Carolinian

Absolutely. . .like decimated real competition and jacking up fares.

Carolinian

All of these mergers are anti-competitive and that is ultimately going to bite consumers in the butt in a lot of ways.

But if mergers had to happen, it would have been best for US to take over DL, and put the two airlines most inclined to race to the bottom together.

NW and CO, under NW leadership would have resulted in a customer-friendly airline. Then let UA and AA stay independent.

But it would have been far better for customers if no mergers at all had happened.

Majuki

...happened and are a done deal. The US/AA one will likely happen too. So instead of complaining about how hypothetical scenarios didn't come to pass, focus on waiting until more facts become known then make the determination of whether or not to take your business elsewhere.

Face it, merger or not, frequent flyer programs will continue to be devalued. There was talk of MileagePlus switching to a revenue model a few years ago. It didn't happen, but now SkyMiles will be the first US program to have a revenue component for maintaining status. Don't be surprised if MileagePlus and AAdvantage, merger or no merger, follow this example DL has set.

eponymous_coward

How would liquidation of bankrupt airlines benefit customers, given that in many of these merger scenarios, we are discussing airlines that either needed to merge or die?

Airlines in the 21st century are highly capital-intensive, and we can see that an airline with lots of customer love like VX is having problems getting to black ink. So how are airlines with pension plans, retired employees and so on supposed to survive selling products below cost, along with buying or leasing airplanes and the other costs of being an airline? Make it all up on volume? Shouldn't customers be paying the real costs of doing business? Is it fair that airlines should treat a customer who gives them $2000 of business to fly 100,000 miles better than a customer who gives them $9000 of business to fly 90,000 miles?

bubba198

There is a lot of talk about the revenue component for maintaining status. My read of what DL has done is that they require an average of $.10 per mile in revenue from an FF to qualify for the status level. I think this is reasonable, I personally generate about $.15 per mile and would retain my Platinum status in a normal year w/o the LT qualification. People brag about getting EXP w $4,000 in expenditure but I think it is entirely reasonable that an airline would make this impossible. Much like stopping the ability to attain lifetime status by churning credit cards. AA changed this in a reasonable manner giving notice of the change.

I am not so sanguine about changes in award levels and upgrade qualification. The current levels are not unreasonable, are long established, and are not being gamed. AAL has the right to change this, no question, but it would disturb me far more than a Delta like revenue component. At some point it would change behavior but everybody knows that and we are not there yet.

What bothers me most about the merger is that the merger appears to be giving back too much of the corrections to the cost structure negotiated in bankruptcy. In addition it nullifies what appears to me to be the only reason USAir made a profit, the incredibly ( word not used lightly ) low wages paid pilots and FA's on USAir. I don't believe there isany genius in Parker beyond this. So the merger is with a long term less viable airline and so on.

My concern as an FF is another bankruptcy in a couple of years resulting from this. That imho would really destroy the value of what is now the world's largest airline for it's customers.

FWAAA

About the bolded portion: IMO, you have mischaracterized my post. There's nothing in my post that argues or implies that Parker should have known in August, 2009 that he would one day take over AA. The slot swap turned out to be a poor move measured by what we know now. Whether it was a poor idea in 2009 or 2010 or early 2011 is not necessary for me to declare it, in my opinion, a poor move now.

The slot swap closed on December, 2011, after AA had filed its Ch 11 petition and numerous news sources. A better decision would have been to call off the deal (and pay any damages owed to DL resulting therefrom).


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GadgetFreak

Right now an EXP on AA sees those kind of upgrade rates and it happens in the same way. Lower tier are less but even as a platinum on AA I got upgraded most of the time. One thing someone else pointed out is that while AA, due to the limit on free upgrades and how many seats they keep open, frequently (almost always) have seats available in first when EXPs change flights at the last minute and since US clears more upgrades early this may not happen on the new carrier.

Ambraciot

Keeping both JFK and PHL as hubs is feasible, keeping JFK, LGA and PHL would have been too much, the new AA will have more slots at LGA than it should use/need and is probably better off with a non legacy getting the extra slots at DCA than having DL hold onto them. Plus, did LCC have the cash to pay DL anything, the cash they got from DL seemed pretty important to them?

uxb

+1, this goes with what I've observed having travelled in/out of SFO over the last couple of years.

Duh! But what's done is done. Can't undo the past.

VX operates how many flights from SFO daily? With a fleet size in the low-50s, I cannot imagine that number being greater than 100.

+1, but don't insult Indian airports like that. I found COK and DEL to be superior to many US airports.

Yes, you are in a minority on that one. The better airport is MDW.

I actually thought CO was great pre-UA, and totally wouldn't have mind an AA/CO tie-up. However, I prolly would've mind having to schlep to dumpy EWR to fly in/out of the city. Practically every time I've ever used EWR, I was stranded at the NJT/Amtrak station for an hr+ due to one train calamity or another.

elitetraveler

And you actually know what the penalties were @:-) so you can make your assessment, or is it just another Parker Decision Bad post?

By the way was it a bad decision by Horton to give up the 3 gates at EWR?

eponymous_coward

Fair enough that you're admitting that in hindsight the deal might not have been ideal- though I'd have to point out that if we assume that US was correct in saying the slot swap was in their financial best interest, and the last couple of years have been their best performing ever, that a less-profitable US with underexploited but poorly performing assets dragging down their performance might not have been as attractive a merger partner.

That could have been quite the expensive decision... and it's quite possible a messy lawsuit involving US backing out of a deal with another airline and impacting their bottom line (that presumably a merged entity would have to deal with) might also have driven off AA's creditors and unions.

Again, this is all "hindsight is 20/20" and hypothetical.

Consultette

Agreed. My seat mate and I were more blown away by how happy they are since they obviously didn't see the writing on the wall that LOTS of heads will probably be hitting the chopping block if we were hearing what they were saying correctly.

Consultette

I'd fly out of ONT to DFW to NYC and take the train over going into/out of PHL if my company would let me. Only redeeming quality at that airport is the self service liquor in the AC.

grahampros

These types of arguments show a basic lack of understanding of how economic markets work in general, and the airline industry specifically. There were too many competitors in a capital intensive business like the airline industry and consolidation was long over due and inevitable. It's really hard to make a reasonable argument that everyone loosing money and having to go bk to stay alive really benefited consumers. 4 Strong players controlling 70% of the market domestically provides plenty of competition to keep them honest vs 10 who are all loosing money all about to go out of business.

eponymous_coward

What, you're arguing that having a bunch of airlines flying dirty beater Super 80s, DC9s and 762s held together with duct tape might not be the most consumer-friendly market? That the ability to turn a profit that includes the ability to make capital investment might be important?