Key Usairways Markets Under Attack

[deltawatch]

Delta Expands Service at Richmond, Va. by 25 Percent with New Flights to Florida

Beginning July 1, Delta will offer two additional daily non-stop
flights from Richmond International Airport to the key business and
vacation destinations of Ft. Lauderdale and Orlando.

On July 15, Delta will offer two daily non-stop flights between
Virginia's capital and Tampa/St. Petersburg/Clearwater.

Delta Expands Service at Norfolk, Va., by 20 Percent With New Non-stop Flights to Boston, Orlando

Customers in the Norfolk/Hampton Roads region of Virginia soon will be able to enjoy the only non-stop service to Boston -- with twice-daily flights -- as well as new non-stop service to Orlando and an additional non- stop flight to Atlanta.

"These new flights represent more than a 20 percent increase in our service from the Norfolk-Hampton Roads area and a significant investment by Delta in the Tidewater region," said Doug Blissit, vice president-Network Planning.

With the summer schedule, Delta and Delta Connection carrier Comair will offer Norfolk-Hampton Roads customers 23 daily flights to six non-stop destinations - 11 to Delta's largest hub in Atlanta, two to Boston, five to Cincinnati, two to Ft. Lauderdale, two to New York's John F. Kennedy International Airport, and one to Orlando.

 

[hharotz]

What bugs me is that if the HP merger falls through (like the UA one did) we will have wasted a year focusing on an unsucessful corporate transaction instead of making gains in the market place and improving our competitive position. Remember the UA merger? No updates to IT technology, no investments in facilities, etc... because everyone, every dept was focused on the merger. Then when UA fell through the cracks and the Twin Towers fell we found ourselves up $hitcreek without a paddle. :down:

We'll (continue to?) let places like RIC,CAK,RDU,ROA,GSO fall to the hands of competitors unless we continue to aggressively defend out turf in the meantime.

 

[Heinrich]

With the retun of those 737s, we have lost a couple of flights a day out of ORF.

Delta's upgraded to 757 a few years back out of here.

 

[Flufdriver]

Delta's is also losing over a billion dollars a quarter too!!! Wait until the Delta BK...you'll see downsizing and pulling out of markets like the rest of us!! In my opinion, the whole industry is under attack! With the merger...we are hurting Delta the most, and they know it!

 

[USAir757]

Delta's is also losing over a billion dollars a quarter too!!! Wait until the Delta BK...you'll see downsizing and pulling out of markets like the rest of us!! In my opinion, the whole industry is under attack! With the merger...we are hurting Delta the most, and they know it!

The whole industry is changing, not "under attack" as you say. DL is doing exactly what they should be doing with the piedmont markets. But you're spending your money before it even gets to your pocket with the HP merger... because as it stands now, US is nothing more than a thorn in DL's side. And even if the merger is successful, it will take that much more to regain presence in these vital markets.

 

[usair_begins_with_u]

Seeing as how the complete merger is going to take 3 years... as a competitor who might be hurt by the deal, I would do my best to attack all U air markets, while U is focused more on merger than survival.. HP/U is worthless if U's market share is erroded to crap in the next two years... Delta, South West, Jet Blue, and the rest of the east coast carriers all know this.. You think U's markets were under assault before?? You just wait and see what happens now.. U dropped the gauntlet, now you are going to see what competition is really all about..

Think about it, what would do? Just sit there and watch? U's hands are now tied by merger, soon the dogs of war are going to be unleashed. If increased competition can make U burn through most of this new cash just sustaining operations, there wont be any left to complete the merger. Hedge Funds, and suppliers will soon realize how futile it is to keep pumping cash into an investment that will never yeild higher returns than treasury bonds. Its a panzi scheme... GE Cap is just trying to climb to the top of the pyramid.

 

[RowUnderDCA]

Seeing as how the complete merger is going to take 3 years... as a competitor who might be hurt by the deal, I would do my best to attack all U air markets, while U is focused more on merger than survival.. HP/U is worthless if U's market share is erroded to crap in the next two years... Delta, South West, Jet Blue, and the rest of the east coast carriers all know this.. You think U's markets were under assault before?? You just wait and see what happens now.. U dropped the gauntlet, now you are going to see what competition is really all about..

Think about it, what would do? Just sit there and watch? U's hands are now tied by merger, soon the dogs of war are going to be unleashed. If increased competition can make U burn through most of this new cash just sustaining operations, there wont be any left to complete the merger. Hedge Funds, and suppliers will soon realize how futile it is to keep pumping cash into an investment that will never yeild higher returns than treasury bonds. Its a panzi scheme... GE Cap is just trying to climb to the top of the pyramid.

[post="271972"][/post]​

Convincing competitors to move on is what the money is for. If it's convincing, they'll move on, if not, they won't. In the window, they might try all sort of financial, pr and marketing manuevers, including raiding, making motions in court or, less likely, arguing before ATSB, DOT or DOJ. But IF it moves forward and the writing is on the wall that the new US will be well funded, like say, jetBlue was prior, then stratagies will change.

