Mergers: ST Losses Dots On The Map
If DL and NW do in fact merger, which at this time looks more than likely, that merger probably will lead to a CO and UA merger. Assuming the new CO/UA ends up in *A, which is a safe bet, ST will be the loser. Instead of strengthen ST, the cascading after mass of the DL/NW merger will have a negative impact on the ST Alliance.
The DL/NW merger keeps both airlines in ST. For ST as a whole, this merger will mean little, and for ST, probably nothing would be gained. However, when CO leaves, COPA and Aerorepública, which is a de facto ST member given their codeshares with COPA, will no doubt go with CO. Excluding AeroMexico from the equation, ST would lose a major penetration into Central and South America. Losing CO will eliminate the IAH Hub and, for those of us on the left coast, convenient access to many cities in Texas. After all, going from LAX, or SFO, for that matter, to Central and South Texas via SLC just does not cut it. For those that use CO as a ST Airline to Guam, they will need to fly NW out to Tokyo, then back. That is certainly not the most pleasant way to Guam. So, while *A takes the IAH hub, and gains strength in Texas, Central and South America, and in the Pacific, at the expense of SkyTeam, AF sticks its head in the sand. After all, AF wants the DL/NW merger so badly that AF may even throw a billion dollars into the deal. Maybe somebody in Paris should look at the other repercussions of the DL/NW deal. On the other hand, AF, DL, and NW just may not care about SkyTeam in Central and South America and to Guam and its surrounding Islands. For the most part, AF, DL, and NW, keep silently chanting the airline merger mantra: “the flying public be dammed”. @:-) |
This post is just absurd:
1) Assumes that DL and NW will merge 2) Assumes that CO and UA will merge (what will US have to say about that?) 3) Assumes that Uninental will leave Skyteam (*A already have US and AC in North America, so there will definitely be some bargaining before a decision's made) 4) Assumes that ST will see no expansion in Latin America and the Southern US (which is eventually bound to happen, since LAN remains the only S. American airline that belongs to an alliance). And goes on to criticise AF for something that it has limited control over. My guess is that, even if the DL/NW merger goes ahead (which is far from certain), CO will not necessarily want to merge with anyone. If they do, you can be certain that Deltawest will strengthen its operations in SE US. In any event, the States are covered quite well. From a global perspective, the addition of KQ and China Southern is a lot more important than the loss of one of three US members (which at this point remains nothing more than wild speculation). |
Mmm...Wild speculation. That's what FT is good for :p :D
If we make the not so wild assumption that the DL/NW merger happens, it is clear that they will remain in ST. When the discussions were about DL/UA there was a comment made that UA would consider leaving *A, but I do not think that would happen in a CO/UA merger (which is not a foregone conclusion, but reasonably probable) following NW/DL. Having 4 USA carriers in ST is overkill and wouldn't be productive for the alliance. That being said, I would not be surprised if the DL/NW combined entity decides to expand dramatically into South and Central America from their ATL hub. I also wouldn't be surprised to see them work on expanding LAX more and even possibly scaling back SLC, and that LAX growth could be south-bound. CO doesn't want to merge unless their executives can remain in charge and unless they can be reasonably assured that the merger will actually improve their competitive stance in the marketplace, which is probably a 50/50 bet these days. S. |
Originally Posted by sbm12
(Post 9236814)
Mmm...Wild speculation. That's what FT is good for :p :D
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Originally Posted by graraps
(Post 9236712)
2) Assumes that CO and UA will merge (what will US have to say about that?)
3) Assumes that Uninental will leave Skyteam (*A already have US and AC in North America, so there will definitely be some bargaining before a decision's made) |
Originally Posted by NickB
(Post 9238453)
Both US and AC are relatively minor players in *A. The central Axis is LH-UA. I can't see US or AC having sufficient weight to force a merged CO/UA out of *A against their will. Nor would there be much likelihood of DL/NW+ CO/UA belonging both to the same alliance without the competition authorities making much noise against it.
My whole point is that taking speculation that far is totally pointless, as you cannot build any sort of picture of reality based on assumption upon assumption. |
Why do you assume that Copa would leave ST. CO has not owned a majority of CM for quite some time.
They no longer control CM strategy. |
Originally Posted by flyingcat
(Post 9243862)
Why do you assume that Copa would leave ST. CO has not owned a majority of CM for quite some time.
