 he
U.S. DOJ’s denial of the proposed $11 billion merger between American
Airlines and US Airways will have a minimal to non-existent impact on
air cargo.
For his part, Kenji Hashimoto, in a letter to AA Cargo customers, said:
“We do not know how long the court process will take, so in the
meantime, American and US Airways will continue to operate as independent
companies and as competitors.
“Our focus remains on delivering excellent customer service and
meeting your business needs,” Kenji said.
Outside of the official loop, the consensus
of opinion was summed up in very few words.
“I do not see any impact in terms
of air cargo.
“USArways has never been that big
an air cargo player,” a top air cargo executive said.
 One
well-placed industry observer, aviation consultant, and former top executive
at Delta Cargo—Neel Shah—delivers very strong thoughts as
to how the AA/US scenario will develop moving forward:
“They are going to fight like hell,
because they are already so vested in the merger, especially the US team.
“It will tie them up for weeks if
not months heading into the very difficult 4th and 1st quarters.
“I am guessing overall financial performance
at both carriers will slip a bit and DL and UAL will pick up the benefit
of that.
“My gut is that this is going to depend
on how far the DOJ has dug their heels into the ground.
“I don't care about the individual
US States involved because, predictably, they are going to sue to stop
the merger because they are negatively impacted in some way (notice that
NC didn't join because they believe that it is very good for Charlotte).
“But the more I think about this situation,
it is also possible that this approval isn't going to happen because the
DOJ really threw everything into the lawsuit and didn't offer any sort
of path to eventual approval.
“So everyone must brace for the possibility
that the merger is dead,” Neel Shah said.
“A real shame for everyone who worked
so hard to make it a reality and also a shame for AMR employees who are
in limbo because AA will now face a much tougher road to exit bankruptcy
as a viable enterprise.
“I really think the rub here in some
part had to do with U.S. government officials not wanting to pay more
for airfare.
“It will be interesting to see what
banter comes out in the coming days.
“In the meantime, it’s a wonderful
buying opportunity for DL and even UAL who got beat up (in the markets)
for no real good reason.
“Look for airline stocks to recover
in the next week to ten days.”
Another way to view Tuesday’s stunning
announcement, which puts the brakes (for now) on finalizing what would
become the biggest airline in the world, is that the AA/US plan is still
in place, except everybody working on integration at the carriers has
a bit more time to let things unfold while the big picture gets hashed
out between the lawyers.
No doubt, the immediate statement by the
carriers that they plan to mount a vigorous defense is in line with the
belief that, just like Budweiser’s first attempts to be acquired
by Inbev (21b), which was also opposed by U.S. DOJ, eventually some kind
of compromise between the two carriers and the U.S. government will be
found.
Reactions to all of this have been immediate
and predictable. The Dallas Morning News wrote:
“DOJ blocks AA US who vow ‘vigorous
and strong defense.’
“It seems inconsistent for the Justice
Department to put its thumb on the scales this time when in recent years
it has approved mergers of Southwest and AirTran, United and Continental
and Delta and Northwest airlines.
“Those were mega-mergers, too.
“Both Delta and United had been the
third largest airline at the time they proposed their mergers.
“The Delta merger had the effect of
moving American into the No. 2 spot; the United merger dropped American
to No. 3.
“It makes no sense for those marriages
to be blessed by Washington and this one not.”
“The DOJ’s challenge comes just
days before AMR and American Airlines were to ask the U.S. Bankruptcy
Court in New York City to confirm their plan of reorganization, a major
step toward moving forward. If DOJ prevails, North Texas jobs and billions
of dollars in salaries, direct spending, and other economic impacts are
once again in limbo,” Dallas Morning News reported.
Geoffrey
|
At
about 6am CDT today (Wednesday Aug. 14) UPS flight 1354, an A300 freighter
en-route from SDF/KDSF to BHM/KBHM, crashed on approach to BHM airport
just short of the perimeter fence. 
Looking
back a bit as we get ready to saddle up during the upcoming autumn of
2013, IATA WCS in Doha earlier this year succeeded bringing together "who's
who" of the industry.
And
the executioner who will deliver results.
When
the hatred of his anti-Semitic classmates became unbearable, 9-year-old
Walter moved to Luxembourg to live with relatives. 
RE:
