BoeingBoy said:
usfliboi,
Yes, to partake in the consolidation that is forcast we certainly need to be around. However, if Siegel is as visionary in running this airline as he is in forecasting the inevitable consolidation, we don't have to worry about being the awkard teenager standing along the wall at the dance - we won't even be at the dance.
Jim
So Siegel's predictions of the future are unconvincing BECAUSE other 'experts' agree with him? (Sorry, I think I quoted the wrong post.)
logic alert
Look I'm sure that there is a lot of irrationality at CCY, mostly fear and anxiety, I suspect. But, where's the evidence that he is foolish to perceive the industry situation as he describes in his analysis. (I seem to remember reading something that sounded a bit dubious to me.... but not by much.)
In any case, my intuition tells me that CCY is concerned that making this death-defying recovery from U's spiral is VERY difficult and they might go beyond structural tolerances. GEEEZ... for 20 years U has been building the OPPOSITE of a competitive operation, prefering to retreat to the closest thing to monopoly markets that they can find (the seminal event being the U/PI merger).
So, know after procrastinating and taking the easy way out for 2 decades and AFTER 9/11, some crazy new executives decide to take the task of trying to change the business plan to COMPETE (that means to compete with today's competitors in markets were the customers are) and deal with U's unions and pull out of this death spiral, it's not particularly shocking that they are being very careful how they roll this thing out. (Not to mention that he's right about the industry changing more rapidly than most predicted.)
Look, could it be that U execs are worried that if they change the business plan for easy pricing before nearly matching other carrier's cost structure that they'll just bleed to death!
Furthermore, isn't it possible that U management is concerned that if other legacy carriers get the IDEA that U is going to institute such a move a bit before U gets its costs in line that THEY will go for the jugular to kill U before it can do much damage to their yields?
Isn't it possible that U management thinks that the financial community will not only focus financiing on U's competitors, but deny new financing to U AND pull existing financing to U, if U hints at doing this before getting a sustainable cost plan in place?
My point is that I suspect that this is like threading a needle and MANY if not MOSt of the industry observers think it can't be done. So, go figure that U management is not exactly announcing routes and fares and aircraft orders and schedule changes, when to do so would be basically, saying "OK, go ahead and shove the knive in, cuz we're bleeding already."
There's just somethings that seem so clear. Like, the reason U's prior hybrid model was only successful during very high boom times is because the aircraft that U was flying between small cities and medium hubs was too big and also internally incompatible. That's the reason to have dismantled the prior hybrid structure... but don't rebuild it WRONG again, get financing for appropriate aircraft and build it right.... get proper costs and go into the markets were the customers are (don't hide your high costs and fly to the three remaining markets on the east coast where you can charge monopoly prices!
I have no idea abou the front line management/operational practices, but I suspect that there have been 20 years of less than brilliant practices there too. Let me know if anyone really thinks those things can be changed with a memo.
!!!
