JHwk
Posts: 557
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Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 9:58 pm

Long-time UA 1K, but I find myself flying a lot more DL flights now. LAX-HNL with lie-flat seats for a significantly lower fare and I am sold. I don't know what it says for DL long-term (on profitability), but price and hard product keep getting me on DL flights.
 
N649DL
Posts: 490
Joined: Sat Aug 25, 2018 10:21 pm

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

Mon Jan 21, 2019 10:28 pm

A few reasons BIG reasons:

1. Smisek Era Destructive Moves: Failing to integrate UA and CO properly, unnecessary cost cutting, fleeing of elites, too many mainline aircraft retirements and not enough 50 seat ERJ phase outs (also that came with excessive outsourcing to RJ carriers on key business routes)

2. Slower than expected Polaris roll out of Lounges and Seating.

3. Intense competition at most hubs LAX / SFO / DEN / ORD and slightly less dominance at legacy fortress hubs (EWR).

4. Bad P.R. moves and mixed responses from corporate HQ with a thick glass ceiling (they were in the news every week for one reason or another last year.)

5. General inconsistency compared to DL with front line staff, meals, entertainment options, etc.
 
gwrudolph
Posts: 390
Joined: Sat Sep 13, 2008 3:46 pm

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

Mon Jan 21, 2019 10:32 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.


I think this way of looking at things is a bit flawed. You have to look at cities and/or metro population areas, not states as a whole. Moreover, business markets are where the money is made.

United has significant strength in some of the most popululated and biggest business metros in the U.S.
 
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 10:39 pm

sohanb82 wrote:
jagraham wrote:
sohanb82 wrote:

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.


Back in the early 90's there was talk of UA purchasing HP for their fleet. Perhaps one of the FLL carriers (***cough***NK***cough***) could provide a sizable footprint as well as an existing neo order that UA could morph into the much-vaunted A321neo needed? :-)
-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.
 
Swadian
Posts: 537
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Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Mon Jan 21, 2019 10:44 pm

Blloydtbird wrote:
TTailedTiger wrote:
Blloydtbird wrote:

Fully agreed. Further, it’s not as though Polaris is anything revolutionary. It’s very similar to the product Delta has had in its A330 for several years. Slightly better than the 777 and 767 products nearing 8+years of age. I’m a UA1k and I’ve stayed with them for two reasons. The first, ANA. I need them for onward connections to SE Asia and absolutely love their product and service. The second, singapore. I need a non-stop from the US and for that it’s United that works for me. GPUs help also. But, Delta’s latest J seat on the a350 and updated 777 blows Polaris out of the water. If United is just catching up with Delta’s outgoing product, United has a problem. You hit the nail on the head I’d say. If ANA were in SkyTeam I’d be gone. I’m not a huge fan of KE nor MU, this DL no longer works for me.


You're the first person I've seen who likes the new Delta suite. There's a long thread about it on another website and those people were saying it felt very claustrophobic and tight with the door closed. They preferred the old seat on the 744 and A330.


Perhaps a bit tight, but the privacy is worth it. The UA777 Polaris seat is quite tight as well, saving for the bulkhead seats which I generally go for. The footwell is ridiculously narrow in the others. My favorite seat of them all is the ANA First Square but I don’t get to use them often enough. The short of it is, United’s latest product is 7 to 8 years behind that if DL.


Why not switch to OW and use JL Sky Suite and AA Super Diamond?
John Wang, Founder and President of Inland Streamliner.
 
musman9853
Posts: 710
Joined: Mon May 14, 2018 12:30 pm

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

Mon Jan 21, 2019 11:07 pm

BN727227Ultra wrote:
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.



wow, seems like a waste of a widebody.
Welcome to the City Beautiful.
 
musman9853
Posts: 710
Joined: Mon May 14, 2018 12:30 pm

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

Mon Jan 21, 2019 11:08 pm

BN727227Ultra wrote:
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.


i stand corrected, then. I was just looking at its gdp, of 40billion, which isnt a ton. The city I live in, orlando, has over triple the gdp of des moines, and even then we don't really have a ton of business travelers
Welcome to the City Beautiful.
 
PHLCVGAMTK
Posts: 68
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Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Tue Jan 22, 2019 1:32 am

dtw2hyd wrote:
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.


It seems wrong to say that any of the US3 has a flat margin threshold, when they clearly all vary depending on the priority they give to the market segment.

To tie in another recurring thread, DL uses the connecting power of the ATL hub to provide a huge volume of low-but-positive yielding Y traffic to leisure destinations in Florida and the Caribbean. AA does the same, split between CLT and MIA. Both can therefore also aggregate the business traffic that exists, even though it's a lot thinner than traffic or even population would imply. UA, with the nearest hubs to Florida being IAD and IAH, can't aggregate traffic nearly well enough to pursue the same business model, so they tend to not compete nearly as well in the region, beyond the non-stops from their big-origin hubs at EWR and ORD, and a handful of connections through IAD. I don't think it hurts them very much to not engage heavily in that fight, but it does depress their domestic numbers.

On the flipside, UA has been very aggressive on upgauges and capacity increases at SFO, EWR, and most especially ORD, to the point where I'm surprised that yields are still as strong as they are, and it wouldn't surprise me to learn that UA leadership are just as (pleasantly, in their case) surprised. Certainly in the case of ORD, the prosecution of UA's strategy against AA has some definite risk to yield in the short-to-medium term. That may put AA in a sticky position, and it then becomes a test between the two airlines of which is willing to accept what yields. Over time, it is inevitable that UA will put some minor hurts on itself in hopes of hurting AA more; they may wish to do the same to DL but I don't think that even UA has the capability to do so in a way to make DL feel it.
 
jagraham
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Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Tue Jan 22, 2019 2:08 am

gwrudolph wrote:
jagraham wrote:
sohanb82 wrote:

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.


