The Future of United Airlines ???
05-01-2007, 01:57 PM
#1
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Joined APC: Jan 2007
Position: CRJ CPT
Posts: 74
The Future of United Airlines ???
I am posting this thread not to bash anybody or call anybody out, but I would like to get an answer to this question. It must have been a couple of days ago, when I heard that once again United is back to its old tricks of losing many millions of dollars in its quarterly earnings reports. Back in 01, 02 , and 03, we all had the excuse of 9/11 this and 9/11 that. This time, its different as American, U.S. Airways, Continental, and pretty soon Delta are all reporting relatively descent news financially. There was another airline back in the 90s that carried this same type of trend: TWA. They seemed to be losing a bunch of money when other carriers were doing well.
What is wrong with United Airlines today?
Why are other majors doing better than United?
Where do you think UAL will be in 5, 10 years?
And most of all, what will happen to the aircraft, people, and local communities of (SFO, LAX, ORD, DEN, IAD) who would have much to lose if the company folds?
What are the chances of a merger with another carrier?
What is wrong with United Airlines today?
Why are other majors doing better than United?
Where do you think UAL will be in 5, 10 years?
And most of all, what will happen to the aircraft, people, and local communities of (SFO, LAX, ORD, DEN, IAD) who would have much to lose if the company folds?
What are the chances of a merger with another carrier?
05-01-2007, 02:28 PM
#2
Self Employed.
Joined APC: May 2005
Position: Corporate Pilot
Posts: 7,119
Ual
I am posting this thread not to bash anybody or call anybody out, but I would like to get an answer to this question. It must have been a couple of days ago, when I heard that once again United is back to its old tricks of losing many millions of dollars in its quarterly earnings reports. Back in 01, 02 , and 03, we all had the excuse of 9/11 this and 9/11 that. This time, its different as American, U.S. Airways, Continental, and pretty soon Delta are all reporting relatively descent news financially. There was another airline back in the 90s that carried this same type of trend: TWA. They seemed to be losing a bunch of money when other carriers were doing well.
What is wrong with United Airlines today?
Why are other majors doing better than United?
Where do you think UAL will be in 5, 10 years?
And most of all, what will happen to the aircraft, people, and local communities of (SFO, LAX, ORD, DEN, IAD) who would have much to lose if the company folds?
What are the chances of a merger with another carrier?
What is wrong with United Airlines today?
Why are other majors doing better than United?
Where do you think UAL will be in 5, 10 years?
And most of all, what will happen to the aircraft, people, and local communities of (SFO, LAX, ORD, DEN, IAD) who would have much to lose if the company folds?
What are the chances of a merger with another carrier?
SkyHigh
05-01-2007, 02:44 PM
#3
Gets Weekends Off
Joined APC: Aug 2005
Position: Retired 121 pilot
Posts: 1,033
I am posting this thread not to bash anybody or call anybody out, but I would like to get an answer to this question. It must have been a couple of days ago, when I heard that once again United is back to its old tricks of losing many millions of dollars in its quarterly earnings reports. Back in 01, 02 , and 03, we all had the excuse of 9/11 this and 9/11 that. This time, its different as American, U.S. Airways, Continental, and pretty soon Delta are all reporting relatively descent news financially. There was another airline back in the 90s that carried this same type of trend: TWA. They seemed to be losing a bunch of money when other carriers were doing well.
What is wrong with United Airlines today?
Why are other majors doing better than United?
Where do you think UAL will be in 5, 10 years?
And most of all, what will happen to the aircraft, people, and local communities of (SFO, LAX, ORD, DEN, IAD) who would have much to lose if the company folds?
What are the chances of a merger with another carrier?
What is wrong with United Airlines today?
Why are other majors doing better than United?
Where do you think UAL will be in 5, 10 years?
And most of all, what will happen to the aircraft, people, and local communities of (SFO, LAX, ORD, DEN, IAD) who would have much to lose if the company folds?
What are the chances of a merger with another carrier?
However, the board of directors over the years is the real culprit.
Frankly, if it wasn't for the fact that they have had a great route structure, I think they would have been out of business some time ago. Of course, management has to be given credit for the route structure.
One of the biggest potential assets that UAL has always had is their work force, but management pays lip service to its employees.
The opposite is SWA, with their management that stays focused and recognizes the value of their work force, is the reason for their unparalleled success in the airliner industry.
05-01-2007, 03:23 PM
#4
Gets Weekends Off
Joined APC: Dec 2005
Position: FO, looking left
Posts: 1,060
I read a great article a few weeks ago about United and their fleet utilization. United has historically had a very low fleet utilization. They were able to get away with this in the 90's. Not anymore. In the last 6 months, United launched an initiative to use their fleet more. They expected to increase their capacity by 6% without adding a single airplane! It was a good idea. But it was not without its problems...
