User avatar
LAXintl
Topic Author
Posts: 24065
Joined: Wed May 24, 2000 12:12 pm

UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 3:21 pm

United Airlines reported a first-quarter 2013 net loss of net loss of $417 million, or $1.26 per share on total revenue $8.7 billion, an increase of 1.4 percent year-over-year.


Basically cost outpaced modest revenue growth.

Though excellent quarter operationally with record on-time performance, and high customer satisfaction scores.


More after the earnings call tap dance;


Story:
http://finance.yahoo.com/news/united...-first-quarter-2013-113000158.html

=
From the desert to the sea, to all of Southern California
 
AeroWesty
Posts: 19551
Joined: Sat Oct 30, 2004 7:37 am

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 3:42 pm

Stunning loss, about 20% higher than expectations.

Quoting LAXintl (Thread starter):
More after the earnings call tap dance;

I read on another forum that they've put a gag order on attendees of the call, making listeners agree not to reproduce anything said on the call or hang up.
International Homo of Mystery
 
AWACSooner
Posts: 2506
Joined: Tue Jan 22, 2008 12:35 am

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 3:46 pm

I'm sure this will somehow get spun into "we lost money due to merger costs," but I can't help but wonder how WN still makes a quarterly profit with their merger if mergers are such money-losers.
 
sulley
Posts: 395
Joined: Wed Jan 13, 2010 6:55 pm

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 3:47 pm

Quoting AeroWesty (Reply 1):
I read on another forum that they've put a gag order on attendees of the call, making listeners agree not to reproduce anything said on the call or hang up.

That's just the FlyerTalk drama queens doing their thang  

Still, not good. They talk of cutting costs. What's left to cut? I know UAL usually loses money in Q1, but it's still very concerning.
In thrust we trust!
 
AeroWesty
Posts: 19551
Joined: Sat Oct 30, 2004 7:37 am

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 3:53 pm

Quoting sulley (Reply 3):
That's just the FlyerTalk drama queens doing their thang

Drama queens, on the interwebs?  Wow!
International Homo of Mystery
 
User avatar
ramprat74
Posts: 1356
Joined: Wed Dec 17, 2003 6:01 pm

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 3:55 pm

Jeffy is already putting the blame on rising cost, including employee pay. It can't be the 30,0000 IAM members working under bankruptcy pay! In a bunch of stations. They have two companies performing the same job for over a year. The vendor ramp work should of been tossed out on March 3rd, 2012. They could've saved a bunch of money there.
 
User avatar
AVENSAB727
Posts: 1363
Joined: Sun Jul 01, 2012 4:02 am

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 3:58 pm

This is kind of worrying, I wonder if Smiseks days could be numbered.
Always look on the bright side of Life!
 
MaverickM11
Posts: 17867
Joined: Thu Apr 06, 2000 1:59 pm

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 4:03 pm

Better than last year but not good.

Quoting AeroWesty (Reply 1):
I read on another forum that they've put a gag order on attendees of the call, making listeners agree not to reproduce anything said on the call or hang up.

??? Who honestly believes that? Anyone can listen to the call.

Quoting sulley (Reply 3):
They talk of cutting costs. What's left to cut?

I think there's still plenty opportunity, particularly at HQ, but I don't know if that adds up to much.
E pur si muove -Galileo
 
MaverickM11
Posts: 17867
Joined: Thu Apr 06, 2000 1:59 pm

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 4:05 pm

Quoting ramprat74 (Reply 5):
. It can't be the 30,0000 IAM members working under bankruptcy pay! In a bunch of stations.

It's probably mostly the pilot contract
E pur si muove -Galileo
 
panamair
Posts: 4146
Joined: Fri Oct 12, 2001 2:24 am

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 4:09 pm

Quoting AeroWesty (Reply 1):
Stunning loss, about 20% higher than expectations.

Not sure how you came to that conclusion, but they did beat analyst estimates. Net Loss excluding specials was $325m or $0.98/share, whereas analysts were expecting $1.10/share or so. Analyst estimates are always against the Net Profit/Loss excluding special charges.
 
