Dyce

I doubt Q3 revenue will fall (materially) - given official statements by the company, as well as the timing. Q2 includes approx one month (June) of kids out of school... Q3 includes two months (July-August). September revenue should be an interesting indicator for them, as logically the leisure travel should drop somewhat. What will also be interesting to know is how much of the buy up business drops once ppl have a) had their first trip in a while, and b) economic tightening takes place.

Got to love the pilots turning down a 14% pay hike after being subsidized by tax payers for a couple of years...

Should be yet another interesting couple of years for United... increased costs, operational difficulties, shrinking revenue... the aggressive goals announced in the last year are already being revised downwards...

And whatever happened to the beloved NPS scores?

EWR764

On one hand... but on the other, consider 9%+ inflation negates much of the pay hike, the company touting its margin performance and return to profitability, along with concessions made by pilots during the pandemic to enable recovery. Plus, the counterparty (management) was also a beneficiary to PSP/CARES and government aid, so it's not as though taxpayers were at the table. Why should pilots feel some obligation to management in exchange for government aid, and take a substandard deal? Put another way, should a worker accept a lower, or less-competitive wage from his/her employer because the employer accepted pandemic aid from the government?

Upon further consideration, the TA really wasn't very compelling. This is also a workgroup in which a considerable number of members lost defined benefits during bankruptcy and even with contract "wins" over the last few years are still substantially behind in projected career earnings. I think the industry consensus is that this was a pretty shoddy deal. The MEC knew a "no" vote was coming and agreed with management to go back to the table to avoid the political ramifications of a failed TA. That tells me UAL management has some more room to work and the negotiating committee fundamentally fell short of its obligations.

Yep. As I've said, I'm confident United Next will ultimately be a fleet renewal program, not a significant expansion.

On the call, I think Scott noted they improved by the end of the quarter, but no doubt are substantially depressed from during the pandemic, with empty middle seats, deserted airports, on time flights and plentiful elite upgrades. So, not exactly something the company wants to discuss with specificity at the moment.

SPN Lifer

NPS = Net Promoter Score (market research metric)
TA = Temporary Agreement ?
MEC = Master Executive Council (Local Council Presidents from the same airline)

LarryJ

TA is Tentative Agreement

The MEC is made of the Master Chairman, Vice Chairman, Secretary, and Treasurer. Additional each LEC's Captain representative and First Officer representative is on the MEC. I believe each LEC's Secretary/treasurer is on the MEC but is not a voting member.

Dyce

So "only" a net gain of 5% over inflation... got it. How quickly thee forget - if it wasn't for tax payer subsidies a lot of pilots (actually airline employees in general) would be applying for new jobs and starting again with low seniority. But hey, that's all in the past, right?

My point exactly - only refer to them when they improve but crickets when they go down or continue to be low.

EWR764

The company did not afford the payroll support to the pilots, though. The government did. So why should pilots offer a concession to the company in the form of a below market contract? Taxpayers aren�t at the table, the company is, and both parties (pilots and management) benefit from the aid.

cesco.g

Link to the transcript:

https://news.alphastreet.com/united-...ll-transcript/

HNLbasedFlyer

Interesting read - seems the profit miss is largely attributed to fuel, labor (they used the word overstaffed relative to capacity), and mainline flying UAX routes with poor utilization. They seemed pretty happy with themselves operationally (and I think they should) - and they are not happy at all with Boeing. I took it as biz travel revenue at 80% from 2019 which seems high to me - and the messes at LHR are hurting things from a biz travel perspective. Obviously Asia is still a big concern.

Dyce

So the airlines get bailed out, but hey, it's tax payer money, not mgmt. Got it.

You're trying to squeeze as much money as you can, weeks/months before an impending recession (some would argue we've already started one). Seems pretty basic economics that higher operating costs, higher fuel, and lower demand/capacity (Q3 onwards) means United could easily be back in the red within 12 months. So given your logic, you'll be willing to take a comparable pay cut as soon as that happens?

