Jetblue and the PVC
04-21-2013, 07:45 AM
#232
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So, explain to me how the CBA will prevent a "Guadalupe" holdings type alter ego. SWA is one of the heaviest unionized carriers in the industry and they have Guadalupe. Yes, I know they have great scope protections at SWA due to their CBA. I'm just trying to follow the argument of "This is what happens with no CBA in place." JetBlue could start an alter ego at anytime, CBA or no CBA.
04-21-2013, 09:34 AM
#233
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Guadalupe holdings is what allowed AirTran to be bought. A holding company not an airline. That's one of the issues with our docs. AMR buying JetBlue as opposed to the airline. Operating them independently or siphoning of aircraft. This is how AirTran was forced to accept a deal.
04-21-2013, 09:51 AM
#234
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So, explain to me how the CBA will prevent a "Guadalupe" holdings type alter ego. SWA is one of the heaviest unionized carriers in the industry and they have Guadalupe. Yes, I know they have great scope protections at SWA due to their CBA. I'm just trying to follow the argument of "This is what happens with no CBA in place." JetBlue could start an alter ego at anytime, CBA or no CBA.
I am also ware that our PVC is currently attempting to address the lack of alter ego protection but we will see how far they get.
Last edited by Climbto450; 04-21-2013 at 09:57 AM. Reason: Because I can't spell.
04-21-2013, 09:57 AM
#235
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Was there anything in the SWAPA contract that prevented a Guadalupe situation operating Airtran as a separate entity?
What would prevent a future scenario of Guadalupe Holdings buying a LCC with unlimited domestic and international codesharing, maybe some RJ outsourcing, etc and using that as a whipsaw against the SWA pilot group to get those same changes in their contract.
What would prevent a future scenario of Guadalupe Holdings buying a LCC with unlimited domestic and international codesharing, maybe some RJ outsourcing, etc and using that as a whipsaw against the SWA pilot group to get those same changes in their contract.
04-21-2013, 09:58 AM
#236
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04-21-2013, 11:59 AM
#237
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That being said the concept doesn't necessarily infer SWA but rather any airline with a holding company can purchase Jetblue airways and essentially break it apart. This is one of the issues the PVC has been trying to correct while jetblue denies it's even possible.
04-21-2013, 12:14 PM
#238
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Below is an article from 2011 shortly after Barger stated we would never place and AA code on a Jetblue flight. The article also references AMR purchasing Jetblue, not AA.
There is a gaping hole is section 15 which jetblue expressly fought for in order to allow this to happen. In this scenario M/B would not apply.
AMR Is Said to Be in Talks With JetBlue Airways to Widen Booking Agreement - Bloomberg
American Airlines and JetBlue Airways Corp. (JBLU) are in talks to add more cities outside the U.S. to their joint booking and frequent-flier agreement, two people familiar with the discussions said.
An expanded accord would help AMR Corp. (AMR)’s American fill more seats on international flights from New York and Boston, and let JetBlue win domestic passengers by offering destinations it can’t reach with its own planes, said the people, who declined to be identified because the discussions are private.
Enlarge image
American Airlines and JetBlue Airways Corp. are in talks to add more cities outside the U.S. to their joint booking and frequent-flier agreement, two people familiar with the discussions said. Photographer: Michael Nagle/Bloomberg
New York is home to JetBlue’s headquarters and biggest base and American’s chief East Coast hub for trans-Atlantic flights. American is fighting for market share there after being eclipsed by the merger of United and Continental airlines and Delta Air Lines Inc. (DAL)’s purchase of Northwest Airlines.
“If they want to be a bigger player, they are going to need more presence and more feed,” said James M. Higgins, an analyst with New York-based Ticonderoga Securities LLC. “JetBlue is a way to get that.”
There is no timeline for Fort Worth, Texas-based American and JetBlue to decide on broadening their 15-month-old interline agreement, the people said.