User avatar
GCT64
Posts: 1791
Joined: Sun Nov 04, 2007 6:34 pm

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 4:11 pm

Doesn't really surprise me. Regularly travelling from LHR to the US on multi-stop itineraries, UA has been and continues to be consistently and substantially cheaper than the BA/AA or VS/DL alternatives and yet the costs must be fairly similar.
Good for the consumer as I / my company gets the travel for cheaper than if they weren't there but I have always wondered about the commercial viability (as I don't believe the competitors are making vast profits from their much higher fares).
Flown in: A20N,A21N,A30B,A306,A310,A319,A320,A321,A332,A333,A343,A346,A359,A388,BA11,BU31,(..56 more types..),VC10,WESX
 
EricR
Posts: 1226
Joined: Mon Jul 26, 2010 4:15 pm

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 4:19 pm

Mainline domestic passenger revenue (the majority of their total revenue) is down year over year. Part of this is attributed the 5% reduction in ASMs, but one has to wonder if UA's only option to profitability at this point is further cuts in expenses. Anyone interested in a hub in Cleveland?
 
FriendlySkies
Posts: 3540
Joined: Fri Aug 13, 2004 3:57 pm

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 4:24 pm

Quoting panamair (Reply 9):
Not sure how you came to that conclusion, but they did beat analyst estimates. Net Loss excluding specials was $325m or $0.98/share, whereas analysts were expecting $1.10/share or so. Analyst estimates are always against the Net Profit/Loss excluding special charges.

It's still concerning that while the competition is all posting net profits, UA continues to post fairly high losses, and can only continue to blame employee costs and merger costs while failing to seriously invest in their product. That is not a recipe for success, however you want to spin it.
 
AeroWesty
Posts: 19551
Joined: Sat Oct 30, 2004 7:37 am

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 4:24 pm

Quoting panamair (Reply 9):
Not sure how you came to that conclusion, but they did beat analyst estimates.
United Continental expected to report first-quarter loss tomorrow

Quote:
WHAT’S EXPECTED: A loss of $1.09 per share on revenue of $8.7 billion, according to analysts surveyed by FactSet.
International Homo of Mystery
 
FURUREFA
Posts: 637
Joined: Mon Mar 01, 2004 2:26 am

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 4:36 pm

Quoting AeroWesty (Reply 1):
Stunning loss, about 20% higher than expectations.
Quoting AeroWesty (Reply 13):
Quoting panamair (Reply 9):
Not sure how you came to that conclusion, but they did beat analyst estimates.
United Continental expected to report first-quarter loss tomorrow

Quote:
WHAT’S EXPECTED: A loss of $1.09 per share on revenue of $8.7 billion, according to analysts surveyed by FactSet.

Right, and they lost $.98 per share, meaning they beat estimates.
 
AeroWesty
Posts: 19551
Joined: Sat Oct 30, 2004 7:37 am

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 4:41 pm

Quoting FURUREFA (Reply 14):
Right, and they lost $.98 per share, meaning they beat estimates.

You may color it any way you'd like it, at the end of the day they lost $1.26. Estimates are there for investor guidance, not sleight of hand for how the loss is qualified. That's why companies give guidance and occasionally change the guidance between reporting periods when unexpected business results require it.
International Homo of Mystery
 
mcg
Posts: 1001
Joined: Tue Sep 16, 2003 11:49 am

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 4:44 pm

Quoting GCT64 (Reply 10):
Regularly travelling from LHR to the US on multi-stop itineraries, UA has been and continues to be consistently and substantially cheaper

Interesting, in Denver (a very different market) UA seems to be able to always charge more than the competition.
 
atrude777
Posts: 4355
Joined: Wed Aug 13, 2003 11:23 pm

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 4:47 pm

Quoting awacsooner (Reply 2):
I'm sure this will somehow get spun into "we lost money due to merger costs," but I can't help but wonder how WN still makes a quarterly profit with their merger if mergers are such money-losers.

This goes to show many here complained about how slow Southwest was taking with the acquistion/merger with Air Tran. The proof is right here, speed doesn't always equal to a good thing. Southwest took their time, and still continued to earn money. United did their own pace, much faster then Southwest and still lost money. Not saying this is the reason...but it didn't help.

