Bad news

[Cosmo]

Chip:

I have two comments --

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On 7/2/2003 3:35:14 PM Chip Munn wrote:

However, on the other hand, with its $25 billion in assets, Bronner with the stroke of a pen can purchase assets for US Airways if he so desires.
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While that is true with regard to aircraft, gates, slots and other facilities and equipment, it is clearly NOT true concerning international route authorities, such as United''s routes to LHR and NRT. DOT has stated repeatedly that only airlines can own route authorities. So if Bronner wants to buy those United assets, he will need to increase his investment in US Airways so that carrier can buy the routes.

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On 7/2/2003 3:35:14 PM Chip Munn wrote:

Also noteworthy, I believe a strong business argument can be made that if United is forced to sell assets, its Plan of Reorganization can be strengthened by divesting of assets to US Airways because a portion of the lost revenue could be retained within the alliance, unlike if a divestiture occurs to a non-United business partner.
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But as I have repeatedly told you in thread after thread on the US Airways board, United won''t retain any of that revenue because, according to the United/US Airways code-share agreement, the carrier that flies the passenger keeps that passenger''s money. Thus, especially in the context of a bankruptcy proceeding, if an asset sale is necessary, United (or, perhaps more importantly, its creditors) has absolutely no incentive to sell any such assets to anyone other than the highest bidder, regardless of whether or not the revenue from those assets stays within the Star Alliance. Furthermore, IMHO, asset sales by United as you describe will simply hasten the carrier''s departure from this industry, as airlines generally are unable to "shrink to profitability."

When I have made these arguments in the other threads, you have either been unable or unwilling to attempt to refute them. Why? And if you can''t refute them, that indicates that your statements, like those quoted above, have little or no merit. So the question becomes: "Why do you insist on making such statements, over and over again, in thread after thread, ad nauseum?"

And BTW, to paraphrase, "I find it interesting that someone from another airline would be posting on the United board." You''ll have to admit, when it involves something that''s important to you, it''s not so surprising, is it?

 

[iflyjetz]

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On 7/2/2003 3:35:14 PM Chip Munn wrote:
However, I take exception to some posters who simply "shoot the messenger" or misrepresent my comments. To set the record straight, I have continually said I believe United will not liquidate, but could be forced to sell assets to fund "on-going" operations.​

 

[737nCH11]

iflyjetz,

Thank you! That has to be the best post in the history of this website. Chip acts pious and tells folks that he only wants the best for UAL employees, but when you look at your compilation you see the truth.

As for your remarks about U''s relationship with UAL, I believe that you are dead on. I once heard UAL referred to as the black widow of the airline industry for using the heck out of it''s partners and then casting them aside or destroying them. I fear that is what''s in store for U.

You stated what I have thought all along. U is converting to RJs. CEO Glen Tilton has stated that shrinking UAL is not the answer. Tilton wants to focus on business travelers, U is driving them away in droves. Heck, if U pulling out of SNA and giving it to UAL (same for DEN-CLT) isn''t a sign of things to come then I''ll eat my hat.

My honest take on this situation is that Chip is fiddling while Rome burns down around him. The USAirways that you see today won''t exist in two years.

 

[USA320Pilot]

Cosmo & Iflyjetz:

I find it interesting that you spent time reviewing my posts on the US board to try and dispute my comments. I do not intend to spend very much time, if any in the future at all, on the United board debating my comments, but I am flattered at your response.

Regardless, I disagree with your emotional comments regarding US Airways'' strategic direction, which is likely fueled by your fear that my thoughts will come to fruition.

In my opinion, US Airways is not interested in NRT, LHR, or international routes and I have never said the Arlington-based company would seek these assets, although anything is possible. In regard to LHR and the likely LHR suitor, if this asset becomes available, I believe Continental could make a strong bid because the Houston-based carrier could finally make London to New York work, with their powerful Newark hub that would provide an excellent domestic hub to feed the two cities.

