Tilton...and...Consolidation..."AGAIN"

[The Gopher]

Also, I understand a fairly big announcement for new Euro service is to be announced in the next couple of months.

I am probably much closer to that knowledge than you are, and I have heard some chatter, but not to the point of actually offering new UA service.

What I can see is flying a route from one of our hubs to an existing UA city in Europe.

 

[NewHampshire Black Bears]

First off, let me say what you know, "I don't know ####". There, that being said:

No, what you're looking at here, unbelievable as it may sound, is EXTREME consolidation. I'm saying, CAL/UAL or UAL/CAL and then a large part of DAL coalescing into one industry altering brute. Don't know the sequence or what triggers this, then LCC getting a large piece and then there's Southwest...UAL will compel AMR/NWA.

It'll end up being, imho:

UAL - CAL management

AMR - AMR management

LCC - LCC management

LUV - LUV management

These managements/businesses have or are being entrusted with the keys to the 21st century industry.

Of course this is just another opinion, but we're talking about changes that will absolutely and fundamentally change this industry forever, for predictable robust health,

...or at least in the long run, with some pain ramping up to the potential...

Fund your future, Invest! ( I M H O )

Paradigm Shift

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bulscu,

Once "one deal" goes, the rest of the domino's will fall into place.

Bottom line, I(mostly) agree with you !

NH/BB's

AA has no options but to watch.

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Thanx for clearing up, how much you DON'T know about AA !


NH/BB's

 

[whlinder]

Also, I understand a fairly big announcement for new Euro service is to be announced in the next couple of months.

I thought UA was maxed out on their widebodies. Where would the planes come from?

 

[JungleClone]

magsau,

I agree with you. In my view, any merger scenario involving UA would usher UA's current management team out the door. And rightfully so, in my opinion. Everyone gets slap happy patting Tilton on the back for all that he did during bankruptcy. The bottom line is that Glenn and the Boys did nothing more than pluck the low hanging fruit off the vine. They didn't get nearly creative enough in their cost-cutting. They went the predictable route and gouged the employees, only to then turn around and reward themselves with nice stock bonuses. I can't see how any knowledgeable investor would want that team running the show.

whlinder,

I was wondering that myself. If, indeed, UA is getting ready to launch a slew of new routes to Europe, which would most likely start-up on or after April 1 (when the summer international slot season begins), where will the aircraft come from? If it's only a couple of new routes, than they'd already have the aircraft from seasonal down-gauges and shifts off the winter international schedule. But it does make you wonder if they don't have something larger planned. I tend to doubt it, since Europe isn't the money-maker that Asia is. And considering that UA's non-labor unit costs are still pretty high, I don't imagine that service to Europe would cost-out very well.

 

[magsau]

I thought UA was maxed out on their widebodies. Where would the planes come from?

I asked the same question but was told they were available. My guess is you take them from some of the domestic transcon flying and keep them on the coast. Some of the two class 767's may actually see europe in the interior reconfiguration they keep talking about. If the merger is afoot I suspect we will go to a two class international operation akin to both DL and CO. Also, I would not be surprised to see some of the 757's that are ETOPS flown to Europe. This rumor came from a fairly reliable source at EXO but like all rumors believe it when it actaully happens.

 

[Cosmo]

I asked the same question but was told they were available. My guess is you take them from some of the domestic transcon flying and keep them on the coast. Some of the two class 767's may actually see europe in the interior reconfiguration they keep talking about. If the merger is afoot I suspect we will go to a two class international operation akin to both DL and CO. Also, I would not be surprised to see some of the 757's that are ETOPS flown to Europe. This rumor came from a fairly reliable source at EXO but like all rumors believe it when it actaully happens.

I thought the transcons done by the international fleet were mainly for maintenance reasons so that the periodic overnight checks could be done in SFO and/or LAX. Any truth to that rationale? And even if the aircraft doing those transcons could be shifted to new international markets, what would replace that lift? It's not as if those mostly hub-to-hub flights go out empty.

A more likely scenario, IMHO, is for United to re-lease some of the B747-400s that have been sitting in the desert for a few years. I would imagine those lessors might be a little more eager to consider United's offer after receiving no payments at all in that time. In fact, given the "conventional wisdom" that United currently has no spare aircraft (other than the necessary operational spares), that may be where the -400s are coming from next year to operate the resumed SFO-TPE flights. And there are also four ex-United, and soon to be ex-Varig, B777-200s (two ERs and two "A" models) that United might take back as well if the lessors are "cooperative".

The question then becomes: what would United do with these planes? My guesses (which are worth what you're paying for them 😛 ), in descending order of likelihood, are: 1.) SFO-TPE (as noted above); 2.) IAD-PEK if the DOT awards United the 2007 frequencies, which I believe is a very strong possibility; 3.) IAD-DEL which needs only one aircraft if done in conjunction with IAD-PEK and would further build on the "Capital-to-Capital" theme, especially if both routes were started at the same time; 4.) IAD-MAD with MAD being a Star Alliance hub that was one of the few major European cities that received no additional transatlantic service this year, and it also qualifies as "Capital-to-Capital" service; 5.) ORD-VIE to connect to another Star Alliance hub; 6.) IAD-Italy, either MXP due to Alitalia's upcoming cessation of service on that route or FCO as another "Capital-to-Capital" service, or perhaps both; 7.) DEN-MUC to complement Lufthansa's service to FRA; 8.) IAD-GIG to partially replace Varig's service and allow the IAD-GRU flight to handle more GRU passengers also impacted by that carrier's retrenchment; 9.) IAD-LIM with LIM being the largest international Washington (DCA + IAD) market without nonstop service and another "Capital-to-Capital" market (anybody seeing a trend here? ) and 10.) IAD-TLV since U.S.-Israel traffic is booming. There could also be frequency increases, such as making the second ORD-HKG flight daily and offering additional LAX-SYD service. Of course, while I believe that these suggestions have decent potential, beyond numbers "1.)" and "2.)" above that United will start and wants to start, respectively, they have been made without any serious review of traffic and yield figures. More importantly, it's unlikely that more than three or four of these routes could be done in the next year, and for United to implement all of them would likely take at least three years and probably longer.

