UA Q4/Full Year 2017 Results/Conference Call 23 Jan 2018
#46
Join Date: Dec 2017
Posts: 26
#47
Join Date: Oct 2015
Location: SAN
Programs: 1K (since 2008), *G (since 1990), 1MM
Posts: 3,213
I hope that they (a) roll it out quickly, and (b) come up with a reasonable price structure. I am a little concerned if they are basing projections on ANA and LH, both of which (a) have much better Y product than the new United, and (b) rely much less on elite traffic, and (c) have always had more non-discounted J traffic - and bigger J sections, than does UA. I would expect United to have far more demand for PE given its horrible Y and large number of discounted corporate J deals.
I as a consumer however, as I get older, look for comfort and amenities and look for this which is why UA does not get all if my busiess, although I do ensure I meet 1K qualification each year.
#48
FlyerTalk Evangelist
Join Date: Mar 2010
Location: DAY
Programs: UA 1K 1MM; Marriott LT Titanium; Amex MR; Chase UR; Hertz PC; Global Entry
Posts: 10,136
I didn't get to listen to the entire call, but what I heard about the 50 seaters and "small" markets was a hoot.
They just decimated my DAY service, removing all 2 cabin planes that were standard on ORD, and had been increasing to other hubs. All 50 seaters now. And AA and Delta both have multiple mainline ops every day. Hardly competetive.
I started flying out of CVG to avoid the CR2s, and now my costs have gone down as I am seeing lower fares.
I fear they are going to be disappointed by their plan to have the Devil's Chariot be the solution to their yield issues.
I will try to listen to the entire call later tonight to see if I missed anything, though.
I was was also struck by "natural share" discussion, which sounded a lot like "we don't need to compete for business".
I think they recognize that (Kirby said as much several times) but it is clear right now that domestic growth, especially to small "connectivity" markets is more important than waiting for any of the following:
- a new pilot agreement with revised scope to permit the operation of more 76-seaters, including larger/heavier variants
- a new small narrowbody (NSNB) for mainline
- more deliveries of new/used A32x/737
The CRJ flying can be spun up and drawn down quickly, as necessary. It's subpotimal from a passenger perspective, and I think they realize that, as the move is being billed as "temporary". Time is clearly of the essence, which is why UA was willing to come back to the negotiating table with ALPA earlier than the amendable date. Whatever agreement United secures with its pilots will give us a clearer picture of what kind platform(s) UA's long-term domestic capacity growth will be built on.
- a new pilot agreement with revised scope to permit the operation of more 76-seaters, including larger/heavier variants
- a new small narrowbody (NSNB) for mainline
- more deliveries of new/used A32x/737
The CRJ flying can be spun up and drawn down quickly, as necessary. It's subpotimal from a passenger perspective, and I think they realize that, as the move is being billed as "temporary". Time is clearly of the essence, which is why UA was willing to come back to the negotiating table with ALPA earlier than the amendable date. Whatever agreement United secures with its pilots will give us a clearer picture of what kind platform(s) UA's long-term domestic capacity growth will be built on.
The whole thing is a circular gibberish. If someone can explain the logic I am missing, it would be appreciated.
Oh, and how many times is re-banking hubs going to be presented as a solution. Haven't we been hearing this for years now?
And I admit being cynical, but when United says they want to increase "asset utilization", I would be willing to bet they are not going to be able to maintain their recent operational gains. As they tighten up turns and keep less slack in the schedule, something is going to give out.
How is PRASM going to grow when they are going to dump 2000 seats of CR2 on the market? Does UA really expect to get to DL yield from E- in literally the worst aircraft to fly?
There is an obvious disconnect in the plan, investors see that and the expansion of a fare war with Sprint, maybe with OAL.
"Smaller gauge increases exposure to high yield/small markets"
There is an obvious disconnect in the plan, investors see that and the expansion of a fare war with Sprint, maybe with OAL.
Part of the issue was operating those aircraft in prime markets (Kirby always cites ORD-DFW and EWR-ATL) with inferior schedules that drove pax elsewhere. If the aircraft are staying in either short-haul (<500mi), smaller markets where the competition is largely comprised of 50-seaters, or competition is nonexistent, I don't see a problem with it. Kirby acknowledges that UA is not offering a competitive product where other carriers have mainline or two-cabin regional service.