Delta was an amazing company to look at as an example of how to integrate companies together, HUGE props to them.

While I am sure WN may have lost some passengers due to the slow pace of the integration, one thing WN didn't lose in terms of overall operations was money/profit.

This is horrendous for United to lose so much money even if they beat expectations...I don't care what expectations are..if you lost money, you lost money.

United better shape up and figure out how to get it all together. I worked at a UAEX station and I could see it day to day how bad the operations were. I have since relocated to another work station so things have gotten better but still seeing some trickle effects.

I hope to see all airlines post profit we need it in this industry.

Hopefully United can post better results for the 2nd Quarter.
Good things come to those who wait, better things come to those who go AFTER it!
 
Rdh3e
Posts: 3587
Joined: Wed Mar 30, 2011 2:09 pm

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 4:53 pm

Quoting AeroWesty (Reply 1):
Stunning loss, about 20% higher than expectations.

As said before, the loss was lower than expected...

Quoting sulley (Reply 3):
Still, not good. They talk of cutting costs. What's left to cut? I know UAL usually loses money in Q1, but it's still very concerning.

Umm pretty much everything? Nothing has gotten cut since the merger, everything has been inflated and inflated. They attributed most of the cost increase for the rest of the year to the Pilot contract, but I've heard floated around was about $500M additional costs per year compared to the old contracts.

Quoting FriendlySkies (Reply 12):
while failing to seriously invest in their product.

They're putting wi-fi on all mainline aircraft and almost finished reconfiguring all the 777's, and have reconfigured all of the 763's that were in domestic configuration to internation standards. Plus additional spend on preventative maintenance to reduce out of service aircraft and increase on-time performance. And even on top of that, retiring older 752's, and 735's and replacing them with 739's, AND replacing the interiors on the PS fleet for the JFK transcons.

Where do you get "failing" to invest out of that?

[Edited 2013-04-25 09:54:03]
 
FlyPNS1
Posts: 5483
Joined: Wed Dec 01, 1999 7:12 am

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 4:56 pm

Quoting RDH3E (Reply 18):
Umm pretty much everything? Nothing has gotten cut since the merger, everything has been inflated and inflated. They attributed most of the cost increase for the rest of the year to the Pilot contract, but I've heard floated around was about $500M additional costs per year compared to the old contracts.

They're not going to get cost cuts from the pilots (or any labor group) and they shouldn't need them. DL signed a new pilot agreement after BK and gave their pilots substantial raises, yet DL is posting far better numbers than UAL.

Fundamentally, this merger has produced very little value.
 
airplaneboy
Posts: 692
Joined: Sat May 15, 2004 11:59 am

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 5:07 pm

One thing to add about the WN/FL merger is that their Q1 results do not include any profits from synergies of the full codeshare, which only went into effect only a couple weeks ago. It will be interesting to see how much $$ this will add to their bottom line (which will most definitely be a positive thing).
 
deltal1011man
Posts: 5334
Joined: Mon Sep 19, 2005 9:17 am

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 5:09 pm

Quoting AeroWesty (Reply 15):
You may color it any way you'd like it, at the end of the day they lost $1.26. Estimates are there for investor guidance, not sleight of hand for how the loss is qualified. That's why companies give guidance and occasionally change the guidance between reporting periods when unexpected business results require it.

Its not coloring. Its common knowledge that with the projections that special charges are not part of it. UA beat estimates.


They did still manage to post a loss of nearly half a billion dollars. not good.

Quoting Atrude777 (Reply 17):
Delta was an amazing company to look at as an example of how to integrate companies together, HUGE props to them.

Ah Ok you said something. Thought you were going to leave this out.

You guys think UA/CO has been fun to watch....I have a feeling AA/US could be epic.

Quoting FlyPNS1 (Reply 19):
DL signed a new pilot agreement after BK and gave their pilots substantial raises, yet DL is posting far better numbers than UAL.

and UA has about the same cost across the other front line employee groups also.
 
