US Airways Debate

If they [we] tank soon, I'd expect the anal-cysts to spotlight the PHL debacle as the final nail.

I personally experienced the goofiness that day (as a pilot), and we got so angry by the end of the day that the skipper and I were throwing our own bags- and very nearly parking ourselves.

It WAS organized, it WAS intentional, and IT WAS mishandled by the management. 900 bags stuffed in a ground-vehicle depot? Planes landing with ZERO bags, but two baby strollers managed to make it into the hold? How about the marshallers too busy chatting on their phones to pick up the wands and bring us in? Forget the lav.

Lakefield needed to be there along with some cronies that very day, doing facework with some news cameras and rolling up his sleeves on a holiday... enough venting- sorry.

I wonder where the assets will be spun? The Boeings have a certain bit of liquidity, right? I wonder what they have in store for the MDA certificate- all those bright, shiny, new Embraers?? Fold the little Airbuses (you can't decline Airbus into Airbii) into that ticket, run the Big Airbuses and Boeings through the auction block, and have a LCC fresh for the ruining? Collapse the contract carriers' stake [just guessing, Bog] and compete with the WO RJs- they're already there, right? The only place left to compete is service. Imagine if RyanAir was here in the US as an LCC competitor!!!
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THAT would shake up the public's view of value!!

Who knows. During the heady days of "Parity +1%", they were still reviewing pilot contracts every few months while BEP was 102%. Hmm. Sometimes the view goes from bleak to wasteland.
 
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It WAS organized, it WAS intentional, and IT WAS mishandled by the management. 900 bags stuffed in a ground-vehicle depot? Planes landing with ZERO bags, but two baby strollers managed to make it into the hold? How about the marshallers too busy chatting on their phones to pick up the wands and bring us in? Forget the lav.

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I heard the same from another pilot.

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I wonder where the assets will be spun? The Boeings have a certain bit of liquidity, right? I wonder what they have in store for the MDA certificate- all those bright, shiny, new Embraers?? Fold the little Airbuses (you can't decline Airbus into Airbii) into that ticket, run the Big Airbuses and Boeings through the auction block, and have a LCC fresh for the ruining?

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That is the question. Is there capital out there looking for assets? Of course we've worked so hard to keep foreign capital out and that is an obvious source (Branson for example).

Good luck.
 
There's always capital looking for assets.

Note how TWA was taking deliveries of 717's and was on queue to pick up A-318's up until the last day of operation.
 
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Little do you realize that it's not the LCCs the pax would scramble to, it's the other legacies. Because there are so many hubs, all the legacies compete on almost every city-pair. This, along with internet pricing, is what has forced yields down.

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Right. Thanks for that. Little do you realize that I'm well aware it's more than just the LCCs scaring the legacies, however their main concern is the LCCs, such as Southwest, whose business model is so effective at keeping costs low that every legacy must keep up. Most pax would simply go back to Priceline and find the cheapest seat. 95% of the traveling public is too uneducated (for lack of a better term) to know anything about the airlines. Little do you realize that I'm also aware of the saturation of the market, considering how many times per day I lead or follow another airliner on the exact same leg I'm operating.


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Take the airlines off of Wall Street. Let's see what happens then. What does that mean?

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Quite simply it means that they'll no longer be so darn concerned about keeping the stock price up, rather than running the airline. Sure, in the current state of the industry, it's only a concern for CEOs of the regionals (ala Johnny O), but if / when things recover, there will be too much emphasis on the stock price. Again. If management would focus on running the business, we wouldn't have half the mess we do today.
 
The legacy carriers need to stop competing with themselves and focus on the LCC's. I'm sure the LCC's only have a limited amount of seats and eqipment to service their routes. Would it be possible for the legacies to agree to raise prices and set an equal price for fares on routes competing with LCC's?
Example: Say Delta, American, United, Northwest and Continental agreed to a $360 roundtrip fare on a particular route. The LCC has a fare for $170 on the same route. In order for the LCC to sell seats, they would have to increase service frequency on that route. If you do that on all competeing routes, could the LCC have the means to increase service on the competing routes? If not, customers would be forced to purchase the higher fare on the legacy carriers, thus making revenue, instead of break even or in the red.
 
