United Airlines President: Leaving New York’s JFK ‘Was the Wrong Decision’ {2017}
Apr 26, 2017, 4:02 pm
#286
Join Date: Dec 2002
Location: Bloomfield, MI, USA
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FT audience simply better informed than the general public.
I was reflecting on the lunacy of his approach to running a full service carrier while enjoying whole cashews in UA Polaris yesterday. The CEO who brags about saving six figures by serving his premium cabin passengers broken cashews just doesn't get it. That decision was emblematic of his entire approach, and the fact that UA has quietly reversed the decision is equally emblematic of its failure.
I was reflecting on the lunacy of his approach to running a full service carrier while enjoying whole cashews in UA Polaris yesterday. The CEO who brags about saving six figures by serving his premium cabin passengers broken cashews just doesn't get it. That decision was emblematic of his entire approach, and the fact that UA has quietly reversed the decision is equally emblematic of its failure.
Apr 26, 2017, 10:22 pm
#287
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EWR could benefit from a name change. Something like "Newark New York International Airport" would signify it serves Newark but also serves as a gateway to New York City. Like "Baltimore Washington International Airport" promotes BWI as serving Baltimore and Washington DC.
Apr 27, 2017, 3:13 am
#288
Join Date: Nov 2006
Location: EWR
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I live in Manhattan (on the UWS). Theoretically, it is easier for me to fly in and out of EWR (geographically closer) than out of JFK. However, I avoid EWR like the Plague.
IME (and mileage varies widely on this, obviously), traffic heading out to EWR is just as bad as heading out to JFK, so that is a wash. Coming back from EWR, depending on the time of day, can be much worse, so unless you time it exactly right, and hope that the flight arrives exactly as scheduled (and that, on an international flight, customs is not an unmitigated disaster), coming in from EWR can take forever and a day.
There are also fewer cabs coming in from EWR to Manhattan. What there are are (obviously) Jersey-based, and like to play games with Manhattanites. Manhattan-based car services charge more to go to/from EWR than to go to JFK (still better than those damnable Jersey cabs, though).
Then there is the EWR experience itself. JFK needs some work. EWR is a disaster. Dirty, dingy, overcrowded, poorly managed. And that is as an F/J passenger. The lounges are a joke. My husband once said to me that the BA lounge in TXL, the one everyone makes fun of for being a time capsule, is an oasis of tranquility, with decent quality teas, good coffee making machines, and constant cleaning. It never feels crowded, the staff keeps it clean and tidy, and it feels like a sweet, quaint way to say good-bye to Berlin.
Go to any J lounge in EWR, and it's like the beginning of the zombie apocalypse. Someone is always yelling at some poor staff member, finding a clean spot -- scratch that -- finding an empty spot at which to set down your things becomes an ever more stressful challenge. The minimal offerings are of questionable quality and look like they have been sitting out a bit too long. The bathrooms too often look like they were, perhaps, given a quick once-over in the morning, and then were opened to a frat house for the rest of the day (if that's the bathroom in a J lounge, what on earth do the bathrooms in the rest of EWR look like?).
And then there are the interminable lines, too often unrelieved by status or class of service. No real fault of the airline -- it's just the lack of personnel at EWR that makes the lines so unrelentingly long and the experience feel like a cross between the last flights out of Cuba when Batista fell and checking into minimum security prison.
I realize that I exaggerate (but not by a lot). Flying in and out of EWR is an unpleasant experience for most of us who live in the area and have a choice. It has made UA a non-factor in making travel plans.
IME (and mileage varies widely on this, obviously), traffic heading out to EWR is just as bad as heading out to JFK, so that is a wash. Coming back from EWR, depending on the time of day, can be much worse, so unless you time it exactly right, and hope that the flight arrives exactly as scheduled (and that, on an international flight, customs is not an unmitigated disaster), coming in from EWR can take forever and a day.
There are also fewer cabs coming in from EWR to Manhattan. What there are are (obviously) Jersey-based, and like to play games with Manhattanites. Manhattan-based car services charge more to go to/from EWR than to go to JFK (still better than those damnable Jersey cabs, though).
