta/Northwest stronghold, to Philadelphia. Delta responded by lowering its fares on US Airways’ lucrative Boston-Washington route. US Airways’ pricing team got the message loud and clear and concluded it had far more to lose by going ahead with the Philly-Detroit move and walked it back.

Among the more embarrassing documents unearthed by the government was a string of e-mails among US Airways executives from 2010 complaining about a new “triple miles” promotion launched by Delta as it sought to move into new markets and bring some mothballed planes back into service. US Airways chief executive Douglas Parker complains that the aggressive move would hurt the profits not just at Delta but at all the other airlines that would be forced to match it. Then he suggests bringing pressure on Delta by contacting industry analysts to have them criticize the move. To reinforce the point, Parker even sent the e-mail string to Delta’s chief executive, who quickly remonstrated Parker for his ham-handed attempt at price fixing and forwarded the whole thing to his general counsel.
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How are the airlines supposed to lower fares if most of them are losing money? It's better for US Airways to play along for fair competition's sake. The Advantage Fares are unfair and cause losses for US because it's impossible to have lower operating costs with a one-stop flight then a non-stop flgiht.

Most of these problems are caused by US. AA is recovering nicely, but US could get squished by the others if it dosen't merge with AA. I think AA should take over US instead of vice versa, because Doug Parker seems to be a terrible airline executive.

For consumers, it's better to let them merge into a new big AA. Don't think UA and DL are minor competitors. The industry is still ruinous and essentially killing itself slowly until only a few majors remain.
 
If you read many of the reply's to that Washington Post blog, you will see some very strong pro-merger arguments and logic. And a good petition drive to ask the DOJ to drop their objection with valid reason.

I don't think that the merger will eliminate competition. Even with three strong legacy carrier's after such a merger, you would still have the likes of Southwest, JetBlue, Alaska, and others growing. And if that still is not enough, the government could always modify regulations preventing foreign airlines from competing here domestically.....
 
railiner said:
If you read many of the reply's to that Washington Post blog, you will see some very strong pro-merger arguments and logic. And a good petition drive to ask the DOJ to drop their objection with valid reason.
I don't think that the merger will eliminate competition. Even with three strong legacy carrier's after such a merger, you would still have the likes of Southwest, JetBlue, Alaska, and others growing. And if that still is not enough, the government could always modify regulations preventing foreign airlines from competing here domestically.....
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Oh god, think about the likes of BA, LH, or QF flying US Domestic! QF still does the JFK-LAX, but no tickets are sold on that segment, only through to SYD.

Besides, can't US secretly reduce the Advantage Fares to a discount of 20% or less? It would still undercut the other prices, while possibly recovering more costs.

And US sure is acting a lot like an LCC right now.
 
Since PHL is my home airport, I fly US a lot. I've never heard of "Advantage Fares."

In what way is US acting like an LCC (other than using "LCC" as their stock code)? US fares are only low when competition dictates. PHL-BOS was $400 each way until jetBlue entered the market with low fares in May. Now the fare can be under $100. US is in no way, shape, or form a "low cost carrier', at least if that means cost to the customer.
 
PRR 60 said:
Since PHL is my home airport, I fly US a lot. I've never heard of "Advantage Fares."
In what way is US acting like an LCC (other than using "LCC" as their stock code)? US fares are only low when competition dictates. PHL-BOS was $400 each way until jetBlue entered the market with low fares in May. Now the fare can be under $100. US is in no way, shape, or form a "low cost carrier', at least if that means cost to the customer.
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Exactly the thing I was wondering about. US Airways behaves exactly like any of the other legacy carriers as far as fare policy goes. It is another matter that some other legacy carriers are able to command higher premium than US obn certain routes for reasons that I don't quite understand.
 
I don't consider US as quite an exact 'legacy carrier' in the sense that AA, UA, and DL are.....

US Air evolved not from a so-called 'trunk carrier', but rather from Allegheny Airlines, a regional carrier.

And they merged with America West, which I think of as a LCC........
 
Swadian Hardcore said:
railiner said:
If you read many of the reply's to that Washington Post blog, you will see some very strong pro-merger arguments and logic. And a good petition drive to ask the DOJ to drop their objection with valid reason.
I don't think that the merger will eliminate competition. Even with three strong legacy carrier's after such a merger, you would still have the likes of Southwest, JetBlue, Alaska, and others growing. And if that still is not enough, the government could always modify regulations preventing foreign airlines from competing here domestically.....
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Oh god, think about the likes of BA, LH, or QF flying US Domestic! QF still does the JFK-LAX, but no tickets are sold on that segment, only through to SYD.

Besides, can't US secretly reduce the Advantage Fares to a discount of 20% or less? It would still undercut the other prices, while possibly recovering more costs.

