UAL pulling out of MDW

[SWA/FO]

Its just a click and paste special.....Mugs where are you?


United to end Midway flights Sept. 5

June 7, 2006

BY MARY WISNIEWSKI Business Reporter


United Airlines has decided to abandon its short-lived experiment at Midway Airport.

United, which started flying out of Midway 14 months ago, told Chicago's Department of Aviation this week that it will cease operations at the Southwest Side airport beginning Sept. 5.

"We've seen limited customer interest in service from Midway," said Robin Urbanski, a spokeswoman for United. "It's prudent we allocate those resources where we have stronger customer demand."

United has to watch its costs -- high fuel prices contributed to a $306 million loss in the first quarter, excluding reorganization gains. For competitive reasons, Urbanski couldn't say how much money the Midway shutdown would save.


United has three "Ted" flights to Denver and two United Express flights to Washington-Dulles from Midway daily. Urbanski said the airline already has a strong schedule out of O'Hare International Airport to both Denver and Washington, D.C.

After Sept. 5, all passengers booked on the Midway United flights will be accommodated on O'Hare flights, Urbanski said.

United was using a city gate part-time.

The change "will provide opportunity for additional service expansion at Midway by existing airlines and new entrant carriers," Chicago Aviation Commissioner Nuria I. Fernandez said.

 

[Sonny Crockett]

I am glad we pulled out.

Enjoy your Herb Turd!

 

[SWA GUY]

Too bad yo Daddy didn't pull out...

 

[Mach 80]

Ever since ORD opened in '59 or so, UAL has been in and out of MDW. Each time they announce some grand reason to re-enter MDW, then a couple years later they announce a sound reason to withdraw from MDW. If they follow the pattern, they'll probably be back in MDW in a couple years and pull out again 2 years after that.

 

[SWA/FO]

Getting their A$$es handed to them from F9 & WN.

the SWA/FO

imp:

 

[Yuppyguppy]

Listen here ********************head, UAL is gonna hand your ass to you soon enough SWAFO along with the rest of the Legacy carriers. You'll be losing money soon enough when your hedges run out. I say bring your WT haulers into DEN and let's play...you'll hurt F9 substantially more than an airline that's been around over twice as long as your's.

 

[Otto77]

pull out so to speak

 

[canyonblue]

...you'll hurt F9 substantially more than an airline that's been around over twice as long as your's.

I've heard that the people in Denver favor F9 more than UAL, but hey UAL has been around 6 times as long so it must be better.

 

[GuppyWN]

Listen here ********************head, UAL is gonna hand your ass to you soon enough SWAFO along with the rest of the Legacy carriers. You'll be losing money soon enough when your hedges run out. I say bring your WT haulers into DEN and let's play...you'll hurt F9 substantially more than an airline that's been around over twice as long as your's.

06-06-2006 | Southwest Adds Flights in DEN and Other Key Cities

Southwest is expanding our route network by adding new and additional service in DEN and several other key Southwest cities. In addition to 12 new DEN nonstop flights, we will be adding new low-fare transcontinental service between OAK and BWI, which we hope will be a hit with business and leisure travelers.
“Southwest is extremely pleased with the response we have gotten from Customers in the Denver market,” said Vice President Marketing, Sales, and Distribution Kevin Krone. “We are delivering on the promise we made to increase service in response to Customer demand.”
Beginning July 17:
• One new nonstop between DEN and HOU
• One additional nonstop between DEN and BWI (for a total of two)
• One additional nonstop between DEN and MDW (for a total of five)
• One additional nonstop between DEN and PHX (for a total of six)
• One additional nonstop between HOU and TPA (for a total of three)
Beginning August 4:
• Four new nonstops between DEN and MCI
• One new nonstop between DEN and MCO
• One new nonstop between DEN and BNA
• One additional nonstop between DEN and LAS (for a total of seven)
• One additional nonstop between DEN and HOU (for a total of two)

You gonna hand our arse to us like you did in California or like you did on the MDW - DEN run?

Gup

 

[SWA/FO]

I say bring your WT haulers into DEN and let's play

Looks like we are already there.. Next is IAD. Looks like there are plenty of WT folks in DEN and IAD for us to fly. But since you fly the other people - you shouldn't worry about us. So why are you worried about us, our hedges are running out, and its almost over.

the SWA/FO

imp:

 

[ironspud]

Listen here ********************head, UAL is gonna hand your ass to you soon enough SWAFO along with the rest of the Legacy carriers. You'll be losing money soon enough when your hedges run out. I say bring your WT haulers into DEN and let's play...you'll hurt F9 substantially more than an airline that's been around over twice as long as your's.

