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LAXintl
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Re: United Fleet, Network, & Livery Thread - 2020

Tue Jun 09, 2020 5:40 am

Here are a couple of stories that might be of interest.

Brett Snyder takes look at why the US3 differs so much. His take on UA is that its hubs are disadvantaged due to uneven recovery in the U.S with their coastal hotspot locations, it's bigger international flying dependence (with a network built for such feed), and also owning the largest collection of premium widebody fleet which are less useful today.

American Bets on United’s Network Disadvantage and Delta’s Conservative Nature to Leap Ahead
https://crankyflier.com/2020/06/08/unit ... advantage/

Another story is by Skift looking at how airlines view summer recovery differently and also looks at AA vs UA and similarly points out different hub structures, seat mix, and exposure to returning markets like Florida where United is far undersized compared to AA

American and United Diverge on Summer Recovery Expectations
https://skift.com/2020/06/04/american-a ... ectations/
From the desert to the sea, to all of Southern California
 
jayunited
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Re: United Fleet, Network, & Livery Thread - 2020

Tue Jun 09, 2020 12:18 pm

jetmatt777 wrote:
Too early to say who's approach is the right one. The question is, can United add capacity back fast enough if needed? I'm hearing of the company requesting voluntary furloughs (COLA) to return ahead of the scheduled date. Just the other day, for the first time in months, I received a work email advertising overtime. If demand does "snap" back United's aggressive cuts will be too deep to ramp up quick enough. That's where AA and WN will have a large advantage, they can absorb demand and convert it into operating income instantly. American is operating double the flights and carrying double the traffic.

There are two distinct strategies and I think you are calling United the winner way too early.


But are they carrying the traffic at a profitable rate? Just yesterday UA put out a really great article on Flying Together that directly address this issue. With so many employees looking at AA and asking why will AA fly 55% while UA domestically will only be at 30%? The answer comes down to profitability, UA will fly some routes where we know we can make a profit. UA is focusing on preserving cash because it is expensive to fly aircraft and it is not simply about carrying traffic it is about carrying traffic profitability. Is AA simply carry traffic just to carry traffic or is AA carrying traffic profitably? In this environment where we are seeing price sensitive leisure customers return we will have to wait for the Q2 and Q3 report to see if AA's move is paying dividends or if it is costing them money. AA's cost are just as high if not higher than UA's cost, taking on ULCCs and LCCs is a gamble.

Another issue the article touched on is what happens after October 1st. Even in this COVID environment there is still an ebb and flow to leisure traffic, right now as we enter into summer there is going to be a nice spike domestically because most international destinations still have some type of restriction in place. But what happens in October when leisure demand drops? If the US remains open and I think we will even if there is a second wave, children will be back in school (either in person or online), and for Americans who manage to keep their job they will be back at work (either in person or work from home). If UA spends money now in a dog fighting for price sensitive domestic leisure traffic and we do not see a return on that investment UA would have wasted a ton of money and for what. If UA and DL wants to survive all 12 rounds of this figuratively speaking boxing match then they have to be smart. It may seem like we are loosing valuable market share but keep in mind most leisure travelers are not loyal to any one particular airline, their wallet dictates which airline they fly, COVID-19 has not changed this reality. I think airlines like UA and DL are willing to take the hit this summer and conserve cash (get the burn rate down) so they have the resources necessary to fight come summer 2021 which is probably when the REAL recovery begins.
 
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calpsafltskeds
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Re: United Fleet, Network, & Livery Thread - 2020

Tue Jun 09, 2020 3:40 pm

I totally understand UA's approach, but am somewhat concerned about aircraft assignments and cost of adding flights.

Generally UA has been heavily flying smaller domestic mainline aircraft (below chart). That could be totally appropriate with low loads, but providing more seats would allow UA to spread passengers (improved social distancing) out and maybe prevent UA from having to advise passengers when the LF gets to 70% that they can change flights w/o cost. I know cash is the most important thing now, but the incremental cost of moving flights from 319s to 320s or 73G to 738/739 must be very low (minimal higher fuel and landing fees plus extra FA that are already on the payroll).

I don't have capability or time to view all flights, but many seat maps out of my home airport SAN (where departures are few) show full seat maps, knowing middle seats and some F seats may be blocked, all windows and aisles can be shown as taken. At departure, I understand UA is carrying a higher percentage of non-revenue travel due to depressed revenue passengers, so revenue passengers per flight is a bit hard to figure. For good employee relations, if larger aircraft were flown, it could allow non-revenue passengers from getting bumped with a LF over 70%.

Airbus fleet flying today
319: 32 flying, 43.2% of fleet
320: 31 flying, 32% of fleet

737 fleet flying today
73G: 10 flying, 25% of fleet
738: 20 flying, 14.2% of fleet
739: 14 flying, 9.5% of fleet

757 fleet flying today
752: 3 flying, 5.9% of fleet (these all have lie flats)
753: 7 flying, 33.3% of fleet

As for added flying, at this point I'm sure UA is looking at incremental costs as that's all that matters vs. having an aircraft parked for the day. Incremental costs only include fuel and landing fees plus only direct crew, labor at stations and maintenance cost to operate the flight vs. having it parked. With low fuel costs and crews/station personnel already on payroll, I wonder what the break-even incremental cost is today. It could be as low as 50% lower than fully allocated costs which include fixed advertising/rentals/administration/lease/interest/depreciation/insurance costs.

Obviously covering (and adding) flights with the right equipment is a very labor intensive process as all flights are under constant review and I'm assuming UA is doing the right thing even though I'd like to see more upgauging.
 
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UPlog
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Re: United Fleet, Network, & Livery Thread - 2020

Tue Jun 09, 2020 5:49 pm

jayunited wrote:
Just yesterday UA put out a really great article on Flying Together that directly address this issue. With so many employees looking at AA and asking why will AA fly 55% while UA domestically will only be at 30%? The answer comes down to profitability, UA will fly some routes where we know we can make a profit. UA is focusing on preserving cash because it is expensive to fly aircraft and it is not simply about carrying traffic it is about carrying traffic profitability. Is AA simply carry traffic just to carry traffic or is AA carrying traffic profitably? In this environment where we are seeing price sensitive leisure customers return we will have to wait for the Q2 and Q3 report to see if AA's move is paying dividends or if it is costing them money. AA's cost are just as high if not higher than UA's cost, taking on ULCCs and LCCs is a gamble.


For benefit of others below is the article:

As states and municipalities begin to reopen, United is restoring nonstop service to places customers want to go. Whether visiting family, going on vacation, or conducting business, many customers have told us they are considering flying again. In response, United is reinstating flights at over 150 of its U.S. and Canadian destinations, including the resumption of approximately 140 previously suspended nonstop routes. While overall capacity will continue to be significantly lower year-over-year due to the effects of COVID-19, July domestic capacity will be down 70% year-over-year, an improvement from June, which was down 87% from 2019.
If you get questions:
◘ While it’s encouraging to see U.S. domestic demand begin to creep back toward former levels, we are still seeing softness in demand across the board, particularly for domestic flying.
◘ We are not alone in a taking a more conservative approach – Delta’s schedule looks a lot like ours this July.
◘ Flying airplanes is expensive – and it’s more critical now than ever for us to conserve costs and fly as profitably as we can so we can remain flexible and bounce back when demand returns.
◘ But there’s a lot more to flying profitably than just filling seats – we have to be able to offer those seats to customers for a price they’re willing to pay and in a way that compensates us for the cost of operating our schedule.
◘ We continue to fly more international flights than any major U.S. airline, and we’ve been able to resume as much international flying as we have largely because of our aggressive and successful cargo business.
◘ The bottom line: We would rather fly a reduced schedule, save cash and set ourselves up for long-term success than operate an inflated schedule that costs us money and risks our ability to preserve as many jobs as we possibly can on October 1 and beyond.



Personally I believe UA is doing well by being conservative with focus on minimizing cash burn. Also like others mentioned UA's hub locations vis-a-vis COVID19 hotspots, and its exposure to international flying and feed also certainly plays roles on how it rebuilds flying.
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CPS001
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Re: United Fleet, Network, & Livery Thread - 2020

Tue Jun 09, 2020 6:06 pm

Is United blocking seats for social distancing? On a B737 on an itinerary next week, all the B and E seats are unavailable, but on an E175 all 4 across are available.

