Aeroman62 From United States of America, joined Jan 2004, 158 posts, RR: 0 Posted (9 years 10 months 1 week 4 days 2 hours ago) and read 3696 times:
Does it seem odd to anyone that a bankrupt airline (which has been bankrupt for over 12 months, and keeps postponing its emergence from bankruptcy every six months) is (a) spending a great deal of money on starting a lcc knockoff with a goofy name, which is essentially their coach product, but costing them millions in $ to rebrand (when they could have just taken out the first class seats, and sold it as an all coach product under the United name), (b) repainting their entire fleet, (c) engaging their union employees to the point of acrimony on give backs, while they spill $700 or more an hour on legal fees, and have some ex-oilman running the place.
I don't get it, nor do I grasp how they will ever get out of this, given the fact that they still bleed millions in losses each quarter (although the amount of loss is going down)(on the other hand, a $100 million something loss is still pretty bad compared to a profit at WN).
Bottomline, there are too many airlines in the US, many of which have legacy, flawed business models, who aren't figuring out how to simplify their operations, and provide the services the flying public requires.
Syncmaster From United States of America, joined Jul 2002, 1998 posts, RR: 13 Reply 1, posted (9 years 10 months 1 week 4 days 2 hours ago) and read 3662 times:
"Bottomline, there are too many airlines in the US, many of which have legacy, flawed business models, who aren't figuring out how to simplify their operations, and provide the services the flying public requires."
And flawed business models is what UA is trying to fix. Read some of the other NUMEROUS topics on this same subject, you will find that what they are doing is actually probably for the best.
Syncmaster From United States of America, joined Jul 2002, 1998 posts, RR: 13 Reply 4, posted (9 years 10 months 1 week 4 days 1 hour ago) and read 3596 times:
First of all they are not re-branding their coach product Ted, they are starting an additional service called Ted. Not to mention the fact that they have not said they are spending millions doing this, in fact, it's probably been fairly cheap. Cheesy marketing, the plane would need to be re-painted either way, and taking seats out is not necessarily expensive, what about this is not a good business model?
AirT85 From , joined Dec 1969, posts, RR: Reply 5, posted (9 years 10 months 1 week 4 days 1 hour ago) and read 3575 times:
I think United is being smart by not rushing out of bankruptcy. US went in and got out ASAP and look at them now...they're knocking on deaths door.
Nobody here can say for sure whether or not TED will fail. It remains to be seen. Personally, I applaud United for the effort. At least they are doing *something* to try and fix segments of their operations that aren't performing well. Once again-one only needs to look at USAirways and see what happens when you don't.
FA4UA From United States of America, joined Nov 2003, 812 posts, RR: 21 Reply 6, posted (9 years 10 months 1 week 3 days 21 hours ago) and read 3480 times:
can we beat a dead horse a little more please?
Ted is responsive move to the market conditions. The long term goal of TED is to reach Leisure destinations. As leisure travel is the fastest growing segment in the States and since UA has very little service to leisure markets it's a smart move to bring this cost effecient "vehicle" to reach that goal. Marketing for TED has cost less then $200,000! I just went through training and that was one thing they said right up front (since the biggest critics of UA are the employees!).
Painting planes needs to be done through the D-checks anyways... the new paint job will eventually end up saving money as well as adding a huge psychological benefit to employees and passengers as we re-emerge.
To piggy-back on to what AirT85 stated above, it isn't a race to get out of Ch. 11. It's best to have our house in order for long term stability!
Granted, UA has some challenges ahead.
Ted hasn't even launched so we don't know how this move will work long-term. I do know that advanced bookings are way up and it's a very positive sign that things are looking good with the business model since they're adding it to IAD.
UA also has recently done some damage internally by moving for the bankruptcy court to change retiree medical benefits after promising they would leave them alone. This is caused an enormous upheavil which was recently seen globally as Flight Attendants and other work groups did informative picketing world wide.
Check your facts before posting: Operationally we're making money... so don't even go there! Lawyers are never cheap and totally necessary when we're talking the largest aviation bankruptcy in history. Was that really a suprise to anyone?
The debate continues... Starwood or Hyatt... which is better
Iflewrepublic From United States of America, joined Jun 2000, 537 posts, RR: 3 Reply 7, posted (9 years 10 months 1 week 3 days 8 hours ago) and read 3299 times:
I'm just wondering, correct me if I'm wrong, doesn't the catch phrase on airliners.net seem to be "Check your facts, first"? If people could do that, it would save everyone, you yourself, so much trouble.
