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Comments On This USA Today Article

Mon Jan 30, 2006 10:34 pm

This is the link to the article. What do you think? Is UA destine to repeat BK? Is their plan flawed? Is it similar to the mistake US Airways made after their stint in BK?

USA Today Article
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RE: Comments On This USA Today Article

Mon Jan 30, 2006 11:01 pm

The writer, who sounds to me like a frequent business traveler, makes some very compelling arguments. The leadership at United needs to think about the long term viability of the company, not their own short term, self interest.
United needs to invest in the future. Buy the 787, damn it! Simplify the fleet structure.
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RE: Comments On This USA Today Article

Mon Jan 30, 2006 11:03 pm

This guy certainly has a hard on for UA...but I will admit that most of what he says is unfortunately, true.
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RE: Comments On This USA Today Article

Tue Jan 31, 2006 1:42 am

In addition to this columnist, it does seem many are pessimistic about UA's chances or their management's taking of the gold (Ben Stein and Micheal Boyd).
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RE: Comments On This USA Today Article

Tue Jan 31, 2006 1:49 am

After reading the article I do have to agree, I think he has made some valid points.
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RE: Comments On This USA Today Article

Tue Jan 31, 2006 4:54 am

While I don't believe his business school BS about "unifying" and "focusing" your product (look at GE ... they've got their hands in dozens of markets and do them all quite profitably and well), his rants are well-written and researched. Pointing out how leveraged the company is (up to and including leveraging the Mileage Plus Program) is particularly revealing.

He also points out well in this and other articles about the myth of "overcapacity". Domestic flights are almost as full today than they have been in any time since the deregulation of the industry. I believe that it is a buzzword that is being circulated to encourage a merger frenzy and the executive bonuses and fees paid to Wall Street that go along with such mergers.

In the end, he correctly points out that the success or failure of UA (and the entire industry) lie on one variable that is out of their hands -- the price of oil.

Good article ... thanks for posting the link.
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RE: Comments On This USA Today Article

Tue Jan 31, 2006 8:55 am

I think this guy is right on the mark.

United is still losing about $1 billion a year. Numbers that exclude fuel are absurd. The fuel has to be paid for and can't be excluded.

I think the plan for United all along has been to get costs down through bankruptcy and then try to merge with a stronger carrier. It's unfortunate there aren't any US carriers (except for Southwest) that are financially capable of absorbing United.

United is a mess. They've screwed their investors, employees and suppliers. I think the day of reckoning is coming soon for them.

Of course if oil goes to $100 per barrel, we're all screwed.
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RE: Comments On This USA Today Article

Tue Jan 31, 2006 9:51 am

I'll be the guy that comes to the defense of UA.

Ok, I'll admit the guy makes many valid points. However, he has ignored certain bits of recent news.

The Wall Street Journal recently had an article about UA's p.s. services. UA has been able to increase revenue on those routes, and according to the WSJ, is thinking of expanding it. UA is also planning a major refresh of interiors of internationally configured aircraft.

UA's route network has not changed much. In fact, UA has added or reinstated many routes, particularly internationally. And UA has battled with AA at ORD for years, so I don't see how anything will be different there now. OK, WN is expanding at MDW and DEN, but some analysts, particularly Michael Boyd, have doubts on how successful WN will be at DEN.

Finally, many of the arguments thrown at UA can be thrown at other legacies. Load factors are high for everyone, so does that mean every airline will have a frequent-flier crisis? Airline employees are in general angry. Are there any working at the legacies that are truly happy?

I'll admit again, the author of the article makes many valid points, particularly about UA's financial situation and the amount of debt it will have. But the author does not compare UA to any other legacy airline that is in a similar or worse situation (DL, NW, etc). He has absolutely nothing positive to say about UA, while many analysts, such as Michael Boyd, see UA as an airline that will be in a very strong position to compete, particularly thanks to its decreased labor costs. The whole column seems like just a great big rant against UA, like something we might see here on . Maybe it was just one bad experience on UA that caused him to write this.

Just to add, seeing how an earlier post stated that Michael Boyd is pessimistic about UA. Michael Boyd has criticized UA heavily for instituting Ted and other things (some management decisions). Howerever, in his column about WN's entrance into DEN, he writes that UA is in a very strong position to put up a fight against WN, and might actually win.

[Edited 2006-01-31 01:57:16]
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