I think this way of looking at things is a bit flawed. You have to look at cities and/or metro population areas, not states as a whole. Moreover, business markets are where the money is made.

United has significant strength in some of the most popululated and biggest business metros in the U.S.


I have looked at it by metro area. My short answer was that other than DC (#4, 9.4 million including Baltimore) there is ATL. Also MIA is #9 (may now be 10 behind HOU) but is too far south for a connecting hub.

But since you asked

Metro areas in the South

9 MIA 6.4 million
11 ATL 5.9 million
- - - - -
20 MCO 3 million
22 TPA 2.9 million
25 CLT 2.5 million
34 RDU 2 million
35 BNA 1.9 million
38 Winston Salem 1.7 million
39 JAX 1.6 million
41 Louisville 1.5 million
44 GSP 1.4 million
45 MEM 1.4 million
47 BHM 1.3 million
56 Knoxville 1.2 million
60 Naples FL 1.1 million
62 Chattanooga 1 million
64 Sarasota 1 million
65 Columbia SC 1 million

Out of 45 metro areas (CSA) between 20 and 65, all the metro areas 1 million and over, 16 are in the Southeast.

Add these VA cities
37 Norfolk 1.8 million
48 Richmond 1.2 million

And New Orleans 46 1.3 million

and it's 19 of 45. Almost half of metro areas between 1 million and 3 million are in the Southeast
 
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BN727227Ultra
Posts: 588
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Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Tue Jan 22, 2019 2:53 am

musman9853 wrote:
BN727227Ultra wrote:
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.



wow, seems like a waste of a widebody.


AA does their 787 maint at DFW, might as well make a few bux instead of ferrying empty. I've gone out of my way to plan itineraries around this exact route--on a 772 and 788, six years apart--just to say I've been on a flight with these aircraft. Now if I can convince DL to do DTW-ATL using a 359...
 
Fargo
Posts: 774
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Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Tue Jan 22, 2019 3:00 am

gwrudolph wrote:
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.


True, but when the O'Hare 21 work is done, they need to really aggressively expand ORD grow more connections and put extreme pressure on AA. They have all the cards at ORD, they just need to realize it.

DEN on the other hand can grow now with the new gates coming online in a few years.
 
crescent
Posts: 106
Joined: Thu Apr 19, 2018 3:09 am

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

Tue Jan 22, 2019 4:18 am

DL has higher PRASM than UA - UA will never catch DL unless it equals DL's PRASM of 106% of industry average (which DL likes to highlight on investor conference calls). Pretty hard to equal DL without those pretty unchallenged hubs DL has at ATL SLC DTW. Closest thing UA has is IAH but that is heavily diluted by major competition at EWR/NYC, SFO/SFB, DEN, LAX, ORD.
 
Antarius
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Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Tue Jan 22, 2019 4:31 am

crescent wrote:
DL has higher PRASM than UA - UA will never catch DL unless it equals DL's PRASM of 106% of industry average (which DL likes to highlight on investor conference calls). Pretty hard to equal DL without those pretty unchallenged hubs DL has at ATL SLC DTW. Closest thing UA has is IAH but that is heavily diluted by major competition at EWR/NYC, SFO/SFB, DEN, LAX, ORD.


IAH is a fortress but like DFW, both have HOU and DAL (respectively) that factor into pricing.
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
 
tealnz
Posts: 504
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Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Tue Jan 22, 2019 1:41 pm

NYKiwi wrote:
DL have done a really good job on capex that UA lagged and they brought good cheap mainline aircraft..

I am.a UA flyer now just bc they are in Star, but they lack consistency in product...I'll tempered crews DL crews are always cheerful UA are just there. I had one argument with UA FA recently as she told memto.put my bag under my seat and I said no I'm putting it in thy he locker as being 6'4" I needed the leg space.....just extremely unprofessional

I have had several really bad experiences with UA ground staff - something I've never encountered with other airlines. I now avoid flying UA. I imagine I'm not alone. Being an airline that customers actively avoid is not great for margins...
 
majano
Posts: 101
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Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Tue Jan 22, 2019 2:12 pm

From an expenses point of view, I have tried to determine the efficiency of each airline by applying a cost drivers to the top two expense line items of each airline.
Expense Line Item (Driver)------------------------------FY'18 Costs---------------------------Units of Cost Drivers--------------------------Cost Per Unit
Salaries Costs in $Millions (Number of Employees)
Delta---------------------------12,044------------------------------------86,500---------------------------------$139,000 per annum
United-------------------------11,458-------------------------------------88,000---------------------------------$130,000 per annum
Aircraft Fuel in $Millions (Passenger Miles Available in Millions)
Delta----------------------------9,020-----------------------------------263,265---------------------------------3.42 Cents
United---------------------------9,307-----------------------------------275,282--------------------------------3.38 Cents
*: The Delta salaries amount includes profit sharing of $1,307.

Based on the above tables, it appears to me that United is not inefficient when compared to Delta. They pay less per employee per annum, and spend 0.04 cents per passenger mile available on fuel. The two line items above account for 50% of the total at Delta and 55% at United. United also has a relatively large "Other Expenses and Special Items ($6.288 Million) vs Delta at only $1,723. Delta seems to spend more on depreciation and amortisation, but this may be due to depreciation methods and useful life assumptions as much as anything else. The rest of the line items are more or less comparable.

So, in my view, the problem with United, if there is, is not that they are inefficient, it is rather that they are not as effective as Delta. For example, each Delta employee accounts for approximately $513,700 of revenue, whist at United this is only $469,352. Delta has 98 employees per active aircraft whilst United requires 114.
 
gwrudolph
Posts: 390
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Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Tue Jan 22, 2019 2:48 pm

Fargo wrote:
gwrudolph wrote:
Fargo wrote:

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.


