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Ted In Disguise -- The Plot For A New United  
User currently offlineFLY777UAL From United States of America, joined May 1999, 4512 posts, RR: 3
Posted (10 years 2 months 4 weeks 1 day 1 hour ago) and read 7381 times:

Could it be true?! Read through with an open mind...its been done in the past, and what reason would United have to be so opposed to it?

When Ted was still known as "Starfish", the talk that was coming out of both the company and the Union was that in order for United to become a much leaner airline, they would have to change many things, specifically the way the airline operated its domestic versus international flying. The main idea which United threw out was that United was to operate a separate airline on most domestic flights. Pilots would be paid signifigantly less, their flying changed, and F/A's would be paid slightly above minimum wage, would only have 20 days off (including sick and vacation), and would also fly longer and harder days. They would be relegated to this flying until a position became available at "Mainline," in which case they would be eligible to move to Mainline and its added benefits of better pay, vacation, scheduling, etc.

Well...flight attendants didn't really care for that and would have almost unanimously voted it down had it come to a vote.

Now we see United's new subsidiary, Ted, spring up in certain markets through United's hubs offering low(er) fares to leisure destinations. For now, they crew with the same flight attendants as Mainline, but operate under a completely different type of flying--one with very quick turns, no first class, expanded Economy Plus, and buy on board, just to name a few.

With the ATSB announcement that they are denying United's appeal for the $1.1 bn loan, United obviously needs to further reduce costs, and what better way to further reduce them with than by expanding cheaper-to-operate Ted. United's back is now against the wall, and as the company puts it, all measures must be investigated in order to survive. If United were to make the quick and easy "alterations" to Ted as they had originally wished to make from the start with the separate "Domestic United" (lower pay, etc.), and spin it as "necessary to survive," no one F/A or pilot wise would really argue. The question to pose to those F/A's and pilots is: "lower-pay Ted, or no job at all?" in which case, United would ultimately get what it had wished to acheive from the start: a low cost carrier subsidiary and not a low cost division.

Ted would take over United's current domestic route structure, and would fly a mixture of A320/A319 aircraft (possibly even A321). Not a stretch of the imagination by any means, as we have already seen Ted accomplish this feat quite easily and quickly.

All International flying would be kept United Mainline, as well as almost all trans-con and hub to hub flying. The majority of these rare Mainline domestic flights would be operated by widebody aircraft not only operating positioning flights between international gateways, but also replacing say, two or even three narrowbody trans-con flights. A greatly reduced 757 fleet would cover thinner trans-con markets as well as Canada, Mexico, the Caribbean, and Central America. Essentially, United Mainline would consist of 777-200, 767-300, 757-200, and 747-400 aircraft.

Just as history has shown us with Singapore Airlines and Boeing, it is entirely possible for an aircraft manufacturer to arrange good terms to switch out aircraft. Airbus is notorious for offering hard-to-resist deals on new frames, and I'm certain that they would have no problem doing the same with trade-ins from United. Even aircraft which United owns outright could be sold and used against the payments for new A321/A320/A319 Ted aircraft.

The real kicker to this whole deal is that Jane Allen, United's Senior Vice President of Onboard, was quoted as saying that United has seriously been considering, "an exchange of money for an ownership stake in the company" by many companies and lending agencies versus actual repayment of the loans. She did not, however, specify if these companies or agencies were US or foreign-based.

Many on here have been talking about what United would have to sell if it looked like they were to go further into trouble, yet despite all of the rumors of Narita and Heathrow sell-offs, no one has bothered to look at one thing which is right underneath their noses: United domestic. The infrastructure is already there at the many airports throughout the country, and if United were to change directions with Ted, it would potentially be the most viable option and viable operation which to sell. United would basically rid itself of the trouble which domestic fare wars, LCC's, etc., have caused over the years (and will continue to cause), and could instead turn its focus to the most profitable trans-con and international routes. The reduction in operating costs alone would be more than enough to launch United (albeit a much, much tinier version) out of Chapter 11 and into profitability. As stated before, the switchover wouldn't be hard to do as already proven by Ted's launch.

Ted would be able to continue operating profitably on routes and under market conditions for which it was originally designed: the new LCC market of the United States, and United would be able to operate profitably on routes and under the market conditions for which it is optimally designed.

So, that, in a nutshell, is the most viable option I see United taking. It really does seem to click with the original plan they had desired to set in motion from the start of the bankruptcy proceedings. Ted is expanded, sold off, United emerges much smaller and more profitable, able to concentrate on its core markets.

Maybe Tilton is smarter and sneakier than we originally presumed... Smile

Thoughts?

