Print from Airliners.net discussion forum
http://www.airliners.net/aviation-forums/general_aviation/read.main/4591473/

Topic: UAL Chief Sees New Route To Airline Mergers: FT
Username: Jawake
Posted 2009-10-28 04:57:39 and read 13947 times.

Financial Times has a blurb from Glenn Tilton.

"Glenn Tilton told the Financial Times that consolidation should still play a role in shaping the US aviation industry’s future, adding that balance sheets had “probably” improved enough to help finance prospective merger plans. “There is still too much capacity in the US market,” he said."

http://www.ft.com/cms/s/0/aab0d3d0-c334-11de-8eca-00144feab49a.html

He seems to beat this drum a lot. That mergers need to happen. Why is he always calling for mergers? And he seems to have the mindset that UA is "for sale". Come and merge with us.

Do you think he is right, too much capacity? I really am not sure.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: Skymiler
Posted 2009-10-28 05:25:52 and read 13861 times.



Quoting Jawake (Thread starter):
Do you think he is right, too much capacity? I really am not sure.

I am not sure that we are in an "over capacity" situation but an "unbalanced capacity" situation.

While there must obviously be a matching of capacity to market, the issue tends to be that the market and demand shifts much faster than an airline can reasonably be expected to be able to react, especially where new equipment is required.

Also, the capacity cuts we have seen in the last 2 years have removed almost any "elasticity" from the system. Just spend an evening at ATL with bad weather, when in the old days the "next available flight" meant that day, not 36 hours later. Of the 10 or so flights I have done in the last few days, the load factors ranged from 98 % to 100%, plus there were standbys who did not make it on board!

A merger, if done well could address the imbalance by providing enough equipment sizes, but with the economies of scale of reasonable sub-fleets, that make the matching of supply to demand easier -- just look at what DL is doing with its routes and equipment shuffles!

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: OzarkD9S
Posted 2009-10-28 05:27:37 and read 13850 times.



Quoting Jawake (Thread starter):


Why is he always calling for mergers?

So he can unload UA off on someone else and take a nice chunk of change with him on his way out.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: Rjnut
Posted 2009-10-28 05:40:13 and read 13774 times.

[quote=OzarkD9S,reply=2]So he can unload UA off on someone else and take a nice chunk of change with him on his way out.



"""ding ding ding"" we've got a winner..!!

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: NetjetsINTL
Posted 2009-10-28 05:49:27 and read 13709 times.



Quoting Skymiler (Reply 1):
I am not sure that we are in an "over capacity" situation but an "unbalanced capacity" situation

I disagree, I think there is way too much capapcity in the U.S... too many seats available

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: Enilria
Posted 2009-10-28 05:53:16 and read 13685 times.



Quoting Jawake (Thread starter):
He seems to beat this drum a lot. That mergers need to happen. Why is he always calling for mergers? And he seems to have the mindset that UA is "for sale". Come and merge with us.

Because that is how he cashes out and that is all he cares about. Obviously it is directed at CO following the Star announcement.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: Rjnut
Posted 2009-10-28 06:00:00 and read 13645 times.



Quoting NetjetsINTL (Reply 4):
disagree, I think there is way too much capapcity in the U.S... too many seats available

At a certain point ,the degree of shrinkage results in inconvenient schedules, jam-ups at meghubs , i.e. Ohare, and too high prices. The demand for the service then begins a downward spiral.

Maybe air travel should go back to being just for the rich. Trying to become a "mass" transportation option appears to have become an abysmal failure!

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: Jfk777
Posted 2009-10-28 06:15:54 and read 13563 times.

Continental is better off alone then merging with United and all its problems. The last decade at Continental has been great but miraculous for it to have come from the ashes of the Lorenzo era and two bankruptcies. Continental has achieved at Newark a hub never before seen in teh New York area with nonstops using 777 to Hong Kong, Shanghai, Peking, Mumbai and New Dehli. It has huge international service to Europe and Latin America. Some of this would be lost if a merger with UA happened and Liberty Airport had to compete with UA's IAD hub and ORD.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: Jawake
Posted 2009-10-28 06:16:58 and read 13556 times.



Quoting NetjetsINTL (Reply 4):
Quoting Skymiler (Reply 1):
I am not sure that we are in an "over capacity" situation but an "unbalanced capacity" situation

I disagree, I think there is way too much capacity in the U.S... too many seats available

I would tend to agree with Skymiler. When I look at flights, I do not see a lot of empty planes. Maybe there are other markets where that is not so, but with friends who are in the industry, seats seem to be full all the time.

Prices for those seats on the other hand, seems to be at the lowest in years. Is that a result of too many empty seats? I am not so sure.

I know, Tilton is looking to get out of his job and leave with a "bonus" Did that happen in regards to DL & NW? Why would he think that is going to happen? He frustrates me to know end. The Pide Piper of Consolidation.  Yeah sure

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: DocLightning
Posted 2009-10-28 06:32:40 and read 13466 times.



Quoting NetjetsINTL (Reply 4):

I disagree, I think there is way too much capapcity in the U.S... too many seats available

In the last year, I've flown a number of times and every single flight has been full to within one or two seats. On a number of occasions, I simply have not been able to find a seat on a flight I wanted, even 3 weeks in advance (this is getting to be a problem on the SFO-LAX or SFO-SAN routes).

On the other hand, the fares I've paid are sometimes ludicrously low. WN is offering $37 one-way SAN-SFO? How can they make money on that?

As for UA/CO, Mr. Tilton seems to want to merge with someone, but I can't figure out why. His personal fortune must be enormous. I'm sure he could retire tomorrow and live quite luxuriously for his remaining days (he's 61).

So I'm really at a loss. Then again, I'm at a loss as to how merging NW and DL saved anyone any money, either.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: WorldTraveler
Posted 2009-10-28 06:33:24 and read 13466 times.



Quoting Skymiler (Reply 1):
While there must obviously be a matching of capacity to market, the issue tends to be that the market and demand shifts much faster than an airline can reasonably be expected to be able to react, especially where new equipment is required.

well said... the reason why there is too much capacity is not because of the good times but because there are down times; in down times, it is very hard to remove unwanted capacity, esp. if it is controlled by multiple airlines, all of whom want to preserve their network footprint.

The whole reason why DL is moving forward w/ its merger w/ NW from a network standpoint is because it can begin to get rid of unwanted capacity such as at CVG knowing that even if that capacity is needed in the future, it can be readded someplace else where it makes better long term sense. DL and NW couldn't have rationalized capacity on their own but obviously together control a significant enough capacity that DL doesn't need to view CVG as a hub - solely as a local market.

