US Airways Dividend Miles - If US is Taken over....

If US ever gets taken over I think the successor should comp all of the FF an extra year of status for all the heartaches and aggravation. Not sure if most would come back or stay but they will need to do something, I just hope something happens soon.

Which airline do you have in mind?

Which airline is in good enough shape to take over US?

If US ever gets taken over I think the successor should comp all of the FF an extra year of status for all the heartaches and aggravation. Not sure if most would come back or stay but they will need to do something, I just hope something happens soon.

If US gets taken over? Remember this winter when they went after DL?

Despite the lack of success of the airline - I don't see THEM being taken over or being sold anytime soon. Their route structure would only be attractive to someone like UA (for the increase in northeast coverage) or CO (for the increased western coverage of LAS/PHX)...I don't think UA is in any position to acquire US, and I'm not sure CO would want to go down that road since they seem, superficially, to really be taking strides in both their product and service.

I hope they merge or get taken over by a company with a competent management team! It can be AA, CO, DL, NW, or UA!

Which airline do you have in mind?

Which airline is in good enough shape to take over US?

Virgin? They could fold it in with Virgin America, and join the *A. (I know....wishful thinking.)

Well while we're rubbing our genie lamps, I'd like a pony...no a unicorn...no both!

Not sure where this thread comes from...

Why "take them over" and possibly pay a PREMIUM, when a FIRESALE is sure to come with BKIII!

Which airline do you have in mind?

Which airline is in good enough shape to take over US?

Virgin? They could fold it in with Virgin America, and join the *A. (I know....wishful thinking.)

It is interesting that you mention "Virgin" (in general). I am sure that this is not news to many, but I just recently realized (AFTER I paid for a US Airways ticket round trip to Europe and upgraded to Envoy) that US Airways DM members can buy Virgin Atlantic tickets and earn US Airways DM towards their tiers. Isn't that a kick? I love it, pay money for great, legendary service, instead of lousy service, and still get credit towards renewing Gold, Plat, or CP!

As far as Virgin Atlantic buying US Airways, that could never happen, because Richard Branson would have to divest himself of control and a heck of a lot of stock in Virgin Atlantic because of American laws regarding ownership of American "flagged" carriers, and there is no way that he would do that. Branson had to reduce his ownership of Virgin America to 24.9%, resign as an officer, and as a board member, in order for Virgin America to get an operating certificate. Wonderful wishful thinking for a Virgin takeover, but never gonna happen! :(

Wonderful wishful thinking for a Virgin takeover, but never gonna happen! :(

I was afraid somebody would wake me up!!!

My next choice would be Singapore!

UA really does have the best route structure to complement US's route structure. If they could afford it, I would love to see UA buy US, and add E+ to the US aircraft!

Why "take them over" and possibly pay a PREMIUM, when a FIRESALE is sure to come with BKIII!

I dont like the product either... but to say that a company stringing together profitable quarters in a traditionally money losing business is headed for BK 3 in the near future is, at best, fallacy.

IMHO, it's also a fallacy to think that UA management and product would be retained in any UA-US merger. Parker has paid his investors back too well.... Tilton, well, hasn't.

I'll take BKIII... and while we're at it.. my own unicorn...

I dont like the product either... but to say that a company stringing together profitable quarters in a traditionally money losing business is headed for BK 3 in the near future is, at best, fallacy.

IMHO, it's also a fallacy to think that UA management and product would be retained in any UA-US merger. Parker has paid his investors back too well.... Tilton, well, hasn't.

Two quibbles here:

1. Anybody who gets two cracks at the BK apple can do what US is doing now financially. Parker's only right move is to chase the property whose costs have been artificially lowered. Near future is probably pushing it--absent another 9/11 or a massive oil spike, I'd say, oh, 2012 or 2013. Once he's actually got to deal with the unions on a level playing field, the cost structure is toast. Once they have to start replacing narrowbody aircraft in number, same thing.

2. If UA goes "US," the combined franchise is in real trouble, since much of the revenue that UA brings in now (relative to other US airlines) is as a result of it being the remaining flag carrier to offer something approaching decent service (E+, PS, things like that). Kill that, and the entire UA operation probably tanks. Can you imagine how badly AA would crush UA in all the UA PS markets if UA's product went "US?"

I dont like the product either... but to say that a company stringing together profitable quarters in a traditionally money losing business is headed for BK 3 in the near future is, at best, fallacy.

IMHO, it's also a fallacy to think that UA management and product would be retained in any UA-US merger. Parker has paid his investors back too well.... Tilton, well, hasn't.

Two quibbles here:

1. Anybody who gets two cracks at the BK apple can do what US is doing now financially. Parker's only right move is to chase the property whose costs have been artificially lowered. Near future is probably pushing it--absent another 9/11 or a massive oil spike, I'd say, oh, 2012 or 2013. Once he's actually got to deal with the unions on a level playing field, the cost structure is toast. Once they have to start replacing narrowbody aircraft in number, same thing.

2. If UA goes "US," the combined franchise is in real trouble, since much of the revenue that UA brings in now (relative to other US airlines) is as a result of it being the remaining flag carrier to offer something approaching decent service (E+, PS, things like that). Kill that, and the entire UA operation probably tanks. Can you imagine how badly AA would crush UA in all the UA PS markets if UA's product went "US?"

In reply to the comment "Parker has paid his investors back too well....." First day of trading 27-Sep-05 $21.05 stock price at opening. 11-Sep-07 $31.15 stock price at closing. approx. 23.99% annualized return, approx. 47.98% total return, however, the recent stock price is about 50% off the high of $63.27.

Right now, US is doing well because of full planes, but when the shoulder season comes along (now through the week before Thanksgiving, and again from the week after New Years through the end of April), the planes will not be so full. Also, eventually, the poor customer service, the dirty planes, the reduced seat pitch, the reduced benefits for elites, the added fees and hidden fees will catch up with them, as more and more customers get fed up and leave, and the chickens will come home to roost.