Then there is the EWR experience itself. JFK needs some work. EWR is a disaster. Dirty, dingy, overcrowded, poorly managed. And that is as an F/J passenger. The lounges are a joke. My husband once said to me that the BA lounge in TXL, the one everyone makes fun of for being a time capsule, is an oasis of tranquility, with decent quality teas, good coffee making machines, and constant cleaning. It never feels crowded, the staff keeps it clean and tidy, and it feels like a sweet, quaint way to say good-bye to Berlin.
Go to any J lounge in EWR, and it's like the beginning of the zombie apocalypse. Someone is always yelling at some poor staff member, finding a clean spot -- scratch that -- finding an empty spot at which to set down your things becomes an ever more stressful challenge. The minimal offerings are of questionable quality and look like they have been sitting out a bit too long. The bathrooms too often look like they were, perhaps, given a quick once-over in the morning, and then were opened to a frat house for the rest of the day (if that's the bathroom in a J lounge, what on earth do the bathrooms in the rest of EWR look like?).
And then there are the interminable lines, too often unrelieved by status or class of service. No real fault of the airline -- it's just the lack of personnel at EWR that makes the lines so unrelentingly long and the experience feel like a cross between the last flights out of Cuba when Batista fell and checking into minimum security prison.
I realize that I exaggerate (but not by a lot). Flying in and out of EWR is an unpleasant experience for most of us who live in the area and have a choice. It has made UA a non-factor in making travel plans.
Having said that - I completely disagree. I live on the West Side of Manhattan as well and will always take EWR over JFK. Much quicker to get ther (25mins by car). Terminal C is fine and functional and the LH Sen lounge in Terminal B is crowded but nice too.
Coming back I can land mid day from Europe and be home in less than 1h after touch down.
Friday night Holland tunnel traffic can be bad - but good luck with mid town tunnel and LIE coming from JFK at that time - I'd argue it's much worse
And lastly: Uber makes NJ cabbies obsolete!
Apr 28, 2017, 8:51 pm
#289
Join Date: Feb 2008
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On the second point, united is selling the seats, but at what yield? To give an example, I just had to book three trips to DCA from SFO. I looked at UA as they have the only afternoon direct (VX has the other) and it was notable that on connecting flights, UA was offering DCA-EWR-SFO in first for basically the same price as connecting elsewhere, and it was often the cheapest option. In sharp contrast, a DCA-JFK-SFO connection on Delta was far more expensive, and every time I have looked in the past is more expensive. Routing ATL/DTW/MSP/SLC was always far cheaper in F.
That says to me that Delta is not needing to fill the J seats JFK-SFO with connecting traffic (or at least connecting traffic at domestic F pricing) while UA is.
I ended up booking one of my six legs on United, mostly as it was the 777-300 so I can try out the Polaris hard product, but the difference in pricing statagy was very pronounced.
Apr 29, 2017, 1:29 pm
#290
Join Date: Feb 2001
Location: NYC
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Posts: 1,567
It sounds to me like UA might return to JFK if an opportunity arose for several decent slots, but that in the current environment it is basically impossible. Just the fact that Kirby announced it was a mistake is telling that clearly several HVF/contracts left UA over it's JFK abandonment.
In terms of yield on Premium NYC-LAX/SFO, does anyone know if JFK is more profitable than EWR? I don't know. And I guess it depends per carrier. But it would seem that one carrier dominating EWR with some VX flights competing might likely be more profitable than what's on offer at JFK - i.e. AA/DL/JB/VX.
The aviation industry is sitting on quite a bit of uncertainty right now, and UA has the unique unknown of how bad a hit it's earnings will take from the Dr Dao optics.
Just as a historical perspective, UA's CEO Ferris pursued Pan Am for its Pacific route authorities for three years until Ed Acker had to finally give in or risk a shut down. I am not saying that any of the 4 carriers flying JFK-SFO/LAX are in a comparable financial state as was PA in 1985, but if any of a handful of world hotspots actually go off and air traffic drops significantly, it's possible a good number of slots might open up at JFK for the right price. Of course, in such a new reality, UA might be hit just as badly as everyone else. That is why we are told to save for a rainy day. But short of this type of scenario or a merger (which seems unlikely due to the recent spate of ones concluded), UA is just going to have to make the best out of EWR. It seems like they are at least doing fine without JFK, just not as well as they could have had they kept JFK.
