US Air long term survivability

[XXXPILOT]

How can a broke airline buy 500 rj's????????

 

[boeingdriver213]

They aren't broke........yet......

 

[Boeingman]

How can a broke airline buy 500 rj's????????

On the backs of their employees.

Is it true U management has called for an emergency meeting with the unions tomorrow?

 

[reepicheep]

The meeting is supposedly friday. I'm wondering what Dave wants, my left or my right kidney.

 

[Boeingman]

The meeting is supposedly friday. I'm wondering what Dave wants, my left or my right kidney.

Probably both of them. Not sure what good it will do him, they have sucked every last drop of blood from the employees.

I heard that U's fiscal situation is deteriorating at an alarming rate and the Alabama bunch is getting impatient. Any truth to this?

Tell David to pound sand. They will just keep coming back for more and more. It is never enough....... same thing with Frank.

 

[boeingdriver213]

I listened to Dave's weekly message last Friday. Listening to his vioce, I have the impression that he is a little stressed........

 

[OldManPilot]

The way that PHL and Southwest plays out will be quite interesting. The International flying that U has in PHL will continue to sustain their business to a point. It is possible that some of the feeder operation for their International flying in PHL will be done by SWA. People will simply pay less to get to PHL to get on U International.

SWA has in the past been able to push U management around like a rag doll. Perhaps the new managment will stand up to the challenge a bit stronger.

In my opinion U has a considerable fight ahead of it to continue operations.

 

[Sniper@YourFeet]

The Boyd Group

reposted from The Boyd Group

Southwest & Philadelphia:
The New Low-Fare Service Environment

After almost ten years of being able to pretty much call its own shots up and down the East Coast, Southwest now has to look over its shoulder. JetBlue is now firmly in the game, and it's a factor that will change the way Southwest plans its operation in the months and years ahead.

Southwest's decision to enter Philadelphia signals a whole lot more than just another expansion city for the Dallas-based airline. Up until now, they had no significant, well-focused, and large-scale low-fare competition in the Northeast and Mid-Atlantic regions. As a result, Southwest had the luxury of being able to pick and choose new markets as it saw fit. Not any more. For the first time, Southwest has meaningful direct competition that it must address.

Southwest is facing what may be its biggest challenge since Braniff and Texas International tried to freeze it out of Texas in the mid-1970s. Back then, Southwest faced outright collusion from two dinosaur airlines. Today, Southwest now faces a competitor that can - and fully intends to - successfully dive into the core East Coast traffic base which has been pretty much Southwest's exclusive playground for nearly a decade. And it's just beginning. Increasingly, consumers are going to have a choice. Not just between mega carriers and Southwest, but between competing low-fare airlines. Specifically, between Southwest and jetBlue.

The PHL move is clear proof that the jetBlue challenge not been lost on the folks down at Love Field HDQ. Some of the usual lightweight analysts will spout that it's an attack on US Airways. Forget it, US is just a bystander caught in what will become an increasingly nasty firefight between WN and jetBlue.

Remember, Southwest didn't get where it is by relying on a Ouija board. Too many analysts have misread the well-publicized and well-humored antics of the airline's chairman, and mistake that to mean that Southwest is just a big, fun flying furball with low fares. It's a whole lot more than that. Southwest is a tough, well-run airline with management that knows the business. Especially the low-fare airline business.

And that means they do not take the jetBlue threat lightly.

Entry of jetBlue = New WN Strategies. It's clear now that jetBlue will be a long term player. More ominously, it's not a low-fare airline. Instead, it's a low-fare airline with excellence in service - which is the formula on which WN built its business. Like Southwest, jetBlue is an airline that focuses on brand loyalty, not just dirt-cheap fares, to build its future.

Let's look at what Southwest is probably considering in regard to jetBlue:

* Big time jetBlue expansion is inevitable. Southwest knows that jetBlue has over 200 airplanes on order. A lot of iron that will need to go someplace. Southwest knows that jetBlue will need to fly these machines in markets other than just JFK. And this will inevitably put jetBlue in direct competition for many of the traffic flows that Southwest now dominates. East Coast. West Coast. And in between, too.

