Originally Posted by
cadetdrivr
Evidence supporting:
UA pulled out of JFK, so there is greatly diminished direct "overlap". Considering that UAL and CAL mutually did the same thing with mainline flying in the year prior to the official merger announcement it could appear that the pieces are being moved around with an "end state" in mind.
Evidence against:
AK and VA apparently can't get their merger past DOJ/DOT...at least in the present form as the deal keeps getting delayed. If AK can't get the gov't to sign off on their deal, how on earth can UAL (or DAL or AA) buy anybody?
-and-
What assets does JB have that UAL could just not buy for a few billion dollars cheaper without the baggage of a merger?? (JBLU's market cap is currently $5.66B)
This is a correct statement. The DOJ uses “HHI”, which means the Herfindahl–Hirschman Index, a commonly accepted measure of market concentration. The HHI is calculated by squaring the market share of each firm competing in the market and then summing the resulting numbers. For example, for a market consisting of four firms with shares of 30, 30, 20, and 20 percent, the HHI is 2,600 (302 + 302 + 202 + 202 = 2,600).
If you take the top 9 airlines by market share and apply this you will see that UAL would score very high in the NYC and south FL markets. The only way for a merger to get approved would be to give up gate slots at both JFK and FLL. This would not be worth it.
BLUF: Nobody is buying jetBlue.