REPUBLIC757

What about this: http://seekingalpha.com/article/2248...ng-with-united

cerealmarketer

I don't see the comparative score for UA.


CO's balance sheet was not in worse shape than UA's post bankruptcy sheet.

Airlines are risky.

In fact if you run altman Z scores on Delta today, they say it is at high risk of default.

Which is why I preach here the hubris there and with Parker is something investors need to be very weary of for the sector as a whole.

By the way, love the credible source of 'guy who wrote 3 blog posts for Seekingalpha.' The comments there are a gem.

fly18725

It is absolutely true that pre-merger Continental enjoyed the lowest borrowing rates in the industry. United continues to get lower rates than any of its peers today.

Either investors are stupid, or the market find's the fleet planning model you continue to disparage to be superior.

tuolumne

Mr. Kellner engendered himself grave ill-will and mistrust from UAL Corp.'s board and senior leadership after this decision, one that wasn't fully supported within Continental either, mind you. He wasn't around for much longer.

It was a humiliating public repudiation that had minds in Chicago wondering what exactly the motive was. Was it truly derived from operational considerations, which were incidentally cleaned up on a shoestring budget within 18 months? Or was CO trying to paint a narrative of a failed entity, and then ultimately profit off of its demise?


You're leaving out context.

As you're very much aware, UAL Corp. had started to court US Airways. When news splashed across the WSJ of an imminent transaction, Houston called home. The gig was up - CO could merge now or languish as a small-scale also-ran in the world of a post DL/NW & UA/US; AMR was off the table. It is not unreasonable at all to speculate that in this environment, it's financial rating would take an immediate hit, as it's long-term prospects would turn bleak.

If you disagree, phone up Smisek. He told the same to the New York Times. They were "ready to merge" alright!

goodeats21

I don't see in that article any comparison to DL/AA for the early July. They report UA's increase in performance over 2014 and 2015 (and actually the best July 4th since the merger), but frankly those comps weren't very hard to beat soundly.

Were you using other data to make the comparison?

Agreed. I would bet UA takes a step backward on performance metrics this month.

cerealmarketer

Here's some context....

http://www.nytimes.com/2008/04/28/business/28air.html

UA had just reported worse than expected results for 1Q 2008 (remember, this was a time when fuel was spiking and the economy slowing simultaneously) when CO decided to put it on hold.

UA was being viewed in a much more precarious position than CO/AA/US going into the 2008 downcycle by the market (one the industry and market got wrong).

And UA's perceived financial health was a reason Delta walked away from talks with United beforehand.

"Analysts said the situation created doubt about United’s health, an issue that has hovered around United since it emerged from bankruptcy protection in early 2006. That concern was a reason talks between Delta and United, which took place while Delta was under bankruptcy protection earlier this decade, never gained traction."

There are no primary sources of internal discussion from 2008-2010, but the move to join Star was in my view part of the bridge agreement UA and CO verbally built. CO joins star, UA works on keeping the operational and financial house in order. And they see what happens once the economy and industry stabilize.

The brief reengagement of US / UA in 2010 was a stalking horse in my view once the macro conditions stabilized. UA / CO were just too codependent in an unhealthy but necessary way.

A shame the feds never approved UA/US back in 1999. Two airlines that deserved each other.

cerealmarketer

Yes, same author, wrong article. Here's the one

http://www.bizjournals.com/chicago/n...mpetitive.html

"According to data from from masFlight, an airline data provider, and other sources, United ended the first week of July on Thursday with the best overall on-time performance of any of the four major domestic carriers. The numbers show United finished the week with 81.7 percent of its flights arriving on time. The United States Department of Transportation designates a flight as on time if it gets to the gate within 14 minutes of the scheduled arrival time.

The UA results for the first week of July put the carrier well ahead of perennial on-time frontrunner Delta Air Lines (NYSE: DAL), which slipped in the past week with only 77.4 percent of flights arriving on time. United also squeaked out a first place finish over Southwest Airlines (NYSE: LUV), which got 81.5 percent of its flights to the gate on time for the first week of July.

And American Airlines (NASDAQ: AAL), gearing up for new routes to Cuba starting in September, trailed among the four major domestic carriers, with 74.5 percent of its flights arriving on time between July 1 and 7."

goodeats21

Interesting. Thanks.

