Kellys Comments On U/hp Merger

[Hope777]

http://biz.yahoo.com/ap/050518/airlines_sh...lders.html?.v=4


What I find interesting is....
Southwest chief executive Gary Kelly said if the two carriers merged and shed 50 of US Airways' planes, it could represent the consolidation that many experts have long predicted for the industry.
US Airways Group Inc. and America West Holdings Corp. merged but still continued to operate all their current flights, that would be another setback for an industry already struggling with low fares and high fuel costs, said Kelly and Gerard Arpey, the CEO of AMR Corp.'s American Airlines, the nation's biggest carrier.


So my take is that it is ok for Southwest to EXPAND, ADD AIRCRAFT but if anyone else does it, it is bad for the industry.

 

[KCFlyer]

http://biz.yahoo.com/ap/050518/airlines_sh...lders.html?.v=4
What I find interesting is....
Southwest chief executive Gary Kelly said if the two carriers merged and shed 50 of US Airways' planes, it could represent the consolidation that many experts have long predicted for the industry.
US Airways Group Inc. and America West Holdings Corp. merged but still continued to operate all their current flights, that would be another setback for an industry already struggling with low fares and high fuel costs, said Kelly and Gerard Arpey, the CEO of AMR Corp.'s American Airlines, the nation's biggest carrier.
So my take is that it is ok for Southwest to EXPAND, ADD AIRCRAFT but if anyone else does it, it is bad for the industry.

[post="270735"][/post]​

In the letter to shareholders, it's better explained. There is an oversupply of seats in the market. Bankruptcy laws and subsidies by "outside vendors (GE)" are keeping too many seats in the market. Those bankrupt carriers, in efforts to keep business, are selling tickets at "fire sale" prices. Airlines who are NOT bankrupt, such as Southwest, American, Northwest and others, are forced to offer "less than profitable" fares to maintain their "market share". If US or UAL were to fold, then the non-bankrupt carriers most likely WOULD require some expansion to pick up the traffic.

It's sort of like a guy with gangrene in his foot. You can do everything to keep from cutting off the foot, but eventually, you'll let the problem spread to the rest of the body until the whole body dies.

 

[Winglet]

In the letter to shareholders, it's better explained. There is an oversupply of seats in the market. Bankruptcy laws and subsidies by "outside vendors (GE)" are keeping too many seats in the market. Those bankrupt carriers, in efforts to keep business, are selling tickets at "fire sale" prices. Airlines who are NOT bankrupt, such as Southwest, American, Northwest and others, are forced to offer "less than profitable" fares to maintain their "market share". If US or UAL were to fold, then the non-bankrupt carriers most likely WOULD require some expansion to pick up the traffic.

It's sort of like a guy with gangrene in his foot. You can do everything to keep from cutting off the foot, but eventually, you'll let the problem spread to the rest of the body until the whole body dies.

[post="270739"][/post]​

The bankruptsy debacle has gone on long enough. Two trips through Bk and U is still one breath away from dying and UAL has had TWO YEARS to get its house in order and has failed, except for alienating and screwing employees. Enough is enough, but I guess not if Bush is trying to drive a stake in the heart of airline unions.

 

[Ch. 12]

The bankruptsy debacle has gone on long enough. Two trips through Bk and U is still one breath away from dying and UAL has had TWO YEARS to get its house in order and has failed, except for alienating and screwing employees. Enough is enough, but I guess not if Bush is trying to drive a stake in the heart of airline unions.

[post="270758"][/post]​

I vote for European law and just say that when the cash dries up, so does the company. Ch.11 is nothing more than subsidized operations. Hardly seems like an even playing field to me.

 

[wnbubbleboy]

So my take is that it is ok for Southwest to EXPAND, ADD AIRCRAFT but if anyone else does it, it is bad for the industry.

[post="270735"][/post]​

It is when they are in bankruptcy. When they are being propped up by a third party who extends and extends credit to them. When they are dumping their pensions on the US Taxpayer. When they laying off US workers but outsourcing to other countries the same jobs. I could go on an on but I think I have said this before.

SOAP BOX ALERT-----SOAP BOX ALERT----SOAP BOX ALERT--

Finally, If Joe Smith at the Widget factory thinks his pension's safe he doesn't have a clue that he's next. Gates are open, and companys will be crossing the border to Bankruptcy in droves. It's time to post Minute Men at the Stairs of the Bankruptcy court.

