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STT757
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UA Renews DEN Lease, Saves $35 Million

Tue Aug 19, 2014 10:37 pm

UA has signed a lease extension through 2035 at DEN, the new lease will allow UA to save up to $35 Million per year. Is this another agreement or is this the same one from about two years ago that they signed with DEN to save $20 Million? If this is another deal, and they've realized $55 million in savings per year at DEN then good for UA. That's a heck of a deal.

Quote:
Denver International Airport and United Airlines have reached an agreement to extend the airline’s lease through 2035, alleviating worries about one of the airport’s biggest operators.

Officials said the agreement allows DIA to restructure its debt and United to reduce non-gate facilities that it operates at the airport.

DIA officials said the agreement is expected to save airlines serving Denver about $45 million a year through the airport’s debt restructuring. United is expected to save $35 million a year.
http://www.bizjournals.com/denver/bl...NYSO%2FPp6HvasW0hUjit&t=1408469873

Some more reporting here:

http://www.denverpost.com/business/c...ia-reach-deal-extend-30-year-lease
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STT757
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RE: UA Renews DEN Lease, Saves $35 Million

Tue Aug 19, 2014 10:41 pm

Here's the deal from 2012 I mentioned, is this the same deal?

http://www.denverpost.com/ci_2053542...rt-united-airlines-reach-deal-debt
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Rdh3e
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RE: UA Renews DEN Lease, Saves $35 Million

Tue Aug 19, 2014 11:23 pm

Quoting STT757 (Reply 1):
Here's the deal from 2012 I mentioned, is this the same deal?

From what I've gathered it consolidates about 2-3 agreements that UA and DEN had together into one new long term lease agreement.
 
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RE: UA Renews DEN Lease, Saves $35 Million

Tue Aug 19, 2014 11:37 pm

Quoting RDH3E (Reply 2):
From what I've gathered it consolidates about 2-3 agreements that UA and DEN had together into one new long term lease agreement.



So that previous agreement , $20 Million per year in savings, had some other incentives added which boosts it to $35 Million per year? Awesome deal for UA.

The MWAA should be working to Provide similar relief for UA at IAD to deal with the disparity in costs between IAD and DCA.
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N104UA
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RE: UA Renews DEN Lease, Saves $35 Million

Wed Aug 20, 2014 12:44 am

The BizJournal article says that UA will give up 140,000sq ft of non-gate space, does anyone know where this will come from, Old CO Hanger? UA cargo building on the south side of the field.

Just throwing this out here, but do you think UA might bring more intl traffic from Denver as they are committing to 9.1% of overall traffic (although with BA to LHR, LH to FRA, and UA already having NRT it is hard to think if another destination unless if they want to compete with BA to LHR). Although I don't think UA needs to increase the amount of flights to hit it.
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RE: UA Renews DEN Lease, Saves $35 Million

Wed Aug 20, 2014 12:49 am

Quoting N104UA (Reply 4):

Don't forget they recently announced daily DEN-PTY

'902
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RE: UA Renews DEN Lease, Saves $35 Million

Wed Aug 20, 2014 12:59 am

Quoting N104UA (Reply 4):
Just throwing this out here, but do you think UA might bring more intl traffic from Denver as they are committing to 9.1% of overall traffic (although with BA to LHR, LH to FRA, and UA already having NRT it is hard to think if another destination unless if they want to compete with BA to LHR). Although I don't think UA needs to increase the amount of flights to hit it.

Don't forget FI to KEF. Anyway, UA has tried both LHR and FRA, and they've both failed. A second FRA may be successful if LH/UA chose to fly their respective flights on smaller equipment, since a flight on top of the daily 744 seems to be a bit too much.
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n7371f
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RE: UA Renews DEN Lease, Saves $35 Million

Wed Aug 20, 2014 1:30 am

Quoting N104UA (Reply 4):
The BizJournal article says that UA will give up 140,000sq ft of non-gate space, does anyone know where this will come from, Old CO Hanger? UA cargo building on the south side of the field.


It's space on Concourse B - storage, ground level, etc...

