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AA - US Merger Agreement / Announcement / DOJ Action Discussion (consolidated)

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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)

 
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Old Feb 16, 2013, 9:52 am
  #721  
 
Join Date: May 2009
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Originally Posted by cdepks
Thought I'd try and get some input here (I am US but I guess we are all together now!), I fly PHL-IST, normally through FRA or MUC on LH or TK. Now, with OW it looks like I can only take BA through LHR. I looked on BA's site, looks like a charge for reserved seats (is this NK or what?). My quetion is, how is the service/connection (I've never been to LHR), etc. from some of you seasoned AA folks for service from PHL-IST? I appreciate any feedback, with this merger my biggest complaint (and to this day Doug never called for my opinion) is the move to OW from *A, thanks....
If you flew BA the whole way, you'd have one change at LHR British Terminal 5, of course, avoiding the "connections" bus between terminals.

US will eventually switch from using LHR Lufthansa Terminal 1 (since they're tearing it down in 2014), presumably to use Virgin Terminal 3 along with AA, perhaps even before the merger is complete.

You'd probably get better data about the BA-BA transfer in that airline's forum.
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Old Feb 16, 2013, 11:44 am
  #722  
 
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In an article written yesterday I noticed this:

---Asked by a West Coast pilot about the new American’s plans for Asia, Horton said “we would anticipate more flying out of LA [Los Angeles] in the next two or three years.” ---

Does anyone know what destinations out of LAX seem like a logical possibility?


http://www.dallasnews.com/business/a...ttle-poker.ece
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Old Feb 16, 2013, 11:46 am
  #723  
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Originally Posted by MAH4546
While true, AA alone is the second largest airline at SFO, and adding US will widen the gap AA has over VX and WN.
AA+US is larger by volume, but since DL can get you nonstop to Hawaii or Japan and one-stop to Singapore or Sydney (entirely on DL metal), I'd say a SFO based traveler not loyal to UA or VX would be better served by DL's coverage.

Also, according to The BAT SF, AA alone is not even in the top 4 :
http://thebat-sf.com/2013/02/05/sfo-...Traveler%29%29

Airline Market Share at SFO
46% United Airlines
9% Virgin America
8% (tie) Delta, Southwest/AirTran
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Old Feb 16, 2013, 12:16 pm
  #724  
 
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Originally Posted by 787fan
AA+US is larger by volume, but since DL can get you nonstop to Hawaii or Japan and one-stop to Singapore or Sydney (entirely on DL metal), I'd say a SFO based traveler not loyal to UA or VX would be better served by DL's coverage.

Also, according to The BAT SF, AA alone is not even in the top 4 :
http://thebat-sf.com/2013/02/05/sfo-...Traveler%29%29

Airline Market Share at SFO
46% United Airlines
9% Virgin America
8% (tie) Delta, Southwest/AirTran
I'll trust the Bureau of Transportation Statsitics for this info.

1) United 48.37%
2) American 9.21%
3) Southwest 8.55%

Originally Posted by WilliamWanderlust22
In an article written yesterday I noticed this:

---Asked by a West Coast pilot about the new American’s plans for Asia, Horton said “we would anticipate more flying out of LA [Los Angeles] in the next two or three years.” ---

Does anyone know what destinations out of LAX seem like a logical possibility?


http://www.dallasnews.com/business/a...ttle-poker.ece
LAXPEK is probably coming. I'd also look for LAXCOS, LAXMCI, LAXYYC, LAXGEG, and I would not be shocked if we see LAXSEA and LAXPDX. Some smaller stations that the US merger ads to the network might very well see service move from PHX to LAX. AA also really wants LAXHND, but of course that requires more Haneda slots to open. Growth won't be easy, though, until TBIT construction is done. AA will move all international ops to TBIT (but no worries, TBIT and T4 will be merged behind security, so no re-clearing).

DOT also just opened up 14 new GRU frequencies and airlines can apply up to March 5th. If AA applies for LAXGRU, it honestly would not surprise me, although I have heard no indication whatsoever AA would do so.
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Old Feb 16, 2013, 2:18 pm
  #725  
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Originally Posted by thewayofthefuture
I believe that would require another perimeter exemption. UA and VX went after the DCA-SFO slot last year, while US received SAN-DCA, among others.
True, but I wonder if new AA could request a transfer of one of its DCA-PHX exemptions to DCA-SFO? IIRC, US has three nonstops to PHX, one to LAS and the newest to SAN. That assumes, of course, that the new AA gets to keep all of its DCA perimeter exemptions, and as the largest airline, that may be asking too much.
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Old Feb 16, 2013, 2:23 pm
  #726  
 
Join Date: Feb 2013
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Originally Posted by Altaflyer
Yuck. Hate USAirways....bottom of the barrel airlines. Hope the regulators refuse to approve. Loss of competition is always bad. I assume they will choose Oneworld as the alliance.
It has been funny watching all of the groaning about USAirways in this thread. Have you flown them lately? The criticisms sound circa 2001. Doesn't AA still use absurd paper coupons for upgrades? US got rid of that a decade ago. If you are mid-tier on US, you ride up front nearly every flight. I haven't sat in coach but once out of probably 50 segments. I flew 120 segments last year on AA, UA and US and by far, the AA product was the most pathetic experience on a plane I've had in years. Delays, surly FA, gate changes after gate changes at DFW. Out of 105 US segments I had exactly one delay and one cancellation.

