United-US Airways Redux

There's been a lot of talk the last couple weeks about United & Continental linking up, Continental deciding they want to stay independent, and now, United and US Airways linking up...

While there's been a lot of chat over Skyteam's involvement with the Delta/Northwest deal, what hasn't been talked about much is how United's membership in Star Alliance is going to figure into a potential merger.

UA/CO presents some serious issues for LH. My impression is that Wolfgang Mayrhuber is in Anschluss mode, given their takeover of Swiss, potential takeover of LOT, and last week's announcement that they plan to take over Michael Bishop's stake in BMI.

Given those actions, it shouldn't be a great leap of faith to believe LH wants UA to function as a puppet, and Tilton serves that role pretty well. If you put CO's management team in place at the operating company, LH's ability to manipulate gets minimized quite a bit. Kellner's team knows they don't have to use an alliance partner to expand internationally, and they know how to run an airline without strings attached.

Switch to Frankfurt's view... if CO exits Skyteam (which they've hinted at), they see Skyteam with one strong partner in the United States. oneworld has one strong partner in the United States. What Star really needs is one healthy partner in the US, and not two fractured partners.

So, taking labor out of the picture, UA/US might not be so dumb of an idea.

It gives me fits thinking abou merging the various employee cultures, but you have a more homogonous fleet.

Hubs?

Yeah, something's gotta give there. ORD and CLT seem to be far enough apart to stay as-is, but IAD and PHL have too much overlap to Europe. If I were UA, I'd concentrate on IAD given the better dependability of the airport, the profile, and the fact that PHL is smack dab in-between NYC and Washington.

PHX and DEN are too big to go away, and could remain a decent size, but combined with LAS, you do have some serious hinterland issues similar to what legacy US had with PIT and PHL, and what will be made worse with MEM/CVG/DTW/MSP once DL/NW is consumated.

Control? Tilton could appear to stay in control at Chairman, Parker could run the show with his team of misfit toys, and Wolfgang can continue to pull the strings from Germany...

Now, you'll ask... Didn't LH just invest in Jetblue.... Yep. They did.

Again, they've got a homogonous fleet with both UA and US, and relative strength in an area where UA & US perhaps aren't as good -- Florida. The JFK hub isn't such a bad addition either (see above regarding PHL...).

As I said earlier, this is ignoring labor. From a labor standpoint, it would rival merging Texas Air's pile of crap in 1987, but drastic times call for drastic measures.

A friend and I were having this same discussion... and he pointed out something I managed to miss....

Despite all the crap that happened cobbling together People Express, New York Air, remnants of Frontier, and pieces of Eastern, look at how well that managed to turn out... it's the Continental we know today.