Quoting Jfk777 (Reply 7):
Continental is better off alone then merging with United and all its problems.

agree... and CO will only take on UA if it can control the transaction to the point of not taking CO under and if UA's influence can be neutralized. That is, honestly, a long ways off.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: Mcmax
Posted 2009-10-28 06:44:55 and read 13380 times.

While mergers between existing airlines might be a short-term solution to the over-capacity issue, the ultimate problem is that the mergers create unused "space" at airports and in the system as a whole. This makes it much more attractive to new start-ups who perceive a gap in air service which they can fill. Then, the vicious cycle starts all over again.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: WA707atMSP
Posted 2009-10-28 06:46:22 and read 13363 times.



Quoting WorldTraveler (Reply 10):
Quoting Jfk777 (Reply 7):
Continental is better off alone then merging with United and all its problems.

agree... and CO will only take on UA if it can control the transaction to the point of not taking CO under and if UA's influence can be neutralized. That is, honestly, a long ways off.

WT, this is one of the rare times I agree with you 100%!

I still think the only way there would be a CO / UA combination would be if UA filed for bankruptcy first. That way, CO would only have to pay for the UA assets they wanted (ORD, SFO, LAX, and NRT), without having to deal with labor issues.

If AA can resolve their own labor issues (and that is a VERY big if!), I could see AA buying UA's IAD hub in the aftermath of a UA bankruptcy. CO probably would not be allowed to take over IAD because IAD and EWR are so close.

I would be very surprised if any airline wanted UA's DEN hub, although I could see F9 and WN taking over at least some of UA's B concourse gates.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: 777fan
Posted 2009-10-28 07:05:10 and read 13260 times.



Quoting Jfk777 (Reply 7):
Continental has achieved at Newark a hub never before seen in teh New York area with nonstops using 777 to Hong Kong, Shanghai, Peking, Mumbai and New Dehli. It has huge international service to Europe and Latin America. Some of this would be lost if a merger with UA happened and Liberty Airport had to compete with UA's IAD hub and ORD.

I think you're overlooking the significance of UA's hub at IAD; similar destinations and arguably more prestigious given the capital-to-capital service.

Quoting DocLightning (Reply 9):

In the last year, I've flown a number of times and every single flight has been full to within one or two seats. On a number of occasions, I simply have not been able to find a seat on a flight I wanted, even 3 weeks in advance (this is getting to be a problem on the SFO-LAX or SFO-SAN routes).

No doubt. UA's mainline has to be running comparable to pre-recession capacity levels (anyone have stats?); it's pretty difficult to book seats less than a week out and the frequencies are obviously not as plentiful as have been in the past.

Quoting WorldTraveler (Reply 10):
agree... and CO will only take on UA if it can control the transaction to the point of not taking CO under and if UA's influence can be neutralized

Not sure how UA's creditors would feel about a merger at this point since they'd have to write off a significant amount of debt and/or as require CO to assume the debt (not likely).

Back on target: it'd be interesting to see UA in north Africa but Algiers doesn't seem like a "headline" destination. Is there demand to support such a route and what a/c would most likely be used on that route: 763? 752 (3700nm)? What about Cairo (from IAD)?


777fan

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: Kiwiandrew
Posted 2009-10-28 07:11:10 and read 13207 times.



Quoting 777fan (Reply 13):
Back on target: it'd be interesting to see UA in north Africa but Algiers doesn't seem like a "headline" destination. Is there demand to support such a route and what a/c would most likely be used on that route: 763? 752 (3700nm)? What about Cairo (from IAD)?

I believe that *A partner MS is looking at IAD as one of a number of possible North American points , if they do it then it would seem unlikely that UA would start a competing service .

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: Catiii
Posted 2009-10-28 07:14:46 and read 13185 times.



Quoting DocLightning (Reply 9):
In the last year, I've flown a number of times and every single flight has been full to within one or two seats. On a number of occasions, I simply have not been able to find a seat on a flight I wanted, even 3 weeks in advance (this is getting to be a problem on the SFO-LAX or SFO-SAN routes).

Loads dont necessarily indicate profit. Yields indicate profit.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: Tharanga
Posted 2009-10-28 07:18:12 and read 13154 times.



Quoting Jawake (Reply 8):
Prices for those seats on the other hand, seems to be at the lowest in years. Is that a result of too many empty seats? I am not so sure.

That would be basic supply and demand, wouldn't it? Loads are high, fares are low, most everybody is losing money, including WN.

Enjoy the low fares while they're here. Unless the economy picks up faster than expected, figure on more capacity cuts.

How can capacity be cut without damaging the network? Smaller planes, or mergers that allow competing hubs to be whittled down.

I don't see why Tilton's statement should be surprising. Seems natural, to me.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: STT757
Posted 2009-10-28 07:45:56 and read 13026 times.



Quoting WA707atMSP (Reply 12):
CO probably would not be allowed to take over IAD because IAD and EWR are so close.

Not really, EWR-IAD is the same distance as CVG-DTW and is just shy of MEM-ATL. Neither of which caused any problems to the DL/NWA deal.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: EMB170
Posted 2009-10-28 07:50:46 and read 12984 times.



Quoting Jawake (Thread starter):
He seems to beat this drum a lot. That mergers need to happen. Why is he always calling for mergers? And he seems to have the mindset that UA is "for sale". Come and merge with us.



Quoting OzarkD9S (Reply 2):
So he can unload UA off on someone else and take a nice chunk of change with him on his way out.

Exactly. Tilton is hung up on mergers because he's STILL trying to sell UA off and cash in.

Sad thing is, what he doesn't really get is that he needs to make UA the best it can be by itself...then an offer might come naturally. Apparently they've started investing in the hard product (in J and F), now they need to do the same for Y/Y+ and invest in the front-line employees. Take care of their own people, in other words.

The whole thing reminds me of someone who is so desperate to get married that they scare off anyone they start dating, so even if they meet someone wonderful, it never had a chance to succeed.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: NorCal
Posted 2009-10-28 09:13:39 and read 12591 times.



Quoting EMB170 (Reply 18):
The whole thing reminds me of someone who is so desperate to get married that they scare off anyone they start dating, so even if they meet someone wonderful, it never had a chance to succeed.

