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RE: WN To Add PHL

Posted: Thu Oct 30, 2003 2:51 pm
by DCA-ROCguy
As for WN being "chased" out When your the big carrier in a city like SFO UA cold take the delays on UA Shuttle. Your right to say that WN left becasue of ATC but are we sure that the ATC problem wasn't exacerbated by UA choking the taxiways and runways in SFO and DEN to cause those problems for WN? Intentionally or not it works.

My own impression is that at SFO, it wasn't delibrate. There was an article in Aviation Week sometime in 2000 chronicling a fight that United was then having with the City of San Francisco over UA schedules at SFO. United's high-frequency flights to other CA cities, in the City's view, were snarling the airport unnecessarily. So the City was threatening regulation to reduce UA's frequencies. The City cited UA's then eight-daily Skywest EMB-120's to SMF as an example of unnecessary congestion--they argued that UA should fly, say, five CRJ's instead.

UA threatened to sue, saying the gov't didn't have authority to "interfere with its business plan." UA said that high frequencies on small aircraft were necessary to please business travelers. I don't know the outcome of the fight, but don't remember SFO ever having route-frequency restrictions, so apparently UA prevailed.

Thanks for the article STT757...confirms some developments this week. Siegel's eye-popping assertions that network carriers should enter into alliances with LCC's and even link them to their FF programs, shows how desperate he thinks US's situation is. As Neidl said, US's yields haven't improved despite the bankruptcy concessions, and the airline is still vulnerable. Kelleher's brusque dismissal of US's suggestion of alliance and FF linkups shows how confident he is of WN's financial and competitive position.

Potomac....WN won't threaten US's PHL hub right away, it will take time to achieve critical mass. And yes, connections and int'l flights will help US for a while. But when WN starts passing 100 dailies, which will probably happen sooner at PHL than it did at BWI, US is in real trouble--maybe sooner.

Interesting, too that Kelleher is who everyone's going to for comment about this big development--Jim Parker may be CEO, but Kelleher is still the face of WN.

Jim

RE: WN To Add PHL

Posted: Thu Oct 30, 2003 3:15 pm
by USAFHummer
That article makes it seem like if WN puts US out of business than WN will be the dominant carrier at the airport...dont you think another of the majors would step in and try to fill US's shoes??? I just can't imagine PHL being a WN-dominated airport...

Greg

RE: WN To Add PHL

Posted: Thu Oct 30, 2003 10:11 pm
by WNfan
That article makes it seem like if WN puts US out of business than WN will be the dominant carrier at the airport...dont you think another of the majors would step in and try to fill US's shoes??? I just can't imagine PHL being a WN-dominated airport...

Ten years ago, who would have imagined BWI being dominated by WN?

I know the analogy isn't perfect (US has more activity at PHL now than at BWI in 1993), but I think the end results might be the same. We'll know in a few years.

RE: WN To Add PHL

Posted: Fri Oct 31, 2003 12:12 am
by STT757
"Dow Jones Business News
In Southwest Courtship, Lehigh Valley A Bridesmaid Again
Tuesday October 28, 6:54 pm ET
By Dinah Wisenberg Brin, Of DOW JONES NEWSWIRES


PHILADELPHIA (Dow Jones)--After years of trying to attract Southwest Airlines Co. (NYSE:LUV - News) , the Lehigh Valley International Airport in Allentown, Pa., is once again the bridesmaid.
Low-cost carrier Southwest announced plans Tuesday to start service at Philadelphia International Airport next May, with up to 14 flights a day initially. The company plans to announce the routes and fares in December.

"Obviously, we're somewhat disappointed that they did not decide to use our airport," George F. Doughty, executive director of the Lehigh-Northampton Airport Authority, which runs the Allentown facility, told Dow Jones Newswires.

"The industry is obviously very surprised by their choice of Philadelphia, except if you look at it in context of the vulnerability of US Airways right now. But they have to make their own business decisions, and we have to make ours," he said.

The Philadelphia airport is home to a major hub of troubled US Airways Group Inc. (NYSE:U - News) .

The Lehigh Valley airport, currently served by low-cost carrier Southeast Airlines, is trying to attract other discount carriers as well, including JetBlue Airways Corp. (NasdaqNM:JBLU - News) , Spirit Airlines Inc. and Frontier Airlines Inc. (NasdaqNM:FRNT - News) , Doughty said.

Southwest's decision to expand to Philadelphia rather than Allentown may make another low-cost carrier warm to the idea of Lehigh Valley International, as other airlines may have been concerned about entering the market and then having Southwest follow them there, Doughty said.

That may be the silver lining for the Allentown airport, he said, adding, "It may give us a better opportunity with some other carriers."

The roughly 10-gate Lehigh Valley airport, with a target market of 6 million people within a 50-mile radius, still would like to host Southwest should the airline add cities in Pennsylvania in the future, he said.

The airport is about a 45-mile drive from the outskirts of Philadelphia.

-By Dinah Wisenberg Brin, Dow Jones Newswires; 215-656-8285; dinah"

http://biz.yahoo.com/djus/031028/1854001811_1.html

RE: WN To Add PHL

Posted: Fri Oct 31, 2003 12:22 am
by goboeing
I think ABE would be a good place for WN to fly to, although going to both there and PHL would seem like a bad idea. Just sticking to one is enough, especially since they'll want all the pax flying them from PHL as they can get. I don't think they'll have a problem with that; in fact I think they'll be overwhelmed and find themselves selling out every flight every day.