F L Y 7 7 7 U A L



31 replies: All unread, showing first 25:
 
User currently offlineConcordeBoy From , joined Dec 1969, posts, RR:
Reply 1, posted (10 years 2 months 4 weeks 1 day 1 hour ago) and read 7323 times:

...well, now that UA's been forced to abandon its pipedream of government-guaranteed financing; it needs to get on the ball... else the only "plot" concerning it will also feature the letters R, I, and P.  Sad

User currently offlineAa757first From United States of America, joined Aug 2003, 3350 posts, RR: 8
Reply 2, posted (10 years 2 months 4 weeks 1 day 1 hour ago) and read 7322 times:

F/A's would be paid slightly above minimum wage

Who do they expect to hire when one can go to AirTran or jetBlue for three times as much?

Ted would take over United's current domestic route structure, and would fly a mixture of A320/A319 aircraft (possibly even A321). Not a stretch of the imagination by any means, as we have already seen Ted accomplish this feat quite easily and quickly.

Without First Class? That will just get the Elites mad and they will go to AA or CO.

AAndrew


User currently offlineMariner From New Zealand, joined Nov 2001, 25328 posts, RR: 85
Reply 3, posted (10 years 2 months 4 weeks 1 day ago) and read 7281 times:
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"Ted is expanded, sold off...."

Assuming that happened, and assuming that the "new" United kept the transcon routes, it be almost a carbon copy of Pan Am.

It is generally agreed that part of Pan Am's problem was that they didn't have enough domestic route structure to support the international flying. This is why Pan Am bought National - to try and beef up that domestic network.

cheers

mariner



aeternum nauta
User currently offlineFLY777UAL From United States of America, joined May 1999, 4512 posts, RR: 3
Reply 4, posted (10 years 2 months 4 weeks 1 day ago) and read 7280 times:

AA757First--

The crews were originally planned to have come from mainline. Starting up from the bottom and working its way up until the Ted positions had been filled. The remainder (ie: old ones) would be flying the non-Ted flights. Slightly above minimum wage might be a bit of a stretch--they would be payed lower than what Mainline flight attendants are paid, which would be comparable to AirTran and JetBlue.

Without First Class really isn't that bad of a thing. Doubt that you've been onboard a Ted flight, but the expanded Economy Plus (40% of the aircraft) is great--sure, you lose out on those 8-12 First Class seats, but in the end, it really is nothing more than a wider seat. If you look at how United had planned on routing Ted (how I explained it), you would see that very few Ted flights (if any) would be over 2.5 hours. I'm sure that frequent flyers wouldn't mind taking an EconomyPlus seat with no one in the middle seat for their 2.5 hour flight--after all, that's what EconomyPlus was designed for!

F L Y 7 7 7 U A L



User currently offlineFLY777UAL From United States of America, joined May 1999, 4512 posts, RR: 3
Reply 5, posted (10 years 2 months 4 weeks 1 day ago) and read 7264 times:

Mariner--

Exactly why Ted and United would have the same type of relationship which they have today. Ted offers United what the PanAm/National merger did, minus the added costs of operating such a large network under the parent company. It would be the same relationship which BA and US had in the early 90's--feeding the international flights. It would be perceived as "one carrier," but with two different companies.

F L Y 7 7 7 U A L


User currently offlineMariner From New Zealand, joined Nov 2001, 25328 posts, RR: 85
Reply 6, posted (10 years 2 months 4 weeks 1 day ago) and read 7238 times:
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FLY777UAL:

Sorry, I'm confused. You said "Ted is expanded, sold off...".

"Sold off" means (to me) that Ted would get new owners, not UAL.

But now you seem to be saying that Ted would still be part of UAL?

cheers

mariner



aeternum nauta
User currently offlineFLY777UAL From United States of America, joined May 1999, 4512 posts, RR: 3
Reply 7, posted (10 years 2 months 4 weeks 1 day ago) and read 7219 times:

It would get new owners. Ted and United would be completely seperate from the standpoint of ownership, etc., but would basically have an almost code-share like relationship in the way they funnel passengers to and from other airlines.

F L Y 7 7 7 U A L


User currently offlineCs03 From United States of America, joined Oct 2003, 413 posts, RR: 0
Reply 8, posted (10 years 2 months 4 weeks 1 day ago) and read 7220 times:
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And look what happened to Pan Am! They overpaid for National, and got the DC10 to operate with, and with a high (union) workforce, was one of the factors that took Pan Am out of the sky! UA got the PA Pacific Division at a nice price!

