There is clearly a lot of positioning going on by AT&T to convince the public and U.S. regulators that its proposed acquisition of rival T Mobile from Deutsche Telecom shouldn’t be viewed as anti-competitive. One certainly might think that when two of the top leaders in any industry join forces.
If you check out the AT&T website, already there is a video of CEO Randall Stephensen discussing, among other things, his respect for regulators. There is a brief presentation of the deal that shows how consolidation has not hurt pricing. to the contrary, prices have come down since consolidation has been underway.
Posted by Rick Stine
on July 19, 2010
This falls into the category of “don’t they ever learn?”
Airline stocks were weaker on Monday after Delta Airlines reported earnings. It wasn’t the gains in income and sales that had investors worked up – the same gains that had CEO Richard Anderson declare: “Delta’s profit this quarter is our best result in a decade.” No, it was a declaration by the company that its mainline business (it’s business but not that of the regionals it works with) should see capacity growth in the next quarter – domestic growth from 1% to 3% and international growth of 2% to 4%.
The airline industry was plagued in recent years by having too much capacity – flying too many planes with empty seats. That, of course, spells a lack of profitability. They began to cutback on capacity a few years back when fuel prices skyrocketed and they continued the paring back process as the recession hit. Clearly, investors feel the industry should sit tight on the capacity issue until there is clear evidence more planes are needed in the skies.