Recently crankyflier.com stirred up lots of controversy by questioning whether UA still had a true hub at LAX. He's at it again with a followup. Check out his website.

crankyflier.com

Interesting read - thanks for sharing. I like and admire Brian Znotins - in this as in past interviews, his straightforward honesty and directness, coupled with his obvious avgeekery and demonstrated willingness to "talk shop," are quite refreshing and enjoyable for us fellow avgeeks.

As for what he said ... he basically just restated what pretty much anybody paying attention already knew:

"There’s no question we have invested more in San Francisco than we have in LA. Anytime we fly a San Francisco route and an LA route, the San Francisco route over-performs the LA route… higher share of business traffic, more schedule differentiation. We’re absolutely investing more in San Francisco than in LA but we’re not totally ignoring LA either."

"For us, LA is much less successful than San Francisco and we don’t have a strategic priority there to build an Asia-Pacific gateway, we’ve already got the best one. So if I’ve got a new long haul airplane to add, some will go to LA, but most will go to San Francisco."

"Yeah, then there are other markets where the economics of that airplane are the only thing that worked in the market. Other markets we converted to 50-seaters, and others we’ve pointed toward San Francisco and converted to 50-seaters. That was a lot of it. It wasn’t necessarily “de-hub LA.” And domestically there’s no question we haven’t focused on LA. We haven’t invested our growth there."

"You know, if I wanted a West Coast gateway and San Francisco was already taken, you can maybe think of LA as an option. I can see why some might want to give that a try."

Some of those statements could have been lifted literally straight out of some of the various threads here on A.net over the last few years about this topic.

The bottom line is that United obviously still plans to be a big player in the LAX market, but the emphasis is and naturally, logically ought to be on SFO.

seriously, that crankyflier troll ought to get a life instead of writing more UA LAX articles hoping his Put options will finally become in-the-money eventually. rehashing tired old talking points doesn't make him a genius, but certainly makes him a plagiarist.

So there you go. United still considers LA a hub, a smaller hub for sure and one that’s by far secondary to San Francisco, but a hub nonetheless. What do you think? Does this make sense to you?

What doesn't the guy get? Yes is makes sense. They have the best, period, TransPac gateway in SFO just up the road, it is a fortress hub (LA is fortress for no one). They still have an impressive operation at LAX, with many additional connections on Star Alliance (connections from East to West and WC to Long Haul- even Southwest would call that a hub). The result is not having to chase revenues in saturated markets and they can command higher fares. Seems like United is making excellent business choices.

With the amount of flights LAX-SFO, if you have to make the quick connection it is not a chore, and if you have status (the flyers UA cares about) they have F and Y+ seats that are all but guaranteed to make the 1hour enjoyable.

a380787 wrote:

seriously, that crankyflier troll ought to get a life instead of writing more UA LAX articles hoping his Put options will finally become in-the-money eventually. rehashing tired old talking points doesn't make him a genius, but certainly makes him a plagiarist.

He interviewed someone from UA and they gave the answers to the questions so many had asked and provided a view into what UA thinks.
How does any of that make him a plagiarist?

You are making a big accusation against him (re: the put options comment). He actually address this on his ethics portion of the site: http://crankyflier.com/ethics/
He states "I currently have no equity holdings in any airlines"; since my almost any definition options are equity he is breaking his own ethics disclosure. I am sure you have proof of such a claim......

ordbosewr wrote:

a380787 wrote:

seriously, that crankyflier troll ought to get a life instead of writing more UA LAX articles hoping his Put options will finally become in-the-money eventually. rehashing tired old talking points doesn't make him a genius, but certainly makes him a plagiarist.

He interviewed someone from UA and they gave the answers to the questions so many had asked and provided a view into what UA thinks.
How does any of that make him a plagiarist?

You are making a big accusation against him (re: the put options comment). He actually address this on his ethics portion of the site: http://crankyflier.com/ethics/
He states "I currently have no equity holdings in any airlines"; since my almost any definition options are equity he is breaking his own ethics disclosure. I am sure you have proof of such a claim......

