United Airlines Seeks To Join American on LA-Shanghai Route

United Airlines announced plans Tuesday to launch a new service to China, just days after American Airlines received regulatory approval to start flights on the same Los Angeles-Shanghai route.

The prospect of American and United on the route also sets up a three-way battle between the global airline alliances that dominate the industry on the busiest route between the U.S. and Shanghai.

China Eastern Airlines Corp. Ltd. is the only airline flying non-stop between the cities, and is due to join the SkyTeam alliance headed by Delta Air Lines Inc. and Air France-KLM.

American, a member of the Oneworld grouping, has identified Los Angeles as one of five U.S. “cornerstone” cities that will be a strategic focus. Tom Horton, president of parent AMR Corp. (AMR), said in a recent interview to “stay tuned” for further expansion from Los Angeles. Its daily Shanghai service is due to start on April 5.

United, a unit of United Continental Holdings Inc. (UAL) and a member of the Star alliance, has applied to the Department of Transportation for permission to start daily service six weeks later.

The twin United and American applications appear to vindicate DOT’s recent granting of antitrust immunity to pacts involving all three alliances, despite concerns from some lawmakers and consumer groups about the impact on competition.

Regulators are increasingly using competition between alliances in their analysis, as well as that between individual airlines.

The recent award of Los Angeles-Shanghai to American still leaves room for U.S. carriers to launch another 21 weekly flights to China under 2004 aviation treaty between the countries that triggered a scramble for route rights. The global travel slowdown delayed the launch of many services and saw some rights handed back.

The U.S. and China are negotiating a new treaty to liberalize access.

Southwest Airlines Agree $1.4 billion to Buys AirTran Airways

Southwest Airlines, the nation’s largest low-fare carrier, said on Monday that it had agreed to buy its smaller rival AirTran Airways in a transaction valued at $1.4 billion, expanding its foothold in New York and Boston and allowing it to move into Atlanta, the nation’s largest airport.

The deal is valued at $3.4 billion when AirTran’s debt and aircraft leases are included. Southwest said the purchase had been approved by the boards of both companies, although it still needs regulatory and shareholder approval.

The move comes as the domestic airline industry is consolidating and reducing the number of seats offered as it attempts to return to profitability. United Airlines is taking over Continental Airlines on Oct. 1, after shareholders of both companies recently approved the tie-up and the government gave the green light. Delta Air Lines led the way in 2008 when it acquired Northwest.

The transaction is a sharp departure for Southwest, one of the nation’s few consistently profitable airlines. The company’s success had been built on a simple business model, operating the same type of Boeing 737 planes at a higher frequency between smaller airports.

But Southwest has been looking for ways to expand as its network grew. For instance, it had sought ways into the nation’s larger markets, like New York, Boston and Washington.

So far, Southwest’s presence in New York has been very limited. It has a few landing and take-off rights, called slots, at La Guardia Airport. As part of the United-Continental merger, Southwest had recently obtained some slots at Newark Liberty International Airport.

Southwest said the acquisition would increase its presence in New York and open the door to Atlanta, which is the nation’s largest airport and the hub of Delta Air Lines.

Analysts at Deutsche Bank said they expect the deal to gain swift regulatory approval given the speed with which the federal government approved the United-Continental tie-up and the fact that the networks of Southwest and AirTran do not overlap much.

Southwest said the transaction would save $400 million a year by 2013. It said the one-time costs related to integrating AirTran would be $300 million to $500 million.

The offer represents a premium of 69 percent over AirTran’s closing stock price on Friday. AirTran shareholders would receive a combination of Southwest shares and cash. That includes at least $3.75 in cash and 0.321 shares of Southwest common stock for each share of AirTran common stock.

United Airlines Flight Test for Flight Business Class Seat

Aircraft United Airlines Boeing 747-400.
Route San Francisco to Sydney.
Class Business, seat 13K (upper deck).

Seat pitch and width 77 inches between rows of seats on main deck; 74 inches on upper deck; 23½ inches between armrests.

Seat configuration 2-4-2 layout on lower deck; 2-2 on upper deck; 52 business seats in total. Plum spot is a window seat on the upper deck because of the smaller cabin and the extra storage bin under the window.

Luggage allowance Two checked pieces, each up to 32 kilograms. One bag and one personal item for carry-on.

Scheduled flight time 13 hrs, 54 min.