Sent from my SAMSUNG-SM-G930A using Tapatalk
 
atrude777
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Re: United Fleet, Network, & Livery Thread - 2020

Tue Jun 09, 2020 6:55 pm

CPS001 wrote:
Is United blocking seats for social distancing? On a B737 on an itinerary next week, all the B and E seats are unavailable, but on an E175 all 4 across are available.

Sent from my SAMSUNG-SM-G930A using Tapatalk


They are not "blocking" middle seats from being sold, but they are holding the middle seats from being assigned.

UA is only "holding" middle seats on aircraft with middle seats, and the first row of F and Last Row of Economy on 2 Class Aircraft, and Front row and last row of Economy on 1 Class Cabin Aircraft.

Since there is no middle seats on 175 and 1 Cabin aircraft, there is no middle seats to block/hold.

Alex
Good things come to those who wait, better things come to those who go AFTER it!
 
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CPS001
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Re: United Fleet, Network, & Livery Thread - 2020

Tue Jun 09, 2020 7:27 pm

atrude777 wrote:
CPS001 wrote:
Is United blocking seats for social distancing? On a B737 on an itinerary next week, all the B and E seats are unavailable, but on an E175 all 4 across are available.

Sent from my SAMSUNG-SM-G930A using Tapatalk


They are not "blocking" middle seats from being sold, but they are holding the middle seats from being assigned.

UA is only "holding" middle seats on aircraft with middle seats, and the first row of F and Last Row of Economy on 2 Class Aircraft, and Front row and last row of Economy on 1 Class Cabin Aircraft.

Since there is no middle seats on 175 and 1 Cabin aircraft, there is no middle seats to block/hold.

Alex
Thanks.
 
bigb
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Re: United Fleet, Network, & Livery Thread - 2020

Tue Jun 09, 2020 8:07 pm

tphuang wrote:
LAXintl wrote:
A bit more insight as to why UA is growing its schedule so slow.

Per Inflight townhall last week:

While travel demand is slowly increasing, we’re still only operating a small fraction of our original schedule. Many of you have asked about why we aren’t increasing flying faster to locations that are opening up (like Florida and Texas). While we’re eager to add flying to the schedule, we also need to be able to operate the route profitably, or atleast not lose even more money doing it. We have a highly skilled team in revenue management and network planning who are closely watching bookings, travel demand and customers willingness to travel. As soon as it’s clear that there is enough demand to justify operating a route, we’ll be quick to add flying. On the international side, you’ll see we are currently focused on hubs that have historically strong international flying demand, which are our coastal hubs versus a mid-continent hub. For our mid-continent hubs, we’ll continue focusing on domestic connectivity that is required to support further restoration of our flying.


This seems like the difference between AA and UA. UA is making capacity decisions based on the forward bookings/demands they see. AA is making capacity decisions based on demand they hope to see. And in June, it worked out well for AA in that bookings came back faster in Texas/Florida. Now that every ULCC is adding back capacity, that means a bigger portion of bookings will go to them. Unless demand really jumps, I don't see how this leap in capacity will work out again for AA.


You have no idea what booking numbers are looking at AA to make that kind of judgement. Something else you are failing to consider is different markets which AA has increased its flights to and from and domestic network infrastructure vs United international heavy network. Just like UA seeing increased demand at its coastal hubs, AA is already seeing that demand in and out of Texas, Florida, and the SE states with AA has a stronghold shared with DL. I think the leap of capacity will work in AA's favor.
 
MSPNWA
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Re: United Fleet, Network, & Livery Thread - 2020

Tue Jun 09, 2020 10:36 pm

LAXintl wrote:
Here are a couple of stories that might be of interest.

Brett Snyder takes look at why the US3 differs so much. His take on UA is that its hubs are disadvantaged due to uneven recovery in the U.S with their coastal hotspot locations, it's bigger international flying dependence (with a network built for such feed), and also owning the largest collection of premium widebody fleet which are less useful today.

American Bets on United’s Network Disadvantage and Delta’s Conservative Nature to Leap Ahead
https://crankyflier.com/2020/06/08/unit ... advantage/

Another story is by Skift looking at how airlines view summer recovery differently and also looks at AA vs UA and similarly points out different hub structures, seat mix, and exposure to returning markets like Florida where United is far undersized compared to AA

American and United Diverge on Summer Recovery Expectations
https://skift.com/2020/06/04/american-a ... ectations/


I think the experts are dramatically over-analyzing the situation. They're stuck on pre-crisis talking points. They need to wipe the slate clean over what used to be the strengths and weaknesses of each carrier. Instead they're analyzing this as if the previous structural advantages and limitations still hold. That era is gone for good. All carriers have more than enough physical capability to operate a larger network that consists of the right equipment. UA operating a fraction of their narrowbody fleet isn't because of a pre-crisis network that proportionally offered more international capacity. It's not because of regional demand differences in traffic that AA is running more capacity than UA at ORD, and that capacity is to diverse cities such as LAX, SEA, PDX, AUS, MCO, MSY, ATL, DCA, and LGA. It isn't regional differences to explain why IAH is a ghost town compared to DFW. It's ironic to even talk about UA's former international capacity percentage because it was no secret that UA was actively building a larger domestic network in response to the sound belief that UA was smaller domestically they they should have been. And so now the loss and reset of all traffic, international included, is a reason that UA cut their network so deeply and isn't bringing it back as quickly? The connection doesn't exist. The opposite is more reasonable. This is UA's opportunity to correct the imbalance and gain their "natural share".

What this comes down to isn't pre-crisis networks. This comes down to the strategy formulated and the decisions made post-crisis. Granted, some of those decisions are likely affected by internal physical issues that either prevent or limit the capacity actions than can be taken, but outsiders won't know all that, and this isn't the argument being made anyway. Just as much as I thought AA and WN didn't cut deeply enough right away in the very short-term, I'd say at this point it looks like DL and UA ceded the prime recovery opportunity to WN and AA by cutting too much this far out. As more and more people travel, there's often only two carriers to go with. If UA wants to sit this recovery out, that's their choice, but it doesn't take much revenue to turn more capacity into a marginal profit. With the substantial fixed costs of employees being paid to sit around and twiddle their thumbs, the cheap variable costs with today's cheap fuel means that demand doesn't have to be large to reduce the cash burn. And there's plausible reasons for internally getting it wrong. For example, if UA is looking at their own demand profiles, it's tough to make the decision to increase capacity. However, there appears to be a significant "build it and they will come" situation going on. The analysis needs to be from an industry-wide demand perspective. From that perspective, demand is coming back more than what UA and DL are preparing for. And this is where being the first mover (or never mover) is better. If UA and DL came back now, there's a good chance the market will be flooded again. So I don't doubt that coming back more quickly now might not be lucrative for UA, but that is a self-inflicted wound, and it's not because of their pre-crisis network.
 
Super80DFW
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Re: United Fleet, Network, & Livery Thread - 2020

Tue Jun 09, 2020 10:52 pm

tphuang wrote:
LAXintl wrote:
A bit more insight as to why UA is growing its schedule so slow.

Per Inflight townhall last week:

While travel demand is slowly increasing, we’re still only operating a small fraction of our original schedule. Many of you have asked about why we aren’t increasing flying faster to locations that are opening up (like Florida and Texas). While we’re eager to add flying to the schedule, we also need to be able to operate the route profitably, or atleast not lose even more money doing it. We have a highly skilled team in revenue management and network planning who are closely watching bookings, travel demand and customers willingness to travel. As soon as it’s clear that there is enough demand to justify operating a route, we’ll be quick to add flying. On the international side, you’ll see we are currently focused on hubs that have historically strong international flying demand, which are our coastal hubs versus a mid-continent hub. For our mid-continent hubs, we’ll continue focusing on domestic connectivity that is required to support further restoration of our flying.


This seems like the difference between AA and UA. UA is making capacity decisions based on the forward bookings/demands they see. AA is making capacity decisions based on demand they hope to see. And in June, it worked out well for AA in that bookings came back faster in Texas/Florida. Now that every ULCC is adding back capacity, that means a bigger portion of bookings will go to them. Unless demand really jumps, I don't see how this leap in capacity will work out again for AA.


