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UA Q4/Full Year 2019 Results/Conference Call 22 Jan 2020

UA Q4/Full Year 2019 Results/Conference Call 22 Jan 2020

Old Feb 24, 2020, 11:23 pm
  #31  
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Originally Posted by spin88
Exactly my thought. They are now 12 months into the MAX issue, and a month into Coronavivus, and it is full speed ahead with MP and product devaluation, and the same old fleet and business plans.. Really head in the sand, "we are so great, everyone just has to fly us" typical UA behavior post 2011.
MAX is relatively minor for UA. WN different story.

For once I dont blame UA. Every affected company in every industry is doing triage and resetting plans last minute on the fly reactively due to the unknown contours of this pandemic.

If China and HKG gets suspended into 2H20 and the ban broadens to other key destinations I could see UA just scrub it and let everyone roll status over to 2021. Unless they earned a higher status in 20.
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Old Feb 24, 2020, 11:38 pm
  #32  
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Originally Posted by uastarflyer
For once I don’t blame UA. Every affected company in every industry is doing triage and resetting plans last minute on the fly reactively due to the unknown contours of this pandemic.
But UA isn't doing any of that in terms of its overall earnings forecast. Even in pulling 2020 guidance, management says they remain on track to deliver "strong earnings growth in 2021 and beyond." It's a total wink wink, nod nod guidance pull ("our lawyers are telling us we have to do this, but we really expect to meet or exceed our targets not just for 2020 and 2021, but beyond").
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Old Feb 25, 2020, 12:28 am
  #33  
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Originally Posted by Zoltar
https://www.marketwatch.com/story/un...rus-2020-02-24

There going to need to do something. Can't have a business that doesn't make money.
For the first quarter, United said that canceled flights to China will not affect its earnings thanks to savings on declining fuel costs and other cuts, and stuck with a forecast for adjusted earnings of 75 cents to $1.25 a share.
Now we know why food quality has gone downhill - they have to cut something to remain profitable.
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Old Feb 25, 2020, 5:47 am
  #34  
 
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Originally Posted by Kacee
But UA isn't doing any of that in terms of its overall earnings forecast. Even in pulling 2020 guidance, management says they remain on track to deliver "strong earnings growth in 2021 and beyond." It's a total wink wink, nod nod guidance pull ("our lawyers are telling us we have to do this, but we really expect to meet or exceed our targets not just for 2020 and 2021, but beyond").
Entirely pulling full year guidance in the middle of the 1st quarter is about as bold an admission a public company will offer at this stage. Investors give little credence to mgmt forecasts beyond a year in good times and bad.

You can bet every intl airline is acting like a swan - calm on outside pedaling like crazy under the surface.

Sales teams are gathering feedback, MP is looking for patterns. Hard to incent flying to places that have no demand - and they know better than us the domestic mix of these grounded flyers. Im sure promos are in consideration but goodness you all step into the drivers seat with all the stakeholders and unknowns.

At at this point its in the running for #3 or 4 on most disruptive modern travel events behind 9/11 and fall of 2008, first gulf war in 1990. The Iceland volcano is up there but forget how long. The saving grace is fuel prices falling in advance.

Disclosure: I own puts on UA that profit from a decline in share price.

Last edited by cerealmarketer; Feb 25, 2020 at 6:02 am
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Old Feb 28, 2020, 4:52 pm
  #35  
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UA 8-K filing 28 Feb 2020
United Airlines Holdings, Inc. ("UAL"), the holding company whose primary subsidiary is United Airlines, Inc. ("United," and together with UAL, the "Company"), previously announced its plans to host an Investor Day on March 5, 2020. As the spread of coronavirus ("COVID-19") has continued and the market reaction has worsened, investor concerns are focused almost exclusively on the near-term impact on demand and how the Company is managing it. Given that, the Company does not believe it is practical to expect that it can have a productive conversation focused on its long-term strategy next week. As a result the Company has decided to postpone Investor Day, which the Company now currently plans to hold in September 2020.

