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On 2/24/2003 2:01:24 PM argentomaranello wrote:
If USAir can acquire the existing UAL Airbus fleet and use it to equip and hub DEN and ORD, sans existing UAL employees, it ought to be a huge plus for USAir and provide a huge post-bankruptcy boost.
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I see a few problems with your suggestion that US acquire UA's Airbus fleet and take over UA's ORD and DEN hubs. First, there is a mismatch between the Airbus fleet size at UA (currently about 140 or so aircraft, split in about a 2-to-1 ratio between A320s and A319s) and the current number of departures at UA's two largest hubs (about 850 daily combined). This equates to an average of about 6 departures per day per former UA Airbus aircraft, a number that IMHO is unrealistic given the amount of UA's current medium- to long-haul flying in ORD-west and DEN-east markets. So unless you expect US to significantly curtail the current UA flying from ORD and DEN (but if so, why pick up the hubs?), I believe that US would also need to acquire 50-75 of UA's B737-300/500 aircraft (or pull some similar parked US aircraft out of the desert) for some of the shorter-haul routes like ORD-DTW/MSP/STL and DEN-ABQ/OKC/SLC, to name a few.
Second, what do you propose that US do to replace UA's current long-haul nonstop international flying from ORD (it's not an issue for ORD-Canada/Mexico/Caribbean service or at DEN) that now uses B747-400s (NRT/HKG), B777-200s (LHR/FRA/GRU/NRT) and/or B767-300ERs (LHR/CDG/AMS)? Would you drop some or all of these long-haul flights? While I wouldn't expect US to pick up any of the 747s, nothing in US' current fleet will do ORD-NRT/HKG nonstop and the A330-300s would be hard-pressed to do ORD-GRU nonstop (and maybe even ORD-Europe, especially westbound). I believe that US would need to acquire some of UA's B777s if it is going to continue to serve these routes. Otherwise, US will cede these routes to AA and various foreign-flag carriers, diminishing to value of the ORD hub.
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On 2/24/2003 2:01:24 PM argentomaranello wrote:
LHR rights would likewise be a plus (but would likely require additional equipment and could come at a steep auction price -- if conducted before the BK judge).
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While LHR rights would clearly be a plus for US, you are absolutely right that such rights would not come cheaply. IMHO, US would almost certainly be in a bidding war with CO and DL which, as you note, would not be easy given US' likely immediate post-bankruptcy financial state. Moreover, assuming that bilateral issues are resolved with the U.K., what would US do with all of UA's LHR slots? US can offer nonstop LHR service at only one of its three current hubs (PHL) plus ORD if it picks up that hub. BOS might also make sense. But what then? Even assuming that US operates 3 PHL-LHR, 3 ORD-LHR and 1 BOS-LHR flights, IIRC that still leaves enough former UA LHR slots for 9 more round trips. Furthermore, there is a strong chance that the DOT will require the airline that acquires UA's LHR rights to continue to operate at least 2 daily flights to LHR from one of the NYC airports, and a similar number to LHR from both IAD and SFO where UA is now the only domestic carrier (against BA and Virgin) in those large markets. Although this might not actually be that bad of an overall LHR service pattern, assuming US does indeed operate the NYC/IAD-LHR routes (given the carrier's strength in both New York and Washington) and sell the SFO-LHR slots to AA, it places most of US' new LHR service at locations that are not its hubs. The issue is whether or not US could operate this new LHR service in a competitive and profitable manner.
Finally, while I think it's still much too early for US to be contemplating which of UA's assets it would acquire after it emerges from bankruptcy (see, for example, the threads about a possible shutdown of US if the pilots' pension issue is not resolved by March 31), let's at least play the game intelligently and come to some logical conclusions.