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The real benefit of a merged company is that where the two original companies were competing in the same market, it would be illegal for them to collude to set

The real benefit of a merged company is that where the two original companies were competing in the same market, it would be illegal for them to collude to set the same prices as eachother. However, when merged, they can do exactly that - which allows them to extract more profits. Rather than denying mergers, I suggest merged companies have an extra sales tax for ever on all goods they sell where they used to be competing - with the size of that tax set by the regulator to estimate the benefit they get.

Panzer04 14d ago
Merged companies are more able to compete. Combining duplicate corporate structures let them save on costs, etc. It's not a strictly bad thing - iirc spirit? Airlines? Wanted to merge with someone, got denied, and went bankrupt anyway, depriving people of any competition at all.
- ungreased0675 13d ago
  Not exactly. Competitors like Breeze and Allegiant filled in some prior Spirit routes. Those are better budget airlines. Poorly run companies are supposed to go bankrupt, that’s the feedback loop keeping management in check.
  - saturn8601 13d ago
    Companies that have massive startup costs (Automakers, Airlines) are harder to replace. This is a failure of the system we are in. Seems like the free market cannot properly evaluate value when all the cash is going into nonsense like Bitcoin, NFT and now a lot of the AI. Allegiant is an old Airline that has had a lot of problems. Breeze is new but both are starting super small and are not planning to really cover Spirits extended network anytime soon. The result of Spirit dying is alot of that prior investment in second tier cities/airports is just gone for the forseeable future. The potential value that could have generated will now not come to pass. >Poorly run companies are supposed to go bankrupt, that’s the feedback loop keeping management in check. The problem that is occuring in my opinion is that Spirit is a symptom of a greater problem. The "K shaped" economy is not only segregating groups of people into haves and have nots, its extending into regions of the country. Losing major airlines access is the precursor to entire regions declining, and ultimately dying completly. If the AI robot world comes to fruition maybe many humans just have no economic value at all.
- saturn8601 13d ago
  To be fair, Spirit suffered from multiple reasons and a merger with Frontier may have just delayed the inevitable. Note: I was very emotionally invested in Spirit because they made possible many fascinating trips that wouldn't have happened so my take may be biased. I can only think of a handful of companies that clearly positively impacted my life and Spirit was one of them. 1. Post COVID, the structural costs went up: pilots, flight attendants, suppliers demanded more money. Spirit paid decently well, had decent benefits from what I heard. When you are Spirit...to attract good people you gotta pay. It really showed in their operations, they had 0 crashes during their 34 years and had notable excellence in their maintenace operations. People thought they flew rickety junk planes. The reality was that they had a stellar run. 2. Pratt & Whitney GTF issues: Spirit actually had quite a young Airbus only fleet. Great for lowering costs through fuel/maintenance savings, customers enjoy the newest best planes...the downside is that if a major issue comes out, it could spread across the entire fleet. Thats exatly what happened: They leased brand new planes and then a serious engine issue occured that forced grounding of many new planes for 1+years....while they are still paying the leases on those planes. 3. The bigger competitors are really just credit card companies that fly planes as a hobby on the side. That gave them the financial ability to siphon off customers by introducing a barebones tier. Spirit customers aren't really the type to play the credit card points game so they couldn't copy what the big guys do and despite travel increasing after COVID, people decided to pay a bit more to not have the barebones experience. 4. Spirit was in the process of revamping their entire offering to better compete. More simple tiers with things baked in and less extreme customization that they used to offer. Makes sense: 9$ fares were gone for good so maybe they could compete as a solid basic tier. They did not move fast enough to turn things around. Its a bummer because it looks like they had an interesting plan after the second bankruptcy but we never got to see it fully play out. 5. The final nail in the coffin: The Iran war took out any remaining breathing room. They were just coming out of their second bankruptcy. I personally feel they had a viable plan to try and turn things around but the Trump admin just let them die without really trying. From my understanding(and I could be wrong) Trump pulled some nonsense where he wanted like 90% of the airline for peanuts, they would support ICE transport operations etc. The owners of the debt obviously said no and that was the end of that. Great job losing 17k employees their livelihood. Since this is a tenure based industry, many end up starting from scratch at another airline. A emergency merger or something would have had better consequences for the employees. Will be interesting to see how this affects the midterms since Spirit was based in Dania Beach, FL (Miami area) The idea behind a Frontier + Spirit merger makes sense. The airlines combining together can cover a greater network, Spirit was getting rid of its poor leases through bankruptcy and maybe they could have been a major airline in the low end. The argument against is that Frontier is not doing too well either so should you really combine bad + bad?
spwa4 13d ago
The whole problem of monopolies is that they can set the monopoly tax as high as they want. There is no real upper limit. What you suggest will 1) make monopolies legal 2) set a floor for the monopoly tax (whilst excessive company profits are bad, obviously companies MUST make a profit, and hence whatever this governor sets as extra tax must be added to the costs for customers. Profit = good (even if you are a communist), only excessive profits or profiteering are bad. Otherwise, after a short while, no more company, no more goods, no more service. No exceptions, not even under different systems. Or in other words: communist companies must make profits too, and just ask some older Russians, even if that means making a profit at the expense of employees) This seems to me like it would be by far the worst of all worlds. This would mean lots of monopolies, with the specific purpose of making life more expensive.

