Theodore And Airbus

[Ukridge]

In the thread dedicated to the transgressions of Busdriver, mention was made by SVQLBA of United’s Theodore. From his statements one is led to believe that this operation has stepped off smartly and certainly is not proving to be the unmitigated disaster that was prognosticated by the sparkling constellation of craven lapdogs in the press. (Disclaimer: I still wish though that I could sit at home as one of these expert commentators, field a call , render my opinion, collect my fee, and set Mrs. Ukridge up in her new auto)

The question then is if Theodore does indeed build a sound following and makes a mark with strong profitability, would United then be tempted to further increase the size and scope of this operation? In other words, United has made (from what I read on this forum) no secret of searching for ways to survive, change, and compete. If Theodore is a vehicle toward this goal, then it would follow that it would gain a place of primacy within the carrier’s operations.

Now, for the wild unfounded speculation. Rumors have abounded on this forum as to what United’s fleet will look like. Months ago there was a posting concerning Airbus and a possible investment. Though I did not see anything further on this topic, would not a strong and robust Airbus operation such as Theodore merit additional interest from the Toulouse based consortium? Is it possible that Airbus would ‘strike a deal’ with United on this as a means of gaining an even further foothold into the FCs? Just a thought from a casual observer who thinks that the changes in the industry (worldwide, but as always led from the States) may just not play out as first assumed. Theodore does not seem to be a static template and may be the flexible response that all the world’s large airlines must employ to fight the encroachment of the Young Turks.

Could it be that this is part of a Grand Unified Theory that is only now beginning to take form? Not to sound conspiratorial, but everyone likes a winner and if Theodore proves to be one, then United will just naturally attract attention from all quarters. Of course the risk is equal for the downside as well- just as when times were tough for United the vultures were in full flight, so if a strong horse is noted, the bets flow in.

Additionally, and not to be provocative, but over the past year we heard frequent mention of United’s assets being acquired by another airline. Has there been an update of when this will occur and to what extent? I remember all the Westward Ho talk that surrounded this discussion yet before one dons a sombreo and saddle, it is probably best to find out the status of this great migration.

Frankly, from my very humble and very outside viewpoint, there seems to be much greater forces involved with United – forces such as Theodore and the Star that are stronger than the aforementioned asset transfer.
Cheers

 

[Segue]

Just exactly why would Airbus want to invest in an airline? They are already leveraged enough against an airlines finananical success already, why would they want to increase it? Airbus builds planes, and I don't think their core skills lie in airline operations.

 

[Ukridge]

Actually the enquery was posed in a slightly different manner. The question is not if Airbus would take a direct investment in United (though that seemed to have been the implication of last year's postulations) but rather that they would provide favourable prices for the acquisition of additional aircraft. Please read my post carefully as I make clear that I ask this as a question and not as a supposition. It merely is based on the idea that if Theodore succeeds (a supposition) than what would United do with it (or him)? Common fleets seem to be an advantage of the new entrants (Easy Jet, RyanAir, your Jet Blue) and therefore if United's experiment is based on the Airbus aircraft why would a future deal not stand in order? The "investment" if you will, would be the same 'sweetheart' deals made to the others. On the face of it not a difficult proposition, but the added element of Airbus vs. Boeing makes patent that Airbus would like to secure even more of the North American market.
Cheers

 

[Segue]

Actually the enquery was posed in a slightly different manner. The question is not if Airbus would take a direct investment in United (though that seemed to have been the implication of last year's postulations) but rather that they would provide favourable prices for the acquisition of additional aircraft. Please read my post carefully as I make clear that I ask this as a question and not as a supposition. It merely is based on the idea that if Theodore succeeds (a supposition) than what would United do with it (or him)? Common fleets seem to be an advantage of the new entrants (Easy Jet, RyanAir, your Jet Blue) and therefore if United's experiment is based on the Airbus aircraft why would a future deal not stand in order? The "investment" if you will, would be the same 'sweetheart' deals made to the others. On the face of it not a difficult proposition, but the added element of Airbus vs. Boeing makes patent that Airbus would like to secure even more of the North American market.
Cheers

Airbus has always taken that strategy. They did so with the sweetheart walk-away leases they gave UAL in 1992. That deal raised the bar.

The A320 line will continue to be a very popular aircraft for LCCs around the world with or without Ted. Perhaps the Ted's success will provide a marginal lift, but nothing like the endorsement of a JetBlue.

You use too many words. Its hard to figure out what you are trying to say.

 

[Just Plane Crazy]

As I have mentioned in a different thread, it is my humble opinion that UA will over time convert all US domestic operation into TED with the exception of HUB to HUB traffic (flights between LAX, SFO, DEN, ORD and IAD). Only these and International flights are going to be conducted by United. Ted and UAX will have all the rest. And since Ted has an Airbus driven fleet, it would make a lot of sense that Airbus will do everything they can to help UA/Ted and to strengthen their market share in the US. Just imagine UA has to replace 147 B737, and 97 B757 with Airbus A319, 320 and 321. That would give Airbus a boost of 244 aircrafts. In addition they could be bargaining to replace the B767 with A330 aircrafts that would mean another 45 airplanes. This way UA/Ted would be more in sync with other STAR airlines (US, LH, SQ, SA, TG etc.). But as I said, it is my humble opinion and it would be a positive move for UA to have a slimed down fleet structure. A320 Family, A330, B747, B777

 

[Bigsky]

TED does seem to be having success in recapturing market share at DIA. A wise choice by UA to go head to head with F9 with the exact type of aircraft, the A320. If TED continues on it's successful path, why not expand the scope of operations to deal with the LCC threat in a more aggressive manner in other markets.