Options are not a form of equity holdings. Equity holding imply you're actually a shareholder with voting rights - options provide none of that. So no, your personal definition of what options are hardly constitute the financial definition of it.

Second, note how he only mentioned "equity" holdings, so he could theoretically be holding their bonds/debt (e.g. of UA's competitors) and still make that statement true.

And thirdly, note how he mentioned equity of "airlines", so theoretically he could be holding Swire Group stock and his statement is still true since he isn't directly holding CX stock.

a380787 wrote:

seriously, that crankyflier troll ought to get a life instead of writing more UA LAX articles hoping his Put options will finally become in-the-money eventually. rehashing tired old talking points doesn't make him a genius, but certainly makes him a plagiarist.

Did you actually read either of these articles, or are you just badmouthing him for pleasure? The older article was a refutation of the short-sellers... he argued that United's already optimized the LAX operation so that it's profitable without hurting SFO, and that this naturally means largely O&D traffic. He argued that the short-sellers should move on from criticizing LAX, since United's running it like a competent, profit-maximizing business. He also tapped into the perennial "definition of a hub" argument as click-bait, arguing that the O&D-focused operation doesn't match the traditional definition of a "hub."

In today's article, he chats with someone from UA who basically agrees with all those points, but says UA still is thinking about connections and considers LAX a "hub." The argument that they'd still be doing more regional flying if their regional partners could seems kind of pointless, but I guess it makes the point that the de-emphasis on connecting passengers isn't so much UA-driven as bubbling up from the regionals.

My overall takeaway is that UA at LAX is operating much like Delta and AA at JFK, or like Southwest does at a lot of airports... a good-sized operation driven primarily by O&D traffic. UA, DL, and AA all still call these "hubs," while Southwest still doesn't. This distinction continues to be pretty much meaningless, but is really effective at getting people worked up.

phxsanslcpdx wrote:

He argued that the short-sellers should move on from criticizing LAX, since United's running it like a competent, profit-maximizing business.

And how do you KNOW he didn't own put options that failed to trigger, and now writing yet another article trying to save face ? It's funny he's telling others to stop criticizing LAX when previously he was one of the biggest proponents for massive LAX+IAD shrinkage. How convenient for him to shape-shift and flip-flop just to suit the prevailing winds.

Wow one of the first questions was regarding PHX service. If UA didn't have a hub there it wouldn't fly to PHX if all it can operate at this time is RJ service. That's how hubs work. 1.) They connect traffic and 2.) They provide non-stop services to frequent flyers at the hub city.

Thanks for posting, nice read. I always like Znotin's interview responses - generally seem more open and honest than I would expect from a US3 exec.

As for his point, it probably comes down to personal definition of what a hub is. When you look at LAX compared to the fortress hubs that UAL operates in ORD, SFO, IAH, EWR, it is definitely not meeting nearly those volumes or movements, but the operation is far above the other markets (with IAD along with it). I would have a hard time calling a market with that much mainline short-haul, and especially long-haul a focus city.

Wow one of the first questions was regarding PHX service. If UA didn't have a hub there it wouldn't fly to PHX if all it can operate at this time is RJ service. That's how hubs work. 1.) They connect traffic and 2.) They provide non-stop services to frequent flyers at the hub city.

a380787 wrote:

ordbosewr wrote:

a380787 wrote:

seriously, that crankyflier troll ought to get a life instead of writing more UA LAX articles hoping his Put options will finally become in-the-money eventually. rehashing tired old talking points doesn't make him a genius, but certainly makes him a plagiarist.

He interviewed someone from UA and they gave the answers to the questions so many had asked and provided a view into what UA thinks.
How does any of that make him a plagiarist?

You are making a big accusation against him (re: the put options comment). He actually address this on his ethics portion of the site: http://crankyflier.com/ethics/
He states "I currently have no equity holdings in any airlines"; since my almost any definition options are equity he is breaking his own ethics disclosure. I am sure you have proof of such a claim......

