US/AA Merger and impact on United

Discussion in 'United Airlines | MileagePlus' started by HaveMilesWillTravel, Feb 13, 2013.  |  Print Topic

  1. HaveMilesWillTravel
    Original Member

    HaveMilesWillTravel Gold Member

    Messages:
    12,504
    Likes Received:
    20,199
    Status Points:
    16,520
    So now that the merger is a reality, perhaps it's time to speculate about the impact this may or may not have for United and UA fliers.

    - US is leaving AA -- does that mean UA will have to expand into areas that they previous left to US to cover?

    - Will UA copy AA and try to poach AA elites?
     
    autolycus and jbcarioca like this.
  2. NYCUA1K

    NYCUA1K Gold Member

    Messages:
    4,739
    Likes Received:
    5,086
    Status Points:
    4,270
    No, because the UA-CO merger already took care of that by providing coverage where PMUA had none (but was strong almost everywhere else) and US had a sizable presence: Latin/South America.

    No, because Smisek has more class than that :D , and UA is not desperate, whereas AA has been for a while, as it kept losing money Q after Q...
     
    autolycus and jbcarioca like this.
  3. Wandering Aramean
    Original Member

    Wandering Aramean Gold Member

    Messages:
    28,217
    Likes Received:
    61,750
    Status Points:
    20,020
    Internationally United is pretty well situated. In the southeastern USA, however, they relied on US to handle things. It will be interesting to see how they adjust now that they are losing that capacity. United can get you in and out of the region well enough but moving around within it is not at all reasonable with the current route network minus US.

    UA has a status match program in place. I don't expect anything new or different to change in that regard.
     
    akcae, IDGflygirl, mht_flyer and 2 others like this.
  4. jbcarioca
    Original Member

    jbcarioca Gold Member

    Messages:
    17,507
    Likes Received:
    57,455
    Status Points:
    20,020
    I am perplexed, maybe I do not understand. US has almost nothing in South American, only a single daily flight CLT-GIG-CLT and a brand new single daily flight CLT-GRU-CLT. They are not well known in any Latin American market, including the two South American cities to which they have flights and have only a couple of frequencies in Latin America anywhere. AA, by contrast, has more LA/Caribbean service than any other carrier, as much as 40% of all traffic country-US in several cases. They dominate Brazil-US, the largest market by far, even more so now that their codeshares with JJ are coming, and existing ones with LA, a OW founder, in several other markets.

    Mr. Parker is not unacquainted with facts. US has East Coast US to offer, that is about it. The new AA has a large Asia problem, though, and parker and Co will be working hard to fix that one.

    That is a very good point IMHO. The UA moves to compensate will be interesting. UA also is relatively weak in South America and strong in Asia, opposite the new American. DL is now strong in both Asia and South America. I will be curious to see how the new AA and UA work to fix those strategic weaknesses, as DL has already done.

    Finally, few people mention the new AA shareholders, which will now include Airbus. Will that portend some fleet changes in the new AA plans?
     
    IDGflygirl and autolycus like this.
  5. autolycus

    autolycus Gold Member

    Messages:
    2,136
    Likes Received:
    7,321
    Status Points:
    5,000
    There is a lot of potential for increased competition in the SE, depending on what AA does with its new CLT hub. As it stands right now, DL and Airtran/SW have got to be thinking they're in unbelievable shape down here. Will new AA and United try to take some of the SE stronghold from the two ATL-hubbed carriers or will they focus on other areas they believe they are already stronger and have less risk with?

    My personal hope is that AA keeps and strengthens CLT at the expense of PHL. I think it makes sense for them to do that. I also hope, for my parents' sake that UA and AA offer better connection options out of smaller SE markets than they currently do. My parents right now can get AA to DFW, US to CLT, DL to ATL, and UA to IAH and maybe IAD--although a lot of times they end up having to do CLT to IAD, so that might not currently be a nonstop route. Ideally, the US/AA merger will leave the DFW and CLT routes and possibly add or shift one to ORD, and UA will add flights to IAD. The problem they have is that it's all RJs, so I don't know how viable those routes really are. So again, does UA have any realistic way to try to recapture people like my parents who want competition on east coast routes and not just be stuck with DL as a monopoly player?
     
    jbcarioca likes this.
  6. Wandering Aramean
    Original Member

    Wandering Aramean Gold Member

    Messages:
    28,217
    Likes Received:
    61,750
    Status Points:
    20,020
    UA is definitely behind AA but they have service from 4 gateways and a decent lift in and out of GIG/GRU. I'm surprised that other Brazil/LatAm destinations haven't been added yet but I know that the UA fleet rationalization and adjustments are going slower than they hoped. Plus there are slots issues. I expect to see AA be required to divest some of those slots.

