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jmc1975
Topic Author
Posts: 3072
Joined: Mon Sep 18, 2000 10:57 am

United's "Natural Share"?

Mon Jun 25, 2018 3:33 am

United's Scott Kirby has been talking about United regaining its "natural share" like it's a concept only relevant to UA. But in reality, don't AA and DL also have "natural share" to capture? Examples of this are recent route additions such as AA's DFW-BUF and DL's SLC-ELP. It would appear that AA might have more opportunities than DL, due to DL's increased network maturity; however, this does not appear to be a concept that is exclusive to UA.

UA:
SFO-CLT
IAD-AGS
IAD-ISP
IAD-HPN
IAH-ACT
IAH-AEX

DL:
ATL-MFE
ATL-ISP
ATL-LYH
DTW-ISP
SLC-DRO

AA:
DFW-ROC
DFW-SYR
DFW-ALB
DFW-MDT
DFW-CRW
DFW-LNK
DFW-YWG
DFW-AGS
DFW-DHN
DFW-CPR
CLT-GRB
CLT-FNT
CLT-DHN
CLT-CSG
CLT-TTN
CLT-ACY
CLT-ISP
CLT-ICT
CLT-BMI
CLT-LFT
ORD-LNK
ORD-MBS
ORD-DLH
ORD-SCE
ORD-ERI
ORD-ABE
ORD-ROA
ORD-AVL
ORD-IAD
ORD-ISP
ORD-YWG
MIA-DAB
MIA-GSP
MIA-GNV
MIA-TLH
PHX-COS
PHX-HDN
PHX-PSC
PHX-IDA
PHX-ACV
PHX-RDD
PHX-BZN
PHX-BIL
PHX-CPR
PHX-FAR
PHX-RAP
PHX-MSN
PHX-TUL
PHX-ICT
PHX-CID
PHX-RDU
PHX-BNA
PHX-MSY
PHX-CLE
PHX-CVG
PHX-XNA
PHX-MTY
PHX-CUU
PHX-BJX
LAX-TPE
LAX-ICN
LAX-CAN
LAX-YUM
.......
 
jetero
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Re: United's "Natural Share"?

Mon Jun 25, 2018 3:38 am

The “natural share” idea is way more about the existing network and routes (nonstop and connecting) than starting new routes.

IAH-AEX is served BTW.
 
winginit
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Re: United's "Natural Share"?

Mon Jun 25, 2018 6:08 pm

While it makes for a good sound bite to a non-aviation audience, the complexities behind calculating "natural share" are such that it's obviously not that simple. Sure, if all of the majors used an off the shelf QSI product or a simple MIDT share to capacity share gap analysis to agree to their "natural share" that was public that would be one thing, but UA, AA, and DL all use their own proprietary analytical black boxes to crunch a combination of industry and internal data to calculate their own FMS values that they then bake into their corporate contracts.

Having said all of that, I do recall off the shelf QSI products showing that UA had a negative FMS gap when measured at the system level.
 
LAXdude1023
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Re: United's "Natural Share"?

Mon Jun 25, 2018 9:38 pm

Man oh man, I would love to see UA launch some more destinations within Texas like ACT, TYR, and ABI.

I think DL could try and launch ATL/SLC-MAF to capture oil traffic.
FOR THE LOVE OF GOD BRING BACK THE PAYWALL!!!!
 
joeljack
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Re: United's "Natural Share"?

Mon Jun 25, 2018 9:56 pm

Yes, Natural share for example, they are still rotating 50-seat CRJ and ERJ on routes that should be almost all mainline or a mix of mainline and 76 seat RJ's. Just one example that I am familiar with, OMA-ORD/DEN. In May, OMA-DEN was almost 100% mainline, either 4/5 or 5/5 of the flights were mainline. In June, 2 of the flights go down to 50-seat RJ's and one to a CR7 with only 2 being mainline. This comes as June is the busiest month of the year in OMA with the college world series going on. The natural share year round (except January/February) is probably running 4 out of 5 of the flights as mainline A319 or A320 (737-900 is too big on most days). They just don't have enough of these mainline planes and have to move them around like like crazy.

