Old Mar 4, 13, 1:25 pm
Join Date: Feb 2008
Programs: 6 year GS, now 2MM Jeff-ugee, *wood LTPlt, SkyPeso PLT
Posts: 6,525
Jeff comments on loss of "unmanaged" corporate traffic/PRASM at JP Morgan conference.

There have been a lot of back and forth on whether UA was loosing High Value Fliers, and today Jeff provided more information than I have ever heard said about who left. His comments on this, and the importance of judging UA by PRASM are below.

He also said stressed that UA intended to increase "ancillary revenues" by 9% Y/Y, and commented on how UA is going to be getting the A350. Now that he is stressing A350 (vs. 787) was interesting.

Comment on PRASM/loss of business travel, and plan to get it back:

Unknown Attendee

Jeff, could you talk a little bit more about the corporate travel trend as you went through integration, you alluded to the fact that some bumps last summer and that maybe had an impact and just as you're having conversations now or if you look at your corporate travel growth relative to your overall revenue growth, what sort of trends did you see and are you seeing there?

Jeffery A. Smisek - Chairman, Chief Executive Officer, President, Member of Executive Committee and Member of Finance Committee

Well, sure. Well, a couple of things. One, you have to divide corporate travel into the managed and the unmanaged corporate travel. Small and medium-size enterprise, the unmanaged and the managed traveler. And there, obviously, there's a differentiation between the 2. Both of those fell off last summer as you would expect them to. I would say that the unmanaged traveler fell off even more than the managed travel. We're working hard to get both back and the way you get them both back is just proving yourself. I mean, as Mark mentioned, he flew yesterday or whenever it was and had no problem. I think many of you, if you fly United, you'll see not only are you not having a problem but actually you're getting an on-time airline and you're getting a continually better customer service. That's what our business traveler looks for. So the proof isn't just talking about, proof is actually doing it every single day and we are doing it and our on-time performance since September has been very good. Our completion factor is excellent. And our customers are also, this year, beginning to see the product investments we've been making sort of behind the scenes for the past couple of years. And they'll just continue to see more and more of those product investments and that's how you get the business back. So the trends we're seeing is the business is coming back. You're seeing our PRASM results. You'll see it in our yields. And that's how you'll judge how well we'll get it back. But we're clearly, as you saw on our year-over-year PRASM chart, you see that returning and we see it returning everyday as well and we expect it to continue to return.


Notably, DL reports its February PRASM was + 4.5-5.5%, will be interesting to see if UA matches this since they claimed they have closed the gap... That number will be out this week.
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