Doug sees consolidation

[Ralph]

If you want to discuss what is or is not wrong with society, please start a thread in the Water Cooler. It is a more appropriate place for sociological discussions. This thread is about the need for consolidation (or not) in the airline industry and Mr. Doug Parker's views on same. Please stick to the topic. Thank you.

 

[wench1]

Then let someone who HAS The Experience and Excells in CUSTOMER SErVICE-not just another BUSINESS Monkey!!

1) Buyout if consol occurs

2) Needs A LONGTERM grand plan for profitablity.

3) Less Management

4) Less Micro Management

 

[PITOCC71]

Dougie fails to realize that US is now the zit-faced, overweight girl begging for a prom date! With the ongoing pilot division, lack of appeal to the business traveler, and very little to offer in route structure other than (maybe) the CLT hub I doubt any of the majors will want to consolidate with US. In the long run I see a UA/CO merger with possibly several of the LCCs (not US) combining. If AA wants the CLT hub so badly they will be patient enough to wait for our demise, whenever that may be!

 

[night-ice]

consolidation is bad for employees

Lordy yes, consolidation can be bad for employees...just look at the regional employees for the new DL...
jobs were lost to other ground handling companies (and the 'winner' of the new ramp contract did not hire but a handful of the ones at some stations who have been there for a long time)
At my station, out of apx 30 employees, 6 were hired for the new company. Pathetic. On top of that, our flight benefits are now drastically reduced.

 

[Henderfuzz]

consolidation is bad for employees

And what were seeing now is good for employees.
Like more layoffs, short work forces. Something has to give and its time to see major changes in this industry if we are ever to reap real benefits from it as employees.

 

[davo77]

Dougie fails to realize that US is now the zit-faced, overweight girl begging for a prom date! With the ongoing pilot division, lack of appeal to the business traveler, and very little to offer in route structure other than (maybe) the CLT hub I doubt any of the majors will want to consolidate with US. In the long run I see a UA/CO merger with possibly several of the LCCs (not US) combining. If AA wants the CLT hub so badly they will be patient enough to wait for our demise, whenever that may be!

While agree US has lots of problems...we are not going away.... If we survived the past 10 years there is no reason we wont survive for the forseeable future. Unless oil goes up again, then we will have a problem and that is Dougies rationale behind industry consilidation. Do I want to merge with someone else....hell no!. I would much rather just grow as a company, but we all know how thats been going lately...heres to 2010

 

[luvn737s]

When times are bad legacies try to reduce capacity, but costs are so high that a certain amount of cash flow has to be maintained regardless of eventual loss. Smaller competitors use their size advantage to hunker down and operate a smaller airline and survive to fight another day. In good times those competitors skim the cream and redeploy assets to the vacancies created by the legacy which pulled back in bad times. Now the legacy fights a strengthened competitor who has become a price maker in many markets. Those prices are still below that which is necessary to make a profit. The legacy starts a fare war to drive the competitor out, but in doing that, it wastes the opportunity to make money in the good times and before you know it, the business cycle turns and the legacy is back facing tough times with a thinner bank account. So they file for bankruptcy to lower their costs and get back on the Merry Go Round.

So when is a good time to negotiate a contract?

 

[gaucho99]

Dougie fails to realize that US is now the zit-faced, overweight girl begging for a prom date! With the ongoing pilot division, lack of appeal to the business traveler, and very little to offer in route structure other than (maybe) the CLT hub I doubt any of the majors will want to consolidate with US. In the long run I see a UA/CO merger with possibly several of the LCCs (not US) combining. If AA wants the CLT hub so badly they will be patient enough to wait for our demise, whenever that may be!

Doug is on record as saying that US would be the last choice for other airlines to want to merge with. But the goal of consolidation does not have to include US Airways as one of the merging airlines. For example, if CO-UA merge, that would reduce capacity and benefit the entire industry.

 

[wench1]

How can you furlough, when you dont lose flights?
So this is what you do-increase p.t hrs.5.5 - 30 min for lunch unpaid, this is the managers discreation- larger bonus for him- this has ALWAYS got me laughing sure no prob, I can get lost for 30 min🙂

Now we are back to the primary question? No flts cut, but a couple p/t are..

Makes no sense..am I missing something?

 

[john john]

So when is a good time to negotiate a contract?

When the union(s) has a strong strike vote to support the negotiating

 

[FlyUs]

Not much new here. Doug has been advocating consolidation of the majors since before he took the CFO job at AWA. The message has always been: too many hubs and too much market fragmentation leading to irrational pricing. For decades the airlines have barely been able to cover operating costs in the “goodâ€￾ years and then generate massive losses and shareholder devaluation in the not so good years. The Big Five must become the Big Three if profits, shareholder returns on investment, and employee wages are to enter the healthy range for the first time since deregulation. The only way to accomplish this is to leverage higher fares through reduced competition. Consolidation reduces competition so it is the single best hope of the industry.

In most industries the free market forces would sort out the winners and losers so that there isn’t a sustained period of overcapacity and price discounting below operating costs. However, the major airlines have taken numerous trips into bankruptcy court which is incapable of solving the real problem of irrational fares. Since the majors are “too big to failâ€￾, the courts force creditor and labor concessions and put the reorganized bankrupt carrier back into the same oversaturated market that was the root cause of their financial woes in the first place. Because the root cause issue is never resolved, groups such as labor, suppliers and shareholders all continue to take a financial beating so the customers can enjoy a subsidized ride to the destinations of their choice. If the bankruptcy court would have let UA, DL, NW, or US fail (liquidate) over the past decade, then consolidation would have already happened through natural market forces and rational fares would be much more likely, even in the recession.

No.. if the government would have allowed the "Big 6" carriers to merge 10 years ago.. then bankruptcy may not have been necessary. US and UA have tried hooking up several times only to be shot down. Either regulate the industry or let them merge!!!

 

[RowUnderDCA]

For example, if CO-UA merge, that would reduce capacity and benefit the entire industry.

I don't think it would reduce capacity much. Rather UAL has reduced capacity on its own.

 

[usa1]

No.. if the government would have allowed the "Big 6" carriers to merge 10 years ago.. then bankruptcy may not have been necessary. US and UA have tried hooking up several times only to be shot down. Either regulate the industry or let them merge!!!

Yep .... government involvement 10 years ago cost me my pension, and about $80000.00 in my 401K. Now the tax payer is stuck with my retirement check and IM stuck with the PBGC and IRS healthcare 😱 . Government involvement broke the US/UA merger and now the government is broke. Wonder why? The PBGC and Social Security are questionable.