UA-CO Merger Rumors Now Surfacing on Wall Street

[TechBoy]

Precisely. But the reality which you and everyone else seem to be unwilling to address is that every UA pension plan has participants that will not receive the same amount of benefits they were promised under the plan as if it had been paid out by UA. It is those people that I'm speaking of and they are very much out there; added together those lost benefits make up the difference between what UA promised and what the PBGC will pay - and the PBGC will pay LESS than what UA promised - IN TOTAL.

IIRC, this discussion was started when YOU suggested that UA's FAs were worse off than DL's because of the pension termination. I and others replied that you were wrong because BELOW THE LIMITS, there is no difference between a freeze and a termination. (No one ever suggested that the pilots, some mechs, and lots of management took it in the shorts.) Why can you not just admit that you were wrong on this point? It's painfully obvious that you were.

 

[WorldTraveler]

Why can’t you proud folks at UA just admit that some of your people are losing pension benefits? That is the crux of my argument and one you refuse to acknowledge. And it validates that DL flight attendants do in fact make more money when you consider all compensation.

DL has said they will exit in the 2nd quarter and there is no reason to doubt that is not true. Given that UA took over twice as long as what DL expects to take and still has costs that are the highest in the US industry, the lowest operating margin, and a non-pension debt load that is essentially unchanged despite the longest and most costly bankruptcy in US airline history, I don’t think anyone from UA is in any position to be pointing the finger – any finger – at anyone else’s reorganization efforts.

 

[TechBoy]

Why can’t you proud folks at UA just admit that some of your people are losing pension benefits? That is the crux of my argument and one you refuse to acknowledge. And it validates that DL flight attendants do in fact make more money when you consider all compensation.

First off, I'm not at UA and never have been.

Second, no one has suggested that higher paying UA folks have not lost pension benefits (just like DL's pilots). But the FAs have not. What part of "below the limits" do you not understand? Are you stupid? Or just blind? How does it "validates" your point on FAs?

I don't mean to beat this horse so hard, but it drives me crazy when people repeatedly, purposefully misstate the facts.

 

[UALDC767]

Sorry for the interruption, bulscu, but I had to take a call. Neither you or anyone else has shown me something positive that any nationally known industry analyst has written about UA since the 2nd quarter results were released. You also have not explained how UA will not be impacted when they had the biggest traffic drop of all the large airlines in the month of August.

....And DL's traffic was virtually flat in August w/ far less capacity reduction than UA had at this point in its bankruptcy.

Maybe I am missing sonething but what passenger drop?

from the August press release:

http://www.united.com/press/detail/0,6862,54684,00.html

United Airlines today reported its preliminary traffic results for August 2006. The company reported an August passenger load factor of 83.5 percent. Total scheduled revenue passenger miles (RPMs) increased in August by 1.5 percent on a capacity increase of 3.2 percent in scheduled available seat miles (ASMs) compared to the same period in 2005.

2006
2005
YOY

August
August
Change


SCHEDULED SERVICE ONLY:

REVENUE PLANE MILES (000)
68,824
66,126
4.1%

NUMBER OF DEPARTURES
50,180
47,710
5.2%

REVENUE PASSENGERS (000)
6,205
6,019
3.1%

REVENUE PASSENGER MILES (000):

NORTH AMERICA
6,442,460
6,303,424
2.2%

PACIFIC
2,326,122
2,372,550
-2.0%

ATLANTIC
1,436,367
1,437,242
-0.1%

LATIN AMERICA
392,194
325,007
20.7%

SYSTEM
10,597,143
10,438,223
1.5%


AVAILABLE SEAT MILES (000):

NORTH AMERICA
7,820,351
7,428,013
5.3%

PACIFIC
2,703,906
2,784,228
-2.9%

ATLANTIC
1,691,474
1,703,594
-0.7%

LATIN AMERICA
479,169
389,717
23.0%

SYSTEM
12,694,900
12,305,552
3.2%


PASSENGER LOAD FACTOR (PERCENT):