On-time performance Pushed back a few minutes late; arrived 10 minutes early.

Lounge access United Red Carpet Club in San Francisco. Large but basic compared with other business-class lounges. Free soft drinks and two drinks vouchers for the bar. Free snacks limited to cheese and biscuits. More substantial meals cost $US5-10 ($5.60-$11). Outbound flights from Sydney use the superior Air New Zealand lounge.

Aircraft condition Good. United’s revamped international business class was rolled out two years ago. It has been completed on the airline’s international 747 and 767 fleet, but 777s are still under refurbishment. The upgrade includes 180-degree lie-flat seats.

Entertainment Thirty-nine-centimetre screen in seat back, with good range of TV shows but limited movie selection: 25 in total and only 12 new releases. There’s a facility to listen to iPod through entertainment system. Noise-reducing headphones. Six audio books and a variety of games.

Comfort Comfortable seat with a large shelf under screen for storage. I slept for seven hours in the flat-bed position.

Service Friendly and efficient cabin crew who ensure dinner is served promptly so passengers can sleep on the night flight.

Food and beverages Very good. Smoked salmon followed by steak and a glass of Australian shiraz. Tiramisu, cheese and port for dessert. Mid-flight snacks available and a decent omelet for breakfast.

Flight frequency Daily between San Francisco and Sydney. I checked four dates and United’s business fares averaged 30 per cent cheaper than Qantas, V Australia and Air New Zealand on this route.

Online unitedairlines.com.au.

U.S. Regulators Approved Propose Merger Continental Airlines and United Airlines

Continental Airlines Inc. and United Airlines cleared the biggest hurdle in their proposed merger on Aug. 27 after federal regulators said they had approved the deal.

United Airlines and Continental were informed by the Antitrust Division of the U.S. Department of Justice that it had completed its review of the proposed merger. That clears the way for the deal to close Oct. 1, pending shareholder votes in September.

“The completion of DOJ’s review is an important step on our journey of creating the world’s leading airline, benefiting our customers, co-workers, communities and stockholders,” said Jeff Smisek, Continental’s chairman, president and chief executive in a statement. “The DOJ’s decision permits us to clear one of the last regulatory hurdles to closing our merger.”

Houston-based Continental and Chicago-based United announced an all-stock merger on May 3. Both companies have set special shareholder meetings to vote on the deal Sept. 17.

United and Continental received clearance from the European Commission on the airlines’ proposed merger in July, which noted its investigation found the transaction would not raise competitive concerns in Europe or on trans-Atlantic routes.

Continental shareholders will receive 1.05 UAL shares for every Continental share they own. At the closing of the deal, Continental shareholders will hold 45 percent of the new entity, while UAL shareholders will own 55 percent. The combined company will have headquarters in Chicago.

Also on Aug. 27, Continental and United said they would lease 18 pairs of round-trip flights to Southwest Airlines at Newark Liberty International airport in an effort to address DOJ concerns.

Southwest Airlines to Begin Flights To Newark Liberty

Southwest Airlines Co. said Friday it will boost its New York-area flying next year as part of a deal that also seeks to ease concerns from regulators about the proposed merger of UAL Corp.’s United Airlines and Continental Airlines Inc.

Dallas-based Southwest plans to lease take-off and landing slots at Newark Liberty International Airport from Continental, adding to its existing services in the region from New York LaGuardia and Islip on Long Island.

Southwest would lease slots to operate 18 daily round-trip flights at peak and off-peak times, which analysts said would likely be enough for high-frequency service to three yet-to-be-disclosed destinations. It would start some flights in March 2011, with a full schedule by next June.

Continental and United said in a joint statement that the plan was a fair solution to concerns raised by the Department of Justice about their proposed merger. The airlines have responded to a second request for information from regulators, and had previously said they were confident of closing a deal by year end. The Southwest plan is contingent on sealing a deal by Nov. 30.

Newark is the New York area’s largest hub and a stronghold of Continental, but rivals including Delta Air Lines Inc., AMR Corp.’s American Airlines and JetBlue Airways Corp. are seeking to buttress their presence in the country’s largest travel market.

Southwest has a limited presence at slot-restricted LaGuardia and successfully campaigned to block a planned transfer of slots at the airport involving Delta and US Airways Group Inc. Delta aimed to strengthen its position at LaGuardia while US Airways would have secured more access to Reagan National in Washington, D.C.