F9Animal
Posts: 4287
Joined: Thu Dec 16, 2004 7:13 am

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 5:13 pm

Wow! I am lost for words! That is an incredible amount of money to lose. $417, 000, 000.00! Just typing that made my stomach churn. Forget blaming the employees for the loss, because I see most other airlines making profits with nearly identical wage scales. In fact, I doubt UA would have profited if it paid its employees minimum wage at this point. The problem is not the employees or the merger. The problem starts at the very top of the executive team, and trickles down from there. These kinds of losses are unacceptable, and should result in some top management oustings. UA needs a leader that can make the changes needed to turn the company around, and the current leadership does not cut the mustard. Blaming the workers that operate a good airline is a slap to their faces, and I am disgusted that any leader of the company thinks taking money out of their wallets will turn the airline into a profitable airline. If Smisek or however you spell it should be ashamed of this loss. The blame rests entirely on his shoulders. A true leader takes responsibility for a loss, and works very hard to fix the loss. He knows day by day how the airline performs financially, and has forecasts of upcoming days of financials. Instead of trying to fix the problem quarterly, fix it daily. Even if he is able to get employee costs down, what can he put the blame on next? Sorry for ranting, but I seriously get angry when any leader blames losses on the hands that feed the leader. Ughhhhhhhh! I was never in favor of a merger, and I wonder what CO would have posted if the merger had not happened.

Anyways, I want to send my deepest and strongest hopes to the employees of UA. I applaud what you guys do, and I am hopeful things get better. You guys have been knocked around enough through these tough years, and I wanted to let you know that we stand on the sidelines cheering for brighter days for you.  
I Am A Different Animal!!
 
toxtethogrady
Posts: 1861
Joined: Sat Dec 23, 2000 12:33 pm

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 5:13 pm

We are seeing now the full effects of United dissing their Houston constituency.
 
toxtethogrady
Posts: 1861
Joined: Sat Dec 23, 2000 12:33 pm

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 5:15 pm

Quoting sulley (Reply 3):
They talk of cutting costs. What's left to cut?

They better talk about revenue growth and hub synergies or they're dead.
 
MSPNWA
Posts: 3642
Joined: Thu Apr 23, 2009 2:48 am

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 5:16 pm

Financially that's a disappointing quarter. But the operational gains are big and should help UA down the road. You have to start with fixing your product. Then the financials will set in.

Quoting RDH3E (Reply 18):
Umm pretty much everything? Nothing has gotten cut since the merger, everything has been inflated and inflated. They attributed most of the cost increase for the rest of the year to the Pilot contract, but I've heard floated around was about $500M additional costs per year compared to the old contracts.

That's what I was thinking. UA really hasn't cut anything yet. Shoot, DL is an LCC compared to UA at this point. They've ruthlessly slashed left and right since acquiring NW.
 
toxtethogrady
Posts: 1861
Joined: Sat Dec 23, 2000 12:33 pm

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 5:19 pm

Quoting MSPNWA (Reply 25):
That's what I was thinking. UA really hasn't cut anything yet.

Well, except for a whole lot of destinations out of Houston that could have made them profitable.
 
User avatar
AVENSAB727
Posts: 1363
Joined: Sun Jul 01, 2012 4:02 am

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 5:20 pm

Quoting toxtethogrady (Reply 26):

Houston is not a big issue, the routes they cut were unprofitable!
Always look on the bright side of Life!
 
User avatar
United_fan
Posts: 6691
Joined: Fri Nov 24, 2000 11:11 am

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 5:22 pm

Four hundred million loss in one quarter is stagering.
"Suspicion is a matter of opinion"
 
User avatar
AVENSAB727
Posts: 1363
Joined: Sun Jul 01, 2012 4:02 am

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 5:25 pm

I have a feeling that we are going to see a new CEO soon, I wish it would be Gordon Bethune, but he is in retirement.
Always look on the bright side of Life!
 
MSPNWA
Posts: 3642
Joined: Thu Apr 23, 2009 2:48 am

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 5:25 pm

Quoting toxtethogrady (Reply 23):
We are seeing now the full effects of United dissing their Houston constituency.