 

[skyflyr69]

since when is UAL and U offering FIRESALE fares?????????? your so full of horse-
stuff its funny!

seems to me Delta isoffering firesale fares along with the "lowcost" carriers.
you can't prove those fares.


So, if you want to get rid of chp.11 carriers lets start with continental , ual, that will take out the seats.

At least U has a plan . UAL doesn't and Delta should never have a business plan based on a competitor going out of business. What are they smoking in ATL?


looks like ol LUV and AMR getting a bit tight in the panties?????

 

[KCFlyer]

since when is UAL and U offering FIRESALE fares?????????? your so full of horse-
stuff its funny!

seems to me Delta isoffering firesale fares along with the "lowcost" carriers.
you can't prove those fares.


So, if you want to get rid of chp.11 carriers lets start with continental , ual, that will take out the seats.

At least U has a plan . UAL doesn't and Delta should never have a business plan based on a competitor going out of business. What are they smoking in ATL?
looks like ol LUV and AMR getting a bit tight in the panties?????

[post="270810"][/post]​

U does in fact have a plan. Whatever route Southwest flies...undercut the fare by $50. Would you be so kind as to explain how U's "plan" that results in an almost 90% load factor cannot also result in a profit? That tells me that they are indeed offering "fire sale prices". And if you work for US, then YOUR panties ought to be just a bit tight by looking at that little statistic. And even tighter if it weren't for GE and the bankruptcy courts.

Say what you want about Delta, but while they are near bankruptcy, they aren't in bankruptcy...and were it not for the protection afforded by the bankruptcy courts, then I'd submit that Delta would be in a helluva lot better shape than they are by having to compete with an airline selling 90% of their planes seats at a loss. THAT is Southwest's point....if the truly "capitalistic economy" were allowed to operate, then the demise of one or two bankrupt carriers would strengthen the remaining players in the industry....not just Southwest, but American, Delta, Northwest, Continental and any other non-bankrupt airline.

 

[FWAAA]

since when is UAL and U offering FIRESALE fares?????????? your so full of horse-
stuff its funny!

[post="270810"][/post]​

Unit revenue has fallen much faster at UAL and USAir than at their legacy colleagues since 2002.

The numbers don't lie: Desperate companies discount aggressively, especially when faced with industry-wide domestic overcapacity.

 

[ngneer]

Don't leave out Independence Air when talking about fire-sale prices. They've been offering deeply discounted fares to keep revenue coming in but meanwhile losing money by the boatload. How long can this Ponzi scheme go on?

 

[Winglet]

It will go on until Mr. Bush and the Republicans have completely emasculated unions. That's the agenda.

 

[ELP_WN_Psgr]

Winglet:

We're all entitled to our own individual political opinions, and maybe I am naive, but I just don't get the connection between airline union emasculation and the White House. I really don't.

How is the GOP after unions? They haven't introduced any legislation to repeal the RLA, they haven't started making sounds supporting a nationwide Right-to-work law, and as far as I know the labor protecting provisions of taft-Hartkey are still intact. With a Republican majority in both houses of congress, if they were after labor, I don't think there would be any ambiguity.

I think the whole industry mess is more a function of management than any governmental or labor action or inaction. Let's look at this objectively.....airlines are losing money because their overall model is broken. The hub and spoke works great when people lack the ability to comparison shop on their own. When folks used to call a travel agency to do their booking, the flights were sorted by enroute time and time of day. Most people generally pick the first option presented to them....so flights that had a 27 minute connection at DFW (never mind the fact they come in one terminal and out another) would show up at the top of the list. Due to years and years of regulated prices, not that many people would inquire as to the price of said ticket.

The evolution of the internet gave consumers the power to shop aroound. Once they could shop around, they were much less willing to take it in the shorts with regard to airfare.

Once revenue fell due to the change in consumer habits, airlines had two choices: change or die. Most of them, for whatever reason, have elected not to change.

The evisceration of employee wages and associated weakening of ther collective bargaining organizations is really only a stopgap measure. Those things have reduced the rate at which money is lost, but the overall problem is a broken, inefficient system.

Who is making money? Southwest. Is it the result of a non-union shop and low wages? Hardly...their folks are well paid and their workforce is highly organized.

