toxtethogrady
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RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 8:58 pm

"United does that as well, ever think maybe these routes were bad even on a system basis?"

If Houston to Paris was bad on a system basis, that's the airline's fault.
 
sulley
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RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 9:55 pm

Quoting tommy767 (Reply 45):
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.

That's not a very nice way to talk to a PMUA employee...
In thrust we trust!
 
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AVENSAB727
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RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 10:09 pm

Quoting toxtethogrady (Reply 50):

Not necessarily true...
Always look on the bright side of Life!
 
toobz
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RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 10:14 pm

What terrible results once again. UA is one of the worst airlines in the US. I'm sure they have a lot of awesome employees but most seem like they prefer to not be at work. Thankfully I non rev on DL most of the time but have used UA numerous times. I think the cabin crew is just as bad as AA, for the most part. I notice these things being my job.
You can't say they are all crap but I've seen some awful examples. US even ranks higher when it comes to cabin crew. I hope mngt can pull this airline together and start reaping the rewards of this merger. But I have little trust in this current mngt. Just seems like their is too much bad blood in the employee group and that is the biggest no no to run a business from the custs point of view. Wish UA better times.
 
seatback
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RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 10:31 pm

Quoting F9animal (Reply 22):
These kinds of losses are unacceptable, and should result in some top management oustings.



Someone else mentioned Tom Horton. I wonder if he'll leave AA with a no-compete clause.

Quoting MaverickM11 (Reply 48):
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.



I'm not sure Horton should have been expected to 'control' his employees. He inherited a toxic relationship, dealing some with union leadership that, in my opinion aren't very smart.

Bottom line, Horton has done a great job in steering AA through BK...I wonder if he'll stick around in the industry.
 
LAXdude1023
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RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 10:36 pm

Quoting toxtethogrady (Reply 26):
Well, except for a whole lot of destinations out of Houston that could have made them profitable.
Quoting toxtethogrady (Reply 49):
I think they ran things irresponsibly, just because they got mad with the Houston city fathers. Which is no way to run an airline.

Nonsense. The routes that were cut from Houston were dont because they made no money and in fact lost quite a bit of it.

For some reason, people are nieve enough to believe that an airline walks away from profitable routes just out of personal spite. Absolute rubbish. They arent there because they brought nothing to the table. Granted, starting SFO-CDG was dumb and it will come crashing down soon too.

Quoting toxtethogrady (Reply 49):
The urban GDP is the fourth or fifth largest in the country. And within North America,

Well, no. But it is still huge. These are the largest economies as of 2012:

New York-Newark-Bridgeport, NY-NJ-CT-PA CSA 1.463 Trillion
Los Angeles-Long Beach-Riverside, CA CSA $902.8 Billion
Washington-Baltimore-Northern Virginia, DC-MD-VA-WV CSA $587.1 Billion
San Jose-San Francisco-Oakland, CA CSA $569.5 Billion
Chicago-Naperville-Michigan City, IL-IN-WI CSA $553.6 Billion
Boston-Worcester-Manchester, MA-RI-NH CSA $446.5 Billion
Houston-Baytown-Huntsville, TX CSA $420.4 Billion
Dallas-Fort Worth, TX CSA $405 Billion
Philadelphia-Camden-Vineland, PA-NJ-DE-MD CSA $372.9 Billion
Atlanta-Sandy Springs-Gainesville, GA-AL CSA $283.1 Billion
Seattle-Tacoma-Olympia, WA CSA $265.6 Billion

And those are the top ten.
FOR THE LOVE OF GOD BRING BACK THE PAYWALL!!!!
 
tommy767
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RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 10:38 pm

Quoting MaverickM11 (Reply 48):
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.

What are you talking about? I think Horton has done a remarkable job at AA. Most importantly, he seems like a very down to earth kind of guy who genuinely loves his airline.

Quoting LAXdude1023 (Reply 55):
Granted, starting SFO-CDG was dumb and it will come crashing down soon too.

Agreed. This route really doesn't make a whole lot of sense considering it bombed during a good economy.

[Edited 2013-04-25 15:39:09]
"KEEP CLIMBING" -- DELTA
 
EricR
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RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 11:05 pm

Quoting LAXdude1023 (Reply 55):
New York-Newark-Bridgeport, NY-NJ-CT-PA CSA 1.463 Trillion
Los Angeles-Long Beach-Riverside, CA CSA $902.8 Billion
Washington-Baltimore-Northern Virginia, DC-MD-VA-WV CSA $587.1 Billion
San Jose-San Francisco-Oakland, CA CSA $569.5 Billion
Chicago-Naperville-Michigan City, IL-IN-WI CSA $553.6 Billion
Boston-Worcester-Manchester, MA-RI-NH CSA $446.5 Billion
Houston-Baytown-Huntsville, TX CSA $420.4 Billion
Quoting toxtethogrady (Reply 49):
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.




UA has hubs in 6 of the top 7 markets, yet still struggles to make a profit. AA has hubs in 4 of the top 8 markets, yet struggles to make a profit. B6 has publicly stated that BOS (#5 on the list) is unprofitable for them.

I am not sure why everyone continues to believe there is a direct correlation between the size of a city's economy and an airline's financial performance or an individual hub's financial performance. If this were the case, UA and AA should be rolling in the dough, and US and DL should be bankrupt.

Cities with bigger economies have a lot more competition which means no one airline has the pricing power to raise fares high enough to achieve a decent level of profitability. Fortress hubs equal profitability, not hubs located in large business centers where competition is fierce and share is spread amongst multiple carriers.
 
tommy767
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RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 11:24 pm

Quoting EricR (Reply 57):

I am not sure why everyone continues to believe there is a direct correlation between the size of a city's economy and an airline's financial performance or an individual hub's financial performance. If this were the case, UA and AA should be rolling in the dough, and US and DL should be bankrupt.

