Spoke2Spoke
Topic Author
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United Posts 1st Quarter 2007 Loss

Wed Apr 25, 2007 11:17 pm

First Quarter Loss of $152 million. Revenue was $4.4 billion vs. expected revenue of $4.6 billion.

Weather was bad plus fuel was expensive equals weak earnings.

http://biz.yahoo.com/ap/070425/earns_ual.html?.v=1

[Edited 2007-04-25 16:18:34]
...carelessness and overconfidence are usually far more dangerous than deliberately accepted risks. - Wilbur Wright
 
RL757PVD
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RE: United Posts 1st Quarter 2007 Loss

Wed Apr 25, 2007 11:41 pm

That is a major dissapointment and clearly shows needs that more work needs to be done. and their top management got huge bonuses??????

Ever other airline has begun to turn the corner, there really is no excuse for a loss like that, esp after CH 11, if i was a creditor/stock holder id have some serious questions about what their plans are to turn a profit.
Experience is what you get when what you thought would work out didn't!
 
FriendlySkies
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RE: United Posts 1st Quarter 2007 Loss

Wed Apr 25, 2007 11:59 pm

Sigh...alright.

Tilton and the boys got UA off the brink. Me thinks it's time to bring someone a bit more visionary in to turn UA into what it used to be...a popular airline making more money than they knew what to do with.

I'm a UA supporter, but there is no excuse for this kind of loss. Other airlines had to deal with weather and fuel too.
 
georgebush
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 12:06 am

Quoting RL757PVD (Reply 1):
That is a major dissapointment and clearly shows needs that more work needs to be done. and their top management got huge bonuses??????

Yea WTF?!

Not to mention their recent decline on the in-filght service. Even their first class service took a hit! I have not a clue what is going on in that boardroom but there are NO excuses now... Someone with a couple of balls needs to let Tilton know which way is up!
Al Gore invented global warming.
 
dallasnewark
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 12:07 am

It's too bad they can't go into Chapter 11 that easily anymore, but it looks they are headed that way anyway.
What a mess. A year after they emerged from bankruptcy, they are back to square 1.
Oh well, at least there are some money to be made in shorting their stock
B732/3/4/5/6/7/8/9, B742/4, B752/3,B762/3/4, B772/3, A306, A318/9/20/21, A332/3, A343/6, MD80/83/88, L1011, TU104/134, F
 
N174UA
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 12:08 am

Quoting FriendlySkies (Reply 2):
Tilton and the boys got UA off the brink. Me thinks it's time to bring someone a bit more visionary in to turn UA into what it used to be...a popular airline making more money than they knew what to do with.

 checkmark  Yep. I give it 2 or 3 more posts before someone comes in with the "hire Bethune" comment. In terms of labor relations, the well is very, very poisonous. Now might be a very good time for Tilton and crew to exit stage right.

Quoting FriendlySkies (Reply 2):
I'm a UA supporter, but there is no excuse for this kind of loss.

Slowest quarter of the year, delays, surge in oil prices are the official excuses. Behind the scenes, UA has a lot more work to do, obviously. Middle management issues, inconsistent service quality, etc. etc. Those I see are the biggest challenges right now.

Quoting Spoke2Spoke (Thread starter):
Weather was bad plus fuel was expensive equals weak earnings.

THere was also a change in the revenue recognition method for frequent flier miles, which resulted in a $100 million difference. That is a one time event. In quarters where you know things will be bad, that's when those kinds of changes are made.

I haven't had a chance to look at the cash position and cash flow statement. As long as they're CASH FLOW POSITIVE, I'm not all that worried.

Might be a good buying opportunity for UAUA...buy low now and as summer approaches, it should rebound a little.
 
georgebush
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 12:11 am

Quoting N174UA (Reply 5):
Might be a good buying opportunity for UAUA...buy low now and as summer approaches, it should rebound a little.

Let me know how that works out for ya.
Al Gore invented global warming.
 
Flighty
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 12:12 am

What I can't believe is that NEW senior corporate HQ in downtown Chicago. What hubris! What arrogance. A CEO needs to be near the directors of all sorts of departments. Who in turn need to be near the staff. The dual HQ just suggests UA management had their heads in the clouds. They were more interested in glamor than in running an airline.
 
dallasnewark
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 12:13 am

Quoting N174UA (Reply 5):
I haven't had a chance to look at the cash position and cash flow statement. As long as they're CASH FLOW POSITIVE, I'm not all that worried

You meant Cash Flows from operations.

