US Airways' plans shift in travel slump

[Poug Darker]

LCC needs a merger. I know, I know...we've all heard it before. But, realize that the only way to compete with WN and DL on the home court (east coast) is to lower costs by increasing the scale. LCC needs to get big - quickly. But, no cash to do it alone, and the increased capacity would result in lower RASM anyway. Better to consolidate with a larger carrier (with the commensurate management complement) and be able to offer customers 'go anywhere - from anywhere' service. LCC needs to announce their plan by 1Q 2010, to complete it by 4Q '10 to survive in the new marketplace. Oh, and LCC will need to repaint and rebrand - the old name is toast.
My prediction: Most possible: UAL - antitrust issues moot. Least possible: CAL - lots of A/T issues so not likely. Unknown entity: AMR - Equipment issues, but low A/T issues. Not likely but possible.
That's it folks, who else or what other options are left?

 

[redheadtempe33]

LCC needs a merger. I know, I know...we've all heard it before. But, realize that the only way to compete with WN and DL on the home court (east coast) is to lower costs by increasing the scale. LCC needs to get big - quickly. But, no cash to do it alone, and the increased capacity would result in lower RASM anyway. Better to consolidate with a larger carrier (with the commensurate management complement) and be able to offer customers 'go anywhere - from anywhere' service. LCC needs to announce their plan by 1Q 2010, to complete it by 4Q '10 to survive in the new marketplace. Oh, and LCC will need to repaint and rebrand - the old name is toast.
My prediction: Most possible: UAL - antitrust issues moot. Least possible: CAL - lots of A/T issues so not likely. Unknown entity: AMR - Equipment issues, but low A/T issues. Not likely but possible.
That's it folks, who else or what other options are left?

Perhaps merging/buying a few smaller carriers? Alaska, Frontier maybe?

 

[does this plane go to paris]

....."AWA did a pretty admirable job against WN compared to many other carriers. It faced them longer and more directly than any other major and still made money doing it. When it combined with US, it was compelled to keep the pipelines of cash flowing (i.e. regional feed from every podunk city, a small international presence, congested hubs) even if all those pipelines weren't profitable. It was the complete opposite of what United did with TED (trying to add LCC to a legacy rather than add a legacy to an LCC) but with the same dismal results. ....."

737, How did going into BK in the early 90's and then avoiding BK court by getting a federal hand out right after 9/11, then facing BK again, the only way Wall Street would give them any more money was to merge the 2 carrier's WN had devastated the most be called admirable?


It's very popular with the United folks when commenting about TED that United management forgot about the "you and I"

 

[FlyOnWall]

US needs a merger with a big legacy carrier just as it always has. Until then- Reposition the brand. It's a small legacy carrier with mostly business market presence, a northeast shuttle, and a small international network. Act like a businesslike carrier that fits into a global network. That doesn't mean spending a whole lot of money, just stop purposely making everything look cheap. Drop the kiddie paint and imagery, wittle the uniform down to the classic business suit. Consider that a network airline flies the same person on more than one flight so they should be able to expect the same on all. They try to be everything and disapoint everyone. They have great airplanes, great employees, great market presence, they need to use their resources!

 

[nycbusdriver]

They have great airplanes, great employees, great market presence, they need to use their resources!

There's the crux of the problem.

"They" don't see the great employees as resources. "They" see the great employees as liabilities and nuisances to be quashed and marginalized at every opportunity. And, if there is no opportunity, then create some.

 

[Pacemaker]

US needs a merger with a big legacy carrier just as it always has. Until then- Reposition the brand. It's a small legacy carrier with mostly business market presence, a northeast shuttle, and a small international network. Act like a businesslike carrier that fits into a global network. That doesn't mean spending a whole lot of money, just stop purposely making everything look cheap. Drop the kiddie paint and imagery, wittle the uniform down to the classic business suit. Consider that a network airline flies the same person on more than one flight so they should be able to expect the same on all. They try to be everything and disapoint everyone. They have great airplanes, great employees, great market presence, they need to use their resources!

If you remember this was kind of what Wolf/Gang proposed in the wake of the failed UAL merger of 2001. A "Boutique" regional airline, I think they called it. Drop down to something like 200 planes, get rid of a lot of domestic, focus mostly on short-haul routes out of PHL & DCA, keep the international.

