Pit's Future

[USA320Pilot]

Bear 96:

MDA is a mainline division and its marketing plan will be used to support mainline flying to backfill downsized mainline flying. In addition, the aircraft will be deployed into key US Airways markets to fight the LCC's.

MDA will have the lowest LCC response break even load factor and will fly in and out of the three hubs, three key focus cities, and in certain point-to-point markets.

In fact, two weeks ago US Airways was able to effectively lobby the federal government to have the EMB-170 and other 70-seat aircraft permitted to operate with RJ slots into Ronald Reagan Washington National Airport per the new FAA Reauthorization Bill.

This is an important step for US Airways who will now be able to operate this aircraft into this airport at a significant competitive advantage.

MDA will have a break even load factor lower than the LCC's and much lower than other network carrier low cost response, which require very high load factors to produce a profit because of their cost structure.

Regards,

Chip

 

[Light Years]

Why would we start an Express carrier to feed someone else's hub? Duh...

 

[AP Tech]

Although I hurts me to do so, I have to agree with Chip on MDA. It will be almost impossible for Dave and his gang of thieves not to make a profit while utilizing MDA. How could they not with employee's making sub standard wages and very little benefits!!!!!!! :down:

 

[PITbull]

Chip,

Then why is management coming around for round #3 concessions from employees? Why would they? The purpose of MDA was to give U a competitive advantage, just as you illustrated. Why do they want even more which financially cripples the employees personal well-being and families? To what end? Share holder value again?

 

[delldude]

US Airways has options to move the Pittsburgh hub and close/move all of its supporting facilities. In addition, the company can secure the financial resources to do so, therefore, in my opinion, the ACAA should not call Siegel's bluff and should act sooner than later to secure US Airways' future in Pittsburgh.

The ACAA made a mistake in not accepting US Airways' offer to extend the current agreement until October.

Regards,

Chip

chip,your saying then...in light of a possible failure to acheive their POR target in june(very real,i might add) that they got someone who knowing this may or will front them the cash to move an entire station while the ships taking on water in the lower compartments?i find this to be totally against the grain if you will.

 

[Bear96]

Bear 96:

MDA is a mainline division and its marketing plan will be used to support mainline flying to backfill downsized mainline flying. In addition, the aircraft will be deployed into key US Airways markets to fight the LCC's.

MDA will have the lowest LCC response break even load factor and will fly in and out of the three hubs, three key focus cities, and in certain point-to-point markets.

In fact, two weeks ago US Airways was able to effectively lobby the federal government to have the EMB-170 and other 70-seat aircraft permitted to operate with RJ slots into Ronald Reagan Washington National Airport per the new FAA Reauthorization Bill.

This is an important step for US Airways who will now be able to operate this aircraft into this airport at a significant competitive advantage.

MDA will have a break even load factor lower than the LCC's and much lower than other network carrier low cost response, which require very high load factors to produce a profit because of their cost structure.

Regards,

Chip

Chip, thanks for the response.

I understand this is *currently* the goal and plan for MDA.

However it seems that if U and ACAA continue to play hardball with each other to the point that suddenly MDA is looking for a new home base, and if ACA actually goes down its sucidal road of independence, and if U and UA want to try to work more closely together in the coming months/years, at some point the decision makers at WHQ and CCY may realize this makes sense.

Though I understand it is unlikely and not the original purpose of MDA, I have not seen any reasons yet why it would be impossible.

 

[Busdrvr]

Why would we start an Express carrier to feed someone else's hub? Duh...

Are you being sarcastic? Here's why. UAL pays a fee per departure. you get a guarenteed revenue stream that is in excess of costs. You're right, why would anybody start a business with a guareteed profit?

 

[Light Years]

Hmmmm....