True, but when the O'Hare 21 work is done, they need to really aggressively expand ORD grow more connections and put extreme pressure on AA. They have all the cards at ORD, they just need to realize it.

DEN on the other hand can grow now with the new gates coming online in a few years.


Agree. The timing should work well for them. By the time they have the gates, they should be in good shape with their aggressive Mainline NB expansion
 
B737900ER
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Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Tue Jan 22, 2019 3:46 pm

Fleet size
Delta: 876
United: 763

113 airplanes makes a huge difference.
 
jumbojet
Posts: 2728
Joined: Mon Dec 29, 2003 3:01 am

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

Tue Jan 22, 2019 4:22 pm

B737900ER wrote:
Fleet size
Delta: 876
United: 763

113 airplanes makes a huge difference.



i'll bet that UA has more widebody than DL?
 
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spinotter
Posts: 485
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Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Tue Jan 22, 2019 4:31 pm

B737900ER wrote:
Fleet size
Delta: 876
United: 763

113 airplanes makes a huge difference.


But that begs the question, what are the best metrics to judge an airline's profitability? Is it the net income (DL 3935 MM, UA 2100 MM), pre-tax margin (DL 10.2%, UA 7.7%) or what?
 
sargester
Posts: 137
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Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Tue Jan 22, 2019 4:51 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.


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

Tue Jan 22, 2019 4:56 pm

Most would look at operating margins but then maybe get into whether it happens more on revenue per unit or cost. Last quarter the two were not that different DAL 9.8%, UAL 9.1%.

I believe the reasons DAL has had higher margins the last few years has to do with RASM being higher than UAL, not so much cost. It is hard to compare directly because DAL gives TRASM (including cargo) while UAL and others give PRASM (passenger only). The reasons DAL has a superior PRASM has to do partly with a lower stage length than the overseas-heavy UAL (which should reflect in a higher cost too on the CASM side), but more having true fortress hubs with no significant competitor with a secondary hub- ATL SLC DTW
 
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compensateme
Posts: 3280
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Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Wed Jan 23, 2019 2:16 am

This thread is painful to read. Some people are as obsessed with UA having a Southeastern hub as others other about 764 painted pink.

UA has a solid presenc in the Southeast, and is competitive in carrying passengers everywhere around the world, except within the Southeast. This is a very small, insignificant amout of traffic; the amount of traffic DL “can’t” carry within Texas and to/from the Southern Central states is much, much larger.

Every airline can’t be everything to everyone. Yet these posters want to believe that serving Fayetteville, NC - Memphis will make UA a much more profitable airline....
We don’t care what your next flight is.
 
B737900ER
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Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Wed Jan 23, 2019 3:11 am

spinotter wrote:
B737900ER wrote:
Fleet size
Delta: 876
United: 763

113 airplanes makes a huge difference.


But that begs the question, what are the best metrics to judge an airline's profitability? Is it the net income (DL 3935 MM, UA 2100 MM), pre-tax margin (DL 10.2%, UA 7.7%) or what?

If you had those 113 aircraft running high revenue, short stage length flights like DL, then the income and margin gaps would be closer. It’s amazing that UA does what it does with the limited resources available to it. Replace 113 50 seaters with 113 737s or 320s and UA would outpace DL
 
FSDan
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Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Wed Jan 23, 2019 3:46 am

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


Actually, I'd argue that DL's strong presence in small-to-medium markets like OMA, DSM, MSN, GRR, BDL, etc. could be a significant contributing factor to their higher revenue. Many of these markets have several large companies and/or industries that provide a lot of high value traffic, and they often don't have too much LCC competition. Average ticket prices can be a good deal higher than in larger markets. Individually, each market might be relatively insignificant, but when you add them all together they can have a significant impact.

As an example, I used to live in Madison, and my company sent/sends thousands of employees through MSN each week, with DL getting by far the most traffic (nonstops to major markets like DCA and LGA, and easy connectivity through MSP, DTW, or ATL to most other destinations). The fares occasionally knocked my socks off - one time I flew MSN-ATL-MIA-ATL-MSN on a business trip for $900 in Y!
This is my signature until I think of a better one.
 
tphuang
Posts: 2894
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Re: Why can’t UAL close the revenue/ profit gap with DAL ?

Wed Jan 23, 2019 3:32 pm

Fargo wrote:
tphuang wrote:
Now that UA has done a good job of chasing ULCC off from aggressively expanding at their hubs, they are strengthening their midcon hubs and getting more profitable. They will do fine going forward with the current leadership.


Please expound more on this. Last I checked, UA faces large WN stations at every hub except EWR and NK/F9 have been making inroads in ORD, IAH and DEN.

Also, I may add that they'll never be able to strengthen ORD to where it needs to be as long as AA hangs around.


WN is not a ULCC. The large WN presence is certainly a major reason why UA cannot dominate its major hubs the way DL has been able to. If you followed the recent NK moves, they have been adding at large DL/WN stations, DTW/ATL/BWI in particular. Their growth at AA/UA hubs have flatlined a little bit, especially at IAH and DFW. Defending your turf against ULCC incursion is going to be costly in the short term, but it needs to be done. DL hasn't been as aggressive with defending DTW against NK adds. That's why NK is doing so well there. I did comparison of similar routes out of BOS/DTW a while ago for NK and it's yields are much higher at DTW. At some point, DL will choose to more aggressively price match NK or NK will either grow large enough at DTW that DL's margin on many of the leisure routes will melt away. Either way, DL can't ignore ULCC threat at its hubs forever and eventual moves to defend its turf will hurt margins at those station.
 
