• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

Meet America's Largest, Brand New Airline

Tyler Durden's picture


Until last night, United which combined with Continental in 2010, was the nation's largest airline (surpassing Delta which had merged with Northwest some two years earlier). This morning this changed when the previously disclosed merger between US Airways and bankrupt American Airlines, was formally announced. The resulting airline, with some 26% of the market share is now the nation's largest legacy carrier, bigger than United at 19.3%, Delta with 19.2%, and discounted Southwest with 18.2%. Below are some of the key highlights of this brand new airline behemoth. And just like that, taxpayers now eagerly await the bailout of United South-American Deltawest Airlines in 2-3 years: the first Too Big To Take Off airline.

Airlines at a snapshot:

Broken down by passengers and fleets:

The combined pro forma hub structure:

Pilot labor costs compared between the various airlines:

There is limited overlap in LCC-AMR routes:

And the combined LCC-AMR fleet which will have over 1000 planes at day 1.

Finally, for those who enjoy learning through cartoons, here is the WSJ charting the evolution of the US airline space, and how we ended up with the Big 4.

Sources: Reuters, WSJ, JPMorgan

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Thu, 02/14/2013 - 16:24 | 3244041 azzhatter
azzhatter's picture

This is tieing two stones together and expecting them to float

Thu, 02/14/2013 - 16:36 | 3244087 Id fight Gandhi
Id fight Gandhi's picture

It's always funny to watch something like ma bell or standard oil. Some big monopoly that gets broken up to bring capitalistic competition to industries being brought right back to where it started.

Airlines have been on the new normal plan long before that became an auto industry thing.

Thu, 02/14/2013 - 16:41 | 3244125 Manthong
Manthong's picture

American Airlines  meets  the same fate as United Airlines  (the airline formerly known as Continental).

The good old days of flying commercial are long passed.

Thu, 02/14/2013 - 16:49 | 3244180 fourchan
fourchan's picture

The Terrorists have won.

Thu, 02/14/2013 - 17:05 | 3244272 Ahmeexnal
Ahmeexnal's picture

That list is wrong.
Where are Braniff, PanAm, Eastern, TWA, and other major airlines?

Thu, 02/14/2013 - 17:17 | 3244316 NotApplicable
NotApplicable's picture


So... exactly how far below book value is this pig?

Thu, 02/14/2013 - 17:48 | 3244449 SafelyGraze
SafelyGraze's picture

for the sake of efficiency, it's time to merge *all* the airlines.

together with the manufacturers of airplanes.

and the suppliers of their fuel.

and the providers of their security.

and the municipalities that host their landing sites.

the result would be an efficient, vertically-integrated public/private partnership. and, of course, would be the envy of the world.


Thu, 02/14/2013 - 23:30 | 3245362 wee-weed up
wee-weed up's picture

Yeah, more airline mergers, like more bank mergers - to help the customers!


Thu, 02/14/2013 - 23:46 | 3245393 steve from virginia
steve from virginia's picture




The airlines can merge all they like, they cannot solve the fuel cost 'problem' that is relentlessly pushing all jet airlines into bankruptcy.


Fuel is not the single greatest cost factor for airlines, supplanting labor costs. Problem? Airlines cannot 'negotiate' with fossil fuel depletion. They either cut flights ... or flights are cut involuntarily: 'conservation by other means'.


'sputter ... cough-cough ... sput,sput ... sput ...'

Fri, 02/15/2013 - 10:57 | 3246293 Bicycle Repairman
Bicycle Repairman's picture

Can we stop the charade now? 

Just merge all the airlines together.  Call the new entity "National Defense Airlines".  Put the military in charge.  Fire all the airlines personnel. Fire the TSA.  Have armed Marines man the checkpoints.  Have them patrol the planes fully armed with bomb sniffing dogs.  Put the endless subsidies in the Defense departments budget.  Paint the planes with camouflage.  And serve MREs on the plane.  At $10 a pop.

Fri, 02/15/2013 - 10:14 | 3246105 DriveByLurker
DriveByLurker's picture

We could call it "Chapter Eleven Airways"



Thu, 02/14/2013 - 17:12 | 3244300 harami
harami's picture

The terrorists we intentionally created as a legitimate excuse to impose these new measures?

Yes, yes we can.

