uni"TED" 200 planes

[Gordo]

Just thought I'd share this article I read. As a UAL furloughee, this is optimistic news.

TOP STORIES
Ted Fleet Could Reach 200 Aircraft


United's rump, say critics. Could be a big rump.
Commercial Aviation Today has learned, from a source close to United, that the carrier's management has plans to eventually grow the fleet of its low-fare carrier Ted to 200 aircraft. The larger fleet size would be up significantly from the 45 aircraft United has announced publicly would be in service with Ted by the end of 2004.

As reported last month, an all-Airbus A320 Ted will begin flying customers in February 2004 with four aircraft based in Denver and operating to Reno (Nev.), Las Vegas, Phoenix, New Orleans, Tampa, Orlando, Ontario (Calif.) and Fort Lauderdale. United has said that 19 aircraft will be based in Denver, the remainder at other hubs. Beyond Denver, United also has announced Ted service between Las Vegas and Los Angeles, Las Vegas and San Francisco and San Francisco and Phoenix.

Increasing the Ted's fleet to 200 aircraft would represent nearly half the size of mainline carrier's current domestic narrowbody fleet. While numbers are fluctuating due to United's ongoing restructuring, loose fleet figures from October showed the carrier with a narrowbody fleet of about 445 aircraft, of which 98 are A320s and 55 are A319s -- these included both owned and leased aircraft, as well as aircraft in storage.

A United spokesperson told Commercial Aviation Today the carrier is maintaining its publicly-stated fleet projections for Ted.

 

[Newjetjockey]

Could someone please tell me how repainting 200 airplane is saving money? Are they also going to have different uniforms, sceduling dept, marketing dept, menues, refitting each aircraft, etc. Is it me or is someone missing the point?

 

[Mugs]

I don't think you are missing any point. It is hard to understand just what the big advantage of Ted will be at this point. Here is a clip with some analysts comments......

For one thing, he said, United's planned low-cost carrier, christened Ted, will not be all that cheap to fly because it will be staffed with mainline United employees at standard salaries. "I don't know if it's really a low-cost carrier,'' Neidl said.

Michael Boyd, the principal in Colorado aviation consulting firm the Boyd Group, is not convinced that starting Ted consists of any more than repainting Airbus 320 aircraft already in the United fleet and cramming in more seats.

"In fact, by increasing seat capacity from 138 to 156 seats, Ted will actually require one additional flight attendant,'' thus increasing labor costs, Boyd said.

United executives insist Ted will save the parent company money and reduce fares for fliers by making more extensive use of each aircraft and using A320 pilots already on the United payroll who are paid less than United pilots who fly larger aircraft.

Whether Ted ultimately flies with investors and the public, United could rely on other strengths to help it get off the ground.

Chief among them, analysts say, is United's extensive global route structure, which it has extended through code-sharing agreements with other airlines. United's membership in the Star Alliance allows passengers who book flights on United to continue long-haul journeys on other Star Alliance carriers such as Lufthansa, All Nippon Airways and US Airways.

 

[T-Bags]

"Michael Boyd, the principal in Colorado aviation consulting firm the Boyd Group, is not convinced that starting Ted consists of any more than repainting Airbus 320 aircraft already in the United fleet and cramming in more seats.

"In fact, by increasing seat capacity from 138 to 156 seats, Ted will actually require one additional flight attendant,'' thus increasing labor costs, Boyd said."

Boy, old Mike has it figured out... How foolish of the jetblue boys. Don't they know 156 seats requires 4 F/As? Now a REALLY smart manager would outfit the A320 with 50 seats. Then it'd only require ONE F/A!! For the record, my understanding is that UA normally staffs the A320 with 4 F/A's despite only having 138 seats. Hmmm, 15% more seats on the SAME jets with the same staffing equals a CASM that is 15% lower.... Surely I'm mistaken... But considering UA currently has 98 A320's, and has stated publically that the Ted fleet will include only ONE fleet type... and Airbus is on the unsecured creditors commitee and will likely have a fairly large equity stake in UA post bankruptcy (<25%)... Maybe they won't be just repainting old jets....

