Exclusive: Justice Department probing American, US Airways merger

Discussion in 'US Airways | Dividend Miles' started by uggboy, Jun 27, 2013.  |  Print Topic

  1. uggboy
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    uggboy Gold Member

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    || Exclusive: Justice Department probing American, US Airways merger ||

    [​IMG]
     
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  2. Gtitan
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    Gtitan Gold Member

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    Doubt it wants to since DL and US did the DCA-LGA swap not long ago. ;)
     
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  3. Wandering Aramean
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    Wandering Aramean Gold Member

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    Obviously they don't want to. When Parker testified in Congress the other day he made that abundantly clear.
     
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  4. LETTERBOY
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    LETTERBOY Gold Member

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    Regardless, I can't see this being approved without them being forced to relinquish some slots. The question, in my mind, is how many slots they'll have to give up. A lot, or a few? Regardless of how many they have to give up, I don't see this derailing the merger (unfortunately).
     
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  5. icurhere2
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    He did make such abundantly clear but there are few high-yield, slot-restricted airports where one U.S. carrier would have a continuing right to offer 68% of all flights with no threat of new entrants. Even with the support of Congresspersons beholden to US/AA, I cannot see how this meets the aims of the DoJ.
     
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  6. gleff
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    gleff Co-founder

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    There will be some divestiture of slots, even if it's only for bureaucratic face-saving. They have to extract something in exchange for not standing in the way of the transaction. Other airlines are pushing for it too.

    Good or bad for consumers, Parker is actually right that the effect of taking away slots would be less service to smaller cities with new entrants flying already-served routes.

    And not really an argument made by Parker but there's plenty of competition... at Dulles (and BWI).

    DCA's slot restrictions aren't driven by congestion the way they are at LGA, opposition from incumbent airlines and from the local neighborhood notwithstanding they could just add slots...
     
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  7. austin_res

    austin_res Silver Member

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    Re: DCA – I could see AA/US divesting around 15 slots with reductions coming from duplicate routes (ie Raleigh and Nashville) and high-frequency RJ routes. They can consolidate these routes into fewer flights on larger aircraft which would result in no significant capacity reductions.
     
  8. estnet
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    estnet Gold Member

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    Gee when I read the headline I had the momentary fantasy that they might actually be concerned about lack of competition and increased prices/poorer choices for consumers. Well a person can dream can't they?
     
  9. Wandering Aramean
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    They could, but they don't want to. They'd rather keep those slots and use them in other markets, increasing their profits.
     
  10. Mike Reed

    Mike Reed Gold Member

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    Considering that the airlines are quite literally perpetually bankrupting themselves, the real issue with competition is that there's much too low a barrier to entry, allowing startups to be more successful in niche markets but still not even necessarily profitable long term, preventing established carriers from any semblance of profitability in the overall market.

    Add to that that airfares are often too low compared to inflation as well as the mileage reimbursement rate for driving (MUCH cheaper to fly, usually), and a correction is needed both in terms of a higher barrier to entry - even if artificial (like posting a multi-billion dollar performance bond to start an airline or treating slots like we do rail, as national commodoties) - and in terms of higher fares to adjust to actual, long-term operating costs of airlines.
     
  11. Newscience

    Newscience Gold Member

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    Here's an article that has the latest timeline for the Feds vs. US + AA proposed merger:
    http://aviationblog.dallasnews.com/...ce-officials-set-out-timeline-for-trial.html/
    Since this (admittedly ambitious) timeline isn't completed until January 2014, it will likely be some time before this entire brouhaha is over.

    IMHV, the fact that Congress and the government executives don't want their perquisites flying out of DCA changed in any way, weighs big on this whole deal. There was talk DCA was going to be shuttered post 9/11 (it was in fact closed, but then reopened due to tremendous political pressure, see: http://www.nbaa.org/news/2011/20110907-dca-ten-years-after-9-11.php). After all, IAD was built 50 years ago with the intent of alleviating air travel at, and potentially closing, DCA. But our polticos won't soon give up their conveniences, so any threat to air traffic patterns at DCA is taken very seriously.
     
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  12. ballardFlyer

    ballardFlyer Gold Member

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    Merger aside - protecting DCA is one thing I agree with the politicians on because DCA is one of the best executed metro airports in the USA. So convenient for inbound DC travelers - 10 minutes to your meeting once you land and 10 minutes back after you're done to fly home. DCA and SAN are in my top 5 major metro area airports for proximity to downtown.
     
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  13. Newscience

    Newscience Gold Member

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    DCA is good for air travelers from the perspective of flying into DCA from elsewhere, and then take the DC metro or taxi to and from your downtown DC or inside-the-Beltway destination.
    If you're living in or near the DC metro area, and don't have ready access to the metro to get there, you will do anything that you can do to avoid driving to DCA, and instead head to IAD or BWI. DC rush hour traffic is among the worst in the country - my commute to work from outside to inside the Beltway is 35 minutes on the weekend, and can easily be 2-3 hours in rush hour traffic. Also, DCA parking is non-existent, when compared to the acres of parking available at IAD and BWI. There are commuter options (bus/train to metro) available from BWI and IAD to get to the DC metro.
    The planned DC metro silver line to IAD is coming, and when it does, and IMHV, they can then shut down DCA for good! DCA air traffic will always be a security liability for protecting our nation's leaders, as the 9/11 flights that crashed into the Pentagon and at Shanksville, PA were DCA-bound. And I also recall when Air Florida flight 90 crashed into the 14th Street bridge in January 1982.
     
  14. Pizzaman
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    Pizzaman Co-founder

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    I agree it will always be a huge security liability. But, I suspect the pull of congress will always weigh strongly here. I remember Andrews being considered as an alternate to DCA. It's really not that much further away from downtown than DCA is. That died pretty quickly.
     
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  15. LETTERBOY
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    Won't happen. I agree with Pizzaman that DCA will always be a security concern, but it is simply too popular with Washington DC based travelers to even contemplate closing. If they didn't close it permanently after 9-11, it's here to stay.

    I don't remember Andrews being considered as a replacement for DCA, but I would've loved to hear the reaction of the Secret Service and the Air Force to the idea of using the base that Air Force One uses as a civilian airport. :D
     
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  16. Pizzaman
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    The tidbits I heard was that Andrews would no longer be home for Air Force One. No logical replacement was named which was one of the clearest indications to me that the plan didn't have legs. I should know this but is DCA runway long enough for Air Force One? I vaguely remember it being mentioned as an alternative and wondering if it was long enough at the time. Not sure why I never followed up on that, but there were certainly more important things to focus on at that time.
     
  17. LETTERBOY
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    According to Wikipedia, the longest runway at DCA is 7169 feet. The runways at Andrews are 9300 and 9755 feet. I'm guessing that wouldn't work in most cases.

    Another thing to think about is all the other military operations at Andrews. It's not just Air Force One, there's a lot of other things at Andrews, many of whom would probably have to be relocated if Andrews were to become a civilian airport.
     

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