The existing accord lets each airline sell tickets on specific partner flights and check bags on a full itinerary, with the revenue going to the flight’s operator. JetBlue travelers can book on American to 15 foreign cities from New York and Boston, while fliers to the two destinations on American jets from abroad can reach 26 U.S. cities via JetBlue.
JetBlue’s Interest
While those JetBlue airports aren’t in competition with markets served by American, JetBlue would like to expand the relationship to cities where the carriers do compete, one of the people said. JetBlue’s main U.S. airport is New York’s Kennedy, where American serves destinations such as London and Paris.
Spokesmen for American and JetBlue declined to comment on the talks.
“American and JetBlue continue to explore opportunities to expand commercial cooperation where it makes sense for both airlines,” American’s Sean Collins said. Alison Croyle, a JetBlue spokeswoman, said the airline would like to add more cities outside the U.S. to the agreement.
Deeper ties between the carriers may lead to an eventual merger, possibly in about two years, said Ticonderoga’s Higgins, who recommends buying JetBlue and holding AMR
‘Further Cooperation’
“It definitely furthers cooperation between them,” Higgins said of the current discussions. “If the benefits to AMR of the JetBlue tie-up are as good as I think they’ll be, I also believe it increases the odds there may be a merger down the road.”
The challenge for American is to first resolve contract talks with its three largest unions, Higgins said. The current labor negotiations date back as far as September 2006, when bargaining began with pilots.
American and JetBlue unveiled their accord two months before United and Continental agreed to the tie-up creating United Continental Holdings Inc. The new United Airlines is the world’s biggest carrier by traffic, ahead of Delta, which overtook American with the 2008 Northwest acquisition.
After sitting out consolidation that included those deals and Southwest Airlines Co. (LUV)’s May 2 purchase of AirTran Holdings Inc. (AAI), AMR is the only large U.S. airline company likely to post a 2011 loss, based on analysts’ estimates compiled by Bloomberg.
Declining Shares
AMR tumbled 27 percent this year in New York Stock Exchange composite trading through yesterday, and JetBlue fell 17 percent on the Nasdaq Stock Market, joining declines for most of the U.S. industry.
While interline accords are common among U.S. carriers, the American and JetBlue linkage is unusual because it connects a carrier that collects travelers at hub airports to one focused on point-to-point flights. Interline agreements are used in cases such as an airline scrubbing flights and being unable to rebook passengers on one of its own planes.
Will Randow, a Citigroup Inc. analyst, expects that the carriers’ current accord may evolve into a so-called code-share arrangement, in which airlines agree to share some revenue for joint bookings, and stop far short of a combination.
Moving JetBlue employees to American’s higher union wage rates would be too costly and blending different aircraft fleets would be difficult, said Randow, who has hold ratings on JetBlue and AMR. JetBlue’s planes are from Airbus SAS and Embraer SA, while American’s main jet fleet is from Boeing Co. (BA)
‘Strong Presence’
“JetBlue’s strong presence at JFK can bolster American’s position and extend their network, which is a good thing,” Randow said. “American’s strategic vision is to solidify that relationship as much as possible.”
JetBlue has 10 interline agreements, two with U.S.-based carriers. It has two code-share arrangements, including one with its largest shareholder, Germany’s Deutsche Lufthansa AG. The code shares allow the international partners to put their designation on certain JetBlue flights.
American also agreed as part of the original accord to give eight pairs of takeoff and landing rights at Washington’s Ronald Reagan National to JetBlue in exchange for 12 pairs at Kennedy. The trade allowed JetBlue to initiate service at Reagan.
JetBlue has focused over the past two years on building its network in Boston and the Caribbean, markets where American has reduced service.
To contact the reporter on this story: Mary Schlangenstein in Dallas at [email protected]
To contact the editor responsible for this story: Ed Dufner at [email protected]
There is a gaping hole is section 15 which jetblue expressly fought for in order to allow this to happen. In this scenario M/B would not apply.