So rubbing the girl's tummy on the first date and saying, "I can't wait for my man seed to take root and grow inside you," is the wrong approach? Big grin

Quoting EMB170 (Reply 18):
Apparently they've started investing in the hard product (in J and F), now they need to do the same for Y/Y+ and invest in the front-line employees. Take care of their own people, in other words.

Happy employees are productive employees, just ask WN, B6, etc.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: EMB170
Posted 2009-10-28 09:25:49 and read 12452 times.



Quoting NorCal (Reply 19):
So rubbing the girl's tummy on the first date and saying, "I can't wait for my man seed to take root and grow inside you," is the wrong approach?

It'd be right up there with showing the guy a photo album on the first date of what their future children might look like... Big grin

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: TISTPAA727
Posted 2009-10-28 09:44:46 and read 12214 times.



Quoting Catiii (Reply 15):
Loads dont necessarily indicate profit. Yields indicate profit.

Der...which is why DocLightning asked how WN could possibly make money only charging $37 one way.

Quoting DocLightning (Reply 9):
On the other hand, the fares I've paid are sometimes ludicrously low. WN is offering $37 one-way SAN-SFO? How can they make money on that?

Does WN expect other routes to make up for slim revenue on these flights? $37 one-way is just crazy, even for short flights.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: United1
Posted 2009-10-28 10:26:30 and read 11792 times.



Quoting Jawake (Thread starter):
Do you think he is right, too much capacity? I really am not sure.

I'm not sure that there is too much capacity out there but the capacity is way too fragmented between carriers.

Quoting Jawake (Thread starter):
Why is he always calling for mergers?

This is the first time in quite a while I've heard Tilton mention the "M" word. After UA turned down US the entire consolidation rhetoric seemed to quiet down from the United side. He has mentioned opening up US airlines to foreign investment quite a bit recently thought. Either way its an article and I'm sure he was responding to a questioned asked of him vs some unsolicited comment.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: WorldTraveler
Posted 2009-10-28 11:45:20 and read 11200 times.



Quoting WA707atMSP (Reply 12):
If AA can resolve their own labor issues (and that is a VERY big if!), I could see AA buying UA's IAD hub in the aftermath of a UA bankruptcy

Airline mergers rarely happen from asset carveups; only when you get to the end of a company do airlines start carving up their assets among multiple carriers. Nearly all other times, the copmany goes pretty much intact to one acquirer or another.
UA is a long ways from being in such bad condition that it has to be liquidated piecemeal.

Quoting Mcmax (Reply 11):

While mergers between existing airlines might be a short-term solution to the over-capacity issue, the ultimate problem is that the mergers create unused "space" at airports and in the system as a whole. This makes it much more attractive to new start-ups who perceive a gap in air service which they can fill. Then, the vicious cycle starts all over again.

that is the nature of the airline business....yes, you are right. The hope in consolidation is that the remaining carriers can gain a critical mass an increased efficiencies to survive new competition. You are right that if that doesn't happen, mergers are just a short term painful process that doesn't accomplish much.

Quoting Catiii (Reply 15):
Loads dont necessarily indicate profit. Yields indicate profit.

RASM-CASM=profit (or loss if CASM is greater than CASM)

Quoting TISTPAA727 (Reply 21):
Der...which is why DocLightning asked how WN could possibly make money only charging $37 one way.

because WN is also masterful at allowing only enough capacity so that they can charge $237 to some passengers who must travel at the last minute.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: ER757
Posted 2009-10-28 12:32:31 and read 10858 times.



Quoting DocLightning (Reply 9):
In the last year, I've flown a number of times and every single flight has been full to within one or two seats

That's been my experience as well. Of course, I've flown some pretty popular routes (SEA/PHX, SEA/LAX, SEA/ORD, SEA/HNL and beyond) so that has to account for part of it. I'm with you on the fares thing too. When I see all these packed flights and then see airlines announcing quarterly loss after quarterly loss, I makes me think their fare structure is out of whack.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: Flighty
Posted 2009-10-28 12:33:41 and read 10858 times.



Quoting Jawake (Thread starter):
“There is still too much capacity in the US market,” he said."

That sounds more like a confession than a complaint.

Airline CEOs decided to put overcapacity into the US market. It didn't just happen.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: CO767FA
Posted 2009-10-28 12:43:56 and read 11259 times.



Quoting WA707atMSP (Reply 12):
I would be very surprised if any airline wanted UA's DEN hub, although I could see F9 and WN taking over at least some of UA's B concourse gates.

I think you are incorrect regarding DEN. Enlighten us to the basis for your opinion that DEN is un"wanted" by any airline.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: N1120A
Posted 2009-10-28 12:54:34 and read 11132 times.



Quoting DocLightning (Reply 9):
WN is offering $37 one-way SAN-SFO? How can they make money on that?

They don't. They make money on the people paying $158 for an Anytime fare. Or you can look at it this way. They pay their costs with the higher fares and then make their profits on 4-5 cheapos they sell. In fact, WN's yields on short-haul are higher than on long haul, which is a big reason you see far fewer transcons but these flights as plentiful as ever.

Quoting TISTPAA727 (Reply 21):
Does WN expect other routes to make up for slim revenue on these flights? $37 one-way is just crazy, even for short flights.

Every route at WN has to be independently profitable. They expect other people on the same plane to make up for the slim revenue on that specific ticket.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: Cschleic
Posted 2009-10-28 12:55:05 and read 11122 times.



Quoting Rjnut (Reply 6):
Maybe air travel should go back to being just for the rich. Trying to become a "mass" transportation option appears to have become an abysmal failure!

Exactly. That's what passengers don't get...it's just mass transport, not what it once was.

And you have to wonder about execs who constantly say mergers are the solution to all the problems. They're just admitting they can't run it successfully.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: Tharanga
Posted 2009-10-28 13:00:40 and read 11066 times.



Quoting WorldTraveler (Reply 23):

because WN is also masterful at allowing only enough capacity so that they can charge $237 to some passengers who must travel at the last minute.

B6 seems to have that down, too. But despite that, WN is losing money. If they could charge even more customers $237 instead of $25, they would, but they can't, I presume. Maybe it's impossible to make money in the current economy, but some of these airlines don't make much money, even in a good economy.

Quoting ER757 (Reply 24):
I'm with you on the fares thing too. When I see all these packed flights and then see airlines announcing quarterly loss after quarterly loss, I makes me think their fare structure is out of whack.

Falling over each other to pick up the most price-sensitive customers. Not enough price-insensitive business pax to fill the plane.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: ThegreatRDU
Posted 2009-10-28 13:01:38 and read 11067 times.



