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UA CFO Rainey on Bloomberg: Global First "Effectively the Same" as J

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Old Feb 27, 2015, 10:42 pm
  #361  
 
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Originally Posted by gengar
No one has suggested that it's a contradiction. The problem with your argument, as has been pointed out by myself and other FT'ers in this thread and others, is that the longhaul F footprint isn't shrinking.

You can keep claiming to be respectful, but your protests, however vocal, aren't supported by the facts.
Name two airlines, outside of the ME3, that are offering more longhaul F seats and flights with longhaul F than 3, 5, or 10 years ago.

You can't, but I'll give you a chance to try.
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Old Feb 27, 2015, 11:23 pm
  #362  
 
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Originally Posted by nerdbirdsjc
Name two airlines, outside of the ME3, that are offering more longhaul F seats and flights with longhaul F than 3, 5, or 10 years ago.

You can't, but I'll give you a chance to try.
Ah, so you're saying your argument was actually "Outside of the ME3, there aren't multiple airlines that have increased both total number of longhaul F seats and flights with longhaul F".

Boy, have we come a long way from:

Originally Posted by nerdbirdsjc
2) The longhaul F footprint is shrinking.
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Old Feb 27, 2015, 11:40 pm
  #363  
 
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Originally Posted by gengar
Ah, so you're saying your argument was actually "Outside of the ME3, there aren't multiple airlines that have increased both total number of longhaul F seats and flights with longhaul F".

Boy, have we come a long way from:
I stand by everything I've said.

United dumping GlobalFirst will be a net positive for me, so I fully support the airline laying the rhetorical and logistical groundwork necessary to dump it as the longhaul fleet renewal ramps up in the second half of the 2010s.
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Old Feb 28, 2015, 1:04 am
  #364  
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Originally Posted by roadkit
No, I did not suggest that nor am I suggesting that.

Im suggesting that UA doesn't force FAs to treat first class like first class because the FAs that work first class do so based on a seniority system UA cannot control, and these are the same employees who know union rules to the letter - mostly because they are all over 60 years of age and have been at this game for a lot longer than a lot of us have been flying the airline.

I am not going to apologize for saying that I would much rather have a young, attentive, Singapore Girl or Boy waiting on me hand and foot for my $15K than put up with a <redacted> who is more interested in reading the latest edition of People magazine than making sure I have what I want.

And of course it's cultural -- in the U.S. people are almost keyed into NOT treating wealthy/privileged people with any sort of deference -- and I get that. But they somehow can't even figure out how to do it as sort of play acting "This person paid $15K to sit in this tube in the dark for 12 hours; my job is to act like I give a .... and wait on him/her hand and foot. That's my job." Except they can't figure out it's their job. They think its a distraction to their job, which in their mind is taking a TPAC so they can shop in Tokyo, and then fly home and not work for another week.
I don't dispute anything you wrote, except there are exceptions - I've received phenomenal service on TPAC flights from CO crews (UA, not so much - actually, just once), while I've read horror stories on the SQ board about some FA's getting their sarong (or tie) in a knot and assuming the customer being served is beneath their effort...but that is very rare.

While it's cultural, the root cause is laziness and lack of professionalism. In Asia, being a FA is a decaying proposition because your career lifespan is limited by your ability to remain young and pretty - therefore the goal is to do well, learn, and parlay your success into career #2, which is 90% certain to be outside the airline industry. There is no job security, nor a union - but there is a tremendous pride in the company, the brand, the organization and the job. No matter how you feel when you wake in the morning, no matter how bad your argument was with your husband/boyfriend, you're going to be a polished professional and give it your best once that uniform goes on.

I feel the same laziness is apparent within the management ranks of not just UA, but most US carriers and it's contagious. Remember VX a few years ago? Wow! What about last week when their response to transcon lieflats was toss their reclining customers new pillows and blankets vs update their now tired very un-WOW product.

Are Smisek or Rainey innovative, passionate, authentic leaders? Nothing personal, but heck no. They stare at metrics while licking Hunter Keay's big toe. Periodically they tear away from spreadsheets to see what competitors did 3 years ago, then bring United up to 80-90% of that previous goalpost...unless it's Delta shoving another foot up its customers' behinds. That sort of "we own you, you have no other choice, so we don't really care" attitude toward customers is problematic when the wrong people continue to sit on the Board, and the wrong customer (the shareholder) is being pandered to at the expense of the right customer (the person sitting on the flight) who is considered a data point to be screwed/incentivized.

