Us Airways U United Airlines Update

[USA320Pilot]

ZMan777:

I do not dispute what you have said and you are basically reiterating my comments. As I have said, US Airways must first stabilize itself and United prove it can emerge, which is still unknown, before a corporate transaction can proceed.

Furthermore, this ACA mess could cause United not to emerge because I do not believe the company can replace the lost lift fast enough.

However, the highest sources within US Airways have told me that consolidation is inevitable.

By the way, can you tell me why Jeff Stanley, manager of economic analysis and regulatory affairs at United, in prepared comments, which were reported by Dow Jones Newswires said, "If things stay the way the are now, there will be several Chapter 7 (bankruptcy liquidations) down the road, and that's not good for anyone. The most feasible solution to the situation is consolidation in the domestic airline industry.â€￾

Zman, why would a United executive offered that information in public?

Regards,

Chip

 

[bigbusdrvr]

ZMan777:

I do not dispute what you have said and you are basically reiterating my comments. As I have said, US Airways must first stabilize itself and United prove it can emerge, which is still unknown, before a corporate transaction can proceed.

Furthermore, this ACA mess could cause United not to emerge because I do not believe the company can replace the lost lift fast enough.

However, the highest sources within US Airways have told me that consolidation is inevitable.

By the way, can you tell me why Jeff Stanley, manager of economic analysis and regulatory affairs at United, in prepared comments, which were reported by Dow Jones Newswires said, "If things stay the way the are now, there will be several Chapter 7 (bankruptcy liquidations) down the road, and that's not good for anyone. The most feasible solution to the situation is consolidation in the domestic airline industry.â€￾

Zman, why would a United executive offered that information in public?

Regards,

Chip

I think what the UNITED uppermanagement meant about several ch7's is they (UNITED) will push someone into ch'7 after Usair voluntairly goes there....weve been heading blindly down that road for 15years anyway!!!!!!!!!!

 

[700UW]

I for one am tired of someone's self-prophesy of this uct/ict, how long can you beat a dead horse?

 

[TheLarkAscending]

I for one am tired of someone's self-prophesy of this uct/ict, how long can you beat a dead horse?

Ad Nauseum is probably the most accurate measurement.
:boring:

 

[Cosmo]

Furthermore, this ACA mess could cause United not to emerge because I do not believe the company can replace the lost lift fast enough.

Chip:

I don't think that the situation with United and ACA at IAD and ORD is that dire. In the first place, there's probably at least a 50 percent chance that Mesa's offer to purchase ACA will succeed, thus making the problem go away. But even if that doesn't happen, I believe that replacing the ACA flying in United's system won't be too difficult for the following reasons:

1.) Out of approximately 82 lines of CRJ flying by ACA, after allowing for maintenance and operational spares, United mainline will likely take over 10-15 lines of flying either directly from ACA (such as IAD-LGA, ORD-ORF and ORD-RDU) or indirectly by replacing other carrier RJ flights (such as Air Wisconsin's IAD-ATL service) which will then replace some ACA flights elsewhere.

2.) Some ACA CRJ flying simply won't be replaced, at least in the short term. This falls into two categories: markets where ACA supplements primarily mainline United flying (like ORD-CLE, ORD-DTW and IAD-BOS) with one or two daily flights, and markets where United will probably rely on its other code-sharing partners for feed (such as Air Canada in IAD-YYZ, IAD-YUL and ORD-YUL, and US Airways in IAD-CLT). Combined, I would estimate that this covers another 5-10 lines of ACA's flying.

3.) By May or June of next year, United's other RJ carriers will be receiving about 5 new 50- or 70-seat aircraft per month. It wouldn't totally surprise me if United paid those carriers to "stockpile" 2 or 3 months' worth of aircraft deliveries to be used to immediately replace ACA flying when that carrier's contract with United is rejected. This could amount to another 10-15 lines of ACA's flying being covered.