Very true. On paper, you'd never think ATL and MSP would be profitable hubs but they turn out to print money for DL.

Opposite goes in NYC area -- high unemployment but airlines make money at all 3 airports.
"KEEP CLIMBING" -- DELTA
 
FlyPNS1
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RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 11:37 pm

Big problems I see with UA:

1) UA still has no fleet strategy and relies too heavily on CRJ/ERJ's. While DL now has a clear plan to get rid of most of that flying and use lower cost mainline planes, UA has no plan. This puts UA at a major cost disadvantage (and product disadvantage) for some time to come. Let's say you want to fly BUF-CHS. On DL, you can connect through a DL hub and fly mostly on mainline or large RJ's. On UA, you're almost guaranteed to spend most of it on high CASM RJ's. Advantage: DL.

2) Product: While UA has made some product improvements (more flatbed seats, WiFi, etc), they've really cheapened the product in other areas. I think UA's business/first food has notably deteriorated. And the lounges (while getting makeovers) are inadequate and lack the amenities of many upscale lounges offered by other carriers. And many of UA's facilities are simply dumps. UA's entire IAD operation is pathetic. ORD Terminal F is pretty sad too. And while many carriers are increasing the size of their F cabins (see DL), UA is still flying A319 type aircraft on long legs (3+ hours) that have a whopping 8 F seats. This means even many of UA's most loyal and high yield travelers are in coach.

3) Customer Service: Sorry, but UA has way too many unhappy gate agents and flight attendants. Now, DL/AA/US aren't great, but UA really lacks here. Morale is still pretty down and it shows. Not to mention that in some facilities (see the abysmal UA regional A gates) many of the gate agents seem to barely speak English.

4) Cost problem: Tied in part to 1), UA's costs are rising too fast and the cost synergies from the merger haven't been realized. Plus, in a desperate attempt to drive up revenues, UA is slashing capacity faster than most which drives up CASM.

Bottomline, UA will post a small profit for the year (Q2 and Q3 will be much better), but they will continue to be a marginal player and face growing competition. Without some big changes (or if another downturn hits), UA may find itself teetering right back on the edge of BK.
 
MaverickM11
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RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 11:44 pm

Quoting tommy767 (Reply 56):
I think Horton has done a remarkable job at AA.

What has he done?

Quoting EricR (Reply 57):
Fortress hubs equal profitability, not hubs located in large business centers where competition is fierce and share is spread amongst multiple carriers.

It's a bit of both. Fortress cities in MEM/CVG/PIT/STL don't get you much of anything, and by most accounts major hubs in LAX/NYC are challenging necessary evils.

Quoting seatback (Reply 54):
I'm not sure Horton should have been expected to 'control' his employees. He inherited a toxic relationship, dealing some with union leadership that, in my opinion aren't very smart.

He basically lost AMR to US, between the bankruptcy court, US, and labor. Was there much he could do? I'm not sure, but AMR's standalone plan was not much of a plan, to say the least.
E pur si muove -Galileo
 
tommy767
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RE: UAL Post Q1 Loss - $417mil Net

Thu Apr 25, 2013 11:58 pm

Quoting MaverickM11 (Reply 60):

He basically lost AMR to US, between the bankruptcy court, US, and labor. Was there much he could do? I'm not sure, but AMR's standalone plan was not much of a plan, to say the least.

Wrong. Arpey put the airline in BK because of conservative short sighted decisions and a lack of vision. Horton coined the "cornerstone strategy" in great effort to maintain it's high level customer base in NYC, MIA, and LAX. (Something Smisek should call him up about.)

Might I ask you the same question but phrase it differently: What has Smisek done so far that has been positive? Oh that's right, losses in just about every metric possible.

Why do you keep saying "losing AMR to US?" US was the only other airline left that could possibly be merged into AA.
"KEEP CLIMBING" -- DELTA
 
United1
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RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 12:17 am

Quoting FlyPNS1 (Reply 59):
Bottomline, UA will post a small profit for the year (Q2 and Q3 will be much better)

Not sure about small profit as even with the loss during Q1 UA is projected to post a 1.3 billion dollar profit for the year sans special items. They must be doing something right.... 
Quoting FlyPNS1 (Reply 59):
While DL now has a clear plan to get rid of most of that flying and use lower cost mainline planes, UA has no plan. This puts UA at a major cost disadvantage (and product disadvantage) for some time to come. Let's say you want to fly BUF-CHS. On DL, you can connect through a DL hub and fly mostly on mainline or large RJ's. On UA, you're almost guaranteed to spend most of it on high CASM RJ's.

UA is in the process of adding additional large gauge RJs to the fleet with the latest pilots contract. They also are going to have to retire quite a few of the 50 seat RJs in order to stay under the scope clause over the next few years so you will see a change in the ratio of regional vs mainline flying. As UA is still projected to keep capacity fairly flat so you may see a growth order from UA at some point to back fill some of that capacity....C-Series has been speculated on here for quite some time.

Quoting FlyPNS1 (Reply 59):
And while many carriers are increasing the size of their F cabins (see DL), UA is still flying A319 type aircraft on long legs (3+ hours) that have a whopping 8 F seats. This means even many of UA's most loyal and high yield travelers are in coach.

