After the dismal financial performance by United Airlines last quarter, I’m sure questions about the airline’s viability in the-not-so-long-term are swirling in airline circles.
If United were to disappear —
• Capacity problems for all other airlines would disappear overnight.
• Low cost carriers would rush to fill the profitable routes.
• The legacy carriers could reverse their capacity shrinkage and perhaps begin making a profit.
• International routes would open to other airlines.
• However, the big airlines are in no position to expand their domestic fleets or route structure.
• O’Hare Airport traffic would drop to reasonable levels.
• In the short term, the coming pilot shortage would be delayed another five years.
An airline world without United Airlines doesn’t look so bad.
What do you think?
{ 3 comments… read them below or add one }
Did you post this before or after you found out Delta lost $6.39 BILLION and Northwest lost $4.1 BILLION in the same period? Losing $537 million doesn’t really seem that bad now, does it?
I guess we can substitute Delta or Northwest for United, however, the United operation losses were almost twice those of Delta. $6.1 billion of the loss reported by Delta is non-operating charges and lost “good will.” I’m not sure what that means.
According to Reuters, “Excluding special items, Delta said it lost $274 million…”
Meanwhile United’s losses came in at $537 million.
I think United is in for a rougher ride with competition in Chicago from American and Southwest and growing competition from Southwest in Denver.
I fly UA between LHR and the US regularly (mostly IAD). Given that all the UA flights are usually nearly 100% full, I’d be worried where the passengers from 2 767s and 2 777s per day are going to go even at a higher price. There just isn’t capacity without other entrants or the other legacy carriers picking up the slack.