I've flown SQ, OZ, NH, and BR on longhaul TPAC - and the stark difference in service delivery - not product, seat, or food - but the experience and overall interaction and attitude of the staff - is in such stark contrast to UA and AC that I can only assume there is no hope for this industry on our side of the ocean when the problems are top down, not bottom up.

At least 'ol Herb Kelleher proved you could build a successful, respected and profitable airline operation and brand by middle-fingering analysts and stockholders while empowering employees to take care of customers - and now we have the opposite example where new jetBlue management is proving you can destroy a successful, respected and (sometimes) profitable airline operation and brand by middle-fingering loyal customers and employees while empowering stockholders and analysts....and that is our root cause in action, right there.

Last edited by l etoile; Feb 28, 2015 at 12:18 pm Reason: Comment removed from quote
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Old Feb 28, 2015, 5:37 am
  #365  
 
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The guys who want to fly oversexed, underage staffed airlines are just creepers, sorry. I fly the airline that gets me there fastest, period. The age of the FA are immaterial to me.
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Old Feb 28, 2015, 6:26 am
  #366  
 
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Originally Posted by LaserSailor
The guys who want to fly oversexed, underage staffed airlines are just creepers, sorry. I fly the airline that gets me there fastest, period. The age of the FA are immaterial to me.
Lol your statement might be true for creepers but for the other 99 percent - the rest of us - service actually matters for long haul flights - where time isn't actually as relevant as you make it seem....
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Old Feb 28, 2015, 7:22 am
  #367  
 
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Originally Posted by Always Flyin
Quote:



Incorrect. It's 17 777-300ERs already received with F and three more on the way.

Plus AA has A350s and 787s on order and it is unclear how many, if any, will be configured with F.

At the same time, UA is taking delivery of 789s with 6-year-old design seats that offer a sub-prime C experience. It's &quot;good enough&quot; for United.


Quote:




If UA hadn't pulled out of JFK-LHR it would be an easier decision...having that mission to support the Asia flights for the 777-300 3 cabin let AA more easily make the numbers work.




AA and UA compete on LAX/SFO-JFK. AA went three class. UA went two-class.
You're right on the updated 777-300 count but my JFK-LHR point is this.

For international first it's American's highest frequency 3 cabin market and the lynchpin of its ability to justify its small fleet of 3 cabin wide bodies.

Which also lets it try the fleet out on more marginal routes.

UA pulled out of this JFK market - gave up its prime Heathrow slots.

AA also maintained an international presence at JFK that helps support 3 cabin transcon.

UA gutted international out of JFK.

So while I don't think the final nail in a few 3 cabin planes remaining in 2020 is set - if UA was hell bent on it they would have made moves in 2012 to get rid of first on the 777s like they did to the ghetto birds.

I do think the reasons AA supports a bare bones 3 cabin on this new subfleet dates back to moves made well before today.

Blame management, blame unions, who knows but UA dismantled some East Coast jewels in the 2000s that gave AA a leg up.

Last edited by cerealmarketer; Feb 28, 2015 at 7:34 am
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Old Feb 28, 2015, 7:41 am
  #368  
 
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Originally Posted by bocastephen
Are Smisek or Rainey innovative, passionate, authentic leaders? Nothing personal, but heck no. They stare at metrics while licking Hunter Keay's big toe. Periodically they tear away from spreadsheets to see what competitors did 3 years ago, then bring United up to 80-90% of that previous goalpost...unless it's Delta shoving another foot up its customers' behinds. That sort of "we own you, you have no other choice, so we don't really care" attitude toward customers is problematic when the wrong people continue to sit on the Board, and the wrong customer (the shareholder) is being pandered to at the expense of the right customer (the person sitting on the flight) who is considered a data point to be screwed/incentivized.
We may not frequently agree on the subject of this thread, but I'm 100% with you on this one.
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Old Feb 28, 2015, 9:39 am
  #369  
 
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Originally Posted by nerdbirdsjc
Question. Do you cast similar aspersions upon the following major global airlines?

Delta
American
Air Canada
Air France
KLM
Etihad Airways
Singapore Airlines
All Nippon Airways
Qantas Airways
Air New Zealand
South African Airways
Japan Airlines
Cathay Pacific
Iberia
US Airways
Lufthansa
Asiana


Since the mid-1990s, all of the above have eliminated F on some or all of their longhaul fleets, either through refurbishment programs that removed F cabins, or through acceptance of new aircraft without F cabins.

