US Long-term Standalone Prospects
- Thread starter ChockJockey
- Start date
signals
Veteran
Because it apparently ticks you off!!!
Seriously, it's because your industry effects everybody in one way or another. What goes on in the airline industry will effect everything from transportation to commerce to retirement to global issues to say the least. Not to mention the fall of unions. See Delta on one side and US Airways on the other.
Sad but true.
signals
Veteran
Acually I'm not flying much right now, mostly accounting stuff. Boy, I guess that makes you look really stupid...sorry.
Don't stand too long in front of the mirror.
How about frontier? They seem to ripe for the taking and they have a compatible airbus fleet,about 59 a320's and 319's and 318's, and a Midwest hub in Denver.
This would be the lowest cost option in acquisition of another carrier and there's very little route overlap. I think also the republic fleet of 17 embraer e-190,s would or could be part of the deal. Just me thinking beyond the AA merger frenzy.
Crash Pad DCA
Senior
Frontier doesn't help US make the trip...
Gobbling up Frontier only gets US to 2.37 million weekly departing seats (in North America).
The US/F9 combo would still be at least 30% behind DL/NW (3.59), UA/CO (3.26) and WN/FL (3.63) in weekly capacity...
US would have to gobble up B6, AK and F9 just to get to 3.59 millions weekly departing seats.
That would make US/B6/AK/F9 as big as DL/NW, bigger than UA/CO, and essentially as big as WN/FL.
The US/B6/AK/F9 combo would add some (leisure) international destinations, but none of the additional aircraft have the legs to get to additional European and Asian destinations that would allow US/B6/AK/F9 to effectively compete with DL/NW, UA/CO and (stand alone for now) AA.
The big fish is the US/AA combo pushing US/AA to 4.41 million weekly departing seats.
Then US/AA would be 20%-30% BIGGER than DL/NW, UA/CO and WN/FL.
The US/AA combo could easily outflank DL/NW and UA/CO internationally and domestically, and also easily outflank WN/FL domestically.
Just read that Spirit (NK) is leaving DCA on 5-Sep-12 (giving 4 slots back/2 slot pairs).
Also it appears Virgin American (VX) just posted a first quarter $76 million loss. Let's see how long they last in PHL.
jimntx
Veteran
NK slots have already been purchased by WN. They plan to start DCA-STL service (now that AA has abandoned that route to AE).
Frontier doesn't help US make the trip...
Gobbling up Frontier only gets US to 2.37 million weekly departing seats (in North America).
The US/F9 combo would still be at least 30% behind DL/NW (3.59), UA/CO (3.26) and WN/FL (3.63) in weekly capacity...
US would have to gobble up B6, AK and F9 just to get to 3.59 millions weekly departing seats.
That would make US/B6/AK/F9 as big as DL/NW, bigger than UA/CO, and essentially as big as WN/FL.
The US/B6/AK/F9 combo would add some (leisure) international destinations, but none of the additional aircraft have the legs to get to additional European and Asian destinations that would allow US/B6/AK/F9 to effectively compete with DL/NW, UA/CO and (stand alone for now) AA.
The big fish is the US/AA combo pushing US/AA to 4.41 million weekly departing seats.
Then US/AA would be 20%-30% BIGGER than DL/NW, UA/CO and WN/FL.
The US/AA combo could easily outflank DL/NW and UA/CO internationally and domestically, and also easily outflank WN/FL domestically.
Just read that Spirit (NK) is leaving DCA on 5-Sep-12 (giving 4 slots back/2 slot pairs).
Also it appears Virgin American (VX) just posted a first quarter $76 million loss. Let's see how long they last in PHL.
I was thinking if the AA merger fails,what lies beyond in expanding US,frontier would add more aircraft and pick up a midwest hub in the process. The process of combining US and F9 would be a much easier task as compared with the AA scenario.
Size alone does not guarantee success,but having a good route system does. While adding frontier does nothing for international routes,look what US has done over the years in building up routes to Europe on its own. Perhaps buying some used 767-300er's could help to build on the international side of the operation. A few years ago US bought some used 757's and they have served well on both domestic and international flights. Slow well planned growth is what is needed in this fragile world economy. It appears to be that the AA merger attempt is more about ego and bragging rights than dealing with the real world. The quoted saving synergies are just numbers,figures don't lie but liars can figure. Now we wait.
Yes, most of jetBlue's revenue comes from NYC, BOS, LAX, Florida and the Caribbean and much of it formerly flowed into AA's coffers. B6 grew quickly at the expense of AA as AA was a much higher-cost airline. As I posted previously in this thread, high-cost providers tend to shrink and low-cost providers tend to grow at their expense. That certainly happened with AA and B6. AA didn't "give it away for free," the George Soros-funded, nonunion jetBlue took it away with bargain basement fares, very low wages and blue tortilla chips. AA tried to fight back and kill B6 with triple-mileage promos and lots of capacity, and AA failed.
