Any "Latest & Greatest" about Delta?
08-17-2013, 11:52 AM
Gets Weekends Off
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Flying clubs are a great way to go. The Cub club I'm in is $50/mo plus $50/tach hour, fuel included. Cheapest possible way to fly, other than ultralights. And the Cub is just a hoot. I expect that when/if we decide we want something faster, I'll join a club that has a 182RG or equivalent, or search for some partners. Most of us don't fly enough for sole ownership to make sense, and nothing is worse for planes than sitting unused.
08-17-2013, 12:08 PM
veut gagner à la loterie
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So just saw an investment news article that mentioned deregulation has backfired.
Question, could they ever break up airlines like they did AT&T?
Question, could they ever break up airlines like they did AT&T?
08-17-2013, 12:09 PM
veut gagner à la loterie
Joined APC: Apr 2008
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Posts: 23,286
Flying clubs are a great way to go. The Cub club I'm in is $50/mo plus $50/tach hour, fuel included. Cheapest possible way to fly, other than ultralights. And the Cub is just a hoot. I expect that when/if we decide we want something faster, I'll join a club that has a 182RG or equivalent, or search for some partners. Most of us don't fly enough for sole ownership to make sense, and nothing is worse for planes than sitting unused.
08-17-2013, 12:10 PM
The Brown Dot +1
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08-17-2013, 12:43 PM
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US vs USAirways
INTRODUCTION
INTRODUCTION
1. Millions of passengers depend on the airline industry to travel quickly, efficiently, and
safely between various cities in the United States and throughout the world.Since 1978, the nation has relied on competition among airlines to promote affordability, innovation, and serviceand quality improvements.In recent years, however, the major airlines have, in tandem, raised fares, imposed new and higher fees, and reduced service. Competition has diminished and consumers have paid a heavy price.
This merger by creating the world’s largest airline would, in the words of US Airways’ management, “finish industry evolution.” It would reduce the number of major domestic airlines from five to four, and the number of “legacy” airlines today, Delta, United, American, and US Airway from four to three.
In so doing, it threatens substantial harm to consumers.Because of the size of the airline industry, if this merger were approved, even a small increase in the price of airline tickets, checked bags, or flight change fees would cause hundreds of millions of dollars of harm to American consumers annually.
2.American and US Airways compete directly on thousands of heavily traveled nonstop and connecting routes. Millions of passengers benefit each year from head-to-head competition that this merger would eliminate.With less competition, airlines can cut service and raise prices with less fear of competitive responses from rivals.
3.This merger will leave three very similar legacy airlines—Delta, United, and the new American—that past experience shows increasingly prefer tacit coordination over full-throated competition. By further reducing the number oflegacyairlines and aligning theeconomicincentives of those that remain, the merger of US Airways and American would makeit easier for the remaining airlines to cooperate,rather than compete,on price and service. That enhancedcooperation is unlikely to be significantly disrupted by Southwest and JetBlue, which, while offering important competition on the routes they fly, have less extensive domestic and international route networks than the legacy airlines.
4.US Airways’own executives—who would runthe new American—have long been “proponents of consolidation.”US Airways believes thatthe industry—before 2005—had“too many” competitors, causing an “irrational business model.” Since 2005, there has been a wave of consolidation in the industry. US Airways has cheered thesesuccessive mergers, with its CEO stating in 2011 that “fewer airlines” is a “good thing.” USA Airways’ President explained this thinking that same year: “Three successful fare increases –[we are] able to pass along to customersbecause of consolidation.”(emphasis added).Similarly, he boasted at a 2012 industry conference: “Consolidation has also . . . allowed the industry to do things like ancillary revenues [e.g.,checked bag and ticket change fees]. . . . That is a structural permanent change to the industry and one that’s impossible to overstate the benefit from it.”In essence, industry consolidation has left fewer, more-similar airlines, making it easier for the remaining airlines to raise prices, impose new or higher baggage and other ancillary fees, and reduce capacity and service. This mergerpositions US Airways’management to continue the trend—at the expense of consumers.