User currently offlineFLY777UAL From United States of America, joined May 1999, 4512 posts, RR: 3
Reply 9, posted (10 years 2 months 4 weeks 1 day ago) and read 7199 times:

What's the point, Cs03? The market and conditions under which both situations are occuring are completely different, almost incomparable. Had the idea of full-blown code sharing been around when Pan Am "needed" to buy National, then the buyout would have been off, and the complimentary route networks of National and Pan Am would have played perfectly off of eachother under a code share or at least with the idea that it was to be billed as seamless travel aboard two separate carriers.

F L Y 7 7 7 U A L


User currently offlineAa757first From United States of America, joined Aug 2003, 3350 posts, RR: 8
Reply 10, posted (10 years 2 months 4 weeks 1 day ago) and read 7193 times:

Without First Class really isn't that bad of a thing. Doubt that you've been onboard a Ted flight, but the expanded Economy Plus (40% of the aircraft) is great--sure, you lose out on those 8-12 First Class seats, but in the end, it really is nothing more than a wider seat. If you look at how United had planned on routing Ted (how I explained it), you would see that very few Ted flights (if any) would be over 2.5 hours. I'm sure that frequent flyers wouldn't mind taking an EconomyPlus seat with no one in the middle seat for their 2.5 hour flight--after all, that's what EconomyPlus was designed for!

If I flew 40 segments a year and could get Elite status on any airline, who would I choose? United, that will give me 36 inches of pitch (is that how much it is) and no additional service, or American (just for example) that will give me a wider, leather seat, 36 inches of pitch, a meal and free drinks. I guess it is a matter of opinion.

This is an interesting idea.

AAndrew


User currently offlineFLY777UAL From United States of America, joined May 1999, 4512 posts, RR: 3
Reply 11, posted (10 years 2 months 4 weeks 1 day ago) and read 7161 times:

It is completely opinion...how much does one value that leather? Enough to blow a few thousand miles on an upgrade? It's all how you look at it...those miles could buy you an upgrade on an hour and a half long or two hour long flight, or combined over the year, could buy you and your entire family round trip tickets to Hawaii or perhaps a trip for them all in Business Class to Europe...

F L Y 7 7 7 U A L


User currently offlineUAFan17 From United States of America, joined Mar 2004, 120 posts, RR: 0
Reply 12, posted (10 years 2 months 4 weeks 1 day ago) and read 7113 times:

God Forbid that happen is my opinion because I'm sure Ted is great but my parents didn't join mileage plus to get seated in economy plush which we get upgraded to anyways.

[Edited 2004-07-07 05:41:29]

User currently offlineNWA Man From United States of America, joined Jun 1999, 1828 posts, RR: 12
Reply 13, posted (10 years 2 months 4 weeks 1 day ago) and read 7071 times:

how much does one value that leather? Enough to blow a few thousand miles on an upgrade?


Or enough to switch one's flying to US, DL, CO, NW, or AA (EXPs only). All of these airlines offer unlimited, space-available upgrades to their Elites. In fact, looks like all of the Big Six do this except, uh, well, United.

For those that say that if UA were to do this, they'd be at a competitive disadvantage - well, they're already doing it. And trust me - Mileage Plus is not competitive domestically as a result.


Regards,

N-Dub

[Edited 2004-07-07 05:54:29]


Create your own luck.
User currently offlineUal777contrail From , joined Dec 1969, posts, RR:
Reply 14, posted (10 years 2 months 4 weeks 23 hours ago) and read 6941 times:

Don't know if this is fun, but why in the world would one ask a question like this to people who have no clue what goes on in the industry but what they read in the local news paper?

10% of the people on this forum work in the industry, and 90% think they know how to run an airline. 80% said UAL wouldn't be here right now, 10% are laughing at you.



User currently offlineJc5280 From United States of America, joined Oct 2001, 530 posts, RR: 5
Reply 15, posted (10 years 2 months 4 weeks 22 hours ago) and read 6899 times:

"The question to pose to those F/A's and pilots is: "lower-pay Ted, or no job at all?" in which case, United would ultimately get what it had wished to acheive from the start: a low cost carrier subsidiary and not a low cost division."

Thats what one would think. But it is just the opposite of what happens everywhere in the industry. Faced with the possibility of Ch. 11, or even 7, you will see most unions (ex: UA mechanics) fight to the very last penny, even if it means filing for bankruptcy or no job at all. Most of us do not understand this logic, but thats the way unions work.


You will see lots of changes at UA in the future. The domestic product is where you will see those changes occur most. How is that going to look? Not many people know just yet, and its best to keep it that way for now. But I am not in the 90% group on these forums.



