scotron11
Posts: 1181
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UAL Reports $93M Loss For May

Wed Jun 29, 2005 12:05 pm

UAL reported it had a net loss of $93M in May with fuel the main culprit. Operating loss was $21M against $9M profit last year. Fuel expenses were $93M higher than May 2004.(Various Newswires)

I know this is a loss, but excluding the pesky thing called fuel, UAL did not do all that bad. Can only get better the next couple of months.
 
ejmmsu
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RE: UAL Reports $93M Loss For May

Wed Jun 29, 2005 12:11 pm

Quoting Scotron11 (Thread starter):
but excluding the pesky thing called fuel

Trying to take fuel out of the equation is nice, but it exists, and has to be taken into consideration.

Its like saying "...despite the fact that my car has no tires, Its running great!"
"If the facts do not conform to the theory, they will have to be disposed of"
 
padcrasher
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RE: UAL Reports $93M Loss For May

Wed Jun 29, 2005 12:17 pm

You exclude fuel when looking at airlines because the rise in fuel masks the cost cutting initiatives taking place. Nobody is discounting the bottom line, but to see if UA is making progress you've got to take fuel out of the equation.
 
ejmmsu
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RE: UAL Reports $93M Loss For May

Wed Jun 29, 2005 12:23 pm

Quoting Padcrasher (Reply 2):
You exclude fuel when looking at airlines because the rise in fuel masks the cost cutting initiatives taking place. Nobody is discounting the bottom line, but to see if UA is making progress you've got to take fuel out of the equation.

Well thank you for enlightening me Padcrasher !!! I don't know why I was so dumb before !

Seriously, I never said that UA wasn't making progress, but you can't discount the fact that they are still losing money. If fuel doesn't get cheaper, they need to do better. Fuel costs the same for everyone, and everyone had the chance to hedge it during better times.

You can exclude it from the equation however you'd like, but when the money is gone, its gone. A loss is a loss.
"If the facts do not conform to the theory, they will have to be disposed of"
 
flypdx
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RE: UAL Reports $93M Loss For May

Wed Jun 29, 2005 12:38 pm

That's not too bad at all..Under 100 million. Keep up the good work UA!!!
 
SESGDL
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RE: UAL Reports $93M Loss For May

Wed Jun 29, 2005 12:40 pm

Quoting Flypdx (Reply 4):
That's not too bad at all..Under 100 million. Keep up the good work UA!!!

That's for just one month. Multiply that by 12 and you have an over $1 billion annual loss if all losses were equal to May's. That's not a good report. Fuel prices are expected to get even higher, so their losses will too.

Jeremy
 
cairo
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RE: UAL Reports $93M Loss For May

Wed Jun 29, 2005 12:46 pm

Quoting Flypdx (Reply 4):
That's not too bad at all..Under 100 million.

Are you high? Just kidding. It's over a billion dollars a year and is unsustainable. I predict UA will come close to breaking even over the summer, maybe even with a slight operational (not overall) profit, but will return to its now traditional (going on 5 years) habit of losing money in the fall.

UA needs to fire employees, as painful as that is to hear.

UA with 60000 employees and 466 planes is 128 employees per plane. Southwest has half as many employees and about 424 planes, or about 75 employees per plane. What the hell is UA doing with enough employees per plane to fill up a mainline plane?

Some will say UA needs these employees because they fly bigger planes further. Well, maybe a few more employees, yes, but 53 more? The fact is, UA isn't really doing, on average, much different than what WN is doing, in terms of flying: their stage length average is only 1300 miles, compared to WN's 750. You need 53 extra employees per plane to fly 500 extra miles? You'd think WN would need extra employees due to higher utilization, but this isn't the case. UA's main expense is it's employees, it needs to be operating with less than 100 employees per plane.

Cairo

figures taken from airline quarterly reports
 
AirNZ
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RE: UAL Reports $93M Loss For May

Wed Jun 29, 2005 12:50 pm

Quoting Padcrasher, Reply 2

"You exclude fuel when looking at airlines because the rise in fuel masks the cost cutting initiatives taking place. Nobody is discounting the bottom line, but to see if UA is making progress you've got to take fuel out of the equation."

