View Poll Results: My opinion of the announced AA - US merger is:
This is the best of all possible worlds; great idea!
33
3.93%
This portends a stronger airline, with some changes for all
192
22.88%
I am neutral - pros and cons for all
199
23.72%
I think this is a somewhat bad idea with some real challenges
226
26.94%
I am completely opposed to this merger; terrible idea!
189
22.53%
Voters: 839. You may not vote on this poll
AA - US Merger Agreement / Announcement / DOJ Action Discussion (consolidated)
Aug 30, 2013, 9:44 am
#2776
Join Date: Jan 2003
Location: DL: Silver; AA: EX PLAT; UA: Silver; HY: DIA; HH: DIA; MR: TIT
Posts: 1,708
Aug 30, 2013, 9:47 am
#2777
Join Date: Apr 2006
Location: SJC/SFO & ORD
Programs: LT Gold/BA Executive Club/AS MP/Marriott
Posts: 1,646
Looks like judge sets November 25th as tentative date (CNBC).
Aug 30, 2013, 9:47 am
#2778
Join Date: Jan 2003
Location: DL: Silver; AA: EX PLAT; UA: Silver; HY: DIA; HH: DIA; MR: TIT
Posts: 1,708
Aug 30, 2013, 9:48 am
#2779
Join Date: Mar 2011
Location: NYC LAX RDU
Programs: US-Plt;Concierge key; American AAirpass; Delta Silver;Starwood - Platinum; Amex Cent
Posts: 712
US absolutely allows aa to grow in Asia. Us funnels a lot of traffic to Asia through ua and other star partners - aa can now use that traffic to help sustain flights.
That's a fair summary of the argument. The proponents of that argument omit the fact that the airplane orders were affirmed by AA, with the agreement of the creditors, before the merger.
And has been posted and discussed numerous times since July, 2011, lease financing commitments are in place for the first half of the orders (130 A319/A321 and 100 737).
Generally, airplane leases are long-term (10-20 years) with no manadatory balloon payments. Just like an auto lease, theres usually an option to purchase at the end of the term at a fixed price or a price determined by a formula.
Exactly. AA's creditors approved of the airplane orders before they demanded the merger.
If there's any risk to those airplane orders - it's actually with the merger, as mergers generally mean "right-sizing" and shrinkage, not growth.
Implicit in that worry is an assumption that AA is doomed to fail because its revenue is only about 2/3 the revenue of UA or DL. Not everyone buys that premise.
Yes, the merger would have made AA bigger. But not in Asia, where it's agreed that AA is too small. And it wouldn't have made AA much bigger in NYC, since US has just the shuttles to BOS and DCA and flights to its hubs.
If anybody should be worried about this merger being blocked, it should probably be Smisek and Anderson, as the complaint isn't just a request for a permanent injunction against AA and US; the complaint was also a shot across the bow of UA and DL. Failure to stop their mergers doesn't mean that the government is estopped from later asserting that those airlines have grown too large and are violating the antitrust laws.
And has been posted and discussed numerous times since July, 2011, lease financing commitments are in place for the first half of the orders (130 A319/A321 and 100 737).
Generally, airplane leases are long-term (10-20 years) with no manadatory balloon payments. Just like an auto lease, theres usually an option to purchase at the end of the term at a fixed price or a price determined by a formula.
Exactly. AA's creditors approved of the airplane orders before they demanded the merger.
If there's any risk to those airplane orders - it's actually with the merger, as mergers generally mean "right-sizing" and shrinkage, not growth.
Implicit in that worry is an assumption that AA is doomed to fail because its revenue is only about 2/3 the revenue of UA or DL. Not everyone buys that premise.
Yes, the merger would have made AA bigger. But not in Asia, where it's agreed that AA is too small. And it wouldn't have made AA much bigger in NYC, since US has just the shuttles to BOS and DCA and flights to its hubs.
If anybody should be worried about this merger being blocked, it should probably be Smisek and Anderson, as the complaint isn't just a request for a permanent injunction against AA and US; the complaint was also a shot across the bow of UA and DL. Failure to stop their mergers doesn't mean that the government is estopped from later asserting that those airlines have grown too large and are violating the antitrust laws.