Quoting DocLightning (Reply 9):
I've flown a number of times and every single flight has been full to within one or two seats.

Obviously your flying at peak times....

Quoting Flighty (Reply 25):

Airline CEOs decided to put overcapacity into the US market. It didn't just happen.

Especially the new airlines, like Virgin America enter the fray with no niche....and charge fares that are not even sustainable, bleeding cash trying to buy load factor....and they are facing competition on if i'm not mistaken, all of their routes....they'll never let the airline die because of their egos however....an airline with a niche like skybus had no chance so I really don't believe in Virgin America....entering a saturated market...with no niche...nothing original....and there they are bleeding cash...
There is still too much capacity in the US, and also still in the transatlantic market, another thing that has to happen is the acceleration of the closing of all the medium-sized cities serving as hubs which are basically overlap.....(MEM, CVG, CLE etc...)

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: AADC10
Posted 2009-10-28 13:08:23 and read 11001 times.



Quoting OzarkD9S (Reply 2):
So he can unload UA off on someone else and take a nice chunk of change with him on his way out.



Quoting EMB170 (Reply 18):
Exactly. Tilton is hung up on mergers because he's STILL trying to sell UA off and cash in.

Tilton was not hired to run UA for the long term, although he has been there longer than anyone expected. He was hired as a "turnaround" specialist to stabilize UA and get it ready for a sale or merger. His primary past experience was merging Getty with Texaco. Of course he wants to merge and retire, that is what he is supposed to do. Stephen Wolf played a similar role when he sold UA to the ESOP. For the long term they need CO's management or maybe executives from a well run hotel chain.

Quoting Jawake (Reply 8):
I would tend to agree with Skymiler. When I look at flights, I do not see a lot of empty planes. Maybe there are other markets where that is not so, but with friends who are in the industry, seats seem to be full all the time.

Prices for those seats on the other hand, seems to be at the lowest in years. Is that a result of too many empty seats? I am not so sure.

Yield management has become almost too efficient. Some top secret algorithm makes sure just about all the planes to anywhere are always full. This is true for just about any airline except WN. Cutting capacity means that yield management does not have to lower fares as much to keep the fewer seats full. Since nearly every airline is cutting, there is limited fear of getting pushed aside by another airline, the probably exception being AA at ORD, where they restored flights probably due to fears of getting swamped by UA, which has also cut, just not as much.

Quoting WA707atMSP (Reply 12):
If AA can resolve their own labor issues (and that is a VERY big if!), I could see AA buying UA's IAD hub in the aftermath of a UA bankruptcy. CO probably would not be allowed to take over IAD because IAD and EWR are so close.

There is no need to buy any domestic hub from anyone. If UA goes Ch. 7 and liquidates, another airline could simply submit a bid to the airport for the gates. The equipment and other necessary items could be purchased from a liquidation auction. CO would be allowed to take over UA's hub position at IAD, the question is would they want to?

AA used to have a much larger presence at IAD but they retreated as UA became more entrenched and B6 moved in. The most desirable domestic gates in the UA system are probably ORD. The only things UA could actually sell are their NRT and LHR slots. UA would be unlikely to sell them until the very end as the PA sale of NRT and LHR and the TW sale LHR doomed those airlines.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: KPHXFlyer
Posted 2009-10-28 13:55:36 and read 10706 times.



Quoting TISTPAA727 (Reply 21):
Does WN expect other routes to make up for slim revenue on these flights? $37 one-way is just crazy, even for short flights.

Often times with my job, I have to fly on short notice (usually less than 3 days) and usually pay $300-$375 roundtrip for PHX-LAS/ABQ/LAX/SNA/BUR on WN. Many of the people I've talked with on these flights are also last-minute purchasers. I'd hazard a guess that this probably makes up a sizable chunk of these passengers.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: N1120A
Posted 2009-10-28 14:04:38 and read 10660 times.



Quoting WA707atMSP (Reply 12):

I still think the only way there would be a CO / UA combination would be if UA filed for bankruptcy first. That way, CO would only have to pay for the UA assets they wanted (ORD, SFO, LAX, and NRT), without having to deal with labor issues.

There is no way the Bankruptcy Court allows UA to go into Ch. 7 and shaft creditors, including labor, like that given that UA is turning a not insignificant operating profit.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: WA707atMSP
Posted 2009-10-28 14:44:28 and read 10346 times.



Quoting CO767FA (Reply 26):
Quoting WA707atMSP (Reply 12):
I would be very surprised if any airline wanted UA's DEN hub, although I could see F9 and WN taking over at least some of UA's B concourse gates.

I think you are incorrect regarding DEN. Enlighten us to the basis for your opinion that DEN is un"wanted" by any airline.

WN and F9 already have very strong name recognition in DEN. Both airlines also have lower costs than almost any purchaser of UA's DEN hub.

Any airline that bought UA's DEN hub would need to spend a lot of money promoting themselves in DEN, while competing against two low cost rivals that could match or undercut any discounts the acquirer of UA's DEN hub offered to build market share.

WN and F9 would view a UA shut down or merger as a "once in a lifetime" opportunity to become the dominant airline in DEN, and they would cut fares aggressively, and add as many flights as possible, to gain market share there. This would make it very, very hard for any airline that bought UA's DEN hub to make money on the transaction.

As I said in my earlier post, I don't think it would make sense for either WN or F9 to buy UA's DEN hub in its entirety, because WN or F9 could increase their share of DEN by acquiring gates on UA's concourse, for a fraction of the cost of buying the entire hub. This is exactly the approach DL took in ATL when EA shut down - by buying just 1/3 of EA's old gates in ATL, they were able to establish a commanding position in ATL.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: Jawake
Posted 2009-10-28 15:02:47 and read 10230 times.



Quoting AADC10 (Reply 31):
Tilton was not hired to run UA for the long term, although he has been there longer than anyone expected. He was hired as a "turnaround" specialist to stabilize UA and get it ready for a sale or merger. His primary past experience was merging Getty with Texaco. Of course he wants to merge and retire, that is what he is supposed to do.

Thats fine, if that was he was SUPPOSE to do and be hired for, then I understand why he says what he says. Makes sense.

But he has not delivered. He has tried, I won't fault him for that. But if it is not working and he is not doing what he was SUPPOSE to do, then get someone else. He has been since 2002. 7 years is a long time.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: Commavia
Posted 2009-10-28 15:14:10 and read 10201 times.

Man I'll say this about a hypothetical United-Continental merger: that combined network would be a force to be reckoned with and would handily dominate every other airline's network in the United States, including Delta.