User currently offlineFLY777UAL From United States of America, joined May 1999, 4512 posts, RR: 3
Reply 16, posted (10 years 2 months 4 weeks 14 hours ago) and read 6683 times:

Ual777Contrail--

It was posted as an observation based on what United has stated they wanted to do in the past and what it appears as if they could (and maybe even are) starting to do present day, not as a question.

JC5280--

"You will see lots of changes at UA in the future. The domestic product is where you will see those changes occur most."
...exactly why I posted this  Smile.

F L Y 7 7 7 U A L


User currently offlineAlitaliaORD From United States of America, joined Aug 2003, 242 posts, RR: 0
Reply 17, posted (10 years 2 months 4 weeks 14 hours ago) and read 6642 times:

i got a better idea than yours....United takes over a small Middle Eastern Country in an attempt to lower its own fuel operating costs.


Joy To The World, All The Boys and Girls, Joy to the Fishes in the Deep Blue Sea, Joy to You and Me
User currently offlineDesertJets From United States of America, joined Feb 2000, 7781 posts, RR: 16
Reply 18, posted (10 years 2 months 4 weeks 14 hours ago) and read 6632 times:

This is a very interesting scenario, but I see some problems.

I would assume the buyout of domestic UniTED by a 3rd party would include a contractual obligation that you fly as codeshare for United mainline. Not being a corporate lawyer, I think this is doable, but I am not sure if this is something that you could do forever. What prevents the new owners of TED from saying 5 years down the line saying f/u to United and going it on their own. Especially if the domestic route structure proves to be reasonably profitable. The only other way I could see this being workable is doing what Continental did with ExpressJet. Doing a TED IPO, but UAL remains the controlling shareholder.

Still an interesting proposition, but I see the potential for it to become very messy unless the people in Elk Grove Village have a strong enough voice in the spun off company.



Stop drop and roll will not save you in hell. --- seen on a church marque in rural Virginia
User currently offlineFLY777UAL From United States of America, joined May 1999, 4512 posts, RR: 3
Reply 19, posted (10 years 2 months 4 weeks 14 hours ago) and read 6610 times:

That would be much better, DesertJets. So as long as United itself controls 51% of the company...

F L Y 7 7 7 U A L


User currently offlineSlider From United States of America, joined Feb 2004, 6818 posts, RR: 34
Reply 20, posted (10 years 2 months 4 weeks 14 hours ago) and read 6578 times:

With the ATSB announcement that they are denying United's appeal for the $1.1 bn loan, United obviously needs to further reduce costs, and what better way to further reduce them with than by expanding cheaper-to-operate Ted.

FLY777, a critical misstatement of fact above, as I've bolded. Ted is not cheaper to operate than mainline UA. Unless there was a *structural* change in the workforce, via the unions--unlikely IMHO--you won't see any true cost savings. At present time, it is the same UA crews, the same UA paid pilots, the same ground crews, the same mechanics, the same fuel. The only thing that has changed--the ONLY thing--is that you've added more seats, painted the planes, removed F/C (thereby alienating premium customers), but everything else remains the same...what am I not understanding about this whole Ted construct?

Correct me if I'm not understanding this, but are you advocating just the massive proliferation of Ted as it exists today? And do I discern a B-scale in there?


User currently offlineCrosswind From United Kingdom, joined Nov 2000, 2598 posts, RR: 58
Reply 21, posted (10 years 2 months 4 weeks 14 hours ago) and read 6552 times:
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All of these airlines offer unlimited, space-available upgrades to their Elites. In fact, looks like all of the Big Six do this except, uh, well, United.

Maybe that's part of the problem, and one reason why US carriers are losing so much money. Their domestic-F cabins are full of people on upgrades, who want to fly first class but only bought economy tickets because they know they'll probably get upgraded.


And all majors do it because they're terrified that if they do not, their FFP members will go off and fly somebody else.

Look at US Airways, it seems their reconfiguration of the 757 fleet from 24 to 8 first class seats somewhat aligns the number of seats available with the number who actually purchase F class tickets.

I would think US carriers know that flying around F class cabins full of upgrades isn't really good for their finances, but nobody has been bold enough up to now to go out into the market and radically alter their product, United may well have their hand forced, and that could well turn out to be a positive step.

A European-style business class could well be sensible move for US carriers, and one, which if successfully implemented the competition would follow. Business class fares within Europe are only very slightly more than a flexible economy ticket, giving travellers a choice - but importantly you get what you pay for, and the expectation for upgrades will be removed or at least reduced. You can still offer a separate cabin with 34-36" pitch, but at 5 abreast, with the same level of inflight service they currently offer in F.

