US Airways Dividend Miles (Pre-FlightFund Merger) - What will replace AA if no United deal?

It's looking more and more like the United deal is a bust. And of course, the AA relationship is about to end.

What, if anything will US do to replace the AA partnership? Will it be reinstated? Will they find another partner? Will we ever have another way to get to Hawaii?

Speculation? Theories? Thoughts?

I suspect that USAirways can't even HINT at anything until the United deal is OFFICIALLY dead. I suspect that they would need to renew the AA deal or make a similar deal with someone else (United?) to try to stay competative. They will also need to do something about additional lounge access for their USAirways Club (at which point the can raise the membership fees just like many of the other airlines did last year).

I had the opportunity to sit beside a marketing exec for Us on a recent flight back to DCA and I asked the same question. He said that if the deal falls through, look for US to become part of the Star Alliance. If you recall, when the two execs originally met, it was supposedly to discuss the possibility of US becoming part of SA, not to talk about selling the airline (at least that's what everyone was told). Consequently, US should be a shoo-in after August 1 or once the deal is officially pronounced dead. That's the word on the street, anyway.......

Well joining Star would certainly get us the best of both worlds......Dividend Miles and an improved route structure.

My biggest concern is that Wolf, in his desperation to make the deal happen, will continue to make the airline bleed more red ink than it really needs to.

<font face="Verdana, Arial, Helvetica" size="2">Originally posted by romadaro:
He said that if the deal falls through, look for US to become part of the Star Alliance.</font> http://www.flyertalk.com/forum/eek.gif http://www.flyertalk.com/forum/biggrin.gif http://www.flyertalk.com/forum/eek.gif http://www.flyertalk.com/forum/biggrin.gif

chexfan: *A Gold



[This message has been edited by chexfan (edited 06-20-2001).]

<font face="Verdana, Arial, Helvetica" size="2">Originally posted by romadaro:
...look for US to become part of the Star Alliance...</font>

Does this mean tyhe same type of deal as a codeshare? Or would it be a bona fide codeshare, in which we could book travel between any two places either US or UA serves and it be priced as a single trip, not two added together?

As the old song goes..."Wouldn't it be nice..."


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"You can never have too much Reverb."

<font face="Verdana, Arial, Helvetica" size="2">Originally posted by Surfrider:
Does this mean tyhe same type of deal as a codeshare? Or would it be a bona fide codeshare, in which we could book travel between any two places either US or UA serves and it be priced as a single trip, not two added together?

As the old song goes..."Wouldn't it be nice..."


</font>

I raised this issue in the planebusiness board and the reply was that domestic codeshares are prohibited by each of the UA and US ALPA contracts.

That said, I think that this could be good for UA and U without the hassle of a merger. Some implications: travel on all * carriers counts toward elite status on U, lounge access with AC, LH and UA, award travel to virtually any city in the world, elite level treatment on all * carriers. The downside: upgrades are available only on your "home" * carrier, but I think UA lets elite * flyers into Economy Plus. All the details on reciprocity can be found at www.staralliance.com. (http://www.staralliance.com.)

Check this thread I posted - interesting article from USA Today about AA's thoughts on the proposed merger.

http://www.flyertalk.com/forum/Forum109/HTML/002743.html

Good Times!

[This message has been edited by doctajay (edited 06-21-2001).]

<font face="Verdana, Arial, Helvetica" size="2">Originally posted by us2:
... domestic codeshares are prohibited by each of the UA and US ALPA contracts.

...The downside: upgrades are available only on your "home" * carrier, but I think UA lets elite * flyers into Economy Plus. All the details on reciprocity can be found at www.staralliance.com. (http://www.staralliance.com.)</font>

OK, sorry to be dense, but I'm still confused. I read up all I could on the *A site, but I did not find specifics on one key important point: I know a codeshare makes the flights seamless fare-wise, but would that same effect happen in the StarAlliance?

I know this sounds trivial, but the fact is, there's a bundle of "2nd/3rd tier" domestic destinations that US serves that UA doesn't. Example: I need to go MYR-PDX. The best way, avoiding DL, is: MYR-ORD on US, ORD-PDX on UA. I would expect that in the alliance deal, I would actually hold 2 paper tickets, one for each carrier. BUT...would that fare price out by strictly adding the 2 separate fares (very high), or would there be a single price (much less) for the MYR-PDX 'market?'

