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US Air In Trouble... When?  
User currently offlineLono From United States of America, joined Apr 2004, 1335 posts, RR: 1
Posted (9 years 11 months 3 days 1 hour ago) and read 5236 times:

Looks like the US Air saga will be with us for a while yet... however... When did US first get into trouble?? It seems like they have been in trouble for many years... I seem to remember many years ago that it was thought that US would be the 1st hub and spoke carrier that would have to merge with someone to survive or it would be the first large carrier to go out of business... this was after EA went away of course...


Wally Bird Ruled the Skys!
23 replies: All unread, jump to last
 
User currently offlineIflyatldl From United States of America, joined Nov 2003, 1936 posts, RR: 3
Reply 1, posted (9 years 11 months 3 days 1 hour ago) and read 5168 times:

US has pretty much has pretty much always had problems for years, but when it knocked up Piedmont, it just started a slow spiral..... Just my .02  Big grin


Ah, Summer, Fenway Park, Boston Red Sox and Beer.....
User currently offlineLono From United States of America, joined Apr 2004, 1335 posts, RR: 1
Reply 2, posted (9 years 11 months 3 days 1 hour ago) and read 5158 times:

Iflyatldl
What year was the Piedmont deal...??? and was it that they failed to implement Piedmont properly..???



Wally Bird Ruled the Skys!
User currently offlinePiedmontfan From United States of America, joined Jun 2004, 12 posts, RR: 0
Reply 3, posted (9 years 11 months 3 days ago) and read 5087 times:

Piedmont became a wholly owned subsidiary of USAirways Group November 5, 1987.




Piedmont Airlines...how I miss them
User currently offlineLono From United States of America, joined Apr 2004, 1335 posts, RR: 1
Reply 4, posted (9 years 11 months 2 days 23 hours ago) and read 5057 times:

1986/87... when all the Majors as they used to be called were buying up smaller regionals... to be bigger and better than their competition... the fear then was to be left behind... so..can we say that was when US troubles began..??
and
Therefore can we say that DL, UA, NW, AA troubles started... almost 20 years ago..??
Then can we say that it has taken 20 years for the "Legacy" carriers to self destruct...
A slow painful death of on old business model.....???



Wally Bird Ruled the Skys!
User currently offlineUA777222 From United States of America, joined Dec 2003, 3348 posts, RR: 11
Reply 5, posted (9 years 11 months 2 days 23 hours ago) and read 5411 times:

God if 9/11 didn't happen I would be interested as hell to see the out come of things. Even before 9/11 the UA buying US was slight but still it would be funny to see how that one turned out. I think it's just that these are great airlines but they only shine when people are willing to spend $$ and with today's economy that's not going to happen.

In the end they offer what all the other majors don't thus causing a major decline in their numbers. And I think it will take shutting down for them to see that they can't be who they want to be.

The whole thing with UA and their "Ok let's cut costs here and there". Yet at the same time they counter strike with New routes, "Flowers in first", New colors. All the wrong things they need to get out of CH.11 successfully. US is facing this same issue as well.

UA had a leg up to start with b/c they are much larger but they will in the end be sitting there together at the end of the race sitting at the bank wondering why it says $0.00 and sometimes -$$. They used to be the big fish in the small pond but the pond just got a whole lot bigger and it looks like these guys are about to be eaten.

AA is just too friggen big to take down. CO has a good mix of a/c and routes but nothing over the top. NW is borderline good or bad for the next few years (we'll see by the end of Q2 of 2005).

US has bitten too much off and they can't take it. UA has the right stuff to be successful in what they want but just don't know how to go about it. CO is great where they are. NW too. AA is just always going to be good. DL is trying too much at once w/o the right stuff.

Therefor can we say that DL, UA, NW, AA troubles started... almost 20 years ago..? Then can we say that it has taken 20 for the "Legacy" carriers to self destruct.. A slow painful death of an old business model.....???

