UAL 1Q 2013 call/results - Thursday 4/25/13
May 27, 2013, 6:22 pm
#271
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Strawman alert!! NO ONE accused you of doing so. Just sayin.
True, as far as that goes. Financial results paint a not so rosy picture however.
Pray tell, WHICH picture??
Dave
True, as far as that goes. Financial results paint a not so rosy picture however.
Dave
May 27, 2013, 6:24 pm
#272
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I didn't say the UAL management team was perfect and no one said the most loyal and valuable flyers have been run off.
There have been plenty of mistakes made at UAL, but the picture painted on FlyerTalk about the airline business is far from accurate/rational/relevant.
There have been plenty of mistakes made at UAL, but the picture painted on FlyerTalk about the airline business is far from accurate/rational/relevant.
May 27, 2013, 6:46 pm
#273
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Airlines are stepping up competition for full-fare passengers between New York and Los Angeles, with lie-flat seats, pricey French wines and personal valets to whisk travelers from curb to gate without wasting time in lines.
The latest dogfight over first- and business-class fliers involves five carriers on the most lucrative U.S. route. Delta Air Lines Inc. (DAL), American Airlines (AAMRQ) and United Airlines (UAL) are expanding space for high-end customers and offering goodies once reserved for international trips, such as mini-suites.
Joined by JetBlue Airways Corp. (JBLU) and Virgin America Inc., they’re chasing bankers, celebrities and others who buy tickets that can top $6,500. That market, a minority of passengers on any given trip, produces an estimated 75 percent of the revenue on cross-country flights -- a payoff for airlines’ investment in plusher cabins and four-course meals.
.......
“Unlike other domestic U.S. routes, there is significant demand from customers who are willing to pay full price to sit in the first-class cabin,” American Chief Commercial Officer Virasb Vahidi said.
At AMR Corp. (AAMRQ)’s American, the transcontinental-only perks include concierge employees who greet elite passengers at curbside and whisk them to a dedicated check-in room and a private elevator that skips to the front of security lines. Those fliers then go to the Flagship Lounge, a private facility within American’s Admirals Club lounges.
New York-Los Angeles is both the busiest long-haul U.S. route, at about 3.2 million passengers a year, and the most lucrative, at $1.43 billion in annual sales, according to the Bureau of Transportation Statistics. First-class fares on that trip may be 10 times as much as in coach, based on prices on airline websites.
........
American, reorganizing in bankruptcy and poised to merge with US Airways Group Inc (LCC)., accounts for 32 percent of revenue on the New York-Los Angeles route, according to Boyd. By his estimates, Virgin America has 21 percent, Delta has 19 percent, United Continental Holdings Inc. (UAL)’s United is at 16 percent and JetBlue has 11 percent.
The latest dogfight over first- and business-class fliers involves five carriers on the most lucrative U.S. route. Delta Air Lines Inc. (DAL), American Airlines (AAMRQ) and United Airlines (UAL) are expanding space for high-end customers and offering goodies once reserved for international trips, such as mini-suites.
Joined by JetBlue Airways Corp. (JBLU) and Virgin America Inc., they’re chasing bankers, celebrities and others who buy tickets that can top $6,500. That market, a minority of passengers on any given trip, produces an estimated 75 percent of the revenue on cross-country flights -- a payoff for airlines’ investment in plusher cabins and four-course meals.
.......
“Unlike other domestic U.S. routes, there is significant demand from customers who are willing to pay full price to sit in the first-class cabin,” American Chief Commercial Officer Virasb Vahidi said.
At AMR Corp. (AAMRQ)’s American, the transcontinental-only perks include concierge employees who greet elite passengers at curbside and whisk them to a dedicated check-in room and a private elevator that skips to the front of security lines. Those fliers then go to the Flagship Lounge, a private facility within American’s Admirals Club lounges.
New York-Los Angeles is both the busiest long-haul U.S. route, at about 3.2 million passengers a year, and the most lucrative, at $1.43 billion in annual sales, according to the Bureau of Transportation Statistics. First-class fares on that trip may be 10 times as much as in coach, based on prices on airline websites.
........
American, reorganizing in bankruptcy and poised to merge with US Airways Group Inc (LCC)., accounts for 32 percent of revenue on the New York-Los Angeles route, according to Boyd. By his estimates, Virgin America has 21 percent, Delta has 19 percent, United Continental Holdings Inc. (UAL)’s United is at 16 percent and JetBlue has 11 percent.
So if this market does have people willing to pay for F, it makes one wonder why UA is abandoning this segment.
