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MSPNWA
Posts: 3698
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 7:07 pm

Quoting catiii (Reply 97):
I think it does prove something. The marketplace votes. In an era when DL is breaking records in operational reliability and winning awards hand over fist for their product, they're also breaking records in revenues. You're saying there's no corollary in that. I don't know how one can draw that distinction.

No, I'm saying that individual experiences don't prove anything. You get thousands of them together, and now you're talking. It also shows that perception is maybe more important than reality in the airline industry.
 
copter808
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 7:08 pm

Quoting tlecam (Reply 52):
We may see more labor cutbacks and other "enhancements."

Just what they need to do! I arrived at ORD Saturday, made it through immigration in 2.5 minutes--then waited 50 more minutes for my bag!!! Looking at the bag arrival pattern on the belt, it appeared it was caused by a lack of bag-runners.

Let's cut even more Jeff, I'm looking forward to the 90 minute bag wait. MAybe UA can open a refreshment stand in the baggage claim area to supplement earnings!
 
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Pellegrine
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 7:11 pm

Quoting PSU.DTW.SCE (Reply 51):
Hubs below a certain size and/or those that are highly directional are better run with a banked operation. DEN is small enough to where it needs banks to maximize connections across limited frequencies per market.

IAH may be big enough to be banked, but is highly directional at various periods throughout the day. Plus, IAH also have a high amount of low-frequency markets that need banks to mazimize connecting flows.

Makes complete sense to me.

Quoting LDVAviation (Reply 56):
Just when they need to be spending more to attract HVC's.
Quoting ua900 (Reply 86):
Agree with you that the 145s and the CRJ2s need to go and that new rules will cut into regional's business models.
Quoting T5towbar (Reply 72):
I thought that IAH and to an extent IAD will have to work together to serve the South East now that US is gone from *. Problem is that everyone prefers DCA. IMHO, pulling down IAD is not an option right now.

UA is absolutely abominable in the Southeast now. They've lost most of my domestic flying since US is gone from *A. Being based in WAS, am I going to drive out to IAD to take a 2 hr flight on a little RJ to ATL/SAV/RDU/CLT/JAX/SRQ/MIA? Not really.
We fly JETS, we don't fly donkeys. Citizenship/Residence::: Washington DC, US; Vaud, CH; Providenciales, TCI (hence my avi)
 
toxtethogrady
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 7:11 pm

Quoting jetblastdubai (Reply 95):
That's the attitude I see throughout most of the comments...it's always someone else's fault.

I can afford to have that attitude. I'm merely a customer.
 
toxtethogrady
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 7:14 pm

Quoting jetblastdubai (Reply 95):
You've got the "Houston versus Chicago" headquarters bickering going on yet...who cares...the deal is done. Get over it.

Houston doesn't have to get over it. They have the strongest local economy in the US, they have the oil industry, they have a wealthy community, and now they have alternatives.
 
FlyPNS1
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 7:21 pm

Quoting MSPNWA (Reply 100):
You get thousands of them together, and now you're talking.

Yes, and if you surveyed thousands of people overall they would have a better opinion of DL than UA...particularly among the most lucrative of business travelers.

Quoting United1 (Reply 92):
UA was profitable in 2013 and is projected to be profitable in 2014...don't be shortsighted and simply look at one quarter.

But the profits are way too small and not enough for UA really invest in it's products or new planes. UA needs much larger profits if they are ever going to grow the mainline fleet. Plus, if UA is making such meager profits now, what happens when the next economic downturn comes or fuel prices spike. Times are relatively good right now and UA should be raking profits in so that they are ready for when times turn south.

Quoting United1 (Reply 92):
UA needs to make some changes no one argues with that, including upper management,

The problem is that the changes AREN'T being made. UA today still looks about the same as UA did two years ago. And NOTHING UA management has announced so far will have it looking any different in two years.
 
MSPNWA
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 7:24 pm

Quoting FlyPNS1 (Reply 105):
Yes, and if you surveyed thousands of people overall they would have a better opinion of DL than UA...particularly among the most lucrative of business travelers.

Likely yes. But it begs the question. How much of that is caused by perception, and how much is caused by reality? I see UA as having a major perception problem.
 
vin2basketball
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 7:26 pm

If people here are willing to listen to reason instead of beating their chests saying "Smisek must go"

Results not quite as bad as the hyperbole indicates and forward indicators are okay.

1) FCF of - $43 million was not awful - will be interesting to see how AAL comes in on this -- this is good news for forward bookings
2) Removing weather + currency effects (yen + Venezuela) shows YOY improvement in net loss, and much narrower operating loss
3) United always loses money in Q1 - I still expect them to be profitable (maybe even improve on 2013)
4) Share price and TTM ROIC metrics are still robust for UAL - this is why Smisek has a job
5) De-hubbing of Cleveland will save company $150-200 million annually (including elimination of 50-seat fleet)

Other observations

1) United has a revenue problem and an RJ problem
2) UAL vs. DL financial performance reminds me of ANA vs. JAL in Japan - former has "better" network, but latter has the better business model and profit/cash generation
3) UAL's Lat. Am performance likely hampered by fact that best margin markets (Houston - Venezuela/Brazil) impacted by currency in former and economic weakness in latter
4) Why in the world was UAL adding TATL capacity YOY?
 
FlyHossD
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 7:27 pm

Quoting jetblastdubai (Reply 95):
You've got pilots from the UA and CO sides not allowing pilots from 'the other side' to fly eachothers aircraft. That's got to help with the "team player" environment.

That's been the case for some time now, except for the 747 and 787 fences. IIRC, the fences end when the 26th 787 is delivered.

Quoting jetblastdubai (Reply 95):
Customers fleeing because they hate the inefficient and customer-unfriendly 50-seaters? re-write SCOPE and let the company put the right planes in the right markets. A 2-class 76-seater is far better if a mainline isn't available.

