UA AND US Merger Talks

[freedom]

Fair point. Federal government is not especially subject to economic hard times.


PHL, sure. But I seem to recall CLT as being pretty financial-sector heavy, and that's been a rather tough part of the economy.


Here I strongly disagree, for several reasons, which I will outline below:


Clearly you don't live in California, or you'd understand why that statement is pure fantasy. I'd suggest you look into the details of Proposition 13 before you talk about taxes in California.


Which is the first reason why I don't think PHX makes sense for a network airline's hub.


Blah, blah, blah...see above re: Proposition 13.


Yes, the Arizona government will bend over backward to try to keep airline business in the state. This is the only positive I see with keeping a PHX hub. And it's probably worth reminding that US got phenominal concessions from Pittsburgh government a decade ago. Today, PIT is an outstation for the most part. So anything Arizona's government offers may delay the inevitable, but it probably won't stop it.


O&D margins are the more important factor. DEN's are better. PHX's are good enough for a focus city, for now.


Not from where I sit. And I don't even work for the airline.

i've been watching cali like a hawk , their state government is in perpetual gridlock and their always a day away from insovlency ... they are not a good choice for major operations ...

i don't know what prop 13 entials , but i do know it was written awhile ago ... when things get bad all bets are off .... if our company is going to guage the future they had best go with fundamentals ... arizona has shown a willingness and ABLITY to trim it's expensess ... We used to have all day kindergarden , i hear next year it's gone due to budget constrants ... we may not have the most compent state government , but their willing to cut where ever and however is necessary to keep out state budget blanaced without raising taxes ... i don't think cali can say the same ...

 

[freedom]

I thought OP was joking about the "FANTASTIC" part.

no way am i joking , without DP i'd have long since been out of a job ... i doubt there's any way AWA would have made it on it's own this far ... then when i think of US airways , i don't think they'd still be around today either ....

Not only is he a good leader , but he's an asset due to the faith trust and general adoration he recvieves in the investment community ...

If Doug is trying to merge us with united then he's making the right choice in a hard enviroment ..

 

[mweiss]

i've been watching cali like a hawk , their state government is in perpetual gridlock and their always a day away from insovlency ... they are not a good choice for major operations ...

The perpetual gridlock comes from needing a supermajority to pass a budget, or a tax increase of any sort. In addition, about 2/3 of the state budget is constitutionally mandated. The legislature, even if they wanted badly to cut spending, has few options to do so.

i don't know what prop 13 entials , but i do know it was written awhile ago

1978. Read all about it here.

when things get bad all bets are off

Except that it's pretty hard to get away with violating the state constitution.

Regardless, just looking at O&D numbers will make it very clear that PHX is no match for LAX or SFO. There are plenty of reasons why that will persist for a long time.

 

[freedom]

The perpetual gridlock comes from needing a supermajority to pass a budget, or a tax increase of any sort. In addition, about 2/3 of the state budget is constitutionally mandated. The legislature, even if they wanted badly to cut spending, has few options to do so.


1978. Read all about it here.


Except that it's pretty hard to get away with violating the state constitution.

Regardless, just looking at O&D numbers will make it very clear that PHX is no match for LAX or SFO. There are plenty of reasons why that will persist for a long time.

interesting , thanks for the link ...

i do agree that for now O&D numers are going to be higher in SFO & LAS , and that both of those citites play a vital role in international depatures ...

still for all the regions outside of cali in the west that need to be fed into a west coast hub in order to be shuttled on down the line to the east coast , PHX still stands out as most cost effective and reliable ...

you said it yourself that PIT bent over backwards to try and make us airways stay , PHX will do the same ...now i don't think that in a merger between us airways and United that PHX will stay the same size , i could see us shrinking by 20% but i can also see denver shrinking more and simply being funneld down here to PHX ..

PHX never shuts down , at least not like other cities .... our weather problems are never really as harsh as other locales ...when it comes time to chop down a hub in the west , their going to look to save the HUB that keeps funneling the passengers to the east coast day after day , night after night without fail .... that's PHX in a nutshell ...

