StevenUhl777
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UA's LCC To Start In 2004 (Q1?)

Tue Sep 09, 2003 6:28 am

Tilton announced it at a conference in Chicago today, saw it on MSNBC. 40 jets, not named yet. They're working on marketing functions for it now.

Hopefully the United-haters on the website won't slam it until the details are at least known!
And the winner for best actress is....REESE WITHERSPOON for 'Walk the Line'!!!!!!!!
 
StevenUhl777
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RE: UA's LCC To Start In 2004 (Q1?)

Tue Sep 09, 2003 6:33 am

Here's the article...I just cut and pasted it in...

United Airlines' parent UAL Corp.(OB:UALAQ) plans to launch its low-cost airline operation in the first quarter of 2004, said chief executive Glenn Tilton, beginning with 40 airplanes as previously outlined.

The world's No. 2 airline, which filed for bankruptcy in December, 2002, is beginning to work on various marketing tasks including the potential name for the low-cost carrier, said Tilton, speaking after a business conference here.
Delta Air Lines Inc.(NYSE:DAL), the No. 3 U.S. airline, has already started a low-cost unit called Song on the New York-to-Florida market. Executives at Atlanta-based Delta have said the carrier is doing very well but no separate financial details have been released.
Low-cost airlines like Southwest Airlines Inc. (NYSE:LUV) and newer rival JetBlue Airways Corp.(NASDAQ:JBLU) have been taking market share from major network carriers including United, AMR Corp.'s (NYSE:AMR) American Airlines and Delta.
Public details of United's plans to compete in the low-cost market -- code-named Starfish -- have been sparse, other than company statements that it now has in place wage and other cost cuts from unions that will allow the venture to move forward.
Kevin Mitchell of the Business Travel Coalition, which represents corporate travel managers and has criticized United's strategies, said United does not have the luxury of time or the resources to launch a new business.
"Their back is against the wall. They run the risk of brand confusion in the eyes of the customer," Mitchell said.
And the winner for best actress is....REESE WITHERSPOON for 'Walk the Line'!!!!!!!!
 
CRJ'sRule
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RE: UA's LCC To Start In 2004 (Q1?)

Tue Sep 09, 2003 6:51 am

Groan!!!! I hope they know the mess they're getting into. Anyone remember United Express? I wonder if they're capable of walking the walk, and not just talking the talk of low cost airlines.
 
FLY777UAL
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RE: UA's LCC To Start In 2004 (Q1?)

Tue Sep 09, 2003 6:53 am

We all remember United Express...matter of fact, many of us continue to fly United Express today...

I'm assuming you were referring to Shuttle, which started out in I believe '93 and was successful until a year or two before its demise following September 11th. Very capable of walking the walk and talking the talk in that situation.

F L Y 7 7 7 U A L
 
AA717driver
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RE: As Time Goes By: Many 767s Bound For Scrapping

Tue Sep 09, 2003 12:11 pm

A better analogy might be CAL Lite... TC
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United Airline
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RE: UA's LCC To Start In 2004 (Q1?)

Tue Sep 09, 2003 12:43 pm

How big was United Shuttle?

Will this new LCC be run on a shuttle basis? What will it be named?
 
lga1011
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RE: UA's LCC To Start In 2004 (Q1?)

Tue Sep 09, 2003 12:49 pm

With United Airlines current fianacial situation do you think a LCC is the smartest thing for them to start now or wait awhile until they build up more capitol?
 
ual777contrail
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RE: UA's LCC To Start In 2004 (Q1?)

Tue Sep 09, 2003 12:55 pm

UNITED AIRLINES,
The name so far is STARFISH. To answer on LGA1011, Tilton must have a pretty good plan. People on this forum will THINK they have the answers but lets wait and see. Personally I agree with you LGA1011, but only time will tell.


ual 777 contrail
 
jpetekyxmd80
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RE: UA's LCC To Start In 2004 (Q1?)

Tue Sep 09, 2003 12:57 pm

I am not a UA hater and i do fly UA quite a bit. I just think this path is the wrong way to go, and i am extremely skeptical. Maybe this will outclass their current coach operations.......(not including Econ plus)
The Best Care in the Air, 1984-2009
 
StevenUhl777
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RE: UA's LCC To Start In 2004 (Q1?)

Tue Sep 09, 2003 1:28 pm

Everything in the airline industry is short-term focused....

Shuttle by United was the answer in 1994, the last time the airline was on the brink of Ch. 11. At that time, it served a purpose for keeping people flying on United, gave the other LCC's a good run for the money, and it helped feed the mainline and international routes for United. Over time, and other complications, not to mention 9/11, it ran it's course. But, it served its purpose, and UA lived on well past the last crisis.

