UA On Its Own...Is it Possible?

[FWAAA]

Nope. My post here appeared 30 minutes before it hit PlaneBuzz...

I'd say that perhaps Holly should have credited eolesen, not the other way around.

 

[767jetz]

And if I was so inclined I could find more 'analysts' to support my position of no value added.

All this wasted energy by the UA crowd to find a dance partner instead of focusing on their own appearance is sickening.

If you are that good and pretty then the numbers (and crowds) will flock to you.

CO does not need UA. Face reality.

What's with all the hostility? Are you looking for a fight? :down: Perhaps YOU should face reality and stop looking for trouble where there is none.

How many times do I need to repeat myself. NO ONE SAID CO NEEDS UA. But there is money to be made in an alliance between CO and UA. Just like there was money to be made for CO in Skyteam. But if it is more profitable to be in Star, then they will switch. Many of the benefits of a merger without the pain and cost associated with one. Sorry if this offends you in some way.

If you care to show me any evidence whatsoever that CO joining an alliance with UA would be unprofitable for either party, please do so. Otherwise your posts are nothing but worthless flame bait.

 

[eolesen]

I need to up my estimate....

I'm hearing from multiple sources that the entire 737 fleet will be grounded (94 aircraft). That alone is around 20% of the existing UAL fleet...

If so, I'd be shocked if there wasn't also some reductions in the widebody fleet to keep the two in proportion.

 

[brokenwrench]

Zman777,

I disagree with you most of the time,................BUT,,,,,,,,,this time you "nailed it" !!


There is a REAL, though invisable "line" that spells the difference for some carriers "dying", which in turn lets the others "live", even in HARD Oil times !

Question is, where will that line fall(on which failed carrier)

Not picking on USAir, but they are the logical choice to drop first, among the big "6".

Logic tells me that the Biggest carriers would be the last to "drop", only because they have more options.
So following THAT logic, if the..."line"..dictates that of the 7 carriers, ..3.5..make it, I'd have to rank the survivors (who will look a WHOLE LOT DIFFERENT, than they do today, with the exception of WN), as....,

1. WN
2. AA
3. UA,

and the .5(1/2) being DL which would come at the HUGE EXPENSE of NW,.............................Which is EXACTLY why BIG RED should do everything in their power to STAY AWAY from DL !!!!!!!!!!!!!!!!!!!!!!!!!

Then again, the "line up" could be,

1. WN
2. AA
3.UA

3a. CO

I can't prove my theory, but I bet I'm VERY VERY close !

Per JP Morgan headed by analysts Jamie Baker and Mark Streeter the following rankings appear with the airlines at the top of the list having the LEAST BK risk.
1. Southwest
2. Alaska
3. Delta
4. AirTran
5. JetBlue
6. Continental
7. American
8. United
9. Northwest
10. UsAirways.

The following was taken from the 65 page or so report.

"Due to the timing of the Midwest Airlines transaction, $200 million of cash held in escrow will leave the restricted cash category, improving liquidity and unrestricted cash by that amount. Note that our placement of NWA at the weak end of our chapter 11 risk rankings continues to generate the most debate amongst the authors of this report and from our clients. NWA's balance sheet and liquidity are currently high but liquidity options are limited under a scenario (not our base case) where Delta walks away from the merger table or the government blocks a deal later this year. Other airlines may be able to raise capital more quickly, thereby buying more time. The NWA opinion offered here is certainly a non-consensus view (as is our view on JBLU at the other extreme). Nevertheless, keep in mind that it is only a view and as we wrote earlier in this report, none of these liquidity projections are likely to match reality as capital raising and industry restructuring events occur."

As carriers take actions to mitigate losses i.e. pull downs and restructure debt the ratings will no doubt change.

It would seem that Northwest needs Delta more than the other way around as NHBB suggests.

 

[ual777fan]

I need to up my estimate....

I'm hearing from multiple sources that the entire 737 fleet will be grounded (94 aircraft). That alone is around 20% of the existing UAL fleet...

If so, I'd be shocked if there wasn't also some reductions in the widebody fleet to keep the two in proportion.

The old UAL rumor mill has been kicked into overdrive. I've heard some combination of the following...
1) All 737's are grounded
2) Significant domestic cutbacks. Possible pulling down one hub (some say DEN, I say IAD since it really wasn't a hub to begin with).
3) TED could be gone (hallelujah from a customer perspective!) Where does UAL put the exTed planes?
4) What happens to stations like MIA and OAK which are going all Express or all Ted with such a significant capacity pull down? I've heard that OAK could very well be gone by this time next year.
5) How does reducing domestic capacity by 20% affect international system? I've heard that more flights could be pulled from LHR (like the new DEN-LHR) as UA focuses on the Pacific and FRA. I wouldn't be surprised to see further reductions in what little SA flying remains.

Anyways... that's a synopsis of the rumor mill right now... come back in 2.5 minutes for another update.

 

[cooper43]

Zman777,



and the .5(1/2) being DL which would come at the HUGE EXPENSE of NW,.............................Which is EXACTLY why BIG RED should do everything in their power to STAY AWAY from DL !!!!!!!!!!!!!!!!!!!!!!!!!


I can't prove my theory, but I bet I'm VERY VERY close !

Why are you so sure DAL will be at the bottom?

