cjermain

In the current political environment, any corporation that stakes is future on a federal bailout is making a bad bet.

emcampbe

good luck with that.

Sorry, the lower load factors are from days long ago, and aren’t coming back. It took them a long time, but airlines finally learned that market share isn’t worth chasing exclusively when it lowered profit. Now the focus is on profit, which means they aren’t going back to the days of hourly flights that are cheap to make sure that, say, UA is able to pick up customers over DL on a given route, while sending out half empty planes. And packing in the seats, while they’re at it.

Airlines at some point realized that rather than chase each other for most capacity while dropping fares to encourage more passengers for them, etc., it makes more sense to limit capacity to what they need, carry fewer passengers on a given route, with higher profits from higher fares that brings. And they had more planes to deploy on other routes they hadn’t served before. Add in the extra fees, and airlines have finally been making big $ again. You don’t think they would really give that up, do you?

this.

take me for example. Two trips. One - domestic - was canceled (events canceled - no point in going anymore, though I suppose we could). Expensive fare that is being reimbursed, though this fare leaving Fri. has lowered to a reasonable amount, though I wouldn’t call it cheap. one international (to Caribbean - first time we were supposed to go in 10 years!) for spring break for the family - two relatively young adults and two kids. Not really worried about getting sick ourselves - we’re not in a group that would be high risk to have serious consequences (fever isn’t fun, of course, but we are relatively healthy and young). More worried about being quarantined somehow - country becomes a hotspot, someone on the flight starts coughing and sets off a panic, or our 2 year old gets a fever because, well, she’s a two year old, so not odd - and that causes a panic based on the current environment. Not a high risk, IMO, but the consequences would be great if it did happen. It’s not a risk I want to take at the moment. Low fares (which our flight was NOT) isn’t much of a factor - the waived change fee helps as it makes the change very low cost - we’ll use the credit by the end of the year for sure.

mozilla

People will still need to fly from A to B, and for many A's and B's UA will still be the only nonstop option available. They'll simply cut capacity, furlough crews, and increase award availability as necessary. Only if that doesn't help, they may consider (just consider) slightly lowering fares here and there. That way, a crisis would really have to last several months - which is extremely unlikely - to bring UA even remotely close to the brink of collapse. And then there will still be government aid, Chapter 11, etc.

Consider this a good exercise for the next recession.

dilanesp

​​​​​​There's a big data point against your position: cabotage rules. If the public really viewed US airlines as horrible, you would see support for foreign competition coming in. Quite the opposite- basically every politician, even big time free traders, knows relaxing cabotage rules is political suicide. The public does not want the big 3 airlines to fail.

MatthewLAX

EWR-CPT was almost full Sunday night. UA is doing bad, but once the coronavirus fears dissipate, UA will recover.

dilanesp

​​​​​​
Why? Stimulus packages usually pass in recessions and often contain bailouts.

mozilla

Well, many of the domestic routes I fly with UA don't have a nonstop DL or AA anymore, anyway. It definitely helps that - even with record profits - the market has become so stagnant that no real competitors have launched in a decade to grab a piece of that revenue pie. I agree that the lower load factors are (unfortunately) not coming back anytime soon.

DCEsquire

Did I miss the announcement that Smisek returned as CEO?

Judging from their recent behavior they are not sorry for anything and continue to show their disdain for the passengers. It's like they just want your dollars and are annoyed they actually have to fly you anywhere.

- Sending email telling they won't do anything for existing elites but they will extend period for those on a challenge.
- Saying they don't need to refund if they change flight w/in a 25 hour window (up from 2).
- Waiving change fees for people who booked in March, but if you were a loyal flyer and booked in Feb - tough luck we want your 200 buck change fee.

I think some of these have been modified but that's only because of public or competitive pressure. I'm glad they kicked me out of 1k with their ridiculous changes to MP. UA deserves to get crushed and when they are open for business again, they will have alienated me so much that I will only fly UA if it's the only choice or I decide to burn my miles.

st3

I flew UA1597 (TPA-DEN) on Saturday 3/7. F was completely booked and there were only a few seats in Y. Some routes are suffering more than others.

I know a lot of people want UA to crash and burn since they "kicked out" some elites with the MP changes but the truth is that all airlines are hurting right now.

TEBraniff

Yes. A lot of the routes to southern points are running close to full. Isn't United the largest US International carrier? That is the routes they appear to be really short of passengers.

awu25

I'm #20 on the upgrade list this Thursday as a 1K (hub to hub). Not seeing much reduction on my end

jsloan

Eh, what I really said was that they'll try cutting capacity first. There's a limit to how much capacity can be cut, though. There are already some reports of fare sales, and there will be more if demand is as low as it appears to be. The airlines won't be able to avoid cutting fares to find a point where they can fill the planes. Also, opening up frequent flyer seats improves the bottom line but not the top line, and indications are that UA is hurting not just for profit but for cash. It may be better to take $200 in cash than to remove a $300 non-cash liability from the books.

For the record, I'm of the opinion that the US market is actually extremely competitive: you've got the US3 as international carriers, WN as a national carrier, AS and B6 as regional carriers, and F9, NK, G4, and SY as ULCCs. Yes, there may not be head-to-head nonstop competition on the majority of routes, but there are a lot more routes in the US than there are in most other countries too.

Often1

Same threads on AA and DL as well.

Bottom line is that all three (as well as other US carriers) are well aware that the US won't let them go under. If COVID issues point to insolvency, there will be a bailout. That may take many forms, including a "tax holiday" but there will be whatever it takes,

Problem is that the core business are corporate customers who are being directed not to travel. Offering an extra hot towel or whatever won't change that,

cjermain

Political polarization and anti-corporate populism. Just look at the price various politicians paid for supporting the bailout after the financial crisis (https://www.nytimes.com/2010/07/11/u...cs/11tarp.html) and things are worse now. One might argue that airlines are not as hated as financial institutions, and things are different in that the travel industry didn't bring the pandemic on themselves--and they'd be correct--but that should be little comfort to airline CEOs.

sincx

I think you'll find fares have already cratered.

SFO-ORD is available right now in regular (not basic) economy for $104 one way. Dates are wide open.

Hawaii roundtrips still available below $300.

SFO-ATL as low as $97 roundtrip in basic.

Etc.