TTailedTiger
Posts: 1262
Joined: Sun Aug 26, 2018 5:19 am

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 7:27 am

United has a lot of 737s on order and that should help in retiring 50 seat regional jets. Mainline takeover some E175 flights and then they can takeover former CR2/145 flights. I think the 797 will also help their domestic network at constrained hubs like EWR and SFO.

I have been a lifelong Delta frequent flyer but United isn't anywhere near as bad as some people make them out to be. I was honestly scared the first time I flew with them from hearing everyone say how bad they were, but it was a great flight. Delta has really gone downhill over the last year. I can usually score F tickets at a good price since I'm able to book in advance. Pre-departure drinks are hit and miss and I've had to ask for drink refills. If you get a MCO or CVG crew then you are pretty much guaranteed awesome service. NYC is generally very good since they tend to be younger. The rest range from ok to awful.
 
User avatar
RyanairGuru
Posts: 7777
Joined: Wed Nov 01, 2006 3:59 am

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 7:32 am

Fargo wrote:
flyguy84 wrote:
lightsaber wrote:
This. They need a pilot agreement where they fly more A220-100 or E2-195 in return they are allowed more modern (heavier) 76 RJs.

DL worked out a compromise, when will UA?

Lightsaber

They don’t need a new pilot agreement for that. The current contract allows for this. UA could order E195/A220 tomorrow and unlock more 76-seat aircraft. Kirby doesn’t want to pay mainline pilots to fly a 100-seater. It’s as simple as that.


Why is this? They can build up the hubs with more connections all they want, but do they not realize the margins would be better if they added more mainline? DL is operating 100 seaters successfully, why can't UA?


Don't forget that Kirby is very familiar with the economics of the E190 at US Airways. AA is in the process of removing that fleet, and once that's don't the A319 will be their smallest aircraft, just like United. Delta is the exception that than the rule when it comes to running 100 seaters with mainline costs.

While Kirby has been steadfast in no 100 seaters, and this no more 76 seaters, United has been buying up every gently used A319 that's hit the market. The mainline fleet is growing quite rapidly, just not in a way that will unlock more large RJs. Becuase of this UA will almost certainly always have a larger 50 seat fleet than DL, but it will start to drawdown as A319s take over from E170s, especially in hubs like DEN where they are making a play for volume, which can in turn replace 50 seaters.
Worked Hard, Flew Right
 
Fargo
Posts: 810
Joined: Fri Sep 21, 2018 3:00 am

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 9:23 am

joeljack wrote:
Fargo wrote:
joeljack wrote:
7) DL looks at where high dollar flyers are going and adds one-off nonstop flights to accommodate. For example Austin, TX. UA and AA are ahead of DL right now and there are crazy amounts of high dollar elites living there. If DL adds nonstop flights to about 10 business cities from AUS, over a period of 10 years, AA and UA will lose 50% of their high dollar elites and DL will gain them. Long term play for lots of money! UA should really look at AUS hard before DL adds nonstops and gains Elites there. If UA added LAS, SAN, SJC, BOS, CLE and maybe RDU from Austin, UA would be in a strong position to keep their elities and gain new ones that pay a large premium. UA should have done this at BOS too but they have already lost that battle with all the DL adds. BOS will get worse for UA in the coming years because of that.


Problem is UA already has a large hub 165 miles to the east in IAH, it would be extremely redundant to build a focus city of p2p flying in AUS. DL on the other hand doesn't have a Texas presence and could build up a significant operation there if it gets enough gates. UA would be better off trying build a SE hub in BNA rather than focusing on AUS.


It isn’t about location or connecting passengers. It is about getting high fare passengers where they want to be and fast to keep them loyal and then connect them at their hubs like IAH to all other destinations that don’t have enough margin and O/D passengers. Look at BNA and RDU, both close to ATL and DL has a nice focus city at both.


Contrary to popular belief, DL does not have a focus city in BNA, it is simply a large spoke. They fly no p2p there.

RDU is much further away from ATL than AUS is from IAH; if they we’re closer, the RDU focus city probably wouldn’t exist. It doesn’t make sense to deploy a bunch of resources to a market when you have a hub that is a 2 hour drive away. AUS has DL’s name written all over it. I wouldn’t be surprised if they made it an actual mini-hub at some point.
 
Fargo
Posts: 810
Joined: Fri Sep 21, 2018 3:00 am

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 9:33 am

RyanairGuru wrote:
Fargo wrote:
flyguy84 wrote:
They don’t need a new pilot agreement for that. The current contract allows for this. UA could order E195/A220 tomorrow and unlock more 76-seat aircraft. Kirby doesn’t want to pay mainline pilots to fly a 100-seater. It’s as simple as that.


Why is this? They can build up the hubs with more connections all they want, but do they not realize the margins would be better if they added more mainline? DL is operating 100 seaters successfully, why can't UA?


Don't forget that Kirby is very familiar with the economics of the E190 at US Airways. AA is in the process of removing that fleet, and once that's don't the A319 will be their smallest aircraft, just like United. Delta is the exception that than the rule when it comes to running 100 seaters with mainline costs.

While Kirby has been steadfast in no 100 seaters, and this no more 76 seaters, United has been buying up every gently used A319 that's hit the market. The mainline fleet is growing quite rapidly, just not in a way that will unlock more large RJs. Becuase of this UA will almost certainly always have a larger 50 seat fleet than DL, but it will start to drawdown as A319s take over from E170s, especially in hubs like DEN where they are making a play for volume, which can in turn replace 50 seaters.


I’m no expert, but I’m pretty sure the more modern A220 has much better economies than the E190. The A319 can only go so far, it still won’t be as competitive as DL’s A220s.

Regardless, UA needs to drastically reduce its 50 seat fleet to regain competitiveness. It’s a joke that it’s “hometown hub” of ORD has the lowest mainline % of any US3 hub outside of LGA/DCA. Imagine the possibilities if UA ordered the A220 and used it to upgauge routes out of ORD....
 
User avatar
intotheair
Posts: 1717
Joined: Sun Aug 31, 2014 12:49 pm

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 9:40 am

I don't know about you, but at least looking at this chart, UA seems to be on track to be doing something right.

