CO's level of "connectivity" within SkyTeam is small enough to allow the airline to leave without anyone (save NW and KL) noticing - CO has not sought to join the SkyTeam antitrust arrangements, and most of its strengths within the alliance are largely duplicative with DL anyways.

I disagree somewhat - cutting costs is important, but boosting the other side of the equation -- revenues -- is just as important at this stage, and both carriers offer products that cannot reasonably entice passengers to choose them when the pax have a choice of airlines (to say nothing of trying to get them to pay *more* to fly your airline). Heck, DL and NW domestic fliers should ask for a *discount* on their tickets if B6 is an option on a given route.

The avg american consumer cares about the dollar amount. It takes less than a dollar tyo sway a sale many times.

If NWA and DL can cut labor costs and lease rates, then couple that with cheap fares, one say it would bring them (perhaps for NWA more than DL) close to profiability.

B6 isn't much of an option many times, they are JFK based - and thats not a big deal for NWA, but more so for DL - which they have already combated by putting Song on many ex JFK routes.

Interesting ,I am sure DL is going to be able to wipe out some of the cost associated with the retrofitting of the 757s for Song... :eek:

-Vincent

Why do you suspect that? The international routes are profitable, and the merged airline is keeping the US name because it has more international recognition and sounds less regional. They're not going to fly A330s and A350s to the carribean.

Theres a good chance that those soon to be launched 350s won't ever wear a USAir livery, if Southwest keeps taking marketshare from US's east coast cities :D Having flown US to ART 3 times now (one more time and I'm finally done), I find US to be sorry excuse for an airline. Their first class is a joke compared to CO or NW. I suppose they got the last laugh be downgrading the longest segments I have in my remaining trip to a CRJ :rolleyes: :mad: If there are airlines that deserves to bite the dust, it'd be USAir, FlyI and JetBlue :D I know, JetBlue will probably stick around, but I can wish right?

That's mostly because US was run by idiots. HP has proven that they can compete effectively, expand, and profit against WN. How many airlines can say that?

My 2 Cents
 

Team,

Great Information in the notes above. A couple of items that we do know are as follows:

1. Gordon is not silent about reviewing UA's potential w/exCEO and contemplating making a go of turning UA around. Does that include a merger with CO? (Maybe/Maybe Not) Does Gordon want this challenge?

2. Gordon has rolled his eyes several times when Tilton's name has been mentioned. I think that says a lot.

3. UA's international routes are incredible. This is a prize that if used correctly can create a financial powerhouse of an airline.

4. CO would have to buy UA due to the agreement with NWA. The desire would be to maintain the UA name and drop CO. The details of how all this would work is fairly complicated. NWA still maintains the right of first refusal on CO.

Speculation

1. Delta is just dead. Their attempt with Song was a great idea but poorly executed. There is just nothing positive I can say about them. The entire company needs an overhaul. I would love to see Gordon go into Delta. He has done some magic but this would require a miracle worker.

2. UA and CO will merge. I just think it makes a lot of sense.

3. AA will stand alone. The benefit of NWA with AA would be minimal.

4. US/HP is going to be big winners here. I believe they will be a LCC but will starting picking and choosing routes being sold by NWA and Delta.

5. After Delta and NWA finish their culling, you will see a merger of the bones. They will maintain their international routes and the money making regional routes plus a ton of codes share agreements with several LCC. This will benefit all parties and make a nice route map.

6. Southwest - hummmm The speculation is how they will continue to grow. They have it correct on how to run an airline. I am guessing they will start working on some additional code share routes to international locations.

Finally, does anyone know which US airline has the rights to the routes to Cuba if the US government dropped the sanctions? I read an article about Cuba being the next Hawaii in the year 2010.

I'm no lawyer, but my understanding of bankruptcy reorganization is that the court is given very broad latitude in facilitating the restructuring plan. I would not be at all surprised, therefore, to learn that a bankruptcy judge could easily scuttle that provision as part of a reemergence plan, especially if the first-refusal agreement posed some antitrust problems (which, in a shrinking industry, it may increasingly do). Is there a lawyer around with bankruptcy knowledge who could weigh in on this query? Sorry, BTW, this is not billable. :)

Isn't this "right of refusal" tied to an equity ownership that CO has in NW? If that is the case if equity is slahsed to ZERO by the courts wouldn't the underlying terms also be axed?

In reference to speculation #1 above internal reports show that SONG on its own IS a profit center for the airline as a whole. DL has made blunders over the years. One of their bigest problems was that they were WAY cash rich pre 9/11 and had to burn through and then leverage their fleet to stay a float. Factor in also the astronomical cost of fuel today and it is a receipe for where they are today.

All here have to remember the dier striaghts that CO was in TWICE going to BK and look at the company today. Yes the landscape is different but with the right management and today DL's management team, which is new to the helm in respect to how they got to where they are today is poised to maybe make this work.

Their communications have been very open from the time the walked up to the filing window yesterday. They have a comprehensive website up and emails to their customers. They are not just laying down and playing dead. They are in it for the long haul and if they can do what UA did with pensions etc they can do it.

Lets see what they lay out in the next 90 days for the overhaul plan. That will tell the story of whether it can or can not be done.

Considering that the codeshare between US/UA is working well for both airlines, and that AC is heavily invested in the new HP/US merger, doubtful UA will kick 'em out of *A.

United stands to lose significant revenue from the enlarged US Airways, as East-West domestic traffic that hitherto connected onto United codeshares remains in house.