 

[Jester]

What I am trying to figure out is how many think East was once in the fairly recent history catering to the high end business traveler while having only 8 first class seats on those B757's and having an extremely limited international operation. Furthermore, given much of the higher end business traveler was using the Shuttle on short hops, I don't think it was an issue of being served a meal either. So are all the complaints about not being a first rate carrier due to a lack of "professional" uniform, the new paint job, and the lack of a free meal on board longer haul flights?

I won't deny some stupid mistakes like being charged for water seems almost inhumane given the large number of summer flights in and out of PHX and LAS, but thankfully, that has been reversed. Maybe the Tempe boys cheapened the product a little too much by charging for every checked bag (but then others followed), having Buy-On-Board (but then others followed), and of course, charging for soft drinks (that was thankfully dumped). It appears US has many of the same policies as other airlines as that passengers prefer domestic cheap seats while having upgraded service on European routes. The domestic business traveler wants convenience primarily which translates into frequency, not frills, and non-stop flights with potential upgrades. Southwest has a gold mine operation catering to the business traveler with 27 daily non-flights between DAL and HOU, and it isn't because of the first class upgrades or the uniforms or the meals.

Posters who think America West was admirable competition to Southwest forget about it was done on the backs of cheap labor, in particular, Customer Service Agents and Fleet Service Agents. America West was still standing after 12 rounds against Southwest, but was more akin to a punch-drunk fighter, as Doug Parker said himself another round of bankruptcy was in the near future if the merger did not happen with US East. Now the labor costs aren't so cheap, the hubs are suspect (relatively to the competition), and the company name is bad... only one option to survive... a merger, but who would take us?

So Analyzes Jester.

 

[nycbusdriver]

What I am trying to figure out is how many think this airline was once in the fairly recent history catering to the high end business traveler while having only 8 first class seats on those B757's and having an extremely limited international operation. Furthermore, given much of the higher end business traveler was using the Shuttle on short hops, I don't think it was an issue of being served a meal either. So are all the complaints about not being a first rate carrier due to a lack of "professional" uniform, the new paint job, and the lack of a free meal on board longer haul flights?

I won't deny some stupid mistakes like being charged for water seems almost inhumane given the large number of summer flights in and out of PHX and LAS, but thankfully, that has been reversed. Maybe the Tempe boys cheapened the product a little too much by charging for every checked bag (but then others followed), having Buy-On-Board (but then others followed), and of course, charging for soft drinks (that was thankfully dumped). It appears US has many of the same policies as other airlines as that passengers prefer domestic cheap seats while having upgraded service on European routes. The domestic business traveler wants convenience primarily which translates into frequency, not frills, and non-stop flights with potential upgrades. Southwest has a gold mine operation catering to the business traveler with 27 daily non-flights between DAL and HOU, and it isn't because of the first class upgrades or the uniforms or the meals.

Posters who think America West was admirable competition to Southwest forget about it was done on the backs of cheap labor, in particular, Customer Service Agents and Fleet Service Agents. America West was still standing after 12 rounds against Southwest, but was more akin to a punch-drunk fighter, as Doug Parker said himself another round of bankruptcy was in the near future if the merger did not happen with US East. Now the labor costs aren't so cheap, the hubs are suspect (relatively to the competition), and the company name is bad... only one option to survive... a merger, but who would take us?

So Analyzes Jester.

Originally, the USAir 757 had 24 seats in the first class cabin. The A321 had 26 in first class.

When the decision was made to use the 757s on the low yield routes (i.e. into LAS and Florida,) Crystal City decided that 24 seats was overkill for what would be a mostly-leisure cattle car operation. So, the 24 seats was reduced to 8.

As the high yield business traveler began to resist actually paying for first class, and happily accepting the free upgrades, it was decided that it was inefficient cost-wise to provide more than a token carrot, so the A321s went down to 12 (I think,) and the rest of the fleet was similarly reduced in the number of "premium" seats.

If memory serves, all this was the Crystal City brain trust (probably an intentional dumbing down in anticipation of "Operation Dumbell." I know, I know...it was "Barbell," but I think "Dumbell" is more descriptive.)

 

[ussnark]

....more akin to a punch-drunk fighter, as Doug Parker...

I don't think punching had anything to do with it.