MDA is a wholly-owned division/subsidiary of US Airways. Its not an ACA or Air Willy or Chautauqua. It will be operating 70-80 seat aircraft that are more of a replacement for Boeing 737s than for RJs and props. In reality, the "magic" of it is that the public will get a mainline experience (in fact, superior in some ways) and the company gets it from the same employees but at at Express costs (maybe even lower due to the larger aircraft).

Imagine UA announcing that TED will instead be a low fare carrier for US. Kind of defeats the purpose. US needs to worry about its own operations before lending a hand (or aircraft and employees) to its codeshare partner. Plus, I'm sure a few unions at both carriers would have a bit if a problem with such an arrangement.

If MDA operated, say ALB-IAD, this has now become a US Airways route rather than a United one. So this would make a dual hub, with US operating half and UA operating the other.

The only part of UA that overlaps with US is IAD (and PIT semi-overlaps with ORD). US just got rid of a major hub in BWI and is stll the dominant carrier in Washington DCA, where along with New York and Boston it has focus cities. Not to mention hubs at Philadelphia, Charlotte, and Pittsburgh. So why would they want to start a hub down the road in Dulles, VA? Doesnt make any sense.

Guaranteed revenue stream. OK, how do you feel about it with larger aircraft? Maybe UA should stop thier transatantic ops and pay US a fee per departure for our flights out of our PHL gateway. Now I'm being sarcastic.

You guys should be trying to bring flying IN-HOUSE rather than farming it out... thats what we're trying to do with MDA and jets for jobs... bring back our own employees and hopefully someday grow to have more.

Does UA still have fee-per-departure agreements with its contract carriers? I hope not! If there has to be contract carriers thier compensation should be based on performance (we'd see ACA and Mesa clean thier act up quick!)

 

[ual06]

Just curious. Are the EMB's of MDA to be certified to be CAT III birds?

 

[Bear96]

1. MDA is a wholly-owned division/subsidiary of US Airways... Imagine UA announcing that TED will instead be a low fare carrier for US... Plus, I'm sure a few unions at both carriers would have a bit if a problem with such an arrangement.

2. If MDA operated, say ALB-IAD, this has now become a US Airways route rather than a United one. So this would make a dual hub, with US operating half and UA operating the other.

3. So why would they want to start a hub down the road in Dulles, VA? Doesnt make any sense.

4. You guys should be trying to bring flying IN-HOUSE rather than farming it out... thats what we're trying to do with MDA and jets for jobs... bring back our own employees and hopefully someday grow to have more.

Hi Light Years,

Some thoughts on your post...

1. There are significant differences between MDA and TED. As you pointed out, MDA is a subsidiary of U. I believe they will have their own operating certificate and will be a different business unit as the current wholly-owneds are, no? As I understand it, for scheduling and bidding purposes the employees will be on separate lists. In other words, a MDA F/A or pilot cannot bid MDA one month and then mainline the next, or fly primarily mainline but then choose to pick up some open time at MDA to get some hours. (I think that is correct, but I am not sure of all the details with U and MDA so please correct me if I am wrong.) On the other hand, operationally and as far as union contracts go, TED is fully mainline, with pilots and F/As being completely interchangeable. The only significant operational difference is the exterior paint scheme. So a comparison with MDA becoming a UAX carrier at IAD and TED becoming a UX carrier at PHL does not seem valid.

I don't know the U union view, but I don't see how UA unions wold have a beef about MDA being the UAX carrier out of IAD, any more than we already have with the other UAX carriers.

2. If MDA changes its business plan to be a UAX carrier and operates IAD-ALB, then for UAL it would be just like IAD-ALB is now, if indeed ACA operates that route for UA (I think they do but am not 100% sure). Not sure what you mean by 'dual hub' at IAD or ALB, though.

3. I am not saying U or MDA, or UAL for that matter, *want* to do this. It just seems that if things really turn sour with U at PIT and suddently the MDA business plan is looking for a hub, and ACA leaves UAX and the UA business plan is looking for a UAX carrier at IAD, this would seem to be a logical solution.