Image
300 319 320 321 332 333 345 346 717 733 734 735 73G 738 739 744 752 753 762 763 772 77W 788 789 CR2 CR7 CR9 Q400 E175 DC10 MD82 MD90
AA AF AS AY AZ B6 BA BR DL F9 FI GA HA KF LH MI QX SK SN SQ UA US VY WN
 
User avatar
lightsaber
Moderator
Posts: 17690
Joined: Wed Jan 19, 2005 10:55 pm

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 2:12 pm

TTailedTiger wrote:
United has a lot of 737s on order and that should help in retiring 50 seat regional jets. Mainline takeover some E175 flights and then they can takeover former CR2/145 flights. I think the 797 will also help their domestic network at constrained hubs like EWR and SFO.

I have been a lifelong Delta frequent flyer but United isn't anywhere near as bad as some people make them out to be. I was honestly scared the first time I flew with them from hearing everyone say how bad they were, but it was a great flight. Delta has really gone downhill over the last year. I can usually score F tickets at a good price since I'm able to book in advance. Pre-departure drinks are hit and miss and I've had to ask for drink refills. If you get a MCO or CVG crew then you are pretty much guaranteed awesome service. NYC is generally very good since they tend to be younger. The rest range from ok to awful.

Good to hear about the 737s. As I posted above, US needs a small jet (A220-109 or E2-195) and more modern RJs.

But what is the arrive on time percentage for UA vs. DL?

Unfortunately for UA, they are suffering from the past when service was horrible. I stopped flying them when I couldn't get service as the FAs would just sit in the galley. Since I never had an issue on AA, DL, or B6, it was UA.

It might be LAX crew. Surly does not equal great customer service.

Lightsaber
IM messages to mods on warnings and bans will be ignored and nasty ones will result in a ban.
 
B737Driver
Posts: 15
Joined: Tue May 15, 2018 7:26 pm

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 2:15 pm

Delta's domestic network is amazing, but Delta's international network is horrible - mainly due to outsourcing intl flying to JV partners. UA's international network is amazing, but domestic network is lacking - in terms of frequency. With UA acquiring more narrowbodies, refreshing their widebody cabins with Polaris, and if they keep improving their service as they have been, in a few years they'll easily overtake Delta. I'd rather fly point to point internationally on a UA 787 instead of flying a Delta A330 to AMS/CDG. UA's hubs also should allow for proper expansion - SFO ORD DEN EWR IAH IAD blow ATL DTW MSP SLC LAX SEA out of the water any day.

Give it some time, UA will be number 1.
 
User avatar
BN727227Ultra
Posts: 599
Joined: Fri Jan 10, 2014 7:15 pm

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 2:26 pm

joeljack wrote:
My take from a flyer that has been some level of elite for past 17 years solid and from having many friend that travel and the reasons why they have left UA:

1) Too many 50-Seat RJ's on routes that should all have first class. High End Elites chose other airlines because of this. 50-Seat plans are fine to small cities are are expected, but shouldn't be flying to bigger cities that business travelers go to. Examples: OMA, DSM, BHM, DTW etc.


I'm glad you mentioned this. I mentioned in a post a few months ago that when one looked at equipment between fortress hubs (DFW-DEN, IAH-ATL, etc. UA had a higher percentage of RJ flights than AA or DL. (I notice lately AA has 4x 788 DFW-ORD!).

But it isn't so much the equipment, rather the condition. I last flew UA OMA-IAH fall 2017, There was a maint issue (hot day, I think they had to move cargo around for weight distribution issues) but the interior of the plane looked like crap--greasy windows especially. IAH-GRK was just as bad. One thing in common was that these were monopoly routes.

I really want to give UA the benefit of the doubt, but that experience makes it hard.
 
rbavfan
Posts: 3143
Joined: Fri Apr 17, 2015 5:53 am

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 2:33 pm

Fargo wrote:
One reason I can think of is its small domestic footprint compared to its rivals. Consider these things

A. They don't have a megahub like an ATL/DFW

B. They lack a true SE hub

C. They are often in 3rd/4th place or lower compared to AA/DL/WN in airports outside of their hub markets

D. They haven't figured out how to get the proper scale in places such as ORD, DEN, IAH. Scott Kirby's recent decision to bulk up the mid-continent hubs was a great start, but more is needed, particularly at ORD and DEN.

E. They fly too many regional jets compared to AA/DL, particularly too many 50 seaters. Upgauging alone would improve domestic margins nicely.

IMO, UA has the best international network of the US3, but they are the weakest domestically. If they could address their domestic holes, they'd far surpass DL and AA and become the premier US airline.


Replacing those 50 seaters with mainline at a hub like ORD means they cannot cancel RJ flights in bad weather to keep their on time performance numbers up. After all RJ service is not considered UA. But the Government should start counting all the Airline specific RJ flights as part of the airlines ops. Those cancelations should count and affect te numbers. After all they cancel them & strand the passengers.
 
flyguy84
Posts: 770
Joined: Thu Dec 22, 2016 7:26 pm

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 2:42 pm

rbavfan wrote:
Fargo wrote:
One reason I can think of is its small domestic footprint compared to its rivals. Consider these things

A. They don't have a megahub like an ATL/DFW

B. They lack a true SE hub

C. They are often in 3rd/4th place or lower compared to AA/DL/WN in airports outside of their hub markets

D. They haven't figured out how to get the proper scale in places such as ORD, DEN, IAH. Scott Kirby's recent decision to bulk up the mid-continent hubs was a great start, but more is needed, particularly at ORD and DEN.

E. They fly too many regional jets compared to AA/DL, particularly too many 50 seaters. Upgauging alone would improve domestic margins nicely.

IMO, UA has the best international network of the US3, but they are the weakest domestically. If they could address their domestic holes, they'd far surpass DL and AA and become the premier US airline.


Replacing those 50 seaters with mainline at a hub like ORD means they cannot cancel RJ flights in bad weather to keep their on time performance numbers up. After all RJ service is not considered UA. But the Government should start counting all the Airline specific RJ flights as part of the airlines ops. Those cancelations should count and affect te numbers. After all they cancel them & strand the passengers.

A) That has nothing to do with it.
B) They do, that was recently changed.
SFO
 
WPvsMW
Posts: 2040
Joined: Thu Mar 23, 2017 7:30 pm

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 3:07 pm

As to B):
IAD is mid-Atlantic, not SE. For ease of reference: https://goo.gl/maps/VUnNcPTn5m62
RDU to FLL... via IAD? MSY to MCO .... via IAD?
 
