New alliance with US Airways gives United rare boost

[AOG-N-IT]

[blockquote]
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On 10/6/2002 10:15:23 PM diogenes wrote:

The tsunami sized repurcussions from the AL/PI/PSA mergers have just subsided to ripples after 12 years of acrimony. That deal was Sunday school compared to a U/UA get-together. Please, God, no.


On the other hand, the U MO has been to piss off most of the people most of the time, so it could be!?!
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[/blockquote]
diogenes, I don't agree with your perception of U's MO. However I completely agree with the 12 years of Acrimony. The problems in the beginning of The Merger Fest , were never accuratley addressed....and what we are doing now is this! paying for the mistakes Anytime you pool assets and resources of two or three companies , You will have duplication of efforts and resources. In many cases U never addressed these problems until Crunch Time was kicking down the front door. Ed Colodny never took the bull by the horns...nor did Seth Schoefield. Wolf and Gangwhal saw the problems...and rather than correcting them , they took the path of least immediate resistance. Rather than structuring a business model...They only attempted pacification with the Employee Groups with Parity Plus 1%...and attempted to clean up the image , As we know..this was eye-wash for a potential sell-off (Merger). You and I were not a thought in this process. This was another attempt by The Suits to line thier own pockets. The lack of a Plan B when the UA/US Merger imploded says it all. OK, with that said...We find ourselves in a New World. Dave is not Wolf....the playing field has changed drastically...and we have had to change with it or die , to continue to play. This I feel more confident about , with each passing day. I do not believe that Dave wants to become a 41 yearold failure in this business. That aspect alone says alot. The guy has gained more of my confidence during his short tenure , than W&G could have ever hoped too. The only thing that will de-rail my confidence in him is this , Anything beyond maximizing the benefits of the UA/US Codeshare agreement. I have limited/no faith in the assumption of us buying any of UA's Domestic Assets. Again...both companies need to resolve thier own seperate issues , prior to attempting anything like the abomination that Goodwin and Wolf were dreaming of during better times. .....As you said. The PI,US and PSA Quagmire...should stand as a hard lesson learned.

 

[LGA Fleet Service]

[BR][BR]
[BLOCKQUOTE][BR]----------------[BR]On 10/6/2002 5:31:52 PM AM49AAA wrote: [BR][BR]I think you'll see U buy UAL's JFK, IAD and MIAand associated Heathrow and Latin American divisions and become the total East Coast partner in the codeshare alliance. With the cash infusion UAL may be able to limp back to health.[BR][BR]----------------[BR][BR][FONT size=1]I think you'll see the River Styx choked by ice before that happens.[/FONT][BR][BR][FONT size=1]And if it does, I will be the first to have a double portion of crow, feathers and all.[/FONT]

 

[Oliver Stone''s Apprentice]

[BLOCKQUOTE]
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On 10/6/2002 5:31:52 PM AM49AAA wrote:

I think you'll see U buy UAL's JFK, IAD and MIAand associated Heathrow and Latin American divisions and become the total East Coast partner in the codeshare alliance. With the cash infusion UAL may be able to limp back to health.

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[/blockquote]

This might have been a bad parody on what happened to Pan Am...

But as long as AMR is the one who picks up the Pacific routes this time, I'm OK with the above scenario.

What's more likely is that US will pull out of the North Atlantic and ask to dump the A330's. UA's coverage of Europe plus the Star Alliance blows away what US can provide.

 

[UAL777flyer]

Chip,

We've been told that it appears the company would like to keep the talks with the unions from becoming public until a solution is ironed out. That is why there has been no press releases from Tilton or the unions.

As for the scenario of UA buying fragmented US assets, I doubt that any other competitors are just going to sit back and allow UA to acquire valuable assets that will strengthen UA to the detriment of everyone else. Financially, UA won't be in a position to get into a bidding war for US assets. So I don't see fragmented US assets coming to UA. That is a pipe dream. The only way UA gets their hands on key US assets is via an acquisition/merger.