Quoting N174UA (Reply 5):
Might be a good buying opportunity for UAUA...buy low now and as summer approaches, it should rebound a little

Summer is historically weak season for stocks coupled together with the summer dirving season, making fuel prices even higher. It won't rebound till fall/winter
B732/3/4/5/6/7/8/9, B742/4, B752/3,B762/3/4, B772/3, A306, A318/9/20/21, A332/3, A343/6, MD80/83/88, L1011, TU104/134, F
 
SRT75
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 12:14 am

I'm a little suprised to see this. I've done a fair amount of UA domestic flying in the last few months and loads were consistently high, even on off-days like mid-week flights. I know, I know. . . . full planes does NOT always equal profitable flights.

I hope UA turns the corner.
 
RL757PVD
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 12:21 am

I see no excuse when comparing UA to other legacy airlines, they are all operating in the same environment and there should not be a drastic spead between them.

AA Posted a sizeable profit thanks to non-Ch11 reorganizing efforts

DL spent 1/2 as much time in CH11, and it cost them 1/2 as much and excluding Ch11, they would ahve had a $ 6 mil loss.

UA is not very different from either AA or DL so their finacial results shouldnt be either, Especially fresh out of CH11 !!
Experience is what you get when what you thought would work out didn't!
 
N174UA
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 12:22 am

Quoting Dallasnewark (Reply 8):
You meant Cash Flows from operations.

To be specific, yes. Bigger picture, if UA sold an asset and received say $100 million from it for example, but cash flows from operations were at $(15) million, overall, they would still have positive cash flow of $85 million.

Cash flow and income/loss are two different things, two different financial statements. Short-term, you can show a net loss for a month or quarter, but as long as cash flows are positive, then long term, you're fine.

Conversely, you can show a small profit for a month or quarter, but if you had a big cash outlfow, and have future large cash outflows, then that becomes more of a longer-term concern.

[Edited 2007-04-25 17:24:46]
 
N174UA
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 12:30 am

Quoting RL757PVD (Reply 10):
DL spent 1/2 as much time in CH11, and it cost them 1/2 as much and excluding Ch11, they would ahve had a $ 6 mil loss.

That is largely attributed to the fact DL didn't have to spend time renegotiating labor deals with every employee group. Plus, they had the advantage of seeing the mistakes that US and UA made before their case began.

If DL didn't leave any cost savings on the table during their time under court protection, unlike US, then their restructuring will be successful.
 
georgebush
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 12:36 am

Quoting SRT75 (Reply 9):
I'm a little suprised to see this. I've done a fair amount of UA domestic flying in the last few months and loads were consistently high, even on off-days like mid-week flights. I know, I know. . . . full planes does NOT always equal profitable flights.

Well one would think that more butts in the seats = more $$. I think their upper managements theory is... more butts in the seats = more paychecks for us!
Al Gore invented global warming.
 
Bicoastal
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 12:44 am

I've been listening to the webcast of the earnings announcement. Go to www.united.com, bottom of the page and click on Investor Relations. Better to get the facts before commenting....something rare on this forum.

http://ir.united.com/VirtualPlayerFS...&IndexId=&EID_TIK=&RGT=&RGS=&CTID=
Airliners.net has many forums. It has spell check and search functions. Use them before posting!
 
N174UA
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 12:48 am

Here are some key facts that suggest UA is on the right track:

**UAL continued its strong cost performance, with first quarter mainline CASM decreasing by 4.3 percent from the first quarter of 2006. Excluding fuel, profit sharing programs and special items, mainline CASM decreased by 3.3 percent from the first quarter of 2006.

**Operating cash flow increased by 38 percent from the first quarter of 2006 to approximately $626 million.

**The company's cash and short-term investments balance at March 31, 2007 was $4.2 billion, including $856 million of restricted cash after reducing on and off balance sheet debt by $1.4 billion in the first quarter of 2007.

Source: www.united.com

[Edited 2007-04-25 17:49:38]
 
RDUDDJI
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 4:26 am

Quoting N174UA (Reply 15):
**The company's cash and short-term investments balance at March 31, 2007 was $4.2 billion, including $856 million of restricted cash after reducing on and off balance sheet debt by $1.4 billion in the first quarter of 2007.

That reduction in debt alone will likely save UA about $100 millon/yr. in interest.

My biggest worry after reading the whole report is the drop in YOY revenue. That surprised me. I heard a few weeks ago that UA was seeing weaker than planned domestic revenue.

