US Airways to keep $200M codeshare deal with UAL - for now

[USA320Pilot]

Bear96:

USA320Pilot said: "Glenn Tilton told the news media in an interview, if my memory serves me correctly, it was to Dave Carpenter that UAL was very close to liquidating during its judicial reorganization."

Bear96 said: "Link please? Even assuming something to this effect was said, I would like to see the whole context and the actual words used, instead of your (mis?)representation of them."

The USA Today reported: "(In interview with the AP), United CEO says carrier was 'close' to liquidation."

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USA320Pilot comments: UAL posters cannot fathom that what is now called "Project Minnow" was actively discussed between the CCY and WHQ "executive suites", that I reported it first on this website, and that the Chicago-based airline was close to liquidation. Moreover, even when Dave Carpenter asks UAL CEO Glenn Tilton "How close was United to liquidating at the start of the process?" and Tilton responds "The company was so dysfunctional, it had come off such a difficult period of time ... It was close," people like Bear96 state, "I would like to see the whole context and the actual words used, instead of your (mis?)representation of them."

Did the UCT and then the ICT happen? No, but it was very, very close to happening because as Tilton said, "it (UAL) was close (to liqudation)."

Best regards,

USA320Pilot

 

[Paul]

USA320Pilot, you have a PM.

 

[JAMAKE1]

I attended company meetings all last week at World Headquarters, Chicago, in which I spent the majority of my time in Q & A sessions interfacing with Senior Executives from every department of the company. I posed the question to Mr. Tilton about the future of the UA-US codeshare along with USAirways' continued participation the Star Alliance. His reply was that that there is some concern among the Alliance members with regard to US' product consistency and/or quality over the long term (implying adhearance to the product standards set by the Star Alliance Group) but in the short term, the agreement provides $200 million in revenue to UAL. Hence, his words echoed that of HP/US disclosure in the SEC filing.

Regardless of how self-important, well-educated, and in-the-know airline pilots assert themselves to be, in my fifteen years of association with them, I have come to the same recurring conclusion: That is, as a group, they tend to be a rather incredible (read, not credible) source of ACCURATE and/or FACTUAL information. Unless I hear it directly from the horse's mouth, or read it in a company-issued press release, I take it for what it is...jumpseat gibberish. I think you guys should stick with what you know...flying busses...er...airplanes, that is.

 

[Bear96]

Did the UCT and then the ICT happen? No, but it was very, very close to happening because as Tilton said, "it (UAL) was close (to liqudation)."

Thanks for the link.

As I thought, and indicated in my previous post, it was mostly a statement of the obvious (and made basically in passing), because a company generally only files Ch.11 if it is so financially messed up that it is close to liquidating. In other words, OF COURSE UA (and U) was close to liquidating -- otherwise there would be no need to file Ch.11 to protect it from creditors!

 

[767jetz]

I agree we should return to the topic, so I will not continue this debate here. For the sake of accuracy I will point out that Tilton said, when asked about liqidation at the start of the process:

"it had come off such a difficult period of time ... It was close."

Here is what someone said about a possible transaction years later in the process:

"but it was very, very close to happening."

A subtle difference, but a misrepresentation all the same.

Now back to the code share...

I posed the question to Mr. Tilton about the future of the UA-US codeshare along with USAirways' continued participation the Star Alliance. His reply was that that there is some concern among the Alliance members with regard to US' product consistency and/or quality over the long term (implying adhearance to the product standards set by the Star Alliance Group) but in the short term, the agreement provides $200 million in revenue to UAL.

You are correct. I heard similar information. Like I said earlier, this is not about one airline "outing" another.

It is about what's in the best business interest of each airline and the Alliance. This is not a personal or emotional decision. USAirways will either stay in Star, sponsored by UA, or they will leave due to an inability of the parties to negotiate a resolution to route overlap and quality issues.

If they leave, there will be no code sharing for US with other Star partners. I'm sure in that case US will find other alliances that make sense for them.

767jetz

 

[767jetz]

One more point on the code share...

It is not just the Star partners that have concern with product consistency. After talking to several US customers flying UA through the code share, there seems to be some dissatisfaction with the US product overall. In the end this might have a bigger impact on US staying in Star than any other issue.

 

[LCC_#1]

One more point on the code share...

It is not just the Star partners that have concern with product consistency. After talking to several US customers flying UA through the code share, there seems to be some dissatisfaction with the US product overall. In the end this might have a bigger impact on US staying in Star than any other issue.

Time for US define what they want to be once and for all. If they do not want to be the "quailty" airline that STAR and our "customer" codesharing would like, then it is time to leave STAR. US has made it clear that they are a LCC in the making. That has NOTHING to do with quaility. That is a choice and unfortunately for those of us who like alot of service, one we must live with. There is no shame in that. It just may not be for Star or those who prefer a full service airline. Believe me, we at US have had to adjust as well.

 

[767jetz]

US has made it clear that they are a LCC in the making. That has NOTHING to do with quaility. It just may not be for Star or those who prefer a full service airline. Believe me, we at US have had to adjust as well.

I agree that going to an LCC format means people have to decide if they want full service or not, and that an LCC may not be what the typical STAR customer wants.

But it's more than that. The customers I've talked to stressed quality of the product more than level of service. They were displeased with customer service, condition of the airplanes and airport areas, etc. I realize this was a small sample of US customers, and doesn't neccessarily reflect the overall experience on US. But it might.

 

[700UW]

We should be a hybrid carrier, not a true LCC.

You can be an LCC in coach, but still offer good service in first class. But it seems the powers to be will never learn that.

