iquitos

Incoming 777/747/787 flights from DEN, LAX, IAD, IAH, EWR, SFO, GUM to feed a six 1/2 hour flight on an Air Mike 737 to BKK?

spin88

I have not spent three hours, I've been hoping that Seeking Alpha does the transcript, so I can scan...

But I think your read is correct. UAL does not want to be a leader, provide better service, win the loyalty and spending of the best customers. It wants to put the squeeze on its passengers and try to shake any loose change out of their pockets. They are in a major hole because they are losing the high value passengers (and I expect a lot of FFers who are over the average yield and fly a lot) and as a result their yield growth is badly under-performing, yet they are doubling down and expecting ALL OF THE NEW REVENUE they will get to come from non-passenger revenue such as TODs, E+ sales, differentiating what they charge for each passengers, etc. Its just nuts, and the "its just nuts" plan is also not backed by any detail, its consultant babble.

As the commenter on Motley Fool I posted earlier http://www.fool.com/investing/genera...-a-secret.aspx notes, UAL already leads in ancillary revenue, its the one area that UAL shines. They are already picking their passengers pockets, selling the benefits that used to go to the elites, yet results are bad. To double down on this approach, which has (evidently) not worked well so far, is just stupid. Yet, as I have noted Jeff does not have many options. He has evidently decided that doing further damage to UAL is worth it, if it gives him another 9-12 months at the helm just hoping some something to save him, or given him a new excuse.

MrJBoy

UA staff at BKK will be laid off. One of my UA friends who works at BKK told me.

B787938

I am rather confused about the continuation of NRT - BKK. The press release seems indicate a down gauge on some of the intra-Asia routes as opposed to out right cancellation. All of the aforementioned schedule changes are now loaded into the timetable.

However, the Narita to Bangkok flight is loaded in the schedule through the end of the schedule - albeit on a 777. I did see the posts indicating that the Bangkok station coworkers were told their jobs will be ending.

What gives? Should we take the fact that the flight remains in the timetable as affirmation that it will remain? Or is that just wishful thinking?

emcampbe

Be careful with SQ. Many of the lower fare classes don't earn mileage. In that regard, the SQ skies aren't necessarily too friendly.

exerda

I think you've nailed the reason UA is fleeing BKK-NRT: competition!

halls120

Same reason they are dropping SEA-NRT - they don't want to admit they can't compete with their own *A partner or with DL.

787fan

Any bets on when NRT-SIN gets the chop ? I'd imagine UA cancelling NRT-SIN and ceding that traffic to NH/SQ could really help repairing the ice cold UA/SQ relationship

spin88

I don't have a doubt that once ANA entered the market, and offered far superior service to the craptastic product that UAL is offering, and once DAL jumped into the market, that margins were under pressure. That UAL was only running CRJ-200s from LAX and on some flights from SFO, and that UAL overall has cut its service quality domestically dramatically, so that AS (and now VX) is offering a far better experience, likely did not help. I don't doubt that UAL is losing many HVFers ex-SEA.

But the point being made was that UAL runs from competition. This move (and the general pull back from SEA, and now BKK) is "running from competition." My second point was that to say that what DAL is doing is the same (as the poster I responded to claimed), is simply false.

Bottom line, this retrenchment and the shrinking of the network, is just further evidence that Jeff has driven away HVFs and when an airline starts to fail, it fails at the edges first.

star_world

I'm not sure you understand how the Pacific JV works. UA shares the costs and revenues associated with that NH flight, and therefore directly benefits from the fact that they are using a low-cost aircraft (788) on the route, compared with the aircraft that UA operates itself. Better to take a share of the lower costs and lower revenue (but better % margin overall) than to take a share of the higher costs and significantly lower margins on the 772. So NH doesn't squeeze UA's margin, it increases it from a percentage perspective. If capacity is a concern UA would be perfectly happy for NH to operate another 788 on the route rather than keep its 772. So would NH, for the same reason.

DL entering the market squeezes margins across the board, but for an entirely different reason. Their entry affects both UA and NH. Even more of a reason to get an expensive 772 off the route.

The link you create between moving aircraft around to find the more profitable business and the loss of HVFs is either wishful thinking or fantasy - or maybe a combination of both. I don't see an issue with cutting routes that tie up aircraft where they could be making more money elsewhere, especially if there are JV partners that allow a higher % margin to be retained on the route you cut.

jasondc

United, as most companies, has fixed resources. It has to decide how to best use them. They have apparently decided it's worth it to them to focus on SFO rather than on SEA.

DL did not have a west coast asia gateway. They've tried and fumbled somewhat in LAX. They're putting their marbles in SEA, United is putting its marbles in SFO.

Business is about hard choices sometimes and sometimes deciding to give up on a market if you can make more money elsewhere.

AA did the same thing when it dropped its long-standing BOS-LHR and BOS-Caribbean/ Bos-Florida flying. I dont see you screaming about that.

Delta did the same thing years ago when it dropped its long-standing Dallas hub.

That's the way airlines and most businesses function.

jasondc

United is adding Chengdu, China. Is that a drop in your book? Yeah, BKK is gone, but China is where the real action is and they've expanded their nonstop options there from the US, which is probably the right move.

Also, UA has added DEN-NRT, and added IAH-NRT #2. I'd say their strengthening the market, cutting the dead weight, and reinforcing their presence through optimal use of their partners.

exerda

Your quibble should be with the article I quoted & responded to, then. They're the ones saying UA is shifting focus from Asia to Europe.

FWIW, Thailand has 6.4% GDP growth for 2012, one of the highest in Asia. Yet UA is cutting them out?

kmfdm91

This keeps getting mentioned, but while there is a willing partner in NH from TYO and options to other hubs in Asia on *A (TPE, BKK, SIN, ICN, PEK), getting people on UA planes should be the management's primary motivation - that way, they can do their favorite thing, and charge them ancillary fees on baggage, duty free, AVOD, etc.

Even if China as a whole is the cash cow and tons of business will be going there in the upcoming years, keeping a bunch of flights to NRT and not having as many (or ANY??? in the upcoming years) tags on UA planes seems pretty stupid. Sure, business is fine in Japan, but NRT isn't a favourite airport for Tokyo-bound folks with the rise of HND and for US-based travelers that want (or have to) stay on a US-flag carrier are going to be pushed to other carriers.

I've done a lot of the UA-metal tags in Asia and in my experience throughout various times of the years and days of the week - they were relatively full, if not packed. As soon as I saw a 738 on some of these routes (and sadly, saw one on the ground in comparison to the competitions [literally, every other plane] widebody jets) I laughed and promised never to step on one in Asia, which I haven't...

This move makes sense if UA either:
Expects people to stay in Japan (and is happy with Narita)
or
Wants people to connect to the partners and just try to grab as much money from the JV

-jeremy

cerealmarketer

And Bangkok is the equivalent to Las Vegas for South Asia - lots and lots of leisure. Yes, there are some connections with Thai to new business centers but not many places ANA doesn't serve out of NRT.

The JV changed the economics of it all.