If Bronner does purchase United assets, I suspect he is interested in what the United and US Airways Marketing Departments call Chicago West airport gates and facilities; as well as some narrowbody equipment such as the A320 family or B757s. Incidentally, I have heard that Bronner owns United B757 and A320 EETCs, which he may allow to be rejected by the Chicago-based carrier and then the EETCs would be taken over by US Airways. This is just a rumor, but it’s a pretty hot rumor.

Cosmo, in regard to your statement of "But as I have repeatedly told you in thread after thread on the US Airways board, United won''t retain any of that revenue because, according to the United/US Airways code-share agreement, the carrier that flies the passenger keeps that passenger''s money," your comment is inaccurate. Here’s why. If United sold some domestic assets and in this example we will theoretically say ORD gates, let’s say a passenger elects to fly from MDT to NRT. The passenger could then fly on US Airways from MDT to ORD and onto SEA. The passenger could then connect to a UAL flight and continue on to NRT, where US Airways would keep the MDT to SEA revenue and UAL the SEA to NRT revenue.

However, if these assets are sold to let’s say Delta, the passenger could fly round trip on Delta and then United would not get any of the revenue.

Regardless, I believe I am the only person being talked about from another airline by employees from another company on their message board and I am flattered that United employees read my comments and feel the need to have their own conversation about my thoughts and posts.

Finally, I do not want to see anybody get hurt whether it’s at US Airways United, or any other carrier, but facts are facts. But to be honest, I do disagree with United ALPA attempting to obtain super seniority with a pre-nuptial clause. I find it very interesting the United pilots have included ALPA Merger Policy in their contract, the pilots aligned their Merger and Fragmentation language to be identical to US Airways ALPA, and United pilots now have fragmentation language, which may be the worst in the industry with only 50% protection.

Regardless, I do not want to debate this issue on the United board, but once again I am flattered that the United employees and those parties interested in the airline want to discuss my comments on their board.

Best regards,

Chip

 

[USA320Pilot]

Just one more thought…the bottom line is David Bronner, US Airways’ chairman of the board, who controls a huge amount of cash, has said in three independent interviews he is interested in acquiring United assets. Specifically, the Charlotte Observer reported if United were to sell assets, he would consider backing the purchase of some "if it would be beneficial to US Airways."

Best regards,

Chip

 

[LGA Fleet Service]

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On 7/3/2003 12:30:26 AM Chip Munn wrote:



Just one more thought…the bottom line is David Bronner, US Airways’ chairman of the board, who controls a huge amount of cash, has said in three independent interviews he is interested in acquiring United assets. Specifically, the Charlotte Observer reported if United were to sell assets, he would consider backing the purchase of some "if it would be beneficial to US Airways."


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Whats the date on that Charlotte Observer piece?

Has he said that recently? As in this week? Last week? Two month old newspaper interviews aren''t gospel truth.

Yes, Bronner controls a "Huge" ammount of cash.. do the retirees of Alabama feel secure in potentially having even more of their pensions invested in the airline industry? I sure as hell wouldn''t.

More importantly, does Bronner have absolute Carte Blanche to "Buy United assets with the stoke of a pen"? I somehow doubt that.


Your good Doctor could well be brought up short should he attempt to sink more pension fund money into the airline game.

Overlooked in this neat little ORD East and West scenario is the other airline that hubs in ORD, the Dallas/Ft.Worth based American Airlines and what their response would be.








​

 

[UnitedChicago]

Baghdad Bob''s Public Relation''s Business Partner - Drip Mudd - Reports Further Whinings of Moronic Distraction (WMD)

"United assets will be sold to the moon!" Mr. Mudd excaimed at Baghdad International Airport.

Mr. Mudd went on to claim "black is white, a full glass is always half empty, and two rights make a wrong!"

Not surprisingly - like Baghdad Bob - Mr. Mudd did not have the honor of a playing card assigned.

 

[737nCH11]

The article that chip quotes from is old news. I believe it was published just after UAL filed for bankruptcy protection. This was also when U was a strong major carrier and not some half-assed regional/major wannabe.

