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How many are REALLY leaving UA? [2014 edition]

How many are REALLY leaving UA? [2014 edition]

Old Jan 6, 14, 2:07 pm
  #46  
 
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Originally Posted by LaserSailor View Post
Loyalty to an airline has always been pointless. No airline ever loved you, it just made you feel like it did.
Of course no airline ever loved anyone - nor does any company. It isn't love that loyalty was about. It was a relationship oriented customer retention strategy. Airlines via FF programs proposed a value exchange that went beyond the transaction of the moment. They effectively said "if you bring us business on a continuing basis, we will give you extra value for your spend". That never was about love and using that term is just clouding any discussion. When I would choose a carrier to fly on a paid business class ticket a few years ago I would look at schedule (most options were essentially equivalent), on board service level, ground service level, cost, etc. An airline could give itself extra competitive ammunition by expanding the choice criteria beyond those to also include things like treatment on other flights I took, generally better customer service, FF miles, etc. In those days I could look narrowly at a UA TPAC and say it was inferior to some Asian carrier's TPAC (and it clearly often was) but that by giving my business to UA I got other value in better treatment for a large number of domestic flights that I also took. This was simply a value equation - it wasn't a romantic relationship. But it absolutely was a rational response to the offering and it hinged on a notion of total business relationship or in common parlance "loyalty". That "loyalty" was not at all "pointless" - it had absolutely tangible value to me. When I got trapped in a snowstorm in DC that "loyalty" got me home when few others were going anywhere. You really need to stop generalizing the whining of MRers and card mileage junkies and realize that there is something much more basic in play here in the fundamental business decisions that UA and its rational customers are making or not making.
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Old Jan 6, 14, 2:12 pm
  #47  
 
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Originally Posted by LarkSFO View Post
Industry average of 42%?

What industry are you referring to, or was this a rectilinear calculation?

Inst Ownership %
UAL: 97%
ALK: 99%
LUV: 82%
DAL: 91%

I don't know how this is possible, but according to NASDAQ JBLU is 102% institutional owned...

AAL is too new (?) to have ownership listed.
I'm using stats from Fidelity for institutional ownership (sorted by market cap):

AAL: 68.10%
DAL: 89.68%
UAL: 96.39%
LUV: 79.58%

ALK: 97.82%
JBLU: 94.74%

IAvg: 58.05%

It does appear that the industry average is somewhat skewed by inclusion of some foreign airlines, so the difference is not as dramatic as it seemed to me on first glance. That said, UA is still the clear laggard in non-institutional ownership among the big 4:

UAL: 4%
DAL: 10%
LUV: 20%
AAL: 32%
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Old Jan 6, 14, 2:27 pm
  #48  
 
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Originally Posted by pdx1M View Post
Thanks. Sadly I don't think UA is listening to these types of input. I tried saying pretty much the same thing to them through various 1-1 channels including UA Insider over the past couple of years as I saw my own purchase patterns start to change. I got either "tough" or simply silence. Not even the courtesy of a response in the case of UAI. You would think that someone who spent 100's of thousands of dollars over years of being a GS and who now consciously books away from UA unless I have some special deal or there is simply no alternative would be worth having a chat with to at least understand why the change. However, I have seen this type of behavior before and it comes of a culture so convinced it is right about something that it cannot allow itself to take inputs that might contradict their own views. When I have seen it in other business settings (and even been a part of it myself I am sorry to admit) it NEVER has come out well. Reality is a harsh teacher to those who put their fingers in their ears and chant na-na-na. Unfortunately for us (and for UA actually) reality is also a very slow teacher and these types of behaviors have to persist until real damage is done before folks like boards and stockholders wake up to them. So unlike others here I don't really have any hope of regime change at UA anytime soon because cultures that get this insular also develop amazing defenses and staying power.
I 100% agree that UAL has "culture wise" become not interested in negative feedback. Upper management at this point is firmly set on a course based on the theory (a theory espoused by folks who have posted in this thread) that air travel is a commodity and spending extra on service, even "premium" service does not pay for itself in extra revenue.

