cubguy

Does anyone know of any current talks between the Companies and the DOJ?

JetRage

I would tend to agree with this except that the Feds didn't stop the UAL-CAL merger or the DAL-NWA. For them to suddely decide this one is anti-competitive is too little too late. Blocking it could leave AA at a serious competitive disadvantage. If you want to make the case that the mergers hurt competition than you're late to the ball game. The Fed's should let this go through. Otherwise DAL and UAL will be the two major players and the Fed's will end up with precisely the opposite of what the want. Instead of more competition they will have less. It's the irony of government intervention.

Gallifrey

I can't stand the waiting. If this doesn't go through I'll have to return the Porsche.

Gallifrey

And there's this... Schnurman: Is tough talk a prelude to concessions in American Airlines merger? | Dallasnews.com - News for Dallas, Texas - The Dallas Morning News

Good article on the DOJ trying to block the mergers in the beer industry. It was approved two weeks later after major concessions.

YourFnout

Seven months ago, the Justice Department sued to block a merger of the makers of Bud Light and Corona beers because they would control almost half the U.S. beer market. The rhetoric sounded a lot like last week’s objection to the marriage of American Airlines and US Airways.
Too much market control in too few hands. Elimination of a competitor that keeps prices low. An industry that plays follow-the-leader in raising prices.
Not surprisingly, the acquiring company pledged a vigorous court fight.
But just two weeks later, Anheuser-Busch InBev and Grupo Modelo proposed a new deal, with InBev selling an extra $2.9 billion in assets — a major chunk of the $20 billion acquisition. That included giving up a brewery in Mexico and U.S. licensing rights to Corona, the No. 1 import beer in this country.
Justice blessed the marriage, the stock price climbed again and the merger closed in June.
Every merger proposal is unique, so the results of one case don’t necessarily apply to another. But an airline analyst compared the language of the complaints against InBev and American and found striking parallels. That’s reason for some optimism.
“We wouldn’t be surprised to see a settlement here, too, as both sides appear deeply entrenched and would have much to lose at trial,” wrote Hunter Keay of Wolfe Research in New York. “We expect this merger to get done.”
In a report last week, Keay listed 10 similarities in the two complaints: The deals would eliminate head-to-head competition; the markets are highly concentrated and would become significantly more so; Modelo’s “momentum” pricing plan put pressure on InBev beers, while US Airways’ “Advantage Fares” offer discounts on connecting flights.
“Even a small increase in the price of beer could result in billions of dollars of harm to American consumers,” Justice wrote.
The government used almost the same line on American-US Airways, except that the harm would be in the hundreds of millions of dollars, not billions.
Both cases were led by William Baer, assistant U.S. attorney general, and the corporate response was the same. InBev, American and US Airways said they would “vigorously” fight the lawsuits in court.
More leverage
In Keay’s view, Justice was angling for more negotiating leverage with InBev. If that was the strategy, it worked well.
InBev gave up Modelo’s most advanced brewery in Mexico, along with U.S. licensing rights to seven brands in perpetuity. The sales set up winemaker Constellation Brands as an independent competitor, and the settlement requires Constellation to expand production.
InBev initially proposed a $1.9 billion asset sale to address antitrust concerns. But the first deal called for a 10-year supply agreement and no brewery. After the Justice suit, InBev’s stock sank, and experts were divided over whether the merger would happen.
Some immediately urged InBev to give up more of Corona, because that was the logical path to compromise. Ultimately, InBev made major concessions, selling assets worth almost a quarter of the acquisition value. Regulators declared victory, with one beer company replacing another.
The American-US Airways merger doesn’t offer a similar, straightforward road map. In past mergers, airlines gave up airport slots to satisfy concerns about competition. United-Continental, for example, leased 36 slots at the Newark, N.J., airport to Southwest Airlines.
Similar deal?
Many expected a similar side deal with American-US Airways. The merged airline would control 69 percent of the takeoff and landing slots at Reagan National Airport in Washington.
But Baer indicated that giving up slots wouldn’t be enough. Last week, he said “a full-stop injunction” was the right outcome for consumers. If that was just tough talk, it shook up many analysts and antitrust experts, and some said the deal was dead. But outsiders have often misjudged these cases.
In 2010, experts predicted that United-Continental would face close scrutiny from regulators and might be forced to give up one of its China routes. The merger was approved in about three months, with only the Newark adjustment.
The American merger has been under review for almost seven months. In February, The Wall Street Journal said it was likely to fly clear of government objections. Last week, Bloomberg reported that it would be difficult to reach a settlement.
The airlines might have to get creative. United won over the Ohio attorney general by pledging to keep a hub in Cleveland and maintaining at least 90 percent of flights for two years.
American and US Airways might have to make similar promises to the feds and six states that joined the suit. In addition to slots at Reagan, Keay said, the merged airline may have to commit to maintaining certain service levels for a time. And it may have to hold the line on fares and fees.
“At this point,” Keay wrote, it’s “a small price to pay.”

R57 relay

I sent Kirby an email and told him to pledge to cut bag fees if the merger went through, raise them if not. That's probably all it would take and improve the operation too!

flybywire44

I believe SWA/AT control 74% of BWI flights, UAL controls a similar amount of flights in IAD (75%??) and AA/Airways would control 66-71% of flights after the merger.

Forget about percentage of flights for a second and consider the actual breakdown of physical seats:I am willing to guess that merged AA/Airways would only control 25% of DC area flights, which is probably somewhere around 16% of capacity in the DC Area market—not to mention all the people who ride buses and trains or otherwise drive!

DOJ did not acknowledge the largest domestic carrier in the US in their filing—SWA/AT. DOJ did not mention how AA/US would increase international competition. DOJ has not taken into account how the merger would up-gage aircraft and lower fuel consumption on a per capita basis—the ultimate green initiative. DOJ has never used one-stop connections as a basis for HHI competitiveness. DOJ failed to account for how the AA/Airways merger will provide a basis for the services business travels want and otherwise subsidize for leaser travelers.

DOJ is anything but unbiased in this case.

CanoePilot

when can we expect an update on this mess from the doj or the company?

R57 relay

You don't acknowledge what doesn't help you reach your objective. Fairness and competition is not their objective and not sure what their objective is.

Saw an interesting article on Allegiant taking advantage of the SW/AT merger. Interesting, a free market balancing itself.

Allegiant Air targets East Coast with new routes - Yahoo! Finance

80ktsClamp

They are waiting for USAPA's response.