United & Denver Reach Deal to Keep DEN a UA Hub Through 2035 (per DEN Biz Journal)
Aug 19, 2014, 11:39 am
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United & Denver Reach Deal to Keep DEN a UA Hub Through 2035 (per DEN Biz Journal)
United Airlines and DIA reach deal to keep Denver a hub through 2035:
http://www.bizjournals.com/denver/bl...t&t=1408469873
http://www.bizjournals.com/denver/bl...t&t=1408469873
Aug 19, 2014, 11:41 am
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Didn't CLE have a similar deal at one point? UA walked when the numbers said it made more sense to buy out the deal than fly the planes. :-:
The story also stops short of identifying just what it means to be "keeping a hub" there or what the "non-gate facilities" are which UA will be reducing at the facility.
The story also stops short of identifying just what it means to be "keeping a hub" there or what the "non-gate facilities" are which UA will be reducing at the facility.
Aug 19, 2014, 11:49 am
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Maybe there's more here than meets the eye of the Denver Business Journal, but the "deal" sounds perfectly meaningless. There's no quantitative definition of "hub," and no sign that this is any different from the assurances CLE received around merger-announcement time about UA's future there.
In any event an ironclad 21-year deal is impossible to make; who knows if UA will still be around by then, or what its network will look like if is.
This looks like a long-term gate lease deal with embedded options for UA to assign the obligation in the event of hardship, merger, strategy change, etc. Nothing more.
In any event an ironclad 21-year deal is impossible to make; who knows if UA will still be around by then, or what its network will look like if is.
This looks like a long-term gate lease deal with embedded options for UA to assign the obligation in the event of hardship, merger, strategy change, etc. Nothing more.
Aug 19, 2014, 12:05 pm
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DEN is needed in the United Network. Example, GEG, from ORD, IAH, EWR you need to go thru DEN. I'm surprised Boise get's nonstop mainline but GEG get's nothing from ORD.. Add, GEG to the routes that UA should fly from ORD..
Aug 19, 2014, 12:20 pm
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There are a lot of cities in the west which aren't easily served from ORD or SFO for various reasons and thus where it doesn't make sense to connect anywhere but DEN. Of course, UA could just discontinue service to all of them...
Aug 19, 2014, 12:41 pm
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Aug 19, 2014, 12:55 pm
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If DIA is planning on restructuring its bond debt, it looks like they are going for a 20-year bond deal that will match duration with the 20+year lease term. Rates are relatively good now for this sort of product, and this probably allows DIA to take the principal balance remaining on the original deal and slow down the amortization a bit...in exchange for which UAL reduces its rent payments.
Win-win...
Win-win...
Aug 19, 2014, 1:00 pm
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Nobody can say what UA network flow will look like five years from now, never mind 10 or 20. 20 years ago I would never have predicted UA evacuating the northwest US. 10 years from now they may decide it's most prudent to shrivel back to fortresses SFO/EWR/IAH and abdicate everywhere else. Who knows?
Aug 19, 2014, 1:10 pm
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ummm...
how did they evacuate the Northwest exactly? They've always flown to their hubs from SEA and PDX, with the oddball flight to JFK (that was 10+ years ago) and very recently to ANC as a tag from IAH. NRT was a flight to a hub, a hub that's being reduced as they increase service nonstop and fly over NRT to Asia. They found a partner to serve it, and they share revenue with the partner. The UA Express flying? All at risk flying by SkyWest, which SkyWest has chosen to get rid of as it gets out of the EMB-120 flying. I don't think UA is doing anything markedly different in the NW than they did before - Just flying to their hubs. This hyperbole gets a little ridiculous sometimes on this forum...
Nobody can say what UA network flow will look like five years from now, never mind 10 or 20. 20 years ago I would never have predicted UA evacuating the northwest US. 10 years from now they may decide it's most prudent to shrivel back to fortresses SFO/EWR/IAH and abdicate everywhere else. Who knows?
Aug 19, 2014, 1:14 pm
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I'm guessing any bankruptcy would allow UA to get out of this with no strings attached. Not trying to be fatalistic and say that will happen, but airlines (including UA if past history Is any indication) seem to run on a regular cycle of this over 15-20 years.