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US Airways Group, Inc. Message Board

  • iahphx iahphx Aug 26, 2013 10:09 AM Flag

    after the shock, more evidence of how week the DOJ case is

    Everyone should read Brett Snyder's detailed analysis of the government's antitrust case. Google "dallas airline blog" and read the Cranky Flier entry. We all knew that the case makes no sense in light of their other actions, but Brett makes it very clear that AA and US aren't really competitors on many routes -- even connecting ones.

    My experience as a litigator (many years ago now) tells me that anything is possible in court, but I do think that the DOJ has a remarkably weak case here. "Frivolous" is not too strong a word. I expect the merger to be approved.

    That said, I'm not so inclined to bet more money here. I'm certainly not selling any of my position, but I simply don't think the price is low enough to bet more money. I've seen too many crazy things happen in this sector the past 20 years. Like this lawsuit!

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • week? Your ged is showing.

      Sentiment: Strong Sell

    • Brett is a good guy, and his analysis is spot on. DOJ has no idea what they are trying to do, other than interfere and delay.

    • Perhaps the right words are "the case makes no sense in light of their other actions".

      As an airline consumer, prior mergers have certainly helped "fare discipline" - so the DoJ should have opposed the earlier mergers. However, their failure to do the right thing earlier should not now prevent them from doing the right thing with LCC & AA.

      AA was not forced into BK - they chose to go BK for their own strategic reasons. As such, they should get less consideration as a "failed company" in court.

      That said, just auction off 100% of either LLC or AA slots at DCA (with winning bidders being limited to

      • 2 Replies to alanfrombigeasy
      • No repeat of the chimps blunders.

        Sentiment: Strong Sell

      • Certainly the other mergers made action on capacity quicker, but with fuel high, many over served routes had to be dealt with. Especially given that many airlines felt pressure to rebuild their balance sheets (the industry needed profits to do that. They needed profits to replace their assets and maintain an "on going concern" status. Capacity discipline would have happened with or without the previous mergers and fare increases would have been put though. Even LUV cried uncle a few years ago. The DOJ can't separate an industry acting rationally in response to major cost increases (with or without mergers) and what are actually noncompetitive actions of an oligopoly, which the industry is at this point ... and was previously. Heck, the industry had oligopolistic characteristic when Kahn deregulated. How in the world he thought it was going to be a numerous firm industry and survive is beyond me.

        Leaving DAL and UAL alone at the top is noncompetitive. The US needs three strong carriers in the three world alliances. There is plenty of domestic competition.

    • All along this merger was described as having a very low overlap of routes ... whatever "low" is ... certainly from the standpoint of any other mergers' competitive route overlap. The DOJ must of gotten a hold of some "bad liquor".

      I'd be surprised if something doesn't work out to make the merger possible as well. But that said at least LCC is doing very well with strong after tax earnings. Heck, comparing it to most other airlines not paying taxes and LCC to last year's pre-tax income. LCC's earnings jumped almost 50% and their pre-tax pe is in the 3's..

      • 1 Reply to wgrsh
      • The head of the anti trust section at doj very much against this merger.Just compounds prior mistakes.Lack of comments by AA and LCC clearly indicate they are aware its all over. Too bad the union goons are still lost. Seeing LCC pilots with Teamster badges on their uniforms confirms the myriad of problems lcc has. .

        Sentiment: Strong Sell

 

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