AMR Corporation and US Airways announced (23-Sep-2013) an extension to their merger agreement, in light of the US Department of Justice's antitrust lawsuit against their merger. The amended merger agreement extends the date on which either party may terminate the agreement from 17-Dec-2013 to 18-Jan-2014, or, if the US District Court for the District Columbia enters and order on or before 17-Jan-2014 in favour of the carriers, on the 15th day following the entry of such an order. If the Court's order is against the carriers, either party may terminate the agreement five days after the Court enters a final, but appealable, order enjoining the merger. In a joint statement, AMR Corporation chairman, president and CEO Tom Horton and US Airways chairman and CEO Doug Parker said: "The Boards and management teams of AMR and US Airways remain committed to completing this combination to create the new American, and the extension of this outside date is a reflection of this commitment. Our focus is on mounting a vigorous defense and winning our court case so the new American can enhance competition, provide better service to our customers and create more opportunities for our employees." [more - original PR]
AMR Corporation and US Airways extend merger deadline to 18-Jan-2014
You may also be interested in the following articles...
US DOT rejects Qantas-American Airlines joint venture under pressure of unchecked consolidation
After complaints about airlines amassing power through joint ventures to the detriment of consumers, the US DOT appears to be exerting greater and more conservative scrutiny on partnerships. DOT has rejected a proposed JV between American Airlines and Qantas. After DOT declined their request for a much longer response time American and Qantas withdrew their application, submitted in Jun-2015.
At a top level the JV does seem to raise concern: combined, Qantas and American would hold 59% of the US-Australia market. Yet almost all of that – 53% – is from Qantas; American adds only 6ppt.
DOT rejects the notion that such larger market share can possibly be in the interest of consumers. Yet it appears to overlook the benefit American might bring in exchange for incremental market share gains. Nor is it clear if this combination is more anti-competitive than some JVs where two airlines, each with a small- or medium-sized position, combine and become multiples larger. Qantas' 53% market share was earned through quality and smart loyalty programme development while competitors lagged.
Qantas will continue growth in North America, its most successful international market, but American Airlines' growth is uncertain and it may re-evaluate a supposedly planned Los Angeles-Melbourne 787 service.
United Airlines Part 1: New management declares ambitions to usher in a new competitive era
For years United Airlines has operated at a competitive disadvantage to its large US network peers. The challenges that United never seemed to overcome were largely self-inflicted, and ranged from widespread employee discontent to consistent revenue shortfalls.
Now United finally appears to be charting a course to level the competitive playing field with its large global US network competitors, to close the long-standing revenue gap it has held with its rivals. The elements of United’s plan to shore up revenues include bolstering connections at its hubs, improved revenue management, and product segmentation that entails a new basic economy fare structure whose restrictions are more stringent than those of its peers.
United’s revenue transformation will not occur overnight, but for the first time since its 2010 merger with Continental the company seems laser-focused on shrinking the competitive challenges that have hindered its performance. It projects billions in improvement – to pre-tax profits by 2020 – as a result of its doubling down on efforts to shore up revenue. Obviously the measure of United’s success lies in its execution and its ability to navigate competitive responses to its revenue-generating strategies.
This is part one of a two part series examining United’s strategies to compete more effectively with its peers on revenue and costs.