U.S. government, two airlines say open to settling merger fight

[Saluki Dawg]

AA leases 1 gate to DL and 1 to Seaport Airlines. My guess is that DL gets the option to retain the gate they're currently using and WN gets the other gate IF no other Airline comes forward and asks to serve DAL.

 

[Flopgut]

I'm pretty sure this is how we know SWA is in the room when the decisions are made. This is simply a bit of chin music sent at American.

I realize I sound like a broken record talking about Love Field and the issues around it. But this should be a bit of redemption. Love is a microcosm for what this Country has in place of a real policy on airlines. SWA is who they care about.

 

[SWA Bubba]

My head exploded.

Seriously, who is actually low fare these days? Holder has no idea what he's talking about.

Why are gates at Love included in this deal?

That IS a good question, and something I don't think anyone saw coming.

The only thing I can come up with is, that it was part of a calculated face-saving move. It was starting to look like the DOJ was having second thoughts about the suit in general, and was looking to make a deal. If you notice, a lot of the assets claimed to be "divested" in the agreement were gates/slots that American/USAir weren't actually using in the first place. Besides the DAL gates, it included LGA and DCA slots that were actually subleased to other airlines.

My guess would be (and it's only a guess) that it was American who offered to "divest" the DAL gates as well, since they weren't actually using them anyway. That way their package of divestitures looks bigger on paper (the DOJ is happy because it looks like they got more from the deal), and the new American is happy because they weren't giving up anything more that they were actually using. "Giving up" something they weren't actually using costs them nothing. It was a win-win, face-saving compromise.

That's the only thing I can come up with. I don't think there's any big Southwest conspiracy here, Flop. The actual divestitures at DCA and LGA will be fought over, and probably split amongst several airlines, of which it's not secret that Southwest hopes to be included in.

Bubba

 

[scoreboardII]

I'm pretty sure this is how we know SWA is in the room when the decisions are made. This is simply a bit of chin music sent at American.

I realize I sound like a broken record talking about Love Field and the issues around it. But this should be a bit of redemption. Love is a microcosm for what this Country has in place of a real policy on airlines. SWA is who they care about.

As they should, all hail SWA.

Really dude?

 

[Metrojet]

That IS a good question, and something I don't think anyone saw coming.

The only thing I can come up with is, that it was part of a calculated face-saving move. It was starting to look like the DOJ was having second thoughts about the suit in general, and was looking to make a deal. If you notice, a lot of the assets claimed to be "divested" in the agreement were gates/slots that American/USAir weren't actually using in the first place. Besides the DAL gates, it included LGA and DCA slots that were actually subleased to other airlines.

My guess would be (and it's only a guess) that it was American who offered to "divest" the DAL gates as well, since they weren't actually using them anyway. That way their package of divestitures looks bigger on paper (the DOJ is happy because it looks like they got more from the deal), and the new American is happy because they weren't giving up anything more that they were actually using. "Giving up" something they weren't actually using costs them nothing. It was a win-win, face-saving compromise.

That's the only thing I can come up with. I don't think there's any big Southwest conspiracy here, Flop. The actual divestitures at DCA and LGA will be fought over, and probably split amongst several airlines, of which it's not secret that Southwest hopes to be included in.

Bubba

And I got something from Southwest yesterday -

They generously gave me a ride home! Thanks Bubba!

Metrojet

 

[Flopgut]

Really dude?

Yeah, really. There is absolutely no other reason for Love Field real estate to be in this equation.

 

[SWA Bubba]

I'm pretty sure this is how we know SWA is in the room when the decisions are made. This is simply a bit of chin music sent at American.

I realize I sound like a broken record talking about Love Field and the issues around it. But this should be a bit of redemption. Love is a microcosm for what this Country has in place of a real policy on airlines. SWA is who they care about. SWA will not want, will not suffer, and will not have to compete in fair markets. This is a message to the surviving mgt at American "don't forget who we care about".

Good analogy, Flop--you DO sound like a broken record talking about Love Field.