The criticism in this thread loses credibility if delivered without an objective embrace of the reality that longhaul F is a shrinking violet in the marketplace.
Stop making stuff up. If you're going to make assertions, back it up with numbers. I'll just respond with respect to ANA (which you assert is eliminating F) since I fly them a lot and know their fleet.

It's true ANA eliminated F seats in their longhaul 744s. (Actually they got rid of the 744s.) So over the last 10 years an elimination of 100 F seats. During the same period they added 19 773ER with a total 152 F seats. So a net increase of 52%. They have an additional 9 773ER and 20 777-9X on order for an additional 232 F seats. So to put it plainly, what you describe as an elimination of F is in fact a four fold increase in the number of F seats.
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Old Feb 28, 2015, 11:22 am
  #370  
 
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Originally Posted by cerealmarketer
I think the real difference between the two airlines was the old Pan Am Asia routes Ferris picked up before the Allegis mess. No other US airline had that nonstop to Asia coverage, which lends itself to long haul premium fliers.

Not because UA had some magical product, but because US companies are willing to pay for business on routes of that length and there was no other choice with a domestic network to feed. DL, NW, CO, AA didn't cut it. Singapore and Cathay have no feed. Call it Pacific captive fliers from the US.

Is that Asia flying Chicago exec any more or less valuable than the hub captive Houston oil people or New Jersey pharma execs?

Not if they're all netting the same stage and cost adjusted yield.

Let's not pretend UA had some magic domestic First population - the airline that went Ted wasn't selling enough domestic First.

It's all about the network - and Asia drove it all.
I disagree that the only difference in pmUA and pmCO was the asian routes.

United and AA were the "business" airlines. They both flew all of the main "business" routes, and had a major presence in all of the major business markets. And when I say "business" I mean full fare premium traffic that was wiling to pay for expensive seats. Both airlines were in BOS, NY (JFK), ORD, LAX, SFO. Both then had a major presence in the key European market LHR. pmUA has Seattle and MIA, and AA had MIA to round out their networks. Both had the lions share of both the transcon business market, and the valuable finance/investment/entertainment markets. That both profitably operated elite transcon flights (PS and flagship) shows the different market position. The main difference (which would sometimes dictate which airline a person chose when both were options) was that United had an extensive Asian network, and AA had an extensive south American network.

Delta and NW and CO and US never had these premium passengers, and they mostly had hubs in secondary cites. I think your thesis that it was all the TPAC routes is belied by NW, which had a similar pacific market. Yet, NW dumped FC back in the 90s (and even then it was just the first row of seats were better). Why? Well their market was mostly upper mid-west, industrial, + pmCO passengers going to Asia, and that was not premium (as in real first class) traffic. For example, Detroit companies would pay for "business" but never First Class. They did not draw the NYC/LAX/SFO business traffic, and big banks/investment firms did not fly them as they (like sCO) did not service LHR nor the major coastal cities where they lived. United got the premium pacific traffic as it had a major presence in the cities where those fliers lived/worked, and its West Coast hubs were the places with the strongest business connections to Asia. [And p.s. NW did try, numerous times, N/S to Asia other than NRT, but they usually did not perform well as NW did not have the group of HVFers at its hubs willing to pay a premium to make it work.]

pmCO? It did not get much of the high value Manhattan traffic (say what you like, its frigg'n NJ, and EWR is/was a DUMP!), and the NJ Pharma traffic is mostly actually workers/researchers and they at best could fly business class. Big companies top execs (for example Pfizer) who might fly First Class were in Manhattan, and so CO did not get their traffic anyway. [The top executives I knew at Pfizer - people who could fly First Class, were based in NYC, and flew AA or UA, not CO, and I might add in my firm, of the NYC based partners who could fly FC, all flew AA or UA, none CO]. Houston? Well its a boom/bust city, and most of the overseas traffic is from actual engineers, etc that can fly Business Class, not FC, and moreover ended up flying other airlines as pmCO did not serve where they needed to go. My guess is that Dallas, although smaller, with its historically bigger banking/investment industry, and some high tech, along with retailing, is a better "premium" market for AA than is Houston for pmCO and UA now.

