Is Ch11 unavoidable for UA next year?
Dec 15, 2013, 3:07 am
#76
Join Date: May 2013
Location: west coast best coast
Programs: TINDER GOLD, STARBUCKS GOLD, COSTCO EXECUTIVE!!
Posts: 3,989
In the past year, my experiences with UA customer service have been much better and more satisfactory than with PMUA. That wasn't the case in the first few months after the merger, but now I find my interactions with FAs, agents, pilots, and CSRs to be almost uniformly positive, pleasant, affable, and helpful. ^
It seems a lot of UA fliers seem to fly in bubbles...
Dec 15, 2013, 3:21 am
#77
FlyerTalk Evangelist
Join Date: Aug 2002
Location: Bay Area, CA
Programs: UA Plat 2MM; AS MVP Gold 75K
Posts: 35,068
In fairness, PMUA is where a lot of the high-value flyers who defected came from, and without recognizing and understanding some of the gaps between present UA and PMUA, they will not be able to remedy them.
Dec 15, 2013, 4:01 am
#78
Join Date: Oct 2009
Programs: UA 1K, Hilton ♦ , Hyatt Carbonado, Wyndham ♦, Marriott PE, "Stinking Bum" elsewhere.
Posts: 4,993
So long as the FED keeps pumping, UA will be fine.
No bankruptcy in the foreseeable future since the cost of money is so cheap.
Also I don't believe that Smisek and the board are unhappy with UA's performance because their plan hasn't been fully implemented yet.
IMO, Smisek is trying to increase profits the way that Xerox et. al. have been doing it, and that is by cutting costs to the bone, by getting more productivity out of the workforce i.e. more hours without additional compensation, cheapening the product, decreasing CS failure compensation etc. etc., combined with finding incremental revenue wherever it can be had e.g. increased bag fees through decreased free allotments to lower level FFs and * partners, increased liquor/wine/food revenue etc., increased airfares wherever competition allows, etc.
I honestly don't think that he cares that much about the premium cabin product because he believes that he has a largely captive premium customer base because of the route network and existing corporate/government travel agreements and very competitive prices.
JMO
No bankruptcy in the foreseeable future since the cost of money is so cheap.
Also I don't believe that Smisek and the board are unhappy with UA's performance because their plan hasn't been fully implemented yet.
IMO, Smisek is trying to increase profits the way that Xerox et. al. have been doing it, and that is by cutting costs to the bone, by getting more productivity out of the workforce i.e. more hours without additional compensation, cheapening the product, decreasing CS failure compensation etc. etc., combined with finding incremental revenue wherever it can be had e.g. increased bag fees through decreased free allotments to lower level FFs and * partners, increased liquor/wine/food revenue etc., increased airfares wherever competition allows, etc.
I honestly don't think that he cares that much about the premium cabin product because he believes that he has a largely captive premium customer base because of the route network and existing corporate/government travel agreements and very competitive prices.
JMO
Dec 15, 2013, 5:48 am
#79
Moderator Hilton Honors, Travel News, West, The Suggestion Box, Smoking Lounge & DiningBuzz
Join Date: Jun 2000
Programs: Honors Diamond, Hertz Presidents Circle, National Exec Elite
Posts: 36,024
Because he was so beloved on this board? As shown by
It's also funny how so much of the bashing of Mr. Smisek is just deja vu all over again:
http://www.flyertalk.com/forum/unite...nn-tilton.html
http://www.flyertalk.com/forum/unite...ghlight=tilton
http://www.flyertalk.com/forum/unite...ilton-now.html
UA could bring Mr. Tilton back and there would still be exactly the same kind of bashing that we see with Mr. Smisek.
It's also funny how so much of the bashing of Mr. Smisek is just deja vu all over again:
http://www.flyertalk.com/forum/unite...nn-tilton.html
http://www.flyertalk.com/forum/unite...ghlight=tilton
http://www.flyertalk.com/forum/unite...ilton-now.html
Dec 15, 2013, 6:03 am
#81
Join Date: Oct 2012
Location: NYC
Programs: AADULtArer
Posts: 5,681
I understand this is like telling a teenager a starting position doesn't pay 100k a year, but life is full of setbacks for us to conquer.
Ps...if you are really tired of these threads, either use ignore, or petition mods to separate the forum into true MP issues and drivel. I've done both.