They went to great lengths to characterize this as 'temporary', and I have no reason not to believe this is the case... with fuel back on the rise, maintenance costs increasing (for older aircraft) and limited revenue generating potential, 50-seaters are not a long-term solution. This is the lowest-hanging fruit for UA to spool up some cheap capacity.
They went to great lengths to characterize this as 'temporary', and I have no reason not to believe this is the case... with fuel back on the rise, maintenance costs increasing (for older aircraft) and limited revenue generating potential, 50-seaters are not a long-term solution. This is the lowest-hanging fruit for UA to spool up some cheap capacity.
I will again mentioned DAY (no matter how much it annoys United). When I need to get anywhere other than a hub, I connect. When that means Mainline out of Dayton on DL and AA, why would I choose to take a United CR2? It really feels like United is talking out of 2 sides at the same time.
#49
Join Date: Jan 2007
Location: Bellingham/Gainesville
Programs: UA-G MM, Priority Club Platinum, Avis First, Hertz 5*, Red Lion
Posts: 2,808
And all these CR2s entering United service are being scooped up as they are exiting the AA fleet, so United is pretty much at the bottom of the comfort barrel here.
I am not sure I buy the "connectivity" argument, especially with the dramatic increase in CR2 flying. I always heard that direct flights provide the bigger yields, as passengers are willing to pay a premium to not connect. So now they are saying that the yield solution lies with increasing connectivity from small markets, making connections through hubs. But that means all routes are exposed to competition. Kirby was quite explicit about the connection competition, where each of the 3 majors is a viable option But they are throwing CR2s at the competition after admitting they are not competitive aircraft and caused book-away in the past. Why would a person choose to be not comfortable, when other option is available?
The whole thing is a circular gibberish. If someone can explain the logic I am missing, it would be appreciated.
Oh, and how many times is re-banking hubs going to be presented as a solution. Haven't we been hearing this for years now?
And I admit being cynical, but when United says they want to increase "asset utilization", I would be willing to bet they are not going to be able to maintain their recent operational gains. As they tighten up turns and keep less slack in the schedule, something is going to give out.
I think we are on the same track here. Doesn't really make sense.
Again, I am not following this. Maybe I am dense (very possible), but how is a definition of a "prime market" different then connection traffic? If someone needs to connect from a valuable small market, and they have the choice of each of the 3 majors, why would they choose the crappy, 1 cabin, no E+, Devil's Chariot?
I am not sure I buy the "connectivity" argument, especially with the dramatic increase in CR2 flying. I always heard that direct flights provide the bigger yields, as passengers are willing to pay a premium to not connect. So now they are saying that the yield solution lies with increasing connectivity from small markets, making connections through hubs. But that means all routes are exposed to competition. Kirby was quite explicit about the connection competition, where each of the 3 majors is a viable option But they are throwing CR2s at the competition after admitting they are not competitive aircraft and caused book-away in the past. Why would a person choose to be not comfortable, when other option is available?
The whole thing is a circular gibberish. If someone can explain the logic I am missing, it would be appreciated.
Oh, and how many times is re-banking hubs going to be presented as a solution. Haven't we been hearing this for years now?
And I admit being cynical, but when United says they want to increase "asset utilization", I would be willing to bet they are not going to be able to maintain their recent operational gains. As they tighten up turns and keep less slack in the schedule, something is going to give out.
I think we are on the same track here. Doesn't really make sense.
Again, I am not following this. Maybe I am dense (very possible), but how is a definition of a "prime market" different then connection traffic? If someone needs to connect from a valuable small market, and they have the choice of each of the 3 majors, why would they choose the crappy, 1 cabin, no E+, Devil's Chariot?
Also, isn't the whole genesis of the LCC was that the legacy's maintained such high fares in the connecting markets that the LCC's went to the alternate point to point routes to undercut them? Last time I checked Frontier and WN both have a heck of an aircraft order book. It's like they are in a bubble sometimes. Maybe they feel they don't have a choice after they axed the 73G order.
#50
FlyerTalk Evangelist
Join Date: Mar 2010
Location: DAY
Programs: UA 1K 1MM; Marriott LT Titanium; Amex MR; Chase UR; Hertz PC; Global Entry
Posts: 10,136
DAY again. For 2017, both UA and DL (even mainline) are shrinking at DAY. AA is the largest and is up slightly. Much of the declines at DAY are undoubtedly due to competition returning to CVG, lowering fares there, and reversing CVG leakage to DAY.
