Ua Positioned To Gain Market Share In Den

[UnitedChicago]

Frontier Airlines is significantly dependent on its lone Denver market, the analysts say. JP Morgan believes that United Airlines (UAL) is well positioned to gain the market share lost by Frontier Airlines at Denver, by the early next year.

Click here for the full story. Mentions that Frontier is the highest cost of the low cost carriers.

They aren't Southwest - United picked a good place to begin the LCC.

 

[iflyjetz]

Frontier only exists by the grace of UAL. IF UAL wanted to, they could put Frontier out of business within 24 months. It would not necessarily be achieved by undercutting their fares, either. (There are other more subtle ways of accomplishing that end).
However, it would not be the smartest move to eliminate your only competition at one of your fortress hubs; you just want to keep them alive enough to give the public perception of competition. Killing your 'competition' was a mistake that Delta made with Eastern out of the Atlanta hub. In Eastern's ashes rose Valujet (now Airtran). In retrospect, I think that Delta regrets putting Eastern out of business.
Granted, Frontier is no Eastern, but if UAL put Frontier out of business, you can be guaranteed that some new low(er) cost carrier would move into DEN.
One of the reasons why United won't release the 8 gates on A concourse back to the city of Denver (so that they can in turn be leased by Frontier) is to contain the size of Frontier at Denver.
I also think that United will initiate its Starfish service at Denver on mirror routes with Frontier in order to rein in Frontier's expansion. Time will tell.

 

[ac500]

iflyjetz,

I hope you didn't drive last night after making your post, because your obviously trashed!

 

[iflyjetz]

iflyjetz,

I hope you didn't drive last night after making your post, because your obviously trashed!

Pal, I don't know how long you've been in the aviation business or how knowledgeable you are of aviation history, but I would assume from your post that you know very little. You probably also think that the industry is changed permanently. ... just like every other downturn in the business, there have been many who said the airline industry business model had permanently changed.
Remember People Express? Probably not. I do. They were supposed to change the future of the airline industry. The only thing that they did was increase the number of airlines that are no longer in existance by one.
If you think that Frontier is not aware of how much United effects their pricing and growth rates, you need to dig out a few articles from early to mid 2002 where United lowered prices to cut the knees out from Frontier. United could have continued at those prices and gotten to the point that Frontier was severely wounded. But they eventually backed off, because United needs the appearance of competition.
As for the relative strength of Frontier and other LCCs, take a look at past recessions, and you'll see that LCCs always thrive during recessions. When the economy recovers, the majors undercut LCC fares on strategic routes to ensure that they do not get too strong.

 

[Busdrvr]

Stop it!! you're confusing Him!!! . You get a guy who got his "dream job" flying for FRNT wages after a few years of slugging it out in a EMB-120 fresh out of high school, and he has no knowledge of the way this business works.

 

[Andre1980]

why would they want to kill F9? I now it may sound tempting but is it worth it? If Ual management is thinking about I think they should look at the big picture of the causes and effects carrying out such a plan since if they kill F9, B6 might find it attractive to establish a larger presence at DIA since they already have flights there and they will have one more in January coming out of Logan Airport in Boston and remember a major part of B6's business plan is to go into airports that have a fairly large presence of 'full service carriers' that are charging higher than average fares so they can lower those fares and stimulate demand and we all know how harmfull this could be for Ual especally with B6's low CASM. So we have to look at the big picture and ask ourselves who is the greatest threat F9 or B6. TC

 

[Busdrvr]

Actually, i think FRNT runs a better operation than B6, and i honestly think they will have a bigger impact on UAL. despite operating primarily point to point flights, B6 STILL loses more luggage than many Majors (how complicated is it to put the bag with the DEN tag on the ONE DEN flight...) YTD, thier on-time rate is lackluster, and as they add more flights, structural issues will result in either lower load factors or more DB's.

