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Continental & United Merger supposedly more serious [Merged Threads]

 
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Old Feb 9, 2008, 12:19 am
  #121  
 
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Originally Posted by 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?
I don't think it does. B6 is unlike any other *A carrier. They are an LCC, no F, no lounges, not a huge FFP...I don't see it as being a candidate for entry into *A. As for why LH decided to do that....I personally don't have a CLUE.

I like the idea of 4 legacy carriers but raise the obvious points with the AC/US deal with regulatory approval.
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Old Feb 9, 2008, 9:33 am
  #122  
 
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I'm not sure B6 doesn't factor into LH/*A plans.

No F, No lounges - sounds a lot like what a LH customer has to put up with in Ted on getting to Vegas. (no airside *A lounge at LAS). B6 is a far better LCC product than the misbegotten Ted. B6 320s have as much seat pitch, or more depending on row, than the best E+ on UA (UA tops out at 36", I think B6 is now 36-38" after they removed one row.) B6 has way better IFE (free live TV and available PPV movies), lots more varied snacks, no half-can nonsense.

As far as the mileage plan, all that needs happen is "Miles & More jetBlue" - doesn't have to be controlling ownership for an airline to partner up with another on miles. LH could work out an arrangement with B6 where M&M members could get miles on B6 in lieu of getting B6 points. Or B6 could beef up TrueBlue to have slightly longer expirations and additional LH-provided award options. There are already points-based (not miles or km-based) programs in *A, so the "exchange rate" issue is already dealt with - e.g. NZ or JK members flying on LH or vice-versa.

An LH/B6 bilateral FFP arrangement, even if LH didn't sponsor B6 into Star, could take away a big blocker to why some people don't fly LCCs - the fact that no matter how much you fly B6 (or WN, or F9), you can only get awards within their network. That's basically the reason I switched from B6 to UA 3 or 4 years ago when I was a regular BOS-DEN commuter - the B6 points weren't really doing much for me. If I could have flown B6 and banked them for *A (or even just LH) international travel, B6 would have continued to look attractive to me. Instead I haven't been on a B6 plane since Nov 2004.

Don't rule out some closer LH/B6 integration. I think LH's purchase was a warning shot across UA's bow: provide better options to our connection pax or we'll find someone else who will.

In that regard, I think LH would welcome CO into *A if CO buys UA. In which case, they might not ramp up their B6 integration, instead treating B6 mostly as an investment property. Remember, back in the early 90's, LH and CO were FF plan partners. I earned a bunch of OnePass miles on an LH flight EWR-TXL. CO was also heavily partnered up and partially invested in by both AC and SAS. CO has history with *A members predating the creation of *A.
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Old Feb 9, 2008, 11:07 am
  #123  
 
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Originally Posted by yogi
question: What's the situation at CLE? New? Old? At capactity?
Answer: The CLE hub is nice and new, well at least the CO part of the airport is, with a lot of capacity.

I used to fly CO exclusively, SI/GO/PL for several years, but the last 5 years I have been a UA fan (destination Asia & no NW partner!). CLE is definitely the red-headed step-child in CO's network, but I have always enjoyed the convenience of non-stop flights from here. I would hope that a combined UA + CO would retain the CLE hub. It is cheaper to operate out of than EWR or ORD and it does provide excess capacity for transcon routes that are normally connecting in ORD or DEN. There are also a few direct flights from CLE to Europe. I'm not sure if those would continue.

If this has to happen, I would be glad if they kept CLE in the mix and I think there could be some cost justification in doing so.

