Posts Tagged 'United Airlines'

United And Continental Announce Merger

After a long period of speculation, that included reported merger talks between US airlines in practically all combinations, it became official today: United Airlines and Continental Airlines are merging to form the world’s Largest Airline Company in a “Merger of Equals”.

Following the mega-merger of Delta Airlines and Northwest Airlines announced practically two years ago, the third and fourth largest US airlines are merging to form not only the largest in the US, but also in the world. They will remain in the Star Alliance, under the name “United”, but will keep the Continental logo and airplane liveries.

The two airlines together will operate a very extensive domestic US network and a very advanced international network – where currently they operate no overlapping routes, with a fleet of 692 aircraft! Connecting 370 destinations in 59 countries the more than 144 million passengers will have access to the widest global network of any carrier, which combined with the benefits of the Star Alliance will provide a true Global reach, with emphases on the 91 million (!) frequent flier members. With 10 hubs (Chicago, New York, Los Angeles, Houston, San Francisco, Washington DC, Denver, Cleveland, Guam and Tokyo), the combined United Airlines will be at home in the four largest US cities.

Interestingly, United and Continental were first reported to be in talks at the time of the Delta-Northwest announcement, but the merger rumours about United Airlines merging with US Airways were stronger recently, played down only early last week. The news about a possible tie-up with Continental got stronger (again) towards the second half of the week – but this merger had surely been in the pipeline for some time, as they even have developed a special website only dedicated to the merger: www.unitedcontinentalmerger.com

In a presentation targeted at investors, the new company announced that it will be headquartered in Chicago, “maintaining significant presence in Houston” as well, with the CEO having offices at both locations. On a pro forma basis, the combined company would have annual revenues of approximately $29 billion based on 2009 financial results and ownership will be: 55% United shareholders and 45% Continental shareholders. The holding company for the new entity will be named United Continental Holdings, Inc.  The proposed transaction is expected to generate approximately $200 million to $300 million in annual net cost savings by 2013. The two companies currently employ 87.529 (46.602 (United) + 40.927 (Continental)) people.

Talking about employees, the two airlines’ pilot unions released a joint statement observing that “history has demonstrated that the integration of two airlines is always a difficult challenge. The support of the pilots is pivotal in determining whether a merger is successful or not, as will be the case with this merger…

Of course the merger is subject to approval by shareholders and anti-trust regulations, but will most probably be completed according to plan before the end 2010 (by Q4 this year), with the single operating certificate targeted for the first half of 2012. (It took Delta Airlines to reach that goal by the end of 2010 and to retire the Northwest brand – thus United plans to work with similar timelines).

Looks like if American Airlines wants to stay in the game, it is now left with only one potential partner of significant size: US Airways. Will that be an acquisition type of merger like Delta, or a merger of equals like United and Continental, we’ll see, but it looks like the only logical step to be taken.

by balint01

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United Breaks Guitars

A song was written about the negligence of United Airlines. The band Son of Maxwell was on a tour and flew United from Halifax to Nebraska. They changed flights in Chicago, where musician Dave Caroll noticed a ground worker dropping his guitar. He asked the flight attendants to do something, but they could not or did not want to help.

After arrival his fear got proven, his guitar worth more than 500 dollars was broken. He immediately claimed his damage, but it was rejected by the airline.

He promised himself to write three songs about this incident and he will make sure that each song will be viewed at least 1 million times. The first video was uploaded at the beginning of July and it was viewed more than 150 thousand times in the first 3 days.

After the appearance of the video the airline revised the case and offered a compensation, but Dave refused it and told them to give that sum to charity.

Later Taylor guitars offered Dave that they fix his guitar for free plus they gave him a shiny new one.

This was the song about the incident by Son of Maxwell:

Here is the second song:

By Szafi

Top 5 Airlines in 2008

The International Air Transport Association (IATA) has published its latest ranking of the world’s airlines in terms of passengers carried and passenger kilometres flown on scheduled flights for the year 2008.

International and Domestic – Number of passengers

Based on number of passengers carried on scheduled flights in 2008 and considering International as well as Domestic traffic, US and Chinese companies seem to rule the world with Southwest Airlines taking number one. However, if we would count Delta and Northwest as one entity (they merged in 2008), they would claim the number one spot (seen in line 0 in the table below). It should be noticed that the fifth position in terms of passengers carried has been taken by a Chinese air company (China Southern Airlines) – which also signals the ongoing growth of the Chinese domestic air travel market.

Top5 Airlines in 2008 in terms of Passengers on Domestic And International flights

International – Number of passengers

Looking at only International scheduled traffic in 2008 (excluding domestic), Ryanair has grown to be the largest International airline in the world. Mostly European airlines are included in this bucket, as most of their flights are international, even though the distances flown would in most cases match up with the US (or Chinese) Domestic flights. This just shows how strong the US airlines are on their domestic market and how weak they are on the international routes – in terms of number of passengers. It is interesting to note that Air France and KLM are a merged company since 2004, but operate their separate networks. Also interesting to see that 2 of the top 5 are low-cost carriers (Ryanair and easyJet). If we would consider European international flights as domestic (in terms of distance intra-European flights are similar in nature to the domestic flights within the US or China), none of the European airlines would make it in the top 5 – based on the number of passengers flown, even though Ryanair comes very close to fifth position China Southern.

2008 Top 5 Airlines (number of Passengers on International travel)

International and Domestic – Passenger kilometres

When looking at passenger kilometres flown, it gives a slightly different view of the same results. Such a statistic shows us all airlines in terms of passenger kilometres flown (passengers*kilometers flown) and theoretically levels out the difference between the European International flights and the US Domestic flights for example – which produce similar numbers in terms of passenger kilometres. On the other hand, this gives a chance for airlines flying mostly longer routes with less passengers to move up the list. (E.g.: a Budapest-London flight is 1 passenger or rougly 1500 passenger kilometres, while a Paris-Rio de Janeiro flight is also counted as 1 passenger, but rougly 9400 passenger kilometres.)