Sure enough, here we are again and history has repeated itself. Once again, LCC's (some new players this time around) are on their back, and to keep people flying on United and keep the business, they are once again looking at a variation of Shuttle. Lessons were learned from the last time, and I think the 2nd attempt will be more successful than the last. Here's what "Starfish" has to do to be successful, for however long is needed:
- Offer a low competitive fare
- Avoid hubs and related problems
- Quick turn/easy connections
- Reliable service
- Provide tough competition for other LCC's
- Possible force other LCC's to lower fares even further
- Delay/prevent other LCC's from further eroding UA's market share

There's others, but these are the ones that come to mind. Will Starfish be around in 5 years? Maybe. Will it be profitable? Yeah, at first. Will it force other LCC's to change its fares/strategies? Possibly.

Time will tell. I believe in United, and I think their strategy will be a good one and force the industry to take notice. The overall strategy hasn't been unveiled yet, and won't until some more issues in Ch. 11 are resolved. Just because it hasn't been released yet doesn't mean that it doesn't exist or that UA is scrambling to come up with one.

And the winner for best actress is....REESE WITHERSPOON for 'Walk the Line'!!!!!!!!
 
txagkuwait
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RE: UA's LCC To Start In 2004 (Q1?)

Tue Sep 09, 2003 2:33 pm

The previous poster says this about UA's LCC variant:

>>"Here's what "Starfish" has to do to be successful, for however long is needed:
- Offer a low competitive fare
- Avoid hubs and related problems
- Quick turn/easy connections
- Reliable service
- Provide tough competition for other LCC's
- Possible force other LCC's to lower fares even further
- Delay/prevent other LCC's from further eroding UA's market share"<<

Here is my question ---

Why the heck isn't United doing this on their other flights, all the time?

What happens if UA is successful with their LCC and they manage to drive LCCs out of a market/put them out of business entirely? Does UA junk the LCC subsidiary and jack the prices up to unconscionable levels?

OPINION: A LCC subsidiary carrier-within-a-carrier is not the answer. UA (and other so called majors) needs to ____ or get off the pot. It's time to give the consumer what they want.

But the funny thing is now, and I don't understand why people don't see this more readily: The so-called majors are already charging low fares where they have LCC competition. In many cases they are charging less than the LCCs. They are carrying bucketloads of people. The answer is not to throw a starfish, or a jellyfish, or any other aquatically-creature-named subsidiary carrier at the LCC.

They have to become an LCC themselves, head to toe.

The so-called majors do not understand what a LCC is all about.

They think "no frills" and immediately set to cutting all perks, services, and passenger comforts.

The real deal is to retain those things while giving the customer what the customer really wants.

This whole UA deal seems really ill-advised to me. There is enough schizophrenia in the airline industry now without complicating it further.




 
star_member
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RE: UA's LCC To Start In 2004 (Q1?)

Tue Sep 09, 2003 3:16 pm

i think LCC may not mean no frills, it has come to encompass an airline with a low cost structure. by setting up another company, united can get new employees with new contracts which are often less generous and more flexible. this allows united to fly on the less lucrative routes. think australian airlines and qantas. australian airlines now flies to kota kinabalu from sydney - win win for the airline and the travelling public.
 
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Aloha717200
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RE: UA's LCC To Start In 2004 (Q1?)

Tue Sep 09, 2003 5:00 pm

Well, I'll wait for more details to come out before I decide whether it's a bad idea or not. But I think it's a little premature for United to be doing this while they're still in Chapter 11 and still losing quite a bit of money each quarter. If the aim of setting up this carrier is to make UA profitable again, fine, but there's still expense (unnecessary expense perhaps) in setting up a new devision, and of course repainting or slapping a sticker on all the planes in this new fleet, introducing new marketing, etc, etc.

I'm interested when big airlines spin off smaller versions of themselves. Song interested me. I was especially interested when QANTAS re-launched Australian airlines as a separate division. I'll be interested to see what UA comes up with.

In SLC it's like the Shuttle never left as most of the UA flights that arrive daily are still painted in the old Shuttle colours. As far as I'm concerned, we still have the Shuttle in the intermountain west.  Smile/happy/getting dizzy

I do hope they give it a better name than "starfish" though. Ugh...that's one pet peeve of mine, big airlines spinning off interesting new LCC versions of themselves, and the naming it these god-awful names.  Sad
 
JC5280
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RE: UA's LCC To Start In 2004 (Q1?)

Tue Sep 09, 2003 5:23 pm

From what I have heard, it will definitely not be a no-frills airline. Think about it...everything UA does is for the business traveller. I will not be suprised to see laptop connections, email access, DirectTV, Econ +, etc. You can bet that UA's marketshare of the business travellers out there, especially the ones on a budget, will value these amenities much more than a few jokes from a comedian flight attendant on that Texas-based carrier with the orange planes. What will the "original" LCCs (WN) do when all of the "new" LCCs (F9, B6) have great amenities?
 