Thu, 02/14/2013 - 21:13 | 3245038 philipat
philipat's picture

"The Terrorists have won."

You are referring to the in-flight "Service" of all the US carriers?

Thu, 02/14/2013 - 21:11 | 3245033 philipat
philipat's picture

Next comes deregulation? Rinse, repeat.....

Thu, 02/14/2013 - 16:24 | 3244044 Buckaroo Banzai
Buckaroo Banzai's picture

Airline customers, brace yourselves for another round of reductions in number of flights offered, and fare increases.

Thu, 02/14/2013 - 16:31 | 3244067 Shell Game
Shell Game's picture

Let this debacle be called what it is - End of Empire Air - Fly the Fascist Skies! 

Thu, 02/14/2013 - 16:49 | 3244179 machineh
machineh's picture

TBTF airlines, financed by TBTF banks, protected by TBTF government.

* reaches for barf bag in seat pocket *

Thu, 02/14/2013 - 17:23 | 3244346 NotApplicable
NotApplicable's picture

Don't worry, it gets worse. Who knows what deals are being made with various entities running the airports as the smaller ones are trying to become Too Big To Fail by planning for major expansion of their facilities (via grants from Uncle Sugar). Never mind the fact that this only takes business away from existing airports in nearby larger cities. Nope, all they know is the "If we build it, they will come." mantra.

The secret is that the smaller commuter planes are going extinct, as they are not cost effective. So, you either start finding a reason to grow an airport to 100 seat planes, or prepare to wind down operations in a few years. As these are mostly government entities, I'm sure we can all guess what their choice will be.

Thu, 02/14/2013 - 17:42 | 3244437 Buckaroo Banzai
Buckaroo Banzai's picture

If the fares are high enough, the smaller commuter planes are plenty cost effective. I've been seeing these small planes increasingly used on routes between major hubs. Something that was unheard of a few years ago.

Thu, 02/14/2013 - 16:37 | 3244096 harami
harami's picture

But think of all the jobs they'll save!

Fuck while we're at it lets destroy a few airbuses and pass the bill onto the customer to stimulate the economy since we'll have to pay highly skilled workers to fix it!


Thu, 02/14/2013 - 18:37 | 3244650 Son of Loki
Son of Loki's picture

What amazes me is how many flights are full depsite the 100% increase in prices these last five years.....


BTW, how many Dreamliners did they buy?

Thu, 02/14/2013 - 16:25 | 3244049 Iwanttoknow
Iwanttoknow's picture

Carter's airline deregulation has achieved the desired result,an oligopoly.Be prepared for the sheer joy of forking out more money for that coach class seat.

Thu, 02/14/2013 - 16:33 | 3244076 gbresnahan
gbresnahan's picture

The thing I saw was charging for seats like stadium seats.  Each seat has a different price depending on its popularity.

Thu, 02/14/2013 - 16:26 | 3244053 centerline
centerline's picture

Come on, let's get some chemtrail moonbats out for a bit.

Thu, 02/14/2013 - 16:39 | 3244108 SMG
SMG's picture

There is some truth to chemtrails.   Seems like they are mainly used as a weather modification tool.




Thu, 02/14/2013 - 17:23 | 3244347 centerline
centerline's picture

Just shaking the tree for the sport of it! lol.  On a limited basis, it is plausible as weather modification.  But, on a world-wide basis...

Like anything else, let people imaginations run wild and they will.

What should alarm people is that food production via expanding technology is reaching an upper bounds limit and Malthusian theories are about to get revisited.

Thu, 02/14/2013 - 16:29 | 3244054 LongSoupLine
LongSoupLine's picture

Riddle:  What fucking happens when you combine two huge fucking buckets of hot shit together?


A: You get a fucking airline merger, that requires 3 times the fucking middle class bailout money in a few years.


Fuck you airline industry and your fucking govt master obama.

Thu, 02/14/2013 - 16:32 | 3244070 IridiumRebel
IridiumRebel's picture

I count 6 "fucks"...excellent job. You get a bonus for the "hot shit". Keep up the good mothefucking hot shit ass fucktastic donkey bastard bitchass posting my friend.

Thu, 02/14/2013 - 16:36 | 3244089 Albertarocks
Albertarocks's picture

You said "ass".  Not supposed to say swears.