[Edited 2014-08-19 18:31:20]
 
Dallas
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RE: UA Renews DEN Lease, Saves $35 Million

Wed Aug 20, 2014 3:26 pm

I read the article and I'm not a finance guy, but how exactly does UA save $35 million a year at a single airport by extending a lease to 2035? Are they really giving up that much space? It's just hard to fathom by extending a lease and restructuring current debt, that UA can save that amount of money annually, as well as an additional $10 or $45 M (not sure if UA's $35 M was included in the $45 M or not) annually for other airlines serving DEN.
 
airplan727
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RE: UA Renews DEN Lease, Saves $35 Million

Wed Aug 20, 2014 5:33 pm

What is the percentage of traffic miles is United there now? I would feel like they are already doing that much or pretty close.
 
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RE: UA Renews DEN Lease, Saves $35 Million

Wed Aug 20, 2014 6:20 pm

Quoting OA412 (Reply 6):

When did UA fly DEN- FRA? I still think LHR could work with a 763 instead of the 777's of last time. Last time I flew FRA to DEN through ORD, the flight # continued onto DEN. I didn't take that flight so I wouldn't get short changed on the miles for the "direct" flight, but both flight's bags arrived together, and there were many people connecting on from FRA to DEN, though I agree it seems redundant with their partner LH flight.
 
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RE: UA Renews DEN Lease, Saves $35 Million

Wed Aug 20, 2014 6:22 pm

Quoting STT757 (Reply 3):
The MWAA should be working to Provide similar relief for UA at IAD to deal with the disparity in costs between IAD and DCA.

Why should the MWAA do that?
 
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RE: UA Renews DEN Lease, Saves $35 Million

Wed Aug 20, 2014 6:30 pm

Quoting cosyr (Reply 10):
When did UA fly DEN- FRA?

In 2001, UA metal was announced to be flown June 1 through October 26 with a 777, in conjunction with LH's new year-round nonstop on an A340 which began March 25, 2001.
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Rdh3e
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RE: UA Renews DEN Lease, Saves $35 Million

Wed Aug 20, 2014 6:31 pm

Quoting LDVAviation (Reply 11):
Why should the MWAA do that?

Because they are at risk of getting the CLE treatment? Why should it be cheaper to operate at DCA than IAD?

If you have 2 products, one that is in demand and limited, and the other that no one wants and is unlimited, which should be priced higher? The one that is of limited quantity and high demand should be priced higher. Yet MWAA has DCA costs lower than IAD.

This is basic economics and MWAA can't figure it out. I understand they have some sort of constitution or charter document that prevents them from doing it right now. But their choice is to either change that, or risk being in a major hole if their #1 carrier at IAD decides to stop footing the bill.
 
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RE: UA Renews DEN Lease, Saves $35 Million

Wed Aug 20, 2014 7:20 pm

Quoting RDH3E (Reply 2):
From what I've gathered it consolidates about 2-3 agreements that UA and DEN had together into one new long term lease agreement.
Quoting Dallas (Reply 8):
I read the article and I'm not a finance guy, but how exactly does UA save $35 million a year at a single airport by extending a lease to 2035?

I'm barely a financial guy (having taken some basic courses ages ago) and reading all of the articles does seem quite confusing. However, what I think is important here is that the expensive big-daddy 30-year bond that financed the airport will be paid off in 2025 - at which point it is estimated that CPE (Cost per Enplaned Passenger) will drop drastically at DEN from some current $14 to about $5 (IIRC). And at that point, DEN will become one of the least expensive airports in the U.S. for carriers at which to operate. Since UA has its deal from 1995 to 2025.... well, UA wouldn't get to realize any of the benefits of the expired 30 year bond, or the much less expensive DEN operating costs. So by extending its lease now for another 10 years..... I would imagine that the financial folks of both UA and DEN realized the gain that UA will get if it sticks around DEN. Hence... with some space returned and lease extended, the number of $35M in savings somehow is the result.

At least the above is the way I see this situation, despite my very limited financial knowledge.