Elementalism
Posts: 426
Joined: Sat Jun 10, 2017 4:03 am

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 3:09 pm

Without flying UA that much. In fact not much at all. I can only guess Delta has provided a superior product for which people are willing pay? I have flown Delta quite a bit in the last couple years. They have a really good product imo. I will now even pay a premium to fly Delta vs Southwest or Sun Country. The couple of times I flew UA it was blah. But it has been a couple years so my opinion is not current.
 
JamesCousins
Posts: 410
Joined: Fri Jul 14, 2017 1:19 pm

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 3:30 pm

Tailwinds wrote:
How much is Delta profiting by their many investments in other airlines? That seems to be one thing that differentiates their income from other airlines. They own 49% of Virgin Atlantic and AeroMexico.


I don't know about AeroMexico, but Virgin Atlantic is hardly a pot of gold at the moment. Definitely a solid set of long-term plays by Delta here and the long term effect could be really good. Likewise, the strategy could be mirrored by UA or AA and end in an Etihad-style situation and no one wants that...
Q400, A320-200, A321-200, 737-500, 737-800, 747-400, 757-200, 787-9 // FCA, TOM, TUI, MON, MT, BA, VS, DL, BE, X9, OLY
 
User avatar
FlightLevel360
Posts: 406
Joined: Mon Dec 04, 2017 2:26 pm

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 3:32 pm

I'm not an expert, but maybe because DL is doing things right? Maybe because they actually make an effort to care about the people who are driving their revenue?
To me, it will always be:
- Bombardier CSeries
- Airbus A321neoLR and A321neoXLR
- EMBRACER ERJ-170, ERJ-175, ERJ-190, and ERJ-195
- MITSUBUSHI MRJ

Anti narrowbody-long range-twinjet gang. Long live the A380 and 747!
 
ShinyAndChrome
Posts: 189
Joined: Fri Aug 28, 2015 1:53 am

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 3:41 pm

Fargo wrote:
RyanairGuru wrote:
Fargo wrote:

Why is this? They can build up the hubs with more connections all they want, but do they not realize the margins would be better if they added more mainline? DL is operating 100 seaters successfully, why can't UA?


Don't forget that Kirby is very familiar with the economics of the E190 at US Airways. AA is in the process of removing that fleet, and once that's don't the A319 will be their smallest aircraft, just like United. Delta is the exception that than the rule when it comes to running 100 seaters with mainline costs.

While Kirby has been steadfast in no 100 seaters, and this no more 76 seaters, United has been buying up every gently used A319 that's hit the market. The mainline fleet is growing quite rapidly, just not in a way that will unlock more large RJs. Becuase of this UA will almost certainly always have a larger 50 seat fleet than DL, but it will start to drawdown as A319s take over from E170s, especially in hubs like DEN where they are making a play for volume, which can in turn replace 50 seaters.


I’m no expert, but I’m pretty sure the more modern A220 has much better economies than the E190. The A319 can only go so far, it still won’t be as competitive as DL’s A220s.

Regardless, UA needs to drastically reduce its 50 seat fleet to regain competitiveness. It’s a joke that it’s “hometown hub” of ORD has the lowest mainline % of any US3 hub outside of LGA/DCA. Imagine the possibilities if UA ordered the A220 and used it to upgauge routes out of ORD....


I'm not as bearish on 50 seaters as most people here. I think Kirby's onto a good idea gradually shifting them away from routes that could justify bigger planes but they'll still have an important role serving small markets and growing new ones.
 
User avatar
msp747
Posts: 408
Joined: Sat May 29, 2010 6:42 pm

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 3:46 pm

WPvsMW wrote:
UA at IAD is tenuous in that the currently low CPE depends upon subsidies that MWAA takes from DCA. When that stops, and the Virginia state subsidy expires, CPE will probably go from $16 back up to $26 or higher. That's a significant risk for UA's plans at IAD.


MWAA just sold a large parcel of its western lands for nearly $250 million and that money has to go towards airport operations. This will help far more than the subsidies from the state.

https://www.flightglobal.com/news/artic ... -d-451996/

And since MWAA operates both IAD and DCA, I don't think that "subsidy" will be going away. It is not like the deal with the state, which was for only 2 years.

MWAA is serious about cutting costs at IAD and helping UA grow.
 
codc10
Posts: 2507
Joined: Sat Jul 08, 2000 7:18 am

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 3:49 pm

Antarius wrote:
codc10 wrote:
Antarius wrote:
Their intl J is a decade behind AA and DL. I'm not referring to Polaris that's on 20 planes - I'm talking about the rest of their product.


47, to be exact, with 60 to follow in 2019... and as for the rest of the product, like the Polaris Lounge?


You can argue till the cows come home. The reality is in the numbers. If those 60 were there now and maybe a couple of years ago, maybe the OP wouldnt be asking this question. The rest of the product is the rest of the fleet missing Polaris still.

But since he/she is, maybe the homer talk isn't answering their question?


Wouldn't it be great if we could just snap our fingers and entire fleets could be converted overnight?

The Polaris rollout has been frustratingly slow, but hey, at least it's dramatically faster than the pace of the D1 Suite program, right?
 
User avatar
spinotter
Posts: 518
Joined: Wed May 27, 2015 1:37 am

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 3:55 pm

gaystudpilot wrote:
UA has so much potential to blow AA and DL out of the water it’s not even funny.

DL/UA would have been an awesome merger vs DL/NW and UA/CO.


ORD/MSP/DTW? EWR/JFK/LGA? DEN/SLC?
 
User avatar
airzim
Posts: 1412
Joined: Wed Jun 20, 2001 7:40 am

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 3:57 pm

WPvsMW wrote:
As to B):
IAD is mid-Atlantic, not SE. For ease of reference: https://goo.gl/maps/VUnNcPTn5m62
RDU to FLL... via IAD? MSY to MCO .... via IAD?


When I lived in RDU, I did exactly that. RDU-IAD to make the first bank to JAX/MCO/CLE etc. It's barely and hour flight. The issue with IAD is just not enough frequency but perhaps that's changing.