That's also already been done; SkyWest and Mesa are now doing the proving runs for 2-class 76 seats E175s. Your information seems to be rather dated.
My statements do not represent my former employer or my current employer and are my opinions only.
 
Prost
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 7:28 pm

Quoting MSPNWA (Reply 100):
No, I'm saying that individual experiences don't prove anything. You get thousands of them together, and now you're talking. It also shows that perception is maybe more important than reality in the airline industry.

Does that hold true when you talk of your displeasure with Delta?
 
jetblue1965
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 7:30 pm

Quoting Pellegrine (Reply 102):
UA is absolutely abominable in the Southeast now. They've lost most of my domestic flying since US is gone from *A. Being based in WAS, am I going to drive out to IAD to take a 2 hr flight on a little RJ to ATL/SAV/RDU/CLT/JAX/SRQ/MIA? Not really.

if those are your primary routes, you should've been loyal to US even before the merger(s)
 
apodino
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 7:34 pm

Quoting vin2basketball (Reply 107):

1) United has a revenue problem and an RJ problem

One of the their big problems is these are not mutually exclusive. I didn't hear the call but I am curious if the RJ's or the revenue were really addressed by either Jeff or the analysts.

Quoting FlyHossD (Reply 108):

That's also already been done; SkyWest and Mesa are now doing the proving runs for 2-class 76 seats E175s. Your information seems to be rather dated.

They are, but two issues going forward is going to be finding pilots to fly these planes, and the fact that UA is late to the party.


One thing I was thinking about. It is clear that UA has too many 50 seaters and this is dragging UA down. It is also well known that the majority of the ERJ's are operated by ExpressJet. SkyWest Inc has made no secret of the fact that they are losing a lot of money operating these flights for UA. So the question I raise is, given the need for UA to pull 50 seaters from the fleet, and SkyWest Inc's desire to rid themselves of a lot of this unprofitable flying, would it be hard for the two sides to come to an agreement on this? Seems like if SkyWest Inc can ease themselves out of leases on the ERJ's, such an agreement would serve both parties well.
 
MSPNWA
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 7:34 pm

Quoting FlyHossD (Reply 108):
That's also already been done; SkyWest and Mesa are now doing the proving runs for 2-class 76 seats E175s. Your information seems to be rather dated.

Now I detest contract flying, so I don't want to sound like a fan of this, but the latest "re-write" of scope still leaves UA well behind the competition. The point remains that UA management is not the main party to blame for the lack of large RJs.

Quoting Prost (Reply 109):
Does that hold true when you talk of your displeasure with Delta?

That's what I stated. My individual negative experiences don't prove things for the whole either.

[Edited 2014-04-24 12:37:56]
 
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jetblastdubai
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 7:35 pm

Quoting FlyHossD (Reply 108):
That's been the case for some time now, except for the 747 and 787 fences.

The fence still exists and that was my point.

Quoting FlyHossD (Reply 108):
That's also already been done; SkyWest and Mesa are now doing the proving runs for 2-class 76 seats E175s. Your information seems to be rather dated.

The SCOPE still restricts the number of 76-seaters UAX can operate so my information is actually very up-to-date. The number of 76-seaters, including the turbo-props are part of that quota.
 
FlyHossD
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 7:39 pm

Quoting jetblastdubai (Reply 113):
The SCOPE still restricts the number of 76-seaters UAX can operate so my information is actually very up-to-date. The number of 76-seaters, including the turbo-props are part of that quota.

Now I understand. You want a carrier other than United to flight United flights.

And IIRC, the UA Scope section mirrors the DL Scope section. So if UA management isn't to blame for the Scope limits, DL's management is?
My statements do not represent my former employer or my current employer and are my opinions only.
 
FlyHossD
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 7:44 pm

Quoting jetblastdubai (Reply 113):
Quoting FlyHossD (Reply 108):
That's been the case for some time now, except for the 747 and 787 fences.

The fence still exists and that was my point.

So, that L-UAL pilots can't yet fly 787s (10 airplanes) and L-CAL pilots can't fly 747s (25 airplanes) is the reason for UA's problems? Let's see, 10 787s and about 25 757s is 35 aircraft, or about 5% percent of the fleet. And THAT's the reason for UA's problems including revenue shortfalls???

 

In other words, I don't buy that.
My statements do not represent my former employer or my current employer and are my opinions only.
 
catiii
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 7:46 pm

Quoting MSPNWA (Reply 106):
Likely yes. But it begs the question. How much of that is caused by perception, and how much is caused by reality?

Right, and my individual experience is replicated thousands of times over with others. So the thousands of positive individual experiences, the record setting operational performance, the record setting revenues, plus the awards listed here http://news.delta.com/awards-recognition are all just hype and perception and not rooted in reality? If United's detractors were only looking at perception, point me to similar concrete operational, revenue, and achievements that UA has had over the last 3 years to prove otherwise?

People fly Delta because they run a reliable operation, they have a strong onboard product, they have a strong network that easily gets you where you want to go in most cases, and they have strong customer service. The independent awards and the numbers in both operational performance and revenues don't lie. Perception is the reality at Delta.
 
ldvaviation
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 7:55 pm

Quoting jetblue1965 (Reply 75):
These aren't stage-length adjusted. It's a known fact that UA's network is transcon and long-haul international heavy.

Does it really matter?

There is no way of adjusting the operational or net loss, stage-length or otherwise, to make the number appear any better than it really is.

Quoting Pellegrine (Reply 102):
UA is absolutely abominable in the Southeast now. They've lost most of my domestic flying since US is gone from *A. Being based in WAS, am I going to drive out to IAD to take a 2 hr flight on a little RJ to ATL/SAV/RDU/CLT/JAX/SRQ/MIA? Not really.

Ah, but we read it here and on flyertalk, Jeff didn't think losing US would result in much of a revenue hit.
 