You sure have some heavily negative options about AA without any idea of what AA's bookings actually look like. Over the last couple weeks, AA has been carrying 3 times the amount of passengers daily that UA is.
 
tphuang
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Re: United Fleet, Network, & Livery Thread - 2020

Wed Jun 10, 2020 12:12 am

Super80DFW wrote:
tphuang wrote:
LAXintl wrote:
A bit more insight as to why UA is growing its schedule so slow.

Per Inflight townhall last week:

While travel demand is slowly increasing, we’re still only operating a small fraction of our original schedule. Many of you have asked about why we aren’t increasing flying faster to locations that are opening up (like Florida and Texas). While we’re eager to add flying to the schedule, we also need to be able to operate the route profitably, or atleast not lose even more money doing it. We have a highly skilled team in revenue management and network planning who are closely watching bookings, travel demand and customers willingness to travel. As soon as it’s clear that there is enough demand to justify operating a route, we’ll be quick to add flying. On the international side, you’ll see we are currently focused on hubs that have historically strong international flying demand, which are our coastal hubs versus a mid-continent hub. For our mid-continent hubs, we’ll continue focusing on domestic connectivity that is required to support further restoration of our flying.


This seems like the difference between AA and UA. UA is making capacity decisions based on the forward bookings/demands they see. AA is making capacity decisions based on demand they hope to see. And in June, it worked out well for AA in that bookings came back faster in Texas/Florida. Now that every ULCC is adding back
capacity, that means a bigger portion of bookings will go to them. Unless demand really jumps, I don't see how this leap in capacity will work out again for AA.


You sure have some heavily negative options about AA without any idea of what AA's bookings actually look like. Over the last couple weeks, AA has been carrying 3 times the amount of passengers daily that UA is.


They have been burning cash at 50% faster than UA this quarter and 25 to 30% faster than DL. And they have the weakest cash position of any airline. And now, WN and ULCCs have all added back a lot of capacity for second half of June and July. That means those mostly leisure travelers are going to be very low yielding.

Just take a look at G4's investor update today to see how much cash a well run airline will still be burning when booking is 40% of normal levels. And AA definitely is not at 40% of its normal booking levels.

Keep in mind that while AA may have been carrying 2.5 to 3 times the amount of passengers UA is, it's certainly not getting that much total revenue. Stuff like cargo revenue and loyalty programs will be about the same between the two airlines and they are going to be a larger portion of total revenue than before. Also keep in mind that the extra customers AA are carrying are going to be a lot lower yielding than UA's passengers, since AA is essentially fighting LCCs/ULCCs for price sensitive customers.
 
Super80DFW
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Re: United Fleet, Network, & Livery Thread - 2020

Wed Jun 10, 2020 1:06 am

tphuang wrote:
Super80DFW wrote:
tphuang wrote:

This seems like the difference between AA and UA. UA is making capacity decisions based on the forward bookings/demands they see. AA is making capacity decisions based on demand they hope to see. And in June, it worked out well for AA in that bookings came back faster in Texas/Florida. Now that every ULCC is adding back
capacity, that means a bigger portion of bookings will go to them. Unless demand really jumps, I don't see how this leap in capacity will work out again for AA.


You sure have some heavily negative options about AA without any idea of what AA's bookings actually look like. Over the last couple weeks, AA has been carrying 3 times the amount of passengers daily that UA is.


They have been burning cash at 50% faster than UA this quarter and 25 to 30% faster than DL. And they have the weakest cash position of any airline. And now, WN and ULCCs have all added back a lot of capacity for second half of June and July. That means those mostly leisure travelers are going to be very low yielding.

Just take a look at G4's investor update today to see how much cash a well run airline will still be burning when booking is 40% of normal levels. And AA definitely is not at 40% of its normal booking levels.

Keep in mind that while AA may have been carrying 2.5 to 3 times the amount of passengers UA is, it's certainly not getting that much total revenue. Stuff like cargo revenue and loyalty programs will be about the same between the two airlines and they are going to be a larger portion of total revenue than before. Also keep in mind that the extra customers AA are carrying are going to be a lot lower yielding than UA's passengers, since AA is essentially fighting LCCs/ULCCs for price sensitive customers.


You don't know any of that to be a fact, you're simply hoping it to be true. You don't know what percentage of AA's, or UA's business for that matter, comes from elite driven high dollar revenue.
 
codc10
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Re: United Fleet, Network, & Livery Thread - 2020

Wed Jun 10, 2020 1:23 am

Super80DFW wrote:
You don't know what percentage of AA's, or UA's business for that matter, comes from elite driven high dollar revenue.


This is true, but what I can tell you with certainty that the "elite driven high dollar revenue" isn't flying right now, and substantially won't until corporations begin to relax travel policies (in nearly all cases, it hasn't happened yet).
 
tphuang
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Re: United Fleet, Network, & Livery Thread - 2020

Wed Jun 10, 2020 2:54 am

Super80DFW wrote:

You don't know any of that to be a fact, you're simply hoping it to be true. You don't know what percentage of AA's, or UA's business for that matter, comes from elite driven high dollar revenue.


i got no stake in the game here.

Just taking a look at the challenges facing legacy airlines right now. G4, a mostly domestic airline that relies on leisure travel and flies minimally out of areas most affect by COVID, is saying they are getting basically under 40% of their regular revenue flying over 70 to 85% of their pre-COVID schedule. So for them, they are getting about 50% of their regular revenue per flight. It's 50% due to a combination a lower LF (probably 60% vs 90% regularly in peak summer month) and lower fares from having to attract price sensitive customers.

Now if you are a legacy, there is a lot of fixed cost involved. Let's say you can cut 20% of total costs and the remaining 80% is split between fixed costs and variable costs like fuel, maintenance, more salaries from more hours by front line cabin crew, landing fees, contracting costs. You will probably need to be getting 40% of a regular revenue on a flight to justify the additional flying. And now yield is down not only due to lower load factor, but also more connection itineraries, less business travel and more bargain hunters. Obviously, the more flights you add, the less likely you will reach the threshold of covering the cost of flight. That's why you see UA and DL being a lot more cautious adding back flights.

This is from LAXIntl a few days ago
"As of Wednesday, at the employee townhall event, Scott Kirby said bookings were down 92% compared to same first week in June 2019.

UA also summarised that May ended with 88% decline in bookings and 94% decline in revenue from them."
A couple of things here. Notice how the decline in revenue is greater than the decline in bookings? That means UA is still getting lower yield on itineraries than it did a year ago even with the reduced schedule.

So 2 data points here.
UA - 94% decline in revenue from bookings and 88% decline in bookings. So 6% revenue from 12% bookings. That's 50% off in revenue per booking. That could be a reflection in just having fewer international business class fares or less high yielding business travelers, but that's a tough reality facing all the legacy airlines.
G4 - 50% less cash coming in per flight than a year ago. over 60% decline in booking revenues.

Let's just put it this way, if AA is getting 25% of its regular booking right now, they would be overachieving expectations. And that still would not bring their burn rate below DL or UA got down to.
 
jayunited
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Re: United Fleet, Network, & Livery Thread - 2020

Wed Jun 10, 2020 1:30 pm

Super80DFW wrote:
You don't know any of that to be a fact, you're simply hoping it to be true. You don't know what percentage of AA's, or UA's business for that matter, comes from elite driven high dollar revenue.


No one can say with 100% certainty but looking at the market this recovery is being driven by leisure travelers. Also no one is saying UA's approach is right approach overall. Instead what people are saying is UA originally may have cut to much capacity but flying 30% domestically in July is the right approach for an airline like UA. Why are we saying this first you have to look at UA's cost and like it or not AA's cost mirrors UA's. In normal times UA could take on ULCCs and LCCs and fend them off. This is why airlines like AA, DL and UA all created some form of basic economy. If an airline like NK offered for instance ORD-MCO at $69 dollars each way, while UA may not match the fare dollar for dollar, UA may offer 10-15 basic economy seats on each of our flights at $89 dollars each way. We know $89 dollars is not the actual cost of the seat but without basic economy UA runs the risk of loosing passengers to NK.