Same could be said of MSY. Barely and hour to IAH.
 
dtw2hyd
Posts: 7070
Joined: Wed Jan 09, 2013 12:11 pm

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 4:00 pm

I think UA is content with low margins. Dl has a higher threshold. Both approaches have pros and cons.
 
flybry
Posts: 134
Joined: Mon Jul 09, 2012 11:26 am

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 4:11 pm

Antarius wrote:
If nothing else, time . Smisek made a ungodly mess out of UA. Their routes were cut, the product is hands down the worst on the market and lots of high value customers left.

Its going to take time to recover from that.


Why isn't Smisek in jail???
 
flybry
Posts: 134
Joined: Mon Jul 09, 2012 11:26 am

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 4:12 pm

B737Driver wrote:
Delta's domestic network is amazing, but Delta's international network is horrible - mainly due to outsourcing intl flying to JV partners. UA's international network is amazing, but domestic network is lacking - in terms of frequency. With UA acquiring more narrowbodies, refreshing their widebody cabins with Polaris, and if they keep improving their service as they have been, in a few years they'll easily overtake Delta. I'd rather fly point to point internationally on a UA 787 instead of flying a Delta A330 to AMS/CDG. UA's hubs also should allow for proper expansion - SFO ORD DEN EWR IAH IAD blow ATL DTW MSP SLC LAX SEA out of the water any day.

Give it some time, UA will be number 1.


LAX is also a hub for United :)
 
User avatar
Dieuwer
Posts: 1353
Joined: Tue Dec 26, 2017 6:27 pm

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 4:14 pm

flybry wrote:
Antarius wrote:
If nothing else, time . Smisek made a ungodly mess out of UA. Their routes were cut, the product is hands down the worst on the market and lots of high value customers left.

Its going to take time to recover from that.


Why isn't Smisek in jail???


He got a nice deal for himself (pay a fine, do community service).

https://skift.com/2017/03/06/ex-port-au ... ns-flight/
 
flybry
Posts: 134
Joined: Mon Jul 09, 2012 11:26 am

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 4:18 pm

Dieuwer wrote:
flybry wrote:
Antarius wrote:
If nothing else, time . Smisek made a ungodly mess out of UA. Their routes were cut, the product is hands down the worst on the market and lots of high value customers left.

Its going to take time to recover from that.


Why isn't Smisek in jail???


He got a nice deal for himself (pay a fine, do community service).

https://skift.com/2017/03/06/ex-port-au ... ns-flight/



Wish I could get a golden parachute like that!! lol! ;)
 
User avatar
Dieuwer
Posts: 1353
Joined: Tue Dec 26, 2017 6:27 pm

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 4:21 pm

flybry wrote:
Dieuwer wrote:
flybry wrote:

Why isn't Smisek in jail???


He got a nice deal for himself (pay a fine, do community service).

https://skift.com/2017/03/06/ex-port-au ... ns-flight/



Wish I could get a golden parachute like that!! lol! ;)


Only if you are rich you get a nice deal like that. For the 99% it is jail time and hard labor.
 
majano
Posts: 120
Joined: Sun Oct 14, 2018 10:45 am

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 4:31 pm

This is an accountant's attempt to provide some context to what is an interesting question and even more interesting views from the gallery. I will use the full year 2018 reported numbers as a basis. Firstly, I will consider the revenue. As a new member, please pardon my clumsy tables (this comes form somebody who was lecturing to someone else on behaviour etc on a.net, so.....)
-----------------------------------------------DL------------------------UA
Total Revenue(($ Million)------------44,438------------------41,303
Passenger Revenue($ Million)------39,755------------------37,706
TRASM (Cents)--------------------------16.87-------------------15.00
PRASM (Cents)-------------------------15.09--------------------13.13
Yield (Cents)------------------------------17.65-------------------16.38
Load Factor-------------------------------85.5%-------------------82.4%
United reported a marginally better PRASM increase than DL (2018 vs 2017) - 4.3 vs 3.9, but DL reported a slightly better TRASM increase 4.2 vs 4.3. So, United is catching up very slowly on passenger revenue but falling behind (even more slowly) on total revenue. Yield went up 4% at Delta, but only 2.8% at United. United improved its load factor by 1.2 percentage points vs a flat Delta. So, whilst the OP seems to have concluded that United cannot catch up to Delta on revenue, he seems to be correct, at least in the short to medium term.

My question is, has Delta reached an optimum load factor for a legacy carrier, or is there room for improvement? If they have reached that optimum level, is this why they were able to improve yield as much as they have (compared to United)?

I will look at the expenses tomorrow to try and answer the second part of the OP's question.
 
Antarius
Posts: 1562
Joined: Thu Apr 13, 2017 1:27 pm

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 4:56 pm

Dieuwer wrote:
flybry wrote:
Antarius wrote:
If nothing else, time . Smisek made a ungodly mess out of UA. Their routes were cut, the product is hands down the worst on the market and lots of high value customers left.

Its going to take time to recover from that.


Why isn't Smisek in jail???


He got a nice deal for himself (pay a fine, do community service).

https://skift.com/2017/03/06/ex-port-au ... ns-flight/


This article is about the PANYNJ chief. Smisek got even less.

He is still on the Board of Trustees at my alma mater. Sends an extraordinary signal to the students
2019: SIN HKG NRT DFW IAH HOU CLT LGA JFK SFO SJC EWR SNA EYW MIA BOG LAX ORD DTW OAK PVG BOS DCA IAD ATL LAS BIS CUN PHX OAK SYD CVG PHL MAD ORY CDG SLC SJU BQN DEN DOH BLR MAA KTM YYZ MEX
 
PlanesNTrains
Posts: 9527
Joined: Tue Feb 01, 2005 4:19 pm

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 5:47 pm

spinotter wrote:
gaystudpilot wrote:
UA has so much potential to blow AA and DL out of the water it’s not even funny.

DL/UA would have been an awesome merger vs DL/NW and UA/CO.


ORD/MSP/DTW? EWR/JFK/LGA? DEN/SLC?


There wouldn’t be MSP or DTW - those were NW. There wouldn’t be an EWR - that was CO. I think SLC would have been marginalized. Otherwise it’d be all the UA hubs plus ATL/CVG/JFK/LGA.

In the end, not sure if that would have been “better”?
-Dave


MAX’d out on MAX threads. If you are starting a thread, and it’s about the MAX - stop. There’s already a thread that covers it.
 
