Apr 23, 2019, 1:48 pm
Oscar Speaks! New Interview - 23 April 2019
Apr 25, 2019, 8:14 am
#61
Join Date: Jan 2005
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Is Delta or American's equivalent basic Y product any different? You just as easily could have ended up in a non-reclining seat on AA or DL, and they have plenty of the same BE and Recaro slimlines as UAL...
Apr 25, 2019, 8:48 am
#62
Join Date: Jul 2014
Location: BOS
Programs: 1MM, UA 1k
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Comfortable is debatable depending on config and seat. Cleanliness is a different story. Outside of Mint, B6 planes are worn out and disgusting, worse than WN
Apr 25, 2019, 9:03 am
#63
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The reality is that for capital intensive industries like an airline, shareholders (and debt holders) are of critical importance. If your not satisfying your sources of capital, you can’t acquire more airplane or fund investments in your existing infrastructure. That would inhibit growth, one of the most important things to employees. Lack of investment also leads to dissatisfaction with customers.
Also, unless the company is paying a dividend, which United is not, shareholders receive absolutely zero/none/nada/zip share of company profits aside from what the outside stock market decides to reward them based on the market's own assessment of the company's performance, and none of that equity is realized until an individual shareholder sells their holdings, and their recognition of such profits is affected by their cost basis....not to mention that no matter how well a company performs in the eyes of the market, all of that "equity" can be instantly erased in the event of an overall market or market sector drop.
This whole concept of a company's "shareholder equity" somehow being passed directly on to shareholders as cash in their pocket is just pure fantasy nonsense.
My general belief is to treat the customers and employees right, the the profits for the share-holders will auto-generate. Unfortunately this industry may have proved me wrong.
The argument that planes are always full doesn't support much since almost everyone on the flight pays a different price, but the almost doubling of the stock price in 3 years and the comparison of annual return compared to competitors (who have a better relationship with their passengers) as shown above says a lot.
The problem is that in the US the Shareholder has more power than other stakeholders. Since a CEO is more likely to get fired for protecting the other stakeholders at the expense of the shareholders, Oscar is doing exactly what I would do if I were in his shoes. The FA or Pilots Unions or the passengers will have a very difficult time getting Oscar fired for not putting their interests first.
The argument that planes are always full doesn't support much since almost everyone on the flight pays a different price, but the almost doubling of the stock price in 3 years and the comparison of annual return compared to competitors (who have a better relationship with their passengers) as shown above says a lot.
The problem is that in the US the Shareholder has more power than other stakeholders. Since a CEO is more likely to get fired for protecting the other stakeholders at the expense of the shareholders, Oscar is doing exactly what I would do if I were in his shoes. The FA or Pilots Unions or the passengers will have a very difficult time getting Oscar fired for not putting their interests first.
Last edited by WineCountryUA; Apr 25, 2019 at 12:43 pm Reason: merging consecutive posts by same member
Apr 25, 2019, 10:26 am
#64
Join Date: Mar 2015
Location: Austin, TX - AUS
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The challenge is convincing executives to think about long term success, rather than just the next quarter.
Apr 25, 2019, 10:35 am
#65
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The US airline cartel will test the proposition that a service company run as an anti-Costco -- mainly for the benefit of shareholders, and to exploit customers and workers, while unimpeded by notions of fairness, shame, or loyalty -- will underperform in the long run. The next recession will help tell the tale.
Apr 25, 2019, 10:44 am
#66
Join Date: May 2013
Posts: 3,361
Existing shareholders are of absolutely no value whatsoever to a company. Once the initial offering is completed and the shares are issued, there are no further capital infusions from existing shareholders. The transaction has already been completed. Capital infusion can come from either new share issues, or taking on debt.
Also, unless the company is paying a dividend, which United is not, shareholders receive absolutely zero/none/nada/zip share of company profits aside from what the outside stock market decides to reward them based on the market's own assessment of the company's performance, and none of that equity is realized until an individual shareholder sells their holdings, and their recognition of such profits is affected by their cost basis....not to mention that no matter how well a company performs in the eyes of the market, all of that "equity" can be instantly erased in the event of an overall market or market sector drop.
This whole concept of a company's "shareholder equity" somehow being passed directly on to shareholders as cash in their pocket is just pure fantasy nonsense.
Also, unless the company is paying a dividend, which United is not, shareholders receive absolutely zero/none/nada/zip share of company profits aside from what the outside stock market decides to reward them based on the market's own assessment of the company's performance, and none of that equity is realized until an individual shareholder sells their holdings, and their recognition of such profits is affected by their cost basis....not to mention that no matter how well a company performs in the eyes of the market, all of that "equity" can be instantly erased in the event of an overall market or market sector drop.
