United perfuming?

[desertfox]

Interesting article from Michael Boyd, aviation consultant in Denver.....


Now, We Can Talk Mergers
United's Perfuming Itself

It's about as subtle as a IED attack.

United has clearly tossed itself onto the sale block. Not to mention the chopping block.

They're apparently clearing the decks to make themselves an easy pick-up. They're talking about selling off parts to, in the B-school-ese they're paying dearly for, "unlock shareholder value." Not to mention shed stuff that might be duplicative in case somebody wanted to buy them.

United appears to be transforming itself from an airline into an acquisition target. They've hired consultants to "review" spinning off their maintenance operations - translation: spin'em off as fast as possible. They're talking about selling off other parts of the company, too. Parts that once gone might make United more attractive. And with cash in the till, too.

Then we have the CEO who was reported to have blurted out to an employee meeting that the choice is a combination of United with another carrier, or back into bankruptcy. Subtle, eh? A heck of a compliment to a management team that had the airline in Chapter 11 for three years.

This presents a real challenge for the rest of the industry. Since UA is hell bent on selling itself, it's not out of the question that somebody will look at buying. That means that every airline out there has no choice but to sit down and accomplish a lot of "what-if" scenario planning regarding their strategic options.

Buy United? Encourage a competitor to do so? Make a play for key parts? Plan a regulatory attack, with the intent of stripping key parts (like the Tokyo fifth-freedom rights) from a potential merger? Might the PBGC try to grab some of the spin-off cash? Might the Star Alliance be interested in doing something? Go after ORD slots? Lots of competitive options out there. One thing, at least at this point, seems to be certain. United's management really wants to sell.

So if United wants to sell itself, it's going to sell itself. And somebody - or somebodies - will end up buying all or pieces of the entity.

Stand by for some really innovative competitive responses.

 

[whatkindoffreshhell]

How long before the UA posters launch their firestorm of scorn at Boyd?

Do Glenn & Jake ever have an original idea or is it all just recyclec pablum from their goofy consultants?

Grow the business and the beloved UA brand I say! UA has way too much brand value to simply fade away.

UA is determined to 'perish' itself -- where is Jim Goodwin these days?

 

[NYCDelta]

How long before the UA posters launch their firestorm of scorn at Boyd?

Do Glenn & Jake ever have an original idea or is it all just recyclec pablum from their goofy consultants?

Grow the business and the beloved UA brand I say! UA has way too much brand value to simply fade away.

UA is determined to 'perish' itself -- where is Jim Goodwin these days?

I have enjoyed Boyd's website for many yeras. I just think, like any analyst, you have to take what he says with a grain of salt. He's wrong as many times as he's right. I think it's kinda funny that an "analyst" who goes on TV and holds a conference every year to discuss such things, has the insight that UA wants to sell or merge. Duh! I would think by this point, anyone with half a brain knows that Tilton wants a merger.

 

[JungleClone]

I enjoy Boyd also. While I don't always care for his Dennis Miller-esque rhetoric, he does make good points.

The sad reality is that if UA had a talented senior management team in place that was committed to actually running the airline for the long haul, they could make UA a winner again. UA has an incredible franchise with an un-rivaled route/hub network. They have arguably the most lucrative frequent flier program in the industry. And the STAR Alliance has incredible value. And they do give great customer service. Sure, you always hear the occasional horror story. But overall, UA has always been noted for providing better Customer Service than most of their competitors. So all the pieces are in place to make UA successful again, provided the management team is committed to doing so. However, they would still need to attack the inefficiency of UA's management structure. That really has never been done. But these guys are not interested in that. They are only interested in getting a rich payday off the backs of UA and its employees. From Day 1 that Glenn Tilton arrived, he never sounded like a guy who was in it for the long haul. All he ever does is recycle the same $100 words in interview after interview and press release after press release. He seems more interested in proving his vocabulary is superior to every one else's than he is in actually running the company. What's even more sad is that UA's notoriously weak-kneed Board of Directors seems intent on letting this pillage happen. So one thing is for sure. UA's Senior Mgmt and it's BOD are intent on dressing UA up to enable a merger. And the only thing anyone could do to stop it would be to essentially burn the company down, so to speak. Sounds like a lose-lose situation for the employees either way. Good luck. it shall be interesting!

 

[North by Northwest]

An Oil guy running a customer service business, just like an inexperienced rich boy who had one job in his life now running the country.

This industry needs Airline people running airlines.

 

[JungleClone]

I couldn't agree with you more. In fact, whenever Tilton speaks on record, I almost have to force myself to keep from laughing. That's because it seems he is always trying to use these big, big words to prove his intellect. Either that or he's just a pro at using such high-calibre vocabulary in his rhetoric that he is convinced that whomever his audience is will be so lost that they'll forget their question.

But he reminds me of the comedy-sketch show "In Living Color" from the late 80's, early 90's, and a character played by Damon Wayans. He was a convict in prison named Oswald Bates who would always try to use these big words that when put together never made any sense, but was absolutely hilarious. That is who Tilton reminds me of. It's actually embarassing. I wonder if he realizes how much of a fool he makes himself out to be with his constant evasiveness to questions.