ORD is among the worst experiences in all of aviation. CLT and DCA, among the best. Granted, PHL is no fun, but neither is DFW.

My point is all this moaning and groaning about US is probably from people who have not set foot on a Parker managed airplane. You better hope that the US model becomes the AA model, because it means: On time, limitless upgrades, low fares and clean planes.
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Old Feb 16, 2013, 2:28 pm
  #727  
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Originally Posted by Consultette

I didn't have the heart to tell them that the fact they're going to have a lot of people sitting around probably means they are going to have a large amount of "restructuring" (layoffs) in the near future. They made their bed, I guess they can lie in it.
Won't the F/A buyouts give AA the numbers they need to work with?
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Old Feb 16, 2013, 2:30 pm
  #728  
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Originally Posted by CatotheCat
It has been funny watching all of the groaning about USAirways in this thread. Have you flown them lately? The criticisms sound circa 2001. Doesn't AA still use absurd paper coupons for upgrades? US got rid of that a decade ago. If you are mid-tier on US, you ride up front nearly every flight. I haven't sat in coach but once out of probably 50 segments. I flew 120 segments last year on AA, UA and US and by far, the AA product was the most pathetic experience on a plane I've had in years. Delays, surly FA, gate changes after gate changes at DFW. Out of 105 US segments I had exactly one delay and one cancellation.

ORD is among the worst experiences in all of aviation. CLT and DCA, among the best. Granted, PHL is no fun, but neither is DFW.

My point is all this moaning and groaning about US is probably from people who have not set foot on a Parker managed airplane. You better hope that the US model becomes the AA model, because it means: On time, limitless upgrades, low fares and clean planes.

Does this year count? But welcome to Flyertalk!

Last edited by GadgetFreak; Feb 16, 2013 at 3:29 pm
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Old Feb 16, 2013, 2:42 pm
  #729  
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Originally Posted by CatotheCat
Doesn't AA still use absurd paper coupons for upgrades? US got rid of that a decade ago.
No.

If you are mid-tier on US, you ride up front nearly every flight. I haven't sat in coach but once out of probably 50 segments.
That's just not going to happen at AA, particularly on transcons. You'd be competing with too many EXPs to give you a 100% clearance rate, plus you'd need upgrade instruments.

I flew 120 segments last year on AA, UA and US and by far, the AA product was the most pathetc experience on a plane I've had in years. Delays, surly FA, gate changes after gate changes at DFW. Out of 105 US segments I had exactly one delay and one cancellation.
So will AA be your choice of carrier when US disappears? If not, who will be your primary carrier? I'm quite happy with the AA model after 12 years at EXP and can't think of going anywhere else.

Don't you get 50% bonus miles at midtier at US? Wouldn't you prefer 100% at AA?

Welcome to FlyerTalk.

Tom at JFK Europe bound
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Old Feb 16, 2013, 2:57 pm
  #730  
 
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Originally Posted by FWAAA
True, but I wonder if new AA could request a transfer of one of its DCA-PHX exemptions to DCA-SFO? IIRC, US has three nonstops to PHX, one to LAS and the newest to SAN. That assumes, of course, that the new AA gets to keep all of its DCA perimeter exemptions, and as the largest airline, that may be asking too much.
The combined capacity of AA and US at DCA is going to be the biggest regulatory hurdle to clear. I imagine that Parker is kicking himself now for making the swap with DL at LGA for DCA slots. He's probably going to be almost back to where he started on DCA while having lost a significant footprint at LGA. US Airways terminal D at LGA would have been a great place to consolidate the existing AA gates into a relatively newer terminal. Since terminal D is not an option, I wonder if the combined AA/US could swap with UA to trade the current AA gates and slots at DCA in exchange for picking up a similar number of slots at LGA complete with the balance of the gates in the terminal that supports most of the American Eagle LGA flights?
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Old Feb 16, 2013, 2:59 pm
  #731  
 
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Fuel Costs

On the day the merger was announced one network said the main reason for the merger was the cost of fuel. However Mr. Parker said the comnined airline would be flying the same number of airplanes to the same destinations and keep all hubs. So how does this maintin or keep fuel prices from raising. Only thing I can think of is purchasing power/leverage as with one airline buying all the fuel for both you can negotiate better pricing.
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Old Feb 16, 2013, 3:11 pm
  #732  
 
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Originally Posted by george 3
I see plenty of nice promotions near term by AA to keep us happy when things go wrong. Sure, there may be (actually more than likely) some long term changes to make it more difficult requalify at the highest levels with some reduced benefits. However, I see AA rolling out DEQMs (general and targeted) to compensate for the likely integration pain. I'm not going to complain about that.
I complete agree; the only concern is that AA has been targeting such offerings this year, apparently I do not spend enough to be included, would consider more discretionary travel, MRs during off-peak DEQM offers.
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Old Feb 16, 2013, 3:16 pm
  #733  
 
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Originally Posted by ksweeney
The combined capacity of AA and US at DCA is going to be the biggest regulatory hurdle to clear.
This is often mentioned but DCA in the big scheme of things is a relatively small airport is it not? I do not understand why is this such a big deal? IAD and BWI have more traffic and UA and WN each have hubs at those airports so it is not like AA would corner the WAS metro area market.