DesMoineser
Posts: 10
Joined: Mon Oct 29, 2018 5:25 pm

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

Thu Jan 24, 2019 4:24 pm

FSDan, Des Moines has a Fortune 500 company headquartered here, major operations for another F500 company, multiple Fortune 1000 company HQs, and has the third highest concentration of insurance company headquarters of any city in the world. We have significant portion of business traffic through the airport.
 
DesMoineser
Posts: 10
Joined: Mon Oct 29, 2018 5:25 pm

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

Thu Jan 24, 2019 6:19 pm

Sorry, meant that as a response to musman9853, not FSDan.
 
winginit
Posts: 2514
Joined: Sat Feb 23, 2013 9:23 pm

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

Thu Jan 24, 2019 6:43 pm

tphuang wrote:
If you followed the recent NK moves, they have been adding at large DL/WN stations, DTW/ATL/BWI in particular. Their growth at AA/UA hubs have flatlined a little bit, especially at IAH and DFW. Defending your turf against ULCC incursion is going to be costly in the short term, but it needs to be done. DL hasn't been as aggressive with defending DTW against NK adds. That's why NK is doing so well there. I did comparison of similar routes out of BOS/DTW a while ago for NK and it's yields are much higher at DTW. At some point, DL will choose to more aggressively price match NK or NK will either grow large enough at DTW that DL's margin on many of the leisure routes will melt away. Either way, DL can't ignore ULCC threat at its hubs forever and eventual moves to defend its turf will hurt margins at those station.


I'm going to push back just a little bit on the notion that NK growth in places like IAH and DFW have flat-lined (especially IAH) while pointing out that NK has had a presence in DTW and ATL for far longer than the other mentioned hubs. Yes, NK has been particularly aggressive in DTW and ATL over the past few years and DL haven't been as public or vocal as AA or UA in how they're combating that expansion; but it's not as though NK has packed it up and moved on from AA/UA hubs on account of aggressive price matching. The below are year end directional NK seats by hub over the past ten years. While acknowledging that DTW and ATL have seen very rapid expansions indeed, IAH and DFW in particular continue to show notable growth after what was a calmer 2017.

Image

Point being, DL is well versed on how to combat or co-exist with NK in their hubs - it's why they were the first of the US3 to pioneer basic economy fares.
 
tphuang
Posts: 2894
Joined: Tue Mar 14, 2017 2:04 pm

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

Thu Jan 24, 2019 7:57 pm

winginit wrote:
tphuang wrote:
If you followed the recent NK moves, they have been adding at large DL/WN stations, DTW/ATL/BWI in particular. Their growth at AA/UA hubs have flatlined a little bit, especially at IAH and DFW. Defending your turf against ULCC incursion is going to be costly in the short term, but it needs to be done. DL hasn't been as aggressive with defending DTW against NK adds. That's why NK is doing so well there. I did comparison of similar routes out of BOS/DTW a while ago for NK and it's yields are much higher at DTW. At some point, DL will choose to more aggressively price match NK or NK will either grow large enough at DTW that DL's margin on many of the leisure routes will melt away. Either way, DL can't ignore ULCC threat at its hubs forever and eventual moves to defend its turf will hurt margins at those station.


I'm going to push back just a little bit on the notion that NK growth in places like IAH and DFW have flat-lined (especially IAH) while pointing out that NK has had a presence in DTW and ATL for far longer than the other mentioned hubs. Yes, NK has been particularly aggressive in DTW and ATL over the past few years and DL haven't been as public or vocal as AA or UA in how they're combating that expansion; but it's not as though NK has packed it up and moved on from AA/UA hubs on account of aggressive price matching. The below are year end directional NK seats by hub over the past ten years. While acknowledging that DTW and ATL have seen very rapid expansions indeed, IAH and DFW in particular continue to show notable growth after what was a calmer 2017.

Image

Point being, DL is well versed on how to combat or co-exist with NK in their hubs - it's why they were the first of the US3 to pioneer basic economy fares.


Sorry, i can't really see that image. I do think NK's DTW expansion has been pretty significant recently. And the reason for that is they are getting higher yields out of there than some other stations they've tried to expand. And they've added at least AUS, RDU and JAX recently. I haven't seen same level of new routes out of IAH and DFW.
 
strfyr51
Posts: 3753
Joined: Tue Apr 10, 2012 5:04 pm

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

Thu Jan 24, 2019 8:24 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.

In Short You do NOT recover from Long Term damage and stupidity in the short term. United's damage went far back past the CO Merger. They were just the LAST buttwipes to run the Company. Richard Ferris with his Allegis scheme, started United down the slope then Bankruptcy so the slide started in 1987. Nobody Knows the damage wrought by that mess!! Glenn Tilton was brought in to clean UP the mess and ceated his OWN with the merger. And it was not the merger, But the CEO who directed United After the merger. Jeff Smisek. Many if not Most of the same people who worked at United Before the merger still work there. Nobody but senior management has changed. But? When you dig a volcano? You have to backfill the HOLE before you're again on level Ground. United is now coming to be on Level Ground..
 
User avatar
airzim
Posts: 1402
Joined: Wed Jun 20, 2001 7:40 am

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

Thu Jan 24, 2019 11:05 pm

strfyr51 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.

In Short You do NOT recover from Long Term damage and stupidity in the short term. United's damage went far back past the CO Merger. They were just the LAST buttwipes to run the Company. Richard Ferris with his Allegis scheme, started United down the slope then Bankruptcy so the slide started in 1987. Nobody Knows the damage wrought by that mess!! Glenn Tilton was brought in to clean UP the mess and ceated his OWN with the merger. And it was not the merger, But the CEO who directed United After the merger. Jeff Smisek. Many if not Most of the same people who worked at United Before the merger still work there. Nobody but senior management has changed. But? When you dig a volcano? You have to backfill the HOLE before you're again on level Ground. United is now coming to be on Level Ground..