Commonality is certainly an advantage but when running a global airline like UA it also has it pitfalls. An example would be the US to Asia market where Airbus has yet to build an aircraft that could compete with the B747-400. Yes, the A380 is on the way but it could be overkill and the prospect of having the A380 to maintain fleet commonality and reduce costs is overridden by the fact the the A380 really does not fit into the marketing strategy for this financial environment anyway.

It is very possible that UA could expand their TED operation via the Airbus but my guess is that it with A320/319 type of aircraft

cheers

bigsky

 

[Just Plane Crazy]

Commonality is certainly an advantage but when running a global airline like UA it also has it pitfalls. An example would be the US to Asia market where Airbus has yet to build an aircraft that could compete with the B747-400. Yes, the A380 is on the way but it could be overkill and the prospect of having the A380 to maintain fleet commonality and reduce costs is overridden by the fact the the A380 really does not fit into the marketing strategy for this financial environment anyway.

I don’t think that it is the issue of having an aircraft that can compete with the B747-400. SQ has paved the way to replace Pacific B747-400 service with Non-Stop A340 service. So it is all a numbers game. If you don’t have to stop over in HKG or NRT to connect to SIN, BOM, etc, you don’t need all the seats to those destinations and a slightly smaller aircraft can handle it. As I said, it is all a matter of playing with numbers.

I don’t want to say that the A380 is an overkill. This aircraft will have its market and will replace many of the B747-400’s over the next decade or so.

 

[Cosmo]

Ukridge:

Following your naming logic, shouldn't you therefore refer to United as "Unitheodore"?

Sorry, I couldn't resist!

 

[Bigsky]

The A340 is not in the same league with the B747-400. Bypassing NRT or HKG and flying with increased frequency nonstop to Asia is not always viable alternative. Keep in mind that Air France and Lufthansa also fly the B747-400. I very much doubt the A380 will enjoy the successes of the B747 series. Since it's first flight in 1968, there have been well over 1000 whales sold throughout the world.

My point, however, it that it extremely difficult for one aircraft manufacterer to satisfy ALL the needs of a global airline. On a smaller scale, even B6 is buying the Embraer instead of the A318.

cheers

bigsky

 

[Cosmo]

Just Plane Crazy:

I disagree with two of your comments about United's future.

1.) Despite the commonality with the A320 family, I doubt that United will opt for the A330. Instead, I expect that the carrier will acquire quite a few of the new B7E7s as I believe it is a more capable aircraft to operate on long, thin routes like IAD-TLV or LAX-EZE. Plus, I understand that the B7E7 will have some cockpit commonality with the B777, which is currently a big part of United's international fleet. Of course, United isn't likely to be acquiring any new aircraft types for a few years.

2.) I also think it's highly unlikely that Ted will take over all of United's domestic mainline flying other than hub-to-hub service. Many of United's cities other than its hubs generate a substantial amount of business traffic, which is not really the raison d'etre of Ted. Cities like BOS, LGA, JFK, MIA, DFW, MSP, SAN and SEA, to name just a few, are not likely to become Ted cities any time soon. The same can be said for most of United's transcon services from IAD to the West Coast and from LAX/SFO to the East Coast. Lastly, while United's destinations in Hawaii certainly fall into the leisure category, their traffic volume and distance from the mainland will probably preclude the use of A320s. Besides, first class seats to Hawaii burn off a lot of accumulated frequent flyer miles.

 

[C54Capt]

Cosmo,
United could have achieved the domestic market results it wanted without the creation of Ted, so I hope you are correct in guessing that United mainline will not go away domestically. It is kind of sad seeing the once gracious gentleman (UA mainline) be forced to perform circus acts (Ted) for no reason.

bigsky,
The low-fare frenzy and the improving economy are creating a huge increase in passenger enplanements at DIA. Your talk about Ted (alone) taking back marketshare should be studied a bit more. Maybe it should just be kudos for UA mainline.

Keep in mind: Ted=UA mainline Aircraft + a few seats.
In other words the A-320s were removed from UA mainline service, sent to the paint shop, and then came out as Ted with a few more seats. Price charged for the seats went from UA mainline fare schedule to a clone of the Frontier fare schedule.

Busdriver, before you and your accounting team in charge of Ted start in on me, keep in mind that this post was simplified to the lowest common denominator and not meant to be submitted as part of the restructuring process. Besides I'm a big fan of yours.

 

[Ukridge]

Segue wrote: "You use too many words. Its hard to figure out what you are trying to say."


Are you related to my wife?


Cosmo: "Following your naming logic, shouldn't you therefore refer to United as "Unitheodore?"


You have a point, as it does have a very undistinct ring to it. Best keep me away from the marketing department!

 

[Fly]

UK - Are you certain that she isn't just ignoring you? BTW, Thanks for the great posts!

 

[Bigsky]

The low-fare frenzy and the improving economy are creating a huge increase in passenger enplanements at DIA. Your talk about Ted (alone) taking back marketshare should be studied a bit more

C54Capt

You have a point. I didn't mean to suggest that TED was winning back market share from only F9 but from other airlines as well....... and UA itself.

cheers

bigsky

 

[mga707]

Ukridge:

Following your naming logic, shouldn't you therefore refer to United as "Unitheodore"?

Sorry, I couldn't resist!

Our verbose friend calls Teddy by the formal "Theodore"; I go one step further out on the pop-culture reference limb and simply refer to it as "the Beav"....