In normal times an airline like UA could afford to sell a limited number of seats at a lost but still make money overall on the flight, however these are not normal times. For sure UA could take on ULCCs and LCCs we could fill up our planes with passengers paying $69 dollar fares. For people not in revenue management who may simply focus on load factors, a high load factors would make it appear as though UA is further along in the recovery than we actually are. At $69 dollars UA would lose money while NK would be laughing all the way to the bank. Right now ULCCs and LCCs have the advantage because the recovery is being driven by leisure passengers and we are not in normal times where an airlines like AA, DL and UA can directly take on airlines like NK, F9, or even WN and win. In normal times airlines like AA, DL, and UA could use basic economy to their advantage but now filling a A320 for example with basic economy fares would make our load factors look great but UA would be committing financial suicide. Airlines like UA can't rush this recovery, the recovery pendulum will not swing in our favor until business travel starts to come back and international travel resumes on a larger scale than where were are right now. Until then airlines like UA have to focus on survival and reducing our daily cash burn rate not fighting for price sensitive leisure customers.
 
factsonly
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Re: United Fleet, Network, & Livery Thread - 2020

Wed Jun 10, 2020 7:54 pm

It seems UA is fine tuning some TATL flying this week.

- IAD - BRU has (temporarily) moved to IAD - AMS.
- ORD - AMS has a 2nd service several days this week.

As a result UA has five AMS flights on 11 June, 2020:

- UA 2775 IAD-AMS-IAD Boeing 787-9 Dreamliner N29978 United Airlines Cargo (previously IAD-BRU)
- UA 70 EWR-AMS-EWR Boeing 787-10 Dreamliner N14011 United Airlines (daily pax service)
- UA 2810 ORD-AMS-ORD Boeing 787-10 Dreamliner N12010 United Airlines Cargo (3x weekly)
- UA 2800 ORD-AMS-ORD Boeing 787-9 Dreamliner N91007 United Airlines Cargo (extra service 9, 10, 11 June)
- UA 2768 SFO-AMS-SFO Boeing 787-9 Dreamliner N13954 United Airlines Cargo (3x weekly)
 
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jetblastdubai
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Re: United Fleet, Network, & Livery Thread - 2020

Wed Jun 10, 2020 8:51 pm

factsonly wrote:
As a result UA has five AMS flights on 11 June, 2020:


It seems like AMS gets quite a bit more of cargo traffic that other cities of similar or even larger size. I'm not familiar with the manufacturing scene around the Netherlands but is AMS some sort of central cargo staging region or is a lot of this cargo going into Europe from the US?

Regardless, it's nice to see that there's some sort of commerce that the airlines can take advantage of in this environment.
 
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adamblang
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Re: United Fleet, Network, & Livery Thread - 2020

Wed Jun 10, 2020 9:56 pm

Interesting article on the cargo operation: https://www.stattimes.com/news/doing-ev ... air-cargo/
 
FSDan
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Re: United Fleet, Network, & Livery Thread - 2020

Wed Jun 10, 2020 10:53 pm

jetblastdubai wrote:
I'm not familiar with the manufacturing scene around the Netherlands but is AMS some sort of central cargo staging region or is a lot of this cargo going into Europe from the US?


This is only part of the picture, but in normal times AMS handles a huge amount of fresh flowers from all over the world. High value, time-sensitive cargo. I'd assume there's also a ton of other import/export goods for which AMS is a logical EU gateway.
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Re: United Fleet, Network, & Livery Thread - 2020

Wed Jun 10, 2020 11:05 pm

FSDan wrote:
jetblastdubai wrote:
I'm not familiar with the manufacturing scene around the Netherlands but is AMS some sort of central cargo staging region or is a lot of this cargo going into Europe from the US?


This is only part of the picture, but in normal times AMS handles a huge amount of fresh flowers from all over the world. High value, time-sensitive cargo. I'd assume there's also a ton of other import/export goods for which AMS is a logical EU gateway.


Seems like UA hired the right guy if they had 1,100 cargo flights in one month...wow.
 
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Re: United Fleet, Network, & Livery Thread - 2020

Thu Jun 11, 2020 12:30 pm

fun2fly wrote:
Seems like UA hired the right guy if they had 1,100 cargo flights in one month...wow.


United hired Jan Krems from KLM he is president of UA Cargo and Jan in turn hired Jacques Leijssenaar another KLMer to be vice president of UA Cargo. They also hired a former LH cargo executive (I can't think of his name right now) to come over and join UA Cargo's executive team.

Before UA brought these guys on, UA Cargo was a joke at best. Not to keep referring to bankruptcy but the damage done during and after bankruptcy to this company was staggering and UA Cargo was no exception. I'm sure when Jan Krems left KLM for UA people probably thought he was nuts, however, some people thrive on a challenge, it is what they live for and what Jan saw was UA had the most widebodies out of the US3 and we were under utilizing them below the wing. Jan has put together a team at UA Cargo that has really brought back UA Cargo from the brink, and during this crisis UA Cargo has really stepped up to the plate and it is because we have people who understand CARGO running the show.
 
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Re: United Fleet, Network, & Livery Thread - 2020

Thu Jun 11, 2020 2:32 pm

jayunited wrote:
fun2fly wrote:
Seems like UA hired the right guy if they had 1,100 cargo flights in one month...wow.


United hired Jan Krems from KLM he is president of UA Cargo and Jan in turn hired Jacques Leijssenaar another KLMer to be vice president of UA Cargo. They also hired a former LH cargo executive (I can't think of his name right now) to come over and join UA Cargo's executive team.

Before UA brought these guys on, UA Cargo was a joke at best. Not to keep referring to bankruptcy but the damage done during and after bankruptcy to this company was staggering and UA Cargo was no exception. I'm sure when Jan Krems left KLM for UA people probably thought he was nuts, however, some people thrive on a challenge, it is what they live for and what Jan saw was UA had the most widebodies out of the US3 and we were under utilizing them below the wing. Jan has put together a team at UA Cargo that has really brought back UA Cargo from the brink, and during this crisis UA Cargo has really stepped up to the plate and it is because we have people who understand CARGO running the show.


Interesting. Might also explain why so many flights to AMS...
 
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Re: United Fleet, Network, & Livery Thread - 2020

Thu Jun 11, 2020 2:57 pm

jetblastdubai wrote:
factsonly wrote:
As a result UA has five AMS flights on 11 June, 2020:


It seems like AMS gets quite a bit more of cargo traffic that other cities of similar or even larger size. I'm not familiar with the manufacturing scene around the Netherlands but is AMS some sort of central cargo staging region or is a lot of this cargo going into Europe from the US?

Regardless, it's nice to see that there's some sort of commerce that the airlines can take advantage of in this environment.


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Re: United Fleet, Network, & Livery Thread - 2020

Thu Jun 11, 2020 7:34 pm

nonrevelite wrote:
United’s ground handler in BRU shut down.


United's ground handler in BRU is Swissport, are you saying Swissport at BRU has shut down?
 
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Re: United Fleet, Network, & Livery Thread - 2020

Thu Jun 11, 2020 7:39 pm

jayunited wrote:
nonrevelite wrote:
United’s ground handler in BRU shut down.


United's ground handler in BRU is Swissport, are you saying Swissport at BRU has shut down?


Swissport's Belgian subsidiary declared bankruptcy last week. Not sure if they are insolvent, but they sure are bankrupt.
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Re: United Fleet, Network, & Livery Thread - 2020

Thu Jun 11, 2020 7:39 pm

Swissport Belgium filed for BK and is being wound down.
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Re: United Fleet, Network, & Livery Thread - 2020

Fri Jun 12, 2020 12:15 am

A few more tidbits from flight ops townhall:


Q. What led to the further reduced staffing target numbers for the 777 fleet?
A. Network planning expects the 777 fleet to be utilized less in 2021 than we expected prior to 20-07D.

Q. Why is the projected head count of Airbus fleet now so much lower than the projected head count of 737 captain?
A. There is a projected lower head count because we expect the Airbus fleet to be utilized less than the 737 fleet over the next two years, in part due to a wave of upcoming expensive maintenance requirements.

Q. How long will the current high temp of cargo flying continue?
A. We are operating 35-45 cargo flights on a daily basis. The tempo of this flying is dependent by market demand for the cargo capacity which is mostly driven by the lack of longhaul passenger flying. Its quite probable we are at or near the peak for cargo flying, and demand could taper off as widebody passenger flying volume returns across global markets.


=

Also was mentioned that for summer 2021 they building staffing for an airline that will be 30% smaller in size compared to 2019 with the flexibility to adjust +/-10%.
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Re: United Fleet, Network, & Livery Thread - 2020

Fri Jun 12, 2020 12:25 am

I definitely think it’s premature to cut up to 30% for next year. UA should expect others to pounce at already cut throat hubs like EWR, DEN, LAX, and even ORD.
 