On the quarterly calls UAL have acknowledge the loss of valuable passengers, and they have yet to propose a plan to get them back other than asserting they are coming back. I agree that management can do a lot of damage before they are let go, and I am sure that UAL is no exception. Once High Value Fliers leave, change their travel habits its hard to get them back. As Jeff candidly said "he was hoping to do to AA/US what AA did to him." I think Jeff (and UAL management) knows that they have a problem, but as I have noted before, they really have no option at this point. The HVFers who left are gone, and upping bonuses or marginaly improving service is not going to win them back. So Jeff has chosen to look at the cost side. I think this is a mistake (as I think it is causing more folks to leave, and what was a steady leak may become a gusher in 2014) but I recognize he has few options. The time for a course correction was at end of 2012, and having missed that UAL was committed.

I think the sharply more negative tone on FT though is emblematic of what I hear from FC passengers, they are all down on UAL (with only ONE exception in perhaps 100 conversations). Talk to your seatmate, and what they say is never nice. Talk to your seatmate on AA or DL and you may find they are ex-UAL. If what we are seeing on FT is correct (and I think it is) revenue is not going to suddenly turn around, with UAL outperforming, and absent that Jeff is toast. As I have said before, he will be out in 3Q 2014 perhaps the quarter after that.


Originally Posted by LarkSFO View Post
As a stockholder, the most important place to look is at your monthly statement from your broker...
Lark, if you are making decisions on what stocks to own by looking at your monthly statements, then you are not exactly a savvy stock picker. Sorry to say... - your friend who bought lots of DAL x-mas of 2012.

Originally Posted by NiceLanding View Post
I keep wondering if UA's lack of non-institutional ownership, less than 4% vs. an industry average of 42%, is the cause or the result of market expectations being skewed. Maybe it's easier for them to convince a small number of key analysts to believe in their strategy than it would be with a broader distribution of shareholders.
There are two types of airline "analysts" One pay attention to operations and competitive posture (Baker, for example). The other looks at trends and see the industry going the direction of Spirit, so they cheerlead any cuts in service (Hunter Keay) is this way. But given the difference in ratings (half of analysists are down on UAL) its very hard for me to see how UAL's stock is doing as well as it is. But over time, these things correct themselves...
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Old Jan 6, 14, 2:36 pm
  #49  
 
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Originally Posted by LaserSailor View Post
I will abandon UA in a heartbeat when a new airline can more efficiently route me to where I need to be.
You (and Smisek, too) should realize that many of us care about more than just routing efficiency.
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Old Jan 6, 14, 2:42 pm
  #50  
 
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Originally Posted by spin88 View Post
Lark, if you are making decisions on what stocks to own by looking at your monthly statements, then you are not exactly a savvy stock picker. Sorry to say... - your friend who bought lots of DAL x-mas of 2012.
Originally Posted by LarkSFO View Post
You are not claiming that Flyertalk is a better barometer than Wall Street of company value, are you?

I am a buy and hold investor. I try not to actually even look at my statements more than once a quarter... (difficult to do sometimes)
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Old Jan 6, 14, 2:45 pm
  #51  
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Originally Posted by pdx1M View Post
Of course no airline ever loved anyone - nor does any company. It isn't love that loyalty was about. It was a relationship oriented customer retention strategy. Airlines via FF programs proposed a value exchange that went beyond the transaction of the moment. They effectively said "if you bring us business on a continuing basis, we will give you extra value for your spend". That never was about love and using that term is just clouding any discussion. When I would choose a carrier to fly on a paid business class ticket a few years ago I would look at schedule (most options were essentially equivalent), on board service level, ground service level, cost, etc. An airline could give itself extra competitive ammunition by expanding the choice criteria beyond those to also include things like treatment on other flights I took, generally better customer service, FF miles, etc. In those days I could look narrowly at a UA TPAC and say it was inferior to some Asian carrier's TPAC (and it clearly often was) but that by giving my business to UA I got other value in better treatment for a large number of domestic flights that I also took. This was simply a value equation - it wasn't a romantic relationship. But it absolutely was a rational response to the offering and it hinged on a notion of total business relationship or in common parlance "loyalty". That "loyalty" was not at all "pointless" - it had absolutely tangible value to me. When I got trapped in a snowstorm in DC that "loyalty" got me home when few others were going anywhere. You really need to stop generalizing the whining of MRers and card mileage junkies and realize that there is something much more basic in play here in the fundamental business decisions that UA and its rational customers are making or not making.
+1!!!!!
Nuff 'said!