It's an earnings call - they're not going to say we're crap at managing an airline. They put spin on anything they can to point at how well they think the airline is managed to hopefully boost the investment appetite to drive up the stock price. Every company does this. The airline industry as a whole has made a right hash of the recovery - forward thinking doesn't seem to exist.

That said, I think the 80% number is believable... and the statement about Asia not yet rebounding (believable because they're actually legally required to tell the truth!). Based upon my (highly unscientific) travel of the past 12 months - no real concerns with travel to Europe at the moment (conveniently ignoring Mr. Putin's world dominance ambitions). Yet Asia lags 6-12 months behind in opening things up...I've done one Asia trip in the past 12 months, whereas in 2019 I did 5 transpacs. On the flip side I've done more Europe trips than in 2019... The company I work for has probably 2-3 thousand ppl flying domestically every week. The bubble is the summer leisure travel which by definition will drop off after August.

Operationally they should NOT feel happy with themselves... embarrassed would seem more appropriate.

HNLbasedFlyer

How so, by all accounts I see - news - FT threads for Delta, American, Southwest, British Airways, etc - UA seems miles ahead of them from far less cancelled flights, proactively reducing schedule, better pilot availability, putting mainline on Express routes, etc

featheroleather

Mgmt finds a way to give themselves �retention� bonus� in the million$, but can�t believe pilots rejected a substandard TA, even with a Tumi bag thrown in to sway anyone sitting on the fence. ALPA is backpedaling big time with all the egg on their face, esp since the MEC approved the Jul 15voting deadline &
the earnings call was a week later. In their dreams they thought pilots would jump on the first bone
offered & then mgmt would be able to lavish bonus� upon themselves. Pilots saw right through that & are livid.

How stupid do they think labor is?

Dyce

I'd say very for rejecting a 14% pay raise... in six months when United is losing money again and they offer 8% what will they do then? So short sighted...

Yea, United is the gleaming example of how to run an airline, lol. Cutting UAX flights because they encouraged pilots to retire 18 months ago and now don't have enough to fly their planes. Cutting schedules 10-20% is operational excellence??? It's admitting they scheduled too many flights in the first place and now everyone that was on one of those cancelled flights is scrambling for seats on different flights or on different airlines. I've been on flights that have taken an hour to taxi to the gate because there's not enough rampers... and at one of my home airports they haven't bothered bringing a gate checked bag to the jetway on a single flight I've been on this year - easier to just throw them in with all the checked bags and take them to baggage claim. And don't get me started on some of the food offerings... quite frankly I find the argument that United are doing well operationally is both sad and hilarious. I don't even think they're saying that themselves!

Ppl splurged this summer because they hadn't been anywhere in up to two years and they had money saved (or credits from 2 years ago), thus were willing to put up with operational nonsense and very high prices. Fast forward six months when companies start laying off ppl because we're in a recession, and gasoline prices are still double what they were a year ago, groceries are still increasing, and disposable income for that trip to see Grandma suddenly isn't there... then watch revenue drop... don't need econ 101 to see less revenue and higher costs = less profit (or a net loss).

DELee

Uh, you probably don't want to know.

David

featheroleather

pay is the last thing negotiated but the first thing everyone looks at.
A 14% pay raise 3.5 yrs after their contract become ammendable doesn�t mean squat when work rules, qol, lca pay, health benefits, rsv rules, vac etc etc are being reduced.

Tumi Bag aint gonna cut it.

Do you believe if pilots & all other labor worked for free, that ticket prices would go down 1cent or that mgmt would stuff it into their pockets?

goodeats21

Anyone know why there is no talk about fuel hedging in any of call? Seems odd since it was so highly mentioned as a major headwind / impact on financial performance.
I took a quick review of the transcript and didn't see it mentioned all all, even during the questioning.

Saw some reporting that other carriers (Lufthansa, BA, Singapore,etc) have been doing this, but nothing about United doing it.