Mar 20, 2020, 9:29 pm
Last edit by: WineCountryUA
Please do not modify or remove
In recent days a number of threads have started touching on the impacts on UA as a business going forward due to the travel disruption of COVID-19 --- including multiple Viability / Bankruptcy / Bailout discussions. While inconceivable a few months ago, UA (and all commercial airlines) is facing challenges that are uncharted.
This consolidated thread has been created by merging a number of existing threads that trend to address essentially the same subjects.
Some thread guidelines
-- This thread / forum is for discussing UA and the UA traveler, so please focus on UA in these discussions. Other forums exist to discuss other carriers or the industry in general -- we do just UA here.
-- This thread is for discussion of how UA gets from here to its future state.
-- All the standard FT rules apply. We will have a civil, constructive, collegial discussion -- even in these turbulent times.
-- While much of this will play out in the political arena, this forum is not the place for political / OMNI discussions. Please use threads in appropriate forums for that, such as Covid-19 US tax cuts or fiscal stimulus
-- Similarly, discussions of the evils / greed of corporations or other broad societal issues are out of scope, those are for OMNI -- let's stick to discussing UA, its past and its future here
-- Please do not start new threads on these topics in the UA forum. One reason for this consolidated thread was to minimize the redundant posts in separate threads. There is plenty of room in the scope of this thread to cover all aspects of these topics. (Note things like M&A, restructuring, ... would all be in scope).
-- Please once you have laid out your position, do not repetitively re-state that opinion. It is usually a better discussion if many participate vs a few dominating the thread
On behalf of the UA Moderator Team
WineCountryUA
In recent days a number of threads have started touching on the impacts on UA as a business going forward due to the travel disruption of COVID-19 --- including multiple Viability / Bankruptcy / Bailout discussions. While inconceivable a few months ago, UA (and all commercial airlines) is facing challenges that are uncharted.
This consolidated thread has been created by merging a number of existing threads that trend to address essentially the same subjects.
Some thread guidelines
-- This thread / forum is for discussing UA and the UA traveler, so please focus on UA in these discussions. Other forums exist to discuss other carriers or the industry in general -- we do just UA here.
-- This thread is for discussion of how UA gets from here to its future state.
-- All the standard FT rules apply. We will have a civil, constructive, collegial discussion -- even in these turbulent times.
-- While much of this will play out in the political arena, this forum is not the place for political / OMNI discussions. Please use threads in appropriate forums for that, such as Covid-19 US tax cuts or fiscal stimulus
-- Similarly, discussions of the evils / greed of corporations or other broad societal issues are out of scope, those are for OMNI -- let's stick to discussing UA, its past and its future here
-- Please do not start new threads on these topics in the UA forum. One reason for this consolidated thread was to minimize the redundant posts in separate threads. There is plenty of room in the scope of this thread to cover all aspects of these topics. (Note things like M&A, restructuring, ... would all be in scope).
-- Please once you have laid out your position, do not repetitively re-state that opinion. It is usually a better discussion if many participate vs a few dominating the thread
On behalf of the UA Moderator Team
WineCountryUA
UA's Viability / Financial Future due to the COVID-19 Era [Consolidated]
Oct 8, 2020, 9:53 am
#1036
FlyerTalk Evangelist
Join Date: May 2000
Location: TPA for now. Hopefully LIS for retirement
Posts: 13,716
Once a vaccine is widely available and virus fears have abated, the state of the travel / airline industry will depend on the state of the larger economy. That IMO is the biggest unanswerable (right now) question - how much economic damage will the virus ultimately cause. It will take a while for all the trickle down effects to be realized.
Sure, all else being equal companies will find that some things can be done just as well via Zoom etc., but I think this experience is also teaching companies that a lot of things really are better done in person, so a lot (though not all) business travelers will be back on the road when it is safe. How many of those business travelers there are depends on budgets which goes back to the state of the larger economy. Likewise with leisure travelers - how much they will be back depends on their household budget, which depends on their employment status.
Sure, all else being equal companies will find that some things can be done just as well via Zoom etc., but I think this experience is also teaching companies that a lot of things really are better done in person, so a lot (though not all) business travelers will be back on the road when it is safe. How many of those business travelers there are depends on budgets which goes back to the state of the larger economy. Likewise with leisure travelers - how much they will be back depends on their household budget, which depends on their employment status.