Irony at its finest, and failing to see the forest through the trees.

What’s the common denominator?

Hint, not management.
 
77H
Posts: 1388
Joined: Mon Sep 19, 2016 11:27 pm

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

Sun Jan 27, 2019 10:36 pm

Flighty wrote:
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.


Is this a serious post? Sure, UA is weak in the SE as has been discussed ad nauseum here. But beyond that they have a strong presence in every other region of the US. UA has also been adding domestic routes at a rapid pace to gain market share lost during the Tilton and Smisek eras. Can you name me another region in the US where UA lags behind AA and DL? Surely not the Midwest, Mountain West or West Coast and I would argue the NE is well covered by all 3.

Also, your notion that UA operates an international network for prestige or show is laughable. What publicly traded, for-profit airline is going to operate in that manner for prestige alone if it doesn’t make money? Do many shareholders you know invest to loose money ?
Moreover, if UA’s International network was nothing more than a façade, why would DL try and replicate UA’s “success” out of their SFO hub at SEA, with less success I might add? Why are some of the biggest investments the US3 making in their international hard product if it was simply for show ? Wouldn’t that money be better spend on the domestic aircraft then?

77H
 
Planeflyer
Posts: 1390
Joined: Fri Mar 14, 2014 3:49 am

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

Sun Jan 27, 2019 10:59 pm

77H wrote:
Flighty wrote:
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.


Is this a serious post? Sure, UA is weak in the SE as has been discussed ad nauseum here. But beyond that they have a strong presence in every other region of the US. UA has also been adding domestic routes at a rapid pace to gain market share lost during the Tilton and Smisek eras. Can you name me another region in the US where UA lags behind AA and DL? Surely not the Midwest, Mountain West or West Coast and I would argue the NE is well covered by all 3.

Also, your notion that UA operates an international network for prestige or show is laughable. What publicly traded, for-profit airline is going to operate in that manner for prestige alone if it doesn’t make money? Do many shareholders you know invest to loose money ?
Moreover, if UA’s International network was nothing more than a façade, why would DL try and replicate UA’s “success” out of their SFO hub at SEA, with less success I might add? Why are some of the biggest investments the US3 making in their international hard product if it was simply for show ? Wouldn’t that money be better spend on the domestic aircraft then?

77H


I think one advantage Delta is the SE US. This area is dL home turf and is booming.

FWIW I just took a trip to Asia w multiple red eyes on SQ, KE and UA all in business. I’m a customer that values sleep over food and drink and almost always eat in the lounge so I can sleep on the plane.

I was on sq and ke 380 which are both very comfortable but UA Polaris on a 787 Seoul to SFO stole the show.

In business class most lie flat seats are good enough for me. What stood out for me was the lack of dry mouth and burning itching eyes that almost always interrupts my sleep.

The flight attendant had to wake me as we descending into SFO.

I assume this was more to do w the higher humidity levels I have read about on the 787 than w Polaris but nonetheless 8.5 hours of sleep on a flight is a personal best.

4 days later jet lag is still an issue but at least for that first day I avoided the zombie feeling.
 
77H
Posts: 1388
Joined: Mon Sep 19, 2016 11:27 pm

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

Mon Jan 28, 2019 12:22 am

Planeflyer wrote:
77H wrote:
Flighty wrote:
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.


Is this a serious post? Sure, UA is weak in the SE as has been discussed ad nauseum here. But beyond that they have a strong presence in every other region of the US. UA has also been adding domestic routes at a rapid pace to gain market share lost during the Tilton and Smisek eras. Can you name me another region in the US where UA lags behind AA and DL? Surely not the Midwest, Mountain West or West Coast and I would argue the NE is well covered by all 3.

Also, your notion that UA operates an international network for prestige or show is laughable. What publicly traded, for-profit airline is going to operate in that manner for prestige alone if it doesn’t make money? Do many shareholders you know invest to loose money ?
Moreover, if UA’s International network was nothing more than a façade, why would DL try and replicate UA’s “success” out of their SFO hub at SEA, with less success I might add? Why are some of the biggest investments the US3 making in their international hard product if it was simply for show ? Wouldn’t that money be better spend on the domestic aircraft then?

77H


I think one advantage Delta is the SE US. This area is dL home turf and is booming.

FWIW I just took a trip to Asia w multiple red eyes on SQ, KE and UA all in business. I’m a customer that values sleep over food and drink and almost always eat in the lounge so I can sleep on the plane.

I was on sq and ke 380 which are both very comfortable but UA Polaris on a 787 Seoul to SFO stole the show.

In business class most lie flat seats are good enough for me. What stood out for me was the lack of dry mouth and burning itching eyes that almost always interrupts my sleep.

The flight attendant had to wake me as we descending into SFO.

I assume this was more to do w the higher humidity levels I have read about on the 787 than w Polaris but nonetheless 8.5 hours of sleep on a flight is a personal best.

4 days later jet lag is still an issue but at least for that first day I avoided the zombie feeling.


My personal best is ~13.5 hrs in Polaris on a 789 LAX-MEL. I agree that the 787 helps you feel better onboard and less groggy on arrival.

77H
 
Planeflyer
Posts: 1390
Joined: Fri Mar 14, 2014 3:49 am

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

Mon Jan 28, 2019 3:41 am

13.5! Sweet! Any advice on meds or was that an organic sleep?
 
kavok
Posts: 540
Joined: Wed May 11, 2016 10:12 pm

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

Mon Jan 28, 2019 4:23 am

77H wrote:
Flighty wrote:
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.