It will not take until 2012 for the cracks to start showing in the US business plan. The pilots are already at odds with themselves and with management, and other unions will want big raises the next time to compensate for what they gave up in BK 1 and BK 2 now that the airline is profitable. The cost of oil continues to rise. Airplane maintenance is getting more and more expensive, with almost all of the 737's being 18-20 years old, and by 2011, the 320 family planes will start turning 20 years old! The 767s are already over 20 years old, and look it, though the airline is redoing the cabins now, way overdue! The airline has to pay for nine new A330s being delivered in 2009, along with a passel of new 320 family planes too, so their cost structure is about to sky rocket, beginning about 18 months from now! By late 2009, I would say that good old Dougie will be sweating bullets!

As far as potential merger partners, don't count out UA just yet! By market value, UA is the second highest valued airline out of all of the legacy carriers, and could buy US using its stock easily, if it wanted to. US would be a good fit for UA, as a feeder for UA international routes, as it would be for NW, and also for CO. A merger with UA would make the largest airline in the world, by far, and with NW or CO, it would be close! However, all of these airlines are customer service challenged, excepting CO, which generally has a good reputation, but is the least likely to be interested in merging and taking on the morass that is US.

It is interesting that you mention "Virgin" (in general). I am sure that this is not news to many, but I just recently realized (AFTER I paid for a US Airways ticket round trip to Europe and upgraded to Envoy) that US Airways DM members can buy Virgin Atlantic tickets and earn US Airways DM towards their tiers. Isn't that a kick? I love it, pay money for great, legendary service, instead of lousy service, and still get credit towards renewing Gold, Plat, or CP!

:(

I happen to be sitting in London right now after doing just that. Not only am my points going to put my just about at my CP renewal for this year, but I get two other big advantages from doing this -1) I get to fly nonstop from SFO or LAX to London (no Philly for me!) and 2) I buy their Premium Economy ticket and use AMEX reward points to upgrade to VS's Upper Class.

FYI, Upper Class is very good- especially when I only spend a grand and a half on it rather than the $10k Virgin asks and from all appearances, actually gets for it.

If US gets taken over? Remember this winter when they went after DL?

Despite the lack of success of the airline - I don't see THEM being taken over or being sold anytime soon. Their route structure would only be attractive to someone like UA (for the increase in northeast coverage) or CO (for the increased western coverage of LAS/PHX)...I don't think UA is in any position to acquire US, and I'm not sure CO would want to go down that road since they seem, superficially, to really be taking strides in both their product and service.

Well, since the failure of the DL deal, what has happened with US?

they've left the fleet to fester and rot, they've pulled an admitted scheduling con to try and fool PHL into leaving them gates, and they've let operations reach the point generally where "scheduled" is now descriptive of the East hubs less than a majority of the time... that's not an organize-and-build plan, it's a pinch-a-penny til the next great financial community deal can be invoked in a new "transaction".

we should watch for some new shellgame-like sign that the next transaction is in the offing-- something like a dramatic "resolution" of the pilot contract problem allowing the certificates to merge and "FINAL SUCCESS!" to be stamped firmly in the press on the US-HP merger and heralded as management genius coming at just the right time... then ride that good press to investors' funding a harvest of the next great batch of "synergies"... Chairman Doug convincing them that only he can be the one to "finish the job" at UA... yeee---hawwww

1. Anybody who gets two cracks at the BK apple can do what US is doing now financially.

The usual Cx4 spin aside, explain to me exactly how UA's longer trip through one BK is substantially different from US' trips? And UA is matching US' results how well exactly?


2. If UA goes "US," the combined franchise is in real trouble, since much of the revenue that UA brings in now (relative to other US airlines) is as a result of it being the remaining flag carrier to offer something approaching decent service (E+, PS, things like that). Kill that, and the entire UA operation probably tanks. Can you imagine how badly AA would crush UA in all the UA PS markets if UA's product went "US?"

... and yet all the premium revenue that UA brings in as a flag carrier translates to bottom line results how exactly? Even in their recent profitable quarter they STILL didn't clear US' (declining) margin. The market result is pretty clear, at least in the domestic US - premium services that are largegly comped or sold at a loss are NOT money makers. Heck, look at AA - they abandoned MRTC when it was clear folks wouldn't pay for it. I'd suspect UA doesn't gain much of a premium for E+ either in terms of fares paid on the average.

On the "what would I rather fly" front, I'd definitely prefer a UA-style product and FFP. From a financial performance standpoint, there's just NO WAY UA's results hold a candle to US' financially. I just don't see Wall Street supporting a UA-US merger retaining UA management.

I'm not terribly concerned about labor. The way union contracts are setup the East pilots have about as good a deal as they'll get anytime soon - they gambled, lost, and are going to wind up losing more if they keep it up. Who would put it past Tempe to pull a fast one and start moving assets from east to west?

As far as planes and cost - you can't have it both ways. Either the fleet gets old and maintainance costs go up or you buy new planes and lease/financing costs go up. Eventually that becomes a zero-sum game and I'll bet Tempe will push it right to that limit. Further, aren't the vast majority of East's A32x's of late 90s/early 2000's vintage?

I'd love to be the one saying "see we're right - the sky is falling", but I just can't. US is amoung the most profitable and recognizes and does business as though their product is nothing more than a commodity. We're kidding ourselves to think that it's anything else. The best we can hope for is that they stop making new promises and instead focus on executing the ones they've already botched. (ie redoing Envoy, upgrade systems that work, improved food offerings, etc)

The usual Cx4 spin aside, explain to me exactly how UA's longer trip through one BK is substantially different from US' trips? And UA is matching US' results how well exactly?



... and yet all the premium revenue that UA brings in as a flag carrier translates to bottom line results how exactly? Even in their recent profitable quarter they STILL didn't clear US' (declining) margin. The market result is pretty clear, at least in the domestic US - premium services that are largegly comped or sold at a loss are NOT money makers. Heck, look at AA - they abandoned MRTC when it was clear folks wouldn't pay for it. I'd suspect UA doesn't gain much of a premium for E+ either in terms of fares paid on the average.

On the "what would I rather fly" front, I'd definitely prefer a UA-style product and FFP. From a financial performance standpoint, there's just NO WAY UA's results hold a candle to US' financially. I just don't see Wall Street supporting a UA-US merger retaining UA management.

