Superguy

I think this is good news. While I generally thing the current DOJ is incompetent in a lot of things, I think they have this one right.

Further industry consolidation reduces competition. My only question was where were they when DL/NW and UA/CO happened? Granted, DL/NW happened under Bush, which would have presumably been more in favor to such consolidation, but why not oppose the UA/CO merger? As a PMUA flyer, that would have been very welcome indeed.

I saw little upside going to AA as a US flyer. The only plus would have been a larger domestic network, but it would come at the cost of higher prices, fewer flights, and going to an arguably much weaker alliance. Domestically, US already has UA to codeshare on gaps in their network, and they had great foreign coverage thru *A.

Dougie and Kirby would have their new empire.

I see a bit more upside for AA, like filling in gaps in its network, a couple decently placed hubs (CLT in particular, for the SE), and getting a fleet of some decently aged Airbus planes that they wouldn't have to buy.

In short, DOJ took AA's and US's managements' words and used them against them. If they admitted capacity will be reduced, and fares and fees will go up (which they already did when they said they've been able to make them stick due to less competition), as well as AA and US being able to survive fine without the merger, it's going to be hard for them to justify the merger. The only counter argument I see is saying there's precedent with allowing DL/NW, UA/CO and WN/FL being allowed to merge. I don't see that being successful as the market can only handle so much consolidation.

If the merger gets canned, I don't see US leaving *A. They'd have to redo all their systems, which would cost money for no real benefit over what they get now with *A. They'll always be the "little sister" regardless of which alliance, so again, I don't see much advantage being AA's little sister vs. UA's. I also think UA's network is a better fit with US's for codesharing.

I'm happy this is happening. US will likely remain in *A and continue on being a good place for elites.

richarddd

If it were just about DCA, US and AA would have agreed to sell a number of slots and the merger would have been approved.

ramalama8

Amen! Preach on!

metsfan1962

I'm optimistic this merger is on life support now and they'll eventually pull the plug. Looks like I won't have to be worrying about adverse effects to the AAdvantage program and you guys can keep whatever you like best about US Airways Dividend Miles

Centurion

I can not believe the talking heads on news networks saying ticket prices have not gone up much. That statement technically can be true as ticket prices have not increased that much but the COST TO FLY HAS INCREASED via surcharges for bag fees, seat assignments. Worse every member of the public pays as the government FAA, Your local airport authority, etc are not collecting the tax on the surcharge fees.

Yuengling

What airline took an angry email from Parker in 2010 over a triple miles promotion? From the complaint:

US Airways also has communicated directly with a competitor when it was upset by that competitor’s efforts to compete more aggressively. In 2010, one of US Airways’ larger rivals extended a “triple miles” promotion that set off a market share battle among legacy carriers. The rival airline was also expanding into new markets and was rumored to be returning planes to its fleet that had been mothballed during the recession. US Airways’ CEO complained about these aggressive maneuvers, stating to his senior executives that such actions were “hurting [the rival airline’s] profitability – and unfortunately everyone else’s.” US Airways’ senior management debated over email about how best to get the rival airline’s attention and bring it back in line with the rest of the industry. In that email thread, US Airways’ CEO urged the other executives to “portray[ ] these guys as idiots to Wall Street and anyone else who’ll listen.” Ultimately, to make sure the message was received, US Airways’ CEO forwarded the email chain—and its candid discussion about how aggressive competition would be bad for the industry—directly to the CEO of the rival airline. (The rival’s CEO immediately responded that it was an inappropriate communication that he was referring to his general counsel.)

IADCAflyer

So....Is US still joining 1W???

GTITAN

My guess no.

jn in ca

Really? I just listened to theCBS Radio top of the hour news just now, listen for yourself, and the young journalism school graduate was telling us peons how the posted fare from DCA to JAX is already $1000, and will climb if the merger is approved. Thinking that was ridiculous, I went over to Travelocity to see for myself, and found plenty of $199 DCA/JAX fares on USAir.

I'd like a lot less of the chicken little media trying to scare us.

Nicksterguy

Praise God! It appears the merger is not going to happen!

Superguy

It all depends on your flight parameters.

If you do a same day turn around, yes, you're looking at 1000 for non-refundable Y.

If you can travel on Tuesdays and spread the return out for a week, yes, it drops down to 199 each way.

Flexible Y is going for $900+ each way.

You can find any scenarios where something is or isn't true when it comes to pricing. You and the journalist are both right, but neither disclosed the sets of circumstances for quoting their fares.

GTITAN

If the merger is off, it is a loss for AA flyers in that there would have been a better Southeastern and Northeastern Network. It is a loss for US flyers with less coverage in South America and Asia. There are reasons to be pleased that the merger may not go through (i.e. rising prices, etc.) IMHO, the FFP presented by a combined carrier would have been better than the programs that either presently have. YMMV

saranyc

Almost certainly not on Nov 1...

Superguy

The announcement I saw indicated that the *A exit was under the assumption that the government would sign off on the merger. Now that there's a huge wrench thrown into that works, I think it's going to be kiboshed.

There's no real business sense to leave *A and join OW outside of the merger. Changing the systems to being *A compatible to OW compatible would be expensive. You'd also have to redo codesharing agreements, rebranding, etc. He's also said that US being in *A has worked out well for the airline.

Add to that the fact that US will be playing second fiddle to AA instead of UA absent a merger, I don't see the benefit it to that - especially when AA and *A could funnel more traffic to US than AA and OW could.

In other words, there's no real compelling reason that would enhance US's bottom line to do it outside of a merger.

Dougie's not known for being one to spend money unnecessarily. Fortunately, I think his cheapness is going to keep US in *A unless they can figure out a way to make the merger happen.

I see DOJ regarding this much like AT&T/T-Mobile's attempted merger. While some large mergers were allowed to happen in the past, it's just a bridge too far at this point. Consolidation's been bad for the consumer in the wireless industry as it brought higher prices, less innovation, less consumer-friendly practices, and generally stale offerings. Barring some serious concessions, I don't see how further consolidation of the airline industry is going to be good for the consumer. We're already seeing higher prices, less service, less consumer-friendly practices, and stale offerings. I don't see how allowing AA and US to merge would counteract that trend.

ElmhurstNick

I'm very disappointed, because a combined US-AA route network would be near ideal for me. Right now, I can't maintain Platinum on AA without flying a disproportionate amount of 50-seaters and tight-in-Y CR7s. Adding in DCA really takes care of that, and CLT helps as well - especially the 10pm CLT-ORD flight.

I bought into a AA Platinum challenge because I had a short-term project which worked perfectly within the 3-month window (lots of trips, good ability to pay out of pocket for KUP fares). I'll probably use it enough next year to pay for the $240 cost in free MCE seats, but there's no way I can actually qualify the hard way next year.