Around 90% of the narrowbody fleet has a F class cabin with between 12 and 24 F class seats....I'm not sure the A319s F cabin is as big of an issue as you might think. Those who are in coach are virtually guaranteed a Y+ seat anyway...

quote=FlyPNS1,reply=59]2) Product: While UA has made some product improvements (more flatbed seats, WiFi, etc), they've really cheapened the product in other areas. I think UA's business/first food has notably deteriorated. And the lounges (while getting makeovers) are inadequate and lack the amenities of many upscale lounges offered by other carriers. And many of UA's facilities are simply dumps. UA's entire IAD operation is pathetic. ORD Terminal F is pretty sad too[/quote]

UAs been doing a lot of customer facing stuff over the past 12 months or so (WiFi, new overhead bins, 757 cabin refresh, P.S. 2.0, the UA club overhauls, Terminal B at IAH, finishing IPTE, streaming video, Y+, the 2 cabin 763/764s ect.) I don't think you can say they have been neglecting product improvements. Although they have been concentrating over the last 6 months or so with getting the operations right more so then anything else.
I know the voices in my head aren't real but sometimes their ideas are just awesome!!!
 
MaverickM11
Posts: 17853
Joined: Thu Apr 06, 2000 1:59 pm

RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 12:29 am

Quoting tommy767 (Reply 61):
Arpey put the airline in BK because of conservative short sighted decisions and a lack of vision

Arpey tried pretty hard to keep AMR out of bankruptcy, to no success obviously.

Quoting tommy767 (Reply 61):
Horton coined the "cornerstone strategy" in great effort to maintain it's high level customer base in NYC, MIA, and LAX.

No he did not.

Quoting tommy767 (Reply 61):
Why do you keep saying "losing AMR to US?" US was the only other airline left that could possibly be merged into AA.

Horton and team's first choice was definitely to stay in control of a standalone AMR
E pur si muove -Galileo
 
tommy767
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RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 12:34 am

Quoting MaverickM11 (Reply 63):

Arpey tried pretty hard to keep AMR out of bankruptcy, to no success obviously.

Whoa are you for real on this one? Arpey did just about everything possible to plug AA into BK: stubbornly waiting to retire the S80, closing SJU and STL, giving PW 757s to DL on a silver platter, not finding suitable replacements for A300, dilapidated interiors, launching the most half assed J cabin on the 763 ever known to man, angry pilots/flight attendants (morale declined.)

Horton was put in Arpey's place for clean up and he's doing well thus far. Don't forget Horton was the man who made the deal with the devil -- getting those new Airbuses.
"KEEP CLIMBING" -- DELTA
 
MaverickM11
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RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 1:04 am

Quoting tommy767 (Reply 64):
closing SJU and STL, giving PW 757s to DL on a silver platter

This is another thread, but these were all major revenue positive decisions. DL barely flies those 757s across the Atlantic anymore.

Quoting tommy767 (Reply 64):
Don't forget Horton was the man who made the deal with the devil -- getting those new Airbuses.

Smisek ordered loads of new aircraft, including replacing those beat UA 757s, but lemme guess, you hate new airplanes when UA orders them.
E pur si muove -Galileo
 
DFWHeavy
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RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 1:07 am

UA will NOT make a full year profit of $1.3 Billion.. They would have to make a Profit of $1.717 Billion the last 3 Quarters just to break even. I'm a big UA supporter and want them to do well, but they will not turn a profit for the entire year unfortunately.

Yes, they will probably turn a profit, albeit fairly small one for quarters 2 and 3, but likely go back into the red quarter 4.

It's time for Smisek to go....and without a big "going away parachute". Tell him his services are no longer needed and hire someone else.
Christopher W Slovacek
 
United1
Posts: 3911
Joined: Wed Oct 08, 2003 9:21 am

RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 1:18 am

Quoting DFWHeavy (Reply 66):

UA will NOT make a full year profit of $1.3 Billion.. They would have to make a Profit of $1.717 Billion the last 3 Quarters just to break even. I'm a big UA supporter and want them to do well, but they will not turn a profit for the entire year unfortunately.

Wall Street is estimating a profit of $3.78 per share for FY2013 (low estimate is $2.75 high is $4.91.) ....with roughly 335 million outstanding shares you can do the math yourself. Now as with all wall street estimates they exclude special items so they wont have a net of of 1.3Billion but they should be solidly profitable.

Q2 they are estimating 2.00 per share profit....so around $670 million.
I know the voices in my head aren't real but sometimes their ideas are just awesome!!!
 
usairways85
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RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 1:30 am

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.

Agreed while competitors are spending to make soft onboard improvements UA remains flat and any more cuts will put them at a severe disadvantage to competitors.
 
phileet92
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RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 1:35 am

Listening to the call and questions, Mr. Rainey attributed many of the costs to "one time costs" such as the construction of new hangars at EWR. Additionally, they are phasing out some 757s earlier so depreciation will be expedited for those planes, increasing the expenses.
 
cle757
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RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 1:38 am

How much money has UA lost in cargo since it was outsourced? I've heard lots of customers took their business elsewhere!
Cleveland the best location in the Nation
 
tommy767
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RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 2:00 am

Quoting MaverickM11 (Reply 65):

This is another thread, but these were all major revenue positive decisions.
AA keeping 300 S80 during the mid/late-2000s put them into the red. There is no way you could deny any of that. The price of oil shot up and they were unprepared.

Quoting MaverickM11 (Reply 65):
Smisek ordered loads of new aircraft, including replacing those beat UA 757s, but lemme guess, you hate new airplanes when UA orders them.

Well we differ on the 757s there. I have yet to be on a sUA 757 that isn't clean and comfortable. Dated, yes but that's part of the charm. The 739 isn't comfortable and the IFE is a nickel and dime tactic. That's why I avoid them.

