United to be split up.

[Borescope]

Latest rumor is that they Negotiations CO had with AA were about each airline aquiring a piece of UA. AA and CO would form an alliance and would wait until late in the year. UA would then most likely be in BK and AA would pick up ORD, IAD and Florida operations. CO would pickup DEN west. Interesting scenario, remember I said rumor, which is what everything on these boards is, right?

 

[CubsFanJohn]

I don't think the DOJ would let AA have ORD exclusivley. I could see AA getting IAD, FL, LAX and possibly a few NRT slots. CO Gets everything esle.

 

[Jim Lively]

I don't think the DOJ would let AA have ORD exclusivley.

Exclusively?

There are quite a few airline that fly to ORD besides AA and UA.

There are also a lot of hubs in the US that are controlled by mainly one airline. If United is in BK and they end up selling piece meal, the judge decides who gets what not the DOJ.

 

[700UW]

The DOJ and DOT are still involved in the process, they wont allow AA to monoplize ORD.

 

[767jetz]

Here we go again. The same vultures who were circling UA for the last 7 years are overhead.

UA is not going anywhere. This thread is a waste of bandwidth.

 

[KCFlyer]

The DOJ and DOT are still involved in the process, they wont allow AA to monoplize ORD.

They don't seem to have a problem with them at DFW.

 

[ual777fan]

NO ONE! Given the current environment can predict with any degree of certainty what will happen.

With fuel priced as it is, the election year silliness and uncertainty of who will control Congress and the White House the whole industry is a crap shoot. I wouldn't be surprised to see the NW/DL fall apart for a bunch of reasons.

In fact I wouldn't be surprised to see all of the same major players as stand alone companies 2 years from now. Conversely I wouldn't be surprised to see the big six down to three, two merged and one BK'sd out of existance.

No the waste of bandwidth is assuming any carrier will be "here" 6 months from now in its current form.

If UAL keeps bleeding like this they might have to consider selling off a portion of the airline. $550 million dollar operating loss is obscene especially in the light of AMR's loss of $300 million; they pay there employees more and have a significantly older fleet.

UA pays its employees significantly less than American (a MD pilot tops out at about $150 an hour and a A320 UA pilot tops out at about $130 an hour). They have already unloaded their pensions onto the federal government, slashed worker benefits and overall staff and screwed their creditors, shareholders and employees. Another bankruptcy filing will NOT fix what is fundamentally wrong with UAL... A management team that is so clueless and inept they have managed to turn the best route network in the industry (ORD, DEN, SFO, LAX, the Pacific, Heathrow) into a money pit.

Would someone please shame Glenn Tilton out of the executive suite for the sake of my friends who still work for UAL?!

 

[novaqt]

NO ONE! Given the current environment can predict with any degree of certainty what will happen.

With fuel priced as it is, the election year silliness and uncertainty of who will control Congress and the White House the whole industry is a crap shoot. I wouldn't be surprised to see the NW/DL fall apart for a bunch of reasons.

In fact I wouldn't be surprised to see all of the same major players as stand alone companies 2 years from now. Conversely I wouldn't be surprised to see the big six down to three, two merged and one BK'sd out of existance.

No the waste of bandwidth is assuming any carrier will be "here" 6 months from now in its current form.

I have to agree with you, Piney Bob. Currently, the Dems control both Houses of Congress. If the General Election goes their way, they will control the Presidency also. I do not believe a Democrat controlled Congress will approve of a merger between DL/NW and it will take at least 6 mos. to scrutinize the deal. This takes it past the General Election. If a Dem wins the Presidency, then you can be sure Re-regulation of the airlines will be addressed. Jimmy Carter deregulated the airlines and a lot of profits were made, however, managements and Wall Street got too greedy. Too many jobs lost, too many lives have been destroyed or devastated by greedy management. Management teams have run the airlines into the ground after Clinton passed NAFTA. Just what has all that outsourcing done? It has created an environment of using airlines as a means to quick money hit and run from their 5 yr. employment contracts.

