US Airways Debate

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I think to succesfully compete with the LCCs, the legacy carriers need to become LCCs.

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?!

In order to be more environmentally and financially friendly, I think GE should develop an engine that silently converts lav waste into gold dust. I mean, it's just a matter of R/D, right?

Seriously, though-

You can only shrink the fares so far. I think service is where the next big competetion will occur.

Domestic travellers in the US take a LOT for granted. Once again, I point to RyanAir. If Wal-Mart fares is what the flying public wants, then Wal-Mart frills is what they'll eventually face. Could you imagine paying a premium for every bag you carry? How about zero chance of getting remunerated after a flight cancellation or indefinite delay? We find those ideas shocking, right? How about buying a ticket to Dallas/Fort Worth, yet you land in Waco (70 miles south) and the CEO of the airline says, "Close enough. Now F off." O'Leary does just that, turns a profit, and has full planes. Unlike Herb Kelleher, O'Leary couldn't give less of a damn about his employees if he tried... and the company thrives.

And WOOHOO! I have a job through June!!
 
Sig... that is an awesome point. No matter what way you look at it, people complain about fares being to high or too low. LCC's are a good item, but most of them are inconveinent. Because they are inconveinent you can get away with the pricing (by the way---by inconvienent I mean things like Southwests "boarding process," stoping in random cities en route to their destination, Ryan Air's baggage policy, AirTrans crap terminal long layovers, etc.) I think that eventually the airlines like Delta will come full circle and serve the "businessman" like they set out to do waayyyyy back in the day. As for the average joe, we'll put up with the crappy terminal of AirTran in ATL, or flying on Southwest all the way up the east cost stopping in 3-4 cities along the way to deplane 10 and pickup 4. Bottom like... Be careful what you wish for
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I have been thinking for the longest time if someone would start an airline with all around good service, and a single cabin of something like all F class or at least business class they could do very well.

Imagine a 50 seat CRJ with 2-1 seating and only 10-11 rows? Sure you lose about 30% of your revenue but if you combine it with good service people will pay for those comfortable seats. Even if an RJ is a bad example, think of an A319 or a 737 with two or three rows pulled out along with making it 3-2 seating. Legroom and shoulder room goes a long way. Make seats like the kind you get in a movie theater with stadium seating. Maybe its fantasy world but maybe not.
 
Kind of like these guys:

Midwest Airlines

(at least they started out that way with what they now call "Signature Service". They've diluted things a little over time with the addition of the "Saver Service".)
 
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I have been thinking for the longest time if someone would start an airline with all around good service, and a single cabin of something like all F class or at least business class they could do very well.

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Midwest Express used to follow that model. The new Midwest Airlines still offers some of that service on their "Signature Service" flights with 717s and M80s having 2x2 seating. But they introduced "Saver Service" a few years ago, adding back seats, plus the signature service in the cabin is nothing like it used to be. So I take that to assume that model ultimately wasn't proving successful enough.

Legend Airlines (I think that is what it was called) used to fly 56-seat configured DC-9s out of Love Field (56 seats to get around the Wright Amendment)). They didn't make it (largely due to American bringing in F100s in the same configuration on the same routes). With Legend gone, they stopped the flights and took everything back to DFW.

In theory it seems like it would work though. And even with the scale backs, MidEx offers the best domestic product in my opinion.
 
Well, yeah, KINDA like those guys but not quite. I forgot about them. I don't think I would have my main hub at MKE though.

Maybe use focus cities instead of Hubs. Perhaps one on each corner of the country to get the N/S traffic along the east and west coast then another hub in the middle of the contry that isn't MCI so you can do the transcons with flyovers or stops. A fleet of CR7s and 737s or 319s would work well.

Again, probably fantasy world.
 
You won't see the business traveler paying more money for frills until the economy is fully rebounded and on the road to boom again. Everyone's cutting, not just airlines.

As for U getting the extension, all I have to say is we the taxpayers are keeping a vegetable on life support. This is nuts. Again, let me clarify, my current job will be dramatically affected by U going out of business, but please! Pull the plug already. The industry will rebound better and faster if someone drops out. Give 1-3 years at the most for everyone to be working again.