Mr. Munn needs to realize that things have changed and move on. U is a shell of it''s former self, and if anybody buys UAL assets it sure as hell won''t be them. Bronner and Co. are positioning U to be a nice feeder carrier for somebody, they evidently aren''t out to take over the world.

 

[Ukridge]

Mr. Munn

I thank you for your response. As one who put out a call for answers to the basic questions of United, I enjoy the variety of reasoning that surfaces.
I must admit though, that my recent send-ups of you (to which you gratefully bear no ill-will and have seem to borne in a spirit of comity) were not so much motivated by an attempt of flattery toward you. Rather, they were humourous critics of your style that seems often sprung from a sense of pique and provocation. Whether this style is of purpose or merely incidental to the conveyance of thoughts remains unknown to those of us in the readership.
At the risk of serving as a somnificant to those who have read my previous posts, I relate to you that I work within an organization that does business in London, Mainz (near Frankfurt), Washington, and sometimes Tokyo. My travel is sporadic, yet we often have someone from the office traveling to one of these metropoles. The Star Alliance has therefore been of great importance to our travel needs. A close friend of my wife’s is employed by United in the U.K. and led us to the benefits of jettisoning BA for the “seamless†network of Star. When I heard that United was in peril (either real or perceived), this employee passed along this site as a possible source of information that augments that which we read in the business pages. Once here however, I noticed an odd admixture of information and opinion that was quite striking. Your posts seemed to serve as a catalyst for much heated debate.
I will, and must, leave the detailed argument to those such as Cosmo, iflyjetz et. al, who can argue to the facts of the matter. Iflyjetz’ recent missive lends credence to the thought that this debate is not yet settled. 737inch11 appears to be one of your colleagues and yet is not as sanguine as to Airways’ prospects. At the great risk of injuring American sensibilities, I did indeed level a few ripostes in your direction. Your style begs for such a response and I was pleased that the moderator, in a spirit that Winston Smith would be accustomed to, did not delete my posts. Frankly said Chip, I enjoy reading your posts, but you do have quite a provocative manner. I realize the news about United is not good – one cannot make a silk purse from a sow’s ear. There is a style however, of being too eager by a half and I believe that this, not flattery is what elicits the bile of your readership from United.
Do not take refuge back in your corner. I as a Brit love solid disputation. Let the games continue and do not be so easily aggrieved.
Cheers


Quite good UnitedChicago – WMD

 

[b737gearboy]

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On 7/2/2003 310 PM Fly wrote:

US Air and United together.....US air flying the RJ''s and UAL flying all the rest. Yes, I can see that part as true. Now is the time for the UAL groups to dump their unions and find independant unions so we can staple US Air to the bottom like American did.

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Hey Fly,
What are YOUR career expectations now? That''s all I ever heard from you UAL guys during the merger debacle. I hope nothing but the best for everyone in this industry. And no I don''t work for U anymore.

 

[will fix for food]

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On 7/3/2003 2:15:33 AM LGA Fleet Service wrote:



Whats the date on that Charlotte Observer piece?

Has he said that recently? As in this week? Last week? Two month old newspaper interviews aren''t gospel truth.

Yes, Bronner controls a "Huge" ammount of cash.. do the retirees of Alabama feel secure in potentially having even more of their pensions invested in the airline industry? I sure as hell wouldn''t.

More importantly, does Bronner have absolute Carte Blanche to "Buy United assets with the stoke of a pen"? I somehow doubt that.


Your good Doctor could well be brought up short should he attempt to sink more pension fund money into the airline game.

Overlooked in this neat little ORD East and West scenario is the other airline that hubs in ORD, the Dallas/Ft.Worth based American Airlines and what their response would be.






​

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Bingo.

 

[UnitedChicago]

One of my favorite Chip quotes:

Finally, former United president Rono Dutta serves as a RSA consultant and was appointed to the US Airways board of directors in April. What’s interesting about this appointment is that Dutta told a friend of mine at dinner in the fall of 2001, just a few short months after United’s attempt to acquire US Airways was terminated, that he would "not sleep until he put United and US Airways together."


