narvik

I'm not too sure this "huge difference" that is envisaged will last all too long. Old habits will soon come back, no matter where the source (UA or passenger).
Meal choices will soon be a top priority again, and [current] hardships will be forgotten.

I do see one change going forward: everyone will try and milk this catastrophe to the fullest: anything negative will be quickly blamed on "the great pandemic of 2020", and a "Pandemic prevention and cleaning fee" will be added to many different things.

Capitalism will not be eradicated by this global pandemic!
"Spend and prosper" will be the norm again soon enough!

Added:
It will only take one or two lost customers to companies who made the effort to actually visit the customer instead of "Zoom/Team" meetings to bring back corporate J travel to that type of group.

zombietooth

Truth, brother!

Loyalty to a business these days is transactional. If UA gets me the best combination of price, comfort and minimum transit time/hassle to my destination, they get my business. I believe that most flyers are in this "transactional loyalty" bucket, and that UA was doing just fine with this sort of flyer and will in the future. Everyone who raves about better soft product and service on other carriers must think that those things are important but, to those of us who travel for our livelihoods, they matter far less than reliably getting to your destination in a timely fashion.

UA is not finished.

Bear96

I agree with both of the above. I wouldn't quite say status is meaningless, but it is not one of the main things I consider when looking to fly. I look most for schedule convenience (and will pay a significant premium for a nonstop vs. a connection - after a day of meetings, I wanna get home ASAP!) - which includes reliability - and price in some sort of sliding scale. All else being equal I will avoid AA, but I think WN, DL and now finally again UA all offer a solid product and I don't have particular loyalty to - or complaints about - any of those three.

If I happen to rack up enough points to get some sort of status or be able to redeem a "free" flight or upgrade once in a while, great, but that does not drive my choice of airline. At the moment I have more Rapid Rewards points than I can use on WN because of its nonstop schedule (and reliability) out of TPA. Plus they treat me great as an A-Lister (as they do most everyone). But I also think both DL and UA offer a good product at a good price these days (speaking pre-Covidly).

I should add in the interest of disclosure that my company is pretty liberal in letting me choose flights and will tolerate paying a somewhat higher fare for my scheduling convenience or for a refundable fare, which happens fairly frequently (or at least did until March), and that I am fortunate enough to be able to pay for domestic first / int'l business at least most of the time I choose to travel for pleasure.

ffI

I do agree it is due to tax issues but the best use would have been to give it to the owners as a dividend.
If they had not bought back shares and had some money in the bank, the unions (like at SW) would have told them to go pound sand instead of giving them any concessions
Dividends should not be taxed at all; then a lot of the companies can be truly judged by their cash flow and stability of their business models

jsloan

The only functional difference between a dividend and a share repurchase is that share repurchases allow the investor to decide when to take the cash.

That's a pretty solid argument in favor of repurchases, then.

cerealmarketer

Kirby has been pretty open about UA's weakness....it didn't have the domestic scale of AA and DL in the last cycle (or the 2000s for that matter)

How that plays now that they've all effectively scaled to near zero is another question. Kirby's employee comment recently was they want to be in a position to spool up domestic more quickly than the others.

On the negative side for UA domestic travel will be a greater mix for the big 3 than it was going into this for at least the rest of this year.

Int'l travel restrictions may come off more slowly than the rebound of inherent travel demand so to the extent there is inertia and preference among domestic fliers for AA/DL it would be at a disadvantage

On the plus side the domestic scale advantage is diminished for DL/AA in a prolonged reduced demand environment - having an extra 100-200 frames doesn't offer a share advantage when there's no demand at that level - so if UA figures out how to place them in the right markets with the right value proposition / cost structure / liquidity (a big ask) can take some share.

It's early to take the over on that one and a lot of payments on intl birds to deal with that DL/AA don't.

UA 545 regional frames (about 200 2 cabin), 580 mainline narrowbody
AA 604 regional (about 450 2 cabin), 750 mainline narrowbody
DL 429 regional (429 2 cabin), 700 mainline narrowbody

bearkatt

I have always heard that people who lived through the great depression were always very careful with their money afterwards. It will be interesting when we get through this what corporations do with their profits.

fly18725

Everyone will be paying down debt for the foreseeable future. I don’t expect United will return cash to shareholders for at least 5 years.

HoyaSFOIAD

I had a great economics professor who said simply, a dividend is a marriage, a share repurchase is a one night stand. A share repurchase might be more fun, but the dividend requires a lot more discipline.

jsloan

I don't see it that way. The discipline he's talking about comes from the expectation that investors have about continued dividends -- once you've given out a dividend a couple of times, you're expected to continue to grow the dividend in subsequent quarters / years. But the same expectation could be priced into share repurchases. If you announce regular share buybacks, purchasers are going to take that into account -- and if you suspend buybacks, it'll create as much blowback as suspending dividends.

cesco.g

I got a feeling this thread will be finished well before UA!

fly18725

Most institutional investors disagree, to varying extents, with your opinion, which is a reason why buybacks are more prevalent then dividends.

John Aldeborgh

Capitalism, by it’s very definition, is about rapidly adapting to market needs, UAL will do just that.

Folks who say the days of global travel are behind us need to look at the entire history of air travel. The world has gone through global wars, pandemics and depressions, all of which have had a temporary impact on air travel but the long term trend is always up. Human nature doesn’t change, as travel becomes more affordable, more people will travel more.

The substantial, well managed carriers will survive and after a while prosper again. We should all be thankful they will.

I, for one, can’t wait to get back in the air! I’m already sick of spending 10 to 12 hours a day on conference calls. Anyone who thinks Zoom Meetings are anywhere near the equivalent to face to face contact are kidding themselves. Is having phone sex a good substitute for having real sex? Hint, the answer is no. Long live UAL, and other carriers as competition is always good.

aero219

When it comes to investing in airlines, I'll take Warren Buffett's advice on how to become a millionaire:
"There's really nothing to it. Start as a billionaire and then buy an airline.'"

uastarflyer

Bailouts and free govt subsidies isn’t capitalism.