Quoting N104UA (Reply 4):
Just throwing this out here, but do you think UA might bring more intl traffic from Denver as they are committing to 9.1% of overall traffic (although with BA to LHR, LH to FRA, and UA already having NRT it is hard to think if another destination unless if they want to compete with BA to LHR). Although I don't think UA needs to increase the amount of flights to hit it.
Quoting N104UA (Reply 4):
Don't forget they recently announced daily DEN-PTY
DEN route planners are also looking for routes to CDG and DBX next now that they have their NRT and PTY routes.

http://www.bizjournals.com/denver/pr...nal-airport-has-eyes-on-dubai.html
(I'm not a subscriber, so I can't get the whole article)

So maybe UA to LRH (which could easily compete with BA and generate O&D traffic) and to CDG would have some possibilities? DXB.... well, I think DEN will have to wait for EK to get either some 787s or A350s to get into the ME3 bandwagon.......... I don't think UA will do that one. There also could be ICN with *A partner OZ, but if started too soon, that could cannibalize the UA DEN-NRT flight. Also, AC is dropping after many years its YUL-DEN nonstop..... this is an easy one for UA to pick up.

It seems that both F9 and WN are going to be realizing some savings as a result of this UA lease extension. When DEN gave UA some $22M for the DEN-NRT route some couple years back..... F9 and WN were to firsts to sound off about this...... and obviously things easily were settled, since the threat of lawsuits, etc, never materialized. This time DEN officials were smart to include both before the fact of the lease extension.

At any rate, with the paying-off of the 30-year airport finance bond in 2025, supposedly a paradigm shift will happen in terms of operational costs at DEN...... and these operational costs will fall drastically.

Just my    here.

 

[Edited 2014-08-20 12:30:45]
 
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RE: UA Renews DEN Lease, Saves $35 Million

Wed Aug 20, 2014 8:51 pm

Quoting point2point (Reply 14):

I'm barely a financial guy (having taken some basic courses ages ago) and reading all of the articles does seem quite confusing. However, what I think is important here is that the expensive big-daddy 30-year bond that financed the airport will be paid off in 2025 - at which point it is estimated that CPE (Cost per Enplaned Passenger) will drop drastically at DEN from some current $14 to about $5 (IIRC). And at that point, DEN will become one of the least expensive airports in the U.S. for carriers at which to operate. Since UA has its deal from 1995 to 2025.... well, UA wouldn't get to realize any of the benefits of the expired 30 year bond, or the much less expensive DEN operating costs. So by extending its lease now for another 10 years..... I would imagine that the financial folks of both UA and DEN realized the gain that UA will get if it sticks around DEN. Hence... with some space returned and lease extended, the number of $35M in savings somehow is the result.

It looks like DEN is about to restructure a chunk of that debt to take advantage of the low interest rates. Basically, they will add about 20 million dollars of interest over the lifetime of the loan, but extend the debt over an additional ten years at a significantly lower interest rate. This will result in a immediate drop of $45 million dolars a year in debt servicing, and lock in the low interest rates. From a estimated present value perspective this makes a hell of a lot of sense. I am waiting for documents to show up on the City of Denver page that describe this in more detail. This also makes it a slower glide from $14 to $5 in terms of cost per passenger.

There are two catches here - the first is that the financing would almost certainly have to be tied to long term leases. The WN lease is fairly new, and not risky, while the F9 one has consistently shrunk. United leaving would almost certainly mean that the airport could not meet their obligations for this debt. Hence the agreement with UA to re-up now. I also imagine that there will be some colorful anti-bankruptcy law conditions in the re-up.

The second is that Denver is in the middle of a lot of capital construction. They have a significant expansion of C concourse for southwest underway, talks about restoring the main terminal to it's original glory by moving the security areas out of the main hall, and a new hotel and train station built, they are spending a lot of money. To make sure that maintenance doesn't suffer, they may need to shift more capital to maintenance. There's been a bit of controversy between some factions in Denver because of this.
 
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RE: UA Renews DEN Lease, Saves $35 Million

Wed Aug 20, 2014 9:01 pm

It's $35 million per year for UA:

• United will quit paying an annual penalty to DIA if it doesn't hit an annual target of 6.5 million connecting passengers a year, a target the airline has missed by about 1.5 million passengers for the last few years. Eliminating the penalty will save United about $9 million a year.