Once AA exits Ch 11 as a lower-cost provider (lower-cost than it used to be), what's wrong with merging with an airline that took away $5 billion plus of your revenue? You make it sound like some revenue spends better than other revenue; if AA could take over B6 and capture that $5 billion of revenue, it would again be very large at BOS (like in the old days), very strong at JFK (like in the old days), stronger in Florida and the Caribbean (again, like in the old days) and would have more transcon traffic (where it's always been strong).
Yes, B6 does not bring much strength at LGA or at PHL or CLT or PHX. Perhaps the combined US/AA needs to acquire B6 just as much as a solo AA needs to acquire B6? Acquisitions to eliminate competition and acquire their customers/revenue are good reasons to acquire someone.
On a fine detail point, an acquistion of B6 would result in some extra slots at JFK. Currrently, AA and B6 fly plenty of transcons to SFO and LAX. A combined AA/B6 could simply fly the current AA schedule on even larger planes than AA's low-capacity 767s and voila - some extra slots result, perfect for more TATL flying from JFK. Fans of US tout its impressive schedule of TATL flights from PHL and CLT - markets with relatively low O&D to Europe. NYC-Europe has lots and lots and lots of O&D, and AA wants (and needs) to grow its TATL schedule to compete with DL and UA (across the river at EWR). More than a decade ago, AA announced the most impressive NYC airport terminal imaginable, built only about 60% of it (thanks to September 11, bankruptcy-induced lower costs at its competitors and jetBlue's arrival and growth). AA needs to finish that terminal (discussions have been underway for a while to do so) and take full advantage of its JFK facilities.
PHL and CLT and PHX are nice places with great people. Doug Parker has said (and honest US employees tend to agree) that those hubs don't produce enough high revenue for US to match the wages at DL, UA and AA. Dunno whether the larger presence at DCA changes that. NYC, on the other hand, does produce that kind of revenue. So does LAX. So does CHI. So do MIA and DFW. Denigrate AA's cornerstone strategy all you want, but remember that US' strategy last year produced only about $100 million in profit, a far smaller profit percentage than UA or DL. And keep in mind the huge unit revenue gains shown thus far in 2012 by AA compared to the relatively small unit revenue improvements at US. The AA strategy appears to be working - which many at US (especially Doug Parker) probably don't want to hear - they really don't like hearing it anymore than a lot of AA employees don't like hearing it (a lot of AA employees hate their employer so much that they want it to fail).
Tie US and AA together if that makes everyone happy. But then find a way to grow in NYC. That's going to require an acquisition of jetBlue. Unlike the old US/Parker strategy of "cut and run" from NYC, a combined US/AA has to find a way to grow in NYC - which is still the center of the universe when it comes to international O&D in the USA.
ContUNITEus
Veteran
- May 4, 2011
- 501
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I am surprised by the Reuters article of Doug's supposed new statement to employees. Could it be that reality is starting to set in - that this thing with AA isn't gonna fly?
I am always amused by Mr. Parker and Mr. Kirby's spins on things!
Parker/Kirby in 2008: "Charging for drinks is good, because now people will have a quiet cabin, and they will be able to rest more."
http://www.flyertalk...e/t-867600.html
Kirby: "Charging for drinks better for passengers as there is less garbage to deal with, resulting in cleaner cabins."
http://www.consumert...ges-for-drinks/
http://blogs.wsj.com/middleseat/2008/09/19/us-airways-without-free-drinks-cabins-cleaner-calmer/
Parker and Co. keep pulling things out of their a$$es.... and people just buy into it. They always find a positive spin on things that amount to a pile of bull-sh!t.
Parker post Delta fiasco: "US Airways does not need a merger."
Parker prior to UA/CO union: "Consolidation is a must."
Parker after UA dumping US over CO: "US Airways fine alone."
Parker at the heels of AA's bankruptcy: "A merger is imperative."
Parker today and tomorrow: "A merger is not urgent."
Ohh my... I'm getting dizzy again from so much spinning!!!
I am always amused by Mr. Parker and Mr. Kirby's spins on things!
Parker/Kirby in 2008: "Charging for drinks is good, because now people will have a quiet cabin, and they will be able to rest more."
http://www.flyertalk...e/t-867600.html
Kirby: "Charging for drinks better for passengers as there is less garbage to deal with, resulting in cleaner cabins."
http://www.consumert...ges-for-drinks/
http://blogs.wsj.com/middleseat/2008/09/19/us-airways-without-free-drinks-cabins-cleaner-calmer/
Parker and Co. keep pulling things out of their a$$es.... and people just buy into it. They always find a positive spin on things that amount to a pile of bull-sh!t.
Parker post Delta fiasco: "US Airways does not need a merger."
Parker prior to UA/CO union: "Consolidation is a must."
Parker after UA dumping US over CO: "US Airways fine alone."
Parker at the heels of AA's bankruptcy: "A merger is imperative."