 

[diogenes]

Hi AOG, and thanks for your thoughts. The U MO may not have been the case in your shop, and good on you. On my side of the floor, it was most definitely the case, from the lead right on up to the veep, and I know this up-close and personal. The question is, is it still the case? Too soon to tell - Dave is making the right noises, and Lord knows, he has a plate full before attending to the little matter of day-to-day labor relations. For me, the answer will reside in three parts. 1. Will there be shake-ups in our chain of command, or business as usual? 2. The resolution of a few outstanding issues in our contract, weaseled around by the past 'administration', and 3. Will RJ's be placed based on market needs, or merely to reduce labor costs? We'll see what we'll see.

 

[ITRADE]

I just want to know when I can fly to HNL, PDX, or CLD...

 

[chipmunn]

[BR][FONT face=Times New Roman size=3]UAL777flyer:[/FONT][BR][BR][FONT face=Times New Roman size=3]I suspected there was a news black at the end of last week. If the US labor restructuring agreements are used as a benchmark, I believe it is probably a good idea to keep all of the discussions private to remove as much emotion as possible.[/FONT][BR][BR][FONT face=Times New Roman size=3]UA does not need any further negative publicity either from inside or outside of the company. The labor vs. labor and labor vs. management battles will be difficult enough, without rank-and-file and news media input.[/FONT][BR][BR][FONT face=Times New Roman size=3]I agree with you that the unique corporate transaction scenario Argento illustrated, which I have been hinting about since early summer, is much less likely in bankruptcy for the points you described. It is my understanding, the concept was discussed to shed UA of its high cost problem, its domestic route network, to lower unit costs to a point where the company could use its high yield international network to regain profitability, with feed provided by the domestic alliance.[/FONT][FONT face=Times New Roman][FONT size=3][BR][BR]UA is now having meaningful restructuring discussions, but US is further ahead of UA in its restructuring per the column I wrote at [A href=http://www.usaviation.com/nm/anmviewer.asp?a=662&z=8]http://www.usaviation.com/nm/anmviewer.asp?a=662&z=8[/A] I believe the big question continues to be is there enough time for Glenn [BR]Tilton to obtain agreements from all stakeholders to obtain financing and what will happen to the governance issue. [/FONT][/FONT][BR][BR][FONT face=Times New Roman size=3]The US three-point business plan will improve liquidity by $1.24 billion, improve revenue with the alliance, RJ deployment, and network optimization, and will dramatically reduce costs. Employee cost reductions will be greater than $871 million per year and US senior vice president of consumer affairs Chris Chiames recently said US will exceed its target non-labor stakeholder concessions of $200 to $300 million per year.[/FONT][BR][BR][FONT face=Times New Roman size=3]Also noteworthy, I recently talked with a member of the US unsecured creditors committee who said the group supports a reorganization and the member was confident the company would quickly emerge as a viable business entity.[/FONT][BR][BR][FONT face=Times New Roman size=3]I agree with AVEK00’s comments about the US & UA restructuring, and US is building its network. This winter with its GoCaribbean partners US will serve more cities than any other US carrier that will total 30 destinations, is maintaining service to all of its European destinations, and has announced plans to reinstate European flights removed on a seasonal basis. In addition, it is expected as MDA comes on-line, mainline equipment will be redeployed in long-haul transcontinental markets which will further lower CASM. [/FONT][BR][BR][FONT face=Times New Roman size=3]I continue to believe there are deeper discussions ongoing between US & UA management, but at this point I believe there are to many variables to predict how this may or may not turn out. There are likely 120,000 different opinions on the issues regarding a corporate transaction between US & UA, but my personal desire is for the parties to obtain a reasonable agreement that can allow the company’s to prosper, regardless if its independent or combined.[/FONT][BR][BR][FONT face=Times New Roman size=3]Chip [/FONT]