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UAL 1Q 2013 call/results - Thursday 4/25/13

UAL 1Q 2013 call/results - Thursday 4/25/13

Old May 29, 2013, 7:43 pm
  #361  
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Originally Posted by mitchmu
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.
When I look back at the last two years - screwing up a perfectly workable boarding process, exchanging Starbucks for brown swill they didn't even bother testing in flight before rolling it out, the 3/12 PSS debacle, the too-early cross-fleeting and crew shortages leading to abysmal operational performance - none of those more substantive screw-ups match the public relations disaster of publicly trashing your customer base. That is what makes me laugh out loud when I read the suggestion that UA has a "savvy" management team.

Maybe if all you do is look at the balance sheet in the short run, that label makes sense. The AA and DL management teams must be counting their blessings these days.....

Look, I hope this management team succeeds. I really do. I still fly UA when it makes sense to do so, and most of the time, on those flights I have an enjoyable trip. But the days of 1999-2011, the days when I went out of my way to fly UA - those days are over. Since Jeff only values me as a single transaction customer, I return the favor.

Last edited by halls120; May 29, 2013 at 7:57 pm
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Old May 29, 2013, 8:05 pm
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Originally Posted by halls120
Maybe if all you do is look at the balance sheet in the short run, that label makes sense.
Even then, one could only look at the balance sheet and would have to ignore the income statement, right? Because if you look at the income statement, you see huge losses each quarter and scarce evidence of promised synergies.
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Old May 29, 2013, 8:07 pm
  #363  
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Originally Posted by mitchmu
Even then, one could only look at the balance sheet and would have to ignore the income statement, right? Because if you look at the income statement, you see huge losses each quarter and scarce evidence of promised synergies.
well, you know what they say when it comes to numbers - there are lies, d*mn lies, and statistics.
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Old May 29, 2013, 8:10 pm
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Originally Posted by halls120
well, you know what they say when it comes to numbers - there are lies, d*mn lies, and statistics.
And, then, after that, there is Jeff's compensation package, which contorts even the most cynical perspective on lies and statistics by giving him bonuses for performance that excludes the cost of "special" items.
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Old May 29, 2013, 8:12 pm
  #365  
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Originally Posted by fly18725
I never said I was fully satisfied with UA and I've admitted management has made mistakes.
While we are at it, and since you are not "fully satisfied" (indicating you are in large part satisfied with his "savvy" management) and we know everything that Jeff did wrong for his $13.9M payday, I would be curious what you think Jeff did right?

What has he done that shows that he is still the guy to lead UA?

And I am not asking for platitudes or generalities. What has Jeff done that improved UA that other airlines have not done? And don't give me things that happened to everyone (e.g. yes, UAs stock price went up, but then it lagged all other carriers since he took over). And don't give me things done by others (e.g. Jeff did not order the 787s). Jeff inherited two profitable airlines, what has he done to make better what he was put in charge of.

I look forward to your very LONG and DETAILED list.

Last edited by spin88; May 29, 2013 at 8:33 pm Reason: adding n't. :)
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Old Jun 10, 2013, 8:08 am
  #366  
 
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It appears that yield number declines YoY aren't just a UA problem, but could be an industry trend (one that DL is bucking though) as both AA and WN had drops for May. AA was down 1.8% while WN was down 2% (DL was up 0.5%.) http://finance.yahoo.com/news/americ...222235518.html Granted, this is just a single month snapshot, but it is the most recent data, and with AA's and WN's limited exposure to the currency issues in Japan, which DL and UA have stated, it points to more of an industry wide issue than a specific cause.

If as many FT members have surmised tons all of UA's HVFs are switching their high yield tickets to AA/WN, they must have all taken May off.
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Old Jun 10, 2013, 8:58 am
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Also worth noting that GS recently upgraded UA from 'sell' to 'neutral' and give the stock a price target of $36.

The analysts wrote, “UAL stock has had a tremendous run, up 38% ytd (vs. S&P 500 UP 13%). While it has underperformed our preferred airline stock, DAL, it has performed in-line with its peer group even though UAL has been in a negative earnings revision cycle. We under estimated how far forward the market would discount the negatives. In our view, the worst is behind UAL, and earnings growth should accelerate in 2H13. We estimate UAL’s earnings to inflect in 2Q13E, as the second derivative turns positive after two tough quarters. Looking ahead, we expect the stock to continue performing in-line with the US airline sector. Thus, we upgrade the stock to Neutral from Sell.”
See, http://zolmax.com/goldman-sachs-upgr...ral-ual/71107/
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Old Jun 10, 2013, 2:55 pm
  #368  
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Originally Posted by fastair
It appears that yield number declines YoY aren't just a UA problem, but could be an industry trend (one that DL is bucking though) as both AA and WN had drops for May. AA was down 1.8% while WN was down 2% (DL was up 0.5%.) http://finance.yahoo.com/news/americ...222235518.html Granted, this is just a single month snapshot, but it is the most recent data, and with AA's and WN's limited exposure to the currency issues in Japan, which DL and UA have stated, it points to more of an industry wide issue than a specific cause.
And on June 10, UA finally released its so-so operational numbers for May:

http://finance.yahoo.com/news/united...201500816.html

The good news for UA is that traffic fell slightly less than the capacity cuts, which is better than the other way around.

It's quite apparent that the sequester's impact continues to be felt industry-wide, and I'm confident that the industry CEOs will be singing from that hymnal in 5-7 weeks as they make excuses, err, explain the lackluster second quarter results.

Originally Posted by fastair
If as many FT members have surmised tons all of UA's HVFs are switching their high yield tickets to AA/WN, they must have all taken May off.
Given UA's dismal revenue performance in 2012 compared to AA (UA's revenue was essentially flat while AA's revenue was up by almost $900 million), it's clear that AA took revenue away from UA in 2012 due to Smisek's failings. That damage has already been done, and there's scant evidence that Smisek has been able to undo that damage thus far in 2013.

Recall that the Wall St analysts were unanimous in late 2011 that AA's 2012 revenue would be down by 10% or more, and that UA, DL and US stood to pick up that revenue.

Instead, Smisek handed AA the best possible gift as AA picked up $876 million or so of additional revenue while UA added about $42 million of additional revenue in 2012. Did AA pick up that revenue at the expense of US or DL? Perhaps, but both of those airlines also reported impressive revenue improvements in 2012. The most likely source of the revenue improvements at US, DL and AA for 2012 would be the businesses and high value elites that fled UA.

For May, 2013, no network airline has reported impressive numbers, but UA's release today shows no signs that UA is recovering from the self-inflicted wounds of March 3, 2012. That damage is evident, and continues to this day.
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