On this route, once southwest gets more gates, I would guess they add a 4th daily OMA-DEN. If United is able to get to their natural share first, that could fend off a 4th daily flight on Southwest.
 
Prost
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Re: United's "Natural Share"?

Tue Jun 26, 2018 12:47 am

I wonder if a lot of it is backward looking when UA/AA were the top airlines in the US and the ‘natural share’ is rallying the troops and Wall Street to allow them to grow.
 
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mercure1
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Re: United's "Natural Share"?

Tue Jun 26, 2018 1:13 am

PMUA+PMCO > new UA, in terms of ASMs.
Probably something like that.
While DL grew. The new UA floundered and retreated for ~5yrs post merger.
mercure f-wtcc
 
MIflyer12
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Re: United's "Natural Share"?

Tue Jun 26, 2018 1:38 am

Prost wrote:
I wonder if a lot of it is backward looking when UA/AA were the top airlines in the US and the ‘natural share’ is rallying the troops and Wall Street to allow them to grow.


That's an interesting idea: natural share to get off the Wall Street love for capacity discipline.
 
SFOtoORD
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Re: United's "Natural Share"?

Tue Jun 26, 2018 2:02 am

I think this “natural market share” idea is largely a product of how much NB capacity sUA gave up when the dumped the 733/735 fleet without replacement. After the merger sUA absorbed a lot of the sCO NB capacity in their hubs and it left the airline short of mainline across the board. I think they’re still recovering.
 
jetero
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Re: United's "Natural Share"?

Tue Jun 26, 2018 2:12 am

SFOtoORD wrote:
I think this “natural market share” idea is largely a product of how much NB capacity sUA gave up when the dumped the 733/735 fleet without replacement. After the merger sUA absorbed a lot of the sCO NB capacity in their hubs and it left the airline short of mainline across the board. I think they’re still recovering.


:thumbsup: UA has to rebuild a competitive domestic network or it doesn’t have a future. I’ve said many times the only part of the plan I disagree with is spreading the growth over 3 hubs. But 3 years of 8-10% growth at IAH and DEN and as much as can be squeezed out of ORD will create pretty powerful hubs, just not the same “category killer” as DL at ATL and AA at DFW and CLT, which, quite honestly, you need at the end of the day to compete against WN in the denser trunk markets. I just don’t know if the economy will hold up for the 3 years required to do that.
 
Judge1310
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Re: United's "Natural Share"?

Tue Jun 26, 2018 2:32 am

I find it absolutely mind-boggling that some folks on here think that the Network Planners at the larger airlines have not considered all the route possibilities. Network Planning is *sooo* much more than "oh wouldn't it be nice to connect the dots between these two cities, etc...?"The algorithms and data points involved are so immense. Is it okay to dream? Sure! But to bemoan carriers for not serving certain routes is premature -- try to take a few more mental steps to develop a clearer idea as to why certain routes aren't operated.
 
United1
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Re: United's "Natural Share"?

Tue Jun 26, 2018 2:55 am

mercure1 wrote:
PMUA+PMCO > new UA, in terms of ASMs.
Probably something like that.
While DL grew. The new UA floundered and retreated for ~5yrs post merger.


Actually the "new" UA is about 4% larger than it was at time of merger. They must have grown enough to catch up to DL as UA has passed DL in terms of ASMs and RSMs. UA is about 3% larger than DL is now.
I know the voices in my head aren't real but sometimes their ideas are just awesome!!!
 
Rdh3e
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Re: United's "Natural Share"?

Tue Jun 26, 2018 12:07 pm

United1 wrote:
mercure1 wrote:
PMUA+PMCO > new UA, in terms of ASMs.
Probably something like that.
While DL grew. The new UA floundered and retreated for ~5yrs post merger.


Actually the "new" UA is about 4% larger than it was at time of merger. They must have grown enough to catch up to DL as UA has passed DL in terms of ASMs and RSMs. UA is about 3% larger than DL is now.

UA is only larger than DL because of its very long haul operations. For flights under 7,000 miles DL is larger.

DL is also about 8% larger for US/CA.