All of us, not just United, have a long, long road ahead of us.
Aviation is proof that, given the will, we have the capacity to achieve the impossible.
UALPHLCS From , joined Dec 1969, posts, RR: Reply 8, posted (9 years 10 months 1 week 3 days 4 hours ago) and read 3156 times:
Where is the irony? What is ironic?
I do find it ironic that those who say the LCC model is the way of the future laugh when other carriers take a page from the LCC play book. Why is it that only WN, B6, FL and F9 can be all coach, quirky, fun and cheap? If they have the monopoly on those criteria how long before they become as complacent as AA, UA, CO, NW and DL became?
That is the ONLY irony in this thread so far. "Legacy" carriers can't make it with their current model according to the wise and all knowing airliners.net crowd. But they are stupid for even trying to change, unless the carriers in question are Jetblue, or Southwest.
I wonder how ironic it was for Valujet to repaint their planes and rebrand themselves.
Same drivvle we have been hearing for well over a year. Now its just someone new saying it. Sorry to jump on your case Aeroman62, seeing as you are new, but this path is well worn, and most of the old arguments about UA's stupid management have NOT held water. So excuse us for being skeptical, that you argument will hold any water either.
Airzim From Zimbabwe, joined Jun 2001, 1148 posts, RR: 1 Reply 9, posted (9 years 10 months 1 week 3 days 1 hour ago) and read 3069 times:
UA is not being particularily inovative or leading edge on this one. The "airline within an airline" has never worked, will never work, and is a doomed to failure from the start. AC (Tango), DL (Express and Song looks shaky), CO (Lite), UA (Shuttle, that is ironic), and US (Metrojet). All failed. Show me the difference from what UA is doing fundamentally. Not much.
Uadc8contrail From United States of America, joined Sep 2003, 1782 posts, RR: 10 Reply 10, posted (9 years 10 months 1 week 3 days ago) and read 3024 times:
ua said a year ago dec that they expected to be in judge wedoffs court room for at least 18 months, there were some press reports coming out a year ago that ua might be leaving early but that was denied by jake brace, ua has said from the get go that they wanted to be out around 2q of 04....
contrary to popular belief....ua shuttle was a money maker and it worked....it failed when the summer of 2000 came upon us and wreaked havoc on everyone, i hope that ua has learned from that and tweeked the formula to make it right this time, at least the 320 pilots are going to be paid the 300/500 rate thru 2009, so if they at least follow that biz model that they had before 2000 then there is no reason it shouldnt work.
UALPHLCS From , joined Dec 1969, posts, RR: Reply 11, posted (9 years 10 months 1 week 2 days 16 hours ago) and read 2945 times:
United Shuttle was making money but Goodwin pulled the plug after 9-11. Why? Because this was the same guy who's leadership got us into Chapter 11 in the first place.
I won't deny UA has made some boneheaded decisions. But Those decision makers are out looking for work at other airlines right now. (God bless the airline that hires them.)
I fail to see how the "airine with in an airline" has been proven dead. Are not Comair and Airlink wholly owned and integrated into the DL and NW system? What makes you think that done correctly the same can't be integrated with A320s.
Another thing that is consistantly overlooked is Ted's simplified fare structure. EVERY airline desperately wants to simplify the fare structure that they have right now. It is confusing, expensive, and annoys passengers. But no airline has been willing to make the first move in simplifing thier structure. Ted is UA's move. That is truly innovative. No airline has done that.
Additionally so what if Ted isn't "leading edge" as you called it. Auto manufactures had airbag technology since the early 70s. Yet they didn't begin to install it until someone made the first move. Were the automakers who added airbags second stupid for following suit? Or smart to realize they wouldn't be able to compete without them?
You seem to want UA just to roll over and die, without trying to change, all the while complaining that if they became more like LCC's they wouldn't have these problems. You can't argue both.
Ordpark From United States of America, joined Nov 2003, 560 posts, RR: 1 Reply 12, posted (9 years 10 months 1 week 2 days 14 hours ago) and read 2853 times:
FA4UA - I had this big long list of things I was gonna add to this but you covered most of them.....nice post...
Some people are gonna be critical of ANYTHING UA trys - as UAPHLCS said, some people want UA to just roll over and die, and I'm sorry to disappoint them but that's just not gonna happen!