It seems like no one person here knows why UA decided to forego JFK. Was BA asking too much, maybe not offering any renewal, maybe no other terminal to relocate the operation to, maybe something else? It's inconceivable that UA would not have investigated the residual effects on some of it best corporate contracts and flyers, as they did just shortly to abandoning their last JFK Int'l service to NRT and LHR. But I guess we are talking about 2 very different United Airlines.
In terms of yield on Premium NYC-LAX/SFO, does anyone know if JFK is more profitable than EWR? I don't know. And I guess it depends per carrier. But it would seem that one carrier dominating EWR with some VX flights competing might likely be more profitable than what's on offer at JFK - i.e. AA/DL/JB/VX.
The aviation industry is sitting on quite a bit of uncertainty right now, and UA has the unique unknown of how bad a hit it's earnings will take from the Dr Dao optics.
Just as a historical perspective, UA's CEO Ferris pursued Pan Am for its Pacific route authorities for three years until Ed Acker had to finally give in or risk a shut down. I am not saying that any of the 4 carriers flying JFK-SFO/LAX are in a comparable financial state as was PA in 1985, but if any of a handful of world hotspots actually go off and air traffic drops significantly, it's possible a good number of slots might open up at JFK for the right price. Of course, in such a new reality, UA might be hit just as badly as everyone else. That is why we are told to save for a rainy day. But short of this type of scenario or a merger (which seems unlikely due to the recent spate of ones concluded), UA is just going to have to make the best out of EWR. It seems like they are at least doing fine without JFK, just not as well as they could have had they kept JFK.
It seems like no one person here knows why UA decided to forego JFK. Was BA asking too much, maybe not offering any renewal, maybe no other terminal to relocate the operation to, maybe something else? It's inconceivable that UA would not have investigated the residual effects on some of it best corporate contracts and flyers, as they did just shortly to abandoning their last JFK Int'l service to NRT and LHR. But I guess we are talking about 2 very different United Airlines.
Apr 29, 2017, 4:57 pm
#291
Join Date: Jun 2015
Programs: UA GS, Amex Centurion
Posts: 33
Favorable for me, but I see why they lost customers
As a resident of Hoboken, NJ and someone that works in investment banking, the move of PS has been good for me. I am GS and fly EWR-SFO/LAX twice a month. However, I can see why this may not have made the most business sense. First, despite it being horrifically inconvenient, most EWR flyers made the trek to JFK pre PS move since we didn't have any flat bed options to SFO/LAX. At JFK, United likely retained its elite flyers and could jump ball for those not tied to one airline. It seems like United traded corporate customers for likely lower yielding connecting premium traffic.
Apr 29, 2017, 9:25 pm
#292
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In terms of yield on Premium NYC-LAX/SFO, does anyone know if JFK is more profitable than EWR? I don't know. And I guess it depends per carrier. But it would seem that one carrier dominating EWR with some VX flights competing might likely be more profitable than what's on offer at JFK - i.e. AA/DL/JB/VX.
It's pretty clear that what Kirby was saying was that the spreadsheet numbers on EWR were better than JFK for these routes. But the impact of the JFK pullout caused ancillary damage in the form of lost customers and corporate contracts that they hadn't planned for making the pullout a net negative for the company.
Apr 29, 2017, 11:04 pm
#293
Join Date: Apr 2011
Programs: WN, AA, UA, DL
Posts: 1,313
Thinking that the past does matter and UA lost important traffic well before they dropped JFK actually hurts Kirby's statements and implications. That "lost traffic" would have to be re-gained even if they stayed at JFK. Hence it can't be counted in the cost equation for re-starting JFK, as it's incurred in the equation for the initial decision to leave. It makes leaving more of the right decision.
In terms of yield on Premium NYC-LAX/SFO, does anyone know if JFK is more profitable than EWR? I don't know. And I guess it depends per carrier. But it would seem that one carrier dominating EWR with some VX flights competing might likely be more profitable than what's on offer at JFK - i.e. AA/DL/JB/VX.
Apr 30, 2017, 4:56 am
#294
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No, it's not because I say it. It's because the past is irrelevant. Kirby's statements are logically and economically tested in the present situations--the time of the decisions. Whether it was the wrong decision to leave or not at the time of the decision isn't determined by what happened years ago. The past is the past. You have the analyze the current situation.