The Company still plans to participate in several conferences in March 2020. .....
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Old Feb 28, 2020, 5:08 pm
  #36  
 
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Originally Posted by WineCountryUA
Wow, just wow. But full speed ahead on devaluting MP, increasing the qualification thresholds and tossing people off status....

Watching what AS and B6 are doing, and given UA's much greater exposure to TPAC markets, the results must be bad....
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Old Feb 28, 2020, 5:18 pm
  #37  
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Originally Posted by spin88
Wow, just wow. But full speed ahead on devaluting MP, increasing the qualification thresholds and tossing people off status....

Watching what AS and B6 are doing, and given UA's much greater exposure to TPAC markets, the results must be bad....
"the Company does not believe it is practical to expect that it can have a productive conversation focused on its long-term strategy next week. "
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Old Feb 28, 2020, 5:50 pm
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Originally Posted by kb1992
"the Company does not believe it is practical to expect that it can have a productive conversation focused on its long-term strategy next week. "
Why does United need to discuss strategy? Its just Jeff's strategy from 2011, cut service, product, stick it to elites, and they will keep flying us, infact give us more $$$$, because well, we are UNITED. The only difference is that Kirby does not think that there are "diminishing returns with OP beyond 80%", he seems to think upper 80s for OT is about right...
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Old Feb 28, 2020, 8:27 pm
  #39  
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Originally Posted by spin88
Wow, just wow. But full speed ahead on devaluting MP, increasing the qualification thresholds and tossing people off status....

Watching what AS and B6 are doing, and given UA's much greater exposure to TPAC markets, the results must be bad....
Uh? What difference would it make if UA does something similar to what AS/B6 are doing? Most airlines with extensive international flights are going to see depressed performance. Of course, anything to throw shades at UA is the cool thing to do at FT.

Originally Posted by kb1992
"the Company does not believe it is practical to expect that it can have a productive conversation focused on its long-term strategy next week. "
Oh come on, you know fully well if UA starts to talk about LT strategy at this juncture in time, it would be criticized for not spending enough time on the hottest topic right now.
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Old Feb 28, 2020, 9:45 pm
  #40  
 
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Originally Posted by cerealmarketer

At at this point it’s in the running for #3 or 4 on most disruptive modern travel events behind 9/11 and fall of 2008, first gulf war in 1990. The Iceland volcano is up there but forget how long. The saving grace is fuel prices falling in advance.

.
<edit -all noted flights in this example were on UA in my flight history notes; good portion of $ amounts noted at present are spend/stranded costs on UA tickets; discussion of MP status on UA and in general...rather pertinent to topic of UA financial health going forward in a topic on UA financial results--sorry to say but Covid is a trigger that will prove a temporary setback or full blown systemic shock to UA..not sure how this is assumed to be missing some point related to UA as UA 1MM that's flown, well a lot of miles on UA and a vested interest to see them survive this...end edit>

i'll go out on a limb here and say this is going to be the clear gold medal winner and a new World Record for an unprecedented external shock that will make this #1 by end of next week. Gulf War 1, I was on a trip to Australia and flew all that spring; 9/11 I was on a 727 to LGA with everyone on the right side of the plane solemnly staring at the still smoldering crater on approach within 2 weeks (~Sep 20) and flew all that fall including overseas; 2008 travel budgets were reduced, but business carried on.

On this one, 100s of big name companies are doing the "no corporate travel allowed without leadership approval" until April 1...and that's a rolling date where I work. Leisure travel and being quarantinted in a hotel, ship or plane (whether over-reaction or not) absolutely no way. Based on $ pricey tickets for international travel and less pricey non refundable domestic ones...my small team has refunded $30k in C travel in past 2 weeks and is sitting on $20k in non refundable ticket credits. I have no idea how the accounting works on that, but even if this thing is hyberbole,,,once the complete travel ban is lifted where I work, we'll be working through Q1 sunk cost tickets well into Q2 or Q3. Can't image that forward bookings to Europe look very good right now...and if we have an Italy situation going on in N. Cal right now, there goes the SFO hub.

long story to say, all those previous events pale in comparison to this as I've never seen a mass of companies ban travel outright or make it super difficult to travel without risk department approval. SARS crisis--I was still on a plane weekly...now grounded and definitely in no mood to go somewhere fun to find out I'm quarantined in a hotel (Canary Island luxury resort) or god forbid an airplane (stuck in UA882 747 F at ORD for 2.5 hours after returning NRT during SARS b/c Y pax was very ill...not something I want to repeat and that was being comfortable in F).