Dec 15, 2013, 6:33 am
#82
Suspended
Join Date: Jun 1999
Location: Los Angeles
Programs: Loyal to Myself
Posts: 8,303
99% of UA customers share this view, and the business is being run for them, not FT.
I understand this is like telling a teenager a starting position doesn't pay 100k a year, but life is full of setbacks for us to conquer.
Ps...if you are really tired of these threads, either use ignore, or petition mods to separate the forum into true MP issues and drivel. I've done both.
I understand this is like telling a teenager a starting position doesn't pay 100k a year, but life is full of setbacks for us to conquer.
Ps...if you are really tired of these threads, either use ignore, or petition mods to separate the forum into true MP issues and drivel. I've done both.
United's model diverged from mine, so they lost most of my revenue. But I'm too busy to worry about their prospects.
Dec 15, 2013, 6:51 am
#83
Join Date: Oct 2009
Location: MSN
Programs: UA Gold, SPG Lifetime Gold
Posts: 210
Dec 15, 2013, 7:25 am
#84
Join Date: Sep 2011
Programs: UA Premier Platinum 1.4MM, Hertz PC, Marriott Platinum
Posts: 115
When UA starts to lose money and is unable to pay its bills--even if it is outperforming its competitors and is ranked the planet's best airline--then start this thread; otherwise, this was such a silly thread to start.
It would have been better to start one asking something like, "Can UA win back corporate contracts and frequent fliers in 2014?"
It would have been better to start one asking something like, "Can UA win back corporate contracts and frequent fliers in 2014?"
Dec 15, 2013, 7:59 am
#85
FlyerTalk Evangelist
Original Poster
Join Date: Dec 2004
Location: East Coast
Programs: AA CONCIERGE KEY & 1MM, HILTON DIAMOND
Posts: 11,970
The answer is yes, but it will take time.
Would anyone 10 years ago have thought that DL would be in such a dominant position? People were complaining about DL and their plastic cups in F.
But they've improved service -- customer service, in-flight experience, amenities, etc. tremendously, and they're reaping the rewards as a result.
Could anyone 5 years ago have thought that US with their limited network and connection focused hubs (PHX, CLT), outperform behemoth UA from a RASM perspective, despite UA's much broader global network and more business-oriented hubs (WAS, ORD, SFO, LAX)?
The industry is quite cyclical.
This executive team does not understand how to increase the revenue, so the only choice they have is to adjust costs.
They don't just have weak systems, they have weak business processes. In your situation in the old UA, it would have given you the same bad connection, but a second sweep checking for that would have moved you to another flight and/or put you in a call queue to be addressed.
I had one several months ago where UA simply cancelled the flight in a market. I ended up not needing it, and decided to wait and see what UA would do. The answer was absolutely nothing. I waited until 2 days before the flight to actually change the ticket.
That's part a technology issue, and part business process. Someone needs to be contacting customers in these egregious schedule change situations.
That was not a hiring issue, rather a cultural one. The CO "we know best" attitude is responsible for a lot of what's wrong with UA. When you have someone who doesn't know what they're doing, but thinks they know what they're doing, that can be very damaging. Unfortunately, the CO culture bred a lot of that mentality, and a lot of that seems to be driving the organization at the moment at various levels.
But what if UA made substantive improvements to the product, mileage program, customer service, etc., fired the CEO, rebranded, and marketed to the hilt to regain former high-value flyers?
That's basically what a new CEO who gets it is going to have to do.
At the end of the day, people change their decisions all the time. People aren't running back to UA in droves in their present state of poor CS, hot pockets in F, devalued mileage program, etc., because Jeff says they're "flyer friendly."
They'll come back when the place actually looks, feels, and smells a bit different.
Yup, and that pretty much sums it up. While there still are some hard feeling from that, UA was ultimately able to recover from it.
And they can recover from this too, if they do the right things.
Would anyone 10 years ago have thought that DL would be in such a dominant position? People were complaining about DL and their plastic cups in F.
But they've improved service -- customer service, in-flight experience, amenities, etc. tremendously, and they're reaping the rewards as a result.
Could anyone 5 years ago have thought that US with their limited network and connection focused hubs (PHX, CLT), outperform behemoth UA from a RASM perspective, despite UA's much broader global network and more business-oriented hubs (WAS, ORD, SFO, LAX)?
The industry is quite cyclical.
This executive team does not understand how to increase the revenue, so the only choice they have is to adjust costs.