ROTFLMAO

 

[Tejas-Jet]

You'll be losing money soon enough when your hedges run out.

Really????? And.....what would happen if SWA was working on hedges up into 2012? If they have the money to pay up front....why not?

Tejas

 

[HalinTexas]

And, what if fares come up and everyone is making money? Then the hedges won't really matter.

Can other airlines without hedges continue to lose money until 2009 when SWA hedges allegedly expire?

For those of you who wish ill upon SWA, you better worry about your own house first, then worry about SWA's hedges.

 

[F9 Driver]

Oookay?

...you'll hurt F9 substantially more than an airline that's been around over twice as long as your's.

Multiple choice;
UAUA's CASM is: a) Higer than. b) Lower than. F9 and WN?

bizjournals.com
Frontier expands flights
Thursday June 8, 7:08 pm ET
Frontier Airlines on Thursday announced additional flights between Denver and seven U.S. cities, as well as to sites in Mexico.
Denver-based Frontier (NASDAQ: FRNT - News) announced these changes:

Denver-Chicago Midway daily flights will increase to six starting Aug. 20.
Denver-Dallas daily flights will increase to seven beginning July 31.
The Denver-San Diego seasonal sixth daily flight will extend through Nov. 17.
A Denver-Phoenix seventh daily flight will resume Aug. 31.
A Denver-Las Vegas seventh daily flight will resume Aug. 31.
The airline also announced that flights to its seven Mexico destinations will rise an average of 30 percent during the peak winter holiday period.

"Having recently secured six new gates at Denver International Airport, we now have the operational flexibility to offer more optimal scheduling, such as our new Denver to Chicago evening flight," John Happ, senior vice president of marketing and planning, said in a news release.

Published June 8, 2006 by The Denver Business Journal

 

[Mugs]

Getting their A$$es handed to them from F9 & WN.

the SWA/FO

imp:

Probably true. At least to the point where the duplication of service in the Chicago market was not worth the cost. Not at all surprising. Apparently AA felt the same way about it.

 

[Mugs]

Multiple choice;
UAUA's CASM is: a) Higer than. b) Lower than. F9 and WN?

Shouldn't that be obvious simply by the nature of the operation? Had the point of CH11 been to match those CASMs, it would have required a liquidation and a new startup that is nothing like the current operation. If you are looking for those types of low CASMs, you don't achieve it with an international operation, multiple fleet types, first class, business class, etc.

 

[ultrarunner]

And, what if fares come up and everyone is making money? Then the hedges won't really matter.

It will matter to the share holder.

[/quote] Can other airlines without hedges continue to lose money until 2009 when SWA hedges allegedly expire?[/quote]

Not alledged. It's fact. The are currently hedged through end of '09. However, the next qurarterly report will likely show additional hedges.


[/quote] For those of you who wish ill upon SWA, you better worry about your own house first, then worry about SWA's hedges.[/quote]

Since no one on here really bothers to read financial statements, here is SWA's current hedge:


[FONT='Times New Roman',Times,serif]

The Company currently has a mixture of purchased call options, collar structures, and fixed price swap agreements in place to hedge over 70 percent of its remaining 2006 total anticipated jet fuel requirements at average crude oil equivalent prices of approximately $36 per barrel, and has also hedged the refinery margins on most of those positions.

The Company is also approximately 60 percent hedged for 2007 at approximately $39 per barrel, over 35 percent hedged for 2008 at approximately $38 per barrel, and approximately 30 percent hedged for 2009 at approximately $39 per barrel.​

[/FONT]

 

[Mugs]

SWA may get some additional hedges beyond 2009, but they are unlikely to be all that significant. The people that sell fuel hedge contracts probably will not make the same mistake all over again.

http://news.moneycentral.msn.com/category/topicarticle.asp?feed=AP&Date=20060602&ID=5767430&topic=TOPIC_FINANCING&iSub=1

 

[Metro752]

B6 incoming

 

[F9 Driver]

Shouldn't that be obvious simply by the nature of the operation? Had the point of CH11 been to match those CASMs, it would have required a liquidation and a new startup that is nothing like the current operation. If you are looking for those types of low CASMs, you don't achieve it with an international operation, multiple fleet types, first class, business class, etc.