5.US Airways intends to do just that. If this merger wereapproved, US Airways would
no longer need to offer low-fare options for certain travelers. For example, US Airways employs “Advantage Fares,” an aggressive discounting strategyaimed at undercutting the other legacy airlines’ nonstop fares with cheaper connecting service.US Airways’hubs are in cities that generate less lucrative nonstop trafficthan the other legacy airlines’ hubs. To compensate, Airways usesits Advantage Faresto attract additionalpassengers on flightsconnecting through its hubs.
6.The other legacy airlines take a different approach. If,for example, United offersnonstop serviceon a route,and Delta and American offer connecting serviceon that same route, Delta and Americantypically charge the same price for their connecting serviceas United charges for its nonstop service. As American executives observed, the legacy airlines “generally respect the pricing of the non-stop carrier[on a given route],” even though it means offering connecting service at the same price as nonstop service. But American, Delta,and Unitedfrequentlydo charge lower prices for their connecting service on routes where US Airways offers nonstop service.They do so to respond to US Airways’use of Advantage Fareson other routes.
7.If the merger were approved, US Airways’economic rationale for offering Advantage Fares would likely goaway. The merged airline’s cost of sticking with US Airways’ one-stop, low-price strategy would increase. Delta and United would likely undercut the merged firm on a larger number of nonstop routes. At the same time, the revenues generated from Advantage Fares would shrink as American’s current non stop routes would cease to be targets for Advantage Fares. The bottom line is that the merged airline would likely abandon Advantage Fares, eliminating significant competition and causing consumersto pay hundreds of millions of dollars more.
8.Consumers will likely also be harmed by the planned merger becauseAmerican had a stand alone plan to emerge from bankruptcy poised to grow. American planned to expand domestically and internationally, adding service on nearly 115 new routes. To support its plan, American recently made the largest aircraft order in industry history.
9. American’s standalone plan would have bucked current industry trends toward capacity
reductions and less competition. US Airways called American’s growth plan “industry destabilizing” and worried that American’s plan would cause other carriersto react “with their own enhanced growth plans . . . .”The result would be to increase competitive pressures throughout the industry.After the merger, US Airways’current executives—who would manage the merged firm—wouldbe able to abandon American’s efforts to expand and instead continue the industry’s marchtoward higher prices and less service.As its CEO candidly stated earlier this year, US Airways views this merger as “the last major piece needed to fully rationalize the industry.”
10.Passengers to and from the Washington, D.C. area are likely to be particularly hurt.... blah To serve Ronald Reagan Washington NationalAirport (“Reagan National”), a carrier must have “slots,” which are government-issued rights to take off and land. US Airways currently holds 55% of the slots at Reagan Nationalandthe merger would increase the percentage of slots held by the combined firm to 69%. The combined airline wouldhave a monopoly on 63% of the nonstop routes served out of the airport. Competition at Reagan National cannot flourish where one airline increasingly controls an essential ingredient to competition. Without slots, other airlines cannot enter or expand the number of flights that they offer nother routes. As a result, Washington, D.C. area passengers wouldlikely see higher prices and fewer choices if the merger were approved.
11.Notwithstanding theirprior unequivocal statementsabout the effects of consolidation, thedefendantswill likely claimthat the elimination of American as a standalone competitorwill benefit consumers. They will arguethat Advantage Fareswill continue,existing capacity levels and growth plans will be maintained, andunspecified orunverified “synergies” will materialize, Case 1:13-cv-01236 Document 1 Filed 08/13/13 Page 6 of 567creating the possibility of lower fares.The American public has seen this before. Commenting on a commitmentto maintain service levels made by two otherairlinesseeking approval for amergerin 2010,the CEO of US Airways said: “I’m hopeful they’re just saying what they need ... to getthis [transaction] approved.” Bymaking claims about benefits that are at odds with theirprior statements on the likely effects of this merger, that is precisely what the merging parties’ executives are doing here—saying what they believe needs to be said to pass antitrust scrutiny.
12.There is no reason to accept the likely anticompetitive consequences of thismerger. Both airlines are confident they can and will compete effectively as standalone companies. A revitalized American is fully capable of emerging from bankruptcy proceedings on its own with a competitive cost structure, profitable existing business, and plans for growth. US Airways today is competing vigorously and earning record profits. Executives of both airlines have repeatedly stated that they do not need this merger to succeed.