Is this a serious post? Sure, UA is weak in the SE as has been discussed ad nauseum here. But beyond that they have a strong presence in every other region of the US. UA has also been adding domestic routes at a rapid pace to gain market share lost during the Tilton and Smisek eras. Can you name me another region in the US where UA lags behind AA and DL? Surely not the Midwest, Mountain West or West Coast and I would argue the NE is well covered by all 3.

Also, your notion that UA operates an international network for prestige or show is laughable. What publicly traded, for-profit airline is going to operate in that manner for prestige alone if it doesn’t make money? Do many shareholders you know invest to loose money ?
Moreover, if UA’s International network was nothing more than a façade, why would DL try and replicate UA’s “success” out of their SFO hub at SEA, with less success I might add? Why are some of the biggest investments the US3 making in their international hard product if it was simply for show ? Wouldn’t that money be better spend on the domestic aircraft then?

77H


In the Midwest, despite the large ORD operation, UA does lag a bit behind DL. But DL and UA are both well ahead of AA in the Midwest.

The reason UA is behind DL in the Midwest is that almost all of UAs eggs are in ORD. Yes DL dominates DTW/MSP, but DL is also the leading legacy carrier in most of the larger Midwest states as well.

Minnesota and Michigan are obviously dominated by DL, but because of the strong presence from the Northwest days, Delta also leads in MKE/MSN and Wisconsin, and IND and Indiana. The CVG “hub” and strong presence at CMH tilt Ohio DLs way also, despite a lot of legacy UA flyers still in the Cleveland area. Anyway, DL basically is king in 4 of the 5 largest Midwest states, which gives them an advantage in the Midwest despite UAs dominance at ORD.
 
rta
Posts: 1412
Joined: Mon Jan 26, 2015 2:01 am

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

Mon Jan 28, 2019 5:21 am

UA hubs are more expensive to operate at, and they face heavy competition.

Chicago: AA @ ORD, WN @ MDW
New York: DL/AA/B6 @ LGA/JFK
Houston: WN @ HOU
Denver: WN/F9 @ DEN
Washington: AA and others @ DCA
San Francisco: UA is big but does not dominate
Los Angeles: Free for all between all airlines

Also some of their most important hubs (ORD, EWR, SFO) frequently get brought to their knees due to weather/ATC. Compare this to the largest AA and DL hubs where competition is lower, costs are lower, and weather is more cooperative.

It's not all bad though. UA is positioned in the largest and most important metros of the country which gives them an edge despite their other disadvantages. It will be interesting to see how much more they can close the gap.
 
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 28, 2019 5:22 am

kavok wrote:
77H wrote:
Flighty wrote:
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.


Is this a serious post? Sure, UA is weak in the SE as has been discussed ad nauseum here. But beyond that they have a strong presence in every other region of the US. UA has also been adding domestic routes at a rapid pace to gain market share lost during the Tilton and Smisek eras. Can you name me another region in the US where UA lags behind AA and DL? Surely not the Midwest, Mountain West or West Coast and I would argue the NE is well covered by all 3.

Also, your notion that UA operates an international network for prestige or show is laughable. What publicly traded, for-profit airline is going to operate in that manner for prestige alone if it doesn’t make money? Do many shareholders you know invest to loose money ?
Moreover, if UA’s International network was nothing more than a façade, why would DL try and replicate UA’s “success” out of their SFO hub at SEA, with less success I might add? Why are some of the biggest investments the US3 making in their international hard product if it was simply for show ? Wouldn’t that money be better spend on the domestic aircraft then?

77H


In the Midwest, despite the large ORD operation, UA does lag a bit behind DL. But DL and UA are both well ahead of AA in the Midwest.

The reason UA is behind DL in the Midwest is that almost all of UAs eggs are in ORD. Yes DL dominates DTW/MSP, but DL is also the leading legacy carrier in most of the larger Midwest states as well.

Minnesota and Michigan are obviously dominated by DL, but because of the strong presence from the Northwest days, Delta also leads in MKE/MSN and Wisconsin, and IND and Indiana. The CVG “hub” and strong presence at CMH tilt Ohio DLs way also, despite a lot of legacy UA flyers still in the Cleveland area. Anyway, DL basically is king in 4 of the 5 largest Midwest states, which gives them an advantage in the Midwest despite UAs dominance at ORD.


It is not just the midwest. It is also the southeast, a massively important region that Delta is also the king of. Delta also does a great job in the Northeast. They have little competition in what they do. That is the whole point. Other than SFO, UA faces competition everywhere. EWR is special enough that I do not question its power. Still would say, UAL assets are not as valuable As they appear.
 
WPvsMW
Posts: 2016
Joined: Thu Mar 23, 2017 7:30 pm

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

Mon Jan 28, 2019 4:08 pm

SFO is not SoCal and is not the PNW. UA is strong at SFO, but not in SoCal, PNW, SE, or New England. IMO, network limitations will continue to relegate UA to #3... or #4. WN is on a roll.

WN's expansion to Hawaii will impact UA more than AA or DL, given WN's gate count at SFO. Just as WN's MDW/SFO nonstop hurt UA ORD/SFO, I think significant one-stop traffic Chicago/Hawaii will shift from UA to WN.
 
77H
Posts: 1388
Joined: Mon Sep 19, 2016 11:27 pm

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

Tue Jan 29, 2019 11:36 am

Planeflyer wrote:
13.5! Sweet! Any advice on meds or was that an organic sleep?


No small shortage of red wine. Was out lie a light before the sundae cart came round.

77H
 
77H
Posts: 1388
Joined: Mon Sep 19, 2016 11:27 pm

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

Tue Jan 29, 2019 11:42 am

kavok wrote:
77H wrote:
Flighty wrote:
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.