Just some things to consider and, as always, IMHO.

 

[Bulscu]

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bulscu,

Once "one deal" goes, the rest of the domino's will fall into place.

Bottom line, I(mostly) agree with you !

NH/BB's


Well here's the thing, in this extremely lemming-like industry, where alterations as small as a few gates at places like Midway, or elsewhere, which throws everyone concerned into a Tizzy, imagine the indexed impact of 'ANY' major airline merging with another, or the impact it would have on the entire airline industry. That is to say just the selling of a few assets impacts the long lasting 'Status Quo', and big time. Can you imagine with one merger, what kind of scramble that'll cause, and the next one, with an even larger disruption to the 'Status-Quo'...not unlike 'Musical Chairs', someone's left standing, with no chair or partner.

My belief is NO ONE is IMMUNE to the natural fallout when this process starts, and there's no way to predict, with any certainedy, what starts it or who starts it, Hell, EGO's alone bring in enough variables, that throws a wrench into any logical prediction. It seems reasonable to think, if UAL picks off CAL, AMR would be forced to react. Who would be better than another that has a Pacific Operation?

I sure as 'H...' don't know, I just think where's there's smoke there's fire, and I believe it's gonna get crazy, real crazy different, than the 'Status-Quo' here pretty soon.

I stand by my predictions, of Consolidation via mergers and some fragmentation...

But what the Hell do I know???

Should be interesting though.

 

[magsau]

I am probably much closer to that knowledge than you are, and I have heard some chatter, but not to the point of actually offering new UA service.

What I can see is flying a route from one of our hubs to an existing UA city in Europe.

Gopher,

You probably have better sources. Although my guy has been pretty good in the past, although he did not leak KWI. That one was kept very quiet so things can be secret I suppose. Again I won't believe anything until it actually happens.

 

[WorldTraveler]

doesn't UA operate its Hawaii 767 services with derated ERs which could be "uprated" and returned to int'l service? Given that neither UA or AA have not been very successful in continental Europe, I'd be surprised if UA does much although there probably are some Star to Star hub routes that could work.

Also, I noticed that Tilton's contract has been extended so the board apparently wants him to keep trying to find a partner for UA.

 

[jbguppy]

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bulscu,

Once "one deal" goes, the rest of the domino's will fall into place.

Bottom line, I(mostly) agree with you !

NH/BB's
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Thanx for clearing up, how much you DON'T know about AA !
NH/BB's

Sorry,

AA has gotten too big, and if there is one target for the overcapacity police to hit on from the US govt, it is your beloved Dallas based airline.

AA will not get DOJ approval for any more acquisitions.

Shows how much you have been paying attention....

JBG

 

[featheroleather]

 

[LGA Fleet Service]

Sorry,

AA has gotten too big, and if there is one target for the overcapacity police to hit on from the US govt, it is your beloved Dallas based airline.

The government got out of regulating the airlines, or weren't you paying attention?

 

[superG]

doesn't UA operate its Hawaii 767 services with derated ERs which could be "uprated" and returned to int'l service? Given that neither UA or AA have not been very successful in continental Europe, I'd be surprised if UA does much although there probably are some Star to Star hub routes that could work.

Also, I noticed that Tilton's contract has been extended so the board apparently wants him to keep trying to find a partner for UA.

Hey WT
I'm tired of paying to fly HA/UA to LIH, can U put a flight on anytime soon?

 

[Borescope]

The government got out of regulating the airlines, or weren't you paying attention?

The DOJ isn't out of the regulating business as far as anti-trust and the last time I looked the DOJ was part of the US Gov't. or weren't you paying attention?

 

[USA320Pilot]

Continental CEO Says No -- Has No Merger Plans

By KATHLEEN MILLER

MEXICO CITY (AP) (Oct. 2) - Continental Airlines Inc. CEO Larry Kellner said Monday that his company has no plans to merge with another carrier despite industry speculation it could join forces with United Airlines.

"We're in a position that is very good competitively. We're in a position where we can grow. And we're in a position where I'd prefer to remain independent," Kellner said at a luncheon celebrating the Houston, Texas,-based company's 40th anniversary of service to Mexico at the American Chamber of Commerce in Mexico.

Kellner said he did not plan to meet with United officials while in Mexico City. United officials in Mexico who attended the luncheon confirmed that.

"We just came to hear the head of Continental's positions because he is always very interesting," said Jesus Noguez, general manager of United in Latin America.

Last week, Crain's Chicago Business reported that United had hired an investment banker adding credence to widespread industry talk that it could merge with a carrier such as Continental or Delta Air Lines .

Kellner said in the next few years Continental plans to increase flights and seats to its 30 destinations in Mexico, and may expand service to one or two more Mexican airports.

Continental officials said the airline will continue to provide service to the state of Oaxaca, despite civil unrest in the region. Flights to the Yucatan Peninsula, reduced following several hurricanes last year, will also be fully restored by December, officials said.