UA isn't doing the due diligence in storing and retiring 757 and getting 739. What they SHOULD be doing is phasing out costly ERJs and maintaining both the 739 and 757 for network growth. As a previous poster mentioned, it's disturbing how UA has no plan to combat the ERJ for the long term compared to say DL which is being very proactive getting rid of the CRJ. Jeff lacks vision and clarity in many of his decisions.

Quoting phileet92 (Reply 69):
Listening to the call and questions, Mr. Rainey attributed many of the costs to "one time costs" such as the construction of new hangars at EWR.

That's what I'd like to call one time smoke and mirrors. This is the same goon who said elites are "over-entitled." You can't trust him.

[Edited 2013-04-25 19:04:15]
"KEEP CLIMBING" -- DELTA
 
SESGDL
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RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 2:10 am

Quoting EricR (Reply 57):
UA has hubs in 6 of the top 7 markets, yet still struggles to make a profit. AA has hubs in 4 of the top 8 markets, yet struggles to make a profit. B6 has publicly stated that BOS (#5 on the list) is unprofitable for them.

I am not sure why everyone continues to believe there is a direct correlation between the size of a city's economy and an airline's financial performance or an individual hub's financial performance. If this were the case, UA and AA should be rolling in the dough, and US and DL should be bankrupt.

Cities with bigger economies have a lot more competition which means no one airline has the pricing power to raise fares high enough to achieve a decent level of profitability. Fortress hubs equal profitability, not hubs located in large business centers where competition is fierce and share is spread amongst multiple carriers.

This is an assertion I have made repeatedly here only to be dismissed. I think needing to be the biggest in the big cities is more of a pissing match than anything else, it looks really good for a carrier to be the largest in NYC or LA. The frequently mentioned comparison is DL having MSP and DTW (two moderately sized but low competition markets) and AA and UA having ORD (a large market that is shared between three airlines). I think DL's position in this example is vastly superior, at least from a domestic standpoint. Another example is a large fortress hub in a large city with little competition, like AA's MIA hub. Obviously AA's control of the South Florida market from MIA is the preferred situation, where this is little viable competition which allows AA to basically print money.

Quoting tommy767 (Reply 58):
Very true. On paper, you'd never think ATL and MSP would be profitable hubs but they turn out to print money for DL.

I don't know why one wouldn't imagine ATL being profitable, it's one of the largest O&D markets in the country with a fantastic location and a history of being one of the country's main transportation hubs (along with Chicago). MSP is a medium-sized market with a diverse economy and a large corporate base that DL has to itself, this is a recipe for making money.

Quoting MaverickM11 (Reply 60):

It's a bit of both. Fortress cities in MEM/CVG/PIT/STL don't get you much of anything, and by most accounts major hubs in LAX/NYC are challenging necessary evils.

All of those markets were simply too small to sustain a major airline hub in today's world of megahubs. I do think STL and PIT could be great hubs for an airline operating 250 or so flights omni-directionally, they simply were at the whim of airline mergers or reorganizations where nearby larger hubs absorbed their connecting traffic flows. There needs to be a balance of origin and destination passengers and connecting passengers, with the O&D passengers supporting the connections. Most major airline hubs in the US are at least 50% O&D save a few of the largest hubs, like ATL, DFW, IAH, and CLT, where the critical mass is so enormous that a 70-30 mix of O&D to connections still allows for a large enough number of passengers to produce that critical balance.

Jeremy
 
tommy767
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RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 2:17 am

Quoting SESGDL (Reply 72):
I don't know why one wouldn't imagine ATL being profitable, it's one of the largest O&D markets in the country with a fantastic location and a history of being one of the country's main transportation hubs (along with Chicago).

Old data I suppose. Back in the early/mid 2000s it was hazy whether DL was actually doing well at ATL with the company in turmoil and Air Tran being a strong competitor. Now it's clearly the opposite.
"KEEP CLIMBING" -- DELTA
 
SESGDL
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RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 2:28 am

Quoting tommy767 (Reply 71):
AA keeping 300 S80 during the mid/late-2000s put them into the red. There is no way you could deny any of that. The price of oil shot up and they were unprepared.

That doesn't seem to be an issue for DL at all. An S80 operating on short flights (DFW-IAH, ORD-MSP) is nearly identical in fuel costs to a 738. It was AA's usage of MD-80s on routes like DFW-SEA and ORD-SFO that was problematic.

Quoting tommy767 (Reply 73):

Old data I suppose. Back in the early/mid 2000s it was hazy whether DL was actually doing well at ATL with the company in turmoil and Air Tran being a strong competitor. Now it's clearly the opposite.

True, DL now has lower costs and is much better run than the DL of the early 2000s. WN/FL's focus on ATL has diminished considerably, allowing DL to flourish more than ever before.

Jeremy
 
N766UA
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RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 2:30 am

Quoting AVENSAB727 (Reply 6):
This is kind of worrying, I wonder if Smiseks days could be numbered.

That guy should never have even been allowed NEAR the driver's seat of an airline, let alone TWO airlines. He took a mediocre airline and a stellar airline, smashed them together, and ran them both into the ground.
 
EricR
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RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 2:35 am

Quoting MaverickM11 (Reply 60):
It's a bit of both. Fortress cities in MEM/CVG/PIT/STL don't get you much of anything, and by most accounts major hubs in LAX/NYC are challenging necessary evils..