User avatar
spinotter
Posts: 518
Joined: Wed May 27, 2015 1:37 am

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 6:06 pm

PlanesNTrains wrote:
spinotter wrote:
gaystudpilot wrote:
UA has so much potential to blow AA and DL out of the water it’s not even funny.

DL/UA would have been an awesome merger vs DL/NW and UA/CO.


ORD/MSP/DTW? EWR/JFK/LGA? DEN/SLC?


There wouldn’t be MSP or DTW - those were NW. There wouldn’t be an EWR - that was CO. I think SLC would have been marginalized. Otherwise it’d be all the UA hubs plus ATL/CVG/JFK/LGA.

In the end, not sure if that would have been “better”?


You're totally right. I've already got DL and NW merged before the merger. But still, as a former NW fanboy and not even a current flyer, I'm glad NW ended up with DL. So NW and CO together? EWR/CLE/DTW/MSP/MEM/IAH. No western presence at all. UA/DL would have been ATL/CVG/SLC/JFK/LGA against ORD/DEN/SFO/IAD? Then I think both CVG and SLC would have been ditched, leaving JFK/LGA/IAD/ATL/ORD/DEN/SFO. Alternative airline mergers.
 
Elementalism
Posts: 426
Joined: Sat Jun 10, 2017 4:03 am

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 6:08 pm

dtw2hyd wrote:
I think UA is content with low margins. Dl has a higher threshold. Both approaches have pros and cons.



What are the pros of having lower margins? What are the cons of having higher margins?
 
jagraham
Posts: 862
Joined: Sun Jul 17, 2016 11:10 pm

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 6:24 pm

WPvsMW wrote:
As to B):
IAD is mid-Atlantic, not SE. For ease of reference: https://goo.gl/maps/VUnNcPTn5m62
RDU to FLL... via IAD? MSY to MCO .... via IAD?


IAD is the closest hub. And so the best that UA can do without standing up a new hub somewhere.

MSY to MCO would be via IAH unless . .

UA did some point to point flying. IAD to MSY to MCO to IAD for example. Or IAD to RDU to FLL to IAH.

It's nowhere close to perfect. And UA can't generate frequencies like AA and DL doing this kind of thing. But they can stem the bleeding in the Southeast before they pick a new hub city.
 
gwrudolph
Posts: 397
Joined: Sat Sep 13, 2008 3:46 pm

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 6:48 pm

Fargo wrote:
slcdeltarumd11 wrote:
I think United is working on closing the gap. They are actively working to connect less people in EWR, and pushing connections via IAD. Moves like that are what they need to be more "delta like" UA focus on DEN is a great move also. Amazing hub for connections (costs are low for UA hubs) (less delays not crowded airspace) . Great hub to make money on connections for UA. ORD, LAX should only be when needed for connections DEN should be focus.


ORD and DEN should be the focus for UA connections, since they are among the (if not the) best geographic US hubs in the country. ORD should be the ATL/DFW with 1,000+ flights and a good mixture of domestic and international connections while DEN should be the CLT with 600+ flights mainly focused on domestic.


Unfortunately, they can't grow the number of flights at ORD right now. They simply don't have enough gates. It will be the mid-2020s before they do.

They can upguage though.
 
User avatar
Pudelhund
Posts: 186
Joined: Tue Jan 15, 2019 11:06 pm

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 6:55 pm

I could see United being US E195-E2 launch customer upon seeing the success Delta will have with the A220. The thing I dislike most about United is the large number of non-premium regional jets.
 
Antarius
Posts: 1562
Joined: Thu Apr 13, 2017 1:27 pm

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 7:22 pm

codc10 wrote:
Antarius wrote:
codc10 wrote:

47, to be exact, with 60 to follow in 2019... and as for the rest of the product, like the Polaris Lounge?


You can argue till the cows come home. The reality is in the numbers. If those 60 were there now and maybe a couple of years ago, maybe the OP wouldnt be asking this question. The rest of the product is the rest of the fleet missing Polaris still.

But since he/she is, maybe the homer talk isn't answering their question?


Wouldn't it be great if we could just snap our fingers and entire fleets could be converted overnight?

The Polaris rollout has been frustratingly slow, but hey, at least it's dramatically faster than the pace of the D1 Suite program, right?


The saving grace for DL is that their old product was still better than UA's. UA's old product was/is truly horrible compared to its peers. AA's old NGBC was the absolute worst, but they got rid of that a few years ago, thankfully.

I'm not arguing for or against UA or DL here. I'm merely suggesting that the disparity of product was ONE of the reasons why UA has lagged DL in terms of revenue and profit.
2019: SIN HKG NRT DFW IAH HOU CLT LGA JFK SFO SJC EWR SNA EYW MIA BOG LAX ORD DTW OAK PVG BOS DCA IAD ATL LAS BIS CUN PHX OAK SYD CVG PHL MAD ORY CDG SLC SJU BQN DEN DOH BLR MAA KTM YYZ MEX
 
Flighty
Posts: 9963
Joined: Thu Apr 05, 2007 3:07 am

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 7:40 pm

United doesn't have the best route network. Probably it is #3 behind American and Delta in that respect.

The money is made on the regional networks, and UA has a lackluster regional network. The international stuff is mostly for show and is not necessarily a business at all.

The airline with the best route network, from a business perspective, is Delta.
 
sohanb82
Posts: 45
Joined: Sat Jan 19, 2019 5:37 am

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 7:48 pm

jagraham wrote:
WPvsMW wrote:
As to B):
IAD is mid-Atlantic, not SE. For ease of reference: https://goo.gl/maps/VUnNcPTn5m62
RDU to FLL... via IAD? MSY to MCO .... via IAD?


IAD is the closest hub. And so the best that UA can do without standing up a new hub somewhere.

MSY to MCO would be via IAH unless . .

UA did some point to point flying. IAD to MSY to MCO to IAD for example. Or IAD to RDU to FLL to IAH.

It's nowhere close to perfect. And UA can't generate frequencies like AA and DL doing this kind of thing. But they can stem the bleeding in the Southeast before they pick a new hub city.


Why do they really need a new hub city? To be the most profitable, one does not need to serve the most destinations, or have the most routes. I'd argue that right now, UA has a much better hub portfolio then DL.

