While not quite cancelled, the mega merger between American Airlines and US Airways to form the world's largest airline, has certainly been delayed. Announced in February, the deal is supposed to create, yet again, the largest airline in the States and be the grand finale of airline mergers after more than 5 years of industry consolidation through mergers and acquisitions. The deal was put on hold Tuesday however, when the Department of Justice filed an antitrust lawsuit against the merger, claiming the merger would reduce competition on routes, raise fares, and increase the likelihood of coordinated actions by the industry. While unlikely to derail the merger, which was scheduled to be finalized next month, the lawsuit will definitely delay its progress.
Washington has become a hot spot for debate for regulators, with officials pushing the new airline to give up slots at National. The joint airline would control 69 percent of takeoff and landing slots, and the Justice Department fears that this will lead to increased fares and fees out of and into the airport, as well as more limited choices for passengers. The lawsuit also alleges that the merger may threaten the presence of airlines like JetBlue at national, who entered the market when they traded slots at JFK in New York with American for slots at National, and they still maintain a relatively weak presence in DC.
The Department of Justice claims the merger is also anti-competitive across the board, not just here in washington. Since the airlines don't share any hubs, they only directly compete on 12 non-stop routes, however, the merger would make the new airline the only carrier to fly the route on seven of the 12. Using an algorithm called the Herfindahl-Hirshman Index to measure market concentration and competition, the DoJ also says that the merger will lower competition on 1,677 routes, including the non-stops, and increase competition on only 210 routes.
Lawyers for American Airlines and US Airways have said they fully intend to fight the suit in court, rather than pursue a compromise or settle out of court.
Special note: From this point forward, blog posts will not come every Monday like clockwork as they have in the past. School is starting soon and the pressure to have one post every week at the exact same time has proven to be too much as sometimes topics will be harder to come by than other times. I will still try to post an average of one post a week, sometimes there will be multiple posts in a week, other times none at all.
Monday, August 19, 2013
Monday, August 12, 2013
What Has Happened in the Past Month
I arrived back from New York about a week ago, and so I thought I'd make this week's post about what all has happened in the month since I last posted. In an attempt to brush up on my journalism skills, I wrote a short paragraph on each event. Enjoy.
Ethiopian Airlines 787 Catches Fire in London: On July 12 Ethiopian 787 ET-AOP at London Heathrow Airport had a fire near the back of the plane. Currently being investigated is the plane's ELT (Emergency Locator Transmitter) battery is being investigated as the cause of the accident. Unrelated to the battery problem that plagued the plane in the beginning of the year, the system is activated in the event of a crash and is located in the rear of the plane, above the cabin just before the tail. The damage was sufficient enough that it blackened the roof just above the battery and the airline is considering writing off the airplane that was delivered a year ago, which would be the first time a Dreamliner has ever been written off.
Southwest Jet's Nose Gear Collapses at LaGuardia Airport: On July 21, Southwest Airlines Flight 345 had its nose gear collapse upon landing at LaGuardia Airport in New York. The flight from Nashville was uneventful until landing when the nose gear on the 737-700 suddenly collapsed. A total of five passengers and three flight attendants reported injuries from the incident. An official cause has yet to be determined, but preliminary reports suggest that the plane landed nose gear first at LaGuardia.
American Airlines Receives First Airbus A319: On July 23, American Airlines took delivery of their first A319 from the European manufacturer Airbus. The airline received their first aircraft in the A320 family at a ceremony in Hamburg, Germany, marking the start to a series of more than 130 deliveries over the next 4 years as part of a fleet renewal program. They also have another 130 A320neo family aircraft on order that they will begin taking deliveries of in 2017.
On August 1, the airline also debuted its Embraer E175 regional jet in Chicago.
