They're making it look like getting people from point A to point B is really important, like it's some kind of core product or something. Those expensive spare aircraft and expensive and spare crews make for a bad business model. Every MBA knows you have to run things cost-cuttingly lean to satisfy the customer* today.

* stockholder

 

I would never propose such a silly thing. Just passing on what I read about Delta.

Since DAL's unit costs are lower than ours, seems we have a cost problem somewhere. My guess is most of it is pi$$ed away in a big tall building in downtown Chicago.

 

When was the last time United or one of it's pre-merger predecessors had a 100% completion factor day ( no cancellations)?

Hint, it was before a couple certain executives in charge of tech ops and route planning left and went to Delta.

As Delta and Alaska are showing the industry, it is not a matter of being the "biggest". Meeting the core expectations of customers is what counts first. Once that becomes the norm, growth can occur -slowly.

 

Unit costs are misleading. We are in the midst of a higher depreciation schedule under MACRS than Delta is because of where we are in the aircraft delivery schedule. DALs costs are going to rise as their deliveries come in because of the accelerated depreciation on those aircraft.

Its not as simple as looking at hourly pay rates between employee groups, etc.

 

That's a very good point. We have a relatively new fleet. Delta is going to need to start replacing almost all of their narrowbody airplanes and the entirety of the 767 fleet in 10 years or so. You can only delay the replacements for so long. American is on the same page as us; they can't get new airplanes fast enough.

 

Great post.

 

I am trying to fly only on DAL/Skyteam, for 3 reasons, and 2 of them are because of DAL mgmt decisions:
1-DAL has the most larger aircraft:
I flew Columbus to MIA on an Eagle 50 seater.
I flew ORD-MIA on a United Express Mesa 50 seater.
I looked at LAX-GRB:
AA and UAL both had 50 seaters from LAX-ORD-GRB.
DAL had an A-320 from LAX-MSP, then a Compass ERJ-175 from MSP-GRB. I booked the DAL itinerary.

2-DAL has a lot less cancellations than UAL/AA, and they don't fly through ORD, which is over-capacity during rush hour, so the slightest WX problems cause delays, which AA and UAL both blame on ATC!!!

About the only reason I am not flying DAL more, is that sometimes DAL/Skyteam doesn't go where I need to fly, or sometimes DAL has no seats. Occasionally AA/UAL has better schedules, but not often.

If it is not DAL, then I try to fly AA, and that is for two reasons:
1-AA has Qatar in it's network, so when I am flying thru or to/from the Middle East, I can get airline miles on AA (can't with Emirates, Etihad or DAL/UAL).
2-AA seems to have a better network, and less cancelled flights than UAL.

Overall, for American carriers, I really prefer DAL.

My buddy flies feed for both UAL and DAL. He said it is Night and Day when comparing the support he gets for his flights. The DAL personnel are MUCH more helpful, and the DAL operation runs much more smoothly. He said it is really obvious that DAL is doing a much better job than UAL.

My last point: I hope that DAL/AA/UAL can compete effectively vs. EK/EY/Qatar (and Turkish). They are really starting to move a lot of passengers (including me) to and from the US, from all points of the globe, and with a MUCH higher level or service, food, and passenger amenities.

 

Exactly. You can't attack the messenger, even if he does HATE United. You have to look at the data and see if any of this rings true. Is UAL management and vision putting the airline well behind the competition? Is this type of leadership killing an already sick airline? I think the answers are clear. The other threat is UAL is getting killed internationally flying small airplanes (787 and other narrow body types) and providing sub standard service, competitively speaking. The real threat is not just Delta and Southwest, it's Cathay (to Asia from the East Coast, West Coast, Midwest) and British Airways/Lufthansa/Emirates every where else United flies overseas. The little airplane experiment is killing UAL's long haul and global presence and the management is killing UAL domestically by way of "Bad News Bears" performance, with such obviously better performing organizations right here at home.

The trend is "technically" reversible but you can't get there from here. Changes must be made and yesterday. The right people in the right positions and a heavy dose of REAL leadership from the heart is required. Is that realistically possible? I don't know but structural / managerial changes have to lead the rally for it to sustain and have any credibility for leadership to be effective.

UAL + "2012 Same old - Same old song and dance" = The new TWA.

 

We just made $900M in the 2nd quarter and going to make over $1B in the 3rd quarter. Both will be quarterly records. That's "data".

And I don't care how much DAL said they made because they aren't taking 787s and 35 guppies this year, when 1st year capital depreciation is at its highest.

Why does no one compare us to Southwest, the largest US domestic airline, where we almost doubled their 2nd quarter profit of $475M.

United could certainly perform a lot better, but in our 75+ year history we just set an all-time financial performance record.

I'm not thrilled with the performance, but we are doing damn good IMO.

Let's keep things in perspective, please.

 

UAL was also doing great late 90's - 9/11. At the time we were a massively bloated airline. But the economy was so good, and the revenue environment so high, we looked great, for a few short years.

Our current predicament isn't as bad in some ways, but the reason we just reported high earnings is just the revenue environment. "A rising tide raises all boats".

A lot is being made of how many aircraft we are taking delivery of. Guess what, it is just the normal rate of aircraft replacement, assuming a 25 year life for an airframe. We are taking delivery of about 4 - 5% of our fleet in new aircraft per year. Our fleet is not "new" it is just not as old as DAL's.

Less than 10% of our fleet is in the first 2 years of their lives. The high depreciation rate that you speak of affects only a very small fraction of our overall fleet.