The simple truth is UAL CAN'T allow FRNT to get much bigger in DEN. So REGARDLESS, it WILL get bloody in DEN. FRNT would probably be wise to be happy with the current market share in DEN and take advantage of the opertunity to establish another hub (PIT?).

 

[whatkindoffreshhell]

iflyjetz,

You probably also think that the industry is changed permanently. ... just like every other downturn in the business, there have been many who said the airline industry business model had permanently changed.
Remember People Express? Probably not. I do. They were supposed to change the future of the airline industry. The only thing that they did was increase the number of airlines that are no longer in existance by one.

Sir, the airline industry business model has permanently changed. Lower prices all around. And People Express had a helluva lot to do with encouraging folks in the Northeast USA to get on a plane. Unlike Southwest, PeopleExpress lost focus.

Even when the economy does recover you will not see a return of astronomical airfares bought by businesspeople. Have you ever participated in a web demo? Wonderful stuff and nobody has to fly anywhere.

Is there another airline in DEN losing focus?

 

[2shrtdks]

Hey iflyjets.

I see the arrogant corporate culture of United is alive and well. Unlike the company. United would love to be rid of Frontier, and all the other competition, if it could. It can't. United is losing the battle. United is in bankruptcy. Just the facts.

 

[Bizman]

You get a guy who got his "dream job" flying for FRNT wages

Your just about there too, aren't you? Seems to me the UAL pilots were trashing every other airline that had lower wages than they did a few years ago. Complaining that they were dragging the industry down. who's dragging it down now.

 

[Diesel8]

Busdrivr,

JetBlue's completion factor was 99.9 percent and its on-time(1) performance was 92.1 percent. ( From the latest release for september)

I believe UAL set a new company record of just above 80 percent, according to a press release.

As fas as bags are concerned, the info I have seen and read seem to dispute your posting.

I fully understand, that UAL has a very complex operation, however, at least post the factual numbers.

 

[Busdrvr]

Your just about there too, aren't you? Seems to me the UAL pilots were trashing every other airline that had lower wages than they did a few years ago. Complaining that they were dragging the industry down. who's dragging it down now.

Well Biz man you are right, UAL although above FRNT's are not that high. So lets review. The Before UAL raised salaries, and backed off on FRNT under the threat of legal action, FRNT was DAYS away from BK and UAL was concurantly profitable. Since then, UAL has lowered employee costs for ALL work groups, and significantly lowered lease costs. meanwhile, FRNT has raised wages. Hmmm. I think the "fat lady" just got on the train to the A concourse....

As for "wage rates" UAL pilots now have costs inline with CAL, AMR, and U. Currently DAL and NWA (to a lesser degree) are the lone holdouts. I don't see how matching costs with our primary competators is "Lowering the bar". Economics forced us to match them, stupid greed prevented them from matching us.

 

[Busdrvr]

Deisel8,


http://airconsumer.ost.dot.gov/reports/200...03/0310atcr.pdf

pages 4,5 and 23.

 

[Busdrvr]

Busdrivr,

JetBlue's completion factor was 99.9 percent and its on-time(1) performance was 92.1 percent. ( From the latest release for september)

I believe UAL set a new company record of just above 80 percent, according to a press release.

Diesel, speaking of "factual numbers"...

UAL's record "on time" number is for ON TIME +0. And even then, it's for DEPARTURES. Nothing to do with your scheduled + 14 stat.

For the 1st quarter of 2003, Jblu was 14 out of 17 for all the reporting airlines in DOT on time +14.

 

[Andre1980]

As for "wage rates" UAL pilots now have costs inline with CAL, AMR, and U. Currently DAL and NWA (to a lesser degree) are the lone holdouts. I don't see how matching costs with our primary competators is "Lowering the bar". Economics forced us to match them, stupid greed prevented them from matching us.

I still believe that even though UA pilots have had their salaries cut they are still paid higher than pilots at AA but they are paid less than thoes at DAL are at the moment the highest paid.