RUMOR: Potential Settlement Leaked in AA/US Merger Case

Discussion in 'General Discussion | Travel' started by AdamKooper, Nov 8, 2013.  |  Print Topic

  1. AdamKooper

    AdamKooper Active Member

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    Honestly it doesn't seem all that bad. It's less dc slots than I expected and honestly it seems like us/aa have to give up the smaller carriers prior assets at the larger hubs. They are mostly 4 or 5 gates anyway.

    I do find it odd that the doj would make them do these things because imo making them give up dc slots hurts competition. AA is going to pull the rj flights out before the bigger mainline flights.
     
  2. Randy Petersen
    Original Member

    Randy Petersen Founder

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    Agree, nothing there that should stop any merger if US is really interested. Obviously AA wasn't doing much with those clots if they were willing to lease them any way. Love the terms "... as they see fit". Thanks for the latest.
     
  3. Mike Reed

    Mike Reed Gold Member

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    The LAX gates could be an issue.
     
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  4. Newscience

    Newscience Gold Member

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    AdamKooper, this posting provides amazing detail to these negotiations - thank you for sharing!

    And it doesn't run contrary to my initial reaction on the DOJ holdup of the US-AAS merger, that the DC politicos want to have their way with the slots/pricing out of DCA. Maybe they are even trying to maintain cheap flights to the USVI and HI? :rolleyes:
     
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  5. AdamKooper

    AdamKooper Active Member

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    Other than the International gates I don't think it will be as bad. Those Us air gates are in a spot that isn't easy to get to.

    People I think took this case too literally at face value. Yes, there is a legal issue here, however when you talk about airlines its much more political. The entire airline industry has been a political hot potatoes since the 1920s.
     
    Last edited: Nov 8, 2013
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  6. LETTERBOY
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    LETTERBOY Gold Member

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    What is your source for this?
     
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  7. AdamKooper

    AdamKooper Active Member

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    It was e-mailed to me, I know it's a rumor but the details seem pretty particular to be a hoax.

    EDIT: Are you talking about the rumor settlement leak or my statement that aa/us would pull flights to smaller cities? It's the opnion of many wall street airline analysts that those slots are worth too much to put a 50 seat rj on them. I do know that not all dc slots are equal, I believe that they do classify some for rj operations.

    The thing is US operates a hub out of dc. Every other airline does point to point to other hubs. The doj I'm sure doesn't want to have AA/US drop that category but tat the same time they feel that letting AA do 15 flights a day to mia and dfw is too much for 1 airline.
     
    Last edited: Nov 8, 2013
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  8. Mike Reed

    Mike Reed Gold Member

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    I'd believe that to be true - sacrificing an Eagle slot for mainline makes all the sense in the world when you add in US Express, too...
     
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  9. AdamKooper

    AdamKooper Active Member

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    There is a list to all the cities us/aa serve out of dca. I was shocked at the frequency to places like Albany NY and Columbus OH. It's something like 7 flights a day. They could easily cut that in half or by 2. When you do that over 10-15 small cities you get your 37 slots.
     
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  10. Mike Reed

    Mike Reed Gold Member

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    Fleet reconfiguration will matter here, too. Losing a slot that's currently assigned to some MD-80 flight means losing 140 seats, but for each MD-80 that's replaced with a 738 (Config 2) flying in some other slot they own, they're gaining 20 seats (160 vs. the 140). When they announce the config for the two-class A-321's that may help, too. Sure, that takes 7 MD-80's replaced with 738's to equal the lost passenger count of losing a slot, but a little creative shuffling never killed RM. If it were really bad they could mirror Delta and swap in the 757's where load dictates.

    The math changes with the new 2-class A321's expected in 2Q14. The transcon A321's (three-class) seat 102 ea, but you'd expect that to be significantly higher in a domestic 2-class config.
     
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  11. AdamKooper

    AdamKooper Active Member

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    I've heard that soon after por that US air planes specifically the 319s will be moved to Chicago and Miami. Miami for the performance into hot and high airports and Chicago for lower yielding markets. The md80 will replace some of the 319s in Charlotte and Philly. I don't know about DC, however I do know the last of us airways' 734s are being parked and replaced with 187 seat a321s.
     
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  12. LETTERBOY
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    LETTERBOY Gold Member

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    I'm talking about the rumored settlement leak. Who e-mailed it to you, and what makes you think they know what they're talking about? I would think anyone involved in any settlement talks, either on the side of DOJ or US/AA wouldn't be talking to anyone on the outside.
     