Sorry, but how can you take fuel out of the equation....or even why? It's a necessary operating expense applicable to all airlines if they want to fly from A to B! I just don't get how losses of 'under $100 million' per month can be seen as good. What world is UA living in, and how long is this farce going to go on?
Flown:F27/TU134/Viscount/Trident/BAC111/727/737/747/757/767/777/300/310/320/321/330/340/DC9/DC10/Dash8/Shorts330/BAe146
 
avek00
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RE: UAL Reports $93M Loss For May

Wed Jun 29, 2005 12:59 pm

Quoting Padcrasher (Reply 2):
You exclude fuel when looking at airlines because the rise in fuel masks the cost cutting initiatives taking place.

No, it means the cost cutting initiatives were insufficient to address current industry realities.
Live life to the fullest.
 
ckfred
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RE: UAL Reports $93M Loss For May

Wed Jun 29, 2005 1:18 pm

Cairo:

You have to remember that UA has a far-flung route structure. There are a lot of cities in Asia, South America, and Europe where UA may only have a few departures, but needs a station manager, CSAs, etc.

I would also bet that UA has a larger sales department to handle conventions, corporate accounts, and the like. My guess is that WN doesn't have a sales staff anywhere near the size of UA's.

Then there's catering. Since UA still has in-flight meals for international flights, someone has to create menus, test recipies, make wine selections, etc. I'm assuming that WN doesn't have a wine specialist who selects the best red and white wine to go with peanuts.

That said, I saw something on a local news broadcast in Chicago about the amount of money UA is spending in fees related to the bankruptcy. I didn't pay that much attention, but I guess the amount is astronomical, and the two largest fee generators are Kirkland & Ellis, UA's bankruptcy counsel, and McKinnsey & Co., the business consultant.
 
FlyingTexan
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RE: UAL Reports $93M Loss For May

Wed Jun 29, 2005 1:21 pm

Hate to be morbid - but as many probably do, I get a chill reading ‘United’ and the number ‘93’ in the same sentence.

Quoting Cairo (Reply 6):
Well, maybe a few more employees, yes, but 53 more?

Keep in mind, UA has many other types compared to SWA. And UA operates many other stations, some in far away foreign places.
"Wouldn't your boss like to fly home nonstop at 4:30 on a Friday afternoon?" -Airline Exec to Congressional Staffer
 
padcrasher
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RE: UAL Reports $93M Loss For May

Wed Jun 29, 2005 1:24 pm

So true avek00. You're very wise...LOL...
 
padcrasher
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RE: UAL Reports $93M Loss For May

Wed Jun 29, 2005 1:30 pm

Quoting AirNZ (Reply 7):
Sorry, but how can you take fuel out of the equation....or even why? It's

I can't teach you to read in context. I told you why one would want to "look" at non-fuel CASM. I did not say airlines do not run on fuel. I did not say fuel doesn't matter. I even said quote "nobody is discounting the bottom line".
English is your first language right? Read my post again, this time slower, and see why you've just wasted your time and mine.
 
zotan
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RE: UAL Reports $93M Loss For May

Wed Jun 29, 2005 1:33 pm

How many passengers did United fly in May?
 
flybynight
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RE: UAL Reports $93M Loss For May

Wed Jun 29, 2005 1:33 pm

What seems amazing to me is that it is so damn difficult for airlines to raise their prices just a little bit to cover the rising fuel cost.
Personally, if I have to pay $30 or 30 Euros or 210 Kroners more for a ticket,I'd be fine with that.
It really is shame.
Heia Norge!
 
FriendlySkies
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RE: UAL Reports $93M Loss For May

Wed Jun 29, 2005 1:37 pm

Quoting Cairo:
UA with 60000 employees and 466 planes is 128 employees per plane. Southwest has half as many employees and about 424 planes, or about 75 employees per plane. What the hell is UA doing with enough employees per plane to fill up a mainline plane?