I'm not terribly concerned about labor. The way union contracts are setup the East pilots have about as good a deal as they'll get anytime soon - they gambled, lost, and are going to wind up losing more if they keep it up. Who would put it past Tempe to pull a fast one and start moving assets from east to west?

As far as planes and cost - you can't have it both ways. Either the fleet gets old and maintainance costs go up or you buy new planes and lease/financing costs go up. Eventually that becomes a zero-sum game and I'll bet Tempe will push it right to that limit. Further, aren't the vast majority of East's A32x's of late 90s/early 2000's vintage?

I'd love to be the one saying "see we're right - the sky is falling", but I just can't. US is amoung the most profitable and recognizes and does business as though their product is nothing more than a commodity. We're kidding ourselves to think that it's anything else. The best we can hope for is that they stop making new promises and instead focus on executing the ones they've already botched. (ie redoing Envoy, upgrade systems that work, improved food offerings, etc)

US starts taking delivery of new A320 family planes in late 2008 as far as I know, which will be replacing 737s first, and then the very oldest of A320 family planes which US Airways was the American launch customer for back around 1990. They start taking possession of the new A330-200s, which are smaller than the A330-300s that they have now, in 2009, and which will probably supplement the current fleet, and they will probably fly the 767s until 2013 or 2014 when they take delivery of the A350s. However, their debt cost will be going sky high by 2009 or 2010, and so will their maintenance costs on the older planes that they will still be flying, such as the 757s, which will be about 14 years old by then. It is not a pretty picture for Dougie. I would not want to bet against a merger offer from him or to him in the next 18 months, if they don't have a meltdown on the transatlantic routes that they can't service now!

I buy their Premium Economy ticket and use AMEX reward points to upgrade to VS's Upper Class.



Can you do that and still credit the mileage to US? How many Amex reward points does it cost to upgrade from premium economy to Upper Class?

US starts taking delivery of new A320 family planes in late 2008 as far as I know, which will be replacing 737s first, and then the very oldest of A320 family planes which US Airways was the American launch customer for back around 1990. They start taking possession of the new A330-200s, which are smaller than the A330-300s that they have now, in 2009, and which will probably supplement the current fleet, and they will probably fly the 767s until 2013 or 2014 when they take delivery of the A350s. However, their debt cost will be going sky high by 2009 or 2010, and so will their maintenance costs on the older planes that they will still be flying, such as the 757s, which will be about 14 years old by then. It is not a pretty picture for Dougie. I would not want to bet against a merger offer from him or to him in the next 18 months, if they don't have a meltdown on the transatlantic routes that they can't service now!

US is currently taking delivery of A32x's on the West side of the operation (I assume as they're all NxxxAW. I believe the 2008 orders are the additional 321's. Further, the average age of the active 32x's is ~7-8 years with the oldest being of late 90s vintage per airfleets.net. (which may or may not be accurate).

As far as the additional widebodies, if they're put on profitable international flying, that's a net gain.

Further, maintainance costs on the whole will go down as the fleet gets younger with the exit of the 737's. I'm not sure where you get the 2009-10 "debt bomb" theory from - right now these guys are among the best credit risks in the industry (and, in turn, should have the lowest financing/lease costs) thanks to their strong balance sheet.

We've been reading on these boards that the sky is falling for the past two years (remember when the first combined quarter was profitable amidst a gloom and doom forecast?). It isn't. The industry in general is rough, and these guys are getting away with sub-par operational quality. It's baffling and I can only explain it by saying that it simply verifies that to the overwhelming majority of travelers airline travel is a commodity or that they have a basic assumtion that all airlines stink. (even though the reality is that some stink less than others... I don't think anyone would argue that UA, AA, or CO are exactly utopia either).

I can only explain it by saying that it simply verifies that to the overwhelming majority of travelers airline travel is a commodity or that they have a basic assumtion that all airlines stink. (even though the reality is that some stink less than others... I don't think anyone would argue that UA, AA, or CO are exactly utopia either).

I think you hit the nail on the head. People tend to universally think travel sucks. Only VFFs notice that US tends to suck the most - hence our apparent departure.

US thinks it can attain long term profitability by ditching business VFF travelers (it has basically stated so) in favor of people who don't realize that there is something better out there.

... and yet all the premium revenue that UA brings in as a flag carrier translates to bottom line results how exactly? Even in their recent profitable quarter they STILL didn't clear US' (declining) margin. The market result is pretty clear, at least in the domestic US - premium services that are largegly comped or sold at a loss are NOT money makers. Heck, look at AA - they abandoned MRTC when it was clear folks wouldn't pay for it. I'd suspect UA doesn't gain much of a premium for E+ either in terms of fares paid on the average.

On the "what would I rather fly" front, I'd definitely prefer a UA-style product and FFP. From a financial performance standpoint, there's just NO WAY UA's results hold a candle to US' financially. I just don't see Wall Street supporting a UA-US merger retaining UA management.


you're right; it would appear wall street's patience is exhausted with regard to UA's management team. they squeezed the last nickel out their labor groups in bankruptcy, but operationally they didn't get the costs where they need to be. they're still running five complete domestic hubs plus NRT, and all five of those hubs are under low fare carrier attack-- all of the other legacies retain at least two hubs of "fortress" character each. Doug could easily "sell" the financial crowd on shutting down IAD and DEN (and perhaps "focus citying" LAX) in favor of beefing up PHL and PHX...

The usual Cx4 spin aside, explain to me exactly how UA's longer trip through one BK is substantially different from US' trips? And UA is matching US' results how well exactly?....................

And

US is currently taking delivery of A32x's on the West side of the operation (I assume as they're all NxxxAW. I believe the 2008 orders are the additional 321's. Further, the average age of the active 32x's is ~7-8 years with the oldest being of late 90s vintage per airfleets.net. (which may or may not be accurate)........