Is this a serious post? Sure, UA is weak in the SE as has been discussed ad nauseum here. But beyond that they have a strong presence in every other region of the US. UA has also been adding domestic routes at a rapid pace to gain market share lost during the Tilton and Smisek eras. Can you name me another region in the US where UA lags behind AA and DL? Surely not the Midwest, Mountain West or West Coast and I would argue the NE is well covered by all 3.

Also, your notion that UA operates an international network for prestige or show is laughable. What publicly traded, for-profit airline is going to operate in that manner for prestige alone if it doesn’t make money? Do many shareholders you know invest to loose money ?
Moreover, if UA’s International network was nothing more than a façade, why would DL try and replicate UA’s “success” out of their SFO hub at SEA, with less success I might add? Why are some of the biggest investments the US3 making in their international hard product if it was simply for show ? Wouldn’t that money be better spend on the domestic aircraft then?

77H


In the Midwest, despite the large ORD operation, UA does lag a bit behind DL. But DL and UA are both well ahead of AA in the Midwest.

The reason UA is behind DL in the Midwest is that almost all of UAs eggs are in ORD. Yes DL dominates DTW/MSP, but DL is also the leading legacy carrier in most of the larger Midwest states as well.

Minnesota and Michigan are obviously dominated by DL, but because of the strong presence from the Northwest days, Delta also leads in MKE/MSN and Wisconsin, and IND and Indiana. The CVG “hub” and strong presence at CMH tilt Ohio DLs way also, despite a lot of legacy UA flyers still in the Cleveland area. Anyway, DL basically is king in 4 of the 5 largest Midwest states, which gives them an advantage in the Midwest despite UAs dominance at ORD.


MKE for sure but I think UA is gaining ground in MSN. DEN and ORD have mainline flights most of the year and EWR has been upgauged to 70/5 seaters. Last year SFO was added with LAX set to start in a few months. I’d argue that’s pretty impressive growth. When I worked on the ramp in college in 2011 there you were lucky to see a CR7.

77H
 
77H
Posts: 1388
Joined: Mon Sep 19, 2016 11:27 pm

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

Tue Jan 29, 2019 11:52 am

WPvsMW wrote:
SFO is not SoCal and is not the PNW. UA is strong at SFO, but not in SoCal, PNW, SE, or New England. IMO, network limitations will continue to relegate UA to #3... or #4. WN is on a roll.

WN's expansion to Hawaii will impact UA more than AA or DL, given WN's gate count at SFO. Just as WN's MDW/SFO nonstop hurt UA ORD/SFO, I think significant one-stop traffic Chicago/Hawaii will shift from UA to WN.


Ehhh not sure how you figure UA is weaker than AA or DL for that matter in SoCal? They have a sizeable presence at SAN, SNA and are tied in second for market share at LAX. The only large airport UA doesn’t serve in SoCal is LGB. Additionally, UA is far stronger than AA in the PNW. As far as Hawaii is concerned, WN hasn’t announced any plans to start SFO and are as likely to offer service from LAX (impacting AA, AS, DL, HA and UA) and PHX (AA and HA) as SFO. If any airlines have something to fear from WN in HI it’s AS, HA and even MW if WN’s interisland service comes to fruition. MW will be safe on their JHM, MKK, LNY flights but will likely suffer on the trunk routes between HNL, KOA and OGG. It may come down to, as your screen name suggests, WNvsMW

77H
 
WPvsMW
Posts: 2016
Joined: Thu Mar 23, 2017 7:30 pm

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

Thu Jan 31, 2019 1:19 am

MW will lose that battle, and it becomes MW vs. Makani Air (no IATA code). :lol:
 
hoya
Posts: 546
Joined: Wed Jun 23, 2004 2:25 pm

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

Thu Jan 31, 2019 2:09 am

WPvsMW wrote:
SFO is not SoCal and is not the PNW. UA is strong at SFO, but not in SoCal, PNW, SE, or New England. IMO, network limitations will continue to relegate UA to #3... or #4. WN is on a roll.

WN's expansion to Hawaii will impact UA more than AA or DL, given WN's gate count at SFO. Just as WN's MDW/SFO nonstop hurt UA ORD/SFO, I think significant one-stop traffic Chicago/Hawaii will shift from UA to WN.


Significant Chicago/Hawaii traffic will shift to WN?!? UA's got a daily non-stop to HNL, and seasonal non-stop to OGG, from ORD, both on the domestic 777s. And a plethora of options on the return to Chicago via LAX/SFO/DEN, whereas without redeyes WN will offer you at best a super early morning departure from Hawaii that might connect to their last MDW flights out of California. Without redeyes, WN will only be competitive on the West Coast.
Hoya Saxa!!
 
winginit
Posts: 2514
Joined: Sat Feb 23, 2013 9:23 pm

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

Thu Jan 31, 2019 2:38 am

77H wrote:
Ehhh not sure how you figure UA is weaker than AA or DL for that matter in SoCal? They have a sizeable presence at SAN, SNA and are tied in second for market share at LAX.


In 2018 DL deployed a full 1.4 million more seats in and out of LAX when compared to UA representing 1.3% in incremental seat share, so that's not really how ties work.

The below is how Domestic Seat and ASM share shake out if you combine LAX, ONT, BUR, LGB, SNA, and SAN for the full year 2018:

Seat Share

1. WN 30%
2. AA 18%
3. DL 15%
4. UA 15%
5. AS 10%

ASM Share

1. AA 22%
2. DL 18%
3. WN 17%
4. UA 17%
5. AS 9%

Again that's just domestic traffic so as you can imagine the US3 shoot up if you include international traffic and at that point things get a bit hairy with JVs
 
surfdog75
Posts: 270
Joined: Thu Nov 17, 2005 5:39 am

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

Thu Jan 31, 2019 3:24 am

I believe the profit gap may be harder to close than the revenue gap. Both UAL and AAL have much larger debt service obligations than DL.
 