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aloha73g
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RE: UA's LCC To Start In 2004 (Q1?)

Tue Sep 09, 2003 6:20 pm

It troubles me that posters in this forum are so quick to bash new ideas. Song and "Starfish" aren't completely new ideas, but they are, and will be somewhat different from past forays into this area (United Shuttle, CAL Lite, Delta Express etc.) I think it would me much better if people would focus on the differences between the new airline within airlines and the old ones, rather than just saying that because it failed a few times it will NEVER work.

Imagine if George Washington said, "Well we lost our first 4 battles, we're gonna give up!" That is not what makes America, and all humans so great. What does make humans great is our ability to learn from past experiences and improve upon those ideas to make life better. I've never flown Song, but everyone knows it is different from Delta Express in more ways than it is similar, yet almost everyone here feels that just because its operated by Delta it will 'fail' like Delta Express did. Instead of being so sure of what WILL happen why don't we wait a few years and see where Song and 'Starfish' are.....I don't know and no one else does either.

I'm not saying that people shouldn't make predictions based on their experiences or known facts, I am saying that the logic in most of the predictions for failure is flawed and over-simplified. It seems peoples obsession with jetBlue makes them WANT Song to fail. I take the same outlook for both--wait and see. Both are charting uncharted territory and they both will probably completely defy the predictions of most people on this board in more ways than one.

Aloha!
Aloha Airlines - The Spirit Moves Us. Gone but NEVER Forgotten. Aloha, A Hui Hou!
 
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Aloha717200
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RE: UA's LCC To Start In 2004 (Q1?)

Tue Sep 09, 2003 8:24 pm

I must be living in a hole. I thought Delta Express was still around.  Confused

 
potomac
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RE: UA's LCC To Start In 2004 (Q1?)

Tue Sep 09, 2003 8:50 pm

the logical strategy presented over and over is for UA and other majors is to try to be like LCCs as much as possible. however, as has been discussed before, the operating models and cost structures of the majors do not allow that type of transition to be practical or possible.

i think for UA to do it right, it will push 4 'products' to gain/maintain market share and remain competitive: international, mainline, express/regional, and LCC. the LCC would compete with other LCCs and target that passenger base, while the other three would support eachother and serve the market needs that they have been supporting to date. to consolidate those into one product would eliminate any market differentiators and the ability for UA to target specific customer needs, and prevent UA from capitalizing on its stengths.

a lot of things have to line up for this to work, but i think this strategy has the most potential for success.

 
UA744Flagship
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RE: UA's LCC To Start In 2004 (Q1?)

Wed Sep 10, 2003 12:31 am

Potomac, that is precisely the strategy United will be taking.

However, in order to be different than the pre-bankruptcy business strategy, it will have to:
  • Treat each "product" as individual entities
  • Do not have one subsidize another -- treat revenue on a "product-segment basis"
    ====> Example: A revenue passenger flying from SMF-SFO-LAX-SYD
    =========> SMF-SFO portion of ticket revenue accounted with "express"
    =========> SFO-LAX portion accounted with either Mainline or LCC
    =========> LAX-SYD accounted with International
  • This will force managers to look at profitability on a "division" basis

    This multi-tier strategy will enable United to be more profitable and focus on more relevant strategies within its market segments, as if operating three different airlines, while enabling the airline to have the operational efficiency (repositioning flights, increased utilization of mainline jets through redeyes, etc.) of one (save for Express).
  • no wire hangers!
     
    jmets18
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    RE: UA's LCC To Start In 2004 (Q1?)

    Wed Sep 10, 2003 12:41 am

    A quote from Jc5280....."I will not be suprised to see laptop connections, email access, DirectTV, Econ +, etc".

    I don't see how UA could achieve any of this with the 737-300's and 500's they are planning on using for this venture.
     
    AA717driver
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    RE: As Time Goes By: Many 767s Bound For Scrapping

    Wed Sep 10, 2003 12:59 am

    UA744Flagship--You pointed out the exact problem I see with the "airline within an airline" concept.

    DAL is working to avoid the pitfall of "passenger expectations" by using a totally different(and unidendifiable) livery for Song. When someone buys a ticket from SMF to SYD on UAL, they expect to fly on UAL. (Sure, they recognize a RJ and understand the regional concept) When they climb on a UAL 737--even if it says starfish or whatever on the side, they expect to fly on a UAL 737. They don't expect to be on "someone else's" airplane.

    I think the low cost section should be completely separate from mainline.TC
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    JC5280
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    RE: UA's LCC To Start In 2004 (Q1?)

    Sat Sep 20, 2003 1:37 pm

    Jmets18.....

    Ummm, where the hell did you get the 737 idea?

    The plan has been for A320s for several months now, never 737s....TRUST ME on that one.

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