spin88

I don't profess to have internal knowledge, my comments are based more of multiple discussions with pilots/FAs/agents. Jeff promised to quickly do contracts (which I recall and thought was a good idea at the time) they expected it, and then nothing happened. Maybe nothing could have been done earlier, but I have heard for lots of folks that they believe that Jeff wanted to play hard to get, let the merger get going and then bargain from a position of strength. Alas he is now stuck in a position of weakness. As far as I could see from the outside the merger had been on for 18 months before Jeff really begin to try to negotiate.

Well if you did your research better you would have known that I simply copied what Kaye had said on his blog. But more generally, I note that I post on Hunter Keay, and a few days later you show up, make your first post and say " I am not Hunter Keay, but I have great respect for his experience and track-record." Most folks have a set Google search for their name. The lady doth protest too much, methinks.

Regardless, the dissatisfaction expressed on this board is not somehow limited to here. If you were really a 1K, and bothered to ask your seat mate, or the guy/gal in line with you to board you would get an earful about UA. I can't remember a single person I have talked to who likes the changes, and they either say "I'm flying UA less, flying others, or "well out of x [usually IAH, EWR, sometimes SFO I don't have a lot of choice." I've not talked to a single person in the last 6 months who would recommend flying UA to their worst enemy.

In a business where a single high value fare per flight is the difference between a loss and making money, and where much of the travel dollar can and will move, and its well known that CS/product effects the buying decision, that the "analysts" have not bothered to look further or discuss these issues (instead concentrating like Hunter has on possible income from extra fees, or savings from cutting costs/benefits without looking at the effect they have in driving passenger revenue away) says it all.

This would not matter if UA actually had a monopoly, it does not, and its not selling bulk widgets either.

I could diagram your sentence if you like, you have "United or other major carriers," and then say after the coma "they are among the most experienced and savvy at running a business than any other management team"

No one has said that they don't like the mangement teams at other airlines, and team is single, and clearly refers in your sentence to UA.

I note that you have cited no facts.

In fact AAs traffic and yields crashed at STL far more than other hubs. 9/11 happened, but AA specifically stated that they had weakness at STL and has a reduction in valuable traffic though STL in pulling down the hub. You can pull the articles and discussion from their quarterly calls at the time if you want. I've also discussed this with a high level executive at AA who when hearing I was ex-TWA told me that AA management regretted how they handled the cuts in FF benifits and stated that they lost many of the high value TWA fliers.

Good management avoids issues, or proactively addresses them. Cross-fleeting is a good example. DL had problems, quickly pulled down cross-fleeting, and openly admitted that it did not work on calls. So UA? What do they do? Well they aggressively cross-fleeted, making it worse by imposing CO dispatch rates on cross-fleeted UA planes. Well the S**t hit the fan immediately, yet in the face of crumbling OT and skyrocketing cancellation rates, UA "stayed the course" for 3 more months before having to admit they were changing course when they got pummeled on the 2Q call.

All of this was predictable. And even today, cross-fleeting is causing UA to have a sub-par reliability. DL is running at 86-87% OT without increasing block times, UA is having a hard time keeping over 80% OT with increased block times.

I could go on, but management has demonstrated the most amazing, and continuous arrogance, and then an utter refusal to say sorry or make any effort to make it up to their customers who are POed.

AA had a similar melt down, and a BKR, yet its yields and revenue went up. It shows a good management vs. the bad one at UAL, and as others have rightly pointed out the "analysis" got AAs revenue entirely wrong since they don't pay attention to customer service, or what drives passenger revenue growth in a consumer service industry.


Ain't seeing any analysis from you so far. Alas the numbers speak for themselves. I'll direct you to FWAA (post 340) re AAs numbers.

As to DL (from its 2012 10K):

Operating revenue +4.4% [to 36.6B], ASM (1.8%), yeild +4.9%.

UAL? (which was supposed to have $800M in revenue synergies, making these numbers actually worse than they look):

Operating revenue +.1% [to 37.1B], ASM (1.5%), yeild + .6%

No offense, but given that UA was given 800M in "synergies" and still performed this way says their management was not exactly "savvy."

BUT in 2013 new strategy by UA (SLASH CAPACITY!)

2013Q1 Operating revenue +.7%, ASM (4.9%), yeild +1.9% Given that these numbers are based upon weak comps in 1Q 2012, and include the approx $200M in extra synergy revenues, things are not looking so good for UAL.

