How Will United React To The Us/hp Merger?

[PHX Flyer]

It seems as if the new US Airways hopes to stay in the Star Alliance, but it seems to depend on UAL's approval.
I am not sure, what I would do, if I was sitting in Tilton's chair. On the one hand, US would still compensate for some of UAL's weaknesses in the route system. On the other side, the new US would shift much more of its business into UAL territory. I am not sure, if it would be good thing for UAL to have low-cost competition within its own maketing alliance, especially one that competes in many of UAL's core markets. My sentiment is that it would not leave United enough room to grow.

I realize United has still some work cut out for itself with all the unresolved labor issues. But I am sure everybody there realizes that cost savings cannot just come from labor. In order to compete successfully with American, they must grow to a similar size so that fixed cost can be spread over a larger operation. And the only way to grow the fleet from 400+ to 700+ frames is the way America West is doing it. So, I guess I would probably stall a decision regarding U's Star membership for as long as possible, look for merger partner (and financiers), and - if there is one - force U out.
What do you think?

 

[markkus757]

I wouldn't worry so much about Star. I'd be worrying about who is going to lend you money to get out of BK. The merger might have chewed up any competitive-rate borrowing for the industry. Be afraid. Be very afraid.

 

[JungleClone]

Figure the loss of US Airways as a codeshare partner in Star would affect UA to the tune of about $150 million per year in revenue, give or take. Nothing to shake a stick at, but not necessarily chump change, either. My guess is US will remain in Star for the foreseable future.

As for how UA reacts to this merger, it's hard to say. There really isn't much head to head competition. UA currently competes head to head with HP in only a handful of low-yield, leisure markets. UA currently competes head to head with US in only a handful of markets. So combining the two doesn't change much. I wouldn't do anything drastic. Although the opportunity will certainly present itself for more Ted expansion into these markets. But a combined US/HP will have a tough enough time making a go of it without any competitors getting crazy. US is still a VERY high cost airline. Before this merger is viable that cost must be squeezed out of the entity once and for all. Good luck on that one. You know you're being snowed a bit when they break out the 'ole "synergy" word. Brings back memories of all the great revenue "synergies" of the UA/US merger.

 

[Art at ISP]

I have a funny feeling that perhaps the code share and Star will remain for now, and that at somepoint there might be further M/A activity this time involving UA...

I may be dreaming but stranger things have happened.

 

[767jetz]

Hey Art,

Welcome back.

Here's a wild idea. NWA is talking about bankruptcy again. So CO "shuns" their partners and makes a deal to combine with UA. Then DL and NW go BK and merge to get out.

Bingo! The new UA, US, and NW leave 3 less airlines.

767jetz

 

[Fly]

I wouldn't worry so much about Star. I'd be worrying about who is going to lend you money to get out of BK. The merger might have chewed up any competitive-rate borrowing for the industry. Be afraid. Be very afraid.

[post="271594"][/post]​

Amazing.....two weeks ago they were chocking on their own vomit, now they give advice and act cocky!

 

[JAMAKE1]

I say, kick 'em out of Star and shack up with Continental! (Me thinks that Skyteam is not a very satisfying menage trois). Seriously, A UA/CO alliance would give the two carriers great coverage with hubs in SFO/LAX/DEN/IAH/ORD/CLE/WAS/NYC.

 

[whlinder]

Well if UA can drop US for CO, they should do it in a heartbeat. I don't see that happening yet, unless UA/CO decide to try to pull off the same transaction that US/HP are trying to pull off. But without those things happening, I don't see UA dropping the US codeshare. The DOT might require certain markets that are currently codeshared to be dropped, like the cities in California that US codeshares to and now will actually offer service to, but I don't think UA will kill it.

 

[StraaightTaalk]

Amazing.....two weeks ago they were chocking on their own vomit, now they give advice and act cocky!

[post="271675"][/post]​

Good one, fly.

You and I don't agree on much, but I gotta give you two thumbs up on this one.

 

[StewGuy86]

Amazing.....two weeks ago they were chocking on their own vomit, now they give advice and act cocky!

[post="271675"][/post]​

"They?" By that, do you mean all of us here at US Airways or just Markkus757? He/she doesn't speak for all of us here and, besides, what exactly was so bad about the comments Markkus757 made to cause you to respond with such an incredibly tasteless post? They didn't make any disparaging remarks about United or its employees. They didn't get personal. And besides, the comments made by him/her were nothing compared to most of the mean-spirited crap that gets directed at US on these boards.

You know, it sounds as if you actually enjoy seeing us "choking on <our> own vomit," as you so eloquently put it, Fly. Why is that? Do you WANT to see the employees of US Airways jobless and on the street? And if so, why? And if not, then what's the point in making such nasty statements to begin with? Remember, US isn't some faceless company made up of a bunch of suits who sit in boardrooms and make stupid decsions. It's 30-some thousand human beings who want to make a living and put food on the table just like you.

Good one, fly.

You and I don't agree on much, but I gotta give you two thumbs up on this one.

[post="271747"][/post]​

Same goes for you. That's like high-fiving someone who just threw an insult at someone else. Real classy.


You know, it's sad. I never ceased to be amazed by the amount of bile an employee of one airline can throw at the employee of another.

 

[TWskyliner]

Hang in there Stewguy86.

 

[phasersonstun2]

Figure the loss of US Airways as a codeshare partner in Star would affect UA to the tune of about $150 million per year in revenue, give or take. Nothing to shake a stick at, but not necessarily chump change, either. My guess is US will remain in Star for the foreseable future.

As for how UA reacts to this merger, it's hard to say. There really isn't much head to head competition... You know you're being snowed a bit when they break out the 'ole "synergy" word. Brings back memories of all the great revenue "synergies" of the UA/US merger.

[post="271604"][/post]​

We were never allowed to get to the "synergy" part of that equation, so that argument is moot. All we saw was the "syn".

 

[EyeInTheSky]

Amazing.....two weeks ago they were chocking on their own vomit, now they give advice and act cocky!

[post="271675"][/post]​

Fly, markkus757 is not a US employee. Speaking of vomit, you guys still don't have your head out of the toilet either.

 

[Fly]

Sometimes I wonder if we ever will. Perhaps we have bulimia!

 

[EyeInTheSky]

Sometimes I wonder if we ever will. Perhaps we have bulimia!

[post="272667"][/post]​

Next thing you know Mary Kate and Ashley Olsen will be the spokespersons... Seriously, you'll be fine. Hang in there!!!