The loss hurts, but it's not all dark clouds... I also heard on the earnings call that they have some new routes planned to be announced in the next six months. It was also mentioned on the earning's call that those additional routes would likely come at the expense of some not-so-profitable routes.
Sometimes we don't realize the good times when we're in them
 
N174UA
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 4:59 am

Quoting RDUDDJI (Reply 16):
I also heard on the earnings call that they have some new routes planned to be announced in the next six months. It was also mentioned on the earning's call that those additional routes would likely come at the expense of some not-so-profitable routes.

Good to hear. I'm glad that UA (finally) is making these kinds of decisions, rather than keeping routes like SFO-CDG alive for no reason. Hell, if some flight to LHR isn't profitable over a long time-frame, cut it and put the plane on something that will have a higher yield. Plain and simple.

UA needs to do something to restore the employee morale level. Too much bitterness, and that hasn't changed throughout the last several years.
 
panamair
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 5:10 am

Quoting N174UA (Reply 17):

UA needs to do something to restore the employee morale level. Too much bitterness, and that hasn't changed throughout the last several years.

I did notice Tilton somewhat stumbling through his answer when a reporter or an analyst asked him a question about employees' criticism of management and whether there would be an increase in labor costs in order to placate the rank-and-file......
 
jacobin777
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 5:14 am

Quoting RL757PVD (Reply 10):
DL spent 1/2 as much time in CH11, and it cost them 1/2 as much and excluding Ch11, they would ahve had a $ 6 mil loss.



Quoting N174UA (Reply 12):

That is largely attributed to the fact DL didn't have to spend time renegotiating labor deals with every employee group. Plus, they had the advantage of seeing the mistakes that US and UA made before their case began.

If DL didn't leave any cost savings on the table during their time under court protection, unlike US, then their restructuring will be successful.

....add to the fact UA went into Chapter 11 during one of the worst periods in aviation history (certainly in recent memory).....DL however has been in Chapter 11 during a very strong "upcycle" recovery....which has helped DL's top and bottom line....

Quoting RDUDDJI (Reply 16):

My biggest worry after reading the whole report is the drop in YOY revenue. That surprised me. I heard a few weeks ago that UA was seeing weaker than planned domestic revenue.

......actually I've read that CO was stating "softening" of yields and possible profits..so its not too far fetched to hear UA something along the same lines....
"Up the Irons!"
 
N174UA
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 5:53 am

Quoting Panamair (Reply 18):
whether there would be an increase in labor costs in order to placate the rank-and-file......

Money doesn't solve everything. I think it's more of a credibility/more things change, more they stay the same feeling amongs the rank and file.

That said, you could hire Santa Claus, Mickey Mouse, and Easter Bunny tomorrow to run UAL, and within a year or two, employees would ask for them to resign, too. So, I dunno....I don't have all the answers.
 
floridaflyboy
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 6:01 am

Quoting FriendlySkies (Reply 2):
Tilton and the boys got UA off the brink. Me thinks it's time to bring someone a bit more visionary in to turn UA into what it used to be...



Quoting N174UA (Reply 5):
Now might be a very good time for Tilton and crew to exit stage right.

I tend to agree. Different CEOs serve different purposes during different times. Tilton served his purpose, and now it's time to bring someone in to help United in the next chapter of its existence.
Good goes around!
 
spartanmjf
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 6:05 am

DL turned an operating profit. US turned an operating profit. WN turned an operating profit. AA turned an operating profit.

If UA is not comparable to any of these, then to which carrier is it comparable. The carrier has used and misused the bankruptcy process to create the never ending crisis. When is enough enough?

But then, UA does have a really good compensation plan for its CEO.
"Nuts to the man in 21D!"
 
N174UA
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 6:20 am

Quoting Spartanmjf (Reply 22):
DL turned an operating profit. US turned an operating profit. WN turned an operating profit. AA turned an operating profit.

If UA is not comparable to any of these, then to which carrier is it comparable. The carrier has used and misused the bankruptcy process to create the never ending crisis. When is enough enough?

To DL and AA and NW, yes. But to compare them to WN? UA and WN are airlines, yes. But two very different business models, and two very different sized companies.

WN has the highest rate of unionization in the industry, yet they've never had a strike. AA, UA, NW, et. al. can certainly take lessons from that, and how to more effectively manage it's workforce to avoid unnecessary strikes, slowdowns, etc.
 
F9Animal
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 7:40 am

Darn! It just goes to show that the industry is still struggling. I agree with some of the statements about Tilton and his team. He

Quoting RL757PVD (Reply 1):
That is a major dissapointment and clearly shows needs that more work needs to be done. and their top management got huge bonuses??????



