Future of United???

[Iced_up]

that still leaves a good number of years before they go "belly up".

I wouldn't consider 3.2 year very long in the grand scheme of things.

 

[JimNtexas]

How can United compete with Southwest, Jet Blue, and other low cost carriers? Their costs are so high in comparison, and the culture of both labor and management seems very dated and inflexible.

The only difference between Southwest and United to the passenger is that you can reserve a seat on United. People won't pay extra just for that.

It's like watching a Greek tragedy. You know what the outcome will be, but it hurts to watch.

Jim

 

[Wiggums]

What has changed so suddenly that United cannot compete with low fare airlines? Hasn't United been completing with low fare airlines like Southwest, America West, People Express, and New York Air for over twenty years?

 

[habubuaza]

There are so many variables working against Airlines like United. First of all companies like United don't have a lock down on reservations and travel agents. The internet took care of that. They don't have a lock down on the Business travelers market fractional jet ownerships took care of that. And the forgotten economy traveler, the segment of the traveling public that has been forgotten for so long, well JetBlue, SWA and Airtran took care of that. Combine that with massive debt. Combine that with shriveling revenues from cargo and mail. Combine that with out of control labor costs. Last I checked Frontier wasn't doing too bad out of Denver. And who does United pair up with USAirways. It's like 2 rocks tied togethor in a lake. They don't even have a CEO for Christ's sake. I think that United, American, Northwest, Continental, and even Delta have big big problems ahead.

 

[TIMP]

Without getting into a quantitative balance sheet analysis I personally can't see how UAL can survive in the future unless they go through some MAJOR structural changes in management, operations, and labor/management relations. They are so large and regimented that they can't seem to adapt to change quickly enough to accommodate unforeseen economic pressures (not just speaking of 9/11).

Unfortunately, I think this is the inevitable fate of any "old school" company that grows so large. Kind of like "hardining of the arteries". Survival is possible, but only through painful restructuring (IBM and Sears come to mind). All those low cost carriers like JB, SWA, etc, are still small enough to flex against pressure. And when they do increase in size they need to work hard to maintain their operating principles that kept them healthy.

UAL and DAL remind me of "full service stock brokers" whereas JB and SWA are the discount brokers. Most of my friends, including myself (average middle-class Americans), go for what ever is cheaper as long as it's not unreasonably inconvenient and gets the job done. For me meals and seat reservations can't justify and extra $200-300.

I do hope they pull through, though.

 

[publisher]

difficult

It is difficult to change the direction of this huge ball rolling down hill.


Some years back, I had a 135 operation within a public company. The employees could not figure out why I was so tight about expenses because "the company has plenty of money." I was constantly explaining that they got that way because they did not tolerate losing operations. If we did not make money, the operation would be shuttered.

United has a bunch of people who seem to think that the point of that story does not apply. It has money and should keep going and paying until there is no more. Meanwhile, a strategy to make profits seems elusive as is the leadership to get there.

For every minute that it takes to get going forward, it will take two minutes to get 30 seconds back. They need to find where they are strong, international, Chicago, etc and try to build back from there.

This is unfortunately not the time to be one of the high cost airlines.