US Airways Dividend Miles (Pre-FlightFund Merger) - Court Approves US Airways' Request To Abandon Some Planes

I'm sure this will get updated later with the types of planes in question:


http://biz.yahoo.com/djus/021003/1431000565_1.html

Dow Jones Business News
Court Approves US Airways' Request To Abandon Some Planes
Thursday October 3, 2:31 pm ET

WASHINGTON -(Dow Jones)- The U.S. Bankruptcy Court in Alexandria, Va., approved US Airways Group Inc.'s request to abandon some of its planes deemed too costly to maintain.

The number of planes wasn't specified, but they will be among a pool of more than 100 planes that financial advisers said are too expensive for US Airways, which filed for Chapter 11 bankruptcy protection in August. The company said it must lighten its load of unprofitable aircraft and engines.

US Airway's request drew opposition from 18 financing parties. All but two of the 18 objections were resolved prior to a Sept. 26 hearing before Judge Stephen S. Mitchell of the U.S. Bankruptcy Court in Alexandria.

Judge Mitchell overruled the remaining two objections, brought by Sumitomo Mitsui Banking Corp. and MetLife Capital L.P. at the hearing.

-Carol McCleary, Dow Jones Newswires; 202-628-8916; carol.mccleary@dowjones.com

Any idea what they are ditching? Hopefully some of the older 737-! Gimme an Airbus ALB->PHL *please*?!? http://www.flyertalk.com/forum/smile.gif

-Chris

Chris-

I expect some older 737s are in that group of jets to be returned.

I think part of US' business plan is to move the Airbuses to more long-haul routes and keep the 737s around the East Coast. It doesn't look good for ALB-PHL.

No update on the article just yet, though.

Maybe anything that's still in the silver livery?

Although some 737's are likely going to go, I bet some 757's and 767's might be on their way out too ... and as painful as this sounds, with the UA/US code share now approved it would not surprise me to see some A330's go too ...

The only planes in US's fleet that are safe are narrow-body Airbus and RJ's ...

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by tcollins33:
Maybe anything that's still in the silver livery?</font>

The only thing still in silver livery is 737's I believe ... all 757's and 767's have been repainted and anything else that had silver livery is already gone.

They probably won't get rid of just 737's because they'd have too many big planes then, they're going to have to get rid of some bigger planes too to keep the fleet with the right size planes in the right amounts ...

I believe fleet "rationalization plan" specifics have been widely reported already. What I recall was that EVERY SINGLE 737 (yes, even 400s) were gone as were all 757s.

To me, the most amazing component of the fleet news is the continually circulating rumor that US deparately wants to eliminate the A330 from its fleet! News reports have mentioned that US has been in preliminary negotiations for a POSSIBLE assumption of more 767s so that they could kiss the A330 goodbye. http://www.flyertalk.com/forum/frown.gif

With the exception of the 767s, it's looking quite clear that in early 2003, US could very nearly be an all-Airbus operation. Amazing.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Beckles:
The only thing still in silver livery is 737's I believe ... all 757's and 767's have been repainted and anything else that had silver livery is already gone.

They probably won't get rid of just 737's because they'd have too many big planes then, they're going to have to get rid of some bigger planes too to keep the fleet with the right size planes in the right amounts ...</font>

They don't make any money from the codeshare if they don't fly codeshare pax on U metal. One of the biggest opportunities for them is the trans-atlantic flying. They may trade the 330s for more 767s or maybe the other way around but I wouldn't write off wide bodies quite yet.

Rumor over on usaviation has the old 737s being replaced with EM170s (SJs with F) and the 319s doing more "long thin" western routes. Some 737s stick around on the East coast.

Tom:
Not sure I understand the point about the importance of US transatlantic and code-shares. The only place I know of in Europe that US serves that isn't already served by UA out of IAD is FCO (Rome). Why would a PHL-LGW or PHL-FRA flight operated as a UA codeshare be a big draw to United flyers? UA already flies to both these cities with MANY times more flights daily from IAD than are available from PHL - not to mention the fact that UA serves LHR. I see the value of US flights being sold as UA mainly domestic, and almost exclusively north-south, where it's almost impossible to fly UA today. My money would be on fewer US transcon and transatlantic flights (absorbed by UA aircraft operated as US codeshares) supplemented by a relatively stable level of US Atlantic Seaboard flights operated as UA codeshares. This allows each line to focus on its core business areas. Thoughts?

Regarding the ER170s: 'twill be interesting to follow US's moves, if any, toward Embraer aircraft for thinner markets. This aircraft would APPEAR to be a logical choice for serving so much of the US network. (Think: AVL, ROA, ILM, GSO, etc.) A thought, however: given that US just screwed the bejesus out of two global leasing corps., how thrilled would you be to extend them a few hundred million to go buy some new toys?