Quoting FriendlySkies (Reply 2):
Tilton and the boys got UA off the brink. Me thinks it's time to bring someone a bit more visionary in to turn UA into what it used to be...a popular airline making more money than they knew what to do with.

I'm a UA supporter, but there is no excuse for this kind of loss. Other airlines had to deal with weather and fuel too.

I totally agree with both of your views. I know the weather had to be a huge factor on their $$$'s, and the price of fuel is not exactly a deal of the century. I think the trend we are observing for most of the industry will be here for awhile. They are talking about $80-$90 ppbl oil this year. That is going to hurt a few of the airlines.
I Am A Different Animal!!
 
Buddys747
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 7:52 am

Quoting N174UA (Reply 23):
WN has the highest rate of unionization in the industry, yet they've never had a strike. AA, UA, NW, et. al. can certainly take lessons from that, and how to more effectively manage it's workforce to avoid unnecessary strikes, slowdowns, etc.

 checkmark 
That just goes to show it's not ALWAYS the unions fault, like some people like to complain about on hear all the time.
 
Bicoastal
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 7:57 am

For those interested in UA aircraft orders.......they said on the web cast today that UA will wait until the next generation of narrow bodies is available before it makes a narrow body order. No 737NG and no more 320 family. They were vague about widebody orders other than saying UA has a relatively young fleet and will pull out of under performing markets and find more profitable utilization of its widebody fleet.
Airliners.net has many forums. It has spell check and search functions. Use them before posting!
 
congaboy
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 8:37 am

Quoting RL757PVD (Reply 10):
I see no excuse when comparing UA to other legacy airlines, they are all operating in the same environment and there should not be a drastic spead between them.

Negative, I disagree, Providence. Nobody else hubs DEN except F9...B6 took it on the chops, too, with JFK being a hell hole during the winter months. Weather is a factor for UA and B6. Certainly that bone-headed non-move leaving several aircraft on the taxiways was instrumental in B6 fiscal woes, but UA loosing what amounts to a small percentage is nothing to get goofy about. And the USA Today article about UAX leaving pax in Wyoming was sensationlist. All airlines commit this. UA is a bit unique when you consider that ATL and DFW didnt have the issues DEN had. Not fair to compare.
"Joey, you like movies about gladiators?"
 
gigneil
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 8:47 am

I am unfamiliar with any UA management receiving any bonuses.

NS
 
ual777
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 9:59 am

Quoting Congaboy (Reply 27):

Negative, I disagree, Providence. Nobody else hubs DEN except F9...B6 took it on the chops, too, with JFK being a hell hole during the winter months. Weather is a factor for UA and B6. Certainly that bone-headed non-move leaving several aircraft on the taxiways was instrumental in B6 fiscal woes, but UA loosing what amounts to a small percentage is nothing to get goofy about. And the USA Today article about UAX leaving pax in Wyoming was sensationlist. All airlines commit this. UA is a bit unique when you consider that ATL and DFW didnt have the issues DEN had. Not fair to compare.

UA got hit hard in DEN and ORD. It was estimated they lost $80 million because of the Denver storm alone.

Quoting Gigneil (Reply 28):
I am unfamiliar with any UA management receiving any bonuses.

Tilton got something along the lines of 36 million in stock options and the unions are pissed..


To stir the pot, there are 67 unidentified 787 orders...perhaps UA paid down 1.2 billion in debt to get better interest rates for an order?

If i recall correctly, they have 2011-2013 slated for 767 replacement.....isnt that about where delivery slots are for the 787 now???  stirthepot 
It is always darkest before the sun comes up.
 
UA772IAD
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 11:00 am

Quoting N174UA (Reply 17):
UA needs to do something to restore the employee morale level. Too much bitterness, and that hasn't changed throughout the last several years.

Part of this begins with:

Quoting Gigneil (Reply 28):
I am unfamiliar with any UA management receiving any bonuses.

$39.4 million to be exact. Unions are pissed because most eligable employees got pocket change in comparision ($200 or less).

Increased manpower is one way to do it. Either rebuilding the unions or eliminating them all together is another.
 
N174UA
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 2:47 pm

Quoting UA772IAD (Reply 30):
Increased manpower is one way to do it.

Not in this cost environment. Adding manpower in the wrong place only makes things worse. The main problem is the lack of trust and credibility between the two groups. Perception is reality, and the concept of "shared sacrifice" is a bad joke to many rank and file members. And it's not just limited to UA, either...AA is dealing with it now as well.

Quoting UA772IAD (Reply 30):
Either rebuilding the unions or eliminating them all together is another.