But in each case you listed above, the primary reason why the hub was eliminated was due to merger and redundancy of the hub in the newly combined network. It was not due to the fact that the hub city was not large enough to support the hub, but because a larger fortress hub alternative was close by. DL eliminated MEM in favor if ATL (fortress hub), DL eliminated CVG in favor of DTW (fortress hub), US eliminated PIT in favor of PHL (fortress hub), AA eliminated STL in favor of DFW (fortress hub) and ORD.

With this said, I do agree a city has to have a reasonable sized population to make the hub work. However, I would rather be the fortress carrier in a city such as DTW where I have the pricing power to make the hub profitable rather than have a hub located in CHI where I have no pricing power because there are 3 carriers battling for share even though the economy or population might be twice the size.

[Edited 2013-04-25 19:48:29]
 
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RyanairGuru
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RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 2:38 am

Quoting tommy767 (Reply 45):
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.

I'm sorry Tommy, but are you actually using customer service metrics to discern Wall Street attitude to UA?

As short sighted as it seems, the investors largely don't care so long as the share price continues to go up.

You can belittle UA and its management as much as you like, but this statement is laughable really.


Now I'll let you get back to your tiff with Maverick, it makes for interesting reading  
Worked Hard, Flew Right
 
tommy767
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RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 4:36 am

Quoting RyanairGuru (Reply 77):

I'm sorry Tommy, but are you actually using customer service metrics to discern Wall Street attitude to UA?

You want to talk stock price that's one thing. The fact of the matter is that UA lost dough in 2012 and now 2013 (not good.) The formula isn't working (CO) so the only way to change it is via fresh blood. And wasn't good old CO all about the customer anyway? So if the customer rankings slip and they are losing money, why does it deserve defense? Simply things aren't working out with Smisek at the helm. Just admit it.

And for the record Smisek has been with CO since the mid-1990s so he inherited the so-called "Gordonism" that made CO great (or at least had a lot of experience working with him as CEO.) So why do users constantly say he wasn't part of the ex-CO organization? To me, it's that he kept the worst things about CO, merged it into UA and made the overall merger non-profitable.

For a public company, this is no good.

[Edited 2013-04-25 21:39:20]

That doesn't seem to be an issue for DL at all. An S80 operating on short flights (DFW-IAH, ORD-MSP) is nearly identical in fuel costs to a 738. It was AA's usage of MD-80s on routes like DFW-SEA and ORD-SFO that was problematic.

A whole different animal you are bringing up.


This has been questioned many times on the forum (I've even questioned it) and the reasoning is complete. Delta renegotiated M88 leases at a stellar price, hence why they keep them around at a cost advantage. AA couldn't get it's costs in order to make the S80s profitable. BK, newer planes, and a merger seems to make it all better for them, at least in the short term.

Still, AA seems to be paranoid about S80 costs and are retiring them rapidly. DL seems to not care as much so to the point where they are upgrading interiors and buying second hand M90s at a honorable cost.


[Edited 2013-04-25 21:44:03]

[Edited 2013-04-25 21:45:10]
"KEEP CLIMBING" -- DELTA
 
F9Animal
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RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 4:41 am

UA should not have merged with CO so soon. The airline had just barely gotten out of bankruptcy, and I think UA jumped too fast. Should UA have not fixed itself first? CO was doing just fine on its own. I just dont get the reasoning for this merger.
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tommy767
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RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 4:49 am

Quoting F9animal (Reply 79):
UA should not have merged with CO so soon. The airline had just barely gotten out of bankruptcy, and I think UA jumped too fast. Should UA have not fixed itself first? CO was doing just fine on its own. I just dont get the reasoning for this merger.

UA was posting better operational numbers before the merger (remember #1 on-time napkins in 2009?.) CO got Smisek in 2010, at soon after that CO cut meals, switched over to DTV PPV programming, F class meals went downhill, and they refused to upgrade 767 BF interiors.

http://articles.chicagotribune.com/2...rline-analyst-continental-airlines

This is proof that things were turning around at UA around the time of the merger.
"KEEP CLIMBING" -- DELTA
 
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RyanairGuru
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RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 4:53 am

Quoting tommy767 (Reply 78):
The fact of the matter is that UA lost dough in 2012 and now 2013 (not good.)



I agree personally, and wasn't disputing that.

I was just pointing out that this would be less concerning to the institutional investors that own the majority of UCH stock (and have the power to remove Smisek) than Anutters or mom-and-pop stock holders.

Quoting tommy767 (Reply 78):
The formula isn't working (CO) so the only way to change it is via fresh blood. And wasn't good old CO all about the customer anyway? So if the customer rankings slip and they are losing money

OK, just to help me understand what your point, can you update me one what you mean by"CO formula"?That would help me clarify what it is you're saying  
Quoting tommy767 (Reply 78):
things aren't working out with Smisek at the helm. Just admit it.

Oh I do, I can't stand him.

(I don't recall ever saying otherwise)

Quoting tommy767 (Reply 78):
so he inherited the so-called "Gordonism" that made CO great (or at least had a lot of experience working with him as CEO.) So why do users constantly say he wasn't part of the ex-CO organization?

I'll leave this to somebody else to flesh out in full, but Smisek didn't really take on much Gordonism and CO did somewhat loose its way under him. Gordo put employee relations front and centre. This helped build the "culture" that we read about that was alive and well in the late 90s/early 00s, but it was weakened somewhat by subsequent leadership mis-steps and died completely post-merger.

Quoting tommy767 (Reply 78):
To me, it's that he kept the worst things about CO, merged it into UA and made the overall merger non-profitable.