NORTH AMERICA
82.4
84.9
-2.5 pts

PACIFIC
86.0
85.2
0.8 pts

ATLANTIC
84.9
84.4
0.5 pts

LATIN AMERICA
81.8
83.4
-1.6 pts

SYSTEM
83.5
84.8
-1.3 pts


And AMR did report a drop:

http://www.aa.com/content/amrcorp/pressRel...aatraffic.jhtml

American Airlines Reports August Traffic


FORT WORTH, Texas – American Airlines, the world’s largest airline, reported an August load factor of 81.9 percent – an increase of 0.4 points compared to the same period last year. Traffic decreased 1.4 percent year over year as capacity decreased 1.9 percent.

Domestic traffic decreased 4.1 percent year over year on 4.8 percent less capacity. International traffic increased by 3.7 percent relative to last year on a capacity increase of 3.7 percent.

American boarded 8.5 million passengers in August.

PASSENGERS BOARDED
8,525,935

8,780,679

(2.9)
%





But wait...hold the phone......Delta had a traffic decrease too!!!!

http://news.delta.com/article_display.cfm?article_id=10353

Delta Air Lines Reports August Traffic
ATLANTA

ATLANTA, Sept. 6, 2006 – Delta Air Lines today reported traffic results for August 2006. System traffic for August 2006 decreased 3.0 percent from August 2005 with a capacity decrease of 2.9 percent. Delta’s system load factor was 79.9 percent in August 2006, down 0.1 points from the same period last year.....

During August 2006, Delta operated its schedule at a 98.6 percent completion rate compared to 97.1 percent in August 2005. Delta boarded 9.4 million passengers during the month of August 2006, a decrease of 11.6 percent from August 2005. Detailed traffic and capacity are attached.




So an increase in passengers for UAL is actually the largest drop of the majors? Man, no wonder why I didn't do so well in math.....i had it backwards.

And you wonder why people don't believe all your Delta "rah rah" and UAL sucks mantra?

DC

 

[magsau]

DL has said they will exit in the 2nd quarter and there is no reason to doubt that is not true. Given that UA took over twice as long as what DL expects to take and still has costs that are the highest in the US industry, the lowest operating margin, and a non-pension debt load that is essentially unchanged despite the longest and most costly bankruptcy in US airline history, I don’t think anyone from UA is in any position to be pointing the finger – any finger – at anyone else’s reorganization efforts.

What you fail to mention in your diatribes about the length of the UAL BK timeline is the two visits to the ATSB. If you want to remove those FACTS and grade each carrier on the curve of time in BK without ATSB efforts then you might find UAL exited prior to DL in LOV (length of visit) to BK. Now for the grand finale. DL has said they will exit in 07. It ain't 07 yet and they have not exited. It is all just talk until the actual exit.

Also, I noticed a chart in the USAToday this week that showed DL had the largest use of RJ's by any carrier. By slinging seats to the RJ operations (DL does include all those wholly owned seats in it operations stats right?) it gives the appearance of a less of a reduction in ASM's and RPM's. When in truth DL has cut more mainline capacity than you will admit because you mask the data with your ownership of the crown jewels of ASA and CMR.

One nice thing is that UAL is getting some cash from the BK dl for the route authority to London, we keep the LHR slot and you have to pay up. We might have some dented ramp equipment available for purchase also if you are interested? Perhaps your own personalized lav truck to carry your opinions in an appropriate place.

 

[Cosmo]

Why don’t you post UA’s LF versus other carriers?

Sure, I'd be happy to do so (August 2006 systemwide mainline load factors from carrier press releases). See below:

American 82.0%
Continental 83.0%
Delta 80.5%
Northwest 86.9%
Southwest 77.1%
United 83.5%
US Airways 79.5%

So while insolvent Delta ranks fifth out of the seven largest carriers in terms of load factor, United continues to post the second highest load factor out of the seven largest carriers (a position it has held in nearly every month for the past several years). Happy now?