I forget if it was 9/11 or something else, but I definitely see a current status roll-forward into 2021 if this thing doesn't turn out to be overblown in a month. Won't prognosticate, but toss in a cancelled Olympics, MLB baseball season, and summer travel season will be ruined and then we all may be talking about airline russian roullette mid summer to see who managed to stash away enough cash to survive, let alone limp into 2021. I know that's a bit hyberbolic, but I've never seen a point where companies are saying "no travel" and the massive trade shows and tech conferences for the late winter/spring season are cancelled en-masse. MWC alone was 100,000 people (~80,000+ with plane tickets) who thankfully didn't [have to] get together in a giant convention center this week as this thing blows up in Italy and other parts of Europe.

And even if overblown, this is just another topic that will have companies outdoing themselves to see who can be more "eco-friendly" in the coming weeks and vuture by using tele-presence and video-conference vs putting people on airplanes which is probably the other shoe that will drop if this thing prolongs more than the average sr. executive's attention span.

Last edited by mike1968; Feb 28, 2020 at 10:48 pm
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Old Feb 28, 2020, 10:32 pm
  #41  
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Topic Reminder

Topics of the COVID19 /Coronavuris in the UA forum should relate to UA. General discussion of the virus and its spread / transmission are best done in the general FT thread, Corona Virus

For this forum, let's get back to UA and what this means for our travel on UA.

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Old Mar 10, 2020, 10:26 am
  #42  
 
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Scott Kirby is coming up in a "fireside chat" with Jamie Baker of JPM, webcast link here:

https://edge.media-server.com/mmc/p/js6ap6iv

Kirby has a history of rather enlightening candor in this setting (more free-form discussion) so it should be an interesting listen, under the circumstances.

Coming up at 12:50 Eastern, today (March 10). It will be archived here at some point after completion.
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Old Mar 10, 2020, 11:05 am
  #43  
 
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Originally Posted by EWR764
Scott Kirby is coming up in a "fireside chat" with Jamie Baker of JPM, webcast link here:

https://edge.media-server.com/mmc/p/js6ap6iv

Kirby has a history of rather enlightening candor in this setting (more free-form discussion) so it should be an interesting listen, under the circumstances.

Coming up at 12:50 Eastern, today (March 10). It will be archived here at some point after completion.
My notes from his prepared remarks:
Sounds like they thought they were kickin' butt before COVID
Sounds like they didn't get a clue ex Asia until a couple weeks ago.
Appears they don't think it will last for very long but "hope is not a strategy".
Cut, cut cut. 20% monthly capacity cuts each month going forward if no improvement (would imagine that's not great for what they will do in the cabin).
Asia booking down 100%
Gross bookings down 60/70 internationally. Domestically 20%
As testing expands - more cases likely. Expect things to get worse.

This scenario is not a forecast - but preparing for the worse - this is the stress test scenario.
- rev down 70% april, may, then improving to 20% in december. (looks like his stress test assumes that we don't get the virus to reappear in fall/december).
- sars took 14 months to recover. Their plan is expect 18 months to recovery (let's hope it's not this bad).
- no cap x until demand has recovered.
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Old Mar 10, 2020, 11:08 am
  #44  
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No CapEx meaning no more fleet conversions to Polaris or Polaris lounges?

Anything about jettisoning the MAX for good?
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Old Mar 10, 2020, 11:12 am
  #45  
 
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Originally Posted by uastarflyer
No CapEx meaning no more fleet conversions to Polaris or Polaris lounges?

Anything about jettisoning the MAX for good?
Sounded like they aren't going to be doing anything. I don't recall him getting into specifics. Sounds like they are literally in survival mode planning.
He said they are planning for the worst..but the stress test scenario seems frightening.
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