 

[Gordo]

That's what I got out of the original article I posted, as well as the information available for TED. If they are to increase the total number of planes to 200 (again, not publiclicly announced, just a speculation by the analyst) that would imply new aircraft purchases by UAL Corp. If memory serves right UAL had options for more Airbus aircraft pre 9-11. Since the options weren't exercised...

 

[46Driver]

Could someone please tell me how repainting 200 airplane is saving money? Are they also going to have different uniforms, sceduling dept, marketing dept, menues, refitting each aircraft, etc. Is it me or is someone missing the point?

I'm wondering the same thing. Do the pilots, flight attendants, maintenance personnel, ground crew, etc all work under the same rules and same pay as UAL? Is there anything low cost about TED? Also, what is the mission? SONG has been set up to run the Florida routes for Delta, I don't understand the plan for TED.

Not meant to be flamebait - I'm just trying to figure out the rationale behind TED.

 

[FDJ2]

For one thing, he said, United's planned low-cost carrier, christened Ted, will not be all that cheap to fly because it will be staffed with mainline United employees at standard salaries. "I don't know if it's really a low-cost carrier,'' Neidl said.



Michael Boyd, the principal in Colorado aviation consulting firm the Boyd Group, is not convinced that starting Ted consists of any more than repainting Airbus 320 aircraft already in the United fleet and cramming in more seats.

"In fact, by increasing seat capacity from 138 to 156 seats, Ted will actually require one additional flight attendant,'' thus increasing labor costs, Boyd said.

I hardly consider United's restructured salaries and work rules "standard".

More ASMs same costs equals lower CASM. What's so difficult about that to understand. The bigger question is how will they deploy TED. Will they increase aircraft untilization and reduce wasted sit around time for the plane and crew at the hub?

 

[Networ-King]

I'm wondering the same thing. Do the pilots, flight attendants, maintenance personnel, ground crew, etc all work under the same rules and same pay as UAL? Is there anything low cost about TED? Also, what is the mission? SONG has been set up to run the Florida routes for Delta, I don't understand the plan for TED.

Not meant to be flamebait - I'm just trying to figure out the rationale behind TED.

Now correct me if IM wrong, but what exactly do you not see as low cost about the new UAL work rules and pay. After the concessions, SWA pilots make more then UAL pilots. Now for their other costs....dunno....need a united guy/gal to step in and be ther perverbial pilot/business man or woman.

 

[Andy]

46Driver,
Take a look at this route map:
http://www.united.com/page/article/0,1360,50627,00.html

Now go to www.frontierairlines.com and look at their route map. Notice how TED goes everywhere Frontier goes? And you can bet that TED will expand to cover most of Frontier's route structure.

Interesting how everyone gets wrapped up about TED's cost structure. TED isn't designed to make a profit; it's mission is to contain (or kill) LCCs. UAL created TED in order to compete directly against LCCs and will juggle the books to make it appear profitable while undercutting the LCCs.
And TED won't be going after all of an LCC's business; they'll just take enough business away from LCCs to hurt them.

I see that you fly for ACA. If Mesa's takeover is unsuccessful and Independence Air comes to fruition, don't be surprised to see TED shadowing all of Independence's routes.

 

[46Driver]

46Driver,
Take a look at this route map:
http://www.united.com/page/article/0,1360,50627,00.html

Now go to www.frontierairlines.com and look at their route map. Notice how TED goes everywhere Frontier goes? And you can bet that TED will expand to cover most of Frontier's route structure.

Interesting how everyone gets wrapped up about TED's cost structure. TED isn't designed to make a profit; it's mission is to contain (or kill) LCCs. UAL created TED in order to compete directly against LCCs and will juggle the books to make it appear profitable while undercutting the LCCs.
And TED won't be going after all of an LCC's business; they'll just take enough business away from LCCs to hurt them.