13.The merger between US Airways and American would likely substantially lessen competition, and tend to create a monopoly, in violation of Section 7 of the Clayton Act, 15U.S.C. § 18. Therefore, this merger should be permanently enjoined.
safely between various cities in the United States and throughout the world.Since 1978, the nation has relied on competition among airlines to promote affordability, innovation, and serviceand quality improvements.In recent years, however, the major airlines have, in tandem, raised fares, imposed new and higher fees, and reduced service. Competition has diminished and consumers have paid a heavy price.
This merger by creating the world’s largest airline would, in the words of US Airways’ management, “finish industry evolution.” It would reduce the number of major domestic airlines from five to four, and the number of “legacy” airlines today, Delta, United, American, and US Airway from four to three.
In so doing, it threatens substantial harm to consumers.Because of the size of the airline industry, if this merger were approved, even a small increase in the price of airline tickets, checked bags, or flight change fees would cause hundreds of millions of dollars of harm to American consumers annually.
2.American and US Airways compete directly on thousands of heavily traveled nonstop and connecting routes. Millions of passengers benefit each year from head-to-head competition that this merger would eliminate.With less competition, airlines can cut service and raise prices with less fear of competitive responses from rivals.
3.This merger will leave three very similar legacy airlines—Delta, United, and the new American—that past experience shows increasingly prefer tacit coordination over full-throated competition. By further reducing the number oflegacyairlines and aligning theeconomicincentives of those that remain, the merger of US Airways and American would makeit easier for the remaining airlines to cooperate,rather than compete,on price and service. That enhancedcooperation is unlikely to be significantly disrupted by Southwest and JetBlue, which, while offering important competition on the routes they fly, have less extensive domestic and international route networks than the legacy airlines.
4.US Airways’own executives—who would runthe new American—have long been “proponents of consolidation.”US Airways believes thatthe industry—before 2005—had“too many” competitors, causing an “irrational business model.” Since 2005, there has been a wave of consolidation in the industry. US Airways has cheered thesesuccessive mergers, with its CEO stating in 2011 that “fewer airlines” is a “good thing.” USA Airways’ President explained this thinking that same year: “Three successful fare increases –[we are] able to pass along to customersbecause of consolidation.”(emphasis added).Similarly, he boasted at a 2012 industry conference: “Consolidation has also . . . allowed the industry to do things like ancillary revenues [e.g.,checked bag and ticket change fees]. . . . That is a structural permanent change to the industry and one that’s impossible to overstate the benefit from it.”In essence, industry consolidation has left fewer, more-similar airlines, making it easier for the remaining airlines to raise prices, impose new or higher baggage and other ancillary fees, and reduce capacity and service. This mergerpositions US Airways’management to continue the trend—at the expense of consumers.
5.US Airways intends to do just that. If this merger wereapproved, US Airways would
no longer need to offer low-fare options for certain travelers. For example, US Airways employs “Advantage Fares,” an aggressive discounting strategyaimed at undercutting the other legacy airlines’ nonstop fares with cheaper connecting service.US Airways’hubs are in cities that generate less lucrative nonstop trafficthan the other legacy airlines’ hubs. To compensate, Airways usesits Advantage Faresto attract additionalpassengers on flightsconnecting through its hubs.
6.The other legacy airlines take a different approach. If,for example, United offersnonstop serviceon a route,and Delta and American offer connecting serviceon that same route, Delta and Americantypically charge the same price for their connecting serviceas United charges for its nonstop service. As American executives observed, the legacy airlines “generally respect the pricing of the non-stop carrier[on a given route],” even though it means offering connecting service at the same price as nonstop service. But American, Delta,and Unitedfrequentlydo charge lower prices for their connecting service on routes where US Airways offers nonstop service.They do so to respond to US Airways’use of Advantage Fareson other routes.
7.If the merger were approved, US Airways’economic rationale for offering Advantage Fares would likely goaway. The merged airline’s cost of sticking with US Airways’ one-stop, low-price strategy would increase. Delta and United would likely undercut the merged firm on a larger number of nonstop routes. At the same time, the revenues generated from Advantage Fares would shrink as American’s current non stop routes would cease to be targets for Advantage Fares. The bottom line is that the merged airline would likely abandon Advantage Fares, eliminating significant competition and causing consumersto pay hundreds of millions of dollars more.