Oct 10, 2020, 12:44 pm
#1037
Join Date: Jun 2018
Posts: 2
Ref bobcastphen Oct 8 “ gloom & doom” prophecy of 5–8 years w/o a return to a business process that is functional. This is, in itself, a “dime-store MBA analysis“ ...he nor any of us has ANY idea what the business process will be even in a year, never mind 8 years.
Last edited by WineCountryUA; Oct 10, 2020 at 1:09 pm Reason: Removed non-UA COVID discussion
Oct 10, 2020, 1:08 pm
#1038
Moderator: United Airlines
Join Date: Jun 2007
Location: SFO
Programs: UA Plat 1.997MM, Hyatt Discoverist, Marriott Plat/LT Gold, Hilton Silver, IHG Plat
Posts: 66,861
Just a reminder before we get too far off track. This is not the forum or thread to discuss COVID but rather the forum / thread for discussing UA and how UA will be impacted in the future.
We all have personal opinions and no crystal ball. Fine to suggest how UA will be impacted BUT we will not debate and analyze the COVID prognosis for the world / economy offered by each other. Understand that may seem an impossible distinction -- our opinions are just opinions and not facts (no matter how much we think they will be).
UA is the forum topic, not COVID. Please stick to UA here
WineCountryUA
UA coModerator
We all have personal opinions and no crystal ball. Fine to suggest how UA will be impacted BUT we will not debate and analyze the COVID prognosis for the world / economy offered by each other. Understand that may seem an impossible distinction -- our opinions are just opinions and not facts (no matter how much we think they will be).
UA is the forum topic, not COVID. Please stick to UA here
WineCountryUA
UA coModerator
Last edited by WineCountryUA; Oct 11, 2020 at 12:22 pm Reason: typo
Oct 11, 2020, 12:34 pm
#1039
Join Date: May 2001
Location: IAD
Posts: 6,148
What really should be happening is an amplification of the old low-frequency hub-spoke system where outlying stations sent banks of flights into a hub less frequently, then a larger aircraft would fly a larger number of customers to the next hub or focus city. That might mean 4-5 777 or 787 flights IAH-LAX instead of ~8 737 flights spread through the day. Frequency and capacity need to come way down.
Oct 11, 2020, 2:52 pm
#1040
A FlyerTalk Posting Legend
Join Date: Sep 2002
Location: LAX/TPE
Programs: United 1K, JAL Sapphire, SPG Lifetime Platinum, National Executive Elite, Hertz PC, Avis PC
Posts: 42,231
What this means is, United and other airlines need to prepare for a radical shift in travel. It doesn't mean no travel will occur, it means the revenue mix from air travel will shift dramatically towards leisure and away from business, and that will depend on other factors since leisure travel is price sensitive.
Oct 12, 2020, 6:16 am
#1041
Join Date: May 2013
Posts: 3,361
This information is readily available - many large corporation management groups have already made it very clear they are moving towards a fragmented, virtual workforce and will focus more on virtual engagement with customers and vendors, as well as intra-corporate teams and meetings. This is not going to change. The only people who will be returning to business travel are those who need to put their hands physically on equipment, or the odd exception where someone has requested an onsite visit.
What this means is, United and other airlines need to prepare for a radical shift in travel. It doesn't mean no travel will occur, it means the revenue mix from air travel will shift dramatically towards leisure and away from business, and that will depend on other factors since leisure travel is price sensitive.
What this means is, United and other airlines need to prepare for a radical shift in travel. It doesn't mean no travel will occur, it means the revenue mix from air travel will shift dramatically towards leisure and away from business, and that will depend on other factors since leisure travel is price sensitive.
I would agree that remote work will increase, replacing some travel. However, the need for human connection is undeniable and most of us understand the importance of face to face engagement outside of the office to build relationships and advance complex transaction. Business travel can’t disappear, but it will look different.
Oct 12, 2020, 6:38 am
#1042
Join Date: Jun 2014
Programs: UA MM
Posts: 4,130
I think you’re missing the distinction between short and long term trends. While a company like Microsoft is allowing employees to be fully virtual and even relocate, there is an expectation travel will resume. Geographically dispersed employees can even create a new type of travel demand: returning to the HQ for training or other team activities.