Dave
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Old Jan 6, 14, 5:51 pm
  #52  
 
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Originally Posted by spin88 View Post
On the quarterly calls UAL have acknowledge the loss of valuable passengers, and they have yet to propose a plan to get them back other than asserting they are coming back. I agree that management can do a lot of damage before they are let go, and I am sure that UAL is no exception. Once High Value Fliers leave, change their travel habits its hard to get them back. As Jeff candidly said "he was hoping to do to AA/US what AA did to him." I think Jeff (and UAL management) knows that they have a problem, but as I have noted before, they really have no option at this point. The HVFers who left are gone, and upping bonuses or marginaly improving service is not going to win them back. So Jeff has chosen to look at the cost side. I think this is a mistake (as I think it is causing more folks to leave, and what was a steady leak may become a gusher in 2014) but I recognize he has few options. The time for a course correction was at end of 2012, and having missed that UAL was committed.

I think the sharply more negative tone on FT though is emblematic of what I hear from FC passengers, they are all down on UAL (with only ONE exception in perhaps 100 conversations). Talk to your seatmate, and what they say is never nice. Talk to your seatmate on AA or DL and you may find they are ex-UAL. If what we are seeing on FT is correct (and I think it is) revenue is not going to suddenly turn around, with UAL outperforming, and absent that Jeff is toast. As I have said before, he will be out in 3Q 2014 perhaps the quarter after that.
Extremely well put.

I don't think one can debate the fact that there have been significant cuts in service and price increases (primarily a reduction in the effective discount offered by the FF program) and that these have caused a loss of HVF revenue. Jeff believes (or at least claims) that the cost savings will outweigh the loss of revenue. IMHO this is a huge miscalculation and Jeff (despite the manifest ineptitude and passivity that the UA board has so far demonstrated) will be gone by the end of the year.
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Old Jan 6, 14, 5:59 pm
  #53  
 
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Originally Posted by 5khours View Post
Extremely well put.

I don't think one can debate the fact that there have been significant cuts in service and price increases (primarily a reduction in the effective discount offered by the FF program) and that these have caused a loss of HVF revenue. Jeff believes (or at least claims) that the cost savings will outweigh the loss of revenue. IMHO this is a huge miscalculation and Jeff (despite the manifest ineptitude and passivity that the UA board has so far demonstrated) will be gone by the end of the year.
You don't? You include so many variables, it is easy to shoot down your statement.

That being said, we'll see how things go in 2014... The optimist in me wants to believe we'll see improvement.

The realist says, there are now only 3 legacies, and they are not in business to 'over-provide' benefits.

The only hope I see is that AA decides to differentiate themselves through better services / improvement of the experience for frequent travelers and elites.

And, with this strategy, AA makes a lot of money.

Putting pressure on DL and UA to likewise improve.

Farfetched, maybe, but possible!
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Old Jan 6, 14, 6:12 pm
  #54  
 
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Originally Posted by LarkSFO View Post
You don't? You include so many variables, it is easy to shoot down your statement.

That being said, we'll see how things go in 2014... The optimist in me wants to believe we'll see improvement.

The realist says, there are now only 3 legacies, and they are not in business to 'over-provide' benefits.

The only hope I see is that AA decides to differentiate themselves through better services / improvement of the experience for frequent travelers and elites.

And, with this strategy, AA makes a lot of money.

Putting pressure on DL and UA to likewise improve.

Farfetched, maybe, but possible!

I would tend to agree. I also think an improving economy may save Jeff even if he under-performs relative to his peers.