As far as the additional widebodies, if they're put on profitable international flying, that's a net gain.
I'd love to be the one saying "see we're right - the sky is falling", but I just can't. US is amoung the most profitable and recognizes and does business as though their product is nothing more than a commodity. We're kidding ourselves to think that it's anything else. The best we can hope for is that they stop making new promises and instead focus on executing the ones they've already botched. (ie redoing Envoy, upgrade systems that work, improved food offerings, etc)

The only Factual posts in this Thread. Note how the vast majority of the offerings here typically present their SPIN as "here is my personal bashing position with little (usually slanted), or no proof - let the reader refute or accept it". It's really getting old and transparent. I like the one especially which presumes US is the only airline which can expect a revenue/profit downturn during the Winter travel season.
By the way, US is scheduled to receive 10, not 9 332s starting in 2009 - several of which could be converted to 340 early deliveries for China if a 2nd source cannot be located. Anyone remember not so long ago when you could replace US with CO in most if not all of these gloom and doom predictions?

Doug could easily "sell" the financial crowd on shutting down IAD and DEN (and perhaps "focus citying" LAX) in favor of beefing up PHL and PHX...

Oy, vey....Can you imagine forcing any more international flights (or any more flights at all) through PHL??

As far as Virgin Atlantic buying US Airways, that could never happen, because Richard Branson would have to divest himself of control and a heck of a lot of stock in Virgin Atlantic because of American laws regarding ownership of American "flagged" carriers, and there is no way that he would do that. Branson had to reduce his ownership of Virgin America to 24.9%, resign as an officer, and as a board member, in order for Virgin America to get an operating certificate. Wonderful wishful thinking for a Virgin takeover, but never gonna happen! :(


Your response to SS25 isn't completely correct. There is no reason why VX couldn't buy US at this moment. As far as the govt is concerned, VX is an independent US based carrier and is as free to purchase another airline as AA, UA, CO, etc.

So the possibility of US ending up as a part of the Virgin Group via VX remains. *A membership most likely wouldn't continue.

It is interesting that you mention "Virgin" (in general). I am sure that this is not news to many, but I just recently realized (AFTER I paid for a US Airways ticket round trip to Europe and upgraded to Envoy) that US Airways DM members can buy Virgin Atlantic tickets and earn US Airways DM towards their tiers. Isn't that a kick? I love it, pay money for great, legendary service, instead of lousy service, and still get credit towards renewing Gold, Plat, or CP!

As far as Virgin Atlantic buying US Airways, that could never happen, because Richard Branson would have to divest himself of control and a heck of a lot of stock in Virgin Atlantic because of American laws regarding ownership of American "flagged" carriers, and there is no way that he would do that. Branson had to reduce his ownership of Virgin America to 24.9%, resign as an officer, and as a board member, in order for Virgin America to get an operating certificate. Wonderful wishful thinking for a Virgin takeover, but never gonna happen! :(

Your response to SS25 isn't completely correct. There is no reason why VX couldn't buy US at this moment. As far as the govt is concerned, VX is an independent US based carrier and is as free to purchase another airline as AA, UA, CO, etc.

So the possibility of US ending up as a part of the Virgin Group via VX remains. *A membership most likely wouldn't continue.

I said that Virgin ATLANTIC could not possibly buy US because of the foreign ownership rule, I did not say that Virgin America could not buy US. However, it took more than THREE years for Virgin America to gain approval because of the other US legacy carriers trying to tie them up, how far do you think that the US legacy carriers would go if any part of Virgin tried to sink its' teeth into any part of another US legacy carrier? First, it would be transparent and/or at least argued vociferously that it was coming from Branson and second, it would be tied up in hearings and the courts for at least twice as long!

Below excerpted from Wikipedia - http://en.wikipedia.org/wiki/Virgin_America :

Virgin then proposed that the airline be restructured, with the voting shares held by a trust approved by the DOT, and with only two Virgin Group directors on the eight-person board. In addition to removing the Virgin Group's veto and consent rights, Virgin America said that it would consider removing Richard Branson from the board, and possibly even dropping the "Virgin" brand entirely. The company was also prepared to remove CEO Fred Reid "should the DOT (US Department of Transportation) find that necessary."

On March 20, 2007, The U.S. DOT tentatively cleared Virgin America to fly. However in order to get full permission Virgin America must still change its business structure by enacting several reforms specified by the DOT, these include replacing Fred Reid as CEO and limiting the influence of Virgin Group over Virgin America's operations. Virgin America is attempting to get the DOT to reverse its demand that Fred Reid be fired, but is ready to implement the rest of the changes. A speech given by Branson at the end of the airline's inaugural flight, however, revealed that Reid was legally unable to retain his position as CEO of Virgin America.

On May 18, 2007, The U.S. DOT granted final approval for Virgin America to begin operations. The airline conformed with all conditions specified from the tentative approval on March 20, 2007. However, CEO Fred Reid will only be allowed to retain his position until six months after the airline certification. The airline is still planning a mid-summer launch.

On July 11, 2007, The U.S. DOT granted approval for Virgin America to sell tickets in advance of their launch. The airline began selling tickets on July 19, 2007.

The airline made its inaugural SFO/JFK flight on August 8, 2007, as well as its SFO/LAX flight. Its inaugural LAX/JFK flight was on August 29, 2007.


Support and opposition
During the debate process, there were many supporters of both sides of the debate. City and state representatives led the support for the airline. Arguments by California Governor Arnold Schwarzenegger and San Francisco Mayor Gavin Newsom included that Virgin America would create jobs and have other economic benefits for the San Francisco Bay Area.

The biggest opposition came from the Air Line Pilots Association (a national aviation labor union) and U.S.-based "legacy" airlines (led by Houston-based Continental Airlines). The review of Virgin America's DOT certificate application was prolonged because of this opposition. The opponents' strategy was to try to block or delay approval by claiming that Virgin America will not be under U.S. ownership or control. By filing motions that Virgin America's responses to inquiry were not sufficient to prove that the airline is a "U.S. citizen," the application opponents urged the DOT to require Virgin America to produce additional documentation.

US is currently taking delivery of A32x's on the West side of the operation (I assume as they're all NxxxAW. I believe the 2008 orders are the additional 321's. Further, the average age of the active 32x's is ~7-8 years with the oldest being of late 90s vintage per airfleets.net. (which may or may not be accurate).