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Re: United Fleet, Network, & Livery Thread - 2020

Fri Jun 12, 2020 12:42 am

Update on China per tweet of Brian Sumers

Image

https://pbs.twimg.com/media/EaRWBtPU4AI ... ame=medium
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Re: United Fleet, Network, & Livery Thread - 2020

Fri Jun 12, 2020 1:42 am

interesting comments that I saw Brian Sumers posted.
"Some of our competitors are flying a bigger July schedules than we are, by selling extremely low-priced tickets, and wasting money to fly those extra flights"

And apparently this is what DL has said.
"Ed noted that each airline is taking a different approach in their recovery strategy. The revenue being booked now is discount-based - Delta's pricing is down about 10% and Ed estimates that pricing at other airlines with more capacity out there is down between 20-30%. Chasing traffic is expensive and degrades the brand and quality of the experience..... He expressed with confidence that we will get our premium customers back... by keeping load factor caps and ensuring quality of experience".

I think UA's comments are more directed toward employee's complaints about AA and WN running a large schedule, but especially AA. DL's comment about heavy discounting probably is geared toward not just AA but also WN and ULCCs. DL's strategy is certainly the most expensive out of the 3, but they do have the most cash of the 3. You can see WN/AS/B6 also doing the same with the middle seat blocking.

UA's strategy is fine. It's burning less cash than both DL and AA. I actually think it will be down by more than 30% next summer due to having the most international exposure, but we will see.
 
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Re: United Fleet, Network, & Livery Thread - 2020

Fri Jun 12, 2020 2:11 am

tphuang wrote:
interesting comments that I saw Brian Sumers posted.
"Some of our competitors are flying a bigger July schedules than we are, by selling extremely low-priced tickets, and wasting money to fly those extra flights"

And apparently this is what DL has said.
"Ed noted that each airline is taking a different approach in their recovery strategy. The revenue being booked now is discount-based - Delta's pricing is down about 10% and Ed estimates that pricing at other airlines with more capacity out there is down between 20-30%. Chasing traffic is expensive and degrades the brand and quality of the experience..... He expressed with confidence that we will get our premium customers back... by keeping load factor caps and ensuring quality of experience".

I think UA's comments are more directed toward employee's complaints about AA and WN running a large schedule, but especially AA. DL's comment about heavy discounting probably is geared toward not just AA but also WN and ULCCs. DL's strategy is certainly the most expensive out of the 3, but they do have the most cash of the 3. You can see WN/AS/B6 also doing the same with the middle seat blocking.

UA's strategy is fine. It's burning less cash than both DL and AA. I actually think it will be down by more than 30% next summer due to having the most international exposure, but we will see.


Probably worth pointing out that AA's cash burn was at $70M at the beginning of May, and they are expecting it to be at $40M by the end of June. So clearly their increased schedule is working for them.

UA's cash burn started from a much lower base ($50M entering Q2), and they have said they only expect it to go down to $40-$45M by end of June
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Re: United Fleet, Network, & Livery Thread - 2020

Fri Jun 12, 2020 2:17 am

Midwestindy wrote:
tphuang wrote:
interesting comments that I saw Brian Sumers posted.
"Some of our competitors are flying a bigger July schedules than we are, by selling extremely low-priced tickets, and wasting money to fly those extra flights"

And apparently this is what DL has said.
"Ed noted that each airline is taking a different approach in their recovery strategy. The revenue being booked now is discount-based - Delta's pricing is down about 10% and Ed estimates that pricing at other airlines with more capacity out there is down between 20-30%. Chasing traffic is expensive and degrades the brand and quality of the experience..... He expressed with confidence that we will get our premium customers back... by keeping load factor caps and ensuring quality of experience".

I think UA's comments are more directed toward employee's complaints about AA and WN running a large schedule, but especially AA. DL's comment about heavy discounting probably is geared toward not just AA but also WN and ULCCs. DL's strategy is certainly the most expensive out of the 3, but they do have the most cash of the 3. You can see WN/AS/B6 also doing the same with the middle seat blocking.

UA's strategy is fine. It's burning less cash than both DL and AA. I actually think it will be down by more than 30% next summer due to having the most international exposure, but we will see.


Probably worth pointing out that AA's cash burn was at $70M at the beginning of May, and they are expecting it to be at $40M by the end of June. So clearly their increased schedule is working for them.

UA's cash burn started from a much lower base ($50M entering Q2), and they have said they only expect it to go down to $40-$45M by end of June

In April, UA was burning 100M a day. So they’ll have slashed it by 60% by the end of June. UA simply cut their cash burn sooner then AA.
 
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Re: United Fleet, Network, & Livery Thread - 2020

Fri Jun 12, 2020 2:27 am

Midwestindy wrote:
tphuang wrote:
interesting comments that I saw Brian Sumers posted.
"Some of our competitors are flying a bigger July schedules than we are, by selling extremely low-priced tickets, and wasting money to fly those extra flights"

And apparently this is what DL has said.
"Ed noted that each airline is taking a different approach in their recovery strategy. The revenue being booked now is discount-based - Delta's pricing is down about 10% and Ed estimates that pricing at other airlines with more capacity out there is down between 20-30%. Chasing traffic is expensive and degrades the brand and quality of the experience..... He expressed with confidence that we will get our premium customers back... by keeping load factor caps and ensuring quality of experience".

I think UA's comments are more directed toward employee's complaints about AA and WN running a large schedule, but especially AA. DL's comment about heavy discounting probably is geared toward not just AA but also WN and ULCCs. DL's strategy is certainly the most expensive out of the 3, but they do have the most cash of the 3. You can see WN/AS/B6 also doing the same with the middle seat blocking.

UA's strategy is fine. It's burning less cash than both DL and AA. I actually think it will be down by more than 30% next summer due to having the most international exposure, but we will see.


Probably worth pointing out that AA's cash burn was at $70M at the beginning of May, and they are expecting it to be at $40M by the end of June. So clearly their increased schedule is working for them.

UA's cash burn started from a much lower base ($50M entering Q2), and they have said they only expect it to go down to $40-$45M by end of June


I'm sure UA will make further updates on this, but my interpretation of their comments is that 40 to 45 million is for Q2 overall. And that they expect to be $30 million for Q3. AA has been very bullish about demand coming back so far. Advertising a 55% domestic schedule for July will bring cash in for June, but it will become costly in July once they have to actually operate that schedule. Capacity is doubling across the board from June to July. I don't think we are going to run into a situation like the past 2 or 3 weeks when demand caught back much faster than capacity coming back.
 
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Re: United Fleet, Network, & Livery Thread - 2020

Fri Jun 12, 2020 2:49 am

Scarebus34 wrote:
Midwestindy wrote:
tphuang wrote:
interesting comments that I saw Brian Sumers posted.
"Some of our competitors are flying a bigger July schedules than we are, by selling extremely low-priced tickets, and wasting money to fly those extra flights"

And apparently this is what DL has said.
"Ed noted that each airline is taking a different approach in their recovery strategy. The revenue being booked now is discount-based - Delta's pricing is down about 10% and Ed estimates that pricing at other airlines with more capacity out there is down between 20-30%. Chasing traffic is expensive and degrades the brand and quality of the experience..... He expressed with confidence that we will get our premium customers back... by keeping load factor caps and ensuring quality of experience".

I think UA's comments are more directed toward employee's complaints about AA and WN running a large schedule, but especially AA. DL's comment about heavy discounting probably is geared toward not just AA but also WN and ULCCs. DL's strategy is certainly the most expensive out of the 3, but they do have the most cash of the 3. You can see WN/AS/B6 also doing the same with the middle seat blocking.

UA's strategy is fine. It's burning less cash than both DL and AA. I actually think it will be down by more than 30% next summer due to having the most international exposure, but we will see.


Probably worth pointing out that AA's cash burn was at $70M at the beginning of May, and they are expecting it to be at $40M by the end of June. So clearly their increased schedule is working for them.

UA's cash burn started from a much lower base ($50M entering Q2), and they have said they only expect it to go down to $40-$45M by end of June

In April, UA was burning 100M a day. So they’ll have slashed it by 60% by the end of June. UA simply cut their cash burn sooner then AA.


