Archive for the 'United' Category

Yet More Denver Promotions

Published
by
Dan Webb
on February 18, 2010
in Southwest and United
. 0 Comments

Well, the competition going on in Denver has really resulted in some great promotions, and I just noticed another one going on after United essentially matched another one from Southwest. The latter has really been pushing its Business Select product (which I still don’t think is worth the price, unless you always buy full economy fares), and for awhile was offering a free roundtrip after the purchase of a Business Select roundtrip out of Denver.

Well, I discovered that last week Southwest has been selectively offering Business Select at the same price of its Anytime (fully refundable) fare, which represents a savings of only about $15-20. Of course, if you’re going to book an Anytime fare anyway, that’s a no-brainer. Though I still don’t think Business Select presents enough of a value when the prices are compared to Southwest’s cheapest fares. (Besides, you can get the main perk of Business Select – priority boarding – for $20 roundtrip with EarlyBird Check-In.)

Anyway, United tweeted about a new similar promotion – it has lowered its First Class fares for some markets out of Denver. Conveniently, the fares listed on the page for the promotion are the same as Southwest’s fares. :D

So, I guess if you want to fly first class on the cheap, this is for you. I would caution that on United you should avoid the regional jets. Yes, the larger RJs have a first class cabin but they aren’t as nice as mainline (no IFE, for example).

Anyway, I think it’s smart that the airlines have been doing these promotions. First of all, they’re going for the high-yielding business travelers here. But my other guess is that competing on first class fares (or in the past promotion, more expense economy fares) doesn’t have as much as a negative effect on a carrier’s bottom line than a race to the bottom on the cheap fares.

Photo: ASA CRJs in United Colors

Published
by
Dan Webb
on January 28, 2010
in Delta and United
. 0 Comments

Well, my friend and aviation photographer extraordinaire Chris Weyer got an interesting shot the other day – Atlantic Southeast Airlines CRJ-200s freshly-painted in United Colors. Delta was removing 20 of them from service (in exchange for swapping in 10 CRJ-900s), so ASA (owned by SkyWest) found a new home for them with United, with service starting in a couple of weeks.

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United Announces Return to Anchorage

Published
by
Dan Webb
on January 18, 2010
in Alaska, Frontier and United
. 0 Comments

United announced last week that would come back to Anchorage after leaving in 2008. In the past, United flew there year-round with an increase in service during the summer, but in 2007 it said that the city would only be a seasonal destination. A year later, the decision was made to cut all service entirely.

But after a year hiatus, United will come back with the same destinations it had when it left: its Chicago, Denver, and San Francisco hubs. All will have daily service, though Chicago gets an extra frequency on Saturdays. The Saturday-only service to Chicago starts a couple of weeks before the daily flights, and ends a couple of weeks after.

The routes are already flown by other carriers, so for the heck of it, I played around with some online timetables to see the increase in capacity that the new service would be providing:

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Anchorage to O’Hare is interesting, as it is a new route for American this summer as well (like United’s, the service is seasonal). One benefit for American’s new service, is that because of their partnership with Alaska, their new Chicago service carries Alaska’s code.

What I found to be very interesting, however, is the new San Francisco service, just from a scheduling perspective. The Denver and Chicago flights are timed pretty close to those of the competitors, but San Francisco is different. Alaska’s current nonstop service takes place overnight,  while United’s is during the day. That might just be the best way it fit into the schedule, as it appears one 757 flies ORD-ANC-SFO, while another flies SFO-ANC-ORD. I guess I’m wondering if the different timing will give one airline an advantage over the other.

But Anchorage has certainly been getting some nice boosts in service of late. Awhile back US Airways announced seasonal service to Philadelphia, and last week Continental announced seasonal service to Portland.

Continental, United Match Delta’s Bag Fee Increase

Published
by
Dan Webb
on January 13, 2010
in Continental and United
. 0 Comments

Not surprisingly, now that Delta has raised its checked luggage fees, the other airlines have decided to jump onboard with the exact same policy as Delta – $23 and $32 for the first and second bags, respectively, if the fees are paid online, and $25 and $35 if paid at the airport. (United, for some reason, has decided to not list the discounts for online check-in on its website.) Apparently all of these carriers think the smaller discount is enough to encourage passengers to pay online.

