Southwest announces potential flights from Love Field in gate fight

[The Prussian]

Delta has never really accomplished much at Love, even with the RJ's.

Why is Jenny's name in red?

FINALLY!!!....He has been banned.

 

[HowardBorden]

I can see some of DL's application maybe being denied, but the 6 daily 717 flights from ATL? That would be beneficial to the folks in and around downtown Dallas, right? Hmmmm.

The DOJ recently released further clarification and justification of the divestiture remedies, here is what they have asserted.


D. Delta Is Not an Appropriate Divestiture Candidate

Delta, while first arguing that the government's theory of liability was flawed, asserts that it should be entitled to acquire a significant portion of the remedy assets, namely slots at Reagan National and the two gates at Dallas Love Field.

Section IV.N. of the proposed Final Judgment requires that the assets be divested to an acquirer or acquirers who in the judgment and sole discretion of the United States 'will remedy the competitive harm alleged in the Complaint.' In response to Delta's request to acquire assets, the United States considered all the facts and circumstances in determining whether Delta should be considered an appropriate divestiture candidate. The United States concluded that divesting assets to Delta would fail to address the harm arising from the merger and would be inconsistent with the goals that the remedy seeks to achieve.

In cases involving allegations of coordinated effects arising from a proposed merger, divestiture assets should not be acquired by firms that are part of the oligopoly. The Complaint describes oligopoly behavior by the legacy carriers (including Delta), such as examples of legacy carriers 'respecting' the nonstop prices of cooperating legacies but undercutting the nonstop fares of US Airways in response to its Advantage Fares program and tactics used to deter aggressive discounting and prevent fare wars. Delta's Comments ignore these specific allegations of coordinated behavior. The allegations of coordination among the legacy carriers fully justify the United States' discretionary decision to direct that the divestiture assets be sold to firms that are unlikely to follow industry consensus, in this case the LCCs. The goal of the divestiture remedy is to enhance the ability of the LCCs to frustrate coordination among the legacy carriers. Allowing Delta to acquire divestiture assets would undermine the effectiveness of the remedy to accomplish this goal and, given Delta?s status as the second largest slot holder at Reagan National, would exacerbate the slot concentration issues at that airport. Delta further claims that an LCC-only divestiture of slots would be 'harmful to competition' as Delta would be more likely than LCCs to serve small- and medium-sized communities, including those communities that New American is exiting. Delta?s argument ignores the substantial benefits of LCC competition, especially with respect to entry at slot-constrained airports long dominated by legacy carriers.

It also ignores the fact that LCCs routinely serve small-and medium-sized communities; indeed, JetBlue has already announced schedules for half of the twelve roundtrip flights it will serve from Reagan National with its divested slots and five of these six new flights will be to small- or medium-sized communities, either to replace service that New American is exiting or in competition with New American. Southwest is likely to serve many more such cities when it announces its
schedule at Reagan National.

Finally, Delta fails to note that none of the proposed markets it claims it would serve with the additional forty-four slots it requests (i.e., over 40% of the total number of Reagan National slots being divested) corresponds to routes New American is exiting. With respect to the divestiture of the Love Field gates, Delta argues that 'no reasonable justification' exists to favor LCCs over Delta. But the point of the Love Field divestiture is for an LCC to offer service at the airport that even Delta recognizes is 'poised to become a highly attractive option for business travelers from across the nation who will be drawn by its proximity to the Dallas city center.' The acquirer of the gates will be able to offer a compelling product to sought-after business passengers who otherwise would favor New American?s service out of its hub at DFW. Obtaining access to Love Field will significantly enhance the acquirer's ability to meaningfully compete against New American, thereby furthering the overall goals of the remedy. In contrast, Delta, given its overall size and scope as well as its presence at DFW, can and does challenge New American for the business of corporate customers flying to and from the Dallas area.

Delta also asserts that it is the only airline that can offer business travelers at Love Field a network of domestic and international destinations, but Delta?s network offerings are not unique at Love Field. United Airlines, which has access to two gates at Love Field, offers a network of locations substantially similar to Delta's. Delta also argues that only it offers a 'premium product' that includes amenities such as a first-class cabin and travelers from across the nation who will be drawn by its proximity to the Dallas city center. The acquirer of the gates will be able to offer a compelling product to sought-after business passengers who otherwise would favor New American?s service out of its hub at DFW. Obtaining access to Love Field will significantly enhance the acquirer's ability to meaningfully compete against New American, thereby furthering the overall goals of the remedy. In contrast, Delta, given its overall size and scope as well as its presence at DFW, can and does challenge New American for the business of corporate customers flying to and from the Dallas area.

Finally, Delta's claim that it will be improperly evicted due to the divestiture is similarly unavailing. Delta currently operates one gate under a sub-lease from American that is terminable on thirty-days' notice. (Another airline, Seaport, sub-leases the otherAmerican gate.) But for the remedy, New American was likely to terminate the subleases and operate the gates itself, an outcome that Delta surely recognizes given the competitive value of the gates once the Wright Amendment restrictions expire in October of this year. Delta, therefore, never had a contractual (or other) right or expectation that it would be able to remain at the American gate. The divestiture does not change this fact.

In the end, the thrust of Delta's position is that its private interests in obtaining divestiture assets should trump the remedial goals of the proposed Final Judgment. Yet, no third party has a right to demand that the Government exercise its discretion in approving divestiture buyers to better serve the private interests of that third party. While a court may inquire into the impact of the settlement on third parties, it "should not reject an otherwise adequate remedy simply because a third party claims it could be better treated."


http://www.justice.gov/atr/cases/f304200/304233.pdf

 

[DUBLINFLYER]

Wow it must be a slow day

 

[redflyer65]

Looks like Howard would have won any bet with Jenny. Delta looks like they are officially out and off the table.

So that leaves just VA and SW?

 

[dicko]

[/B]

But you keep debating him.

What Red does is not "debating". What he's doing does sound the same though; if you slur the word and say it real fast.

 

[redflyer65]

And what exactly did you add Dicko? Jack squat, right? So in essence you're defending Flops lunacy, without any counterpoint (which is called debating).

You prefer one liners instead. At least your consistent!

 

[waveflyer]

"In cases involving allegations of coordinated effects arising from a proposed merger, divestiture assets should not be acquired by firms that are part of the oligopoly. "

This is key for pilots whether it's in our airlines interactions with govt, public perception or our own contracts-

We are not just in a free market industry- and we cannot act like farmers-
Our careers are very political the roots of which go back to this oligopolistic nature of our business

It also addresses flops concerns, but I doubt he's ever read wealth of nations

 

[Flopgut]

Looks like Howard would have won any bet with Jenny. Delta looks like they are officially out and off the table.

So that leaves just VA and SW?

Should be no reason whatsoever for the idea of common use gates to go away. DAL understands that they don't have to have them (not crucial), but that it's important that SWA does not get them. The idea that DAL (or any legacy) can't participate while one airline gets a clear monopoly is wrong. If an oligopy is bad, so is a monopoly. SWA getting sweetheart deals at Texas airports needs to end.

 

[Flopgut]

Or better yet, you might explain exactly HOW the city of Ft Worth "got screwed" when Southwest flew out of DAL...

Bubba

http://en.m.wikipedia.org/wiki/Greater_Southwest_International_Airport

 

[waveflyer]

The govt looks at the bigger picture- not one airport
If they did- how would so many fortress hubs look