NW-CO-DL Sign Alliance Agreement - Seek SkyTeam

luv2fly

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Aug 21, 2002
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What did you expect? I believe Mullin signed off on this in order for the gov. to take a closer look at U/UA. He is trying to kill the deal. As for DL codeshare, it really doesn't matter. Leo just announced another 50 furloughs for Oct. bringing the total to just over 900 pilots. Meanwhile they continue to hire pilots for the connection carriers. That's a heck of a way to ask for DALPA's blessing. Hmmmm... I wonder what the answer will be?
 

Tim47SIP

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Aug 23, 2002
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Does it matter? He has pretty much blown them off anyway, but thier contract has allowed Leo to legally accomplish what Delta has done up until now. Dont know what mainlines PWA states concerning this. Should here something soon as the restructuring plan comes out on the 26th, I believe. [:0]
 

a320av8r

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Aug 20, 2002
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They don't care if it passes. The objective is to have DOT come out and say either nobody can code share or we need another 2 years to look at UA/U. Meanwhile UAL and U are bleeding and DAL/CAL/NWA can wait it out. CAL/NWA are grandfathered in their codeshare since they started before it required a review.
 

luv2fly

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Aug 21, 2002
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On 8/23/2002 12:34:05 PM

Does it matter? He has pretty much blown them off anyway, but thier contract has allowed Leo to legally accomplish what Delta has done up until now. Dont know what mainlines PWA states concerning this. Should here something soon as the restructuring plan comes out on the 26th, I believe. [:0]
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Actually, it does matter. There are certain sections of the PWA that are affected by FM. Guess what. Codeshare is not one of them. The deal is as good as dead.
[:devil:]
 

trvlr64

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Aug 20, 2002
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received this blurb on the JOESENTME.COM website/newsletter:

COUNTER INTELLIGENCE:
The Big Bluff on Airline Code Shares
Watch for Delta, Continental and Northwest to announce a three-way code-share deal in the next few days. Ostensibly, all three carriers will offer reciprocal frequent-flyer and airport-club privileges and place their codes on each others flights. Continental and Northwest are also supposedly defecting from the Wings Alliance (anchored in Europe by KLM) to join the Delta-Air France SkyTeam Alliance. So what's wrong with this picture? Pretty much everything. The Transportation Department isn't likely to permit a code-share deal between the nation's third, fourth and fifth largest airlines, and that may be the ultimate point. The three carriers, who all oppose the proposed United-US Airways code-share, may be hoping that the DOT will use the threat of such a massive code-share consolidation as an excuse for scuttling the United-US Airways deal. The chances of a United-US Airways code-share deal being approved? Fifty-fifty at best. The chances of the tri-partite Delta-Continental-Northwest deal getting approval? Virtually nil.


I guess competition is NOT a good thing amongst the MAJOR airlines anymore. I can only hope that UA/US will survive this threat and join forces soon. As a consumer who can I write to in the government to show my support for the UA/US codeshare?
 
OP
C

chipmunn

Guest
I believe the timing of the DL-NW-CO three-way alliance is designed to disrupt the UA-US accord.

10 days ago Siegel told me on one of our flights he was confident the DOT would permit the UA-US alliance to proceed. I suspect the government understands the importance of two failing carriers using their alliance to prop each other up.

However, in my opinion the story is different for the three financially strongest U.S. hub and spoke airlines combining, which will enable this group to have nearly 36 percent of the domestic traffic and 40 percent of all U.S. traffic.

The DOT extended its UA-US review by only thirty days, but could have done so for 150 days, which is a good sign for the agreement proceeding. There are signals that the federal political view of US is changing with the 91-4 Senate vote to not alter the loan guarantee program and the conditional loan guarantee approval.

Meanwhile, another important point is that UA, a carrier who one could argue has more government pull than other airlines, was told "no way" to their current loan guarantee application by the ATSB. This point sheds a different view of UA versus US within the confines and hallways of the ATSB.

Mullin is clearly trying to "kill off US" and does not want a lower cost, viable carrier on the East Coast with access to UA's world-wide network. Mullin's motives are transparent and he is hoping to fix his company's financial problems by leading the charge for the failure of US.

Even though US has been somewhat snake bit in the past by the government, the airline has two recent government victories and a management team trying to fix its mess.

I'm very optimistic the US-UA code share will proceed, I suspect that eventually there will be some kind of UA-US combination (I suspect so does UAL ALPA or why would they have included pre-nuptial seniority language into their ERP concessionairie agreement?), and the three-way alliance will be killed.

