Dave Is Not The Problem

[ISP]

How about selling a WO to raise enough capitol, and then doing what should have been done a long time ago... offer an early retirement plan

 

[PITbull]

Not quite. They're trying to cut costs to buy time. I can't imagine the employees going with the assets.

mweiss,

Any airline that buys USAirways can not take the slots, routes, gates, planes etc and have enough employees to man-them. Some of the employees will go with the assets IMO when we are acquired, either in parts or as a whole.

But you can not deny the fact that Siegel has stated on more than one occasion that "consolidation" is ineviatable. There, you have the MAJOR hint to what is being "planned". These statments even gives more weight and credence to USA320 pilots constant "song and dance" about merger and UCT, there has to be some plausibility to what is being said. And it makes sense that a LCC will acquire and want the East Coast franchise and because they have the cash to do it. The legacy carriers don't.

The enemy is not the LCCs; it's U's inability to create and produce a unique product that the customer wants that would set them apart from the LCCs and legacy carriers.

The industry doesn't need two Jet Blues, or two SW or two America West's etc. So Siegel trying to convince the employees to be like JetBlue or SW etc, is blowing smoke...... U does not have the management that is capable of finding a "nitch" in the market place anymore. They all lack the ingenuity to reinvent or improve and create a unique model or product to bring the customers to USAirways. They also have lost the employees support. Apathy and indifference is a disease, and at this point folks won't just up and quit. They will eventually phase themselves out of this job.

There is no bottom. If employees came to work free for the legacy carriers they still won't be able to compete because they do not have a unique product like SW and Jet Blue.

 

[mweiss]

Any airline that buys USAirways can not take the slots, routes, gates, planes etc and have enough employees to man-them.

Only in the sense that some may be hired by the new entity, in something that ends up being little more than a coincidence, if that makes any sense.

The industry doesn't need two Jet Blues, or two SW or two America West's etc.

Well, yes and no. The differences among B6, FL, and F9 are subtle. Yet the industry seems to support all three just fine.

Of course, one might expect some consolidation to occur even in this space; B6 and F9 would fit well together...could they be called "benign" as a result? [B9, get it?]

 

[PITbull]

mweiss,

I don't think I made my point..

The industry doesn't need another SW or JetBlue or America West. Each has their own uniqueness and product that offers the customers what they seek for the dollars spent.

If all the legacy carriers copy the exact blue print of SW or JetBlue, why would customers go there when they already have Sw and B6 or HP in existence.

In simplier terms, Walmart offered 1 stop shopping. K-Mart, and Hill's Dept. stores couldn't compete with the uniqueness of having all in one. In the same vein, Kroger's and A&P grocery chains couldn't compete with Sam's Clubs of the world.

It does no good to repeat the same "theme". You have to create a demand for YOUR product, that's sustaining.

USAirways and perhaps other legacy carriers that do not offer any unique product for the dollar will either have to create a "demand for their product", or consolidate by being acquired or acquiring, or cease to exist.

 

[mweiss]

Oh, no, PITbull, I got it. I just wasn't clear in response.

B6 and F9 are very similar products. Their territories are different, which is why they are able to coexist.

Drawing upon that, one could conclude that there is, in fact, room for another HP. HP is focused on the southwest, while US is focused on the northeast. In that respect, modeling after HP wouldn't be that bad. Similarly, modeling after AS wouldn't be a bad idea, as AS is focused on the northwest.

Personally, given a choice between modeling after HP or modeling after AS, it wouldn't even be a contest.

 

[PITbull]

Well mweiss,

I can't agree.

You are making an assumption that airlines stay in their territory and don't expand out. SW and B6, Frontier and alike are expanding and so will the others. Each offering their own unique product/service.

The idea in a competitive market place ( and I surely don't need to explain this to you because I believe you may have written the book) is to beat the other guy out of the market place, and not to coexist. Hell, that would be too socialistic, LOL....

It's a "dogy, dog world".

 

[mweiss]

PITbull, you're agreeing with me more than you're disagreeing with me, believe it or not.

As I said above, a B6/F9 merger would make sense. (if the "benign" suggestion didn't do it for you, how about calling it a 69 merger? can I get you to at least giggle???) One reason it would make sense is that they differ primarily in the territory they cover, and thus would likely gain some economies of scale. The other is, as you noted, they will have trouble expanding into each others' territories because their products are similar enough that the newcomer will have trouble acquiring customers from the existing business.

Likewise, US could be modeled after HP, and the same thing could happen. If they expand in each others' direction, they will ultimately have little choice but to merge. But so what? It'd give them better networking, better coverage, and economies of scale. Not a bad thing.

I'm not against consolidation when it makes sense. I'm very much against consolidation for the sake of consolidation (which was, in essence, US's strategy in the 80s).

And even when the parties are an excellent fit, swallowing another business isn't an easy undertaking. Kelleher commented later on how painful the Morris acquision was...and that was an airline modeled in almost every way after WN.

 

[PITbull]

mweiss,

My objective position would be that "consolidation" is ok under certain circumstances, for some of the very reasons you cite above.

However, must I remind you, I AM LABOR. My position is a subjective one and if the possibility of consolidation would hurt the employees (which it does in most instances) I'm adamently opposed. In U's situation, I believe that the consolidation or the acquiring of our airline would absolutely hurt the majority of the employees here.

The merger that I was not opposed to in retrospect and if 9/11 never happened, and if the gov. did approve, was the United merger. Our unions were the same and we were a perfect fit at the time.

I have subsequentely changed my mind on that. <_<

 

[mweiss]

Even from the proletariat point of view, a merger such as HP/US wouldn't be bad. You end up with almost no overlap, so there's no reason any capacity should be removed. About the only place I'd see the "labor" economies of scale come from layoffs would be in management, your mortal enemy.

Bourgeoisiely yours,

 

[PITbull]

uh, mweiss,

Who you calling "low class" unskilled?

 

[BoeingBoy]

In theory a merger between HP and US might make sense, but in the real world of today, there are problems.

Time - the PI/US merger took over a year to accomplish from time of purchase. This one would be about the same scale - 400+ airplane fleet, 50,000+ employees, etc.

Money - does either have the cash to purchase the other. Of course some sort of stock transaction could be accomplished, but then you have the cost of merging the two airlines - training, consolidating facilities, etc. Which leads to....

ATSB - both airlines are restricted by ATSB loan financial benchmarks. Given the time & money necessary to put the carriers together, what's the chances of being in default at some point during the process.

Jim

 

[LGA Fleet Service]

Any airline that buys USAirways can not take the slots, routes, gates, planes etc and have enough employees to man-them.

Forgetting that most majors have thousands of people on the streets aren't you?

 

[avek00]

IMHO, combining US' costs with HP's revenues would be a recipe for disaster.

 

[PITbull]

Any airline that buys USAirways can not take the slots, routes, gates, planes etc and have enough employees to man-them.

Forgetting that most majors have thousands of people on the streets aren't you?

LGA,

I never forget.....

 

[mweiss]

Then surely you must recognize that there will be competition for those jobs. As such, the bargaining power of existing US Airways employees will be low. It's ugly, but it's real, and pretending otherwise does a disservice to people who may make their decisions based on their understanding of what happens after the assets are acquired.