AA - US merger being challenged

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Aug 13th, 2013, 01:58 PM
  #1
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AA - US merger being challenged

USDOJ and six states plus DC are opposing the American - US Airways merger on the basis that it will reduce competition and result in fewer flights, higher prices. http://tinyurl.com/lus8qda
Well, of course it will! Maybe not at first, but eventually. Hard to drum up a lot of sympathy when revenue and profit are up, due in no small part to the fees introduced for everything from seat assignment to checked (maybe even carry on) baggage.
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Aug 13th, 2013, 03:33 PM
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On the one hand, I'm thrilled--having been an American FF since the program started and not seeing that it was going to continue in a way that would be as generous as our experience has been with it ; on the other, do have concerns about its being able to emerge from bankruptcy --or compete successfully with all the other merged airlines.
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Aug 14th, 2013, 12:27 AM
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I am not looking forward to the devaluing of my miles with US so I am looking to spend them ASAP.
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Aug 14th, 2013, 05:22 AM
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so it was just announced that last quarter American made a PROFIT of $200 million. I'm not sure what the US Air figure was, but believe it was similar. I'm curious how much they need to profit just to avoid complete bankruptcy? One of their arguments is that the merger is the "only" way for American to avoid bankruptcy.
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Aug 15th, 2013, 06:53 AM
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exactly, Neo. IMO, in general in the post- AIG/Madoff/Citizens United world, there's great deal of skepticism about corporate financial reporting, but this does not seem like rocket science.
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Aug 15th, 2013, 07:29 AM
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AA's profit in bankruptcy has to do with its ability to shed debt and "unprofitable" labor agreements that wasn't possible outside of bankruptcy protection. Lower costs + higher revenues = profits.

I've been reading the DoJ complaint and can only say that US' CEO, Doug Parker (the instigator of the merger) has a real problem with mouth/brain synchronization. I started out skeptical that the government could prevail; I've now switched my view. Talk about arrogance.
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Aug 15th, 2013, 01:56 PM
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You are not alone in that assessment, gardy - arrogance is his rep, along with absence of any ethical principles in conducting business (yes, I know there are those who argue that "business ethics" is an oxymoron.) He managed to sweet talk some of the AA unions, sticking a fork in Horton's efforts and undermining AA's bargaining position. But if you talk to the folks at USAir they are far from content.
I have jumped back to United for now, will wait to see how this plays out.
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Aug 17th, 2013, 03:33 AM
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According to a recent piece in the Washington post which I cannot now find it looks as if the Government has a very good case given some of the internal documents regarding the intent of the two companies once the merger is complete.

The anti-competition "evidence" apparently strong enough to have convinced even the Virginia Attny General to sign onto the case in support of the Fed.

I am not sure where anyone is getting the notion that their FF miles will be devalued with this merger, perhaps I missed that info.

It looks like this thing is going to die.
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Aug 17th, 2013, 08:42 AM
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I am not sure where anyone is getting the notion that their FF miles will be devalued with this merger, perhaps I missed that info.

The award chart for 2014 had doubled.
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Aug 18th, 2013, 06:11 AM
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sparkchaser, which award chart doubled? American's? US Airways'? I've been looking at American's and also One World, and haven't seen any significant changes at all. Or are they still being kept secret?
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Aug 18th, 2013, 07:01 AM
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AA mile chart seems the same to me too.

BTW - Read an article that said this push against airline mergers should have already happened a while ago, with Delta, etc.
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Aug 18th, 2013, 07:15 AM
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When I was researching awards on US Air's website, the amount of miles required for a ticket doubled for 2014. I just checked and now it's back to "normal". Maybe it was a database error?
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Aug 18th, 2013, 09:49 AM
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Maybe you inadvertently clicked for two tickets? I did that once.
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Aug 18th, 2013, 09:56 AM
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Perhaps.
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Nov 12th, 2013, 09:04 AM
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US and AA have settled their suit with the DoJ and the merger now appears to be on for December.

http://www.prnewswire.com/news-relea...231589811.html
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Nov 12th, 2013, 09:47 AM
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Interesting. Can't wait to find out what happens with ff miles in both airlines and reward ticket opportunities.
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