In order to figure out what our future holds, you have to sift through the clutter and concentrate on a few important issues. 1) David Bonner : The only reason he purchased US was to not take a bath on the aircraft he leases to US. He will manage his investment in US with one goal in mind, to sell his stake for more than he paid for it. He has no long term desire to own an airline. 2) Consolidation : There WILL be more mergers in this industry and US will participate. Mergers will occur for the simple reason that the "major airlines" will not be able to survive going forward without further reducing their costs more in line with the Airtrans and Jetblues of the world. As airlines are merged, there will be significant reductions of personnel, capital expenditures, facilities and infrastructure which will go a long way towards bringing the "majors" costs more in line with the competition. Having said this, the most logical end game for US is a combination with UA, and that I believe is where we are headed. 3) Lufthansa: Don't under-estimate the influence that this company has over the destiny of US. After so many attempts over the years to combine US and UA without success, look for Lufthansa to dictate marching orders to UA with regards to this issue. What is good for the Star Alliance is good for Lufthansa, and you can be assured that they are telling UA in no uncertain terms that a combination of UA and US is in the best interest of the Star Alliance. Every action being taken now by US and UA is being orchestrated to enable a future merger of the two companies. 4) Pit Hub: The Pittsburgh hub IS expendable. US is running-out the clock on this issue to give them more time to assess the situation with UA. Siegel will take nothing less than a 500 million reduction in debt at the airport in order to stay. But he has already said that he will not commit to any minimum employment levels or number of flights with any agreement. In other words, he doesn't want to OWN this "house" any longer, he just wants to have a "walkaway lease" with the only promise being that US will stay and hub the airport if it makes sense. Basically, NO committments. The reason for this is that the combination of UA and US in the future does not need a PIT hub. When a merger does occur, US/UA will walk away from PIT and concentrate on DUL.
The Big Picture
- Thread starter birdseyeview
- Start date
PITbull
Veteran
Welcome new poster,
If what you say has some credence, even 50% of it....then, $%$%'um.
If all this sacrifice was to get rid of U or sell it, and (as I always thought and said) to position the co. to line the pockets of senior management on the sacrifices of all employees who were kicked to the streets and those who stay on and endure more suffering daily....
Then DOWN THEY GO. We employees here at U will not go out in silence....we will batlle them for OUR airline, OUR jobs.... all the way out the door!
If what you say has some credence, even 50% of it....then, $%$%'um.
If all this sacrifice was to get rid of U or sell it, and (as I always thought and said) to position the co. to line the pockets of senior management on the sacrifices of all employees who were kicked to the streets and those who stay on and endure more suffering daily....
Then DOWN THEY GO. We employees here at U will not go out in silence....we will batlle them for OUR airline, OUR jobs.... all the way out the door!
Great post, birdseyeview. I've said all along U is positioning itself to be acquired and used the bankruptcy process to rid itself of assets no other airline wanted anyway. The last remaining piece is PIT. U's decent transatlantic routes, decent Caribbean presence and presence in major east coast business markets will fit in nicely with United, Northwest and maybe even American.
sniff, sniff, sniff, This was not even hard to find.
Thanks for your insight DAVE (birdseyeview) what is the fasination with birds and you lately? I have lots of friends who would love to show you their"s.
Thanks for your insight DAVE (birdseyeview) what is the fasination with birds and you lately? I have lots of friends who would love to show you their"s.
I do believe that there will be consolidation in the industry in the next couple of years.
However one must realize that Dave's vision is to make this airline a super-regional operation. He has already placed huge orders with the regional carriers and this is the direction he is heading. With that being said, he will not run this operation out of Philly because it can not handle the traffic and it makes no sense to do it out of Clt because it is further away than the population centers of the North East.
If Dave wanted out of Pitt he would have said bye-bye. He did not for the very reason he wants to emulate Delta's enoromous success with regionals out of CVG in Pittsburgh. The infastructure is there and the employees are there to make Mid-Atlantic the key to Dave's success. You will not be able to run this operation as smoothly at any of the other hubs.
Finally in regards to the United merger. That is not going to happen for at least another 2 years and Dave needs to make the state of Alabama money now. His focus is on profitability and the RJ's are going to do the trick for him. United first concern is getting out of bankruptcy.
However one must realize that Dave's vision is to make this airline a super-regional operation. He has already placed huge orders with the regional carriers and this is the direction he is heading. With that being said, he will not run this operation out of Philly because it can not handle the traffic and it makes no sense to do it out of Clt because it is further away than the population centers of the North East.
If Dave wanted out of Pitt he would have said bye-bye. He did not for the very reason he wants to emulate Delta's enoromous success with regionals out of CVG in Pittsburgh. The infastructure is there and the employees are there to make Mid-Atlantic the key to Dave's success. You will not be able to run this operation as smoothly at any of the other hubs.