I see that you fly for ACA. If Mesa's takeover is unsuccessful and Independence Air comes to fruition, don't be surprised to see TED shadowing all of Independence's routes.

Andy,
3 questions:

1) TED isn't designed to make a profit? Then how is UAL to stay in business?

2) If MESA takes over ACA, I believe that will be a disaster for UAL. Dulles will grind to a stop and Chicago will have a slowdown as well. If UAL's pilot staged a slowdown in 2000 for a contract raise, imagine what ACA pilot's will do knowing MESA and UAL have just ended our ACA careers.

3) Many of our routes are going to be flown by RJ's. How are Airbus's going to be able to survive on those thin routes?

I'm not trying to be vindictive here, just pointing out some observations. And I have no ill will towards UAL since some of my squadronmates are furloughed from there. Like you, I'm feeding at the military trough. However, if MESA buys us, it won't bother me any to start a non-aviation career. If you can sit back and look at the airline mess dispassionately, it is a quite entertaining soap opera.....

 

[zonker]

Interesting how everyone gets wrapped up about TED's cost structure. TED isn't designed to make a profit; it's mission is to contain (or kill) LCCs. UAL created TED in order to compete directly against LCCs and will juggle the books to make it appear profitable while undercutting the LCCs.
And TED won't be going after all of an LCC's business; they'll just take enough business away from LCCs to hurt them.

That's an interesting philosophy from a company trying to exit bankruptcy protection.

 

[Splert]

If 'TED is not designed to make a profit then how is UAL going to convince the ATSB to finance a losing operation whose only chance is to destroy the competition that has lead to lower fares that benefits the American people.

 

[F9 Driver]

Funny thing about..

ASM vs CASM. Untied replaces some 757s with 150 seat 320s and they are adding ASM? It looks to me like they are reducing capacity in some markets. The only new route that UAL started with Ted is FLL.

We've been competing just fine against Untied main line, and Ted is just a low end version of that product.

My theory is that even a bad plan is better than no plan when trying for exit financing.

It will be interesting later on if UAL gets its ATSB loan guarntee, and exits BK protection (and I truly hope they do.) I wonder what their CASM will be?

Just my .02 and I'm just a pilot.

Andy,

Frontier goes everywhere Ted goes. Ted doesn't go everywhere Frontier goes. Untied does, but not nonstop from DEN, and has except FLL and all of our Mexico destinations.

 

[FDJ2]

Re: Funny thing about..

ASM vs CASM. Untied replaces some 757s with 150 seat 320s and they are adding ASM? It looks to me like they are reducing capacity in some markets. The only new route that UAL started with Ted is FLL.

If UAL is replacing 757s with 320s on a particular route, than UAL is reducing the "segment" cost of that route. If UAL than increases the ASMs on the 320s they operate on that route, than they have reduced the CASM on that route aswell.

 

[Andy]

1) TED isn't designed to make a profit? Then how is UAL to stay in business?

UAL was cash positive by $7 mil/day in October. Here's the press release:http://biz.yahoo.com/prnews/031120/cgth072_1.html
Not bad for one of the slower months in air travel.
UAL will stay in business by being profitable on other routes.
TED is a market share move and is only temporary in nature.

2) If MESA takes over ACA, I believe that will be a disaster for UAL. Dulles will grind to a stop and Chicago will have a slowdown as well. If UAL's pilot staged a slowdown in 2000 for a contract raise, imagine what ACA pilot's will do knowing MESA and UAL have just ended our ACA careers.[/QUOTE]

UAL has always played one feeder carrier off against the other. If UAL becomes unhappy with Mesa's performance, they'll shift flying to Air Willy, Trans States, or another feeder.