I would agree that remote work will increase, replacing some travel. However, the need for human connection is undeniable and most of us understand the importance of face to face engagement outside of the office to build relationships and advance complex transaction. Business travel can’t disappear, but it will look different.
I would agree that remote work will increase, replacing some travel. However, the need for human connection is undeniable and most of us understand the importance of face to face engagement outside of the office to build relationships and advance complex transaction. Business travel can’t disappear, but it will look different.
Oct 12, 2020, 8:45 am
#1043
Join Date: Nov 2014
Location: USA
Programs: UA Gold, Marriott Gold
Posts: 1,195
I am fortunate enough to be in a position where my company was already had work and funding for the fiscal year. Company leadership has been proactive about monitoring the state of the pandemic and was increasing support for mobile work early. I had to learn new tools (which already existed) and we've been surprisingly productive during this BUT it absolutely is not a replacement for direct face-to-face contact in many circumstances. I eagerly await an ability to resume some form of business travel, even reduced, to overcome these obstacles. I suspect many other companies are in the same boat and that United knows this. They simply need a good forecast of what that new norm looks like and the tools to bridge to it.
They will not be able to adapt to the new norm without pilots, flight attendants, etc. so they won't want to burn bridges with the personnel but they need to make it that new norm so they need to cut expenses -- that includes purposeless flights, personnel that aren't needed during this stretch (or in a reduced flying future), etc.
They will not be able to adapt to the new norm without pilots, flight attendants, etc. so they won't want to burn bridges with the personnel but they need to make it that new norm so they need to cut expenses -- that includes purposeless flights, personnel that aren't needed during this stretch (or in a reduced flying future), etc.
Last edited by WineCountryUA; Oct 12, 2020 at 9:43 am Reason: Let's stickto UA related topics
Oct 12, 2020, 9:35 pm
#1044
Join Date: Jul 2015
Location: San Francisco
Programs: UA MM Plat, UA 1MM, Hilton Lifetime Gold, Marriott Gold, Hertz Gold, CLEAR, AS MVP Gold
Posts: 3,621
I agree with all of this. Every one of these virtual tools being used today was available and was being used pre-COVID so it's not like the shutdown of business travel caused us to discover these things. As I may have stated upthread, our senior VP expects us to resume business travel in the first half of next year... probably on the early side of that.
Oct 12, 2020, 11:41 pm
#1045
FlyerTalk Evangelist
Join Date: Oct 1999
Posts: 11,468
I have friends in outside sales for a large pharma company. They are back to visiting customers, many of them actually welcoming them back in. About 20% are still avoiding in-person meetings.
Air travel US domestic at this time is back for managers & above.
With regards to UA, return of overseas business travel will be an important factor - and that one has seen very slow improvement sofar.
Air travel US domestic at this time is back for managers & above.
With regards to UA, return of overseas business travel will be an important factor - and that one has seen very slow improvement sofar.
Oct 14, 2020, 8:20 pm
#1046
FlyerTalk Evangelist
Join Date: Feb 2003
Posts: 10,234
It seems domestic business travel is slowly picking up along with domestic leisure travel. For international business travel, unless your main destination is Mexico, I'd say a return in H1 of 2021 is unlikely. Those heady days of 2 a day milk runs SFO-PVG with biz filled with Apple employees aren't coming back anytime soon. UA will have to pivot to more domestic leisure travel and shrink even more internationally if it hopes to survive.
Oct 15, 2020, 1:16 am
#1047
Suspended
Join Date: Feb 2009
Programs: DL, UA, AA, VS
Posts: 5,226
International business travel may not come back but they were selling P fares for pretty reasonable prices the last two years, TATL from SFO for well under $3000 in the summer.
Even if international travel was given a complete green light, it's not clear the airlines would ramp up capacity too quickly. So it seems that whatever F and J tickets they sell won't be discounted, at least not for awhile.
Even if international travel was given a complete green light, it's not clear the airlines would ramp up capacity too quickly. So it seems that whatever F and J tickets they sell won't be discounted, at least not for awhile.
Oct 21, 2020, 7:50 pm
#1048
Join Date: Jun 2011
Posts: 924
During mandatory airport check-in a couple days ago, was speaking with a TA in the 1st class line, and she was great. I asked her how she was doing with all the changes with COVID. She told me that UA hasn't finalized her schedule for next month bc UA is purportedly waiting to see if there is another stimulus pkg.