 

[ual777fan]

Yes, but how does UA having major MX infrastructure at DEN work into the equation? Also, other than London, do the serve any Trans-Atlantic or Trans-Pacific cities with nonstop service? Going much further than London could be an issue for a PHX hub in the summer. I also think PHX lacks any way to compete on gate space requirements.

That, and having a hub at Phoenix means you've just exposed your route network to significant amounts of direct competition from Southwest. And PHX is notorious for having terrible margins as well as low yields. And PHX doesn't generate anywhere near the amount of O&D that it should considering market size.

If this merger happens, PHX will be STL'ed. There's just no reason for it when United already has hubs in San Francisco and Denver as well as a "hub" (or huge operation) at LAX.

 

[bigbusboy]

Regardless, just looking at O&D numbers will make it very clear that PHX is no match for LAX or SFO.

This plus CLT is the real value US brings to the table in a US/UA merger. So many people say US adds nothing to these "rumored" talks. There is more to mergers than extensive international presence, big airplanes, and big hubs. Very true, UA has everything US needs in terms of fleets, hubs, and routes and US brings only CLT for a hub. But if you assume for a moment PHX would be downsized and divided between LAX, SFO, and DEN (consolidation and capacity reduction they all want so badly) and there would be one less competitor west of DEN, revenue yields would go up on already low fares. Add to this a bigger presence in the SE with CLT, a solid presence in the NE with codeshare agreements with CO and the potential for better revenue numbers all seem to be what may be driving these talks, not hubs, fleets, and routes; assuming all of this is true.

Oops, I forgot to add PHL. It probably would be downsized too and rerouted through IAD.

 

[ual777fan]

Regardless, just looking at O&D numbers will make it very clear that PHX is no match for LAX or SFO. There are plenty of reasons why that will persist for a long time.

Not to mention, United has massive transpacific operations at both SFO and LAX to feed their west coast operations with high yield passengers. PHX has no such advantage.

 

[BoeingBoy]

PHX never shuts down , at least not like other cities .... our weather problems are never really as harsh as other locales ...when it comes time to chop down a hub in the west , their going to look to save the HUB that keeps funneling the passengers to the east coast day after day , night after night without fail .... that's PHX in a nutshell ...

Go back a couple of decades and anyone could have said the same about PIT, except it didn't have the large WN presence to hold fares down...

Jim

 

[mweiss]

still for all the regions outside of cali in the west that need to be fed into a west coast hub in order to be shuttled on down the line to the east coast , PHX still stands out as most cost effective and reliable ...

I'm confused. You're talking about going between the east coast and places in the west outside of California. For Oregon, Washington, Idaho, Montana, Utah, or Wyoming, PHX is far more out of the way than DEN. Backtracking from any states east of Arizona makes little sense as well.

So we're left with traffic from Arizona and southern Nevada. That's a focus city, not a hub.

you said it yourself that PIT bent over backwards to try and make us airways stay , PHX will do the same

No doubt. I just don't think it will have as much impact as PIT's efforts. Unlike PIT's situation, where the airport has become an outstation for everyone, PHX has another airline ready to step in to address nonstop traffic between the cities of the west and PHX.

Maybe I'm missing something here. Please give me examples of significant routes that would make more sense going through PHX than through SFO, LAX, or DEN.

 

[Bear96]

actually we have alot of REAL value and future value ...

control of DCA is vital to our survial , when you think DCA think of government traffic not affected by the recession ..

UA already has a big share of the DC area market (maybe even larger than LCC when both IAD and DCA (and maybe BWI) are considered? Not sure) because of its IAD hub.

 

[freedom]

I'm confused. You're talking about going between the east coast and places in the west outside of California. For Oregon, Washington, Idaho, Montana, Utah, or Wyoming, PHX is far more out of the way than DEN. Backtracking from any states east of Arizona makes little sense as well.

So we're left with traffic from Arizona and southern Nevada. That's a focus city, not a hub.


