DL to buy VX?
Apr 5, 2016, 7:46 am
#76
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I highly doubt DOJ will block the acquisition.
Not sure, but I'm willing to bet that pre-merger NW, DL, CO, UA, AA, US, WN were all bigger than even a combined AS/VX would be.
Also not sure what AS will do with the leased airbus planes, t-con routes, 2 gates at DAL, and a revenue based FF program. It will be interesting to see how AS handles all of these things as well as integration of the work forces, systems, schedules, etc.
I know why AS is making the purchase, but I wonder if they'll lose some of their sterling reputation they've kept as they haven't had any merger pains while most of their competition has.
Not sure, but I'm willing to bet that pre-merger NW, DL, CO, UA, AA, US, WN were all bigger than even a combined AS/VX would be.
Also not sure what AS will do with the leased airbus planes, t-con routes, 2 gates at DAL, and a revenue based FF program. It will be interesting to see how AS handles all of these things as well as integration of the work forces, systems, schedules, etc.
I know why AS is making the purchase, but I wonder if they'll lose some of their sterling reputation they've kept as they haven't had any merger pains while most of their competition has.
The Airbus are replaced by 737 as leases come due
Transcon routes stay
DAL gates subleased to another airline
LGA slots sold off
DCA slots are kept
Apr 5, 2016, 9:13 am
#77
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DAL/LGA slots could be interesting....here is an idea that wouldn't happen but could. DAL gates go to DL, LGA gates go to WN, AS gets cash and a player to be named latter
DC perimeter exception slots could be re-bid.
AA has 12, AS 8, F9 has 6, UA 4, DL 4, WN 2, B6 has 2, and VX 2. I wouldn't be surprised to see NK get VX's 2.
Apr 5, 2016, 9:43 am
#78
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Apr 5, 2016, 10:26 am
#79
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Based on combined traffic stats for 2015, AS/VX would enplane about 39 million passengers. That's smaller than NW in 2008 (the smallest of the above) which had 48 million. It is much smaller than the current UA (the smallest of the big 4) at 140 million for 2015. It would make AS/VX slightly larger than JetBlue (35 million pax). The DOJ cannot simply unilaterally block a merger. They have to go through the courts and will be dealing with substantial case history in mergers in general and airline mergers in specific. There are a number of tests here in terms of route overlap and overall market control. Given the small size of this merger, there is likely zero chance DOJ is going to challenge.
Apr 5, 2016, 10:30 am
#80
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What would they do with the DCA slots? I think it's virtually certain that ASVX will want to keep the beyond-perimeter slot pair used for DCA-SFO (assuming the DOT/DOJ let them, which I view as probable but not certain), but the in-perimeter slot pairs (VX currently uses them for DAL) don't have a clear use. I think they'll probably divest them. They might even trade the DCA slots to AA for ownership of the DAL gates (which are currently leased from AA) and move the AS DFW operation to DAL for local Dallas traffic to all four of the ASVX west coast hubs (if that's allowed).
Apr 5, 2016, 10:37 am
#81
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What would they do with the DCA slots? I think it's virtually certain that ASVX will want to keep the beyond-perimeter slot pair used for DCA-SFO (assuming the DOT/DOJ let them, which I view as probable but not certain), but the in-perimeter slot pairs (VX currently uses them for DAL) don't have a clear use. I think they'll probably divest them. They might even trade the DCA slots to AA for ownership of the DAL gates (which are currently leased from AA) and move the AS DFW operation to DAL for local Dallas traffic to all four of the ASVX west coast hubs (if that's allowed).
Apr 5, 2016, 11:52 am
#83
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Based on combined traffic stats for 2015, AS/VX would enplane about 39 million passengers. That's smaller than NW in 2008 (the smallest of the above) which had 48 million. It is much smaller than the current UA (the smallest of the big 4) at 140 million for 2015. It would make AS/VX slightly larger than JetBlue (35 million pax). The DOJ cannot simply unilaterally block a merger. They have to go through the courts and will be dealing with substantial case history in mergers in general and airline mergers in specific. There are a number of tests here in terms of route overlap and overall market control. Given the small size of this merger, there is likely zero chance DOJ is going to challenge.
A stronger AS could go the offense with DL by using some of the redundant metal on new routes. It's in our benefit if some of the lower fares and special offers happened outside SEA and NYC.
Apr 5, 2016, 1:33 pm
#84
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I think you can also make the case that, based on the Adversarial nature of DL and AS these days, that it's one of the few times that consolidation would likely increase competition. It certainly gives AS more market strength to compete with DL.
A stronger AS could go the offense with DL by using some of the redundant metal on new routes. It's in our benefit if some of the lower fares and special offers happened outside SEA and NYC.
A stronger AS could go the offense with DL by using some of the redundant metal on new routes. It's in our benefit if some of the lower fares and special offers happened outside SEA and NYC.
Then you have the DAL gates that could compete with AA as opposed to compliment them
And you have AS getting lots of inter Cali flights competing with WN.
Depending on how AS realigns itself it could upset the apple cart for all the major US carriers.
Apr 5, 2016, 2:32 pm
#85
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Plus this could very easily put AS in an adversarial relationship with UA being the 2nd largest carrier in SFO. AS could easily add some SFO to the STL, MKE's of the world and really be a thorn in UA's side too.
Then you have the DAL gates that could compete with AA as opposed to compliment them
And you have AS getting lots of inter Cali flights competing with WN.
Depending on how AS realigns itself it could upset the apple cart for all the major US carriers.
Then you have the DAL gates that could compete with AA as opposed to compliment them
And you have AS getting lots of inter Cali flights competing with WN.
Depending on how AS realigns itself it could upset the apple cart for all the major US carriers.
Apr 5, 2016, 3:19 pm
#86
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Apr 5, 2016, 4:50 pm
#87
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This will be pretty funny. I can see DL getting the gates if they massively outbid everyone else. If the come to bid, Richard Anderson will not be CEO. So, maybe the new guy will be better at partner relationships.
Apr 5, 2016, 5:06 pm
#88
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Just my speculation but perhaps AS could go after the lower end of the business travel on LAX/SFO-NYC. As of now I don't believe AA, UA, DL, or B6 allow free elite upgrades on those flights. AS could keep the F cabin the same as any other 737, perhaps improve the food a bit, price F below the other four airlines, and allow elite upgrades. I think they could have a place for people who just want a bigger seat, meal, and a few drinks.
Apr 5, 2016, 5:11 pm
#89
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Just my speculation but perhaps AS could go after the lower end of the business travel on LAX/SFO-NYC. As of now I don't believe AA, UA, DL, or B6 allow free elite upgrades on those flights. AS could keep the F cabin the same as any other 737, perhaps improve the food a bit, price F below the other four airlines, and allow elite upgrades. I think they could have a place for people who just want a bigger seat, meal, and a few drinks.
Apr 5, 2016, 5:29 pm
#90
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Or they can start SAN/SJC-NYC. Those markets don't have service and both cities have a loyal AS following. The current VX product on LAX/SFO-NYC is lacking compared to AA/B6/DL. I don't see AS upgrading the product to a lie flat which seems to be the current standard.