JetBlue Unveils Premium Transcontinental Product: Announced two months ago, JetBlue's premium transcontinental product was revealed last Monday to much fanfare in the aviation world. The product, which does not yet have a name, will be fitted onto all of JetBlue's newest aircraft type, the A321, set to begin delivery in December of this year. The product will be somewhat separated into two classes. First, a two-to-a-set business class style seat will be found in rows 1, 3, and 5. Second, a suite style first class like seat in rows 2 and 4. JetBlue intends to use the new product initially on routes out of JFK to Los Angeles and San Francisco.
Terminal Building at Jomo Kenyatta Airport in Nairobi Kenya Catches Fire: On August 7, Kenya's main international airport suffered a small fire that escalated quickly into major catastrophe. The flames destroyed the international arrivals hall, several banks, and foreign exchange bureaus. It caused East Africa's busiest international gateway to be shut down. When the airport reopened later that day, only domestic flights were allowed to arrive and depart. Airport officials say they intend to convert an area of the domestic terminal into an international terminal for the time being. While no cause has been established yet, a widely circulating rumor is that the fire could have been started purposefully as part of a terrorist plot, being that the fire occurred exactly 15 years after the al-Qaeda bombings on US embassies in Kenya and Tanzania.
Ethiopian Airlines 787 Catches Fire in London: On July 12 Ethiopian 787 ET-AOP at London Heathrow Airport had a fire near the back of the plane. Currently being investigated is the plane's ELT (Emergency Locator Transmitter) battery is being investigated as the cause of the accident. Unrelated to the battery problem that plagued the plane in the beginning of the year, the system is activated in the event of a crash and is located in the rear of the plane, above the cabin just before the tail. The damage was sufficient enough that it blackened the roof just above the battery and the airline is considering writing off the airplane that was delivered a year ago, which would be the first time a Dreamliner has ever been written off.
Southwest Jet's Nose Gear Collapses at LaGuardia Airport: On July 21, Southwest Airlines Flight 345 had its nose gear collapse upon landing at LaGuardia Airport in New York. The flight from Nashville was uneventful until landing when the nose gear on the 737-700 suddenly collapsed. A total of five passengers and three flight attendants reported injuries from the incident. An official cause has yet to be determined, but preliminary reports suggest that the plane landed nose gear first at LaGuardia.
American Airlines Receives First Airbus A319: On July 23, American Airlines took delivery of their first A319 from the European manufacturer Airbus. The airline received their first aircraft in the A320 family at a ceremony in Hamburg, Germany, marking the start to a series of more than 130 deliveries over the next 4 years as part of a fleet renewal program. They also have another 130 A320neo family aircraft on order that they will begin taking deliveries of in 2017.
On August 1, the airline also debuted its Embraer E175 regional jet in Chicago.
JetBlue Unveils Premium Transcontinental Product: Announced two months ago, JetBlue's premium transcontinental product was revealed last Monday to much fanfare in the aviation world. The product, which does not yet have a name, will be fitted onto all of JetBlue's newest aircraft type, the A321, set to begin delivery in December of this year. The product will be somewhat separated into two classes. First, a two-to-a-set business class style seat will be found in rows 1, 3, and 5. Second, a suite style first class like seat in rows 2 and 4. JetBlue intends to use the new product initially on routes out of JFK to Los Angeles and San Francisco.
Terminal Building at Jomo Kenyatta Airport in Nairobi Kenya Catches Fire: On August 7, Kenya's main international airport suffered a small fire that escalated quickly into major catastrophe. The flames destroyed the international arrivals hall, several banks, and foreign exchange bureaus. It caused East Africa's busiest international gateway to be shut down. When the airport reopened later that day, only domestic flights were allowed to arrive and depart. Airport officials say they intend to convert an area of the domestic terminal into an international terminal for the time being. While no cause has been established yet, a widely circulating rumor is that the fire could have been started purposefully as part of a terrorist plot, being that the fire occurred exactly 15 years after the al-Qaeda bombings on US embassies in Kenya and Tanzania.
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