SFO –– huge Asian hub, lots of O/D travel and corporate contracts
EWR –– European hub, lots of O/D travel and corporate contracts
ORD –– connecting traffic to Asia/Europe, midwest hub, lots of O/D travel and corporate contracts
IAH –– built in fuel hedge, Latin America hub
LAX –– O/D, good Australia hub, secondary Asia hub
IAD –– nations capitol, growing, secondary European hub
DEN –– great connecting hub, lots of room for expansion, lots of opportunity for growth

Sure, they probably lose a lot of connecting traffic in the SE, but why challenge DL and AA there when they can make so much more money expanding their current hubs? Why open up new hubs, when they don't have the aircraft to do it? How would a SE hub benefit the route network besides domestic connecting traffic and O/D? How would a new SE hub do something that their existing hubs can't?
 
jumbojet
Posts: 2773
Joined: Mon Dec 29, 2003 3:01 am

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 8:09 pm

codc10 wrote:
[
The Polaris rollout has been frustratingly slow, but hey, at least it's dramatically faster than the pace of the D1 Suite program, right?


By and large your wrong. How about providing some factual data that would suggest the D1 suite rollout is slower than Polaris. Also, very impoortant to keep in mind, D1 suites are replacing a product that is still considered modern, which incidently, UA is only changing to now. Delta has had 1-2-1 flat bed on international widebody aircraft since 2008.
 
jagraham
Posts: 862
Joined: Sun Jul 17, 2016 11:10 pm

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 8:11 pm

sohanb82 wrote:
jagraham wrote:
WPvsMW wrote:
As to B):
IAD is mid-Atlantic, not SE. For ease of reference: https://goo.gl/maps/VUnNcPTn5m62
RDU to FLL... via IAD? MSY to MCO .... via IAD?


IAD is the closest hub. And so the best that UA can do without standing up a new hub somewhere.

MSY to MCO would be via IAH unless . .

UA did some point to point flying. IAD to MSY to MCO to IAD for example. Or IAD to RDU to FLL to IAH.

It's nowhere close to perfect. And UA can't generate frequencies like AA and DL doing this kind of thing. But they can stem the bleeding in the Southeast before they pick a new hub city.


Why do they really need a new hub city? To be the most profitable, one does not need to serve the most destinations, or have the most routes. I'd argue that right now, UA has a much better hub portfolio then DL.

SFO –– huge Asian hub, lots of O/D travel and corporate contracts
EWR –– European hub, lots of O/D travel and corporate contracts
ORD –– connecting traffic to Asia/Europe, midwest hub, lots of O/D travel and corporate contracts
IAH –– built in fuel hedge, Latin America hub
LAX –– O/D, good Australia hub, secondary Asia hub
IAD –– nations capitol, growing, secondary European hub
DEN –– great connecting hub, lots of room for expansion, lots of opportunity for growth

Sure, they probably lose a lot of connecting traffic in the SE, but why challenge DL and AA there when they can make so much more money expanding their current hubs? Why open up new hubs, when they don't have the aircraft to do it? How would a SE hub benefit the route network besides domestic connecting traffic and O/D? How would a new SE hub do something that their existing hubs can't?


Population by state
CA - 40 million
TX - 29 million
FL - 21 million
NY - 20 million
PA - 13 million
IL - 13 million
OH - 11 million
GA - 11 million
NC - 10 million
MI - 10 million
NJ - 9 million
VA - 8.5 million
WA - 7.5 million
AZ - 7.2 million
MA - 7 million
TN - 6.7 million
IN - 6.7 million
MO - 6.1 million
MD - 6 million

Of these 19 most populous states, 3 states totaling about 32 million people are in the Southeast. MD, VA, and MO border the southeast with another 20 million. 50+ million people going to, from, and within the Southeast is a lot to miss (23 thru 26 are SC (5 mil), AL (5 mil), LA (4.6 mil) and KY (4.4 mil) 24 million more, or 74 million total). In addition, those states are big, so short flights work better than driving. Unless you have to fly 500 miles out of the way each way to make the connection. Winning strategies don't ignore 74+ million people.

Note also that other than DC, the largest metro area is ATL at #11 (5 mil metro area). Not a few big cities like out West. Not within a couple hundred air miles like the Northeast.

So UA can address that somewhat with point-to-point flying, but to do a good job in this area a hub is needed.
 
slider
Posts: 7385
Joined: Wed Feb 25, 2004 11:42 pm

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 8:28 pm

one facet of this that I don't believe has been mentioned may involve corporate sales... Before the merger, sCO had a strong RASM premium to the industry and a big driver of that was corporate customers and those big sales agreements.

After the merger, when UA imploded operationally and struggled with customer service, I should think they had to really be aggressive on pricing and, as such, probably took a good haircut in unit RASM with many strong corp accounts.

The network improvements obviously help, the improvement in better operating performance helps, but they'll need to justify the ability to clawback some of that revenue all while still improving the domestic network gauge, frequency and connectivity.
 
dtw2hyd
Posts: 7070
Joined: Wed Jan 09, 2013 12:11 pm

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 8:36 pm

Elementalism wrote:
dtw2hyd wrote:
I think UA is content with low margins. Dl has a higher threshold. Both approaches have pros and cons.



What are the pros of having lower margins? What are the cons of having higher margins?


You can have a bigger network. You cannot serve every route your competition is serving.
 
WPvsMW
Posts: 2040
Joined: Thu Mar 23, 2017 7:30 pm

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 8:45 pm

WPvsMW wrote:
As to B):
IAD is mid-Atlantic, not SE. For ease of reference: https://goo.gl/maps/VUnNcPTn5m62
RDU to FLL... via IAD? MSY to MCO .... via IAD?


To those who fly UA intra-SE... it has to be for MileagePlus (aka UA captive), right? The frequencies and failovers are absent on UA compared to DL and AA intra-SE.
 
musman9853
Posts: 738
Joined: Mon May 14, 2018 12:30 pm

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 8:46 pm

joeljack wrote:
My take from a flyer that has been some level of elite for past 17 years solid and from having many friend that travel and the reasons why they have left UA:

1) Too many 50-Seat RJ's on routes that should all have first class. High End Elites chose other airlines because of this. 50-Seat plans are fine to small cities are are expected, but shouldn't be flying to bigger cities that business travelers go to. Examples: OMA, DSM, BHM, DTW etc.