So we’ll have to see what the other legacies do here. US Airways already charges $25 and $35 at the airport, but the discounts are $5 each for paying online. American is charging $20 and $30 for the first and second bags (no matter what). I wouldn’t be surprised if both airlines adjusted their policies. Some other carriers might follow as well.

Meanwhile, I guess Southwest can adjust their “Bags Fly Free” advertising from $100 savings per roundtrip with two bags to $120 in savings – and I suggest they do it quickly, if possible, considering the number of ads they’ve been running during football games this season.

You can see Continental’s baggage policies here and United’s here.

United Responds to Southwest’s Denver Promotion

Published
by
Dan Webb
on January 12, 2010
in Southwest and United
. 0 Comments

jan12

Photo Credit: Chris Weyer.

Remember Southwest’s Denver promotion that I talked about last week? The one available atsouthwest.com/denverfree? I thought it was a shot at Frontier, and maybe it was, but regardless, it got United’s attention. United has gotten really creative and has launched a similar promotion, which can be found at, um, united.com/denverfree.

Southwest is giving out a free roundtrip for every Business Select fare purchased, and United is doing something similar – a free North American roundtrip for every roundtrip in North America, and a free systemwide roundtrip for every international roundtrip booked. One will earn two North American upgrades after the first qualifying flight.

Southwest’s promotion is targeted at Business Select, which is a fully-refundable ticket. While United hasn’t gotten that far, the promotion is not available for the more-heavily discounted economy fares (V,W,S,T,L,K), nor is it available for First Class or Business fares.

While the promotion focuses on Denver, it is available for any Colorado resident leaving from Aspen, Colorado Springs, Denver, Durango, Eagle, Hayden, Grand Junction, Gunnison, or Montrose.

Registration is required. Travel must be booked by February 14 and completed by March 5. More details here.

Denver’s certainly been fun to watch with all this competition. It actually make me think of Mad Max Beyond Thunderdome at times. (And shame on you if you don’t get that reference.) :D

ANA, Continental, and United Seek Anti-Trust Immunity

Published
by
Dan Webb
on December 24, 2009
in ANA, Continental, Star Alliance and United
. 0 Comments

The Japanese government has said that  both ANA and JAL need to enter immunized agreements with their partners in the United States. So, not surprisingly, ANA, Continental, and United have submitted their application for anti-trust immunity to the Department of Transportation. The three carriers said in a joint news release that immunity would allow them “to create a more efficient and comprehensive trans-Pacific network, generating substantial service and pricing benefits for consumers.”

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In the DOT application, the airlines said the deal will “expand consumer choice and enhance competition in the global marketplace” because it will “improve Joint Applicants’ ability – and the ability of the Star Alliance – to compete effectively with the SkyTeam and oneworld alliances.” They also said that the deal “will not substantially lessen” competition on service between the United States an Asia.

Interestingly, the airlines “evaluated the feasibility of including Air Canada in the Pacific JV, but decided that the additional complexities involved, including restrictions under the Canada-Japan bilateral agreement, would preclude implementation of the JV.”

United already has immunized relationships with carriers in the Pacifc region – Air New Zealand and Seoul-based Asiana.

Assuming this deal goes through, Star is in great shape when it comes to the Asian market – so the big question is what happens to the other two alliances. Will JAL stay with oneworld or hop over to SkyTeam? That question is a huge issue for American and Delta. Personally, I think that American/oneworld has a lot to lose here, while Delta/SkyTeam would be successful either way.

American’s share (as measured by nonstop seats) in the United States-Asia market is a measly 4.5% and and is 12.5% for the mainland U.S.-Japan Market (JAL has 11.5% and 13.4%, respectively). Meanwhile, Delta’s market share in those markets is 15.0% and 30.9%, respectively. The Narita hub acquired from Northwest helps them as well. Basically, American really needs JAL to help stay competitive, though it would still have an Asian partner in Cathay Pacific. (Those numbers are from the Star filing.)