Now whose fault is that? DL puked on the customers and employees at MSP. Yet, last I checked, it has remained the highest margin hub percentage-wise in the DL network. Should UA run things irresponsibly just because Houstonians would get mad otherwise? No way.
 
toxtethogrady
Posts: 1861
Joined: Sat Dec 23, 2000 12:33 pm

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 5:28 pm

Quoting AVENSAB727 (Reply 27):
Houston is not a big issue, the routes they cut were unprofitable!

American has shown itself willing to tolerate unprofitable spokes if they provide revenues beyond the hubs. United used to compete in that category, but they're now trimming. Are they paying more than the other carriers for fuel?
 
Rdh3e
Posts: 3587
Joined: Wed Mar 30, 2011 2:09 pm

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 5:29 pm

Quoting toxtethogrady (Reply 31):
American has shown itself willing to tolerate unprofitable spokes if they provide revenues beyond the hubs.

United does that as well, ever think maybe these routes were bad even on a system basis?
 
User avatar
LAXintl
Topic Author
Posts: 24065
Joined: Wed May 24, 2000 12:12 pm

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 5:35 pm

Some notes,


FINANCIAL

o Q1 net loss - $417mil, including $92mil in special charges
o Total revenue $8.7 billion, an increase of 1.4 percent year-over-year.
o PRASM up 5.9%, yield +1.9%
o Consolidated CASM increased 11.1 percent yoy - 4.9% of it due to reduced flying
o Expect 2013 - CASM up 5.5-6.5 CASM much due reduced capacity, new labor agreements bumps
o Paying down debt - $1.3bil in Qtr, including $1.0bil prepayment. Also replace credit lines with lower cost ones.
o Capital structure very strong.
o Accelerate depreciation of fleet - $80mil 2013. Short term adverse impact, but long term shareholder value
o Ended quarter with $6.4 billion in unrestricted cash/equivalents
o Need to do better job control cost, become more efficient, get away from distraction of merger
o Continue with previous announced management/admin work force reduction 6%
o 30% fuel hedges
o Macro economic outlook still soft


TRAFFIC / NETWORK

o Best ontime performance in a decade. Mainline ontime 81.4%
o Consolidated capacity reduction of 4.9 percent yoy. Expect 2013 capacity down 1.75%
o Load factors 81.1% up 3.0%
o Corporate revenue recovering up 4%. More work to do to regain lost corporate traffic from last year
o Govt contract travel down 25% - expect to persist. Direct govt travel accounts for ~2% of total pax revenues
o New transcon competition at EWR (read VX) seeing fares drop 20%, but demand is being stimulated.
o UA is NYC leading airline
o Pacific perform quite well even with weakening Yen - PRASM up 7.2%.
o China was a "standout" PRSAM up 13%
o Europe "rightsized" with capacity reduction of 10.2%
o Well balanced network, provides flexibility to move capacity around. Capacity discipline a key tenant
o Facing economic headwinds Q2/Q3 - April business mix so-so, April PRASM so far flat
o Ancillary revenue very well up +14% per pax. Seek to continue to grow another 9% in 2013. Economy plus and paid premium upgrades selling well.


FLEET

o Expect 787 domestic flights back in May. First international route DEN-NRT on June 10. More international 787 ramp ups in August
o Parked 3 older 737s, and 2 757s in Qtr. 12 aircraft including last 735 leaving in Q2. Also 5 767s leaving.
o 6 737-900ERs arrive in Q1, 6 more due in Q2
o Reached agreement to sell 30 757s to FedEx. 1st delivered this week
o Loss of 787 disrupted plans and had negative bottom line impact, but look forward to getting "fantastic" aircraft back.


OTHER

o Focus on running consistent reliable airline with great customers service offering a target ROI 10%
o New user interface for airport ops "Aero". More intuitive and added functions; better for employees and customers
o Continue to talk with unions. Hope to reach more deals later this year. Hope to restart talks with IAM as TA did not ratify. Waiting on govt for timeline.
o Continue to focus on more tools and training for employees to achieve improved customer service
o Washington needs to fix its problems. ATC fallout, combined with things like taxes are punishing industry. Will damage economy and hurt employment.

