I guess we will see how it all plays out when the slot auctions take place, but the folks making these decisions most certainly DO NOT agree with your assessment.

When the settlement was announced Nov. 12, Assistant Attorney General William Baer made it clear that the department wanted the assets to go to low-cost carriers so they could bring price competition to more markets.

“We see the legacy carriers as part of the problem. We see low-cost carriers as a key part of the solution,” Baer told reporters.
Asked if airlines like Delta should bother applying for the American and US Airways assets, Baer replied: “That’s up to them. But the papers make pretty clear where we think these gates and slots need to go in order to improve on a competitive dynamic today which is not as healthy as it could be.
”Specifically, the settlement requires the companies to divest or transfer to low cost carrier purchasers approved by the department."

 

The only low cost carrier in the US now is spirit.... and maybe frontier. Everyone else has about the same price structure.

 

The DOJ lawsuit against the AMR/LCC merger was magically dropped, so yes.

 

Congressman: Let big airlines bid on merged AA's assets

Open up American's slot-bidding to big rivals?

Today in the Sky


Ben Mutzabaugh, USA TODAY 3:44 p.m. EST November 25, 2013





Let the big airlines in on the action, too.
That's what four key Congress members — two Republicans and two Democrats — are saying to Attorney General Eric Holder about how to divvy up the gates and landing rights that the "new" American must give up following its merger with US Airways.
AP: Lawmakers urge bidding for gates in airline merger
The Justice Department had sued to block the American-US Airways merger, but eventually settled with the company earlier this month after winning significant concessions at Washington's Reagan National Airport (DCA). Justice also won smaller divestitures from AA-US Airways at New York LaGuardia, Boston, Chicago O'Hare, Dallas Love Field, Miami and Los Angeles.
However, the four lawmakers say that if only low-cost carriers are considered for those divested assets — as Justice has indicated — then the smaller cities that typically lack service on such airlines will lose out. Big airlines like Delta and United should be considered as well, the leaders of the House and Senate transportation committees said in a Friday letter to Holder.
ARCHIVES: Justice settles merger lawsuit with AA, US Airways (Nov. 12, 2013)
FULL TEXT: : Parker, Horton explain settlement to workers
"We fully anticipate that many of the slots and gates will ultimately be awarded to LCCs (low cost carriers); we just believe the process should be open to all carriers," the lawmakers say in their joint letter. "While LCCs may increase competition on commercial air service to larger markets, they do not generally provide service to smaller communities or rural areas, as only legacy air carriers have networks that encompass these areas."
Signing the letter were Sens. Jay Rockefeller, D-W.Va., and John Thune R-S.D., as well as U.S. Reps. Bill Shuster, R-Pa. and Nick Rahall D-W.Va. Rockefeller and Shuster chair the transportation committees in the Senate and House, respectively.
TODAY IN THE SKY: Delta: We want some of those slots AA-US have to give up
They add in the letter that "the process the New American will use to divest its slots at DCA and other airports may further compound and already problematic situation for small communities."
As you might expect, that sentiment drew support from one big airline — Delta — while the nation's biggest low-cost carrier pushed back.
Delta already has said it would like to acquire some of the landing rights becoming available at Washington Reagan National as well as some the gates that the merged American will have to give up at Dallas Love Field.
PRESS RELEASE: Delta plans expansion at Dallas Love Field
"We do believe that all airlines should have an opportunity to bid on the divested assets," Delta spokesman Trebor Banstetter tells The Associated Press.
Southwest spokesman Brad Hawkins countered, telling AP that the so-called legacy carriers already dominate Reagan and New York's LaGuardia airports.
Letting them bid on American and US Airways landing rights at those airports "defeats the very purpose of the divestiture — to create lower fares, more competition, and better flight options for consumers," he says to AP.
In Dallas, however, Southwest already has control of 16 of the 20 gates at Dallas Love Field. Delta has detailed a significant service expansion that it plans to make there if it is awarded extra space at the city's close-to-downtown airport.
AP adds perspective on the settlement, writing that "by settling the Justice Department lawsuit, American and US Airways removed the last major hurdle to merging. A federal law called the Tunney Act lets a court review government decisions on mergers and gives the public 60 days to make comments to the Justice Department, but the airlines are so confident in the outcome that they plan to complete their deal in early December."
"Judges have rarely tinkered with antitrust agreements," AP adds.
Stay tuned …

 

You've got your facts wrong. Richard Anderson was CEO of NWA from 2001-2004. Northwest didn't file for bankruptcy until 2005. The "gutting" of contracts and the formation of "Newco" didn't occur until after he left.

Yes, Kelly and Southwest made a once-in-a-lifetime bet on fuel hedges after Sep 11. They used the government money (from the sep 11 airline bailout money) to buy numerous fuel contracts that would secure low fuel prices for years to come. Southwest then had unprecedented growth across the country as they undercut other airline's ticket prices. I'm not saying there's anything wrong with this but let's be honest, Kelly was very lucky. He placed a huge bet on fuel (with money that wasn't his) and it paid off big.

But now that the fuel contracts have expired and Southwest is on equal ground with it's rivals, Kelly and Southwest are realizing that they may have bit off more than they can chew. Southwest is no longer able to expand, their profits have been reduced, they're having problems with the Airtran merger, they're leaving money on the table by not collecting baggage fees, and they've consistently had the worst on-time performance of any airline this past year.

I'm not counting Southwest out because they always seem to succeed. But this next year will be interesting. Delta seems to love the chance to compete head-to-head with Southwest now and consistently beats them. Southwest's entry into Atlanta was a failure. And Spirit is a true "low-cost" airline that is growing and I don't see Southwest being able to compete with their prices.

We'll see....

 

You can call it luck, but I call it smart leadership that has been typical throughout Southwest's history.

I wouldn't say Southwest is on equal ground with the legacy carriers either. The only way the legacies have been able to make money the last 10 years is on the backs of cheap regional airlines. Can't squeeze too much more out of that turnip unless they get more relief on scope from the unions. The legacies need to change their business model to maintain their growth in the future.

To say Southwest has been unable to expand is a bit of a distortion. Southwest has chosen not to expand until it completes the Air Tran merger (agreed this has been difficult) and stabilizes its infrastructure. Again, just smart business.

As for who the true low cost carriers are? Who cares. Southwest has its own unique brand, low fares and great customer service. All without the nickel and dime gimmicks other carriers have to do to turn a profit.

I've heard similar comments 20 years ago about how Southwest was no match for legacy carriers. But, now we see how well people can tell the future in this industry.

I bet you will still see incredible profits out of Southwest this year and the years to come. It's not the same airline as it was 20 years ago, but that's a good thing.

 

Southwest's non pilot employee pay is a problem that cannot be overcome without Chapter 11 and SWA is years away from that. The big 3 with their new very low non pilot employee can compete and crush SWA and Spirit will grow year after year. Again the Spirit non pilot employees make peanuts compared the non pilot employees at SWA.

 

Ironically, a lot of those overpaid non-pilots seem to be the causing too much induced drag. If they fail to kick it up a few notches and work at least as hard as a few years ago, the blurple goose will slowly get strangled.

 

Boy if that isn't an understatement. What an absolute joke of an operation.

 

I stepped on a blurple goose once.