bocastephen

I think the CO brand is certainly recognized globally as 'best in breed' for American carriers. Does every Tom, Juan, Chen and Toshi know this? No - but that is where the opportunity is.

The problem is NO American carrier can compete with the world's great flag carriers - there hasn't been a level playing field in that regard for decades. I would never suggest that CO can compare products with, say, SQ - that is just silly.

entropy

WEll, if you need to pick up some power converters, why not fly ANA?

channa

You just explained why they should keep the UA name. If there's no way they can be as good as the foreign carriers, they're essentially not competing on service quality in foreign markets. So where's that put you in terms of name recognition. It would be foolish to keep an unknown name and spending a ton of money to market it when people are already aware the other guy exists.

pbarnette

Then what difference does it make if UA has a negative reputation? I'm not sure what you are leaving CO to compete on, other than price. And if they are competing on price, then what difference does the reputation make? Once you are second-tier, you are second-tier.

I'm a little more pessimistic about how well (or at least how quickly) marketing can work. At least in Europe, I feel there is a great deal of inertia and the flag carriers enjoy a bigger reputational advantage than might otherwise be expected.

TechBoy

So basically you want to keep most of UA, including all of the widebody flying. But then you discard 152 Airbuses and a significant number of the 94 737s? How are you going to feed all of this international flying? It's not like CO has a bunch of narrowbodies sitting around doing nothing. It just doesn't make sense.

You may be right on E+, given CO management tastes for cramming in the coach seats. UA management claims a significant revenue premium, but I'm sure that would get great scrutiny by new management. I hope it stays, as it is the single reason that UA has a better coach product than the other carriers.

On the Suites, I don't see how the combined airline could truly compete in the international market without a F product. Certainly CO can help UA's mediocre soft product in F. But F will be key to important accounts on major routes. I suspect that the solution will be to refit CO's 777 to 3 class and UA's 767s to 2 class (which is generally what AA has done). That would allow the merged carrier to offer F in the major business markets but avoid the cost of providing F in markets that just don't generate enough paid F. CO's BF product has been one of the best J products in recent years, but it only works well for a smaller carrier that provides a small fraction of the service in its markets. The world's largest carrier will need to offer F to get the best yield possible.

channa

Have you ever flown any of these "third-world carriers" you allude to?

TACA's fleet is younger than CO's. I believe Mexicana's is as well. Btw, both offer free drinks in Economy, both have IFE, MX even has free meals. I have a number of times recommended people fly AM over CO because the service is better.

While developing countries have their share of issues, their carriers don't always. Rhetoric comparing NW to some third-world carriers may try to drive a point, in reality, even comparing CO to some of its third-world carriers shows that even CO can come up short.

bocastephen

The issue is brand perception. The UA brand is known - but not known for a good product or service. I have plenty of friends in Asia who fly here on UA - why? It's the cheapest option, even though they hate it. They chose UA solely on price, and for no other reason.

The CO name isn't unknown, despite the claims of some. It's well known in the markets it serves, and is known to be the best of the US carriers - that is a reasonable legacy to build on and extend.

Target and KMart sell similar products to a similar market segment. Target is known for decent quality products with good service, while KMart is known for lessor quality products and limited service. If the two companies combined, and assume that Target had a limited market presence across the country, which would be a better choice - keep the KMart brand because it's more well known, or assume Target's brand identity, bring the stores, merchandise and service up to Target standards and educate unfamiliar customers about the benefits of shopping at Target and why the new brand is better than Kmart? I think the decision there is easy, just like the one facing CO and UA.

bocastephen

It makes sense if you accept the notion that CO's taking of UA will offer an opportunity for controlled growth. That is why taking the pieces is better than assuming the whole.

You're suggesting that COUA fly the combined schedule of CO+UA, and I think that's the wrong approach. If they did, then of course they'd need all the equipment of both carriers. What I see happening is a significant trimming of the combined domestic capacity of COUA and a focus on building out the international strategy.

That would leave a lot of Airbii and older 737s sitting on the sidelines. The younger 73s and hopefully all of the 75s can be cleaned up and used by the combined carrier to support the additional hubs and focus cities. There would be enough widebodies around to fly many domestic routes as well - those 76s need cabin overhauls and would fly domestic routes along with the 777s, just as UA does today.

ccordova624

TACA with IFE? umm I guess its something very new. Last year (DEC) I had an emergency and I had to flew them from South America to SFO (with 2 stops in Central America) and I dont recall IFE neither in F or Y.

On the other hand, LAN has very nice planes with IFE and great food... and they are both third-world-country carriers...

NWA has very nice planes like the A330 and A340, with routes to ASIA... nice IFE, good seats, and nice WC First seats.

bocastephen

I think you're dramatizing my point - firstly, I don't consider TACA, Mexicana, TAM, or LAN to be third-world carriers. They are strong flag carriers who represent their countries well.

So, substitute my 'third world carrier' comment for the not-so-great national airline of your choice, like USAir as a good example. NW and US make great bedfellows.

pbarnette

I think comparing CO's international product to Target is unfair to Target.

All joking aside, CO has a good reputation in the US because the US domestic market plays to its strengths of clean planes and consistent service. This goes double up front. Internationally, however, the weaknesses of the CO product (aging J; tight, uncomfortable Y seating; complete lack of "extras" in either class; mediocre lounge facilities) really rear their ugly head. You even see this domestically on longer routes - CO has nowhere near the market-share on transcons that UA and AA have. Even in CO's home turf of NYC, both UA and AA have more flights on bigger planes to LAX and SFO. I think it is a mistake to assume that CO will enjoy a good reputation abroad just because they have a good one in the domestic market.

bocastephen

UA and AA have dominated the transcon market for eons. I think CO made a choice - use the big planes for international growth, or try and compete against everyone in a tight marketspace, including UA (reg. and PS), AA, B6, and here comes Virgin America to toast off everyone.

AA and UA have widebodies that CO doesn't, they both fly transcons from airports closer (physically and conceptually) to Manhattan, and in AA's case, have many of the key industry contracts locked up ages ago. Trying to fight for the transcon market with the likes of AA is a battle that is going to be lost.

Many of your points about CO's weaknesses are on target, but many of the same weaknesses are shared by its US competitors, including UA.

TechBoy

I think this part of your thinking is not realistic. It will be very difficult, if not impossible, to feed an international fleet of 150+ widebodies after eliminating 25%+ of the domestic capacity.

I could see the combined airline dropping 10% of domestic capacity to focus on higher yielding traffic, but if you cut much more than that it starts to impact the efficacy of the network.

entropy

How about Ethiopian? Jet? Kingfisher?

I don't think Target and K-Mart are a good metaphor. United is like Wendy's. The quality varies somewhat, there's a lot of them and a large choice of things to eat. OTOH, they are inconsistent, and now that Big Dave isn't around anymore, QC is a problem. Nevertheless, they have some good bargains that you can take advantage of, their big value meal is a great deal, especially if you know how to work it and get the chili. They're crowded at rush time and empty at others.

CO is like in-n-out. They're a smaller operator, but they control everything. No matter which store, The menu is the same, the seats are the same, the burger flippers are the same, in fact they use a cookie cutter design so the stores are the same. You can't order all that many different things but the things you order are good and consistent, but if you pay for it you can get a 4x4 animal style.
The whole operation runs smoothly, with much nicer employees than you get at wendy's. Thus, its almost always crowded, even off hours.

Renard

The KoolAid is flowing....but a lot of it is Blue.