American and US Airways Give Up Very Little to Gain Merger Approval

American, Mergers/Finance, US Airways

So much for taking a writing break this week. I’ve reshuffled this week’s sponsored posts because of yesterday’s big news: American and US Airways will now be allowed to merge thanks to a deal with the Department of Justice (DOJ). (You can read the full settlement here.)

While the deal itself is full of a lot of promises and divestitures, it’s mostly just fluff. Basically, the airlines did exactly what we all expected before the lawsuit was filed. They gave up a chunk of slots at Washington/National Airport, a few at LaGuardia, and that’s really about it. Oh sure, there was more, but none of the other stuff matters. Of course, that won’t prevent me from talking about it.

AA US Merger Approved

While the settlement is not technically final until the bankruptcy court approves, that won’t be an issue. This is a done deal. The merger will close in December, and customers will see reciprocal frequent flier benefits begin on January 7. (They’ve been working on this for a long time, so the short timeline is no surprise.) But let’s get back to the details of the deal.

Give Up 44 Slot Pairs at Washington/National
You may have heard that the airlines had to give up 104 slots or 52 slot pairs (one pair = one departure and one arrival) and that’s technically correct. But eight of those are currently leased out to JetBlue, and now they will go to JetBlue permanently if the folks at JetBlue want to buy them (they do). That means that American and US Airways will have to reduce their flying by 44 roundtrips per day. We don’t know what flying will go, but there are some pretty easy targets.

Today, American and US Airways each fly to Raleigh/Durham 7 times a day. Also, US Airways flies to Nashville 4 times a day while American flies it 5 times a day. That should be an easy 11 to get rid of (and possibly upgauge existing flights to add more seats if needed). Meanwhile, American has 6 daily flights to JFK. Since US Airways has the hourly shuttle to LaGuardia, you don’t need JFK. (And Europe connections should go through Philly from now on.) After those, you’re stuck with about 25 flights to cut.

Soon-to-be American CEO Doug Parker said on a conference call that “hub-to-hub is the best of the flying so that will remain.” That means other cuts will come from other cities. We’ll have to see what that means when the airline announces it, but small city service will remain largely intact thanks to an agreement with the Department of Transportation (DOT). Overall, the new American will still be slightly larger than US Airways is alone today at National.

Who will get these slots? Certainly Southwest and JetBlue are drooling over them. Virgin America and Alaska might be interested, but none of these slots can be used for flights beyond 1,250 miles, so that eliminates what you’d expect them to do. Spirit recently gave up its National slots in favor of Baltimore, so that’s unlikely. Maybe a little guy like Sun Country would try for it, but really, JetBlue and Southwest will be the big winners.

Give Up 12 Slot Pairs at New York/LaGuardia
Not that either airline holds any sort of dominant position at LaGuardia, but DOJ saw this as an opportunity to open up slots anyway. In this case, you may have heard the airlines have to give up 17 slot pairs, and that is true. But five of those are already operated by Southwest and will now be offered to them for sale. So it’s a net reduction of 12 daily roundtrips from where American and US Airways are today. That’s not a lot.

Where will those 12 come from? There are so many options. I’d probably start in Charlotte where US Airways operates 13 a day and American has 5. For the rest, does American need 6 flights a day to Columbus? Does US Airways need 13 to Philly? It won’t be hard to cut that back as needed, so this is pretty minor.

Give Up 2 Gates in Miami
US Airways will have to give up two of the gates it leases in Terminal J in Miami. This is pretty laughable. Who is going to want those? No low cost carrier I know wants to touch that airport. And I haven’t heard about international carriers having trouble getting space.

Give Up 2 Gates at Dallas/Love Field
Wait, American still has gates at Love Field? Yep, it does. It has 2 gates even though it doesn’t fly there anymore. It was supposed to resume flying after the new terminal is fully open, but please, we all know that was just a way to sit on gates so Southwest couldn’t use them. The gates are currently leased out to Delta, but I would expect that Southwest would find a way to gobble them up and further dominate that airport. That’s right, this divestment would actually hurt competition if that plays out.

