United and USAirways announced a marketing agreement just moments ago. Haven’t found any wire stories yet… More as it develops…
Just a few random thoughts:
- They tried this as a merger, but the government balked. That was pre-9/11 and before both carriers were in precarious positions.
- United got pre-approval from the pilots to do this when they negotiated concessions for stock
- USAirways is in big trouble, but they have (1) the DC-NY-Boston shuttle and (2) an extensive East Coast route network. #1 means profits and a base of frequent fliers in lucrative markets. #2 is simply a route network that United doesn’t have.
- USAirways gets a West Coast presence and (assuming the marketing agreement stretches this far) the Pacific. It also gets them frequent flyer awards to Hawaii…
- USAirways will still ultimately have to make some serious changes. They have hub operations in Pittsburgh, Philadelphia, and Charlotte. More or less they constantly overfly their own hubs. They aren’t particularly well positioned here. If this agreement amounts to a virtual merger, there will be no reason to maintain Pittburgh and Philadelpha in addition to Chicago (United hub)… for that matter Philadelphia and Charlotte in addition to Washington-Dulles (United hub).
- We’ll see what form the agreement takes, but even a marketing agreement will have to get around some concerns since United is dominant at Washington’s Dulles airport and USAirways in dominant at Washington’s Reagan National airport (and used to be pretty big at Baltimore-Washington International but has scaled down some)
Like I said.. more to come.