While I think your post reflects the level of analysis that the sCO folks applied to the question, with predictable results in driving away HVFers, I don't think the difference was simply the asian markets, rather I think it is/was in the DNA of the airlines in where their domestic hubs/catchment areas were along with having LHR flights.

What I am very curious about is if Parker is smart enough to realize how different that the AA HVFer base is from anything he had at HP or US, and not make the same mistakes that Jeff has made.
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Old Feb 28, 2015, 11:48 am
  #371  
 
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Originally Posted by Singapore_Schwing
I thought of this thread this morning when I got an email encouraging me to 'turn my seat into a suite' buy buying up to GF. It made me laugh a little, given the original premise of this thread. Suite seems a stretch for UA GF.
What route?
How much?
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Old Feb 28, 2015, 1:34 pm
  #372  
 
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Originally Posted by cerealmarketer
You're right on the updated 777-300 count but my JFK-LHR point is this.

For international first it's American's highest frequency 3 cabin market and the lynchpin of its ability to justify its small fleet of 3 cabin wide bodies.
(emphasis added)

The bolded is incorrect - AA also flies 3x daily MIA-GRU on the 77W. For your reference, 77Ws are on at least the following:

JFK-LHR 3x daily
MIA-GRU 3x daily
LAX-LHR 1x daily (to 2x daily 3/28)
JFK-GRU 1x daily
DFW-GRU 1x daily
DFW-HKG 1x daily
MIA-LHR 1x daily

To be clear, I'd be among the last to dispute the relevance of JFK-LHR, but I'm also not sure I'd say that a single, relatively short route with 3x daily service is what "justifies" a 20-plane fleet that will serve at least 12 r/ts.

Also, there's nothing particularly "updated" about the 77W orders - it's been over 10 since 2011, and confirmed at 20 for more than 2 years now.

Last edited by WineCountryUA; Feb 28, 2015 at 7:24 pm Reason: removed response to deleted post
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Old Feb 28, 2015, 1:44 pm
  #373  
 
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You added even more evidence that the bedrock for UA was the Pan Am route acquisition. It was being able to get a lock on those point to points from the West Coast that kept it from working for NW and its 1960s/70s era interport model.

Your analysis loses credibility when you say pmUA got the high value Manhattan traffic and CO didn't. Reality is UA at JFK was a shell of itself, gutted by a short sighted decision. PS is by far a West Coast originating service as noted by multiple UA employees.

To be a real 'business' airline you need a hub in the nation's most lucrative market. UA was didn't have one.

Continental built one from the ashes of People Express and Eastern in the most profitable place it could...by offering nonstops to places AA and DL didn't. UA was behind the curve and the only of the majors to walk away from NYC. It's sad actually.

I think AA was the only real national 'business' airline if you want to call it that.

But you have a shamefully condescending view of anyone who conducts 'business' that's not in California or New York so I won't bother informing you about the realities of premium fares in between the coasts. And that's coming from a Bay Area native who lives in Manhattan.

Reality is paid First demand is a shadow of what it was 10 years ago.

But Pharma is a marginal player on 3 cabin travel. Investment banks were the biggest customers of it in the US. And they gutted their paid First policies post 2008, even at the Partner level. Now instead of the norm, it's become a special exception, or a free upgrade given by airlines desperate to hold onto the contract (cough, AA).

In fact flying private had fewer issues than 3 cabin first at my firm. And that was the last straw for the US being able to support any airline maintaining its pre-2008 level of 3 cabin first.

AA made the decision to slash its capacity by over 50%. And UA instead of rashly pulling it out from all the 777s is taking a measured approach.

Trust me, they could have gutted this a lot sooner if they wanted to be blunt and not 'smart.'


Originally Posted by spin88
I disagree that the only difference in pmUA and pmCO was the asian routes.

United and AA were the "business" airlines. They both flew all of the main "business" routes, and had a major presence in all of the major business markets. And when I say "business" I mean full fare premium traffic that was wiling to pay for expensive seats. Both airlines were in BOS, NY (JFK), ORD, LAX, SFO. Both then had a major presence in the key European market LHR. pmUA has Seattle and MIA, and AA had MIA to round out their networks. Both had the lions share of both the transcon business market, and the valuable finance/investment/entertainment markets. That both profitably operated elite transcon flights (PS and flagship) shows the different market position. The main difference (which would sometimes dictate which airline a person chose when both were options) was that United had an extensive Asian network, and AA had an extensive south American network.

