Justice Dept Memo says WA violates Sherman Antitrust

[lowecur]

In a strong memo, the Justice Dept came down against possible new WA legislation. This certainly does not bode well for those who thought this was a done deal. I think the 20 gate limitation is the sticking point, and my guess is Jetblue will get what it wants......and that's more than the few gates offered by SWA & AMR, as the 32 gate max will stay in tact. Also, my guess is the Legacy Terminal will be back in play. That ol Schumer sure is a pain to Herb. .....SWA & AMR probably should have let JBLU have their deal in STL. Now they got a heap of trouble.

imp:

http://biz.yahoo.com/ap/060725/wright_amendment.html?.v=1

 

[TexaSWA]

In a strong memo, the Justice Dept came down against possible new WA legislation. This certainly does not bode well for those who thought this was a done deal. I think the 20 gate limitation is the sticking point, and my guess is Jetblue will get what it wants......and that's more than the few gates offered by SWA & AMR, as the 32 gate max will stay in tact. Also, my guess is the Legacy Terminal will be back in play. That ol Schumer sure is a pain to Herb. .....SWA & AMR probably should have let JBLU have their deal in STL. Now they got a heap of trouble.

imp:

http://biz.yahoo.com/ap/060725/wright_amendment.html?.v=1

More than likely play to how we want it. The 20 gate limitation (16 to SWA) is the worst of the deal. Just open the market and be done with it.

 

[vetteracer]

It will work out in the end, JetBlue will just have another chip to play.

Open the free markets, let the product, and service dictate a companies limits, not some political gate favorites!

 

[HalinTexas]

Assuming for the moment for argument's sake that B6 gets what they want, the old Legend terminal, are they via Shumer suggesting that the 8 year through ticketing agreement also violates the SAA? Is B6 willing to take the gates and live with the ticketing restrictions?

I kind of find the judge's argument vacuous since the WA has been upheld for 25+ years, not to mention that B6 never requested to be part of the negotiations to begin with.

FWIW, I've never thought the WA was constitutional to begin with. It should have been over turned 20 years ago.

 

[lowecur]

Assuming for the moment for argument's sake that B6 gets what they want, the old Legend terminal, I think Pinnacle wants the Legend. are they via Shumer suggesting that the 8 year through ticketing agreement also violates the SAA? I don't think they have mentioned that argument. Is B6 willing to take the gates and live with the ticketing restrictions? Sure, why not? SWA has over 30 flts per day to Hobby, 12 flts per day to both Austin and San Antonio, a bunch to Lubbock, ABQ, (13 total n/s markets.) These short little flts are what Gary Chase at Lehmans said drove the yield this quarter at SWA.

I kind of find the judge's argument vacuous since the WA has been upheld for 25+ years, not to mention that B6 never requested to be part of the negotiations to begin with. It's not a judge, it's the Justice Dept, but they can bring actions if they feel the Sherman Anti-trust has been violated.

FWIW, I've never thought the WA was constitutional to begin with. It should have been over turned 20 years ago.

.....

imp:

 

[HalinTexas]

B6 Pinnicle, whoever, they're going to lose their a$$es going head-to-head against WN in KDAL, especially if they're using RJ's.

The JD can be over-ruled in court. Let's face it. It's all politics, not about what right or legal.

The folks I talk to around DFW here say, since 9/11, they'd rather drive than take WN and deal with TSA for intra-state travel. And it's not so subtle a take that SWA wants the restrictions lifted because they are NOT making that much money out of KDAL.

 

[Tejas-Jet]

B6 Pinnicle, whoever, they're going to lose their a$$es going head-to-head against WN in KDAL, especially if they're using RJ's.

Uhhhh...I believe that Pinnacle was/is going to fly feeder for NWA. FLights to MEM, DTW and MSP won't compete with SWA....unless SWA starts flying to those markets....and even then, those wouldn't be high priority markets if the WA was lifted in total.

Tejas

 

[SWA/FO]

I think how ever this turns out Southwest wins! Wins big. Somehow I think all this is part of the master plan, ie. Herb knew this would happen and it will get over with quicker then when it was just SWA vs. AMR. Now JetBlue and NWA want their piece of DAL. They might get it...but so will SWA.

 

[lowecur]

B6 Pinnicle, whoever, they're going to lose their a$$es going head-to-head against WN in KDAL, especially if they're using RJ's.

The JD can be over-ruled in court. Let's face it. It's all politics, not about what right or legal.

The folks I talk to around DFW here say, since 9/11, they'd rather drive than take WN and deal with TSA for intra-state travel. I disagree. First of all you don't have 30+flts to Houston, plus another 70 or so flts to 12 other destinations without making a buck. The Landing Fees and Rent are a gimmee, so don't tell me B6 couldn't go in there and drop 5 or 6 n/s flts with 100 seat 190s in the bigger markets and not cause some pain. What's WN gonna do, drop fares to $29 each way until B6 goes away, or flood an already flooded market with more flts? B6 would do the same thing that's happening to them on transcons; they would put as few planes as necessary between each market to cause the most pain at the least amount of their expense. And it's not so subtle a take that SWA wants the restrictions lifted because they are NOT making that much money out of KDAL.

They want the restrictions lifted so they can make more money. The airports a goldmine and they know it.

SWA like any airline wants a monopoly out of any particular airport to keep competition away. It gives them total pricing power for the foreseeable future at a time when their competitive pricing power is atrophying. Even if Jetblue gets the politicians to open 32 gates, there's no assurance that DAL wouldn't give most of the gates to SWA. That's just the way things work in this here world......but let's hope the JD keeps enough pressure on DAL for that not to happen.

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