Chip
 
What a fantastic wish list! UAL arguably more pull in Wash.? I do believe the Pres. is from Texas,(Cont.) no? Delta carries more politicians up and down the East coast and throughout the South than U. As well as Mrs. Elain Chow coming from the BOD of NWA. Ever heard of Obeastar? Do you really think that the airlines that showed financial restraint during the times of pleanty should be punished and forced to compete with those that go BK because of poor management. Then emerge with a cost advantage. So, what you seem to be saying is UAL and AMR can't compete with and entity that's larger than they are? Doesn't work that way. The "Tri-Partite" will kill the U/UAL alliance. If it does not. It will kill it through sheer competion. We have not survived as the three healthest by being taken advantage of. NWA, Delta, are by far two of the shrewdest managements in the industry. One cannot look for savior at the expense of others. They will have to come up with some DAMN good excuses NOT to allow the Tri-Partite....IF they approve U/UAL. As far as mergers are concerned...You could very well see a Tri-Partite merger as well...If need be to stay competitive. Moore's Law does not say that UAL or AMR MUST be the one in the driver's seat of the largest airline in the nation... or World. Carpe Momentum!
 
OP
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chipmunn

Guest
Hi Blue:

Blue said: UAL arguably more pull in Wash.?

Chip comments: From a PAC perspective yes, I believe UAL does. In fact, reports indicate UA had the political power to complete the UA-US merger, if they had elected to complete the deal.

Blue comments: I do believe the Pres. is from Texas,(Cont.) no?

Chip comments: True, but CO has been through bankruptcy twice and according to Bethune & Anderson, their alliance provides each carrier with 4 percentage points for each airlines loan factor. UA-US want the same playing field.

Blue said: Delta carries more politicians up and down the East coast and throughout the South than U.

Chip comments: Each airline has approximately the same East Coast capacity when measured in ASMs. Could you show me a report that accurately states DL carries more ploiticians than US?

Blue asked: Do you really think that the airlines that showed financial restraint during the times of pleanty should be punished and forced to compete with those that go BK because of poor management.

Chip comments: I'm not sure I said this. September 11 changed the playing field and if I remember correctly, Mullin, Anderson, & Bethune all stood before Congress strongly lobbying for the ATSA. Moreover, each of these airlines accepted the federal grant, along with other carriers. Some airlines were impacted more by the events of September 11 than others due to the closure of Washington Reagan National, having large New York and Washington operations, and the problems associated with the security hassle due to a route network that is more focused on short haul. Could the federal government understand how they have burdened those carriers more affected by the terrorist attacks and are trying to level the playing field?

Blue said: Then emerge with a cost advantage.

Chip comments: Isn't this what CO did twice and then turned to NW for the alliance to prop itself up? Also notworthy, back in the 90's NW was on the verge of bankruptcy when it cut a last minute concession deal with its unions. The government recongized both NW & CO were both in trouble and permitted the alliance to proceed with an out of court settlement.

Blue said: So, what you seem to be saying is UAL and AMR can't compete with and entity that's larger than they are?

Chip comments: I do not believe I said this.

Blue said: The "Tri-Partite" will kill the U/UAL alliance.

Chip comments: Maybe, maybe not. I agree this is the intent when the combination would create a system with over 40 percent market share. In addition, the EWR, LGA, & JFK issue has signficant antitrust problems that may not be satisfactorily addressed because of the multiple monopoly routes, when the deal is viewed on a city-pair by city-pair basis. Nonetheless, there are reports from Crystal City that indicate the UA-US deal will proceed, however, that could always change.

Blue said: If it does not. It will kill it through sheer competion.

Chip comments: During the UA-US merger review I read one analyst report that said the merger would cause a revenue diversion of $450 million from DL, $250 million from AA (pre-TWA), and $250 million from NW per year in revenue. In addition, during a meeting Stephen Wolf had with his pilots earlier this year that I attended, Wolf said UA's internal review believed the merger would generate an additional $1.6 to $1.9 billion per year in additional revenue and AA's number were even higher. I suspect the alliance when fully integrated will create about $600 million per year in combined profits for UA-US. These two carriers simply want what NW & CO have enjoyed for years and is one reason why Mullin appears dtermined to try and kill off US.

Blue said: NWA, Delta, are by far two of the shrewdest managements in the industry.

Chip comments: I'm sure Carty, Bethune, Kelleher, & Siegel may take exception to your comment.

Chip
 
Aug 19, 2002
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Has the proposal for this even been delivered to the DOT yet?

Something of this scale is not going to be rubber stamped in thirty days.

When the DOT completes its review, I would expect it to have a sizeable list of requirements to be met before it grants approval.
 
Chip comments: Isn't this what CO did twice and then turned to NW for the alliance to prop itself up? Also notworthy, back in the 90's NW was on the verge of bankruptcy when it cut a last minute concession deal with its unions. The government recongized both NW & CO were both in trouble and permitted the alliance to proceed with an out of court settlement.
Sorry buddy, NWA was flying in clear Blue financial skys when we spent $1/2 Billion for our investment in Cont. Our out of court settlement was the 25 year alliance, plus our profit. There was NO need to permit our alliance based on " both being in trouble financially" simply a false statement. IF UAL had as much clout in Wash. as you think, the both of you would have merged and perished by now...If's, on the verge, and could have's, really are irrelevent in reality. The fact IS NWA has had 50 STRAIGHT years in it's history of profitability save the "LBO" which was brought on by the fact that we OWNED our fleet and sat on a Huge abount of cash. NO airline including SW has yet to match that accomplishment. We have always ran a tight ship. Time will tell who has the pull in Wash....
 

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