UA still has 2-class RJs to ORD at comparable levels going back quite a few years.
AA has only two mainline flights, and DL has only four mainline flights, both going to one hub each in directions UA doesn't compete with them on.
UA's traffic decline predates the inclusion of CRJs replacing E145s.
UA recently announced a return to IAH, something I mentioned previously was their biggest hole at DAY.
DAY<->ORD on a 2 cabin plane seems to be down to one turn a week...Tuesday afternoons. Everything else seems to be 1 cabin.
That is a drastic reduction in 2-cabin service over the past several years.
And the other routes which used to see 2 cabin -DEN on most days, and the occasional IAD, are all 50 seaters now.
mduell - do you have time to run the schedule on this? I don't know of any other way to prove the obvious.
Oh, and sure, it is nice to see DAY<->IAH be added back this summer...but we are looking at an almost 3 hour flight on a 50 seater, so not like this is a groundbreaking.
#51
Join Date: Feb 2008
Programs: 6 year GS, now 2MM Jeff-ugee, *wood LTPlt, SkyPeso PLT
Posts: 6,526
#52
Join Date: Jan 2005
Location: New York, NY
Programs: UA, AA, DL, Hertz, Avis, National, Hyatt, Hilton, SPG, Marriott
Posts: 9,425
I am not sure I buy the "connectivity" argument, especially with the dramatic increase in CR2 flying. I always heard that direct flights provide the bigger yields, as passengers are willing to pay a premium to not connect. So now they are saying that the yield solution lies with increasing connectivity from small markets, making connections through hubs. But that means all routes are exposed to competition. Kirby was quite explicit about the connection competition, where each of the 3 majors is a viable option But they are throwing CR2s at the competition after admitting they are not competitive aircraft and caused book-away in the past. Why would a person choose to be not comfortable, when other option is available?
The whole thing is a circular gibberish. If someone can explain the logic I am missing, it would be appreciated.
Oh, and how many times is re-banking hubs going to be presented as a solution. Haven't we been hearing this for years now?
And I admit being cynical, but when United says they want to increase "asset utilization", I would be willing to bet they are not going to be able to maintain their recent operational gains. As they tighten up turns and keep less slack in the schedule, something is going to give out.
The whole thing is a circular gibberish. If someone can explain the logic I am missing, it would be appreciated.
Oh, and how many times is re-banking hubs going to be presented as a solution. Haven't we been hearing this for years now?
And I admit being cynical, but when United says they want to increase "asset utilization", I would be willing to bet they are not going to be able to maintain their recent operational gains. As they tighten up turns and keep less slack in the schedule, something is going to give out.
Of course passengers are willing to pay a premium to avoid a connection, but not every city pair has a nonstop option. Traditionally nonstop options generate higher yields, yes. But Kirby's point is that there are many small markets which, despite connections, generate higher-than-average fares and yields but lack the volume for dedicated service. As a result, connections are essential, and hubs with less circuity (a function of geography), better schedules and more desirable equipment as compared to the competition generally fare better. That's the whole rationale for the hub-and-spoke model. United is at a disadvantage because although its hubs are well-positioned geographically, disjointed schedules at lower frequencies result in longer layovers with fewer options, or no connectivity at all. Over the years, United also exited a lot of flying to smaller cities, forgoing that traffic entirely. So part of the strategy is to re-bank ORD/DEN/IAH to maximize the number of connections available at reasonable layovers, to better compete with connectivity offered by DL/AA at ATL/DTW/MSP/DFW/CLT.
The CR2s are a suboptimal solution, but I understand what Kirby is trying to do, which is capture some of the higher-yielding, 'thin' traffic flows from smaller communities and close-in points that United, in more recent years, may have gotten out of in pursuit of higher-volume markets and chasing O&D. There is merit to that approach, for sure, but I don't think you need to do one to the exclusion of the other, and there's no way the CR2s are a long-term play. The economics of 50 seaters are not improving.