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jetblastdubai
Posts: 1993
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 8:00 pm

Quoting FlyHossD (Reply 114):
And IIRC, the UA Scope section mirrors the DL Scope section. So if UA management isn't to blame for the Scope limits, DL's management is?

Delta has roughly 30 more mainline aircraft than UA and they're getting more while United is not increasing their mainline count by much at all...I think someone mentioned a net +6 this year??? DL is adding a bunch of relatively inexpensive 717 so they're able to up their large RJ count in parallel if they want to...it's their option. The bigger issue is the over abundance of passenger unfriendly 50-seaters that a pre-merger SCOPE helped create.

Quoting FlyHossD (Reply 115):
So, that L-UAL pilots can't yet fly 787s (10 airplanes) and L-CAL pilots can't fly 747s (25 airplanes) is the reason for UA's problems? Let's see, 10 787s and about 25 757s is 35 aircraft, or about 5% percent of the fleet. And THAT's the reason for UA's problems including revenue shortfalls???

You're right...this is not a big number but the artificial fence still exists. The planes are still referred to as "Continental's 787's and United 74s" It doesn't help creating a single company attitude. It's like a marriage with a pre-nup..."we're one but my stuff is still only my stuff."
 
DTWPurserBoy
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 8:00 pm

This is clearly a structurally incompetent management team. Shareholders should nail the Board of Directors for allowing this to continue. The other major carriers have long since figured out how to make this work and there is no excuse of this type of incompetence. FIRE 'EM! Bring in some outside blood. Go down the list of every VP at United and check the results of their work. In any other industry in the world this type of performance would not be tolerated. The time has come for Boards to be held to their fiduciary responsibility to the shareholders--"Rubber Stamping" is a thing of the past. So get a new CEO and replace the existing Board.
Qualified on Concorde/B707/B720/B727/B737/B747/B757/B767/B777/DC-8/DC-9/DC-10/A319/A320/A330/MD-88-90
 
hh65man
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 8:04 pm

I've often thought it would be constructive and informative for United to post out a type of questionnaire Email to their Frequent Flyers and put some simple questions to them. Where have you gone? Why did you leave? A feedback form of sorts. For me I've have two simple reasons, poor off shore Customer Service over the phone, a complete inability to fix a simple mileage problem. And the introduction of a Regional Jet flying transcontinental. As a expat living down under I fly home to the US at least twice a year. In the last 6 years it hasn't been with United. After a flight from Australia into LAX I am no mood to be crammed into a jet where I cant even stand up straight in the toilet. I'll be giving them another chance this July when I fly with them from London to Houston on the 787...... Fingers crossed.
 
catiii
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Joined: Mon Mar 31, 2008 1:18 am

RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 8:24 pm

Quoting DTWPurserBoy (Reply 119):
This is clearly a structurally incompetent management team. Shareholders should nail the Board of Directors for allowing this to continue. The other major carriers have long since figured out how to make this work and there is no excuse of this type of incompetence. FIRE 'EM! Bring in some outside blood. Go down the list of every VP at United and check the results of their work. In any other industry in the world this type of performance would not be tolerated. The time has come for Boards to be held to their fiduciary responsibility to the shareholders--"Rubber Stamping" is a thing of the past. So get a new CEO and replace the existing Board.

Wholesale change of every executive is rarely the best answer. This seems to me to be a CEO, CFO, COO issue. Change them and then let them pick their team. I mean, I'm sure the MRO, safety, security, government affairs, general counsel, etc positions are performing just fine. It's an operational and revenue issue.
 
MSPNWA
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 8:25 pm

Quoting catiii (Reply 116):
People fly Delta because they run a reliable operation, they have a strong onboard product, they have a strong network that easily gets you where you want to go in most cases, and they have strong customer service. The independent awards and the numbers in both operational performance and revenues don't lie. Perception is the reality at Delta.

Again, even awards are hugely based on perception. Look at the macroenvironment of the legacy carriers. There's very little differentiation between the products offered. The biggest difference in the airline industry is where they fly, not what they fly. That should benefit UA more than anything. But it doesn't look like it is. Perception.

Quoting LDVAviation (Reply 117):
Does it really matter?

Yes, and I believe it's an underrated aspect. As the economy has improved and consolidation has occurred, demand has increased and people are willing to fly more, especially shorter sectors. Now this is an educated guess, but I bet you that short-haul domestic fares have risen precipitously more than long-haul in the past 3-4 years. UA's domestic network is built on longer stage lengths. That's just a fact. That's how they garner considerably more domestic ASMs per mainline flight than DL does. However, I don't think people have been willing to pay that extra money for a long flight versus short one. I believe the difference in fares between a 1-2 hour flight and a 3-4 flight has grown smaller and smaller. That helps DL and AA, which comparatively run on shorter flights, and hurts UA which relies on longer routes. When you're collecting $400 airfares, you'd rather being doing that on a 1,000 mile flight versus a 2,000 miler. There's your difference in revenue.
 
FlyPNS1
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 8:28 pm

Quoting MSPNWA (Reply 106):
How much of that is caused by perception, and how much is caused by reality? I see UA as having a major perception problem.

Yes, I do think UA has a perception problem, but much of that is driven by reality.

It's not a perception that UA is flying all 50 seaters on ATL-EWR while DL flies mainline with F class, it's reality.
It's not a perception that UA serves meals on far fewer mainline flights that AA or DL, it's reality.
It's not a perception that UA has 8 across in C class on 777's, while DL is four across, it's reality.
The list goes on.

While these items aren't that important to those who fly once or twice a year, they do matter to business travelers.
 
catiii
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 8:35 pm

Quoting MSPNWA (Reply 122):
Again, even awards are hugely based on perception. Look at the macroenvironment of the legacy carriers. There's very little differentiation between the products offered. The biggest difference in the airline industry is where they fly, not what they fly. That should benefit UA more than anything. But it doesn't look like it is. Perception.

And yet you ignored the part of that post where I said, if United's detractors were only looking at perception, point me to the measurable operational categories where UA is surpassing DL that refute the perception of UA? Or, by your metric, where is UA flying that DL isn't?

Saying there's very little differentiation between the products offered is like saying that Outback Steakhouse and LeCirque have very little differentiation. Just because UA and DL are both airlines doesn't mean they have the same product.
 
DualQual
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 8:37 pm

Quoting jetblastdubai (Reply 95):

Former UA and CO pilots can absolutely fly "each others" aircraft. Yes there is a fence around the 747/787. That will likely be down sometime in 2015 making it essentially a 2.5 year fence. Shorter in duration than the similar fence in place at record profit producing DL and not even in the same ballpark at the myriad of fences that can be assumed will be in place at AA/US and still in place at US/HP.
There's no known cure for stupid
 
airtechy
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 8:37 pm

When I saw that seat layout of 8 across in business, I thought "what were they thinking?". Now they are faced with the fact that the competitors have lie flats with direct aisle access. I lot of money will be spent in upgrading their C class to the new industry standards.
 
traindoc
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 8:39 pm

Unfortunately, cutting more costs (people and services) will most likely further damage morale, which will then make customer service worse, which will drive away passengers. Most definitely time for new leadership, especially someone who can improve both morale and finances.

I am both a 1K and a Million Miler, and have stayed loyal to UA. Overall things have improved from 2012, but I fear that they will get worse when the focus is on cost cutting, and not customer service. Maybe they can bring back Gordon Bethune, or find a clone of Richard Anderson.
 
catiii
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 8:40 pm

Quoting DualQual (Reply 125):
the myriad of fences that can be assumed will be in place at AA/US and still in place at US/HP.

I can't even begin to fathom who is going to be able to bid what at the merged AA...
 
masseybrown
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 8:42 pm

Quoting HiFlyerAS (Reply 74):
The debt-to-equity ratio is very high at 4.16 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, UAL has a quick ratio of 0.55, this demonstrates the lack of ability of the company to cover short-term liquidity needs.

CO always operated highly leveraged, even when they didn't need to. It was probably an Icahn/Lorenzo lesson-learned: asset-rich companies attract attention from the wrong kind of "investor".

Scary conference call this morning. It was obvious some of the analysts simply didn't believe what the management team was telling them, generating comments like "That's what you told us last quarter" and questions like "When will you admit that what you're doing isn't working?" UA's answer was basically, "Not today." They deliberately limited the time for questions from the news media.

Smisek and Company make a rational case for what they're doing; but then so did Gerald Arpey at AA and we saw where that went.
 
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tlecam
Posts: 1500
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 8:51 pm

Quoting MSPNWA (Reply 122):
Again, even awards are hugely based on perception. Look at the macroenvironment of the legacy carriers. There's very little differentiation between the products offered. The biggest difference in the airline industry is where they fly, not what they fly. That should benefit UA more than anything. But it doesn't look like it is. Perception.

I do think that there is a perception issue, but I don't think that's the answer entirely. There are some real quantifiable differences in the onboard experience. For example, between UA and DL - things like IFE, Wifi, power at every seat, USB at every seat - and the comprehensiveness throughout the fleet. I can't recall the last time I was on DL mainline metal where I didn't at least have wifi. Many planes have IFE, particularly for cross country flying. Even that 738 from BOS to SLC has both wifi and personal tv. And DL can tell me when I book my ticket whether the scheduled plane has these things. United does not even tell me what the plane will have or not have. And for business travelers like myself, those things do matter.

I live in Boston so I'm an equal opportunity flier. I fly DL more than the other US airlines because they fly to the places I need to go for work (mainly, NYC and London. And, sadly, Columbus in an ER145 that is kind of like flying in a used Campbell soup can).

However, I do fly the others as well; Just in the past 6 weeks I've been on AA to Miami and to ORD. I flew UA to Jackson Hole through DEN. I also fly somewhat regularly to SFO, typically on United.

I don't think the sky is falling on United, but I don't think that they just have a perception issue to fix. If it's a perception issue, then they just need to launch an effective marketing campaign to right hte ship and things will proceed glowingly. I suspect you know that is not the case.
BOS-LGA-JFK | A:319/20/21, 332/3, 346 || B:717, 735, 737, 738, 739, 752, 753, 762, 763, 764, 787, 772, 744 || MD80, MD90
 
SESGDL
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 8:55 pm

Quoting MSPNWA (Reply 89):
Let's be honest here. Fleet type has much less impact on the bottom line that we make it out to be here. DL, AA, and US have all been making nice profits with oodles of 50-seaters on the roster.

"Oodles" doesn't account for the difference in percentages. UA is running, as a percentage, far more of its flights with 50-seaters than DL, AA or US. Why is it so hard to acknowledge that? The tired argument surrounding UA that "so does AA and DL" simply no longer works when the bottom line is so clearly being affected.

Quoting MSPNWA (Reply 89):
The winter MSP had wasn't nearly as bad as ORD. And remember, ORD is already a congested airport. It can't handle weather events like DTW or MSP. I can definitely see how UA was hit the hardest by the winter we had. Still not THE reason they lost big money, but it could be A reason.

ORD has changed leaps and bounds with new runways and re-configuring of operations. Again, the same argument that the other airlines were affected too is being used here. Don't WN and AA have gigantic hubs in the Chicago area? Why was UA so adversely affected and the other airlines weren't?

Quoting MSPNWA (Reply 89):
And from my experiences, UA is clearly above DL's offering. The opposite of the earnings. Does it prove anything? No.

UA didn't take over NW. Unfortunately, that is the biggest contributing factor to your "experiences." I don't know almost anyone that agrees with you that UA's offering is "clearly" above DL's. There's something else not being spoken of directly that is so clearly affecting your perception.

Quoting MSPNWA (Reply 89):
That's why UA's problems can be more easily fixed than some believe.

What? I think that's the opposite of what the poster you responded to was saying. UA's problem is far larger than simply changing the onboard offering.

Quoting MSPNWA (Reply 106):
Likely yes. But it begs the question. How much of that is caused by perception, and how much is caused by reality? I see UA as having a major perception problem.

I don't. They have a management problem, and operational stability problem and a revenue problem. DL and AA don't have these same issues. The revenue problem being worst of all, and from UA's earnings call, I don't see a plan by UA management being executed to fix this.

Quoting MSPNWA (Reply 122):
UA's domestic network is built on longer stage lengths. That's just a fact. That's how they garner considerably more domestic ASMs per mainline flight than DL does. However, I don't think people have been willing to pay that extra money for a long flight versus short one. I believe the difference in fares between a 1-2 hour flight and a 3-4 flight has grown smaller and smaller. That helps DL and AA, which comparatively run on shorter flights, and hurts UA which relies on longer routes. When you're collecting $400 airfares, you'd rather being doing that on a 1,000 mile flight versus a 2,000 miler. There's your difference in revenue.

This is entirely false. UA's domestic network is not built on longer stage lengths, UA has simply chosen to focus on operating longer routes with its larger equipment. There's simply no reason that UA needs to be running 20-plus flights each way between places like LAX, SFO and EWR. These resources could easily be allocated to more routes like ORD-IAD, DEN-MSP, ORD-DTW, DEN-ATL, ORD-DFW, etc. Instead, UA has chosen to serve these routes with 50-seaters (something the competition has nearly abandoned on routes of this length and volume), and the same can be said of nearly any 1,500-mile or less route that UA operates. The influx of 70-seaters to UA should help this issue somewhat, but the problem is far worse since UA management insists on continuing to shrink domestic capacity, a strategy that both AA and DL are doing the opposite of. UA has basically ceded the domestic market to LCCs and the other legacies, and is relying entirely on its international network to "subsidize" the airline's domestic network - almost reminiscent of a practice PA so poorly tried to escape in its late years. This clearly isn't working, and is troublesome when domestic ASMs are still equal to or larger than international capacity. AA, DL and WN (as well as all the other LCCs) have shown that there's considerable money to be made domestically, it's inconceivable to understand how UA seems to be getting this so wrong.

Jeremy
 
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Tigerguy
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 8:56 pm

Whether or not you wish to nail Smisek and Co. to the cross for the current string of lukewarm performances, I think United's problems can be boiled down to one word: inconsistency. I don't have my head in the sand when I say that it's not all bad, but that's merely based on my experiences as a passenger and an outside observer of the goings-on. However, they've got issues that I've (so far) been fortunate to not experience, and that's the problem. For every person like myself that is satisfied with UA, there is another that's been jilted in some fashion. As long as United is trying to go down multiple paths at once, nothing much is going to happen that isn't happening already. Thus, I shall repeat the refrain that has been so often sung: it is up to Smisek and Co. to manage the airline smartly and consistently.

How much more time should they get to prove that they can actually make a plan and make that plan happen? I don't know, but I would definitely like to see what the summer brings. I would like to see that somebody is serious about fixing what problems exist and strengthening what proven assets they posess. Everything won't happen overnight, and some things will definitely cost money, but it has to start somewhere, and it might as well happen when the money should be flowing in. Satisfied though I am, I know there is room for improvement and that they can do better. I would like to see a consistent(ly good) United.

I am not yet ready to crucify Smisek and Co. But if true progress is lacking (not just a quarter where they cut their way or stumbled into a profit, or some not-very-good-at-all reason why they're in the red), then I know where the hammer and nails are. My dollars may be but a blip on their radar, but they should realize that the flying public is made up of quite a few blips.
Good night, and keep watching the skis. Uh, skies.
 
MSPNWA
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 9:05 pm

Quoting FlyPNS1 (Reply 123):
Yes, I do think UA has a perception problem, but much of that is driven by reality.

It's not a perception that UA is flying all 50 seaters on ATL-EWR while DL flies mainline with F class, it's reality.
It's not a perception that UA serves meals on far fewer mainline flights that AA or DL, it's reality.
It's not a perception that UA has 8 across in C class on 777's, while DL is four across, it's reality.
The list goes on.

While these items aren't that important to those who fly once or twice a year, they do matter to business travelers.

And I'll show how in reality it can be perception.

I'm not going to cherry pick a route like EWR-ATL, one in which UA has the proportionally correct capacity but is in dire need of the new 76-seaters coming onboard. Instead let's look at the current routes UA offers out of ATL, and the routes DL offers out of EWR.

UA: EWR, IAH, ORD, CLE, DEN, IAD, and SFO.
D: ATL, DTW, MSP, CVG, and SLC

Most of UA's flight are on regional jets, and some will complain. That's understandable. I avoid most of them too. At the same time they're probably failing to see that UA offers more destinations, more flights, and much better geographic coverage and connecting options. They'll complain about the one negative aspect and fail to see the multiple positives. Of course capacity is well in DL's favor, but that's not a metric that's a concern to a customer unless they can't find a seat at all.

Or take the 8-across business class. Throw away personal preferences over the seats, since I've heard plenty on both sides. UA was a U.S. leader in all lie-flat business. Now the perception is that UA sucks because their business class is behind the latest and greatest. Forgotten is how they led the way for so long, and how it's foolish and impossible it is to change products every time your competitor does. If reality was always the main driver, and it's the case right now at UA, laggards like DL and AA should have been in deep trouble a couple years ago.

