UnitedContinental Holdings (how long before the Continental part turns to dust?) has already started meeting my expectations by demonstration some outstanding financial performance numbers – three times better than is Delta, who has had over two additional years to reap what they have sown.

Check this out - One Reason the Street Should Love UnitedContinental earnings

Otherwise, it’s business as usual over there – charge more, deliver less. And, I’m going to hedge my bets on UA ordering 748i going forward – I’m now leaning more toward 773M for them.

I keep reading in forums and in the mainstream media that United Airlines “bought” Continental Airlines.

It’s not what happened at all.

United and Continental agreed to merge. A merger is a combination of two companies into a single enterprise.

A purchase is a purchase.

When United and Continental agreed to merge, they created a new corporation (UnitedContinental Holdings, Inc.) which issued new shares. These shares were traded for all of the outstanding and existing stock that each of United and Continental had. No United stock is left. No Continental stock is left.

Delta and Northwest recently combined. Delta, without changing its corporate structure, issued new shares and exchanged those for Northwest stock. Northwest, and all of its corporations ceased to exist entirely, and only Delta was the surviving entity.

That the trade name United is being used in the United Continental tie-up is the surviving name does not make it a purchase.

Some ten years ago, I was always pleased to introduce someone to Continental Airlines. My apartment is decorated with so much vintage Continental Airlines swag that people always assume I work for the “Proud Bird”. Now, even I have begun to speak of Continental derisively.

What has changed?

“Frank Lorenzo in a better suit”, aka Jeff Smisek.

Even after 9/11 and the calamitous environment for the airline industry, Continental alone maintained its standards for passenger experience. The ads showing pillows and blankets being thrown off of the airplane, free food in coach at mealtimes, an engaged employee population, all of these things provided support for Continental charging a fare premium to most other carriers, as frequent fliers chose Continental in droves.

There is no way to know just how many WorldPerks and SkyMiles rewards were redeemed on Continental metal. People who had flown Northwest for decades jumped at the chance to fly on a carrier that had clean, tidy airplanes, enough cabin staff to keep everyone happy, left on time, and made a person feel like a valuable customer.

At the end of 2004, Gordon Bethune left the airline. He was pushed out by an investment group who wanted more profits from the revenue stream. Gordon, who had been the champion of both customers and employees, crafted the programs that made Continental the sole premium brand airline in North America. Larry Kellner, who had been the CFO, was elevated to Chairman.

Larry seemed a good enough guy, although the employees didn’t care for him. He did what all accountants do; he counted beans. However, he had been close enough to Gordon’s success that he was able to see the bigger picture. Service didn’t decline too much, and profit enhancements were generated through adding winglets to the entire 757 and 737NG fleet. Aircraft utilization continued to climb – when an American jet or a United airplane was basking in the moonlight, CO’s fleet were leaving contrails on their way to someplace far away, loaded to the gills with passengers.

The route structure continued to expand, even though new aircraft deliveries belied the possibility. Continental was fast approaching replacing Pan American World Airways as the one airline that could take you anywhere.

Larry lasted until the end of 2009. Were we really supposed to believe that Larry wanted to go back to being a private equities broker? That’s the airline industry equivalent of “wanting to spend more time with my family”.

The open question was, which position was it that had prevailed in the Board Room at 1600 Smith St.? Merger or not-merger?

Larry kept his own counsel on the matter. Gordon, too, kept silent, although he continued to champion more industry combinations.

Jeff Smisek, a Harvard lawyer, took over as chairman. It didn’t take very long before it was revealed that the pro-merger forces had prevailed. It also was revealed that profit at any cost was the new marching order of the day.

Free food, blankets and pillows, OnePass rules, free checked bags where chucked out of the cabin door along with employee morale and the attitude of customer accommodation.

Employees are no longer partners in providing the best customer experience; they’re now like Eastern Airline’s overworked, beaten down staff. The airplanes are no longer as clean. Cabin crew are now tasked with up-selling everything, moving about the cabin with WiFi credit card readers. Everything about the passenger operation now screams “have your credit card ready”.

As Hyundai, Audi, or GM – it takes decades to build a powerful customer reputation, and only a few months to destroy it.

Recently, friends who have flown Continental have been universally displeased and derisive. One has said she is sure that the newly merged United staff is behind the problem.

They’re not.

United’s employee population has already been beaten into submission. Their sole hope of salvation was that Continental’s storied passenger and employee relationship culture would lift them from the damp, dark galleys in which they labored.