3) Many of our routes are going to be flown by RJ's. How are Airbus's going to be able to survive on those thin routes?[/QUOTE]

UAL wouldn't necessarily fly A320s against all of Independence Air's routes; just those that needed a 320 to pull down Independence's load factor to an unsustainable level. UAL could also deploy A319s and feeders flying RJs against Independence.

I'm not trying to be vindictive here, just pointing out some observations. And I have no ill will towards UAL since some of my squadronmates are furloughed from there. Like you, I'm feeding at the military trough. However, if MESA buys us, it won't bother me any to start a non-aviation career. If you can sit back and look at the airline mess dispassionately, it is a quite entertaining soap opera..... [/QUOTE]

By no means do I have any omniscience into the future of aviation; I am merely going on what I've seen in the past. I'm also not trying to be vindictive here; sucking off of the gov't teat is a better financial move for me than if I were able to fly with UAL.
You've questioned the wisdom of TED as a moneymaking venture. If it looks like TED won't make money, then why do you think that UAL decided to create TED? Why do you think that Delta created Song?
It's always a gamble whether or not we've chosen a carrier that will remain in existance throughout our careers. Hang on to the guard/reserve job through retirement; at least you know that you'll get a retirement check. I can't say that any airline pilot will be guaranteed a retirement check in the future.

 

[satpak77]

I am not convinced TED will even work. Why WOULD it work?

Everytime the majors tries to re-invent the wheel with shuttle-like/Southwest-like programs, it is met with less than desired results.

what happened to Delta Shuttle?

what happened to Shuttle by United?

Now we have "TED" and "SONG"

After re-painting a bunch of airplanes, re-deploying a new marketing programs, etc, etc, we now have less cash in the coffers

What happened to Uniteds frax jet program, Avalar or something like that?

I am afraid United's financial situation is too fragile to be rolling the dice on TED

my 2 cents, nothing more

 

[FDJ2]

what happened to Delta Shuttle?

The Delta Shuttle is doing great. Song's doing well with lower costs than previously expected. The Song inflight entertainment system apparently is doing quite well and provides the best IFE in the industry, food sales a brisk and the fleet will expand from 36 B757s to between 46 and 51 next year.

If United does a good job of properly marketing TED and increasing the utilization of the 320s while adding 15% ASMs to each segment at the same cost, TED should do well also.

 

[General Lee]

FDJ2 is correct about the Delta Shuttle in LGA, infact they are adding back some 737-800 aircraft to the LGA-BOS flights because the were always filling the 737-300G's. I would say that is good news if they upgrade to larger aircraft, and the fares are still high---$195 one way on weekdays.

Song is also doing well, and I have seen mostly full loads. The bad weather in the NE is attracting more passengers to warmer FLA--and the new IFE system is supposedly better than any other--although I haven't seen one yet on my flights. I think they are being installed fairly quickly though.

It seems to me that TED is being created to go after Frontier, and that is exactly what they will do. Sure, Frontier has their core customers---but as TED grows and offers the same or more flights to the same destinations, and along with that offers free flights to Sydney or Paris after 5-10 flights---it may cause some passengers to switch. Free trips to better destinations with the family can sway people. A lot of those businessmen dream about going on a tropical or exotic vacation during their limited time off---and not all airlines can offer that---for free after a certain number of flights. And, as the economy gets better---more and more businessmen will be flying.

Bye Bye--General Lee

 

[FDJ2]

General, Song estimates that the entire Song fleet of 757s will have their IFE systems installed by early 2004. Just in time for Spring Break.

 

[Andy]

That's an interesting philosophy from a company trying to exit bankruptcy protection.

Do you, Splert, or anyone else think that UAL is going to openly say that Ted's designed to contain FRNT? You and Splert are confusing my assessment of Ted with officially released company policy. Geez, I'm furloughed; I have no inside information and don't pretend that I do.

I am merely stating what I believe is the true purpose of Ted, based on history.
Ted allows UAL to use accounting tricks to show a lower CASM at Ted, so that there is less chance of UAL being sued for anticompetitive practices. The same can be said for Song.