A combined United-Continental with hubs in Chicago, Houston, New York/Newark, Washington, Denver, Los Angeles and San Francisco, plus huge operations at Narita and Heathrow and unequaled networks to Europe and Asia, plus a huge Latin American network, would be quite a sight to behold. By contrast, for example, Delta's hubs are worth almost nothing compared with a combined United-Continental.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: HouStrategies
Posted 2009-10-28 15:17:41 and read 10180 times.

I have a question about UA and DEN. Isn't that hub a core part of their value proposition to loyal premium CA fliers? "We have lots of nonstops from SFO and LAX, but when we don't, we can get you easily through the very nice DEN hub." The reason I bring it up is that the hub may not need to be profitable on its own, if its mere existence creates lots of profitable flying out of CA.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: WROORD
Posted 2009-10-28 16:02:26 and read 9867 times.



Quoting OzarkD9S (Reply 2):
Quoting Jawake (Thread starter):


Why is he always calling for mergers?

So he can unload UA off on someone else and take a nice chunk of change with him on his way out.

...and he did exactly that at his last job, so I guess he is still short some pennies before retirement. Why on earth he is still there beats me, but he consistently tries to fillet the company....to the bare bones.....

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: Planemaker
Posted 2009-10-28 16:21:53 and read 9741 times.



Quoting Tharanga (Reply 16):
That would be basic supply and demand, wouldn't it? Loads are high, fares are low, most everybody is losing money, including WN.



Quoting Cschleic (Reply 28):
And you have to wonder about execs who constantly say mergers are the solution to all the problems. They're just admitting they can't run it successfully.

Please see first quote. Please take a good long look at this industry. Not even WN is profitable at the moment... and you can't get a leaner nor simpler operation. Since you assert that "they can't run it successfully", surely you, and everyone else that is against mergers, must have figured out how to return the major players in this industry to sustained profitability.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: CatIII
Posted 2009-10-28 19:09:31 and read 8895 times.



Quoting WorldTraveler (Reply 23):
RASM-CASM=profit (or loss if CASM is greater than CASM)

But since he was talking solely, presumably by his statement, about loads and their correlation to profitability or a particular flight, and since RASM accounts for all revenues not just passenger revenues (yields) and isn't limited to just ticket sales, I stand by my statement.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: 9252fly
Posted 2009-10-28 20:09:06 and read 8591 times.



Quoting CatIII (Reply 40):
since RASM accounts for all revenues not just passenger revenues (yields) and isn't limited to just ticket sales

I always thought that RASM is the measurement of revenue per available seat mile,emphasis on the word seat?

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: Tharanga
Posted 2009-10-28 20:44:31 and read 8381 times.



Quoting ThegreatRDU (Reply 30):
There is still too much capacity in the US, and also still in the transatlantic market, another thing that has to happen is the acceleration of the closing of all the medium-sized cities serving as hubs which are basically overlap.....(MEM, CVG, CLE etc...)

Exactly my point - in order to reduce capacity, those smaller hubs have to go. but it can be hard for an airline to axe them, unless they merge with somebody else whose bigger hub in the same general area will service that part of the network. Hence, mergers make sense.

Quoting Commavia (Reply 36):
A combined United-Continental with hubs in Chicago, Houston, New York/Newark, Washington, Denver, Los Angeles and San Francisco, plus huge operations at Narita and Heathrow and unequaled networks to Europe and Asia, plus a huge Latin American network, would be quite a sight to behold.

If it were financially healthy, sure. Though again, I'd expect some cuts to reduce redundancy. If I had to guess, IAD would get downgraded into a reliever for EWR. But I'm sure there's been a million topics on here speculating on the look of a UA-CO combine.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: YXwatcherMKE
Posted 2009-10-28 22:50:16 and read 8002 times.



Quoting EMB170 (Reply 18):
The whole thing reminds me of someone who is so desperate to get married that they scare off anyone they start dating, so even if they meet someone wonderful, it never had a chance to succeed.

WOW you nailed it, I have a good friend that was UA FO that just got laid-off and that is what he said to me a month ago before he got the news. It is crazy what Tilton has done to UA. It was such a great airline that has been run into the ground until it has been turned into mud. Just two years ago he was doing International flights on T7's then he was moved to 767's then last year moved to domestic 319's now he outside looking back wondering if he will ever fly on a UA plane ever again.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: PhxIAHszxJNU
Posted 2009-10-28 23:16:20 and read 7901 times.



Quoting Planemaker (Reply 39):
Please see first quote. Please take a good long look at this industry. Not even WN is profitable at the moment... and you can't get a leaner nor simpler operation. Since you assert that "they can't run it successfully", surely you, and everyone else that is against mergers, must have figured out how to return the major players in this industry to sustained profitability.

I don't think anybody has figured out how to run a constantly profitable airline in the US, the demand is there, but the profits are elusive.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: EA CO AS
Posted 2009-10-29 03:38:10 and read 7435 times.



Quoting 9252fly (Reply 41):
Quoting CatIII (Reply 40):
since RASM accounts for all revenues not just passenger revenues (yields) and isn't limited to just ticket sales

I always thought that RASM is the measurement of revenue per available seat mile,emphasis on the word seat?

No, RASM is ALL incoming revenue (ticket sales, cargo, mileage plan, etc) divided by ASMs.

PRASM is just ticket sales (PASSENGER Revenue per Available Seat Mile).

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: Tharanga
Posted 2009-10-29 05:06:25 and read 7190 times.



Quoting PhxIAHszxJNU (Reply 44):
I don't think anybody has figured out how to run a constantly profitable airline in the US, the demand is there, but the profits are elusive.

Again, basic supply and demand. Demand will be there for any good, if the price is low enough. Doesn't mean you can make a profit at that point. Either reduce capacity, or lower your cost base.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: SRT75
Posted 2009-10-29 05:31:35 and read 7180 times.



Quoting Jawake (Thread starter):
Do you think he is right, too much capacity? I really am not sure.

It seems that UA has been increasingly outsourcing its domestic routes to express operations. Just look at all the grey lines on a UA domestic route map. Plus there is no mainline service on routes between some major cities, something that would have been unheard of a decade ago.

If it is profitable, I have no problem with UA outsourcing as much of its domestic route as it wants, reserving its own metal for international operations and profitable, high-volume, domestic routes. But isn't it true that capacity is less of an issue for UA on express routes? Doesn't UA have some type of fixed-rate contract for the operation of those routes with the regional carriers regardless of capacity and loads?

