Jun 21, 2016, 9:45 am
Last edit by: sbm12
06/21/2016 Investor Call Presentation
Alternate link to presentation if the ir.united.com site continues to act wonky.
Alternate link to presentation if the ir.united.com site continues to act wonky.
United Airlines Outlines Value-Driving Initiatives
Expected to drive $3.1 billion in incremental value by 2018;
$300 million earnings benefit anticipated from continued reliability improvement
Updates second quarter passenger revenue guidance
CHICAGO, June 21, 2016 /PRNewswire/ -- As United Airlines continues its efforts to create the world's greatest airline, the company is hosting a call for investors today to provide an update on initiatives the company is implementing to improve its financial performance. Additionally, United will share its current network and commercial objectives. The company also now expects second-quarter 2016 consolidated passenger unit revenue to decline 6.5 to 7.5 percent compared to the second quarter of 2015, a change from its earlier expectations of down 6.5 to 8.5 percent.
"We continue to accelerate our business performance while making strides in earning back the trust of our employees and customers," said Oscar Munoz, president and CEO of United Airlines. "With the renewed engagement of our 86,000 aviation professionals, a great global network, a highly flexible fleet plan and a healthy balance sheet all of the building blocks are in place for United to unlock its full potential."
Value-Driving Initiatives
The company will update investors on initiatives currently underway that are expected to drive more than $3 billion in incremental value to United by 2018 through a combination of cost savings and increased revenue. These initiatives include:
Commercial Enhancements: Improvements across the commercial organization will drive approximately $1.5 billion of value through increased customer segmentation, updates to its MileagePlus program and modifications to its revenue management system.
Cost Structure Improvements: Upgauging aircraft and installing slimline seats, combined with continued sensible cost management, will drive approximately $1.3 billion of benefit.
Strong Operational Performance: The company expects approximately $300 million of value from running a more reliable airline. This operational improvement will grow United's share of premium customers, reduce costs associated with delays and cancellations, decrease the number of passengers re-accommodated on other airlines and improve schedule utility.
Sustained Improvements
Since the beginning of the year, United has achieved significant improvements in its on-time arrival performance, finishing first or second among industry peers all year. United has achieved top-tier performance in baggage handling for 19 of the last 24 months.
As United continues its focus on elevating the customer experience, it recently announced the all-new United Polaris business class, free snacks and transformed airport clubs. And on July 1, United will introduce illy premium coffee on board all flights. Additionally, the company is expanding its industry-leading route network with new service to several destinations across Europe and Asia, including its new flight between San Francisco and Singapore.
For employees, the company has delivered new contracts for the pilots, IAM-represented employees and dispatchers this year and new and improved tools. These and other enhancements are delivering improved service to United's customers, with the company achieving record-high customer satisfaction scores in three of the last four months.
Webcast Information
The investor call will begin today at 9:00 a.m. CT. A live, listen-only webcast of the presentation and question and answer session will be available at ir.united.com. The webcast will be available for replay within 24 hours of the conference call and then archived on the website for a limited time.
Expected to drive $3.1 billion in incremental value by 2018;
$300 million earnings benefit anticipated from continued reliability improvement
Updates second quarter passenger revenue guidance
CHICAGO, June 21, 2016 /PRNewswire/ -- As United Airlines continues its efforts to create the world's greatest airline, the company is hosting a call for investors today to provide an update on initiatives the company is implementing to improve its financial performance. Additionally, United will share its current network and commercial objectives. The company also now expects second-quarter 2016 consolidated passenger unit revenue to decline 6.5 to 7.5 percent compared to the second quarter of 2015, a change from its earlier expectations of down 6.5 to 8.5 percent.
"We continue to accelerate our business performance while making strides in earning back the trust of our employees and customers," said Oscar Munoz, president and CEO of United Airlines. "With the renewed engagement of our 86,000 aviation professionals, a great global network, a highly flexible fleet plan and a healthy balance sheet all of the building blocks are in place for United to unlock its full potential."
Value-Driving Initiatives
The company will update investors on initiatives currently underway that are expected to drive more than $3 billion in incremental value to United by 2018 through a combination of cost savings and increased revenue. These initiatives include:
Commercial Enhancements: Improvements across the commercial organization will drive approximately $1.5 billion of value through increased customer segmentation, updates to its MileagePlus program and modifications to its revenue management system.
Cost Structure Improvements: Upgauging aircraft and installing slimline seats, combined with continued sensible cost management, will drive approximately $1.3 billion of benefit.
Strong Operational Performance: The company expects approximately $300 million of value from running a more reliable airline. This operational improvement will grow United's share of premium customers, reduce costs associated with delays and cancellations, decrease the number of passengers re-accommodated on other airlines and improve schedule utility.
Sustained Improvements
Since the beginning of the year, United has achieved significant improvements in its on-time arrival performance, finishing first or second among industry peers all year. United has achieved top-tier performance in baggage handling for 19 of the last 24 months.