No we can't say that. The buying and building off of the little guys finally set in during the mid-90's say 10 year's ago. The only issue is that once they grew they didn't want to stop. If anything it's a quick death. 9/11 crippled the aviation industry sense day one. It's just that I think the airlines thought it was going to improve over time thus they kept doing what they wanted thinking that the travelers and economy would pick up.

But when you're running one direction and the banks going another you're SOL. If these airlines all had expandable sources of $$ then they'd be fine. Sure in a few years it'll pick back up but the airlines won't be there any more. New guys on the block will be there eating off the remains of the other guys. I can say that we can expect a surge of new airlines in about 5 years and then in a about 20-30years these new guys will be out and then another surge and then over and over again. Like one big food chain.

10 years from now will be very very interesting. All of the out comes of this will happen in the next 1-3 years but it will take 7 years for the repercussion of the results to finally set in................ Aviation as we know it has changed forever.

Sry if my info is off or off track. IM JUST A 14year old COMMENTING ON A BIG KID WORLD!

Thanks.

UA777222



"It wasn't raining when Noah built the ark."
User currently offlineLono From United States of America, joined Apr 2004, 1335 posts, RR: 1
Reply 6, posted (9 years 11 months 2 days 23 hours ago) and read 5019 times:

14 year old kid...!!!! WOW pretty impresive.... Yes you are right "Aviation as we know has changed forever"...


Wally Bird Ruled the Skys!
User currently offlineUA777222 From United States of America, joined Dec 2003, 3348 posts, RR: 11
Reply 7, posted (9 years 11 months 2 days 22 hours ago) and read 5018 times:

Any time. It's a shocker! I have to rember I'm a......KID!! nooooo.

Thanks again Lono!

UA777222



"It wasn't raining when Noah built the ark."
User currently offlineMfricke From United States of America, joined Jun 2001, 269 posts, RR: 0
Reply 8, posted (9 years 11 months 2 days 22 hours ago) and read 5009 times:

Many people out west would say that the beginnings of USAir's troubles was their ill-fated merger with PSA. USAir hoped to gain a nationwide route network, but what happened is that they had the east covered, andthen the west coast, but very little in between. At times, it looked like Kansas City would become a mid-America hub for them, but that never panned out (one of many hub failures at MCI, along with Eastern, Braniff II and Vanguard). Eventually, Southwest came to dominate the west coast routes, so that American (who had merged with Air Cal), and USAir could not compete in the west. The two route systems were nearly impossible to merge together without a mid-continent presence, and after this, USAir seemed to begin to lose the facus that they had for so long as Allegeheny and then later as USAir up to that point.


ONT - Southern California's Ontario!
User currently offlineL.1011 From United States of America, joined Aug 2001, 2209 posts, RR: 9
Reply 9, posted (9 years 11 months 2 days 22 hours ago) and read 4994 times:

USAir(ways) would have been fine as it stood before the acquisitions of Piedmont and PSA. Piedmont would have become another major without the merger, in US's place, and PSA would have continued on their smiling way. Even with the merger, they could have easily been successful. US has been the champion of dismantling their hub system by eliminating "unprofitable" routes only to make "profitable" routes unprofitable. That idiocy has withered US from potentially one of the largest, to the smallest of the Big Six. US could have kept all of the routes, and developed routes to connect the PSA system with the USAir and Piedmont systems, and fill in the gap. US simply needed to analyze what made Piedmont and PSA so resilliant, and imitate it. But no, that would be too logical.

User currently offlineLono From United States of America, joined Apr 2004, 1335 posts, RR: 1
Reply 10, posted (9 years 11 months 2 days 22 hours ago) and read 4974 times:

L.1011

Couldn't the same be said about Delta's merger with Western
and
Americans merger with AirCal...????



