Kootur

False, only people pitching a fit are the people in this site.
Either way this merger is going to happen. After yesterday the doj now has to defend their weak case and the airlines will easily prevail if it even gets to trial. I doubt it will and the doj will cave with a settlement to save face.

Biggie Fries

And will fly fewer at higher prices if the merger goes through. Ditto the other members of the oligopoly.

Kootur

Neither you or the doj can prove that.
This merger will happen.

The airlines have much more data on their side that will show they will add competition that the weak manufactured data the doj has.

FWAAA

Denial isn't just a river in Egypt.

Fanjet

Which means that the oligopic airlines will then be making less money right? People keep thinking that airlines can just keep raising prices with no consequences. And as we have seen, airlines like Spirit and Allegiant fly in when there is market demand. So the lower airfares will still be there. It's just that most people here would cringe at the thought of having to board one of those airlines!

hillrider

None of these fly much of a schedule, and neither can get any meaningful slots and/or facilities at DCA and JFK and other airports.

They may keep prices low in Peoria and in some leisure destinations, but they don't do squat in keeping fares low for US businesses and the vast majority of the American traveler, whose routes are not served by either.

To highlight how silly that statement is, Sprit has 1.6% market share, and Allegiant is so small that it's not even broken out in the DOT data http://www.transtats.bts.gov/Data_Elements.aspx?Data=4

Repeating over and over statements where the data makes them provably wrong will not make them true.

hillrider

Economics 101 -- when a free market is replaced by an oligopoly or a monopoly, the profit-maximizing price is a much higher one than in a free market condition (study https://en.wikipedia.org/wiki/Monopoly_profit), one that will create deadweight loss that makes everybody else worse off (study https://en.wikipedia.org/wiki/Deadweight_loss). These are well known and uncontroversial economic facts.

Of course, Parker's plan is to increase prices and stick 313,000,000 Americans with deadweight loss, give raises to ~130,000 employees to loudly push this through, and make oligopolistic profits.

No thanks.

nkedel

If there were an infinite (or even meaningfully increasing) supply of airport slots, that would be a lot more true. There are a few metro-areas where outlying airports are still competitive and not saturated, and a few metro-areas where the main airport still has gates and slots. There are not many of either.

Even there, in both cases, the open slots are often at less-desirable times, and the outlying airports are often only of interest to price-sensitive leisure travelers. In both cases, time-sensitive travelers (particularly for business, and those who will be paying higher fares) are already not going to be making much use.

Fanjet

People keep bringing up slot-controlled airports. But those airports aren't the ones who have a lack of competition. And in turn, there is actually a downward pressure on fares. How many domestic carriers are there at JFK? LGA? DCA? SNA? It's a lot more than just UA, DL, AA, and US.

Fanjet

Which of these oligopic airlines have revenue margins greater than a single digit?

Biggie Fries

I'm a bit puzzled why, if you know the merger will happen, that you are so intent on schooling the rest of us. But, okay, be that is it may ... Truth is, if the merger does occur, then I will be most pleased if you are correct -- that the new airline runs better for all concerned, whether it is just because of good civic-minded management or in response to competition from new or currently small carriers.

Not only will I be pleased that you are correct, I will be pleased that I am wrong. I have no stake in the validity of economic theory and if this stuff

is repudiated to my benefit, I will be happy.

I wish I could be as certain of my future happiness as you seem to be, but it sounds like eventually I will. It would be just too unkind to be hectored as a fool and then have to turn around and see the things I had foolishly feared turn out to be true.

tommyleo

Riiiiiight.

So how much AA stock did you own before the DoJ (who are clearly also "pitching a fit"...) put the kibosh on your windfall?

AA_EXP09

I used the results on the AA board and this one.
Most people at my company don't care as the company pays for their tickets
(that being said, I am not sure if they realize the impact on their ability to go on holiday.)

AA_EXP09

If their competitors don't, why should they?
Look at CX/SQ/PR/LH/QF margins and tell me if they are high.

burlax

Perhaps you should take Econ 101 yourself before suggesting that others do. Oligopolies / monopolies don't 'replace' ' free market'. Rather, oligopolization / monopolization is a natural consequence of a 'free market,' especially in the sectors with high entry costs. Also, if it is posted on Wikipedia, it must be true, right?