Quoting catiii (Reply 124):
And yet you ignored the part of that post where I said, if United's detractors were only looking at perception, point me to the measurable operational categories where UA is surpassing DL that refute the perception of UA? Or, by your metric, where is UA flying that DL isn't?

I didn't ignore it. I said awards are based on perception too, which they are. WN is always near the top of Fortune's Admired. It's based on reputation, not current reality. Do you honestly believe that characteristics such as on-time performance, which is primarily airport dependent, not airline dependent, is a valid measure? It wasn't that long ago that DL was struggling in those areas. That should have driven people away, right? Take customer complaints statistics for example. Are they reliable? Take two travelers on a flight where things went wrong. Who is going to complain and make it into the stats - the one who thinks the airline is okay and gives them the benefit of the doubt, or the customer who thinks the airline sucks? Pretty clear.

[Edited 2014-04-24 14:16:44]

[Edited 2014-04-24 14:18:22]
 
jpetekyxmd80
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 9:12 pm

Not only are they lagging behind the bunch financially, they have essentially turned themselves into a worse airline than DL or AA.
The Best Care in the Air, 1984-2009
 
jayunited
Posts: 3097
Joined: Sat Jan 05, 2013 12:03 am

RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 9:19 pm

Quoting United1 (Reply 92):
God forbid someone on here actually is a bit optimistic and doesn't jump on the I hate UA or we are doomed bandwagon....

I didn't know you were a UA frequent flier from your post on this thread and others I thought you were part of upper management.

That being said I would love to be optimistic as would a lot of UA employees but how can we be when every other airline in the U.S. is improving except UA. All employees are asking for is a viable workable plan for success and what really set me off was reading all the excuses UA posted on Flying Together while in the comments section employees are are still asking the same question. What is the plan to fix UA's problems? Here it is April 2014 and we still don't have an answer. My comments are not meant to bash UA my comments merely represent my frustration because I really want to see this airline soar.
 
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jetblastdubai
Posts: 1993
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 9:26 pm

Quoting DualQual (Reply 125):
a 2.5 year fence. Shorter in duration than the similar fence in place at record profit producing DL and not even in the same ballpark at the myriad of fences that can be assumed will be in place at AA/US and still in place at US/HP.

Thanks for the background and clarification. I followed ALPA's ongoing discussions about a national seniority list years ago and I've never seen ALPA Council meetings so full. That would have solved a lot of problems down the road but there would have been lasting scars in the negotiations.
 
catiii
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 9:28 pm

Quoting MSPNWA (Reply 133):
the routes DL offers out of EWR.

DL, and UA, look at the entirety of the NYC market, not just EWR. DL doesn't have to fly to a ton of cities out of EWR because they also can cover that NYC lift via EWR/LGA/JFK. ATL is the only airport serving the 9th largest MSA in the nation. UA has to serve it from more cities.

Quoting MSPNWA (Reply 133):
o you honestly believe that characteristics such as on-time performance, which is primarily airport dependent, not airline dependent, is a valid measure?

DL flies into the same congested airports that UA does, so yes, it is a valid measure. As is the fact that DL canceled just 0.3% of its flights in 2013, 2x as good as WN and AS and 5x as good as AA, UA, and US. In addition, they set a record of 72 straight days in 2013 without a cancellation. Reliability matters. The market reflects that.

Quoting MSPNWA (Reply 133):
It wasn't that long ago that DL was struggling in those areas.

And DL fixed it, something UA either can't do or won't do.

Quoting MSPNWA (Reply 133):
Do you honestly believe that characteristics such as on-time performance, which is primarily airport dependent, not airline dependent, is a valid measure? It wasn't that long ago that DL was struggling in those areas. That should have driven people away, right? Take customer complaints statistics for example. Are they reliable? Take two travelers on a flight where things went wrong. Who is going to complain and make it into the stats - the one who thinks the airline is okay and gives them the benefit of the doubt, or the customer who thinks the airline sucks? Pretty clear.

So then if you don't use revenue, on time performance, customer complaints, lost bags, or any other of the myriad number of metrics that the industry uses to benchmark success, how do YOU rate what is or is not a successful airline? The fact that it gets you from point A to point B without killing you?
 
UA444
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 9:36 pm

I sure hope everyone at "ugly girl" US Airways is raising a glass of champagne, and maybe a middle finger, to Jeff Smisek. I know I would be.
 
joeljack
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 9:45 pm

Quoting FlyPNS1 (Reply 123):
Yes, I do think UA has a perception problem, but much of that is driven by reality.

It's not a perception that UA is flying all 50 seaters on ATL-EWR while DL flies mainline with F class, it's reality.
It's not a perception that UA serves meals on far fewer mainline flights that AA or DL, it's reality.
It's not a perception that UA has 8 across in C class on 777's, while DL is four across, it's reality.
The list goes on.

While these items aren't that important to those who fly once or twice a year, they do matter to business travelers.

Yes, my dad, which is allowed to fly in First with his company, was purchasing about 25-30 domestic FC plane tickets per year with UA and is a million miler over his life time. His ticket were mostly between OMA-TPA at about $1,500 each on average. He said that he was tired of paying these prices for only the TPA-IAH flight getting First and the IAH-TPA flight being a 50-seater but what pushed him over the top was not getting a meal on TPA-IAH for a paid First class ticket.

He moved about 90% of his business to DL this past year, connecting in ATL instead and said he gets full-size mainline planes on both OMA-ATL and ATL-TPA with "decent" food options on his flights. He said prices are similar.

This is about $40,000 in very high yield revenue that moved from UA to DL. He is very happy with his switch. I wonder how many people are similar to him?
 
b377
Posts: 120
Joined: Sun Apr 03, 2005 10:51 am

RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 9:51 pm

Quoting UA444 (Reply 138):
I sure hope everyone at "ugly girl" US Airways is raising a glass of champagne, and maybe a middle finger, to Jeff Smisek. I know I would be.

