Impact on UA of the business plan changes in AA

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Sep 17, 2009, 12:48 pm

Intrepid

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Impact on UA of the business plan changes in AA

AA anounced several changes that amount to a minor new strategic plan.

Among various new initiatives - financial and operational " American will add 57 flights a day out of Chicago as part of the plan, including trips to Beijing.
Chicago Mayor Richard M. Daley said the company's new China service will help the Windy City's bid to host the 2016 Olympics." (source:Market Watch).

AA also plans on ordering some 22 CRJ70 for the regional markets served by AE.
Admittedly, none of the AA ambitious changes may pan out.
AA stock rallied earlier today 18% in response to the anouncement. That means that some segments of the market consider this plan to have a chance.

Here are some thoughts:
AA is presently absent from several midwest markets. IF indeed AA will add 57 daily flights ex-ORD, UA will then face stiff competition by AA that among other things will be reflected on lower fares. ( Hopefully.)

UA does not service every CONUS state. Notably UA neglected parts of FL and discontinued service to AK.
It will be ironic, however justified, for AA to plug the gaps in UA map of service. I don't consider codeshare with US and the like (- CO-?) as a substitute to UA/UX service.
Among the 5 legacies remaining, which is next to go/(merge)? Not DL, AA nor CO. Pick your choice.

Sep 17, 2009, 12:57 pm

mahasamatman

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Quote:

Originally Posted by Intrepid

UA does not service every CONUS state. Notably UA neglected parts of FL and discontinued service to AK.

Minor point - but they do service all CONUS states. AK is not part of CONUS, and even though they may not service all cities in FL, they do service the state.

Sep 17, 2009, 12:59 pm

UAX_Brasilia

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Quote:

Originally Posted by mahasamatman

Minor point - but they do service all CONUS states. AK is not part of CONUS, and even though they may not service all cities in FL, they do service the state.

I agree, but there are many who think Alaska is part of the CONUS. Also, I think there are a few states UA has no service to at all. Perhaps Mississippi?

Last edited by UAX_Brasilia; Sep 17, 2009 at 1:05 pm

Sep 17, 2009, 1:19 pm

WineCountryUA

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Quote:

Originally Posted by UAX_Brasilia

I agree, but there are many who think Alaska is part of the CONUS. ...

Quote:

CONUS, Contiguous United States, The term contiguous United States refers to the 48 U.S. states located on the North American continent south of the border with Canada, plus the District of Columbia. The term excludes the states of Alaska and Hawaii and all off-shore U.S. territories and possessions.

Quote:

Originally Posted by UAX_Brasilia

....Perhaps Mississippi?

believe you are correct concerning Mississippi, UA NA route map and Delware??

Sep 17, 2009, 1:26 pm

pinniped

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Minor wikipedia inconsistency: the link below goes to a page titled "Contiguous" United States, but the URL itself is "Continental" United States. One definition would seem to include Alaska (most of it anyway), whereas the other clearly would not.

The content of the page goes on to describe the definition of "contiguous".

Sep 17, 2009, 1:27 pm

UAL awesome

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Quote:

Originally Posted by Intrepid

And why are these 3 suddenly exempt?

Sep 17, 2009, 1:27 pm

UAX_Brasilia

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Quote:

Originally Posted by WineCountryUA

Like I said, I know what CONUS means. My point was that many think it includes Alaska and want to make it "Continental United States".

Sep 17, 2009, 1:32 pm

Thunderroad

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A minor matter, but interesting (to me at least, since I might fly them!) that AA is refitting some of its existing CRJs to include F. Taking a page from UA's book in that respect--and perhaps even vaguely analogous to UA's decision to drop Ted (sorry to say that word!) and it's Y-only service. I don't believe the announcement indicated whether the new AA CRJs would include F.

Sep 17, 2009, 1:42 pm

channa

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Quote:

Originally Posted by Intrepid

AA anounced several changes that amount to a minor new strategic plan.

How is this a new strategic plan? They're not changing fundamentally how they do business.

They're adding a few int'l flights, putting F in the RJ's, and buying some new RJs. If anything, this mimics what UA did already.

Anyhow, given how much the airlines have cut, it's more or less reinstating service. I doubt that they'll even be at the same lift they had last year.

The gutsy move, IMO, is that they think the economy has rebounded to the point where they can expand again (I'm hoping they're right on this one). And by targetting Chicago, they're hoping UA doesn't have the resources to expand as quickly (I'm hoping they're wrong on that).

UA is fortunate that it has arrangements with many (too many) regional partners, so expanding to small cities without a lot of capital is relatively easy. As AA is UA's arch-nemesis, I'm sure there won't take this lying down.

Sep 17, 2009, 2:26 pm

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Quote:

Originally Posted by channa

UA is fortunate that it has arrangements with many (too many) regional partners, so expanding to small cities without a lot of capital is relatively easy. As AA is UA's arch-nemesis, I'm sure there won't take this lying down.

Both airlines are lying down. On a slab just waiting for the undertaker to move them to the pine box.

Sep 17, 2009, 2:38 pm

#11

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Quote:

Originally Posted by pinniped

Quote:

Originally Posted by UAX_Brasilia

Like I said, I know what CONUS means. My point was that many think it includes Alaska and want to make it "Continental United States".

The definition of Continental United States and Contiguous United States are the same (yes seems odd, but this was the way the US armed forces defined the term CONUS years ago)
U.S. Navy Style Guide
plus
http://www.thefreedictionary.com/con...+United+States
http://www.answers.com/topic/continental-united-states
http://dictionary.babylon.com/Contin...nited%20States
and on and on and ....

Sep 17, 2009, 2:59 pm

#12

Intrepid

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Quote:

Originally Posted by mahasamatman

Minor point - but they do service all CONUS states. AK is not part of CONUS, and even though they may not service all cities in FL, they do service the state.

AK is served by the 3-4 other "global" airlines - AA, DL, US, AC (+ AS). Thus UA absence in ANC is not noticed...

Quote:

Originally Posted by WineCountryUA

believe you are correct concerning Mississippi, UA NA route map and Delware??

Delaware is regularly serviced by Amtrak and AF2 (charter flights only).

Mississippi? You can fly there on UA metal to AL or AR and then take a bus.

Sep 17, 2009, 3:04 pm

#13

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Quote:

Originally Posted by WineCountryUA

That's the way I always have and always will think of both contiguous and continental United States (both meaning ONLY the 48 states), but the meaning of continental has changed for some. LOT's of people think Alaska is included in continental. I don't agree with it, I just live with it.

Quote:

Originally Posted by Intrepid

AK is served by the 3-4 other "global" airlines - AA, DL, US, AC (+ AS). Thus UA absence in ANC is not noticed...

Delaware is regularly serviced by Amtrak and AF2 (charter flights only).

Mississippi? You can fly there on UA metal to AL or AR and then take a bus.

What does any of that have to do with whether or not UA flies to Mississippi or Delaware.

Last edited by iluv2fly; Sep 17, 2009 at 3:36 pm Reason: merge

Sep 17, 2009, 3:20 pm

#14

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Quote:

Originally Posted by channa

The gutsy move, IMO, is that they think the economy has rebounded to the point where they can expand again (I'm hoping they're right on this one). And by targetting Chicago, they're hoping UA doesn't have the resources to expand as quickly (I'm hoping they're wrong on that).

AA is gutting service in STL so I think the net result is no change in domestic capacity but a slight uptick in international capacity (it's somewhere in their press release). Also, and I could be wrong on this, but I think that AA drew down ORD further than UA did so really AA is one playing catchup there.