Options are not a form of equity holdings. Equity holding imply you're actually a shareholder with voting rights - options provide none of that. So no, your personal definition of what options are hardly constitute the financial definition of it.

Second, note how he only mentioned "equity" holdings, so he could theoretically be holding their bonds/debt (e.g. of UA's competitors) and still make that statement true.

And thirdly, note how he mentioned equity of "airlines", so theoretically he could be holding Swire Group stock and his statement is still true since he isn't directly holding CX stock.

But you have proof for any of this? So you are just making statements with no facts. In the end you are no better than he is....

a380787 wrote:

And how do you KNOW he didn't own put options that failed to trigger, and now writing yet another article trying to save face ? It's funny he's telling others to stop criticizing LAX when previously he was one of the biggest proponents for massive LAX+IAD shrinkage. How convenient for him to shape-shift and flip-flop just to suit the prevailing winds.

When and where has be advocated for "massive LAX shrinkage"? I know he applauded the switch from the 747 LAX-SYD-MEL to a 787 on both LAX-SYD and LAX-MEL. But honestly this was a big win for MEL fliers, and also an improvement for SYD fliers and UA shareholders. And he was applauding it after the fact... not how I'd expect a short-seller to behave.

I don't know anything at all about Crankfliers finances or options. But if you're going to go out accusing him of things, how 'bout links to actually show the behavior? There might be some, I don't know... but it's not this article or the linked one where he said UA's "already dehubbed" LAX.

ordbosewr wrote:

a380787 wrote:

ordbosewr wrote:

He interviewed someone from UA and they gave the answers to the questions so many had asked and provided a view into what UA thinks.
How does any of that make him a plagiarist?

You are making a big accusation against him (re: the put options comment). He actually address this on his ethics portion of the site: http://crankyflier.com/ethics/
He states "I currently have no equity holdings in any airlines"; since my almost any definition options are equity he is breaking his own ethics disclosure. I am sure you have proof of such a claim......

Options are not a form of equity holdings. Equity holding imply you're actually a shareholder with voting rights - options provide none of that. So no, your personal definition of what options are hardly constitute the financial definition of it.

Second, note how he only mentioned "equity" holdings, so he could theoretically be holding their bonds/debt (e.g. of UA's competitors) and still make that statement true.

And thirdly, note how he mentioned equity of "airlines", so theoretically he could be holding Swire Group stock and his statement is still true since he isn't directly holding CX stock.

But you have proof for any of this? So you are just making statements with no facts. In the end you are no better than he is....

His own absolute lack of disclosure for the 3 items I've mentioned is sufficient to give reasonable doubt. If you think he's so transparent, why is his disclosure language written in such a vague form that a random person can immediately spot 3 loopholes ?

"Innocent until proven guilty" is the surest way to end up at the short end of stick. You're free to believe his trustworthiness and honesty all you want.

And since this is an anonymous forum, for all I know, Cranky Flier himself could be posting here under proxy usernames while defending himself and attempting to drive traffic to his site.

phxsanslcpdx wrote:

a380787 wrote:

And how do you KNOW he didn't own put options that failed to trigger, and now writing yet another article trying to save face ? It's funny he's telling others to stop criticizing LAX when previously he was one of the biggest proponents for massive LAX+IAD shrinkage. How convenient for him to shape-shift and flip-flop just to suit the prevailing winds.

When and where has be advocated for "massive LAX shrinkage"? I know he applauded the switch from the 747 LAX-SYD-MEL to a 787 on both LAX-SYD and LAX-MEL. But honestly this was a big win for MEL fliers, and also an improvement for SYD fliers and UA shareholders. And he was applauding it after the fact... not how I'd expect a short-seller to behave.