4.) Similarly to the CRJs, it's likely that some of ACA's J41 flying just wouldn't be replaced in the short term, such as non-connecting-bank flying from IAD to LGA, JFK, EWR and RDU. And I have heard credible rumors that SkyWest will take some parked Brasilias and move them to the East Coast to serve many shorter IAD J41 markets like ABE, CHO, ROA and SCE, among others. Combined, these actions would cover a substantial amount of ACA's current turboprop flying.

Beyond the above steps, United would nonetheless almost certainly be forced to reduce some of its United Express flying in IAD and ORD markets (and perhaps even at some of its other hubs as aircraft are shifted around United's system) by one or two daily flights per market until a sufficient number of new RJs have been delivered during the subsequent 6-12 months to enable the dropped flights to be restored. In this way, no current market would be eliminated entirely from United's system. And while this action wouldn't be painless, I don't believe that it would be fatal to United's chances to emerge from bankruptcy.

However, the highest sources within US Airways have told me that consolidation is inevitable.

Are you willing to state for the record that those "highest sources within US Airways" that talk to you are specifically referring to a consolidation between United and US Airways? If not, your recent merger fixation is all just wishful thinking on your part. JMHO.

 

[usjacket]

Chip, you really need to get a life!

 

[767jetz]

Just came back from a trip and had a very high level management person onboard.

Here a few of his words:

"USAir's costs are way too high. We wouldn't want to touch them with a ten foot pole."

"UA will not allow itself to lose market share in IAD. There are several options. Mesa may be successful in it's take over. Mesa and others could bring in their RJ's and UA will just move it's express operation elsewhere on the airport. UA could reduce the number of AC it turns back in BK and fly it with mainline, even at a loss, until ACA is replaced. We do not intend to pull out of any markets in IAD."

"revenue continues to increase."

"People may be surprised how soon TED is introduced to Dulles."



As for you Chip, I will answer your questions after you answer mine.

 

[USA320Pilot]

767jetz:

I do not read every post. Would you post them again or PM them?

Regards,

Chip

 

[ZMAN777]

"People may be surprised how soon TED is introduced to Dulles."

FWIW, It's my understanding that UAL will soon announce TED flights out of IAD to both MCO and TPA. There could also be another station or two mentioned as well. Stay tuned!

Cheers,
Z B)

 

[767jetz]

767jetz:

I do not read every post. Would you post them again or PM them?

Regards,

Chip

I'd be happy to...


#1: When people refute what you write and try to hold you accountable for your statements and your claim to have accurate high sources, why do you feel that it is direct attack on you, instead of seeing that it is simply a response to the information itself?

Many of us have high sources. You are not the only one. The info we pass along is just as valid as yours. But usually our sources disagree. When we post info that you disagree with, you are quick to say that we are wrong. The fact that you talk about UA here on the US board is the reason we come here to debate you. If you don't want people to disagree with you, why don't you post on some other forum that is restricted to your info and yours alone? (that one is rhetorical)

#2: Didn't you say over and over again that UA would miss DIP targets by the end of the year? Will you admit you were wrong?

#3: Didn't you quote Duane Woerth over and over again as one of your reliable sources? Wasn't he wrong?

#4: Didn't you tell us all over and over again that your sources predict UA will lose $400 MILLION in Q4? Looks like that will be wrong too.

#5: Isn't it POSSIBLE that if UA and US executives are meeting, that the topic COULD be something related to us being business partners, and not about mergers and aquisitions?

#6: Why won't you concede that your sources have been and continue to be less accurate than you claim? (And please don't use the excuse that you are just the messenger. Or that the info is correct at the time but things change quickly. You claim your sources are accurate, therefore you must take responsibility when the info you pass along turns out to be inaccurate.)

What I find interesting is your inability to ever admit when you are wrong. Maybe if you admit you're wrong once in a while, people would take you more seriously. Instead you often sound like the poor victim of the evil and emotional UA employees who just won't leave you alone. (It's really not that personal.)