It was not to be. Recently, “United” decided to take their pilot negotiation demands to the public, in an effort to persuade the public that labor was being unreasonable.

Instead of lifting United up, Smisek has piloted Continental down to a level consistent with the dank expectations of United’s long-suffering customer base, likely in order to simplify merging a former high flyer with a clunky, hapless, hopeless stalwart.

I have a few prognostications that I have pulled from the vapor of various stories and threads I’ve been reading.

To make it an easier read, I’ll just do one a day.

To start, I’ll do my (former) hometown airline, UCon (now NuCon, or United as it is more commonly known).

United (combined) has already begun to re-gauge several routes and their two east coast hubs – EWR and IAD. A whole lot of big legacy UA metal is moving up to EWR and a whole bunch of CO’s snappy little 75M are going to be hauling the political worker bees across the pond on legacy UA’s routes from IAD.

This makes a whale of a lot of sense.

Rumor has it that a few of legacy UA’s 744s are going to be running from IAH – NRT, FRA, LIM, LHR – the demand is there, and UCon hasn’t had the metal to upgauge.

United is making a push at NRT and flogging the regulatory authorities hard on Tokyo Haneda, now that Delta has drawn down service there.

Here comes my prediction – United is going to be a money machine. They will have the ONLY truly global airline – something that eluded even Pan Am in their heyday. Delta has very little to Latin America, in which United is immensely strong. United’s partnership with Lufthansa’s constellation of carriers will produce enormous revenue generation, as will Lufty and United’s transpacific agreements with ANA. This is basically a kick in the groin to JAL, who is already on the ropes.

The new United, as my buddy Gailen David today noted, seems to be choosing most of legacy Continental’s operating standards going forward – which is a very good thing. With an advancing reputation for service, the right ship on the right route, and the sole opportunity for a traveler anywhere to stay online everywhere – United is going to be the next King of the Jungle.

Yesterday, Air China bought five (5) Boeing 747-8i Intercontinental aircraft (apparently, as a “free gift with purchase” or something). They join Lufthansa and Korean Air in voting with their checkbooks for Boeing’s totally redesigned 747.

For years, the A380 has been held up as the new “Queen of the Skies”, but is it really? A380 sales have fallen off of a cliff in the last few years. In the last few months, cancellations have far exceeded orders.

More importantly, nearly half of the outstanding A380 orders are from one airline – Emirates. While Emirates seems to be moving from strength to strength, it remains to be seen whether they will actually take up this massive order along with the dozens of additional 777s and A350s for which they have spoken. This is a lot of egg in one basket for the A380 program.

The other day, a QFA380 had to make an unscheduled stop in Adelaide on its trip from Singapore to Melbourne. Ran out of gas. Headwinds. Of the 450 seats about, only 239 had found buyers.

This is the same circumstance that made the original 747 such a money loser. It’s just too damned big for most routes.

Right now, the A380 (which was delayed into production by nearly four years has had 234 firm orders of which 46 have been delivered. That’s 46 deliveries in four years. Boeing drops more 737s off the flatcars in a year than that.

Of those 234 orders, 90 are from Emirates.

The 747-8, which just had its first flights a few weeks ago, has garnered only a handful of buyers, although the freight version has a larger take-up.

The 747-8 has a fair amount of commonality with the 747-400, of which 664 are flying today. Most are approaching twenty years of service, but the 747 airframe has proven itself to be a very high-time performer. TWA operated some 747s to nearly 100,000 cycles, which far exceeds any other airframe’s performance.

The 747-8, in other words, will require fewer accommodations to fly. With the complete redesign of the wing (the most expensive and hard to engineer part of any airframe), new engines based on GEnx technology from GE, LED lighting, higher capacity electronics (meaning lower electric consumption) this ship should be able to operate at significantly lower cost per seat mile over a longer range than the 747-400 it replaces. 51 one more passengers, 26% more cargo volume, ability to operate into any current 747 airport, commonality as to tooling, some parts, some maintenance and a great deal of it as to crews.

So far, Boeing has brought in 76 total orders for the 747-8 (F and i versions together). That’s since project launch in 2005. The A380 had a five year head start, and if one backs out the Emirates order, they’ve sold 145 ships.

There are several very good articles out there regarding the advantages each of the A380 and 747-8i have over the other. From the pilot’s perspective, the 747-8i has a much more powerful thrust to weight ratio than the A380. The A380 has a maximum range of 15,000nm to the 747-8i’s 14,800nm – the A380 appears to have a lower fuel burn per seat mile, BUT -

If you can’t fill it up, what good does dragging empty seats at lower cost do for you?