May 27, 2013, 7:06 pm
#274
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I don't have a problem with the so-called 'nickel and diming' of passengers. It costs the airline to schlep a 50lb bag for the customer ( or two or 3), no question. If they charge money for that, it will discourage consumption of that service, and compensate them for when they do. i don't have a problem with them charging for meals. I don't have a problem with charging $50 to sit in their lounges.
what i do have a problem with is the degradation of the PREMIUM products. The lousy food and wine (and coffee) in F (domestically and internationally). Charge $10 more a ticket for F and serve something better than taco bell or reheated 7-11 fare. Look at the 'Lets Eat' thread for some of the 'delicious' slop they serve in F.
I don't think they should be serving free gourmet food in Y. If you're in F through paying for it with cash, miles or loyalty, I think they should give you something better than you'd get in a gas station.
what i do have a problem with is the degradation of the PREMIUM products. The lousy food and wine (and coffee) in F (domestically and internationally). Charge $10 more a ticket for F and serve something better than taco bell or reheated 7-11 fare. Look at the 'Lets Eat' thread for some of the 'delicious' slop they serve in F.
I don't think they should be serving free gourmet food in Y. If you're in F through paying for it with cash, miles or loyalty, I think they should give you something better than you'd get in a gas station.
Loyalty is useless. Paying for something is the new loyalty, this is the way it always should have been. First Class in the USA is a joke precisely because it is filled with "loyal" passengers paying coach fares. I think 10 years in the future USA domestic will move to the European model of same seats, slightly better service than coach. Unless, that is, the buy ups on offer from UA and other airlines are producing significant revenue. They certainly won't keep giving it out for free, this much I'm pretty confident about. And yes, even though you fly 250k miles a year on UA you are still getting that first class seat for free, you don't have an inherent right to it.
May 27, 2013, 7:15 pm
#275
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Classic FT argument: "as long as it doesn't effect me, then I'm fine with it but don't you dare touch my meals that I've earned through "loyalty".
Loyalty is useless. Paying for something is the new loyalty, this is the way it always should have been. First Class in the USA is a joke precisely because it is filled with "loyal" passengers paying coach fares. I think 10 years in the future USA domestic will move to the European model of same seats, slightly better service than coach. Unless, that is, the buy ups on offer from UA and other airlines are producing significant revenue. They certainly won't keep giving it out for free, this much I'm pretty confident about. And yes, even though you fly 250k miles a year on UA you are still getting that first class seat for free, you don't have an inherent right to it.
Loyalty is useless. Paying for something is the new loyalty, this is the way it always should have been. First Class in the USA is a joke precisely because it is filled with "loyal" passengers paying coach fares. I think 10 years in the future USA domestic will move to the European model of same seats, slightly better service than coach. Unless, that is, the buy ups on offer from UA and other airlines are producing significant revenue. They certainly won't keep giving it out for free, this much I'm pretty confident about. And yes, even though you fly 250k miles a year on UA you are still getting that first class seat for free, you don't have an inherent right to it.
Oh, maybe those loyal flyers actually made UA more money (despite the occasional "gift" of a first class seat) than the once-a-year flyer buying a TOD, Premier Access, or any of UA's other monetized transactional services.
May 27, 2013, 7:16 pm
#276
Join Date: May 2013
Posts: 3,361
Is the departure of corporate traffic, which is the actual description UAL has used, the result of integration and operational challenges or because the management team is generally incompetent and hostile to HVF as you allege?
Last edited by iluv2fly; May 27, 2013 at 7:26 pm Reason: merge
May 27, 2013, 7:23 pm
#277
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Dear Leader Jeff pronounced the operational issues over and done with on the Q312 earnings call, IIRC. So 2 more quarters and change since then, yet UA still isn't making the money it should be with (formerly) world's biggest route network, presence in Tier 1 US cities, etc. So why is that then, if the management team is so experienced and savvy?
May 27, 2013, 7:27 pm
#278
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Also, was 'the departure of corporate traffic' the intended outcome? Hard to believe UA management didn't realize that the essence of the FFP wrt to attracting corporate traffic is giving the flyer benefits ( including upgrades ) basically at the cost of his employer. And yet, they 'enhanced' MP nonetheless to significantly reduce benefits.
May 27, 2013, 7:33 pm
#279
Join Date: Jun 2005
Posts: 4,645
I notice you joined this month, this is your 3rd post, and you're jumping right into the conversation.
The "actual description" that COdbaUA has used includes mention of loss of corporate traffic and also includes mention of loss of "unmanaged" travelers.
They are on record stating they have lost both the managed and the unmanaged. I'm not sure what that leaves, except for the beloved kettles.
May 27, 2013, 7:39 pm
#280
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My concern is that instead of reversing course on many of the recent 'enhancements', UA managements will pretend that everything, including capacity cut, was intended, which will, in turn, result in reduction of the competition and further monopolization of the market, which would mean higher fares for the same service.
