ATSB Loan & Alliance Information

bankernclt

Member
Aug 26, 2002
32
0
Personally, I do not see the tri-alliance being approved due to the route overlaps, especially CO - EWR and DL - JFK. Will one of these carriers be willing to give up their fortress in NYC? Also consider the 30 to 40% of the domestic market. The US/UAL combination comes no where near what CO/DL/NW would have.

Also, would DL like for US not to have an alliance with UAL and not get the ATSB loan? Would DL also like to see all of the gates in CLT, or a large amount of them, go to WN? Would DL like more low cost east coast competition? I'm sure that some airline would fly in and set-up shop in CLT, and probably PIT as well (lets not forget about CVG), and if anyone of the majors could do it - WN could.
 

luv2fly

Veteran
Aug 21, 2002
1,187
0
www.usaviation.com
If the DOT approves the U/UA codeshare, then it will most likely have to approve the CO/NW/DL deal, in some form or another. I see the DOT approving the DL codeshare with restricions to limit the market share to a more reasonable level.
I find it interesting that so many people here believe that U/UA should be allowed to codeshare, while insisting that any other airline wishing to compete with such an agreement, be restricted in its ability to do so. Sounds a bit hypocritical. And it will appear that way to the DOT.
The fact is, U brought this on by announcing the codeshare with UA, and specifically targeting DL. Surely U management had to anticipate that DL would respond with a plan in order to compete. Now you want to blame DL for responding. It's called business. If you can't take the heat, then get out of the kitchen. The problem is, U wants to be allowed to wear a flame retardant suit while carrying around a flame thrower.[:bigsmile:]
 

DLFlyer31

Senior
Aug 20, 2002
444
0
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On 8/26/2002 5:37:51 PM

DLflyer,

Poorly run UA and US? I won't disagree with you there. But does that list also include Ron Allen's illustrious 7.5 cent plan that nearly ruined Delta? My point is that this industry is like a game of monopoly. Stick around long enough and at some point everyone feels the pain and at other points everyone enjoys the cash flow, and variations in between. The cyclical nature of this industry catches up to everyone. Delta isn't immune. I would imagine that Delta won't be able to hold off the unions forever. Should that happen, the landscape definately changes.
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Not doubt Allen screwed up....but after the Allen fiasco ended did DL request gov't loan-backing to prop the company up??? Did DL go running to the BK court??

And in terms of US...the company hasn't just been poorly run by one management team...its been poorly run by a succession of teams dating back into the 80's. The company has always had a bloated cost structure that no management team (or union group) has seriously attempted to correct. The company has struggled to make money (even in good times) and is now making a trip through the BK system. I have no problems with US declaring BK...thats certainly within their rights (though I might argue the US BK system needs an overhaul). However, if the gov't continues to prop up the company...I can guarantee you it will only work to ensure misery both at US and at DL,AA,UA,CO & NW. Cyclical loses and gains are one thing....but US's problems go far, far beyond cyclical.

Eastern was allowed to fail and while there was some short term suffering, in the long run, capacity was filled in and people have moved on. Imagine if the gov't had backed loans to keep Eastern/PanAm going, how much longer would the loses of the early 90's continued??? How many more airlines would have been dragged down by allowing Eastern/PanAm to keep operating??
 
Would DL also like to see all of the gates in CLT, or a large amount of them, go to WN? Would DL like more low cost east coast competition? I'm sure that some airline would fly in and set-up shop in CLT, and probably PIT as well (lets not forget about CVG), and if anyone of the majors could do it - WN could.

Be serious for just a moment... Nobody is going to set up shop in either city if US were to go away tomorrow.

If it weren't for the fact that PIT was the hub for Allegheny and CLT was the hub for Piedmont, I don't think either one of them would have nearly the amount of air service they do today based on the size of their respective metro areas...

CLT is the #34 metro area in the US... PIT is #22. People laugh at the CMH and CLE hubs for HP and CO, yet #33 CMH has a larger local market than CLT, and #16 CLE has a larger local market than PIT.

See the Census Data Here

Believe me, LCC's didn't rush into RDU, GSO, DAY, and BNA to pick up all of the abandoned routes when JI, CO, US and AA closed up shop in those cities. WN took over a few routes here and there, but not the tidal wave that some people expected.

So, if US were to shut down tomorrow, sure there'd be some backfilling by carriers at PIT and CLT, but I think you'd also see an awful lot of empty gate space for a very long time at both airports.
 

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