United And The Atsb

[Busdrvr]

"If you ever have flown the nine you'd understand why it's been around for a while."

Same for the DC-3...

"The interiors are all fairlly new and unless you in the last row or two it's not actually a bad ride"

How's the audio entertainment? Video? My point has more to do with the fact that it IS approaching it's service life limits. I've been told by a 9 pilot that they are going away as they hit the cycles/hour level that requires one of the pressure bulkheads to be re-worked. Too expensive. That will put a great deal of press on NWA as they must also resolve serious debt "issues". Going forward, the financial strength of it's rivals WILL have a direct impact on UAL's ability to thrive, and therefore, post BK comparative strength among the majors should probably be a factor in the ATSB decision.

"I would take it over an RJ any day."

Me to.

 

[Bigsky]

How's the audio entertainment? Video? My point has more to do with the fact that it IS approaching it's service life limits. I've been told by a 9 pilot that they are going away as they hit the cycles/hour level that requires one of the pressure bulkheads to be re-worked. Too expensive

There is no audio or video on the DC9. People are actually forced to do the unusual and read something interesting and expand their minds a bit. Anyway there's not really time to get into a movie between MSP and FAR. I did have the priveledge of riding on a UA 737 a week ago. "Thanks for the lift guys". I didn't see any video on that bird either. There was the Elk Grove pre programmed hi-fi sound system with the channel 9 option but I opted for my personal MP3 player and enjoyed the flight.

Yes, as the bulkheads hit cycles, the 9's are retiring. In another 15 years they should be finally gone. Probably the last flight on the 9 will be to pick up a crew who ferried a retiring A320 to the desert.

cheers

bigsky

 

[JetClipper]

Here's an interesting new idea to chew on; who really cares if UA gets the loan? Is getting the loan going to guarantee their long-term survival?

As Cosmo pointed out, even after “restructuring,†UA’s CASM is still higher than two of its network competitors’, particularly American’s (not to mention all of the LCCs). This is significant, since I believe AA is really United’s closest domestic network competitor. Granted, getting the loan will reduce UA’s cost of capital (which would in turn reduce CASM). This, combined with additional lease rejections, might lower CASM even further, but I doubt to the point where it will be competitive over the long haul (when, not if, DL & NW reach concessionary agreements with their unionized workforces, their costs will most likely be instantly less than United’s).

In addition, if UA indeed gets the loan, what will they do with it? My guess is that, in addition to refinancing higher-interest loans, the remaining proceeds will be used to prop-up Ted (or as another poster called “Kill Frontier†or “Kill Independence Air;†take your pick). This will continue until the LCC’s scream to the government (again) and UA is forced to retreat (again). Then what?

The problem is that United still doesn’t seem to have a viable, long-term business plan. Now, you can say they have “record load factors,†and “industry-leading RASM growth,†but this means exactly squat so long as they continue to lose money. United may be able to command a slight revenue premium due to their network advantages, but if the LCC’s limit how much UA can charge and their cost structure makes these fares unprofitable, the ATSB loan will be, at best, a temporary stay of execution.

 

[Fly]

And that is what is flawed with "deregulation". If it is supposed to be Hands Off...then let it be Hands Off. That means that the LCC's can't cry and moan to the government, that means any airline can charge ANY fare they want. But NOoooooo, the network carriers aren't allowed to drop their prices to the LCC level. Something is wrong with that picture. I think we're going to see a few more legacies dancing the Bankruptcy Bop in the next couple of years.

 

[JetClipper]

And that is what is flawed with "deregulation". If it is supposed to be Hands Off...then let it be Hands Off. That means that the LCC's can't cry and moan to the government, that means any airline can charge ANY fare they want. But NOoooooo, the network carriers aren't allowed to drop their prices to the LCC level. Something is wrong with that picture. I think we're going to see a few more legacies dancing the Bankruptcy Bop in the next couple of years.

That's a bit simplistic, isn't it?

The legacy carriers can (and have) matched the LCC's pricing whenever possible. The problem is that due to their higher cost structures they cannot make money doing so over the long term. The goverment has a term for dropping prices below cost with the intent of eliminating competition; predatory pricing.

Many previous LCCs were so severly under-capitalized that that they had no choice but to flee in the face of a serious challenge from a network carrier. However, the current "crop" (e.g. AirTran and JetBlue) have erased this advantage.

 

[N230UA]

Here's an interesting new idea to chew on; who really cares if UA gets the loan? Is getting the loan going to guarantee their long-term survival?

As Cosmo pointed out, even after “restructuring,†UA’s CASM is still higher than two of its network competitors’, particularly American’s (not to mention all of the LCCs). This is significant, since I believe AA is really United’s closest domestic network competitor. Granted, getting the loan will reduce UA’s cost of capital (which would in turn reduce CASM). This, combined with additional lease rejections, might lower CASM even further, but I doubt to the point where it will be competitive over the long haul (when, not if, DL & NW reach concessionary agreements with their unionized workforces, their costs will most likely be instantly less than United’s).

In addition, if UA indeed gets the loan, what will they do with it? My guess is that, in addition to refinancing higher-interest loans, the remaining proceeds will be used to prop-up Ted (or as another poster called “Kill Frontier†or “Kill Independence Air;†take your pick). This will continue until the LCC’s scream to the government (again) and UA is forced to retreat (again). Then what?

