What if?

Ukridge

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Aug 27, 2002
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The firm in which I am involved does a good deal of flying on the Star Alliance. Though the bulk is in Europe we certainly log a fair share on United for our travel to the US. LH sends us frequent flyer information quite often and recently they mentioned that we should not be overly concerned with the financial troubles at UAL as there will always Star flights available.
Now, from reading the posts on these boards I am gaining the impression that USAirways is poised to become the absolute powerhouse of the air travel market. So powerful in fact that UAL will simply be subsumed into the maul of this lynchpin of the market and for the other carriers it is all over but the shout. Interesting that your government is forcing UAL into bankruptcy so this consangunity arrangement with USAirays can be consommated but I certainly am not in a postition to refute the dictates of your federal system.
The question as a customer arises however, as to what LH will do with its american arm of the alliance? Since, according to prognostications, Airways is to be the surviving entity and UAL all but completely liquidated, how is LH to structure its US feed so as to ensure that those of us who are Star FFs will be able to continue? LH promises that they are adding capacity but will it be enough for the Trans-Atlantic flying to cover the loss of UAL?
If this presumption is not correct than I have misread the USAirways board. I always doubted A-level preperation was for nought in some aspects. Uk
 

FrugalFlyer

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Aug 20, 2002
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Ukridge brings up an interesting point - and that is UAL is a key member of the Star Alliance. I would say as much as LH is the anchor in Europe, the same way UA is an anchor for North America. Ofcourse, there is SAS and BMI in Europe as well, but they have supporting roles, just like I believe Air Canada has a secondary role for the Star Alliance in North America.
My question or concern then is as follows: are any of the * alliance airlines ready to inject some cash into UAL? I know there is a limit on foreign ownership of US ailines (25%?), but why are LH, SAS, Austrian, ANA, Thai, etc. not helping out a key player of their alliance? In addition to givebacks from employees and vendors, what about the involvement of * alliance partners in the restructured UAL? I don't think this is unreasonable, given that couple years back LH and UA jumped in to rescue AC from the grasp of CP/AA/1 world.
 

mga707

Veteran
Aug 19, 2002
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[blockquote]
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On 9/30/2002 7:13:54 PM Ukridge wrote:
So powerful in fact that UAL will simply be subsumed into the maul of this lynchpin of the market and for the other carriers it is all over but the shout.
(snip)
If this presumption is not correct than I have misread the USAirways board. I always doubted A-level preperation was for nought in some aspects. Uk

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[/blockquote]

...and they call the languages spoken by both this 'chap' and myself English. Go figure...
 

mga707

Veteran
Aug 19, 2002
1,330
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[blockquote]
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On 10/1/2002 12:36:38 AM mga707 wrote:

[blockquote]
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On 9/30/2002 7:13:54 PM Ukridge wrote:
So powerful in fact that UAL will simply be subsumed into the maul of this lynchpin of the market and for the other carriers it is all over but the shout.
(snip)
If this presumption is not correct than I have misread the USAirways board. I always doubted A-level preperation was for nought in some aspects. Uk

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[/blockquote]

...and they call the languages spoken by both this 'chap' and myself "English". Go figure...

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...and yes, I did discern that this was an example of that allegedly droll British sense of humor.
Sorry, humour....[img src='http://www.usaviation.com/idealbb/images/smilies/9.gif']
 

Taipan

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Aug 20, 2002
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I would be happy if Air Canada gave us back the 600 million ,or bought back there a 340s ASAP
 

trvlr64

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Aug 20, 2002
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FLL
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Therefore my disclaimer that maybe I indeed did not understand those who are maintaining this monolithic powerhouse that Airways will become be next week, next year, or decade. Maybe, but it is certainly the impression one gains.

UKRIDGE........as a very frequent flyer and loyal customer to USAirways, all I see this airline doing is shrinking itself to become a regional EXPRESS carrier for United Airlines. The postings you see on the U board about corporate transaction in my HUMBLE opinion are bull**it. USAirways is not going to be a major airline anymore. I live in PIT and have witnessed what they have done to our airport. If you can get a hold of a copy of the ATTACHE magazine, the A concourse has been turned over to the EXPRESS flights. During the recent schedule changes they have reduced the number of mainline flights to the point I am looking at flying Delta, United or American just so I can avoid the puddlejumpers. What I've heard is that with the introduction of MidAtlantic Airways next year, the A concourse will be the new home for the regional jets that USAirways is acquiring.

So don't worry, I think United will survive (eventually) and USAirways will be feeding it.
 
