fly18725

Ah, the prior posts weren't about diminishing returns, they were 'quoting' Smisek as saying the goal [absolutely and unequivocally] was 80%.

A reoccurring problem in this forum is taking statements made to investors and, after removing them from context, attempting to analyze the statement from a customer perspective.

We don't know what the goal is, we only know that there are diminishing returns for different levels of reliability above 80%.

JBord

That's the definition of diminishing returns. In most cases a business will set it's optimal operating point at that level (in this case 80%), in order to maximize profit margin. If revenue is critical, they may decide to operate above the point of diminishing returns, albeit at a lower margin.

While I haven't seen it stated by UA, it would be logical for a company trying to improve margins over the last few years to set it's goal at the point of diminishing returns.

I agree with you that a lot of UA statements are taken out of context here, or at least misinterpreted. But I'm struggling to see how you can't correlate the on-time goal and the point of diminishing returns here. Do you have any thoughts on why UA would set a goal above the 80% when they've clearly stated this isn't efficient for them?

minnyfly

Does everybody forget that a good goal is one that is attainable? 80% systemwide is a very reasonable goal for UA considering where they hub out of. 85% is too high. They could work their butt off and likely not reach it. Also, too bad some people can't take the truth. There is a point of diminishing returns. Don't you want them to make money to improve the airline? At a certain point, an extra percentage point or two will do little for revenue but will start ratcheting up the costs.

Nope. I know too much about DL from the inside and outside to call them an ethical company. Maybe UA is just as bad, but I don't see it from the outside. Poor performance isn't automatically unethical. You can suck at your job, but do it the right way. Sounds like UA these days.

I don't know. There isn't a stat for it. Isn't that convenient for customers wanting to know what their true cancellation rate is?

channa

The problem is that UA is not sophisticated enough to measure that accurately.

DL now has a revenue premium as a result of their product and service, part of which includes on time performance.

If they weren't at the top of the charts every month for the past few years, there would be a revenue impact as well.

Sure they may be expending resources to achieve it, but they may also be reaping additional rewards for doing so -- rewards that may offset those additional costs.

BearX220

Somehow I don't think that would make a very inspiring marketing message to what's left of the customer base.

UA-NYC

PMCO and PMUA did just fine, even better, than DL in the couple years leading up to the UA/CO merger.

fly18725

I don't interrupt the statement as there's no effort or interest to get to 81% OT or better. From my personal experience, I take United's statement to investors to mean there will be significant discretion in making capital expenditures or resources to beat Delta's OT rates. You could set the goal at 85 or 90%, but you're not going to spend money until you get there.

I think we can all agree that Delta's operational performance is excellent and has helped Delta attract customers (or, at least based on the comments in this forum, United customers who really like Delta).

It is intellectually dishonest (e.g. it ignores the mathematical construct of unit revenue measures) to say Delta's unit revenue has increased and Delta's operational performance has improved, therefore unit revenue is correlated to operational performance.

scruffair

Are you claiming that this happens even close to the number of delayed United flights on a daily basis?? The false equivalence implied by your post is astonishing.

And that was with significantly more flights as well!

SFO_FT

The problem with running an 80% OT performance standard for a hubbing/network carrier is that it establishes a basis for many misconnects. 80% OT is defined as a flight that can arrive up to 14/15 minutes late. Combine that with large aircraft that take awhile to deboard, that has unrealistically low MCT (minimum connect times, such as 30 minutes at a large hub), long walking distances for some/many connections, and a policy that now says to stop boarding 15 minutes prior to ETD means that many pax are going to misconnect. Couple that with UA publishing 30 min connections for flights with OT performances of 50% or less, and that to me is fraudulent marketing -- 1/2 the pax buying tickets for that connection are not going to make it.

Always Flyin

The content of a number of posts above, which blindly ignore reality, particularly in light of the performance of UA's competition, is simply astounding.

UA's reliability amongst its peers is the absolute worst. UA has publicly stated it intentionally wants its reliability at that point because being more reliable costs more and results in diminishing returns. Funny how DL doesn't think so, has the performance numbers to prove it, as well as higher profits.

DL is more (or equally) unethical than UA? Pure fiction. United is an airline run by a bunch of immoral liars. UA promised its Million Milers one thing in writing, and then intentionally reneged on it. Liars. (Lagen v. United Continental Holdings, Inc., et al. (2014) 774 F.3d 1124.)

The courts decided they did not have jurisdiction over UA's consumer fraud. The impotent DOT does, but of course did nothing.

JBord

I see your point, and agree, but I'm not sure we're saying anything different. If you're only going to spend the money to make sure you maintain 80%, then do you really have a goal to achieve a higher on-time? I would say the goal is set at 80% and if they get lucky due to good weather or whatever they'll take it, but they have no plan to improve it above 80%.

A decision to spend additional money because 80% isn't good enough would mean they are now setting a goal above 80% and are putting a plan in place to achieve the new goal.

I'm not saying UA isn't ecstatic if they have 85% on-time, but that's beating the goal not meeting it.

BearX220

I quite agree with you that MCTs are often unhinged from reality and that UA publishes many connections that are too close-run. But I think that is a separate issue from woeful on-time performance. UA can loosen the banks at congested hubs and reduce misconnects as a separate effort.

fly18725

In my experience, one of the most critical component of OT performance is staff. An engaged and motivated team of mechanics, ground, gate, and inflight crew can make the difference between a flight being late and a flight being on time. Throwing more staff, having more airplanes, or increasing turn times can help with OT performance, but they can only help so much (hence the diminishing returns).

You can give your team a higher goal than where you're currently at without providing more staff, airplanes, or increasing turn times and it's not impossible for them to meet it.

Always Flyin

UA can't even meet its stated 80% goal without facing diminishing returns.

Not even close.

UA is presently in the low 70s.

mduell

Since it's hard to define a "next day" delay (is 11:59p to 12:01a a "next day" delay while 5a to 11p delay is not?), let's look at "extreme" delays which I'll arbitrarily define as arriving 6h (A360) or 12h (A720) late.

Stats over the last year:

So yes, Delta has 0.03% more 6 hour delays or 0.02% more 12 hour delays than UA. Which is not even close to the 0.8% cancellations UA has over DL.

DAL cxl + 6h delay = 0.61%
UAL cxl + 6h delay = 1.39%