iahphx

Nobody sells their assets to create new competition. Any of you guys ever run a business? It's hard. And the airline business is one of the hardest.

chicagorich

Hard because..? WN doesn't seem to have a problem.

It's usually not the government's job to create monopoly-type conditions in order to benefit large corporations that are unable to make it on their own, public utilities being an exception.

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sfozrhfco

US/DL are both full of it if they think this transaction would benefit anybody but themselves. They don't care about bringing competitive fares and service to these airports. They want to keep the competition and low fares out. If US can no longer profitably serve LGA, they can easily sell the slots to other airlines can can serve them profitably. Instead they squat on their slots flying 10 round trips a day between LGA and PHL--a route far better served by Amtrak. Just because legacy carriers find it hard to make money on domestic flights doesn't mean it is as difficult for every carrier. If they can't make money, charge more and provide a better product or start cutting back and leave the market to more competitive companies.

ClueByFour

If it makes economic sense to fly to these markets, I'm sure US can re-allocate what it has today. It only makes sense when you get a monopoly position and drive up fares to all markets, which is not good for the consumer.

The Obama administration does not get it economically. However, if the government was really interested in healthy legacy carriers, it would have let HP/US and UA go under, rather than doling out ATSB money earlier in the decade.

It's tough to bellyache about "conditions that a businessman would accept" when the leaders of one of the airlines in question were more than willing to accept that same government's cheese to be around to bellyache. Hubris, we hardly knew thee........

N830MH

Obviously not, WN won't be in DCA due to the congested controlled. I think B6 is considering to bring more extra slots into DCA. Because WN has already existing service BWI & IAD, too. Don't be sure WN is not want to be in DCA at all. There is two logical choice for which one WN or B6 will acquiring to get more slots in LGA to expanded more new markets. This is tougher choice is their own decision WN or B6 will announced more acqiring slots in between DCA or LGA.

iahphx

Yeah, that's just brilliant. I suspect many of the 32,000 people who draw their paychecks from US might disagree.

I often find your comments offensive, but this may be the most disgusting sentiment you've ever expressed. I would suggest an apology.

The demise of HP and US would have been a completely random act of bad luck brought on by international terrorists. HP was simply between financing when the terrorists destroyed the World Trade Center. The credit markets were frozen, and the folks who were going to routinely loan money to HP walked away. The gov't stepped in with a short term loan (at usurious rates) which US paid back early and then netted the gov't millions of dollars in profit from the sale of the warrants.

This put America West in position to then buy the failing US Airways, saving tens of thousands of jobs and maintaining another successful global airline competitor.

Frankly, saying this was all a mistake is simply misguided and downright mean. It's outrageously inconsiderate and stupid.

longtime lurker

The relevant market is not DCA or LGA - it's all 3 Washington-area airports (DCA, IAD, BWI) and all 6 NYC-area airports (LGA, JFK, EWR, HPN, ISP, SWF). CO has a much higher concentration at EWR than DL would have at LGA. Same with UA at IAD versus US at DCA. DL and US' market concentration in the larger WAS and NYC markets would be low, even after the slot swap.

There's little consumer benefit in giving LGA slots to WN so that they can fly to the same city pairs already served by other airlines, or AirTran for more flights to Atlanta, Baltimore, Milwaukee or Akron. The slot swap was supposed to help service to smaller Northeast cities. There's already competition on almost all of the routes from CO at EWR and on some from AA at LGA and/or JFK. DL is just taking over US' flights with larger planes.

jbird82

I agree with you and that is what I was trying to convey in my earlier post. My bellyaching over ticket prices comes from my admittedly rudimentary understanding of how airlines price their flights. For example, why is trip A-B-C so much cheaper than B-C? Other than monopolistic gauging for the direct flight, I don't know the reason.

iahphx

I tend to agree with you, but the DOT says no. They look at average fares which show -- surprise -- airlines charge more for flights from DCA than BWI, and from LGA over JFK. So they think LGA and DCA slots should be redistributed to drive down fares at DCA and LGA.

Personally, I think America is lucky to have the commercial aviation network we have. We really have the best of all worlds. If you're price sensitive, you can travel between almost any two points for a very low price. At the same time, we have several hub and spoke airlines that "connect the dots" with frequent service. Only a fool would argue that, in the aggregate, airfares in the United States are too expensive. I wouldn't trade our air service for any other country's.

