UAL NB Aircraft Order, Bookings Good
10-12-2011, 12:41 PM
#1
Banned
Thread Starter
Joined APC: Oct 2010
Position: IAH 737 CA
Posts: 690
UAL NB Aircraft Order, Bookings Good
Jeffery is quite full of himself. I love the nimble and responsive bit.
United Continental Sales Show No Recession Signs
12:52 pm ET 10/12/2011 - Reuters
* United not seeing recession signs in its bookings-CEO
* Carrier prepared to cut capacity if needed-CEO
* Carrier may order Boeing or Airbus narrowbodies-CEO
By Kyle Peterson
CHICAGO, Oct 12 (Reuters) - United Continental Holdings is not seeing signs of an imminent recession in its travel bookings even as the United States and other major economies grapple with a troubling economic outlook, the airline's chief executive said on Wednesday.
"We're not seeing it in our bookings. We're not seeing it in our business travel at this point. But certainly it could happen," Jeff Smisek told reporters at an event hosted by the Executives' Club of Chicago.
The airline industry is bracing for another round of economic weakness that experts say threatens to drain travel demand. The top carriers are better positioned for shocks now than they were several years ago because of downsizing and consolidation that trimmed excess capacity.
Some airlines like AMR Corp's American Airlines and Delta Air Lines have already said they would trim capacity in the fall. Smisek said United Continental is prepared to be "nimble" and "responsive" to weaker demand.
"If we have demand drop off because of economic developments, we will take capacity out," he said.
United Continental is the parent of United Airlines, the world's largest airline, which was formed last year from the merger of UAL Corp and Continental Airlines. The two companies continue to operate separately while they integrate.
During his prepared remarks, Smisek said the airline expects to take delivery of its first Boeing Co <BA.N> 787 Dreamliner in the second half of 2012.
United Continental will be the first North American carrier to fly the light-weight, carbon-composite widebody, which is three years behind its original schedule because of snags in its extensive global supply chain.
The first Dreamliner was delivered last month to its launch customer All Nippon Airways . Boeing now faces the daunting task of getting its 787 production rate up in time to meet commitments to its customers.
United Continental has ordered 50 Dreamliners. Boeing has taken orders for 821 of the planes.
Smisek also said United Continental, which expects to take delivery of 19 Boeing 737 narrowbodies next year, is looking to expand its order to replenish its fleet with newer planes. Smisek said the carrier is considering updated narrowbody offerings from Boeing and its rival Airbus EADS.
Boeing has said it would upgrade its best-selling 737 with a new fuel-efficient engine and call the plane the 737 MAX. The MAX will compete with a re-engined Airbus widebody known as the A320neo.
"We're looking at both airplanes as we should be. The neo is a very attractive airplane as I believe the MAX will be," Smisek said.
Sources have told Reuters that UAL is mulling an order that could total 200 planes. Talks are in early stages and an order could be several months off.
Shares of United Continental were up 2.6 percent at $20.30 on the New York Stock Exchange. (Reporting by Kyle Peterson in Chicago; Editing by Derek Caney, Phil Berlowitz)
United Continental Sales Show No Recession Signs
12:52 pm ET 10/12/2011 - Reuters
* United not seeing recession signs in its bookings-CEO
* Carrier prepared to cut capacity if needed-CEO
* Carrier may order Boeing or Airbus narrowbodies-CEO
By Kyle Peterson
CHICAGO, Oct 12 (Reuters) - United Continental Holdings is not seeing signs of an imminent recession in its travel bookings even as the United States and other major economies grapple with a troubling economic outlook, the airline's chief executive said on Wednesday.
"We're not seeing it in our bookings. We're not seeing it in our business travel at this point. But certainly it could happen," Jeff Smisek told reporters at an event hosted by the Executives' Club of Chicago.
The airline industry is bracing for another round of economic weakness that experts say threatens to drain travel demand. The top carriers are better positioned for shocks now than they were several years ago because of downsizing and consolidation that trimmed excess capacity.
Some airlines like AMR Corp's American Airlines and Delta Air Lines have already said they would trim capacity in the fall. Smisek said United Continental is prepared to be "nimble" and "responsive" to weaker demand.