As far as the additional widebodies, if they're put on profitable international flying, that's a net gain.

Further, maintainance costs on the whole will go down as the fleet gets younger with the exit of the 737's. I'm not sure where you get the 2009-10 "debt bomb" theory from - right now these guys are among the best credit risks in the industry (and, in turn, should have the lowest financing/lease costs) thanks to their strong balance sheet.

We've been reading on these boards that the sky is falling for the past two years (remember when the first combined quarter was profitable amidst a gloom and doom forecast?). It isn't. The industry in general is rough, and these guys are getting away with sub-par operational quality. It's baffling and I can only explain it by saying that it simply verifies that to the overwhelming majority of travelers airline travel is a commodity or that they have a basic assumtion that all airlines stink. (even though the reality is that some stink less than others... I don't think anyone would argue that UA, AA, or CO are exactly utopia either).

There are no current (2007) deliveries on any 320 family aircraft (319, 320, and 321) as far as I know, and I have checked into it. New deliveries begin again in 2008, and if you wish, I can document it. The information on airfleets.net is incorrect and if you dig two levels deeper on their own site, you will see that the average ages are incorrect because all of the Airbus planes have been reregistered from HP to US, pending the combined operating certificate, which will be effective this month. The reason that I always knew this to be true is that whenever I walk on an airplane, I have made a habit of turning around and looking at the registrations over the boarding door. I have seen 320 family aircraft with entry into service dates as early as 1990, and I see them regularly. Here is an example of one of those registration histories (chosen at random) from airfleets.net:
http://www.airfleets.net/ficheapp/plane-a320-91.htm
General information
Serial number 91
Type 320-231
First flight date 13/11/1989
Test registration F-WWDH

History of the aircraft
Delivery Operator Registration Remark
Date
09/02/1990 GPA N914GP N914BN Ntu by Braniff
28/09/1991 America West Airlines N634AW
01/10/2006 US Airways N634AW

****NOTICE, This plane is already 18 years old, and was originally ordered by BRANIFF!!!!!!

Just for kicks, to make sure I was not just cherry picking, a second picked at random from airfleets.net :
http://www.airfleets.net/ficheapp/plane-a320-317.htm
General information
Serial number 317
Type 320-231
First flight date 27/03/1992
Test registration F-WWBD

History of the aircraft
Delivery Operator Registration Remark
Date
16/09/1992 Leisure Air N317RX lsd from Orix
21/04/1995 Midway Airlines N300ML
16/05/1996 America West Airlines N644AW
16/04/2006 US Airways N644AW


****NOTICE, This plane is already 15 years old, and was originally ordered by Orix, a leasing company, and leased to Leisure Air, then sold to Midway, then bought out of BK by America West in 1996, then reregistered to US Airways in 2006!

The average age of the US fleet is MUCH older than it seems to be, and I do mean MUCH older. Many of the 737s, 757s, and some of the 767s are over 20 years old!

The "debt bomb" as it is being referred to has to do with replacing dozens of paid for planes with dozens of unpaid for planes, and taking an almost debt free balance sheet to a balance sheet with literally a couple of billion of debt within an 18-24 month period between 2008 and 2010 with delivery of many 320 family aircraft and several 330-200 aircraft of the 10 ordered (not 9, yes, I was mistaken on that point, I was in the wrong column), plus refurbishing all 10 767s as well as several more 757s adding Envoy, on the CO model for medium/long haul for more transatlantic as well as Hawaii trips.

The usual Cx4 spin aside, explain to me exactly how UA's longer trip through one BK is substantially different from US' trips?

What's the spin, exactly (score two for the logical fallacies of McFlyPHL--Ad Hominem (http://www.csun.edu/~dgw61315/fallacies.html#Argumentum%20ad%20hominem) and the red herring (http://www.csun.edu/~dgw61315/fallacies.html#Red%20herring))?

I will repeat--anyone can replicate that kind of financial performance with two cracks the the BK apple. One can reduce one's labor costs in a way that's only possible in bankruptcy, one can reduce one's lease costs, one can selectively dump leases and contracts.

Since we are all about the logical fallacies, answer this quasi-complex question (http://www.csun.edu/~dgw61315/fallacies.html#Complex%20question) for me: is it your contention that the financial performance of US has to do with what Parker has done for US after the merger, or due to the higher-revenue and suddenly cost-slaughtered East side of the house?

The correct answer (another fallacy here, but who is counting?) is the bankruptcy lawyers took a high-revenue and high cost operation on the east side and drove the cost down in a way that's only possible in bankruptcy.

Another red herring for you: why do you think Parker would not touch Delta after it emerged? It's because he can't actually run the business, so he's got to get the court to do what he can't do.

... and yet all the premium revenue that UA brings in as a flag carrier translates to bottom line results how exactly? Even in their recent profitable quarter they STILL didn't clear US' (declining) margin.

They only had one bankruptcy, and they did not beat their employees (particularly the pilots) as hard as US did.

The market result is pretty clear, at least in the domestic US - premium services that are largegly comped or sold at a loss are NOT money makers.

And true premium service internationally, there is a premium to be extracted. I'd stipulate that while UA would lose to just about any of the truly premium foreign flag carriers, they are probably able to extract a premium either by market (their China routes, the London Routes, Australia, etc) or by virtue of the fact that they do offer a better experience, notably in coach.

Heck, look at AA - they abandoned MRTC when it was clear folks wouldn't pay for it. I'd suspect UA doesn't gain much of a premium for E+ either in terms of fares paid on the average.

(that's a non sequitur (http://www.csun.edu/~dgw61315/fallacies.html#Non%20sequitur) for those keeping score.)

The fallacy there stands for itself--AA removes MRTC does not beget that UA does not gain much of a premium for E+.

On the "what would I rather fly" front, I'd definitely prefer a UA-style product and FFP. From a financial performance standpoint, there's just NO WAY UA's results hold a candle to US' financially. I just don't see Wall Street supporting a UA-US merger retaining UA management.

And I don't see them tanking the larger franchise, that is arguably worth more if either run properly or run without artificial interference.