What would be the real winner though is the variable geometry seating allows the airline to tailor the size of the cabin to the demand for the exact flight in question. The airline's FFP members in economy can be seated in the forward part of the cabin so they still get the increased pitch of the business cabin, but without them getting the other business class benefits which impact on the airline's bottom line.

I know most US travellers are very anti the European system, but I think it may well prove to be the way forward. If not by choice, then maybe by necessity.

Regards
CROSSWIND


User currently offlineOrdinduaflyer From United States of America, joined Mar 2004, 123 posts, RR: 1
Reply 22, posted (10 years 2 months 4 weeks 12 hours ago) and read 6314 times:

Why ask the folk on this forum? It might be nice to see how the pax feel about TED vs UA...that would be one reason!

Changing to the proposed structure above will leave some ff's with unruffled feathers. Others? Well, I know one UGS who's already given a good portion of his business to AA on routes that individual flies frequently which are now served by Ted. He won't be the only one.

Frankly, to change routes such as ORD-CMH, ORD-CLE, ORD-CVG, which are already served by an increasing number of UX flights...I'd rather be on Ted than an RJ. (Heck, for several years I've been having to fly an RJ ORD-CHS)

One of the ff pax concerns is whether they will be able to earn EQMs and EQSs at the same rate on Ted as they can on UA mainline coach fares? If I'm going to be penalized in that regard by "having" to fly TED, then I'm going to start rethinking my choice of carriers. UA has earned my loyalty the hard way over the past several years and it would take a lot for me to even think about changing my primary carrier -- but that is one thing that would do it.

Do I value the leather seats? I couldn't care less. But when it comes to the meal service and drinks, the larger seats (in F vs Y), the extra attention that I get when I'm sitting in the front end....those things I value.

Fly777UAL....you mentioned transcons & hub-hub flights would stay the same. What about mid-cons such as ORD-PDX or ORD-SEA? What about the ORD-EWR/LGA or ORD-DCA routes? I don't see a lot of the business types flying to New York & DC being willing to fly Ted any more than they would SWA (I may be wrong there, and I'll be the first to admit it...just my observations).


User currently offlineUadc8contrail From United States of America, joined Sep 2003, 1782 posts, RR: 9
Reply 23, posted (10 years 2 months 4 weeks 12 hours ago) and read 6035 times:

FLY777UAL,
when the whole TED thing came about the IAM was told by ual that eventually TED could be spun off as a lower wage paying airline. their are other areas that will be addressed before ual gets out of judge genes court room of comedy, #1)pensions??......what pensions....its either going to get axed or frozen.. either way the p.g.c. is gonna be providing the checks in the near future. #2)the savings of contracting out the ramp either to a sub par out fit or have UAL SERVICES take it over and pay those people far less than what they are making today....any DELTA people in here that was throwing bags for them and now are working for DGS??im sure they could tell us what they are making vs what they were making.cutting pay is not the answer..the wages at ual are lower than even wn..pilots,f/a,ground.remember what UAL does now you can bet the jerrys,gordons and richards of the industry will follow suit. if ual can pimp out the lowest possible wages and benefits and still run a big airline they will follow even if it means going into bk court.



bus driver.......move that bus:)
User currently offlineUAL777 From United States of America, joined Aug 2003, 1556 posts, RR: 5
Reply 24, posted (10 years 2 months 4 weeks 12 hours ago) and read 6003 times:

Hey Slider,

Aircraft utilization for Ted is roughly 3.5 hours higher than mainline. I.E. the plane is in the air more, so it can make more money.

Besides, UA has already stated that Ted is profitable, and considering their average load factor was 88% I believe, I can see why.



It is always darkest before the sun comes up.
25 EA CO AS : A European-style Business class may not be necessary, though. Some U.S. carriers like AS, HP and FL have discovered that changing the fare structure f
26 Andersjt : FLY777UAL - you make some valid points; however, I will echo the others in the reasoning why TED will not emerge as the sole domestic feeder to UA's i
27 Alphascan : UA has already stated that Ted is profitable I have not seen that. Do you have a link?
28 Slider : Hey Slider, Aircraft utilization for Ted is roughly 3.5 hours higher than mainline. I.E. the plane is in the air more, so it can make more money. You
29 AA777 : The idea of expanding TED would probably be a good one... United should reduce its flights as much as possible in the areas that arent profitable. Per
30 Mymiles2go : It wouldn't work for the very simple reason that if they are indeed going to maintain an intl route structure they need a domestic route structure of
31 Wdleiser : PanAm screwed up because they tried to run their Domestic flights based on their international flights , For example, they would have a flight between
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