I had a United CA in my jumpseat yesterday. We were talking about this deal, and about how United was TWICE denied the ATSB loan, whereas U has twice been in Ch11 and now gets an extension on their loan. We could not figure this one out. As he mentioned, United has for years led the way of safety and service, has a more global network, and is several times larger than U. So, it does seem rather "unfair" that U is kept on life support, while United (and ATA and others, as well) were denied Special Airline status by the ATSB.

If Unlce Sam is not going to let the free market economy determine who survives in the airline industry, then it's time to reregulate. This is nuts.
 
I'll probably get a bunch of nasty email for saying this, but UAL sinking is going to have a far more deleterious affect on our international trade, especially in the pacific than USAir taking the dive.

If UAL sinks, there isn't a snowballs chance in Fresno of anyone having the financial capital to successfully overtake the Pacific routes and before one of the A.netters says an LCC, I'll have to laugh my ass off. Diving into international is serious business and is a lot more complicated than loading extra fuel onto an airplane.

Delta overtook Pan Am's Europe routes and their Frankfurt intra-Europe hub operation and it took years to work the bugs out of the system and the reverberations can still be felt today.

Replacing a defunct USAir's feed with existing carriers can be virtually handled overnight and would correct the overcapacity problem by noon.
 
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and before one of the A.netters says an LCC, I'll have to laugh my ass off.

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But I heard SWA and jetBlue were starting LAX-HKG non-stop service using a 737-700 and an Airbus!
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'Course to do this SWA would actually have to equip their airplanes with overwater gear, ETOPS, etc. Not sure if jetBlue has this since they fly to PR already, but they sure don't have the necessary equipment to fly to the Pacific. I'm not even sure if the 320 has the range to do that without stopping somewhere first. SWA would just announce HNL and GUM to add to their point-to-point service.....
 
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I'll probably get a bunch of nasty email for saying this, but UAL sinking is going to have a far more deleterious affect on our international trade, especially in the pacific than USAir taking the dive.

If UAL sinks, there isn't a snowballs chance in Fresno of anyone having the financial capital to successfully overtake the Pacific routes and before one of the A.netters says an LCC, I'll have to laugh my ass off. Diving into international is serious business and is a lot more complicated than loading extra fuel onto an airplane.

Delta overtook Pan Am's Europe routes and their Frankfurt intra-Europe hub operation and it took years to work the bugs out of the system and the reverberations can still be felt today.

Replacing a defunct USAir's feed with existing carriers can be virtually handled overnight and would correct the overcapacity problem by noon.

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Wasn't part of Pan Ams problems the purchases of an airline (I'm not sure if it was Brannif or National). Then then a concflict between the seniority of the two airlines and etc plus there were many routes they couldn't use. Just a big mess overall.
 
It's all about inflight refueling, with the contract for that going to the lowest bidder (of course).
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It's all about inflight refueling, with the contract for that going to the lowest bidder (of course).
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Do you think that will ever happen for civillian aircraft?
 
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I had a United CA in my jumpseat yesterday. We were talking about this deal, and about how United was TWICE denied the ATSB loan, whereas U has twice been in Ch11 and now gets an extension on their loan. We could not figure this one out. As he mentioned, United has for years led the way of safety and service, has a more global network, and is several times larger than U. So, it does seem rather "unfair" that U is kept on life support, while United (and ATA and others, as well) were denied Special Airline status by the ATSB.

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There were three basic requirements to get that status and secure a loan.

1) their need is tied in part or in whole to 9/11, 2) they have insufficient access to financial markets and 3) they have a financial restructuring plan that shows how the loan would be repaid.

The ATSB decided that UAL failed on part 3, in that they couldn't show a workable plan to repay the loan. I would say that was a good assessment given how things have gone for UAL since. How USAir convinced them they could repay is another story. Remember, the ATSB is just another government agency. No more competent than any others. Now that USAir has the money, the ATSB is just another creditor trying to get paid, so they decided to relax the collateral requirements and keep USAir alive a while longer.

My beef is with even having an ATSB to start with. It didn't "stablize" anything.
 
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Delta overtook Pan Am's Europe routes and their Frankfurt intra-Europe hub operation and it took years to work the bugs out of the system and the reverberations can still be felt today.

