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View Full Version : UAL to park aircraft......??????


HercDriver130
11-07-2007, 03:25 PM
http://www.msnbc.msn.com/id/21677016/


HSLD
11-07-2007, 03:30 PM
http://www.msnbc.msn.com/id/21677016/

The way I read it is:

IF the price of oil stays high and IF passengers won't pay a higher ticket price (ie. lost market share due to higher ticket prices), THEN UAL intends to bring capacity in line with demand by selective use of unencumbered aircraft.

HercDriver130
11-07-2007, 03:36 PM
I would agree with that assessment. Oil probably will stay high... just how high is a question. The public will pay higher fares. At some point ALL carriers will be forced to pass it on...even the Skybus's of the world wont be able to turn a profit if they dont.


EMBFlyer
11-07-2007, 03:36 PM
But he said United, a unit of UAL Corp., and other airlines eventually will have to deal with skyrocketing prices by either raising fares further

United further added, "Nah, that'll never work. It's unheard of in this industry."

bigfatdaddy
11-07-2007, 04:15 PM
Here's hopeing for lower OIL!

wannabepilot
11-07-2007, 04:42 PM
Would that mean parking pilots as well?

HercDriver130
11-07-2007, 05:02 PM
parked planes dont need pilots

Professor
11-07-2007, 05:18 PM
All the big time analysis that has been done recently for oil predict it dropping and stabilizing around 80 by early spring.

Iran, Pakistan and the lack of normal pre-winter price elevation has caused commodity market panic.

Now, as far as UAL is concerned...they are going to be hurting for sometime to come. They have an uphill battle at the moment to be sure. Hopefully Asian markets will see major growth in the next few years and UAL can capitalize on those big margin routes.

Adlerdriver
11-07-2007, 05:23 PM
Are new hires getting a Home Depot application during indoc? ;)
What a business. Hopefully it won't come to that.

Linebacker35
11-07-2007, 06:18 PM
Well the Premier of Alberta had the chance to save world oil prices. The Alberta oil sands is the largest oil reserve on the planet, with oil companies having about $100 billion worth of development projects planned. He had a decision to keep Alberta oil royalties low(one of the lowest in the world) or hike them. Well he decided to raise them by 20%...... oil companies are already cutting capacity up here. Last year some reports estimated within a decade Alberta would overtake Saudi as the number one global oil producer! It is to bad, it could have flooded the market with supply dropping oil and gas prices to levels that existed decades ago. Maybe when we oust this communist farmer

mulcher
11-07-2007, 06:48 PM
There is also more proven reserves in CO and UT oil shale then Saudi Arabia.

frozenboxhauler
11-07-2007, 07:16 PM
Well the Premier of Alberta had the chance to save world oil prices. The Alberta oil sands is the largest oil reserve on the planet, with oil companies having about $100 billion worth of development projects planned. He had a decision to keep Alberta oil royalties low(one of the lowest in the world) or hike them. Well he decided to raise them by 20%...... oil companies are already cutting capacity up here. Last year some reports estimated within a decade Alberta would overtake Saudi as the number one global oil producer! It is to bad, it could have flooded the market with supply dropping oil and gas prices to levels that existed decades ago. Maybe when we oust this communist farmer

Those darn moose-jockeys!, Eh?:)
fbh

ghilis101
11-07-2007, 08:49 PM
There is also more proven reserves in CO and UT oil shale then Saudi Arabia.

isnt there a huge problem with oil shale, like it creates 5x more pollution, excess waste, and the energy costs in the refining process are not under control yet?

Linebacker35
11-08-2007, 09:01 AM
There is also more proven reserves in CO and UT oil shale then Saudi Arabia.

Venezvuela aslo has oil sands rivaling the size of Albertas, however as with CO and UT it is not economical, not even possible in many cases to extract the shale reserves in CO and UT and the sands in Venezvuela

Low & Slow
11-08-2007, 04:35 PM
So back on thread topic......


*********************************************

Good evening. By now, many of you have read or heard reports that United is planning to ground 100 aircraft. The reports are based on comments I made at a Goldman Sachs conference yesterday in New York. I want to put the story straight and get the facts into the right context. First, let me be clear, we are not grounding airplanes.

