AA & U.S. Air Two-Step Gets Obama Double-Cross

Obama's New Flight Rules

Good News for the Economy & Jobs:

The American-US Airways (LCC.N) merger would cap a wave of consolidation that has helped return the industry to modest profitability after the 2008-09 economic downturn. Delta Air Lines (DAL.N) acquired Northwest in 2008, United Continental (UAL.N) was formed in 2010 and Southwest (LUV.N) bought rival AirTran in 2011.

The dilemma in the merger is a double-edged sword:

For two different passenger groups, the delicate balance at stake is what the American Airlines - U.S. Air management decides to do about insuring a profitable future while growing their passenger traffic competitively.

A new mega-airline, with the American brand name, would have more flights on more routes and could charge higher ticket prices on at least some. This would appeal to business travelers who generally favor convenience and comfort over price.

If the airlines don't merge, they might offer lower prices, but could ultimately be forced to cut routes or go out of business as they try to compete with much larger United and Delta, themselves the products of mega-mergers over the last few years.

The Two-Step:

US Airways' CEO, Doug Parker, step one, jostled bankrupt American Airlines into a deal initially by making upfront promises to American's unions. Step two, the union deals were supposed to keep Team Obama onboard, a strategy that assured smooth sailing for Delta-Northwest and United-Continental mergers past the Justice Department allowing passage.

The Double-Cross:

Team Obama no longer is running for anything now that it's Obama's second term, "Legacy Time". On the contrary, Mr. Obama has made it clear, through language and body language, that the Washington bureaucracy's job now is to bring home "accomplishments", loosely defined - "anything you can scrounge up" is a better description. So, shooting down this airline merger in the name of the "Consumer" qualifies under Obama's "trash and burn" scorched earth bounty hunt.

Since he has done nothing really remarkable in his first term, Obama has to feverishly build his Presidential portfolio with some intellectual capital and tangible assets proving his historical achievements to fill his Presidential library. "Dreams of My Father" and "Audicity of Hope", his two sole biographical books that Obama and anarchist Bill Ayers ghost wrote, look mighty thin sitting on those empty shelves alone unless he adds the voluminous tomes on his multitudinous scandals.

Fast & Furious Cartel gun running

Benghazi Terrorist Attack & Gun Running to al-Qaeda mercenaries

AP News Wiretaps

IRS Tax-Exempt Status Denials for conservative groups

NSA Warrantless Wiretapping Surveillance

GSA Spending Wild on Conventions & Expenses


Solyndra Solar Panel Debacle

A123 Systems Battery Bankruptcy

The Excess Baggage - Unions

Looks like under Obama's scorched earth policies he has thrown the unions, like excess baggage, under the plane too. Obama’s Justice Department looked at the merger plan and focused on a perceived effort to "raise the cost of a fairly limited set of airline tickets", tickets sold in markets where US Airways operates one-stop flights that compete with non-stop flights. The Justice Department's theoretical reasoning has an obvious flaw. By definition traditionally, American's customers are willing to pay for nonstop service, otherwise they would take US Airways' cheaper fare. Therefore, an increase in the fares for the US Airways routes is neither oppressive nor excessive to be deleterious to competitive ticket pricing.

The Justice Department did not see, or chose not to see, that selling tickets more cheaply than competitors do means that many of US Airways 35,000 employees make less money than peers at Delta and United. According to the unions this merger would allow parity to meet wage and benefits packages with other competition.

The Obama Justice Department does not recognize how profit methods it defines as anticompetitive such as the unbundling of items to reduce overhead from the seat ticket prices are legitimate to meet lower competitive prices with profitable operating margins. Items offered in a passenger seat ticket price may be desirable flight time schedules and would include additional charges for carry-on bags, drinks and beverages, snack food items, overweight baggage limits, preferential seating assignments, pillow, blankets, and headphones.

Similarly, if some sports event ticket holder goes to a stadium he expects a seat and seat location, then he pays extra for bleacher cushions, binoculars, popcorn, drink and food; otherwise, he gets a skybox with all of the amenities. Where is the difference in pricing strategies Barack Obama and Eric Holder?

The mergers and acquisitions between the shareholders of American Airlines and US Airways were on mutual terms agreed between them. Since when does the United States government know how to run any private organizations efficiently and profitably?  Eric Holder and Barack Obama have not demonstrated any abilities to personally manage governmental agencies or departments either - and these two privately owned companies are allowing them to interlope based upon political fear-mongering fairytales about stifling, unfair competition to the detriment of passenger choice and price.

So are official Federal Airline Transportation Flight Rules coming out next under the auspices of Obama's plan for income distribution as an unalienable right of self-entitlement guaranteed to all citizens? After all, in today's fast world jets are quicker than cars, trucks, vans, motorcycles, motor scooters, buses, taxis, trains, bicycles, skates and feet. So why doesn't everyone deserve an airline ticket pass to fly anytime too?

Isn't it time that two big airlines stand up to these bullies for ticketing passengers? 

If Obamacare is such a great program - How does it fly for you?