Replacing a defunct USAir's feed with existing carriers can be virtually handled overnight and would correct the overcapacity problem by noon.

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Agree about USAir. The Pan Am Frankfurt hub was a failed operation which Delta didn't realize going in. The only bug to work out was to shut it down. UAL's pacific routes could be picked up by other carriers, not at a premium, but in an arrangement that would be "self-financing" (know you love that one Doug).
 
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Wasn't part of Pan Ams problems the purchases of an airline (I'm not sure if it was Brannif or National). Then then a concflict between the seniority of the two airlines and etc plus there were many routes they couldn't use. Just a big mess overall.

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Hardly. From guys I've flown with that are former Pan Am, it was a combination of rotten management, trying to run an international operation with little domestic feed and some other stuff.

I wish my pal Bob Beziat would drop by and answer the question!
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Regards fares, the airlines need to set the fares where they need to be to a) cover the cost of operations, and b) make the required profit.

It just needs to come out that the reality is that not every Joe Six-Pack can afford to fly. By trying to make flying available for every swinging-peter in the US, the airlines are killing themselves. IMO, airline flying is a privilege for those than can afford the true ticket cost; in the same way that not everyone can own a BMW.
 
Doug I like your analysis but a couple of points:

1) Continental is poised to take as many Pacific routes as they can, and increase capacity to cover more. They had a crew base out there at one point, Phillipines wasn't it?

2) Northwest is also looking at Pacific expansion.

3) (and you'll hate this one) Foreign carriers such as Cathay Pacific are prepared to take over a lot of UAL's routes.

4) You may be underestimating the effect of U's demise. The Northeast corridor (basically Atlanta to Boston) is still where 80% of the world's business is transacted, and has the highest concentration of business traffic. To think that regional, commuter and LCC would just "flow in" and take over the routes ... well I suppose it's possible but what a nightmare of confusion.

5) U has some international routes as well, although not as extensive as UAL of course.

Just 5 cents thrown in with your dollar.
 
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4) You may be underestimating the effect of U's demise. The Northeast corridor (basically Atlanta to Boston) is still where 80% of the world's business is transacted, and has the highest concentration of business traffic. To think that regional, commuter and LCC would just "flow in" and take over the routes ... well I suppose it's possible but what a nightmare of confusion.

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What "routes" are there that aren't already being covered by other competition? When you look at competing hub operations think city-pairs, the airlines do. Then try to find any city-pairs of any consequence that U serves that don't already have 2 or 3 other airlines serving them. There are none. That's why nobody can get fares up. In many of these city pairs there is no LCC competition, but there is other airline competition. All with seats to fill.
 
Oh you have a point, but don't forget that "routes" does not mean "capacity."

You aren't going to fill all that LGA-IAD-BOS-DCA-CLT-PHL etc flying with RJs! Talk about gridlock ...
 
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By trying to make flying available for every swinging-peter in the US, the airlines are killing themselves.

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Of course, that's not their goal at all. Their goal is to make as much money as possible. And during the period where they couldn't expand fast enough to satisfy demand, they quite happily charged the maximum fares possible, fares that would curl your hair (and which pissed off their business customers). Then when the downturn came and they had too many hubs and too much LCC competition (who could charge fares that "cover the cost of operation") their prices fell through the floor. You can charge all you want but if nobody buys you get zip. And airlines seats are perishable, you only get one chance to sell them and then they are gone.

The variable that is really messing things up is the bankruptcy process. There are too many hubs chasing too few passengers to make money but nobody goes out of business. Doh! After deregulation the ones that couldn't compete folded, their assets were split up and we moved on. Airlines like CAL and TWA went through bankruptcy but could actually pay their creditors, so they kept flying. Now you have airlines that can't pay their creditors but whose assets are worthless. So they keep flying.

Delta is trying to transition to a fare structure like you are suggesting. Charge fares that are more "rational" and stop doing so much yield management (which gives you hunderd dollar and thousand dollar fares on the same flight). Of course the near term result will be, tada, less revenue. The payoff comes if these fares force some capacity and more importantly some hubs out of the system.
 
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