No doubt. I just don't think it will have as much impact as PIT's efforts. Unlike PIT's situation, where the airport has become an outstation for everyone, PHX has another airline ready to step in to address nonstop traffic between the cities of the west and PHX.

Maybe I'm missing something here. Please give me examples of significant routes that would make more sense going through PHX than through SFO, LAX, or DEN.

your point about denver being less out of the way makes sense ...

i think after looking at this honestly i can admit to myself that PHX will become a focus city ..but in that respect , i see no reason ALL of the west coast Hubs couldn't become focus citites , with so many so close together , there's really no reason to put all of your eggs in one basket with a major hub in any of them ..

wouldn't it simply make more sense to shrink operations at all of the major HUBS ... LAX and SFO simply become gateways to international routes , DEN and PHX become the doorways to america ... etc

 

[IberiaMAL]

The more I think about it, the more PHL/CLT/DCA seem better over IAD.

Does United even offer service from IAD to Madrid or Manchester?

US Airways from PHL has T/A flights to Madrid, Lisbon, Athens, Manchester, Barcelona, Dublin, Glasgow, Oslo, Tel Aviv, and Venice that United at IAD doesn't have...


I think IAD should be kept as an O&D International hub, DCA should be kept as an O&D Domestic hub, Philadelphia should be expanded with new United metal to Asia, and Charlotte would just continue growing on as usual.


I think Phoenix should continue on as a focus cities with flights to the hubs, New York, Boston, Miami, Portland, Seattle, etc.


People who keep saying to dump CLT/PHL/DCA in favor of IAD make no sense. It literally makes 0 sense to dump PHL/CLT/DCA/PHX as hubs (AKA the whole US system minus the gold mine we know as LGA)...... If this deal does happen, people should be sure that PHL and CLT would be kept as is... Or else this deal wouldn't even be proposed in my opinion...

 

[Poug Darker]

The more I think about it, the more PHL/CLT/DCA seem better over IAD.

People who keep saying to dump CLT/PHL/DCA in favor of IAD make no sense. It literally makes 0 sense to dump PHL/CLT/DCA/PHX as hubs (AKA the whole US system minus the gold mine we know as LGA)...... If this deal does happen, people should be sure that PHL and CLT would be kept as is... Or else this deal wouldn't even be proposed in my opinion...

CLT competes directly with ATL for SE US market share. Expansion there, mostly international.
PHL and IAD, very close geographically with IAD having easier airspace and runway access. Expect PHL drawdown, especially overlap international. PHL becomes mostly domestic connects with a few major intl.
DCA=shuttle and domestic ops. High yield O&D, no worries.
PHX & DEN: I would vote for DEN....except if a deal is made with Republic.
Chicago/SFO: not going anywhere, in fact most PHX pacific connections transferred to SFO.

That's all my crystal ball says for now.
Cheers.

 

[DCaf]

PHL and IAD, very close geographically with IAD having easier airspace and runway access. Expect PHL drawdown, especially overlap international. PHL becomes mostly domestic connects with a few major intl.

How big is IAD for UA? Last I knew, it was pretty much a PM international bank, mostly to Europe. Anybody know?

 

[IberiaMAL]

CLT competes directly with ATL for SE US market share. Expansion there, mostly international.
PHL and IAD, very close geographically with IAD having easier airspace and runway access. Expect PHL drawdown, especially overlap international. PHL becomes mostly domestic connects with a few major intl.
DCA=shuttle and domestic ops. High yield O&D, no worries.
PHX & DEN: I would vote for DEN....except if a deal is made with Republic.
Chicago/SFO: not going anywhere, in fact most PHX pacific connections transferred to SFO.

That's all my crystal ball says for now.
Cheers.

But regulators would not allow United to dominate both DCA and IAD. If United does shed some DCA, I'm sure other airlines would come in and kill those high yields, right?

If you kept PHL as is (which is a good preforming hub) and DCA (which is a good preforming hub) and focused on O&D internatoinal at IAD (which would be profitable), then I think you could squeeze out more revenue as opposed to scaling down DCA and PHL in favor of IAD.

Again. Just throwing out my opinion.