VA1379

I would have to disagree with you. The biggest potential cost is if Continental needs additional aircraft. If you simply pull out seats, you reduce the number of tickets that can be sold. It is a capacity reduction, and one row on a 737 represents a drop of about 5 % of available capacity. The capacity reduction would be applied on all mainline flights. The actual drop in capacity would depend on the plane model.

This is not an issue if loads are not that high, but it could present some problems if certain routes have over 90 % loads. It becomes an operational issue because higher loads give less flexibility to reroute passengers when flights are cancelled or misconnections occur. People are already complaining about the lack of free seats, so it is not in an airline's interest to repeat what happened on Jetblue and other carriers in 2007.

Continental uses more RJs than United for domestic service, and installing E+ on the RJ would require the removal of a row of seats. This would be a bigger capacity hit since the RJs have less than 60 seats, and one row represents the loss of 3 seats.

mkleiderman

UA RJ's (except for the minority in ex-plus configurations) don't have E+.

HeadInTheClouds

Maybe, but it is impressive to me how fast that minority is becoming a majority - especially if you're not on the west coast.

ual744777sta

Acutally the newer UX routes (there are alot) are mostly exPlus on the west coast.

yogi

If CO and UA merge, I can't see the new management resisting the urge to close at least one hub.

CLE as the #40 O/D location looks like the odd man out. Surrounded by IAD/EWR/ORD, It doesn't offer a unique physical location. EWR and ORD are high ranked for O/D, and IAD is adding runways and is going to build a new terminal, and is the most south-easterly of the group. CLE might get regular main line service to ORD/EWR/IAH/IAD/SFO/DEN/LAX/MIA, which would still be considerable coverage.

A question: What's the situation at CLE? New? Old? At capactity?

TechBoy

I think that you are confusing amount of O&D traffic vs. value of O&D traffic. Certainly Hawaii has an enormous amount of D traffic. I was not advocating that the combined airline reduce service to HI. I was suggesting that premium seats were not needed (or profitable) in this market. UA has proven the domestic F seats are the most profitable for this market. (I know that FFers hate that, but it is certainly true.)

As for IAD, it serves a metro area of 7+ million people with the highest median income in the country. There is a large amount of premium longhaul traffic in the region and almost all of that goes out of IAD. (For instance, UA, BA and VS have 9 flights/day to LHR.) Looking at IAD's overall O&D ranking does not truly measure its longhaul O&D ranking. Because so much of the short/medium haul traffic out of the metro area operates out of DCA, the bulk of the traffic at IAD is longhaul. UA has repeatedly said that IAD is profitable and has grown international service there over the past year so I can't imagine why a merged company would cut back on IAD.

supermasterphil

Capacity still available, plenty of space to extend the airport.

FWAAA

In addition, there's plenty of open capacity at STL, DAY, IND, CMH, PIT and many other airports. All of them former (or severely downsized) hubs.

After this round of consolidation is settled, I suspect that there will be even more open capacity at CVG, MEM, SLC and perhaps others . . .

haddon90

couldn't agree more. yes, DC has a lot of government traffic, but most of the downtown traffic uses DCA. the dulles corridor is where a lot of tech companies are, plus the government contractors and lawfirms in the area that pay the premium fares out of IAD. no way IAD gets cut back. there would actually be more of an exapansion, since UA is practically the only game in town (with the exception of B6).

VA1379

I agree with the view that IAD will grow in a CO-UA merger. The capacity exists along with a market to support people paying expensive tickets. CLE will probably get downgraded into a focus city, and it could be used to reroute airplanes if ORD and/or EWR have weather issues while CLE does not.

I don't see much change to DEN since UA has a dominant position, and the DEN metro area is more economically vibrant than CLE. DEN is far enough away from IAH, SFO and LAX. Some domestic flights might shift to DEN from IAH, which is a better location to serve Latin America.

On paper, a CO-UA merger would produce one of the strongest airlines with multiple hubs on the East and West Coast and in the interior of the United States. United has excellent routes to Asia, while Continental is stronger in Latin America and Europe. The biggest issue is whether a merged airline will be able to provide excellent service. If it looks like it will work, I cannot see AA standing still while their rivals are merging.