The application is 203 pages long. I know what I’ll be reading this weekend. :)

Anyway, I won’t be posting tomorrow as I’ll be taking Christmas off. I will be writing my usual weekend posts, though. Next week, make sure to come visit and read my review of Up in the Air and why I no longer like Al Roker! :D

Thoughts on United Splitting the Order

Published
by
Dan Webb
on December 9, 2009
in United
. 6 Comments

I have concluded that I’m cursed. Really.

Every time I have some kind of big school assignment, an airline has a big announcement. Case in point: I had to study for a management exam yesterday (and that’s why today’s post is late). So, obviously, United decided to announce that instead of sticking with one vendor for its new international aircraft, it would split the order between 25 Boeing 787-8s and 25 A350-900s, with 50 options for each aircraft. I think this an interesting move that makes sense for the carrier – but this deal does raise some interesting questions about United’s future fleet plans.

The decision to replace the 767-300 with the 787-8 is very logical, and I think it gives United a lot of flexibility in terms of its international flying. According to Boeing, the the dash 8 will have a range between 7,650 and 8,200 nautical miles – right in the neighborhood of its 777 and 747 aircraft. So, there certainly could be some markets that might not work with those aircraft but could be perfect for the 787. For example – United’s current nonstop to Beijing from Dulles is operated by a 777 seasonally – perhaps it could go year-round with the 787?

United currently has 21 767-300ERs on international routes, but also has 14 767-300s operating domestic routes. There was no official word from United on if the there would be a domestically-configured 787.

Next, United has ordered the A350-900 to replace the 747 fleet, which is interesting considering that it’s a decent cut in seat count. Continue reading ‘Thoughts on United Splitting the Order’

Gogo Now Installed on All p.s. Aircraft

Published
by
Dan Webb
on November 24, 2009
in United
. 0 Comments

United announced yesterday that all 14 p.s. aircraft (757s) have been outfitted with Aircell’s Gogo service. United has joined other carriers in offering a Wi-Fi promotion. Through December 31, first-time users of Gogo will get a free session.

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A p.s. 757 arrives at LAX. Photo credit: Chris Weyer.

It makes sense for United to install Gogo on these aircraft as generally “take rates” are higher on longer flights (p.s. is all transcon: JFK-LAX/SFO), there is power at every p.s. seat, and the service is geared toward the business traveler. But it’s a competitive move as well as American, Delta, and Virgin America have Wi-Fi aircraft on these routes. Each airline also has in-seat power, though only United and Virgin have it throughout the cabin.

ExpressJet to Pick Up Flying for United

Published
by
Dan Webb
on November 16, 2009
in Expressjet and United
. 0 Comments

It was recently reported that Mesa would stop operating 26 CRJs for United Express, but United has already found replacements for them. First, it was announced (along with United’s third quarter results) that SkyWest was lending them some cash, and at the same time SkyWest-subsidiary ASA would start flying 14 CRJs for them next year.

Today, United has announced that ExpressJet will be doing some flying for them. ExpressJet’s 10-Q, filed today, explains the deal best:

United announced today that we were awarded a multiyear arrangement to fly 22 ERJ-145 aircraft as United Express beginning May 1, 2010. The arrangement will have an initial term of three years for 11 aircraft and two years for the remaining 11 aircraft, and will have a renewal option, at United’s election, for additional periods up to a total term of five years. From May 2010 through October 2010, we will fly an additional 10 aircraft for United in the current ExpressJet livery. These aircraft will be sourced from our corporate aviation division and as necessary, leased from alternate sources.

Prior to May 1, 2010, we will operate up to 22 aircraft under a short-term arrangement for United to assist with the transition of flying from their previous partner. The aircraft, crew maintenance and insurance (ACMI) arrangement will begin with three aircraft on December 1, 2009 and increase to 22 aircraft by March 2010. These aircraft will also be sourced from our corporate aviation division.