The airport will restructure some of its debt before the end of the year, with the goal to defer payments on about $275 million in principal by about six years. That will lower the cost of debt service by about $25 million a year in the short term, befitting all airlines operating at DIA, but raise the overall cost of interest payments on the debt by about $20 million.

The airport will take back up to about 140,000 square feet that United is paying rent on, but not using — reducing the company's operations costs at DIA. Airport officials said they don't have any immediate plans for the square footage, which is spread throughout the airport.

• The airport will extend the time frame in which is pays off projects, such as runways, that have a longer useful life than 15 years. That change also is expected to cut all the airlines costs to operate at DIA.

If United meets the seat-miles goal, its responsibility for reimbursing the airport for the failed baggage-handling system on Concourse B also will be forgiven, Ackerman said.
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capitalflyer
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RE: UA Renews DEN Lease, Saves $35 Million

Wed Aug 20, 2014 9:04 pm

Quoting RDH3E (Reply 13):
Why should it be cheaper to operate at DCA than IAD?

One word, debt. They have several billion in bonds they are servicing at the moment from projects including Metro expansion, Aerotrain, maybe even a bit left from Concourse B expansion.

This is all IAD specific debt, doesn't benefit DCA at all. Hence higher fees at IAD.

Once they get this paid down, I anticipate a huge deal with UA to lower costs, provide funds for new concourse, gold plate jets for execs, etc.
 
ScottB
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RE: UA Renews DEN Lease, Saves $35 Million

Wed Aug 20, 2014 9:14 pm

Quoting STT757 (Thread starter):
UA has signed a lease extension through 2035 at DEN, the new lease will allow UA to save up to $35 Million per year. Is this another agreement or is this the same one from about two years ago that they signed with DEN to save $20 Million? If this is another deal, and they've realized $55 million in savings per year at DEN then good for UA. That's a heck of a deal.

At the risk of being branded a "naysayer," this deal seems like a rather lukewarm commitment to the DEN hub. UA gets out of one penalty they've been paying for falling short on connecting passenger numbers and commits to a different penalty tied to a new, lower baseline and capped at a smaller dollar amount than what they will save annually by giving back space and extending the lease. Moreover, long-term terminal leases didn't keep UA from shuttering the CLE hub earlier this year.

Quoting point2point (Reply 14):
However, what I think is important here is that the expensive big-daddy 30-year bond that financed the airport will be paid off in 2025 - at which point it is estimated that CPE (Cost per Enplaned Passenger) will drop drastically at DEN from some current $14 to about $5 (IIRC). And at that point, DEN will become one of the least expensive airports in the U.S. for carriers at which to operate.

What's happening here is that the airport will refinance some or all of the bonds due through 2025 to extend debt repayment through 2035. They'll probably be able to achieve lower rates on the bonded indebtedness thanks to the current historically low rates, but the bonds also won't be paid-off until 2035, which means that airport tenants will still be indirectly paying off the bonds for an extra ten years.

DEN would likely have had more difficulty refinancing the debt without a signed lease extension in hand from its largest tenant, as the bondholders want some sort of surety that the airport will have the cash flow needed to repay the bonds.

Quoting RDH3E (Reply 13):
If you have 2 products, one that is in demand and limited, and the other that no one wants and is unlimited, which should be priced higher? The one that is of limited quantity and high demand should be priced higher. Yet MWAA has DCA costs lower than IAD.

Maybe if you are selling a product which no one wants, you should simply take that product off the market. But in the end, MWAA is restricted by federal law from using one airport to subsidize the other.

Quoting RDH3E (Reply 13):
But their choice is to either change that, or risk being in a major hole if their #1 carrier at IAD decides to stop footing the bill.

In the end, the ones holding the bag if UA were to abandon the IAD hub would be the other airport tenants, not MWAA. MWAA would just have to raise rates and fees to the level needed to sustain the airport.
 