Nick

RE: WN To Add PHL

Posted: Fri Oct 31, 2003 12:22 am
by ORD2PHL
If PHL was to become an airport dominated by WN, the big loosers would be the people of Philadelphia. US has a huge presence at PHL, serving an ever growing number on international destinations. WN would be unable to fill this gaping hole left, and we would left with good ole' Herby saying "Hey, sorry the two daily non-stops to Rome are gone, but we can get you to Love Field, or better yet Birmingham four times a day"

Let's be honest with ourselves and think about what would really happen if US was gone from PHL and we were left with an airport "dominated" by WN.

ORD2PHL

RE: WN To Add PHL

Posted: Fri Oct 31, 2003 12:30 am
by UALPHLCS
Neidl said US Airways Chief Executive Officer David Siegel did a good job obtaining cost-savings concessions during bankruptcy reorganization. "But the revenues aren't coming back as fast as many thought. Siegel has got to get his [costs] down even more or go to a different business model," Neidl said. One option might be for US Airways to become a strong regional airline.

I find it interesting that the analyst from Radnor mentioned that one US opinion was to become a "strong regional carrier." Not to toot my own horn but I've been saying US was preparing to do just that when it allied with UA and Star.

The pieces all seem to fit. UA and US link up as partners. ACA gets worried about its role as East Coast feeder to UA. LH begins codesharing as the begining of US enterance into Star. US has been building up its international service possibly to fetch a better price. US next move would seem to be to sell the International assets to UA, and take a role as the East Coast feeder for UA and the rest of Star. US has to sit on those INternational routes and babysit them while UA regains its stregth to purchase them so for now they are content to codeshare and have the presence that way. UA probably content to have US compete in the North Eat as a "Strong Regional" partner as insulation from direct competition from F6 and WN and to some extent FL in Florida.

If this was planned by UA and US it's very Machievellian. But its seems to me the plan just naturally grew out of the competive playing field in the North East corridor, as the best way for both to get what they want.

[Edited 2003-10-30 16:32:54]

RE: WN To Add PHL

Posted: Fri Oct 31, 2003 12:35 am
by luv2fly
The international routes that US flies are for the most part open sky countries, so really no need to sell them...

RE: WN To Add PHL

Posted: Fri Oct 31, 2003 12:45 am
by STT757
"US next move would seem to be to sell the International assets to UA"

As stated before those US Airways routes are open skies routes, why would anyone pay for what's free? US Airways did not buy them from anyone, they just started the routes.

"If PHL was to become an airport dominated by WN, the big loosers would be the people of Philadelphia"

I strongly disagree, the winners would be Philadelphians. The majority of folks in the Delaware Valley will not travel to Europe very often if ever, however making fares affordable on routes such as PHL-MSY,MCO, TPA, FLL, LAX, MDW etc will be a huge benefit to folks who are paying US Airways twice (sometimes 3xs) as much as Southwest's fares.

Far more people will fly Southwest Domestically than will fly US Airways Internationaly, if there's a International market demand at PHL someone will fill the gap. That could mean another US Major coming in and setting up shop, or it could mean more International airlines.



RE: WN To Add PHL

Posted: Fri Oct 31, 2003 1:26 am
by UALPHLCS
I'm speaking of the hard assetts US has wrapped up in those International routes. The airport leases, planes and the like. For US to beome a regional as the analyst in the article noted they would not need A330's and 767's for example.

UA could probably fly the Caribbean routes with the A320's and 757's on hand. Plus UA has no presence in some of these cities at all buying US's assets dosen't nessasarily mean slots.

RE: WN To Add PHL

Posted: Fri Oct 31, 2003 2:21 am
by STT757
"The airport leases, planes and the like. For US to beome a regional as the analyst in the article noted they would not need A330's and 767's for example."

UAL has planes (777s, 747-400s) parked, if they were to go into PHL and take over US Airway's International routes they would have no need for A330s or the 20 year old 767-200s.

With the decline in Trans-Atlantic travel after 9-11 there's really no problem setting up shop on new routes in Europe, except LHR ofcourse.

Just rambling here a bit but here's a scenario that might work out..

UAL (after emerging from CH-11) gets support from an Investment group like David Bonderman's Texas Pacific Group (who's been sniffing around UAL), they (UAL+Bonderman who was bidding for US Airways against the Alabama folks) then aquire parts of US Airways and intergrate them into UAL.

UAL would aquire (through Texas Pacific) US Airway's Laguardia slots and shuttle, UAL then takes over flying the stronger business routes from PHL where's there's no LCC competition and turns the rest of the PHL flying where there's LCC encroachment to their own LCC. The LCC could be in the form of the UAL "Star Fish", or US Airways itself could be spun off as a Regional LCC.

Charlotte could either be kept by the new UAL/US Airways LCC, or UAL could take over the operation.

Washington National would probably be sold to generate some cash and also to appease regulatory concerns.

International flying from PHL to UAL, UAL also operates PHL domestic flights that have strong business flyer clientel and the rest of the PHL flights are turned over to a LCC in some form (Star Fish, US Airways LCC etc).

Laguardia and Shuttle operation turned over to UAL.

Charlotte either becomes anouther UAL/US Airways LCC operation or goes UAL main line.

PIT either goes or becomes a UAL/US Airways LCC operation.

This would keep UAL and US Airways seperate, as it would be an Investment group (Texas Pacific) buying US Airways. They can then transfer some assets (LGA, Shuttle) to UAL, then spin off US Airways into a Regional LCC.