Originally Posted by
oldmako
There is one problem that I foresee with your sanguine view of what's coming. Our numbers stink relative to our peers. I imagine there is significant pressure on our management team to fix this and of course, costs will always be the first thing attacked. We are costs.
I hope you're right and they take the airline in a new direction with us flying the larger next-gen RJ's (and whatever else is on the horizon). But as always, I remain skeptronic. Time will tell.
I disagree that we need to reduce costs to get more in line with our peers performance numbers. Our costs are roughly the same as DL and AA but our problems are 2 fold:
1. We have a very high exposure to the ITNL market, 38% of our market, and a very low exposure to the domestic market. AA and DL are exactly the opposite. Currently traffic to the US is soft from Europe due to the higher dollar, along with the increased competition from NAI and ME3 our numbers are taking a larger hit than AA and DL. Also the decrease in travel to China and Asia as a whole, compounded with cheap Chinese carrier competition, has drug down our profits over the pacific.
2. We do not capture the revenue we need out every ticket sold. This leads back, once again, to that epic failure Smizek. I believe it was during a quarterly call in 2016 that he admitted that UA wasn't capturing the revenue DL and AA where and that UA had "accidentally" sold to many cheap tickets. WTF??? I believe it was in Q3 2017 that we were told about our new computer program that was being introduced to better price our tickets in real time in order to maximize revenue. I would like to think that the reason that our YOY in Q4 2017 was better by a large margin due to our ability to capture more revenue.
If Kirby and Munoz can capture more revenue with the same network AND grow domestically then in theory we should post numbers in line if not BETTER than our competition. If United can successfully connect the dots to the best route network, and alliance, in the world then we will be a total powerhouse.
There is one key to the entire plan, management knows it and the pilot group knows it.......who flies the jets. Kirby has a chance to change the entire landscape of the airline industry by bringing 70 seat jets in house. The boost to the bottom line will more than pay for the increased crew costs.