Two things:

There are still some (crazy?) UA fliers who are stuck in Boston, the northeast, etc. Less travel time going through PHL than backtracking to ORD or IAD (and theres not all that much capacity from IAD).

Also - I thought there was some Star Alliance thing about having 3-class aircraft for international service? The current 767s would not suffice. I could deal with renovated 767s - esp if they had the Passport video system.

The fundamental question is whether the transatlantic operations out of PHL are (potentially) profitable. Any ideas? Isn't the idea with the A330 that it is less expensive to operate the 767?

SAS is in the same situation in terms of widebody operations. They are getting rid of the 767s from the late 80s having acquired 340s and just took delivery of the first 330.

I assume that PHL is considered to be large enough of a market to sustain these operations.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by hscottm:
Two things:

There are still some (crazy?) UA fliers who are stuck in Boston, the northeast, etc. Less travel time going through PHL than backtracking to ORD or IAD (and theres not all that much capacity from IAD).

Also - I thought there was some Star Alliance thing about having 3-class aircraft for international service? The current 767s would not suffice. I could deal with renovated 767s - esp if they had the Passport video system.</font>

Huh? SK has been strictly 2 class since the mid 1980s. I also seriously doubt that BD has F class.

Oh yeah, that's another route that UA doesn't serve. (MAN) Although it sounds like Astra-Zeneca paid full C fares are keeping that route alive.

Interesting phenomenon when a single company supports a route. I heard about an SK route where they changed the flight times, the company boycotted in protest -- next thing the route was gone.

UA flies to PHL from IAD, ORD, DEN, LAX and SFO. While a pax can fly UA and get to any of the European destinations nonstop(except MAN) from some or all of those hubs, having PHL as an option of routing a passenger from those hubs into PHL and then onward is also an option.

I suspect UA flyers will gain great benefits on expanded European options (flight times, routings, etc.) and extremely good Carribean routes.

The biggest benefit to US flyers will be Hawaii and Asia (IMHO).

True....but the thing that most of us should be holding our collective breaths about is: What happens to CP,GP and SP upgrades?? No unlimited UG's for UA 1K's as opposed to our unlimiteds ...500 mile upgrade certs vs. 800 milers for GP and CP....I have a feeling that we may get a "mild" screwing here.....hoping it's not major. How come no one is discussing this already? I figured that this would be a HOT topic. http://www.flyertalk.com/forum/smile.gif

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by IM4Travel:
True....but the thing that most of us should be holding our collective breaths about is: What happens to CP,GP and SP upgrades?? No unlimited UG's for UA 1K's as opposed to our unlimiteds ...500 mile upgrade certs vs. 800 milers for GP and CP....I have a feeling that we may get a "mild" screwing here.....hoping it's not major. How come no one is discussing this already? I figured that this would be a HOT topic. http://www.flyertalk.com/forum/smile.gif </font>

No one knows ... but actually we may be safe. The agreement with the government requires that the frequent flyer programs be run completely independently. There is also a provision that if the government thinks that US and UA are not doing that they could re-review the whole thing, subjecting US/UA to another waiting period. In other words, if US were to make any significant changes to the Dividend Miles program, such as changing upgrades from 800 miles to 500 miles, the DOJ could step in and institute another waiting period, further delaying the whole deal.

Because of that restriction, I don't think there will be any significant changes to the US Dividend Miles program to align it with UA's program. Truth be told, I doubt many UA FF's know much about US's program and you'd probably have a very low defection rate. There's also still a huge question of how elite upgrades will even work on the other carrier from your program, if they restrict it enough, the differences won't really matter. Lots of questions right now with very few answers, and I wouldn't get too excited about potential changes to elite benefits until we know more.

IM4TRAVEL --

I have raised that very point in numerous threads over the past month, but no one seems to want to discuss it.

Knowing how incredibly tight UGs are on UA for all levels of elites, I'm predicting that when the final "deal" is announced, you can bet US elites will get a rude awakening about their future ability to UG with the ease to which they've become accustomed. Perhaps now the cockroaches of the world will, at long last, be forced to sit where US wants them: seat 33E !

Re PHL vs IAD: While true that IAD requires back-tracking to get to Europe from PHL, PIT, and other MidAtlantic cities, don't forget that JFK and BOS are international gateways (served by UA) that feed well from the MidAtlantic. Further, PHL and PIT international flights "compete" with IAD, JFK, BOS - and the last 3 gateways have significantly more home-based international volume/revenue. Scaling back international ops out of PHL/PIT fills more planes out of IAD/JFK/BOS. Trend now is to reduce "overcapacity". It will be interesting how this sorts out.