The problem is that United still doesn’t seem to have a viable, long-term business plan. Now, you can say they have “record load factors,†and “industry-leading RASM growth,†but this means exactly squat so long as they continue to lose money. United may be able to command a slight revenue premium due to their network advantages, but if the LCC’s limit how much UA can charge and their cost structure makes these fares unprofitable, the ATSB loan will be, at best, a temporary stay of execution.

AA's CASM "honeymoon" will soon be over.

Watch for the wage snapbacks...

How else do you think AA employees agreed to such draconian out of bankruptcy cuts? The answer is that the concessions don't last anything close to the 6 year concessions UAL employees made.

 

[JetClipper]

AA's CASM "honeymoon" will soon be over.

Watch for the wage snapbacks...

How else do you think AA employees agreed to such draconian out of bankruptcy cuts? The answer is that the concessions don't last anything close to the 6 year concessions UAL employees made.

Perhaps, but don't count on the LCC's cost structures approaching UA's any time soon.

 

[C54Capt]

And that is what is flawed with "deregulation". If it is supposed to be Hands Off...then let it be Hands Off. That means that the LCC's can't cry and moan to the government, that means any airline can charge ANY fare they want. But NOoooooo, the network carriers aren't allowed to drop their prices to the LCC level. Something is wrong with that picture. I think we're going to see a few more legacies dancing the Bankruptcy Bop in the next couple of years.

Gov't pleeeeeeeease bail me out, but don't dare slap my hand if I employ predatory pricing schemes to monopolize markets. Deregulation is Bull S**t.

 

[boeing787]

C54 captain...be quiet...the gov't protected Frontier a few years ago. Now Frontier wants to act a baby and cry that it's not fair.
Jetclipper...AA scales snapback in May...CASM goes up.

As for UAL POR you guys don't know what's going on behind closed doors. So all your garbage is pure speculation.

As for the LCC's cost advantage...they don't have 10 year employees yet some not even 5. What happens when they start paying for the airplanes, senior employees? My answer...costs go up

 

[JetClipper]

AA scales snapback in May...CASM goes up.

By how much? Seems like they have a little ways to go to catch-up with United's.

As for the LCC's cost advantage...they don't have 10 year employees yet some not even 5. What happens when they start paying for the airplanes, senior employees? My answer...costs go up.

You guys keep clinging to this ridiculous notion that someday the LCC's employees will be unionized and then their wage scales (and, therefore, costs) will be at the same level as the legacy carriers, and then all will be right in the world. Trust me, that's not going to happen in time to save UAL (or, possibly, some of the other network airlines), if at all.

 

[Dizel8]

"What happens when they start paying for the airplanes?"

Hate to tell you, but they already are!

 

[Doc]

There is one very valuable thing UA has Usair doesn't. International landing rights at LHR and NRT. If UA goes out of business, DL, CAL and NW would salivate at LHR rights. In NRT AA, CAL & DAL would bid. No one is impressed by Usair's landing rights, they are easily replicated at little clost. UA can encumber these landing rights for Financing. I think USair should be sacrificed for every one's good, UA has too many jobs in to many politically sensitive places: California, Illinois, Virginia, Washington D.C. & Colorado.

Your an idiot..............Why would any body want another airline to fail???????????

I feel sorry for you, that is the kind of thinking that can take your company down.... another thought ..UAL is not in as good a shape as you might think so I would be careful.....

I would not want your company to fail I have friends over there............!

 

[C54Capt]

Boeing 787,
Relax...

Bigsky,
I often ride on your old DC-9s and find them quite comfortable. I believe NW spent millions in refurb to make the old girls as nice or nicer than most other legacy mainline narrow-bodies. One thing is for sure in my personal experience, NW has not forgot how to provide First Class Service like some other carriers have.

 

[avek00]

1. I'm not denying for a second that United has experienced a substantial turnaround in its financial stats. However, I AM suggesting that this recovery is more a function of United finally recovering from the massive revenue shocks of SFH and 9/11 than the result of flying planes with only half of the United name painted on them.

2. It is quite possible for OALs to present data that makes the sky fall in without getting in trouble with the SEC. Among other things, an airline can present financial data to the ATSB that offers variable outcomes on debt servicing. For example, CO could easily demonstrate that it will make billions OR go completely under by 2010 depending on how the airline calculates its debt servicing figures.

 

[FWAAA]

AA's CASM "honeymoon" will soon be over.

Watch for the wage snapbacks...

How else do you think AA employees agreed to such draconian out of bankruptcy cuts? The answer is that the concessions don't last anything close to the 6 year concessions UAL employees made.

Incorrect.

Unless you call the 1.5% annual raises a snapback. AA's employees get 1.5% raises each year under the concession agreements.

The pilots' pay recently increased but that was built into the concessions. The APA took larger percentage paycuts than other workgroups in year 1 to account for the time lag of layoffs, seat shifting and work rule changes.

There are early openers but AA is not obligated to agree to any changes in the contracts, which run until 2008.

Don't believe me?

Then buttonhole a couple of AA pilots next time you have some free time at ORD. They will set you straight.