Some interesting discussions currently taking place regarding United Airlines at the moment, with, IMO the most likely outcome being liquidation of the airline.
Whilst UAL are already in Chapter 11 bankrupcy Protection, the question is whether they can keep away the dark shadows of liquidation. It was always going to be an uphill task to achieve this (with all the cost cutting methods proposed) but it was always feasible.
Now, however, with increased fuel prices and slowing passenger revenue, the chances of UAL appearing unscathed at the other end of this are diminishing.
Problems surrounding the likely conflict in Iraq is also seriously affecting customer confidence.
I do think though now, UAL are in a ‘catch 22’ position which they will struggle to get out of. To survive they need revenue and passengers are reluctant to fly with them for fear of the airline going under. I count myself as one of these people who, only last week, turned down a UAL ticket for a similar priced NWA ticket, in part because I feel that NWA is relatively more secure.
By: Saab 2000 - 20th March 2003 at 19:39
Well US Airways will soon be emerging from Chapter 11 a stronger airline. I think there is suppose to be announcement about their plans to join Star in Spring 2003.
By: Hand87_5 - 20th March 2003 at 17:47
Replace a chap 11 with an other one ?
By: Saab 2000 - 20th March 2003 at 16:38
I think US is the likely target.
By: Hand87_5 - 20th March 2003 at 16:26
I wonder one thing: If UAL would disappear , do you think that an other american major such as NW or CO could join Star Alliance?
By: mongu - 19th March 2003 at 22:45
Yes, I agree.
By: Bhoy - 19th March 2003 at 21:34
dunno about that… Star would still have Air Canada in the North American market…
What would happen to oneworld if American were to dissapear… oneworld would be left without a foothold in the biggest market in the World…
By: mongu - 19th March 2003 at 19:36
…but Pan Am didn’t.
UAL’s labour costs are generally held to be excessive and I think one lesson that the US gov’t needs to learn, is to learn (from the Brits!) how Unions should be dealt with.
Incidentally, I predict the collapse of the Star Alliance if UAL goes under.
By: Saab 2000 - 19th March 2003 at 19:10
Despite all temporary cuts things are not getting any better.
If UA cannot achieve its proposed labor cost reductions then it faces catastrophic consequences with the current aviation climate helping it do no better.
Sadly I think it is too little too late and sadly UA could go into liquidation and will drift into history. Though who knows, look at Continental how they came back.
By: mongu - 19th March 2003 at 18:44
I think a lot of airlines (esp AA) wil be praying for a UAL collapse for the reasons Pembo gave – massive constriction of capacity and a better chance for the survivors.
Cheaper aircraft and parts in even more of a buyers’ market, too.
By: Pembo330 - 19th March 2003 at 16:08
I hope I’m wrong too. I love UAL – my best flights were with them; but I just can’t see things improving enough for them to survive long term. 🙁
Fingers crossed they’ll pull through though. 🙂
That said from a purely economic point of view, a major airline collpase in the U.S. (such as United) could reduce the over-capacity and help to secure the other airlines’ future.
Interesting times.
By: Hand87_5 - 19th March 2003 at 16:01
I wish you were wrong 🙁
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March 19, 2003 at 2:26 pm