If SWA was "who they care about," then there never would have been a Wright Amendment in the first place. Trust me, Southwest has "wanted" and "suffered" in the Dallas area since 1979, due to that little piece of protectionist political payback from Representative Wright to American. You bitch about our little "monopoly" operation at Love all you want, but you're wrong. Airlines have come and gone at Love as much and as often as they wanted over the years (including American, several times); they just never wanted to stay. They left because Love was too small for them, and it wasn't worth their while. However, there was always plenty of room for them to try. And try they did, with no interference from Southwest. That was, of course, before the compromise agreement to end Wright. Love Field is now limited to 20 gates total, at American Airline's behest, to limit how big Southwest can grow from there.

Anyway, if you're really worried about the Dallas area and "monopolies," consider this: of all the combined commercial air traffic from the two airpo0rts, 86% of the total departures are American Airlines. And that's including Love Field's departures, Flop! And as time goes by, and American gets even bigger (while Southwest is limited to the same number of gates), it'll only get more lopsided.

Put another way, that means that for every one departure Southwest has from Love Field, American has, on average, eighteen or twenty departures from DFW. And you're seriously worried about Southwest's monopoly? Yeah, you're a broken record alright.

Bubba

 

[Flopgut]

It is what it is Bubba

 

[Old School 737]

We already have the pay and the contract, retroactive back to Feb. 8, so Doug has zero incentive to play the "neutral" game this time.

Does that all start before a combined seniority list ??
If so good on ya

 

[AeroDMB]

Does that all start before a combined seniority list ??
If so good on ya

Pay rates have been established and effective upon POR, which is closing of the merger first half of December. The finer details and nuts and bolts of the JCBA, not yet.

http://aviationblog.dallasnews.com/...an-to-a-Merger-MOU-explainer-January-2013.pdf

 

[Old School 737]

Pay rates have been established and effective upon POR, which is closing of the merger first half of December. The finer details and nuts and bolts of the JCBA, not yet.

http://aviationblog.dallasnews.com/...an-to-a-Merger-MOU-explainer-January-2013.pdf

Thx for posting that MOU !

 

[MATHEWS]

Can anyone speak to vacation time under the new MOU??? I see no mention of it in there, just sick time.

Thanks!

 

[Dornier 335]

Anybody have an estimate by how many pilot numbers the DCA base is going to shrink?

 

[ERfly]

Anybody have an estimate by how many pilot numbers the DCA base is going to shrink?

They have been saying it'll be a reduction in RJ flying in DC. Mainline numbers will stay the same.

 

[slaquer5]

I'

I realize I sound like a broken record talking about Love Field and the issues around it.

Thanks for opening your eyes.

 

[Guppiedriver]

Can anyone speak to vacation time under the new MOU??? I see no mention of it in there, just sick time.

Thanks!

31 days @ 3.40 per day credit.

 

[MATHEWS]

Thanks for the response Guppedriver.....one last thing is this 31 days across the board no matter longevity? Or does 1st year vs 2nd year vs 3rd year vary any?

Thanks again!

 

[Guppiedriver]

Thanks for the response Guppedriver.....one last thing is this 31 days across the board no matter longevity? Or does 1st year vs 2nd year vs 3rd year vary any?

Thanks again!

21 days for the first 6 years, 1 additional day per year thereafter. The MOU vacation section is a copy and paste from the AWA contract.

 

[General Lee]

Looking at the MOU, I can't find first year newhire pay. Anyone know what it is at the new AA?


Bye Bye---General Lee

 

[dugan jones]

Looking at the MOU, I can't find first year newhire pay. Anyone know what it is at the new AA?


Bye Bye---General Lee

1st year pay on all planes $40/hr, so 190 gets a pay cut

 

[Flopgut]

Good analogy, Flop--you DO sound like a broken record talking about Love Field.

If SWA was "who they care about," then there never would have been a Wright Amendment in the first place. Trust me, Southwest has "wanted" and "suffered" in the Dallas area since 1979, due to that little piece of protectionist political payback from Representative Wright to American. You bitch about our little "monopoly" operation at Love all you want, but you're wrong. Airlines have come and gone at Love as much and as often as they wanted over the years (including American, several times); they just never wanted to stay. They left because Love was too small for them, and it wasn't worth their while. However, there was always plenty of room for them to try. And try they did, with no interference from Southwest. That was, of course, before the compromise agreement to end Wright. Love Field is now limited to 20 gates total, at American Airline's behest, to limit how big Southwest can grow from there.