"If we have demand drop off because of economic developments, we will take capacity out," he said.
United Continental is the parent of United Airlines, the world's largest airline, which was formed last year from the merger of UAL Corp and Continental Airlines. The two companies continue to operate separately while they integrate.
During his prepared remarks, Smisek said the airline expects to take delivery of its first Boeing Co <BA.N> 787 Dreamliner in the second half of 2012.
United Continental will be the first North American carrier to fly the light-weight, carbon-composite widebody, which is three years behind its original schedule because of snags in its extensive global supply chain.
The first Dreamliner was delivered last month to its launch customer All Nippon Airways . Boeing now faces the daunting task of getting its 787 production rate up in time to meet commitments to its customers.
United Continental has ordered 50 Dreamliners. Boeing has taken orders for 821 of the planes.
Smisek also said United Continental, which expects to take delivery of 19 Boeing 737 narrowbodies next year, is looking to expand its order to replenish its fleet with newer planes. Smisek said the carrier is considering updated narrowbody offerings from Boeing and its rival Airbus EADS.
Boeing has said it would upgrade its best-selling 737 with a new fuel-efficient engine and call the plane the 737 MAX. The MAX will compete with a re-engined Airbus widebody known as the A320neo.
"We're looking at both airplanes as we should be. The neo is a very attractive airplane as I believe the MAX will be," Smisek said.
Sources have told Reuters that UAL is mulling an order that could total 200 planes. Talks are in early stages and an order could be several months off.
Shares of United Continental were up 2.6 percent at $20.30 on the New York Stock Exchange. (Reporting by Kyle Peterson in Chicago; Editing by Derek Caney, Phil Berlowitz)
10-13-2011, 03:52 AM
#3
Gets Weekends Off
Joined APC: Sep 2007
Posts: 520
every reposnse from jeffy has the bad news built in:
Smisek said United Continental is prepared to be "nimble" and "responsive" to weaker demand.
AKA-- we can park aircraft as demand sags, negotiations continue, and pilots retire quicker than can be retrained/replaced. We are seeing this current trend with AA.
Narrow body order-- thats funny-- we all know for ual togget new planes, others must be parked- its the ual way
Smisek said United Continental is prepared to be "nimble" and "responsive" to weaker demand.
AKA-- we can park aircraft as demand sags, negotiations continue, and pilots retire quicker than can be retrained/replaced. We are seeing this current trend with AA.
Narrow body order-- thats funny-- we all know for ual togget new planes, others must be parked- its the ual way
10-13-2011, 04:46 AM
#5
Gets Weekends Off
Joined APC: Jan 2008
Posts: 400
At first glance it could be easy to compare the situation at AA with what could happen at UAL, but I don't believe they are as similar as one might think.
First, AA is a company that is almost sure to enter a structured reorganization at some point or possibly bankruptcy. It must be obvious from the decision making there lately that either, as much as execs deny it, is on the table for AA. They need to re-organize to compete with their peers and their situation is similar to the Greek debt crisis in that they are too far in the hole currently to get out and no matter what you throw in the hole to help them out, it just ain't going to happen in the long run.
AA I am told from quite a few friends there is parking these jets on an accelerated schedule conveniently matching the retirements. Most of these jets are very far behind on heavy maintenance and they basically ran them to the last minute and coupled with the retirements decided to park them early. They were supposed to be replaced by Airbus or new 737 gear.
UCH is quite different. This a company not threatened by bankruptcy which is generating tremendous cash flow from escalating ticket prices, skyrocketing fee revenue and stable to declining fuel prices. UCH's situation is chalk and cheese in comparison to AA. Not to say they can't be right back there in trouble, any airline can quickly...but thats not in the cards for now.
A few reasons UCH will park airplanes that are full and generating cash flow and revenue is if there is significant drop in demand on the part of the consumer or if in the case of AA the cost to fly these jets outstrips their cash flow generation or positive liability value (oxymoron granted). I don't think any Board or large stakeholder would be enamored with it's executives if they parked a bunch of jets just for the hell off it in light of the unusually resilient demand from the public as of late. It is very curious how the consumer has stuck with flying through the recession and it's a subject to be studied in business schools for some time. The predictions as the economy free fell in 2008 were far more dire than they turned out to be...
