If you want to see just how dire the situation is with respect to yields, go on ITA and do some route searches...I just did this for personal planning reasons, and UA is WAY lower than its competitors during both Thanksgiving and Springbreak timeframes from AUS to tons of destinations I just checked. LHR, FRA, DUB, CDG, DXB, LIS, MAD, NRT, HKG, BKK. Wherever they fly to themselves from AUS, the other legacies are typically charging significantly extra.

While I am sure the picture is generally better from their fortress hubs, I just did BKK from all their hubs and they still show up at the very top of the list in ITA even for IAH, EWR, SFO, LAX as origins.

I think this speaks to just how weak they project demand to be. And I suspect they are still too optimistic with respect to the demand level for their services...

The estimate is a narrow range based on preliminary data, not mangement estimates. A "miss" in the final number would indicate a flaw in how the preliminary data was collected or an intentional misstatement by management. Neither are legally or ethically acceptable to the SEC or shareholders.

UA's PRASM for the second quarter is evident to analysts at this point and it is inappropriate (at best) to allege that management is holding back data and/or there will be a suprise when final numbers are released. The impact to earnings is unknown as of yet, but that is not what was discussed...

I should note that institutional investors are more concerned with cost and revenue performance than net earnings. Further, I don't think the current PRASM trends are indicative in customers' confidence in UAL.

I won't speak for others, and I hope I'm wrong, but I think the new UA got some of the basics wrong. If the foundation is faulty, no quick fix is going to make things better.

IMO, the basics they got right weren't implemented well anyway. That's easier to fix, or "optimize."

This is a pretty substantial and absolute statement. Do you have support?

Let's be clear: UA has already announced monthly PRASM performance for 2Q, and is likely to follow up with mediocre-to-poor quarterly results. Attacking a poster for commenting on such is either ignorant or an intentional attempt to undermine the credibility of a poster.

Actually UA has release relative RASM performance to last year ad last month. Relative numbers are nice, they show trends, but absolute numbers provide actual hard data. Without a reference point, a relative number isn't worth all that much. If airline a has a RASM of 13.65 and it improves 8% but airline b has a RASM of 14.7 and improves 4%, airline a is still doing worse than airline B, but it is closing the gap. Relative is only rleative to a fixed point of reference. Without that, it is still just guesswork, and UA choose not to release any abolute numbers in terms of rvenue performance (they did release them for operational performance.)

Trust me - you've made my point for me, we don't disagree on what has been released vs what is still to be released - potential information damaging to their stock price

I'm just trying to defend myself from a personal attack ;)

It is quite easy to back into an estimate of the absolute number for the quarter using publicly available data.

it can be calculated, but absent making some assumptions, you can't get it exact. You can look at their revenue and total seat miles for Q2 2011, figure it out (or find someone who did it on the web) and then do the math. It will not absent some real work be absolutely correct (as you have a 3mo revenue figure for q2 2011 and monthly PRASM for Q2) but close enough.

But for purposes of a comparative analysis, you can take PRASM and use it for a proxy for the revenue growth figures and apply them. Q2 2011 UAL had (excluding special items) revenue growth of 9.1%, PRASM was up 9% (these are from Q2 2010), and revenue was $9.7B

If I average the PRASM figures for the April-June 2012 period UA is 3.26%, DL is 8.3%, and AA is 9.16%.

Without trying to back out the capacity issue (AA cut more, DL was in the middle, UA slightly less - and this should somewhat reduce these figures) had UA matched DL's PRASM growth it would have had $488M more in revenue. Had they matched AA's PRASM growth they would have had $572M in extra revenue. Again the actual difference is probably somewhat smaller, but as an idea of the magnitude of difference its interesting.

Excellent analysis! Sounds like some potentially damaging information may come out on the earnings call. Hopefully the analysts will grill the over-entitled leadership on what's causing the PRASM gap vs. competitors.

Don't we already know this???

I thought it was simply a matter of selling MORE TOD's - given the ability of SHARES to price dynamically. I suspect that FLIBS & Co. will simply tell them that the 'future' TODs will more than make up for the current shortfall. Or something.

Dave

A great point. They may also attempt to deflect the financial impact of any potentially damaging information by highlighting a new program to reduce balance sheet liabilities (i.e., miles) by the ingenous new clawback program :D

The issue here is not so much difficulties with transition as it is terrible policy decisions by CO management. The nearly full elimination of 1K benefits and upgrade rights, for example, are policy decisions and have nothing to do with transition pain. Furthermore, all of the terrible experiences we're having now are identical to what I experienced on CO metal before 3/3. This isn't a transition problem we need to be patient with - this is a totally different philosophy about how to run and airline, and the new philosophy has no place in it for high value loyal customers.

When revenue performance for the quarter has already been reported, I find it legitimate to question why you would allege that UA management is withholding information and that, "potentially damaging Q2 PRASM figure being released soon..."

This is a distinctly different statement/position than discussing expectations for quarterly results. I didn't think that questioning the validity and basis of a specific statement/position constitutes a attack and I apologize if you took it personally.

That may come up, or it may not. I am sure that UALs management is watching the numbers carefully, what they chose to do about it is a different matter. I am not in the camp of those who think that UA will simply continue down the same road, but how they can make changes at this point is another matter.

When the April figures were bad UAL said that they had reduced bookings in anticipation of the SHARES change over (but still ended up with higher IDBs than other carriers.) Nothing has been said since relevant to PRASM. But I am sure that "merger" will be raised and I anticipate that they will probably note that as they integrate they are having to fine tune their revenue management (IM) system and figure out how to adjust pricing for a unified airline. There is a lot going on. Your theory (and mine) that they are loosing some high value traffic is likely part of the story, but probably not the entire story.

The real question is if the subject of status matches or elite defection or ability to fell F/C seats or attract "high revenue" traffic will come up.

I also note that I fully agree with Sfx24, there are no "disclosure" issues here, UAL has not held back anything or provided less information than in the past. The information is all out there, and any investor/analyist can run (probably far better than I did :o) the numbers.