UA is only this year in 2018 surpassing merger capacity levels domestically. This while both AA and DL have grown (and the market overall) well into double digits.
 
tphuang
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Re: United's "Natural Share"?

Tue Jun 26, 2018 12:20 pm

UA's natural share is whatever they want it to be. Kirby wants to expand because UA shrunk too much. But others have already added capacity due to their cuts. Who is to say what each airline's market share should really be. It's all nonsense.
 
slider
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Re: United's "Natural Share"?

Tue Jun 26, 2018 12:37 pm

LAXdude1023 wrote:
Man oh man, I would love to see UA launch some more destinations within Texas like ACT, TYR, and ABI.

I think DL could try and launch ATL/SLC-MAF to capture oil traffic.


Given all that Kirby has said about reclaiming home turf, you'd think they'd have done just that. Instead, it's IAH-CAK, IAH-DAY??? Makes zero sense whatsoever when UA ceded the TX & Gulf Coast region post-merger.
 
slider
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Joined: Wed Feb 25, 2004 11:42 pm

Re: United's "Natural Share"?

Tue Jun 26, 2018 1:03 pm

tphuang wrote:
UA's natural share is whatever they want it to be. Kirby wants to expand because UA shrunk too much. But others have already added capacity due to their cuts. Who is to say what each airline's market share should really be. It's all nonsense.


I think there is also the notion that UA has hubs in some very large markets, with built-in business traffic. Geographically, they have far and away the best continental network. Yet they have continued to underperform in a PRASM sense. Kirby knows that and so the "share" from a network standpoint has to support the FP&A targets.
 
United1
Posts: 4210
Joined: Wed Oct 08, 2003 9:21 am

Re: United's "Natural Share"?

Tue Jun 26, 2018 1:16 pm

Rdh3e wrote:
United1 wrote:
mercure1 wrote:
PMUA+PMCO > new UA, in terms of ASMs.
Probably something like that.
While DL grew. The new UA floundered and retreated for ~5yrs post merger.


Actually the "new" UA is about 4% larger than it was at time of merger. They must have grown enough to catch up to DL as UA has passed DL in terms of ASMs and RSMs. UA is about 3% larger than DL is now.


UA is only larger than DL because of its very long haul operations. For flights under 7,000 miles DL is larger.


...nothing quite like cherry picking a number is there Rdh? I doubt if 7k is an accurate number but whatever it's irreverent.

DL, AA and WN are all larger than UA is domestically but quite frankly UA isn't really trying to be larger than the rest domestically.

As others have mentioned this is really about fixing a pmUA issue that happened back in 2008/2009 when they parked ~100 or so 737s. That really cut into the bones of the domestic network and wasn't something the merger had been able to fix until Kirby came aboard and started addressing UAs narrowbody shortage.
I know the voices in my head aren't real but sometimes their ideas are just awesome!!!
 
MIflyer12
Posts: 8793
Joined: Mon Feb 18, 2013 11:58 pm

Re: United's "Natural Share"?

Tue Jun 26, 2018 2:49 pm

jetero wrote:
SFOtoORD wrote:
I think this “natural market share” idea is largely a product of how much NB capacity sUA gave up when the dumped the 733/735 fleet without replacement. After the merger sUA absorbed a lot of the sCO NB capacity in their hubs and it left the airline short of mainline across the board. I think they’re still recovering.


:thumbsup: UA has to rebuild a competitive domestic network or it doesn’t have a future. I’ve said many times the only part of the plan I disagree with is spreading the growth over 3 hubs. But 3 years of 8-10% growth at IAH and DEN and as much as can be squeezed out of ORD will create pretty powerful hubs, just not the same “category killer” as DL at ATL and AA at DFW and CLT, which, quite honestly, you need at the end of the day to compete against WN in the denser trunk markets. I just don’t know if the economy will hold up for the 3 years required to do that.

Eight to ten percent annually for several years over multiple hubs? The investor community would have a crap fit. It's hard to see how yields could be sustained with that rate of growth, frankly.
 
jetero
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Re: United's "Natural Share"?

