livitup

Why do you think so?

UA seems dedicated to 3 cabins and I can't see them throwing away the investment they've already made on the new cabins.

E+ is both a gigantic loyalty builder, and as investor's day has proven, a good profit center. Wouldn't both of those things be just as attractive to the new carrier?

If anything goes, it would probably be MP... neither OP or MP as been burning up the Freddies lately. UA flyers tout MP as a big factor in loyalty, but I don't know how to measure that in a way that would be meaningful to the new board. MP would seem to be more "expensive" as there's no concept of SWUs in OP. But, top tier earns 125% RDM bonus and Y->C upgrades to Europe are 10K/20K vs. 15K/30K, so I would actually end up with more miles in the bank using CO's system. I'm guessing their H is our B, so I still wouldn't have to pay a "service fee."

Meh, I think that if this happens, it won't be too bad, as long as they keep the 3 cabins and E+, at least for my personal travel patterns.

HaeMaker

I agree with gardener. I think with any merger we will get the "worst of both worlds". There will be LESS pressure to compete as there will be less competition.

With a CO merger, I imagine if they don't remove E+, as a elite, you will get E+, but have to pay, a la CO's upgrade co-pay, unless you are a Y/B fare.

Paid upgrades will remain, imagine: H fare + SWU + $200 for TPAC upgrade to Business.

I am sure CO will get BOB as that is a clear money-maker.

I am sure top elite on CO will go to 100k.

I dread a world with only four US International carriers, AA, UA/CO, DL/NW and US.

emma dog

The only reason it's an assumption is that UA is the outlier forthis product... The only other equivalent was AA with MRTC, which was killed post 9-11.

Amen to that. Everything you say is true. On the other hand, the real wild card winners in the merger equation: WN, B6, F9, and Allegiant... and VA.


3 cabin is here to stay on some routes. First, UA is still competing on flights to Asia and Australia, so 3 cabin is important... on the other hand, recent reports of F service/seat quality leaves one to wonder if they're serious. The second thing to remember: CO is making $ on 2 cabin 757's to Europe. I'm sure we're goign to see a realignment of flights... i.e. some mixed 2 and 3 cabin service kind of like what you see on UA transcons (but with true F service vs. what goes on if you fly transcon from SEA in a 767/777). Finally, any discussion about "all the money spent so far" on new seats doesn't hold much merit since the planes have not been updated yet and a merger can just cease the transformation.

Finally, earlier, I mention closing CLE, shrink DEN, and realign IAD and some naysayers brought up various issues including weather and aesthetics. Here's why:
Hubs at EWR ORD, and IAD are here to stay. CLE is in the center of these three airports. No need for international flights of any significance. Transfer the connecting pax to IAD if N/S, or ORD/DEN if E/W. CLE will go away like PIT, IND, RDU, and BNA.

DEN... will shrink and be used purely for some transcon transfers. Problem is that IAH and ORD do the exact same thing. The N/S west coast traffic is served pretty well with nonstops and/or the competition.

IAD... i see more international stuff being sent back to EWR if it does not have sufficient O&D traffic from IAD. Also, you may see consolidation of traffic that currently is transferring at EWR and IAD... possibly to be shifted to iad as a concession to relieve NYC airport traffic.

PHLGovFlyer

Except that MRTC and E+ are not really the same product. MRTC was free to everybody while E+ is exclusive and has a means to provide added revenue to UA. MRTC was killed because it reduced direct revenue for AA (although you could argue that killing it reduced revenue to because that action drove away fliers - like me - who really liked it).

emma dog

You are absolutely correct in what you are saying. On the other hand, no other airline has taken any steps to start E+. Why not? I suspect it's because the numbers don't entirely add up in favor of the premium economy model. Or maybe it's a wash. But the fact that no one else does it makes me think that it's not a big moneymaker.

planeluvr

I agree and those reasons and more is why I left US.

VA1379

There may not be enough demand for two carriers to offer E+ seating as a separate service section with people willing to pay extra for it. United has already made the capital investments to rearrange the seats and market E+. For a competitor to do the same thing, they have to be willing to accept the reduction in coach seats and invest the effort to market the product and train F/As to enforce seating rules. Other carriers may have decided that this is not worth the effort to imitate United if it means that they would need to order more aircraft to make up for the reduction in capacity.

