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US/AA merger- MASTER DISCUSSION THREAD/incl 'when will US leave STAR'

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US/AA merger- MASTER DISCUSSION THREAD/incl 'when will US leave STAR'

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Old Dec 8, 13, 9:45 am   -   Wikipost
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There is an existing thread in the AA forum that may be useful to US and AA Flyertalkers:
US-AA Merger: Just the Facts thread

As facts become posted, that should be the place to look.

Merger discussion, speculation, and other questions can be directed here, or the similar thread in the AA forum:
MERGER: US and AA 9 Dec 2013 and implications for AA flyers (new)

AA - US Merger Agreement / Announcement / DOJ Action Discussion (consolidated, and now closed to new posts)
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Old Jun 20, 13, 1:33 pm
  #811  
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Originally Posted by relangford View Post
Isn't MSP (in MN) a major hub for DL? Isn't SLC (in UT) a minor hub for DL? Hmmmm?
You don't say...
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Old Jun 20, 13, 4:13 pm
  #812  
 
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LA Times: "American, US Airways merger would cut competition, GAO says"

Story here.

Could the almost-certain merger now be not-so-certain?
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Old Jun 20, 13, 4:45 pm
  #813  
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Originally Posted by tommyleo View Post
Story here.

Could the almost-certain merger now be not-so-certain?
It's still surefire, because Wall Street wants it to happen and has this administration in its back pocket.
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Old Jun 20, 13, 5:11 pm
  #814  
 
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Originally Posted by BearX220 View Post
It's still surefire, because Wall Street wants it to happen and has this administration in its back pocket.
Didn't people say the same thing about AT&T with T-Mobile? That didn't turn out the way the corporations wanted.
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Old Jun 20, 13, 5:36 pm
  #815  
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Originally Posted by tommyleo View Post
Story here.

Could the almost-certain merger now be not-so-certain?
The merger will certainly happen.

The GAO has no regulatory function in approving or disapproving mergers, nor does Congress. Yesterday's Senate subcommittee hearing was just political grandstanding - what politicians do best.

The Justice Department will approve the AA/US merger, perhaps with some DCA slot divestitures.
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Old Jun 20, 13, 7:52 pm
  #816  
 
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Originally Posted by FWAAA View Post
The Justice Department will approve the AA/US merger, perhaps with some DCA slot divestitures.
The DOJ probably won't have to fight it. The same DOT that said that over 50% of DCA slots being in one airline's hands was too much is unlikely to rule differently now.

Just remember that it's Parker's job to portray any slot divestures as terrible for the consumer, just like with the slot swap. Yet small market flights that weren't profitable went on the chopping block pretty quickly.

Jim
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Old Jun 21, 13, 10:42 am
  #817  
 
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Originally Posted by FWAAA View Post
The merger will certainly happen.

The GAO has no regulatory function in approving or disapproving mergers, nor does Congress. Yesterday's Senate subcommittee hearing was just political grandstanding - what politicians do best.

The Justice Department will approve the AA/US merger, perhaps with some DCA slot divestitures.
The GAO said CLT may lose it hub status in a combined AA/US.
(with operations shifted to MIA)

While I don't really believe that.... can AA/US put it in writing
and make financial guarantees that CLT will continue to have
the same amount of flights as today? Probably not.
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Old Jun 21, 13, 10:53 am
  #818  
 
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I don't know why folks seem to be fixated on the bigger the city the better the hub. I understand O&D but also it seems a hub also needs connecting passengers.

Piedmont was hugely successful on secondary cities. US has made CLT into a jewel. Great airport, easy connections, etc.

I agree both CLT and PHL will lose some specific flights, in part because of a change in alliances. What I can see AA is #3 in the NYC metro area for TATL flights. They are not going to add enough connecting passengers to greatly expand JFK, I know people don't like PHL but it has worked for them. That is why I believe there will be some adjusting but PHL will stay and grow.

AA is behind UA at ORD. I am sorry but it will billions for AA to match UA in Chicago.

Why screw with CLT just to send people from ROA or AVL to MIA or JFK to connect?

AA is thin in the SE. I don't have an exact count but a LOT of cities than US serves from CLT are not served from MIA and a LOT of cities that US serves from PHL are not served by AA from JFK.
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Old Jun 21, 13, 12:55 pm
  #819  
 
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Originally Posted by santarosaflyer View Post
I agree both CLT and PHL will lose some specific flights, in part because of a change in alliances.
I think the biggest thing CLT will lose are it's flights to the Caribbean/South America/Central America. MIA is by far the best geographic hub within the continental US for those connections for people on the Eastern Seaboard (although I think SJU could be turned into an excellent hub for the Caribbean if an airline wanted to go that route)
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Old Jun 21, 13, 1:05 pm
  #820  
 