Actually, I suspect you're not happy, because you really meant to say "year-over-year change in load factor", didn't you? Regardless, here's that data as well (showing the percentage point change):

American +0.4
Continental +0.5
Delta -0.8
Northwest +2.1
Southwest +1.1
United -1.3
US Airways +1.9

There you go -- I've finally found a metric that supports you contention, since you apparently couldn't do it yourself (or at least you couldn't properly describe it). So yes, United had the worst change in load factor percentage in August among the seven largest carriers, although Delta was only marginally better (and negative as well). And even with that, United still had a three percentage point load factor advantage over Delta.

But you're certainly smart enough (maybe ) to know that one month does not a trend make, especially in the airline industry. For instance, if we look at data for the second quarter of 2006, United's year-over-year change in mainline load factor was +1.5 percentage points (up to 84.9%) while Delta's change was only +0.7 points (up to 79.9%), giving United a full five percentage point advantage over Delta. But as I said, even a full quarter by itself isn't such a great indicator either -- it's longer-term trends (probably entailing a year or more) that are most meaningful. So don't make such a big deal about only one month.

Present the facts, not some pathetic manipulation of them.

It seems that you wouldn't know a fact if it slapped you in the face! Here's what YOU said:

You also have not explained how UA will not be impacted when they had the biggest traffic drop of all the large airlines in the month of August.

I simply replied to your inaccurate post AS YOU TYPED IT. Everyone in this industry who works with airline data (as I do) knows that the term "traffic" refers to RPMs, not load factor or anything else. You were simply unhappy that I threw your own quote back at you with data that did not support your allegation. In short, the reality is that YOU were the sloppy one.

So don't try to lecture me simply because you seemingly don't know how to type what you intend to say. If you can't accurately get your point across, and are so obtuse that you don't understand that people are responding to your own quoted comments, then perhaps you shouldn't participate in these discussions.

 

[Cosmo]

Also, I noticed a chart in the USAToday this week that showed DL had the largest use of RJ's by any carrier. By slinging seats to the RJ operations (DL does include all those wholly owned seats in it operations stats right?) it gives the appearance of a less of a reduction in ASM's and RPM's. When in truth DL has cut more mainline capacity than you will admit because you mask the data with your ownership of the crown jewels of ASA and CMR.

Magsau:

Perhaps that explains why insolvent Delta had the second smallest increase in mainline passenger revenues (ahead of only also-insolvent Northwest) during the second quarter of 2006. See below:

American 10.7%
Continental 21.6%
Delta 4.9%
Northwest 3.3%
Southwest 26.4%
United 15.3%
US Airways 9.9%

And while United's year-over-year mainline passenger revenue increase was ranked third in size behind Southwest and Continental, it was also more than three times the size of Delta's growth in that category. So let's see, which carrier is growing faster, at least in terms of mainline passenger revenues?

Also, note that SkyWest purchased ASA from Delta last September for (IIRC) $425 million. So Comair is the only remaining wholly-own regional subsidiary of Delta.

 

[WorldTraveler]

ok..so yes traffic is not the appropriate term to refer to load factor change. I did however say that I was referring to load factor change after that so three rounds of posts is way too long for you to admit that UA has a problem which is worse than any other airline in the industry... whether they added capacity back or took their foot off the network restructuring throttle, I don't know but UA has consistently had one of the highest LFs in the industry. When UA's LF dips in a peak month, it is bound to affect their profitability.

I never said DL's traffic grew... I said DL matched its capacity to demand better than most other airlines, including UA. And I also said that DL cut its capacity less at this point in its bankruptcy than UA did at this point in their bankruptcy and yet DL has been able to fill what they put out in the market.

DL's traffic reports, like most US airlines', is perfectly cleaar as to what is mainline and what is flown by connection carriers. Connection carrier traffic is further broken down into owned connection carriers (Comair only) or contract carrier (everyone else). DL has had one of the largest RJ fleets for most of the time then RJ has been in existence. The fact that DL has many more options to properly match capacity to demand. At the end of the day, (or quarter really) though, every airline reports the success or failuire of its entire network. DL reported an 8% operating margin on ALL of its capacity and costs - mainline and connection carrier. That margin was higher than UA and CO. Whether DL used RJs to generate its profits or mainline is immaterial to the financial community.