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Example: Say Delta, American, United, Northwest and Continental agreed to a $360 roundtrip fare on a particular route.

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"Federal Antitrust Enforcement

Enacted in 1890, the Sherman Act is among our country's most important and enduring pieces of economic legislation. The Sherman Act prohibits any agreement among competitors to fix prices, rig bids, or engage in other anticompetitive activity. Criminal prosecution of Sherman Act violations is the responsibility of the Antitrust Division of the United States Department of Justice.

Violation of the Sherman Act is a felony punishable by a fine of up to $10 million for corporations, and a fine of up to $350,000 or 3 years imprisonment (or both) for individuals. In addition, collusion among competitors may constitute violations of the mail or wire fraud statute, the false statements statute, or other federal felony statutes, all of which the Antitrust Division prosecutes.

In addition to receiving a criminal sentence, a corporation or individual convicted of a Sherman Act violation may be ordered to make restitution to the victims for all overcharges. Victims of bid-rigging and price-fixing conspiracies also may seek civil recovery of up to three times the amount of damages suffered. "

It would in fact be illegal to "agree" to prices. It's known as price fixinng. For more info click on the
US Dept. of Justice website.
~wheelsup
 
Just a theory!
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An illegal theory. There just has to be some way for the legacy carriers to compete with LCC's and make a profit.
 
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Just a theory!
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An illegal theory. There just has to be some way for the legacy carriers to compete with LCC's and make a profit.

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The legacies can agree on fares and do it all the time. One airline puts a fare out and the others either match or not. They just can't go in a back room and set fares.

The problem is that the same mechanism that airlines have depended on for decades, yield management, is now working against them. Yield management means the carrier constantly jockeys prices trying to maiximise revenue on each flight. With too many hubs in the market, meaning too many airlines serving each city-pair, the prices keep getting jockeyed too far down. And it's all transparent since you can see the prices lined up next to each other on the computer screen.

So we have two forces that have aligned to kill the airlines ability to set viable fares. One was the post-deregulation over-expansion of hubs. The other is the steady growth of the LCCs that now impact a significant part of the system.

The legacies will get healthy and prices will head higher when/if some of the hubs get shut down. Two or three airlines serving each city-pair is plenty of competition. Now there are four or five. Until then there is no way that they won't tear each other apart over passengers.
 
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Wouldn't that be collusion?

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Oh yeah! But I'd say that most businesses practice collusion. Ask any insurance company about body work!
 
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I read about US Airways going out of business, and as a pilot I feel for the airline and its employees. However, putting that aside---it is a subject that bothers me a lot. US Airways is doing no good right now for the industry, they are hurting suppliers and manufacturers. My father works for Goodrich, and US Airways currently owes them $3.6 million just in wheel and brake services which they will never see. However, all of the other airlines are in good standing with Goodrich as far as wheel and brakes are concerned.

Moreover, US Air owes for its aircraft, avionics, evacuation systems (another Goodrich product US Air owes $1.2 mil in this dept.) etc. It simply isn't fair that they can be in bankruptcy, not paying their bills, and still operating their aircraft as if everything was fine. US Air is bringing the industry down and its about time that someone put a fork in them.

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Well If your dad is still getting his paycheck I'd say stop complaining. I don't think they're hurting the industry at all. They'll recover. Their too good of a company to die.
 
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I read about US Airways going out of business, and as a pilot I feel for the airline and its employees. However, putting that aside---it is a subject that bothers me a lot. US Airways is doing no good right now for the industry, they are hurting suppliers and manufacturers. My father works for Goodrich, and US Airways currently owes them $3.6 million just in wheel and brake services which they will never see. However, all of the other airlines are in good standing with Goodrich as far as wheel and brakes are concerned.

Moreover, US Air owes for its aircraft, avionics, evacuation systems (another Goodrich product US Air owes $1.2 mil in this dept.) etc. It simply isn't fair that they can be in bankruptcy, not paying their bills, and still operating their aircraft as if everything was fine. US Air is bringing the industry down and its about time that someone put a fork in them.

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Well If your dad is still getting his paycheck I'd say stop complaining. I don't think they're hurting the industry at all. They'll recover. Their too good of a company to die.