At the conference, I was talking with analysts about how the industry would respond to an economic environment where oil is hovering near $100 a barrel. I was reinforcing to the analysts a point that I believe strongly: United has more flexibility to respond to economic challenges than our competitors. We have a great network that gives us the opportunity to move our aircraft around in response to changes in worldwide economics. We have managed our U.S. domestic capacity very well. We have a strong cash balance and good cash flow. We are in a very good fundamental position.

As part of that conversation, I also brought up, as one point about our flexibility, the fact that we have more than 100 aircraft that are debt-free. Because they are unencumbered, if oil prices stay high and if we cannot pass the costs on to our customers, one way to manage our capacity could be to ground aircraft, which we could do without incurring ongoing costs. It was one point in a larger conversation about the possible responses we would have in an extreme environment, which the analysts in the room understood. Unfortunately, the point was picked up by reporters listening to the webcast as something we were considering, rather than a possibility if certain conditions occurred.

There is no underestimating the impact the price of oil has on our industry. Itís a significant issue for every airline and something we are watching every day. Just today, we announced a $10 fare increase on U.S. domestic flights to offset higher fuel costs. We will continue to weigh our options to manage the impact the price of oil has on our business and we will certainly inform you in a much more deliberate way if we ever get to a point where decisions as serious as grounding 100 aircraft are necessary.

In the meantime, as Pete reinforced in a recent email, the best course for all of us is a continued focus on fuel conservation, efficiency and looking for cost savings at every opportunity.

Jake

captjns
11-09-2007, 05:55 AM
Are new hires getting a Home Depot application during indoc? ;) What a business. Hopefully it won't come to that.

No... they get applications to Mac Donald's... free food. and preferred seating

ewrbasedpilot
11-09-2007, 07:00 AM
......... Just today, we announced a $10 fare increase on U.S. domestic flights to offset higher fuel costs. We will continue to weigh our options to manage the impact the price of oil has on our business and we will certainly inform you in a much more deliberate way if we ever get to a point where decisions as serious as grounding 100 aircraft are necessary.

.............


We should just do as the oil speculators/traders do and announce that we're adding a $40 "war/terror" premium on all our flights. And when hurricane season comes, we can tack on a $10 "possible hurricane divert" premium. Then we'd be done with it till oil went up another $50 or so or no hurricanes hit during the season. Seems the traveling public has NO problem with paying these ridiculous prices for gas even though there is no need for it. Nickel and diming increases is just so petty. :o

B757200ER
11-09-2007, 07:17 AM
IF the price of oil stays high and IF passengers won't pay a higher ticket price (ie. lost market share due to higher ticket prices), THEN UAL intends to bring capacity in line with demand by selective use of unencumbered aircraft.

What really sucks is that if UAL, NWA or DAL reduce capacity, it is dumped right back into the market by SkyBus, VirginAmerica and others, leaving the 'overcapacity' problem intact.

HSLD
11-09-2007, 08:15 AM
What really sucks is that if UAL, NWA or DAL reduce capacity, it is dumped right back into the market by SkyBus, VirginAmerica and others, leaving the 'overcapacity' problem intact.

Yes and No. In the near term, legacy carriers could shrink capacity FAR more than VA or Skybus's ability to fill that void. If the LLC's want to expand into a weak market with record high energy prices - good luck ;)

I think high energy costs could have a leveling effect in the market in terms of pricing. Without the ability to distribute increased costs over a large network (as with legacy airlines) LLCs will be forced to raise fares or bleed. With $100 barrel oil, it's going to be a waiting game to see who blinks first, and skybus will find that 200 million in current funding won't last long.

As pricing normalizes, I'd look for airlines to focus on service and route networks strengths to attract new passengers. Legacy airlines have the potential to do this more effectively, but the execution by legacy's has me favoring startups like VA to succeed.

Rocco
11-09-2007, 08:17 AM
Here's hopeing for lower OIL!


....lets hope for better management!!

Rocco
11-09-2007, 08:21 AM
There is also more proven reserves in CO and UT oil shale then Saudi Arabia.

Shale yes....oil no. Shale-oil production is still a developing tech. But $80 per Barrel was the break even point from what I have read.

bigfatdaddy
11-09-2007, 10:26 AM
....lets hope for better management!!
That is a good idea too!

ewrbasedpilot
11-09-2007, 10:46 AM
....lets hope for better management!!

Including the guy "supposedly" running this country..........;)

JoeyMeatballs
11-09-2007, 02:17 PM
Including the guy "supposedly" running this country..........;)

Yeah Cheney has to go.......