2) I know 2 current Delta Elites here in DSM that switched from AA because DL has PTV's in every seat, they both love them.

3) I know a former UA 1K that switched to AA from UA here in DSM because AA has a daytime ORD-LHR flight that you can connect to from DSM. UA might want to consider this.

4) I know a former UA Elite in California that switched to WN because the last flight of the day going west from Omaha is at 5pm which doesn't allow for a entire day of work. There used to be an 8pm flight. This was a $50,000+ traveler too that UA lost because of short shortsightedness. Even though that particular flight wasn't making Money, if several 1K's took it, you should keep it going. I know I used to take it and it was always full but probably not profitable on it's own with the fares.

5) During the winter, the first flight of the day on ORD-OMA is at 10am! You can't expect to have loyal, year-round business customers with a departure that late for 2 months. Most the year ORD-OMA 8am flight is mainline, for 2 months in the winter it just doesn't exist! If they want to keep elites and not send AA business on a silver platter, they should at least fly a 50-seat plane in the morning during those slow months, even if it loses money. Otherwise you run away your elites.

6) You can't work a full day in Florida and then get home to either DSM or OMA that night. UA has zero later departures from FL most of the year vs DL which makes it easy to work a full day and come home.

7) DL looks at where high dollar flyers are going and adds one-off nonstop flights to accommodate. For example Austin, TX. UA and AA are ahead of DL right now and there are crazy amounts of high dollar elites living there. If DL adds nonstop flights to about 10 business cities from AUS, over a period of 10 years, AA and UA will lose 50% of their high dollar elites and DL will gain them. Long term play for lots of money! UA should really look at AUS hard before DL adds nonstops and gains Elites there. If UA added LAS, SAN, SJC, BOS, CLE and maybe RDU from Austin, UA would be in a strong position to keep their elities and gain new ones that pay a large premium. UA should have done this at BOS too but they have already lost that battle with all the DL adds. BOS will get worse for UA in the coming years because of that.

Positives on routes that I'm familiar with:
OMA-EWR now flying 3x daily to match Delta both ways with good times all day long. This will attract elites on both ends.
DEN-OMA now is flying a 8am flight year-round. This also helps to keep elites happy. They also recently added a 8am DEN-DSM flight too. Big plus for business travelers.



are there really that many business travellers in places like des moines? that city is more or less irrelevant
Welcome to the City Beautiful.
 
musman9853
Posts: 738
Joined: Mon May 14, 2018 12:30 pm

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 8:56 pm

BN727227Ultra wrote:
joeljack wrote:
My take from a flyer that has been some level of elite for past 17 years solid and from having many friend that travel and the reasons why they have left UA:

1) Too many 50-Seat RJ's on routes that should all have first class. High End Elites chose other airlines because of this. 50-Seat plans are fine to small cities are are expected, but shouldn't be flying to bigger cities that business travelers go to. Examples: OMA, DSM, BHM, DTW etc.


I'm glad you mentioned this. I mentioned in a post a few months ago that when one looked at equipment between fortress hubs (DFW-DEN, IAH-ATL, etc. UA had a higher percentage of RJ flights than AA or DL. (I notice lately AA has 4x 788 DFW-ORD!).

But it isn't so much the equipment, rather the condition. I last flew UA OMA-IAH fall 2017, There was a maint issue (hot day, I think they had to move cargo around for weight distribution issues) but the interior of the plane looked like crap--greasy windows especially. IAH-GRK was just as bad. One thing in common was that these were monopoly routes.

I really want to give UA the benefit of the doubt, but that experience makes it hard.



I think you mean 738 not 788 lol
Welcome to the City Beautiful.
 
User avatar
BN727227Ultra
Posts: 599
Joined: Fri Jan 10, 2014 7:15 pm

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 8:58 pm

musman9853 wrote:
are there really that many business travellers in places like des moines? that city is more or less irrelevant


Whoa, Nellie. Imma gonna cook some popcorn, this shoud be fun.

1. Insurance. 2. Big Ag., including alternate energy. 3. Lobbyists that support 1 and 2.
 
User avatar
BN727227Ultra
Posts: 599
Joined: Fri Jan 10, 2014 7:15 pm

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 9:00 pm

musman9853 wrote:
I think you mean 738 not 788 lol


naw, I checked Flightaware and for two days in a row the end of last week there were four 788s. Made my eyes bug out, too.
 
ytib
Posts: 500
Joined: Sun Nov 07, 2004 3:22 am

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 9:02 pm

musman9853 wrote:
BN727227Ultra wrote:
joeljack wrote:
My take from a flyer that has been some level of elite for past 17 years solid and from having many friend that travel and the reasons why they have left UA:

1) Too many 50-Seat RJ's on routes that should all have first class. High End Elites chose other airlines because of this. 50-Seat plans are fine to small cities are are expected, but shouldn't be flying to bigger cities that business travelers go to. Examples: OMA, DSM, BHM, DTW etc.


I'm glad you mentioned this. I mentioned in a post a few months ago that when one looked at equipment between fortress hubs (DFW-DEN, IAH-ATL, etc. UA had a higher percentage of RJ flights than AA or DL. (I notice lately AA has 4x 788 DFW-ORD!).

But it isn't so much the equipment, rather the condition. I last flew UA OMA-IAH fall 2017, There was a maint issue (hot day, I think they had to move cargo around for weight distribution issues) but the interior of the plane looked like crap--greasy windows especially. IAH-GRK was just as bad. One thing in common was that these were monopoly routes.

I really want to give UA the benefit of the doubt, but that experience makes it hard.



I think you mean 738 not 788 lol


No they are right, the B788 is correct.

