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This
merger responds to a major shift in consumer demand…
- Since 1978, the number of people flying has more than doubled,
rising from 275 million to 635 million last year - straining the
capacity of a system designed in the 1950's. The key to an
effective networked system is more hubs and stronger hubs - both
of which will be created in the combination of United and US
Airways. (Source: U.S. Dept. of Transportation)
- Information technology has freed businesses from the need to
cluster around major cities like New York, Chicago and Los Angeles
and has fueled an increased need for service into smaller markets.
While New York is still the favorite location for Fortune 500
companies, 65 percent of these companies have left New York and
relocated elsewhere since 1967. (Map
) (Source: Fortune, 4/17/00).
- People and cities United serves want aviation to do for the
movement of people what information technology has done for the
movement of ideas and information. It's a networked world - nobody
would use a credit card that only works in part of the
world.
- We are reflecting an international trend of consolidation.
It's happening in Europe and Asia and relative to other
international carriers, United ranks 8th in the number of
international passengers it carries. That amount is shrinking as
European and Asian carriers form combinations and alliances and in
countries where such agreements are encouraged (Source: IATA, May
2000).
All this is good news for
consumers...
- Added competition will give consumers more choice with a
combination of East/West, Pacific/Atlantic, short-haul and
long-haul - one stop shopping for seamless travel, and, the
"convenience of one" - one airline, one check-in, one or no stops
aboard one airplane and one frequent flier program.
- More hubs and more flights in one system mean more opportunity
to tailor cost to need. The leisure traveler who books in advance
and the business traveler who books at the last minute will all
find greater choice.
- With more competition between hubs, the downward pressure on
prices will continue. Post-deregulation competition has helped
drive down fares by 40 percent. That momentum is not going to
change.
Contrary to what others are
saying, the United-US Airways merger will actually inject
competition...
- It will create strong new hubs to compete with existing hubs
(e.g. Charlotte vs. Atlanta), which will, in turn, jump start
competition.
- It will challenge Delta's dominance on its routes in and out
of Atlanta.
- Commerce follows air connections. Where cities like Charlotte
become part of a global system, business will grow. For example,
Charlotte estimates that the growth of the US Airways hub will
bring in an additional $1.5 billion annually in new
business.
- It will be a wake-up call to American, which has had virtual
control of the Caribbean and Latin American
markets.
The merger will also provide
greater customer convenience and additional choice in air travel...
- It will provide a brand new competitor in markets only one or
two carriers had served that and now will be served by two or
three.
- Current US Airways passengers will gain same-carrier service
to 117 U.S. cities and 28 international destinations.
- Current United passengers will gain same-carrier service to
80 U.S. cities and 13 international destinations.
- On the East Coast alone, the United-US Airways merger will
inject new competitive service in 32 markets.
- Network air service gives smaller cities what they need to
thrive economically - access. The United-US Airways merger will
deliver global access. The hub and spoke system allows for viable
air service to smaller communities.
- One example: The Boise to Denver route is served by three
jets a day. Most passengers use the flight to connect to other
destinations - on average only 23 of 102 are actually going to
Denver. Connecting passengers boost the volume and allow the
scope of service cities need. An enhanced structure will result
from the United-US Airways combination generating growth in both
hub and spoke cities.
- Passengers will have access to more than 500 additional
worldwide destinations through the Star Alliance, again reflecting
the merger's focus of giving passengers more choice, better
service and ultimately, lower fares.
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