Yes. Because someone says they won''t sleep until something happens - it will happen. Rono may be a board member - but he''s powerless to put the two together. Get over it Chip!

 

[Cosmo]

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On 7/3/2003 12:15:19 AM Chip Munn wrote:

Cosmo, in regard to your statement of "But as I have repeatedly told you in thread after thread on the US Airways board, United won''t retain any of that revenue because, according to the United/US Airways code-share agreement, the carrier that flies the passenger keeps that passenger''s money," your comment is inaccurate. Here’s why. If United sold some domestic assets and in this example we will theoretically say ORD gates, let’s say a passenger elects to fly from MDT to NRT. The passenger could then fly on US Airways from MDT to ORD and onto SEA. The passenger could then connect to a UAL flight and continue on to NRT, where US Airways would keep the MDT to SEA revenue and UAL the SEA to NRT revenue.

However, if these assets are sold to let’s say Delta, the passenger could fly round trip on Delta and then United would not get any of the revenue.
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Chip, with all due respect, you can''t seriously believe that UA would keep any significant amount of its current international revenue from non-gateway cities under the scenario that you describe. First, most of the higher revenue business travelers will simply opt for other truly online solutions -- using your example of an MDT-NRT passenger, he/she would probably switch to AA over ORD or NW over DTW. Second, once UA''s name is no longer on aircraft or airport facilities in cities that it would give up (like CMH, DSM, ICT, SLC, BOI and RNO, for example), many passengers will not even think about UA when planning their trips. This would certainly be true of folks who called another airline or visited another airline-specific web site. Third, UA''s remaining international operations would be dependent on US'' advertising of UA''s international flights in the non-gateway cities. But to the extent that such advertising existed at all, UA would likely be relegated to being just another one of US'' Star Alliance partners. And if US decided to cut its advertising budget, for whatever reason, even that benefit to UA would probably disappear. And fourth, the successful operation of UA''s remaining international flights would be highly dependent on the interests of UA and US being in sync. However, there is no reason to assume that that will always (or even often) be the case. But even if it is, that essentially gives control over UA''s future to US, hardly a position that any UA employees, creditors or potential new owners would want to occupy.

At the end of the day, the rump UA would look troublingly like a pre-deregulation Pan Am, and in fact it would almost literally be an exact replica since UA bought many of PA''s international route authorities. And I suspect that the future UA that you envision would be equally as (un)successful.

Chip, there''s one other comment I would make about your continued support of US'' potential purchase of some of UA''s assets. In essence, what you are describing is, from a UA employee''s point of view, a plan to transfer US'' furloughs to UA''s employees (disclaimer: I am not an employee of UA or any other airline). So while UA''s future may still be somewhat in doubt as the carrier continues through the bankruptcy process, even you should be able to see why current UA employees do not look kindly upon the main proponent of a plan that would hasten the demise of many of their careers. That''s why they respond (whether on this board, the US board or anywhere else) to your various threads about the supposedly bleak future of UA and your support of this erstwhile plan to "save" UA. Thus, it should no longer be a surprise to you (if it really ever was) when UA employees respond to threads of that nature.

 

[Ukridge]

Cosmo - Your last paragraph in your reply to Mr. Munn is as fine of piece of writing that I have seen on this forum. I tried in a quite gentle and roundabout way to mention to him that it was his 'style' that was often the source of the problem and not some inherent fascination/complusion with him per se. Your summation is without peer.

 

[Cosmo]

Ukridge:

Thanks for the kind words -- they are very much appreciated. I have simply been trying to point out what I believe are some of the fallacies, inconsistencies and occasional downright obtuseness of some of the good Capt. Munn''s postings regarding UA''s future and a possible transaction of some sort (unique, interesting, etc.) between UA and US.

BTW, have a good weekend as we "colonials" get an early start to it in order to celebrate the 227th anniversary of the U.S. Declaration of Independence! In respect of your sensibilities, I''ll refrain from mentioning the name of the country that was on the receiving end of that Declaration.