They don't just have weak systems, they have weak business processes. In your situation in the old UA, it would have given you the same bad connection, but a second sweep checking for that would have moved you to another flight and/or put you in a call queue to be addressed.
I had one several months ago where UA simply cancelled the flight in a market. I ended up not needing it, and decided to wait and see what UA would do. The answer was absolutely nothing. I waited until 2 days before the flight to actually change the ticket.
That's part a technology issue, and part business process. Someone needs to be contacting customers in these egregious schedule change situations.
That was not a hiring issue, rather a cultural one. The CO "we know best" attitude is responsible for a lot of what's wrong with UA. When you have someone who doesn't know what they're doing, but thinks they know what they're doing, that can be very damaging. Unfortunately, the CO culture bred a lot of that mentality, and a lot of that seems to be driving the organization at the moment at various levels.
But what if UA made substantive improvements to the product, mileage program, customer service, etc., fired the CEO, rebranded, and marketed to the hilt to regain former high-value flyers?
That's basically what a new CEO who gets it is going to have to do.
At the end of the day, people change their decisions all the time. People aren't running back to UA in droves in their present state of poor CS, hot pockets in F, devalued mileage program, etc., because Jeff says they're "flyer friendly."
They'll come back when the place actually looks, feels, and smells a bit different.
Yup, and that pretty much sums it up. While there still are some hard feeling from that, UA was ultimately able to recover from it.
And they can recover from this too, if they do the right things.
Dec 15, 2013, 8:06 am
#86
Join Date: Aug 2004
Location: OSL/IAH/ZRH (time, not preference)
Programs: UA1K, LH GM, AA EXP->GM
Posts: 38,265
As for productive - the UA management neither considers customer input nor does it value it. So constructive criticism is just short of a public show of cowardice.
I stopped using the UA forum very often for the exact opposite reasons as I perceive it flooded with apologists who each offer their hypotheses and faiths on why UA has to act the way it does.
But here I agree with the posting majority - short of another 9/11 style event, there is no way UA could go CH11 anytime soon.
Dec 15, 2013, 9:16 am
#87
Join Date: Jan 2009
Location: WAS
Programs: AA EXP2M, DL 1MM DM ext, UA PP <=> HH G/Marr PE/Hyatt G/IHG P FT RA ( Recovering Addict)
Posts: 4,596
A very rational post that hits most of the points I was going to make.
Are we sure this belongs on FT, the home of speculation / arm chair verdict?
UA is fine money wise, but not as good as its peers.
When its business metrics improve to help increase profits, then the market will take note and lift its value accordingly.
When management figures out that it takes both revenue growth (from satisfied customers) AND cost cutting to be truly profitable, then it will happen.
The blame goes to the UA of long ago which decided that staff seniority will determine advancement in life and that the staff will deal with it rather than management. The soft product will not improve until the employees realize it. A successful airline is the best guarantee of good job in a free market. Otherwise one has to work for Air India.
Are we sure this belongs on FT, the home of speculation / arm chair verdict?
UA is fine money wise, but not as good as its peers.
When its business metrics improve to help increase profits, then the market will take note and lift its value accordingly.
When management figures out that it takes both revenue growth (from satisfied customers) AND cost cutting to be truly profitable, then it will happen.
The blame goes to the UA of long ago which decided that staff seniority will determine advancement in life and that the staff will deal with it rather than management. The soft product will not improve until the employees realize it. A successful airline is the best guarantee of good job in a free market. Otherwise one has to work for Air India.
Something very unfortunate financially would have to happen for UA to enter CH 11 next year. Bankruptcy is not a tool to address frequent flyer-alienating decisions or redesign cabins. It is a tool to restructure burdensome debt that is keeping the business for being solvent. UA's finances are in order - though trailing its peers - which means no judge would allow a CH 11 filing.
UA's woes are not financial. The airline simply has two faces: the one the passenger sees and the one its leadership sees. Leadership sees a merged United that serves more cities than ever, has a very competitive hard product on international flights and dominant hubs in IAH, SFO, EWR and IAD. It believes that operational challenges are behind them and every day things get better. Because of this vantage point they believe they don't need to offer as many incentives to gain/retain frequent flyers (we just want to fly United).