=
From the desert to the sea, to all of Southern California
 
fun2fly
Posts: 1551
Joined: Tue Dec 26, 2006 8:44 am

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 5:45 pm

Is it simply just cutting out all the RJ flying and decrease # of RJ contracts like DL did a year or so ago? They have plenty of mainline capacity coming online and more CR7' size a/c. If so, OK as UA is moving towards that.

I know the cut CLE hub deal comment has to be coming, but wouldn't it have made more sense to ship all those ORD connecting pax via CLE with better ontime, baggage handling, and certainly lower operating costs? In a low margin business, there'd have to be 3% to pick up just by that move. And ORD is a nightmare, just what they will lose in the 4 days I flew them in April in revenue from ORD shutdowns due to weather would not take long to note that it's inefficient. Also, having people stand outside at Terminal F in Ohare in the rain does not make one want to fly UA. Perhaps, same applies to IAD vs. EWR - what's cheaper to operate out of?

Leadership comes in many forms: true leaders make tough decisions to utilize their assets to their fullest potential. Smisek seems to be hung up on cutting inflight services and customer service and picking fights w/cities vs. the former.
 
Rdh3e
Posts: 3587
Joined: Wed Mar 30, 2011 2:09 pm

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 5:46 pm

Quoting LAXintl (Reply 33):
Expect 2013 capacity down 1.75%

I believe the range was down .75%-1.75%, which is quite a significant range.
 
tommy767
Posts: 4658
Joined: Sat Aug 09, 2003 12:18 pm

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 5:49 pm

This is bad. Just goes to show the CO way of doing things isn't working. How much time before they realize that?

Maybe they should hold off on buying all those new planes.

Quoting LAXintl (Reply 33):
o UA is NYC leading airline

Gotta love that Harvard chalk talk!

[Edited 2013-04-25 11:02:26]
"KEEP CLIMBING" -- DELTA
 
DFWHeavy
Posts: 518
Joined: Thu Jul 21, 2011 5:35 pm

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 6:19 pm

The CO way of doing things did work.. they were making money. Smisek is just a bad apple from that group and doing a terrible job.

CO was an amazing airline and did many things well. They didn't have to file bankruptcy in the 2000's...UA did.
Christopher W Slovacek
 
SonomaFlyer
Posts: 2216
Joined: Tue Apr 20, 2010 2:47 pm

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 6:33 pm

I need to look up when the next shareholder meeting is for UA. There's only so many times management can blame things other than themselves for poor performance. Running a publicly traded company allows for no excuses (unless the share holders allow it). The numbers are there for all to see.

UA has a substantial cash pile and is making the right moves in paying down high interest debt and improving its overall debt structure. However, the "synergies" that management crowed about are still not visible on the balance sheet. If it were, we'd not see a loss of $417m while its competitor's losses are either narrower or they actually turned a small profit.

DL profit of $7m on revenues of $8.5b;
AA loss of $341m on revenues of $6.1b (loss cut from $1.66b same quarter last year);
WN profit of $59m on revenues of $4.1b
US profit of $44m on revenues of $4.4b

Smaller airlines such as AS and B6, NK etc also posted profits.

I guess to be fair, we could just compare UA to AA, DL and US but I'm glad I own no UA stock. Spin all you want but Smiersk's style and how his team has planned (or not) and implemented his strategy should be on the block before long.
 
User avatar
LAXintl
Topic Author
Posts: 24065
Joined: Wed May 24, 2000 12:12 pm

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 6:40 pm

I don't think its an issue of CO way not working. Frankly CO did quite well for itself.

However the pmCO was a quite different airline, with less hubs and network, less labor issues, less complex operation.
In many ways CO kept a KISS principle approach to things which worked well enough for its environment.

But what I have seen happened in area after area is when the more basic CO operation was grafted into many UA practices the operation was stressed. Maybe CO leadership came into the merger with a more naivete approach and figured things could be melded easier, but UA was very complex enterprise from its people to network that included decades of inhouse customization and patches essentially.

Along the way the merger also suffered terrible wounds like the PSS cut over and the revenue system changes, which were again basically attempt to go the more simplistic CO way, but that resulted in both operational and financial red ink.

