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Old Posted May 23, 2012, 3:47 AM
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SnyderBock SnyderBock is offline
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Originally Posted by Kngkyle View Post
...Anything more than those 2 would likely depend on United building up Denver more, which has about no chance of happening since they are getting killed by Southwest and Frontier. I actually suspect the opposite will happen, with United moving capacity from DEN to newly acquired IAH to escape the LCC bloodbath.

Here's some news regarding United Airlines and their future at Denver:
Quote:
Denver council OKs United Airlines cost cuts at DIA despite objections from Southwest, Frontier
Denver Business Journal by Ed Sealover, Reporter
Date: Monday, May 21, 2012, 9:12pm MDT - Last Modified: Monday, May 21, 2012, 11:41pm MDT


The Denver City Council voted unanimously Monday night to lower the cost of United Airlines operating at Denver International Airport , despite protests from competitor airlines, as long as the airline increases its business at DIA over the next four years...

...United -- a unit of Chicago-based United Continental Holdings Inc. (NYSE: UAL) -- reduced the passenger capacity on its flights 10 percent near the end of 2011 and indicated it needed to reduce its roughly $150 million annual lease with DIA as well.

So, city officials worked out a deal under which United's lease payments would fall by $22 million a year on the condition that it grows its total available seat miles flown from DIA 4.5 percent by 2016.
If not, it must pay $100 million back to the airport.
The deal, which involved DIA using unallocated cash balances to pay off about $100 million in debt for the airport's baggage system and for unused space in the basement of the United-dominated Concourse B, also benefits all other airlines at the facility.

Frontier's lease payments will drop by about $2 million per year and Southwest's by about $1 million annually because of the reduction of debt, Ackerman said...

http://www.bizjournals.com/denver/ne...es.html?page=2

And from the Denver Post:
Quote:
Denver International Airport, United Airlines reach deal on debt
By Ann Schrader
The Denver Post


All of Denver International Airport's airlines will save money on their leases and the airport will pay off some of its debt through a proposed deal with United Airlines. Presented today to a Denver City Council committee, the agreement calls on DIA to pay off about $100 million in debt associated with unused and unneeded space for the original baggage system on Concourse B and maintenance space on Concourse A.

In return, United — the largest carrier at DIA with a 41 percent domestic market share — could save up to $22 million a year if service benchmarks are met. Currently, United pays up to $151 million a year on its DIA lease, which includes payment on the baggage space.

"United is committed to success in Denver, but it must be cost effective for us to operate," United said in a statement. "We worked together with Denver International Airport's leadership team to address our cost structure at DIA, and this proposal helps to narrow this cost disparity compared to our peers."
The next-largest carriers — Southwest and Frontier — will save $1 million a year and $2 million, respectively.

John Ackerman , DIA's chief commercial officer, said that under the agreement, United must level off a capacity cutback at DIA that began several years ago and accelerated to a 10 percent reduction in the fourth quarter 2011 from the fourth quarter 2010. United must grow capacity 4 ½ percent and maintain that level through 2016 to receive the maximum benefit.

The money that DIA will use to pay off the baggage system-related debt will come from the federal $4.50 passenger facility charge . The money is used to pay for Federal Aviation Administration-approved projects. DIA gets $1.50 of each $4.50 fee.
Aviation manager Kim Day said it is hoped the agreement "will result in growth at DIA" for United. The airport must continually look for ways to reduce costs for the airlines, she said, "or frankly, they will pack up their airplanes and go somewhere else."
With the merger between United and Continental airlines, there has been concern about the future of its Denver hub. The airline maintains a continuing commitment to its hubs that existed prior to the merger.

"We weren't as concerned about them leaving us as a hub as we were concerned about losing out to Houston and Chicago," said Patrick Heck, DIA's chief financial officer. "We want to make Denver as attractive as possible," which means lowering the cost of doing business. DIA has a total debt of $4.1 billion, with the bulk scheduled to be paid off in 2025 .


Read more: Denver International Airport, United Airlines reach deal on debt - The Denver Post http://www.denverpost.com/business/c...#ixzz1vjWLYnF4
Read The Denver Post's Terms of Use of its content: http://www.denverpost.com/termsofuse
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Last edited by SnyderBock; May 23, 2012 at 10:00 PM. Reason: Wrong Thread
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