Winglet said:
The sad truth is that there is still way too much capacity in the airline system now. In order to normalize a big chunk needs to come out. The only way that's going to happen is for one or more of the majors to close shop. The economy is still crap despite Bush's rhetoric and looks to remain so even in this election year with the only people doing well being the elite classes of Bush and Kerry types.
The only way fares are going to recover is if customers have to compete for available seats.
UAs has terminal problems if the economy stays in the dumps this year. For U, I think it's already all over but the shouting. It'd take a miracle for Siegel to pull it out at this point. A merger between U and another major? Like throwing a guy in a sinking boat an anchor.
A year ago I would have agreed with you wholeheartedly. However, I'm afraid that today, the demise of a major--UA, U, or even AA--would not necessarily result in a return of rational (from the airlines' viewpoint) fares. I fear that such an event would result in a ramping up of service by one or more of the LCCs to the suddenly underserved destinations.
Say for instance, UA goes Chap. 7. ATA "over-water" qualifies their flight crews during new hire training to support their charter business as well as their scheduled domestic service. ATA's flight attendant training last 4-5 weeks. There would be a host of highly qualified UA pilots on the street. And, lord knows there is a plethora of a/c available for sale/lease which would be exponentially increased by the addition of UA's a/c to the sale table. How long would it take ATA to double/triple its service out of Chicago? Or any of the other LCCs, for that matter?
Even though AA has almost 6,000 of us f/a's on furlough and a host of pilots available for callback, corporations the size of AMR have not historically been capable of the flexibility needed to react quickly to events. For AA to grab any of UA's international flying, the following would have to occur...
1. Determine what routes they want to serve and how much service to provide.
2. Determine how many flight attendants and cockpit crews would be needed to support the service.
{Already I see weeks of committee and sub-committee meetings ahead. <_< }
3. They would have to extend proffers for the International bases involved. I think that under the CBA, proffers must be open for some minimum period of time.
4. Once the proffers were awarded (which more than likely would involve some flight attendants who were already International transferring to a more desirable base which means zero gain to the total corps), you have to train those flight attendants coming from domestic.
5. Recall a/c from the desert or lease/buy additional a/c.
6. I'm sure there is something I've omitted, but I'm only a junior {furloughed} flight attendant; so, I don't really have a total grasp of the "big picture."
I think someone else, probably one or more LCCs, would step in to fill the void. And, I don't think any of them would risk alienating their customer base by jacking up fares to what the majors had historically charged.
Expect to see a revision to the agreements with JP Morgan and CitiGroup that will have each lending UA $250Million each in unsecured money. (instead of the original $200M)