Topic: RE: UAL Chief Sees New Route To Airline Mergers: F
Username: Airzim
Posted 2009-10-29 06:05:17 and read 7112 times.



Quoting CO767FA (Reply 26):
Quoting WA707atMSP (Reply 12):
I would be very surprised if any airline wanted UA's DEN hub, although I could see F9 and WN taking over at least some of UA's B concourse gates.

I think you are incorrect regarding DEN. Enlighten us to the basis for your opinion that DEN is un"wanted" by any airline.

Quite simply, there's no longer a need for a Mountain West hub. In the 727 and DC-9 days, most east/west routes needed a place to put down unless the city pair could support widebody non stop service. UA and CO can now support every market from ORD and IAH nonstop with n/b aircraft in addition to supporting all transcons with n/bs. DEN is redundant.

Denver is also too far East to support a viable N/S market in the Western US. SFO, and the plethora of point-to-point service from AS/WN/UA already support every major market west of DEN.

Over the next few years, DEN will cease to be a large connecting point for UA and will likely be a large focus operation; much like LAX.

It is possible that SLC will see the same fate, but given DL's track record, they'll probably take a blood bath before conceding defeat.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: F
Username: STT757
Posted 2009-10-29 06:39:53 and read 7056 times.



Quoting Tharanga (Reply 42):
If I had to guess, IAD would get downgraded into a reliever for EWR. But I'm sure there's been a million topics on here speculating on the look of a UA-CO combine.

IAD is a great money maker, huge Government contracts. EWR and IAD would compliment each other, not compete against each other. EWR and IAD serve two different markets;

EWR:

Serves the Northern New Jersey pharmaceutical industry and Manhattan financial, entertainment and advertising agencies.

IAD:

Serves the United States Government, Government contractors, lobbyist etc..

They don't compete, CO cannot divert International travelers to IAD nor can UA divert International travelers to EWR as both hubs have very healthy O&D bases upon which the hubs are built. EWR and IAD are not as reliant on connecting travelers as say CLE, CVG, MEM. Those hubs do compete with their larger rivals nearby (ORD, DTW, ATL), EWR and IAD are big enough O&D markets that they don't encroach on each other's business.

IAD has the room and capacity to pick up the connecting domestic-domestic traffic CO handles through EWR, allowing EWR to focus more on Domestic-International, International-Domestic and local O&D traffic.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: ThegreatRDU
Posted 2009-10-29 07:49:34 and read 6951 times.



Quoting Tharanga (Reply 42):
Though again, I'd expect some cuts to reduce redundancy. If I had to guess, IAD would get downgraded into a reliever for EWR. But I'm sure there's been a million topics on here speculating on the look of a UA-CO combine.

That's bold but not going to happen IAD and EWR are far apart and large in their own right...the only hub that will go if CO and UA merge is CLE, the others complement each other too much...

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: STT757
Posted 2009-10-29 08:04:32 and read 6979 times.



Quoting ThegreatRDU (Reply 50):
That's bold but not going to happen IAD and EWR are far apart and large in their own right...the only hub that will go if CO and UA merge is CLE, the others complement each other too much...

EWR and IAD are not CLE, CVG, PIT, MEM or STL, those hubs are in smaller Cities with heavy dependence on connecting traffic. EWR and IAD are huge O&D markets.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: MasseyBrown
Posted 2009-10-29 08:14:33 and read 6934 times.



Quoting ThegreatRDU (Reply 30):
another thing that has to happen is the acceleration of the closing of all the medium-sized cities serving as hubs which are basically overlap.....(MEM, CVG, CLE etc...)



Quoting Tharanga (Reply 42):
Exactly my point - in order to reduce capacity, those smaller hubs have to go.

I believe that competition among hubs is just as beneficial as competition among airlines. Devolving to three alliance-associated carriers and 6 or so international mega hubs will lead to worse service for the pax, inefficiency-of-scale for the airlines, and government interference in labor relations (leading to reregulation of airlines).

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: ThegreatRDU
Posted 2009-10-29 10:36:31 and read 6764 times.



Quoting MasseyBrown (Reply 52):
I believe that competition among hubs is just as beneficial as competition among airlines. Devolving to three alliance-associated carriers and 6 or so international mega hubs will lead to worse service for the pax, inefficiency-of-scale for the airlines, and government interference in labor relations (leading to reregulation of airlines).

If you say so, but how is it beneficial if you maintain a hub at a medium-sized city which is just redundant overlap, low O&D, and expensive RJ flying scratchchin 

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: MasseyBrown
Posted 2009-10-29 11:36:29 and read 6683 times.



Quoting ThegreatRDU (Reply 53):
how is it beneficial if you maintain a hub at a medium-sized city which is just redundant overlap, low O&D, and expensive RJ flying scratchchin

If a smaller hub is profitable and captures traffic that is not largely self-diversionary, how is it not beneficial? I'm not advocating public subsidy to preserve hubs.

One of the chief reasons hubs proliferated was wretched, abominable service at ORD, ATL, and JFK in the 60's and 70's. (I still get mad thinking of it.) It isn't hard to see a return to those days as competition devolves to a three alliance oligopoly at a handful of mega-hubs.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: Tharanga
Posted 2009-10-29 15:12:54 and read 6534 times.



Quoting STT757 (Reply 49):
IAD is a great money maker, huge Government contracts. EWR and IAD would compliment each other, not compete against each other. EWR and IAD serve two different markets;

Point taken; I should have said IAD would be pared down to support local O&D only. Maybe IAD has a lot of O&D, but it can't be 100%.

Quoting ThegreatRDU (Reply 50):
the only hub that will go if CO and UA merge is CLE

Wouldn't be surprised to see CLE shrunk a bit, even without a merger.

Quoting MasseyBrown (Reply 52):
I believe that competition among hubs is just as beneficial as competition among airlines. Devolving to three alliance-associated carriers and 6 or so international mega hubs will lead to worse service for the pax, inefficiency-of-scale for the airlines, and government interference in labor relations (leading to reregulation of airlines).

I'm just saying what's good for airline profitability, not necessarily what's good for the pax.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: MasseyBrown
Posted 2009-10-29 22:01:50 and read 6304 times.



Quoting Tharanga (Reply 55):
I'm just saying what's good for airline profitability, not necessarily what's good for the pax.

Some economists argue that oligopoly coddles if not encourages mediocrity and thereby reduces profit. That's debatable in the real world but reasonable in the abstract.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: Byrdluvs747
Posted 2009-10-29 22:17:13 and read 6277 times.