Still, if you look at the respective networks of UA, AA and DL, it's clear that AA/DL have something that United lacks: at least one massive domestic connecting complex that can push traffic over a diversity of flows and take advantage of economies of scale. AA/CLT, AA/DFW and DL/ATL each have 700+ peak daily departures with strong ratios of mainline to regional. United doesn't have anything of that scale... even when IAH was at about 700 departures in 2008 or so, fully half (or more) were 50-seat RJs, so the volume was never there. The domestic market has been a huge driver of growth and revenue improvement over the last few years, and United's fragmented domestic hub network did not allow it to fully participate in that growth.
I think Kirby is trying to rectify this issue as quickly as he can, and when we talk about 'structural disadvantages', that's a big one. If you look at the bulk of the cities added in the last year or so, many fall into the 'connectivity' bucket: BIS, SLN, ACV, ILM, LBL, BFF, PUB, ELM, LBF, ELM, CNY, VEL, CKB, SGU, CHO, COU, RST, SGF, STS, etc., all of which were announced in the past year with 50-seater service (and not counting other spoke routes to existing cities). Few, if any, of these routes have competitive two-cabin RJ or mainline service.
I too am a bit skeptical of increased utilization and its possible consequences on operational reliability. However, the last time United tried it, the company was far from integrated, with entirely separate operational groups, systems and fleets. Now, the only workgroup not functioning as a merged unit is the FAs, which should be harmonized later this year. There's a less complexity in the system now than there was in 2013, and by the end of the year, the last major integration barrier will come down. I think that will have a positive effect on the company's ability to better use its assets.
#54
FlyerTalk Evangelist
Join Date: Jun 2001
Programs: DL 1 million, AA 1 mil, HH lapsed Diamond, Marriott Plat
Posts: 28,190
I think Kirby is trying to rectify this issue as quickly as he can, and when we talk about 'structural disadvantages', that's a big one. If you look at the bulk of the cities added in the last year or so, many fall into the 'connectivity' bucket: BIS, SLN, ACV, ILM, LBL, BFF, PUB, ELM, LBF, ELM, CNY, VEL, CKB, SGU, CHO, COU, RST, SGF, STS, etc., all of which were announced in the past year with 50-seater service (and not counting other spoke routes to existing cities). Few, if any, of these routes have competitive two-cabin RJ or mainline service.
While UA may not face much direct route competition from those cities, it will find itinerary competition with 2-class planes from some (of the several I checked) airports on your list. A Delta CR7 from ELM isn't great in coach but it will offer an F cabin, E+, wifi, and power to F and Comfort+. Time it right and ride in a Delta MD-90 from BIS, or a 717 from CHO.
If we accept that CR2s aren't the end game, does the current pilot agreement allow for enough E75s, etc.?
#55
Join Date: Feb 2008
Programs: 6 year GS, now 2MM Jeff-ugee, *wood LTPlt, SkyPeso PLT
Posts: 6,526
That's an interesting thesis. Those generally aren't Spirit/Frontier/Allegiant markets, so he's implying that AA and DL are putting it to small-city travelers and the avg fare will be rich.
While UA may not face much direct route competition from those cities, it will find itinerary competition with 2-class planes from some (of the several I checked) airports on your list. A Delta CR7 from ELM isn't great in coach but it will offer an F cabin, E+, wifi, and power to F and Comfort+. Time it right and ride in a Delta MD-90 from BIS, or a 717 from CHO.
If we accept that CR2s aren't the end game, does the current pilot agreement allow for enough E75s, etc.?
While UA may not face much direct route competition from those cities, it will find itinerary competition with 2-class planes from some (of the several I checked) airports on your list. A Delta CR7 from ELM isn't great in coach but it will offer an F cabin, E+, wifi, and power to F and Comfort+. Time it right and ride in a Delta MD-90 from BIS, or a 717 from CHO.
If we accept that CR2s aren't the end game, does the current pilot agreement allow for enough E75s, etc.?
I think Kirby is right on the problem - UA is getting too little domestic feed, shrinking, lead to more shrinking, as many on this Board Kept saying.... However if UA reenters markets or enters markets already served by a network carrier (AS, AA, DL, in places B6) the available traffic is a lot of one off traffic, but also those who are business travelers and travel often. It is the latter (the person logging 25-50-75+K miles a year) that you want to get, they pay more, yet the example you give proves the problem with Kirby's CRJ-200 play: FFers hate them. So the passangers that you most want to get/need to get, are the ones least likely to pick UA and its single class 50 seaters over OALs. Plus most of the FFers already are with AA,DL, etc., and to get them to switch UA would have to offer them something better, enough to move.