I don't know anything at all about Crankfliers finances or options. But if you're going to go out accusing him of things, how 'bout links to actually show the behavior? There might be some, I don't know... but it's not this article or the linked one where he said UA's "already dehubbed" LAX.

http://crankyflier.com/2016/08/15/shoul ... ready-has/
http://crankyflier.com/2015/10/27/the-7 ... francisco/
http://crankyflier.com/2014/07/01/shoul ... s-airport/

He has a proven track record of being negative UA extraordinaire. He can't run away from it, no matter how he shape-shifts in the latest article to make himself sound like he's pro-UA all of a sudden.

Hi all. Just a reminder that in future, if you post a link to an article, please give a summary of the piece rather than just posting a link. Since the first reply provides a summary, I won't delete an active thread, but just keep this in mind for the future. Thank you!

commavia wrote:

Interesting read - thanks for sharing. I like and admire Brian Znotins - in this as in past interviews, his straightforward honesty and directness, coupled with his obvious avgeekery and demonstrated willingness to "talk shop," are quite refreshing and enjoyable for us fellow avgeeks.

As for what he said ... he basically just restated what pretty much anybody paying attention already knew:

Eh, to be perfectly frank, it's an interview filled with stating the obvious. As long as United officially calls LAX a "hub," the VP of Network for the airline will continue to publicly call it a hub until there's a press release announcing the end of the hub and accommodations made for affected employees (not to mention promises made to appropriate politicians). He's not going to announce a major change in network strategy (like closing a hub) in an interview with a blogger, even if we're talking about a relatively well-known blogger.

If it's still a "hub," it's a "hub" in the sense that both CVG & RDU are "hubs" for DL.

Even the claim of "It’s more of an infrastructure issue. We’re pretty gate-constrained in LA right now" rings hollow given that they just gave up four gates in Terminal 6 to AA. If you plan to grow and compete in a market with constrained gate availability, you don't just hand over gates to a competitor which is itself planning to grow in that market. I could see the point if United were near bankruptcy again and shedding costs, but giving up strategic assets in a time of record profitability for the industry leads one to conclude that those assets aren't all that strategic for UA.

The end of the E120 flying was an externality which couldn't be controlled by UA, but it was also known to be coming in the middle of this decade and the airline made the choice to focus the replacement for that flying at SFO. That's not to say it was the wrong choice -- it was a smart move -- but it points to UA moving away from having two hubs on the West Coast, just as DL moved away from having two hubs in the South.

dmstorm22 wrote:

I would have a hard time calling a market with that much mainline short-haul, and especially long-haul a focus city.

How much mainline short-haul flying to non-hub cities is there really for UA at LAX? Looking at the March 2017 schedules, there are three daily mainline flights to LAS and one daily mainline flight to PHX -- and that's it for short-haul.

a380787 wrote:

And how do you KNOW he didn't own put options that failed to trigger, and now writing yet another article trying to save face ? It's funny he's telling others to stop criticizing LAX when previously he was one of the biggest proponents for massive LAX+IAD shrinkage. How convenient for him to shape-shift and flip-flop just to suit the prevailing winds.

Whether or not the airline chooses to close a hub isn't going to move the stock all that much. And frankly, if Wall Street thinks that a hub closure is a good idea (i.e. the analyst calls for UA to close the IAD hub), the stock is more likely to move higher given that the Street would expect higher profits or margins as a result.

I mean, to be fair, LAX seems a bit more strategic for some Asian destinations, but more so for Oceania.

airzona11 wrote:

With the amount of flights LAX-SFO, if you have to make the quick connection it is not a chore, and if you have status (the flyers UA cares about) they have F and Y+ seats that are all but guaranteed to make the 1hour enjoyable.

I cannot imagine there are a lot of folks in LA who want to take a connection through SFO in preference over a direct flight. Especially given that SFO can be a delay prone operation, which in general is not the case at LAX.

David

diverdave wrote:

airzona11 wrote:

With the amount of flights LAX-SFO, if you have to make the quick connection it is not a chore, and if you have status (the flyers UA cares about) they have F and Y+ seats that are all but guaranteed to make the 1hour enjoyable.