Tue Jun 26, 2018 3:01 pm

MIflyer12 wrote:
jetero wrote:
SFOtoORD wrote:
I think this “natural market share” idea is largely a product of how much NB capacity sUA gave up when the dumped the 733/735 fleet without replacement. After the merger sUA absorbed a lot of the sCO NB capacity in their hubs and it left the airline short of mainline across the board. I think they’re still recovering.


:thumbsup: UA has to rebuild a competitive domestic network or it doesn’t have a future. I’ve said many times the only part of the plan I disagree with is spreading the growth over 3 hubs. But 3 years of 8-10% growth at IAH and DEN and as much as can be squeezed out of ORD will create pretty powerful hubs, just not the same “category killer” as DL at ATL and AA at DFW and CLT, which, quite honestly, you need at the end of the day to compete against WN in the denser trunk markets. I just don’t know if the economy will hold up for the 3 years required to do that.

Eight to ten percent annually for several years over multiple hubs? The investor community would have a crap fit. It's hard to see how yields could be sustained with that rate of growth, frankly.


I don’t disagree, but they’re doing it now at IAH and DEN and have announced 6% growth at mid continent hubs over next 3 years, on average. ORD is running closer to 3%, IAH 7%, DEN 8%. Hence the point re the economy—it’s difficult enough to begin with, but if the economy takes a turn in the near term (which is almost inevitable), they’ll either have to erase all that growth or undertake a major network restructuring (i.e. close a hub).
 
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United787
Posts: 2943
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Re: United's "Natural Share"?

Tue Jun 26, 2018 3:49 pm

jetero wrote:
I don’t disagree, but they’re doing it now at IAH and DEN and have announced 6% growth at mid continent hubs over next 3 years, on average. ORD is running closer to 3%, IAH 7%, DEN 8%. Hence the point re the economy—it’s difficult enough to begin with, but if the economy takes a turn in the near term (which is almost inevitable), they’ll either have to erase all that growth or undertake a major network restructuring (i.e. close a hub).


And to add, ORD would likely be growing faster if it could. ORD's growth is hampered by it's terminal capacity which won't be resolved until the O'Hare 21 starts to kick in and they only just started looking for architects... I think most of that growth has been from upgauging aircraft and shifting from RJs to mainline. Not in aircraft movements.
 
MSPNWA
Posts: 3698
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Re: United's "Natural Share"?

Tue Jun 26, 2018 4:33 pm

Rdh3e wrote:
UA is only this year in 2018 surpassing merger capacity levels domestically. This while both AA and DL have grown (and the market overall) well into double digits.


Measuring total system ASMs, in 2017 DL was only about 3.6% larger than DL & NW were in 2007. I think it's easy to forget how much the combined DL/NW shrank during the recession, and how much capacity restraint DL has been undertaking since then. DL is actually the same size domestically as the combined airlines were 10 years ago. Their small overall growth has come from the Atlantic and Latin America regions.

I think what it illustrates is that low cost carriers have stripped away traffic from legacy carriers in the past 10 years. The legacies really haven't grown much in a decade.
 
Rdh3e
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Joined: Wed Mar 30, 2011 2:09 pm

Re: United's "Natural Share"?

Tue Jun 26, 2018 6:13 pm

United1 wrote:
...nothing quite like cherry picking a number is there Rdh? I doubt if 7k is an accurate number but whatever it's irreverent.

Its called putting things in context. Natural share isn't about total company ASMs. ASMs don't bring you market share. Seats bring market share. UA is massively undersized domestically and that is what "Natural Share" is about.

MSPNWA wrote:
Measuring total system ASMs, in 2017 DL was only about 3.6% larger than DL & NW were in 2007

Here are some stats for US/CA:
2017 vs 2007 Seats
AA -6.0%
DL +0.1%
UA -11.3%
WN +21.8%

Domestic Seats 2017
AA 214.4M
DL 198.2M (92% the size of AA)
WN 198.1M (92% the size of AA)
UA 150.2M (70% the size of AA, 76% the size of DL)

Now consider that UA is co-terminal with a hub for one of their competitors at every single UA hub and you can understand why they need to grow domestically.

