[Travelandtourism] update: DOJ MOVE TO BLOCK AA-US MERGER STUNS INDUSTRY

Wed Aug 14 19:11:56 UTC 2013

Sorry everyone this is the update from today August 14, 2013
I had issues from my e-mail account not my fault, may have sent a few times. 
But this was the update from today's news.

Disabled Entrepreneur of the Year 2012 of NY StateLeading the Way in Independent Travel!
Cheryl Echevarria, Ownerhttp://www.echevarriatravel.com631-456-5394reservations@echevarriatravel.comhttp://www.echevarriatravel.wordpress.com
Affiliated as an independent contractor with Montrose TravelCST - #1018299-10 FL CST T156780Your old car keys can be the keys to literacy for a blind child.  Donate your unwanted vehicle to us by clicking https://nfb.org/vehicledonations or call 855-659-9314.Echevarria Travel has partnered with Braille Smith. http://www.braillesmith.com for all her braille needs.Gail Smith is the Secretary of the NFB of Alabama

> From: margo.downey at verizon.net
> To: travelandtourism at nfbnet.org
> Date: Wed, 14 Aug 2013 13:25:58 -0400
> Subject: Re: [Travelandtourism] update: DOJ MOVE TO BLOCK AA-US MERGER	STUNS	INDUSTRY
> 
> Cheryl, I think I've gotten this from you many times.
> 
> Margo and Arrow
> 
> -----Original Message-----
> From: Travelandtourism [mailto:travelandtourism-bounces at nfbnet.org] On
> Behalf Of cheryl echevarria
> Sent: Wednesday, August 14, 2013 1:08 PM
> To: travelandtourism
> Subject: [Travelandtourism] update: DOJ MOVE TO BLOCK AA-US MERGER STUNS
> INDUSTRY
> 
> If you get this again, I do apologize.
> My hotmail has been out, MSN is trying to fix. So sorry if comes through
> twice.
> DOJ MOVE TO BLOCK AA-US MERGER STUNS INDUSTRYby Michèle McDonaldAugust 14,
> 2013
> 
> In a move that stunned the travel industry, the U.S. Department of Justice
> filed a lawsuit this week to block the proposed merger of American Airlines
> and US Airways, saying it violated antitrust laws.
> Perhaps the most surprising aspect of the lawsuit is its “air of finality,”
> with no suggestion that concessions would change the DOJ’s view, said
> aviation consultant Robert W. Mann.
> Assistant Attorney General Bill Baer flatly stated that “[w]e simply cannot
> approve a merger that would result in U.S. consumers paying higher fares,
> higher fees and receiving less service.”
> The lawsuit, in which the attorneys general of six states and the District
> of Columbia joined as plaintiffs, came eight days after the European
> Commission approved the merger. 
> It also came two days before a hearing at which American’s bankruptcy court
> was expected to confirm its reorganization plan, which involves the merger,
> and release it from bankruptcy.
> The Allied Pilots Association told its members that American Airlines’ plan
> of reorganization includes an automatic 30-day stay, which the DOJ’s
> announcement has triggered. As a result, the airline will exit Chapter 11
> restructuring no sooner than the fourth quarter of this year.
> ‘Vigorous’ defense plannedAmerican and US Airways vowed to “mount a vigorous
> and strong defense” of their planned merger.
> “We believe that the DOJ is wrong in its assessment of our merger,” the
> airlines said in a joint statement.
> “Integrating the complementary networks of American and US Airways to
> benefit passengers is the motivation for bringing these airlines together.
> Blocking this pro-competitive merger will deny customers access to a broader
> airline network that gives them more choices.”
> DOJ objectionsMann commented that the lawsuit “reads like an indictment for
> doing what every other fragmented industry has done: They consolidated.” 
> Among the objections to the proposed merger raised by the DOJ and the
> attorney general are:
> •    It would reduce the number of major domestic airlines from five to four
> and the number of “legacy” airlines from four to three. “Because of the size
> of the airline industry, if this merger were approved, even a small increase
> in the price of airline tickets, checked bags, or flight change fees would
> cause hundreds of millions of dollars of harm to American consumers”
> annually.
> •    US Airways’ Advantage Fares, which offer lower prices on connecting
> services to compete with other carriers’ nonstop services, would likely
> disappear.
> •    American’s original standalone plan for emerging from bankruptcy
> involved growth, whereas US Airways’ management, which would assume the
> management of the merged carrier, favor the capacity discipline practiced by
> other major carriers, notably Delta.
> 
> •    US Airways currently holds 55% of the slots at Washington National
> Airport. The merger would increase that percentage to 69%. The combined
> airline would have a monopoly on 63% of the nonstops departing the airport.
> Mann noted that the United-Continental merger left that combined airline
> with 90% of the slots at Newark, although Newark, unlike National Airport,
> is not a slot-controlled airport. “I don’t see where this follows precedent
> or is rational,” he said.
> Suit cites Kirby’s statementsThe language of the lawsuit suggests that the
> plaintiffs take particular issue with statements made by US Airways
> president Scott Kirby.
> The lawsuit says of Kirby that “[h]e boasted at a 2012 industry conference:
> ‘Consolidation has also … allowed the industry to do things like ancillary
> revenues [e.g., checked bag and ticket change fees]. That is a structural
> permanent change to the industry and one that’s impossible to overstate the
> benefit from it.’” 
> The lawsuit goes on to say: “In essence, industry consolidation has left
> fewer, more-similar airlines, making it easier for the remaining airlines to
> raise prices, impose new or higher baggage and other ancillary fees, and
> reduce capacity and service. This merger positions US Airways’ management to
> continue the trend – at the expense of consumers.”
> Crandall: ‘dumbest thing I’ve ever seen’Former American chief Robert
> Crandall said he was furious at “the stupidity of the U.S. government,”
> which he said was “determined to create ever-greater monopolies.”
> Rather than promoting competition, the lawsuit does just the opposite by
> “not allowing the creation of a third competitor,” he said. “It’s the
> dumbest thing I’ve ever seen.”
> The government made mistakes when they allowed the Delta-Northwest and
> United-Continental mergers, Crandall said, and “now all of sudden we’ve
> allowed too many mergers.”
> “I don’t understand crippling these companies,” he said. “This is nuts.
> Absolutely nuts. If there were any justice in the world, American-US Airways
> would pass in a flash.”
> The last time the DOJ blocked an airline merger was in 2001, when it raised
> objections to a United-US Airways tie-up.
> 
> Disabled Entrepreneur of the Year 2012 of NY StateLeading the Way in
> Independent Travel!
> Cheryl Echevarria,
> Ownerhttp://www.echevarriatravel.com631-456-5394reservations@echevarriatrave
> l.comhttp://www.echevarriatravel.wordpress.com
> Affiliated as an independent contractor with Montrose TravelCST -
> #1018299-10 FL CST T156780Your old car keys can be the keys to literacy for
> a blind child.  Donate your unwanted vehicle to us by clicking
> https://nfb.org/vehicledonations or call 855-659-9314.Echevarria Travel has
> partnered with Braille Smith. http://www.braillesmith.com for all her
> braille needs.Gail Smith is the Secretary of the NFB of Alabama
> 
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