I'm not terribly concerned about labor. The way union contracts are setup the East pilots have about as good a deal as they'll get anytime soon - they gambled, lost, and are going to wind up losing more if they keep it up. Who would put it past Tempe to pull a fast one and start moving assets from east to west?

The East pilots actually have an opportunity to extract a rather large chunk of Doug's backside. That they are too shortsighted to do so is another matter. Tempe cannot easily (and I stress easily) move assets West. The transition agreement with ALPA goes way out of it's way to keep that from happening.

I'd love to be the one saying "see we're right - the sky is falling", but I just can't. US is amoung the most profitable and recognizes and does business as though their product is nothing more than a commodity. We're kidding ourselves to think that it's anything else. The best we can hope for is that they stop making new promises and instead focus on executing the ones they've already botched. (ie redoing Envoy, upgrade systems that work, improved food offerings, etc)

Or, enjoy the better offerings out there. That US is profitable has nothing at all to do with whether or not they view the product as a commodity. Nada.

That's 3 (blatantly intentional) logical fallacies for me and 3 for you. Either I don't spin or you can join me on the merry-go-round.

Oy, vey....Can you imagine forcing any more international flights (or any more flights at all) through PHL??

Kind of like stuffing a big fat pig through a garden hose!

[QUOTE=USirritated;8395404The "debt bomb" as it is being referred to has to do with replacing dozens of paid for planes with dozens of unpaid for planes, and taking an almost debt free balance sheet to a balance sheet with literally a couple of billion of debt within an 18-24 month period between 2008 and 2010. [/QUOTE]

... or you could just lease them, but that's another story.

Increasing a debt load, to a point, doesn't change much depending on what the company's debt capacity is observed or believed to be.
These guys aren't operational geniuses, but I'd bet they're smart enough to know how much they can/should borrow.

What's the spin, exactly ... ?

The spin is simple - for umpteen months, we've heard "everything good is the result of two BKs, which is an opportunity nobody else got". Quite simply, that's not true and there's ZERO factual evidence to support that claim as a sole source of good results.


... is it your contention that the financial performance of US has to do with what Parker has done for US after the merger, or due to the higher-revenue and suddenly cost-slaughtered East side of the house?

...

They only had one bankruptcy, and they did not beat their employees (particularly the pilots) as hard as US did.

Of course, this would be a valid question had Parker simply left the East operation as-is. That didn't happen. East planes are flying more seats, with butts in them, and yields have performed relatively well. Just as UA had the opportunity to lower costs in BK for YEARS (and cumulatively, more time than US spent on two BKs), so did US - US simply did it more effectively than UA. Score one for management (or, if you like, lawyers, consultants, etc...)

Bankruptcy court isn't a magic cauldron that just pops out lowered costs, though from the simplification offered you'd think it was.


Another red herring for you: why do you think Parker would not touch Delta after it emerged? It's because he can't actually run the business, so he's got to get the court to do what he can't do.

... and it would have nothing to do with the ability to renegotiated leases, restructure fleets, etc with less penalty while under BK. Let's assume (and laughably) for a minute thar Parker knows exactly what he's doing and what needs to be done. The DL deal would "go" if the cost to structure the combined company is $X (under BK), but wouldn't go if it was $Y (out of BK). It seems pretty clear to me that they knew where the threshold was to make the deal good/bad and adjusted the offer until it was clear that the deal was a financially bad one.

And true premium service internationally, there is a premium to be extracted. I'd stipulate that while UA would lose to just about any of the truly premium foreign flag carriers, they are probably able to extract a premium either by market (their China routes, the London Routes, Australia, etc) or by virtue of the fact that they do offer a better experience, notably in coach.

... which means that with an already lower margin than US, even if we assume they command an int'l premium - the domestic ops are even worse for the bottom line (and by extension even less profitable than US')


The fallacy there stands for itself--AA removes MRTC does not beget that UA does not gain much of a premium for E+.

Or, stated another way, offering E+ didn't gain UA a revenue premium, hence they decided to start charging for it. AA pretty clearly stated WHY they removed MRTC, UA took actions that imply a similar problem with E+. (without the actual internal numbers we could debate this ad infinitem, though)


And I don't see them tanking the larger franchise, that is arguably worth more if either run properly or run without artificial interference.


.... yes because when financially motivated players merge two enterprises they always model the combined operation on the LESS profitable model.


The East pilots actually have an opportunity to extract a rather large chunk of Doug's backside. That they are too shortsighted to do so is another matter. Tempe cannot easily (and I stress easily) move assets West. The transition agreement with ALPA goes way out of it's way to keep that from happening.

Since when have they held to the agreements? (though they should). I'm curious what cards, exactly, you think the pilots are holding? The notion of unofficial job action? Ask the AA pilots how that worked out for them.


Or, enjoy the better offerings out there. That US is profitable has nothing at all to do with whether or not they view the product as a commodity. Nada.

It has EVERYTHING to do with commoditized product. We'd call it a race for the bottom. The bottom is less expensive to provide, but folks view the price are basically the same. Because US cuts the things that they don't get a premium margin on (or increases the margin on things), they are profitable. They are able to do this because the comsumers (by and large) view all of the products as equally bad.

Either I don't spin or you can join me on the merry-go-round.

... or option 3, you just increased the speed of the spin machine. Take your pick.

Originally Posted by SS255
Oy, vey....Can you imagine forcing any more international flights (or any more flights at all) through PHL??

Kind of like stuffing a big fat pig through a garden hose!

Since most international departures leave PHL after 1900, it is not as much of a big deal as you would think, since flight volume/traffic has tapered off by then in comparison to the busier 700 - 1900 period of each 24 hour cycle. Of course an international departure after 1900 would also mean a corresponding arrival before 1600, but that is not as big of a burden as you would think, because some of the international gates at PHL only get used for one departure and one arrival per 24 hour cycle, and can certainly handle more than that. However, the ATC's and the runway loads might be another matter, depending on the time of day.

... or you could just lease them, but that's another story.

Increasing a debt load, to a point, doesn't change much depending on what the company's debt capacity is observed or believed to be.
These guys aren't operational geniuses, but I'd bet they're smart enough to know how much they can/should borrow.