767jetz

 

[Bear96]

#2: Didn't you say over and over again that UA would miss DIP targets by the end of the year? Will you admit you were wrong?

Actually I think he also said the DIP covenants would be busted as early as October, which has definitely turned out to be wrong. But don't shoot the messenger!

 

[USA320Pilot]

767jetz, I would like to simply respond to your questions point-by-point by number. Here goes:

Question #1 – I disagree. The only time you normally post is to refute every comment I make. It’s not a debate, it’s more of “let’s visit the US Airways board to see what Chip says because we do not like the music, therefore, it is more of “shoot the messenger†versus constructive debate.

Question #2 – Yes I did. The information was obtained from ALPA EF&A through Duane Woerth. The ATA industry numbers were surprising and beat expectations across-the-board, which has helped immensely.

Question #3 – The end of the year is not over yet. Let’s see how things work out.

Question #4 – United posted a net loss of $149 million in October; therefore, if they lost $251 million in November and December the $400 million target will be hit. The $400 million number was obtained from the Denver Post who said analysts predicted the numbers.

Question #5 Yes, but I doubt the board of directors were meeting to discuss something other than M&A activity. Let’s not forget that a former senior vice president told our entire crew about the meeting two weeks ago. In addition, two, not one, but two of the most knowledgeable airline analysts told me something is brewing. In addition, multiple US Airways management sources have commented to me on the subject, but as I have said I know believe the plan has shifted because the UCT does not remove cost.

Question #6 – I sincerely doubt m sources are wrong. They are the same ones that told me about the last merger before it was announced, why I publicly told the MEC about the offer, the AMR carve out, AMR ambivalence, the 21-day Hart-Scott-Rodino Act notice, the domestic alliance, and the Star alliance. I predicted every one of these announcements; therefore, I have a lot of faith in their comments.

767jetz, I have been recently told by a very reliable member of the US Airways Exeuctive Suite that the Company stabilizes its business plan, then the company consider a merger (which is a shift), but consolidation is inevitable. In addition, I understand Bronner is not interested in becoming an equity investor in United unless the company can prove it can emerge (which is uncertain), which requires the company to obtain a resolution to the pension problem, obtain mutiple municipal bond agreements, fix 174 aircraft EETCs that deal with more than 100 financial institutions, figure out what to do with the deepening Dulles problem, and file a loan guarantee application that does not get rejected (this needs a 7% profit margin within 7 years that is more difficult to project because of the LCC issue).

With United's bankruptcy so complex and the uncertainty of whether or not the Chicago-based company can emerge, especially since Jake Brace called Susan Carey, asking her to let the Wall Street Journal be their cheerleader to say the company would be out of bankruptcy by now (by the way -- when this nes broke who said Brace was simply blowing smoke? Did you forget that or do you only try and "shoot the messenger"), nothing can be done on M&A activity, yet.

Regardless, things will be interesting going forward, however, it would not surprise me to see RSA become an airline holding company with two airlines under its umbrella: US Airways and United. United would join the holding company with RSA becoming the equity plan sponsor providing additional exit financing in exchange for a controlling stake in the post bankruptcy company. Then RSA and its chief advisor Rono Dutta would create an integration similar in scope to AF-KLM where the surviving word mark and paint scheme would be US Airways, the surviving senior management would be US Airways, and the combined name would be United Airlines for market identity. This type of consolidation would be a hybrid between the two European carriers and ValueJet and AirTran, where ValueJet acquired AirTran and took its name.

Will it happen? Maybe, maybe not, but a top US Airways official told me "consolidation is Inevitable" and Jeff Stanley from United a few weeks ago said, "If things stay the way the are now, there will be several Chapter 7 (bankruptcy liquidations) down the road, and that's not good for anyone. The most feasible solution to the situation is consolidation in the domestic airline industry."