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I believe his dad's company has all the right to complain and if they aren't getting the money they owe. If I owed you $50 and you kept asking me for it and I said "Stop complaining if you are getting a paycheck". It's their money.
 
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I read about US Airways going out of business, and as a pilot I feel for the airline and its employees. However, putting that aside---it is a subject that bothers me a lot. US Airways is doing no good right now for the industry, they are hurting suppliers and manufacturers. My father works for Goodrich, and US Airways currently owes them $3.6 million just in wheel and brake services which they will never see. However, all of the other airlines are in good standing with Goodrich as far as wheel and brakes are concerned.

Moreover, US Air owes for its aircraft, avionics, evacuation systems (another Goodrich product US Air owes $1.2 mil in this dept.) etc. It simply isn't fair that they can be in bankruptcy, not paying their bills, and still operating their aircraft as if everything was fine. US Air is bringing the industry down and its about time that someone put a fork in them.

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Well If your dad is still getting his paycheck I'd say stop complaining. I don't think they're hurting the industry at all. They'll recover. Their too good of a company to die.

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I believe his dad's company has all the right to complain and if they aren't getting the money they owe. If I owed you $50 and you kept asking me for it and I said "Stop complaining if you are getting a paycheck". It's their money.

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True, but maybe BF Goodrich should stop supplying US Airways with goods.
 
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No. Go to the site. I'm serious as a severe myocardial infarction!

Just when I think I've seen it all.

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Whoa, big words there. But fortunatley I am in the medical profession and understand you are having ACS and need medical assistance.

Now, About US Air. Personally, by the time I am ready to fly for a major airline, I do not believe any of the legacy carriers will be around. I just think that years of mismanagement, over inflated CEO saleries and the trend of aviation will see to their demise.

The optimist side of me hopes that they will be around but, reality is always an option
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I think to succesfully compete with the LCCs, the legacy carriers need to become LCCs.

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If by that, you mean reducing costs of their current operations, then I agree. If you mean copying SWA, jetBlue, etc's business plans, nope. The problem with that is that the legacies would have to shut down and rebuild from the ground up with that business structure in mind. Close all the hubs, switch all their aircraft types, fire their CEOs, etc. Trust me, the charter flight world would LOVE to see more LCCs. Then all the people that don't mind paying the extra $$$ for first class or don't want to fly with Bubba Joe and his screaming trailer full of kids will charter planes instead.
 
Well the ATSB approved extending the loan through June 30, so now it'll just take the bankruptcy court saying "ok" and they'll be afloat through then.

As someone else had mentioned, that gives them the chance to benefit from the strong summer travel period, and the press release says they are planning to re-emerge from Ch. 11 protection this summer. Being a fan of US, I think this is great news (short term, at least).

So they're not dead yet. And something tells me they'll go through this back and forth motion a few more times over the next couple of years before they cease operations, if they ever do. Plus they still have the shuttle operation they can sell off down the road, a la Eastern.
 
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Well If your dad is still getting his paycheck I'd say stop complaining. I don't think they're hurting the industry at all. They'll recover. Their too good of a company to die.

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I believe his dad's company has all the right to complain and if they aren't getting the money they owe. If I owed you $50 and you kept asking me for it and I said "Stop complaining if you are getting a paycheck". It's their money.

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True, but maybe BF Goodrich should stop supplying US Airways with goods.

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Smitty---the way the wheel and brake industry works is that Goodrich provides US Airways with the brakes at no cost. They put them on the plane for free, then USAirways owes Goodrich for maitnence, replacement pads, etc. Goodrich has more on those planes in terms of cabin interiors, wheels and brakes, evacuation systems, etc. They can't just go in and rip out an evacuation slide and say "HA!" This is why airlines going into bankruptcy is stupid. They don't have to pay their bills. Does Delta still pay Goodrich? You bet.... Does United still pay Goodrich---Yes. So how is it fair to Goodrich and the other airlines for US Airways to skip out on the bill?

Guess who makes up for those costs.... you think Goodrich justs writes them off? No, Delta, American, United, Boeing, etc. make those costs up.

Think about it... If Goodrich supplies US Airways with products that they use to further their business at cost to Goodrich, then Goodrich ought to be getting their money.
 
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