 

[FlyUs]

I agree that going to an LCC format means people have to decide if they want full service or not, and that an LCC may not be what the typical STAR customer wants.

But it's more than that. The customers I've talked to stressed quality of the product more than level of service. They were displeased with customer service, condition of the airplanes and airport areas, etc. I realize this was a small sample of US customers, and doesn't neccessarily reflect the overall experience on US. But it might.

And I talked to so and so who said this and that and they'll never fly UA again... Hear it all the time. US is on the upswing and making great progress on many fronts: We're in the top tier for on-time arrivals. Other than PHL, the major US airport facilities are some of the most modern and clean in the country. Check out CLT, PIT, DCA, BOS, LGA and DCA. Even PHL seems to be improving operationally since hp invested 20 million for ground equipment, etc. The BOS-LGA-DCA Shuttle for the most part runs like clockwork. The huge European expansion in PHL(16 non-stop destinations with more to come). One of the biggest improvments I've noticed is the morale of the employees is getting better. The bottom line is U brings the * alliance a huge presence on the eastcoast and now out west also. Because of this, the domestic code-share with UA is not as valuable for both sides. Of course, there is always room for improvement. The interiors of the a/c need an overhaul, etc. I hear a lot of complaints about f/c. For the first time in a long time U seems to have a managment team intent on running an airline and addressing employee and passenger issues.

 

[LCC_#1]

We should be a hybrid carrier, not a true LCC.

You can be an LCC in coach, but still offer good service in first class. But it seems the powers to be will never learn that.

I agree with this. If we bring in a large amt of money from biz travelers who either sit in f/c because they earned it or paid for it, we CAN do better. Frankly, I want a service to proud of like I use to have.

 

[Art at ISP]

Time for US define what they want to be once and for all. If they do not want to be the "quailty" airline that STAR and our "customer" codesharing would like, then it is time to leave STAR. US has made it clear that they are a LCC in the making. That has NOTHING to do with quaility. That is a choice and unfortunately for those of us who like alot of service, one we must live with. There is no shame in that. It just may not be for Star or those who prefer a full service airline. Believe me, we at US have had to adjust as well.

LCC # 1,

This is what I have been saying ad nauseum for a long time. It's time for US to decide what they want to be when they grow up. If they want to really be an LCC, so be it, but unless they adjust the pricing to LCC levels to match the reduced service/amenities, they are looking failure right in the face. There has not been any effort to rationalize business fares since the merger (the publicly announced fare reductions are only good on 21 day advance purchase so they do not count). There is just no value to that proposition. Someone has to realize you can't be everything to everyone--you just have to choose which it is.

On the other hand they could improve the product without spending much money, and retain or regain alot of the business traffic they have lost or will soon lose. One or the other has to happen. If they want to reduce service to LCC levels, so be it, but reduce the fares to LCC levels as well. If they want to be a full service or hybrid, then do so, but price rationally.

Case in point-I am going to LAX for the Freddies in April. I priced JFK to LAX on PS by United, and LGA to LAX on US via either CLT or PHL. I also tried ISP-LAX via PHL. Guess what? The lowest fare, by almost $100 is UA!

Finally, as the new US formulates its new DM program and in flight product, why haven't they asked the customers for input? CCY had a Consumer Advisory Board who met occasionally to give feedback to management and to test ideas etc. I was told by someone at HP that they had the same thing, and would be reorganizing that soon. They need to hear us and to at least listen to the customers.

Time will tell, but based on tidbits we have heard, I don't think the old time loyal customers are gonna be too happy....

 

[767jetz]

And I talked to so and so who said this and that and they'll never fly UA again... Hear it all the time. US is on the upswing and making great progress on many fronts:

FlyUs,

I was not flaming anyone here. I just repeated what I heard from a several US customers flying on UA over the past few months. As I indicated, this is a small sample and might not show the whole picture.

However, sometimes the squeaky wheel gets the oil. If these customers complain enough to UA and the Star Alliance, it could put the codeshare in Jeopardy.

As Art at ISP says, US needs to decide what it wants to be, and go do that to the best of their ability. If that includes Star, great! If not, that's OK too.

 

[ONT_CP]

FlyUs,

I was not flaming anyone here. I just repeated what I heard from a several US customers flying on UA over the past few months. As I indicated, this is a small sample and might not show the whole picture.

However, sometimes the squeaky wheel gets the oil. If these customers complain enough to UA and the Star Alliance, it could put the codeshare in Jeopardy.

As Art at ISP says, US needs to decide what it wants to be, and go do that to the best of their ability. If that includes Star, great! If not, that's OK too.

From a customer perspective, my main need is for US and HP to merge everythign as soon as possible and standardize the aircraft and service. Once that is done, they can build from there, but they need to standardize first and then add to the service. I think we need to see a bit before we get a good idea on what the new US will look like, since they are expending alot of energy, focus and resoruces on putting them together as one airline.

I am looking forward to the blending and then curious to see how they build on that. I am sure UA and * is waiting to see what happens when the dust settles.

 

[FlyUs]

FlyUs,

I was not flaming anyone here. I just repeated what I heard from a several US customers flying on UA over the past few months. As I indicated, this is a small sample and might not show the whole picture.

However, sometimes the squeaky wheel gets the oil. If these customers complain enough to UA and the Star Alliance, it could put the codeshare in Jeopardy.

As Art at ISP says, US needs to decide what it wants to be, and go do that to the best of their ability. If that includes Star, great! If not, that's OK too.

Everyone loves the Kool-aid...