Panzer04 14d ago

Merged companies are more able to compete. Combining duplicate corporate structures let them save on costs, etc. It's not a strictly bad thing - iirc spirit? Airlines? Wanted to merge with someone, got denied, and went bankrupt anyway, depriving people of any competition at all.

ungreased0675 13d ago
Not exactly. Competitors like Breeze and Allegiant filled in some prior Spirit routes. Those are better budget airlines. Poorly run companies are supposed to go bankrupt, that’s the feedback loop keeping management in check.
- saturn8601 13d ago
  Companies that have massive startup costs (Automakers, Airlines) are harder to replace. This is a failure of the system we are in. Seems like the free market cannot properly evaluate value when all the cash is going into nonsense like Bitcoin, NFT and now a lot of the AI. Allegiant is an old Airline that has had a lot of problems. Breeze is new but both are starting super small and are not planning to really cover Spirits extended network anytime soon. The result of Spirit dying is alot of that prior investment in second tier cities/airports is just gone for the forseeable future. The potential value that could have generated will now not come to pass. >Poorly run companies are supposed to go bankrupt, that’s the feedback loop keeping management in check. The problem that is occuring in my opinion is that Spirit is a symptom of a greater problem. The "K shaped" economy is not only segregating groups of people into haves and have nots, its extending into regions of the country. Losing major airlines access is the precursor to entire regions declining, and ultimately dying completly. If the AI robot world comes to fruition maybe many humans just have no economic value at all.
saturn8601 13d ago
To be fair, Spirit suffered from multiple reasons and a merger with Frontier may have just delayed the inevitable. Note: I was very emotionally invested in Spirit because they made possible many fascinating trips that wouldn't have happened so my take may be biased. I can only think of a handful of companies that clearly positively impacted my life and Spirit was one of them. 1. Post COVID, the structural costs went up: pilots, flight attendants, suppliers demanded more money. Spirit paid decently well, had decent benefits from what I heard. When you are Spirit...to attract good people you gotta pay. It really showed in their operations, they had 0 crashes during their 34 years and had notable excellence in their maintenace operations. People thought they flew rickety junk planes. The reality was that they had a stellar run. 2. Pratt & Whitney GTF issues: Spirit actually had quite a young Airbus only fleet. Great for lowering costs through fuel/maintenance savings, customers enjoy the newest best planes...the downside is that if a major issue comes out, it could spread across the entire fleet. Thats exatly what happened: They leased brand new planes and then a serious engine issue occured that forced grounding of many new planes for 1+years....while they are still paying the leases on those planes. 3. The bigger competitors are really just credit card companies that fly planes as a hobby on the side. That gave them the financial ability to siphon off customers by introducing a barebones tier. Spirit customers aren't really the type to play the credit card points game so they couldn't copy what the big guys do and despite travel increasing after COVID, people decided to pay a bit more to not have the barebones experience. 4. Spirit was in the process of revamping their entire offering to better compete. More simple tiers with things baked in and less extreme customization that they used to offer. Makes sense: 9$ fares were gone for good so maybe they could compete as a solid basic tier. They did not move fast enough to turn things around. Its a bummer because it looks like they had an interesting plan after the second bankruptcy but we never got to see it fully play out. 5. The final nail in the coffin: The Iran war took out any remaining breathing room. They were just coming out of their second bankruptcy. I personally feel they had a viable plan to try and turn things around but the Trump admin just let them die without really trying. From my understanding(and I could be wrong) Trump pulled some nonsense where he wanted like 90% of the airline for peanuts, they would support ICE transport operations etc. The owners of the debt obviously said no and that was the end of that. Great job losing 17k employees their livelihood. Since this is a tenure based industry, many end up starting from scratch at another airline. A emergency merger or something would have had better consequences for the employees. Will be interesting to see how this affects the midterms since Spirit was based in Dania Beach, FL (Miami area) The idea behind a Frontier + Spirit merger makes sense. The airlines combining together can cover a greater network, Spirit was getting rid of its poor leases through bankruptcy and maybe they could have been a major airline in the low end. The argument against is that Frontier is not doing too well either so should you really combine bad + bad?

spwa4 13d ago

The whole problem of monopolies is that they can set the monopoly tax as high as they want. There is no real upper limit. What you suggest will 1) make monopolies legal 2) set a floor for the monopoly tax (whilst excessive company profits are bad, obviously companies MUST make a profit, and hence whatever this governor sets as extra tax must be added to the costs for customers. Profit = good (even if you are a communist), only excessive profits or profiteering are bad. Otherwise, after a short while, no more company, no more goods, no more service. No exceptions, not even under different systems. Or in other words: communist companies must make profits too, and just ask some older Russians, even if that means making a profit at the expense of employees) This seems to me like it would be by far the worst of all worlds. This would mean lots of monopolies, with the specific purpose of making life more expensive.