I believe you are referring to March, UA said in their earnings call they entered Q2 burning $50M:
https://seekingalpha.com/article/434216 ... art=single

AA's Q1 Operating expenses were 11.1B to UA's 8.9B, so even pushing out farther to March, UA still likely started at a lower base as revenue would have been close to zero for everyone by the end of Q1.

Regardless, the point I was making was that AA's recent schedule changes significantly benefited their cash burn rate, while UA's cash burn has had little change since April.

tphuang wrote:
Midwestindy wrote:
tphuang wrote:
interesting comments that I saw Brian Sumers posted.
"Some of our competitors are flying a bigger July schedules than we are, by selling extremely low-priced tickets, and wasting money to fly those extra flights"

And apparently this is what DL has said.
"Ed noted that each airline is taking a different approach in their recovery strategy. The revenue being booked now is discount-based - Delta's pricing is down about 10% and Ed estimates that pricing at other airlines with more capacity out there is down between 20-30%. Chasing traffic is expensive and degrades the brand and quality of the experience..... He expressed with confidence that we will get our premium customers back... by keeping load factor caps and ensuring quality of experience".

I think UA's comments are more directed toward employee's complaints about AA and WN running a large schedule, but especially AA. DL's comment about heavy discounting probably is geared toward not just AA but also WN and ULCCs. DL's strategy is certainly the most expensive out of the 3, but they do have the most cash of the 3. You can see WN/AS/B6 also doing the same with the middle seat blocking.

UA's strategy is fine. It's burning less cash than both DL and AA. I actually think it will be down by more than 30% next summer due to having the most international exposure, but we will see.


Probably worth pointing out that AA's cash burn was at $70M at the beginning of May, and they are expecting it to be at $40M by the end of June. So clearly their increased schedule is working for them.

UA's cash burn started from a much lower base ($50M entering Q2), and they have said they only expect it to go down to $40-$45M by end of June


Advertising a 55% domestic schedule for July will bring cash in for June, but it will become costly in July once they have to actually operate that schedule.


Do you not think they have factored that in? They aren't going to put out a schedule that is going to increase cash burn
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Re: United Fleet, Network, & Livery Thread - 2020

Fri Jun 12, 2020 3:12 am

UA’s July schedule while similar to DL’s in terms of flights (ish) is very far behind in terms of seats. UA will offer about only 2/3 the amount of seats DL will. DL will also only offer a fraction of what AA is offering. This shows the shear size of UA’s cuts.
 
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Re: United Fleet, Network, & Livery Thread - 2020

Fri Jun 12, 2020 4:30 am

Nicknuzzii wrote:
UA’s July schedule while similar to DL’s in terms of flights (ish) is very far behind in terms of seats. UA will offer about only 2/3 the amount of seats DL will. DL will also only offer a fraction of what AA is offering. This shows the shear size of UA’s cuts.


DL is also capping at 60% while United is not. United is also upgauging many flights. A few weeks back it was said that United upgauged over 100 flights in a single day. I know DL is upping gauge too, just not sure how much.
 
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Re: United Fleet, Network, & Livery Thread - 2020

Fri Jun 12, 2020 12:08 pm

Midwestindy wrote:

Do you not think they have factored that in? They aren't going to put out a schedule that is going to increase cash burn


I think there is different risk assessment at AA vs UA/DL based on the statements they've made about how much smaller the industry will be a year from now. UA and DL have both implied they are aiming to be about 30% smaller next summer vs 2019. I find it hard to see AA's cash burn come further down in Q3 as their variable cost goes up from increased flying. At this point, UA and DL have made their massive displacements and are ready to furlough front line crewmembers when Oct rolls around. That will really bring down their cost. AA has only talked about 30% managerial so far.
 
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Re: United Fleet, Network, & Livery Thread - 2020

Fri Jun 12, 2020 1:01 pm

Nicknuzzii wrote:
UA’s July schedule while similar to DL’s in terms of flights (ish) is very far behind in terms of seats. UA will offer about only 2/3 the amount of seats DL will. DL will also only offer a fraction of what AA is offering. This shows the shear size of UA’s cuts.


Actually you are wrong UA and DL are taking a similar approach to capacity while DL has more aircraft in the air they are also limiting capacity to 60%. Whereas UA with less flights offers the same capacity at 100%. DL has hinted they may keep the 60% cap in place until September 30th.

Nicknuzzii wrote:
I definitely think it’s premature to cut up to 30% for next year. UA should expect others to pounce at already cut throat hubs like EWR, DEN, LAX, and even ORD.


Every single major US carrier has said they will be smaller coming out of COVID-19 than they were going into COVID-19. As much as airlines would like to see a snap back many even WN has stated a full recovery will take 2-4 years. Every single major carrier is offering some type of voluntary furlough to get their employee numbers down. If you are referring to LCCs and ULCCs there is only so much damage they can do given the cylindrical nature of leisure travel. One thing we all have to realize and accept is traffic will not magically reappear, even if we have a vaccine by summer 2021 the world as we know it has changed, travel needs and demands have changed. The mentality of "if you build it they will come" will land an airline in bankruptcy.

Pre-COVID there was a lot of excess capacity in certain US markets, that excess capacity suppressed yields. Take for example BOS while not a UA hub or focus city prior to this crisis there was a lot of excess capacity in BOS as airlines duked it out sacrificing yield for market share. As we turn the corner in this crisis you are going to see airlines like UA focus more so on yield and profitable flying than simply chasing market share. That doesn't not mean basic economy is going away it means UA will have a renewed focus on the bottom line than on the total number of flights in the air. We are going to see right sizing taking place in markets all across this country. To say an airline is going to pounce I don't buy it because even if the LCCs and ULCCs reactivated their entire fleet there is only so much damage they can inflict. If an airline like NK decides to go all in at EWR (the most expensive airport in the country) they have to pull aircraft off other routes the same is true of F9.

UA saying we will be around 30% smaller in 2021 vs 2019 is wonderful news because no one expected UA to be back to pre-COVID levels in 2021. I would rather UA focus on profitable flying than on market share because airlines like UA need to start preparing now for the next pandemic or the next crisis. When I read statements like the one above I start to think people like you have lost sight of the goal and the goal is survival and preparedness. Airlines that go back to business as usual will not survive the next crisis or pandemic because expectations have changed. The new benchmark COVID-19 is and airlines need to get wot work filling their coffers. While we can spend all day arguing over the right path, the truth is preparedness for the next event starts with profitable flying.
 
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Re: United Fleet, Network, & Livery Thread - 2020

Fri Jun 12, 2020 1:22 pm

tphuang wrote:
Midwestindy wrote:

Do you not think they have factored that in? They aren't going to put out a schedule that is going to increase cash burn


I think there is different risk assessment at AA vs UA/DL based on the statements they've made about how much smaller the industry will be a year from now. UA and DL have both implied they are aiming to be about 30% smaller next summer vs 2019. I find it hard to see AA's cash burn come further down in Q3 as their variable cost goes up from increased flying. At this point, UA and DL have made their massive displacements and are ready to furlough front line crewmembers when Oct rolls around. That will really bring down their cost. AA has only talked about 30% managerial so far.


DL has never said they want to be 30% smaller next summer to my knowledge

The calculus is the same for each airline right now, get cash burn down to zero, it isn't more complex than that.

If you park your planes and don't fly anything, you simply absorb the cost, which makes sense when loads are in the single digits and teens like in April or early May. However, it doesn't make sense if you are getting load factors in the 70s, and fuel prices are where they are. Even if you are not necessarily making money, you are likely burning less than if you grounded the plane and are still paying for the labor, rent, & all the overhead.

This is likely the exact calculation AA has made, and so far it is working for them.
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Re: United Fleet, Network, & Livery Thread - 2020

Fri Jun 12, 2020 1:55 pm

Midwestindy wrote:
tphuang wrote:
Midwestindy wrote:

Do you not think they have factored that in? They aren't going to put out a schedule that is going to increase cash burn


I think there is different risk assessment at AA vs UA/DL based on the statements they've made about how much smaller the industry will be a year from now. UA and DL have both implied they are aiming to be about 30% smaller next summer vs 2019. I find it hard to see AA's cash burn come further down in Q3 as their variable cost goes up from increased flying. At this point, UA and DL have made their massive displacements and are ready to furlough front line crewmembers when Oct rolls around. That will really bring down their cost. AA has only talked about 30% managerial so far.