AMR Is Said to Be in Talks With JetBlue Airways to Widen Booking Agreement - Bloomberg
American Airlines and JetBlue Airways Corp. (JBLU) are in talks to add more cities outside the U.S. to their joint booking and frequent-flier agreement, two people familiar with the discussions said.
An expanded accord would help AMR Corp. (AMR)’s American fill more seats on international flights from New York and Boston, and let JetBlue win domestic passengers by offering destinations it can’t reach with its own planes, said the people, who declined to be identified because the discussions are private.
Enlarge image
American Airlines and JetBlue Airways Corp. are in talks to add more cities outside the U.S. to their joint booking and frequent-flier agreement, two people familiar with the discussions said. Photographer: Michael Nagle/Bloomberg
New York is home to JetBlue’s headquarters and biggest base and American’s chief East Coast hub for trans-Atlantic flights. American is fighting for market share there after being eclipsed by the merger of United and Continental airlines and Delta Air Lines Inc. (DAL)’s purchase of Northwest Airlines.
“If they want to be a bigger player, they are going to need more presence and more feed,” said James M. Higgins, an analyst with New York-based Ticonderoga Securities LLC. “JetBlue is a way to get that.”
There is no timeline for Fort Worth, Texas-based American and JetBlue to decide on broadening their 15-month-old interline agreement, the people said.
The existing accord lets each airline sell tickets on specific partner flights and check bags on a full itinerary, with the revenue going to the flight’s operator. JetBlue travelers can book on American to 15 foreign cities from New York and Boston, while fliers to the two destinations on American jets from abroad can reach 26 U.S. cities via JetBlue.
JetBlue’s Interest
While those JetBlue airports aren’t in competition with markets served by American, JetBlue would like to expand the relationship to cities where the carriers do compete, one of the people said. JetBlue’s main U.S. airport is New York’s Kennedy, where American serves destinations such as London and Paris.
Spokesmen for American and JetBlue declined to comment on the talks.
“American and JetBlue continue to explore opportunities to expand commercial cooperation where it makes sense for both airlines,” American’s Sean Collins said. Alison Croyle, a JetBlue spokeswoman, said the airline would like to add more cities outside the U.S. to the agreement.
Deeper ties between the carriers may lead to an eventual merger, possibly in about two years, said Ticonderoga’s Higgins, who recommends buying JetBlue and holding AMR
‘Further Cooperation’
“It definitely furthers cooperation between them,” Higgins said of the current discussions. “If the benefits to AMR of the JetBlue tie-up are as good as I think they’ll be, I also believe it increases the odds there may be a merger down the road.”
The challenge for American is to first resolve contract talks with its three largest unions, Higgins said. The current labor negotiations date back as far as September 2006, when bargaining began with pilots.
American and JetBlue unveiled their accord two months before United and Continental agreed to the tie-up creating United Continental Holdings Inc. The new United Airlines is the world’s biggest carrier by traffic, ahead of Delta, which overtook American with the 2008 Northwest acquisition.
After sitting out consolidation that included those deals and Southwest Airlines Co. (LUV)’s May 2 purchase of AirTran Holdings Inc. (AAI), AMR is the only large U.S. airline company likely to post a 2011 loss, based on analysts’ estimates compiled by Bloomberg.
Declining Shares
AMR tumbled 27 percent this year in New York Stock Exchange composite trading through yesterday, and JetBlue fell 17 percent on the Nasdaq Stock Market, joining declines for most of the U.S. industry.
While interline accords are common among U.S. carriers, the American and JetBlue linkage is unusual because it connects a carrier that collects travelers at hub airports to one focused on point-to-point flights. Interline agreements are used in cases such as an airline scrubbing flights and being unable to rebook passengers on one of its own planes.
Will Randow, a Citigroup Inc. analyst, expects that the carriers’ current accord may evolve into a so-called code-share arrangement, in which airlines agree to share some revenue for joint bookings, and stop far short of a combination.
