UA AND US Merger Talks

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United & US Airways Merger Talks Underway, Continental Totally Jealous?

United has more in common with US Airways, so their union would be more harmonious and less complicated than a deal with Continental. Continental’s high labor costs, fleet structure and strict regulatory standards clash with United.

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Regards,

USA320Pilot
 
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PHL is US' number 1 revenue generating station, it wont go anywhere in a merger.
I don't doubt that it's US's #1. I just wonder how it compares to the UA hubs nearby.

And there are beyond perimeter slots in DCA
Of course, but those are pretty limited. Not enough to build a hub around. They're designed for point-to-point service, and to connect DCA to other hubs.
 
As for DCA, the O&D government travel up and down the coast supports it nicely. Doesn't need any TA flying, people in the area are very accustomed to the idea that if you want to go across the pond, IAD is it.
Of course. From an airline's perspective, DCA and IAD are very different. I don't see them as cannibalizing each other (much).

Addressing government approval, well, the last time this was tried, USAirways had major operations in both DCA and BWI. United had IAD.
Point taken. Nonetheless, it's a pretty good hike for the residents of NoVA to get to BWI.

The trick for the managements of the two companies is to make the DOJ believe that there is a crisis iminent, such as a bankruptcy. And if this doesn't pass review in short order, then lots of JOBS will be lost....for the O administration, jobs are 'front and center' as far as national attention goes. I predict if presented in this way, passage is assured.
Just a guess, but I suspect if UA filed 7 tomorrow, AA or DL (or both?) would snap up that hub in a heartbeat. Certainly part of the 7 proceedings would include the sale of lucrative TransAt routes, and there would be no reason to move them from IAD to any other city.

If IAD got picked up by AA or DL, they would have to call up furloughed employees; it's too big to simply stretch the existing people. So while some people would lose their jobs, others would gain theirs. From the perspective of the feds, that means a net zero change...much like there would be if the merger were approved.

Of course, on that last point I'm doing a lot of hand-waving. It's hard to say with absolute certainty that the net would be close to zero.
 
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. :)
I've been of the same opinion since it was announced.
 
PHL is US' number 1 revenue generating station, it wont go anywhere in a merger.

And there are beyond perimeter slots in DCA
Last time I saw the numbers PHL had a higher yield than IAD. Also bear in mind that any pull down in PHL or IAD will likely result in an increased southwest presence in either city, hurting domestic revenue in those cities.

As for the beyond perimeter slots, I don't believe those can be transferred (though I don't know if this transaction would qualify). I do think you're likely to see the DCA perimeter rule lifted in the next couple years. That won't do anything for the European or Asian flights though.
 
True, but IAD is much more efficient from an airspace and real estate outlook for connecting to international flying. I would think that O&D PHL flights domestically would remain, but the international would be reduced and consolidated with IAD. This would reduce the amount of stuff the airlines try to fit into PHL's 5 lb bag everyday from about 15lbs to 7.
I don't think DCA flying would be affected much at all, since it is not a hub, but a focus city with a large O&D market.
cheers.

United controls above 60% of the IAD market and US controls over 50% of the DCA market. You either keep IAD or DCA. One has to get scaled back.

DCA has the premium domestic traffic and is a stellar preformer. Why I think IAD should be scaled down to an O&D international hub is that United could cut flights to cities such as Savannah, Charleston, Colombia, etc. etc. and chop down IAD to say where United has like 30% market share. Therefore, you could keep the high yield DCA operation and keep the profitable International flights at IAD.

Cities such as Savannah, Charleston, Colombia, Burlington, etc. can use PHL/CLT to transit to Rome, Paris, London, Munich, Frankfurt, etc. People from Savannah and Burlington are not going to Accra nor Bahrain nor any other service Philadelphia/Charlotte doesn't already have.


DCA can keep flights to Savannah, Greensboro, Martha's Vineyard, Hunstville, etc. and IAD could keep flights to the hubs, NYC, Miami, Seattle, Portland, and Dallas + International flights.



What I'm most interested in is what would happen to LGA. I wonder if United would have any plans for LGA. Probably not. Too much competition to become New York's airline (B6, DAL, AMR, CAL)

I found this article interesting, btw:

United, US Airways Talks at Key Juncture

http://blogs.wsj.com/deals/2010/04/10/united-us-airways-talks-at-key-juncture/
 
Just a guess, but I suspect if UA filed 7 tomorrow, AA or DL (or both?) would snap up that hub in a heartbeat. Certainly part of the 7 proceedings would include the sale of lucrative TransAt routes, and there would be no reason to move them from IAD to any other city.

