Chip reported: There are reliable reports the Pittsburgh hub negotiations are being held hostage to United Airlines on-going bankruptcy problems and the potential to move US Airways mainline, MDA, and other Express assets westward, to airports such as Chicago and Denver."
Cosmo responds: Don't you think that those "reliable reports" that you cited might not be very accurate now (if they ever were) in view of: a.) United just receiving an extension of its exclusive period to file a POR until early March 2004, two months AFTER US Airways must decide on its course of action at PIT but prior to which United is exceedingly unlikely IMHO to sell any significant part of its operation; and b.) United's announcement last week that its LCO operation will begin in February 2004 in DEN, one of the cities you mention as a potential destination for some of US Airways' mainline and Express equipment that is now feeding the PIT hub?
Chip comments: Yesterday the USA Today reported "A bankruptcy judge Friday gave a five-month extension to file a reorganization plan, instead of the six months that United Airlines’ parent company had requested. The new deadline is March 6. UAL’s creditor’s committee had objected to a six-month extension, the second one UAL has requested since entering bankruptcy in December."
Chip discusses: Greg Taylor, United Airlines senior vice president of planning, who held the same position at US Airways until last April, previously told the bankruptcy court United’s creditor’s committee asked the company to divest of the Dulles, Denver, and Los Angeles hubs; as well as the Pacific Division. What’s interesting about the creditor’s committee objection last Friday, is that United told the court during the same hearing that two of the major four obstacles to emergence were a contractual agreement with Atlantic Coast Airlines and its Dulles hub and municipal bond litigation, where the Denver and Los Angeles Airports (along with San Francisco, Chicago, and New York) have filed a motion to evict the Chicago-based carrier.
Chip's rhetorical question: My question is why did the creditor’s committee object to United having an extension to its exclusivity period to file its POR? In addition, why did the court not grant United's request for a six-month extension and approved only five months?
Chip answers rhetorical questions: Informed sources believe the answer to my rhetorical question of "why the creditor's committee objected to a further extension of the exclusive period for United management filing a POR" have said, "the reason is obvious -- the committee intends to file its own POR (which will likely require the fragmentation of United). However, while the domestic operations at Los Angeles, Dulles and Denver could most likely be simply abandoned (or partially spun out to US Airways), there is no obvious buyer for the Pacific Division (AMR's nascent recovery takes it out of the market and Delta, while it may have the money, is about to take on Northwest as a Skyteam partner). Actually, the implicit abandonment of 4-5% of total domestic capacity that would come with a committee POR is the best thing for the industry -- even if US Airways and David Bronner can cherry pick some of this stuff."
Respectfully,
Chip
Cosmo responds: Don't you think that those "reliable reports" that you cited might not be very accurate now (if they ever were) in view of: a.) United just receiving an extension of its exclusive period to file a POR until early March 2004, two months AFTER US Airways must decide on its course of action at PIT but prior to which United is exceedingly unlikely IMHO to sell any significant part of its operation; and b.) United's announcement last week that its LCO operation will begin in February 2004 in DEN, one of the cities you mention as a potential destination for some of US Airways' mainline and Express equipment that is now feeding the PIT hub?
Chip comments: Yesterday the USA Today reported "A bankruptcy judge Friday gave a five-month extension to file a reorganization plan, instead of the six months that United Airlines’ parent company had requested. The new deadline is March 6. UAL’s creditor’s committee had objected to a six-month extension, the second one UAL has requested since entering bankruptcy in December."
Chip discusses: Greg Taylor, United Airlines senior vice president of planning, who held the same position at US Airways until last April, previously told the bankruptcy court United’s creditor’s committee asked the company to divest of the Dulles, Denver, and Los Angeles hubs; as well as the Pacific Division. What’s interesting about the creditor’s committee objection last Friday, is that United told the court during the same hearing that two of the major four obstacles to emergence were a contractual agreement with Atlantic Coast Airlines and its Dulles hub and municipal bond litigation, where the Denver and Los Angeles Airports (along with San Francisco, Chicago, and New York) have filed a motion to evict the Chicago-based carrier.
Chip's rhetorical question: My question is why did the creditor’s committee object to United having an extension to its exclusivity period to file its POR? In addition, why did the court not grant United's request for a six-month extension and approved only five months?
Chip answers rhetorical questions: Informed sources believe the answer to my rhetorical question of "why the creditor's committee objected to a further extension of the exclusive period for United management filing a POR" have said, "the reason is obvious -- the committee intends to file its own POR (which will likely require the fragmentation of United). However, while the domestic operations at Los Angeles, Dulles and Denver could most likely be simply abandoned (or partially spun out to US Airways), there is no obvious buyer for the Pacific Division (AMR's nascent recovery takes it out of the market and Delta, while it may have the money, is about to take on Northwest as a Skyteam partner). Actually, the implicit abandonment of 4-5% of total domestic capacity that would come with a committee POR is the best thing for the industry -- even if US Airways and David Bronner can cherry pick some of this stuff."
Respectfully,
Chip
