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Scenario: ORD If AA And UA Die...  
User currently offlineDtw/ord fan! From United States of America, joined Feb 2001, 288 posts, RR: 0
Posted (13 years 2 months 2 weeks 1 day 19 hours ago) and read 4126 times:

After the possibilities of not only United, but American Airlines going under as well, not only would it be the loss of the worlds 2 largest airlines, but it would leave another glaring hole; O'hare Airport. If both go down, the effects in Chicago could be devastating. I'm not sure how the other carriers would fill in. I think this is something that should be discussed. For one thing, NW would have almost clean supreamacy on the DTW-CHI (MDW/ORD) route.

8 replies: All unread, jump to last
User currently offlineFlyf15 From , joined Dec 1969, posts, RR:
Reply 1, posted (13 years 2 months 2 weeks 1 day 19 hours ago) and read 4104 times:

I can't see both going under no matter what. So much traffic will go to the other if one shuts down (especially at key locations such as LAX, ORD, and LHR) that the other will undoubtedly be able to survive.

User currently offlineArtsyman From United States of America, joined Feb 2001, 4748 posts, RR: 32
Reply 2, posted (13 years 2 months 2 weeks 1 day 19 hours ago) and read 4081 times:

It's odd, there has been so much talk about the benefits to other carriers if UAL goes Chapt 7, and the same if any of the other top 3 go away, but they all seem to be lingering. Going bankrupt, doesnt seem to mean what it used to mean. Companies disappeared, whereas now, you are almost rewarded for going chapt 11. You get to renegotiate all your loans, leases, pay your staff less, void pension schemes and undercut your competition.

User currently offlineUN_B732 From United States of America, joined Jul 2001, 4297 posts, RR: 4
Reply 3, posted (13 years 2 months 2 weeks 1 day 19 hours ago) and read 4073 times:

In the highly unlikely event that it would happen. Midway woudl become the more prominent airport for domestic trips and O'Hare will be covered by European Carriers and soem US carriers with connections

What now?
User currently offlineOPNLguy From , joined Dec 1969, posts, RR:
Reply 4, posted (13 years 2 months 2 weeks 1 day 19 hours ago) and read 4057 times:

My 2 cents worth...

I don't think it's likely that you'll see both UA and AA "go under", as in cease operations and cease to exist as companies.

UA has, and AA may (depending upon whom one listens to) "go(ne) under" in the sense that Chapter 11 bankruptcy is filed, but that's a misnomer, since Chapter 11 allows one to keep operating while attempting a restructuring.

Obviously, UA (and US) are in that mode right at the moment. If fears/concerns about the economy, war, and/or terrorism persist, it's entirely conceivable that other airlines could join UA and US (and maybe AA) in Chapter 11 proceedings. Other airlines filing Chapter 11 might be more for staying competitive as far as costs go, more so that pure financial condition.

All that said, there seems to be increasing buzz about UA -not- making it out of Chapter 11, and changing their filing to a Chapter 7 liquidation. I hope it doesn't happen (for the sake of the employees and others personally affected), but if it did, many feel that AA would be an -immediate- beneficiary by picking up some (but not all) of UA's former ORD traffic, given that AA already has a sizable ORD operation in place. Other airlines could (and would) fill-in some of the missing ORD service, but AA could benefit such that they either avoid a Chapter 11 filing entirely, or at least minimize their time in Chapter 11 (should they file) before exiting the bankruptcy process.

It's been said that the domestic airline industry has about 20% excess capacity, and UA has about 20% of the market, so some think a UA shutdown could make life easier for everyone. Depending upon the other factors (economy/war/terrorism), others might go into Chapter 11 (even after any UA shutdown), but I don't think other airlines will end up disappearing in Chapter 7. I see the federal government taking industry-wide action (tax/fee relief, absorbing security costs, etc.) long before it gets to the point of not having a domestic industry.

User currently offlineDesertJets From United States of America, joined Feb 2000, 7907 posts, RR: 14
Reply 5, posted (13 years 2 months 2 weeks 1 day 19 hours ago) and read 4049 times:

Hell would infact freeze over.

A highly unlikely scenario, if such a possibility did exist I would not be surprised if the US Government and other big financial backer would not intervene.

