Careful what you ask for l . . .
US Airways and American Airlines have gotten what they have asked for and will be going to court quickly over their lawsuit filed by the Department of Justice to “kill” the merger.
The trial will start on November 25 and likely last about 2 weeks. There is a massive amount of discovery that must take place between now and then. The quick trial makes this the airlines’ trial to lose at this point. They must have all their ducks in a row to make this work for them.
There is a key maxim to go by in trials: He who is prepared most often wins.
Believe it or not, even when the stakes are this high people sometimes show up unprepared.
I think the merger chances went up with this trial date but let’s understand somethings here:
- This is a very high stakes poker game in which a settlement would be extraordinary.
- The government’s case is weak based on all modern historical standards by which anyone would testify.
- If the government loses this case, consumers are actually kind of harmed but it will have not achieved any givebacks from the airlines for Reagan National
- Political pressure in this case will be enormous.
- Factual data will rule here, not emotional arguments.
The airlines need to be very sure to show up over-prepared at this point. This is their case to lose now and acting as if the argument in their favor is self-evident will result in the Department of Justice walking away with a win.
You cannot possibly be over-prepared for this case.
It’s time for the airlines to stop the bluster and outrage and get to work.
And will someone remind Doug Parker that the fat lady hasn’t sung yet?
You have not mentioned state-specific political implications as well. For example, State Senator Wendy Davis is watching this with extreme interest as the outcome of this trial may be the deciding factor in whether she will run for Governor. If Greg Abbott comes out looking foolish (which I believe he will) she stands to gain from this as do all of Abbott’s opponents from both parties.
Well, I do agree that a negative outcome for the plaintiff’s will be used against someone such as Greg Abbott but I’m not sure if it will be effective.
The states that have joined this lawsuit barely have standing and the issues involved largely focus on interstate commerce anti-trust issues. In light of the AGs who joined that lawsuit, I suspect it was largely a political move for all involved. With the possible exception of Texas and Arizona, there was little downside to those AGs joining the lawsuit.
Abbott may honestly believe he has a win by “protecting” the consumer in Texas. I believe he’ll be shocked at the rather violent reaction that is likely from large union bases in . . . Dallas / Fort Worth (AA, SWA, Spirit) and Houston (United, SWA) AG Abbott has managed to anger 3 of the 5 major airlines’ unions in one fell swoop.
The Arizona AG has a history of wreckless behavior and likely thought that by engaging in the lawsuit, he could retain enough public visiblity to win another term. Arizona is a loser with respect to high paying US Airways jobs. But, again, that AG seems to have ignored the fact that they have managed to anger airline unions and that two of those unions are highly concentrated in Phoenix with big bases: US Airways (West), SWA.
And if Wendy Davis wants to run, she should run. But it shouldn’t be contingent on AG Abbott losing or winning in this lawsuit.