The part that really got me was reading b/w the lines: how she seemed nervous about what her life and job are going to look like in the near future (and how so many others have or may have some really difficult upcoming decisions). Though I am of the opinion that the airlines should not be the recipient of any further stimulus (and instead should use other available avenues) unless the airlines agreed to certain fundamental changes, simply talking with this woman certainly made me think twice (though I still come to the same conclusion). Though I always make a point to be respectful to all, especially when I am traveling, my personal imperative felt even more pronounced as I certainly experienced a lot of sympathy for anyone in the travel industry.
The part that really got me was reading b/w the lines: how she seemed nervous about what her life and job are going to look like in the near future (and how so many others have or may have some really difficult upcoming decisions). Though I am of the opinion that the airlines should not be the recipient of any further stimulus (and instead should use other available avenues) unless the airlines agreed to certain fundamental changes, simply talking with this woman certainly made me think twice (though I still come to the same conclusion). Though I always make a point to be respectful to all, especially when I am traveling, my personal imperative felt even more pronounced as I certainly experienced a lot of sympathy for anyone in the travel industry.
Nov 17, 2020, 9:27 pm
#1049
Moderator: United Airlines
Join Date: Jun 2007
Location: SFO
Programs: UA Plat 1.997MM, Hyatt Discoverist, Marriott Plat/LT Gold, Hilton Silver, IHG Plat
Posts: 66,861
UA has released information on a change in the max possible loan of the CARES Act “Term Loan Facility” they have entered into with US Treasury - a Restatement Agreement increasing the possible max loan to $7.16B from $5.17B -- a potential $2B extra, with the potential of going to $7.5B if UA pledges certain assets. As before UA would issue warrants to Treasury based on the actual amount borrowed.
So far UA has borrowed just $520M of term loan.
So far UA has borrowed just $520M of term loan.
Nov 18, 2020, 12:01 pm
#1050
Join Date: Aug 2009
Location: Houston, TX
Programs: Continental OnePass Platinum
Posts: 416
"Will the travel world return to some semblance of the old normal?" It's really difficult to know where all of this is leading, and anyone who makes a confident "this is what's going to happen..." deserves to be ignored. 
I'm a computer science researcher, and COVD has forced all of our large, international research meetings to go virtual. And you know what? They've all been surprisingly successful. So much so that people are now asking: do we really need to have thousands of researchers from big tech companies and universities fly to a conference venue in China to meet face-to-face, or can we do this virtually gong forward? Sure, you lose a lot going virtual. But a virtual meeting has the benefit that researchers who are not well-funded (from countries such as Bangladesh) can attend, and many people appreciate the reduction in CO2 pollution.
My guess is: people may experiment a bit, but give it a few years, and things will gradually return to normal, at for researchers like me. But I might be wrong. At the very least, there are enough people in enough industries asking whether all of this travel is actually necessary that these are very, very dangerous times for companies like UA. I personally think that we'll gradually go back to something resembling "normal", but who knows? Anyone who says, "Let me tell you what's going to happen..." whether they are from UA, Wall Street, or wherever, shouldn't be listened to. There are hundreds or maybe thousands of travel-heavy industries, each one different from the next, all of which (together) sustain a company like UA. How can anyone predict with any certainty how they will collectively react?
I'm a computer science researcher, and COVD has forced all of our large, international research meetings to go virtual. And you know what? They've all been surprisingly successful. So much so that people are now asking: do we really need to have thousands of researchers from big tech companies and universities fly to a conference venue in China to meet face-to-face, or can we do this virtually gong forward? Sure, you lose a lot going virtual. But a virtual meeting has the benefit that researchers who are not well-funded (from countries such as Bangladesh) can attend, and many people appreciate the reduction in CO2 pollution.
My guess is: people may experiment a bit, but give it a few years, and things will gradually return to normal, at for researchers like me. But I might be wrong. At the very least, there are enough people in enough industries asking whether all of this travel is actually necessary that these are very, very dangerous times for companies like UA. I personally think that we'll gradually go back to something resembling "normal", but who knows? Anyone who says, "Let me tell you what's going to happen..." whether they are from UA, Wall Street, or wherever, shouldn't be listened to. There are hundreds or maybe thousands of travel-heavy industries, each one different from the next, all of which (together) sustain a company like UA. How can anyone predict with any certainty how they will collectively react?