I figure that since there must be very little if at all overlap between the 15 airlines' routs in the *A, this question isn't impotant enough to answer on the website, but if US joins, it's all of a sudden a big issue (I think)

Thanks in advance if anyone knows the answer to this one.

[This message has been edited by Surfrider (edited 06-21-2001).]

On existing Star Alliance flights that I am aware of (e.g., UA from LAX-HKG; TG from HKG-BKK), it is priced as two tickets. The only way to get the cheaper seamless fare on Star carriers is if it is a codeshare.

Excuse my ignorance, but what's the difference between this deal and the Continental-Northwest-America West alliance? When I buy a ticket to a destination that one or the other doesn't service, I pay one price and have one ticket, although the routing may be on two out of the three carriers. So, if UA and US are the two domestic carriers in the *A and half the trip is on US and the other half is on UA, why would this be any defferent?

<font face="Verdana, Arial, Helvetica" size="2">Originally posted by romadaro:
Excuse my ignorance, but what's the difference between this deal and the Continental-Northwest-America West alliance? When I buy a ticket to a destination that one or the other doesn't service, I pay one price and have one ticket, although the routing may be on two out of the three carriers. So, if UA and US are the two domestic carriers in the *A and half the trip is on US and the other half is on UA, why would this be any defferent?</font>

Maybe a CO/NW/HP flyer could answer this one, but I thought that NW owned a part of CO and HP. That's why they could do all of those ticketing/upgrading arrangements.

<font face="Verdana, Arial, Helvetica" size="2">Originally posted by romadaro:
Excuse my ignorance, but what's the difference between this deal and the Continental-Northwest-America West alliance? When I buy a ticket to a destination that one or the other doesn't service, I pay one price and have one ticket, although the routing may be on two out of the three carriers. So, if UA and US are the two domestic carriers in the *A and half the trip is on US and the other half is on UA, why would this be any defferent?</font>

(This assumes we're merely talking about the merger)Plenty. With CO-NW it wasn't just an Frequent Flyer Program alliance, it included NW buying substantial shares of stock of CO which has enabled it to obtain effective control of CO. There, it wasn't a merger, just a big stock purchase that caused DOJ to act. DOJ sued, and in order to settle it as the trial started, NW sold some of its stock and converted other CO stock to where it no longer had effective control.

SO, DOJ actually didn't approve what CO and NW wanted. They can do the code share, and link FF programs, but they can't have one controlling the other. And if any of US' labor agreements prevent codesharing, then you just US as part of the alliance, with no codeshares.

Now if you're talking solely about the Star Alliance deal - since there's no control being asserted by another airline - shouldn't be a problem. The only issue would be if another *A carrier made an equity investment in US. Then DOJ would have to approve that (BA and US were required to get DOJ approval when BA made the airline-saving equity investment).

<font face="Verdana, Arial, Helvetica" size="2">Originally posted by SFOJFK:
Maybe a CO/NW/HP flyer could answer this one, but I thought that NW owned a part of CO and HP. That's why they could do all of those ticketing/upgrading arrangements.</font>

Actually, the difference has nothing to do with who owns part of whom, but the respective collective bargaining agreements. NW, CO and HP pilots' contracts allow domestic codesharing. Hence, you see CO flights with a NW flight number and vice versa. UAL's and U's ALPA contracts prohibit this. Unless that were to change, any codeshares are not going to happen.

Surfrider, your question is not trivial. My interpretation is that a trip from MYR to PDX would be a standard interline connection. What's good about U joining * though, is that destinations like PDX would be more likely to get U service, as you now have a huge pool of UA frequent flyers who will be more likely to fly U as an alternative because they get tier miles on UA for flying US. In addition, US and UA express flights do not fall within the codeshare ban as far as I know, so you could possibly get a US fare from CLT to Aspen through DEN, with the DEN-ASE segment being operated by UA express. Likewise, you could fly ORD-PGV on a UA ticket through CLT, using UA on the ORD-CLT leg. This could be great for U flyers headed to places like Santa Barbara or Palm Springs, as they could use UA express service under a U code share to get there.