Top 5 Airlines in 2008 - in terms of passenger kilometres for Domestic and International flights

It is interesting to see that this view is still ruled by the US airlines, and the only non-US in the list is the merged Air France – KLM group, taking the fourth position. We are missing Southwest Airlines from this table, as they do not fly long-haul and fly only a limited number of mid-haul international flights to Central America thus their average kilometers flown per passenger is much lower than those big American airlines that also fly long-haul routes. It is also a notable change that American Airlines (considered to be the largest airline company for years) is passed by the new Delta Airlines (merged with Northwest) by as much as 35%.

It will be interesting to see these numbers for 2009 in a few months – where Delta will most likely hold the number one spot for overall passenger numbers as well as passenger kilometers, but Lufthansa may move up a little bit if they start to publish their numbers together with Brussels Airlines and Austrian Airlines. We are also looking forward to the much talked about possible British Airways – Iberia tie up, which would produce an Air France – KLM like congolmerate that could fight for a top 5 position in terms of worldwide passenger kilometers – considering Iberia’s long flights between Europe and South America.

by balint01

United Airlines Low Approach at Frankfurt

Following last weekend’s lucky but scary Lufthansa landing in strong crosswind, here’s another interesting video, again from Germany, but this time from the busy Frankfurt International Airport, where a retiring United Airlines captain was given the chance to make a low approach and a fly-by on his last flight as a commercial airliner captain, who even “waves goodbye” with his Jumbo Jet. It’s really nice from the ATC (Air Traffic Control) to allow such an event, it was probably one of the least busy periods of the day.

If any of you were on that flight, please share your experiences with the readers of this blog!

[Andreas and Thomas, thanks for the link!]

by balint01

Atlanta Fighting For Delta

Last Friday’s (16NOV2007) edition of The Atlanta Journal-Constitution has published a group of articles related to Delta CEO Richard Anderson denying all the reports from a day earlier which suggested that Delta is in talks with Chicago based United Airlines about a merger.

Delta plane with Downtown Atlanta in the background (c by usatoday.com)

Atlanta is surely interested in the possible merger news as it is the current headquarters for Delta Airlines and according to early reports the new merged airlines would have their HQ in Chicago, rather than in Atlanta. The two cities, which are 700 miles apart, reacted very similarly to the emerging news.We’d fight like hell” said Paul O’Connor, executive director of World Business Chicago. “It’s personal. It’s a matter of pride.” Sam Williams, president of the Metro Atlanta Chamber of Commerce countered: “The commitment of Atlanta to keep Delta is unwavering,” he said. “It always has been and always will be: ‘Keep Delta My Delta.” He also added that the chamber is supportive of Delta merging with another airline “as long as the headquarters stays in Atlanta.

At about the same time Delta CEO Mr. Anderson went through some tough minutes last Thursday in the Congress in Washington, too. He arrived for a hearing about the awaited air traffic congestion over the upcoming Thanksgiving weekend, but ended up protecting himself and Delta against the merger “rumours”. During the hearing Representative Lynn Westmoreland (Republican from the state of Georgia) challenged Mr. Anderson to assure him that Atlanta-based Delta was not involved in merger talks with United Airlines. Mr. Westmoreland said he was “dissapointed to read in the paper” about the talks. He said he had also read a statement Delta released Wednesday denying that such talks were taking place: “I want to look at you eyeball to eyeball” and hear you deny it, too.I was as surprised as you were, ther are no discussions. There have been no discussions” replied Mr. Anderson. The congressman from Newnan recalled that he was a “ramp rat” for Delta, his daughter was a flight attendant for the airline, and his wife worked in marketing with Delta (!). He said Delta is part of the Atlanta family, and “we don’t want the family to move north. I’m asking you to keep the family informed.” If the talks are indeed happening, it puts Mr. Anderson in a very-very hard position, having an alumni Delta family as the Congressman’s own family… This could be very useful in any other ways, but if the talks are true, it is a misfortune for him personally. But it would be a big help for Delta’s more than 26.000 emplyees in the state (of Georgia) which includes 3.365 at the headquarters alone.

Even though I’m staying in Atlanta at the moment for a month and a half, let’s hear the other side, too as Chicago is also a tough contender in keeping an airline HQ within the city-limits. United can trace its roots in Chicago to the 1920s, and the above quoted Paul O’Connor also said “They are us.” The two airports have been in a rivalry for a long time to clinch the busiest airport title, Atlanta hosted the Olympics in 1996, while Chicago is pushing to land the 2016 Olympics and show itself to the world, just like Atlanta did 11 years ago. Not so long ago Chicago officials heard rumblings about United Airlines looking at real estate in Denver (possibly to move their offices), and they replied with USD 6 million of incentives to persuade the airline to stay and to shift executive offices from the suburbs to downtown Chicago. O’Conner said if the merger talks “firm up, we would do what we could do.” United has about 16.000 employees in Illinois, almost all of whom are in the Chicago area.

Despite the two cities and their business communities fighting already (without anybody acknowledging the rumours) some people have a different opinion. A consultant from Chicago interviewed by The Atlanta Journal-Constitution said: “At the end of the day, it wouldn’t matter as long as they were on time. They all at this point aren’t very good.” No further comment is needed on that one, I think, but “The Tale of The Two Cities Keeping An Airline Headquarter” seems to have started…

(based on the 16NOV2007 edition of The Atlanta Journal-Constitution)

by balint01


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