blackbox348

Rates aside, what’s your thoughts on the DOT delay?

Rama

The DOT apparently has some issue with transferring the international route authorities to AAG.

PineappleXpres

17 days since DOJ ruling. May have to sift through the Hawaii State official 3 concerns, United’s concerns, and the consumer effects of the transfer of international routes. Seems like we are in the ball park of at least a month.

Were Virgin’s international routes as different as Hawaiians? Seems like a poor comparison. Think this is about complexity rather than political stonewalling. That time has passed. All the big legacy carriers had similar reach (Europe to Asia). Southwest AirTran were regional Mexico/Caribbean like Virgin/Alaska. My half a cent.

FriendlyPilot

Those other airline mergers were under more friendly administrations. The current doctrine is that any company getting larger through merger is bad for consumers and government needs to step in to protect consumers. It wasn't like that the last 30 years.

DenainaPilot

Then why didn’t the DOJ do something?

av8tor55

Let me guess, you were one too?

rickair7777

If this is fundamentally political, here's my suspicions...

In late spring AS and DOJ agreed to a timeline for merger review:
a) AS would not consumate the merger financially for a period of 90 (IIRC) days.
b) DOJ commits to completing the review within that period, and making a decision (to do nothing as it turned out).

DOJ may have intended to torpedo the deal, but knew they had to go through some official looking motions first or maybe they actually wanted to consider what Island people thought.

Then there was this big debate on TV, all the associated political fallout, and the current regime is on the ropes with an election looming.

DOJ is now committed to a timeline, that runs out before the election, but their political bosses don't want negative economic publicity. DOJ gets ordered to not block, but is given some leash to squeeze for concessions. They cannot stall indefinitely because they already agreed to a timeline. While AS can (and did) agree to mutually extend the timeline it would not be in AS's interest to extend it for long, especially past the election.

That might explain DOJ's passive aggressive behavior of letting the clock run out without any comment.

Now the angry activists at justice scurry across the street to conspire with the mayor Pete and the angry activists at DOT...

DOT has no hard timeline, so they might possibly decide to stall the regulatory process until at least after the election. If they lose the election, they can block it out of spite (or drag it out to Jan), even though they know that it will get just approved anyway after Jan 20th. If they win the election (and thereby get to keep their jobs), they have two obvious strategies to try to block...

1) DOT attempt to block based on whatever bureaucrat reasons they can cook up. This is likely hard to do since they do not have an anti-trust mandate and de-regulation explicitly ties their hands, so they could very well lose in court... OR
2) DOJ could just go back on their word and file a lawsuit, which might succeed based on NK/B6 precedent.

If the plan is option 2), they may *need* mayor Pete to drag it out past the election. If the merger is financially consumated, and integration begins, the courts might be less willing to put the toothpaste back in the tube. Judge could easily find that DOJ should have blocked it when they had the chance (politically expedient timing will not be a legit excuse why they didn't). In the law, the timeliness of a complaint matters.

My operating assumption is that DOJ/DOT are hostile to this merger and will still try to block it, if they can navigate the legal and political landmines. The SCOTUS Loper ruling probably creates a lot of uncertainty in beltway bureaucratic minds... they probably want to be pretty darn sure of themselves before they test the Loper waters, and risk setting even worse precedent for the future exercise of their unelected power.


Disclaimer: The political motive is all hypothetical speculation on my part, with no evidence other than DOJ's odd behavior at the end of the review period, DOT's unusual delay, and management's reserved reaction to the review clock running out. My DC insider buddy is too busy running for election (and losing) to bother with questions like this right now. Maybe I'll get the scoop later this year.

sawdustking

My take is: the government is just being slow. Seemed to be the case with the DOJ as they didn't want any consessions.

rickair7777

That's what Occam's razor says normally, but given B6/NK (block the merger regardless of consequences) and the fact that Kanter is a long-time professional anti-trust activist leads me to be suspicious. But I don't know.

PineappleXpres

This seems plausible, but it’s unclear if that would be for optics or actually stopping this. What their goal ultimately is. And toothpaste has already been let out of the tube. The DOT, no so fast, could only be effective if Alaska says no to the whole thing if they think they aren’t getting what they thought they were. Nothing here seems material or in their wheelhouse.

I wonder how much the Jet Blue/Spirit block has poisoned the minds of speculators. It’s something, but not everything.