Occasionally, you do get gouging due to a lack of competition. PHL to BOS certainly comes to mind -- US generally charges usurious prices between those 2 cities. But such monopolistic pricing is rare -- and arguably necessary, to subsidize the routes where the legacy carriers lose money on. If fares between LGA and x city got out-of-line after a swap, I am certain that JetBlue or somebody else would launch a competing flight from, say, JFK, is there was sufficient demand. This relates to longtime lurker's observations: very few price sensitive travellers would be at US or DL's mercy if this deal went through.

flg8rmatt

yes we are quite lucky, I wouldn't trade it either. However, it is tough to compare the air service in the USA to other countries. The US is very large with a dispersed population. In Europe there are entire nations with 100% cell phone coverage. that's not going to ever happen here. Likewise, the air industry has different dynamics in this country than in Europe. Personally, although it will be bad for consumers, I do think that more airlines need to fail or be bought out before the industry as a whole returns to profitability.

The reason for the DOT imposing the slot sale conditions that require a sale to an airline with a small presence at DCA/LGA is to foster competition. Existing slot restrictions are not conducive to fair market competition. Allowing new players to enter the market closer approximates these free market conditions that so many Americans hold up as a vital part of what makes this country so great. If such increased competition leads to the demise of a legacy carrier, then that is what needs to happen to keep the industry profitable (healthy).

ClueByFour

When did the government become a jobs program? By supporting failing businesses, the feds prolonged the pain and suffering for the hundreds of thousands of employees of healthier airlines. How many people at every other legacy were furloughed after 9/11? Absent the current capacity that HP/US represents, that probably does not happen and the airlines that remain are healthier.

You can suggest. It's not going to happen. Maybe it will, when the crocodile tears are gone.

"Between financing" is an interesting euphemism for "broke." You will note that AA, CO, WN and a few others were able to survive, despite frozen credit markets. Why?

Which they were only able to do by extinguishing the equity and bondholders and creditors of the US East entity, twice and lowering wages artificially via bankruptcy. The government made money while these groups above lost their shirts.

And prolong (in the words of your favorite airline execs, Doug and Scott) the overcapacity problem that plagues the industry. I trust the irony here is not lost--you believe Tempe can do no wrong, but while Tempe cries for capacity reduction and consolidation, artificial life support from the Feds that kept Tempe around is essentially what causes that overcapacity in the United States. Hubris, we hardly knew thee....

Perhaps. Earlier in the thread, you decry government interference. When the irony of that is pointed out, you have essentially insinuated that decrying government interference is "inconsiderate and stupid."

Does it only count if it's one's favorite airline that gets saved? Or if you can day-trade the stock?

An aside--this has nothing to do with "small markets that don't have service." US and DL could provide that service tomorrow if they want to. It's about establishing market pricing power. The feds get it. The bit about "service to small communities" is essentially a feel-good headfake and talking point.

SOBE ER DOC

I personally do not have a problem with this slot swap.

There are too many carriers out there and further consolidation of routes and carriers is necessary. The LCC are doing nothing to help this. I agree with other posters that the LCCs are not going to use DCA or LGA to serve smaler markets like SYR, MDT, ABE and the like.

If DL's plan is, as they say, to create a domestic hub at LGA then the slot swap would in fact INCREASE competition as flyers in the NE would have an additional connecting options (CO-EWR, US-PHL/DCA, UA-IAD, DL-LGA). Yes, they're all legacy carriers, but it's still competition.

How many downturns in the industry do we have to endure before folks get it in their heads that current level of competition is artificially deflating airfares and actually HARMING the overall health and viability of the industry.

Funny thing is that if US or DL failed, the gov't would allow another carrier to waltz in and take over everything overnight.

BoeingBoy

He does...if all that matters is what's good for US (and DL). Unfortunately for US and DL, those deciding this issue are charged with considering what's best for consumers too.

Jim

MAH4546

Thanks for posting that.

There are still options out there for US Airways if it wants to rid itself of its LaGuardia operations - it can deal with a variety of carriers for a cash transaction. It depends how willing US Airways would be to opening the door for low-fare competition at LaGuardia.

AZ Travels the World

Exactly right.

And that's why.