I think the result of this is discounting to try to make up for United's inferior service, but there is only so much discouting that you can do w/o a pure fare war breaking out.
#56
FlyerTalk Evangelist
Join Date: May 2007
Location: Houston
Programs: UA Plat, Marriott Gold
Posts: 12,651
Just because you keep saying it, it does not make it true...and I am tired of arguing with you about it. I have lived it.
DAY<->ORD on a 2 cabin plane seems to be down to one turn a week...Tuesday afternoons. Everything else seems to be 1 cabin.
That is a drastic reduction in 2-cabin service over the past several years.
And the other routes which used to see 2 cabin -DEN on most days, and the occasional IAD, are all 50 seaters now.
mduell - do you have time to run the schedule on this? I don't know of any other way to prove the obvious.
Oh, and sure, it is nice to see DAY<->IAH be added back this summer...but we are looking at an almost 3 hour flight on a 50 seater, so not like this is a groundbreaking.
DAY<->ORD on a 2 cabin plane seems to be down to one turn a week...Tuesday afternoons. Everything else seems to be 1 cabin.
That is a drastic reduction in 2-cabin service over the past several years.
And the other routes which used to see 2 cabin -DEN on most days, and the occasional IAD, are all 50 seaters now.
mduell - do you have time to run the schedule on this? I don't know of any other way to prove the obvious.
Oh, and sure, it is nice to see DAY<->IAH be added back this summer...but we are looking at an almost 3 hour flight on a 50 seater, so not like this is a groundbreaking.
Code:
year | one_cabin | two_cabin ------+-----------+----------- 2016 | 2757 | 1575 2017 | 1915 | 1986 2018 | 3270 | 1376
#57
Join Date: Feb 2008
Location: Chicago, IL
Programs: Marriott Ambassador, UA Mileage Plus 1K, AA Executive Plat, Marriott Ambassador Elite
Posts: 2,329
if I recall, the differences between the pilot union and UA was the classification and rates for the smaller planes. I believe the union wanted mainline rates for the larger RJ's and the company balked.
#58
FlyerTalk Evangelist
Join Date: Mar 2010
Location: DAY
Programs: UA 1K 1MM; Marriott LT Titanium; Amex MR; Chase UR; Hertz PC; Global Entry
Posts: 10,136
I think you're conflating a few of his talking points.
Of course passengers are willing to pay a premium to avoid a connection, but not every city pair has a nonstop option. Traditionally nonstop options generate higher yields, yes. But Kirby's point is that there are many small markets which, despite connections, generate higher-than-average fares and yields but lack the volume for dedicated service. As a result, connections are essential, and hubs with less circuity (a function of geography), better schedules and more desirable equipment as compared to the competition generally fare better. That's the whole rationale for the hub-and-spoke model. United is at a disadvantage because although its hubs are well-positioned geographically, disjointed schedules at lower frequencies result in longer layovers with fewer options, or no connectivity at all. Over the years, United also exited a lot of flying to smaller cities, forgoing that traffic entirely. So part of the strategy is to re-bank ORD/DEN/IAH to maximize the number of connections available at reasonable layovers, to better compete with connectivity offered by DL/AA at ATL/DTW/MSP/DFW/CLT.
The CR2s are a suboptimal solution, but I understand what Kirby is trying to do, which is capture some of the higher-yielding, 'thin' traffic flows from smaller communities and close-in points that United, in more recent years, may have gotten out of in pursuit of higher-volume markets and chasing O&D. There is merit to that approach, for sure, but I don't think you need to do one to the exclusion of the other, and there's no way the CR2s are a long-term play. The economics of 50 seaters are not improving.
Still, if you look at the respective networks of UA, AA and DL, it's clear that AA/DL have something that United lacks: at least one massive domestic connecting complex that can push traffic over a diversity of flows and take advantage of economies of scale. AA/CLT, AA/DFW and DL/ATL each have 700+ peak daily departures with strong ratios of mainline to regional. United doesn't have anything of that scale... even when IAH was at about 700 departures in 2008 or so, fully half (or more) were 50-seat RJs, so the volume was never there. The domestic market has been a huge driver of growth and revenue improvement over the last few years, and United's fragmented domestic hub network did not allow it to fully participate in that growth.