My 2 cents,
Bubba
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Old Feb 9, 2008, 11:13 am
  #124  
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Originally Posted by MarkXS
B6 is a far better LCC product than the misbegotten Ted. B6 320s have as much seat pitch, or more depending on row, than the best E+ on UA (UA tops out at 36", I think B6 is now 36-38" after they removed one row.) B6 has way better IFE (free live TV and available PPV movies), lots more varied snacks, no half-can nonsense.
B6 has 36" pitch ahead of the exit rows and 34" behind. TED has 36" ahead of the exit rows and 31" behind. The IFE advantage is much stronger for B6, although UA has Channel 9.
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Old Feb 9, 2008, 11:25 am
  #125  
 
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wanaflyforless,

I don't mean to be rude, but I think your scenarios while possibly ideal for many, are a pipe dream. I'm not saying that at least two of those deals (CO + UA and NW + DL) don't seem very possible, but four deals seems unlikely.

There were a couple of other points in your post that I disagree with:

1. SEA is only an ideal departure point to Asia if you live in the west. If you're in the Midwest or Eastern US, it is actually out of the way and adds to the overall travel time. IMHO if you aren't backtracking to a hub, i.e. EUG-SFO-HKG, then the flights to Asia from the existing west coast hubs are actually better than from SEA.

2. You suggested that the DL + NW merged company (their new slogan: We loved to provide crappy service, and it shows!) would code share with LH, but wouldn't they be better off code sharing with their existing partners AF & KL?

FB
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Old Feb 9, 2008, 11:44 am
  #126  
 
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Doesn't CO have 787s on order?
The merged CO/UA company can utilized that without getting a big plane order.
The fleet isn't need to be streamlined though. There are a lot of different variant of planes with the merged company.
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Old Feb 9, 2008, 12:00 pm
  #127  
 
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Originally Posted by DenverBrian
B6 has 36" pitch ahead of the exit rows and 34" behind. TED has 36" ahead of the exit rows and 31" behind. The IFE advantage is much stronger for B6, although UA has Channel 9.
Ah, I stand corrected. I thought they were already 34" and increased it. Like I said, I haven't been on B6 for a while. But point still is valid: B6 legroom is at least as good as E+ in at least as many seats - note that worst case if behind exits is as good as E+ on some UA aircraft, and nothing is as bad as E-.

You know, if UA doesn't hook up with CO, maybe UA should make a play for B6. "UnitedBlue" replacing Ted.
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Old Feb 9, 2008, 12:06 pm
  #128  
 
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Originally Posted by Scott218
Doesn't CO have 787s on order?
Yes. I believe so.

FB
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Old Feb 9, 2008, 12:30 pm
  #129  
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A new AP story today on a potential UA/CO merger:

http://hosted.ap.org/dynamic/stories...02-09-06-22-21

The Delta-Northwest combination inching toward completion would create a new world leader, leapfrogging American Airlines and the Air France-KLM tandem in passenger traffic, but would also likely trigger a chain reaction of other deals, with unknown consequences for travelers.

The next potential deal in line - United and Continental - would be even bigger, and other pairings are likely too as carriers bulk up to compete in the new, more competitive global airline industry.
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Old Feb 9, 2008, 12:41 pm
  #130  
 
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Originally Posted by flying_bubba
wanaflyforless,

I don't mean to be rude, but I think your scenarios while possibly ideal for many, are a pipe dream.
I agree.

Remember my preface: "If I called the shots" and "If it were up to me."