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RE: UA Renews DEN Lease, Saves $35 Million

Wed Aug 20, 2014 10:29 pm

United was so committed to DIA they took on $100m in debt to keep DIA afloat when they couldn't get the original computerized baggage system to work.
We Already had a working bag system but Denver didn't want to go along with it because Federico Pena didn't want to have it be United's bag system.
At the time ANY bag system was better than what they HAD!! So We've got a LOT of interest in seeing DIA prosper and Us along with the Airport.
They hung in with us while we went through CH-11 and now it's time to show our commitment to them. This is a good deal
 
toxtethogrady
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RE: UA Renews DEN Lease, Saves $35 Million

Wed Aug 20, 2014 10:32 pm

$35 million's a nice nut, but Delta saved $150 million from having access to Trainor. Unless UAL can get their fuel costs down, they will forever being taking cheese off the pizza.
 
mcg
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RE: UA Renews DEN Lease, Saves $35 Million

Wed Aug 20, 2014 10:43 pm

Quoting toxtethogrady (Reply 20):
but Delta saved $150 million from having access to Trainor.

Can you provide a source for this? All of the data says that Delta has lost $100+ million at Trainor.
 
point2point
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RE: UA Renews DEN Lease, Saves $35 Million

Wed Aug 20, 2014 11:03 pm

Quoting AirFRNT (Reply 15):
It looks like DEN is about to restructure a chunk of that debt to take advantage of the low interest rates. Basically, they will add about 20 million dollars of interest over the lifetime of the loan, but extend the debt over an additional ten years at a significantly lower interest rate. This will result in a immediate drop of $45 million dolars a year in debt servicing, and lock in the low interest rates. From a estimated present value perspective this makes a hell of a lot of sense. I am waiting for documents to show up on the City of Denver page that describe this in more detail. This also makes it a slower glide from $14 to $5 in terms of cost per passenger.
Quoting ScottB (Reply 18):
What's happening here is that the airport will refinance some or all of the bonds due through 2025 to extend debt repayment through 2035. They'll probably be able to achieve lower rates on the bonded indebtedness thanks to the current historically low rates, but the bonds also won't be paid-off until 2035, which means that airport tenants will still be indirectly paying off the bonds for an extra ten years.

Ahhh.... thanks for this.... it seems while speedily readying through all, I misread a bit of this....... gotta remember financial stuff needs to be read 2 or 3 times through, not speed read, eh?

Anyways...... if I can get this correct, it seems that now at least DEN can lower some of its financing costs, and is able to pass it on to the carriers, and of course the carriers that have the biggest stake here are the ones who save the most.

 
 
Rdh3e
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RE: UA Renews DEN Lease, Saves $35 Million

Wed Aug 20, 2014 11:03 pm

Quoting point2point (Reply 14):
At least the above is the way I see this situation, despite my very limited financial knowledge.
Quoting AirFRNT (Reply 15):
This also makes it a slower glide from $14 to $5 in terms of cost per passenger.
Quoting capitalflyer (Reply 17):
One word, debt. They have several billion in bonds they are servicing at the moment from projects including Metro expansion, Aerotrain, maybe even a bit left from Concourse B expansion.
This is all IAD specific debt, doesn't benefit DCA at all. Hence higher fees at IAD.
Once they get this paid down, I anticipate a huge deal with UA to lower costs, provide funds for new concourse, gold plate jets for execs, etc.
Quoting ScottB (Reply 18):
Maybe if you are selling a product which no one wants, you should simply take that product off the market. But in the end, MWAA is restricted by federal law from using one airport to subsidize the other.

Yes, and that's what I was alluding to as being the problem. If MWAA were a privately owned entity this complete idiocy would have ceased years ago.

Every company pays debt from sources other than which the debt originates. Imagine if the world ran that way, it would be pathetic.

Quoting ScottB (Reply 18):
In the end, the ones holding the bag if UA were to abandon the IAD hub would be the other airport tenants, not MWAA. MWAA would just have to raise rates and fees to the level needed to sustain the airport.

Ever heard of a vicious cycle? The more debt they stack on the remaining parties the faster those folks will also pack up and leave.
 
toxtethogrady
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RE: UA Renews DEN Lease, Saves $35 Million

Wed Aug 20, 2014 11:30 pm

Quoting mcg (Reply 21):
Can you provide a source for this?

There was a reference on one of the earlier threads to DL saving 15 cents a gallon on fuel thanks to the refinery. This article claims it was only 11 cents a gallon in the most recent quarter.

http://wabe.org/post/deltas-atl-hub-helps-boost-strong-profits

This article from last December estimates the savings at $300 million a year.

http://www.cnbc.com/id/101253932#.