Southwest also doesn't have international service, widebodies, or anything but 737s. They also serve about a third of the destinations that UA does (yes, some are UAX, but even some of those are serviced by mainline employees). UA can't run flights with a minimal crew if they want to offer anything service-wise. They already have cut many ground agents, just ask the CSR's at ORD. They've also outsourced most, if not all, heavy maintenance. Firing employees is not the answer. The only problems that remain are in United's BUSINESS PLAN, the employees have given up everything but their employment. Unless UA decides to use robots instead of humans, labor isn't going to see many further cuts.

In short, comparing UA to WN is like comparing apples to oranges. UA can't operate as a full-service international airline with an operating plan like WNs. They need to figure out how to have similar costs while not destroying their high-end customer base.
 
COSPN
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RE: UAL Reports $93M Loss For May

Wed Jun 29, 2005 1:51 pm

Sell All UA Owned Hotels !!!! Nad other non Aviation Assets
 
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ramprat74
Posts: 1324
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RE: UAL Reports $93M Loss For May

Wed Jun 29, 2005 2:05 pm

Quoting Cairo (Reply 6):

Here are the numbers by divisons. OK start firing!

Chairman office 16
Corp Affrs 72
Corp Sfty 171
Finance 719
People 395
ISD 1461
Law 47
Marketing 66
Planning 215
Sales 258
OPB/Ops 91
Ted 45
Stratg Src 224
Arpt Ops 19039
Cargo 393
Rsrvn 3394
Flt Ops 7093
United Svc 7188
Onboard 16013
WW Sales 156
S&R Atlc 303
S&R Latin 333
S&R Pacifc 368
ULS 90
OPS Admin 235
TOTAL 58385


You can subtract the 303 Res agents in Ireland. They just annouced they are closing that office and shipping those jobs to Poland and India.
 
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PA110
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RE: UAL Reports $93M Loss For May

Wed Jun 29, 2005 2:53 pm

Quoting Flybynight (Reply 14):
What seems amazing to me is that it is so damn difficult for airlines to raise their prices just a little bit to cover the rising fuel cost.

U.S. carriers seem hell bent on putting themselves in the poor house regarding fuel prices. European carriers have been surcharging every flight sector, whereas U.S. carriers have been surcharging only their longhaul international sectors.

Example: UA itinerary SBA UA x/LAX UA x/ORD UA LON = a single fuel surcharge only on the ORD-LON sector

By comparison: LH itinerary IEV LH x/MUC LH x/FRA LH JNB = a regional surcharge for the IEV-MUC sector, a domestic surchage for the MUC-FRA sector and a longhaul surcharge for the FRA-JNB sector.

Quoting Cospn (Reply 16):
Sell All UA Owned Hotels !!!! Nad other non Aviation Assets

What UA owned hotels would those be? What non-aviation assets are you referring to?
It's been swell, but the swelling has gone down.
 
scotron11
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RE: UAL Reports $93M Loss For May

Wed Jun 29, 2005 4:45 pm

Quoting Ckfred (Reply 9):


That said, I saw something on a local news broadcast in Chicago about the amount of money UA is spending in fees related to the bankruptcy

$36M in May alone!
 
COSPN
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RE: UAL Reports $93M Loss For May

Wed Jun 29, 2005 6:03 pm

Sorry I Guess they Sold it...............Quoting Christao17 (Reply 26):
United used to own the Hotel Richelieu in San Francisco - now a La Quinta or Comfort Inn or something - Van Ness and Geary. Remember having several friends stay there when they were working lines into SFO. UA sold it after 9/11
 
Mikey711MN
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RE: UAL Reports $93M Loss For May

Thu Jun 30, 2005 2:56 am

Quoting RampRat74 (Reply 17):
People 395

That settles it...the remaining 57,990 are robots!  Wink
I plan on living forever. So far, so good...
 
cairo
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RE: UAL Reports $93M Loss For May

Thu Jun 30, 2005 6:49 am

Sure, UA has all the international flying, the bigger planes, lounges etc... which would somewhat explain why UA needs a whole mainline plane full of employees (128) to serve each plane they have, if these beared out in their flying figures, but it doesn't.

