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-   -   Broad Divestitures Wanted from DOJ (https://www.airlinepilotforums.com/american/78022-broad-divestitures-wanted-doj.html)

satpak77 11-09-2013 08:17 AM

AMR/LCC should give whatever slots away to whoever and be done with it. Lets look at the 10, 20 year business strategy. So the reduce presence into DCA, ok, so be it. Their entire quarterly earnings statement is not DCA driven, obviously.

Lets stop looking at trees and look at the forest. Better yet, the mountain range.

OscartheGrouch 11-09-2013 09:12 AM


Originally Posted by lolwut (Post 1516531)
What does the flying public benefit more from:

1) The ability to go nonstop from their small hometown to the capital of our nation?

2) The ability to get a $39 airfare to Orlando when Southwest adds 10 more flights?


DCA is a hub. A hub brings a lot of benefits to an airport. And theres nothing wrong with an airline having a hub. If anyone needs super cheap fares for their once a year visit to Florida, BWI isn't far away and has more WN than anyone would ever need.

Actually LL, I would suggest that allowing an RJ to operate non stop to an from BGR/DCA (as an ex.) is a waste of capacity. I would also suggest that while some of the locals might benefit, those flights are designed to accommodate members of congress (and their staffs) who then will feel obligated to respond in kind to protect said route. Let the smaller airports route through a large hub to get to DCA and then utilize bigger aircraft.

BWI is, as you point out, close enough to allow smaller cities to access the Washington DC area without taking up a slot with a 50 seat RJ.

It is quite obvious that this is all about keeping and increasing the market share so as to control prices to benefit the airline that will be created and not about service for the traveling public.

I know you meant if for emphasis, but a $39 fare would benefit the public. The airline operating it .....not so much.

The Oscar

OscartheGrouch 11-09-2013 09:28 AM


Originally Posted by kingairip (Post 1516554)
My apologies then. I must have gotten the wrong impression when you said, "that airlines who go through bankruptcy feel they deserve to keep the slots that could be sold to satisfy creditors and maintain pensions for their employees."

********Again, my response was to a poster who felt that somehow SWA felt entitled to the slots that might be given up but that somehow the employees and creditors were not entitled to have valuable assets sold to satisfy their claims.


Unfortunately, management (in all industries) will make poor decisions. And, bankruptcy code is designed to get companies back on their feet. Like it or not, that's the way it works.

(As an aside, do you see a little irony that a guy that works for SWA is now the vocal champion of worker's pensions? I won't suggest that SWA was the deciding factor in killing airline employee's pensions; but, don't you think they played a significant role in ending pensions?)


************As a union member I feel that the pensions promised to the employees were negotiated in good faith and should be honored. The managements involved felt that it was okay to under fund those pensions to fund day to day operations (including growth) and then claim there was no money for the pensions.

********BTW SWA has honored and funded my pension through negotiated matching contributions. I will acknowledge that there might be some argument that a DC program could cause the demise of a DB pension at a competitors company.


I agree with you. I think GM should have failed...and the large banks too. But, I don't think liquidation is appropriate in AA's case. In fact, I think AA will be quite successful moving forward...just like Delta and United before them. I think you think that too....if you didn't, I don't think you would waste time on a Saturday arguing with a bunch of poor saps whose employer is in bankruptcy. If you did, that would be poor form, wouldn't it?

I will agree with you (and hope for the sake of the employees) that the new AA will be very successful. That does not mean that the government doesn't have some reason to ask for the divestitures.

The Oscar

You are correct that I could be doing something else on my Saturday. Exchanging ideas and info with other pilots is better way of wording it than you did. I have many friends at other airlines that I feel bad for when this industry stings them. So far I have been very fortunate and I count my blessings.

kingairip 11-09-2013 10:48 AM


Originally Posted by OscartheGrouch (Post 1516599)
I will agree with you (and hope for the sake of the employees) that the new AA will be very successful. That does not mean that the government doesn't have some reason to ask for the divestitures.

The Oscar

You are correct that I could be doing something else on my Saturday. Exchanging ideas and info with other pilots is better way of wording it than you did. I have many friends at other airlines that I feel bad for when this industry stings them. So far I have been very fortunate and I count my blessings.