This whole concept of a company's "shareholder equity" somehow being passed directly on to shareholders as cash in their pocket is just pure fantasy nonsense.
Apr 25, 2019, 11:07 am
#67
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In spite of Wall Street's opposition. Exhibit A is Costco, which Wall Street does not like because it takes good care of workers, caps retail markups, and is scrupulously fair and transparent with customers -- in other words, all things most airlines don't do. The Street issues withering coverage of Costco even now, although dividends have done nothing but grow for 15 years and counting.
The US airline cartel will test the proposition that a service company run as an anti-Costco -- mainly for the benefit of shareholders, and to exploit customers and workers, while unimpeded by notions of fairness, shame, or loyalty -- will underperform in the long run. The next recession will help tell the tale.
The US airline cartel will test the proposition that a service company run as an anti-Costco -- mainly for the benefit of shareholders, and to exploit customers and workers, while unimpeded by notions of fairness, shame, or loyalty -- will underperform in the long run. The next recession will help tell the tale.
Last edited by WineCountryUA; Apr 25, 2019 at 12:44 pm Reason: merging consecutive posts by same member
Apr 25, 2019, 12:11 pm
#68
Join Date: May 2010
Location: AVP & PEK
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Posts: 6,349
It probably means United is trying to keep the number of passengers dying of dehydration on one of its flights to a bare minimum, providing such a plan meets shareholder approval.
Apr 25, 2019, 12:21 pm
#69
Join Date: May 2009
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Is there anyway to like this maybe 1000 times? ^^^^ Perfect encapsulation of what is wrong with shareholder value as a concept and this idea that people who are willing to abandon you in a second for 1 penny more of equity profit should have more standing than the customers and employees who make a company successful every single day. And again, I can't stress enough, that UA's "sad devotion to that ancient religion" is the reason why all these customer friendly initiatives will all fail and all be walked back over time.
Existing shareholders are of absolutely no value whatsoever to a company. Once the initial offering is completed and the shares are issued, there are no further capital infusions from existing shareholders. The transaction has already been completed. Capital infusion can come from either new share issues, or taking on debt.
Also, unless the company is paying a dividend, which United is not, shareholders receive absolutely zero/none/nada/zip share of company profits aside from what the outside stock market decides to reward them based on the market's own assessment of the company's performance, and none of that equity is realized until an individual shareholder sells their holdings, and their recognition of such profits is affected by their cost basis....not to mention that no matter how well a company performs in the eyes of the market, all of that "equity" can be instantly erased in the event of an overall market or market sector drop.
This whole concept of a company's "shareholder equity" somehow being passed directly on to shareholders as cash in their pocket is just pure fantasy nonsense.
Also, unless the company is paying a dividend, which United is not, shareholders receive absolutely zero/none/nada/zip share of company profits aside from what the outside stock market decides to reward them based on the market's own assessment of the company's performance, and none of that equity is realized until an individual shareholder sells their holdings, and their recognition of such profits is affected by their cost basis....not to mention that no matter how well a company performs in the eyes of the market, all of that "equity" can be instantly erased in the event of an overall market or market sector drop.
This whole concept of a company's "shareholder equity" somehow being passed directly on to shareholders as cash in their pocket is just pure fantasy nonsense.
Apr 25, 2019, 12:59 pm
#70
FlyerTalk Evangelist
Join Date: Oct 1999
Posts: 11,468
Existing shareholders are of absolutely no value whatsoever to a company. Once the initial offering is completed and the shares are issued, there are no further capital infusions from existing shareholders. The transaction has already been completed. Capital infusion can come from either new share issues, or taking on debt.
Also, unless the company is paying a dividend, which United is not, shareholders receive absolutely zero/none/nada/zip share of company profits aside from what the outside stock market decides to reward them based on the market's own assessment of the company's performance, and none of that equity is realized until an individual shareholder sells their holdings, and their recognition of such profits is affected by their cost basis....not to mention that no matter how well a company performs in the eyes of the market, all of that "equity" can be instantly erased in the event of an overall market or market sector drop.
This whole concept of a company's "shareholder equity" somehow being passed directly on to shareholders as cash in their pocket is just pure fantasy nonsense.
Your assessment is correct - a good leader in the service business will know that taking care of employees and customers is taking care of the business. Unfortunately as you point out, many company leaders are beholden to wall street and only serve metrics that will result in a movement of the stock price in line with expectations of investors, which is often contrary to what strategic direction and decisions are needed to grow the business and its market share, and thus subsequent success. If you look back in history, the service industry companies that have outperformed in the long run have almost always followed this approach.
Also, unless the company is paying a dividend, which United is not, shareholders receive absolutely zero/none/nada/zip share of company profits aside from what the outside stock market decides to reward them based on the market's own assessment of the company's performance, and none of that equity is realized until an individual shareholder sells their holdings, and their recognition of such profits is affected by their cost basis....not to mention that no matter how well a company performs in the eyes of the market, all of that "equity" can be instantly erased in the event of an overall market or market sector drop.