I repeat: the average stage length on UA is 1300 miles. On WN it is close to 800. In other words UA is doing virtually the same type of flying that WN is doing with only slightly more aircraft and considerably worse plane utilization. This is mainline UA, btw, only, not UAX.

In other words, the average UA flight is only 1300 miles long. The average WN flight is 800 miles long. The number of flights to Asia and Europe are trivial compared to the large domestic system. UA is overbloated in employees needing almost double the employees to serve an average flight that is only 500 miles longer than the competition.

Besides that, think about this: in the time of one UA flight to Asia, how many WN employees have touched a typical 737 flying to up to 10 stations a day? If anything, the longer routes on larger planes should dictate LESS employees per plane.

Cairo
 
ramerinianair
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RE: UAL Reports $93M Loss For May

Thu Jun 30, 2005 1:07 pm

Quoting Cairo (Reply 6):
UA with 60000 employees and 466 planes is 128 employees per plane. Southwest has half as many employees and about 424 planes, or about 75 employees per plane. What the hell is UA doing with enough employees per plane to fill up a mainline plane?

This is a flawed method of reasoning. UA operates 744s and 777s. While WN's 737 have a capasity of what 140 people, UA's 747 have more than 350. The domestic 777s from UA have around 400 seats.
SR
W N = my Worst Nightmare!!!!!
 
FriendlySkies
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RE: UAL Reports $93M Loss For May

Thu Jun 30, 2005 1:15 pm

Cairo, you are making huge generalizations. It doesn't take 128 employees to run a UA flight. There is much more to it than that. Now I agree that UA could probably make their operation more efficient, but comparing it to WN is useless.
 
jacobin777
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RE: UAL Reports $93M Loss For May

Thu Jun 30, 2005 1:22 pm

Quoting Flybynight (Reply 14):
What seems amazing to me is that it is so damn difficult for airlines to raise their prices just a little bit to cover the rising fuel cost.
Personally, if I have to pay $30 or 30 Euros or 210 Kroners more for a ticket,I'd be fine with that.
It really is shame.

I don't know about you, but I look for certain flights everyday and the flights which I am going to fly on are 20-30% more expensive this year than last year

Flying SFO-KHI is expensive this year also, EXCEPT for PK which has BUSINESS class seats from ORD-KHI for under $2200..INCLUDING taxes!!!!  biggrin 
"Up the Irons!"
 
cairo
Posts: 889
Joined: Mon Jun 06, 2005 2:41 pm

RE: UAL Reports $93M Loss For May

Thu Jun 30, 2005 1:27 pm

Quoting RamerinianAir (Reply 23):
This is a flawed method of reasoning. UA operates 744s and 777s. While WN's 737 have a capasity of what 140 people, UA's 747 have more than 350. The domestic 777s from UA have around 400 seats.

Employees per mainline aircraft is a key statistic in determining the efficiency of an airline and it's value to the investment community. It is not perfect, and it is subject to some differences, but UA's staffing levels are ridiculous.

Those large planes and their larger crews/groundstaff are canceled out by the fact that by the time it takes a UA 747 to fly from LAX/SFO to Asia, WN has serviced a single 737 five times and boarded more customers per plane. This is a further point, WN with only 737s boards more passengers per plane than UA, with its hefty stable of widebodies.

The longer routes of a widebody should roughly equal the same staff requirement of the shorter routes of a narrowbody in domestic service (considering the smaller planes' frequent loading/unloading), in fact, the longer routes should dictate LESS staff per aircraft, not more.

Besides all of that, the average stage length on UA is 1300 miles. This is not a widebody stage length, so the argument that UA has bigger planes and deserves greater staffing is not in alignment with the fact that their average stage length is small.

UA is way overbloated. Even though the average stage length on UA is 1300 miles, it takes 128 UA employees to get the plane through a daily flight length averaging 1300 miles.

On every non-transcon UA flight I've been on, it has been at staffing minimums. I assume on transcons and international flying they get more staff, but again, this is not the typical UA flight, which is only 1300 miles. Increased aircrew staffing would at most explain 2-8 extra employees per plane, not 70 extra employees per plane.

Cairo

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