I'd adopt a slightly more equal approach, and say he took the worse of CO (institutional arrogance) and the worse of UA (toxic labor relations, poor customer service) and put them together. Neither one side or the other is wholly responsible, and Smisek really should be blamed personally, rather than CO just because that's where he came from.
Worked Hard, Flew Right
 
tommy767
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RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 5:05 am

Quoting RyanairGuru (Reply 81):
OK, just to help me understand what your point, can you update me one what you mean by"CO formula"?That would help me clarify what it is you're saying
CO formula includes flawed boarding procedures, a VERY poor computer (glitches) system, a nickel and dime IFE system in coach, cutbacks in F catering (happened at CO before the merger), stingy IRROPS for elites at major airports etc. Yet he ignores his decisions and plays the blame game. That's not a leader.

Quoting RyanairGuru (Reply 81):
This helped build the "culture" that we read about that was alive and well in the late 90s/early 00s, but it was weakened somewhat by subsequent leadership missteps and died completely post-merger.

"Culture" is overrated. I don't think anybody at the merged airline cares about the culture as the airline performance is busch league. This is a Smisek buzz word. It Means nothing as Smisek took very little positive from CO to form the new UA. The so-called "Culture" only exists as a PR stunt. Smisek, however witnessed CO culture from the Bethune perspective but he got none of it correct. I highly doubt former leaders like Tilton or Bethune care, as they got payouts for compromising their own beliefs.

I seriously don't get Smisek's take on "CO" culture at all. Every time I've been to EWR employees have been cordial yet miserable at the same time. They could care less about any kind of culture, other than if a flight gets out on time the stress level goes down.


I'd adopt a slightly more equal approach, and say he took the worse of CO (institutional arrogance) and the worse of UA (toxic labor relations, poor customer service) and put them together.

This I definitely agree with  Big grin

[Edited 2013-04-25 22:13:30]
"KEEP CLIMBING" -- DELTA
 
Max Q
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RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 5:16 am

Terrible results from a terribly misguided merger with a completely inept Ceo, why on earth is this idiot still in charge ?



It's like giving Captain Smith another command after the Titanic, unbelievable
The best contribution to safety is a competent Pilot.


GGg
 
lhcvg
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RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 5:18 am

Quoting FlyPNS1 (Reply 59):
2) And while many carriers are increasing the size of their F cabins (see DL), UA is still flying A319 type aircraft on long legs (3+ hours) that have a whopping 8 F seats. This means even many of UA's most loyal and high yield travelers are in coach.

But OTOH UA does offer far more E+ seats than either DL or AA do in their E+ offerings. They have a higher proportion of available seats with more than standard economy legroom. Granted E+ isn't F (or even Premium Y) by any means, but it's not as dire as the mere fact of 8F seats sounds.
 
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RyanairGuru
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RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 5:41 am

Quoting tommy767 (Reply 82):
CO formula includes flawed boarding procedures, a VERY poor computer (glitches) system, a nickel and dime IFE system in coach, cutbacks in F catering (happened at CO before the merger), stingy IRROPS for elites at major airports etc.

I'm not really in a position to discuss boarding procedures in terms of how they are set-up, although I will say that my UA flights in the past 12 months have been a virtual free-for-all!

SHARES is rightly criticised, I definitely agree with that. I don't think that keeping it was a bad idea, per se, as it was significantly cheaper than Apollo. Where UA really screwed up was in presuming that sUA employees would be able to competently use shares with minimal training. If you are going to expect your staff to maintain a reliable operation with an inferior computer system then you need to train them and equip them with the skills to do so. This was a really rushed integration IMHO and the operation challenges that it ensued were virtually inevitable. That was very poor leadership.

I can't speak for F really, although international J was superior on CO pre-merger so maybe it was a draw? It's good that international J has been upgraded to BusinessFirst standards, although United Business and United First were SO much better terms!

IRROPS has always been COs achilles heel. EWR clogs up if there is a single cloud in the sky. It would have been good if they had kept UAs superior handling of such situations, although I guess that would have meant keeping Apollo. Maybe the "cost" of Apollo was, in fact, worth it from a customer service and operational stand-point after all. Well it's dead now. Really IRROPS handling goes back to staff training (or lack of)


While I agree that SHARES and IRROPS were the worse parts of CO to keep, and these two things alone have a MASSIVE impact on the customer service experience, I would still disagree that CO ruined UA. I'm not saying CO did everything wonderfully all the time and twice on Sundays. Please understand that. I just think that the current trainwreck has a lot more to do with post-merger factors, starting with training and going through to a demoralized workforce that is less likely to go above-and-beyond when the sh** hits the fan, than the legacy of CO per se.

Quoting tommy767 (Reply 82):
It Means nothing as Smisek took very little positive from CO to form the new UA. The so-called "Culture" only exists as a PR stunt.

I agree 100%

Quoting tommy767 (Reply 82):
I'd adopt a slightly more equal approach, and say he took the worse of CO (institutional arrogance) and the worse of UA (toxic labor relations, poor customer service) and put them together.

This I definitely agree with

I think we've just found things we agree on!!!  Wow!      

I know we've had some acrimonious posts in the past, but I never did believe we were as diametrically opposed as it sometime seemed 
Worked Hard, Flew Right
 
rwy04lga
Posts: 1976
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RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 7:51 am

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

Maybe at EWR, but 'coitanly' not 'in' NYC.

Quoting tommy767 (Reply 36):
Quoting LAXintl (Reply 33):
o UA is NYC leading airline

Gotta love that Harvard chalk talk!