 

[eolesen]

3) TED could be gone (hallelujah from a customer perspective!) Where does UAL put the exTed planes?

They stay where they are, or they move to backfill the 737 markets?...

5) How does reducing domestic capacity by 20% affect international system?

On a seat basis, 737's account for approx 15% of total and 17% of domestic capacity. Some of the drop could be offset with some higher utilization of the A32x fleet that can't be realized today because of the split configs for Ted and Mainline.

 

[luv2fly]

Why are you so sure DAL will be at the bottom?

He has no idea why. He confuses his feelings of nostalgia with reality and the reality is in about 6 months, NW will cease to exist. Next.

 

[Rubble]

Ted aircraft get reconfigured to mainline it fly the most profitable routes. The rest goes to Express carriers- where it makes sense.

 

[FrugalFlyerv2.0]

5) How does reducing domestic capacity by 20% affect international system?

If UAL cuts domestic and international capacity, I wonder if * alliance carriers like LH picks up more US-EU flying for UA?

 

[CubsFanJohn]

How about UAL cuts some 50 Seater flying?

 

[brokenwrench]

Plane Buzz


Updates on All Things United Airlines


From one of our readers this morning:

"Here is what I am hearing on the United front:


1. Culling the B737 fleet (94 airplanes) by Fall 2009.

2. Selling off 7 B747s by Fall 2008.

3. 25 percent staff cuts by Fall 2008.

4. Death to TED (quickly but painfully).

5. John Tague becomes the de facto President. (Hopefully after some quick-but-intense "Grooming by Glenn").

6. Massive reorganization - "all the
wrong people are being promoted."

Are you hearing similar rumblings?"

Yes. And more.

In fact, the Tague comment is especially interesting, as after the US Airways/United deal fell apart, we were told by several folks close to the deal that one of the big reasons was because John Tague wanted to become CEO of United, USTed, or whatever the merged airline would have been called.

So this dovetails with those comments.

We've also had a slew of other comments from readers this morning telling us that the entire United Boeing 737 fleet will be parked. So this seems to coincide with our reader's comments above as well.

So it looks like instead of parking 70 aircraft, the total number of aircraft parked at United Airlines may be over 100.

Technorati Tags: airline CEOs, airlines, airplanes, United Airlines

Posted by Holly at 11:46 AM | Permalink | Comments (0)

 

[Fly]

Still a MUCH better scenario than merging with US Airways.

Here's an article I just found:

United expected to ground dozens of aircraft
Announcement expected as soon as Wednesday
By Julie Johnsson | Tribune reporter 6:38 PM CDT, June 3, 2008 Article toolsE-mail Share

United Airlines is expected to ground dozens of its least fuel-efficient aircraft, including Boeing 747 jumbo jets, as part of sweeping cuts intended to help the carrier conserve cash and surviving a daunting environment as a stand-alone company.

The Chicago-based airline intensified planning for the initiative as it cooled on a potential merger with US Airways in mid-May, say people familiar with its plans. United is expected to announce the cuts as early as Wednesday.

With the economy in a downdraft, capital constraints have made large-scale mergers largely unfeasible, forcing carriers like United to seek other ways to cut capacity in an effort to gain sufficient pricing power to cover rising fuel costs.

United plans to retire the workhorses of its domestic fleet: 94 decades-old Boeing 737 jets, single-aisle planes that seat up to 123 passengers and shuttle over medium-range distances, say people close to the company.


United had already planned to ground 30 Boeing 737-500s in its fleet, which seat just 108 passengers but burn as much fuel as the larger narrow-body jets that it uses for flights within North America.

But the nation's second-largest carrier now will phase out the 64 Boeing 737-300s that it operates, whose average age is approaching 20 years, sources said.

"Aging goes hand-in-hand with fuel inefficiency," said aviation consultant Robert Mann, president of R.W. Mann & Co. "At these fuel prices, more and more of the domestic network is uneconomic."

United is also preparing to park some of its largest jets, Boeing 747s that haul about 350 passengers and are primarily used for flights to Asia and Australia, sources said.

 

[flydude]

Still a MUCH better scenario than merging with US Airways.

I agree with you, a merger with UA would have been awful for all involved. Good luck to everyone at UA, hopefully the job cuts won't be too deep.

 

[ZMAN777]

Big news to be sure, but as I originally posted at the beginning of this thread, certainly not unexpected. While I thought this would've come another month or so later, if you're going to go forward with it, then this shows that they're at least making the decisions necessary that are needed to survive and compete.

What this also will signal, I believe, is that the other legacy's will soon be announcing somewhat similar decisions as well. Remember, the price of oil doesn't care what the name is on the side of the aircraft, it affects everyone. I'd mentioned something earlier on another post about "rationalizing the narrow-body fleet" and that this could've been one outcome of an earlier proposed UAL/LCC merger. Now that that's not going to happen I believe we're seeing what UAL has been espousing for years....a single narrow-body fleet structure. Years ago the planners saw this as a 5-10 process but one that would be made and would reap benefits (efficiency/scheduling/crew training/etc.)

Okay, so now it's upon us today or soon for sure. Take the hit early, be ahead of the rest of the industry in this and recover. Makes sense. Gonna hurt in the short term though. Just for something to ponder......as per the most recent manpower report the current 737 operation utilizes
477 CAPs/492 F/Os. Ouch!!!

Cheers,
Z B)