Large airlines park jets for economic reasons and pilot retirements are not really a high value factor in that decision. Think about it this way, what happens when so many of these 65'ers go off the top and you back fill them with healthier, younger greenhorns at $31 an hour. I think they can't wait for the retirements (a la latest buyout offer?) to come and if a drop in demand coincides with those retirements then its convenient but if those airplanes are making money, they'll stay, if not at the minimum get shifted around and parked temporarily as high yield markets ebb and flow across the domestic/international spectrum.
First, AA is a company that is almost sure to enter a structured reorganization at some point or possibly bankruptcy. It must be obvious from the decision making there lately that either, as much as execs deny it, is on the table for AA. They need to re-organize to compete with their peers and their situation is similar to the Greek debt crisis in that they are too far in the hole currently to get out and no matter what you throw in the hole to help them out, it just ain't going to happen in the long run.
AA I am told from quite a few friends there is parking these jets on an accelerated schedule conveniently matching the retirements. Most of these jets are very far behind on heavy maintenance and they basically ran them to the last minute and coupled with the retirements decided to park them early. They were supposed to be replaced by Airbus or new 737 gear.
UCH is quite different. This a company not threatened by bankruptcy which is generating tremendous cash flow from escalating ticket prices, skyrocketing fee revenue and stable to declining fuel prices. UCH's situation is chalk and cheese in comparison to AA. Not to say they can't be right back there in trouble, any airline can quickly...but thats not in the cards for now.
A few reasons UCH will park airplanes that are full and generating cash flow and revenue is if there is significant drop in demand on the part of the consumer or if in the case of AA the cost to fly these jets outstrips their cash flow generation or positive liability value (oxymoron granted). I don't think any Board or large stakeholder would be enamored with it's executives if they parked a bunch of jets just for the hell off it in light of the unusually resilient demand from the public as of late. It is very curious how the consumer has stuck with flying through the recession and it's a subject to be studied in business schools for some time. The predictions as the economy free fell in 2008 were far more dire than they turned out to be...
Large airlines park jets for economic reasons and pilot retirements are not really a high value factor in that decision. Think about it this way, what happens when so many of these 65'ers go off the top and you back fill them with healthier, younger greenhorns at $31 an hour. I think they can't wait for the retirements (a la latest buyout offer?) to come and if a drop in demand coincides with those retirements then its convenient but if those airplanes are making money, they'll stay, if not at the minimum get shifted around and parked temporarily as high yield markets ebb and flow across the domestic/international spectrum.
10-13-2011, 03:32 PM
#6
Gets Weekends Off
Joined APC: Feb 2006
Position: B737 CAPT IAH
Posts: 1,130
Originally Posted by skippy
every reposnse from jeffy has the bad news built in:
Smisek said United Continental is prepared to be "nimble" and "responsive" to weaker demand.
AKA-- we can park aircraft as demand sags, negotiations continue, and pilots retire quicker than can be retrained/replaced. We are seeing this current trend with AA.
Narrow body order-- thats funny-- we all know for ual togget new planes, others must be parked- its the ual way
Smisek said United Continental is prepared to be "nimble" and "responsive" to weaker demand.
AKA-- we can park aircraft as demand sags, negotiations continue, and pilots retire quicker than can be retrained/replaced. We are seeing this current trend with AA.
Narrow body order-- thats funny-- we all know for ual togget new planes, others must be parked- its the ual way
Standard section 6 drivel from mgmt. Bait, Threat, and potential Switch. Nothing to see here.
I remember a conversation about 10 years ago in ops regarding orders/options given the then current state of affairs. An old crusty Capt said those planes are not real and mean nothing until you are strapped into them and pushing back. Sage advice since those airbi never showed up on the property.
As you said, getting all "dreamy eyed" about new aircraft really means nothing if there is not net growth. Also, new types mean nothing as well until you're strapped in pushing back for IOE.
Frats,
Lee
Thread
Thread Starter
Forum
Replies
Last Post