RTWFF

A true market economy also allows for inefficiencies to be eliminated, via mergers and acquisitions

adambrau

Well, when I speak of NYer's i meant people like me who live in Manhattan. But you're right those who live on Long Island getting to EWR would be a royal pain in the butt if CO and UA merge. But overall, I would rather live in Long Island and have to schlepp to EWR for a nonstop to Europe, than live 20 minutes from an airport that offered only UAX to Dulles. Honestly, for my long weekend trips I have started to contemplate LH economy rather than fly UA to ORD or IAD, then to Frankfurt, then to the destination. For me JFK and EWR are about the same effort to get to, but if I can get on a nonstop on a Thursday night to Europe rather than to leave the office at 12pm to catch a 2pm to Dulles it will make my life SO much better. So in terms of whether United ties the knot with either Delta or Continental I really don't care, just so long as they do it with a carrier with a strong NY-Europe presence.


Adam

wanaflyforless

I don't think we need a merger; I think we need 4 mergers!

If it were up to me we would end up with just 4 big NA legacies (in addition to many LCC that will keep prices in check). I think all of the following should happen:

1) CO merges with UA.
The new carrier is called United and is a member of Star alliance. As a well travelled CO PLT UA 1K I truly think the UA name has a better recognition overall.
LH buys a 30% stake in the new United.
Continental management take over the combined airline. Mileage Plus management, rules, and benefits take over Onepass. The new United keeps all UA and CO hubs, but downsizes DEN. I think the CLE market is high enough revenue to keep. As mentioned by others in this thread, there is tremendous value in irregular opps in having multiple hubs. It also means your passengers travel less distance saving you $. CO meals at meal times should prevail. This is very important for image.
UA and LH get government approval to code-share and revenue share on every transatlantic route they operate. Current UA rules apply to domestic upgrades with UA SWUs remaining but now having a much wider application. UA expands codeshares with NH, SQ, and TG and works to time connections to the top 100 Asia destination. The UA NRT-Asia flights are slightly expanded with added NRT feed from current CO hubs.

2) AA takes over AS and uses their new strong SEA hub to launch about 8 non-stops to Asia (HKG, ICN, SIN, BKK, BOM, others). AA could buy the planes from another carrier if they can't get them from Boeing in time. SEA is geographically the ideal Asia hub. The AS network could provide ample feed. AA expands code-sharing on JAL and CX while working with them to better align schedules. AA goes through the top 100 destinations people fly to in Asia to ensure that someone can get to each with a convenient connection in either HKG or NRT if not non-stop on AA.
AAdvantage takes over MileagePlan and keeps the 20,000 award for trips under 1000 miles. AA rules apply to Domestic Upgrades with AA VIPs remaining but now having a much wider application.
BA buys a 30% stake in AA. BA and AA get government approval to code-share and revenue share on every transatlantic flight they operate. The BA 30% provides AA the $ to buy AS and finance new planes.

3) DL merges with NW. The new carrier is managed by current Delta management but has a new name. AF buys a 30% stake in the new carrier. Worldperks management takes over Skymiles. The new DL/NW get government approval to code-share and revenue share on all transatlantic flights with AF. No hub is cut, some adjustments are made. DL systemwide upgrades are kept, Plat is back up to 100K/year, and the rules for the system-wides now will only require mid level fares (ala current UA SWUs) to compete with the now very strong AA and UA. DL hubs now serve NRT keeping the NRT-Asia hub profitable. Codesharing is expanded with KE and schedules optimized to serve more destinations via ICN with a nice connection.

4) AC merges operations with US. The companies are kept separate to appease the government with AC owning 30% of US and playing a large role in management. They code-share on every flight with expanded connectivity from all over the US (incl small markets) to YYZ timed for an expanded selection of European flights. (YYZ is geographically the most logical place to connect headed to Europe from much of the US). Connectivity to YVR for Asia flights is also expanded. AC ends its relationship with Aeroplan realizing selling the program off was a mistake. Dividend miles take over for both airlines however upgrades both domestic and international are changed to match AA or UA. US front domestic cabins are replaced with the AC version and service. Codesharing is expanded to Europe with LX, SK, BD, and LH along with schedule alignment. Codesharing is expanded to Asia with SQ, TG, and NH along with schedule alignment.

End result: 4 strong airlines with competent management and vast route networks. 1 OneWorld, 1 Skyteam, and 2 Star vast route networks.

IMO four legacies are enough to keep each other in check price wise. They will all want to serve most major markets keeping competition strong. Open skies will soon be completely implemented in Europe and hopefully will become a reality to most of Asia.

ual744777sta

Along with world peace and me as a 2P becoming UGS.

MarkXS

and OMGPONIES.


BTW, foreign ownership of a US-based airline can't exceed 25%. So there goes all those 30% ownership investments.

However, for entertainment value, you forgot to factor in Lufthansa already owning 19% of jetBlue. Where does LH/B6 fit into this grand scheme?