That went right over my head, please explain.
Just accept that some days, you're the pigeon, and other days the statue
 
deltal1011man
Posts: 5333
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RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 9:11 am

Quoting SESGDL (Reply 72):
This is an assertion I have made repeatedly here only to be dismissed. I think needing to be the biggest in the big cities is more of a pissing match than anything else, it looks really good for a carrier to be the largest in NYC or LA. The frequently mentioned comparison is DL having MSP and DTW (two moderately sized but low competition markets) and AA and UA having ORD (a large market that is shared between three airlines). I think DL's position in this example is vastly superior, at least from a domestic standpoint. Another example is a large fortress hub in a large city with little competition, like AA's MIA hub. Obviously AA's control of the South Florida market from MIA is the preferred situation, where this is little viable competition which allows AA to basically print money.

agreed. The key difference here to say CVG is that DTW/MSP are large enough and have a solid O&D base and both have fairly large corporate bases. (Delta was more than happy to basically become the owner of a good chunk of Ford and GM traffic.)

Quoting SESGDL (Reply 72):
MSP is a medium-sized market with a diverse economy and a large corporate base that DL has to itself, this is a recipe for making money.

That Delta has all on its own. It has the best margins for a reason.

Quoting tommy767 (Reply 73):
Old data I suppose. Back in the early/mid 2000s it was hazy whether DL was actually doing well at ATL with the company in turmoil and Air Tran being a strong competitor. Now it's clearly the opposite.

Even then ATL was making money. The rest of the network is what really need changing. (of course ATL was also changed, those changes have just turned it into a printing press for Delta)

Quoting tommy767 (Reply 78):
Delta renegotiated M88 leases at a stellar price, hence why they keep them around at a cost advantage

and is putting in new cockpits which will likely keep the majority of the fleet around 5-10 more years.

Quoting Max Q (Reply 83):
It's like giving Captain Smith another command after the Titanic, unbelievable

Nice. I may steal this one.

Quoting rwy04lga (Reply 86):
Maybe at EWR, but 'coitanly' not 'in' NYC.

you're fighting a battle that you will never win.
 
UAL777UK
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RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 11:16 am

Reading a lot of these poasts here, three years on from the merger i wonder if it would be better to bring in someone new to replace Smisek and that someone who is not connected to UA or CO in the past who can take the bull by the horns and take this company forward. And for the record, I dont think that person is Horton.

That person can perhaps get a decent livery sorted as well!   

Seriously, I dont see Smisek making this company great, just good at best.

Just my two cents.
 
FlyPNS1
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RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 12:18 pm

Quoting United1 (Reply 62):
Not sure about small profit as even with the loss during Q1 UA is projected to post a 1.3 billion dollar profit for the year sans special items. They must be doing something right....

Watch those analyst estimates come down over the next few months. UAL will certainly be profitable in 2013, but it won't be much...especially compared to carriers like DL, US or even AA.

Quoting United1 (Reply 62):
UA is in the process of adding additional large gauge RJs to the fleet with the latest pilots contract. They also are going to have to retire quite a few of the 50 seat RJs in order to stay under the scope clause over the next few years so you will see a change in the ratio of regional vs mainline flying.

There's nothing in UA's order book to support this. I suspect the way UA will fix the ratio is just to shrink the RJ business faster than the mainline business shrinks (goodbye CLE!). However, this will drive UA's CASM up and give business away to competitors.

And remember even some of the large RJ's aren't that great either. The CRJ700 in UA's configuration is still a very high cost plane. Better than a CRJ200, but still not low cost.

Quoting United1 (Reply 62):
I don't think you can say they have been neglecting product improvements.

I didn't say they were neglecting improvements. I said they are making some improvements, but cheapening the product in other areas.
 
rwy04lga
Posts: 1976
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RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 12:25 pm

Quoting Deltal1011man (Reply 87):
Quoting rwy04lga (Reply 86):
Maybe at EWR, but 'coitanly' not 'in' NYC.

you're fighting a battle that you will never win.

Only because they will not admit defeat.
Just accept that some days, you're the pigeon, and other days the statue
 
codc10
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RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 12:34 pm

Quoting rwy04lga (Reply 90):
Only because they will not admit defeat

There's really no battle to win or lose. Ignoring EWR in a comparison of NY-area airports is a useless exercise, and even with the DL/LGA expansion, UA still has more flights, seats, passengers and destinations to/from airports in the region, so why would UA 'admit defeat'?
 
Cubsrule
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RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 12:57 pm

Quoting FlyPNS1 (Reply 89):
And remember even some of the large RJ's aren't that great either. The CRJ700 in UA's configuration is still a very high cost plane. Better than a CRJ200, but still not low cost.

The problem is that to make an RJ comfortable, you really need pretty low density (and thus higher costs). The CRJ-705 is a lovely airplane, but the CASM makes me cringe. In contrast, a 175 seat 738 (WN configuration) is pretty comfortable despite being dense.

Of course, it doesn't help that most of the interiors on the ERJs and all CRJ variants are pretty old; the E70 seats (which I don't believe would fit in a CRJ) aren't half bad, and the seats that DH installed in their CRJs when they gutted the interiors in 2005 or so are much better than the fare you find on the legacies (save some newer 9E birds and, obviously, the ex-DH aircraft).
I can't decide whether I miss the tulip or the bowling shoe more
 
deltal1011man
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RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 1:48 pm

Quoting Cubsrule (Reply 92):
The problem is that to make an RJ comfortable, you really need pretty low density (and thus higher costs). The CRJ-705 is a lovely airplane, but the CASM makes me cringe. In contrast, a 175 seat 738 (WN configuration) is pretty comfortable despite being dense.