Another interesting note in the ExpressJet filing is this:

We anticipate that the definitive agreement with respect to the multiyear arrangement will include a grant to United of 2.7 million common stock warrants with an exercise price of $0.01 per share of common stock and that all related documents will be executed in the near future. Once executed, we will file a Current Report on Form 8-K with respect to the definitive agreement.

Hmm, is this ExpressJet’s way of pulling a SkyWest by giving United some kind of liquidity?

But, anyway, United has found a way to cover all of that lost Mesa flying. This is good for ExpressJet, which has had trouble picking up flying ever since Continental dropped some of their service a couple of years back. Right now, ExpressJet has 30 aircraft for charters, so this deal will leave eight for that service.

While the press release and SEC filing didn’t mention anything about employees, I am sure all the furloughed ExpressJet employees are pretty happy right now.

ASA Will Operate For United Express

Published
by
Dan Webb
on October 21, 2009
in ASA, SkyWest and United
. 2 Comments

Buried in United’s earning release yesterday was the fact that it would get a $129 million boost in liquidity from SkyWest. That made sense when soon after SkyWest issued a press release saying that subsidiary Atlantic Southeast Airlines (ASA) will begin flying as a United Express carrier.

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Photo credit: Chris Weyer. Used with permission.

The first part of the deal is “a secured term loan in the original principal amount of $80 million. The term loan bears interest at a rate of 11%, with a ten-year amortization period.” Next:

SkyWest Airlines also agreed to defer certain amounts otherwise payable to SkyWest Airlines under the existing United Express Agreement. The maximum deferral amount is $49 million and any amounts so deferred accrue a deferral fee of 8%, payable weekly.

ASA has traditionally been a Delta Connection carrier, and was acquired by Delta in 1999. Six years later, ASA was sold to SkyWest, which is a current United Express carrier.

This move in sensible because otherwise, ASA would have a bunch of idle aircraft in a few months. ASA is currently operating ten shiny new CRJ900s for Delta, and part of that deal was that twenty CRJ200s would come out of service next year, so ASA needed to find them a new home. Thirteen jets will fly for United along with one spare aircraft. Eight will shift to United in February, with six more at the beginning of May. According to a message sent to ASA employees, the company is “working on plans for the remaining six CRJ200s.”

In the same employee message, the company reports that its “United Express schedule will concentrate routes out of Washington (IAD) and Chicago (ORD),” and that “ASA is planning to open a new crew domicile within our United Express network,” though a city has yet to be selected.

There’s been no official word on what routes ASA will be operating, and if United will use the additional jets for new routes or if they will replace other service. ASA reported, however, that “we will start out averaging more than 50 flights per day when we launch United Express service on Feb. 11 with eight aircraft.”

So, the move makes sense. United needs cash, and SkyWest has it (for a nice 11% interest rate, of course). SkyWest needed to find a new home for 20 CRJs, and they were able to working out deal. Let’s see how this  partnership develops further over time.

Liquidty Moves from AirTran, Southwest, and United

Published
by
Dan Webb
on October 7, 2009
in AirTran, Southwest and United
. 0 Comments

Well, the liquidity news keeps rollin’ on in…

AirTran announced yesterday that it would sell $75 million in notes and 9,000,000 shares of stock. The stock dilution, as one might expect, is sending AirTran shares lower, as they are currently down over 17% today. At the current price, AirTran would get about $45 million from the sale of stock. This move comes after last week’s announcement of deals regarding its credit line and credit card processing agreement.

Southwest announced earlier this week that it has entered a new three-year deal for a $600 million revolving credit agreement, which replaces an earlier agreement that was to expire next year.

Meanwhile, United has priced its offering of enhanced equipment trust certificates (EETCs – say that five times fast), which is backed by 31 aircraft. Over $651.1 million will be financed at an interest rate of 10.4%. Most of the proceeds will be used to refinance EETCS from 2001, but United is expected to have $90 million in proceeds left over for the always-specific “general corporate purposes.” As a result of the refinancing, United says that “principal payment obligations will be reduced in 2010 by approximately $215 million and in 2011 by approximately $100 million.”