DEN - WN
EWR (NYC) - AA, DL
IAD (+DCA,BWI) - AA, WN
IAH (+HOU) - WN
LAX - AA, DL, WN
ORD (+MDW) - AA, WN
SFO (+OAK,SJC) - WN
 
nmdrdh787
Posts: 185
Joined: Wed Nov 22, 2017 2:39 am

Re: United's "Natural Share"?

Tue Jun 26, 2018 6:20 pm

winginit wrote:
While it makes for a good sound bite to a non-aviation audience, the complexities behind calculating "natural share" are such that it's obviously not that simple. Sure, if all of the majors used an off the shelf QSI product or a simple MIDT share to capacity share gap analysis to agree to their "natural share" that was public that would be one thing, but UA, AA, and DL all use their own proprietary analytical black boxes to crunch a combination of industry and internal data to calculate their own FMS values that they then bake into their corporate contracts.

Having said all of that, I do recall off the shelf QSI products showing that UA had a negative FMS gap when measured at the system level.


Some use Excel templates that date to predecessors also, some of which I used at the consultant level.

I'm curious what off the shelf QSI products you are refering to also? I have only tested OAG's.
 
United1
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Re: United's "Natural Share"?

Tue Jun 26, 2018 6:33 pm

Rdh3e wrote:
United1 wrote:
...nothing quite like cherry picking a number is there Rdh? I doubt if 7k is an accurate number but whatever it's irreverent.

Its called putting things in context. Natural share isn't about total company ASMs. ASMs don't bring you market share. Seats bring market share. UA is massively undersized domestically and that is what "Natural Share" is about.



I am aware that ASM really don't have anything to do with "natural share" but the poster I replied to (not you) cited overall ASMs as a measure so I responded with numbers.
I know the voices in my head aren't real but sometimes their ideas are just awesome!!!
 
nmdrdh787
Posts: 185
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Re: United's "Natural Share"?

Tue Jun 26, 2018 6:37 pm

United787 wrote:
jetero wrote:
I don’t disagree, but they’re doing it now at IAH and DEN and have announced 6% growth at mid continent hubs over next 3 years, on average. ORD is running closer to 3%, IAH 7%, DEN 8%. Hence the point re the economy—it’s difficult enough to begin with, but if the economy takes a turn in the near term (which is almost inevitable), they’ll either have to erase all that growth or undertake a major network restructuring (i.e. close a hub).


And to add, ORD would likely be growing faster if it could. ORD's growth is hampered by it's terminal capacity which won't be resolved until the O'Hare 21 starts to kick in and they only just started looking for architects... I think most of that growth has been from upgauging aircraft and shifting from RJs to mainline. Not in aircraft movements.


100% correct. If CDA published the airline detail statistics monthly, you could piece this together, or piece it together with MIDT data from Diio or directly from the DOT.

Judge1310 wrote:
I find it absolutely mind-boggling that some folks on here think that the Network Planners at the larger airlines have not considered all the route possibilities. Network Planning is *sooo* much more than "oh wouldn't it be nice to connect the dots between these two cities, etc...?"The algorithms and data points involved are so immense. Is it okay to dream? Sure! But to bemoan carriers for not serving certain routes is premature -- try to take a few more mental steps to develop a clearer idea as to why certain routes aren't operated.


With domestic carriers, this is probably true. However, I have seen that some airlines enjoy getting insights from external parties (consultants mainly). Even though they have large teams and a good amount of data, different ways of looking at it are almost always needed.

I will say from my experience working with international airlines, this is not the case at all. Many airlines are blind when looking at the details of the US market other than raw GDS/MIDT data. Helping them to look beyond that (to demographics, business connections, cargo, routing, retiming of existing routes, etc), helped get alot of routes I worked on past the finish line.
Last edited by nmdrdh787 on Tue Jun 26, 2018 6:43 pm, edited 1 time in total.
 
nmdrdh787
Posts: 185
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Re: United's "Natural Share"?

Tue Jun 26, 2018 6:42 pm

Duplicate, please delete
 
winginit
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Re: United's "Natural Share"?

Tue Jun 26, 2018 8:05 pm

nmdrdh787 wrote:
I'm curious what off the shelf QSI products you are refering to also? I have only tested OAG's.


