Just something to think about looking into. I have friends at companies that have done massive AI layoffs. Look into how many people they lay off and then turn around less than a month later and re-hire… I think this is the canary in the Coal Mine…. Some companies like BOX are just laying off people because their business model does not work. But lots of CEO’ believe AI can do work it cant really do… Look into announed lay off and then rehires.
I think Matt's historical point about deregulation and oligopoly consolidation is absolutely correct, especially about the Big Four’s structural advantages and the long-run collapse dynamics of low-cost carriers. But I disagree in that I think the DOJ still failed to ask the critical forward-looking question: if Spirit was already financially deteriorating this rapidly, did preserving it as a nominal competitor actually preserve competition at all? The tragedy is that both sides may have been right simultaneously; the merger likely would have raised fares somewhat, but blocking it definitely accelerated the total disappearance of the ULCC itself. I wrote an Essay exploring this tension through antitrust doctrine, airline economics, and what I call a potential “Failing Market Defense” framework here: https://mikhailgrant.substack.com/p/spirits-antitrust-paradox-how-bidens
Spirit wasn’t deteriorating rapidly during the JetBlue merger period. And it had another chance after the failed JetBlue merger to sell itself. Their execs said no.
Ok, fair. Their execs said no to Frontier. But I still think the underlying question is whether the DOJ’s framework sufficiently accounted for how quickly a heavily leveraged ULCC could deteriorate in an industry exposed to fuel shocks, labor convergence, and shrinking pricing power. Spirit may not have been doomed in January 2024, but the collapse suggests the market was far less stable than the antitrust analysis they used assumed. Going forward, and until DC gets its regulatory reform into place (seems currently unlikely in the near term), this is going to matter in federal courts when a judge needs to make a merger call for industries with similar strained market dynamics: regional healthcare systems, local newspapers, telecommunications, and clean-energy infrastructure. Otherwise, more companies are going to collapse due to blocked mergers.
Just something to think about looking into. I have friends at companies that have done massive AI layoffs. Look into how many people they lay off and then turn around less than a month later and re-hire… I think this is the canary in the Coal Mine…. Some companies like BOX are just laying off people because their business model does not work. But lots of CEO’ believe AI can do work it cant really do… Look into announed lay off and then rehires.
Corporate monopolies will not stand for any competition.
I think Matt's historical point about deregulation and oligopoly consolidation is absolutely correct, especially about the Big Four’s structural advantages and the long-run collapse dynamics of low-cost carriers. But I disagree in that I think the DOJ still failed to ask the critical forward-looking question: if Spirit was already financially deteriorating this rapidly, did preserving it as a nominal competitor actually preserve competition at all? The tragedy is that both sides may have been right simultaneously; the merger likely would have raised fares somewhat, but blocking it definitely accelerated the total disappearance of the ULCC itself. I wrote an Essay exploring this tension through antitrust doctrine, airline economics, and what I call a potential “Failing Market Defense” framework here: https://mikhailgrant.substack.com/p/spirits-antitrust-paradox-how-bidens
Spirit wasn’t deteriorating rapidly during the JetBlue merger period. And it had another chance after the failed JetBlue merger to sell itself. Their execs said no.
Ok, fair. Their execs said no to Frontier. But I still think the underlying question is whether the DOJ’s framework sufficiently accounted for how quickly a heavily leveraged ULCC could deteriorate in an industry exposed to fuel shocks, labor convergence, and shrinking pricing power. Spirit may not have been doomed in January 2024, but the collapse suggests the market was far less stable than the antitrust analysis they used assumed. Going forward, and until DC gets its regulatory reform into place (seems currently unlikely in the near term), this is going to matter in federal courts when a judge needs to make a merger call for industries with similar strained market dynamics: regional healthcare systems, local newspapers, telecommunications, and clean-energy infrastructure. Otherwise, more companies are going to collapse due to blocked mergers.