One other point I would make is that even though there are now only three legacies, they have all made a lot of their money off of international premium travel and I think this market is becoming very competitive. I know it's anecdotal, but I hear a lot of my non-FT (but FF) friends talk about how they have switched to non U.S. carriers.
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Old Jan 6, 14, 8:28 pm
  #55  
 
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With AA starting up a flight to DFW on mainline, thinking about it. Tired of RJ on 3+ hr flights , but Id be giving up a lot of direct flights out east (ord ewr), so I'm not sure yet..
Connecting in PHX and DFW doesn't sound so fun going to NYC lol...

Now if WS joined one world and put in a F cabin, id be gone.
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Old Jan 8, 14, 6:09 pm
  #56  
 
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Originally Posted by boat9781 View Post
Hi all,

Have been a loyal United/CO flyer for the last 5 years, starting when I began my studies at college back in the mid/late 2000s. In those days I was enticed by the little things. Loved the free meals at mealtime, for example. Started as a Silver, got hooked and soon became Gold; it's now my 2nd year as a 1K but doubt I'll re-qualify next year given the advent of PQDs.

That said, the past few years have been great. Economy Plus was a fantastic add, as was the ability to redeem miles for travel on top tier partner airlines in premium cabins at reasonable rates.

Since the value of the program to me has always been on the redemption rather than the CPU side, and given that I'll probably lose the GPUs going forward as I'm merely a ~$7.5K/year flyer, it seems to me that AS provides the best program for me going forward given the recent M+ changes.

BA, Cathy, Qantas, Emirates + others internationally; AA + Delta domestically -- the first of which offers free Main Cabin Extra for MVP Golds and the latter of which offers (a slim shot at) complimentary upgrades. And as of Jan 15, all at a 100% mileage bonus and eligible for elite qualifying miles. The lack of change fees for MVP Gold+ also is a plus.

Anyway, so that's where I'm headed, for better or worse. I'll report back in June.

But for now, adios & good luck. It's been a good ride.
Yes I just quoted myself.

But Delta's announcement today coupled with AA's 321T debut yesterday simply solidified my decision to move away from United. I could do 5 more years as a 1K and attain Gold for life but not sure sure it's worth it. Who's to say down the road that UA deems "Gold" the base level and chooses to rename the tiers Gold (base level), Plat, 1k, 2k, GS... we just don't know.

Sure, Delta is adding slimline seats. But they added something good too -- near fleetwide in-seat IFE. It's a give. And it's a take.

Where's the give these days UA?

"You can make a pizza so cheap, nobody will eat it." Who said that again?

Last edited by boat9781; Jan 8, 14 at 6:15 pm Reason: Quote
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Old Jan 8, 14, 7:02 pm
  #57  
 
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Originally Posted by boat9781 View Post
"You can make a pizza so cheap, nobody will eat it." Who said that again?
I think you just did.

Let all the rest of us SF based flyers know how things work out for you!

Safe travels...
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Old Jan 8, 14, 7:18 pm
  #58  
 
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Originally Posted by spin88 View Post
...AA is not changing its program, ...
Yet.
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Old Jan 8, 14, 8:24 pm
  #59  
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Originally Posted by boat9781 View Post
"You can make a pizza so cheap, nobody will eat it." Who said that again?
Originally Posted by LarkSFO View Post
I think you just did.
Actually

pbs.org/bethune
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Old Jan 8, 14, 8:50 pm
  #60  
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Originally Posted by EmailKid View Post
Nice. Here's the full excerpt:

It's the old adage: You can make a pizza so cheap, nobody will eat it. You can make an airline so cheap, nobody will fly it. They had taken so much cost out that the value wasn't there for the average person. A watch only has value when it's reliable and consistent, and an airline only has value when it's reliable and consistent, and we were not. And we needed to become that, and no one had ever addressed that issue. It's not about market strategy. It's not about the flight attendants with a Kate Spade handbag. It's about getting there safely on time with your underwear every time you fly. ...

Those who cannot remember the past are condemned to repeat it.
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