John Carr

Edited, disregard......

Grumble

Interesting take, UAL could be just too big?

http://m.barrons.com/articles/BL-SWB-32805

Saabs

I think they are arguing that they have too many destinations for their size, or too spread out.

CousinEddie

Every hub has to earn its keep. UAL has more hubs than its competitors, which produces (at least on paper) the best network in the business. Hubs by their nature are expensive to run. Therefore, they must produce a revenue premium through connecting customers of course but also through originating customers. It is crucial to have a dominating position at a hub so that any challenge to the revenue premium is minimal. When you look at hubs like DEN and LAX, UAL has significant competition. Additionally, DEN is an expensive airport to operate out of and LA is fragmented by multiple airports and plenty of competition. Domestically, IAD is a problem with the increasing avalibility of longer range flights out of DCA. The big spenders in Washington are not going to drive out to IAD if they can go out if DCA. Special Tracking is right, even ORD is questionable. If the new AA is able to operate at a lower cost while providing a superior product (which so far they are), they will beat down UAL in its hometown too. To the point where UAL can't maintain a hub there either. So, while the best network looks good in theory, in reality it is too broad to maintain when parts of it fail to deliver the required revenue premium needed to justify it in the first place.

It really sucks talking like this when we hoped that the merger would provide stability for all of us. Maybe there will be some way to overcome these issues, we will see.

Sniper

Just b/c scope allows XX RJ's doesn't mean management has to have that many. There's no limit on Guppies or Busses, just management's imagination.

Negotiating a reduction in 50 seat jets is like negotiating a reduction in 75's.

MPAdriver

New guys here so please excuse the simplistic question/observation...

If every flight is almost always, if not always full then why would you need less planes, pilots and hubs?

Simple supply and demand, the demand is still there if the supply is still being utilized/sold?

Now, if you sell all of your supply (seats) and you still are not making a profit....well you do not have a planes, pilot or hub issue, then you are either not charging enough money for the supply or you are spending to much money somewhere else???

To simple? Like I said just a new guy and no MBA but it just seems like it would make sense to me..

Dave Fitzgerald

A big part of it is the yield management system. You have to know your customers to get the right price for tickets. Along with that, giving away our former best seats, first class, for free, can't help.

Grumble

Delta has quit doing the domestic upgrade thing. To the dismay of the credit card customers, seems the people actually paying for first class were getting miffed that they were constantly sitting next to people that paid 1/10th the price and then got rolled up, which I get. Part of paying for first class, is the exclusivity of it.

Had a captain explain it to me that the computer program that drives and calculates ticket prices isn't hacking it, and that is what drove a large portion of the loss last quarter.

Skyflyin

Another article for digesting:

United Continental Holdings: Up In The Air Or Set To Crash?

tmac3333

That article is scary, because it feels like the truth.