Just sayin'

 

[FlyOnWall]

People misunderstand what 'businesslike' means. It doesn't mean "five star restaurant" service- when people say stuff like that it just shows ignorance. It just means dropping the childish, regionalized, cheap, overly casual image and focusing on running an efficient customer service operation. And competing with your actual competitors. WN is a competitor but our nearest competitor route wise and genetic make-up wise is now the biggest airline in the world. When you are a big company you have to be PC and yes, maybe what some would call generic or stuffy to appeal to a wide, culturally diverse, multinational audience. Small details add up to a perception of the company and what it offers and it seems pretty clear what image has been created.

US has it's strengths but a lot more weaknessess. When you have those weaknesses you have to overcompensate somewhere else like customer service (which comes from morale) or a great loyalty program. The latest US Airways thinks it can overcome it's weaknessess by coming off as so cheap that the public will think they have the lowest fares even though they rarely do. Obviously that has failed! Time for the next idea.

 

[luvn737s]

737, How did going into BK in the early 90's and then avoiding BK court by getting a federal hand out right after 9/11, then facing BK again, the only way Wall Street would give them any more money was to merge the 2 carrier's WN had devastated the most be called admirable?

You must mean "how did going into bankruptcy as a result of the Gulf War hitting at an all-time low in liquidity" then "getting a government handount (Along with a number of other airlines) which it repaid at a handsome profit to the US government (in fact one of their best investments) and then being chosen by Wall Street to maximize any remaining potential of USAirways which was unable to compete with WN due to it's high cost structure" be called admirable? ( I just substituted the truth you left out)

Well, what other airline has faced WN in as high a percentage of it's total market and STILL made a profit while WN's growth was on a tear? Let's have the names.

 

[NCFL]

And bring back the old us airways!!!

bring back the USAirways that Wolfe WAS creating.

It ain't going to happen, folks, and the sooner some people accept that, the happier they will be. Don't like it? Don't fly it. Tara ain't going to come back from the ashes, Scarlett. Sherman's burned all the cotton in the fields and ransacked the house and Rhett ain't going to pay the taxes even if you wear that dress made out of curtains.

I think that much of US's current identity crisis can be traced back to retaining the US Airways name......and thus the brand image that went along with it.

As much as I may wish for the success of the company, USAir has always been an acronym for Unfortunately Still Allegheny In Reality.

 

[USstew23]

You must mean "how did going into bankruptcy as a result of the Gulf War hitting at an all-time low in liquidity" then "getting a government handount (Along with a number of other airlines) which it repaid at a handsome profit to the US government (in fact one of their best investments) and then being chosen by Wall Street to maximize any remaining potential of USAirways which was unable to compete with WN due to it's high cost structure" be called admirable? ( I just substituted the truth you left out)

Well, what other airline has faced WN in as high a percentage of it's total market and STILL made a profit while WN's growth was on a tear? Let's have the names.

Yes a profit.. albeit very limited and small. Having those 747's didn't help either way back in the early 90's and as I have said several times before.. I wouldn't be bragging too much about a profit when it was made on the backs of hard working employees who were the lowest paid and some of the most abused and overworked of the larger airlines. AW held up to Southwest alright..now were they as efficient and well ran? don't think so. Back in the day of living on the left coast I much preferred Southwest and their comfortable 737's to being smashed into absolutely no leg room on a circus like 737 with turquoise mismatched seats.

 

[Pacemaker]

:down: no u were right the first time...DUMP the 737's and bring back the USAirways that Wolfe WAS creating. It was THE only time in memory that US was a real player. Tempe is clueless on how to run any airline.

The Wolf "glory years" were a variation of the current situation. He had the good fortune to take the helm just as the airline industry was kicking into high gear for several years of robust profits. This gave him time to "get the trains running on time", so to speak, but I think everyone knew an eventual sale of the airline was the only real long-term solution to USAir's dilemma.

 

[SS255]

As much as I may wish for the success of the company, USAir has always been an acronym for Unfortunately Still Allegheny In Reality.

Maybe to those who came from PI ( ), but for this customer who did not begin to fly regularly until after US bought PI, my perception is colored differently. (Pun intended!)

True, US East made alot of drastic cuts during 2 bankruptcies to stay alive, but the US which went into the merger was a very customer-oriented airline. The current US is anti-customer, and that -- more than anything else, in my opinion -- has hurt the US Airways brand more than anything else.

US is hurting for cash. They need people to CHOOSE to fly US because they want to fly US......and not just because US is the cheapest ticket. This is where brand loyalty comes into play.