Give Up 2 Gates in Boston
This was another one that I had no idea was constrained. JetBlue seems to be having no problems growing its operation mightily, so is there really an issue if a new entrant wanted in? Neither American nor US Airways have to care very much about this. I’m sure they’ll be able to run their operation just fine from 2 fewer gates.

Give Up 2 Gates at Chicago/O’Hare
I liked this one, but I expected it to happen anyway. With US Airways in 5 gates in Terminal 2 and American dominating Terminal 3, it didn’t seem like it would make much sense to keep those few gates. But then I saw in the settlement that they’re actually talking about giving up gates L1 and L2 (combined from L2A/L2B) in American’s Terminal 3. That’s a surprise, but it’s also not an issue. This is good since O’Hare is gate-constrained and it frees up some openings for others. But it should have no impact on the combined airline.

Give Up 2 Gates in Los Angeles
US Airways was scheduled to move to Terminal 3 at LAX so that Southwest could take over all of Terminal 1, but the move hasn’t happened yet. Still, US Airways is giving up rights to gates 31A and 31B in Terminal 3. That means nothing since American is going to want to consolidate its operation in Terminal 4 and the Bradley Terminal anyway. And it’s that Bradley Terminal where American is supposed to get more gate space once the current expansion is fully opened next year. But this gate cut may actually benefit American. It gives the combined airline the ability to cut back on flying a little in LA since it will have 2 fewer gates. It might have wanted to do that anyway but couldn’t because…

Maintain hubs in Charlotte, New York/JFK, LA, Miami, Chicago/O’Hare, Philly, and Phoenix for 3 Years
This might sound like quite a commitment, but it’s what the airline was planning anyway. Now it just has to keep service at the same historical levels it has had previously, after accounting for the above divestitures. US Airways has publicly said that it sees LA and New York as important points for local traffic. I had expected to see reduced flying in those cities (not that it would really be a competitive issue in these markets), but now that won’t happen for three years except in LA where the 2 fewer gates mean they can cut a little. Instead, we’ll see flying levels stay where they are, and I would expect to see the destinations and frequencies change around a fair bit. The rest of the hubs have never seemed to me like they should be in danger anyway. But if they are, well, then in 3 years they can go away anyway.

Maintain Service From 1 Hub to Each Currently-Served Airport in 6 States for 5 Years
Remember, it wasn’t just DOJ in this lawsuit but some states as well. This provision basically gives these states what the combined airline already offered in Texas to get that state’s attorney general to pull out of the lawsuit. The list of cities served by at least one of the airlines today is:

  • Arizona – Flagstaff, Phoenix, Tucson, Yuma
  • Florida – Daytona Beach, Key West, Ft Lauderdale, Gainesville, Jacksonville, Orlando, Miami, Melbourne, West Palm Beach, Pensacola, Ft Myers, Sarasota, Tallahassee, Tampa, Ft Walton Beach
  • Michigan – Kalamazoo, Detroit, Flint, Grand Rapids, Marquette, Traverse City
  • Pennsylvania – Allentown/Bethlehem, Wilkes/Barre/Scranton, Erie, Williamsport, Harrisburg, Philly, Pittsburgh, State College
  • Tennessee – Nashville, Chattanooga, Memphis, Tri-Cities, Knoxville
  • Virginia – Charlottesville, Washington/National, Washington/Dulles, Lynchburg, Norfolk, Newport News, Richmond, Roanoke

Remember, this just guarantees the airline will serve each city from at least one hub with daily service, so it can adjust service levels as it sees fit. It just can’t pull out completely, but American wouldn’t want to do that anyway.

So that’s the deal. There are a lot of promises in here, but these are things that I can’t imagine the combined airline wanting to break even if it could. This agreement says nothing about controlling so-called Advantage Fare pricing or about the 1,000 plus markets that DOJ said would be too concentrated after the merger. The way I see it, DOJ didn’t like its chances of winning enough to take this to trial. Instead, it crafted a deal with all kinds of fluffy promises that made it look like it was protecting consumers. It tried to save face, but that’s quite a thin veil. If I’m at DOJ, I’m hoping people don’t see through the fluff and think that something amazing has been done here.

