Odds and Ends: Lorenzo weighs in support AA-US merger; lawsuit could delay AA RJ replacement; 93% airport concentration

Lorenzo supports AA-US merger: In a radio interview with Bloomberg news, Frank Lorenzo supports mergers in the US airline industry and the proposed one between American Airlines and US Airways. Lorenzo is the former CEO of Texas Air Corp, and Continental Airlines. Lorenzo said labor, shareholders and stakeholders would lose if the Department of Justice prevails in its effort to block the merger.

DOJ lawsuit might impact Bombardier: An analyst for a Canadian investment bank thinks the DOJ lawsuit could delay an order by American to replace some of its regional jet fleet. The Scotia Capital analyst covers Bombardier, so his focus is on the impact to this company but Embraer is competing for the business, too.

93% Airport Concentration: While DOJ whines about the prospect of the New American Airlines controlling 69% of the slots at Washington Reagan National Airport, the Dallas Morning News cites a report that 93% of the airport traffic at three airports is controlled by the combined Southwest Airlines-AirTran company.

Our own Milestone: Today we surpassed one million views in a single year, running about 55% YTD ahead of last year.

7 Comments on “Odds and Ends: Lorenzo weighs in support AA-US merger; lawsuit could delay AA RJ replacement; 93% airport concentration

  1. CONGRATS on the 1 million+ views. Now if you can only get $1/view..:-)

    I don’t want the meger to go through for my own personal reasons. This includes the fact I don’t want Parker and his team to run the show. I would much, much rather have Horton and his team running the show-be it “solo AA” or a combined AA/US merger. The latter won’t happen so I think I would take the former.

    If the merger doesn’t happen, I expect Horton and his team to run the show. The irony would be that the unions who wanted Horton and his team out in the first place would probably have to deal with him in the future and he can easily use the excuse “hey, it wasn’t my fault the merger didn’t go through”.

    Also, judging from Horton’s letter, it doesn’t really seem he’s “gung-ho” about the merger anyway.

    http://aviationblog.dallasnews.com/2013/08/americans-horton-court-battle-will-likely-take-a-few-months.html/

    Remeber, until this b.s. Parker-led merger talk, AA was ready to “fly solo” and come out of BK as a stand-alone carrier.

  2. Rudy Hillinga Why is filling out these two lines a new equirement every time I write somethingScott?

    Congratulations Scott, on passing the One Million Milestone for the year!

  3. Congratulation on one million views. Keep on kicking everybody and call a cat a cat when you see one. It ensures long term respect from everyone in the end. If you consider relevant adds/ sponsoring, leave out Airbus, Boeing, BBD and Embraer to avoid conflicts of interest.

  4. Interestingly, an op-ed in Competition Law 360, a publication specialised in competition law (who would have thought? ;-) ) dares to disagree with most economical analysts out there.
    Here’s an excerpt – via user IADCA on a.net:

    Experts praised the complaint as thorough and tightly written, with few obvious holes. It pulls from past mergers, like the 2008 union of Delta Air Lines Inc. and Northwest Airlines Inc., to show that promises not to cut service or raise prices often go unfulfilled. And it points to internal emails acknowledging that consolidation has allowed nearly unfettered fees on extra legroom and checked baggage. One attorney said the DOJ’s evidence and breadth of analysis “present a real defense problem.”

    (Some more excerpts here: http://www.airliners.net/aviation-forums/general_aviation/read.main/5847166/#5)

    Again, I’m not saying this merger should/should not be blocked, but I do think that what Scott and a lot of other analysts out there claim – that the DOJ action is just a political move and that the DOJ doesn’t have a case – does not hold much water.

    On the contrary, a lot of people attacking the DOJ on this seem to have their own political agenda of trying to dismiss the notion that companies should come under antitrust scrutiny to begin with. I can only assume that they would suggest that “the market” should simply be left unregulated.

    It’s strange – the more people try to tell me that the DOJ’s case is weak and there is no reason to block the merger, the more I believe that there are actually a good few reasons against the merger. Because we wouldn’t need this almost unanimous PR war against the DOJ otherwise – a weak case would be dismissed in court without AA/US having to make any concessions anyway (i.e. this alleged attempt to “blackmail” AA/US into concessions would be doomed to fail as the DOJ wouldn’t have any leverage).

    • People who know my politics know I am no fan of this administration, or its DOJ. But this is one case I think is apolitical. How often have you seen this DOJ and the State Attorney Generals of TX and AZ on the same side of a legal argument? Never. Yes, politic do make odd bed fellows. But these two AGs just happen to represent the states where AA (DFW) and US (PHX) are headquartered. President Obama and his AG/DOJ are no fans of TX or AZ, but they are all now working together.

      You did not see a division between the GA and MN AGs when DL (ALT) and NW (MSP) wanted to merge, nor between the TX and GA AGs when WN (DAL) and FL (ALT) wanted to merge. There was also no objection from the TX and IL AGs when CO (IAH) and UA (ORD) merged.

      I, personally have always thought the merger of AA and US would be a huge mistake.

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