Kacee

That makes no sense at all. UA would be sunk without SFO and IAH.

I really wasn't referring so much to the physical plant (I think IAD is the "winner" there), but operations and user unfriendliness. EWR is the most delayed airport with the consistently rudest employees.

halls120

Sadly, this won't be happening anytime soon. MWAA can't pay for it 100%, they need UA to belly up and pay their share. Since IAD isn't a priority for UA management at the moment, I don't see UA opening the checkpoint. And in their defense, I wouldn't trust MWAA to keep the project on budget or on schedule.

UA-NYC

With his industry experience, I think I'd rather have this guy running the show over $misek, that's for sure!

morrisunc

I have a hard time believing that Delta has the most lucrative hubs. I always thought that EWR was the most profitable hub in the country. With the exception of Atlanta and NYC (which delta doesn't dominate), Delta isn't exactly dominating hubs in 1st tier cities. I'm sure Delta would trade MSP or Detroit for MIA, IAH, DFW, ORD, or SFO - ALso, I would think that Delta would trade LGA/JFK in a heartbeat for EWR - I hate EWR, but the international flights UAL is able to offer there is extremely impressive.

I think Delta does a great job offering interesting routes from non hub cities - RDU is a great example.

ben237829624

C Concourse is not as fancy as A/B I admit, but it really isn't that bad. At least it is up to par with any other airport. The plan is to demolish the whole C in the future in favor of a new concourse right on top of the C concourse train station. Then they'll build another international immigration terminal to the north of the airport then complete the Airtrain loop. The C concourse, since it was built, was for temporary purpose.

Shareholder

It's really a misnomer to call it the C concourse train station since it's almost a mile walk to get to the concourse from the station! Don't think there'll be a new terminal in my lifetime...

But back to the topic at hand, surely ORD, IAH and IAD plus DEN, SFO and LAX must count as fairly lucrative airports, along with EWR. It's just that UA has managed to squander its advantages by cutting corners. However, having read the article it appears the statement is based on DL being the dominant carrier between these hubs (which is only natural since that's the purpose of its hub and spoke system). But DL has six main hubs: ATL, JFK/LGA, MSP, DTW and SLC. It is claimed it dominates these. However, UA also has six hubs but I suppose its weakest one is the one we perceive as its major one: ORD. It appears that when it comes to domestic flights, AA actually has more than UA...UA's dominance comes when overseas flights are included. The article says DL controls 40% of the traffic at LGA and is just developing JFK as a major overseas gateway. Of course UA has substantial operations at LGA and lesser at JFK (but high yield transcon PS) but dominates EWR which would actually gives it the largest number of flights from/to NYC putting both DL and AA/US well behind.

It really seems DL's advantages of the balance sheet and profitability stem from its decision not to modernize its fleet but to refurb older planes and trade off operating efficiencies over capital depreciation.

The article was written before DL announced major changes to its FF program, but does state the airline's objective is to attract high-yield customers...which is the philosophy of the changes. (In this DL is echoing AC in its quest to keep its high yield customers and give little concern to low-yield/frequent travellers.)

fly18725

Delta's gain in corporate share in NYC is in large part from US with the a lot swap. There's loss from UAL and AA too, but United still has the largest share of corporate traffic in NYC (by a small margin).

Delta has been upfront that LGA is profitable and JFK is not and that NYC overall is in a loss position.

unavaca

Yup. My comment was questioning the legitimacy of the article since it appears to have ignored half of the United States and the 12th (CA) and 14th (TX) largest economies in the world.

Kacee

This certainly matches my anecdotal evidence. Several people I know in NYC who travel premium cabin domestic and international on corporate business have switched to DL in recent years. It seems that operational reliability and the overall level of customer service have been the main drivers for them.

I was agreeing with you

oldgoldflyer

Can't look at one year in isolation, you have to look at a few years put together. With the DL-NW merger happening earlier, UA was still (and is still) going through merger teething pains that DL has already passed by.

spin88

Suffice it to say, as our frequent readers know , that Delta had a very very different revenue profile at a similar period of its merger. It gained in relative yield on its competitors (not like UAL losing relative yield) at similar points in its merger, not like UAL giving up relative yield premium.

Put another way, Delta gained premium travelers from the start of its merger and kept gaining them. United lost premium travelers and is still losing more of them.

In more detail:

United and Continental announced their merger on 5/3/10, and closed the transaction on 10/1/10, so 2013 is the third year post merger. Delta and NW announced their merger on 4/15/08, closed on 10/29/08, so 2011 was the third year post merger and is comparable to 2013 for UAL.

In 2011 the airlines had the following yield growth:

CO 13.5%
DL 10.1%
US 8.5%
UAL 8.3%
AA 6%

in 2013, the comparable year for the UAL/CO merger the yield growth was:

DL: 3%
AA: 2%
UAL: 1.8%

Delta was second highest in its third year (bested only by CO, which got a big boost from hub strength) UAL was last.

The same different pattern applies to year two of the merger, 2010 yield for DAL vs. 2012 yield for UAL.

2010 (note a tough year given the very different economic impacts at each carriers hubs) yield growth:

CO +21%
UAL +17%
DAL +14.8%
US +11.9%
AA +8.7%

the comparable 2012 yield growth:

AA +4.5%
DL +3.6%
US +2.9%
UAL +1.3%

Delta was in the middle of the pack (and CO and UAL benefited that year from having hubs at the areas hardest hit by the great recession, so the biggest bounce back) in year two, United was at the bottom in year two.

Any argument that United's problems are merger related, and what is happening to UAL just happens in mergers is utterly, and completely wrong. The data is directly to the contrary. Mergers give immediate synergies in revenue, United's has caused a "dis-synergy"

Kacee

UA itself is now past blaming the merger for operational issues.

Indeed, it seems (at least based on my personal experience) that post-merger operational performance stabilized in the first half of 2013, and has since gotten considerably worse.

That said, there is no question that delays in integrating the two operating subsidiaries continue to hurt UA on numerous fronts. But you know, the transaction closed in October 2010, and the operational merger occurred in March 2012. At what point does the problem shift from "merger" to "management"?

BF263533

Again, thanks for your insight. Your posts have assisted me. After 45 years of flying and United (DC-8-63, PIT-ORD, $19 Youth Standby) being my first flight and more than a million on Continental, I vote management.

ibuyyoufly

spin, thanks for taking your own time to do the historical comp analysis. Of course mergers bring synergies, and normally the business thrives as a result. It almost can't be helped. That is until.........

DL will always have a 2 year merger lead on UA and UA 3+ years on AA/US. But there has to come a time, even for all the wishful thinkers, savvy management and the BoD, the facts have to bear witness.

Now if Smi/J would stop looking at his own financials and begin to analyze the "industry" metrics, it could possibly lead to a light-bulb moment.

Maybe wishful thinking.

UA-NYC

UA has a 3 year head start on AA/US as noted...yet the 2013 combination of AA/US (without any route coordination; with a much smaller route network for each individually; without any cost synergies, etc.) also had 2x the profits of UA last year.

It's the management, stupid (note, not you)