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Originally Posted by GNRMatt View Post
I think the biggest thing CLT will lose are it's flights to the Caribbean/South America/Central America. MIA is by far the best geographic hub within the continental US for those connections for people on the Eastern Seaboard (although I think SJU could be turned into an excellent hub for the Caribbean if an airline wanted to go that route)
AA had a hub at SJU. They closed it and consolidated its Caribbean flights at MIA. JetBlue has expanded SJU so I doubt AA would reopen a hub at SJU.
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Old Jun 21, 13, 3:10 pm
  #821  
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In order for CLT to be de-hubbed, the new AA will have to shift a lot of that traffic through somewhere else. It really can't be done at PHL unless they want to really increase the flight delays there. And MIA is too far south to be a domestic hub for any traffic outside of FL. I see the new airline moving passengers around domestically mainly via DFW, ORD, and CLT. I do think CLT may see some overall flight reductions because of re-allignments in the network. I also think that ORD will see more flights, at the expense of PHL (mainly for east-west traffic). The one hub at most risk IMO is PHX, not CLT.
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Old Jun 21, 13, 4:18 pm
  #822  
 
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if the DOJ does not grant approval for the AA-US merger,
does US have to pay AA any money? (like the billions of
$$$ that AT&T had to pay T-Mobile after that deal was
not approved)
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Old Jun 21, 13, 4:58 pm
  #823  
 
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Originally Posted by FlyingBackwards View Post
if the DOJ does not grant approval for the AA-US merger, does US have to pay AA any money? ...
No, according to WSJ article ... (emphasis mine). However, there are other types of breakup fees agreed in advance.

... The merger can be terminated if it isn't consummated by Oct. 14, with the possibility of extending that date to mid-December. If US Airways shareholders don't vote for the deal, if the bankruptcy court doesn't approve it as AMR's bankruptcy-exit plan or if antitrust regulators shoot it down, the deal wouldn't go ahead.

If AMR pursued a superior deal, it would have to pay US Airways $135 million in a breakup fee, the filing said. If AMR knowingly breached the merger terms, it would have to pay $195 million. Conversely, if US Airways accepted a better deal, it would have to pay American $55 million. In the case of a knowing breach of the agreement, US Airways would owe American $195 million. Both airlines have "no shop" agreements. ...
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Old Jun 21, 13, 10:18 pm
  #824  
 
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IMO, what happens to PHL (grow/contract) will depend on how AA defines their international network. If JFK is right sized to support primarily (high yielding) O&D during the available prime slot times, then PHL will likely see an increase in international - as well as domestic traffic and become the primary One World NE connecting hub. Some secondary international markets (ATH, BRU, AMS, etc.) currently served from PHL, may be transfered to JFK if it's determined the NYC O&D would make those flights more profitable. PHL-TLV has zero competition, whereas NYC has direct competition from the jewish community's prefered carrier - El Al and other carriers. Even PHL, with its 4th largest U.S. jewish population, has significant bleed to EL Al at EWR/JFK, particularly from Jewish tour groups, thus creating a misleading relatively low daily PHL-Israel air passenger count. My theory is that the new AA will have flights to TLV from both PHL and JFK - and possibly MIA. PHL should continue to work well with both O&D and connections to Israel as one of US's (AA's) most profitable international routes.

CLT is another matter. Unlike PHL, which supports both O&D and connecting traffic in the center of the largest population (and highest yielding) area in America, CLT is essentially both isolated and further from potential key international destinations than both PHL/JFK and MIA. The fact that CLT is logistically and physically a better (and currently a much lower Fee) domestic connecting airport than PHL/JFK or MIA, will likely have little to do with any network decisons, else NYC would be a hubless city. The 2 competitors to CLT are DFW for east-west flows and MIA for Carribean and South America flows - which has been AA's highest yielding geography. MIA has the largest (twice as much as JFK) number of passengers to Latin America than any U.S. city. The profitability of those flights (for AA) is likely dependent mostly on O&D from its huge (Latin) catchment area, with some support from connecting traffic. So, why would the new AA double connect passengers via CLT to support it's projected (by me) 3 main east coast international hubs - JFK/PHL and MIA, or reduce potential route profitability at those hubs, by routing international connecting traffic through CLT at the expense of supporting the much higher international O&D flights at JFK/PHL/MIA?

Absent most existing international traffic, why would CLT continue at its current level as a major NS-EW domestic connecting hub with DFW and ORD now available and their significantly more supporting domestic O&D? Further, CLT will now compete directly with almost identical domestic O&D RDU and its Research Triangle for both domestic connections and the potential 1 or 2 daily flights to LHR. Can the new AA retain the same level of supporting traffic for both airports?

IMO, CLT will be right sized to primarily support both its international and domestic O&D, with a few non-stop seasonal caribbean flights and 1 year round flight to LHR. On the other hand (likely because of previous Parker-CLT relationships), If its determined that the combined network required to compete with UA/DL cannot be supported with JFK/PHL resources alone, then CLT could possibly continue as a seasonal PHL (and now PHL/JFK) connecting reliever for a few international flights.
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Old Jun 21, 13, 10:29 pm
  #825  
 
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ORD and LAS are some of the biggest vacation/business spots for flyers - and US as well as AA seem to be light in LAS. Any chance of hub or focus status returning?
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