Wally Bird Ruled the Skys!
User currently offlineL.1011 From United States of America, joined Aug 2001, 2209 posts, RR: 9
Reply 11, posted (9 years 10 months 3 weeks 5 days 23 hours ago) and read 4802 times:

Lono,

Yes, but not to the same extent. Delta is being foolish right now, with their slow rundown of SLC, and it may be their downfall. AA has a long history of doing exactly what you say, AirCal, Reno Air, and TWA. AA is very predatory in the sense that they purchase airlines solely to get them off the market. It's legal and they're free to do it, but it's not a brilliant strategy. AA was already strong at LAX, so AirCal's northern California hubs were rather redundant.


User currently offlineMoman From United States of America, joined Aug 2004, 1054 posts, RR: 4
Reply 12, posted (9 years 10 months 3 weeks 5 days 23 hours ago) and read 4760 times:

UA777222 -- Smartest 14 year old I know of....

I wish that USAir would have made MCI a big hub. And I wish TWA was still in business so Missouri would have two major hubs.

Moman



AA Platinum Member - American Airlines Forever
User currently offlineMatt D From United States of America, joined Nov 1999, 9502 posts, RR: 47
Reply 13, posted (9 years 10 months 3 weeks 5 days 22 hours ago) and read 4728 times:

Yes, a merger with AirCal, who used to rule SJC and SNA.



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User currently offlineNWAskyteam From United States of America, joined Aug 2004, 75 posts, RR: 0
Reply 14, posted (9 years 10 months 3 weeks 5 days 21 hours ago) and read 4662 times:

I think one of the points that gets overlooked frequently is the cost structure of "legacy" carriers over LCCs. You can talk about pay and benefits, but that can change with new contracts and concessions. WN is proof that labor costs can rise quickly as their new FA contract would show...30% raises over several years can really add up.

The issue facing legacies for the most part is the tremendous load of pension obligations that companies like jetBlue and Frontier have yet to see. When a company is in business for 78 years (NW), you tend to accumulate quite a few retirees. Traditional pension plans are expensive as the recent bankruptcies have shown. Why do you think companies want to eliminate them? This issue is not unique to the airline business...ever take a look at the pension obligations at GM. I don't have exact figures, but I know they are astronomical. Companies founded much later don't have traditional defined benefits for that reason. Most have some form of a 401K which ultimately is much cheaper for the company to offer.

If I were starting a company today I surely would not offer a defined pension program, but I don't think companies who have been around for 3/4 of a century should be dogged for doing it. For decades workers fought for the ability to be compensated into their retirement for years of service. I assume at this point in my career that my pension won't be there when it comes time for me to retire, so I am forced to plan accordingly. Just my $.02.


User currently offlineUA777222 From United States of America, joined Dec 2003, 3348 posts, RR: 11
Reply 15, posted (9 years 10 months 3 weeks 4 days 16 hours ago) and read 4474 times:

Thank you for the kind words Moman, I just hope what I'm saying is right.

Thanks again.

UA777222



"It wasn't raining when Noah built the ark."
User currently offlineAa757first From United States of America, joined Aug 2003, 3347 posts, RR: 8
Reply 16, posted (9 years 10 months 3 weeks 4 days 15 hours ago) and read 4456 times:

I heard on these boards that it cost USAir $100,000,000 more to run the Piedmont operation after the merger.

AAndrew


User currently offlineJc2354 From United States of America, joined May 2004, 569 posts, RR: 0
Reply 17, posted (9 years 10 months 3 weeks 3 days 22 hours ago) and read 4339 times:

I've always said that this airline was the result of "the wrong airline buying the right airline."

If Piedmont had purchased, merged, and managed US Air, It would now be a spectacular and formidable competitor.

Regards,
Jack



If not now, then when?
User currently offlineB727 From United States of America, joined Oct 1999, 521 posts, RR: 2
Reply 18, posted (9 years 10 months 3 weeks 3 days 21 hours ago) and read 4285 times:

JC2354,

I agree wit you 100% Peidmont was by far a better airline.
As far as 9/11 yes it did hurt the airlines, but they were in trouble way before 9/11. The airlines are using this to their advantage for more fecral grants/loans etc... I don't want anyone to lose their jobs, but the industry in the US would be far better wuth fewer airlines fighting it out for passengers.