United has one of the larger fleets around, and the capacity reduction has already been taken. They started E+ when they were still in bankruptcy and looking to reduce excess capacity. United had a lower opportunity cost for creating E+ than what a competing carrier would face because there is less excess domestic capacity now. Since United has already spent much of the initial costs related to E+, the profit from having an E+ section is much higher than it would be for other airlines.

DenverBrian

United Airlines exists as a direct result of mergers; hence the name "United." If any airline should continue to grow through mergers, it's almost natural that it should be UA.

I do like a UA/CO combo. The IAH hub could relieve the nightmare of ORD, which could become more O&D focused. Those who say DEN would diminish are missing the economies and efficiencies that make this hub attractive. IAD would likely diminish in favor of EWR.

A huge factor in determining outcomes from any merger would be where the HQ would reside. If Chicago, then UA DNA would prevail. If Houston, then CO DNA would permeate the merged airline.

coolbeans202

All of the people that claim IAD would shrink in favor of EWR might be forgetting that a) EWR is pretty much maxed out and b) IAD makes a lot of money for UA. While I'm sure flights would be realigned between the two, I think both hubs could easily be supported in a combined airline.

UA_Flyer

At the end of the day, the indutry has to go through consolidation, and airlines all need to survive. As much as we like and dislike about certain aspects of United-Continental marriage, we may as well embrace it and move on.

I don't think there is a better partner for UA other than CO. I only have three items on my wish lists that reflect my personal bias:

1. Let United Mileage Plus runs the combined FFP and retains most of the M+ perks. (If the FFP is not attractive, then I can always start flying other airlines.)

2. Stay in Star Alliance. (If the alliance does not cater my needs, then I'll switch to a different airlines in a different alliance.)

3. Let CO Management run the combined entity. (CO is just that much better than UA now.)

I thought about E+, but no other US legacy carriers offer them. It is not I have other choices.... so why get upset about not having it.

I hope this deal goes through!^ .... as long as the employees get taken care of!:-:

Buster CT1K

The worst of all worlds could happen. CO management takes over (most likely), imposes Nonepass-like changes to the combined carrier (very likely), and eliminates E+.

jabrams72

No other domestic... but plenty of international carriers have better versions of premium economy.

bhmlurker

Instead of writing about the worst that come out of merger, what about potential best of both worlds:

1. Keep E+, ex-CO elites will love this and stay.

2. Keep food on midcon and transcon - A point of pride for every CO FA that I asked.

3. Convert all RCC to CO standard, run by CO's former mgt from now on. Increase fee since now there's more clubs in more cities than ever before.

4. Keep Mileage Plus - CO's members will love this also. 75-99k eqm fliers can go to NW/DL if they're unhappy.

5. Keep CO hubs and flights to maintain lock on O/D traffic.

6. Keeps planes as they are for now (former UA E+ and former CO without E+) to avoid cost due to re-certification and refit. Since flights are also kept and not consolidated, paying F pax flying to Ted cities will fly CO. Upgraders can take their chances or stick with guaranteed E+. All new planes will have both F and E+. Put *A F pax on ex-CO F seats for domestic, which they will enjoy.

7. Keep all front-line workers, since both airlines are probably cut down to the bone. Consolidate accounting, HR, PR, IM, top/mid management.

8. In mid-sized cities previously served by Ex-Plus CRJ by both UA/CO, run leased 320/737 instead if profitable. For first year market them separately and codeshare them, to get non-freq. fliers used to the new entity and regain brand loyalty. Send Ex-Plus to smaller cities not worthy of 320/737, and get rid of CRJ-200. I'm sure Boeing and Airbus will fight to give UA/CO a sweetheart deal on new narrowbody 100-150 seaters.

9. Elites competing for upgrades should be a non-issue, since there's no net # of F seats lost.

10. Simplify elite boarding to DL's model, which will make life easier for GA and pax alike: Pre-board children in stroller and walker/wheelchair elderly, GS zone 1, 1K zone 2, 1P/*G zone 3, 2P/3P/*S zone 4, back window zone 5, back mid and center window zone 6, back aisle and center mid zone 7, etc.