"I predict" would have sounded very different.
Originally Posted by ual744777sta
Along with world peace and me as a 2P becoming UGS.
No program devaluation allowed; YOU will never be UGS!
Originally Posted by MarkXS
BTW, foreign ownership of a US-based airline can't exceed 25%. So there goes all those 30% ownership investments.
Actually, no. "If I called the shots" and "If it were up to me" Congress would change the rules allowing up to 49% foreign ownership (as was proposed but recently shot down).
Originally Posted by MarkXS
However, for entertainment value, you forgot to factor in Lufthansa already owning 19% of Jetblue. Where does LH/B6 fit into this grand scheme?
B6 is part of phase 2. One year later, LH buys another 30% of B6 and the new UA buys the rest. The new UA want to truly dominate the New York area market but recognize that for many travelers, EWR is not a good option. JFK is needed but the combined entity only keeps PS trans-con service at JFK. B6 is integrated in the new UA as a sort of improved Ted providing strong competition to the new DL from JFK. By serving both JFK and EWR with PS trans-cons and a non front cabin across the US, UA hopes to gain supremacy with area businesses. Connecting European premium passengers to the East Coast destinations can connect at EWR or IAD for domestic F service while coach passenger can also choose JFK.
Originally Posted by UnitedF1RST
I like the idea of 4 legacy carriers but raise the obvious points with the AC/US deal with regulatory approval.
I predict it could be a problem; but "IF I called the shots" not a problem.
Originally Posted by flying_bubba
There were a couple of other points in your post that I disagree with:
1. SEA is only an ideal departure point to Asia if you live in the west. If you're in the Midwest or Eastern US, it is actually out of the way and adds to the overall travel time. IMHO if you aren't backtracking to a hub, i.e. EUG-SFO-HKG, then the flights to Asia from the existing west coast hubs are actually better than from SEA.
I agree that SEA is not an ideal departure point for everyone. It is however a convenient departure point from a good chunk of the US. From smaller markets in 1/3 of the US connecting in SEA would usually be similar to connecting somewhere else. Other markets will have added travel time, but this is true of any hub.
IMO SEA would be the most effective AA hub to Asia for a merged AA/AS now competing with 3 other merged carriers with vast route networks. AA would need their own Asia network to remain competitive. IMO it is better to use SEA than duplicating an already well served market.
Originally Posted by flying_bubba
There were a couple of other points in your post that I disagree with:
2. You suggested that the DL + NW merged company (their new slogan: We loved to provide crappy service, and it shows!) would code share with LH, but wouldn't they be better off code sharing with their existing partners AF & KL?
Thanks for catching that typo!
Indeed, it would be AF, the same company that buys a bunch of DLNW that would code-share and revenue share on all transatlantic routes.

Last edited by wanaflyforless; Feb 9, 2008 at 12:47 pm
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Old Feb 9, 2008, 12:43 pm
  #131  
 
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Originally Posted by MarkXS
I'm not sure B6 doesn't factor into LH/*A plans.
Take a look at the LH/Air One partnership in Italy if you'd like some inspiration on how LH can hook up with a LCC....and recently United has joined the bandwagon adding Air One as a partner not long after resuming to FCO. Anything can happen
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Old Feb 9, 2008, 1:07 pm
  #132  
 
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Um, jetBlue's moving into a new terminal in a few months. I don't think they're looking to be bought out.

And jetBlue definitely has enough money to stop an LBO dead in its tracks if it wanted to.
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Old Feb 9, 2008, 1:42 pm
  #133  
 
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Originally Posted by flying_bubba
wanaflyforless,
There were a couple of other points in your post that I disagree with:

1. SEA is only an ideal departure point to Asia if you live in the west. If you're in the Midwest or Eastern US, it is actually out of the way and adds to the overall travel time. IMHO if you aren't backtracking to a hub, i.e. EUG-SFO-HKG, then the flights to Asia from the existing west coast hubs are actually better than from SEA.
That's really only true because of the current flight load out of SEA. If United ever decided to add some more domestic non-stops from SEA, SEA would actually be more direct and would cut down on travel time.

As you can see here.

Chris
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Old Feb 9, 2008, 1:58 pm
  #134  
 
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All right, as long as we're blue skying and providing free consulting advice to the yet to be consummated deal, here are my ideas:

1) Assume international hubs at ORD, IAH, EWR, SFO.
2) Assume international gateways at LAX and IAD.
3) Assume regional hubs at DEN and CLE
4) Provide select international service from MIA, SEA, JFK


Identify key airports with capacity issues and reduce regional service, while increasing seats to hubs. ORD is the biggest benefactor here. The problem with ORD for UA is that it is trying to be all things to all people. The delays, IMHO, are largely due to over expansion of regional service from AA and UA. And what I am talking about is getting rid of the very small destination traffic that can only support RJs. If the destination can't support mainline from ORD (and other hubs) several times a day, they get RJs from elsewhere. But what you do is increase seats to CLE and let the RJs scatter to the four winds from CLE and DEN.