The refinery itself loses money, but it cuts Delta's fuel expense. And the advantage will increase once Trainer starts getting its crude from the Bakken shale.
 
mcg
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RE: UA Renews DEN Lease, Saves $35 Million

Thu Aug 21, 2014 1:26 pm

Quoting toxtethogrady (Reply 24):
This article claims it was only 11 cents a gallon in the most recent quarter.

Thanks for the info. To claim that operation of the Trainer facility cuts 11 cents from each gallon of fuel purchased anywhere in the world is absurd. Trainer might have a small impact in New York, but nowhere else.
 
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STT757
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RE: UA Renews DEN Lease, Saves $35 Million

Thu Aug 21, 2014 1:32 pm

Quoting mcg (Reply 25):
Thanks for the info. To claim that operation of the Trainer facility cuts 11 cents from each gallon of fuel purchased anywhere in the world is absurd. Trainer might have a small impact in New York, but nowhere else.

Also as mentioned in those discusssions the benefits of Trainer are felt by all the carriers, not just DL. So I don't see the comparison, so lets get back to talking about Denver.
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toxtethogrady
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RE: UA Renews DEN Lease, Saves $35 Million

Thu Aug 21, 2014 2:21 pm

Food for thought about a possible missed opportunity. Here's a refinery that was brought out of mothballs to process crude from the Eagle Ford shale into, among other things, jet fuel - at a profit.

http://fuelfix.com/blog/2014/08/21/e...ifts-blue-dolphin-energy-refinery/
 
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ADent
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RE: UA Renews DEN Lease, Saves $35 Million

Thu Aug 21, 2014 3:09 pm

Minimum flight pledge thru 2025:

Quote:
United is pledging to keep 9.1 percent of its total system capacity at DIA through 2025, which is its current operating level.

...

If the carrier falls below that level, it can be penalized up to $20 million a year between 2015 and 2018, $15 million annually between 2019 and 2021, and up to $12 million a year between 2022 and 2025.
 
Rdh3e
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RE: UA Renews DEN Lease, Saves $35 Million

Thu Aug 21, 2014 6:20 pm

Quoting ADent (Reply 28):
Minimum flight pledge thru 2025:

And not sure if it was mentioned, but for clarity since I've seen it elsewhere it's based on ASMs not seats or departures.
 
glbltrvlr
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RE: UA Renews DEN Lease, Saves $35 Million

Thu Aug 21, 2014 9:36 pm

Quoting point2point (Reply 14):
However, what I think is important here is that the expensive big-daddy 30-year bond that financed the airport will be paid off in 2025 - at which point it is estimated that CPE (Cost per Enplaned Passenger) will drop drastically at DEN from some current $14 to about $5 (IIRC).

Not ever going to happen. You can bet your bottom dollar that DEN will come up with all sorts of new projects to spend money on and that per passenger cost will stay right where it's at or climb higher. They're basically pulling the same stunt that people taking on debt consolidation loans to pay off credit cards take. They'll just run up the card again...



[Edited 2014-08-21 15:33:37]
 
ScottB
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RE: UA Renews DEN Lease, Saves $35 Million

Thu Aug 21, 2014 9:51 pm

Quoting RDH3E (Reply 29):
And not sure if it was mentioned, but for clarity since I've seen it elsewhere it's based on ASMs not seats or departures.

Which, IMO, was a dumb move on the part of DEN airport management. I can very easily foresee a scenario in which the LH flight to FRA is replaced by UA under the metal-neutral joint venture. A daily 787-9 (as an example) between DEN & FRA would represent between 0.4% and 0.5% of UA's daily system capacity as represented by ASM's. So UA could cut its flying at DEN quite significantly (5-10% of daily departures) and still meet the capacity commitment.
 
point2point
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RE: UA Renews DEN Lease, Saves $35 Million

Thu Aug 21, 2014 11:22 pm

Quoting glbltrvlr (Reply 30):
Not ever going to happen. You can bet your bottom dollar that DEN will come up with all sorts of new projects to spend money on and that per passenger cost will stay right where it's at or climb higher. They're basically pulling the same stunt that people taking on debt consolidation loans to pay off credit cards take. They'll just run up the card again...

Probably, I'd be foolish to even begin to doubt that..... but..... since DEN does have all of the land that it does, any additions, expansions, new projects, etc, will more than likely cost far less at DEN than it will at other major airports. For example, DEN could probably get a fabulous new 16,000 feet state of the art new runway for maybe about $200M - $300M, while other airports (MIA, ORD, SEA) get a new runway for something approaching $2B...... yes?

But I have to add that since DEN airport management some couple of years ago (I think it was in one of the State of the Airport speeches maybe a year or two or three back) made such hoopla about the fact that once the master bond is paid off - that DEN will be one of the least expensive airports in terms of CPE....... so I would think that possibly there will be some cost reduction so that those who spoke this won't end up with eggs on their faces over this.... and they'll run up the CPE to some $18, and then drop it to some $11, and all of the DEN airport managers and others involved can go running off patting themselves on the back for a wonderful job done, eh?

Quoting N104UA (Reply 4):
The BizJournal article says that UA will give up 140,000sq ft of non-gate space, does anyone know where this will come from, Old CO Hanger? UA cargo building on the south side of the field.

UA seemed intent on keeping Concourse B an all *A concourse for the longest time..... would anyone think they would want to give up any gates there that would go to non*A carriers?

Quoting ScottB (Reply 31):

Quoting RDH3E (Reply 29):
And not sure if it was mentioned, but for clarity since I've seen it elsewhere it's based on ASMs not seats or departures.

Which, IMO, was a dumb move on the part of DEN airport management. I can very easily foresee a scenario in which the LH flight to FRA is replaced by UA under the metal-neutral joint venture. A daily 787-9 (as an example) between DEN & FRA would represent between 0.4% and 0.5% of UA's daily system capacity as represented by ASM's. So UA could cut its flying at DEN quite significantly (5-10% of daily departures) and still meet the capacity commitment.

Hmmmmmm...... UA is going to become the long-haul carrier at DEN?

Anyways...... time for some more popcorn........

 
 
slcdeltarumd11
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RE: UA Renews DEN Lease, Saves $35 Million

Fri Aug 22, 2014 12:14 am

seems like a realy good deal for united to take IMHO. It takes along time to take down a full hub anyway and i don't think anyone sees that happening at DEN with United. I think they'd be crazy not to sign this lease. It doesn't really hold them into keeping the DEN hub that much anyway 20 years is nothing.

Sounds more like a lease the airport did to make banks happy or the city politicians happy but doesn't really hold united to that much in the big picture. Almost seems like too good of a deal for United.

I would be much more interested on Frontiers DEN lease and when they resign. Frontier is starting to develop routes outside of DEN and they have way too many gates for a ULCC. Not very efficient
 
N1120A
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RE: UA Renews DEN Lease, Saves $35 Million

Fri Aug 22, 2014 12:49 am

Quoting STT757 (Reply 3):

The MWAA should be working to Provide similar relief for UA at IAD to deal with the disparity in costs between IAD and DCA.

Or, perhaps United can finally build their new terminal.

Quoting RDH3E (Reply 13):

Because they are at risk of getting the CLE treatment?

Yeah right. Completely different markets.

Quoting point2point (Reply 32):

UA seemed intent on keeping Concourse B an all *A concourse for the longest time..... would anyone think they would want to give up any gates there that would go to non*A carriers?

As I understand it, this is not gate and other specific operational space. Its space United is currently leasing but not using.
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point2point
Posts: 2093
Joined: Fri Mar 19, 2010 10:54 pm

RE: UA Renews DEN Lease, Saves $35 Million

Fri Aug 22, 2014 2:49 am

Quoting N1120A (Reply 34):
As I understand it, this is not gate and other specific operational space. Its space United is currently leasing but not using.

Thank you.......

 
 
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STT757
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RE: UA Renews DEN Lease, Saves $35 Million

Fri Aug 22, 2014 10:55 am

Quoting N1120A (Reply 34):
Or, perhaps United can finally build their new terminal.

I don't think spending $2+ Billion on a new concourse will do anything but worsen the cost per enplanement problem at the airport.
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