US DOJ Suing to Block Meger of AMR and US Airways

[scoreboardII]

I'm slow, so help me.

They are suing to stop the merger to make a healthier entity, for which if no merger occurs, there is a strong likelihood of bankruptcy, which will result in fewer flights and higher fares by the surviving entities.

Did I miss anything? Except this is the Eric Holder DOJ we are talking about.

 

[redflyer65]

I'm not sure it's just about slots.

The DOJ is looking at 4 airlines controlling 80% of the domestic market if they approve this.

AMR/LCC is hoping they get the last chair but the DOJ is saying their might not be another chair.

 

[geardown]

I bet Richard Anderson is laughing his a** off right now at Airways for their LGA DCA slot swap. They gave up 132 slots at LGA for 42 slots at DCA that they will probably have to give up.

 

[TMMT]

The merger would also entrench the merged airline as the dominant carrier at Washington Reagan National Airport, with control of 69 percent of the take-off and landing slots. The merged airline would have a monopoly on 63 percent of the nonstop routes served out of Reagan National airport. As a result, Washington, D.C., area passengers would likely see higher prices and fewer choices if the merger is allowed, the department said in its complaint. Blocking the merger will preserve current competition and service, including flights that US Airways currently offers from Washington?s Reagan National Airport.

The complaint also alleges that the merger is likely to result in higher ancillary fees, such as fees charged for checked bags and flight changes. In recent years, the airlines have introduced fees for those services, which were previously included in the price of a ticket. These fees have become huge profit centers for the airlines. In 2012, domestic airlines generated more than $6 billion in fees from checked bags and flight changes alone. The legacy carriers often match each other when one introduces or increases a fee, and if others do not match the initiating carrier tends to withdraw the change. By reducing the number of airlines, the merger will likely make it easier for the remaining carriers to coordinate fee increases, resulting in higher fees for consumers.

http://www.zerohedge.com/news/2013-...ws-doj-seeks-block-american-us-airways-merger

 

[APFPilot]

full text of the complaint:

http://www.justice.gov/atr/cases/f299900/299968.pdf

 

[WSurf]

Obviously, this merger is profit-motive driven, I get that. But the government trying to step in the last minute and suggest that they know better is why I have a problem with this. Free markets drive competition. If the government would just get out of the way, the consumers will determine how this all works out. Southwest exists because of all of the merger mania before that raised prices. There will be another adjustment if there are too many big airlines. The simplest solution is for the government, which knows nothing, to get out of the freaking way.

 

[scoreboardII]

4 companies control 80%. Doesn't sound remotely like a cartel or monopoly as suggested by the DOJ. That and the fact 20% can set pricing.

 

[Oakum_Boy]

Obviously, this merger is profit-motive driven, I get that. But the government trying to step in the last minute and suggest that they know better is why I have a problem with this. Free markets drive competition. If the government would just get out of the way, the consumers will determine how this all works out. Southwest exists because of all of the merger mania before that raised prices. There will be another adjustment if there are too many big airlines. The simplest solution is for the government, which knows nothing, to get out of the freaking way.

This is the Obama administration and the Democrats. They always know what's best for 'mericans, don't question.

 

[WSurf]

This is the Obama administration and the Democrats. They always know what's best for 'mericans, don't question.

And the funny part is a liar and Clown Eric Holder is behind it! Hahahahahahah

 

[bladeusa]

Come on. We are already on page two.
SWA bought the Justice Dept some pizza and a big screen TV !
=)