Is Smisek doing an awesome job?
Dec 11, 2014, 8:10 am
#1
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Is Smisek doing an awesome job?
I'm taking an outsider perspective on this one. Don't even think of yourself as an investor, don't think of yourself as a frequent flier.
If you're just an outsider, an INFREQUENT flier, and a regular Joe...is Jeff Smisek doing an awesome job?
I fly United roughly 3-4 round trips per year, somewhere between 10-16 segments. The price is usually very competitive with everyone except the LCCs, the product is fine and everything else works for me.
I looked at the stock price today, there's a myriad of these stories in the market, especially coming out of a recession, but on Dec 11, 2009 if you had bought a fairly reasonable 1000 shares at $11 (not their low, but near it) and held until today, at just about $66 (pushing new highs daily) you would've made $55,000. Not a world of cash by any stretch, but that's an amazing gain.
It's been going up based on multiple factors we all know that, but I pose this question...
If you're a shareholder, Jeff is great!
If you're a frequent flyer, Jeff is awful.
But what if you're anyone in between?
If you're just an outsider, an INFREQUENT flier, and a regular Joe...is Jeff Smisek doing an awesome job?
I fly United roughly 3-4 round trips per year, somewhere between 10-16 segments. The price is usually very competitive with everyone except the LCCs, the product is fine and everything else works for me.
I looked at the stock price today, there's a myriad of these stories in the market, especially coming out of a recession, but on Dec 11, 2009 if you had bought a fairly reasonable 1000 shares at $11 (not their low, but near it) and held until today, at just about $66 (pushing new highs daily) you would've made $55,000. Not a world of cash by any stretch, but that's an amazing gain.
It's been going up based on multiple factors we all know that, but I pose this question...
If you're a shareholder, Jeff is great!
If you're a frequent flyer, Jeff is awful.
But what if you're anyone in between?
Dec 11, 2014, 8:17 am
#3
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if i was an infrequent flyer shopping mostly on price and product, i'd be flying B6, WN, and VX most of the time. and maybe DL and AS. but not UA.
the reliability isn't there, the IFE is lagging the competition (but catching up slowly now), and the product lags too (eg, no free booze on TATL/TPAC flights in Y).
the reliability isn't there, the IFE is lagging the competition (but catching up slowly now), and the product lags too (eg, no free booze on TATL/TPAC flights in Y).
Dec 11, 2014, 8:32 am
#5
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Dec 11, 2014, 9:10 am
#9
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Talk to a few FAs about whether he's doing an awesome job.
Labor unrest will always... ALWAYS end up biting you in the butt and eventually destroying customer goodwill and value. Coincidentally, it also has a way of destroying stock value.
Unless he can pull a rabbit out of his hat with a workforce that literally despises the ground he walks on at the moment, he's living on borrowed time. Even a rising tide can only carry you for so long when you've got a hole in the boat.
Labor unrest will always... ALWAYS end up biting you in the butt and eventually destroying customer goodwill and value. Coincidentally, it also has a way of destroying stock value.
Unless he can pull a rabbit out of his hat with a workforce that literally despises the ground he walks on at the moment, he's living on borrowed time. Even a rising tide can only carry you for so long when you've got a hole in the boat.
Dec 11, 2014, 10:03 am
#11
Join Date: May 2011
Posts: 314
I think non-FF who have experienced UA's IRROPs probably wouldn't think the CEO is doing a good job. I know many non-FF who got hosed because of UA's lackluster on-time performance who have sworn off the airline. If a non-FF doesn't experience IRROP, then I don't think they think about if the CEO is doing a passable job or not (or they think it's fine, because they got where they needed to go).
I can't imagine investors think he's doing that great job either. I am sure they aren't as unhappy as some as UA is turning a profit. However, DL is turning a bigger profit, so if I was an investor I'd want to know why UA wasn't making profits more in line with it's competition.
I can't imagine investors think he's doing that great job either. I am sure they aren't as unhappy as some as UA is turning a profit. However, DL is turning a bigger profit, so if I was an investor I'd want to know why UA wasn't making profits more in line with it's competition.
Dec 11, 2014, 10:04 am
#12
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Very one sided response.
Under the premise of the ops statement that "the price is usually very competitive", I wouldn't say he's doing an awesome job. A decent one, but I wouldn't even be watching the company if I was a kettle.
When I was a regular kettle I didn't look up an airlines IFE, reliability, or product reviews. How many would? Those are a non-factor to the original question, IMO
Under the premise of the ops statement that "the price is usually very competitive", I wouldn't say he's doing an awesome job. A decent one, but I wouldn't even be watching the company if I was a kettle.
When I was a regular kettle I didn't look up an airlines IFE, reliability, or product reviews. How many would? Those are a non-factor to the original question, IMO
Dec 11, 2014, 10:26 am
#13
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I looked at the stock price today, there's a myriad of these stories in the market, especially coming out of a recession, but on Dec 11, 2009 if you had bought a fairly reasonable 1000 shares at $11 (not their low, but near it) and held until today, at just about $66 (pushing new highs daily) you would've made $55,000. Not a world of cash by any stretch, but that's an amazing gain.
AMR (old AA) stock was at $7.69/sh on Dec 11, 2009 and despite bankruptcy, each share of old AMR is now .75 shares of new AAL, so at 3/4 of a share of new AAL (at $51/sh), each share of old AMR is worth $38.25/sh, a five-fold gain despite Ch 11 (which generally wipes out old stock).
Similar story at DL and even WN (although WN hasn't had quite the same percentage improvement in stock price). Improving economy, airline consolidation and moderating fuel prices have conspired to help all airline CEOs do "an awesome job" over the past five years. Every time I've looked, UA's stock has lagged the industry in performance since March 3, 2012.
Dec 11, 2014, 10:41 am
#14
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awesome, nothing close to by any stretch. but as a semi frequent flyer (1K 2014, Plat 2015), the merger has brought more positive than negative experiences for me.
I'm in NYC so not hub captive to Smisek's ransom, but their route network and frequencies serve my needs far better than DL or AA could. I'm not an alcoholic to a point that not having free booze on long haul causes me to pick DL (especially how much worse SkyMiles and their partners are compared to M+)
I'm in NYC so not hub captive to Smisek's ransom, but their route network and frequencies serve my needs far better than DL or AA could. I'm not an alcoholic to a point that not having free booze on long haul causes me to pick DL (especially how much worse SkyMiles and their partners are compared to M+)
Dec 11, 2014, 10:48 am
#15
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I looked at the stock price today, there's a myriad of these stories in the market, especially coming out of a recession, but on Dec 11, 2009 if you had bought a fairly reasonable 1000 shares at $11 (not their low, but near it) and held until today, at just about $66 (pushing new highs daily) you would've made $55,000. Not a world of cash by any stretch, but that's an amazing gain.
http://finance.yahoo.com/echarts?s=U...2%3A1%7D%7D%7D
As for whether the CEO is doing a good job, That really does depend on what parameters you want to evaluate on. For the 2-3x annual passenger I cannot come up with a set of metrics by which I'd care other than fare.
Ahead of Allegiant and JetBlue. Behind the other larger carriers.