Latest XJT info

[Plug]

Yeah, right, uh huh ?
unical's m,o, is to outsource as much as possible whenever possible.
After all, jeffry wants to run it more like a business and less like an airline.
More like a non profit and less like a business.

From a pilot perspective only....outsourcing is not a viable long term solution, regardless of what jeff wants. He most certainly will try but as they park 2.5 50 seaters to 1 70/76 seater delivery with no return to service on the 50 seaters and a decrease in block hour percentage as they get more 70/76 seaters, outsourcing pilot jobs is not a viable long term solution. Again, they are increasing Airbus block hours to cover RJ block hours because folks like XJT can't staff.

I do agree that jeff is trying to run a business more so than an airline. That may well be his undoing, we'll see.

 

[XPOO]

Since when did United announce they are swapping 2.5 50-seaters for every E-175?

SkyWest is losing absolutely ZERO 50-seaters in exchange for 40 E-175s. Mesa is exchanging absolutely ZERO 50-seaters in exchange for 30 E-175s (because they didn't have any to trade to begin with).

 

[Plug]

Since when did United announce they are swapping 2.5 50-seaters for every E-175?

SkyWest is losing absolutely ZERO 50-seaters in exchange for 40 E-175s. Mesa is exchanging absolutely ZERO 50-seaters in exchange for 30 E-175s (because they didn't have any to trade to begin with).

The CLE express operation for starters. I believe that was announced some months ago. It isn't a straight 2.5 to 1 ratio with the individual regional partner. I believe CHQ and XJT are parking 145's to allow for the 175's at Skywest and Mesa.

Either way, the UAL scope section essentially ties 1 70/76 seater (Q400's included) to the parking of roughly 2.5 50 seaters. Those 50 seaters can not come back. The total express hull count caps at 450 in a few years (there are still some 600 RJ's running around flying UA code). The RJ block hours are tied solely to narrow-body mainline block hours and have a percentage decrease as more 70/76 seaters fly UA code.

 

[catIIIc]

The CLE express operation for starters. I believe that was announced some months ago. It isn't a straight 2.5 to 1 ratio with the individual regional partner. I believe CHQ and XJT are parking 145's to allow for the 175's at Skywest and Mesa.

Either way, the UAL scope section essentially ties 1 70/76 seater (Q400's included) to the parking of roughly 2.5 50 seaters. Those 50 seaters can not come back. The total express hull count caps at 450 in a few years (there are still some 600 RJ's running around flying UA code). The RJ block hours are tied solely to narrow-body mainline block hours and have a percentage decrease as more 70/76 seaters fly UA code.

Exactly, let's hope the "Scope Choke" comes to fruition.

 

[Oakum_Boy]

Exactly, let's hope the "Scope Choke" comes to fruition.

We're all going to choke on your management's incompetence. I purchased two tickets ATL-IAD-LHR-IAD-ATL and boy, what a joke. All four legs. No wonder it was so cheap.

 

[badog]

From a pilot perspective only....outsourcing is not a viable long term solution, regardless of what jeff wants. He most certainly will try but as they park 2.5 50 seaters to 1 70/76 seater delivery with no return to service on the 50 seaters and a decrease in block hour percentage as they get more 70/76 seaters, outsourcing pilot jobs is not a viable long term solution. Again, they are increasing Airbus block hours to cover RJ block hours because folks like XJT can't staff.

I do agree that jeff is trying to run a business more so than an airline. That may well be his undoing, we'll see.

From a pilot perspective only, the BOD will decide when he goes and no strongly worded letter from ewr pilots amounts to a hill of recycled beans.

 

[Plug]

From a pilot perspective only, the BOD will decide when he goes and no strongly worded letter from ewr pilots amounts to a hill of recycled beans.

The "pilot perspective only" statement was only in reference to scope and what the future may hold. Block hours added back to mainline because UAX is having staffing issues is a sign that, from a pilot perspective, outsourcing is not a viable long term solution.

My comment about co-worker jeff is based on this guy's perspective (couldn't post the entire article because of it's size):

http://seekingalpha.com/article/2209723 ... t-to-crash

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


Another Lousy Quarter

Last week, UAL reported another disappointing quarter, with a whopping $489 million ($1.33/share) loss, which management blamed on bad weather. While the weather certainly didn't help the industry, it's hard to ignore the fact that Delta (DAL), American Airlines (AAL), and Southwest Airlines (LUV) managed spectacular quarters in spite of it. Delta did so well it forecasted a 50% dividend increase this year and initiated a share repurchase.

