19 Responses

  1. Tom // Sit in first
    Tom // Sit in first at |

    Thoughtful post.

  2. Zach
    Zach at |

    I agree about the less competition equals higher prices but I hope the other airlines – jetBlue, Southwest, Alaska – will still provide a stabilizing effect in their regions. Or at least I hope they can

    Yes it does not solve their Asia problem but I think the Latin America move is a big deal. It may not be as profitable as Asia but there is still potential for it in the future if the region can achieve more stability politically.

    But that is just my subjective, completely gut feeling about it, so I am probably wrong.

  3. Lark
    Lark at |

    Do you think the Alaska and Jetblue relationships will be challenged (by DOJ/merger officials)?

    Jetblue will be less necessary to the new USAA (and only RDM’s anyway). But a loss of AS would leave a big hole in the West that USAA would have to quickly fill…

    What are you referring to here? (odds of the TLV route sticking around given the open TWA-related judgment against AA??)

  4. Scottrick
    Scottrick at |

    Hopefully AA-US can actually complete this merger and all the new agreements with their unions before making a run at Alaska. US Airways reminds me of a kid who keeps biting off more than he can chew.

  5. Ryan E
    Ryan E at |

    In addition to the reduction in competition, the other disappointment that came first to mind is the lack of any improvement in service to key world regions as Seth mentions. UA and even DL still have them beat in important areas, for the near future at least.

    A lot of chatter talks about how US FFP members will gain this or that improvement with AA (or in limited cases, vice versa). But I think that’s whistling past the graveyard. Eventually the combined program will water everything “good” down as much as they can get away with…which is probably a lot.

    Who else will you turn to – only two legacy choices now. OK, plus Southwest and a few others if you happen to live in certain cities and fly to their serviced destinations.

  6. Jason
    Jason at |

    @Lark : I’m not an expert in the matter, but i recall that AA didn’t pay some severance pension thing to Israeli employees when they bought TWA and ditched the route …. That’s the main reason why AA doesn’t fly there today despite it printing cash for UA DL and US : it’s alleged that as long as AA doesn’t pay back what they owe, the moment they land a plane there it Eli,d be impounded

  7. eponymous coward
    eponymous coward at |

    AA is not going to be making a run at Alaska without DL getting in the way (and last I checked, DL has a checkbook, too).

    Oh, and AS’s management is perfectly fine being an independent, thankyouverymuch, and unlike AA and US, hasn’t been through Chapter 11 and has a nice long record of return on invested capital that blows everyone else in the industry away, so they can make a very good case to shareholders that a merger is NOT in their best interests. Unless AS goes into the tank, the shareholders are going to need a lot of cash to convince them to surrender a well-run midsize company in a merger with a clunky behemoth, and with DL capable of bidding up the price too… I think AS stays independent for the foreseeable future (and once we get 5-10 years out, very little is foreseeable).

  8. eponymous coward
    eponymous coward at |

    Oh, and on AA ditching AS…

    The problem is it would be adding SEA/PDX/etc. feed would be expensive (especially since AA has things to do in NYC/LAX, oh and in 2014 WN gets to fly ANYWHERE in the US from DAL), and it would drive AS into DL’s arms (note that SEA is an international focus city for DL). Which is exactly what AA does NOT want to do here- try to enable an AS/DL merger. They are better off with AS codesharing with anyone with a pulse.

  9. David
    David at |

    DL has such a headstart on AA/US, look at DL evolve SEA into more FOCUS mini-hub w/ Alaska at that premium market to JFK & Europe grows. DL not AA/US would be in a position with its strong market cap to pay a premium to shareholders at Alaska. Both DL & AA/US have to sort out LAX, as PHX relates to it for AA/US, and SLC w/ SEA long term – premium O&D v. transfer hubs.

  10. stephan
    stephan at |

    I think this will be not so good news for the US consumer and the employees. Redundancy will certainly cause layoffs and if you look at Canada, where I live, we have Air Canada (which has governement backing and is considered too big to fail so in essence politically subsidised to survive) and some competition from private, employee owned Westjet. That is it. Look at what we pay for domestic flights and you will cringe. That is the result of little to no competition

  11. phil
    phil at |

    Seth,
    Do you think the merger will help those of us in BOI, who currently are without AA service? I like to use miles to go to HI but currently I have to use my AA miles to book on AS which is not ideal. If they keep the BOI-PHX-Hawaii route that would seem like a very good thing.

  12. RakSiam
    RakSiam at |

    while the holes in the route map remain, isn’t that what alliances are for? To fill in the holes in your route map with partner airlines?

  13. eponymous coward
    eponymous coward at |

    I could see AA starting up LAX-GEG/BOI/SEA/PDX on RJs (DL has started most of those routes, and AS no longer flies LAX-GEG/BOI). That’s basically all they need to do.

    I’ll point out, though, that AS tried a lot of LAX routes to places like RDM, with planes that are pretty fuel efficient (Q400s via AS), and dropped the service, and they haven’t flown LAX-GEG/BOI for some time. I find it hard to believe that RJs with F are going to be very profitable on a lot of the smaller West Coast markets like EUG, RDM, STS, MRY and so on.

  14. eponymous coward
    eponymous coward at |

    My bad, AS no longer flies LAX-GEG. They do fly 1x LAX-BOI. Still suspect AA would start another frequency or two to BOI and AS wouldn’t mind so much.

  15. phil
    phil at |

    I hope AA/MQ does start, actually restart, a BOI-LAX route. Would make us Hawaii lovers happy. But they need a plane with a FC section. 🙂