UAL ramps up merger talks
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USA320Pilot
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What got the chat boards, employees and analysts buzzing again were comments made last week by United Chief Financial Officer Jake Brace, who told a New York transportation conference that the Chicago-based company remains interested in a "consensual" consolidation with a carrier that has both a strong presence in the Northeast and a hub in the South, so the nation's No. 2 carrier can strengthen its connections to the Caribbean and Latin America.
No airline fits that description better, arguably, than US Airways, which began 70 years ago as a Northeast-only carrier and evolved to one that serves the Caribbean and Latin America from a large hub in Charlotte, N.C. It still has a significant presence in Washington, D.C., New York, Boston and Philadelphia.
Right.... LCCs extensive latin american 🙄
network....
LCC_#1
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What I find funny is that United had an opportunity in Latin America when they wasted money on the Miami Pan Am assets and Latin American routes. This tells me they aren't that concerned about that part of the world.[Right.... LCCs extensive latin american 🙄
when should i start buying stock
767jetz
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I agree. I think it is clear that the airlines that fit the bill are obviously DL and CO. In fact there have been several articles in the past few days quoting analysts who do not mention US. I think this is wishful speculation on the part of this particular author, Dan Fitzpatrick, of the Pittsburgh Post-Gazette.Right.... LCCs extensive latin american 🙄
Plus we all know that UA had discussions with DL and CO in the recent past. Add to that the fact that US is only interested in hostile takeovers, and the fact that DL stated that once out of BK it would "consider" options in a consensual situation.
One more nail in the coffin of the idea of a US/anyone merger is the melt down occurring with the East pilots due to their failed negotiating tactics with the West, and there threat tactics with ALPA. There is not a pilot group in the world that would stand for a marriage with that group now that their true colors are exposed. Their civil war will drag on until every East pilot retires or the company fails once again and ends up in CH7. (Whichever comes first.)
IMO USAirways days of merging with anyone else are over for a long time to come.
LCC_#1
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Pot, meet kettle!!
United seems to have its share of disgruntled passengers. Here is a recent story from USA Today.
United passengers air their bitter grievances
By Marilyn Adams, USA TODAY
United Airlines stranded Brenda Kitterman in Mexico. Her ordeal didn't end there.
Kitterman, 43, learned last December that United (UAUA) had canceled the first leg of her trip home to Montana from Cancun because of a blizzard in Denver.
But rather than re-book her on different flights or promptly refund the price of her return tickets, United agents in Mexico told her she was on her own, she says. To get home, Kitterman was forced to buy new tickets to her hometown of Kalispell, Mont., on Delta Air Lines, at a cost of $1,198, more than she had paid for her entire week's vacation in Mexico.
Kitterman, a Montana state employee, e-mailed a complaint about her experience to the U.S. Department of Transportation, as did 942 other United passengers last year.
Their discontent with United reflects a particularly vexing problem for the USA's second-largest airline: a severe decline in the quality of service at a carrier that once prided itself on just that.
Multiple studies show plunging satisfaction with the industry generally. The April DOT complaint rate for US Airways, still grappling with its 2005 merger with America West, tripled year-over-year. The rate for Delta Air Lines, which just emerged from Chapter 11 reorganization, doubled.
But United arguably has fallen furthest and fastest among the big U.S. airlines in its ability to keep customers satisfied. Company officials acknowledge service problems and say efforts are underway to fix them. The performance of Chicago-based United, one of four major U.S. carriers forced into bankruptcy reorganization after the Sept. 11 attacks, is a sign of the times in an industry trying to accommodate near-record passenger volumes with fewer workers.
Some indicators of trouble:
•United had the industry's highest rate of passenger complaints to the DOT for all of 2006: 1.36 complaints for every 100,000 passengers boarded. By April, the latest month for which DOT has data, that rate had risen to 2.6 per 100,000. Last year, United's first year out of Chapter 11 bankruptcy, saw its worst showing in DOT complaints since 2002, the year the airline filed for Chapter 11.
•In the University of Michigan's 2007 American Customer Satisfaction Index, airlines scored lower than at any time since 2001, and United scored at the bottom of the industry. The ACSI gauges satisfaction with companies and industries based on thousands of interviews.
