UAL appears to be backing off the center piece of their restructuring, Starfish. Recent statements, and buzz, indicate that United is moving away from the idea of starting a totally new brand.
In fact, recent statements allude to a smaller United. You may remember the alternative to Starfish, called plan B, was to shrink United by closing one or more of it's hubs. Despite the recent announcement to add flights this summer, we quite possibly may see a smaller United in the future.
Forget SARS or Iraq or even terrorist threats, overcapacity is the problem plaguing this industry.
Everybody hoped United would solve this problem by simply going away. This "easy solution" appears less likely. AA
just announced they are doing away with the extra legroom so highly touted only a little while ago. Why are they doing this? It isn't because there are more people wanting to fly AA
than there are seats available, so they need to add more seats to pack 'em in. It is because AA
plans to cut back on the number of planes they will fly and need to squeeze every available seat out of what's left.
United staying in the game means everyone else has to cut back. Funny thing is, no one wants to start first - for fear of losing market share.
Will United survive? Look, it is easy to put on the mantle of a religious zealot and say "We Will Survive" as if it were some kind of profession of faith.
A few months ago things looked bleak. We had the war, high fuel cost, low demand, high operational costs, SARS, dwindling cash reserves, you name it. Now the war is behind us, fuel cost are way down, demand appears to be picking up, operational costs are down, SARS appears under control, and we are able to tap-in to more cash.
The bet is that since we have been able to make it through all we've just been through, we should be able to go all the way. Simply put, United has the same chance of "making it" as AMR, DAL
[Edited 2003-05-23 06:50:38]