DOB Systems offers a MIDAS-driven QSI product that they've rolled out to a host of Amadeus carriers, IATA offers AirportIS that has a QSI-tool, and FlightGlobal offers a QSI package through their subsidiary tClara to name a few.
 
nmdrdh787
Posts: 185
Joined: Wed Nov 22, 2017 2:39 am

Re: United's "Natural Share"?

Tue Jun 26, 2018 8:16 pm

winginit wrote:
nmdrdh787 wrote:
I'm curious what off the shelf QSI products you are refering to also? I have only tested OAG's.


DOB Systems offers a MIDAS-driven QSI product that they've rolled out to a host of Amadeus carriers, IATA offers AirportIS that has a QSI-tool, and FlightGlobal offers a QSI package through their subsidiary tClara to name a few.


Thanks, I'll take a look into this.
 
GSP psgr
Posts: 736
Joined: Thu Mar 30, 2000 7:09 am

Re: United's "Natural Share"?

Tue Jun 26, 2018 8:27 pm

SFOtoORD wrote:
I think this “natural market share” idea is largely a product of how much NB capacity sUA gave up when the dumped the 733/735 fleet without replacement. After the merger sUA absorbed a lot of the sCO NB capacity in their hubs and it left the airline short of mainline across the board. I think they’re still recovering.


...and yet they're still endlessly dithering on a 100-120 seat narrowbody order.
 
jetero
Posts: 4673
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Re: United's "Natural Share"?

Tue Jun 26, 2018 9:33 pm

GSP psgr wrote:
SFOtoORD wrote:
I think this “natural market share” idea is largely a product of how much NB capacity sUA gave up when the dumped the 733/735 fleet without replacement. After the merger sUA absorbed a lot of the sCO NB capacity in their hubs and it left the airline short of mainline across the board. I think they’re still recovering.


...and yet they're still endlessly dithering on a 100-120 seat narrowbody order.


Haven’t they all but come out and said they’re not going to order one?
 
wxtech
Posts: 46
Joined: Mon May 09, 2016 3:04 pm

Re: United's "Natural Share"?

Tue Jun 26, 2018 9:33 pm

slider wrote:
LAXdude1023 wrote:
Man oh man, I would love to see UA launch some more destinations within Texas like ACT, TYR, and ABI.

I think DL could try and launch ATL/SLC-MAF to capture oil traffic.


Given all that Kirby has said about reclaiming home turf, you'd think they'd have done just that. Instead, it's IAH-CAK, IAH-DAY??? Makes zero sense whatsoever when UA ceded the TX & Gulf Coast region post-merger.


Maybe adding mainline on IAH/ CRP ELP MAF is his idea of reclaiming home turf? You have to admit it's been a long time since those routes had mainline.
 
SFOtoORD
Posts: 1218
Joined: Tue Jul 03, 2007 2:26 am

Re: United's "Natural Share"?

Wed Jun 27, 2018 3:39 am

GSP psgr wrote:
SFOtoORD wrote:
I think this “natural market share” idea is largely a product of how much NB capacity sUA gave up when the dumped the 733/735 fleet without replacement. After the merger sUA absorbed a lot of the sCO NB capacity in their hubs and it left the airline short of mainline across the board. I think they’re still recovering.


...and yet they're still endlessly dithering on a 100-120 seat narrowbody order.


Probably because dramatically increasing 100 seat flying won’t be good for margins. Mainline pay rates on small aircraft will be tough.
 
jetero
Posts: 4673
Joined: Sat Oct 11, 2014 3:45 am

Re: United's "Natural Share"?

Wed Jun 27, 2018 3:46 am

SFOtoORD wrote:
GSP psgr wrote:
SFOtoORD wrote:
I think this “natural market share” idea is largely a product of how much NB capacity sUA gave up when the dumped the 733/735 fleet without replacement. After the merger sUA absorbed a lot of the sCO NB capacity in their hubs and it left the airline short of mainline across the board. I think they’re still recovering.


...and yet they're still endlessly dithering on a 100-120 seat narrowbody order.


Probably because dramatically increasing 100 seat flying won’t be good for margins. Mainline pay rates on small aircraft will be tough.


