CO767FA
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Forbes Take On The UA Exit

Fri Feb 03, 2006 12:29 pm

Click here to read the entire article

I found this quote to be very interesting:

Quote:
United’s predicament is even a little more complicated. Tilton slashed jobs and dumped planes. Even so, United has way too much infrastructure (gates, hangers, ground-support equipment) as it exits bankruptcy.

Adjusting for stage length or miles flown, United’s unit costs are 50% higher than low-cost carriers and 10% above other bankrupt legacy airlines, writes Goldman Sachs analyst Glenn Engel in a recent report. “Labor can no longer be blamed for United’s cost disadvantage,” says Engel.

Those 50%/10% unit costs are enough to question UA's plan.
 
MX757
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RE: Forbes Take On The UA Exit

Fri Feb 03, 2006 3:49 pm

Quote:
Wall Street wags are already speculating that Tilton will merge UAL with the first partner that comes along with a wad of cash. That could explain why management took 8%, or 10 million, of the new UAL shares that begin trading Thursday.

I got a baaaad feeling who that might be.  headache 
Is it broke...? Yeah I'll fix it.
 
TWA902fly
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RE: Forbes Take On The UA Exit

Fri Feb 03, 2006 4:08 pm

Quoting MX757 (Reply 1):
I got a baaaad feeling who that might be.

Quick somebody say Continental... I dont want to say it cause ill get yelled at for it lol.

'902
life wasn't worth the balance, or the crumpled paper it was written on
 
centrair
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RE: Forbes Take On The UA Exit

Fri Feb 03, 2006 4:32 pm

ahhhhhhhhhhh..........CONTINENTAL......

There I feel better.

Personally, I want the Foreign Ownership law to be changed and have United bought out by one of their Star Alliance partners.
Yes...I am not a KIX fan. Let's Japanese Aviation!
 
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Stitch
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RE: Forbes Take On The UA Exit

Sat Feb 04, 2006 2:37 am

If UA merges with anyone of their domestic competitors, it will be US (once they are done with HP) since they're both in STAR and have at least vaguely mergeable fleets (Airbus narrowbodies, 757s and 767s) and US needs higher capacity planes, which UA has (777s and 747s). Since US is going A350, and UA has yet to make a decision, this could also inspire UA to choose the A332 and A359 to replace their 763 and 772 fleets.

US also has a semi-decent prescence in Europe, which combined with UA's and the LH codeshares, would give a solid network across The Pond from both ends. And US has no Asian ops, so no worries of anti-trust issues (as would happen with a UA-NW merger or to a lesser extent, UA-CO).
 
luv2fly
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RE: Forbes Take On The UA Exit

Sat Feb 04, 2006 2:55 am

Quoting Stitch (Reply 4):
If UA merges with anyone of their domestic competitors, it will be US (once they are done with HP) since they're both in STAR and have at least vaguely mergeable fleets (Airbus narrowbodies, 757s and 767s) and US needs higher capacity planes, which UA has (777s and 747s). Since US is going A350, and UA has yet to make a decision, this could also inspire UA to choose the A332 and A359 to replace their 763 and 772 fleets.

US also has a semi-decent prescence in Europe, which combined with UA's and the LH codeshares, would give a solid network across The Pond from both ends. And US has no Asian ops, so no worries of anti-trust issues (as would happen with a UA-NW merger or to a lesser extent, UA-CO).

Though pray tell where US is going to get the necessary wad of cash to complete the transaction.
You can cut the irony with a knife
 
Tifoso
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RE: Forbes Take On The UA Exit

Sat Feb 04, 2006 3:00 am

Quoting Centrair (Reply 3):
Personally, I want the Foreign Ownership law to be changed and have United bought out by one of their Star Alliance partners.

The Star partner would of course be Lufthansa, who have expressed an interest in buying UA.
 
ikramerica
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RE: Forbes Take On The UA Exit

Sat Feb 04, 2006 3:01 am

Quoting Luv2fly (Reply 5):
Though pray tell where US is going to get the necessary wad of cash to complete the transaction.

Does that really matter when people are trying to figure out a way to get more A330/350 orders out there? Some people will come up with any scheme on earth to make UA choose the A350, no matter how little sense it makes. (the scheme, not the plane)
Of all the things to worry about... the Wookie has no pants.
 
petmbro
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RE: Forbes Take On The UA Exit

Sat Feb 04, 2006 3:14 am

If the UA/US merger failed the first time, why would it work the second time? US and AW is a good match for now and highly doubt they're looking for another airline to add under US's belt. But if this were to happen, would US go away or would UA leave the friendly skies?
"don't pee on my leg and tell me it's raining!" - Judge Judy
 
LAXintl
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RE: Forbes Take On The UA Exit

Sat Feb 04, 2006 3:18 am

One unique thing about the United Ch11 process was that they company cleverly avoided selling of much of its physical assests and other valuables such as route authorities to gain cash during the process.

Besides the limited aircraft rejections, some reduced and restructured facility leases, and sale of a few LHR slots the carrier exits Ch11 nearly the same physical shape as it entered it.

Even with much of the carrier being pledged as collateral for the exit financing, UA incase of future problems does have significant valuables that could be sold in the same manner Pan Am and TWA managed to buy themselves years of additional life.
From the desert to the sea, to all of Southern California
 
flyinghippo
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RE: Forbes Take On The UA Exit

Sat Feb 04, 2006 3:24 am

Just wondering... why does so many poeple on A.Net think CO is such a good partner to merge with UA?

Route structure, management, and or their fleet type??
 
ord
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RE: Forbes Take On The UA Exit

Sat Feb 04, 2006 3:24 am

Quoting Petmbro (Reply 8):
If the UA/US merger failed the first time, why would it work the second time?

The first merger attempt was before 9/11. The whole industry has changed since then and there seems to be a willingness to allow mergers that did not exist before. That said, I don't think US Airways would seek a merger with United.
 
PanAm747
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RE: Forbes Take On The UA Exit

Sat Feb 04, 2006 3:45 am

Quote:
Just wondering... why does so many poeple on A.Net think CO is such a good partner to merge with UA?

Route structure, management, and or their fleet type??

UA has a large (although not exclusive) Boeing fleet. CO is exclusively Boeing. This would at least be a start for fleet simplification.

UA is strong to Asia, whereas CO is strong to Europe. Together, they remind me of the glory days of Pan Am...

UA and CO could offer a UA/CO combo a hub (1) on the west coast (SFO), (2)a west-central hub (DEN), (3) a strong hub to Latin America (IAH), (4) a large O&D/transfer airport (ORD), and (5) possibly a dual east-coast style hub (EWR & IAD) in the style of LAX and SFO that UA has now. I know CO is making quite a profit on their EWR-Europe flights - what are the O&D numbers for UA on IAD-Europe flights?

I am NOT saying this will work - but compared to DL/NW merger talk (which has NO compatibility in my opinion), this one stands the best chance of actually working.

I don't think a US/UA merger would work at this point - hubs at SFO, LAX, PHX, LAS, & DEN? That's just the western U.S. - something would have to give.
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