Delta and NW and CO and US never had these premium passengers, and they mostly had hubs in secondary cites. I think your thesis that it was all the TPAC routes is belied by NW, which had a similar pacific market. Yet, NW dumped FC back in the 90s (and even then it was just the first row of seats were better). Why? Well their market was mostly upper mid-west, industrial, + pmCO passengers going to Asia, and that was not premium (as in real first class) traffic. For example, Detroit companies would pay for "business" but never First Class. They did not draw the NYC/LAX/SFO business traffic, and big banks/investment firms did not fly them as they (like sCO) did not service LHR nor the major coastal cities where they lived. United got the premium pacific traffic as it had a major presence in the cities where those fliers lived/worked, and its West Coast hubs were the places with the strongest business connections to Asia. [And p.s. NW did try, numerous times, N/S to Asia other than NRT, but they usually did not perform well as NW did not have the group of HVFers at its hubs willing to pay a premium to make it work.]

pmCO? It did not get much of the high value Manhattan traffic (say what you like, its frigg'n NJ, and EWR is/was a DUMP!), and the NJ Pharma traffic is mostly actually workers/researchers and they at best could fly business class. Big companies top execs (for example Pfizer) who might fly First Class were in Manhattan, and so CO did not get their traffic anyway. [The top executives I knew at Pfizer - people who could fly First Class, were based in NYC, and flew AA or UA, not CO, and I might add in my firm, of the NYC based partners who could fly FC, all flew AA or UA, none CO]. Houston? Well its a boom/bust city, and most of the overseas traffic is from actual engineers, etc that can fly Business Class, not FC, and moreover ended up flying other airlines as pmCO did not serve where they needed to go. My guess is that Dallas, although smaller, with its historically bigger banking/investment industry, and some high tech, along with retailing, is a better "premium" market for AA than is Houston for pmCO and UA now.

While I think your post reflects the level of analysis that the sCO folks applied to the question, with predictable results in driving away HVFers, I don't think the difference was simply the asian markets, rather I think it is/was in the DNA of the airlines in where their domestic hubs/catchment areas were along with having LHR flights.

What I am very curious about is if Parker is smart enough to realize how different that the AA HVFer base is from anything he had at HP or US, and not make the same mistakes that Jeff has made.
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Old Feb 28, 2015, 1:53 pm
  #374  
 
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Originally Posted by gengar
...
The bolded is incorrect - AA also flies 3x daily MIA-GRU on the 77W. For your reference, 77Ws are on at least the following:

JFK-LHR 3x daily
MIA-GRU 3x daily
LAX-LHR 1x daily (to 2x daily 3/28)
JFK-GRU 1x daily
DFW-GRU 1x daily
DFW-HKG 1x daily
MIA-LHR 1x daily

To be clear, I'd be among the last to dispute the relevance of JFK-LHR, but I'm also not sure I'd say that a single, relatively short route with 3x daily service is what "justifies" a 20-plane fleet that will serve at least 12 r/ts.

Also, there's nothing particularly "updated" about the 77W orders - it's been over 10 since 2011, and confirmed at 20 for more than 2 years now.
In which case I wonder whether there is a clause in the JV with BA that requires some sort of 3 cabin minimum.

If the order size has been more than 2 years at that level then 3 cabin in those birds is not a reflection of Parker and Company.

And consider it on watch given the lead times on this stuff.

Since then TAM has pulled 3 cabin from its South America routes, with the best possible product, before the currency devaluation. Which says a lot about the ability to support the concept.

Last edited by WineCountryUA; Feb 28, 2015 at 7:27 pm Reason: quote updated to reflect mod edit
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Old Feb 28, 2015, 2:12 pm
  #375  
 
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Originally Posted by 5khours
Stop making stuff up. If you're going to make assertions, back it up with numbers. I'll just respond with respect to ANA (which you assert is eliminating F) since I fly them a lot and know their fleet.

It's true ANA eliminated F seats in their longhaul 744s. (Actually they got rid of the 744s.) So over the last 10 years an elimination of 100 F seats. During the same period they added 19 773ER with a total 152 F seats. So a net increase of 52%. They have an additional 9 773ER and 20 777-9X on order for an additional 232 F seats. So to put it plainly, what you describe as an elimination of F is in fact a four fold increase in the number of F seats.
S/he didn't make anything up.

S/he asserted that each of those airlines introduced versions of planes that had no First Class.

S/he didn't assert those airlines had a net reduction in seats.
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