Parker today and tomorrow: "A merger is not urgent."
Ohh my... I'm getting dizzy again from so much spinning!!!
About today's statement from Parker to the employees, I posted on the AA forum, only half-jokingly, that it read as if Parker had been given a brief education on the subject of tortious interference and warned by the corporate attorneys that perhaps some of his statements and actions the past six months came awfully close. I'm a lawyer, and it reads as though the legal team wrote it for him. Here is a link to a Reuters article about today's statement:
http://www.reuters.com/article/2012/07/04/us-airlines-usairways-amr-idUSBRE8630RH20120704?feedType=RSS&feedName=innovationNews&rpc=43
http://www.reuters.com/article/2012/07/04/us-airlines-usairways-amr-idUSBRE8630RH20120704?feedType=RSS&feedName=innovationNews&rpc=43
Crash Pad DCA
Senior
I think US's scheduled delivery of A330s and A350s will help US with international coverage.
Picking up F9's Airbus capacity could help US domestically. But F9 is caught up in a four way battle for DEN with WN, UA/CO and NK (article). I'm just not sure that US/F9 would keep such a large presence at DEN with the four way battle going on.
Also, staying in the "battle for DEN" would squarely pit US/F9 against "sister" StarAlliance carrier UA/CO. I would suspect that a US/F9 would redeploy F9's DEN capacity, and let UA/CO continue to duke it out in DEN with WN and with NK joining in the fray.
Who truly knows. Perhaps US/F9 combo would help. I'm certainly not saying the US/AA combo is a panacea. Parker et al. is not going to keep US/AA 20%-30% larger than rivals UA/CO, DL/NW and WN/FL. US/AA will be "right-sized", i.e. layoffs, firings, furloughs and general economic mayhem for worker-bees will ensue while CEO/executive pay will double if not triple.
But if it's now true that US has "no urgency to merge", then I think US can - with the Airbus A320/A330/A350 acquisitions coming and with appropriate route management saavy - put the wedding dress back in the closet (again) and stay in the fray as a single competitor (plus or minus F9 or B6 or AK or ....)
Queue "All the single ladies, all the single ladies, all the single ladies...put your wheels up!" (Beyonce US Air mix)
signals
Veteran
Sounds like merger wolf is coming to yet another end.
To support your assertion, please provide the LOW 2011 International O&D % versus Connecting passengers from/to PHL and the major TATL cities of London, Paris, Frankfurt, Rome, Brussles, Zurich and Tel Aviv - and please cite a reference.
PITbull
Veteran
- Dec 29, 2002
- 7,784
- 456
What do you mean by "stand alone carrier"? US Airways is as "stand alone" as Delta, and United.
US Airways is still processing the merger of American West. Although, its taking 7 years and counting, they are merging; just not very successfully yet. US Airways has merged with many carriers, Piedmont Pacific Southwest Airline((PSA) just to name a few.
US Airways has been merging with carriers for decades. US Airways was also the first to use the bankruptcy protection to abrogate pensions and restructuring planning post 9/11, hence starting the "domino effect", with many other carriers specifically the legacy carriers to follow in toe. US Airways was so good at using bankruptcy protection to clear their books of debt and labor contracts that they did this TWICE in 3 years post 9/11.
And you ask what would their long-term strategy be to remain profitable and competitive?
What????
You mean this current management doesn't have a plan except to merge with other carriers whereby making it LESS competitive for the flying public, who will essentially have only 4 airlines to choose from???? And that's their road to profitability and survival??? You mean all those billions and billions of cost savings they took from labor and terminating their leases and dumping pesnion liabilities, giving their debt to the taxpayers wasn't enough to "go it alone" and be a "stand alone low-cost carrier" as they had proported to labor over and over again...??????? What??????? So, another merger would make this all possible????
What makes anyone on this Board think that US Airways is in the position to merge, yet again, with another carrier, when the most recent, has not been completed....now there lies THE question? Why don't they have that under control? But, yet they want to merge, uhhh a-gain????? to take them to their ultimate plan of....profitability?????
I would think the US Airways Board needs to start looking for new top management. That would be for starters...find some real talent out there that is bold and creative, and not a group that "steals from paul to pay peter" crapola.
The current Mangement talks a big talk and a big game about their goals and prospects to be competitive, with "pie in the sky", feel good retorhic, leap-frogging over AA management and going directly to the AA labor groups runing around with frick'in term sheets, for crying out loud already. But, hell, they just ignore their own labor groups by not negotiating new agreements recognizing the sacrifices already made by their own employees...
So, the question on "stand alone carrier", uuh, that be Southwest, the only carrier I know that is truly "stand alone" profitable, and successful.
PITbull
Veteran
- Dec 29, 2002
- 7,784
- 456
Why would you put anyone on this thread on your "ignore list". You asked for the naysayers to come out and voice their opinion, yet you can't take opinions you don't agree with? Hmm, that's interesting.