Personally I think the biggest focus today needs to continue to mesh employees together. For all effects and purposes there are still two airlines being run with tons of duplication from both out in the field to the overhead.
Only once every work group is one can things be properly trimmed (yes that means headcount losses) and the efficiency and financial cost fall back in line meeting expectations.
From the desert to the sea, to all of Southern California
 
SonomaFlyer
Posts: 2216
Joined: Tue Apr 20, 2010 2:47 pm

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 6:48 pm

LAX's points are well taken and reveal a overly simplistic, poorly conceived and poorly executed plan. October will mark three years since the merger of the two airlines. We are already one year post merger of the data systems.

Hopefully the current team will take a fresh look at things and consider making adjustments with a lot more employee input.
 
tommy767
Posts: 4658
Joined: Sat Aug 09, 2003 12:18 pm

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 6:59 pm

Quoting DFWHeavy (Reply 37):
CO was an amazing airline and did many things well. They didn't have to file bankruptcy in the 2000's...UA did.

Amazing? No way. They were about the same as the rest minus a poor hub network and lousy computer system.

Quoting SonomaFlyer (Reply 38):
There's only so many times management can blame things other than themselves for poor performance. Running a publicly traded company allows for no excuses (unless the share holders allow it). The numbers are there for all to see.

Exactly. Makes me wonder when Smisek and his cronies will finally have the plug pulled on their operation?

Quoting LAXintl (Reply 39):
But what I have seen happened in area after area is when the more basic CO operation was grafted into many UA practices the operation was stressed. Maybe CO leadership came into the merger with a more naivete approach and figured things could be melded easier, but UA was very complex enterprise from its people to network that included decades of inhouse customization and patches essentially.

I think enough evidence is out there (boarding procedures, maintenance policies, SHARES, IRROPS) to show that the CO style grafted into UA simply is not working. This is so to the point that they lost a crap ton of money last quarter.
"KEEP CLIMBING" -- DELTA
 
MaverickM11
Posts: 17867
Joined: Thu Apr 06, 2000 1:59 pm

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 7:29 pm

Quoting tommy767 (Reply 41):
I think enough evidence is out there (boarding procedures, maintenance policies, SHARES, IRROPS) to show that the CO style grafted into UA simply is not working.

What is your brilliant solution, besides beating the same dead horse over and over and over.....

Quoting LAXintl (Reply 39):
I don't think its an issue of CO way not working. Frankly CO did quite well for itself.

It's an appetizer of things to come at US/AA. US is running an incredible airline, financially and operationally, considering the network they have and the labor groups involved, and they've done this by piecing together two nearly hopeless carriers retrieved from the morgue. They're taking over a carrier much like UA that has been largely rudderless for over a decade, with poisonous labor relations, a tired product just now being renewed, and low customer service metrics. Fortunately, US has a) done this before and b) has the benefit of watching the UA/CO merger to know which pitfalls to avoid.
E pur si muove -Galileo
 
Rdh3e
Posts: 3587
Joined: Wed Mar 30, 2011 2:09 pm

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 7:30 pm

Quoting DFWHeavy (Reply 37):
CO was an amazing airline and did many things well. They didn't have to file bankruptcy in the 2000's...UA did.
Quoting LAXintl (Reply 39):
I don't think its an issue of CO way not working. Frankly CO did quite well for itself.

It's an issue of scale. The way you do things with 3 fortress hubs is entirely different than with 8 hubs, 5 of which are under intense competitive pressures.

Quoting tommy767 (Reply 41):
Exactly. Makes me wonder when Smisek and his cronies will finally have the plug pulled on their operation?

The only people not happy with them are a-nutters. Wall Street seems perfectly content with current management, don't forget stockholders could give a crap what your quarterly earnings are. They care about capital appreciation, if stock price is increasing then they're happy. As it stands the stock is up about 34% over the last 12 months.
 
SonomaFlyer
Posts: 2216
Joined: Tue Apr 20, 2010 2:47 pm

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 7:50 pm

Quoting RDH3E (Reply 43):
The only people not happy with them are a-nutters. Wall Street seems perfectly content with current management, don't forget stockholders could give a crap what your quarterly earnings are. They care about capital appreciation, if stock price is increasing then they're happy. As it stands the stock is up about 34% over the last 12 months

That's true but a short sighted way of looking at things - which Wall St often does. People still fly UA of course - the flights are still pretty full. However, yields are under pressure.