This raises an interesting question. Just how much US Air revenue has now switched to AA from UA?

I know on the earnings call AA indicated Trans-Atlantic revenue was down due to the US *A switch to 1W, but what about the Domestic, Latin America and Pacific Markets?
 
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malaysia
Posts: 2667
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 9:54 pm

Quoting United_fan (Reply 83):
Everything else is being farmed out ...

I also noticed that UA is looking for supervisors at some stations that already have been decided to be farmed out. why would you apply for a job that is scheduled to be farmed out, I think it was OGG or something?
There Are Those Who Believe That There May Yet Be Other Airlines Who Even Now Fight To Survive Beyond The Heavens
 
IAHWorldflyer
Posts: 885
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 10:22 pm

Quoting MSPNWA (Reply 133):
UA was a U.S. leader in all lie-flat business. Now the perception is that UA sucks because their business class is behind the latest and greatest. Forgotten is how they led the way for so long,

OK, as a sales and marketing guy, I just can't let this go without a comment.

Being the market leader 5 years ago, or 6 months ago, does not put money in the bank today. You constantly have to perform at the highest level you can to retain customers. Look, the airline industry is now an oligopoly that has almost commoditized it's product. I worked for a company about a decade ago that had been the market leader, and management thought they could rest on their laurels and the customers would come begging for our product. That company liquidated in 2010. People got the same or better product quality for the same or lessor price, with better customer service. Those same lessons apply to an airline like United. Three decades ago Pan Am was the number one choice for people flying across the Atlantic. Where are they today?
 
FlyHossD
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 10:22 pm

Quoting SESGDL (Reply 131):
The revenue problem being worst of all, and from UA's earnings call, I don't see a plan by UA management being executed to fix this.

That was my "take," too and so I'm concerned about my friends and colleagues at UA.
My statements do not represent my former employer or my current employer and are my opinions only.
 
United1
Posts: 4209
Joined: Wed Oct 08, 2003 9:21 am

RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 10:33 pm

Quoting jayunited (Reply 135):
That being said I would love to be optimistic as would a lot of UA employees but how can we be when every other airline in the U.S. is improving except UA.

They are improving however...compared to 2012 from a customer standpoint UA is doing much better, on time performance is better (you want to see an airline with horrible on time numbers look at WN,) less flights are being canceled, the fleet is clean and getting much younger. Financially even UA is actually doing alright and is expected to post a larger profit this year than last.

I know its frustrating to see something that you care about bashed around a lot (the organization that I work for is widely criticized as an institution but those same people love what we do.)

Quoting tlecam (Reply 130):
do think that there is a perception issue, but I don't think that's the answer entirely. There are some real quantifiable differences in the onboard experience. For example, between UA and DL - things like IFE, Wifi, power at every seat, USB at every seat - and the comprehensiveness throughout the fleet. I can't recall the last time I was on DL mainline metal where I didn't at least have wifi. Many planes have IFE, particularly for cross country flying. Even that 738 from BOS to SLC has both wifi and personal tv. And DL can tell me when I book my ticket whether the scheduled plane has these things. United does not even tell me what the plane will have or not have. And for business travelers like myself, those things do matter.

Well thank you for nailing some of the perception issues on the head...

UA absolutely tells you what services are available on the flight at the time of booking, at check-in and at the gate via GDS. You can find all of that information out at any time by checking the amenities tab either online or via the app.

IFE:
UA has PTVs of some kind on 391 aircraft...in coach mind you...that's about the same as DL, AA and US combined.

Power ports:
744s: AC in every F/J seat nothing in Y (shared AC being retrofitted in Y)
772 International: AC in every F/J seat shared in Y (2 for every 3 seats) on every 2 or 3 class aircraft
772 Hawaii: AC power to be retrofitted (AC in every C seat shared in Y)
789: AC in every J seat shared in Y (2 for every 3 seats)
788: AC in every J seat shared in Y (2 for every 3 seats)
764: AC in every J seat shared in Y (2 for every 3 seats or 1 for every 2)
763 2-Class: AC in every J seat shared in Y (2 for every 3 seats or 1 for every 2)
763 3-Class: AC in every F/J seat nothing in Y (being retired)
753: AC in every C seat shared in Y forward of the exit row (2 for every 3 seats) being retrofitted - half done
752 International: AC in every J seat shared in Y (2 for every 3 seats)
752 P.S.: AC in every J seat shared in Y (2 for every 3 seats)
752 Domestic: Nothing (being retired)
73E: AC in every C seat shared in Y (2 for every 3 seats)
739: AC in every C seat shared in Y forward of the exit row (2 for every 3 seats)
738 Micronesia: Nothing
738 Domestic: AC in every C seat shared in Y forward of the exit row (2 for every 3 seats) being retrofitted - 85% done
737 Micronesia: Nothing
737 Domestic: AC in every C seat shared in Y forward of the exit row (2 for every 3 seats)
320: AC power to be retrofitted (AC in every C seat shared in Y)
319: AC power to be retrofitted (AC in every C seat shared in Y)
175: AC in C

USB:
Every IPTE/Diamond F/J seat and in Y on 2-Cabin 767s, 787s and P.S. 752

We had a big discussion about this on the UA 789 thread...net net UA has more power ports on offer than AA or DL.

WiFi
DL has everyone beat on WiFi coverage hands down but UA does have WiFi on 240 or so aircraft and expects to have it on-board 450 by years end. The system also works worldwide...UA was the first US airline to offer that.

[Edited 2014-04-24 15:36:06]
I know the voices in my head aren't real but sometimes their ideas are just awesome!!!
 
FriendlySkies
Posts: 3540
Joined: Fri Aug 13, 2004 3:57 pm

RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 10:50 pm

Quoting United1 (Reply 145):
They are improving however...compared to 2012 from a customer standpoint UA is doing much better, on time performance is better (you want to see an airline with horrible on time numbers look at WN,) less flights are being canceled, the fleet is clean and getting much younger. Financially even UA is actually doing alright and is expected to post a larger profit this year than last.