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  13. skyvan

    skyvan Gold Member

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    Would suck for US to have to give up access to T3 at LAX considering they just put money to build a new club there for when they move from T1.
     
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  14. AdamKooper

    AdamKooper Active Member

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    It wasn't anyone involved with airline or the doj just a colleague, He got it from a lawyer friend of his.

    Like I said it's just a rumor.
     
  15. TheBOSman

    TheBOSman Silver Member

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    Yeah I'm a little surprised by the LAX gates too, I would have thought AA would defend those. Hopefully those are not in any final settlement. Same with LHR.

    The DCA slots aren't a big deal, drop a service or two to each of the hubs at off-peak times and upgauge the nearest services. US has both mainline and RJ flights DCA-CLT and DCA-PHL, just drop an RJ or two and upgauge another RJ to mainline. AA could do the same for ORD, and cut some of the services that they compete on ex-DCA to RDU, and BNA. STL as well but I want AA to keep STL strong, selfishly :) (even if they're slowly cutting back anyway :mad:). And it doesn't seem to include any of the slots for outside of the perimeter which is also good for AA.
     
  16. Mike Reed

    Mike Reed Gold Member

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    There's still going to be weakness in the Northwest and Southeast. I could see AA working to expand services from PDX if they have to reduce at LAX, but CLT and MIA don't make up for WN/FL/DL's powerhouse at ATL.

    Sent from my iPhone using milepoint
     
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  17. AdamKooper

    AdamKooper Active Member

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    southeast? CLT is the 3rd or 4th largest hub in the world.
     
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  18. Mike Reed

    Mike Reed Gold Member

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    Sure, but look at a map. It's on the northeast periphery of "the southeast", not in a central location like ATL. Miami, likewise, is on the southeast periphery but plays a role as a large hub for Caribbean and South/Central American travel but does little when flying from Birmingham, AL to Knoxville, TN or from Pensacola, FL to St. Louis, MO.
     
  19. clscholes

    clscholes Silver Member

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    My first thought while reading this thread...I actually understand this. My second thought: I am a HUGE geek.
     
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  20. TheBOSman

    TheBOSman Silver Member

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    WN/FL is actually pulling back slightly at ATL. And DL is plenty weak in quite a wide area east of LAX, from there through AZ/NM/OK/TX (to the northern extent of those four states) where AA dominates DL (IAH suffers partly from the CLT problem you mention, compared to AA's version of ATL in DFW), and will even more so with a hub at PHX. Can't compete everywhere :). DL used to hub DFW as well but gave that up.

    I'm guessing BHM-TYS isn't a large market, only about a 4-hour drive with no direct flights. That sort of route is WN's specialty and where they make their money, and they don't serve TYS at all. Second example I understand, but STL just isn't as large as it once was, it lost passengers at a decent clip annually for much of the past decade until 2012.
     
  21. AdamKooper

    AdamKooper Active Member

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    True, but I can't think of a base other than ATL that would be better than CLT.
     
  22. Mike Reed

    Mike Reed Gold Member

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    Sad fact, neither can I. Birmingham probably doesn't have the O/D traffic, I'd suppose. :)
     
  23. AdamKooper

    AdamKooper Active Member

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    I think united would Kill to get anything half as good as Charlotte.
     
  24. JetsettingEric
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    JetsettingEric Silver Member

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    Interesting. Great news if it was true. Now the question is whether the divestitures would be for free, or whether they would receive something for them.

    The gates is an interesting balance. I like the idea.
    DCA will be tricky - it's already tight on gate space and the RJ bus gates enable more flights out of a limited space. Upguaging PHL/CLT flights make sense, especially if a 321 can fit in the space of a 319 right now.

    I could also see the remaining MD80s being used on the shuttle (short flights and lot of ground time), and the 319s being used on longer thin flights
     
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  25. TheBOSman

    TheBOSman Silver Member

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    Might compete with IAD a little much for their concern. That said, as noted above, ATL and CLT are the only two airports that really work in that area. ATL works clearly but has the metro area to support it, and CLT's main benefit is its very low operating costs and decent sized banking community. WN sort of uses BNA for a similar purpose, only BNA and RDU could even come close to ATL and CLT in my mind. UA used to have MIA but gave that up, part of the reason AA's expansion there has been so successful.
     
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