DAL? Against very very hard comps, and without any synergies, Operating revenue was +1%, ASM (3%), yield +2%.

UALs numbers only look better than those in 2012 as it had very weak comps and slashed capacity dramatically.

[A note of caution, I recall that FWAAA has said that DL's yeild numbers are actually just mainline, not consolidated, I took the numbers from the 10K/10Q, and did not recalculate them from the raw figures in the reports]

ditto

fly18725

Considering this is the first thread I've participated in, I think your accusations are off-base and inappropriate.

But, my basic point still stands: you're making judgements based on soundbites, not a review of the full picture.

I never said I was fully satisfied with UA and I've admitted management has made mistakes.

Actually, analysts talk a great deal about customer service and product and most of them are top-tier elites on one or more US carrier. The reason these attributes are not highlighted in analysts' reports is that they aren't the primary driver of passengers' purchase decisions. Network, schedule, and operational performance, which can all be objectively measured, are the biggest influencers of air travel purchase decisions.

I would encourage you to include 2010 and 2011 network capacity and capacity and yields by region as part of your analysis. Cherry picking top line numbers from one period doesn't tell much of a story.

spin88

UA just had to hand over approx $150M in stock to some convertible bond holders (difference in value of bonds exchanged and the stock). The new stock is sufficient to dilute UAL stock by nearly 2%.

http://biz.yahoo.com/e/130529/ual8-k.html

I would think this would materially impact the stock price tomorrow.

FlyingNut724

I think a bunch of us are making judgments based on our significant and regular interactions with this company and those of our friends and colleagues. But putting that aside, UA's stock performance is significantly lagging its competitors.

What should we attribute such poor performance to? It would seem to rest squarely on the shoulders of management.

EWR764

I believe management deliberately dragged its feet in certain aspects of the negotiations, at least with respect to how closely it could integrate the two carriers without actually having to achieve joint labor agreements. That said, nobody in their right mind could have anticipated a rapid close to the negotiations.

Most agents, F/As and pilots on the front lines aren't closely involved in the labor negotiations, and, to a man (or woman), it would be difficult to find someone who wouldn't be happy with a rapid, favorable resolution. Unfortunately, the blockbuster contracts in the boom years of the late 1990s in part led to the need for deep givebacks in the early 2000s when the economy turned south. The desire to avoid that is shared by both sides, but there is naturally a difference of opinion of how to get there.

I think the part that gets lost is that the labor pictures at UA and CO were extraordinarily different, almost diametrically opposed, save for the fact that both were heavily unionized where DL was to a much lesser extent. Philosophically, integrating UA and CO was and continues to be a monumental task. There was very little common ground regarding work rules, pay, scope clauses, workforce demographics, etc. making the groups themselves difficult to integrate regardless of orientation toward management. Management probably could have run right down the list and conceded all of the pilots' demands and there would still be a host of internal conflict amongst the UA/CO ALPA MECs that need to be hashed out. Same with the AFA (which needed to be voted in ahead of the IAM first, before even sitting down at the joint bargaining table), Teamsters, etc.

Things are moving forward slowly, and even though blaming this "incompetent" management team (I use quotations because competence is more of a subjective assessment) is en vogue, as always, there is a lot more to the story.

halls120

Didn't you forget something?

AAExPlat

For the record. That was no threat. As someone who deals with regulators all the time, I have sincere concern for you not to create a problem for yourself. Sometimes in the heat of battle, we can forget the liability we create for ourselves. I was honestly only trying to remind you of those issues. If they don't apply (meaning you can make these comments pro-UA without any worry about regulatory issues) then feel free to post as much as you'd like.

I am sure you and I were not the only ones.

spin88

thanks for the 411. The first part "dragging their feet" is what I have heard over and over. Not understating the difficulties at UA, but DL had them too, including integrating unionized and non-unionized work forces. Yet they seem to have done a very good job of it. Its notable that Dougy, used the DL approach, not the UA approach.

fly18725

You make strategic business judgements for multi-billion dollar corporations based on solely on your perspective as a customer?

If you had sincere concern, you would have addressed the issue in private. Making such a public statement, particularly when there is nothing to indicate the type of firm I work for, only serves to intimidate someone who holds a contradictory opinion.