But his point isn't about public bashing. When UA's own employees, on their employee-only website, are questioning the excuses (and yes, they are excuses) being made by management without any real answers or plan given, then there is a serious problem, however you want to try to spin it. Clean airplanes do not make money, efficient and reliable operations and smart revenue management do, and right now UA cannot do either correctly, and more importantly, the management have not said or done anything to indicate they are serious about changing that.

When your workforce no longer trusts anything coming out of your mouth, it's pretty damn difficult to run a business.
 
a321luke
Posts: 144
Joined: Fri Aug 30, 2013 9:36 am

RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 10:54 pm

I do apologize for not reading all of the almost 150 replies, but my questions:

1.) Is United too big for its own good?
2.) Is Smisek going to be ousted?
3.) Are we going to see a leaner, meaner UA in the near future? IE cutting underperforming routes, placing properly sized aircraft on routes, etc.

Quoting FlyPNS1 (Reply 8):
Indeed. I can see it now:

Analyst 1: Your revenue performance is trailing the industry.
Smisek: We've got 787's.
Analyst 2: Your cost performance is trailing the industry.
Smisek: C'mon guys we've got 787's.
Analyst 3: Your merger doesn't seem to be producing any benefits.
Smisek: 7-8-7.

You owe me a new computer.   
Planes, Trains, and Cars... Heaven :)
 
DDR
Posts: 1736
Joined: Sat Sep 28, 2013 11:09 pm

RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 11:00 pm

Quoting United1 (Reply 145):

So If UA is so great, why are they losing money when everyone else is making money? That is the question that no one can answer and that is the reason that there are concerns about UA. I still do not agree that this merger was the right thing to do.
 
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tlecam
Posts: 1500
Joined: Tue Jul 23, 2013 1:38 pm

RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 11:05 pm

Quoting United1 (Reply 145):
Well thank you for nailing some of the perception issues on the head...

UA absolutely tells you what services are available on the flight at the time of booking, at check-in and at the gate via GDS. You can find all of that information out at any time by checking the amenities tab either online or via the app.

I'm happy to be proven wrong...would make my travel life better. Where do they show this at the time of booking? I just went to the Delta website and to the United Website and here's what I see when selecting flights.

I just went and tested this. I used BOS-SLC and BOS-SFO for the same dates in May (May 5-8). As far as I can tell, United does not tell me what amenities my flight has. It tells me the following, along with the flight number, departure and arrival time:

Flight: UA433
Aircraft: Boeing 757-200
Fare Class: United Economy (S)
Meal: Meals for Purchase
No Special Meal Offered.
See On-Time Performance
View Seats

Am I missing something (entirely possible).

Edit to add that I would post screen shots but I can not get them to upload for whatever reason.

[Edited 2014-04-24 16:06:35]
BOS-LGA-JFK | A:319/20/21, 332/3, 346 || B:717, 735, 737, 738, 739, 752, 753, 762, 763, 764, 787, 772, 744 || MD80, MD90
 
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LAXintl
Posts: 24964
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RE: United Posts Hefty Q1 Loss

Thu Apr 24, 2014 11:10 pm

Some of my notes from earnings call.


FINANCIAL
o $489mil loss
o Financial performance not acceptable, understands importance of improving results for investors.
o Confident that strong assets, combined with strategies being implemented will yield improving as progress in 2014 and beyond. Still expect improved profitability in 2014 vs 2013 and improved quarter over quarter performance.
o Winter storm effects approx $200mil
o Overall happy with CASM - grew slower than forecast thanks to improved productivity. Need to keep focus to manage into future and raise overall productivity 15-20% by 2017 to ensure cost remain not too high
o Improving balance sheet. In Q1 paid down $637 in debt. Almost 50% decline in total debt since 2012.

TRAFFIC / NETWORK
o Q1 PRASM down 2% Shift in Easter and winter storm cancellations about 1.25-1.50 of decline.
o Brutal winter - 35,000 cancellations. Equivalent to grounding airline for 7 days.
o Seeing revenue strength domestically.
o Planning improved management of ticket sales. Less inventory for advance sales, more last minute tickets.
o Pressure in Pacific due Japanese Yen, and significant competitive capacity growth to markets like China. Still solidly profitable however
o Better coordination with ANA and NRT flying saw 30% increase in connecting flow between carriers. UA able to exit non productive intra-Asia flying.
o DEN & IAH hubs structures being "recalibrated" - more directional flow, allow for shorter connections and push up yields.
o Look to develop more secondary Asian cities with "power of 787"
o See great hub assets. EWR only true connecting hub for NYC, IAH into Latin America, SFO as gateway to Asia.

FLEET
o Q1 had 11 new aircraft including 2 787s
o Q2 will have 9 739ERs plus 6 E175s deliveries
o By end of 2014 all Airbus and CRJ700 will have new econ seats
o 230 aircraft with wi-fi today. 450 by year end.
o 787s perfect for routes like SFO-Chengdu. Also "Terrific" aircraft for high competitive markets like LAX-China.
o Over next 18-months have 175 regional aircraft coming off CPA's. Lots of flexibility to decide to renew or not.

OTHER
o Not afraid of tough choices such as recent Cleveland reductions, but willing to make changes that are necessary for long-term success.
o Seeing strong customer satisfaction scores year-over-year.
o Ancillary revenues strong - especially economy plus and F class upsells. Approaching $3bil annual contribution (up 15%) Now sell Econ+ via Travelport GDS and soon on Amadeus.
o New website roll out now planned for summer
o Frequent flyer programs continue to evolve across industry. Seek to better align benefits to customers based on benefits customers deliver to company. More sophisticated bidirectional relationship.

=
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