IADCAflyer

Do also bear in mind Economics 101 supply and demand curves.....

Fanjet

You would think how the DOJ is describing it, these oligopic legacy carriers have their boardrooms filled with shareholders lighting their cigars with $100 bills. People keep boasting about the record profits they are making (from an industry that lost over $10 billion dollars in the past decade), as evidence of that. But DL's revenue margin for the last quarter was I believe the highest of these oligopic carriers coming in at around 9%. Yes, a big price gauging 9%!!!

coastalguy

9% margin isn't bad when one considers that a domestic airplane operated by any US-based carrier is effectively a hyper speed Greyhound bus with better security running at a higher elevation.

Fanjet

9% isn't bad. And it is definitely better than a loss. But it also isn't price gauging.

tommyleo

What's "price gauging"???

KennyBSAT

The carrect spelling af "price gouging" an keybaards withaut an "o".

FWAAA

The government's rationale for mentioning the current profits in the complaint (more than once) is two-fold:

1. Mergers have been permitted to occur in the recent past, reducing capacity and (in the view of the DOJ) reducing competition, resulting in higher fares and profits even though fuel prices remain close to record highs; and

2. Current profits at US and AA absolutely prevent any argument of the failing company defense. Neither company is failing - they're both reporting record profits. The rampant speculation that AA and/or US will fail if the merger isn't approved is irrelevant under the reasoning of International Shoe.

The $60 billion lost by the industry in the last dozen years is irrelevant in this merger. It simply doesn't matter. Wouldn't matter if the industry had earned $60 billion or if the industry had lost $60 trillion. The current good health of US and AA is all that matters - the previous losses are no longer relevant.

Antitrust law isn't concerned with creating a long-term stable, profitable industry (like the industry analysts and CEOs are).

kudzu

Minor point: International Shoe dealt with jurisdiction. Perhaps you meant Brown Shoe?

Fanjet

Which is why AA/US aren't using a failing company defense. I believe they have stated that not allowing them to merge puts them at a competitive disadvantage against UA and DL. But I haven't seen any statement by them that it means either airline's demise.

And the DOJ is using average fare increase data starting from a time period when those airlines were losing money, not when they were making money. Does the DOJ think that those airlines should revert back to their old fares and start losing money again?

FWAAA

No, I meant International Shoe Co. v. FTC, 280 U.S. 291 (1930).

http://supreme.justia.com/cases/fede.../291/case.html

IADCAflyer

You're bring up bad memories of Civ. Pro.

Stop.

bertheike

Sorry if this is already discussed, but I not found.
Would like to know, how long US will be a member of *aliance, or better said, how Long we will be able to book *aliance flights with DM ?

PHL

As of now, there is no announced withdrawal because the merger is on hold pending the DOJ law suit. They go to court Nov 25. So, I'd say they're definitely in *A through the end of the year, at a minimum. If US/AA are able to win the suit or come to a settlement, then we'll hear more maybe by the end of the year about the merger plans. A company letter to employees said they hope to wrap it up in Q1/2014 if things go their way in court.

apeortdz

If it makes you feel better, Last week I booked a *A flight through US that is for June/July 2014. I understand the danger and I am willing to take the risk.

AA_EXP09

So have you not noticed airfare being up ~5-6% in many major markets?