It is great to see United getting competitive on schedule performance. Delta's numbers for the first week of July seem really low for them. I don't really follow the other airline forums. Wonder if there was some outside factors that caused their fall for the week?

I am anxious to see how United comes out for the whole month. Anecdotally, my flights this month seem at about 20% on time and 10% cancel.

EWR764

No doubt that weather in the 2nd half of July has been a lot worse than the 1st half, but AA/DL are similarly exposed to it.

W/r/t delays and cancellations, the long hauls are certainly "big ticket" items and create more havoc for more customers, but in the end only count for one flight.

artvandalay

July 27

922 LHR-EWR Canceled
959 LHR-ORD 3H 30 late
949 LHR-SFO 5H 30 late
79 NRT-ICN Canceled
902 NRT-HNL Canceled
91 TLV-EWR Canceled
1005 LIM-EWR 3H 50 late
2060 VCE-EWR Canceled (Replacement for 169 on July 26 also canceled)
162 GLA-EWR 1H 40 late
121 BCN-EWR 1H late
169 VCE-EWR 1H 50 late
180 HKG-EWR 5H 40 late
951 BRU-IAD 1H 20 late
43 FCO-IAD 1H late
141 BCN-IAD 1H 35 late
127 DUB-IAD 1H 15 late
808 PEK-IAD 2H 30 late
973 BRU-ORD 1H late
986 CDG-ORD 2H 50 late
906 FRA-ORD 1H 30 late
836 PVG-ORD 1H 10 late
2064 PVG-SFO 1H 30 late (replacement for canceled 858 on July 26)
983 HGH-SFO 1H 10 late
984 CDG-SFO 1H 30 late
851 ORD-PEK 6H 50 late
59 FRA-SFO 7H 50 late (visited ORD)
896 HKG-ORD 14H 30 late
835 ORD-PVG 1H 20 late
987 ORD-CDG 1H 20 late
956 EWR-GVA 4H 10 late
1007 IAH-BOG 4H 10 late
163 IAD-MAD Canceled
907 ORD-FRA 2H 20 late
120 EWR-BCN 4H 10 late
989 IAD-FRA 1H 50 late
974 IAD-GVA 1H 30 late
845 ORD-GRU 2H 50 late
124 EWR-ATH 3H 10 late

Thanks to worldtrav.

EWR764

My point is... I am not expecting United's numbers to suddenly go off the rails in July, considering that the airline has around 4,700 flights per day counting toward its on-time statistics, give or take.

I'm not denying the UA long haul operation is a mess this summer (again), but these flights don't count for double, and in terms of on-time performance, 5h late is the same as 16 minutes late. Further, I think you'll find similar longhaul disruption in the month of June.

So looking only at long haul operations, which tend to have less redundancy and are arguably more susceptible to major maintenance/operational disruption, might paint a worse performance picture than consideration of the entire operation.

halls120

Over in the international delays thread, someone posted the delays/cancellations rate for yesterday. WN and AA led the pack in both, far ahead of UA (good) but when it came to cancellations, UA had more than twice the number that DL had. And they can't all be on account of weather.

AAExPlat

This delay discussion is actually really interesting. Maybe delays should be based on pax or ASMs to factor in the volume of affected passengers?

EWR764

Probably not, but we also know there is some philosophical difference between DL and others w/r/t cancellation of flights. Every airline has their 'preferred' metric: AA with D:0, UA with A:0, and DL (arguably) with 100% completion factor.

The key is going to be for United to move closer to parity with DL in terms of operational reliability, which it is, and hopefully achieve or exceed the DL standard once all employees are on joint contracts and integrated (FA/MX). This is still a structural deficiency that negatively impacts operations, but the work United has done to date in getting their house in order is still impressive.

halls120

Yes, UA is improving. There is no question about that. Hopefully the new contracts will have everyone on the same page. However, I don't see how that is going to address the MX breakdown disparity between UA and its competitors. Over on another thread, there has been a very interesting discussion about 787 reliability, and whether UA's poor 787 reliability is because of the plane. Of course, when ANA has a much better record with the same airplane as UA, that suggests that the problem isn't the 787, it's how UA chooses to operate it and maintain it. And before someone wants to blame Glenn Tilton and pmUA, those 787s have all been sCO......