Of course, as we know first-hand, the actual UA experience leaves a lot to be desired. Yes, the network is expanded but as a passenger I could always get where I needed to go. Just because PMUA didn't fly to Quito, Ecuador, didn't mean I couldn't get there. I just flew another airline. Yes, the lie-flat hard product is competitive but the horrible soft product devalues it. Yes, there are people who are "hub captive" but the majority of passengers don't live in that environment. When choosing between other carriers with Wi-Fi, better on-time records, lower fees, lower fares, better service, and mainline aircraft, people will weigh their options and without a strong loyalty program to incent them they will defect. Unfortunately for UA another trip to the courts won't fix this problem. Only a new management point of view will...
UA's woes are not financial. The airline simply has two faces: the one the passenger sees and the one its leadership sees. Leadership sees a merged United that serves more cities than ever, has a very competitive hard product on international flights and dominant hubs in IAH, SFO, EWR and IAD. It believes that operational challenges are behind them and every day things get better. Because of this vantage point they believe they don't need to offer as many incentives to gain/retain frequent flyers (we just want to fly United).
Of course, as we know first-hand, the actual UA experience leaves a lot to be desired. Yes, the network is expanded but as a passenger I could always get where I needed to go. Just because PMUA didn't fly to Quito, Ecuador, didn't mean I couldn't get there. I just flew another airline. Yes, the lie-flat hard product is competitive but the horrible soft product devalues it. Yes, there are people who are "hub captive" but the majority of passengers don't live in that environment. When choosing between other carriers with Wi-Fi, better on-time records, lower fees, lower fares, better service, and mainline aircraft, people will weigh their options and without a strong loyalty program to incent them they will defect. Unfortunately for UA another trip to the courts won't fix this problem. Only a new management point of view will...
Dec 15, 2013, 9:19 am
#88
Join Date: Mar 2010
Location: Orygun
Posts: 461
I think United is a long way off from BK. Yes they're trying to slash costs and in the process cheapen their product and bleed work out of their employees.
The only way I could see BK even being in Smisek plan is a vehicle to terminate the CO pension plan. Recall that in the two previous CO bankruptcies the pension plan remained intact out of both of them. On the other hand, part of the United BK included one of the largest pension plan defaults in the history of the US thanks in large part to Glenn.
If we really want to know what a POS the current United management is it would be to see them put the new United into BK and see what they do to the pension plans.
Even though I don't like what the Houston boys have done to the product, I don't see them being as unscrupulous as that. In fact, if you read any of the investor reports or SEC filings there's regular reference to the current management's commitment to funding the intact pension plans.
The only way I could see BK even being in Smisek plan is a vehicle to terminate the CO pension plan. Recall that in the two previous CO bankruptcies the pension plan remained intact out of both of them. On the other hand, part of the United BK included one of the largest pension plan defaults in the history of the US thanks in large part to Glenn.
If we really want to know what a POS the current United management is it would be to see them put the new United into BK and see what they do to the pension plans.
Even though I don't like what the Houston boys have done to the product, I don't see them being as unscrupulous as that. In fact, if you read any of the investor reports or SEC filings there's regular reference to the current management's commitment to funding the intact pension plans.
Dec 15, 2013, 9:25 am
#89
FlyerTalk Evangelist
Join Date: Jul 1999
Location: ORD/MDW
Programs: BA/AA/AS/B6/WN/ UA/HH/MR and more like 'em but most felicitously & importantly MUCCI
Posts: 19,719
I would say the SFH and 9/11 era, 2000-02, represented the company's al-time low since deregulation. Back then there were serious financial losses, and vicious, debilitating labor fights, and other factors which did lead to bankruptcy. Back then I really did think the airline was going to tear itself apart (just on the basis of SFH, which repelled a very large bloc of HVFs and thereby arguably hastened the airline's post-9/11 decline).
Today is bad but not 2000 bad.
Yup -- another fair metaphor. We don't know if UA has consciously chosen this path or if they are surprised by HVF defections / lost corporate contracts / slumping PRASM, and now have to make the best of it. But they can make money as a weak sister. Allegiant makes plenty of money.
Dec 15, 2013, 9:29 am
#90
Join Date: Jun 2005
Location: AUS
Programs: AA Exec Platinum/MM, DL Gold/MM, Hilton Diamond, Accor Platinum, Hertz Presidents Circle
Posts: 6,975
Seems silly to be discussing bankruptcy for a company that is consistently profitable and generating significant cash from operations ($1.8 billion YTD). Underperforming relative to its peers? Yes. But a plausible candidate for bankruptcy in the short to medium term? Not a chance.
Bring back Gordon and get some cheese back on the pizza.
Bring back Gordon and get some cheese back on the pizza.