Anyway, if you're really worried about the Dallas area and "monopolies," consider this: of all the combined commercial air traffic from the two airpo0rts, 86% of the total departures are American Airlines. And that's including Love Field's departures, Flop! And as time goes by, and American gets even bigger (while Southwest is limited to the same number of gates), it'll only get more lopsided.

Put another way, that means that for every one departure Southwest has from Love Field, American has, on average, eighteen or twenty departures from DFW. And you're seriously worried about Southwest's monopoly? Yeah, you're a broken record alright.

Bubba

You are not the underdog anymore. You're the Nations largest domestic carrier and you're getting helped along like you're a startup. It's ridiculous Bubba, and you know it. This little 10 year argument we've been having is over. You no longer have a leg to stand on.

 

[Dornier 335]

To finalize this great thread, let's hear our "expert" MB comment on this settlement:

link

The AA/US - DOJ Settlement.
Very, Very Troubling, But For A Lot of Different Reasons -
_______________________
But First, Let's Sink A Couple of Holiday Travel Myths...
Thanksgiving - No, There Won't Be Any More Flights Than Usual...
Fewer, Actually
Identify These Data: Down half of one percent. Up one-point-one percent.
The first is the difference in airline flights for the ten-day Thanksgiving period in 2013 v 2012. Yes, less

flights this year. The second is the difference in seat capacity, which will change very slightly due simply to fleet changes, not any airline industry intent to bulk-up seats for the holiday. Fact is, they aren't doing much if anything to meet the supposed "travel rush" that the media hypes every year. Regardless of lore to the contrary, scheduled airlines this year are not - repeat not - adding capacity to meet the supposed Thanksgiving "crush."
Hard Numbers. Not Hype. Take a look at the ten days around Thanksgiving this year v 2012. Due to average aircraft size changes, seats are up just 1.1% - statistical noise. And flights offered - i.e., flights in the sky - will be down. These are facts - as filed by scheduled passenger airlines with our partner, Innovata LLC and analyzed by Aviation DataMiner.
Thanksgiving 10-Day Period 2013 v 2012

Source: Aviation DataMiner Analysis of Data From Innovata LLC
No Increase In Flights - Therefore, No Increase In Propensity For Flight Delays. Fact: the breathless, me-too media stories we'll be seeing about the "expected" Thanksgiving "flight delays" are mostly un-researched pabulum. Certainly, the highways will see more cars, but the skies do not see more airplanes. So, the prognostications of holiday-induced flight delays are built entirely on sloppy reporting.
Nearly 5% Fewer Flights Than Non-Holiday Periods. In that same regard, what many of the media stories leave out is that there are typically fewer seats and fewer flights in the skies over the Thanksgiving day period than usual - airlines actually pull capacity. Take a look at the ten-day period before Thanksgiving compared to the ten-day holiday period:

Summary of The Myths. Message to the media: over the holiday period, there are three key fact areas that are in play. Try to consider them:

• First, airlines will not be putting more airplanes in the sky this holiday compared to last year. So, you might want to consider that when you do the oh-so-exciting, reporter-live-from-the-airport pieces.
• Second, there are fewer flights in the sky over the holiday period than normal. That means try to
  
  avoid the breathless stories of "jam-packed" flights. It's not materially worse - volume-wise - than other weeks of the year. Flights will be full - just like the rest of the year... the days of a "holiday travel rush" at airports ended a decade ago. Airlines typically are at 80% and above load factors, anyway. Which means at peak periods, they are full - holiday or not.
• And, finally, there isn't a higher propensity for delays over the Thanksgiving period than any other time of the year. Less, actually because carriers are putting fewer, not more, flying machines into the sky. Back in 2007, the Bush Administration stuck its foot in its mouth by grandly announcing that it would open military air space to commercial flights over the holiday. The fact that it was normally open, and there were no additional flights scheduled in the sky tended to make one wonder who was feeding W the talking points. (He also announced higher compensation for oversales, and nobody yet has figured out how that had anything to do with air traffic control issues.)