Quoting MasseyBrown (Reply 56):
Some economists argue that oligopoly coddles if not encourages mediocrity and thereby reduces profit. That's debatable in the real world but reasonable in the abstract.

I would agree in the sense that the complacency and customer apathy of monopolies/oligopolies usually fosters a fertile environment for LCC's to grow.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: Tharanga
Posted 2009-10-29 22:18:42 and read 6282 times.



Quoting MasseyBrown (Reply 56):

Some economists argue that oligopoly coddles if not encourages mediocrity and thereby reduces profit. That's debatable in the real world but reasonable in the abstract.

Oligopoly meaning too few hubs, or too few airlines, or both?

So long as the hubs can handle what's being asked of them, I don't see a big deal. ORD is not as bad as it was; JFK doesn't have a whole lot of connecting going on except for maybe on B6.

Too few airlines.. I think after another merger, there'll still be enough. The question is, how many major routes lack competition? Things like BOS-PHL. I'm sure that's been a topic here at some point.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: Planemaker
Posted 2009-10-30 10:36:45 and read 6071 times.



Quoting MasseyBrown (Reply 56):
Some economists argue that oligopoly coddles if not encourages mediocrity and thereby reduces profit. That's debatable in the real world but reasonable in the abstract.



Quoting Tharanga (Reply 58):
Too few airlines.. I think after another merger, there'll still be enough.



I do not think that we are near an oligopoly in the domestic airline industry... look at the number still remaining. And if we were, the airlines would be somewhat consistently profitable. Even with all the major cost reductions and restructuring of the past few years the end of the tunnel isn't visible.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: TAN FLYR
Posted 2009-10-30 17:14:49 and read 5863 times.

I too will miss the "Guppy"! Many flights in the 70's,80's and into the 90's on UA 737's. So , in a nostalgic way, another piece of the heart of what many of us older guys remember as the "real United Airlines" gone. DC-8's, all gone, DC-10's gone, 747 100/200's gone and now the 737-300 (200' s gone a number of years back), 727 and 72S gone...every one of them gave you the sense you were flying...Take-off;s that you felt in the seat of your pants. Coach class that was coach..not cattle car, Planes that , in a way, made you proud that you had bought a ticket to fly on United.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: TAN FLYR
Posted 2009-10-30 17:18:58 and read 5852 times.

Mod..Please delete above post. I mistakenly put in wrong thread. My apologies.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: STT757
Posted 2009-11-03 11:00:03 and read 5470 times.

More from the CO/UA merger rumor mill;

Quote:
Continental president says airline would consider merger with United



Quote:
Continental Airlines President Jeff Smisek says the carrier will consider merging with United Airlines if the new combination of Delta Air Lines and Northwest Airlines becomes a profitable hookup.

Smisek refering to DL/NWA;

Quote:
"They've gotten bigger, they've gotten more complex, but they haven't gotten profitable."

http://www.cleveland.com/business/in...ontinental_president_says_air.html

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: Alphascan
Posted 2009-11-03 13:27:48 and read 5221 times.

I laughed when I first saw this thread's headline. Its like the Groundhog Day movie. Maybe it should read:

UAL Chief Sees New Route To Airline Mergers Around Every Corner

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: UA772IAD
Posted 2009-11-03 14:34:14 and read 5134 times.



Quoting Jawake (Thread starter):
He seems to beat this drum a lot. That mergers need to happen. Why is he always calling for mergers? And he seems to have the mindset that UA is "for sale". Come and merge with us.

Either that or the less likely scenerio that he is encouraging other mergers to keep UA solo.

-Just thought for "fun" I'd put a different spin on things. After all, why is he still in command of UA when he could have left sitting pretty years ago?

Quoting Airzim (Reply 48):
Quite simply, there's no longer a need for a Mountain West hub. In the 727 and DC-9 days, most east/west routes needed a place to put down unless the city pair could support widebody non stop service. UA and CO can now support every market from ORD and IAH nonstop with n/b aircraft in addition to supporting all transcons with n/bs. DEN is redundant.



Quoting Airzim (Reply 48):
Over the next few years, DEN will cease to be a large connecting point for UA and will likely be a large focus operation; much like LAX.

I disagree. SFO and LAX are slowly getting flighs back to smaller cities (like STL for example) but there are still far too many cities/markets in the middle of the country that can't support "longhaul" nonstop service from the West Coast/East Coast>>(think SLC, RNO for example). Chicago is stacked and most seasoned travellers will avoid it if possible. Except for the few anomolies in terms of poor weather, DEN provides a consistent and near seamless operation for UA.

Furthermore, it has a decent O&D market as well.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: AirFrnt
Posted 2009-11-03 18:27:02 and read 4893 times.

The problem with DEN for UA isn't logistical - in fact, it's the location and the logistics that are saving it - rather it's the sheer carnage of being stuck between two popular and lower cost carriers, and continuing eroding of pricing power.

UA is committed to DEN in a way they can't get out of unless they go into bankruptcy.

That being sad, there is a lot that UA has tried to do and failed, that could make DEN profitable for them. The first of them being turned DEN from a connecting hub to a true international hub with international destinations that don't require a trek to SFO or ORD.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: Flyiguy
Posted 2009-11-03 18:59:36 and read 4819 times.



Quoting AirFrnt (Reply 65):
That being sad, there is a lot that UA has tried to do and failed, that could make DEN profitable for them. The first of them being turned DEN from a connecting hub to a true international hub with international destinations that don't require a trek to SFO or ORD.

This was tried with LHR and LH tried with flights to FRA. The problem with DEN is the Altitude. With that it takes a huge hit on payload just to get off the ground, kinda like the heat with PHX...

Just my 0.02

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: AirFrnt
Posted 2009-11-03 21:06:58 and read 4714 times.

British Airways is eating United's lunch in DEN, United at least gets the carrots from LH's lunch thanks to Star Alliance, but F9 also wallops them in Mexico. Poor planning led to that.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: Rampart
Posted 2009-11-03 22:21:05 and read 4642 times.



Quoting UA772IAD (Reply 64):
Quite simply, there's no longer a need for a Mountain West hub. In the 727 and DC-9 days, most east/west routes needed a place to put down unless the city pair could support widebody non stop service. UA and CO can now support every market from ORD and IAH nonstop with n/b aircraft in addition to supporting all transcons with n/bs. DEN is redundant.

Tell that to WN. DEN is perfectly situated to be a hub, and probably better than IAH.

