Boeing Aviator

Hey I could certainly be wrong certainly wouldn’t be the first time! One of the reasons we trail AA and DAL is that domestic today is the most profitable flying and our approximately 200 mainline narrowbody deficit vs AA and DAL is a big reason why we lag them in profits. Our labor costs - especially pilots are very much in line with them.

Boeing Aviator

Good point.

My posts on allowing more 70/76 RJ’s only if flown by mainline pilots should include scope restrictions on these aircraft replacing Airbus/737 flying, hub to hub and large market to hub flying. If Kirby truly wants to do what he says, flying RJ’s into smaller markets to feed our hubs that can’t support 100 seat or 100 plus seat flying, he should have no problem with these types of protections or no deal. I believe the Scope choke worked and we have management in a box. They want to grow 70/76 seat flying and grow domestically significantly in the next three years. Only one way to do it and that’s to cut a deal with the pilots. Our MEC is no pushover and neither are the majority of our pilot group when it comes to scope.

Kirby is smart enough to know if he picks a scope battle with the pilots he will lose. Remember to guys like Kirby it’s all about ego. He wants to be a success and show AA they shouldn’t have axed him. The only way to do that is to cut a deal with the pilots or we both lose.

Andy

Where did you get the idea that AA axed Kirby? He was Dougie's right hand man for more than a decade. UAL wooed him over, dangling the prospect of succeeding Oscar.

Kirby may be hated by AA pilots but Kirby did a good job of cleaning up the merged AA/USAirways operation.

One can hate Kirby, but he's one of the better airline execs at running an airline out there. Let's not forget the Crandall was also despised when he was an active airline exec.

RomeoHotel

Is limiting the distance or size of an airport necessary if the RJ is being flown by mainline pilots...? Unless we allow some type of "B" scale I don't see a need.

Boeing Aviator

You may be right. I believe he was Parker’s right hand man for two decades. Rumors I heard were that something happened between Parker - Kirby and possibly the AA BOD or something to sour the relationship. As you know a lot of ego at that level.

From what I was told from one of our MEC reps when Kirby briefed our MEC within a few months of arriving at UAL. He had a fire in his belly to make sure AA regretted losing him. He stated to our MEC, AA thought he was too aggressive.

Either way fired/replaced by AA or he was recruited and or stolen by Oscar. Most likely he’s our next CEO and has a lot to prove. Time will tell if he can pull it off, but the only way he’s got a chance to be very successful, if he works with ALPA. A long drawn out fight over Scope, he loses and he will not be successful during the next three years with his aggressive domestic growth plans. If he fails the BOD, and or Wall Street will probably make sure he’s gone.

I believe we have a good chance for a contract this year as there is a window of opportunity and both sides want a deal. Kirby for reasons I discussed and ALPA because this is the third bite of the apple in a long bull market that could be on its last run.

MasterOfPuppets

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.

oldmako

You may be right, but we are the low hanging fruit.

MasterOfPuppets

The low hanging fruit is the 100 seat jet.....

Boeing Aviator

It is if the new 70/76’s force 737 and Airbus flying to be reduced below current levels. Even at A scale rates no way 70/76 seaters will pay the same as 737/320 rates.

Just like we have narrowbody to SNB ratios now we can negotiate them into a mainline flown 70/76 seaters.

Boeing Aviator

Great post!