May 2, 2017, 11:12 pm
#295
Join Date: Feb 2008
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One tiny route tells us nothing. I found the exact opposite. DL is the one discounting DCA-NYC-SFO for the foreseeable future. What does tell us something is PS fare data, and UA has been a top contender for years when adjusted to PRASM. Another thing that tells us is capacity, and UA wins there too.
Easy to make any claim you want on the interthingy 
I actually just booked my second flight on UA via PS. Its a return from DCA on May 16, United is posting all of the flights DCA-EWR-SFO for $745 o/w, Delta wanted $1822 for a flight via JFK, and F via other hubs (non-Delta One) was
$1022. VX wanted $1699. I saw the same thing out, UA via EWR in J was cheap, cheap, cheap. This is now the third connecting routing in a week I have found United to be massively cheaper via EWR than DL is via JFK, with UA being as cheap (if not cheaper) than DL on non-Delta-one flights.
Either Dao is having an impact, or UA is selling a lot of connecting J seats on "PS" for real cheap.
May 2, 2017, 11:35 pm
#296
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May 2, 2017, 11:52 pm
#297
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It's just DCA, right? For whatever reason there's something wonky about cat3 on the SFO/WAS fares and the ones which allow the intl aircraft on SFO-IAD are also allowing p.s. routing (and the DCA fares too).
May 3, 2017, 1:34 am
#298
Join Date: Apr 2011
Programs: WN, AA, UA, DL
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Take this simplified example. Let's say UA's PS product was slipping over the years, and this cost them 50 million a year in revenue by 2015. The cost to re-gain their revenue position is unknown, but clearly it will take an expense of some sort.
If UA stays at JFK, will they have to address this trend? Yes.
If UA leaves JFK, will they have to address this trend if they decide to return? Yes.
It's a continuous "cost". Therefore it can't be included in the analysis of Kirby's comments of decisions made in a moment of time. If one says that this lost business was very high and would cost a high amount to re-gain, that makes the equation for leaving stronger, since the cost to re-gain competitiveness is increased. But it also makes the equation to return stronger, since now there's more potential revenue to re-claim, and any cost to remain competitive has a larger potential payout. It works in the opposite direction of Kirby's implications. Arguing for its importance actually works against Kirby's comments and is ironically the opposite of a defense of him.
lots of claims, no data. Easy to make any claim you want on the interthingy
I actually just booked my second flight on UA via PS. Its a return from DCA on May 16, United is posting all of the flights DCA-EWR-SFO for $745 o/w, Delta wanted $1822 for a flight via JFK, and F via other hubs (non-Delta One) was
$1022. VX wanted $1699. I saw the same thing out, UA via EWR in J was cheap, cheap, cheap. This is now the third connecting routing in a week I have found United to be massively cheaper via EWR than DL is via JFK, with UA being as cheap (if not cheaper) than DL on non-Delta-one flights.
Either Dao is having an impact, or UA is selling a lot of connecting J seats on "PS" for real cheap.
I actually just booked my second flight on UA via PS. Its a return from DCA on May 16, United is posting all of the flights DCA-EWR-SFO for $745 o/w, Delta wanted $1822 for a flight via JFK, and F via other hubs (non-Delta One) was
$1022. VX wanted $1699. I saw the same thing out, UA via EWR in J was cheap, cheap, cheap. This is now the third connecting routing in a week I have found United to be massively cheaper via EWR than DL is via JFK, with UA being as cheap (if not cheaper) than DL on non-Delta-one flights.
Either Dao is having an impact, or UA is selling a lot of connecting J seats on "PS" for real cheap.
Do I really need to show you evidence when its already been stated earlier in this thread and has been commonly known for years? Do I really need to point out to you the current schedules that show us that UA runs the most flights and J seats on the NYC-JFK/SFO routes?
Last edited by WineCountryUA; May 3, 2017 at 9:55 am Reason: Discuss the issues, not the poster(s)
May 3, 2017, 4:45 am
#299
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Join Date: Jun 2005
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It's pretty clear that what Kirby was saying was that the spreadsheet numbers on EWR were better than JFK for these routes. But the impact of the JFK pullout caused ancillary damage in the form of lost customers and corporate contracts that they hadn't planned for making the pullout a net negative for the company.