Finally in regards to the United merger. That is not going to happen for at least another 2 years and Dave needs to make the state of Alabama money now. His focus is on profitability and the RJ's are going to do the trick for him. United first concern is getting out of bankruptcy.
PITbull
Veteran
All sentiments are plausible.
PIT is definitely part of this "New Business Plan" equation. Management is shrewd enough to make every attempt, and use every kniving tactic to get the PA Delegation to commit to paying for the whole "kitten Kabootle". But, I know for a FACT that Redell is no "dummy", and he is "on" to this mangement style. You can take that to the bank. Trust, there will be something in this for we employees and Laobr in Pittsburgh...OR NO DICE.
Big talk that airlines are interested in coming into Pittsburgh. AA will sart to nonstops from PIT. They will be croaching on U. The cities U pulls out of or puts in their little "cry baby" planes, the Big Majors will be in big jets. Maybe not alot of flight, but I believe many airlines will come in.
So, luck to us all. In the big scheme of things...there maybe things we can't control, but together, THERE ARE MANY THINGS WE CAN!
PIT is definitely part of this "New Business Plan" equation. Management is shrewd enough to make every attempt, and use every kniving tactic to get the PA Delegation to commit to paying for the whole "kitten Kabootle". But, I know for a FACT that Redell is no "dummy", and he is "on" to this mangement style. You can take that to the bank. Trust, there will be something in this for we employees and Laobr in Pittsburgh...OR NO DICE.
Big talk that airlines are interested in coming into Pittsburgh. AA will sart to nonstops from PIT. They will be croaching on U. The cities U pulls out of or puts in their little "cry baby" planes, the Big Majors will be in big jets. Maybe not alot of flight, but I believe many airlines will come in.
So, luck to us all. In the big scheme of things...there maybe things we can't control, but together, THERE ARE MANY THINGS WE CAN!
ClueByFour
Veteran
You cannot hub the existing PIT flights thru PHL. The capacity is not there, and Dave knows it. He blinked.
US cannot outbid more solvent airlines for ORD or DEN. If US gets IAD, you can rest assured the feds will require divestiture of DCA for antitrust reasons. And, you have to fund it--Bronner is probably not inclined to do so.
Until these two issues are addressed, those advocating either are clearly looking to spread FUD.
US cannot outbid more solvent airlines for ORD or DEN. If US gets IAD, you can rest assured the feds will require divestiture of DCA for antitrust reasons. And, you have to fund it--Bronner is probably not inclined to do so.
Until these two issues are addressed, those advocating either are clearly looking to spread FUD.
Starting to look like, once again U is being set up for sale. Dave's job is to shine it up and sell it off. Bonner will easily recoup his money, it appears that is the whole purpose.
Let them sell us, the mechanic and related contract states the following:
Upon a change in control defined as the sale of all or substantially all of the assets or common stock of the Company or US Airways Group in a single transaction (or in multi-step related transactions) to a single purchaser (or a group pf purchasers acting in concert), the hourly rates of pay under this agreement shall be increased to the rates which would have been effective following the Pay Parity Adjustment in October 2003 under the Pay parity Letter of Agreement. In addition to such hourly rates the IAM will have the right to extend the duration of the IAM Restructuring Agreement for one, two or three years at the IAM's option, past the amendable date of the IAM Restructuring Agreement, with across the board wage increases of four and one half percent (4.5%) on the amendable date on each of the three (3) annual anniversaries of the amendable date thereafter.
Upon a change in control defined as the sale of all or substantially all of the assets or common stock of the Company or US Airways Group in a single transaction (or in multi-step related transactions) to a single purchaser (or a group pf purchasers acting in concert), the hourly rates of pay under this agreement shall be increased to the rates which would have been effective following the Pay Parity Adjustment in October 2003 under the Pay parity Letter of Agreement. In addition to such hourly rates the IAM will have the right to extend the duration of the IAM Restructuring Agreement for one, two or three years at the IAM's option, past the amendable date of the IAM Restructuring Agreement, with across the board wage increases of four and one half percent (4.5%) on the amendable date on each of the three (3) annual anniversaries of the amendable date thereafter.
Amen to that. U cannot survive on the long term with such a high cost sturcture and their one sided route structure. The only way I figure U can survive being a stand alone carrier is probably by copying some of the business aspects of Alaska Airlines (primarily a West coast airline and has some aspects that is a mix of a major network carrier and a low cost carrier) which would mean 1 or 2 or may be three types of mainline jets and leaving the short flights for their regonial partners. I don't think David is interested in transforming U into that but he is busy preparing U to be merged with another airline and Bonner will want to receive twice or three times as much money that he invested in it from the buyer.Diesel8 said:
Dea Certe
Veteran
- Aug 20, 2002
- 889
- 0
I think Dave is working on turning US into the feeder for UAL. We will be the biggest, baddest commuter in the Star Alliance constellation! I'll bet the long-hauls are worked into UAL's schedule. Note that we are moving to UAL terminals in LAX and SFO.