Let me reiterate one thing - I have nothing against any of UA's people because I don't believe UA's rank and file employees have any control of UA's destiny on a large scale. I do slight UA management and have for quite some time. It is inconceivable that UA was once considered to have the world's best route system and yet can't seem to make it work now. You should be mad as you know what at UA mgmt and its board for allowing UA to continue to die the death of 1000 cuts. This is the time to turn your company around. If DL can do it from the position they were in, UA can certaintly do it.

And I don't necessarily think that UA is the only airline's mgmt that needs a kick in the pants. Perhaps you've read that CO, FL, and B6 have all said that they are struggling in the aftermath of the British terrorist attacks. Yet based on traffic reports, DL and NW have been able to keep people onboard and paying decent fares. CO and B6 thrived in NYC and FL in ATL because DL was sick and not operating in the best interests of its long-term health. Now that DL is back and becoming a fierce competitor again, is it any surprise that FL, B6, and CO are all not doing quite as well as they previously did and were expecting to do now?

 

[Fly]

It takes a big man to admit when he is wrong.

Cheers to little man Tate. (throw in the towel, you've done enough harm to yourself already)

 

[WorldTraveler]

why quit now? this has turned into one of USAviation's all-time top threads. Unlike the Comair crash thread, no one has to die for us to have a good discussion.

 

[Bear96]

Why can’t you proud folks at UA just admit that some of your people are losing pension benefits?

Ooops -- looks like the goal posts just moved!

I guess that's as close as we'll get to an admission that WT doesn't know what the fcuk he's talking about.

 

[casual rat]

WT just reached 'Fish' status...other than the fact WT can spell....they're in the same aquarium...

 

[superG]

Ooops -- looks like the goal posts just moved!

I guess that's as close as we'll get to an admission that WT doesn't know what the fcuk he's talking about.

I don't think that the employees of DL are worrying as much as the folks at UA about their pensions these days, however on the other hand, I feel that UA is very aggressive about filling empty seats with revenue by making some last minute low fare availability that I've enjoyed over the past few months, as well as great gate personnel in SFO when on ID90's. In trying to get some low fares for friends of late in various markets, DL, most of the time, isn't even competitive, when compared to AA & UA....good for non rev travel, bad for the bottom line.

 

[WorldTraveler]

now Fly is upset. She wanted to amicably bring the discussion to an end but you boys would hear nothing of it.

No goal posts have moved. I said from the beginning and I say it now... some UA employees covered by all 4 pension plans will lose benefits. You have yet to explain who they are while I contend that they exist.

You'd love to discredit me but the truth is I'm right... deadly right in fact and that is what scares the poop out of you.


Perhaps the reason you're not seeing the fares you once did on DL is because they don't need them anymore. They've pulled enough capacity out of their system to get rid of the need for bottom feeder fares and thus increase yields. You do realize that DL has significantly closed its revenue gap with other carriers by more than 10 points in less than a year, don't you?

 

[Fly]

SuperG said: I don't think that the employees of DL are worrying as much as the folks at UA about their pensions these days

HUH? What are you talking about? UAL employees have nothing to worry about. The pension issue was settled over a year ago. They already know what happened. Actually, Delta employees have nothing to worry about either. Delta froze accrual, so they won't acquire one more penny than they have already have.

World Trav: No goal posts have moved. I said from the beginning and I say it now... some UA employees covered by all 4 pension plans will lose benefits. You have yet to explain who they are while I contend that they exist.

You never said SOME, you said ALL. Reading comprehension isn't a strong point of yours I guess. Delta f/a's lost more and that just burns your tush. BTW, I said who they were (as did every other poster) but you must have trouble reading. PILOTS & MANAGEMENT .... can you read that?

fyi - I never wanted to stop the discussion, I just knew that you had proven what I've known all along.....and now everybody else sees it too.