UA will not exit bankruptcy until EVERYTHING has been addressed and corrected and yes it's VERY expensive to be in bankruptcy.(I should have listened to my Dad and become a lawyer - but that's a whole different post).
Things are falling into place and when UA walks out of the courtroom for the last time, It will be more than ready to compete.
Caetravlr From United States of America, joined Oct 2000, 907 posts, RR: 1 Reply 13, posted (9 years 10 months 1 week 2 days 13 hours ago) and read 2773 times:
I pretty much want to second what most people on here have said.
It takes money to run a business, and sometimes that means investing in change. If the $200,000 in marketing expenses for Ted is accurate, then that is dirt cheap, relatively speaking. Also, as others have pointed out, UAL is actually saving money on scheduled maintenance by simpliflying the new livery. Also, if Ted is such a flawed business model, none of the stakeholders (i.e. the DIP lenders) would have signed off on it, and it would never happen.
If you have a fundamental understanding of business, a lot of these things make sense, although times are still a bit scary.
A woman drove me to drink and I didn't have the decency to thank her. - W.C. Fields
Beltwaybandit From United States of America, joined Mar 2003, 495 posts, RR: 0 Reply 14, posted (9 years 10 months 1 week 2 days 12 hours ago) and read 2687 times:
A bankrupt airline with the intention of emerging from bankruptcy MUST operate just like an airline with a future. All those things make sense. As long as the big creditors are happy with the course of the plan, the plan will move forward. At some point, however, if all these efforts seem futile, the creditors will need to step in and pull the plug.
AA7573E From United States of America, joined Nov 2003, 475 posts, RR: 2 Reply 15, posted (9 years 10 months 1 week 2 days 12 hours ago) and read 2655 times:
While I do agree that UA must be aggressive as to their plans for reinventing the airline as it exits bankruptcy, I also agree with the general sentiment that Ted is doomed, and in some sense will hurt United overall.
Simply put, the similarities in the underlying cost structure between United and Ted, means it will be more difficult for Ted to achieve the economic advantages that WN or B6 profit on. The Unions clearly feel misstreaTED, misrepresenTED, and are quite vociferous in expressing their feeling. Furthermore, I'm am far from convinced, as is a large portion of the commercial aviation community, that TED will generate a substantial amount of new business, as opposed to cannibalizing mainline traffic, and moving it to TED for a lower fare, and a yield that is marginally better to the same as mainline. There is only so much utilization you can squeeze out of an airplane before you start to see marginalized returns. TED is operated by UNITED for UNITED, and thusly carries the associated burden of the comparatively bloated cost structure that United has. That's not to say that United has not reduced, over the past 12 months, their cost structure - but it is nowhere near that of an LCC, and it does not provide them with the ability to operate like one.
Unless the underlying structure of TED is addressed, and substantial reductions in operating costs are achieved - above and beyond those achieved through higher utilization rates- TED will fail. SONG is proving it out. Although far from a failure, it is far less of a white knight than Delta expected, and it's future is way up in the air. United has a history of being wagged by the tail. This is yet another example.
UAL777 From United States of America, joined Aug 2003, 1505 posts, RR: 5 Reply 16, posted (9 years 10 months 1 week 2 days 5 hours ago) and read 2512 times:
Well I don't want to speak without backing my facts up so here are the loads for Feb 12, Ted's launch day:
(the time is departure, the first column is seats available, second is seats sold, and thirds is S/As.)
As you can see TED is running a 93.2% load factor (S/As NOT included).
Hope these facts help show how well TED is doing. Song never had loads this high and this is Feburary, one of the slowest months of the year. I think that Ted will be a money-maker indeed.
Airzim From Zimbabwe, joined Jun 2001, 1148 posts, RR: 1 Reply 17, posted (9 years 10 months 1 week 2 days 4 hours ago) and read 2456 times:
Well let's just post the loads and that explains everything. First off, posting loads is quite possibly illegal since only people with access to RES have access to that information.
Secondly, you could charge $5 bucks and fill the plane 100% so your information is useless.
Thirdly, Ted is falling right in line with the other "airline within an airline" concepts of failure. Let me first state that Comair etc., is not a fair comparison although they are in the "Delta" family they are a totally seperate company. Comair pilots are paid far less than the collegues at DL, they have a seperate management team, HQ, etc.