Utilize airports with capacity to burn as regional hubs. Since CO will likely take it in the shorts from the city of Cleveland if they abandon that investment, make CLE the East's RJ hub. Do the same for the West with DEN. IAH can probably handle a mix better than ORD. IAD can probably also handle the mix. If additional capacity is needed, I'm willing to bet good deals could be worked out with PIT, STL or MCI. (And possibly DTW, CVG, MEM and SLC in the near future.)

A particular challenge in this world will be wrangling the UX carriers and ExpressJet and convincing them that this is a good idea.

The bugaboo in this strategy is trying to streamline the manner in which you get folks from a relatively minor market to an international destination without making them connect twice. Right now, if a guy from Oshkosh Trucks needs to go to Europe to sell equipment, he can fly direct to ORD and get pretty much anywhere. Under the new scenario, he likely flies to CLE and connects to EWR and then onward. (Or, more likely, flies a NW/DL RJ to MSP and then KLM to Europe.)

The guy in RDU that needs to get to OMA is probably flying RDU-CLE-OMA, which is probably better than going through ORD. If the guy in RDU needs to go to PEK, he probably is getting a RDU-CLE-ORD-PEK routing, versus RDU-ORD-PEK today.

ORD becomes the Northern hemisphere International hub and a mainline domestic hub.

IAH becomes the Southern hemisphere's hub, with a focus on Latin America. It is also a mainline domestic hub, with some RJ traffic.

SFO is a Pacific hub, with LAX picking up some capacity and SEA available for cargo focus.

EWR is the European hub, with IAD complementing service. (One thing that no one has noted is that CO flies to India, ex EWR.)

MIA and JFK are used for seasonal Caribbean service.

Business1 (such as that exists anymore) continues ex ORD and now IAH, with IAD. The main idea is to ensure hourly mainline service to LGA, BOS, DCA, plus frequent service to PHL, ATL, DFW, and MSP to provide alternatives to AA, US, and NW/DL.

There is also a need for BOS-LGA-DCA direct services. Arguably, that could be handled by an expansion of CO's relationship with Amtrak for Northeast Corridor codesharing.

I'm not sure what you do with Continental Micronesia, but if it works, keep it.

The routing is seriously complicated, but a bigger airline also allows for more flexibility and options. If you have IAH and ORD as mainline hubs, you are in a much better place to shift traffic when the weather goes sour. If you move your RJ ops to places where capacity isn't as much of an issue, you again provide more options when the weather goes sour.

Operationally, the 733's are off to the desert pretty quick. If you need more of their capacity, you infill with RJs (Emb 170 / 190 class in particular).

Keep CO management, *A, upgrade the RCCs to CO standard, and retain M+ and perks.

Ted is toast. To compete with AA and NW/DL, you will need an F product to "leisure" markets. AA, NW/DL and UA/CO will need to differentiate from the LCCs and mainline food, E+, F, and upgrades are the way to go. The A319 / 320 aircraft are problematical, if only because CO is all Boeing. The UA 737 and 757 fleet is also problematical simply because the vast majority of them are at least 15 years old (is it worthwhile to invest in upgrading old airframes or simply trying to get newer ones?). CO has newer 757s, but has the same issues with the 733 and 735s. The good news is that CO has been buying the 737 NGs for a while (and has some on order).

Still, neither airline has a lot of money out there for new aircraft. However, if the economy continues to soften, will some newer aircraft be made available on the used market if some airlines go bust?
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Old Feb 9, 2008, 2:34 pm
  #135  
 
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Originally Posted by JayhawkCO
That's really only true because of the current flight load out of SEA. If United ever decided to add some more domestic non-stops from SEA, SEA would actually be more direct and would cut down on travel time.

As you can see here.
Yes, but NYC customers would just connect in ORD which would be even shorter than SEA. SEA only makes sense if you are west of the Mississippi and north of SFO.
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