The View From The Fool: Ted's Journey Is Bogus | Aero-News Network
Aero-News Network
RSS icon RSS feed
podcast icon MP3 podcast
Subscribe Aero-News e-mail Newsletter Subscribe

Airborne Unlimited -- Most Recent Daily Episodes

Episode Date

Airborne-Monday

Airborne-Tuesday

Airborne-Wednesday Airborne-Thursday

Airborne-Friday

Airborne On YouTube

Airborne-Unlimited-05.13.24

Airborne-NextGen-05.07.24

Airborne-Unlimited-05.08.24 Airborne-FlightTraining-05.09.24

Airborne-Unlimited-05.10.24

Sun, Feb 15, 2004

The View From The Fool: Ted's Journey Is Bogus

Ted's Not-So-Excellent Adventure

Coming of age in the 1980s, I remember when "Ted" referred to Keanu Reeves, as Ted "Theodore" Logan in Bill & Ted's Excellent Adventure. Alas, no more. Now, Ted is an airline.


On Thursday, bankrupt United Airlines launched a new lower-fare affiliate called Ted, with an inaugural flight from Denver to Ft. Lauderdale. Billed as a hip alternative to such low-fare rivals as JetBlue and Southwest Airlines, Ted supposedly combines bargain prices with outstanding service.

United may be one of the finest in the air for passenger service, but is this really a differentiator in the world of no-frills airlines? Uh, no. More airlines are getting into the discounting business daily and passengers expect more for less. Witness Delta's Song, which is a distant cousin to Ted. Then there's AirTran and Denver-based Frontier, both modestly successful no-frills carriers.

Cool new paint aside, Ted is the same old thing. Both Ted's and Frontier's websites showed that the airlines charge the exact same price for a proposed trip to Vegas from Denver, leaving a week from today and returning on Monday, Feb. 23.


Of course, the biggest problem is that Ted actually raises United's costs. UAL says it will dedicate 45 planes to Ted and plans to keep them in the air 20% more than its remaining fleet, which will use additional fuel and jack up payroll. The additional seating in each of Ted's A-320 aircraft could offset those expenses, but that depends on taking customers from competitors. It's a failed strategy, according to aviation consultant Mike Boyd, who has followed the industry for 20 years. In an interview, Boyd cited bankrupt carrier Braniff and United's defunct Shuttle by United Service as prime examples of the failed Ted model.

So what should investors do? For one thing, it would be Foolish to keep a microscope on UAL's finances. Last month, the company reported that it reduced fourth-quarter operating expenses by 16% from the same period a year ago. Ted could reverse that trend without adding substantial revenue gains.

Certainly the no-frills airlines business is a good one, just ask Southwest. But none of the larger carriers have successfully encroached on Southwest's turf. Continental Airlines ditched its low-fare subsidiary five years ago, and AMR Corporation's American and Northwest Airlines are ignoring the lower end of the market. See the pattern here?

United may be picking a fight it can't win at the worst possible time. Bogus, dude.

FMI: www.fool.com

Advertisement

More News

ANN's Daily Aero-Term (05.10.24): Takeoff Roll

Takeoff Roll The process whereby an aircraft is aligned with the runway centerline and the aircraft is moving with the intent to take off. For helicopters, this pertains to the act>[...]

Aero-News: Quote of the Day (05.10.24)

“We’re proud of the hard work that went into receiving this validation, and it will be a welcome relief to our customers in the European Union. We couldn’t be mor>[...]

Aero-News: Quote of the Day (05.11.24)

"Aircraft Spruce is pleased to announce the acquisition of the parts distribution operations of Wag-Aero. Wag-Aero was founded in the 1960’s by Dick and Bobbie Wagner in the >[...]

ANN's Daily Aero-Term (05.11.24): IDENT Feature

IDENT Feature The special feature in the Air Traffic Control Radar Beacon System (ATCRBS) equipment. It is used to immediately distinguish one displayed beacon target from other be>[...]

ANN's Daily Aero-Linx (05.11.24)

Aero Linx: Pararescue Air Force Pararescuemen, also known as PJs, are the only DoD elite combat forces specifically organized, trained, equipped, and postured to conduct full spect>[...]

blog comments powered by Disqus



Advertisement

Advertisement

Podcasts

Advertisement

© 2007 - 2024 Web Development & Design by Pauli Systems, LC