The international routes will make good chips to sell off.
Purely paranoid speculation on my part.
h34r: Dave has said he wants to turn US into a "super-regional" carrier, so if I take him at his word...maybe it's not so paranoid.
Dea
The international routes will make good chips to sell off.
Purely paranoid speculation on my part.
h34r: Dave has said he wants to turn US into a "super-regional" carrier, so if I take him at his word...maybe it's not so paranoid.Dea
Dave Siegel manages expectations with third party comments to create FUD, just like in this thread.
Here we have all of this talk of a "super regional", however, nobody talks about Siegel's recent comment in the September 2003 Air Transport World story of the company eventually flying to 20 European cities.
In regard to AA, UA, or NW acquiring US, AA nearly missed bankruptcy, Duane Woerth told the ALPA MEC a few weeks ago that NW will be in bankruptcy next year without pension relief, and UA cannot get exit financing.
Therefore, how can any of these companies acquire US?
I agree the mature carriers need to consolidate, take capacity out of the system, and create economies of scale to reduce unit costs.
However, let's not forget US chairman of the board David Bronner has speculated three times UA has a 50-50 chance of surviving. He said that if UA were to sell assets, he would consider backing the purchase of some "if it would be beneficial to US."
Let's not forget that many industry observers believe UA must sell assets to get exit financing, therefore, there must be a buyer and I'm not sure that DL, AA, CO, or NW have the financial resources to go shopping.
I agree US in itself, with about $2 billion in liquidity, probably would not acquire UA or its assets, however, Bronner's $25 billion could.
Separately, US Airways is spending significant capital to re-paint its entire fleet, the company is buying the pilot/flight attendant “Pref Bid†program, and has received financing for 150 RJs. If the airline was going to be sold, why would the company make these moves and weaken the balance sheet?
I'm not saying a deal couldn't come along, I just do not believe it will come along and the UCT has a much better chances.
Respectfully,
Chip
Here we have all of this talk of a "super regional", however, nobody talks about Siegel's recent comment in the September 2003 Air Transport World story of the company eventually flying to 20 European cities.
In regard to AA, UA, or NW acquiring US, AA nearly missed bankruptcy, Duane Woerth told the ALPA MEC a few weeks ago that NW will be in bankruptcy next year without pension relief, and UA cannot get exit financing.
Therefore, how can any of these companies acquire US?
I agree the mature carriers need to consolidate, take capacity out of the system, and create economies of scale to reduce unit costs.
However, let's not forget US chairman of the board David Bronner has speculated three times UA has a 50-50 chance of surviving. He said that if UA were to sell assets, he would consider backing the purchase of some "if it would be beneficial to US."
Let's not forget that many industry observers believe UA must sell assets to get exit financing, therefore, there must be a buyer and I'm not sure that DL, AA, CO, or NW have the financial resources to go shopping.
I agree US in itself, with about $2 billion in liquidity, probably would not acquire UA or its assets, however, Bronner's $25 billion could.
Separately, US Airways is spending significant capital to re-paint its entire fleet, the company is buying the pilot/flight attendant “Pref Bid†program, and has received financing for 150 RJs. If the airline was going to be sold, why would the company make these moves and weaken the balance sheet?
I'm not saying a deal couldn't come along, I just do not believe it will come along and the UCT has a much better chances.
Respectfully,
Chip
Dea Certe
Veteran
- Aug 20, 2002
- 889
- 0
Chip,
Maybe the UCT could be exactly what I fear: US becomes the Star feeder of choice but remains as a seperate entity. The transatlantic/Caribbean could easily feed into the domestic UAL routes. That would solve all the tricky senority integration problems.
Thus, US could stand alone, easily discard the PIT mainline hub in favor of hubs more compatible with UAL's system and be the "super regional" Dave envisions. UAL would feed the US RJ's to all those cities in the Northeast. Everyone in Corporate and RSA will be happy.
Don't think I like it, I surely don't. But it does make sense.
Dea
Maybe the UCT could be exactly what I fear: US becomes the Star feeder of choice but remains as a seperate entity. The transatlantic/Caribbean could easily feed into the domestic UAL routes. That would solve all the tricky senority integration problems.
Thus, US could stand alone, easily discard the PIT mainline hub in favor of hubs more compatible with UAL's system and be the "super regional" Dave envisions. UAL would feed the US RJ's to all those cities in the Northeast. Everyone in Corporate and RSA will be happy.
Don't think I like it, I surely don't. But it does make sense.
Dea