Is there anyone out there in the know who can do a simple back-of-the-envelope illustration?

1x Capt $x/hr
1x FO $y/hr
3x FA $z/hr

+ work rule differences (e.g. hotel daily room rate, what else?)

= CS100 cost

Compared with E75 cost

Plus incremental revenue from 30 seats

Less load factor decrease

Plus net differential acquisition cost

Less fuel CASM savings

Is it that clear a difference?

Or is it less a downward comparison to the E75 and more an upward comparison to a 319 or 320?
 
SFOtoORD
Posts: 1218
Joined: Tue Jul 03, 2007 2:26 am

Re: United's "Natural Share"?

Wed Jun 27, 2018 4:37 am

jetero wrote:
SFOtoORD wrote:
GSP psgr wrote:

...and yet they're still endlessly dithering on a 100-120 seat narrowbody order.


Probably because dramatically increasing 100 seat flying won’t be good for margins. Mainline pay rates on small aircraft will be tough.


Is there anyone out there in the know who can do a simple back-of-the-envelope illustration?

1x Capt $x/hr
1x FO $y/hr
3x FA $z/hr

+ work rule differences (e.g. hotel daily room rate, what else?)

= CS100 cost

Compared with E75 cost

Plus incremental revenue from 30 seats

Less load factor decrease

Plus net differential acquisition cost

Less fuel CASM savings

Is it that clear a difference?

Or is it less a downward comparison to the E75 and more an upward comparison to a 319 or 320?


I’m guessing they are comparing it to buying and staffing used A319/320s or new 739s.
 
jetero
Posts: 4673
Joined: Sat Oct 11, 2014 3:45 am

Re: United's "Natural Share"?

Wed Jun 27, 2018 4:44 am

SFOtoORD wrote:
jetero wrote:
SFOtoORD wrote:

Probably because dramatically increasing 100 seat flying won’t be good for margins. Mainline pay rates on small aircraft will be tough.


Is there anyone out there in the know who can do a simple back-of-the-envelope illustration?

1x Capt $x/hr
1x FO $y/hr
3x FA $z/hr

+ work rule differences (e.g. hotel daily room rate, what else?)

= CS100 cost

Compared with E75 cost

Plus incremental revenue from 30 seats

Less load factor decrease

Plus net differential acquisition cost

Less fuel CASM savings

Is it that clear a difference?

Or is it less a downward comparison to the E75 and more an upward comparison to a 319 or 320?


I’m guessing they are comparing it to buying and staffing used A319/320s or new 739s.


I think you’re right. It seems like a miscalculation to me, but I’ve never worked on the fleet side.

Where did 76 seats come from? That had to be some financial calculation ... it could’ve been 75, it could’ve been 82, could’ve been 72. The scope deals used to come with an MTOW (or MCGLW) requirement. I think they still do, no?

There must be someone out there who knows the puts and takes. It’s nothing new ... AA couldn’t make F100s work, either. Now US/AA/AC/B6 with the E190s. It must be some weight/pax ratio... once you cross the line at 100 pax, you might as well go 125. There just must be some inflection in the curve at that point.
 
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SumChristianus
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Re: United's "Natural Share"?

Thu Jul 05, 2018 4:36 am

I think natural market share for UA means recapturing or growing point of sale strength in non-hub markets, collecting high yield connecting traffic from places like MAF, MSN, MFR, or PWM, etc. UA needs more planes to do this to match Delta's strength at markets of this type., but simply give UA 100 100-seaters, 60 more 76 seat jets, and more used A319/B737s and the like and they are well on the way there.
Not that these all wold work out, but I can easily think up 20 new cities United could consider, dozens of new routes and numerous routes that can see mainline service (I think). The transition period between where United is now and where it wants to be is the hardest time for it to fill capacity (due to the choke effect of growing only on a few routes at one time) but UA has opportunity.
Just focus on success, not on politics or the like, but execution and perfection, and UA, you can come around.
Disclosure: I like United, biased I know, but I have flown them the most of any carrier having been on only three others once each (that I can remember); while I disagree with some of their decisions, again I'm biased.
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