If one big domino falls :(

[DLFlyer31]

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On 10/16/2002 425 PM Busdrvr wrote:

UAL shold figure out NWA's best O&D market out of MSP and run the jet on that route overnight. I wonder how long it would take to get lower "rental rates" for that gate?
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Not gonna work.

Why would anyone fly UAL 1x daily flight vs. NWA's 10x daily flight? The only way would be if you lowered fares to a rock bottom level. However, NW would only lower its fares on the flights near the same time as your flight. NW would match your rock bottom fares and lose money. BUT, NW would still lose less than UAL since NW has a lower cost structure. Worst of all, UAL would probably lose even more since almost everyone would pick NW over UAL accounting to the fact that NW has a lot of loyal fliers in MSP.

 

[Busdrvr]

[blockquote]
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On 10/16/2002 11:25:14 AM casual rat wrote:

With the way this Industry's being run, I think that suicide fares in a dominant carrier's backyard makes sense. The idiots will match your cheap fare on their 10-12 planes compared to your one plane. Call it "revenue killing fares"! I know that someone'll be scratchin' their chin on this one. I think the Industry as a whole is looking at things 'economically backwards'. What I mean is that cost cutting makes total sense when it doesn't affect revenue. Revenue has been chased away, and now...."revenue killing fares"...I'll go back into my pit now.
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I'd mess with the airlines that poached some of UALs revenue earlier this year, anywhere possible. If nothing else, it sends a message like maybe if you cut one of your flights to ORD, we'd use that jet there instead of your lucritive backyard I parked a jet at MSP overnight at a NWA gate. the agent said we were paying a HUGE amount of cash to rent the unused gate overnight. UAL shold figure out NWA's best O&D market out of MSP and run the jet on that route overnight. I wonder how long it would take to get lower rental rates for that gate?

 

[Busdrvr]

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On 10/16/2002 11:39:24 AM UAL777flyer wrote:

AirplaneFan,

Please explain your logic for why you think the federal government is subsidizing UAL and its inefficiencies.
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The opposite is true. The feds capped the per segment ticket tax at two segs each way as a compromise for poor little SWA. A 747-400 takes up no more airspace than an RJ or 737, yet pays substatially more in fees for landing and to the aviation trust fund. A guppy 5 hopping from coast to coast uses MUCH more federal manpower and facilities than a WB going non-stop.

 

[Busdrvr]

[blockquote]
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On 10/16/2002 5:00:00 PM DLFlyer31 wrote:

NW would match your rock bottom fares and lose money. BUT, NW would still lose less than UAL since NW has a lower cost structure. Worst of all, UAL would probably lose even more since almost everyone would pick NW over UAL accounting to the fact that NW has a lot of loyal fliers in MSP.
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DLflyer,
Did you take me up on that free try us out offer?

 

[DLFlyer31]

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On 10/16/2002 558 PM Busdrvr wrote:

DLflyer,
Did you take me up on that free "try us out" offer?
. Couple points. First, you will be surprised to know that UAL has a fair amount of FFs in MSP, just as NWA has some in DEN. Now throw in the cheap ****** that will fly the lowest fare even if it meant Aeroflot, and there would be a market for some locals. They could even make it a purely leisure fight to somewhere like Orlando or Duluth. If NWA can fly 10 flights to a location, UAL could poach away one. Second, don't get confused about our "total" cost vs "Marginal" costs. The reason we're using a NWA gate is all ours have jets just sitting on them doing nothing. When figuring the cost, the amount we usually have to spend to rent the gate, is now a CREDIT. The jets are already paid for, we have excess flt crews (for now), we have the gates (as long as we actually move a jet off of them), and I'd bet landing fees at MSP are lower than ORD. So the "cost" of the additional flight would be MUCH less than NWA's (or UAL's) system wide average costs.
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If you have planes sitting overnight at MSP, I assume it's because they're overnighting before making the morning runs to ORD,DEN,etc. However, where are you going to fly these planes at midnight? Going to do a midnight run to BOS,SFO,MIA...how popular would that really be? Also, wouldn't that plane have to make another night flight to get back to MSP for the morning? Who wants to fly BOS-MSP,MIA-MSP at 3am? Even if NWA did nothing in response, I have a feeling UAL would still lose money on the deal...cost of fuel, flight crews, gate agents,etc. I'm pretty sure the folks at UAL HQ (like UAL777) have analyzed every possible route where money can be made.