They no longer control CM strategy. |
UA/CO Merger
I received some information from a source close to the UA/Continental merger. It looks like both carriers will merge pending the Delta/NWA merger should that happen UA and CO will merge for sure. Continental gets absorbed in UA. STINKS! All the hard work and efforts that Continental have accomplished now get thrown away by merging with an inferior carrier that will ruin a lot of peoples travel habits. No more CLE hub, no more One Pass, getting rid of the 737 300's and 500's, and the list goes on. It sounds to me it will be worse than the US Air /America West mess. It's a shame bring back Gordon to make sure this is not going to happen. Houston gets downgraded too...... I hope not!:td:
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Welcome to FlyerTalk!
I think that the merger is a fait accompli, but that all the doom and gloom associated with it that you've cited is a mix of reality and over-reaching. Losing the 733/735s isn't a bad thing, for starters. They're old and have small F cabins. Seeing IAH shrink would be surprising, though it would not be the end of the world, especially if fewer E/W connections are routed through it and its role as a connector to S. America and Latin America is increased. There are a lot of questions surrounding any merger, and most of the things you identified will be covered in them. |
Originally Posted by sbm12
(Post 9275648)
Welcome to FlyerTalk!
I think that the merger is a fait accompli, but that all the doom and gloom associated with it that you've cited is a mix of reality and over-reaching. Losing the 733/735s isn't a bad thing, for starters. They're old and have small F cabins. Seeing IAH shrink would be surprising, though it would not be the end of the world, especially if fewer E/W connections are routed through it and its role as a connector to S. America and Latin America is increased. There are a lot of questions surrounding any merger, and most of the things you identified will be covered in them. I doubt we lose PDX, TUS, SJC, ABQ, or even the secondary L.A. airports. There's no way IAH-SEA/PHX/LAX/SFO/SAN disappear. IAH generates a good deal of O&D traffic, due to it being a major hub (if not The Hub) of the world's energy/petroleum/chemical industries. Adding DEN as a hub could only improve things from IAH, as one has to connect through SLC already to get service to much of the upper mountain-west (Idaho, Montana, Wyoming). DEN is much more convenient as a connecting point to those areas if originating from IAH. The real question is the Caribbean. IAH is pretty far west to service much of the Eastern Caribbean (and IAD/EWR are fairly far North, though EWR has a good deal of flights down that way). With DL, ATL provides a huge amount of options to the Caribbean (moreso than even CO out of EWR). I hope that CO/UA would not rely on US out of CLT to fill the holes in its Caribbean coverage. I would prefer a separate code-share agreement with NK to that :D. |
Originally Posted by Anglo Large Clawed Otter
(Post 9278450)
The real question is the Caribbean.
ATL is the best overall location (no surprise there) but not the best for each destination and in each case one of the other three is no more than 200 miles further. Sure that CASM adds up ($3K per flight, on average) but not so much that CO/UA can't be competitive, and if the feeder networks are running the way they should then it won't be a problem at all. Code:
From To Distance From To Initial Heading Distance Code:
EWR (40°41'33"N 74°10'07"W) SCL (33°23'35"S 70°47'09"W) 5102 mi I don't see too many issues with this at all, other than what to do with DEN. I don't know how much traffic there really is connecting in the rockies that demands keeping that up. S. |
Originally Posted by sbm12
(Post 9279218)
Only GIG is really bad, and then only by ~280 miles. That's not terrible if you're putting together a top-notch route network headed south with the appropriate feed structure.
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Forgot to add... I doubt IAH would lose LHR or AMS (too much oil traffic to AMS). Also, I think it doubtful that IAH-CDG would go as well (Total Oil is HQed there). In fact, IAH may even gain an IAH-FRA on UA/CO metal. The route appears to be doing well enough for LH that they're putting a 744 onto it. I could also envision LH starting up MUC-IAH. Also, I don't think IAH-NRT will disappear, as CO has a monopoly on the route (and seems to be doing okay with it). Given that UA has a hub at NRT, that would only increase traffic on the route (or cause it to remain sustainably static, given that NW also has a hub operation there).
All in all, but for the potential loss of some service to secondary West Coast markets, I think this will turn out to be a net positive for IAH in nearly all respects. It appears that even if we are headed into an economic downturn, that big oil should continue to reap near-record profits. That means full front cabins out of IAH on high-yielding long-haul oil routes. If CO/UA are *A, I can assure you that CO will be itching to codeshare on the SQ IAH-SVO route ASAP. That route is yet another license to print money. |
It's IAH-DME-SIN not SVO.
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