Assuming that Dougie can manage a whole pile of new debt, and cash flow, and recalculate EBITDA{D} (with the last {D} being a whole big pile of airplane debt, plus maintenance on the old planes that he is still keeping (A320s that will be 20 years old by then, 757s that will be 25 years old plus by then, and 767s that will be 15-22 years old by then, assuming that all of the 737s will be gone {which is a big assumption}) is a huge assumption that I do not believe Dougie will survive to Wall Street's or shareholder's satisfaction. But who TRULY knows? It will take two to three years to find that out, if he does not get arrested for DUI again before then!

I have to agree with McFly here. Say what you will about Doug's atrocious operational performance, but he knows how to run a profitable domestic operation. United doesn't seem to be able to do as well on this front. If US post-merger rationalizes the hubs a bit and shifts to more mainline, it could be very profitable.

A merger between US and United would work well this way:

Domestic:

1) Keep the United first class product and spread throughout the fleet.

2) Keep the US domestic coach product and spread throughout the fleet (i.e. no more Economy Plus).

3) Increase first class seats in US planes, slightly decrease them in United's fleet.

4) Move RJs and small props out of Philadelphia and replace with mainline.

International:

1) Move United's international ops at IAD to PHL, and push more traffic through Philly (this can be done if the turboprops to Altoona and other such destinations are moved from PHL to IAD. IAD has more competition.

2) Envoy nuked, replaced with United business and first class.

3) Start growing at Heathrow again instead of shrinking.

4) Add new international service out of Boston -- perhaps make Boston a new "mini hub" with connections, etc.

5) Reduce LAX to focus city (Delta is planning a hub here and US cannot compete). Reduce LAS to focus city. Grow PHX to principal western hub complete with Asia, Europe and South America flights. Make ORD the crown jewel of the new system. Grow Philly mainline and international, dramatically shrink regional jets there. Grow Boston to hub or near-hub status. Shrink IAD to focus-city status. Keep PIT about where it is. Close Denver hub (it's redundant and Frontier does a better job than Ted anyway).
Grow CLT to mega-hub status to take on DL at Atlanta (replete with lots of new international flights to Europe and South America -- where CLT is uniquely positioned geographically.

Overall:

1) Keep DM's mileage levels and "unlimited domestic upgrades" feature, while preserving United's "global services."

2) Come up with a new name for the new airline. United and US both have tons of baggage and loads of horror stories around their "storied monikers."

Since most international departures leave PHL after 1900, it is not as much of a big deal as you would think, since flight volume/traffic has tapered off by then in comparison to the busier 700 - 1900 period of each 24 hour cycle.

It seemed to be a big problem over the summer.

It seemed to be a big problem over the summer.

Mostly because of a combination of old equipment with maintenance issues (767s especially), the atrocious SHARES reservation system, and very high turnover in Philadelphia. None of those are insurmountable problems, if managed correctly.

The problem is, they weren't. Hence the Great Philadelphia Permanent Meltdown.

While I may wish they get taken over I along with others dont see it happening any time soon.

While I may wish they get taken over I along with others dont see it happening any time soon.

Here are a few environments that might precipitate a takeover: 1) Dougie gets one or two more DUI's; 2) a corporate raider, such as Carl Icahn or Kirk Kirkorian sees an undervalue in the stock and starts buying the stock, making the mismanagement public, or forcing a proxy fight, or forcing Dougie to step down, such as what happened with the founding CEO at JetBlue; 3) one or two of the outside board members, or major institutional shareholders takes a ride on Dougie's mismanaged little playtoy and has a really bad experience and it precipitates a "blow up" of some kind. Keep in mind, we really don't know what actually was the reason for Dougie to hire new COO Robert Isom. Was Dougie forced to hire COO Isom, or was it his idea? Take a look at the articles below!

http://www.usatoday.com/travel/columnist/brancatelli/2007-08-26-us-airways-europe_N.htm

from http://blogs.usatoday.com/sky/us_airways/index.html we have this......

US Airways may hire COO to help performance woes
US Airways is considering hiring a chief operations officer as the airline struggles with what Bloomberg News calls "the U.S. airline industry's worst service and on-time rankings." Bloomberg says adding a COO would be a reversal for US Airways, coming 11 months after the carrier had opted not to fill such a position. "We've been telling employees all summer long that we understand a chief operations officer is something we ought to consider doing," US Airways Andrea Rader tells Bloomberg. "It's beyond the ‘we think it's a nice idea' stage."

The position became vacant with the resignation of previous operations chief Al Crellin, with US Airways president Scott Kirby taking over his operations responsibilities. When it made that move last year, US Airways said Kirby would keep the duties "long term," according to Bloomberg. R.W. Mann & Co. consultant Robert Mann thinks revisiting that idea is a good move. "It 100% makes sense given the challenges they face," he tells Bloomberg. "There is a limited amount of time you can tick off customers to this degree and still be able to say, We'll fix it.' ... It's a big enough job to be a president and a chief of operations."

The spin is simple - for umpteen months, we've heard "everything good is the result of two BKs, which is an opportunity nobody else got". Quite simply, that's not true and there's ZERO factual evidence to support that claim as a sole source of good results.

Sure there is. Nothing was done.

US was making money after making zero structural changes. That lasted, in essence, until Dougweiser started stuffing seats into the planes and had the abortion of a reservation migration.

And yes, bankruptcy court is (or was, before the law changed) a magic solution for US--it did for Dougie what he can't--lower costs in a structurally significant way.

And now for the dirty little secret--America West never made the kind of money it makes after the merger with US. The big money is coming from the east--and has been since the money started rolling in. That is entirely due to the cost-cuts imposed by the bankruptcy court. (that DoUgIe would not touch DL after emergence is the icing on the cake).

Sure there is. Nothing was done.

US was making money after making zero structural changes. That lasted, in essence, until Dougweiser started stuffing seats into the planes and had the abortion of a reservation migration.

And yes, bankruptcy court is (or was, before the law changed) a magic solution for US--it did for Dougie what he can't--lower costs in a structurally significant way.