Easy Mugs

The CASM comparison has more veracity than the argument Yuppy was making (that UAUA has a better chance simply because it has been around longer.)

Don’t ya think?

 

[ultrarunner]

SWA may get some additional hedges beyond 2009, but they are unlikely to be all that significant. The people that sell fuel hedge contracts probably will not make the same mistake all over again.

I"d have to agree...the days of SWA being able to hedge fuel at 36 bucks a barell are likely over...but it's all relative. They have real cheap fuel for the next 3 and a half years. I predict a liquidation between now and then, which will raise fares. I think it's a done deal. I just don't see how those in BK will be able to continue to pay the off the street prices they are currently paying.

 

[UALjan15]

SWA may get some additional hedges beyond 2009, but they are unlikely to be all that significant. The people that sell fuel hedge contracts probably will not make the same mistake all over again.

They will definitely get some hedges beyond 2009, and will probably increase their hedged position from 2007-09. How "significant" they are depends on the price of oil in 2009. It's not going down, that much I would bet. Even if they are getting futures at $60/bl, that will probably seem as good as their $35/bl prices now when oil is going for $125/bl in 2009. Part of the equation that you are not considering is that hedges = planning security....it is a lot easier to plan a growth strategy when you can largely eliminate the unknown of fuel prices.

I just wish my airline could hedge in the same way, but in that market, it seems that cash on hand and a good bond rating are prerequisites, and we don't shine in either area.

 

[mdf]

They will definitely get some hedges beyond 2009, and will probably increase their hedged position from 2007-09. How "significant" they are depends on the price of oil in 2009. It's not going down, that much I would bet. Even if they are getting futures at $60/bl, that will probably seem as good as their $35/bl prices now when oil is going for $125/bl in 2009. Part of the equation that you are not considering is that hedges = planning security....it is a lot easier to plan a growth strategy when you can largely eliminate the unknown of fuel prices.

I just wish my airline could hedge in the same way, but in that market, it seems that cash on hand and a good bond rating are prerequisites, and we don't shine in either area.

Well said. That's kind of what I was thinking, just couldn't express it as nicely.

 

[HalinTexas]

It will matter to the share holder.

Can other airlines without hedges continue to lose money until 2009 when SWA hedges allegedly expire?

Not alledged. It's fact. The are currently hedged through end of '09. However, the next qurarterly report will likely show additional hedges.


[/quote] For those of you who wish ill upon SWA, you better worry about your own house first, then worry about SWA's hedges.[/quote]

Since no one on here really bothers to read financial statements, here is SWA's current hedge:






[FONT='Times New Roman',Times,serif]

The Company currently has a mixture of purchased call options, collar structures, and fixed price swap agreements in place to hedge over 70 percent of its remaining 2006 total anticipated jet fuel requirements at average crude oil equivalent prices of approximately $36 per barrel, and has also hedged the refinery margins on most of those positions.​

The Company is also approximately 60 percent hedged for 2007 at approximately $39 per barrel, over 35 percent hedged for 2008 at approximately $38 per barrel, and approximately 30 percent hedged for 2009 at approximately $39 per barrel.​

[/font][/quote]
[/quote]

Pay attention to the first part of my statement. I'll restate it. By your facts the hedges run out in 2009 if they don't get new ones. My bet is they will. None of their hedges is above $40 right now. Crude is consistently trading above $70, and is not expected to ever go below $50. SWA is still making money. Call it an accounting profit if you will, but that is still looked up favorably by Wall Street and creditors.

Now to the first part of my statment. Other airlines either have no hedges or are no where near hedged as SWA is. They cannot afford to wait until SWA's hedges run out. Therefore they will continue to bleed cash if ticket prices stay constant. If that is the case, they will liquidate. SWA wins. SWA will increase market share regardless. With less competition, they will control the price, i.e. market share. My bet is that they will. SWA can win. If oil goes down or fares go up so that other airlines are profitable, SWA wins.

In conclusion, there are more things for the industry to worry about in 2009 if the only way for SWA to make money is through hedges. Three years is an eternity. Fortunes change rapidly in this industry in that time frame. Look at CAL in the 1990's between Lorenzo and Bethune.

 

[dc8b75v8r]

Mdw

On a much less sophisticated level, I think the guy that UA hired and started TED just wanted to stick it to his ex employer ATA. (I believe he also ran Midway and Vanguard off the runway as well). And thats why xtown A/L suddenly ended up yet again in another seasonal entry back in MDW.