At the same time, the combined airlines were nervous enough about their chances of winning in court that they decided it was worth it to give up slots to avoid the chance that they lose entirely. If I’m at American/US Airways, I’m pretty happy with this deal. In fact, I would have been happy before the friggin’ lawsuit was filed in the first place. But hey, at least the lawyers are all rich now, right?

Of course, if I’m at JetBlue or Southwest, I’m pretty damn happy right now since I’ll get more slots in congested airports. If I’m Southwest, double bonus! I have a chance to increase my dominance at my home airport, Dallas/Love Field. That’s particularly helpful since, by agreement, they are prohibited from physically adding new gates.

Now it’s time for the fun part. I’ve always believed that this merger was a good idea. But good ideas don’t always get implemented properly. Once this closes in December, it will be time to turn the microscope on to the integration. Let’s see if they can do this better than others before them.

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78 comments on “American and US Airways Give Up Very Little to Gain Merger Approval

  1. CLT-NYC fares are kept in check by B6 even though they only fly CLT-LGA. Maybe they’ll shift the capacity over to to CLT-JFK for more international feed.

    1. b6 seres CLT-JFK (no LGA)
      DL/US/AA service CLT-LGA
      US serves CLT-JFK

      I’ve been flying this route weekly for awhile, and fares are cheap ($120 each way with 2 weeks notice for monday morning/thusday evening). B6 is actually on the expensive side when I look.

      I see US upgauging some of the e190 / a319 frequencies to a320/321, and DL upping cr7s to CR9s.

    2. JohnBom – Remember that the management team has been pretty clear that it sees JFK as a place where it can serve the local market. Philly will be the primary connecting hub in the northeast. So I wouldn’t expect to see a lot more capacity in Charlotte-JFK just to feed connections.

  2. As a Chicago-based AA flyer, I think this is great news. I prefer AA to US at ORD and hopefully this strengthens/cements their hub operation. I have family in NH and am delighted that I’ll soon be able to fly AA metal to MHT. I think AA has made some great recent progress – new planes, better moral of employees, and in-flight catering that far exceeds the competition. I just hope that Doug Parker leaves this service enhancements that have made AA my airline of choice. Good luck to both organizations and their employees.

    1. I hope AA competes on the MHT-ORD route and drives prices down a little.. I think United has gotten a little.. Complacent.

    2. I do most of my flying on UA, so I was surprised to here that AA didn’t offer ORD-MHT service on their own metal. Can you please clarify a little? Is there only connecting service? American Eagle service? Thanks!

        1. Wow, I’m surprised to hear that. With BOS prices coming down, I’ve hardly flown into MHT the last few years and hadn’t noticed AA’s absence when I have flown through there.

  3. Just looks like a transfer of wealth from the US taxpayers to the lawyers working with the DOJ. What a bunch of absolute idiots at the DOJ. If there was any accountability in government, which we all know is a big laugh, they’d all be fired

    @JohnBom you are absolutely right. When I moved to RDU in 2006 flights to LGA were typically $700-$1000 round trip on a consistent basis. As soon as B6 started service to B6 prices dropped to $200-400 overnight and have pretty much stayed there since, maybe creeping up to $300-500 recently with better load management by everyone. I would not expect to see CLT-LGA or the “Bank of America Commuter Shuttle” move to JFK. Maybe they will add more JFK service but I doubt at the expense of LGA service.

    1. “What a bunch of absolute idiots at the DOJ”

      It sounds like they were under pressure from the various states – TX, AZ, FL, VA, MI, and TN. Had they not challenged the merger you can bet that the DOJ would have heard from elected representatives from those states, which account for a very large chunk of the US population.

      The DOJ did what the states wanted them to do which is guarantee they the new airline will maintain services.

    2. Last I checked the Lawyers at the DOJ were on salaries, and didn’t get paid by the case. Or perhaps I’m misinformed about this? So how could there be a transfer of wealth from tax payers to the DOJ lawyers? I’d rather have them do something than sit on their bums.

      1. A lot of the heavy lifting is done by salaried staff counsel, but in a case like this there’s likely a considerable amount of expert consultancy being paid for, and both the consultants and the staff can run up some good-sized travel bills.

  4. My eyebrow raising moment was that the slot divestitures “appear” to be limited to benefiting “low cost carriers.” That seems a bit discriminatory. How would LCC be defined in today’s blurred world? And there may be some carriers not considered LCCs, such as Alaska, that would seem to have a legitimate business case.

    1. What Legacy Carrier needs more slots, they are the ones merging with each other, they have been cutting for years. The bidget carreis are the ones that make us forget the overcharging of UAL on may routes.

    2. I found it laughable that the news media used Southwest as a descriptor for Low Cost Carrier. Obviously, they havent checked fares lately

    3. Salvador Blue – What’s interesting is that Delta has made it clear that it wants slots at National (after giving a bunch up in the slot swap with US Airways) and it wants those gates at Love Field. So if DOJ blocks them from even competing for them, I wonder what kind of leverage Delta would have? They’ve already gotten aggressive, putting out press releases.

    1. dan – I will be very curious to see what happens to the frequent flier agreement. There is no codeshare yet, but that is now allowed per the pilot agreement. Frequent flier earning is limited to certain routes out of JFK and Boston. I’ll be interested to see if they decide to keep it or not.

  5. It’s pretty much what I expected. I do agree that this merger, on balance, is a good move for everyone. Why have two mega legacies and two weak sisters? I fine the situation at Dallas Love to be interesting. An airline which was barely considered in the DOJ complaint sure did reap the most benefits. The conspiracy theorist in me (which I only take half seriously) is pondering this …

    1. Actually, jetBlue’s reportedly been interested in flying to Dallas Love for some time (they fly to DFW now and would have to leave it), so Southwest may not be unchallenged for those two gates.

      1. noplot – there isn’t any requirement that an airline must operate out of only DAL or DFW, but not both, at least to my knowledge. Assuming they can get their hands on a gate, B6 could start flying from DAL tomorrow if they wanted to, and not leave DFW. The only restriction at the moment is that nonstop flights out of DAL are restricted to the Wright Amendment perimeter, but that goes away in October 2014.

      2. You’ll note again that my conspiracy theorist brain doesn’t take these things seriously most of the time. I’ve read elsewhere that the Love gates are currently leased to Delta. In any event, I have little doubt that American will be able to negotiate the best deal it can for them. It was just interesting that Love was deemed important enough to warrant divestitures, especially since Southwest almost completely monopolizes Love. I simply find the apparent double standard intriguing.

    2. DesertGhost – Love is particularly interesting since Southwest is supposed to be capped at 16 gates. I asked both Southwest and Love Field PR people whether Southwest would even be allowed to compete for those gates. Both say they don’t know. Weird.

      1. “Don’t Know”=We’d love to, but the lawyers are looking at how to make it work. Perhaps we’ll resurrect Airtran’s certificate just for this purpose?

      2. Terry Maxon’s blog this morning had a paragraph that said AA could either sublease its gates to someone else, or just turn them back over to the city (for some kind of compensation, I presume), but that appears to have been removed, so not sure if that’s true or not. If one or the other is true, my money would be on WN getting those gates. They will either win the bidding war behind door #1, or the Dallas City Council will show the LUV behind door #2. What I don’t know, though, is whether the Wright repeal permanently capped WN at 16 gates, or if they can pick up extras if the airlines that currently hold them give them up.

        An interesting sidebar is that the DOJ apparently said they they “prefer” that legacy carriers not be given the divested slots/gates. If DL ends up winning the right to those two gates at DAL, what, if anything, could the feds do about it? Do they have the right to overrule the city and tell them to give the gates to someone else?

        1. MeanMeosh – I believe the way it works is that airlines apply to the feds and they pass on qualified bids to the airlines to pick from. If that is the case (and I’m going to probably write more about this), then DL could be eliminated straight away if the feds so choose.