Moving JetBlue employees to American’s higher union wage rates would be too costly and blending different aircraft fleets would be difficult, said Randow, who has hold ratings on JetBlue and AMR. JetBlue’s planes are from Airbus SAS and Embraer SA, while American’s main jet fleet is from Boeing Co. (BA)
‘Strong Presence’
“JetBlue’s strong presence at JFK can bolster American’s position and extend their network, which is a good thing,” Randow said. “American’s strategic vision is to solidify that relationship as much as possible.”
JetBlue has 10 interline agreements, two with U.S.-based carriers. It has two code-share arrangements, including one with its largest shareholder, Germany’s Deutsche Lufthansa AG. The code shares allow the international partners to put their designation on certain JetBlue flights.
American also agreed as part of the original accord to give eight pairs of takeoff and landing rights at Washington’s Ronald Reagan National to JetBlue in exchange for 12 pairs at Kennedy. The trade allowed JetBlue to initiate service at Reagan.
JetBlue has focused over the past two years on building its network in Boston and the Caribbean, markets where American has reduced service.
To contact the reporter on this story: Mary Schlangenstein in Dallas at [email protected]
To contact the editor responsible for this story: Ed Dufner at [email protected]
04-30-2013, 03:14 PM
#240
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Joined APC: Dec 2007
Position: EMB 145 CPT
Posts: 2,934
Wow, I was NOT asking the question because I didn't know the answer.
I will try again.
Question one asks how someone that spends 500,000, 5,000,000, and 25,000,000 would have the SAME tax rate (you said "close to 23%"). You say it is a progressive tax, but I gave you 3 vastly different spending levels and you said the tax rate was the SAME "close to 23%".
The question was to illustrate that for all practical purposes, beyond the poor and lower middle class, that this is actually a VERY flat tax for the upper middle class, rich and super rich.
Spending tax rate on A is .22724%, B is .229999724% and C is .2299999448. So, it is technically progressive, but only if you are looking at 2 tens of 1%, or less. In other words, you are talking about .002.... This is a VERY flat tax with exeption of the poor and lower middle class.
Question 2 shows you that as a tax on INCOME, most rich people will have an effective tax on INCOME much lower than the middle class and upper middle class. People don't become rich, or stay rich by spending a high ratio of their annual earnings... They get rich and stay rich by spending much less each year than they earn, thus avoiding taxes on a high percentage of the their income, be that annually, 3 year lookback, 10 year lookback. They can't stay rich if they spend a high ratio of their earned income, and most of them DON'T. Much of that wealth may SOMEDAY be spent, but firstly, how do we fund the government while we wait for decendents decades from now to spend the money, and secondly, there is nothing stopping these people from buying used cars, boats, homes, airplanes....
As a tax on income in the short term, IT IS REGRESSIVE as wealth increases, because the rich CLEARLY spend a smaller percentage of their income, while saving and investing HIGHER percentages of their income, avoiding taxes. In the long term, we may recapture some of that lost revenue, but that is dependant on spending/savings/investment habits and whether or not they bias their purchases toward used luxury items to keep the gubament from getting their hands on it.
Your scheme will also cause the prices of used homes, cars, boats and other durable goods to be bid up by people who don't want the big bad gubament to get their money, and the prices for used items would also naturally rise to close the gap with NEW items which will fall out of favor because they cost 30% more PLUS the difference in the depreciation from new-used.
Also, stop saying 23% inclusive. It is a 30% tax. It is amazing that they have you typing 23% inclusive. It is misleading. It is a 30% tax in the context of how Americans understand taxation. Sales tax in my state is 6.5%. You don't see people saying the tax is 5.2% inclusive.... You are using a very unconventional way of calculating taxes in order to show a misleadingly low tax rate of 23%, all the while have to type the word inclusive after every time you quote the tax rate of 23%. It is misleading, requires extra unnessasary key strokes, and is annoying. It is a 30% tax. People that insist on say it is "23% inclussive" are being manipulative and misleading to those that don't understand the distinction.
Either way, your unicorn with herpes will never become law, so I am checking out of this tax discussion.
I will try again.