Fair enough. We'll see about the divestitures. May very well happen...if the merger is even allowed to go through. Which remains a very big IF. (However, I don't think any creditor, or employee for that matter, would like to see the slots sold in bankruptcy to somehow satisfy their claims. In fact, I think the opposite is true. Those slots will be beneficial to the company, creditors, and employees in the future. BTW, I'm not exactly sure on the specifics, but I'm pretty sure the AA creditors are making out better than the average creditor in a bankruptcy. I could be wrong. I frequently am.)

InformationEcho 11-10-2013 05:53 AM

...Southwest spokesman Brad Hawkins said the airline’s brief would cover “the enormous benefits Southwest would offer consumers if we were able to expand access” to Reagan National Airport near Washington, D.C., and New York’s LaGuardia Airport.

Poor New Yorkers, having to choose between Spirit,Frontier,Jetblue and Westjet at LGA.Won't Southwest come and save them from the tyranny of high prices?

They should have the Gubbmint knock on Delta's door if they want to go after the largest slot holder at a "Hub" airport.Doesn't Delta have Donald Sutherland touting the "LGA Hub" in those pretentious commercials?




http://www.dallasnews.com/business/a...k-airports.ece

FlyingKat 11-10-2013 05:18 PM


Originally Posted by satpak77 (Post 1516557)
AMR/LCC should give whatever slots away to whoever and be done with it. Lets look at the 10, 20 year business strategy. So the reduce presence into DCA, ok, so be it. Their entire quarterly earnings statement is not DCA driven, obviously.

Lets stop looking at trees and look at the forest. Better yet, the mountain range.

The DCA market is one of the most lucrative in the country. Before the merger with America West, it was something like 25% of Airways traffic and 50% of its revenue, which is why the closure of DCA after 9/11 was so devastating to Airways financially. Parker will fight and scratch to keep every slot he can in DCA. It's a gold mine, which is why Southwest, JetBlue, et al are salivating over the idea of getting some of these slots.

satpak77 11-10-2013 05:21 PM


Originally Posted by FlyingKat (Post 1517262)
The DCA market is one of the most lucrative in the country. Before the merger with America West, it was something like 25% of Airways traffic and 50% of its revenue, which is why the closure of DCA after 9/11 was so devastating to Airways financially. Parker will fight and scratch to keep every slot he can in DCA. It's a gold mine, which is why Southwest, JetBlue, et al are salivating over the idea of getting some of these slots.

Good. So if Parker tosses the "gold mine bone" to DOJ, merger should move forward.

FlyingKat 11-10-2013 05:50 PM


Originally Posted by OscartheGrouch (Post 1516584)
Actually LL, I would suggest that allowing an RJ to operate non stop to an from BGR/DCA (as an ex.) is a waste of capacity. I would also suggest that while some of the locals might benefit, those flights are designed to accommodate members of congress (and their staffs) who then will feel obligated to respond in kind to protect said route. Let the smaller airports route through a large hub to get to DCA and then utilize bigger aircraft.

BWI is, as you point out, close enough to allow smaller cities to access the Washington DC area without taking up a slot with a 50 seat RJ.

It is quite obvious that this is all about keeping and increasing the market share so as to control prices to benefit the airline that will be created and not about service for the traveling public.

I know you meant if for emphasis, but a $39 fare would benefit the public. The airline operating it .....not so much.

The Oscar

Politics plays a part in service to DCA, but the bigger reason is all those government employees flying on government fares. Routes into DCA are some of the most profitable in the country which is why the airlines fought to keep DCA open when some government agencies wanted to close it after 9/11.

FlyingKat 11-10-2013 05:53 PM


Originally Posted by satpak77 (Post 1517266)
Good. So if Parker tosses the "gold mine bone" to DOJ, merger should move forward.

Parker isn't going to toss anything that he doesn't absolutely have to. One of the reasons the Airways/United merger fell apart was over DOJ demands on DCA slots and the creation of DC Air. What the government demanded made the merger financially unviable. What DOJ demands may get to the point Parker and co decide it would be better for the company to fight in court.

R57 relay 11-10-2013 06:15 PM


Originally Posted by FlyingKat (Post 1517262)
it was something like 25% of Airways traffic and 50% of its revenue, which is why the closure of DCA after 9/11 was so devastating to Airways financially.

Uh, I'm not sure about that, do you have some numbers to back it up?

DCA has been very profitable, but I don't think it was ever near 50% of revenue. Last time I heard Parker talk about hub profitability he said that CLT was first, but DCA had the best margin.


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