    Doubt it. They have a lot of Airbii on order already and unlikely to change.
     
    IDGflygirl and jbcarioca like this.
  7. NYCUA1K

    NYCUA1K Gold Member

    Messages:
    4,739
    Likes Received:
    5,086
    Status Points:
    4,270
    You are right to be perplexed. Before the UA-CO merger, every time I went south of the border, which was to some place in the Caribbeans, was on US, so I erroneously concluded that it might be as big elsewhere "south of the border". It really isn't. Looking at a route map would have made that clear. Here is a comparison of the US-UACO route maps for North/some Caribbean;

    USAIR-ROUTE-MAP.jpg

    UACO-MAP.png
     
    unavaca and jbcarioca like this.
  8. Wandering Aramean
    Original Member

    Wandering Aramean Gold Member

    Messages:
    28,217
    Likes Received:
    61,750
    Status Points:
    20,020
    This is the Caribbean map for UA; the one above has only domestic US and Canada service.
    UALatAm.JPG

    Most of that is legacy CO service into Mexico and some in the Caribbean.
     
    desamo, IDGflygirl, unavaca and 2 others like this.
  9. Weatherboy

    Weatherboy Gold Member

    Messages:
    4,199
    Likes Received:
    7,445
    Status Points:
    5,245
    So if US/AA code-share in Q3 but won't be out of *A until '14, does that mean UA flyers will be able to earn UA miles on AA flights flown under a US banner? :)
     
    unavaca and jbcarioca like this.
  10. autolycus

    autolycus Gold Member

    Messages:
    2,136
    Likes Received:
    7,321
    Status Points:
    5,000
    That's an amusing hypothetical, but I wouldn't count on it. Their FAQ for customers reads as if US will likely leave *A when the merger closes, which will be Q3. That's just me reading between the lines, but all the FAQ says about *A is that US Airways will remain until *A "until the merger closes". I read "closes" as the stock transaction, not the final integration into a single operating license.
     
    desamo and jbcarioca like this.
  11. jbcarioca
    Original Member

    jbcarioca Gold Member

    Messages:
    17,507
    Likes Received:
    57,455
    Status Points:
    20,020
    UA has only three destinations in the Southern Cone where the revenues are. They have two daily 763's from EZE, one each IAH and EWR. From GIG they have a 777 to IAD and a 764 to IAH, and GRU has IAH and EWR 767's plus the 777 to ORD that feeds Japan. They do have BOG, UIO, LIM and CCS too. DL has more destinations but less capacity, but the GOL codeshare is giving them good feeds and they're still building. Both of these are having a harder time than they planned and have had lighter loads recently, while AA has been holding up well, surprising when seeing their domestic US collapse in the last quarter.

    I'll happily wager with you that the new AA will be forced to give up DCA slots, maybe even a handful elsewhere, but probably not anywhere in Latin America, least of all in Brazil where US has a grand total of two flights daily, one, to GRU, that is less than six months old. If there were to be South America problems they'd be related to the planned JJ/AA codeshare that will give them 100% Brazil-MIA, for example and more than 50% in NYC. With Open Skies the local betting is for AA/JJ action for ORD and ORL with LAX coming just as soon as they get some long range aircraft. EZE and SCL are both expected to get more service too.

    In northern South America and the Caribbean all the growth is almost certain to be opportunistic. With the notable exception of CCS these are all seasonal and have dramatic yield fluctuations. AA has been in this area for eons and knows the options well. I'm certain Doug Parker remembers the region well since he dealt with it when he was at AMR. Frankly, any carrier that can make money running daily 763, 738 and 757 from MIA to PAP plus a daily 763 to JFK from PAP knows how to make money in hard places. Both DL and UA manage a single daily flight to PAP.

