9-- Months From Now ?

[NewHampshire Black Bears]

These are legitimate question's for the LUNATICS on these boards(all of us) to ponder.

What will be the situation, "9" months from now(2004/2005), and how much longer can the status quo continue with;

AA-UA-DL-NW-CO, and US ????

NH/BB's

ps.
This has NOTHING to do with what union, will be where !!

 

[twasilverbullet]

J.W. will be arrested for fraud and found guilty along with other multiple charges. He will face a 25 year jail sentence and fined $500,000.00. Forced to eat one small meal a day and not allowed to sleep longer than 4 hours per day. He most work at least 15 hours doing inmates laundry each day of his 25 year jail sentence..... NO he will not be eligible for parole.

 

[jimntx]

My SWAG (scientific wild-a** guess).
If things continue on the current course, 9 months from now...
1. AA, DL, NW still in business, but still losing money.
1a. DL may file bankruptcy just to get out from under their contract with the pilots unless the pilots become more willing to give concessions. I would not want to be one of their non-represented groups (like the flight attendants). I have a feeling that they are going to get hit big in the fall unless DL has a huge summer.
1b. I think AA will still be limping along. The incredible increase in the cost of jet fuel recently has put the kibosh on their hopes of being profitable by the 3rd or 4th quarter this year. This may sound like heresy coming from a furloughed f/a, but I think Gerard Arpey is trying to be a good guy. However, I have my doubts about his success. There is too much of a legacy of distrust that has been cultivated up until now. Plus, there is still a large number of "old" management still in place at Centerport that feel like lying to the employees is the proper way to run a business.
2. CO still in business and very close to profitable. Like AA they are really being held back by the jump in fuel prices, but CO's management is doing a lot of things right--in fact, most things. CO has top-notch leadership.
3. I'm going to get creamed on this one. Remember my initial qualifier, if things continue on the current course, United or US Airways, or both, are gone.
3a. If United does not get a renewal of its DIP financing or the ATSB turns them down again on their loan application, I don't think they will have enough cash to stay in business. Also, I would be very surprised if their flight attendants just roll over and let the company eliminate medical benefits for their retirees after encouraging a large number of the senior flight attendants to retire last year. (They're not "eliminating" medical benefits. They want to stop the company contribution to the premium. It would be like permanent COBRA for the retirees.)
3b. US Airways says they need concessions from the employees. The problem is that they have been to that well 3 times before and each time told the employees that this would be the last. At the same time (according to a post elsewhere on this board), they have reinstituted bonusses and raises for management employees. If true, this is NOT going to put the union employees in a concessionary mood. Does this sound at all familiar to AA employees?

One thing that might change my SWAG #3 is that the Bush administration may not want a large U.S. airline going under before the election. There may be an ATSB loan to United or US Airways with stipulations that can not be met in the long run, but that would keep the airline flying until the first of next year. (And, don't start attacking me for saying the Bush admin. I don't think a Gore administration would want a major airline going under during the election, either.)

Ready, aim, fire!

 

[NewHampshire Black Bears]

jimntx,
ACTUALLY "NO" fire at you at all. IMHO I'd give you an "A" to "A-" for your post.
About the only area where I may disagree with you, is how "rosy" CO will be by years end.(Ol' Gordo is'nt leaving without an ulterior motive)

Obviously if 1 or more company "disappears", than the remaining outfits gain much needed "wiggle room". And it's not being sadistic to suggest that US and UA "might" be the afformentioned(SP?) airlines to go "bye bye" !!!

The following 2 theory's, I feel the strongest about. But I must caution you, that my theory's + $3 will purchase you a "cold one", in most establishments.

AA.
By "hook, or by crook"(or by COMPANY unions), has Always (99% of the time) gotten the "phone call" at 11:59 pm, to "stop the execution"!!!
I don't know WHY, only that they DO. !!!

NW.
"Quirky", is the only word I can use to describe them.
Because of their "Hope Diamond", in their "crown Jewel" of a hub in NRT, and the fact that (virtually) nobody fly's where they fly, could (in a MOST worst case scenario for the industry), be the LAST man standing.
Christ, even WN does'nt fly to MSP.


NH/BB's

 

[jimntx]

Obviously if 1 or more company "disappears", than the remaining outfits gain much needed "wiggle room". And it's not being sadistic to suggest that US and UA "might" be the afformentioned(SP?) airlines to go "bye bye" !!!

A year ago, I would have agreed with you wholeheartedly. At the time that United entered bankruptcy, I read an article about overcapacity in the domestic air markets. It was a little eerie that the estimated overcapacity (as Dan Garton puts it, too many seats chasing too few butts) was almost exactly equal to the total number of seats United had in their domestic service. In other words, killing United would solve the overcapacity problem overnight.