WPvsMW
Posts: 2016
Joined: Thu Mar 23, 2017 7:30 pm

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

Thu Jan 31, 2019 4:17 am

hoya wrote:
WPvsMW wrote:
SFO is not SoCal and is not the PNW. UA is strong at SFO, but not in SoCal, PNW, SE, or New England. IMO, network limitations will continue to relegate UA to #3... or #4. WN is on a roll.

WN's expansion to Hawaii will impact UA more than AA or DL, given WN's gate count at SFO. Just as WN's MDW/SFO nonstop hurt UA ORD/SFO, I think significant one-stop traffic Chicago/Hawaii will shift from UA to WN.


Significant Chicago/Hawaii traffic will shift to WN?!? UA's got a daily non-stop to HNL, and seasonal non-stop to OGG, from ORD, both on the domestic 777s. And a plethora of options on the return to Chicago via LAX/SFO/DEN, whereas without redeyes WN will offer you at best a super early morning departure from Hawaii that might connect to their last MDW flights out of California. Without redeyes, WN will only be competitive on the West Coast.


Methinks you underestimate FF loyalty to WN. Without WN's connections to Hawaii, WN FFs were on other metal to Hawaii. That will change. My premise is that the competitive impact, esp ex-ORD, will hurt UA more than DL or AA.
 
hoya
Posts: 546
Joined: Wed Jun 23, 2004 2:25 pm

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

Thu Jan 31, 2019 4:23 pm

WPvsMW wrote:

Methinks you underestimate FF loyalty to WN. Without WN's connections to Hawaii, WN FFs were on other metal to Hawaii. That will change. My premise is that the competitive impact, esp ex-ORD, will hurt UA more than DL or AA.


And those FF's weren't earning sweet miles on UA's long ORD-HNL and ORD-OGG, or AA's ORD-HNL? I also think you're not fully grasping how noncompetitive Southwest will be east of the Rockies without redeyes. You'll need to leave Hawaii at 7/8am to be able to get to MDW the same day (well, arrival around midnight). It's somewhat telling that there are only 5 flights total right now leaving Hawaii for the mainland before 9am, all from HNL - 4 to LAX (AA, DL, HA, UA) and 1 to SFO (UA). People just don't want to leave Hawaii that early, especially if they're paying hundreds for a room. On AA/AS/HA/DL/UA, you'll be able to leave in the afternoon after hotel check-out, and arrive at your destination east of the Rockies in the morning.
Hoya Saxa!!
 
User avatar
compensateme
Posts: 3280
Joined: Wed Jan 28, 2009 4:17 am

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

Thu Jan 31, 2019 4:34 pm

hoya wrote:
WPvsMW wrote:

Methinks you underestimate FF loyalty to WN. Without WN's connections to Hawaii, WN FFs were on other metal to Hawaii. That will change. My premise is that the competitive impact, esp ex-ORD, will hurt UA more than DL or AA.


And those FF's weren't earning sweet miles on UA's long ORD-HNL and ORD-OGG, or AA's ORD-HNL? I also think you're not fully grasping how noncompetitive Southwest will be east of the Rockies without redeyes. You'll need to leave Hawaii at 7/8am to be able to get to MDW the same day (well, arrival around midnight). It's somewhat telling that there are only 5 flights total right now leaving Hawaii for the mainland before 9am, all from HNL - 4 to LAX (AA, DL, HA, UA) and 1 to SFO (UA). People just don't want to leave Hawaii that early, especially if they're paying hundreds for a room. On AA/AS/HA/DL/UA, you'll be able to leave in the afternoon after hotel check-out, and arrive at your destination east of the Rockies in the morning.


It’s kinda silly to assume WN won’t operate redeyes from Hawaii, since that would cut off a large portion of its network from connecting. Those redeye flights are probably part of the logistical holdup in launching service.
We don’t care what your next flight is.
 
77H
Posts: 1388
Joined: Mon Sep 19, 2016 11:27 pm

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

Fri Feb 01, 2019 1:46 am

WPvsMW wrote:
hoya wrote:
WPvsMW wrote:
SFO is not SoCal and is not the PNW. UA is strong at SFO, but not in SoCal, PNW, SE, or New England. IMO, network limitations will continue to relegate UA to #3... or #4. WN is on a roll.

WN's expansion to Hawaii will impact UA more than AA or DL, given WN's gate count at SFO. Just as WN's MDW/SFO nonstop hurt UA ORD/SFO, I think significant one-stop traffic Chicago/Hawaii will shift from UA to WN.


Significant Chicago/Hawaii traffic will shift to WN?!? UA's got a daily non-stop to HNL, and seasonal non-stop to OGG, from ORD, both on the domestic 777s. And a plethora of options on the return to Chicago via LAX/SFO/DEN, whereas without redeyes WN will offer you at best a super early morning departure from Hawaii that might connect to their last MDW flights out of California. Without redeyes, WN will only be competitive on the West Coast.


Methinks you underestimate FF loyalty to WN. Without WN's connections to Hawaii, WN FFs were on other metal to Hawaii. That will change. My premise is that the competitive impact, esp ex-ORD, will hurt UA more than DL or AA.


WN has significant operations in ATL, DAL, LAX and PHX too. And is no weak link in places like SLC or even SEA either. WN will compete against the US3 at all hubs and focus cities where WN also has a presence. Again, not sure why you think UA will be disproportionately impacted. Beyond that, UA is larger domestically than AA and DL to/from Hawaii. So please help me understand with facts why WN will impact UA more so than AA/DL.

77H

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