    I am not trying to change the topic, but to point out that AA has a very valuable corporate knowledge and experience in "south of the border" that no US carriers other than PanAm and Braniff ever possessed. No domestic carrier in the region comes anywhere close to their breadth. Even in Europe no carrier has their entree, even IB, post IAC, is not a threat. Doug Parker will know how to monetize all that access, and get an Asia deal somewhere. One cannot help but imagine Qatar or another such carrier playing a role also.
     
    desamo and IDGflygirl like this.
  12. NYCUA1K

    NYCUA1K Gold Member

    Messages:
    4,739
    Likes Received:
    5,086
    Status Points:
    4,270
    Much clearer map for UA, but the US map did include the Caribbean, which is why I had qualified my post as showing "some" Caribbean. I did not feel like spending the time to search for maps as I was preparing for work...;)
     
    jbcarioca likes this.
  13. Wandering Aramean
    Original Member

    Wandering Aramean Gold Member

    Messages:
    28,217
    Likes Received:
    61,750
    Status Points:
    20,020
    What other destinations are important then, particularly where AA has service? SCL is a gaping hole for UA but the general consensus is that it is coming as soon as the 787s are running smoothly. Beyond that, some northern Brazil options could be served but it is not clear those are high yielding. AA definitely has more lift there,

    The feed helps DL a bit but still no revenue sharing AFAIK so that's sit a challenge on the revenue side, I'd think.

    I'm placing the over/under line at 20 pairs. :D

    I agree, to an extent. AA certainly knows the markets but they've also been beating a hasty retreat from many of them. Other carriers - notably JetBlue - have been picking up a lot of the slack and in some cases arguably pushing AA out with a better cost structure. Unfortunately this merger isn't going to help the combined AA/US cost structures too much.

    Agreed that they have the institutional knowledge. But it is still just one region in the world and it is the only one they have the presence. With open skies on the horizon the barrier to entry is going to be dropping and other companies with some experience growing into markets are going to be gunning for them. Right at the time that the new AA is working to finalize their systems and flet integration. That's a ripe opportunity to strike.

    Not so easy to compare service in the Caribbean when one map doesn't show any. Bad info is worse than no info.
     
    HaveMilesWillTravel likes this.
  14. NYCUA1K

    NYCUA1K Gold Member

    Messages:
    4,739
    Likes Received:
    5,086
    Status Points:
    4,270
    I have great faith in the ability of folks on this board to sift through the multitude of daily posts to find what they can use and discard all else... especially posts that seem like an obsessive compulsion to be polemical.
     
  15. HaveMilesWillTravel
    Original Member

    HaveMilesWillTravel Gold Member

    Messages:
    12,504
    Likes Received:
    20,199
    Status Points:
    16,520
    A simple "yeah, I guess I picked the wrong map for my comparison" would have worked, too.
     
    Ygor, newbluesea, unavaca and 3 others like this.
  16. KenInEscazu

    KenInEscazu Gold Member

    Messages:
    1,548
    Likes Received:
    1,935
    Status Points:
    1,120
    One very important factor that hasn't been noted here is Copa. CM can get you anywhere within Latin America, albeit through PTY. Flying Copa counts as UA metal for those of us who have such a concern.

    Copa is lacking in IFE, but their new planes are being delivered with a very acceptable version of it. I look for that one shortcoming to disappear over the next 5 years. And their food? WAYYYY better than any USA-based carrier. UG percentages are excellent for those of us with Premier status, too.

    With Taca having recently joined *A, there are now even more options for MileagePlus fliers. Taca (like Copa) has wonderful food catering, plus they have good IFE and their F seating is excellent - even on E190s. While Taca flights don't count as UA metal, they still add a great number of options for those of us frequently flying south of the border.

    These two carriers may lack somewhat in terms of branding, but as a SJO-based MileagePlus passenger, they often come in very handy. UA may need to do some co-promotion to make this option apparent to the general public.