I think Kirby is trying to rectify this issue as quickly as he can, and when we talk about 'structural disadvantages', that's a big one. If you look at the bulk of the cities added in the last year or so, many fall into the 'connectivity' bucket: BIS, SLN, ACV, ILM, LBL, BFF, PUB, ELM, LBF, ELM, CNY, VEL, CKB, SGU, CHO, COU, RST, SGF, STS, etc., all of which were announced in the past year with 50-seater service (and not counting other spoke routes to existing cities). Few, if any, of these routes have competitive two-cabin RJ or mainline service.
I too am a bit skeptical of increased utilization and its possible consequences on operational reliability. However, the last time United tried it, the company was far from integrated, with entirely separate operational groups, systems and fleets. Now, the only workgroup not functioning as a merged unit is the FAs, which should be harmonized later this year. There's a less complexity in the system now than there was in 2013, and by the end of the year, the last major integration barrier will come down. I think that will have a positive effect on the company's ability to better use its assets.
Of course passengers are willing to pay a premium to avoid a connection, but not every city pair has a nonstop option. Traditionally nonstop options generate higher yields, yes. But Kirby's point is that there are many small markets which, despite connections, generate higher-than-average fares and yields but lack the volume for dedicated service. As a result, connections are essential, and hubs with less circuity (a function of geography), better schedules and more desirable equipment as compared to the competition generally fare better. That's the whole rationale for the hub-and-spoke model. United is at a disadvantage because although its hubs are well-positioned geographically, disjointed schedules at lower frequencies result in longer layovers with fewer options, or no connectivity at all. Over the years, United also exited a lot of flying to smaller cities, forgoing that traffic entirely. So part of the strategy is to re-bank ORD/DEN/IAH to maximize the number of connections available at reasonable layovers, to better compete with connectivity offered by DL/AA at ATL/DTW/MSP/DFW/CLT.
The CR2s are a suboptimal solution, but I understand what Kirby is trying to do, which is capture some of the higher-yielding, 'thin' traffic flows from smaller communities and close-in points that United, in more recent years, may have gotten out of in pursuit of higher-volume markets and chasing O&D. There is merit to that approach, for sure, but I don't think you need to do one to the exclusion of the other, and there's no way the CR2s are a long-term play. The economics of 50 seaters are not improving.
Still, if you look at the respective networks of UA, AA and DL, it's clear that AA/DL have something that United lacks: at least one massive domestic connecting complex that can push traffic over a diversity of flows and take advantage of economies of scale. AA/CLT, AA/DFW and DL/ATL each have 700+ peak daily departures with strong ratios of mainline to regional. United doesn't have anything of that scale... even when IAH was at about 700 departures in 2008 or so, fully half (or more) were 50-seat RJs, so the volume was never there. The domestic market has been a huge driver of growth and revenue improvement over the last few years, and United's fragmented domestic hub network did not allow it to fully participate in that growth.
I think Kirby is trying to rectify this issue as quickly as he can, and when we talk about 'structural disadvantages', that's a big one. If you look at the bulk of the cities added in the last year or so, many fall into the 'connectivity' bucket: BIS, SLN, ACV, ILM, LBL, BFF, PUB, ELM, LBF, ELM, CNY, VEL, CKB, SGU, CHO, COU, RST, SGF, STS, etc., all of which were announced in the past year with 50-seater service (and not counting other spoke routes to existing cities). Few, if any, of these routes have competitive two-cabin RJ or mainline service.
I too am a bit skeptical of increased utilization and its possible consequences on operational reliability. However, the last time United tried it, the company was far from integrated, with entirely separate operational groups, systems and fleets. Now, the only workgroup not functioning as a merged unit is the FAs, which should be harmonized later this year. There's a less complexity in the system now than there was in 2013, and by the end of the year, the last major integration barrier will come down. I think that will have a positive effect on the company's ability to better use its assets.
If United is really re-entering markets where they totally pulled out, and AA/DL are also running CR2s, then I totally get that. That also makes sense why some voiced concern about price coming down, as that would be a lot of erosion of pricing power for AA/DL, if they didn't face United competition before.
I had no idea that United had started up service at that many airports that they previously were not serving.