And US sure is acting a lot like an LCC right now.
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Where's the "Oh God" coming from? No, really...I'd get that if RyanAir got in on the game, but not most of the major airlines.

The only issue I can sort-of see with a few foreign carriers is that some of them do have fairly protected markets, and I believe a few (not European at this point due to EU rules IIRC) may get government support of one kind or another...so you could see some fair competition issues there. Just as I would have no problem with VIA running a train to New York (actually, I think a lot of us would go ape over it!), I don't see issues with foreign competitors running airline services in the US as long as they're not getting oodles of protection somewhere else.
 
Anderson said:
Swadian Hardcore said:
railiner said:
If you read many of the reply's to that Washington Post blog, you will see some very strong pro-merger arguments and logic. And a good petition drive to ask the DOJ to drop their objection with valid reason.
I don't think that the merger will eliminate competition. Even with three strong legacy carrier's after such a merger, you would still have the likes of Southwest, JetBlue, Alaska, and others growing. And if that still is not enough, the government could always modify regulations preventing foreign airlines from competing here domestically.....
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Oh god, think about the likes of BA, LH, or QF flying US Domestic! QF still does the JFK-LAX, but no tickets are sold on that segment, only through to SYD.

Besides, can't US secretly reduce the Advantage Fares to a discount of 20% or less? It would still undercut the other prices, while possibly recovering more costs.

And US sure is acting a lot like an LCC right now.
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Where's the "Oh God" coming from? No, really...I'd get that if RyanAir got in on the game, but not most of the major airlines.

The only issue I can sort-of see with a few foreign carriers is that some of them do have fairly protected markets, and I believe a few (not European at this point due to EU rules IIRC) may get government support of one kind or another...so you could see some fair competition issues there. Just as I would have no problem with VIA running a train to New York (actually, I think a lot of us would go ape over it!), I don't see issues with foreign competitors running airline services in the US as long as they're not getting oodles of protection somewhere else.
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Agreed. The US government would probably only "open our skies" to airlines whose home countries would grant similar opportunities to US carrier's....
 
railiner said:
Anderson said:
Swadian Hardcore said:
railiner said:
If you read many of the reply's to that Washington Post blog, you will see some very strong pro-merger arguments and logic. And a good petition drive to ask the DOJ to drop their objection with valid reason.
I don't think that the merger will eliminate competition. Even with three strong legacy carrier's after such a merger, you would still have the likes of Southwest, JetBlue, Alaska, and others growing. And if that still is not enough, the government could always modify regulations preventing foreign airlines from competing here domestically.....
Click to expand...
Oh god, think about the likes of BA, LH, or QF flying US Domestic! QF still does the JFK-LAX, but no tickets are sold on that segment, only through to SYD.

Besides, can't US secretly reduce the Advantage Fares to a discount of 20% or less? It would still undercut the other prices, while possibly recovering more costs.

And US sure is acting a lot like an LCC right now.
Click to expand...
Where's the "Oh God" coming from? No, really...I'd get that if RyanAir got in on the game, but not most of the major airlines.

The only issue I can sort-of see with a few foreign carriers is that some of them do have fairly protected markets, and I believe a few (not European at this point due to EU rules IIRC) may get government support of one kind or another...so you could see some fair competition issues there. Just as I would have no problem with VIA running a train to New York (actually, I think a lot of us would go ape over it!), I don't see issues with foreign competitors running airline services in the US as long as they're not getting oodles of protection somewhere else.
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Agreed. The US government would probably only "open our skies" to airlines whose home countries would grant similar opportunities to US carrier's....
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The "Oh God" comes from the possibility of even more ruinous competition in the airline industry.

AmtrakBlue said:
<blockquote class='ipsBlockquote'data-author="CHamilton" data-cid="462591" data-time="1376856316"><p><blockquote class='ipsBlockquote'data-author="Anderson" data-cid="462583" data-time="1376855750"><p>Where's the "Oh God" coming from? No, really...I'd get that if RyanAir got in on the game, but not most of the major airlines.</p></blockquote>

Ryan, are you planning an airline? :p <span style='font-size: 14px;'> Oh, wait...</span></p></blockquote>

Or maybe he's just full of air. :lol:
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What's this?
 
railiner said:
The US government would probably only "open our skies" to airlines whose home countries would grant similar opportunities to US carrier's.
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Thanks to asymmetrical bilateral agreements US carriers often have rights of carriage in other countries that foreign carriers either do not have or cannot make practical use of here. If you look at the history of international travel agreements US carriers have benefited greatly from the disproportionate power of their government to set the terms largely in their favor. Even in cases where the agreements would appear to limit the rights of US carriers they are sometimes overridden or simply ignored.
 

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