Jeremy: I don't think it is nothing but smooth sailing for the airlines that emerge from Ch.11. In the last major downturn, Continental, America West and TWA both went through Ch.11. One doesn't exist, one had been poorly managed up until recently, and another seems to be doing ok relatively speaking. We have many more months before United emerges from Ch.11, but with USAirways coming out at the end of this month it will be interesting to see how it performs after reorganization... I bet everyone will be paying attention.

Stop drop and roll will not save you in hell. --- seen on a church marque in rural Virginia
User currently offlineArtsyman From United States of America, joined Feb 2001, 4748 posts, RR: 32
Reply 6, posted (13 years 2 months 2 weeks 1 day 18 hours ago) and read 4032 times:

Jeremy: I don't think it is nothing but smooth sailing for the airlines that emerge from Ch.11

I was more refering to them when they are still in chapt 11. Continental has been better managed than UAL / US and AA over the recent times, but if AA goes Chapt 11, then all three of those Bankrupt carriers end up having advantages over the carrier that didn't do so badly in the first place.

If UAL and US get the government loans that they applied for on emergence from Chapt 11, then not only do they have a huge cash balance, but they also will be 30% owned by George Bush and Co. In this scenario, I can see a large conflict of interest also.

User currently offlineSpeedport From United States of America, joined Sep 2001, 284 posts, RR: 0
Reply 7, posted (13 years 2 months 2 weeks 1 day 17 hours ago) and read 3970 times:

If UAL gets the contracts voided, and imposes their wish list on labor, then expect to see AA, DL and NW line up in sequence for the bankruptcy court as they do for the runway.

User currently offlineCloudy From , joined Dec 1969, posts, RR:
Reply 8, posted (13 years 2 months 2 weeks 1 day 15 hours ago) and read 3921 times:

As to what would happen to Ohare if both carriers died -

United and American made Ohare a hub because of its geographical location, its excellent groundside links, and it very large O&D market. These things will not go away if United and American die. Someone would have a hub there. I just don't think there would be TWO major hubs. This is a unique and unstable situation and I would be surprised if it survived if EITHER United or American went bankrupt - let alone both. And Make no mistake about it - a dual C-7 could happen. There is no guarantee that the traffic carried by one would be taken by the other once the first dies. Much of it would simply disappear in the short term. And these two airlines have a ton of traffic from other hubs that simply does not overlap anyway. Plus, both could fail more or less simulaneously - if this happens, the failure of one could not help the other.

If both majors die, some of the slack would probably be taken up by an expansion of its regional partners into mainline routes with newly-acquired 70-150 seat aircraft. International routes would go to international partners or to domestic buyers. It is entirely possible that JetBlue may set up a new hub there and it is growing at an astounding rate. Probably, what you would end up with is one major hub consisting of EITHER JetBlue or a coalition of United's regional carriers and alliance partners - perhaps augmented by some bought - out remnants of United's former route structure. There may be a couple minor-to-midsize hubs set up by smaller lo-co's. Needless to say, non-dominant carriers will increase the number of flights to their own hubs.

American's regional network is wholly owned (the part that isn't largely flies from other hubs). So probably if AMR goes down, Eagle goes with it because they are essentially the same company. However, United's codeshare partners may add some AMR assets to the above mentioned "Ad-hoc" hub.

BTW, I would not be surprised if the ad-hoc hub chooses to codeshare with USair and use its name and marketing assets to give the immediate appearance of a single entity, even though it would take a long time to make such an "ad-hoc" hub work as a unified whole on the operational level. It would be a mess for awhile - kind of like Continental was after it gobbled up so many other airlines with Lorenzo at the helm.

IN SHORT - the result would probably be one major "Ad-hoc" hub at Ohare that will look allot more like United's network than American's. Perhaps it would have the Usair name on it even though UsAir would probably not own it. There would be more traffic to other hubs from other airlines. Probably - we would see an increase in point-to-point traffic as well. There may be one or two new smaller Lo-Co hubs at Ohare. Jetblue could stop the formation of this "Ad-Hoc" hub by publicly planning a major operation of their own. Or they could have a smaller operation and coexist. Either way, Ohare's days as a dual hub would be over. The result would look more like Atlanta or even Denver then like the O'hare of today. One major hub, a smaller Lo-co hub, and a smattering of smaller players. The main difference would be that the "smattering of smaller players" would be larger at the "reformed" ORD than it is in DEN today.

But those are just my half-educated guesses.....

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