DOJ to block AA/USAir merger

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Quote: Delta proves that consolidation drives up ticket fares - The Term Sheet: Fortune's deals blogTerm Sheet

FORTUNE -- Delta's record earnings could give the government just what it needs to finally crush the merger hopes of American Airlines and US Airways. Delta's pricing power and heft allowed it to reduce service and raise fares in the third quarter, leading to absurdly high profit margins for an airline........
So an airline makes a profit. Since when is that such a crime?

I agree that this only helps not hurts the merger.
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Quote: The earnings that AA posted compared to Delta make me think it proves the case for the merger more.

How can the doj say AA is in good shape and able to compete against Delta when delta made almost 5 times more than AA, even after AA cut everything in Chpt 11? Delta is making the money they are because they are basically the only game in town. UA because of it shameful mismanagement and merger related issues has been unable to really put the pressure on DAL that it eventually will. This has let delta basically run without any form of real competition. If you add in a strong merged AA and a UA that has fixed its problems you will see delta with smaller margins. I don't understand why this author doesn't get basic economics. The more airlines that will compete with each the lower the prices.



Actually it doesn't.
They doj doesn't get Do-overs nothing delta is doing is unethical or illegal. It just is finally making a stable profit. If the doj has such a problem with this they would have to go after hundreds of other companies in industry that actually do have monopolies oligopolies.

and only idiots who don't understand the industry or economics question these mergers. These mergers have been better for the industry, the employees and yes even the consumer in the way of more stable companies and companies willing to spend money on their products. But these are the same people who do not think a state sponsored and state run airline like Emirates is a threat to our market driven airlines here.
Its not just airlines, there was an article in the WSJ a couple of months ago about industries that have had a lot of consolidation that are nervous about DOJ antitrust scrutiny. Only idiots that don't realize how much we are ticking off passengers and government regulators don't understand why there is so much resistance to this, and why this may just be the beginning of further DOJ scrutiny into the airlines.

One of the big reasons UAL is having problems is the CLE hub and their inability to "right size" or close it due to promises made to the state of Ohio and Rob Portman to get that merger approved. This was very similar to the promises Parker made to the state of Texas to get them to drop their part of the anti trust lawsuit.

Delta had a system wide load factor of 87% in August. That means good luck getting to Fort Lauderale within 3 days if your flight cancels. Delta is the least admired brand in the country according to Forbes. When your flight cancels, instead of running to the crew room or closing the cockpit door, go wander out into the concourse and listen to what is going on with these passengers. They aren't happy. When they aren't happy, they complain to elected officials. When they aren't happy, crap happens and they investigate. Its the nature of the business and has been for fifty years.

Whatever happens with US/AA if you think this government scrutiny is going away any time soon, you're mistaken.
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Quote: http://aviationblog.dallasnews.com/2...html/#comments



The more pressure the better.
Will be interesting to see what they say once the merged American starts "right sizing" hubs like Delta has done with Memphis and Cincinnati. My bet is the first to get "right sized" will be Charlotte.
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Quote: Its not just airlines, there was an article in the WSJ a couple of months ago about industries that have had a lot of consolidation that are nervous about DOJ antitrust scrutiny. Only idiots that don't realize how much we are ticking off passengers and government regulators don't understand why there is so much resistance to this, and why this may just be the beginning of further DOJ scrutiny into the airlines.

One of the big reasons UAL is having problems is the CLE hub and their inability to "right size" or close it due to promises made to the state of Ohio and Rob Portman to get that merger approved. This was very similar to the promises Parker made to the state of Texas to get them to drop their part of the anti trust lawsuit.

Delta had a system wide load factor of 87% in August. That means good luck getting to For Lauderale within 3 days if your flight cancels. Delta is the least admired brand in the country according to Forbes. When your flight cancels, instead of running to the crew room or closing the cockpit door, go wander out into the concourse and listen to what is going on with these passengers. They aren't happy. When they aren't happy, they complain to elected officials. When they aren't happy, crap happens and they investigate. Its the nature of the business and has been for fifty years.

Whatever happens with US/AA if you think this government scrutiny is going away any time soon, you're mistaken.
again nothing you posted showed or proved anything "ticking people off"
is the norm when people feel like they should get things for free.

87% load factor is still too low in the summer months. Why should delta have planes with lower load factors?
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Quote: Will be interesting to see what they say once the merged American starts "right sizing" hubs like Delta has done with Memphis and Cincinnati. My bet is the first to get "right sized" will be Charlotte.
Wrong CLT has a lot of potential and it could compete head to head with ALT. The company announced yesterday a hand full of new destinations to Europe from CLT, is cheap to operate out of there, easy to get in and out and don't forget the new cargo train coming right to the Airport.
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Quote: Wrong CLT has a lot of potential and it could compete head to head with ALT. The company announced yesterday a hand full of new destinations to Europe from CLT, is cheap to operate out of there, easy to get in and out and don't forget the new cargo train coming right to the Airport.
Too bad the terminal and ramp are inefficient dumps.
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Quote: Wrong CLT has a lot of potential and it could compete head to head with ALT. The company announced yesterday a hand full of new destinations to Europe from CLT, is cheap to operate out of there, easy to get in and out and don't forget the new cargo train coming right to the Airport.
Same thing was said about CVG until the DL merger was complete and then it was a different story. All this flying you are talking about can be flown out of MIA, PHL, or JFK just as easily. CLT has the lowest O/D numbers of the four east coast hubs so it will be an easy target.
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Quote:
Quote: Wrong CLT has a lot of potential and it could compete head to head with ALT. The company announced yesterday a hand full of new destinations to Europe from CLT, is cheap to operate out of there, easy to get in and out and don't forget the new cargo train coming right to the Airport.
Same thing was said about CVG until the DL merger was complete and then it was a different story. All this flying you are talking about can be flown out of MIA, PHL, or JFK just as easily. CLT has the lowest O/D numbers of the four east coast hubs so it will be an easy target.
Your correct, except people aren't gonna fly CHS-LAX via PHL or MIA. It is a connecting hub, but the only thing else around the southeast is ATL. In my opinion that's why it will stay around.
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Quote: again nothing you posted showed or proved anything "ticking people off"
is the norm when people feel like they should get things for free.

87% load factor is still too low in the summer months. Why should delta have planes with lower load factors?
Go have a conversation with a few gate agents. Or like I said, go watch what happens when a flight cancels.

People don't feel like they should get things for free. They just expect to get to their destination within a reasonable time.

You question about 87% load in the summer demonstrates your ignorance of how the passenger service side of this business operates. Excess capacity is crucial in getting passengers to destinations when there are IROPs or other types of cancellations. 87% is so full that when flights cancel there is no way to get passengers to their destination in anywhere near a reasonable time frame. It is not unusual for passengers to take up to 3 days to get to a destination when there is a disruption. The drawdown of more capacity is a major concern with this merger along with the reduction in competition.
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Quote: Your correct, except people aren't gonna fly CHS-LAX via PHL or MIA. It is a connecting hub, but the only thing else around the southeast is ATL. In my opinion that's why it will stay around.
Never said it would close, but that it would be "right sized" similar to CVG and MEM. The only flights that would remain would be those that the local Charlotte traffic would support.
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