  6. Now they can get on with the business of merging the airlines. It will be interesting to see what culture comes out. United STILL has two cultures, the old Continental and the old United, and if you fly a lot, you see the difference say if you go through Houston vs. Chicago or Denver.

    American’s culture is a bit more oriented toward the customer, especially the higher end customers. They have the Main Cabin Extra, power ports, more first class seats, etc. than US Airways does. Their meal service in first is better. We will see how things develop.

    As far as fares go, the airlines will only be constrained by one thing – public pressure. The airlines made a boatload of money in the third quarter. If that trend continues, there will be some public pressure for the government to rein them in. We will see how it goes.

    I guess I shouldn’t complain too much about the merger. I bet on it earlier this year by investing in US Airways, and also in AAMRQ, the bankrupt shares of American. LCC (US Airways) has just almost doubled, and I bought AAMRQ at $3.15 and sold it yesterday at $12.45. A tidy little gain!

  7. When I saw the news yesterday I understood DCA/LGA as a way of opening more slots and getting other carriers/routes in those markets. But the other reductions didn’t make to much sense to me.

    Love Field? Seems a way to build up dominate WN more then reducing AA/US service since neither fly there now.

    Wow MIA, yeah US was really big in Miami so must be cut back. That laughable.

    I can also understand the service level agreements, cities/states are just trying to protect themselfs against being dropped completely.

    Now the game begins of who gets all those DCA/LGA slots and what they do with them.

    1. The gates in Concourse J in Miami were already going to be given up as they consolidate both airlines into Concourses D&E that AA already has. Why would they keep gates on the other side of the airport and have to use additional equipment and personnel?

      Concourse J is used for the Star Alliance Partners and the One World Partners are supposed to move to E when the renovations are completed.

  8. I think the reason AA want to give up the ORD gate in the L concourse is that is where B6 and Spirit and others are and that is where they will want their expanded gates.
    They most likely have something else up their sleeve for the T2 gates, since Eagle already operated from T2 as well

    1. jay – That might be why DOJ wanted gates in the L concourse, but American wouldn’t want to give those L gates just for that same reason. Still, I will be interested to see how American maintains a footprint in T2. It’s going to be somewhat awkward.

  9. My point of curiosity: did US ever get properly merged with US (meaning America West’s takeover of US)? I thought the pilots were still squawking, but maybe I recall that AA’s pilots will just be able to outvote them… Still, that seems a little dysfunctional if it is still outstanding.

    Who this merger is bad for is the United flyer that likes to take cost effective flights (me…). Now I won’t be able to pick up a cheap US flight and concentrate my elite miles whenever they leave star.

    1. I’m in kind of the same spot. I’ve split my time between UA and US based on pricing, but now I’m stuck with UA’s sometimes extraordinarily high pricing. I guess my plan to boost myself to UA Gold this year and try to status match with AA next year will be working out. Probably makes more sense since I largely fly out of DFW anyway due to a recent move.

    2. DAB – There was an outstanding issue in merging the pilot groups, but that’s been sitting in courts as the two pilot sides fight it out. There really wasn’t anything US Airways management could do until the two sides figured it out. Management even went to court to get clarification on how it could proceed. This new merger should avoid this problem thanks to legislation that was introduced after the America West/US Airways merger to avoid this issue.

      1. I wonder if there is an internal number for synergies resulting from the US/AW labor group consolidation getting fully completed as a result of the merger with AA? It’d be funny and sad.

  10. Well I’m glad to see that this joke by the doj is now over. Having said that however I do understand the caution on behalf of the affected states to not become a pittsburgh or st Louis given the history of both airlines.

  11. Mostly agree with this analysis, but AA may not be so willing to cut DCA flights to JFK since they provide feed for international traffic to other oneworld carriers — obviously can’t get that over Philly.

    1. Bill S – From DC, American can connect through Philly to its most important oneworld partner, British Airways. It can also connect through there to Qatar. It can connect through Chicago to JAL and Cathay Pacific. It can connect through Dallas or LA to Qantas. Miami will connect with LAN/TAM. That leaves Royal Jordanian, Iberia, Finnair, and Air Berlin as of today’s schedules. If they think that’s really important (which I’d be surprised if they do), then they can run one flight up to JFK to feed those instead of 6.

        1. Nick – Absolutely. I’m assuming that Qatar service to Philly might not have happened if the merger fell apart. I’d expect we’d see more connecting the dots in Philly, Charlotte, and Phoenix. At the same time, I’d imagine those hubs might see less Star Alliance service (well, not Phoenix, which has none already). But I’d be amazed if that Charlotte-Munich flight on Lufthansa lasts.

  12. CMH-LGA has the highest RASM of AA’s service out of LGA… forget Skybus and stop picking on the C-BUS

  13. Cranky, I’d like to think your posts, well-supported, well-reasoned, well-stated had something to do with DOJ’s decision. Congratulations!

    Interesting, the Virginia AG, who was one of the plaintiffs, running for Virginia governor as what could be described as Tea Party-esque, last week lost the election. Now this week, DOJ decides to settle.

    Who says nothing ever gets done. Can we now say this is the industry as it is going to look for some time? Any more consolidations to come?

    I would think not, but let’s see what is going to happen. Survival, or blood in the streets? Nice, healthy competition, or who can kill off whom the quickest? My guess, the latter.

  14. From the beginning, it was obvious this would settle. I predicted it. I maintained it. I explained it. And I defended it. And, despite the naysayers, I was the first on this blog to publicly state that LGA slots were what this deal hinged upon. I believe my words were: “Throw in some LGA slots and you might just have a deal.” Nuff said.

  15. Agree with most of what you’ve written here, except for this about DAL:

    “That’s right, this divestment would actually hurt competition if that plays out.”

    I don’t see it that way, even if WN does pick up the gates. WN doesn’t really compete with other airlines out of DAL. They’re really competing with the big boys over at DFW. Part of WN’s sales pitch the past 30 years has been the “convenience” of flying in and out of DAL vs. using a competitor at the bigger airport down the freeway (though the convenience factor has whittled down over time as the northern and eastern suburbs have expanded). If anything, an extra 2 gates will allow them to put up a stronger schedule against USAA once the Wright restrictions expire in a year. I wouldn’t necessarily rule out another player making a run at those gates, either.

    Otherwise, I sure hope they take the time and do this integration right. As an AA loyalist, I don’t plan on giving these guys much of a leash if they start running into UA-like systems problems.

    1. MeanMeosh – That’s fair. Though I think you’d see more competition with other carriers at Love once Wright opens up and they’d be flying Love – Atlanta side by side. But still, I get your point.

      I’m guessing I have a longer leash than you do here, but I will have very little tolerance for reservation system issues. They’ve had plenty of chances to learn. They better not mess this one up.

      1. Very ironic but Southwest has a solid arguement to get the additional gates at DAL
        1.WN will likely utilize those gates (flights per day) more than any other carrier.
        2.More formatable competitor to US-AA (as MeanMeosh said)
        3.They are unable to expand in DFW without loosing gates at DAL.
        4.If B6 or VX get a gate, they would likely close down their DFW operation. No new flights or carriers, just same service at a different airport. No benefit to the metroplex.
        5. Delta can expand in DFW if they wanted to, WN cannot per Wright Ammendment 2.0.

        1. What’s fair and reasonable rarely intersects with anything Wright Amendment-related (including its reform). The Five Party Agreement that paved the way to, and whose terms were specifically blessed by, the Wright Amendment Reform Act states that upon any carrier’s returning leased gates at Love Field, those gates shall not be leased to another carrier, but instead shall become common use gates. Unless those five parties (WN, AA, DFW, Dallas and Ft. Worth) unanimously agree to amend the Five Party Agreement, those AA gates will become common use gates. Anderson, Kelly, Barger et al. can make all the noise they want about leasing AA’s soon-to-be-formerly-leased DAL gates, but such noise is irrelevant.

  16. Quick note-on the bit about maintaining all Hubs for three years-there is a big “Get out of Jail Card”-if the economic situation no longer allows the hub(s) to show a profit, the hub can be closed. Also go read the CNN and Aviation Week takes on the merger-CNN does not like it.