4. Yes that would be nice, and I think that if ACA leaves some current ACA routes ex IAD will go back to mainline, especially given our lower cost structure now as a result of Ch.11 proceedings. And I have heard of a senior UA manager saying something to the effect that "People will be surprised at how fast TED comes to IAD." But that still leaves some holes in the route structure for cities that can't support larger A320 or B737 service.

 

[PITbull]

Bear96,

MDA is a division of U and will not operate under a separate certificate. It will operate under "mainline" certificate. Mainline employees and MDA employees will have different contracts, but that is it.

It appears TED and MDA are different as you state above. Mainline employees can not bid trips on MDA. However, negotiations are far from over specifically for f/as on many outstanding issues.

 

[Light Years]

Bear-

Interesting points!

1. Point taken about TED, but I was just using it as an example of one airlines "competitive response" being put together and then used for a competitor.

2. The "dual hub" I was taking about would be IAD- half US, half UA. You are correct about the operation of MDA.

3. I believe MDA has been specifically tailored for PIT, however CLT (a US AIRWAYS hub) is bending over backwards to woo MDA into town. They have even offered to build facilities. PHL, DCA, and less likely BOS and DCA could also be MDA's "home". Our current subsidiary airlines are headquartered in Harrisburg PA, Dayton OH, and Salisbury MD but operate throughout our system. MDA will also operate through each of the airlines key cities.

Anything is possible, but after the money spent on aircraft and start-up costs, I'd think U would want to use its new airline to feed its own airline and not another (partner or not) at a hub that competes with its whole route system. I dont see how it would even be allowed.

Much the same as ACA cannot be United Express AND Independence Air, US Airways cannot operate its own major airline as well as a feeder for another airline-this would bring up all sorts of regulatory and union issues.

With Mesa, Air Wisconsin, Trans States, Chautauqua, Sky West, and many other established commuter airlines offering

*lowest costs in the industry

*a fleet of the same size RJs ACA operated, already operating, not on order

*experience in operating as an affiliate


... why would UAL and U venture to use MidAtlantic, which is

*yet to operate

*will use employees on the US Airways Inc seniority list (a direct competitor to United in many markets)

*will operate aircraft that are not only nearly twice the size of ACAs aircraft, but have not been commercially operated yet, and as far as I know would require further scope relief from UAL unions

*if not "used" for U, leaves U further crippled and operating wrong aircraft to wrong markets while feeding another airlines hub apparently just to be a pal and help a brother out.

In this industry anything is possible, we all know much wackier has happened, but that scenario sounds a little too complicated and pointless... like one of Chip's kooky fantasys!

Interesting about TED coming to IAD... if successful out of DEN and brought East, it could the death knell for "Independence Air".

 

[USA320Pilot]

Bear 96 & Dell:

Bear, the best possible Dulles solution for both United and US Airways is for Mesa to gain control of Atlantic Coast and complete the agreement for Mesa to provide UEX service for United.

Dell, in regard to PIT, no transaction will occur until US Airways can project a CASM below its projected RASM that will produce a profit. Once this is done w could then see the hub assets move. Obviously, there are a lot of moving parts here, but again an analyst with direct access to the executive suite told me the hub negotiations are being held hostage to United's exit financing.

Regards,

Chip

 

[deltawatch]

In reality, the "magic" of it is that the public will get a mainline experience (in fact, superior in some ways) and the company gets it from the same employees but at at Express costs (maybe even lower due to the larger aircraft).

I wouldn't count on a mainline experience from customer service employees making $10.50 an hour less than Southwest.

 

[Bear96]

Bear, the best possible Dulles solution for both United and US Airways is for Mesa to gain control of Atlantic Coast and complete the agreement for Mesa to provide UEX service for United.

Chip I completely agree with that.

I was just kinda thinking out loud as to what would happen if Mesa loses its bid for ACA.

Thanks for the interesting exchange of ideas everyone.