    Finally, one option that the US/AA merger doesn't address for me is the intra-Latin America availability. If I want to fly anywhere within Latin America out of SJO, AA/OW offers little if anything. UA via Copa and Taca offer everything. While I may be in a minority of customers who view this as a big bonus, it is HUGE to me, as I travel frequently between SJO, PTY, BOG and MDE.
     
  17. Wandering Aramean
    Original Member

    Wandering Aramean Gold Member

    Messages:
    28,217
    Likes Received:
    61,750
    Status Points:
    20,020
    You'll have the LATAM group and their affiliates. Slightly further south than Copa/Taca/Avianca, but it is somewhat viable.
     
  18. KenInEscazu

    KenInEscazu Gold Member

    Messages:
    1,548
    Likes Received:
    1,935
    Status Points:
    1,120
    I do not know of a single one who flies into SJO. Am I mistaken?
     
  19. NYCUA1K

    NYCUA1K Gold Member

    Messages:
    4,739
    Likes Received:
    5,086
    Status Points:
    4,270
    :(:mad::confused:
    I did!!! In my own way:
    but the Armenian would not have it any other way. I had no time to hunt for the maps, and my statement did clearly indicate that I was aware that all of the Caribbeans was not included. So, why couldn't the Armenian just let go?

    I thought he'd improved his ways on this board for a while but now he's back to the personality that got some folks leaving MP. He belongs over at the other board!

    That is the end for me on this, lest we turn MP into the other board...
     
  20. desamo

    desamo Gold Member

    Messages:
    9,320
    Likes Received:
    10,970
    Status Points:
    14,975
    LAN does afaik.
     
  21. Wandering Aramean
    Original Member

    Wandering Aramean Gold Member

    Messages:
    28,217
    Likes Received:
    61,750
    Status Points:
    20,020
    Tell me again why it is my fault for pointing out that the information provided was, at best, woefully incomplete to support the claim made? All I did was add another map with the Caribbean coverage, pointing out that it had the information you appeared to be trying to provide/compare. I was trying to support your post with more information. That's all.

    You could have simply said thanks for providing the map or even ignored the situation. Instead you tried to defend the map you shared as being useful in comparing the Caribbean network - the topic you were replying to - when it wasn't. I'm not trying to pick a fight, just provide a more complete and more accurate answer.
     
  22. NYCUA1K

    NYCUA1K Gold Member

    Messages:
    4,739
    Likes Received:
    5,086
    Status Points:
    4,270
    Well., I am now rectifying that big error and ignoring the situation as of now, but I do not think you can. It would be unlike you and highly uncharacteristic...
     
  23. Captain Oveur
    Original Member

    Captain Oveur Gold Member

    Messages:
    7,243
    Likes Received:
    14,058
    Status Points:
    12,520
    Only one page and this thread has gone full FlyerTalk.
     
  24. KenInEscazu

    KenInEscazu Gold Member

    Messages:
    1,548
    Likes Received:
    1,935
    Status Points:
    1,120
    Nope. I wish they did. It would be a very convenient use of my currently aging AAdvantage miles. :-(
     
  25. AZjohn

    AZjohn Silver Member

    Messages:
    461
    Likes Received:
    384
    Status Points:
    550
    Interesting development while I was enjoying vacation in Maui:p

    So, yet another airline merger is on it's way "officially" being drug out. This should be fun for the next few of years.
    Being one who gladly accepted the status match from 1K to ExPlat, seems bad news just keeps following me around.

    So, will the leaders of both companies take the best from each or do exactly as all previous airline mergers and be dictated what to screw up from the winning CEO .I guess this will be US's commander and chief, Parker, as it sound like old Tom get's kicked out in a couple of years with his golden parachute (which is I guess the American way...)

    So, how will this effect UA? I think I will leave it up to the self-proclaimed experts as I really have no clue or really any interest anymore. My flying patterns are US/Europe and think *A is the best alliance for that route. Now I have US in the mix with AA and BA, but that isn't that much extra capacity to EU. I guess flying in/out of TUS I might have a chance for more mainline flights at least as far as PHX which isn't too bad.

    But got to say after experiencing the UA/CO merger I feel very pessimistic and this merger will end up the same CF.
     

Share This Page