This whole concept of a company's "shareholder equity" somehow being passed directly on to shareholders as cash in their pocket is just pure fantasy nonsense.
Your assessment is correct - a good leader in the service business will know that taking care of employees and customers is taking care of the business. Unfortunately as you point out, many company leaders are beholden to wall street and only serve metrics that will result in a movement of the stock price in line with expectations of investors, which is often contrary to what strategic direction and decisions are needed to grow the business and its market share, and thus subsequent success. If you look back in history, the service industry companies that have outperformed in the long run have almost always followed this approach.
Is there anyway to like this maybe 1000 times? ^^^^ Perfect encapsulation of what is wrong with shareholder value as a concept and this idea that people who are willing to abandon you in a second for 1 penny more of equity profit should have more standing than the customers and employees who make a company successful every single day. And again, I can't stress enough, that UA's "sad devotion to that ancient religion" is the reason why all these customer friendly initiatives will all fail and all be walked back over time.
Last edited by cesco.g; Apr 25, 2019 at 1:02 pm Reason: added detail
Apr 25, 2019, 2:10 pm
#71
Join Date: May 2013
Posts: 3,361
There are obviously different views on how much value should be provided to customers.
Apr 25, 2019, 3:26 pm
#72
Join Date: Nov 2007
Location: Chicago
Programs: UA GS 1MM, CM PP
Posts: 689
My general belief is to treat the customers and employees right, the the profits for the share-holders will auto-generate. Unfortunately this industry may have proved me wrong.
The argument that planes are always full doesn't support much since almost everyone on the flight pays a different price, but the almost doubling of the stock price in 3 years and the comparison of annual return compared to competitors (who have a better relationship with their passengers) as shown above says a lot.
The argument that planes are always full doesn't support much since almost everyone on the flight pays a different price, but the almost doubling of the stock price in 3 years and the comparison of annual return compared to competitors (who have a better relationship with their passengers) as shown above says a lot.
Apr 27, 2019, 1:46 am
#73
Join Date: Apr 2013
Location: Bucks County
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Posts: 1,609
Interesting article - and yes, Oscar we are pissed at the world - but you know where much of the problem starts? Go check out who is sitting in the United president's office - you know, the cheap, nasty, jerk you hired?
https://www.yahoo.com/gma/oscar-muno...opstories.html
Also, Oscar please note - your president took away our pre-arrival cookies some time ago, so I can't really tell you if it would help because you're not giving me a cookie anymore.
https://www.yahoo.com/gma/oscar-muno...opstories.html
Also, Oscar please note - your president took away our pre-arrival cookies some time ago, so I can't really tell you if it would help because you're not giving me a cookie anymore.
Apr 28, 2019, 10:26 am
#75
Join Date: Sep 2003
Location: Bethesda, MD USA
Posts: 35
United CEO blasted for claiming passengers are 'pissed at the world' by the time they
From FoxNews:
https://www.foxnews.com/travel/unite...ne-experiences
...
Munoz’s comments didn’t sit well with social media users. Many seemed to focus on the fact that a lot of the problems that make people miserable while flying are things that Munoz can control. As Heather Hughson pointed out, “If only there was something that he, as CEO of a major airline, could do about airline passenger experience!”
.....
“It’s very telling that @united CEO Oscar Muņoz refuses to address customer impact under his control (e.g., ever decreasing seat comfort) and instead complains about all the experiences outside of his control (airport, etc.). That’s poor business and poor leadership,” tweeted James Coleman.“How long did it take to realize something so obvious, so easy to predict, so blindingly stupid?” asked Archy Dosburg.
Twitter user Beau Cameron, responded, “He doesn't have those problems in his private jet.”
.....
...
Munoz’s comments didn’t sit well with social media users. Many seemed to focus on the fact that a lot of the problems that make people miserable while flying are things that Munoz can control. As Heather Hughson pointed out, “If only there was something that he, as CEO of a major airline, could do about airline passenger experience!”
.....
“It’s very telling that @united CEO Oscar Muņoz refuses to address customer impact under his control (e.g., ever decreasing seat comfort) and instead complains about all the experiences outside of his control (airport, etc.). That’s poor business and poor leadership,” tweeted James Coleman.“How long did it take to realize something so obvious, so easy to predict, so blindingly stupid?” asked Archy Dosburg.
Twitter user Beau Cameron, responded, “He doesn't have those problems in his private jet.”
.....
Last edited by WineCountryUA; Apr 28, 2019 at 10:52 am Reason: Per FT's Posting Copyrighted Material post has been editted