Aug 30, 2013, 9:56 am
#2780
Join Date: Apr 2011
Location: New York
Programs: AA EXP 1.0mm, not sure where I am with hotels these days
Posts: 2,795
Per www.bloomberg.com, trial date set for November 25.
Aug 30, 2013, 10:00 am
#2781
Join Date: Jul 2013
Programs: AA EXP; UA 1k; MR Platinum; SPG Gold
Posts: 167
Per www.bloomberg.com, trial date set for November 25.
I wonder what the strategy will be going forward now for AA/US.
Aug 30, 2013, 10:02 am
#2782
FlyerTalk Evangelist
Join Date: May 2001
Location: LAX; AA EXP, MM; HH Gold
Posts: 31,789
Yes, that's sort of a hybrid between turn-key growth and organic growth. New AA would still have to convince those customers to leave UA/NH/SQ for their Asian travel in favor of AA/JL/CX. Might happen, might not. Nobody really knows. It involves starting new flights to Asia with new airplanes and hoping to fill them. That's also a key part of the AA stand-alone plan. Add flights, hope to fill them profitably.
Aug 30, 2013, 10:05 am
#2783
Join Date: Apr 2011
Location: New York
Programs: AA EXP 1.0mm, not sure where I am with hotels these days
Posts: 2,795
I believe all of the forthcoming Airbus aircraft are on operating leases. The most similar type of situation that we encounter regularly would be a long-term car rental. If you choose to rent a car in 28-day stretches, you never get a dime of equity in the car itself, you're simply paying the car company for the use of the car for the period of time of the lease. It's entirely up to the rental company to own the asset, and they're the ones "paying" the depreciation on it as you use it. The upside of this is that AA do not have to arrange financing for any aircraft bought under such arrangements, and only have to "come up with the money" as they begin using the aircraft.
Aug 30, 2013, 10:25 am
#2784
Join Date: Mar 2011
Location: NYC LAX RDU
Programs: US-Plt;Concierge key; American AAirpass; Delta Silver;Starwood - Platinum; Amex Cent
Posts: 712
November 25
<snip>
My guess is that Kollar will put DOJ to the test, but if they can present a reasonable discovery plan (so she believes they are not running out the clock) they she is not going to go with USs schedule. Instead she wants to make a record so that she can write an opinion that lays out a convincing case for the schedule she will enter. Her order is asking for that information, and anyone reading a preference of any schedule in her order does not understand how Court's work.
My guess is that Kollar will put DOJ to the test, but if they can present a reasonable discovery plan (so she believes they are not running out the clock) they she is not going to go with USs schedule. Instead she wants to make a record so that she can write an opinion that lays out a convincing case for the schedule she will enter. Her order is asking for that information, and anyone reading a preference of any schedule in her order does not understand how Court's work.
Last edited by miamigrad; Aug 30, 2013 at 12:13 pm Reason: redacted quoted content so others wouldn't have to scroll so much
Aug 30, 2013, 10:34 am
#2785
A FlyerTalk Posting Legend
Join Date: Jun 2005
Posts: 57,888
Per www.bloomberg.com, trial date set for November 25.
Aug 30, 2013, 10:43 am
#2786
FlyerTalk Evangelist
Join Date: Mar 1999
Posts: 12,097
It's Monday of Thanksgiving week!! (Thanksgiving is 28 November).
Looks like a big FU to both sides...stop being unrealistic or I will (tentatively) ruin everybody's Thanksgiving.
Pass the popcorn.
Looks like a big FU to both sides...stop being unrealistic or I will (tentatively) ruin everybody's Thanksgiving.
Pass the popcorn.
Aug 30, 2013, 10:47 am
#2787
Join Date: Jan 2013
Location: SFO
Programs: WFBF
Posts: 963
The merger doesn't immediately accomplish that, of course, but I think it does reduce the number of holes AA needs to patch. It's easier to focus on things like Asia when US' 250-strong stable of A320-family (including 1.5x more 319s already in service than AA has on order) craft is giving AA's domestic fleet modernization a shot in the arm and the CLT fortress hub is offering a stronger east-coast network and the ability to compete with DL in DL's own backyard.