767jetz, why would Stanley have made this comment, which was prepared before his speech? With the comments taken from a written speech and not off-of-the-cuff, could it be the intentional comments were a thrid-party communication through the press via Dow Jones Newswires of pending actions? I believe so...

767jetz, consolidation is coming and it does not matter whether you, I , or anybody else likes it, it's coming as a means to reduce costs through economies of scale. The likely suitors: United and US Airways, who just took two more incremental integration steps by announcing their intent for US Airways to take custody of some of United's Los Angeles gates (just like the airline did in Seattle on October 1) shortly after the holidays and the new joint ServiceAir cargo handling contract.

What will be next after Los Angeles? San Francisco, Denver, and ...

Regards,

Chip

 

[ual06]

" Regardless, things will be interesting going forward, however, it would not
surprise me to see RSA become an airline holding company with two airlines under its umbrella: US Airways and United. United would join the holding company with RSA becoming the equity plansponsor providing additional exit financing in exchange for a controlling stake in the post bankruptcy company. "


As I see it, there are two big holds in this argument.

First, when has UAL ever mentioned an interest in using RSA, or other loan shark, for exit financing? Yes, I have seen what may be indications that Bronner may be interested; but, it takes two to Tango. Only factual information I have seen indicates UAL is seeking exit financing only from highly respected financial institutions at a reasonable cost.

Second, what about them good folks expecting a secure retirement from RSA? Don't forget that many of them are educators and other professional people who are quite knowledgeable in financial matters and how other elements of the "system" works. Perhaps Bronner has some leeway on how to invest their money; however, there are most likely some limits. I feel it is quite possible that if RSA were to become an airline holding company that many of the current and expectant recipients may
complain a great deal about the possibility of their retirement funds taking flight. In that they are the good southern folks that they are, they just might resort to an old Southern tradition to truly emphasize their displeasure. The tradition I am referring to involved the use a warm, black sticky substance and a byproduct of preparing that fryer from the chicken yard for Sunday dinner. (Figuratively speaking of course.) Today, the "tradition" would most likely be carried out in a Board room or Court.

 

[Jetlaagd]

The likely suitors: United and US Airways, who just took two more incremental integration steps by announcing their intent for US Airways to take custody of some of United's Los Angeles gates (just like the airline did in Seattle on October 1) shortly after the holidays and the new joint ServiceAir cargo handling contract.
Chip you are so wrong about the language you use about the U taking custody of Ual gates in Seattle.Being a Seattle based Ual employee,U did not take custody of the gates...I repeat U did not take custody of the gates.The Port of Seattle has a lease condition for gate space 900 cutomers per gate.If you cannot maintain 900 passengers the gate is up for lease.Yes it is a fact we sold a few gates back to the port but the 2 gates U uses were not part of the sale.The gates U picked up were to make it easier for U and UAL passengers to connect.And as of today there is NO SERVICE AIR CONTRACT BETWEEN the 2 carriersThe service air contract is a non negogtable item in UAL's contract language.Where or who is your source for the service air contracts?.So again you are wrong.Pease admit when you are wrong.I discussed this issue with you a few months ago and I think you conveniently ignored it.You seem to pick and choose what posts to read or respond to.I for one only wish you would admit your mistakes.other wise quit posting fiction it only creates tension between the U employees and Ual employess in Seattle.Stop the B.S.NOW DISREPECTING YOU MORE EACH DAY, JETLAAGD

 

[LGA Fleet Service]

Announcing their intent for US Airways to take custody of some of United's Los Angeles gates (just like the airline did in Seattle on October 1) shortly after the holidays.

"Taking Custody" Indeed..


You make it sound like Buford Pusser and some extras from "Deliverance" stormed the airport and took the gates by force...

I don't suppose the idea of easing code share connections by bringing US into UAL's larger and superior facilities at LAX ever entered your fertile imagination?

Nah, it's easier to twist it into a harbinger of impending consolidation... :blink: