|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
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
route planners are also looking for routes to CDG
and DBX next now that they have their NRT
(I'm not a subscriber, so I can't get the whole article)
So maybe UA
(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
flight. Also, AC
is dropping after many years its YUL
nonstop..... this is an easy one for UA
to pick up.
It seems that both F9
are going to be realizing some savings as a result of this UA
lease extension. When DEN
some $22M for the DEN
route some couple years back..... F9
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.
[Edited 2014-08-20 12:30:45]