0700 - AAL1079: https://flightaware.com/live/flight/AAL ... /KDFW/KORD
1630 - AAL2418: https://flightaware.com/live/flight/AAL ... /KDFW/KORD
1825 - AAL2520: https://flightaware.com/live/flight/AAL ... /KDFW/KORD
2045 - AAL1294: https://flightaware.com/live/flight/AAL ... /KDFW/KORD
Airbus:318,319,320,321,332,333,388
Boeing:707,717,732,733,734,73Q,735,73G,738,7M8,739,752,753,742,74L,744,762,763,772,77L,77W,789
Misc:142,CN1,CR2,CR7,DC8,DH2,DH8,D8Q,D10,D95,EM2,ER3,ER4,E70,100,J31,M11,M83,M88,M90,SF3

Where is Neil
 
crescent
Posts: 106
Joined: Thu Apr 19, 2018 3:09 am

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 9:16 pm

I don't think it makes sense that UA has better PRASM than DL & AA while it is the most aggressive with capacity expansion, so my theory is that they are getting a lot out of Gemini and are lucky with Asia doing better than other geographies (but that might not last with China slowing as it is).
 
codc10
Posts: 2507
Joined: Sat Jul 08, 2000 7:18 am

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 9:25 pm

jumbojet wrote:
codc10 wrote:
[
The Polaris rollout has been frustratingly slow, but hey, at least it's dramatically faster than the pace of the D1 Suite program, right?


By and large your wrong. How about providing some factual data that would suggest the D1 suite rollout is slower than Polaris. Also, very impoortant to keep in mind, D1 suites are replacing a product that is still considered modern, which incidently, UA is only changing to now. Delta has had 1-2-1 flat bed on international widebody aircraft since 2008.


Why, I am delighted to provide "factual data!" Glad you asked!

D1 Suites were announced August 16, 2016 (888 days ago... lucky me!), and so far 17 aircraft are in service with the seat (which I find very good, btw). That's an average of 1 airplane every 52 days. To Delta's credit, 2 more 777s and 1 764 are currently in mod. Of course, D1 is coming on all new A359 and A339 deliveries.

United announced the Polaris seat on June 2, 2016 (963 days ago) and so far has 47 aircraft in service with Polaris seating. That's a rate of 1 airplane every 20 days or so. United also has 8 aircraft (3 763, 5 772) in mod. Every WB on order will also have Polaris.

Those are what we call "facts", as in, objective, verifiable data. Can't really argue with any of that. United is rolling out its Polaris seats at a rate of more than 2:1 Delta's D1 Suite deployment.

Now, here comes the "subjective" part (these actually aren't facts)... yes, Delta has a better J product across the board with direct aisle access at all seats today, so there's not nearly as much urgency to replace a dated product.
 
sohanb82
Posts: 45
Joined: Sat Jan 19, 2019 5:37 am

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 9:37 pm

jagraham wrote:
sohanb82 wrote:
jagraham wrote:

IAD is the closest hub. And so the best that UA can do without standing up a new hub somewhere.

MSY to MCO would be via IAH unless . .

UA did some point to point flying. IAD to MSY to MCO to IAD for example. Or IAD to RDU to FLL to IAH.

It's nowhere close to perfect. And UA can't generate frequencies like AA and DL doing this kind of thing. But they can stem the bleeding in the Southeast before they pick a new hub city.


Why do they really need a new hub city? To be the most profitable, one does not need to serve the most destinations, or have the most routes. I'd argue that right now, UA has a much better hub portfolio then DL.

SFO –– huge Asian hub, lots of O/D travel and corporate contracts
EWR –– European hub, lots of O/D travel and corporate contracts
ORD –– connecting traffic to Asia/Europe, midwest hub, lots of O/D travel and corporate contracts
IAH –– built in fuel hedge, Latin America hub
LAX –– O/D, good Australia hub, secondary Asia hub
IAD –– nations capitol, growing, secondary European hub
DEN –– great connecting hub, lots of room for expansion, lots of opportunity for growth

Sure, they probably lose a lot of connecting traffic in the SE, but why challenge DL and AA there when they can make so much more money expanding their current hubs? Why open up new hubs, when they don't have the aircraft to do it? How would a SE hub benefit the route network besides domestic connecting traffic and O/D? How would a new SE hub do something that their existing hubs can't?


Population by state
CA - 40 million
TX - 29 million
FL - 21 million
NY - 20 million
PA - 13 million
IL - 13 million
OH - 11 million
GA - 11 million
NC - 10 million
MI - 10 million
NJ - 9 million
VA - 8.5 million
WA - 7.5 million
AZ - 7.2 million
MA - 7 million
TN - 6.7 million
IN - 6.7 million
MO - 6.1 million
MD - 6 million

Of these 19 most populous states, 3 states totaling about 32 million people are in the Southeast. MD, VA, and MO border the southeast with another 20 million. 50+ million people going to, from, and within the Southeast is a lot to miss (23 thru 26 are SC (5 mil), AL (5 mil), LA (4.6 mil) and KY (4.4 mil) 24 million more, or 74 million total). In addition, those states are big, so short flights work better than driving. Unless you have to fly 500 miles out of the way each way to make the connection. Winning strategies don't ignore 74+ million people.

Note also that other than DC, the largest metro area is ATL at #11 (5 mil metro area). Not a few big cities like out West. Not within a couple hundred air miles like the Northeast.

So UA can address that somewhat with point-to-point flying, but to do a good job in this area a hub is needed.


A SE hub would not provide much for international growth. Asia/Europe is taken care of, and UA has solidified an extensive South America hub in IAH. In addition, Caribbean destinations have flights from IAH, and EWR, along with weekend flight from ORD.

All international connecting traffic right now can go through IAD/EWR/ORD.

With DL and AA already solidified within the region, what city would UA go to? Surely not CLT, MIA, or ATL. FLL is dominated by LCC, and DL has a large presence in MCO.
 
gsg013
Posts: 516
Joined: Wed Feb 15, 2017 4:03 pm

Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 9:39 pm

From my observations there are a few key drivers why UAL cannot close the profit gap with DL.

1. DL has a lower % of delays and cancelations.
2. DL has superior technology making it much easier to switch flights in the less likely event of IROPS.
3. DL has branded itself as a "premium" airline and yes in general things are a bit nicer on DL although not Luxury like the middle east carriers or some Asian carriers.
4. DL markets the same routes as AA and UA at a higher price and people are willing to pay top dollar for all the experiences listed above.

This is anecdotal but I fly BNA-LGA-BNA or BNA-(DTW/ATL)- EWR quite frequently on DL. in the past year I have done BNA-EWR-BNA twice on UA both flights were delayed.. speaking to the gate agent in BNA they told me the newark flight is more often delayed than not. For me I will pay more to fly DL and make the connection knowing I should get there ontime

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos