Interesting article by David Ingram from Reuters who offers a very different opinion from the majority of the talking heads on cable news proclaiming that the DoJ’s actions yesterday were solely a negotiating ploy to gain concessions from AA and US at DCA as well as at other airports where the combined carrier would control the majority of take-off and landing slots.
One sign that government lawyers are dead set on blocking the deal can be found in an appendix to its lawsuit, said Mark Ostrau, an antitrust lawyer in Mountain View, California. The appendix lists 1,043 airline routes between cities where, according to the Justice Department, the combined company would have a presumptively illegal monopoly or near monopoly. There may be too many troublesome pairs for AMR and US Airways to resolve in a settlement, and that is something government lawyers must have known when they put the list in their suit, Ostrau said. “If you wanted something to resolve, you would not have listed more than 1,000 problematic city pairs,” he said. “If there were going to be a settlement, it probably would have happened already.”
Another article by Ingram along with Karen Jacobs notes that the DoJ “made it clear that it is out to block the $11 billion deal entirely rather than seeking concessions from AMR and US Airways. “We think the right solution here is a full-stop injunction,” Bill Baer, head of the Justice Department Antitrust Division, told reporters on a conference call. “The (DOJ) complaint tells a compelling story of how the airlines acted together to increase fees and reduce service, and how US Airways and American had a blueprint to increase prices through the merger.”
What do you think? With the current landscape in the wake of the DL/NW, UA/CO, and WN/FL deals, is the DoJ actually looking to block this deal and are they right in doing so regardless of the unions and post bankruptcy plan?
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