Kacee

Sort of like saying that unicorns are worth their valuation.

The bay area economy is absolutely on fire right now and UA is a fortuitous beneficiary (despite their many miscues).

andrewwm

Regardless of the reason why UA is doing well in SF, pax counts are up which means UA needs more/larger planes.

A few A380s on a trial lease aren't exactly a lifetime commitment either.

enviroian

Isn't this because UA chooses to reduce frequency? It's not because more people are flying correct?

frankmu

Maybe they can use the 70's United livery for the two A380's

fgirard

Apparently, the person that airlinehubbuzz references has been trying to get a US operator for the A380 for at least a year

andrewwm

No, absolute pax counts in SFO (total # of emplaned pax on UA airplanes including express) is way up since the merger. Reason is irrelevant - UA needs bigger planes as they are already gate maxed at SFO during the rush periods - around 8:00-10:00am.

Always Flyin

It doesn't mean that at all.

Capacity discipline has gone a long way towards increasing the stock prices. If UA adds A380s, its yields will drop, as will its stock.

It makes no economic sense for UA to acquire A380s, particularly with this penny-pinching management. Ain't going to happen.

tuolumne

What they are now doesn't mean they can't make adjustments in the future, especially for an aircraft with as much floor space as an A380. IMO all bets are off if they get that bird, since it WILL be flown on the handful of routes that UAL actually sees positive returns from the intl. United First cabin (SFO-Asia/Frankfurt/Heathrow). I would venture 10-12F. Having it 2-class would give them a tremendous amount of Y and J seats to sell, not to mention forgoing an opportunity to make a splash with the introduction of a flagship cabin product.

The necessity of capacity discipline during the post- 9/11, Ch. 11 restructuring era does not mean the airlines have to continue that march in perpetuity over a decade later, after consolidation, and in light of a resurgent economy. There's a convincing case to be made for the A380, and it should be easy to spin to investors if they get an amazing price (which they will have gotten if they go for it).

Never say never my friend.

84fiero

I'm not sure UA would even know what a world-class product is.

andrewwm

That doesn't make any sense. No one cares if yields drop if costs also drop. Total profitability is what matters.

As long as RASM/CASM is solid or increasing, no one cares about yields. Yields are only important given a fixed fleet. If you get a cheaper per-seat fleet but with more seats, it's fine if yields drop.

For example, replacing 767s with 787s increases ASM (which dilutes yields) but 787 and 767 trip costs are the same, which keeps costs in line and makes the flights overall more profitable.

fgirard

BTW, I was on a conference call with colleagues based in TLS, and not only is this news to them, they reiterated the point that the A380 production is slated for closure as there is no longer the demand that there once was.

But, who knows, the Paris Air Show is in a few weeks, so there could always be a surprise, although my credentials mention nothing of such an announcement.

Always Flyin

Fantasyland analysis.

Never.

andrewwm

I'm pretty sure the Airbus CEO had to walk back his statement that they were even considering closing the A380 line after pressure from Emirates: http://ch-aviation.com/portal/news/3...rates-outburst

Now, take that with a grain of salt. Certainly the future of the A380 is up in the air somewhat. But if UA eventually gets 10 of these, 2 each from Skymark and 2 from MH, plus 6 others off of the production line, I don't think that would be materially difficult. The A380 line won't be shut down until all unfullfilled orders are produced.

What would you be willing to wager on it? I want to make some money.

fgirard

The issue with Emirates is about whether they can source replacement parts and keeping some minimal operation.

Also, the Skymark orders are still in a state of flux because Airbus is suing them for $700m in penalties. It would be in poor taste to release the airframes to another carrier if Skymark is forced to either pay or accept the frames.

andrewwm

That usually isn't a problem for airlines for a long time after the line is closed. DC-9s kept flying for nearly 40 years after the line stopped. Airbus can still make money producing spares and Airbus isn't going out of business anytime soon.

This isn't true. The Skymark planes are Airbus airplanes free and clear now. Skymark released all interest in the airplanes. And anyway, with Skymark in bankruptcy and selling off its assets like a firesale, I think the odds that they could successfully pay for even one A380 to be about 0.0001%