The Settlement: Part 1
The AA/US v DoJ settlement came more quickly than I expected and I am busier than usual at this time.
However, a few top level comments until I can sit down and do an analysis.
- I so far see the airlines giving up really nothing that they weren’t already prepared to give up for this deal.
- The gates they have to give up in the key airports does (potentially) remove barriers to entry for new airlines in those markets.
- Delta doesn’t surprise me in their loud, vocal expression that they would like to get those Washington D.C. slots. (This was suggested to me by two sources as being an end game of Delta for weeks)
- I think it’s great that the Republican candidate for governor, Greg Abbott thinks this deal is a win for American Airlines. Sadly, he didn’t originally and did very real damage as a result. Blowing with the wind doesn’t impress me unless it’s an airliner.
More to come.
I was curious in the government’s statement how they said this is a win for “low cost carriers”. Won’t the bidding be open to anyone? Couldn’t Delta or United step up and buy the slots? Even foreign carriers?
Previous slot give ups contained language that required sale to LCC carriers. The DoJ and DoT have been pretty good at ensuring that at least a portion of slots go to airlines that are not a part of the Oligopoly / Gang of 4.
I strongly suspect that the gate give-ups are inspired by Virgin America who has complained mightily that it can’t get adequate gate space at several of those airports (Chicago/Boston).
But let’s return to your first sentence and focus in on the words “government’s statement” and acknowledge that all parties will be engaged in spin and most particularly the government will be.