 

[700UW]

They can be well funded but they also will have six billion dollars in debt.

 

[deltawatch]

When Delta wants to attack our system they don’t do it in LGA, DCA, BOS, PHL they do it in ORF, RIC, GSP, GSO, RDU, CHS, the fastest growing geographical region according to government statistics. Why does US continues to pull down these markets, replacing all the mainline flying with outsourced RJ’s. Delta runs 11 MD80’s per day GSO-ATL. These markets are the future! These market are the ones that made Piedmont Airlines “the up and coming airlineâ€￾.

 

[usair_begins_with_u]

Sorry... egos are too big in this game. A few hundred million wont make Airtrian, South West, Jet Blue, Delta pack up and go home... How long have you guys been in this industry??

There is no competitive advantage for anyone... cost is king, and smaller regional carriers will always have lower costs than larger ones. The only advantage in this game is cost.. period. One things for sure, the unions days are numbered in this game, and thats for sure... the only costs that can go down are labor, and the pressure is going to be on.. Non union carriers WILL have lower costs. if HP/US is union based, they wont last long.

Keep talking about how international is going to be the key... the combined U/HP is a pretty small player international player.

 

[StraaightTaalk]

With the merger...we are hurting Delta the most, and they know it!

[post="271944"][/post]​

How is that? IF this merger goes through, the combined carrier will be consumed with attempting to consolidate the two carriers into one for the next two or three years. Seniority battles; equipment rationalization issues; etc.

How is this shotgun marriage going to hurt Delta most? I would be interested in knowing your thoughts.

 

[USAir757]

There is no competitive advantage for anyone... cost is king, and smaller regional carriers will always have lower costs than larger ones.

It's hard to dispute that cost is not king in this business, but it would be difficult to argue that there is no competitive advantage. Fully aside from seat pricing, you don't think airlines like Song and B6 have competitive advantage over U? You'd better believe they do.

How is this shotgun marriage going to hurt Delta most? I would be interested in knowing your thoughts.

I didn't make the original comment, but I'd have to suspect that the poster is suggesting in a perfect world, the HP/US merger would go off without a hitch, and ideally would put DL in a much more defensive stance. But, as you suggested, that is 2-3 years away, and anybody who knows this business knows quite well we don't live in a perfect world. In the meantime, DL will be on the offensive in the ROA/CAK/RDU/GSO etc... markets. Nothing U can do about it except concentrate on what options the merger will bring. And hope for a more perfect world.

 

[sfb]

What bugs me is that if the HP merger falls through (like the UA one did) we will have wasted a year focusing on an unsucessful corporate transaction instead of making gains in the market place and improving our competitive position.

If the HP merger wouldn't have gotten to the proposed deal announced on Thursday, you probably would have seen US Airways being liquidated instead. While certain partners (AWAC, RJET) were willing to throw in some money in return for guaranteed business, the airline was unable to find outside investors absent some sort of scheme to create a more viable competitor.

As for Delta adding service in RIC, ORF, GSO, etc. -- it makes a lot of sense given how US Airways has scaled back service from mainline in many markets to mostly RJ's and props since 2001. RIC has lost nearly half of its mainline flights on US since 2002. US abandoned ORF-BOS -- a route that had one or two daily mainline flights back in 2000, while mainline flights out of ORF have been cut by roughly one third.

 

[WorldTraveler]

very insightful comments, esp. from you, US begins with U.

US didn't have a whole lot of choices about doing this deal but what is surprising is how concerned HP's CEO is that there might not have been a future for them w/o this deal. I'm not sure but he obviously moved alot of money based on his perceived fears.

There is alot of capacity coming online in the east within the next couple years - the time when US has to preserve its network if this merger is to be successful. DL still has RJs coming and they are very likely to put them right where they have put an aweful lot in the past - flying point to point routes on the east coast, with a heavy emphasis on Florida. JetBlue's EMBs will also likely change the east coast market as will WN's attempts to connect some of the dots on their young east coast network and potentially add a city or two.

What should scare airline CEOs is that analysts say we are probably at the top of this airline cycle when it comes to traffic. Yields probably won't get any better but traffic will start falling off. When it does, the weakest players will fail. Because HP and US have very little market strength in each other's key markets, each carrier is essentially on its own to preserve its own network while waiting for the merger to be consummated. Further, if traffic will decline at some point in the future, mergers in the rest of the industry will become more and more necessary and HP/US will likely be trumped by much bigger deals. (see also the thread on the UA board about who UA will combine with).

 

[pit_needs_help]

hharotz...I agree with sfb. If this doesnt go through there was no other option but liquidation. The financing was not coming and it was going to over by late summer anyway. So the ones who remain may have a chance to stay in the industry.