Question one asks how someone that spends 500,000, 5,000,000, and 25,000,000 would have the SAME tax rate (you said "close to 23%"). You say it is a progressive tax, but I gave you 3 vastly different spending levels and you said the tax rate was the SAME "close to 23%".
The question was to illustrate that for all practical purposes, beyond the poor and lower middle class, that this is actually a VERY flat tax for the upper middle class, rich and super rich.
Spending tax rate on A is .22724%, B is .229999724% and C is .2299999448. So, it is technically progressive, but only if you are looking at 2 tens of 1%, or less. In other words, you are talking about .002.... This is a VERY flat tax with exeption of the poor and lower middle class.
Question 2 shows you that as a tax on INCOME, most rich people will have an effective tax on INCOME much lower than the middle class and upper middle class. People don't become rich, or stay rich by spending a high ratio of their annual earnings... They get rich and stay rich by spending much less each year than they earn, thus avoiding taxes on a high percentage of the their income, be that annually, 3 year lookback, 10 year lookback. They can't stay rich if they spend a high ratio of their earned income, and most of them DON'T. Much of that wealth may SOMEDAY be spent, but firstly, how do we fund the government while we wait for decendents decades from now to spend the money, and secondly, there is nothing stopping these people from buying used cars, boats, homes, airplanes....
As a tax on income in the short term, IT IS REGRESSIVE as wealth increases, because the rich CLEARLY spend a smaller percentage of their income, while saving and investing HIGHER percentages of their income, avoiding taxes. In the long term, we may recapture some of that lost revenue, but that is dependant on spending/savings/investment habits and whether or not they bias their purchases toward used luxury items to keep the gubament from getting their hands on it.
Your scheme will also cause the prices of used homes, cars, boats and other durable goods to be bid up by people who don't want the big bad gubament to get their money, and the prices for used items would also naturally rise to close the gap with NEW items which will fall out of favor because they cost 30% more PLUS the difference in the depreciation from new-used.
Also, stop saying 23% inclusive. It is a 30% tax. It is amazing that they have you typing 23% inclusive. It is misleading. It is a 30% tax in the context of how Americans understand taxation. Sales tax in my state is 6.5%. You don't see people saying the tax is 5.2% inclusive.... You are using a very unconventional way of calculating taxes in order to show a misleadingly low tax rate of 23%, all the while have to type the word inclusive after every time you quote the tax rate of 23%. It is misleading, requires extra unnessasary key strokes, and is annoying. It is a 30% tax. People that insist on say it is "23% inclussive" are being manipulative and misleading to those that don't understand the distinction.
Either way, your unicorn with herpes will never become law, so I am checking out of this tax discussion.
I'll start with 23% inclusive. The fact that I include the word inclusive is precisely because I didn't want to make it seem like it was 23% exclusive. In other words, 23% inclusive = 30% exclusive. The only reason I use the 23 figure is because the Fairtax is mostly an income tax replacement and income taxes are inclusive. So the only way to compare apples to apples is to use the 23% when talking about replacing the inclusive income tax system we have. If your marginal income tax is in the 25% tax bracket (meaning that out of the last 100 cents earned, the government takes 25 cents), you don't hear people saying the your tax bracket is 33% exclusive. That would be apples to oranges.
But I do like that you have finally acknowledged that this is a tax on ALL WEALTH. And that its not just a year over year comparison. Taxing all wealth in a consumption tax, especially coupled with a prebate, is the ultimate progressive tax. There is no hiding that wealth.
The fairtax also expands the tax base. Sure, you may see the ubber rich hoarding their money, eating pb&j, buying used Toyotas, and shopping at the goodwill. But my guess is that they will always spend more of their money than anyone else, regardless of price.
Speaking of price, they would come down. Think of all the embedded taxes when you are paying for payroll taxes and corporate taxes. Companies do not pay taxes. Only people pay taxes. With the fairtax, most of the embedded taxes will gradually come down and you will truly just pay one tax at the point of purchase.
Last edited by Nevets; 04-30-2013 at 03:31 PM.