I cannot imagine there are a lot of folks in LA who want to take a connection through SFO in preference over a direct flight. Especially given that SFO can be a delay prone operation, which in general is not the case at LAX.

David

While I agree with you, how many destinations is that? For international connections, especially Asia, it is an easy connection. They still have an operation better or on par with all the carriers there. And for those that don't like it, fly another airline, until UA starts bleeding money as a result of not flying to every XYZ airport on the map, this crankyflyer is just pissed LAX is not a UA fortress hub.

LAX is still a hub for United Airlines. There is still international service from the airport. LAX-LHR is served twice daily by United I believe. In Asia, there is Tokyo and Shanghai. Sydney and Melbourne are also served. It might not be a fortress hub, but LAX is still an important destination and hub for United Airlines.

Ah A.net. The guy in charge of route planning calls it a hub, but the Monday morning quarterbacks on here think he doesn't know what he's talking about.

jetmatt777 wrote:

Ah A.net. The guy in charge of route planning calls it a hub, but the Monday morning quarterbacks on here think he doesn't know what he's talking about.

The VP of Network is going to say *exactly* what the company's official line is about *any* subject when asked by a member of the press, a financial analyst, or a blogger. He's not going to go off-script and reveal any confidential/privileged information -- at least, not if he wants to keep his job. Of course he knows exactly what he's talking about -- he's just not going to be revealing the whole story unless he has approval from his bosses to do so.

Saying that LAX remains a hub is just confirming the status quo, nothing more.

ScottB wrote:

jetmatt777 wrote:

The VP of Network is going to say *exactly* what the company's official line is about *any* subject when asked by a member of the press, a financial analyst, or a blogger. He's not going to go off-script and reveal any confidential/privileged information -- at least, not if he wants to keep his job. Of course he knows exactly what he's talking about -- he's just not going to be revealing the whole story unless he has approval from his bosses to do so.

Saying that LAX remains a hub is just confirming the status quo, nothing more.

While I agree with you generally, I must admit that I do think some of what he said was, at least, "more direct" than I would expect for the typical, highly-scripted, communications-vetted-talking-points, executive. Saying things like, "anytime we fly a San Francisco route and an LA route, the San Francisco route over-performs the LA route," and "LA is much less successful than San Francisco and we don’t have a strategic priority there" are pretty direct. Surprising? No, of course not. Again - anybody who's been paying attention to this subject, or basically reading any of the myriad of A.net threads about it, would already know as much. But still, compared to past airline executive commentary about support for hubs that were obviously soon to close, the strength of routes that were then promptly discontinued, etc., I actually was surprised - pleasantly - with an airline executive stating the obvious that bluntly.

ucdtim17 wrote:

https://twitter.com/crankyflier/status/780900240215859201

Hmmm ... well that's ... "interesting." Wonder where he's going.

klwright69 wrote:

Recently crankyflier.com stirred up lots of controversy by questioning whether UA still had a true hub at LAX. He's at it again with a followup. Check out his website.

crankyflier.com

Great read. I enjoy his site, even if he takes some criticism for what he writes.

Given United's recent senior level hires, I suspect we will see a decent amount of turnover in the near term.

commavia wrote:

ucdtim17 wrote:

https://twitter.com/crankyflier/status/780900240215859201

Hmmm ... well that's ... "interesting." Wonder where he's going.

Man. I hope this was his decision. I've had a one on one lunch with him before in Chicago and he was a very friendly person, and a true avgeek at heart such that it would not surprise me in the least if he were a member of this site. I wish him well.

Somewhat ironically/humurously, Darryl Genovesi and David Strauss from UBS met with United management (including new President Scott Kirby) and put out a research note today following the meeting that, among other things, included this:

"While no hub closures appear imminent, United Continental’s hub-and-spoke review is ongoing, and the [United management] team did refer to LAX as a “big spoke” with limited opportunity to connect." (emphasis mine)

Hmmm