I will say this. The E-jets are also nice aircraft for the size. Even a E75 with DCI is not bad at all. CRX all suck.


and just to be honest I'll take a E45 over CR2 any day of the week. Love the 1-2 config(10x if i can score the 1 seat side.)
 
bobnwa
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RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 2:06 pm

Quoting FlyPNS1 (Reply 89):
UAL will certainly be profitable in 2013

How sure of this are you?
 
MaverickM11
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RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 2:42 pm

Quoting SESGDL (Reply 72):
This is an assertion I have made repeatedly here only to be dismissed. I think needing to be the biggest in the big cities is more of a pissing match than anything else

You're missing more than half the argument. Part of the reason US does so well with its network is its low costs, same with DL to a lesser extent, who is simultaneously trying to grow agressively its way into LAX/NYC/SEA.

Quoting tommy767 (Reply 80):
they refused to upgrade 767 BF interiors.

They're all redone, or nearly all done.

Quoting tommy767 (Reply 82):
CO formula includes flawed boarding procedures, a VERY poor computer (glitches) system, a nickel and dime IFE system in coach, cutbacks in F catering (happened at CO before the merger), stingy IRROPS for elites at major airports etc

Yep I'm sure that was the CO formula . Of course they're on boarding process number 4 unrelated to either carrier, nobody really cares about IFE except for you and the odd diversion due to a violent movie, but I will agree that sUA F catering was embarassig before the merger, and has only slightly improved since then.

Quoting rwy04lga (Reply 86):

Maybe at EWR, but 'coitanly' not 'in' NYC.

Does it really matter? After all the pissing matches on a.net, what have you discovered that would be in any way meaningful to an airline?
E pur si muove -Galileo
 
Rdh3e
Posts: 3587
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RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 2:52 pm

Quoting tommy767 (Reply 45):

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...

Someone already addressed this, and Wallstreet to an extent does not care as long as the stock performance is good. But continuing on the customer service note, UA's customer service in Q1 was very good, so good in fact that eligible frontline/management employees received a bonus for beating company goals.

Quoting toxtethogrady (Reply 50):
If Houston to Paris was bad on a system basis, that's the airline's fault.

Why? AF has a daily 77W, plus the cities just don't generate THAT much traffic. It was overserved.

Quoting FlyPNS1 (Reply 59):
UA still has no fleet strategy and relies too heavily on CRJ/ERJ's

??? We have new 737s arriving every month, more NG's on order, 739MAX on order, 787 on order, A350 on order... There is a regional plan as well, but UA doesn't purchase the jets for it's regionals like CO did so you wouldn't see that on UA's order book.

Quoting tommy767 (Reply 61):
Wrong. Arpey put the airline in BK because of conservative short sighted decisions and a lack of vision.

He had a legal fiduciary responsibility to stay out of bankruptcy until it was unavoidable. Otherwise he'd be sued by shareholders and could lose everything he had.

https://en.wikipedia.org/wiki/Fiduciary

Quoting United1 (Reply 62):
I don't think you can say they have been neglecting product improvements

Finally, someone who gets it.

Quoting rwy04lga (Reply 86):
Maybe at EWR, but 'coitanly' not 'in' NYC.

Really? Can't we just drop this punchline for once?

Quoting ual777uk (Reply 88):
three years on from the merger

Yes, but to be fair, it's only been a year since PSS. I'd really suspect 2014 will be the litmus test for whether UA sinks or swims.

Quoting FlyPNS1 (Reply 89):
There's nothing in UA's order book to support this. I suspect the way UA will fix the ratio is just to shrink the RJ business faster than the mainline business shrinks (goodbye CLE!). However, this will drive UA's CASM up and give business away to competitors.

Like I said above, CO largely owned (UA now owns) all of the RJ's for COEX. UA doesn't do this and will not do it going forward, so you wouldn't see it on UA's order book.
 
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United787
Posts: 2926
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RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 2:57 pm

Bye Bye Jeff!

The guy is obviously more interested in his image than running an airline! I expect a CEO to have an ego but his gets in the way rather than using it to do great things...
 
Cubsrule
Posts: 14217
Joined: Sat May 15, 2004 12:13 pm

RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 2:59 pm

Quoting RDH3E (Reply 96):
He had a legal fiduciary responsibility to stay out of bankruptcy until it was unavoidable. Otherwise he'd be sued by shareholders and could lose everything he had.

That's inaccurate. If the chances were, say, 5 percent of avoiding bankruptcy in the next 5 years, it's not clear whether he would have had a fiduciary responsibility to stay out of bankruptcy today.

Certainly, shareholder value can be (and often is) reduced or eliminated on the open market outside of bankruptcy.
I can't decide whether I miss the tulip or the bowling shoe more
 
codc10
Posts: 2656
Joined: Sat Jul 08, 2000 7:18 am

RE: UAL Post Q1 Loss - $417mil Net

Fri Apr 26, 2013 3:11 pm

Quoting RDH3E (Reply 96):
so good in fact that eligible frontline/management employees received a bonus for beating company goals.

I think people are confusing United's internal customer service performance metrics with a backward-looking survey that considers a range of indicators, such as MBR, OTP, DOT complaints, etc., none of which UA did particularly well with in 2012.

Quoting RDH3E (Reply 96):
Why? AF has a daily 77W, plus the cities just don't generate THAT much traffic. It was overserved

Absolutely, further, much of the traffic on that AF 77W are transfers to Africa, the Middle East, and India. UA would prefer to push those pax over FRA with the LH JV or keep them online via EWR/IAD or nonstop. IAH-CDG was pretty much a dead end for United, and it was determined that the asset (the airplane) is more useful elsewhere (e.g. SFO).

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