I posted earlier today just after news broke that the DOJ was suing to block the merger of American Airlines and US Airways. I reminded that I have refrained from commenting on the merger for a few reasons, and that practice is going to continue. I have my reasons for this stance, some of which I’ve communicated, and some of which will remain private. Further, I will not be pontificating on whether I think DOJ was right or wrong about this. They’ve got a job to do, and in the end, it’s always possible that AA-US weren’t getting the message in negotiations with Justice and this is a great big shot across the bow.
One thing I will say is that I have seen a lot of backslapping and high-fiving around the blogs and boards today over this development and sighs of relief mainly on the part of folks worried about potential changes to their mileage program of choice in this. I say not so fast. There are some very real risks here assuming the DOJ is successful, not the least of which is the possibility of a labor meltdown at AA. Absent a merger, the impetus for the labor wars that were going on at AA prior to the union deals with Parker are still there. Further, there are network risks in that it remains unclear whether these two smaller airlines can compete against Delta and United sized airline networks. One semi-OK quarter during a busy summer does not say all that much about the future.
The two airlines have said they are going to fight this, and I can only assume that there are still some back door communications going on. How it turns out, I have no idea. It will be interesting to watch unfold for sure. I wouldn’t get too excited yet, no matter whose side you are on in this. Believe me, I’ll be watching with interest even if I’m not writing about it.
-MJ, August 13, 2013