To be sure, the traffic mix will change. More kids. More strollers. More less-than-experienced travelers that can slow the process. But that's marginal - and it does not affect the number of airplanes in the sky from an ATC perspective. Thanksgiving flights have the same potential for being off-schedule as flights on any other day.
A couple years ago, one network stationed a correspondent "live" at the FAA Herndon facility, to "get the facts out as soon as those Thanksgiving flight delays started..."
She got pretty bored.
___________________________
The AA/US DOJ Lawsuit:
The Real Messages Are Most Disturbing
It's about as obvious as a blemish on prom night that the settlement of the DOJ's suit against the AA/US merger was basically to get the feds off the hook from what was a very embarrassing political misstep.
But what is most disturbing about this DOJ suit is what it revealed about the people filing it.
Point One: The Sloppy Complaint Document. Anybody with a sense of integrity and a knowledge of the airline industry could tell on one reading that the DOJ complaint was tossed together by amateurs and done very hastily. Instead of using hard actual fare data, they took screen shots of fare availability off of a website, and used it to "prove" that fares would go up. The use of the "HHI" was another sign of absolute ignorance of the airline industry, as that alleged index has little application within the realities of the US air transportation system - which is far from one open to easy competition.
Point Two: The Preparation Time Requested. Another indication the suit was filed in political haste was the DOJ's request for seven months to "prepare." Think about it - they spent time and taxpayer money filing a suit, and then admitted they were clueless about the facts of the matter. Of course, another strategy may have been to delay the trial in order to kill the merger. That's even worse than not being prepared - it was using bureaucracy to deny the defendant's day in court. Keep in mind that this is the government doing it. You know, the people who are supposed to be open, honest and forthright.
Point Three: Refusal of A Government Agency To Provide Data. The DOJ - which supposedly represents the people, and is supposedly in the most "transparent" Administration in history - refused to make public requested documents that involved their prior merger decisions. Remember again - this is

not two private citizens bantering in court - it is the government of the people refusing to make public documents involving their own decisions. Worse, a Master appointed by the Court sided with the DOJ. But that doesn't change the truth: the Administration refused to make public documents that related to decisions made affecting the public. Welcome to the Third World.
Point Four: The Settlement Delivers Minor - Very Minor - Consumer Changes. The comment attributed to Attorney General Holder that the settlement will change the landscape of the airline industry is about as credible as his boss telling folks they could keep their current health care plans if they wanted. First, the 44 flights (out of approximately 270) that will go to other carriers at DCA will still be mostly monopoly routes, not new competition as Holder implies.
Second, freeing a couple of gates at a few airports won't change any air traffic landscapes. At a couple of the airports involved, there is no gate shortage. At ORD, two gates won't cause fares to plummet, either. And the two gates AA agreed to give up at DAL are a joke. American has consistently lost its shirt trying to put mainline flights at Love. Those gates have been financial vapor-holes for American every time they tried using them. The hoot is that if Delta gets those gates permanently, it will be mostly to make life tough for Southwest - one of those Holder-anointed LCCs - when the Wright Amendment goes away next year. Any other new entrant to the DFW Metroplex would be nuts to take them. DFW International draws traffic from the entire region. Dallas/Love accesses less than half - and virtually none of the traffic in the fast-growing areas west and north of DFW.

 

[Dornier 335]

part 2

Point Five: The DOJ Knows Very Little About The Airline Business. Holder is just reading cribsheets telling us that this settlement will open the industry to more service from "low cost carriers" and give big competition to the main network airlines. A lot of the media buys this malarkey hook-line-and-sinker, without a shred of doubt, or a shred of research. Southwest is often mentioned, of course. The fact that WN is no longer a low cost carrier, and is indeed now a major network airline, is missed in the fog of whatever lore that Holder's staff is wallowing in.