Ted is UA Light. Why are the using the same inventory system as UA? Other low cost airlines use systems like Navitaire and the system at Spirit (which I can't remember the name) for a fraction of the cost of mainframe. Even if the want to distribute in the GDS's this is still much cheaper. Strike one from day one.
It is all about cost. Denver is one of the most expensive airports in the US to operate. Strike two.
Product differentiation. Is Ted going to compete against UA in some markets? Yes. Are they going to screw the consumer who thinks he/she is getting one thing and not another? Yes. Strike three. The consumer is not smart enough or cares enough to tell the difference between one flight or the other. Classic CO Lite mistake.
Name one airline where it has been successful? Can't because there aren't any. With one exception, GO. The difference with GO is it was totally seperate from BA. Different RES system, different airports, different markets, no link to FFP, different pilot and FA base. It was different. Ted is not different.
UAL777 From United States of America, joined Aug 2003, 1505 posts, RR: 5 Reply 19, posted (9 years 10 months 1 week 2 days 3 hours ago) and read 2365 times:
Airzim: With all due respect, your analysis is flawed in a number of ways.
First off, I did NOT get my info from the RES computer. Secondly, I do not think that UA would care all that much and if they do, I will gladly apologize and not do it again. I was merely providing a sample of Ted to show it is not a failure.
Secondly, UA is not and NEVER will have $5 fares. Do you honestly think that the people in UA's pricing department are so daft as to price fares so that they cannot make money? They are competitvly priced and designed to make money.
Thirdly, Ted is NOT UA light!!! CO lite was a completely diff. product. They offered NO food, had no galley, and flew to places people did NOT want to go.(Source: From Worst to First by GORDON BETHUNE) In addition, UA is using the same inventory because it SAVES money by integrating Ted into the reservations system. Not only does Ted serve leasure markets, but it can also be used to connect to mainline UA flights, hence why it is flying out of DEN and shortly IAD.
As far as "screwing the consumer" for getting a different product, why don't you look at the airplane. It says PART OF UNITED. From day 1, UA has told the consumer that Ted was merely a "portfolio expansion." It is designed to be pleasure traveler friendly. It is different from mainline UA(and CO Lite) in a number of areas:
1. Ted offers significantly lower fares that suit the leisure traveler without sacrificing good service.
2. Ted is more laid back providing entertainment that a family or couple on vacation can enjoy on the way to their destination.
3. Travelers on Ted can redeem FFMs for later vacations which increases UA's intent to repurchase.
4. Ted offers CHOICE. Travelers will have the ability to purchase food on-board or just stick with the compliamentary beverages and peanuts and save money.
5. Ted shares all of its basics such as interior seats, parts, reservations, pilots, FAs, dispatchers, and other personnel with UA. This not only saves money by not buying additional resources and having to mantain them; it also allows UA to flawlessly integrate the travel experiance for it's customers.
I believe that once in a while a company makes a dramatic shift that proves that industry trends can be beat. In the 70s till now, that trendsetter has been WN. UA has had the oppertunity to review all the "airline within an airline" mistakes and misfires and has created a plan that is economically viable to the company and friendly to the passenger. UA now not only appeals to the business traveler. It has created a product for the average Joe(or Ted in this case) and will be successful. Costs are lower, loads are higher. UA is on the right track with this one.
In closing, just because the success rate has been low in this particular endeavor doesn't mean it can't be done. MANY LCC upstarts had failed before WN came along. UA has watched, listened, lowered costs, and studied what would make this idea work. Now they are implementing it. Please do not make generalizations without backing them up.
SHUPirate1 From United States of America, joined Sep 2003, 3670 posts, RR: 18 Reply 20, posted (9 years 10 months 1 week 2 days 3 hours ago) and read 2314 times:
UAL777-Any way of knowing how many of those passengers on those flights are O&D and how many are connecting...additionally, could you please check UA 1500 (TED) LAS-SFO on 4/12 (the second leg is SFO-JFK on a widebody, can't remember the flight number)...I always wonder about loads on the flights that I am on, because, quite frankly, I am a VDB-compensation freak...
Burma's constitutional referendum options: A. Yes, B. Go to Insein Prison!
UAL777 From United States of America, joined Aug 2003, 1505 posts, RR: 5 Reply 21, posted (9 years 10 months 1 week 2 days 2 hours ago) and read 2288 times:
SHU, right now its only booked to about 35, but so were the ones leaving Thursday about 2 months ago. Remind me about a week or 2 till departure and I will update you.