DL has never said they want to be 30% smaller next summer to my knowledge

The calculus is the same for each airline right now, get cash burn down to zero, it isn't more complex than that.

If you park your planes and don't fly anything, you simply absorb the cost, which makes sense when loads are in the single digits and teens like in April or early May. However, it doesn't make sense if you are getting load factors in the 70s, and fuel prices are where they are. Even if you are not necessarily making money, you are likely burning less than if you grounded the plane and are still paying for the labor, rent, & all the overhead.

This is likely the exact calculation AA has made, and so far it is working for them.


DL told their employees they will be at 75% 2019 capacity at end of 2021 and their other comments suggested about 30% smaller for next summer. Even AS is saying they will be 20% smaller. Of course, all these things are subject to change based on demand level. But once headcount reduction is made after October, it's harder to be flexible. So what should each airline do?

And AA has been burning cash faster than UA/DL in Q2.
 
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Re: United Fleet, Network, & Livery Thread - 2020

Fri Jun 12, 2020 2:14 pm

jayunited wrote:
Nicknuzzii wrote:
UA’s July schedule while similar to DL’s in terms of flights (ish) is very far behind in terms of seats. UA will offer about only 2/3 the amount of seats DL will. DL will also only offer a fraction of what AA is offering. This shows the shear size of UA’s cuts.


Actually you are wrong UA and DL are taking a similar approach to capacity while DL has more aircraft in the air they are also limiting capacity to 60%. Whereas UA with less flights offers the same capacity at 100%. DL has hinted they may keep the 60% cap in place until September 30th.



I wonder if this is a prudent strategy - to attempt to operate at 100% capacity, and if this is why we have seen aircarft upgaging. I cannot imagine how UA can justify filling a flight to 100% capacity while every other business and mode of public transportation that is allowed to currently operate must do so at limited capacity; particularly as many reopened states are seeing an increase in cases.

Someone upthread mentioned brand dilution when it comes to chasing lower fares... having flown several times since the pandemic began, including in premium cabins, I can tell you there is no feeling of brand identity. Flying right now is a very sterile experience- and it would be hard to justify the premium charged to fly on a carrier which normally offers more "premium" services- because they simply do not exist right now.
 
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Re: United Fleet, Network, & Livery Thread - 2020

Fri Jun 12, 2020 2:16 pm

tphuang wrote:
Midwestindy wrote:
tphuang wrote:

I think there is different risk assessment at AA vs UA/DL based on the statements they've made about how much smaller the industry will be a year from now. UA and DL have both implied they are aiming to be about 30% smaller next summer vs 2019. I find it hard to see AA's cash burn come further down in Q3 as their variable cost goes up from increased flying. At this point, UA and DL have made their massive displacements and are ready to furlough front line crewmembers when Oct rolls around. That will really bring down their cost. AA has only talked about 30% managerial so far.


DL has never said they want to be 30% smaller next summer to my knowledge

The calculus is the same for each airline right now, get cash burn down to zero, it isn't more complex than that.

If you park your planes and don't fly anything, you simply absorb the cost, which makes sense when loads are in the single digits and teens like in April or early May. However, it doesn't make sense if you are getting load factors in the 70s, and fuel prices are where they are. Even if you are not necessarily making money, you are likely burning less than if you grounded the plane and are still paying for the labor, rent, & all the overhead.

This is likely the exact calculation AA has made, and so far it is working for them.


DL told their employees they will be at 75% 2019 capacity at end of 2021 and their other comments suggested about 30% smaller for next summer. Even AS is saying they will be 20% smaller. Of course, all these things are subject to change based on demand level. But once headcount reduction is made after October, it's harder to be flexible. So what should each airline do?

And AA has been burning cash faster than UA/DL in Q2.


"Delta Air Lines and its pilots union said they are working to avoid furloughs of roughly 2,300 pilots following a reshuffling process meant to match staffing to summer 2021 flying"

https://www.cnbc.com/2020/06/01/delta-u ... ilots.html

That roughly a 16% reduction in pilots

Please show me where you are seeing DL saying they will be 30% smaller during next summer

You are right AA "has been" burning cash faster, but since they increased their schedule they are now expected to burn the same amount of cash as the other US3. The argument that is isn't working for them doesn't hold any water, as they have brought cash burn down by $30M in 2 months.
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Nicknuzzii
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Re: United Fleet, Network, & Livery Thread - 2020

Fri Jun 12, 2020 2:19 pm

jayunited wrote:
Nicknuzzii wrote:
UA’s July schedule while similar to DL’s in terms of flights (ish) is very far behind in terms of seats. UA will offer about only 2/3 the amount of seats DL will. DL will also only offer a fraction of what AA is offering. This shows the shear size of UA’s cuts.


Actually you are wrong UA and DL are taking a similar approach to capacity while DL has more aircraft in the air they are also limiting capacity to 60%. Whereas UA with less flights offers the same capacity at 100%. DL has hinted they may keep the 60% cap in place until September 30th.

Nicknuzzii wrote:
I definitely think it’s premature to cut up to 30% for next year. UA should expect others to pounce at already cut throat hubs like EWR, DEN, LAX, and even ORD.


Every single major US carrier has said they will be smaller coming out of COVID-19 than they were going into COVID-19. As much as airlines would like to see a snap back many even WN has stated a full recovery will take 2-4 years. Every single major carrier is offering some type of voluntary furlough to get their employee numbers down. If you are referring to LCCs and ULCCs there is only so much damage they can do given the cylindrical nature of leisure travel. One thing we all have to realize and accept is traffic will not magically reappear, even if we have a vaccine by summer 2021 the world as we know it has changed, travel needs and demands have changed. The mentality of "if you build it they will come" will land an airline in bankruptcy.

Pre-COVID there was a lot of excess capacity in certain US markets, that excess capacity suppressed yields. Take for example BOS while not a UA hub or focus city prior to this crisis there was a lot of excess capacity in BOS as airlines duked it out sacrificing yield for market share. As we turn the corner in this crisis you are going to see airlines like UA focus more so on yield and profitable flying than simply chasing market share. That doesn't not mean basic economy is going away it means UA will have a renewed focus on the bottom line than on the total number of flights in the air. We are going to see right sizing taking place in markets all across this country. To say an airline is going to pounce I don't buy it because even if the LCCs and ULCCs reactivated their entire fleet there is only so much damage they can inflict. If an airline like NK decides to go all in at EWR (the most expensive airport in the country) they have to pull aircraft off other routes the same is true of F9.

UA saying we will be around 30% smaller in 2021 vs 2019 is wonderful news because no one expected UA to be back to pre-COVID levels in 2021. I would rather UA focus on profitable flying than on market share because airlines like UA need to start preparing now for the next pandemic or the next crisis. When I read statements like the one above I start to think people like you have lost sight of the goal and the goal is survival and preparedness. Airlines that go back to business as usual will not survive the next crisis or pandemic because expectations have changed. The new benchmark COVID-19 is and airlines need to get wot work filling their coffers. While we can spend all day arguing over the right path, the truth is preparedness for the next event starts with profitable flying.


While I’m not (nor anyone) is expecting air travel to bounce back immediately we can see it is already coming back but slowly. There is strong leisure demand and some carriers are taking advantage of it while others like UA are not. If we look at EWR I compiled a list of the % of departures compared to previous schedules.

AA - 56%
AS - 25%
B6 - 41%
DL - 31%
F9 - 44%
NK - 100%
UA - 26%

While UA should hold a lower % solely because of their large footprint at the airport, they are still lacking. NK has already added to their August schedule so they will be over 40% larger than they were last year during the same time at EWR. NK will offer over 3.4 million seats this upcoming year. Why would NK just let UA sit on 115+ “slots” next summer if they, amongst others want to grow? NK is already suing over 16 slots never mind 115 of them!

On top of this, F9 has already announced 3 new routes for EWR. I don’t think anyone anticipates them stopping soon. B6 will also have room to grow with most of their routes being largely targeting a leisure crowd. Finally, you mentioned a lack of aircraft. I don’t think anyone will have a lack of aircraft coming out of this. Airlines will feed the aircraft to destinations that could use them profitably. Since UA isn’t there at large airports like EWR LCC’s will need fill the gap.
 
tphuang
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Re: United Fleet, Network, & Livery Thread - 2020

Fri Jun 12, 2020 2:31 pm

Midwestindy wrote:
tphuang wrote:
Midwestindy wrote:

DL has never said they want to be 30% smaller next summer to my knowledge

The calculus is the same for each airline right now, get cash burn down to zero, it isn't more complex than that.