I haven't had time to go back and pull up previous transcripts, but I recall the Smisek team doing re-banks at hubs as well. But I guess that was different, as they should now have more feeders, right? I guess I am still cynical that they can pull off tight connections, with high asset utilization, with reliance on UAX, and not impact their "CASM story". But I would be happy to be proved wrong on it.
And I would bet big money that the 2018 2-cabin numbers will actually be much lower, as they continue to pull 2-cabin aircraft out of DAY with every schedule update.
I won't derail this thread any further with it, but I will note that the CR2s are not being used exclusively to restore / enter markets that United previously didn't serve.
#59
Join Date: Jan 2005
Location: New York, NY
Programs: UA, AA, DL, Hertz, Avis, National, Hyatt, Hilton, SPG, Marriott
Posts: 9,425
Thanks EWR764. Very thoughtful post.
If United is really re-entering markets where they totally pulled out, and AA/DL are also running CR2s, then I totally get that. That also makes sense why some voiced concern about price coming down, as that would be a lot of erosion of pricing power for AA/DL, if they didn't face United competition before.
I had no idea that United had started up service at that many airports that they previously were not serving.
I haven't had time to go back and pull up previous transcripts, but I recall the Smisek team doing re-banks at hubs as well. But I guess that was different, as they should now have more feeders, right? I guess I am still cynical that they can pull off tight connections, with high asset utilization, with reliance on UAX, and not impact their "CASM story". But I would be happy to be proved wrong on it.
If United is really re-entering markets where they totally pulled out, and AA/DL are also running CR2s, then I totally get that. That also makes sense why some voiced concern about price coming down, as that would be a lot of erosion of pricing power for AA/DL, if they didn't face United competition before.
I had no idea that United had started up service at that many airports that they previously were not serving.
I haven't had time to go back and pull up previous transcripts, but I recall the Smisek team doing re-banks at hubs as well. But I guess that was different, as they should now have more feeders, right? I guess I am still cynical that they can pull off tight connections, with high asset utilization, with reliance on UAX, and not impact their "CASM story". But I would be happy to be proved wrong on it.
UA management also notes that the CR2 flying is not favorable for CASM, which is where the increased utilization of existing assets can offset that, since it's additional ASMs at the margin using airplanes/gates/crews etc. already factored into the company's cost structure.
but I will note that the CR2s are not being used exclusively to restore / enter markets that United previously didn't serve.
#60
Join Date: Apr 2011
Programs: WN, AA, UA, DL
Posts: 1,313
Just because you keep saying it, it does not make it true...and I am tired of arguing with you about it. I have lived it.
DAY<->ORD on a 2 cabin plane seems to be down to one turn a week...Tuesday afternoons. Everything else seems to be 1 cabin.
That is a drastic reduction in 2-cabin service over the past several years.
And the other routes which used to see 2 cabin -DEN on most days, and the occasional IAD, are all 50 seaters now.
mduell - do you have time to run the schedule on this? I don't know of any other way to prove the obvious.
Oh, and sure, it is nice to see DAY<->IAH be added back this summer...but we are looking at an almost 3 hour flight on a 50 seater, so not like this is a groundbreaking.
DAY<->ORD on a 2 cabin plane seems to be down to one turn a week...Tuesday afternoons. Everything else seems to be 1 cabin.
That is a drastic reduction in 2-cabin service over the past several years.
And the other routes which used to see 2 cabin -DEN on most days, and the occasional IAD, are all 50 seaters now.
mduell - do you have time to run the schedule on this? I don't know of any other way to prove the obvious.
Oh, and sure, it is nice to see DAY<->IAH be added back this summer...but we are looking at an almost 3 hour flight on a 50 seater, so not like this is a groundbreaking.
IAD-DAY had some 2-class service many years ago, but that was also limited. The overall DAY mix has been in the 50/50 to majority 50-seater range for a long time. The mix has been more favorable to 2-class lately, although overall traffic has been in decline for years. But that has been true for most carriers at DAY. Interestingly mainline traffic has also dropped over the past five years with DL and AA. It'as not a UA thing. It's primarily a DAY/CVG thing. Even if UA gets more 2-class RJs, I wouldn't expect a dramatic increase in service to DAY. That ship appears to be sailing down I-75. Maybe the new focus on small markets will stem the tide in the next few years, but don't expect mainline to suddenly dominate.