Back to the moral of my post: George W. & Laura are not sitting around, drinking coffee, and figuring out ways to bust unions. They have nore important fish to fry. Frankly, I think it is going to take a union to shut an airline or two down before management gets the message that people are mad as hell and won't take it any more. The labor groups at USAirways, whom I thought would put up a fight of some sort, basically rolled over like a lap dog and told management to do anything they wish.

Some folks might think that they are better off with some job at a more-or-less going concern than they would be shutting the thing down and having to start from scratch. I'm not so sure. But it is incredibly apparent that until a union or group of unions at a carrier stand up and say "Nope, shut 'er down" that management is going to keep trying to dqueeze enough from employees to compensate for their failure.

And the government really should play "hands off." Let the marketplace work, let a carrier go out of business.

 

[BoeingBoy]

since when is UAL and U offering FIRESALE fares?????????? your so full of horse-
stuff its funny!

[post="270810"][/post]​

I'd postulate that a carrier with mainline costs above 10 cents per seat mile (and which the government says has domestic system CASM of near 15 cents) that sells tickets for as low as 3.5 cents per mile is indeed offering "firesale" prices. And that carrier ain't WN.

Jim

 

[Fly]

They won't though! Enjoy the ride!!!

How long and how many time did Continental go in bk? That's the way it works.

 

[Winglet]

SW and JB are cherry pickers. They are not a transportation system. Point to point isn't going to work for a comprehensive system . . . unless you don't want airline service to most American cities. The problem is that people flying out of Bugtussle AL expect their ticket to be cheap and service frequent. Now, the legacy airlines are, in effect subsidising small city customers flying in grossly expesive RJs just for the cash flow.

And as far as the present administration goes, I used to be a lifelong Republican until I saw what the agenda has morphed into . . . endless and unnecessary war, deficits growing out of control, and granting incompetent corporations unlimited time to reorganize while they pay their failed CEOs millions of dollars. You're right, I have my opinion of the Republicans, and I'll vote for a dead dog before I vote Republican again.

Winglet:

We're all entitled to our own individual political opinions, and maybe I am naive, but I just don't get the connection between airline union emasculation and the White House. I really don't.

How is the GOP after unions? They haven't introduced any legislation to repeal the RLA, they haven't started making sounds supporting a nationwide Right-to-work law, and as far as I know the labor protecting provisions of taft-Hartkey are still intact. With a Republican majority in both houses of congress, if they were after labor, I don't think there would be any ambiguity.

I think the whole industry mess is more a function of management than any governmental or labor action or inaction. Let's look at this objectively.....airlines are losing money because their overall model is broken. The hub and spoke works great when people lack the ability to comparison shop on their own. When folks used to call a travel agency to do their booking, the flights were sorted by enroute time and time of day. Most people generally pick the first option presented to them....so flights that had a 27 minute connection at DFW (never mind the fact they come in one terminal and out another) would show up at the top of the list. Due to years and years of regulated prices, not that many people would inquire as to the price of said ticket.

The evolution of the internet gave consumers the power to shop aroound. Once they could shop around, they were much less willing to take it in the shorts with regard to airfare.

Once revenue fell due to the change in consumer habits, airlines had two choices: change or die. Most of them, for whatever reason, have elected not to change.

The evisceration of employee wages and associated weakening of ther collective bargaining organizations is really only a stopgap measure. Those things have reduced the rate at which money is lost, but the overall problem is a broken, inefficient system.

Who is making money? Southwest. Is it the result of a non-union shop and low wages? Hardly...their folks are well paid and their workforce is highly organized.

Back to the moral of my post: George W. & Laura are not sitting around, drinking coffee, and figuring out ways to bust unions. They have nore important fish to fry. Frankly, I think it is going to take a union to shut an airline or two down before management gets the message that people are mad as hell and won't take it any more. The labor groups at USAirways, whom I thought would put up a fight of some sort, basically rolled over like a lap dog and told management to do anything they wish.

Some folks might think that they are better off with some job at a more-or-less going concern than they would be shutting the thing down and having to start from scratch. I'm not so sure. But it is incredibly apparent that until a union or group of unions at a carrier stand up and say "Nope, shut 'er down" that management is going to keep trying to dqueeze enough from employees to compensate for their failure.

And the government really should play "hands off." Let the marketplace work, let a carrier go out of business.

[post="270944"][/post]​

 

[SWAFA30]

SW and JB are cherry pickers. They are not a transportation system.

[post="271117"][/post]​

The millions of people that travel on both carriers every year might disagree. I guess it all depends on how and what you define as "transportation".