The SEC, like the FAA, has not done their job of properly scrutinizing the airlines. Fiduciary Duties have chronically been violated. The current Congress is beginning to investigate now. We will have to see what happens. If DL/NW does not go through, UA/CO will not either. If Congress slaps down the banking industry, the investment climate will change. If Congress can figure how to pump up the US dollar, oil prices will fall back down. With Euros going up so goes the oil prices. Dubai is becoming a financial mecca and U.S. Corporation are opening up shop there. They then operate outside the U.S. legal environment. We are in a mess and no one knows how to figure it out.

 

[LukeAisleWalker]

I do not believe a Democrat controlled Congress will approve of a merger between DL/NW and it will take at least 6 mos. to scrutinize the deal.

Congress has no authority to approve mergers. They can only hold hearings in order to make recommendations to the Dept. of Justice. DOJ is very aware much of it is political grand-standing (esp in an election year). ONLY the DOJ has the power to approve a merger. DL/NW has only 12 overlapping routes. The industry is on the most shakey ground it has been on since 9/11 days. DOJ is also aware of that. If DL's lobbying efforts and testimony before Congress can show airlines will have a better chance of survival together rather than stand-alone in this environment, expect an approval by year's end.

 

[FrugalFlyerv2.0]

Management teams have run the airlines into the ground after Clinton passed NAFTA.

Interesting comment. :down: What about pre-NAFTA? That would be the FTA between Canada and USA. Were the airlines managed superiorly? What about airline management pre-FTA? Even more superior? Do you even have a clue what NAFTA is? Do you even know what is written in NAFTA with regards to MEX-USA-CDN aviation markets? Or are you just regurgitating what you hear from unionistas or Democratic presdiential candidate speeches?

 

[Bizman]

Frugal,

Could you spell it out for us, that don't know what it says?

 

[LGA Fleet Service]

$550 million dollar operating loss is obscene especially in the light of AMR's loss of $300 million; they pay there employees more and have a significantly older fleet.

Wait until you see AMR's Q2 loss...

 

[flyhigh]

The problem LGA is AMR didn't spend millions financing a bankruptcy. AMR doesn't have billions in exit financing that people want to cash out on. Yes, AMR has angry investors, but it's not the same expectations as what UAL/DAL/NWA have. When you go through bankruptcy, you shouldn't be continuing to lose more than your peers who didn't benefit from bankruptcy. AMR will lose a boatload in Q2 compared to everyone else, but investors will look at the impact of the grounding and take that into account. UAL won't have that benefit and it is likely gas will be high still. With that said, there's nothing to say UAL won't still have an astronomical loss. If you assume AMR's initial projections of ~$30 million lost due to the grounding, that still doesn't explain the difference. If AMR, who has a much more inefficient fleet still loses less than UAL in Q2, that could be a real problem for UAL. UAL has quite a bit less than AMR in cash as well...how long can they go on losing half a billion???

 

[CubsFanJohn]

Exclusively?

There are quite a few airline that fly to ORD besides AA and UA.

There are also a lot of hubs in the US that are controlled by mainly one airline. If United is in BK and they end up selling piece meal, the judge decides who gets what not the DOJ.

Jim,
What I meant was AA for Hub Exclusively. I should have been clearer.

 

[FrugalFlyerv2.0]

Frugal,

Could you spell it out for us, that don't know what it says?

More or less, all NAFTA does is eliminate tarrifs on most products traded between Mexico-USA-Canada. I said on most because there are exceptions such as on agriculture, and things are a little more complicated with respect to investments and there may be some issues with things such as intelectual property.

As far as aviation industry is concerned, and this is IMHO, the only danger to US airline employees is if airline jobs/occupations become TN Status. TN status is granted to certain/limited occupations (professionals). For example, and American with a PhD in nuclear physics can easily work for a Canadian company just by showing his qualifications along with a letter from an employer at the border crossing (speeds up the hiring process, etc.). And vice versa. For Mexicans getting TN status is a little more complicated. Anyways, I really don't see pilots, mechanics, FAs job making the TN status list any time soon.

For reading at your leisure: NAFTA Secreteriat Homepage