That's between the employees and their union....UA doesn't get involved in that sort of thing.
 
UAL777UK
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 4:53 pm

IMHO, I think Tilton and his motley crew did a fantastic job when UA went into CH11.......my god, how many people were on here saying that its only a matter of time that they went to CH7.......theres very short memories on here and other quarters as well. I fly UA alot, mostly Internationally and theres things that make me cringe on some flight and others that I truly love about the it. What concerns me is that, sure UA made a loss, not a massive loss, but a loss. What I want to see from the mamgement is a positive statment about UA for the future. I chat to lots of FA's on flights and when I am in F I will have a quick chat with the resting pilot as well and the main thing I hear is that nobody seems to know where the airline is going, its all specualtion.
I am not for one for seeing somewhere booted out as soon as theres bad news which seem to be the Unions answer to everything (let me tell you some FA's dont give a fig about their union!), but perhaps as was stated above, some new blood should come in and run the show, and just breath a little more life into UA..........One name that crops up a lot on flights that I have is Graham Atkinson......I think thats his name....he is already oon the board and from what I can see, has quite a lot of respect from a lot of FA's at least.
I also think they need to expand Interantionally, nothing dramatic along the DL line but expand, theres plenty of routes out there, they can make money on and being selfish, I sure hope LHR-DEN is on the cards...that seems to be a cert with open skies but we'll see. With expansion comes orders for new aircraft, and again IMHO they need to be thinking very hard about ordering the 787 or alike very, very soon to stay competitive and keep us loyal FF's.
Well that my  twocents 
 
TruemanQLD
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 4:54 pm

and that is suprising?
 
dsa
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 5:15 pm

I don't need to tell you how big an airline UA is, this is a loss yes but its not a huge loss. If the storm in DEN alone cost them $80 Million think of the costs of it at their other hub ORD and their smaller operations in the NE. I am sure that if these costs discounted then the loss would have been smaller or even could have turned into profit. UA came out C11 a stronger airline with brighter prospects, one quarters bad results isn't going to change that.

Besides on the fuel side of things don't other US carriers have more extensive fuel hedging programmes?

BTW, what are their predictions for the next quarter and year?

DSA
Go Skybus!!!!
 
UAL777UK
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 5:34 pm

Quoting TruemanQLD (Reply 33):
and that is suprising?

Young laddy, whats that supposed to mean?
 
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zeke
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 6:47 pm

IMHO UA just have too many employees for the amount of revenue they generate, it adds to their costs significantly.

I think their revenue was in the order of US$16.4 billion last year, and employing about 56000 people to generate that revenue. JA had revenue of about US$19.6 billion last year, and employed about 23000 people to generate that revenue.

At present revenue levels they would need to get rid of 6000 employees to be at the average staffing level compared to other Star Alliance airlines, or to get rid of 24000 employees to be as competitive as SQ.

Hard decisions need to be made.
We are addicted to our thoughts. We cannot change anything if we cannot change our thinking – Santosh Kalwar
 
Ctermua
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 9:00 pm

I really don't think too many employees is the problem. Working at line stations around the East coast, more often than not, we are stretched to the limit. If there is excess, it's probably at WHQ. The reality with Tilton and his gang is that they have zero communication with the rank and file employees. They roll out red carpets for our best customers (literally) but can't get the airplane off the ground. The last couple of weeks has been an endless array of weather/crew/mechanical delays that grind on passengers and even more so, frontline employees. I would have to agree with the those that think UA needs new blood. The morale is worse than I"ve ever seen and it seems to get worse by the week. A loss like we had this quarter surly won't help.
 
ual777
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 10:05 pm

Quoting Zeke (Reply 36):


IMHO UA just have too many employees for the amount of revenue they generate, it adds to their costs significantly.

I think their revenue was in the order of US$16.4 billion last year, and employing about 56000 people to generate that revenue. JA had revenue of about US$19.6 billion last year, and employed about 23000 people to generate that revenue.

At present revenue levels they would need to get rid of 6000 employees to be at the average staffing level compared to other Star Alliance airlines, or to get rid of 24000 employees to be as competitive as SQ.

Hard decisions need to be made.



Never happen. SQ and UA are two TOTALLY different airlines.
It is always darkest before the sun comes up.
 
UAL777UK
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RE: United Posts 1st Quarter 2007 Loss

Thu Apr 26, 2007 10:37 pm

Quoting UAL777 (Reply 38):
Never happen. SQ and UA are two TOTALLY different airlines.

 checkmark 

And totally different cultures.

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