Point Six: DOJ Is Misleading The Public. And that brings up another very troubling factor: DOJ playing favorites. The focus on distributing the vapor-spoils of the deal to "low cost carriers" shows that, consistent with the sloppy quality of the initial complaint, Holder has insufficient knowledge of the subject matter to make any determinations affecting air transportation.

• Message to the read-the-press-release-and-repeat-it media: There are very few "LCCs", and of those, two gates at, say, MIA might be about as valuable as a ski lift in the Sahara. And at Boston that airport is already dominated by a full-service LCC, JetBlue.
• Message to Holder: Other than the 44 flights at DCA - which are minor, which won't have much effect on service patterns, and which, as noted above, will still be mostly be monopoly routes, albeit with a different paint scheme, what you got out of this settlement is bupkis when it comes to changing the air transportation system. Do all the press conferences you want. Wind-up-toy network correspondents can do all the sunshine stories they want. But it won't change the truth. And it won't change the fact that you won't reveal your documentation on prior mergers, either. How come? It should be public knowledge - unless it would be damaging to your case. Thought you guys worked for the people.

It's Not Just A Settlement. It's A Warning Sign. This whole affair should be sending shockwaves regarding how the Department of Justice is run. Facts and data are ignored. Documents are hidden. And politics take a front seat to the openness and transparency,
It's a warning. Heed it.

 

[scoreboardII]

If flights are down YoY from 2012, wasn't 2012 flying passengers counts in the 1996 year range? In other words, our industry is depressed by almost 18 years.

It's like we are becoming the Pony Express.

 

[Dornier 335]

Rumor has it merger got approved today...!

 

[ERfly]

Rumor has it merger got approved today...!

Not a rumor. It's true. Judge Lane denied the TRO, approved the POR and granted permission for American Airlines and US Airways to consummate the merger without delay.

 

[Mike November]

Rumor has it merger got approved today...!

Rumor!?

I almost take offense to that. My rumors are as good as fact brada.

 

[densoo]

Judge OKs American Airlines-US Airways merger, American's exit from bankruptcy

U.S. Bankruptcy Judge Sean Lane said Wednesday that AMR and American Airlines are free to exit bankruptcy court and close their merger with US Airways Group.

UPDATE, 9:55 a.m. CST: American Airlines says it will close the deal, close the merger, exit from bankruptcy on Dec. 9, 2013.

American made these points in a press release, and we quote:

- Consummation of AMR's Plan of Reorganization and the merger of US Airways Group, Inc. with and into a subsidiary of AMR Corporation is planned to be completed prior to the securities markets opening on Dec. 9, 2013.

- Assuming this expected schedule, the last day of trading of all outstanding securities of AMR, including the common stock trading under the symbol AAMRQ, and the common stock of US Airways Group, Inc. (NYSE: LCC) will be Dec. 6, 2013.

- Upon the anticipated closing of the merger on Dec. 9, 2013, AMR Corporation will be renamed American Airlines Group Inc., with its common stock to be listed and traded on the NASDAQ Global Select Market under the symbol AAL and its preferred stock to be listed and traded on the NASDAQ Global Select Market under the symbol ?AALCP.?

- At the time the Plan of Reorganization becomes effective and the merger closes, each outstanding share of US Airways Group, Inc. common stock will be converted into one share of American Airlines Group Inc. common stock and substantially all pre-Chapter 11 unsecured claims against and outstanding equity securities of AMR Corporation will be satisfied by American Airlines Group Inc. common stock or preferred stock in accordance with the Plan of Reorganization.

http://aviationblog.dallasnews.com/...s-merger-americans-exit-from-bankruptcy.html/

 

[Dornier 335]

Rumor!?

I almost take offense to that. My rumors are as good as fact brada.

I didn't have a source to post. Not that your info has EVER been wrong, but it's like saying that the party ain't over until everybody gets pregnant. That's a nine month wait!