Thu, 02/14/2013 - 16:39 | 3244113 harami
harami's picture

If only Bernanke could print at the rate Longsoup drops a f-bomb... we'd have been out of this recession by now!

Thu, 02/14/2013 - 17:01 | 3244240 Freddie
Freddie's picture

F flying and TSA/DHS.  I no longer want to get groped by TSA goons or get my prostate irradiated.  If I wanted to expose my prostate to radiation - I would put it in the microwave.

PS: F TV and F Hollywood.

Thu, 02/14/2013 - 22:41 | 3245264 goldenbuddha454
goldenbuddha454's picture

You've obviously never had the TSA 'Rusty Trombone'.  Quite a pleasure!

Thu, 02/14/2013 - 16:27 | 3244056 goldenbuddha454
goldenbuddha454's picture

Can we just add Pan-Am and Eastern to the name and call it-

"Pan American Eastern Airways"? 

Should be a lovely Albatross!

Thu, 02/14/2013 - 16:59 | 3244239 goldenbuddha454
goldenbuddha454's picture

The only thing better than this will be when Hooters merges with Virgin called

"Virgin Hooters"

Fly the horny skies!

Thu, 02/14/2013 - 17:04 | 3244257 goldenbuddha454
goldenbuddha454's picture

Cum join our mile-high club!

Thu, 02/14/2013 - 16:29 | 3244059 giggler123
giggler123's picture

It expects to have $40 billion in annual revenue, now America's biggest airline.  So how much is Bernanke pumping into the economy?  Gotta be atleast $40 billion EVERY friggin month.

Thu, 02/14/2013 - 16:32 | 3244069 Sudden Debt
Sudden Debt's picture


Thu, 02/14/2013 - 16:32 | 3244072 Caveman93
Caveman93's picture

Come fly the TSA! Totally  Superfluous Airlines! Love it. Totally meaningless.

Thu, 02/14/2013 - 16:34 | 3244080 economessed
economessed's picture

Way to go, boys!  Keep consolidating the industry until you reach a point where we have only 2 or 3 carriers, and they are deemed "too large to fail", and allowing any one of them to go bankrupt for the 91st time would be a "national security risk."  Uncle Sugar will step in with his big bag of minty green fiatscoes and put the wind back under your wings.

I predict Ben Bernanke will be the next owner of United Airlines.  And then I predict Barack will go on national tee vee and proclaim "Air Travel is back on the rise!!!!  The economy is getting better!!!!"

Thu, 02/14/2013 - 16:35 | 3244083 falak pema
falak pema's picture

now if only they could get the dreamliner to take off on the New Tesla car battery, said to be as good as gold!

There are some doubtful thomases on that issue. 

Thu, 02/14/2013 - 16:35 | 3244084 Yen Cross
Yen Cross's picture

 The new airline promises more leg and headroom, as they are installing wooden benches on all aircraft.

Thu, 02/14/2013 - 17:24 | 3244354 NotApplicable
NotApplicable's picture

I'm stealing that!


Thu, 02/14/2013 - 20:38 | 3244983 Yen Cross
Yen Cross's picture

  Feel free...

Thu, 02/14/2013 - 18:49 | 3244702 FeralSerf
FeralSerf's picture

By stacking the sheep like cordwood, they can get even more leg and headroom.

Thu, 02/14/2013 - 20:37 | 3244979 Yen Cross
Yen Cross's picture

  The visual of that was funny as hell! :-D

Thu, 02/14/2013 - 16:36 | 3244085 Crispy
Crispy's picture

TBTF Air. inc

We be flying all up in here...

Thu, 02/14/2013 - 16:36 | 3244086 Hubbs
Hubbs's picture

Crap, now my airfare ticket prices will increase. Why didn't I get reservations earlier?


Now that Imention it,  ever since Obamacare passed, the private insurance companies (United Health Care/Golden rule) raised the rates on my wife and daughter 49.7 %.


Now what's next? Oh yeah more taxes.

Thu, 02/14/2013 - 16:37 | 3244093 CaptainSpaulding
CaptainSpaulding's picture

Do they serve pancakes?

Thu, 02/14/2013 - 16:37 | 3244094 A. Magnus
A. Magnus's picture

Too big to fail is now too big to fly...


Thu, 02/14/2013 - 16:42 | 3244134 Jay
Jay's picture

Those pilot wages; are those hourly or yearly in thousands?

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