10B. Zones 1-4 board through red carpet when they are called, and afterwards when they arrive (a boon to 1P and below, and rid us of "why no red carpet for non-GS/1K argument").

J.Edward

Bit of nervousness in this thread.

Should CO and UA consolidate I suspect none of the hubs, or focus cities, would be lost.

CLE, EWR, DEN, IAD, IAH, LAX, ORD and SFO each are capable of generating their own o/d traffic. What I suspect will happen is that connecting traffic through facilities already running at peak capacity (i.e. IAD, EWR, ORD) will be connected through less crowed cities as to free up additional options for new flights to capture o/d traffic. In other words, the consolidated airline could make room for new international services at IAD, EWR and ORD through shifting connecting domestic traffic to DEN, IAH and CLE.

As for E+...not sure what to think about this one. I jumped over to UA from CO for this reason (and for liberal international upgrades)...but the future I see for E+ in the domestic market looks bleak. I hope a way is found to make it cost effective.

Likewise I am not sure if International First will play as large a component in the new entity. What I suspect will happen is that it will stay on routes where paid F demand, not upgrade demand, can justify its existence. Other routes would then find the F cabin replaced with a larger, and hopefully new, J cabin.

Not sure what will happen to PS...but like domestic E+ the future looks bleak to me...with the chances of a international style F cabin on the route looking even bleaker.

M+ and OnePass, both of which are partnered with Chase, might see some changes but at least for the first few years I don't suspect any major changes will occur; management will have their eye on other issues, I suspect. I do think we'd be able to earn miles for each program from all flights within the entity and applicable partner flights, but the core benefits hopefully will remain intact for the short term.

Not sure how the EQM issue will be handled...although I will say for everyone out there who feels there's too many elites competing for the same scarce resources, limiting the EQMs earned is a way to thin out the numbers...just throwing it out there.

Alliance wise I would suspect the combined entity will also remain in Star and do everything in its power to keep the LH codesharing agreement intact. CO's never seem to have any real interest in SkyTeam and their various agreements with NW (that ironically arouse out of NW trying to buy up CO) currently bind CO to NW's alliance partner. But like that one share of series B preferred stock NW sits on, I suspect much will change in the event of a merger NW merger.

From the corporate side I would think CO's execs would be the surviving management team but at the start I think the only managers who'll be loosing their jobs are those who currently occupy a high floor in downtown Chicago. Again in the short term I suspect the middle management structure to remain mostly intact as someones got to manage the details of UA, and I don't think Houston can tackle that challenge from day 1.

Furthermore I also think both brands will remain in existence, at least for the short term, as both entities will remain. Consolidation will start to occur in the administrative functions (i.e. purchasing, leasing, etc.) and then I suspect it will start to trickle down to the operational side (Chelsea used for catering, outstations being combined). I don't know if labor will ever be unified though as in the past it's gotten ugly when unions workgroups have been merged together. Likewise UA still has deep cost structure issues to address and I suspect through keeping both entities separated, at least for the time being, UA's issues can be addressed and not spill over into CO's.

<shrug>

Interesting times.

J.Edward

bhmlurker - you beat me to what I was trying to say by few minutes! On the international this may have a chance, but I just don't see it surviving on in the domestic market ...may I hopefully be proved wrong!
Food on CO is a good point and hopefully a way to 'synerzise' cost savings. CO still owns their kitchens (Chelsea) and hopefully the combined entity can continue better inflight food at a reduced cost.
Praise god.
Not sure if I'd jump on board wholly with this. Rather, I'd suggest allowing those members who already participate in M+ or OnePass to be grandfathered into their program and then putting new FF'ers into the combined program.
Yeep.
...and if both entities remain in pseudo existence, labor integration issues can be tiptoed around and hopefully resolved in an amicable way.
I too also think the first effects of consolidation will be felt through the combination of administrative offices.
Or even Embraer (sp?) themselves. One point to note - CO's pilot's contract does have a scope clause and jet with more than 50 seats must be flown by a mainline pilot. I do not know how this would play in the merger.