The only UA feed to JFK and BOS from the east coast is UX from IAD. IIRC, MIA is getting dumped. So if you want to fly out of JFK or BOS, you have to get your own ride there. US has tons of east coast feeds to PHL, PIT, and CLT.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by greg:
Re PHL vs IAD: While true that IAD requires back-tracking to get to Europe from PHL, PIT, and other MidAtlantic cities, don't forget that JFK and BOS are international gateways (served by UA) that feed well from the MidAtlantic. Further, PHL and PIT international flights "compete" with IAD, JFK, BOS - and the last 3 gateways have significantly more home-based international volume/revenue. Scaling back international ops out of PHL/PIT fills more planes out of IAD/JFK/BOS. Trend now is to reduce "overcapacity". It will be interesting how this sorts out. </font>

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by greg:
Tom:
Not sure I understand the point about the importance of US transatlantic and code-shares.</font>

U doesn't make any money by sending it's pax on UA metal. So dropping the trans-atlantic routes in favor of codeshares means handing over the revenue to UA.

OTOH to the extent that U can attract UA pax by offering better connections (or looser UG availability...) from the east coast U gets that revenue.

All of this stuff about U dropping transatlantic routes because of the codeshare seems unlikely to me. There's no incentive at all for U to do so.

Tom

I hope you're right. My concern is that someone looking strategically at the codeshare would say 'why do we need JFK, PHL, PIT, and ORD as primary transatlantic hubs - when theyre jointly almost on top of each other,especially when originating cities in the NE USA can get to any of these hubs in roughly the same amount of time'. CLT is far enough away to become a decent 'substitute' for MIA.

Ironically, PIT is much more suited for more transatlantic traffic. Has a half-empty concourse that it could expand into. CLT is bursting at the seams.

Based in PIT, this is my number one concern.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by hscottm:
CLT is bursting at the seams.</font>

Huh? I don't think CLT is anywhere near bursting at the seams especially with the new E Concourse completed and the extension to the D Concourse done now. We may not have any half empty concourses here, but I think CLT has plenty of room to add flights within existing facilities and with three runways there are not significant delays typically.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by hscottm:
Tom

I hope you're right. My concern is that someone looking strategically at the codeshare would say 'why do we need JFK, PHL, PIT, and ORD...</font>

Because that would mean that the "two separate airlines" aren't. And that would be a no-no.

tom

I thought the alliance ruling required them to only manage the FF programs separately. While I understand your point, regardless of the potential antitrust implications, the two airlines would be crazy to not cut/reroute capacity to better feed their expanded scope of "customers". With codeshare bookings, they could get data on flight routing preferences that they could otherwise only get if UA gave it to them - and THAT would be the no-no, I think.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Beckles:
Huh? I don't think CLT is anywhere near bursting at the seams especially with the new E Concourse completed and the extension to the D Concourse done now. We may not have any half empty concourses here, but I think CLT has plenty of room to add flights within existing facilities and with three runways there are not significant delays typically.</font>

I went back and re-read my post, and have no clue why I typed that last part. sorry. Maybe I meant to say 'will be' bursting? I dont remember.

Regardless, I think CLT has some big opportunities IF US continues transatlantic service. I think there's a chance the kind of arrangement implied by Chip Munn and some of the usavation folks (US does domestic, UA Int'l) could come to some sort of fruition.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by hscottm:
tom

I thought the alliance ruling required them to only manage the FF programs separately. While I understand your point, regardless of the potential antitrust implications, the two airlines would be crazy to not cut/reroute capacity to better feed their expanded scope of "customers". With codeshare bookings, they could get data on flight routing preferences that they could otherwise only get if UA gave it to them - and THAT would be the no-no, I think.</font>

We are talking about airlines here -- they'll use that data to offer reduced fares on routes that are losing traffic... Then they'll blame us cockroaches for buying those fares.

In any event -- I have a hard time seeing the people who currently fly U over the Atlantic switching to UA with the possible exception of people who want to go to LHR instead of LGW -- and I'll wager that a lot of those people were already flying UA, AA or whoever anyway. Why switch to UA metal to go somewhere U goes? Other than LHR UA doesn't offer much in Europe and fighting the hordes of 1Ks doesn't sound like a good time either. OTOH there are savvy 1Ks that are going to realize that flying U across the Atlantic has some significant positives.

The more likely scenario for a U flier, in my mind, is people taking U code shares that start on U metal and connect to UA to go places that U doesn't go at all like the Pacific.

This whole thing works best when the two airlines feed each other. UA feeds pax into U's Carribean network, U feeds UA's Pacific biz... Shutting down routes is counter productive though -- that's just handing over the revenue unless the route is hopelessly loss-making (and I don't think Europe is a loser for U).

I'd be interested to know how this sort of thing worked out with the continental/northwest code-share... I'm not familiar with what took place, anyone care to share?