The fact UA felt it had to virtually double the number of seats between SFO and EWR to battle that behemoth VX reveals a flaw in their their strategy. It made the earnings call given yields took a 20% dive. They now run 14 flights a day versus 3x 320s for VX.
 
tommy767
Posts: 4658
Joined: Sat Aug 09, 2003 12:18 pm

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 8:17 pm

Quoting MaverickM11 (Reply 42):

What is your brilliant solution, besides beating the same dead horse over and over and over.....

Well maybe you can finally admit that UA isn't making money. Something you mentioned a few weeks ago..

Quoting RDH3E (Reply 43):
The only people not happy with them are a-nutters. Wall Street seems perfectly content with current management, don't forget stockholders could give a crap what your quarterly earnings are. They care about capital appreciation, if stock price is increasing then they're happy. As it stands the stock is up about 34% over the last 12 months.

Bull. See the recent customer ranking survey? United is dead last. I'm not sure how your smoke and mirrors approach applies to this thread.

Face it THEY LOST MONEY and a lot of it. Had this be 2007 everyone would jump on the bandwagon to poo poo on UA. Now it's excuse after excuse as to why they didn't make the mark. Changes are going to have to be made as the CO approach to running UA isn't making money.
"KEEP CLIMBING" -- DELTA
 
copter808
Posts: 1384
Joined: Sat Dec 30, 2000 1:14 pm

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 8:21 pm

Quoting AVENSAB727 (Reply 29):
I have a feeling that we are going to see a new CEO soon, I wish it would be Gordon Bethune, but he is in retirement.

Jeffy is clearly not a Gordo--unfortunately.

As great as it would be to have Gordo back, I think it would take a LOT to convince him to take the post. He has very little to gain. The best he could possibly do would be to go out on top again. Worst, would be to go out as the Captain of a loser! He has already gone out on top, why would he want to risk being King of the hill?

However, I still want Gordo back!!!
 
tommy767
Posts: 4658
Joined: Sat Aug 09, 2003 12:18 pm

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 8:45 pm

Quoting copter808 (Reply 46):
However, I still want Gordo back!!!

Tom Horton will free up in a few months. He'd likely do a better job than $mi$ek
"KEEP CLIMBING" -- DELTA
 
MaverickM11
Posts: 17867
Joined: Thu Apr 06, 2000 1:59 pm

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 8:49 pm

Quoting tommy767 (Reply 45):

Well maybe you can finally admit that UA isn't making money. Something you mentioned a few weeks ago..

If anything I said UA had a higher operating margin than VX, which isn't hard. But they beat estimates, it was an improvement YOY, and they made $589MM in 2012 ex special charges. They're by no means doing great, but again, you're the only one beating the same dead horse, and you have no idea what you're talking about, as per usual.

Quoting tommy767 (Reply 47):
Tom Horton will free up in a few months. He'd likely do a better job than $mi$ek

Lookatchu puttin' dollar signs in Smisek's name! So creative!  Horton couldn't control his own employees who were making side deals with US--I don't know what he's good at but it's not leading an airline.
E pur si muove -Galileo
 
toxtethogrady
Posts: 1861
Joined: Sat Dec 23, 2000 12:33 pm

RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 8:51 pm

Quoting MSPNWA (Reply 30):
Should UA run things irresponsibly just because Houstonians would get mad otherwise? No way.

I think they ran things irresponsibly, just because they got mad with the Houston city fathers. Which is no way to run an airline.

AA seems to have had quite a bit of success with the "cornerpoint" strategy, which is basically to load up the hubs that have most of the business travel. Houston has more Fortune 500 business headquarters than any other major metro outside of New York, Chicago and San Francisco. The urban GDP is the fourth or fifth largest in the country. And within North America, it is the best location for a hub. United should not be struggling to move traffic through the hub. They've achieved absolutely no connectivity.

Popular Searches On Airliners.net

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

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

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

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

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

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

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos