DCEsquire

I'm not a shareholder, but I follow the stock and the ratings (and the management) because that impacts me as a PAX.

Jeff started in September of 2008 and even thought I am highly critical of many of the changes - I don't dismiss him as a CEO in any way. He seems very engaged and focused.

That said, stock has not done well since he joined. Any perspectives?

Before I get flamed, I think UAL is rated more highly than most of the other US Airlines out there. That said, since stock performance drives executive compensation, pax benefits and behavior it seems worth asking.

http://finance.yahoo.com/echarts?s=U...=0;logscale=on

FlyerChrisK

Wait, what? Jeff Smisek hails from Continental (and started there around 1995). The merger talks in 2008 fell through.

WineCountryUA

Given the performance of DAL, LLC and other market measures SP500, DJIA, NASDAQ over the past year ... UAL has done a worse but not uncommon for companies in the middle of a merger to do a little worse (given the on going uncertainty)

Probably a little early to draw any conclusions.

addendum: over a two period, UAL has out done the others

FightingIlliniUAL

southwest has outperformed united, based on stock price only.

in general, airlines have been and will likely continue to be horrible investments. I love Smisek's quote from a recent Northwestern University lecture/presentation:

"It's interesting for me to be here delivering a lecture, because to me a lecture means you're smart and you're imparting some kind of learning. Well I'm an airline executive so by definition, I ain't smart. In terms of imparting learning, recognize that as an airline business, we haven't returned out cost of capital since the Wright Brothers..."

B787938

UAUA was trading south of $3 when the most recent merger talks were announced if I recall correctly. How is it [UAL] doing today?

Fanjet

September 2008... September 2008... what happened in September 2008? Hmmm... was it Jeff Smisek taking over the reigns? Or was it the start of the financial meltdown and a global recession? Hmmm... let me think...

Sorry, but traders look at the price of oil and the state of the economy when determining airline stock value. Not how much an airline CEO is making a group of pampered whiners upset because he's taking away a bunch of costly freebies. "But, they're elite after all ..."

sbm12

I'd say that a quick review of causation v correlation would be useful in this case. :-:

entropy

funny you mention that; I find it disturbing that so many execs are compensated based on numbers that they may not really have control over/influence over... certainly this falls into that category. Clearly, if oil goes up 50% the airlines will lose money left and right and there's very little that can be done.

But the CEO particularly in this case has the job of setting the tone and managing a complex integration of two large airlines. Unfortunately, in this case, aside from painting aircraft, the "integration" is not going all so well.

sbm12

I find many things disturbing; this is pretty low on my list.

Yeah, they haven't managed to shift capacity to where it is needed, align some of the policies (with basically all complete in 6 weeks), integrate in-flight policies and procedures to a level that satisfied the FAA or do anything else successfully. What's the timeline that successful integration is measured on? Passing judgment today seems awfully premature to me.

LeftsideWindow

Really? Do you think that most passengers can even tell the difference (beyond some new signs)? FT does not represent the flying masses. I don't know why one would explect this to be different than any other merger - there will be problems and it will take more than a few months to fully integrate. Surprise!

DCEsquire

Last I checked, the stock market has done pretty good since 2008..

http://www.1stock1.com/1stock1_142.htm

Even though I don't hold shares, I would like to see UAL doing well - to the extent its stock isn't doing great, I think that results in (more) surly service and probably even deeper cost cutting.

Fanjet

The stock market in general has done great since September 2008. But that doesn't mean that every stock has shared in that glory. Airline stock prices are very much subjected to the state of the economy and the price of oil. And opposite of the point of this thread, I think shareholders of UAL would be quite glad that Smisek is running the company; much more so than Tilton. The only people who seemed to be upset with Smisek running things are the ones who are upset their welfare benefits are being scaled back.

Often1

There are however many threads on FT from people swearing that they know 10,000 people who are jumping ship from UACO because Smisek is using a lower threadcount for the hot towels in F. But, the fact is that UA is on an even keel, it's running a profit and pax satisfaction, as publicly reported, is up.

Capacity is down and fares are up. That means fewer award seats available and more pax competing for fewer UG (at a time when paid F and corporate discounts are up). So, of course, some distressed people out there.

But, the fact is that FF programs are like sheep. They aren't the same, but they do follow each other. So the grass isn't going to be greener elsewhere and, if it is, it won't be for long.

In the end, the CEO's duty is to shareholders. That means keeping pax happy enough to sell tickets and that's what's happening.

Richard Chen

That comment got me to see who owns UAL stock & since 93% institutional of which over half is Jeffey himself. His cuts to get perceived profit are merely pathological, psychotic self-profit. Plus as countless many said, UAL would make not just any real profit but far more profit if they valued their customer. They're done when low fuel prices go.

BearX220

Institutional owners tend to make broad sector plays, not analyze the merits of UAL vs. DAL vs. what have you. In that sense UAL valuation has benefited from a rising-tide environment despite laggard performance.