For Southwest, an enhanced New York presence fits its strategy of winning more premium business travelers. The country’s largest carrier of domestic passengers is revamping its frequent-flier program to secure more high-paying corporate accounts, as well as providing in-flight wireless service and credit card tie-ins, a key revenue source for the industry.

The airline, like other low-cost carriers, had reeled in growth plans over the past 18 months but continues to add back limited capacity to balance supply with recovering demand. Southwest had previously announced plans to add two new cities next year to expand its network to 71 destinations. It will also decide in December whether to order larger versions of the Boeing 737 that would suit more congested airports like Newark.

Source : WJS

U.S. Merger Not Expected to Impact Air Canada Or Westjet

The proposed merger between United and Continental airlines is unlikely to have any impact on Canada’s two dominant carriers, industry observers said Monday.

Since both U.S. airlines are members in the Star Alliance along with Air Canada, the union creating the world’s largest airline shouldn’t have any material operational impact on the Canadian carrier, said Cameron Doerksen of Versant Partners.

The U.S. carriers says there isn’t much overlap in their networks.

So there shouldn’t be any significant impact on Air Canada’s schedule since the partner are already co-ordinating their activities.
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United Airlines and Continental Airlines to Agree to Create World Biggest Airlines

United Airlines and Continental Airlines agreed Sunday to a $3 billion merger that would create the world’s biggest airline, according to people briefed on the negotiations.

United’s purchase of Continental, to be announced officially on Monday, would form a coast-to-coast behemoth with a leading presence in the top domestic markets, including New York, Chicago and Los Angeles, along with an extended network to Asia, Latin America and Europe. The deal was completed in a remarkably swift two weeks, and would give the airlines the muscle to fend off low-cost rivals at home and to take on foreign carriers abroad.

The combined company would keep the United name and be based in Chicago. Jeffery A. Smisek, Continental’s chief executive, would run the company. If the deal wins antitrust approval, the merged airline would replace Delta Air Lines as the top carrier.
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United Airlines Boeing 767 Emergency Landing on Terceira island, Portugal

United Airlines Boeing 767 carrying 179 passengers an emergency landing in Terceira island, Portuguese, after the discovery of smoke on the plane. According to the estimate of the pilot smelled smoke coming from Iceland’s volcanic eruption. However, the results of detection of a flight crew, the smell of smoke coming from the smell of burning electrical wires.

Parties airline United Airlines has confirmed that will provide compensation to passengers for the inconvenience during the flight.

Eyjafjallajökull volcanic eruption in Iceland, which began on April 14, disabled air traffic across Europe, leaving thousands of travelers stranded and forcing more than 20 European countries to close their airspace.

United Airlines Boeing 767 aircraft to continue flight to Moscow on Thursday and landed at Domodedovo airport, Moscow. (more…)

United Airlines and Continental Airlines to Create Largest US Carrier

A merger between UAL Corp.’s United Airlines and Continental Airlines Inc. would create the largest U.S. carrier on routes across the Atlantic and Pacific where business fliers pay some of the industry’s highest fares.

The companies together would pass Delta Air Lines Inc. for the top spot in the U.S. industry across the Atlantic, with 40 percent of the passenger traffic, and grab 53 percent of traffic across the Pacific, where United already leads, based on data compiled by Bloomberg.

UAL and Continental are holding talks on a tie-up, a person with direct knowledge of the meetings said yesterday. Broader networks help funnel in more travelers and attract corporate customers who fly between airports such as San Francisco and Tokyo’s Narita, or Newark, New Jersey, and London’s Heathrow.
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Airlines Merger Analysis, Continental Airlines and United Airlines

A Wall Street analyst expects Continental Airlines to bid to acquire United Airlines, after reports that United and US Airways were in merger talks.

Stifel Nicolaus airline analyst Hunter Keay said in a client note Monday that a United-US Airways merger is “a suboptimal scenario” because of pilot labor issues, revenue risks, and “problems with regulatory review due to higher domestic overlap” on routes United and US Airways have in common.

“We expect Continental to respond to reported United-US Airways merger plans with a bid for United,” Keay wrote, “partly as a defensive maneuver. . . .We expect Continental to respond relatively quickly.” Keay said he had no knowledge of merger negotiations or discussions between Continental and United.
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