I
I'm not suggesting an actual filing would be imminent, just the 'threat' of a filing if the deal doesn't go through. Politically, I think it would be enough (since elections are coming up this fall for seats in congress) to push it through governmental approval. What democratic politician wants 50,000 angry ex-UAL employees filing for unemployment benefits, driving up the nations jobless numbers, then turning around and voting republican?
Just a thought.
cheers.
 
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United controls above 60% of the IAD market and US controls over 50% of the DCA market. You either keep IAD or DCA. One has to get scaled back.

To be honest I would prefer to have DCA if I had to choose. Why? Yield.
 
As for DCA, the O&D government travel up and down the coast supports it nicely. Doesn't need any TA flying, people in the area are very accustomed to the idea that if you want to go across the pond, IAD is it. There is even metro service out there.
While there is metro service at DCA, the train doesn't arrive at IAD until 2016 Dulles Corridor Metro Project

Addressing government approval, well, the last time this was tried, USAirways had major operations in both DCA and BWI. United had IAD. The DOJ said that the citizens of the DC metro area (which includes Baltimore, Washington DC, and the surrounding area) would have no choice but to fly on the merged carrier if approved. Since USAirways gave BWI to LUV, the good citizens have a low-cost choice (or maybe two or three) when traveling in or out of the Washington DC Metro area.
While you're correct about the low cost options out of BWI, today's society is a bunch of whiners who will point out that for anybody living beyond While Oak / CollegePark / Greenbelt the commute to BWI is 45-60 minutes in good traffic, hence not an option. Won't even mention anything about those living in DC-Fairfax-Arlington-Alexandria ... ... ... If there is a US-UA deal, some sort of concessions will most likely be demanded (by government and other carriers) either at DCA, IAD, or both.
 
If there is a US-UA deal, some sort of concessions will most likely be demanded (by government and other carriers) either at DCA, IAD, or both.

Almost guaranteed. Look at the restrictions put on the US/DL slot swap so far - UA would add more slots to those of US at DCA than so far is allowed in the slot swap and that's before IAD is considered in the mix. No way would the DOT/DOJ allow one carrier to have 50% or more of the market at both airports.

Last time US and UA seriously tried to get together, even divesting the shuttle in the initial application with it's slots wasn't enough to satisfy the Feds so why anyone would think the deal would go through with no changes at DCA/IAD is beyond me. IAD might escape relatively unscathed since it's not slot controlled, but expect big changes in DCA.

Jim
 
United, US Air Talks 'Very Serious': Report

http://www.thestreet.com/_yahoo/story/10722608/1/united-us-air-talks-very-serious-report.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

Regards,

USA320Pilot

If a deal is reached, it will be an all-stock transaction, and United will be the surviving airline, the person said.

Will this be a "United name remains but US mgmt runs the show" transaction? I sure hope not. We've been down that road before and have seen the results.
 
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Will this be a "United name remains by US mgmt runs the show" transaction? I sure hope not. We've been down that road before and have seem the results.
United name will likely survive. However, the united boys might have to recite "CACKTISS" a thousand times a week like the US boys do....
Cheers.
 
Will this be a "United name remains but US mgmt runs the show" transaction?

Who knows. At this point sources such as someone "briefed on the negotiations" could mean nothing more than an airline leaking "info" to push something into happening or to make a third party take some action.

Jim
 
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Who knows. At this point sources such as someone "briefed on the negotiations" could mean nothing more than an airline leaking "info" to push something into happening or to make a third party take some action.

Jim

Or to drive the stock price up for the benefit of insiders wanting to cash, at least partially, out.
 
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Three things of note:

1. The feds are not going to let this happen in Washington without either DCA or IAD going away.

2. For the upteenth time, CLT offers UA nothing that they can't do at IAD. They are 322 miles apart. Slightly longer than PIT-PHL, but unlike either, the government business is recession-proof.

3. USAPA is screwed if this happens, because they either get Nicolau or the theory that one can simply vote whatever seniority they want in which case it's only a matter of time till the UA folks get out the stapler.
 
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