May 27, 2013, 7:41 pm
#281
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According to this article from Bloomberg, UA - which has more flights in the NYC-LAX market than any of its competitors - lags badly at attracting passengers willing to pay high fares.
http://www.bloomberg.com/news/2013-0...tml?cmpid=yhoo
So if this market does have people willing to pay for F, it makes one wonder why UA is abandoning this segment.
http://www.bloomberg.com/news/2013-0...tml?cmpid=yhoo
So if this market does have people willing to pay for F, it makes one wonder why UA is abandoning this segment.
With B6 and VX in the market, JFK-LAX has a robust, high volume economy class component which is separate from the strong premium demand. The new p.s. configuration addresses these issues directly, suiting the present state of the market. Without more Y capacity, UA is clearly leaving a lot of money on the table. In 2005, when the first-generation p.s. product rolled out, this was not the case.
Anyway, without a RASM estimate, we can't extrapolate that assertion from this data.
May 27, 2013, 7:47 pm
#282
Join Date: May 2011
Posts: 5,814
My concern is that instead of reversing course on many of the recent 'enhancements', UA managements will pretend that everything, including capacity cut, was intended, which will, in turn, result in reduction of the competition and further monopolization of the market, which would mean higher fares for the same service.
May 27, 2013, 8:26 pm
#283
Join Date: Jun 2005
Posts: 4,645
My concern is that instead of reversing course on many of the recent 'enhancements', UA managements will pretend that everything, including capacity cut, was intended, which will, in turn, result in reduction of the competition and further monopolization of the market, which would mean higher fares for the same service.
Something very strange is going on.
One of the things is that they've started turning the screws on "captive" markets. Routes, such as KIX and LIH, where they have the only direct option ex-SFO are as much as 100% higher in price than what was normal under UA, and the same flights are at "normal" levels when the pax starts from another airport and connects through SFO instead of originating through SFO.
On all the flights I have studied, that exhibit this pattern, I'm seeing planes that have very light loads, far lighter than what would have been normal under UA.
It's extremely clear that there is a new strategy, and the strategy seems a lot like it's designed to strangle anyone they deem to be captive.
Will be very interesting to see how this plays out.
May 27, 2013, 8:40 pm
#284
Join Date: May 2013
Posts: 3,361
Any chance 'integration and operational challenges' were caused by 'management incompetence'?
Also, was 'the departure of corporate traffic' the intended outcome? Hard to believe UA management didn't realize that the essence of the FFP wrt to attracting corporate traffic is giving the flyer benefits ( including upgrades ) basically at the cost of his employer. And yet, they 'enhanced' MP nonetheless to significantly reduce benefits.
Also, was 'the departure of corporate traffic' the intended outcome? Hard to believe UA management didn't realize that the essence of the FFP wrt to attracting corporate traffic is giving the flyer benefits ( including upgrades ) basically at the cost of his employer. And yet, they 'enhanced' MP nonetheless to significantly reduce benefits.
I don't think anyone outside of FlyerTalk believe FFPs are a material factor in attracting or retaining corporate traffic. FFPs exist today to generate cash for the airline from the sale of miles. Corporate traffic is attracted and retained by having the best network and schedule, a competitive product, and operational performance. Many analyst's opinions are based on the UAL's potential to out-deliver its competitors on all three.
Welcome to FT.
I notice you joined this month, this is your 3rd post, and you're jumping right into the conversation.
The "actual description" that COdbaUA has used includes mention of loss of corporate traffic and also includes mention of loss of "unmanaged" travelers.
They are on record stating they have lost both the managed and the unmanaged. I'm not sure what that leaves, except for the beloved kettles.
I notice you joined this month, this is your 3rd post, and you're jumping right into the conversation.
The "actual description" that COdbaUA has used includes mention of loss of corporate traffic and also includes mention of loss of "unmanaged" travelers.
They are on record stating they have lost both the managed and the unmanaged. I'm not sure what that leaves, except for the beloved kettles.
May 27, 2013, 8:47 pm
#285
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Welcome to Flyertalk. 
The recent UA quarterly losses and lackluster quarterly earnings tend to contradict your conclusion. All of the following are excluding special items and are expressed in millions:
1Q2012: (286)
2Q2012: 545
3Q2012: 520
4Q2012: (190) Full year 2012: 589
1Q2013: (325)
The numbers don't paint for me a picture of a savvy management team. YMMV.
1Q2012: (286)
2Q2012: 545
3Q2012: 520
4Q2012: (190) Full year 2012: 589
1Q2013: (325)
The numbers don't paint for me a picture of a savvy management team. YMMV.