Now maybe it is time for UAL to try out some new routes and take a chance on some routes that are outside the traditional thinking. Unfortunately, given UAL's current cash crunch, I don't know if that is possible. I think it would be better for UAL to focus on lowering costs, adapting a better pricing model and exploring the new opportunities brought about by the USAirways alliance.

As for your try us out offer...hmmm I don't seem to remember that? Though I might have just missed your post. I have occasionally flown UAL in the past and had a good experience. Flight crews were pleasant, flight was on-time and we had a decent snack. However, my travel patterns don't fit well within UAL's route system which is why I rarely use UAL.

 

[Busdrvr]

[blockquote]
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On 10/17/2002 11:48:58 AM DLFlyer31 wrote:

[blockquote]
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On 10/16/2002 558 PM Busdrvr wrote:

If you have planes sitting overnight at MSP, I assume it's because they're overnighting before making the morning runs to ORD,DEN,etc. However, where are you going to fly these planes at midnight? Going to do a midnight run to BOS,SFO,MIA...how popular would that really be? Also, wouldn't that plane have to make another night flight to get back to MSP for the morning? Who wants to fly BOS-MSP,MIA-MSP at 3am?


You just described JetBlus business plan. Who wants to fly into DEN from JFK at midnight. Who wants to land in JFK at 5 in the morning?... Purely leisure travelors. In actuality, you'd hurt the low fare I'll travel at any time if it saves me $20 airlines. It would have less of an effect on NWA. You would NOT serve a city like SFO because then you're only competing against yourself.

Even if NWA did nothing in response, I have a feeling UAL would still lose money on the deal...cost of fuel, flight crews, gate agents,etc. I'm pretty sure the folks at UAL HQ (like UAL777) have analyzed every possible route where money can be made.

Our WHQ crowd would tell you it's impossible to make money with a shuttle out of JFK... We are handicapped by paradigms of our own making.

Now maybe it is time for UAL to try out some new routes and take a chance on some routes that are outside the traditional thinking. Unfortunately, given UAL's current cash crunch, I don't know if that is possible.

Cost are minimal.

I think it would be better for UAL to focus on lowering costs, adapting a better pricing model and exploring the new opportunities brought about by the USAirways alliance.'

We can walk AND chew gum at the same time

As for your try us out offer...hmmm I don't seem to remember that? Though I might have just missed your post. I have occasionally flown UAL in the past and had a good experience. Flight crews were pleasant, flight was on-time and we had a decent snack. However, my travel patterns don't fit well within UAL's route system which is why I rarely use UAL.

Thanks for the kind words. I had you confused with DL Gold medallion.
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[AirplaneFan]

[P]
[BLOCKQUOTE][BR]----------------[BR]On 10/16/2002 11:39:24 AM UAL777flyer wrote:
[P]AirplaneFan,[BR][BR]Please explain your logic for why you think the federal government is subsidizing UAL and its inefficiencies.[/P]----------------[/BLOCKQUOTE]
[P]Point I was trying to address was that of a poster who wrote that AA would want UAL to get a Federal loan guarantee because otherwise UAL would have to go into bankruptcy and in that Chapter 11 process would become much more efficient.[/P]

 

[UAL777flyer]

AirplaneFan,

The bankruptcy option is available for ALL corporations, not just airlines. And the Feds would only be backing the UA loan. They wouldn't be directly lending UA $1.8 Billion. Should UA not make good on the loan, it's not as if the Feds will be left holding an empty bag. The fact of the matter is that with this indutry continuing its death spiral, if airlines are not able to make use of the legal avenue of bankruptcy, this industry will be devastated, which would have dire consequences on our economy.