As a kettle, I am selfishly for the US/AA merger.

Discussion in 'General Discussion | Miles/Points' started by boondr, Aug 15, 2013.  |  Print Topic

  1. boondr

    boondr Gold Member

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    Why you ask? Because I have no status in either airline and one simple word, "Avios".

    A merger makes those 4500(9000) Avios trips much more accessible to me. We are planning a move in the future to near where my family lives and that means leaving my in-laws in this area. Having availability to use the small amounts of Avios for RT's makes the prospect of leaving her family much easier for my wife. Sure beats the 25k or even the discounted RT's offered by the legacies.
     
  2. free101girl
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    free101girl Silver Member

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    As a member of MP, you are by definition not a "kettle," regardless of your status with the airlines! :)
     
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  3. Sweet Willie
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    Sweet Willie Gold Member

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    I get it, but unless you will have unlimited Avios in the future, you are likely wishing for higher prices overall which you'll eventually have to pay. (While not as few points/miles as Avios, AA does run discounted short haul as does UA).
     
  4. kyunbit
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    kyunbit Silver Member

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    I am not sure how long the 4.5K deal will stay on. My guess is that it would be eliminated the next time avios revises its charts
     
  5. guberif

    guberif Silver Member

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    Nothing great seems to last in the M&P world...
     
  6. Max M

    Max M Gold Member

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    While the Avios 4,500 mile award for some is a great deal, decreased competition typically does not mean more award seats.

    There are some AA customers that are not US customers [and vice versa]. That means more customers from 2 airlines [if now somehow the merger goes through] all drawing from one pool of award seats.

    Combine that with the inevitability that capacity with be cut, as well as certain routes, and over time even hubs being slashed [ask former TWA customers what the TW/AA merger did to TWA's strong STL hub, or the slowly dying MEM hub from NW's days, and now how MEM is after the NW/DL merger].

    So yes, for the OP the merger might be good, for others, well YMMV.
     
  7. MileageAddict
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    MileageAddict Silver Member

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    Fewer airlines means less competition and for many markets, a substantial increase in the average fare. On the other side of the coin, it's necessary to reduce competition so the remaining airlines can maintain profitability. Hopefully this will be the last airline merger in the US for some time to come.
     
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  8. ChrisUNC

    ChrisUNC Silver Member

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    You're spot on. According to internal documents from US Airways, Parker wants a 4% reduction in capacity to further "rationalize" the industry. He's ruthless when it comes to the bottom line (good for shareholders, bad for consumers). Absent the merger, industry analysts predict that AA will seek rapid growth (increased capacity) to better compete with UA and Delta. This means lower prices (bad for shareholders, good for consumers). I'm typically not a fan of government intervention in a capitalistic economy, but this is one of those rare times I'm actually cheering for the gov't.
     
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  9. Max M

    Max M Gold Member

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    Not to get political here, but the UACO merger had one Chicago-based airline become much larger because of the merger, without a DOJ lawsuit intervention. The currently highest administration has large ties to Chicago. I find it interesting that Eric Holder & Co. pressed a lawsuit about 2 airlines that have operations in largely conservative states [and that the Bush family at one time had a stake in AMR--- and may still] but nothing was done by Holder/DOJ in terms of a lawsuit to block the UA/CO merger.

    Some may say this talking point is irrelevant, but why would an administration allow CO and UA to become the U.S.' largest carrier without threat of legal action, but then do an about face when a larger carrier is formed that doesn't have Chicago ties?

    One could make the argument that the proposed AA/US merger will have the combined carrier having more than a 60% market share at DCA--- how much of a market share does UACO have at IAD?

    I realize that the reality is that the main desire of the merger is to make certain stockholders and bankers richer while streamlining costs, increasing profitability for the airline, and decreasing competition.

    Just wanted to put that thought out there.
     
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  10. ChrisUNC

    ChrisUNC Silver Member

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    Timing is everything and US/AA were late to the game. The consolidation of these two airlines could be the proverbial straw the breaks the camel's back. However, I think you bring up some interesting points about political ties. Regardless of the gov't's motivation, I'm looking out for #1 here - and I'd strongly prefer this merger not happen. We have six airlines here at RIC: UA, DL, AA, JB, and AT. JB and AT really don't count since they only fly to a couple destinations each with an extremely limited schedule. Ticket prices are already high - and the merger would just cause them to increase even more.
     
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  11. Pizzaman
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    Pizzaman Co-founder

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    Depends on what you consider the market. If you include international, I don't think UA has anywhere near 60%. They might have 60% of domestic, but if so I'd bet it's no more than that, considering a reasonable number of flights from AA, US, B6, WN (and AirTran), DL and Virgin America, along with a couple of small regional carriers not associated with UA.
     
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  12. moongoddess

    moongoddess Silver Member

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    I'm tentatively for it because I don't want to see either AA or US crash and burn down the road. I do think requiring the new combined airline to give up some gate slots at airports where it would be hugely dominant would be a fair requirement for allowing the merger to proceed, though.
     
  13. moongoddess

    moongoddess Silver Member

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    I'm not sure I'm following your logic here. Right now RIC has UA, DL, AA, JB, and AT. Presumably after the merger it would still have UA, DL, AA, JB, and AT - no change. Do you think the new combined AA/US wouldn't be in competition with UA and DL in that market post-merger?
     
  14. ChrisUNC

    ChrisUNC Silver Member

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    In the post-merger, you'd have only 3 airlines competing vs 4. So, yes - there would be less competition.

    For Example:
    Both UA and AA offer non-stop flights from RIC to ORD, but fares typically run upwards of $1,000 R/T. US, on the other hand, offers flights from RIC to ORD via PHL or CLT. Those fares are almost always less the half the price (~$400). If AA/US merge, they combined carrier won't have to offer such a substantial discount anymore. It'll certainly be cheaper, not $600 cheaper.
     
  15. moongoddess

    moongoddess Silver Member

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    Ah, I see, you forgot to list US as one of the airlines currently competing out of RIC in your initial post. So yes, if both UA and AA are currently operating out of RIC, the merger will decrease competition in that market.. (That's the situation we'll have here in OMA as well.)
     
  16. boondr

    boondr Gold Member

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    I might buy the conservative state bias angle here if the Texas AG, a Republican candidate for governor, wasn't a party to the AT suit.
     
  17. Max M

    Max M Gold Member

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    I would then consider looking into the TX's AG Govenror Campaign funds to see if UACO, with a huge hub @IAH, and CO's former home, provided a gift--- or if a gift were made to a PAC that supports the TX AG's Governor bid.

    So perhaps the TX AG might not side politically with the big wigs leaning in DC, but politicans on all levels don't bite the hands that feed them.
     
  18. Max M

    Max M Gold Member

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    While I don't want either AA or US to suffer, keep in mind that stand alone AA had a profitable 2nd quarter without any merger. Since finally being able to declare BK, AA has really been able to hone in cost cutting.
     
  19. boondr

    boondr Gold Member

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    Oh I don't doubt there are political undertones to this situations, I just didn't think it is as simple as the President's connections. I suspect that if it is the administration behind it, it is just to gain another pawn in the fight on Capitol Hill.
     

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