That was a year ago. Today, I'm not sure that the loss of United or US Airways would benefit AA, DL, or CO as much as it would have then. I think that in the event that one goes under the void would be filled by one or more of the LCCs. Right now they have the cash to move quickly to occupy a market--cash being the essential ingredient to buying/leasing new equipment.

AA has the equipment, but by the time it was recalled from the desert and reconditioned, the LCCs would already be up and running in the "best" markets.

Also, I heard that ATA is finally going to institute scheduled Europe service as soon as this Fall. I think they could step in quickly and provide service on European routes currently served by US Airways and United. They already have the equipment. It's just being used in their charter business.

P.S. Don't be too sure that Gordon Bethune has ulterior motives in his retirement. I have several friends who work for Continental. General consensus is that he's a good guy. And, lord knows, he's a topnotch executive. Under his leadership, CO has come from bankruptcy to winning more customer satisfaction awards than any other airline. I lived in Houston for 34 years; so, I've seen CO in the bad years as well as the good.

He's been an executive at Braniff, Western, Boeing (he was head of 737 and 757 programs), and Continental. He's 62. Maybe he's decided he wants to take it easy. He has a chance to go out on top. Why would he want to step into Delta's problems?

 

[mweiss]

I mostly agree with jim, but I have an issue with CO.

They're trying to go after the corporate customers in a pretty aggressive fashion, except they keep screwing up in one significant area. About half of their flights have no first class seats. This is suicide for an airline that wants to get all of these high-paying corporate customers. It is, in fact, one reason I have left the CO fold.

NW has been an odd duck, in part because of their "don't laugh, it's paid for" fleet. That worked until fuel prices skyrocketed. Now, suddenly, it doesn't look so brilliant. OTOH, they should be able to get some newer, more efficient metal for cheap right now if they wanted...maybe not so bad an idea if they execute on that strategy.

UA is certainly in trouble, and US is pretty much in ICU.

So we're looking out about a year? US gone. UA maybe gone, maybe not. Everyone else still standing, not much changed. Someone will take the valuable DCA LGA BOS assets that US has and run with them.

Just a totally bizarre, random thought. What if WN bought those assets? Or B6? Does B6 have the cash to do that?

 

[jimntx]

Someone will take the valuable DCA LGA BOS assets that US has and run with them.

Just a totally bizarre, random thought. What if WN bought those assets? Or B6? Does B6 have the cash to do that?

If you ask me, the LGA, DCA, and BOS landing slots are about the ONLY thing that US Airways has right now that EVERYBODY covets. I don't think anyone cares whether the Shuttle is physically replaced by another carrier. It's not as popular as it once was because of the Acela service. If US Airways goes under the Port Authority of New York can book that "Caribbean cruise they've always wanted" because the bidding war for the LGA slots will be intense.

Southwest has been successful because they've followed their business model even when the "conventional wisdom" was that they should break out of it. I don't see them going after the LGA-DCA-BOS assets. Maybe BOS, but it seems to me that the on-going costs of gates and slots at LGA is not something that they are willing to pay. And, if PHL and PIT are too close together to make real economic sense for US, what does that make BWI and DCA? Southwest would want entree to DCA only for the prestige factor.

B6 may not have the money in the bank right now to put a dog in the LGA DCA BOS hunt, but (and I have NO inside info here) I bet they are the darling of the financial community, and could get their hands on a big wad of cash at low interest rates in a hurry.

When it comes to looking at airlines and judging their creditworthiness based on their management, could you go wrong with Southwest, JetBlue, or Continental?

I'm sorry you're not happy with CO, but maybe you are flying to some places that they decided didn't have sufficient F/C traffic to justify having those seats on the plane. I non-revved to BHM recently on AA. Of the 16 F/C seats, 2 were occupied. Me and 1 revenue passenger.

 

[mweiss]

When it comes to looking at airlines and judging their creditworthiness based on their management, could you go wrong with Southwest, JetBlue, or Continental?

Certainly not. They have all done well. As has AS.

I'm sorry you're not happy with CO, but maybe you are flying to some places that they decided didn't have sufficient F/C traffic to justify having those seats on the plane.

Check out their schedule sometime. They're putting those RJs just about everywhere. I've got nothing against the RJs as a rule, but if that's going to be their model, and they want business travelers how 'bout some FC seats and service on them?

FWIW, it's not that I'm not happy with them. I have been treated well by them for many years. The straw that broke the camel's back for me was their changes to the elite qualification program this year. My ticket purhcasing patterns would preclude me from staying elite. That's because I'm not the kind of customer they want. So, I obliged them and gave my business to NW.

