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Old Sep 21, 09, 8:00 am   #1
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the grapevine: US and UA are talking about something

It's hard to keep a secret in the airline world. US management is pretty good about it, but eventually SOMETHING leaks out. And "the buzz" at US almost always seems to lead to something (like this summer, the buzz accurately indicated that US would do some sort of transaction at LGA).

Now the buzz says there are high level talks between UA and US. That's pretty easy to establish because it's hard to keep it a secret when Parker or Kirby get on a plane -- or UA people show up in Tempe. So unless people are just making this stuff up, something important is being discussed.

There has been speculation of a merger possibility between US and AA. I've always dismissed these rumors because there's no obvious seller -- Parker and Kirby aren't looking to retire. With US and UA, there's a more obvious "partnership" possibility.

However, the odds would suggest that US/UA talks are about something significantly less than an actual merger. There's some thought that the 2 airlines (who are Star Alliance partners anyway) want to integrate some airport operations to save money. Makes sense, right? We probably won't know exactly what's going on until the press release is issued.
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Old Sep 21, 09, 10:00 am   #2
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Neither airline is in a very good cash position - and with the union contracts from HP and US still miles apart, I can't imagine another airline would want to touch that ... I can't imagine this will be a true merger.
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Old Sep 21, 09, 10:10 am   #3
  
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Or maybe talking about *A integration/benefits/gate consolidation in wake of Continental joining in a little over a month ? Continental cant get too close just yet, but UAL and US certainly can talk. Neither has much cash, but figuring out a way to save money certainly needs talking.

1 example only: Wouldn't be great if United/USAirways/Continental all found a way to be in the same terminal in BOS ? Soon you will have A/B/C in play for *A domestic carriers...

Cheers.
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Old Sep 21, 09, 11:00 am   #4
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Or maybe talking about *A integration/benefits/gate consolidation in wake of Continental joining in a little over a month ? Continental cant get too close just yet, but UAL and US certainly can talk. Neither has much cash, but figuring out a way to save money certainly needs talking.

1 example only: Wouldn't be great if United/USAirways/Continental all found a way to be in the same terminal in BOS ? Soon you will have A/B/C in play for *A domestic carriers...

Cheers.
Well, it's interesting that US and UA managements tend to "get along," but there's been very little interaction between US and CO management -- even though they're about to now become Star Alliance partners. Even though both airlines are filled with beancounters who you'd think might see eye-to-eye, there seems to be some lingering bad blood. And it goes pretty far back to Gordon Bethune publicly (and erroneously) predicting that America West would go broke, to CO throwing America West out of the OnePass program immediately after Parker "rationalized" America West's fares. But now that there's going to be a new CEO at CO, maybe US and CO can talk about matters of mutual self-interest. Certainly Dividend Miles members would welcome an expanded relationship between the two carriers.
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Old Sep 21, 09, 1:19 pm   #5
  
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I would love to see a menage-a-trois between US, UA and CO. US has been making some much-welcome improvements lately, and the future looks very bright from a product standpoint. Perhaps US was issued an ultimatum to put up or shut up if they wanted to stay in the *A for the long haul, and US decided to make the improvements.
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Old Sep 21, 09, 1:30 pm   #6
  
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If each airline did a better job of honoring each other's status more fully (including "premium" seat assignments in coach) and offering code shares, that would be a very welcome outcome.
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Old Sep 21, 09, 2:13 pm   #7
  
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That's a problem because they still compete against one another.

Or did you mean on routes where they do not compete?
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Old Sep 21, 09, 4:35 pm   #8
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Perhaps US was issued an ultimatum to put up or shut up if they wanted to stay in the *A for the long haul, and US decided to make the improvements.
My guess is that they're making product improvements because it makes good business sense to do so.
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Old Sep 21, 09, 5:34 pm   #9
  
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My guess is that they're making product improvements because it makes good business sense to do so.
If that is the case, why did US management allow the product to decline so badly during 2006-2008? Common sense dictates that they would not have allowed this to happen to begin with. It makes no financial sense to have a good product, ruin it, run off their best customers, build it back up to standards again, then try to win back those they ran off.
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Old Sep 21, 09, 5:55 pm   #10
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If that is the case, why did US management allow the product to decline so badly during 2006-2008? Common sense dictates that they would not have allowed this to happen to begin with. It makes no financial sense to have a good product, ruin it, run off their best customers, build it back up to standards again, then try to win back those they ran off.
Well, perhaps they have some data now which shows that pax are willing to pay for these "enhancements," where before they believed they were not. Perhaps its a realization that some of their moves were wrong. Experimentation is not without risks (but also not without rewards: the new fees, for example, will net US $500 million a year).

I just don't think they're improving their product here because the Star Alliance told them to do so. Of course, a more consistent product DOES make it easier to partner. Delta, for example, restored free wine and beer on transatlantic flights when they partnered with Air France this year.
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Old Sep 21, 09, 5:59 pm   #11
  
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Great...What do you get when two badly run airlines merge? One really big and very bad airline!
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Old Sep 21, 09, 6:13 pm   #12
  
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Great...What do you get when two badly run airlines merge? One really big and very bad airline!
The amazing thing that my dad pointed out to me in the 1990s was that US has a history of merging airlines and soiling the decent one. Piedmont was "good", Allegheny was "bad". The result was "bad". PSA was "good", US Air was "bad". There aren't even remnants of PSA. HP was "not bad", US Air was "terrible"... UA is decent, US is "god-awful"...
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Old Sep 21, 09, 6:35 pm   #13
  
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The amazing thing that my dad pointed out to me in the 1990s was that US has a history of merging airlines and soiling the decent one. Piedmont was "good", Allegheny was "bad". The result was "bad". PSA was "good", US Air was "bad". There aren't even remnants of PSA. HP was "not bad", US Air was "terrible"... UA is decent, US is "god-awful"...
I fully agree with this, except that HP was, IMHO, every bit as bad as US at its worst. But don't forget that CO went through this too; during the Lorenzo years it was easily the worst airline in the country; nowadays they are generally considered (at least one of) the best.

I'd love to see a closer alliance between CO, UA, and US after CO joins *A, with club access, etc. It looks like US and UA have that, and CO and UA are getting this; just add CO and US and all will be well. And we're now two generations away from Bethune at CO so maybe it will happen.
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Old Sep 21, 09, 6:42 pm   #14
  
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Piedmont was a good airline. The other carriers that became US I never flew.

In my opinion, based on my flying from 1997-2005, pre-merger US Airways had a good product, but a very poor balance sheet, and 9/11 made it worse.

I never flew America West, but those here in this forum who flew them seemed happy with its product.

When the two different cultures came together, they clashed, and the two as one became bad. But it didn't have to be that way. The new US did not have to get worse before it got better.
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Old Sep 21, 09, 6:53 pm   #15
  
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I'd love to see a closer alliance between CO, UA, and US after CO joins *A, with club access, etc. It looks like US and UA have that, and CO and UA are getting this; just add CO and US and all will be well.
The CO FAQ Alliance Update webpage says,

Quote:
Will I be able to use my Presidents Club card to access United's Red Carpet Club lounges as well as other Star Alliance partner Lounges after Oct. 27, 2009?

Yes, Presidents Club members will have access to the Red Carpet Club lounges as well as the other Star Alliance lounges. In addition, Continental's Platinum Elite and Gold members traveling on international Star Alliance itineraries will have access to Star Alliance lounges upon Continental joining Star.
So it reads like reciprocal lounge access besides the RCCs is already in the works.
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