As United continues its focus on elevating the customer experience, it recently announced the all-new United Polaris business class, free snacks and transformed airport clubs. And on July 1, United will introduce illy premium coffee on board all flights. Additionally, the company is expanding its industry-leading route network with new service to several destinations across Europe and Asia, including its new flight between San Francisco and Singapore.
For employees, the company has delivered new contracts for the pilots, IAM-represented employees and dispatchers this year and new and improved tools. These and other enhancements are delivering improved service to United's customers, with the company achieving record-high customer satisfaction scores in three of the last four months.
Webcast Information
The investor call will begin today at 9:00 a.m. CT. A live, listen-only webcast of the presentation and question and answer session will be available at ir.united.com. The webcast will be available for replay within 24 hours of the conference call and then archived on the website for a limited time.
United "earnings initiatives" call - 21 June 2016
Jun 21, 2016, 12:56 pm
#46
Join Date: Apr 2011
Programs: WN, AA, UA, DL
Posts: 1,313
There is zero objective support for that position. DOT completion and ontime stats corroborate Delta's statements.
My own experience with DL was very much the opposite. On an award ticket from LAX-LHR-JNB my outbound from LAX was going to be about 45 minutes late, there was no serious risk of misconnect, but DL proactively rebooked me through the app with notifications on AF in FIRST class through CDG for the entire trip. I ended up in JNB 2-hours earlier that planned. Hardly what I'd call cheap or anti-consumer.
My own experience with DL was very much the opposite. On an award ticket from LAX-LHR-JNB my outbound from LAX was going to be about 45 minutes late, there was no serious risk of misconnect, but DL proactively rebooked me through the app with notifications on AF in FIRST class through CDG for the entire trip. I ended up in JNB 2-hours earlier that planned. Hardly what I'd call cheap or anti-consumer.
And the subjective evidence backs up the policies. One only needs to go the DL forum.
DL's domestic revenue gains have come from the backs of its customers. UA will have to do the same if it wants to match. It needs to make the product less valuable. It needs to make more while giving you less. I don't want that at UA.
Jun 21, 2016, 1:02 pm
#47
Join Date: Dec 1999
Location: NorCal - 1K 2MM
Posts: 2,089
Going on in about 40min ... here is the PDF's from the presentation:
http://ir.united.com/~/media/Files/U...esentation.pdf
http://ir.united.com/~/media/Files/U...esentation.pdf
Jun 21, 2016, 1:10 pm
#48
Join Date: Feb 2004
Location: San Francisco
Programs: UA 1K since 1998 & 3 Million Miler & ex-GS; DL Diamond 2015-2022; BAEC Silver; Bonvoy LT Titanium
Posts: 1,018
Jun 21, 2016, 1:23 pm
#49
Moderator: United Airlines
Join Date: Jun 2007
Location: SFO
Programs: UA LT Plat 2MM, Hyatt Discoverist, Marriott Plat/LT Gold, Hilton Silver, IHG Plat
Posts: 67,016
Jun 21, 2016, 1:32 pm
#50
Join Date: Jun 2008
Location: SFO
Programs: UA Gold, AF, Chase, Hyatt Explorist
Posts: 1,098
Jun 21, 2016, 1:39 pm
#51
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: 19,720
Numerous objective assessments of the UA customer experience exist -- JD Power, Wichita State AQR, DOT complaint rates, Skytrax, etc., etc. -- and they all place UA in roughly the same position relative to peers.
Last edited by WineCountryUA; Jun 21, 2016 at 2:35 pm Reason: Discuss the issues, not the posters
Jun 21, 2016, 1:51 pm
#52
Join Date: Feb 2008
Programs: 6 year GS, now 2MM Jeff-ugee, *wood LTPlt, SkyPeso PLT
Posts: 6,526
I am a good example of this. I have year in and year out spent 40-45+c/mi to fly, United used to get that business, now Delta (and VX) gets it.
You can argue that this has not happened, but United disagrees with your view, saying it's financial results are sub-par because it "Lost share of premium customers"
Those lost premium customers, like me, are why United's financial results are bad, and Delta's are good.
For United to improve its financial picture it needs to win back the customers it lost, not just raise prices. Of course the status give aways and massive mileage bonuses (which I was not offered. ) are simply proof of what the actual issue is, the loss of elite and HVFer traffic.
Jun 21, 2016, 2:00 pm
#53
Join Date: Jun 2003
Location: Philadelphia, PA USA
Programs: CO Silver, HHonors Gold, Marriott Silver
Posts: 982
I only read the slides, but given how it was presented it looks like they want to cut buffers to improve the bottom line. I see it as contradictory as well. You have to optimize on one or the other. If you try to do both, you're just going to push the boundaries of lousy service even more.