* Core-city airport service. The entry of jetBlue into Boston Logan was not insignificant to Southwest. It directly threatens much of the traffic base that Southwest enjoys at at MHT and PVD. Some of the reverse leakage driving out of Boston to fly WN is fixin' to get re-reversed back to Logan, which previously had no large-scale viable competition to Southwest. And although it really isn't a New York City airport, the same is likely happening at Islip. Cost-focused consumers in eastern Nassau and in western Suffolk Counties didn't have significant low-fare options from LGA or JFK. Now they do, and dodging potholes on the Long Island Expressway toward JFK becomes much more attractive. This isn't to say that Southwest will enter more core-city airports in the Northeast, only that jetBlue has the potential to dig into WN's existing traffic base.

* Service quality. It bears repeating - jetBlue does not have passengers. More correctly, it has built a cult of travelers rabidly loyal to the airline. Not much different than what Southwest has done, but jetBlue has raised the stakes, with things WN doesn't have - in-flight television, wider seats (that's the A-320 factor), legroom, and yes, seat assignment. This is where Southwest is vulnerable. It's understandable that WN is reticent to adjust its successful service formula, but this time they really do need to take a hard look at comparative on-board service levels.

This time, it's for real - jetBlue is serious competition. This is not the United Shuttle. This is not Continental Lite. This is not MetroJet. It can be argued that the consumer may well begin to compare what he gets at each airline. At Southwest, he needs to be at the ticket counter way early to assure a boarding priority that minimizes the chances of ending up with a middle seat between two people from a culture that has not yet discovered soap. At jetBlue, the consumer doesn't have that anxiety. He has a seat assignment. In a wider seat. With a free TV to divert his attention, middle seat or not.

With jetBlue in the picture, for the first time Southwest is in danger of having the perception of offering less for the dollar than the competition.

* Planning flexibility. Another dangerous competitive sign coming from jetBlue is that carrier's recent attempt to enter the Atlanta market from California. Apparently, it failed. And that's what's been missed by a lot of analysts. When it failed, jetBlue simply left. No chest-beating. No public recriminations. They just took their A-320s and went someplace else to fly another day. Two messages here, both indicating a very tough competitor: Little emotion, and the flexibility to move quickly when things don't work out.

* Fleet flexibility. The addition of Embraer E-190s will be a major competitive advantage for jetBlue. Despite the comments from some ill-informed media types, these are not "regional" jets, but instead mainline airliners - think of 737-500s with better economics. For those of us who have actually been on the Embraer 170 prototype, it's very clear that the -190 is a 100-seat mainline jet that will put jetBlue in a position to enter markets and adjust capacity with extreme flexibility.

Bottom line: jetBlue is now the standard to which low-fare airlines must aspire. Including Southwest, even as good as they are.

On The Whole, They Gotta Be In Philadelphia. And that brings us back to Philadelphia (as terrifying as that sounds, at least for those of us who've had to live there.) Southwest knew that it had to make a pre-emptive strike at PHL - to snarf up gates, establish turf, and attempt to deny jetBlue a beach head there. A sound competitive move, but one that could signal a range of shifts in the future expansion strategies at Southwest. The airline can be expected to move quickly over the next 18-months to shore up its position in key Eastern markets. Probably the most apparent moves will involve connecting the dots between existing airports on the WN route system. Watch for accelerated moves into transcon and semi-transcon markets.

 

[Slug]

Liberia

Isn't Liberia on the West coast of Africa?

 

[Andy]

Slug,
Yes, Liberia's on the west coast of Africa. Currently bogged down in civil strife ... I'll assume you're no longer on the C-5; otherwise, it may have made your itinerary.
BTW, are you 'The Brain' from UAL newhire class 6/18/00? Your background is eerily similar.

Back on topic:
UAL/U merge. There is a faction at UAL who will attempt to burn the house down IF management attempted another merge.

Cash required for a 'Chip's wet dream' merge: While a simple stock swap could take place by the acquirer, the problem lies in integration costs. AMR/TWA ran/is running north of $1 billion. UAL/U would be at least as high. When airlines are concerned about their cash on hand, no one is going to want to burn current cash on hand on integration costs, no matter how accretive a merge would be down the road.

U's future:
Hard to say. SWA moving into PHL is BAD. Somewhere around 25% of U's revenue is generated in and out of PHL. SWA coming in and cannibalizing U's feed does not bode well for U's future.
While U has significant international revenue out of PHL, with SWA moving into PHL, many international travelers could possibly shift to another international carrier (read DAL, AMR, UAL, AF, BA, etc).
SWA's incursion into PHL could seriously cripple U. Fortunately for U, they have $2 bil cash on hand, so they could wage a sustained fare ware for PHL. Unfortunately for U, Bronner and the RSA are probably not going to want to see their investment go south.