•The most recent Airline Quality Rating, done by Wichita State University and the University of Nebraska, ranked United No. 8 of 18 big and small airlines for 2006. American (AMR), Delta (DAL) and US Airways (LCC) scored worse, but United slipped from No. 4 in 2004. Ratings are based on publicly reported performance indicators.
Some of United's most loyal, high-mileage passengers — who get preferential treatment in return for their patronage — say they have seen service decline.
"There were days in the not-too-distant past when United's service was fantastic, especially if you were an elite flier," says Jordan Ayan, CEO of a Chicago high-tech firm.
A million-mile United flier, he used to buy Christmas gifts for his favorite United agents at Chicago O'Hare. "Boy, have times changed."
He says a United gate agent was so rude to his daughter before her March flight that Ayan e-mailed United CEO Glenn Tilton.
Out of luck after 20-25 calls
A USA TODAY review of complaints filed in December 2006 and January 2007 with the DOT about United provides a rare window into the quality of service by one of the nation's largest airlines in the wake of deep cuts in spending and jobs.
Interviews with passengers who complained to the DOT show how hard it can be to reach one's destination, get accurate help from airline customer-service representatives, or get money refunded when a flight goes awry.
Arnold Graham, a Pasadena, Calif., lawyer who begged United for a fare refund for seven months and complained to the DOT, says he was amazed how hard it was to get what he was legally owed.
"I think the system is deliberately designed to never make a refund or listen to the customer," says Graham, whose son Justin, 22, was bumped from a United flight.
In October, Justin Graham was returning from a wedding in Oakland to the University of Michigan for exams. United bumped him from the Oakland-to-Denver leg of his trip. United switched the original plane to a smaller one, so there wasn't enough space. United didn't have a seat until the next day.
So Arnold Graham paid $830 for new tickets on different airlines to get Justin back to school.
Arnold Graham estimates he and his wife, Susan, attempted to call United agents, located in India and the Philippines, 20 to 25 times for a refund. "The system would patch me through to somewhere and then I would be dropped," he says. "It was impenetrable."
After a call to United headquarters from USA TODAY, United last month refunded him $178.62, the price of the return trip Justin never took on United.
United says there is no deliberate effort to save money by frustrating customers and says Graham's experience is not up to its standards. Officials say they are working through customer-service problems related in part to the outsourcing of jobs during the reorganization, which ended in 2006.
"We know we haven't done well, and we're doing an enormous amount of work to improve the experience for customers," says company spokeswoman Jean Medina.
United Executive Vice President Graham Atkinson calls the stories in the complaints "very disappointing." But Atkinson, United's chief customer officer, says the complaints represent a small percentage of all passengers flown.
"What you are seeing here is not acceptable, but they are exceptions to the rule," he says.
United takes steps to improve
United promoted Atkinson to the new job of chief customer officer in October. In January, United recruited a new vice president for customer experience, a new position, from Walt Disney Co., whose customer service is widely acclaimed.
During restructuring, United shed 21,000 jobs, about a quarter of its workforce, and cut annual expenses by $5 billion, yet today it is flying about as many passengers as before bankruptcy. Remaining employees work harder for less pay because of contract changes made during bankruptcy.
Among jobs United outsourced were hundreds of U.S. phone reservations and customer-service jobs. They went to contract call centers in India, the Philippines and Poland. The remaining United call centers in the USA serve only its high-mileage customers, international passengers and special groups such as military personnel.
United also eliminated 200 U.S. finance jobs, including 30 in refunds, and outsourced the work to India.
"Bankruptcy is a cataclysmic event," Atkinson says. "It forces you to think about sacred cows."
Atkinson says United is working to improve its India call centers and its refunds operation. It's increasing phone capacity and doubling the staffing in refunds.
Next year, United plans to install multimillion-dollar software so agents in different customer-service areas can share information about a customer's problem.
Vice President Barbara Higgins, the ex-Disney executive, says she wants to make United so proactive when things go wrong that customers don't need to complain.
"We need to acknowledge when something goes wrong, apologize and immediately let our customers know what we're going to do to fix it," she says.