8.Consumers will likely also be harmed by the planned merger becauseAmerican had a stand alone plan to emerge from bankruptcy poised to grow. American planned to expand domestically and internationally, adding service on nearly 115 new routes. To support its plan, American recently made the largest aircraft order in industry history.
9. American’s standalone plan would have bucked current industry trends toward capacity
reductions and less competition. US Airways called American’s growth plan “industry destabilizing” and worried that American’s plan would cause other carriersto react “with their own enhanced growth plans . . . .”The result would be to increase competitive pressures throughout the industry.After the merger, US Airways’current executives—who would manage the merged firm—wouldbe able to abandon American’s efforts to expand and instead continue the industry’s marchtoward higher prices and less service.As its CEO candidly stated earlier this year, US Airways views this merger as “the last major piece needed to fully rationalize the industry.”
10.Passengers to and from the Washington, D.C. area are likely to be particularly hurt.... blah To serve Ronald Reagan Washington NationalAirport (“Reagan National”), a carrier must have “slots,” which are government-issued rights to take off and land. US Airways currently holds 55% of the slots at Reagan Nationalandthe merger would increase the percentage of slots held by the combined firm to 69%. The combined airline wouldhave a monopoly on 63% of the nonstop routes served out of the airport. Competition at Reagan National cannot flourish where one airline increasingly controls an essential ingredient to competition. Without slots, other airlines cannot enter or expand the number of flights that they offer nother routes. As a result, Washington, D.C. area passengers wouldlikely see higher prices and fewer choices if the merger were approved.
11.Notwithstanding theirprior unequivocal statementsabout the effects of consolidation, thedefendantswill likely claimthat the elimination of American as a standalone competitorwill benefit consumers. They will arguethat Advantage Fareswill continue,existing capacity levels and growth plans will be maintained, andunspecified orunverified “synergies” will materialize, Case 1:13-cv-01236 Document 1 Filed 08/13/13 Page 6 of 567creating the possibility of lower fares.The American public has seen this before. Commenting on a commitmentto maintain service levels made by two otherairlinesseeking approval for amergerin 2010,the CEO of US Airways said: “I’m hopeful they’re just saying what they need ... to getthis [transaction] approved.” Bymaking claims about benefits that are at odds with theirprior statements on the likely effects of this merger, that is precisely what the merging parties’ executives are doing here—saying what they believe needs to be said to pass antitrust scrutiny.
12.There is no reason to accept the likely anticompetitive consequences of thismerger. Both airlines are confident they can and will compete effectively as standalone companies. A revitalized American is fully capable of emerging from bankruptcy proceedings on its own with a competitive cost structure, profitable existing business, and plans for growth. US Airways today is competing vigorously and earning record profits. Executives of both airlines have repeatedly stated that they do not need this merger to succeed.
13.The merger between US Airways and American would likely substantially lessen competition, and tend to create a monopoly, in violation of Section 7 of the Clayton Act, 15U.S.C. § 18. Therefore, this merger should be permanently enjoined.
08-17-2013, 02:27 PM
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I think the chances of that are astronomically small, although I do expect it to considerable air play as a straw man/red herring defense of why DOJ has to let it happen.
08-17-2013, 03:21 PM
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08-17-2013, 03:33 PM
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08-17-2013, 03:40 PM
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FlyingKat over on the UsAir/AA merger blocked thread is in a fantasy land.
08-17-2013, 05:16 PM
The Brown Dot +1
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What they should be doing is hamstringing the foreign carriers operating within the boundaries of the US, not the domestic carriers. IMO, justice in this case is not being fairly applied evenly among domestic carriers.
Now, back to the original topic, what was the goal of "deregulation?" IMO, those goals have been met. Further, if the economic environment, through the razor of competition, has determined that 3 major carriers are the correct mix, all the justice department does is shuffle a few dominoes on the table to cheat the correct order of things. Equilibrium will prevail no matter what they (DOJ) do despite the oligopolistic nature of the airline biz.
BTW, aren't domestic and int'l code shares by definition collusion among competitors?
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