Chip Said:
"Chip answers: You are absolutely correct, but do not forget during the next couple of years the business plan, audited by Fitch Rating and approved by the ATSB, projects about $600 million per year in new revenue from the alliances and RJs. This will help tremendously and limit the required cost cuts to return to profitability."
Schwanker's answer: Not only did this plan not consider Southwest skimming the cream by the truck load (which will dramatically reduce yields on the high fare gravy routes via cherry picking), this plan also assumed that the alliance would bring in additional revenue by taking business from other carriers (Delta). Now that Delta formed an alliance with Northwest / Continental, the combined result may be a net negative for USAir as this "Sky Team" threesome dwarfs the UA/US pairing. This Fitch rated/ATSB approved plan also does not update itself with current market conditions. The playing field is dramatically different today then when US exited Chapter 11. The old analysis does not hold true today. USAir is in deep doodoo. Believing anything else at this point is naive.
JMHO
"Chip answers: You are absolutely correct, but do not forget during the next couple of years the business plan, audited by Fitch Rating and approved by the ATSB, projects about $600 million per year in new revenue from the alliances and RJs. This will help tremendously and limit the required cost cuts to return to profitability."
Schwanker's answer: Not only did this plan not consider Southwest skimming the cream by the truck load (which will dramatically reduce yields on the high fare gravy routes via cherry picking), this plan also assumed that the alliance would bring in additional revenue by taking business from other carriers (Delta). Now that Delta formed an alliance with Northwest / Continental, the combined result may be a net negative for USAir as this "Sky Team" threesome dwarfs the UA/US pairing. This Fitch rated/ATSB approved plan also does not update itself with current market conditions. The playing field is dramatically different today then when US exited Chapter 11. The old analysis does not hold true today. USAir is in deep doodoo. Believing anything else at this point is naive.
JMHO