Even refunds leave fliers leery
Passenger Carolyn Smith of Singapore complained to the DOT after what she calls a "flight from hell" from San Francisco to Hong Kong in January. Eight hours into the 14-hour flight from San Francisco, the United crew announced none of the lavatories in coach were usable, she says. Only the business cabin bathrooms worked, she says. The crew asked passengers to stop drinking so they wouldn't need the bathroom and did not serve the second meal, Smith says.
The captain told passengers there would be food and beverage waiting in Hong Kong when they arrived, but there was not, she says.
United responded to Smith's e-mailed complaint three weeks later — with an apology but no explanation for the toilet snafu. United sent her a $200 voucher; Smith would have liked a refund.
Leah Hardesty of Albuquerque says she would have liked some compassion. When she and her 19-month-old son boarded a United flight to Denver in December, the captain told passengers it would take 15 minutes to de-ice the plane. Hardesty and her son were going to Seattle to see her parents.
But United ran out of de-icer and had to use a de-icing contractor at the airport who was busy with other planes. Passengers had to sit on the plane five hours before takeoff. By the time they reached Denver, Hardesty's connecting flight to Seattle was long gone.
United could not rebook her to Seattle that day and did not offer her a hotel for the night. Fearing she and son Wyatt might have to sleep at the airport, Hardesty sought out United's main customer service desk. The line was too long to wait. In tears, Hardesty phoned her parents, who bought her a $404 ticket to Seattle on Frontier Airlines that day. United sent her a voucher for a future flight. "They treated me poorly," she says.
Kitterman, the Montana woman, waited five months for a refund. Despite months of calls and e-mails to United, she did not get any money back until late May, after USA TODAY asked United's headquarters about her case for this story.
When Kitterman arrived at the Cancun airport for the trip home, she learned United's flight to Denver was canceled.
Kitterman says United's airport staff in Cancun told her it had no obligation to re-book her, book her on another airline or refund her money because she bought discount tickets as part of a $967 vacation package sold by a tour operator. She says United's telephone agents could not re-book her for the next several days, either, so she bought tickets on Delta.
United spokeswoman Medina says the airline's staff in Mexico "should have done a better job explaining the situation and helping her find alternative arrangements." Medina says the airline couldn't re-book her on another airline because carriers don't honor others' deeply discounted tickets sold with tour packages.
United acknowledges it owed her a refund for the price of her unused ticket. Last month, checks for $1,198 arrived from United, the price of the Delta tickets — more than it legally owed her.
Kitterman says her Mexico experience has left her afraid to travel, fearful she will be stranded again with no way home. United recently sent her a $300 coupon that she could use for a future trip.
"I won't use it," she says.
Just a WAG here, but perhaps the tens of billions of dollars lost by the big legacy airlines in the intervening years and their difficulty even today at earning profits like they did during, say, 1995-1999 would convince the antitrust regulators that things have changed dramatically since the ill-fated UA/US/AA three-way deal of 2000.
Although everyone argues that today's high load factors prove otherwise, the fact remains that there's an overcapacity of high-cost domestic airline seats and a shortage of low-cost domestic airline seats. High load factors result from airlines unloading those seats at low fares.
We have far too many hubs in this nation offering far too many options to get from one side of the country to the other in First Class seats. None of the airlines consistently sells enough of them to make big profits. Consolidation would help remedy that problem. Fewer hubs and fewer high-cost choices. Every day there are more and more low-cost choices for consumers, so a reduction of expensive choices doesn't harm consumers as much as it might have in 2000.
In short, a lotta things have changed since 2000 and early 2001 and I have confidence that the Republican administration (don't Republicans have a rep for being lax on antitrust issues??) would not derail much-needed legacy consolidation.
Notice how everyone from LCC wants it to happen but no one from UA does? Hmmmmmm........ I wouldn't hold my breath on this one happening. (although it would be funny to see USA320 flying JUNIOR with the Nic award)
LCC can't even handle the messy merge they are in right now, they certainly can't handle anything as big as United.
LCC can't even handle the messy merge they are in right now, they certainly can't handle anything as big as United.