As far as O&D, I can't say, but I would venture it is pretty high due to the extensive marketing at DEN, but I cannot say for sure. Perhaps UA744Flagship will come on and make a statement. He knows more about that kind of stuff than I do.
Airzim From Zimbabwe, joined Jun 2001, 1148 posts, RR: 1 Reply 24, posted (9 years 10 months 1 week 1 day 19 hours ago) and read 2132 times:
Let me try and repeat this again since you seem to not get it.
First off, airlines consider booking information confidential. Loads indicate how many seats are left on a given flight and a competitor could take that information and use it to their advantage, e.g., shut down lower buckets because it knows UA is sold out for example. Whether UA cares or not this information is not readibly available to the public, no travel agent has this information so I would highly recommend not posting it, but I could care less if you got in trouble.
Secondly, my $5 reference was an example. I didn't say that they were charging $5, I was stating that loads indicate absolutlely nothing on profitability. The statement was, you could charge $1 and fill the bird and have 100% load factor, but lose your shirt. Posting the loads show neither success or revenue potential on the flight.
Do I honestly think that people in UA's pricing department are so daft to price fares so that they cannot make money? Do you really want me to answer that? If UA were pricing their flights to make money they wouldn't have lost $2.4 billion last year. So tell me how they intend to price these flights under their current rates with the same essential costs and make money? I'd love to hear it.
Lastly, the remainder of your e-mail talks about nothing. Good feelings and high expectations are nice, but the numbers just don't add up. How the hell does using Apollo for Ted going to save money? You could do the same thing with a cheaper RES system at Ted for about $30 less a transaction fee per booking. CO, Tango, MetroJet etc all had different logos outside the plane, they tried to tell the consumer they were different products. Didn't work. Nothing else in your e-mail discussing anything different from what the others have tried.
Look you can call it what you want, but if you use the same crews, with the same salaries, with the same cost structure, but with lower fares, TED will be the "end of United"
25 UALPHLCS: Gee if reporting traffic is illegal I guess All that traffic information the airlines report after the fact is illegal too. This ia a weak argument to
26 Airzim: UALPHLCS, You really are blinded by your ignorance. Read very carefully again why you are not allowed to post BOOKED LOADS ON A FLIGHT PRIOR TO DEPART
27 UAL777: Uh, airzim, you really need to read up on UA in order to discuss them. Pilots at UA have taken 30% paycuts or MORE to help reorganize the airline. In
28 KaiGywer: ail to see how the "airine with in an airline" has been proven dead. Are not Comair and Airlink wholly owned and integrated into the DL and NW system?
29 UALPHLCS: Airzim, Before calling someone blinded by ignorance, you should look in the mirror. UA has no problem relating its booking information to nonrev trave
30 Mattnrsa: While I agree with UALPHLCS and all other UA posters regarding the success of TED, it is inappropriate to post specific advance bookings of our flts.
31 Airzim: UALPHLCS, Read Mattnrsa's post. While non-revs on UA have access to that information, it is not readibly available to the general public. Hence my sta
32 UALPHLCS: Airzim, You use rhetorical phrases like " not wasting my breath" to make it sound like I'm the one who doesn't get it. When clearly, I have stated...
33 Airzim: Funny thing is you whined on and on about frikin' RES systems, but yet you failed to even mention that you were wrong about posting bookings informati
34 NWAFA: I just think it is so wrong that UAL has been allowed to spend MILLIONS and MILLIONS of dollars all under Bankruptcy. They have spend MILLIONS on New
35 UALPHLCS: NWAFA is a liar. New Uniforms- No new Uniforms have been designed since the F/A's got theirs redone in EARLY 2001. After 9-11 and Chapter 11 Uniforms
36 NWAFA: UALPHL Once again you are WRONG! I even just called my sister who has been a FA for 24 years with UAL and they DID get NEW China and GlassWear UNDER B
37 Thrust: UA is going to emerge from bankruptcy soon. You watch. They are not suicidal by repainting their planes and creating TED.
38 UALPHLCS: As far as the posting of bookings are concerned Airzim: I think it's fine. The person who did it doesn't habitually post them. They were only a few fl
39 Airzim: UALPHLCS, Now we are having a debate. While 10 flights may be no big deal, it is a breech of confidentiality. One is too many. You should be concerned