And if the controllers are worried about market share does not Delta have more of it percentage wise at ATL then the combined US/AA at DCA? And certainly ATL dwarfs DCA in volume...

Last edited by isle-hawg; Feb 16, 2013 at 3:22 pm
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Old Feb 16, 2013, 3:21 pm
  #734  
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Originally Posted by buckeyefanflyer
On the day the merger was announced one network said the main reason for the merger was the cost of fuel.
Then that network talking head was making things up, as many journalists and analysts are prone to do. Fuel prices are very high, but that's not why Parker lusted after AA. This merger is not about fuel prices.

Originally Posted by buckeyefanflyer
However Mr. Parker said the comnined airline would be flying the same number of airplanes to the same destinations and keep all hubs. So how does this maintin or keep fuel prices from raising. Only thing I can think of is purchasing power/leverage as with one airline buying all the fuel for both you can negotiate better pricing.
No, the size of the airline has nothing to do with fuel pricing.

In 2012, US paid a lower price per gallon for jet fuel, systemwide, than UA, DL or AA. And US was the smallest of the four. If being big meant the best price, then UA should have beaten everyone. Instead, UA paid the highest price per gallon of the four, in part due to inferior hedging performance.

US stopped hedging after the Summer 2008 fuel price spike and fourth quarter 2008 price meltdown, as the resulting hundreds of millions of dollars of losses resulting from that nearly sent US back into Ch 11. Those hedging losses consumed most of US' unrestricted cash. Parker learned a very expensive lesson: if you're not very good at fuel hedging (and US has never been), then you run the risk of bankrupting the company.

That said, AMR paid less per gallon than US in every year since the US-HP merger except for two years - 2010 and 2012 (and US had no fuel hedging activity in either year).

The big question is whether Parker will cancel the very successful AA fuel hedging department and go naked from now on or preserve that function? Since the merger of US and HP, AA's superior fuel pricing (compared to US) saved AMR several hundred million dollars in the aggregate compared to the US pricing, even taking into account the 2010 and 2012 years when US pricing was lower than AA. Parker was very smart to cancel the US hedging program, as they were clearly not very good at it.
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Old Feb 16, 2013, 3:33 pm
  #735  
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Originally Posted by isle-hawg
This is often mentioned but DCA in the big scheme of things is a relatively small airport is it not? I do not understand why is this such a big deal? IAD and BWI have more traffic and UA and WN each have hubs at those airports so it is not like AA would corner the WAS metro area market.
Antitrust enforcers generally don't let you merge/acquire dominant positions - but if you build dominant positions gradually (like fortress hubs like ATL, DFW, CLT, etc) then the government generally doesn't go on the offensive and take away part of your market share.

The reason that new AA (merged US-AA) will have to divest some DCA slots is that during the US-DL slot swap, the government demanded that neither DL nor US end up with more than 50% of the slots at either LGA or DCA, both of which are still slot-controlled.

Because US gave DL such a huge portion of its LGA slots, the government required that DL give up 16 slot pairs at LGA to bring DL down below 50% of the LGA slots. And at DCA, DL-US had to give up 8 slot pairs so that US would hold no more than 50% of the slots. The government made it clear that it viewed 50% of either market as the upper limit.

That brings us to today, when the new AA will hold only about 32% of the LGA slots, so it's unlikely that any divestitures will be required there.

But at DCA, the new AA holds more than 60% of the slots, and undoubtedly, the government will require new AA to give up some/most/all of the DCA slots held by PMAA, to bring new AA down to 50%, the same limit imposed a couple years back on much-smaller PMUS.

THAT's why the LGA-DCA slot swap was such a poor move by Parker: had he not been so hell-bent to accomodate DL and prevail over the government, the new AA would have to give up some LGA slots (probably down to 50% or so) and would not have to give up any DCA slots, since new AA would have just about 50% when you add the former DCA totals of PMUS plus PMAA. In effect, Parker gave up what could have been the dominant LGA position for a position at DCA that's no more dominant than new AA would have been anyway.

Originally Posted by isle-hawg
And if the controllers are worried about market share does not Delta have more of it percentage wise at ATL then the combined US/AA at DCA? And certainly ATL dwarfs DCA in volume...
DL didn't get that dominant position at ATL by merging with/buying/combining with another airline - it built up that dominant position gradually over many years. And another thing: ATL is not slot-controlled, as LGA, DCA, EWR and JFK are. AA has a dominant position at DFW and MIA, yet it's unlikely that the government will do anything about that, as neither airline is slot-controlled. No slot controls means that any airline is free to challenge AA's dominance there. Can't do that at DCA, LGA, EWR or JFK, as the slots are already taken.
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