 

[Dornier 335]

from FI

ANALYSIS: AMR-US settlement good for the airlines and the industry

By: Edward Russell Washington DC
05:05 13 Nov 2013

American Airlines and US Airways? agreement with the US Department of Justice (DOJ) to divest some slots, gates and maintain service levels at select airports will have little impact on the combined airline.
The settlement is a ?win for the airlines? and the ?best-case outcome?, writes Jamie Baker, an equity analyst for JP Morgan, in a report.
American and US Airways agreed to divest 52 slot pairs at Ronald Reagan Washington National ? eight are already leased to JetBlue Airways ? for 250 slot pairs, or 55% of those available, at the airport as part of a deal with the DOJ to grant antitrust approval for their merger on 12 November. US Airways has 244 slot pairs at the airport currently.
The carriers will also relinquish 17 slot pairs at New York LaGuardia airport, of which five are leased to Southwest Airlines.
?The divestitures at Washington National and LaGuardia are in line with expectations, and will likely result in a reduction in regional flying,? writes Helane Becker, an airline analyst at Cowen Securities, in a report.
Delta Air Lines, JetBlue and Southwest have expressed interest in acquiring slots at both airports.
JetBlue and Southwest have small operations that they would like to expand at both airports, while Delta sees itself as the best airline suited to ?provide nonstop service between DCA [National] and the small- and mid-sized cities?, which is an area that the Justice department and states would like to preserve existing levels of service.
?This agreement has the potential to shift the landscape of the airline industry,? said US attorney general Eric Holder on 12 November. ?By guaranteeing a bigger foothold for low-cost carriers at key US airports, this settlement ensures airline passengers will see more competition on nonstop and connecting routes throughout the country.?
American and US Airways? agreement to divest two gates and related facilities at Chicago O?Hare International and Los Angeles International (LAX) airports may dampen future expansion. Becker says growth may be ?slower than previous expectations? due to existing gate constraints at the airports.
American and American Eagle use the majority of the gates in terminal 3 at O?Hare while US Airways uses two gates in terminal 2 at the airport.
At LAX, American flights operate from terminal 4 and a remote commuter terminal with some of its international operations in the Tom Bradley International Terminal at LAX. US Airways use three gates in terminal 1. The remaining domestic terminals ? three, five, six and seven ? are fully occupied.
Gate and related infrastructure divestitures at Boston Logan International, Dallas Love Field and Miami International airports are not expected to impact the carriers, analysts say.
It is unclear whether the gate divestitures at key airports, including American?s Chicago, Miami and Los Angeles hubs, will benefit smaller carriers like Virgin America or other large incumbents. United could use US Airways? gates at O?Hare to expand its adjacent regional operations in terminal 2, while Southwest similarly wants to acquire the Tempe, Arizona-based airline?s gates at LAX to expand its operations in terminal 1.
Virgin America had planned to file a brief with the US District Court regarding concerns that the merger would ?leave most of the hub-hub routes as monopoly markets?, even with slot divestitures at constrained airports like LaGuardia and National.
American and US Airways have also agreed to maintain hubs at Charlotte-Douglas International, Chicago O?Hare, LAX, Miami, New York John F. Kennedy International, Philadelphia International and Phoenix Sky Harbor International airports, in a settlement with the attorney generals from six states and Washington DC who opposed the merger.
?The announcement is positive for the industry as it paves the way for American Airlines and US Airways to better compete with the expansive networks of Delta and United without adding excess capacity to the domestic market,? writes Savanthi Syth, an analyst for Raymond James, in a report. ?Given the complimentary nature of the American Airlines and US Airway?s networks, we do not expect any significant decrease in domestic capacity.?
American has requested a 25 November bankruptcy court hearing to approve its revised reorganisation plan that includes the settlement. If approved, the airlines anticipate closing the merger in December and maintain their target of $1 billion in revenue synergies by the end of 2015.
Integration issues still loom for American and US Airways but agreements with most of their labour groups and a clear plan to move the smaller carrier (US Airways) onto the larger's technology systems will likely ease this process. United, which has suffered from integration woes since its merger with Continental Airlines in 2010, did not have labour agreements in place before the combination and opted to move the larger carrier (United) to the smaller carrier's reservations system with ensuing disruptions in 2012.