I would just like to point out that governments have no control over frequent flyer programs. They do have control over codesharing, joint fares and scheduling, etc. Thus is US Airways wanted to link its marketing program (Dividend Miles, US Airways Club, etc.) with that of another airline, governmental approval is not required (but employee group contracts or something else might prevent this). But working together with fares, schedules, codesharing, etc., is an antitrust issue and requires governmental approval. That's why of the CO/NW, US/AA, and DL/UA links, the government only got involved in the CO/NW as that one consisted of codesharing, and joint fare and schedules (as CLT Flyer explained). US/AA and DL/UA only involved marketing programs (partial link-up of FFP's and club link-ups) so no approval required. But other factors did come into play (employee group contacts) in the DL/UA deal which is why it is only domestic, but I forget the specifics.

Wish I had known all this when I was talking to this guy! Now I'm really confused....Geez http://www.flyertalk.com/forum/confused.gif

<font face="Verdana, Arial, Helvetica" size="2">Originally posted by us2:
In addition, US and UA express flights do not fall within the codeshare ban as far as I know, so you could possibly get a US fare from CLT to Aspen through DEN, with the DEN-ASE segment being operated by UA express. </font>

Well, that would definitely solve my routing problem, as I can go CLT-SEA, then take UAExpress to PDX, they fly that route every hour. I've done it many times and always had good service. I'd actually RATHER do that than use ORD. Likewise, I'm sure that I can go CLT-SFO or CLT-LAX on US, then hop somewhere on the West Coast on UAExpress.

Essentially, it would be exactly like the days when US bought PSA before they dismantled it, but the difference is that now CLT is as busy a hub as PIT, providing much more feeder service to the West Coast. (If US had built CLT up BEFORE scrapping PSA, I think it would all still be in place...but I digress...)

So in a nutshell, US joining the *Alliance produces 2 crucial benefits: (1) A huge increase in international access for its flyers, and (2) A somewhat limited but significant increase in access to Western cities via UAExpress. With these two benefits in place, there should be no reason in the world US can't survive and thrive as a major airline, because these are the two key weaknesses everyone knows they have!

P.S. If this goes through, my bet is to watch the frequency of TransCon flights on US go up fast! Originating Westbounders being US fliers who now have better access to the West, and originating Eastbounders being UA fliers who now have access to virtually every airport in the Northeast & Southeast! Sounds like a winner. We'll see. Thanks to everyone for their input and insight.

I forgot to mention that the marketing guy indicated that US becoming part of the *A was part of PLAN B that Goodwin has alluded to in recent articles. Consequently, I am sure that revising the ALPA contracts of both carriers has been taken into consideration. Does anyone know what the process is and how long it would take to get approval on the revision. Would the DOJ have any reason to object to such an arrangement?

<font face="Verdana, Arial, Helvetica" size="2">Originally posted by romadaro:
I forgot to mention that the marketing guy indicated that US becoming part of the *A was part of PLAN B that Goodwin has alluded to in recent articles. Consequently, I am sure that revising the ALPA contracts of both carriers has been taken into consideration. Does anyone know what the process is and how long it would take to get approval on the revision. Would the DOJ have any reason to object to such an arrangement?</font>

DOJ could object to code-shares, but I suspect that it will never get that far, as I do not believe the pilots will give in on that issue, as they fear that outsourcing flights will lead to less work, the same problem that they've had with RJs. I believe that a change of that magnitude would have to be voted upon by the pilots. One possibility of compromise might be to allow a UA code-share on the US Shuttle and a US code share on the UA shuttle or parts thereof, as there is little likelihood that either carrier would or could develop those routes on their own. Another possible exception might be some of the UA Asian/Pacific and South American routes where route authority is still hard to come by. One thing nobody's noted in all this is that the big loser here is Delta -- they're gonna lose a lot of business in the Northeast to US if US miles count toward UA elite status.

I really would have liked to see a headline today that read..."United-USAirways deal dead, USAirways to join Star Alliance"

So would I, but, hopefully, we will once both parties officially proniunce the deal dead! Thank Goodwin...I mean, goodness!

No you won't, you guys are just tossing the pilots contract out the window.
It will not happen.
How would they decide growth?
Every new route started will be met with, "We should be flying that route".
The lowest cost carrier would fly everything, and US Air again will be doomed(higher costs), and shrunk.