I non-revved to BHM recently on AA. Of the 16 F/C seats, 2 were occupied. Me and 1 revenue passenger.

If I thought I could pull it off, I might have switched to AA. As it was, NW's reciprocal elite services made the difference to me. I think AA's FC service is better than NW's, but it's too hard for me to get up there right now. So I'm left choosing between NW's FC and all other airlines' coach. NW gets the nod.

 

[jimntx]

Check out their schedule sometime. They're putting those RJs just about everywhere. I've got nothing against the RJs as a rule, but if that's going to be their model, and they want business travelers how 'bout some FC seats and service on them?

I agree about the RJs; however, every single one of the majors is offloading 2nd tier (and some 1st tier) stations to their "regionals." Relatively speaking, AE is expanding much faster than AA.

I think that I agree with the Boyd group that the "Age of the RJs" will last until about the end of this decade. Assuming growth in the economy and the population, and a shake-out in the airline business which results in a more realistic total of ASMs with a concomitant return of rational airfares (not asking for much , am I? ), there will be a return of full-sized a/c to a number of these stations.
And, the "regionals" will go back to doing what they were originally intended to do--provide air service to cities that can not support full-size jets.

Let me qualify that with a new definition of full-sized a/c. I don't think new a/c such as the Embraer 170 that seats 100 passengers can reasonably be called an RJ. It may be the wave of the future, and Boeing and Airbus both had better have some plans other than the mega-giga-giganta models for international service. A 550-seater complete with swimming pool and tennis courts may be fine for LAX to Singapore, but it's not going to be of use on the DFW-IAH run.

 

[mweiss]

I agree about the RJs; however, every single one of the majors is offloading 2nd tier (and some 1st tier) stations to their "regionals." Relatively speaking, AE is expanding much faster than AA.

But this is more due to the difference in the wages paid than the efficiency of these aircraft or the demand on the routes.

And I don't really care if they run RJs, they just need to put some FC seats on them with FC service if they want the business customers.

Let me qualify that with a new definition of full-sized a/c. I don't think new a/c such as the Embraer 170 that seats 100 passengers can reasonably be called an RJ. It may be the wave of the future, and Boeing and Airbus both had better have some plans other than the mega-giga-giganta models for international service.

Is the 170 more efficient to fly than a 717, 737-600, or 318? Not counting the bizarre wage differences.

 

[jimntx]

But this is more due to the difference in the wages paid than the efficiency of these aircraft or the demand on the routes.

And I don't really care if they run RJs, they just need to put some FC seats on them with FC service if they want the business customers.

Is the 170 more efficient to fly than a 717, 737-600, or 318? Not counting the bizarre wage differences.

Can I have an amen from the choir! Just the thought of being on that RJ from Bentonville, AK non-stop to LAX with the current configuration gives me a cold chill.

As to the efficiency question, I have no idea. Though I wonder if the 717 production line will remain for long. No matter how you look at it, it's still an MD-80, and as far as I know, AA is one of the few where the majority of the fleet is still that a/c. AA's long-term plan is (or was) to become an all-Boeing fleet, but I don't know if that includes the 717 or if they were planning to replace the MD-80 (excuse me, SUPER 80) with the 737.

 

[firstamendment]

Now don't count US Airways out. It ain't over till the fat lady sings...what's that? Turn it down. I'm not in the mood to hear Ethel.

 

[MCI transplant]

But this is more due to the difference in the wages paid than the efficiency of these aircraft or the demand on the routes.

And I don't really care if they run RJs, they just need to put some FC seats on them with FC service if they want the business customers.

Is the 170 more efficient to fly than a 717, 737-600, or 318? Not counting the bizarre wage differences.

Can I have an amen from the choir! Just the thought of being on that RJ from Bentonville, AK non-stop to LAX with the current configuration gives me a cold chill.

As to the efficiency question, I have no idea. Though I wonder if the 717 production line will remain for long. No matter how you look at it, it's still an MD-80, and as far as I know, AA is one of the few where the majority of the fleet is still that a/c. AA's long-term plan is (or was) to become an all-Boeing fleet, but I don't know if that includes the 717 or if they were planning to replace the MD-80 (excuse me, SUPER 80) with the 737.

<_< jimntx----- a.a. had 717's! But through them away!!!!!(TWA's) Now flying for LLC's!!! :down:

 

[Whadayano]

If the new consensus is right (unlikely) and fuel stays up here, NW is going to be in the market to replace their DC-9-30's and 50's pretty quick. The 717 is a serious candidate, as is the ERJ 190 and the A-318. All of them probably have half the fuel burn per ASM

 

[mweiss]

No matter how you look at it, it's still an MD-80

Not really. More like a DC9-50. The MD-90 was the size of the -80