Jun 21, 2016, 2:09 pm
#54
Join Date: May 2013
Posts: 3,361
I only read the slides, but given how it was presented it looks like they want to cut buffers to improve the bottom line. I see it as contradictory as well. You have to optimize on one or the other. If you try to do both, you're just going to push the boundaries of lousy service even more.
Someone asked in another thread how Delta manages such good operational performance and lots of padding is one reason. Alaska is on the other end of the spectrum. They run much tighter schedules than Delta with fewer spare aircraft (as a percent of fleet) with slightly better operational performance. If United can get to where Alaska is, and the focus on A:0 shows they're focusing on it, there's the potential to add more than $300M to the bottom line with the same set of resources. It will take a lot to get there and removing the operational buffer to quickly can backfire (see Alaska circa 2004).
Jun 21, 2016, 2:10 pm
#55
Join Date: Dec 2004
Location: SFO
Programs: BART Platinum, AA Plat Pro
Posts: 1,158
Either way it sounds like more bad news for elites.
Jun 21, 2016, 3:21 pm
#56
Join Date: May 2009
Location: Washington, DC
Programs: UA 1K 1MM, AA, DL
Posts: 7,430
I only read the slides, but given how it was presented it looks like they want to cut buffers to improve the bottom line. I see it as contradictory as well. You have to optimize on one or the other. If you try to do both, you're just going to push the boundaries of lousy service even more.
Jun 21, 2016, 3:52 pm
#58
Moderator: United Airlines
Join Date: Jun 2007
Location: SFO
Programs: UA LT Plat 2MM, Hyatt Discoverist, Marriott Plat/LT Gold, Hilton Silver, IHG Plat
Posts: 67,016
However on my Win10 PC; FF, Chrome and Edge work but IE does not????
and the simple UA investor site -- http://ir.united.com/ fails on IE
Jun 21, 2016, 4:32 pm
#59
FlyerTalk Evangelist
Join Date: Aug 2002
Location: Bay Area, CA
Programs: UA Plat 2MM; AS MVP Gold 75K
Posts: 35,068
I had some unnecessary pushback on a recent delay that would have necessitated an overnight. Only way out was AA. Ultimately got it, but it took the usual fighting that's been the case since the merger.
UA doesn't even post known delays the way DL does, and even if a delay is posted, the UA IRROP tool doesn't let you change flights sometimes until it's too late.
A delay on DL is far less stressful than a delay on UA.
United is in a box of its own creation. It now has large numbers of corporate deals at 40+% off. If it lowers its pricing to attract fliers who are not tied in "unmanaged fliers" to use Jeff's old term, people like me (and I think you), well then it lowers its cost to the managed flier to way below what OALs are charging.
Not sure what you mean by giving less, seems that DL gives you more for your money.
Maybe the real problem is UA's unreliable operation is getting people OAL'ed to DL, they experience it, and never come back.
Jun 21, 2016, 5:16 pm
#60
Join Date: Feb 2009
Location: SEA
Programs: UA SP, DL SM MM, AS 75K, SPG Platinum, Hyatt Diamond.
Posts: 2,596
The objective evidence does not support your position. When DL made that move, they were the clear industry leader in excessive and overnight "delays"--the situations where OAL rebooking is useful and important for good customer service. The ratio was not 5-to-1 with AA in OAL opportunities. It was more like 1.66-to-1, and AA has more daily flights to boot, so there need will be naturally higher.
And the subjective evidence backs up the policies. One only needs to go the DL forum.
The hard part is too find an objective observer. Don't know if they can even exist.
DL's domestic revenue gains have come from the backs of its customers. UA will have to do the same if it wants to match. It needs to make the product less valuable. It needs to make more while giving you less. I don't want that at UA.
And the subjective evidence backs up the policies. One only needs to go the DL forum.
The hard part is too find an objective observer. Don't know if they can even exist.
DL's domestic revenue gains have come from the backs of its customers. UA will have to do the same if it wants to match. It needs to make the product less valuable. It needs to make more while giving you less. I don't want that at UA.
the DOT has no ax to grind, doesn't give a hoot who is better or worse, they just report the data. AA when combined with US has more daily flights, however that only exacerbates the already greater need to access OAL accommodation because they also have far more cancellations and delays. Delta probably got the brunt of the load because AA and DL share more destinations and routes than do UA and AA.Subjective evidence is an oxymoron.
I don't see HOW UA could make it's product less valuable, and everything in the presentation indicates UA recognizes a need to add value. I don't know where you come up with this stuff.
January 2013 through January 2016 DOT BTS data:
Airline Total flights Cancelled Delayed
AA 1,803,986 1.62% 20.22%
DL 2,432,635 0.52% 14.72%
UA 1,516,377 1.24% 20.89%
US 1,025,753 1.45% 17.78%
Last edited by transportbiz; Jun 21, 2016 at 5:25 pm