If you park your planes and don't fly anything, you simply absorb the cost, which makes sense when loads are in the single digits and teens like in April or early May. However, it doesn't make sense if you are getting load factors in the 70s, and fuel prices are where they are. Even if you are not necessarily making money, you are likely burning less than if you grounded the plane and are still paying for the labor, rent, & all the overhead.

This is likely the exact calculation AA has made, and so far it is working for them.


DL told their employees they will be at 75% 2019 capacity at end of 2021 and their other comments suggested about 30% smaller for next summer. Even AS is saying they will be 20% smaller. Of course, all these things are subject to change based on demand level. But once headcount reduction is made after October, it's harder to be flexible. So what should each airline do?

And AA has been burning cash faster than UA/DL in Q2.


"Delta Air Lines and its pilots union said they are working to avoid furloughs of roughly 2,300 pilots following a reshuffling process meant to match staffing to summer 2021 flying"

https://www.cnbc.com/2020/06/01/delta-u ... ilots.html

That roughly a 16% reduction in pilots

Please show me where you are seeing DL saying they will be 30% smaller during next summer

You are right AA "has been" burning cash faster, but since they increased their schedule they are now expected to burn the same amount of cash as the other US3. The argument that is isn't working for them doesn't hold any water, as they have brought cash burn down by $30M in 2 months.


Go to their pilot forum on one of the townhalls threads. That's what they told their own employees. I don't know what more I can say.
 
frmrCapCadet
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Re: United Fleet, Network, & Livery Thread - 2020

Fri Jun 12, 2020 2:50 pm

From a very limited set of data: large extended family and friends who varied from frequent to seldom fliers. The only travel has been somewhat essential family travel, and repatriation travel from colleges and armed forces/naval employment. And all of these have done a strict voluntary 14 day quarantine after travel and before going back to work or seeing family.
Buffet: the airline business...has eaten up capital...like..no other (business)
 
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Midwestindy
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Re: United Fleet, Network, & Livery Thread - 2020

Fri Jun 12, 2020 2:54 pm

tphuang wrote:
Midwestindy wrote:
tphuang wrote:

DL told their employees they will be at 75% 2019 capacity at end of 2021 and their other comments suggested about 30% smaller for next summer. Even AS is saying they will be 20% smaller. Of course, all these things are subject to change based on demand level. But once headcount reduction is made after October, it's harder to be flexible. So what should each airline do?

And AA has been burning cash faster than UA/DL in Q2.


"Delta Air Lines and its pilots union said they are working to avoid furloughs of roughly 2,300 pilots following a reshuffling process meant to match staffing to summer 2021 flying"

https://www.cnbc.com/2020/06/01/delta-u ... ilots.html

That roughly a 16% reduction in pilots

Please show me where you are seeing DL saying they will be 30% smaller during next summer

You are right AA "has been" burning cash faster, but since they increased their schedule they are now expected to burn the same amount of cash as the other US3. The argument that is isn't working for them doesn't hold any water, as they have brought cash burn down by $30M in 2 months.


Go to their pilot forum on one of the townhalls threads. That's what they told their own employees. I don't know what more I can say.


:lol: C'mon now, I literally just linked DL & the pilots union's latest furlough estimate, I'm not going to sift through pilot rumors(likely out of date anyway at this point) when the answer is right there
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calpsafltskeds
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Re: United Fleet, Network, & Livery Thread - 2020

Fri Jun 12, 2020 2:57 pm

I'm one of UA's biggest fans and OK with the cash preservation program --- but my continued concern is about seat size on aircraft flown. I must admit I don't have load factors on any UA flights to see if this is appropriate and maybe UA will be reactivating more larger narrow bodies soon.

DL has stated it will hold loads to 60% in coach and 50% in F. UA has not placed a limit on seating, even though they will probably continue to block middle seats on seat map - can we assume if more people book those middle seats will be sold?

If UA wants to operate a more restrictive schedule than AA and DL to increase yield, is it reasonable that UA can operate fuller flights at higher ticket prices vs. AA/DL with lower fares and seat restrictions?

An Airways Magazine article 4 days ago said DL is reactivating narrowbodies and so far only larger seats sized 321s and 739s have been reactivated.

UA is flying the lowest percentage of flights in larger 739 and 752 fleets and higher percentage in 319/73G/320 fleets. Today's fleet utilization is below (type, seats: units flying/total units % flying). Also note that UA has over 80% of 739s and 752s stored/parked more than 14 days at this point.:
319, 126 seats: 21/50 35.1% ----- (parked more than 14 days 34/74,46%)
73G, 126 seats: 11/40 27.5% ---- (parked more than 14 days 51/97,52.6%)
320, 150 seats: 30/97 30.9% ----- (parked more than 14 days 17/40,42.5%)
738, 166 seats: 26/141 17.0% --- (parked more than 14 days 71/141,50.4%)
739, 179 seats: 19/148 12.8% --- (parked more than 14 days 112/148, 81.1%)
752: 172 seats*: 4/47 7.8% ------- (parked more than 14 days 44/51,86.3%) (*avg with 3 of 7 in active service having new config)
753: 234 seats: 2/21 19% --------- (parked more than 14 days 11/21,52.4%) (2 additional aircraft are flying military charters today)
So, the narrow bodied total seats offered today on flying units is 17,405 and the 116 units flying average 150.1 seats. This seats size calculation assumes each unit flies roughly the same number of flights. However, at least half the 739s flying today have only 1 flight scheduled, lowering the average by some minor amount.
 
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LAXintl
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Re: United Fleet, Network, & Livery Thread - 2020

Fri Jun 12, 2020 4:45 pm

It seems many are forgetting how serious things are across the global economy and what airlines are truly facing.

Look back at 2008-2009 downturn and you'll see how hard travel was hit. A seemingly small 13.1% decline in U.S. corporate travel led to 144,000 airline and support job losses with billions in red ink that took a good half-decade plus to dig out of.

Today we are looking at a situation corporate travel virtually having come to a halt entirely with a global recession around us. The magnitude of this hit is far worse than 2008-2009, so the idea that an airline will only be back to 70% capacity in 2021 is actually pretty optimistic in my view. Personally I see an even smaller industry so long as people's health cannot be assured and we must operate under various restrictions globally that will slow consumer activity and high-value corporate travel which is critical for legacy operators.
From the desert to the sea, to all of Southern California
 
eugdjinn
Posts: 193
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Re: United Fleet, Network, & Livery Thread - 2020

Fri Jun 12, 2020 5:07 pm

One of the things I don't see anyone factoring in is this: AA is quite cleverly using their wholly owned regionals to do a substantial amount of that increased flying right now. Those are planes they own, and people whose paychecks they are on the hook for anyway. Nothing to lose. UA isn't in a position to do that since they can't officially own a regional due to that surviving kill clause sitting in the FA contract. (Maybe it has outlasted it's usefulness??) As a result, PSA, Piedmont, and Envoy can be put to use earning some of their guarantee pay flying increasing schedules as demand picks up in their backyards, and mainline when demand grows to that point, without killing the airline. Whereas DL and UA are so much more dependent on CPA regional flying where they will have to pay the full fee for departure to the contracted regional even if the flight is empty.

Too, someone asked way up-thread why it is that UA is flying so many CRJ200s instead of ERJ145s - it's a pretty simple answer - on the West Coast, and now in Denver with TSA gone, the only UAX contractor available with 50 seat lift is SkyWest who do not fly and have sworn NEVER to fly a 145. Other than the 175, they are a CRJ house, so you have to deal with 200s. Should ExpressJet survive, and get its house in order, they may someday open the elusive DEN base and you'll see 145XRs there again. (I'd give them a 50-50 chance of folding altogether though, even with Papa Willis paying the bill, they seem to be a nightmare internally.)
 
CRJ5000
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Re: United Fleet, Network, & Livery Thread - 2020

Fri Jun 12, 2020 6:01 pm

WARN notices have to go out August 1st if they want to furloughs on Oct. 1st. They've got just under 2 months to make a decision. After that the airlines with a diverse fleet are going to have quite a mess with training from all the displacements from different aircraft types. Airlines are going to have to guess on what the recovery will look like and hope that they're right.

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