B727
Glenn


User currently offlineDCA-ROCguy From United States of America, joined Apr 2000, 4487 posts, RR: 33
Reply 19, posted (9 years 10 months 3 weeks 3 days 20 hours ago) and read 4271 times:

I think one of the points that gets overlooked frequently is the cost structure of "legacy" carriers over LCCs. You can talk about pay and benefits, but that can change with new contracts and concessions...The issue facing legacies for the most part is the tremendous load of pension obligations that companies like jetBlue and Frontier have yet to see.

This view is incorrect. The major problems with the network carriers are their inefficient work agreements (which is the real pay issue), inefficient uses of their (otherwise quite sound) hubs, and complex fleets. NWASkyteam's argument is simply another variation on the standard, false "LCC's are just like us but younger, wait til they're older" argument. I'd like to have a nickel for every time I've heard a network-carrier employee make it at this forum.

The LCC business model and cost structure is fundamentally different. Southwest has been around for 33 years, so they know all about old a/c, maintenance, pension issues, etc. AirTran and JetBlue have shown themselves to have crack management teams, who win respect that Wall Street woudn't give, if these carriers did not have sound business plans.

Jim


User currently offlineFlyPNS1 From United States of America, joined Nov 1999, 6572 posts, RR: 24
Reply 20, posted (9 years 10 months 3 weeks 3 days 19 hours ago) and read 4219 times:

Southwest has been around for 33 years, so they know all about old a/c, maintenance, pension issues, etc.

While some of what you are saying is correct, you discredit yourself with statements like this since WN does NOT offer a pension plan.

Imagine if WN had to make a pension contribution this year of $200 million dollars plus pay retiree medical benefits for 10,000+ retirees. How profitable do you think WN would be right now??

You are correct that much of WN's success comes from efficiency. But there are limits to efficiency, you can only push people so hard and turn planes so fast.

Believe it or not, it takes a good 40 years to feel the full effect of having a mature employee group. WN is just now approaching that number and right on cue, WN's labor costs are starting to pinch. WN is fortunate that they don't have to worry about funding a pension plan.





User currently offlineDCA-ROCguy From United States of America, joined Apr 2000, 4487 posts, RR: 33
Reply 21, posted (9 years 10 months 3 weeks 3 days 17 hours ago) and read 4169 times:

While some of what you are saying is correct, you discredit yourself with statements like this since WN does NOT offer a pension plan.

Sorry, nice try....a mistake once in awhile doesn't "discredit" one. But thanks for the correction, we always need accurate information. Back to the corporate reports and financial pages for me.

Sure, WN's labor costs are "starting to pinch." But WN would need to reach a 10 or 10.5-cent CASM, for it to be credible to say that WN is really not all that different from network carriers. And if they had to make a $200 million pension plan, well, they'd still be doing a heck of a lot better than the network carriers.

Jim




User currently offlineDCA-ROCguy From United States of America, joined Apr 2000, 4487 posts, RR: 33
Reply 22, posted (9 years 10 months 3 weeks 3 days 17 hours ago) and read 4170 times:

That is, $200 million pension plan *contribution.* Off to bed.

Jim


User currently offlineIowaman From United States of America, joined May 2004, 4358 posts, RR: 6
Reply 23, posted (9 years 10 months 3 weeks 3 days 17 hours ago) and read 4160 times:
AIRLINERS.NET CREW
FORUM MODERATOR

US Air In Trouble... When?

They are already in trouble. They will be in big trouble when:

1. WN starts service into PIT and CLT.
2. When they file for Chapter 7.



Next flights: WN DSM-LAS-PHX, US PHX-SJD. Return: US SJD-PHX, WN PHX-MDW-DSM
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