- May 1, 2003
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UAL to pursue LCC?
- Thread starter phasersonstun2
- Start date
Given Tilton's obsession with mergers, I think the odds are good that UA is going to be doing a deal with someone in the near future.
767jetz
Veteran
- Aug 20, 2002
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Here is an interesting quote:
"U.S. Airways is unlikely to return later with an offer and may itself be approached for takeover by another carrier, possibly United Airlines, observers said.
Shall we title this round as "Project Great White Shark" with the much larger United gobbling up the tiny, weaker minnow?
And just for the record... I don't see it happening. My $ is still on CO or DL.
"U.S. Airways is unlikely to return later with an offer and may itself be approached for takeover by another carrier, possibly United Airlines, observers said.
Shall we title this round as "Project Great White Shark" with the much larger United gobbling up the tiny, weaker minnow?
And just for the record... I don't see it happening. My $ is still on CO or DL.
I'm also not in love with a UAL/LCC match up, according to both the old convential wisdom of airline mergers and the new conventional wisdom (well really just Parker's presumed approach).
Old CV: overlapping networks are bad (there is some overlap)
New CV: overlapping networks are not so bad if you differentiate the weaker markets with right sized capacity, or eliminate the weaker markets (UAL/LCC's overlaping markets don't have obvious stronger and weaker elements... dca/iad? phl/iad? dia/phx/las/lax/sfo?)
DOJ CV: who really knows what the regulatory reaction would be post 9/11
UA+CO is still better, but I guess you need a willing partner (or so it would seem apres LCCDAL)
Old CV: overlapping networks are bad (there is some overlap)
New CV: overlapping networks are not so bad if you differentiate the weaker markets with right sized capacity, or eliminate the weaker markets (UAL/LCC's overlaping markets don't have obvious stronger and weaker elements... dca/iad? phl/iad? dia/phx/las/lax/sfo?)
DOJ CV: who really knows what the regulatory reaction would be post 9/11
UA+CO is still better, but I guess you need a willing partner (or so it would seem apres LCCDAL)
rsv4ever
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- Nov 5, 2005
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and the plot thickens... LOL... i don't care whose wings i wear as long as i get a paycheck, keep my benefits and continue to love my job.
Harry Callahan
Veteran
Here is an interesting quote:
"U.S. Airways is unlikely to return later with an offer and may itself be approached for takeover by another carrier, possibly United Airlines, observers said.
Shall we title this round as "Project Great White Shark" with the much larger United gobbling up the tiny, weaker minnow?
And just for the record... I don't see it happening. My $ is still on CO or DL.
What does your favorite airbus capt. think?
Please don't go there.
Things are so much nicer here when he stays on the LCC board. No need to tempt him.
wings396
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- Aug 20, 2002
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I must ask why do you feel that the UA/CO combination is better that UA/US???
CO has EWR, and US has PHL. US is the only one that can offer a Southeastern Hub to the UA network, which is an area they have very litte presense in.
I must ask why do you feel that the UA/CO combination is better that UA/US???
CO has EWR, and US has PHL. US is the only one that can offer a Southeastern Hub to the UA network, which is an area they have very litte presense in.
I agree with R U DCA on most merger potential scenarios so I'll toss in my 2 cents...
1. EWR is far more valuable than PHL. CO's EWR operation is the largest hub operation in the top air travel market in the world. Plus EWR is a little further away from IAD.
2. IAH is far more valuable than CLT.
3. CO Micronesia would fit in very nicely with UA's west coast hubs, Hawaii, Asian and Australian network.
4. CO has a presence to South America, which is another weak spot for UA.
5. While both US and CO have a widebody shortage, CO has more widebodies.
6. CO has a presence in unique international markets (TLV, India) that UA does not have a presence in.
7. CO would probably require only a small part of the airline to be divested by the DOJ, as there is little overlap. With US, there is the whole issue of IAD/DCA, PHX/LAS/LAX/SFO. I can't see UA wanting to operate PHX and LAS hubs.
8. CO has done a better job of attracting and keeping high-yield business passengers, which is also UA's business plan. US' business plan appears to be to become an airline that is all things to all people, which is not what UA wants to do.
9. While the Airbus and 737 narrowbodies match nicely between US and UA, the reduced commonality between UA and CO isn't a dealbreaker IMHO.
UA has a great route network which only has holes in the Northeast (specifically NYC), deep south and south central (Texas). Merging with CO fills two of those holes. If you could just slap a couple of hubs on to UA's network, you'd want one in NYC, ATL and either DFW or IAH IMHO. CO gives UA two of those.
whatkindoffreshhell
Veteran
Whlinder -- very good post -- thanks!
Previously I did not think UA/CO would be a decent fit. Tilton/Brace and their gang of bankers are determined to make a deal with another airline. They have stock options and fees to collect you know, the airline be damned....
USAir is a mess with too many unhappy people. DL is wounded. NW is just playing out the song until AA cherry-picks 'em.
Yeah, UA & CO would be a good fit --- so long as the management comes from CO.
U
Previously I did not think UA/CO would be a decent fit. Tilton/Brace and their gang of bankers are determined to make a deal with another airline. They have stock options and fees to collect you know, the airline be damned....
USAir is a mess with too many unhappy people. DL is wounded. NW is just playing out the song until AA cherry-picks 'em.
Yeah, UA & CO would be a good fit --- so long as the management comes from CO.
U
I think given the fact that the US hostile bid for DL fizzled, I don't expect to see any major airline merger announcements anytime soon. At least not until hands get forced by unforeseen world or economic events. We'll likely go through another economic downturn before we see the long-talked about industry consolidation. Of course a merger could happen before that. But given that they are extremly costly and distracting, airlines would be wise to avoid that trap.
If consolidation will happen in an environment where there are too many aircraft and too many hubs, LCC is not going to be holding the cards that it is today. Of course, before last week, its ace was its CEO... maybe it still is.
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