If anybody should be worried about this merger being blocked, it should probably be Smisek and Anderson, as the complaint isn't just a request for a permanent injunction against AA and US; the complaint was also a shot across the bow of UA and DL. Failure to stop their mergers doesn't mean that the government is estopped from later asserting that those airlines have grown too large and are violating the antitrust laws.
Aug 30, 2013, 10:55 am
#2788
Suspended
Join Date: Aug 2013
Posts: 76
The question is does this push the doj to settle since they have less half the time they wanted.
Aug 30, 2013, 10:59 am
#2789
Join Date: Jan 2003
Location: DL: Silver; AA: EX PLAT; UA: Silver; HY: DIA; HH: DIA; MR: TIT
Posts: 1,708
It's not that AA is doomed to fail -- it's just that it seems highly unlikely AA by itself can grow both domestically and internationally, in a reasonable time frame, to match the presence of post-merger DL and post-merger UA.
The merger doesn't immediately accomplish that, of course, but I think it does reduce the number of holes AA needs to patch. It's easier to focus on things like Asia when US' 250-strong stable of A320-family (including 1.5x more 319s already in service than AA has on order) craft is giving AA's domestic fleet modernization a shot in the arm and the CLT fortress hub is offering a stronger east-coast network and the ability to compete with DL in DL's own backyard.
The merger doesn't immediately accomplish that, of course, but I think it does reduce the number of holes AA needs to patch. It's easier to focus on things like Asia when US' 250-strong stable of A320-family (including 1.5x more 319s already in service than AA has on order) craft is giving AA's domestic fleet modernization a shot in the arm and the CLT fortress hub is offering a stronger east-coast network and the ability to compete with DL in DL's own backyard.
Aug 30, 2013, 10:59 am
#2790
Join Date: Feb 2008
Programs: 6 year GS, now 2MM Jeff-ugee, *wood LTPlt, SkyPeso PLT
Posts: 6,526
She denied Nov 12 (a tuesday) and pushed it to November 25 (monday before thanksgiving). Assuming that the trial actually goes then and the Court is open the day before thanksgiving, trial is to take 10-12 days. Ten Court days is December 10, 12 court days is December 12. Kollar can I guess rule from the bench, although usually the judge will issue a written ruling, which takes weeks or months to come out.
So this is right up against the December 13 date.
Again, I want to see the schedule she set. That the date is "tentative" with a magistrate to oversee discovery, puts enormous pressure not on DOJ, but on US's lawyers. E.g. DOJ demands Parker's e-mails, and the e-mails over everyone working on the transition, regarding everything related to the merger. They demand them on shortened time (say 10 days, the usual 30 will not work). Is US going to object? If so, the e-mails don't get turned over in time, DOJ does not have access to relevant information, that tentative trial date is gone. Ditto, depositions. e.g. DOJ demands Parker be produced on date X, is US going to object, take it to the magistrate?
As Kollar is quoted as saying by bloomberg: “I’m going to set a schedule that enables both parties to get all of the information that you need to adequately prosecute or defend the case, but I’m going to do it on an expedited basis,”
In the dynamics of litigation, US will not be able to ask for a single extension, nor really object to any discovery that DOJ wants and then loose the motion (in essence delaying the proceedings). That is a bad place to be. Tentative dates are just that.
Also it creates some interesting issues for US. For example, do they file a bunch of motions right before trial? Clearly they want to raise issues, but if they file 30 motions (typical for the defendants) Kollar may take a day or so to resolve them, so that evidence does not start until the Wednesday before t-tiving, and the trial not end till December 14. Also if USs lawyers take too much trial time, they may run past December 13, then what?
So yes, popcorn will be needed.
and a "PS" The initial bloomberg report http://www.bloomberg.com/news/2013-0...ger-trial.html suggests that Kollar set a schedule, aiming for a November 25 trial date. But she DECLINED to enter that date as a trial date, and instead ordered the parties to come back on October 1 for a status hearing.
I am curious what she really did, if its just a schedule, with a come back Oct 1, see if we can meet the tentative date, then the pressure is that much harder on US.
And I will add one more thing. DOJ values it reputation, and Kollar will expect, and the DOJ will do all it can to meet the schedule she set. They will not run out the clock, but they will document any delays by US, or problems created by US.
Last edited by spin88; Aug 30, 2013 at 11:27 am