And now for the dirty little secret--America West never made the kind of money it makes after the merger with US. The big money is coming from the east--and has been since the money started rolling in. That is entirely due to the cost-cuts imposed by the bankruptcy court. (that DoUgIe would not touch DL after emergence is the icing on the cake).

To be even more accurate about WHERE IN THE EAST that the big money is coming from, it is the transatlantic routes, and the shuttle consistently, and much less so from the regular domestic route structure.

Sure there is. Nothing was done.


... except for the reconfiguration of planes to fit the seats sold, a moderate realignment of fare structures, fairly dramatic international expansion, adding programs that generate revenue (like GoFirst, for example). Not all of the changes are good for the "V"FF, but they clearly have been from the bottom line. But why let decent management decisions impact the "company line" we've been reading about for all these months.

There's also the entire notion of missing the data from any internal accounting. Unless you know how things are charged between east and west, you cna't make statements about where profit is coming from that are iron clad. For example, if terminal space is consolidated - how does it get charged or accounted for between what are effectively wholly owned subsidiaries? Or how does the ramp up in the domestic call centers out west flow to the income statement? There's a number of those types of questions that could be asked that there's no way to answer without inside information.

1) Dougie gets one or two more DUI's
2) a corporate raider, such as Carl Icahn or Kirk Kirkorian sees an undervalue in the stock and starts buying the stock, making the mismanagement public, or forcing a proxy fight, or forcing Dougie to step down, such as what happened with the founding CEO at JetBlue
3) one or two of the outside board members, or major institutional shareholders takes a ride on Dougie's mismanaged little playtoy and has a really bad experience and it precipitates a "blow up" of some kind.
4)Keep in mind, we really don't know what actually was the reason for Dougie to hire new COO Robert Isom. Was Dougie forced to hire COO Isom, or was it his idea? ."

Note: formating and making 4) separate are mine.

1) No way. Why would WALL STREET - you know, the guys who bankroll takeovers - care? Historically they don't care too much about that kind of thing unless it impacts results.
2) Why would a raider buy a company that can barely cover it's expected debt load? The cost of the money to do those types of deals is moving higher and the margins in the airline business are shrinking every day. These guys are a lot of things, but not stupid. That said, if they were going to grab one, US would be among the best candidates thanks to the strong balance sheet management has maintained.
3) Oh, yes.... folks who made lots of money in a venture that continues to be profitable are going to move toward a merger because they don't like that the product has become something they personally wouldn't buy. Do you also think that investors in Wal-Mart will shake it up just because they personally wouldn't shop there? US sells a commoditized product - it's not high end and investors know that.
4) ... and we could never ever explore the possibility that the management team made a good management decision by brining in the new COO, could we?

Assuming that Dougie can manage a whole pile of new debt, and cash flow, and recalculate EBITDA{D} (with the last {D} being a whole big pile of airplane debt, plus maintenance on the old planes that he is still keeping (A320s that will be 20 years old by then

.... the "I" in EBITDA is interest dontcha know. That's also known as the cost of debt in some circles. Maint costs and the like are operating expenses that are already in the EBITDA. If you mean to imply that management would somehow manipulate earnings, get an auditor to sign off on them, and then get caught Enron-style, that's quite a stretch of logic.

oh... and the A32xs are an average of 8ish years old now... how again will the be 20 years old (excepting the few older ones) in a couple of years?

To be even more accurate about WHERE IN THE EAST that the big money is coming from, it is the transatlantic routes, and the shuttle consistently, and much less so from the regular domestic route structure.

The same TA routes that are supposedly examples of poor management decisions? They make money? Shock.

... or there's the shuttle, where loads have been off thanks to competition from other, more reliable airlines and Acela? Right.... :rolleyes:

... or there's the shuttle, where loads have been off thanks to competition from other, more reliable airlines and Acela? Right.... :rolleyes:

I flew the shuttle LGA-DCA a few times this week and I have to say I was impressed. Not because it was a top of the line, luxurious flight, but for US, it was very good. I took the 10 am flight and was at LGA by 9 (I came straight from home, not the office, so it was about a 30 minute drive and I wasn't driving). The LGA terminal is pretty nice; I've never been on that side before, but it's miles better than the express side. They should have more mainline out of there. The staff at LGA look very professional. They have the Wall Street Journal, Financial Times and some magazines I usually don't read but aren't bad. The flights were mostly full. There was a CNBC anchor in F on one of the flights (I won't say who since I don't know if it's good form). There was a beverage service. We were usually 1 or 2 for departure and we were quick into DCA. I had no checked bags since I was returning at night and walked straight over to the Metro.

On the way back for the 8 pm shuttle, I took the Metro to DCA, which leaves you right at the US gates. There's a separate shuttle line, and I arrived just before boarding. The plane touched down right around 9, and I was outside waiting for a car by 9:15.

There is no way I could've done that with Acela. I'd have to be at NYP 30 minutes ahead and then take at least a 3 hour ride into Union Station. No way I'd do that roundtrip.

There is no way I could've done that with Acela. I'd have to be at NYP 30 minutes ahead and then take at least a 3 hour ride into Union Station. No way I'd do that roundtrip.

You can pretty much walk right up as the train departs, swipe a credit card, and presto you're on Acela. The F service is quite nice and reasonably priced - less than coach on the Shuttle before you factor in discounts on many trips. It's 2:45 for the Washington-NYC run, which generally runs on time and isn't subject to ATC delays.

On top of that, I can bill every minute I'm on Acela because my phone and wireless internet card work the entire trip and there are standard plugs.

It's a wash on time when you factor in early airport arrivals and the trip into Manhattan - assuming the Shuttle runs on time, which is sometimes an issue. it's chocolate/vanilla no doubt, but the competition is surely eating into yields - that's why you see connecting flights with shuttle segments priced as low as they are.

There is no way I could've done that with Acela. I'd have to be at NYP 30 minutes ahead and then take at least a 3 hour ride into Union Station. No way I'd do that roundtrip.

For me there is no question that NYC to DC Acela is FAR preferable than the shuttle. Assuming a Manhattan origin or destination there is no comparison for me. Cell service and internet are the cherries on top. Ditto for NYC-PHL, Baltimore and coastal CT.