  17. On a fundamental level I can not embrace another industry consolidation.
    I don’t believe either airline is saved by this merger and I know the loss of competition will eventually hurt consumers.
    As a miles junkie we are loosing a great FF program with easy to acquire miles and a generous chart.
    The return to economic health in the U.S./world is emboldening airlines to cut FF benefits and maximize revenue by selling upgrades, replacing first class seats with economy, dropping unprofitable routs, and shrinking seats to barely tolerable sizes.
    How will any of that be checked by fewer airlines?

  18. Brett – Thanks for the usual good work. One small clarification on the Love Field gates: the terms of Five Party Agreement between SWA, AA, DFW Airport, the City of Dallas and the City of Ft. Worth (which are specifically blessed in the text of the Wright Amendment Reform Act of 2006) stipulate that any leased gates a carrier (SWA, AA and CO at the time) might at any time surrender shall not be leased to another carrier, but rather become common use gates. Southwest can schedule on them provided no one else is on them already, but they won’t be able to lease them.

  19. I’m verrrry curious as to what happens at SFO. American shares T2 with VX and has a brand new lounge so it’s not going to move out of there. But is there enough space to take US’ flights in addition to American’s? Certainly some flights will be eliminated in the name of redundancy but will enough be eliminated to prevent American’s combined fleet from spanning two terminals far enough apart to drive passengers bonkers?

    1. Doug – Hard to say what they’ll do at SFO. I would imagine they might have to deal with a split operation for awhile. They’re working to redevelop Terminal 1, so things might change when that’s done, but it’s going to be difficult for everyone until then.

  20. I don’t get why you think AA will cut back at LAX. It won’t. It will only keep growing. It’s even building a second Admiral’s Club in the Eagle terminal.

    All international ops are moving to the TBIT, where AA will have four gates, which will increase gate utilization in T4. Also, the bus operations are moving to a new bus transfer depot being built as part of the TBIT connector, which will possibly allow it to be converted to a jet bridge gate.

    AA – now LAX’s largest carrier – will only keep growing at the airport. It also helps that AA absolutely dominates corporate travel contracts in LA, and it made an insanely aggressive and successful push last year to further grow it’s leading position in that market, grabbing a bunch of key new contracts like CAA (the holy grail), and reupping other major ones like NBC Universal.

    AA will be announcing yet another big LAX push circa January. GEG, COS, MCI, ATL and a few others.

    1. Jay M – You have to remember that any decisions that have been made up until now were made by the previous management team. The new management team may (and should) view things very differently. Nothing that has happened in the past is relevant to what happens in the future.

  21. American Airlines is announcing Los Angeles-Seattle and Los Angeles-Portland shortly. LAX employees were already told about these launches internally. Nothing has changed – AA will continue a huge push in LA post-merger.

  22. Hmmmm – not sure which will have a more positive effect on the merger. Both have become complacent with ther customer service – although I will admit that it has improved of late. Hopefully not too late as they both have the potential to make a great company post merger.

    1. Realist – Is this how it’s going to be? Every time you think you can prove me wrong, you’re going to just post some snarky comment? I’ll plan on ignoring most of them, but in this case, I’ll be happy to expand upon it because others will probably be interested.

      This is not an issue. Basically, as Nick noted, the US Airways union (AFA) is out for itself, and it’s panicking that it’s going to lose all those members. So it’s saying that the AA union (APFA) is throwing everyone under the bus with a sub-optimal contract. It’s using old union tactics to promise the moon, and it won’t deliver on any of it. This is great for headlines, but it really doesn’t matter.

      APFA has far more members and when the union representation vote comes up, I can’t imagine a scenario where APFA doesn’t win. So this is just AFA’s desperate attempt to somehow get enough people on the AA side riled up so that it has a chance to win. You can never be completely sure, but I will be shocked if AFA somehow wins.

      I never said every single person was going to hold hands and love everything that happened. The point is that it’s going to end up resolved. This is just a lot of noise that means nothing.

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