Did anyone else notice a crazy winter this year?? I spent the majority of my time between San Francisco and Denver (United's most profitable and United's 2nd largest hubs, respectivley), and it was the worst winter in Denver I had ever experienced. Chicago and Dulles had major problems (February). Couple this with a fleet that is being used more than ever before, and you will understand United's abismal numbers for ontime percentage and completion factor. First quarter 07 numbers were horrible.
United is trying to "right size" their fleet. It is a process. First quarter numbers were bad. Expect better 2nd and 3rd quarter numbers to be more in line with the rest of the industry.
That was only part of the reason. Accounting is VERY tricky. Example. When UAL exited bankruptcy, they had a $23 BILLION dollar profit. Obviously that was all on paper. This happens from time to time. You have to sometimes read in between the lines. At the end of last year, UAL switched to deferred revenue accounting for its frequent flier program, which resulted in $107 million less in passenger revenue than would have been recorded under the previous method. That was all due to accounting.
Maybe some info that looks a little better. Despite higher fuel costs, United's lowered operating costs and improved cash flow. The company cut its costs per average seat mile, a key industry barometer, by 4.3 percent from the first quarter of 2006 while operating cash flow increased 38 percent to $626 million.
Fleet utilization, terrible 1st quarter weather (exaserbated by the extensive fleet utilization), and accounting were the culprits. I don't think there is much to worry about. Fitch ratings uped United's ranking from "stable" to "positive" just this afternoon. UAL does not have a big problem.
UAL will probably be right about where it is today. Strong internationally. Domestic flights to feed the interationals. The second largest airline in the world. SFO, LAX, DEN, ORD, and IAD will still be UAL hubs...
I have mentioned this before. The days of legacy carriers folding is over for the time being. Each of these carriers have very lucrative frequent flier credit cards. United's Mileage Plus is the most profitable of them all. Banks (who have lots of money $$$) will not let these go away. You saw these banks pump BILLIONS of dollars into these legacy carriers after 9/11. All six legacy airlines will be around in 15 years (mergers don't count, these are good).
Good. Hopefully! Just when we all thought there was about to be a turnaround in the industry, 1st quarter 07 results for ALL airlines showed weaker than expected revenue. There is still too much capacity!!! It would be good to see some mergers. I am very disappointed that Midwest keeps fighting an AirTran merger against Midwest's best interests. Hopefully enough of Midwest's shareholders are smart enough to elect AirTran's candidates to the Midwest board in June!
Did anyone else notice a crazy winter this year?? I spent the majority of my time between San Francisco and Denver (United's most profitable and United's 2nd largest hubs, respectivley), and it was the worst winter in Denver I had ever experienced. Chicago and Dulles had major problems (February). Couple this with a fleet that is being used more than ever before, and you will understand United's abismal numbers for ontime percentage and completion factor. First quarter 07 numbers were horrible.
United is trying to "right size" their fleet. It is a process. First quarter numbers were bad. Expect better 2nd and 3rd quarter numbers to be more in line with the rest of the industry.
That was only part of the reason. Accounting is VERY tricky. Example. When UAL exited bankruptcy, they had a $23 BILLION dollar profit. Obviously that was all on paper. This happens from time to time. You have to sometimes read in between the lines. At the end of last year, UAL switched to deferred revenue accounting for its frequent flier program, which resulted in $107 million less in passenger revenue than would have been recorded under the previous method. That was all due to accounting.
Maybe some info that looks a little better. Despite higher fuel costs, United's lowered operating costs and improved cash flow. The company cut its costs per average seat mile, a key industry barometer, by 4.3 percent from the first quarter of 2006 while operating cash flow increased 38 percent to $626 million.
Fleet utilization, terrible 1st quarter weather (exaserbated by the extensive fleet utilization), and accounting were the culprits. I don't think there is much to worry about. Fitch ratings uped United's ranking from "stable" to "positive" just this afternoon. UAL does not have a big problem.
Where do you think UAL will be in 5, 10 years? And most of all, what will happen to the aircraft, people, and local communities of (SFO, LAX, ORD, DEN, IAD) who would have much to lose if the company folds?
I have mentioned this before. The days of legacy carriers folding is over for the time being. Each of these carriers have very lucrative frequent flier credit cards. United's Mileage Plus is the most profitable of them all. Banks (who have lots of money $$$) will not let these go away. You saw these banks pump BILLIONS of dollars into these legacy carriers after 9/11. All six legacy airlines will be around in 15 years (mergers don't count, these are good).
What are the chances of a merger with another carrier?
05-01-2007, 03:24 PM
#5
Gets Weekends Off
Joined APC: Jan 2006
Posts: 345
I am posting this thread not to bash anybody or call anybody out, but I would like to get an answer to this question. It must have been a couple of days ago, when I heard that once again United is back to its old tricks of losing many millions of dollars in its quarterly earnings reports. Back in 01, 02 , and 03, we all had the excuse of 9/11 this and 9/11 that. This time, its different as American, U.S. Airways, Continental, and pretty soon Delta are all reporting relatively descent news financially. There was another airline back in the 90s that carried this same type of trend: TWA. They seemed to be losing a bunch of money when other carriers were doing well.