I don't get the point about 727s and DC-9s. How are these different than 738s and regional jets currently?

-Rampart

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: United1
Posted 2009-11-03 22:35:31 and read 4624 times.



Quoting AirFrnt (Reply 67):
United at least gets the carrots from LH's lunch thanks to Star Alliance,

As there is a JV in place UA could care less if a passenger is booked on LH....

Quoting AirFrnt (Reply 67):
British Airways is eating United's lunch in DEN,

Oh yes one daily BA flight to LHR is truly a threat to UAs DEN operation...  Yeah sure

UA operates a seasonal daily flight that will more then likely go year round as the economy improves.

Quoting AirFrnt (Reply 67):
but F9 also wallops them in Mexico. Poor planning led to that.

UA seems to be doing fairly well on what little service to Mexico that they have out of DEN. Mexico (or leisure markets in general) have never been a high priority for UA.

DEN is doing exactly what UA planned it to be... a domestic transfer hub. UA never designed or intends for DEN to be a major international gateway to anywhere except perhaps to Canada.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: MasseyBrown
Posted 2009-11-04 08:45:26 and read 4415 times.



Quoting STT757 (Reply 62):

Smisek refering to DL/NWA;

Quote:
"They've gotten bigger, they've gotten more complex, but they haven't gotten profitable."

Bigger may be the problem. During DL's latest earnings conference call Anderson said that DL has significantly increased its share of corporate contracts since the merger. He didn't say (and never will say unless subpoenaed) what "significantly" means in hard numbers.

If, however, UA and CO agree that DL growth (solely attributable to its size) is a big enough competitive advantage to mean long-term damage to themselves, they will feel forced to merge.

Alternatively, I guess they could argue on antitrust grounds for DL to be broken up; the Obama Administration might even prefer that alternative.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: Jawake
Posted 2009-11-04 10:03:01 and read 4314 times.



Quoting MasseyBrown (Reply 70):

Alternatively, I guess they could argue on antitrust grounds for DL to be broken up; the Obama Administration might even prefer that alternative.

I thought of that, but I don't see that happening. The merger is in full swing and Northwest is being broken up all over the place. Reforming NW would be a huge undertaking and would be costly.

I guess that is it though, if DL becomes profitable and powerful as a US Carrier, the other airlines are going to be anxious to want to match DL in routes and infrastructure. We could see at least one more big merger. UAL Chief's is looking, we know that all too well, it will be up to someone else to come calling.....



 chat 

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: AirFrnt
Posted 2009-11-04 11:09:12 and read 4230 times.

Quoting United1 (Reply 69):

DEN is doing exactly what UA planned it to be... a domestic transfer hub. UA never designed or intends for DEN to be a major international gateway to anywhere except perhaps to Canada.

It is doing exactly what UA planned... and loosing money hand over fist. Their competitors are eating away pricing control and market share. That trend can not continue indefinitly. One way or another, United will either continue to shrink, or they will expand and control costs.

One way or another, UA at DEN will look very very different in 10 years.

[Edited 2009-11-04 11:21:14]

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: United1
Posted 2009-11-04 12:15:18 and read 4124 times.



Quoting AirFrnt (Reply 72):
Their competitors are eating away pricing control and market share.

UA is trading (and rather sucessfully at that) market share for yield at DEN. Quite frankly UA isn't interested in getting in a slug fest over lower yielding passenger.

Quoting AirFrnt (Reply 72):
One way or another, UA at DEN will look very very different in 10 years.

I would hope so....UA will continue to evolve and refine their strategy at DEN and in other markets.

Quoting AirFrnt (Reply 72):
It is doing exactly what UA planned... and loosing money hand over fist.

UAs hub at DEN isn't doing anywhere near as badly as you suggest.

Quoting AirFrnt (Reply 72):
they will expand and control costs.

UAs costs are dropping and they have demonstrated the best cost control numbers among the legacies....all while shrinking. Expanding simply to protect market share is an outdated and expensive strategy.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: SurfandSnow
Posted 2009-11-04 12:55:51 and read 4046 times.



Quoting AirFrnt (Reply 67):
British Airways is eating United's lunch in DEN, United at least gets the carrots from LH's lunch thanks to Star Alliance, but F9 also wallops them in Mexico. Poor planning led to that.

Poor planning?? UA did not even have the rights to fly internationally until the 1980s! Once they acquired the Pan Am network, they began building transpacific ops from SEA/SFO/LAX/HNL, European ops from BOS/JFK/EWR/IAD/ORD, and Latin American ops from MIA. DEN, a much smaller market, remained a cross-country and trans-border hub. No need to dedicate precious widebodies on redundant, marginal flights to distant markets when most pax can easily connect through SFO/LAX or IAD/ORD. As for Mexico, that was far down on the list of priorities for UA, and I'd say they have done pretty well - they have acquired quite a few frequencies in recent years, and I don't believe they have dropped any flights entirely.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: UA772IAD
Posted 2009-11-04 14:16:15 and read 3921 times.



Quoting Rampart (Reply 68):
Tell that to WN. DEN is perfectly situated to be a hub, and probably better than IAH.

I don't get the point about 727s and DC-9s. How are these different than 738s and regional jets currently?

Ummm I didn't say that. What I did say was:

Quoting UA772IAD (Reply 64):
I disagree. SFO and LAX are slowly getting flighs back to smaller cities (like STL for example) but there are still far too many cities/markets in the middle of the country that can't support "longhaul" nonstop service from the West Coast/East Coast>>(think SLC, RNO for example). Chicago is stacked and most seasoned travellers will avoid it if possible. Except for the few anomolies in terms of poor weather, DEN provides a consistent and near seamless operation for UA.

Furthermore, it has a decent O&D market as well.

Topic: RE: UAL Chief Sees New Route To Airline Mergers: FT
Username: FlyFitch
Posted 2009-11-04 14:40:00 and read 3874 times.



Quoting United1 (Reply 69):
Quoting AirFrnt (Reply 67):
British Airways is eating United's lunch in DEN,

Oh yes one daily BA flight to LHR is truly a threat to UAs DEN operation...

UA operates a seasonal daily flight that will more then likely go year round as the economy improves.

 checkmark  It was stopped for a while but obviously there was enough demand as that flight returned the next season. I agree, that it has potential for year round service in the future.


The messages in this discussion express the views of the author of the message, not necessarily the views of Airliners.net or any entity associated with Airliners.net.

Copyright © Lundgren Aerospace. All rights reserved.
http://www.airliners.net/