OP
Ukridge

Ukridge

Senior
Aug 27, 2002
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Well, not necessarily meant as a joke but yes there was a humble attempt to address the topic in a drole manner. My enquiry as to the status of Star is indeed meant in earnest as we rely on it for our business travel and enjoy the frequent flyer miles. I beleive we have repeatedly discussed within the confines of this board the importance of UAL to Star and LH's dependance on it. LH cannot so blightly say that they would simply pick up another american partner - whom? American, Delta??
As for the other remarks they are more of a outsider's crtitic on some of what I have struggled to percieve as discourse on the USAirway's board. Having had a dearth of discussion on the UAL site I ventured over to see if
UAL was being mentioned. Indeed yes! Tales of complots reaching into the highest rank of the U.S. government. The assurity of the pre-emminence of a post Chp 11 USAirways, the utter and complete desolation of UAL, the position from which Airways will dictate UAL's future. All this may be true but to an observer it seemed rather a stretch. Yet, if I mention that in a brute-force manner it would only have resulted in the famous comment from the UAL bashers - that last refuge of an argument That is not what I said. Therefore my disclaimer that maybe I indeed did not understand those who are maintaining this monolithic powerhouse that Airways will become be next week, next year, or decade. Maybe, but it is certainly the impression one gains.
There are always two ways to approach the matter and maybe someone should tell those who are certain of UAL's demise to simply pound sand. Not the elegant manner I would prefer but perhaps apt. Uk
 

UAL777flyer

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Aug 20, 2002
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Keep in mind that it isn't just U.S. carriers that are suffering. Most other airlines are suffering as well. I agree that it would be nice to see some fellow STAR partners help us out, but they may not necessarily be in a position to do so.
 

kiowa

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Aug 27, 2002
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I believe air canada expects a profit this year and LH has announced $500 mil profit. they are doing ok.
 

CAETravlr

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Aug 20, 2002
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My belief is that the Star Alliance partners would not want to kick in any cash at all, until they see that UAL truly has a credible business and recovery plan in place, and that labor and management have come to some sort of terms. Partners or not, these are still separate entities, all with one goal, profit for their own company. They would be wise not to kick in any cash to UAL unless they saw something that indicated they would get a return on that investment. I certainly don't see that just yet. Maybe once UAL proves it can survive as its own entity, based on its own business practices, you will see some sort of equity investment from the partners.

I may be way off, but that is my opinion.

CAETravlr
 

Tango-Bravo

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Aug 29, 2002
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Just another thought FWIW...

Perhaps the other Star Alliance members are waiting to see whether UA (and other mis-managed U.S. airlines) will be successful in their apparent impending attempt to fleece U.S. taxpayers for still more billion$ Why risk their own resources on the unknown when the U.S. government--courtesy of taxpayers--may yet choose to subsidize the morass that the full-service majors have brought upon themselves?

Do I forsee a highly ironic role reversal in the making? Not long ago, it was the U.S. airlines who were objecting to government assistance to European airlines. Now it's the U.S. airlines who have their hands out for a handout. If my memory is correct, the major European airlines began to enjoy consistent health after the subsidies stopped. Now we seem to have the U.S. full-service airlines groveling for the very medicine that kept the European airlines limping along for decades.

All of which is to ask the rhetorical question, why would the healthy Star Alliance members even think of risking an investment in UA at this time?
 

UAL777flyer

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Aug 20, 2002
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Tango-Bravo,

I'd like to think that if the Federal Government stopped their incessant taxation of the airline industry, and stopped forcing the airlines to subsidize the TSA when the Feds are responsible for the safety and security of this country's citizens, than maybe the U.S. airlines wouldn't be in nearly as much financial trouble as they are.

Also, while this certainly wouldn't be the only reason to help out UA, the fact of the matter is that the other STAR carriers stand to lose a lot if UA goes under or is significantly downsized. They'd lose an awful lot of UA feed in U.S. gateways. So it's not as if they don't have anything riding on the sucess or failure of United. They do.
 

FrugalFlyer

Senior
Aug 20, 2002
254
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[blockquote]
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On 10/1/2002 12:14:37 PM CAETravlr wrote:

My belief is that the Star Alliance partners would not want to kick in any cash at all, until they see that UAL truly has a credible business and recovery plan in place, and that labor and management have come to some sort of terms. Partners or not, these are still separate entities, all with one goal, profit for their own company. They would be wise not to kick in any cash to UAL unless they saw something that indicated they would get a return on that investment. I certainly don't see that just yet. Maybe once UAL proves it can survive as its own entity, based on its own business practices, you will see some sort of equity investment from the partners.


CAETravlr
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OK, I agree that * alliance carriers are separate entities, all trying to make more $. But, if Air Canada was soooooo important that not just UA but LH bailed it out a few years back, how much more important is UAL?

The bailout of AC was a mess. IIRC, the bailout of AC also meant acquiring CP and all their problems so I would say that it was a bad investment. Basically, the proposal was that Onnex Corp. (corporate raiders) along with AA buy and merge AC with CP and become 1 world members. The UA and LH money was used by AC to offer more $ / share so that they could acquire CP and remain in *. In the end a court ruled that Onnex/AA would own more shares in the new AC than allowede by law at the time and as a result their bid was dropped, but AC still went through with their bid, using UA and LH money and bought CP and all their headaches instead of allowing CP to fail and step in to fill the void.

IMHO, the anchors of the * alliance are: UAL, LH, ANA, (and RG). Take out either AC in north america, or one of SAS/Austrian/BMI in Europe and * alliance is not too adversly affected. Now take out one of UAL or LH and the * alliance almost crumbles.
Or, is there some love lost among UAL and the remaining * alliance carriers ?