The next transaction that happens won't be between any of those three, but it will be with any of those three and US Airways. Sometime in the long term, this could happen two years, five years, we don't particualry care. If you believe we're headed to a network with 3 large hub-and-spoke carriers, we actually have US Airways well positioned. While there's been a number of changes, there's always been three at the top (American, Delta, and United). We have long held the view that the right number of hub-and-spoke airlines for this industry is three. And one, US Airways, has somewhere around 8% share.

If indeed we're now in a situation where there are four large hub-and-spoke airlines, let's assume United/Continental gets done for the sake of this theoretical conversation, there are now four, three of which have 18 to 25% market share. If United/Continental gets done, does that close the door on US Airways? No, I don't believe it does. If, in fact, our talks with United have compelled them to do something with Continental, that'll get us down to the fourth largest airline. If the industry gets better too, that's great. We're feeling extremely good about our standalone business and don't need to do anything. Metrics on every level - operating performance, reliability, financial control, financial improvement - we're doing better than our peers. We're running a very good standalone airline. One way to offset this disadvantage is to combine those assets with other assets and create a stronger route network. It's OK we offset it with a cost advantage. It isn't as strong as airlines who have hubs in places like Atlanta, Dallas, and Newark. We're not the least bit embarrassed to tell you that of the remaining five hub-and-spoke carriers, our route network has the lowest revenue generating capability. We at US Airways would prefer to participate rather than not.

It's not a full panacea, but it's a huge step. While it has some benefits, it has a large number of costs, not the least of which is a very unstable industry which makes it hard to make a profit and very hard on your employees. The industry has been so fragmented for so long. It's something that needs to happen, will happen, and will result in a much stronger industry. For that reason, I thought I'd republish some large snippets from his opening talk here.Ĭonsolidation is good for this industry.

That took a little creativity since we never announced we were in talks with United.'Īfter that, Doug did not hold back on explaining why the airline is in favor of consolidation in his usual clear and straightforward way. 'Last week we announced we were breaking off talks with United. In his opening comments of the day, Doug did not waste time and got right to it.

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