What is wrong with United Airlines today?
Why are other majors doing better than United?
Where do you think UAL will be in 5, 10 years?
And most of all, what will happen to the aircraft, people, and local communities of (SFO, LAX, ORD, DEN, IAD) who would have much to lose if the company folds?
What are the chances of a merger with another carrier?
What is wrong with United Airlines today?
Why are other majors doing better than United?
Where do you think UAL will be in 5, 10 years?
And most of all, what will happen to the aircraft, people, and local communities of (SFO, LAX, ORD, DEN, IAD) who would have much to lose if the company folds?
What are the chances of a merger with another carrier?
ANd its in AC's best interest to keep united going at all costs(probably the closest airline partnership in the world).
Besides I could see other star alliance partners chipping in to help ol United out if they needed it
05-01-2007, 03:38 PM
#6
Gets Weekends Off
Joined APC: Oct 2005
Position: ERJ CAPT
Posts: 227
I would say United is preety safe.... if worst came to worst I could actualy see Air Canada sinking huge sums of money into United. Heck AC saved Continental before, invested millions in USair when they were in trouble, started up Air Jamaica. So Air Canada has bailed out ailing airlines before.
ANd its in AC's best interest to keep united going at all costs(probably the closest airline partnership in the world).
Besides I could see other star alliance partners chipping in to help ol United out if they needed it
ANd its in AC's best interest to keep united going at all costs(probably the closest airline partnership in the world).
Besides I could see other star alliance partners chipping in to help ol United out if they needed it
Well, they sure didn't help out when the ATSB refused to give UAL money after Sept 11th.
UAL's problem is simple. Glenn Tilton (CEO), Jake Brace (the CFO), and the other top management have no intention of making any money. They want UAL to do poorly, they want UAL to be a failiing airline. This is ubba-capitalism at its worst.
Glenn, Jake, Top managment, the hedge fund managers, and options traders stand to make hundreds of millions of dollars if UAL is bought out by another carrier. The drive up of the stock price, the options that they hold on shares etc, etc, etc. Companies that are underperforming are the companies that other companies raid. If all the other carriers are able to make profits, even the ones that didn't go thru bankruptcy, then why can't UAL?
Haven't you wondered why Tilton is running around everywhere saying UAL needs to merge with another airline? Sure it does, to make him filthy rich! Tiltons take if there's a merger will be about $55,000,000+ that is, based on current stock price.
Onfinal
05-01-2007, 08:35 PM
#8
Gets Weekends Off
Joined APC: Jan 2006
Posts: 345
Whaa...
Well, they sure didn't help out when the ATSB refused to give UAL money after Sept 11th.
UAL's problem is simple. Glenn Tilton (CEO), Jake Brace (the CFO), and the other top management have no intention of making any money. They want UAL to do poorly, they want UAL to be a failiing airline. This is ubba-capitalism at its worst.
Glenn, Jake, Top managment, the hedge fund managers, and options traders stand to make hundreds of millions of dollars if UAL is bought out by another carrier. The drive up of the stock price, the options that they hold on shares etc, etc, etc. Companies that are underperforming are the companies that other companies raid. If all the other carriers are able to make profits, even the ones that didn't go thru bankruptcy, then why can't UAL?
Haven't you wondered why Tilton is running around everywhere saying UAL needs to merge with another airline? Sure it does, to make him filthy rich! Tiltons take if there's a merger will be about $55,000,000+ that is, based on current stock price.
Onfinal
Well, they sure didn't help out when the ATSB refused to give UAL money after Sept 11th.
UAL's problem is simple. Glenn Tilton (CEO), Jake Brace (the CFO), and the other top management have no intention of making any money. They want UAL to do poorly, they want UAL to be a failiing airline. This is ubba-capitalism at its worst.
Glenn, Jake, Top managment, the hedge fund managers, and options traders stand to make hundreds of millions of dollars if UAL is bought out by another carrier. The drive up of the stock price, the options that they hold on shares etc, etc, etc. Companies that are underperforming are the companies that other companies raid. If all the other carriers are able to make profits, even the ones that didn't go thru bankruptcy, then why can't UAL?
Haven't you wondered why Tilton is running around everywhere saying UAL needs to merge with another airline? Sure it does, to make him filthy rich! Tiltons take if there's a merger will be about $55,000,000+ that is, based on current stock price.
Onfinal
I agree UA's top managers seem to be doing a terrible job. One day at the employee ticket office in ORD a UA captain was going on and on about how the managment has screwed everything up.
05-01-2007, 09:34 PM
#9
Gets Weekends Off
Joined APC: Feb 2007
Posts: 228
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