FlyingNut724

I think it is a five letter word that starts with the letter "p" and ends with the letter "e".

I'm not making judgements for a multi-billion dollar corporation, as I'm not a banker or an analyst. I'm a customer who has personally spent tens of thousands of dollars a year on tickets with this company (I've spent 10K so far this year) and I believe this company is messed up by its management. So far I think the under-performance of the stock price supports my view point.

spin88

Alas that is about all that UA can compete on now.

I notice their response to DL's new $1.2B JFK terminal, and DL blowing their doors off with corporate accounts in NY was a meek press release touting the lie flat seats on all planes [surprisingly UA didn't bother to mention the effective 5'10" bed on the CO BF seats on the new 763 two class birds with 6'3" pitch or the 787 ] and another how they had been at Newark for 25 years.

No, and no one is saying this. But I think everyone is saying that perhaps it is wise to consider the customer perspective, their complaints, and then that they are leaving, and why that is happening, when one is running a major $37B CONSUMER business. Without revenue, Jeffy ain't paying the bills, and so far the revenue ain't showing up like it should. UA can pay attention, or keep doing the spread sheet analysis divorced from customer's complaints you (and Hunter Keay) appear to be advocating for.

fly18725

Are you telling me that no one in this place is saying they could make better decisions and run a more successful operation than the current management team on UAL?

All of the complaints feedback about how the smallest of changes are driving thousands of dollars of valuable business away is because...?

AAExPlat

If you want to interpret my post as a threat, I can't keep you from doing so...

spin88

I think that most folks here are saying that they would have avoided very bad decisions made by UA, or fixed them faster. Even folks who are generally in the tank for CO have admitted this.

I don't think that anyone here is claiming to put themselves up for the CEO slot (although most of us would not have done as bad, and probably could have done far better than Jeff for his $13.9M last year) but now that you mention it I do believe that I would have avoided all of the bad decisions UA has made. I have certainly posted on the problems with all of them, before those problems surfaced. Just saying. Others FWAAA, Michmu, bocastephen, UA-NYC, Halls120, AA ExPlat (just a few that come quickly to mind) pointed out the folly of all of the mistakes, make them CEO

And hey, I think everyone here has recognized the one thing new management got right, they put together a good moble app showing the upgrade list and where the plane is coming from! I'm sure we would have signed off on that too.

But hey, even those more supportive of management at times have recognized decisions were wrong as they were being made. EWR764 and LarkSFO come to mind on this thread. Hell, Star_word might have done a better job as CEO. Or I nominate Fastair!

Future stuff? Getting rid of IFE, Ch.9 on Airbus's comes to mind as something that will hurt passenger revenue and the already tattered rep UA has for on board service levels. I would have done that very differently (as DL is doing it differently).

But hey, who is counting. Basically anyone with two frontal lobes would have done better than the current bunch of boobs. They took the best network, the best hubs (with the best hub premiums), the most easy to integrate and modern fleet, and two very large and profitable FF basis, and turned it into a steaming pile that no passenger likes. Its actually quite an accomplishment to do all this in only 16 months.

Maybe Jeff lasts till end of 4Q, maybe a quarter longer, but absent a major major turn around to provide real revenue growth (which I don't see happening) and out sided profits, UA will get new management. I am hopping Horton is available by them. Jeff will then become a case study in how not to run an airline integration.

FlyWorld

For one thing, publicly calling your most frequent flyers "over-entitled" is indicative of both the hostility and the amateurish nature of this team.

It's fine for them to think we're over-entitled, it's fine for them to make decisions that I think are stupid in response to that belief.

But, for an executive to enter a public forum and, in that forum, declare that his customers are over-entitled - that betrays both inexperience and unprofessionalism and a sense of hostility.

And, that's just one tiny example of a behavior that a seasoned and professional manager would not have exhibited. There are thousands more.

On a much grander scale, throwing SHARES into action before it was ready and before anyone was trained, presumably for the sole reason of collecting bonuses that were tied to achieving specific milestones by specific dates has got to rank as one of the greatest management failures in recent corporate history. The costs of that horrible and incompetent decision are staggering.

I'm not qualified but I surely would not have made many of the mistakes that have been made. I'd have gone much slower, and would probably have been fired because of it.

I sure hope this happens because I think I'm nearly totally done with this airline on the current trajectory.