One key metric for the airline industry is Passenger Revenue per Available Seat Mile [PRASM], which encapsulates both passenger load and yield. DAL and AAL crushed UAL on PRASM last quarter. And the trend is not good. UAL just updated its revenue passenger miles (RPMs) for April. Although the market greeted the miniscule improvement with enthusiasm, it looks pathetic compared to DAL's and AAL's numbers.

UAL's earnings call was an embarrassment. Analysts were openly skeptical about management's explanations for the lousy numbers, as well as the rosy predictions for next quarter. One analyst referred to "last year's many excuses," while another asked, "At what quarter can we all agree that it's not working?"

So what's really going on? Why does UAL continue to underperform so spectacularly?

The Failed Merger

With the United-Continental merger supposedly consummated over three years ago, it's stunning how UAL still harbors attitudes of separate (and mutually antagonistic) companies. Amazingly, I still hear pilots and pursers making pointed references to "your Continental crew." And I often encounter phone reps, and ticket and gate agents who complain loudly and publicly how someone from the "Continental side" (or the "United side") screwed things up.

After three years, UAL has failed to consolidate union contracts. So there are parallel union cohorts that vie against one another for seniority and privileges. If you fly on United much, you've probably heard flight attendants heatedly discussing these issues in the galley - rather than, say, actually looking after passengers. This contrasts starkly with AAL, where CEO Scott Kirby attributed a record quarter to "improved morale" after its recent merger. Given all of this, it's easy to see why United is dead last in customer satisfaction.

Dead Last in Customer Satisfaction

The "Colbert Report" recently featured a teleconference with Satan. Satan apologized for not appearing in person:

The only flight to New York was in coach on United, and I spend enough time in hell as it is. . . .

According to the American Customer Satisfaction Index [ACSI], Satan has it right. While most airlines' ratings have slipped over the last two decades, United fell faster and further than any of them, settling at dead last.

According to DOT statistics, United scrapes bottom in nearly every category: worst in bumped passengers and second worst in mishandled bags, canceled flights, and overall passenger complaints. But as we'll see, that's just the beginning. UAL has made changes that are set to damage earnings even more.

UAL is Driving Away High Value Flyers (HVFs)

If you're the average guy who buys his tickets on Kayak or Expedia (EXPE), you may be disappointed to hear that the big legacy airlines don't really care about the lousy service you experience. That's because they don't make much money on you. Instead, they garner their margins from a fairly small number of high value flyers (HVFs) -- the business travelers who buy tickets only a few days in advance and pay 4 or 5 times what you pay or shell out $5,000 for International Business or $10,000 for Global First seats. These are the guys like George Clooney in Up In the Air. From the time I spend both flying and talking with other frequent flyers, it is clear that UAL is starting to drive these guys away. This is a really big deal, and we're just seeing the initial effects. DAL and AAL are both garnering 6%-7% corporate sales growth, and it's all at UAL's expense. The sections below describe why competitors will eat UAL's HVF lunch.

PQDs and "Bulk" Fares: How UAL is Telling HVFs to Get Lost

This year, UAL followed DAL's lead and implemented a "Premier Qualifying Dollar" [PQD] scheme, which requires flyers to reach certain spending levels to achieve "elite flyer" status (rather than basing status on flight miles alone). This is actually a great idea: airlines need to focus on revenue, not miles. The problem is that UAL has implemented it poorly; it doesn't count tickets from corporate in-house travel agents [like American Express (AXP)] toward PQDs. This is a big poke in the eye to the corporate traveler, who is paying as much (and often a lot more) than other fliers for these tickets. After spending tens of thousands of dollars a year on UAL tickets, a corporate flyer may find he has earned 0 status because UAL disregards his expensive Amex-generated tickets as "bulk fares." In-house travel agents are very common in mid-size companies, and these companies are precisely where a ticked-off, frequent-flying executive can easily change travel policies and switch to a different airline.

Alienating the HVF for a Few Bucks of Ancillary Revenue

United is also alienating HVFs with its aggressive sale of upgrades to non-elite flyers at time of departure [TOD]. Management probably sees this as a way to boost its "ancillary revenue" (the latest fad in airline management). But this move is set to backfire in a big way.

Here's what's happening: UAL is holding back more and more business and first class seats from HVF upgrades until the last minute and then selling them out from underneath the HVFs (for an idea of this, see diditclear.com). UAL attempts to maximize the upgrade sale with some clever price discrimination, offering the upgrades at different prices to different flyers. So for example, a flyer with no status may be offered an upgrade for only $50; whereas the HVF is offered the same upgrade for $100 (presumably because he will pay more or will be encouraged to buy a premium ticket next time). This works very nicely until the HVFs figure out that's what's going on (I have four different MileagePlus status levels within my family, so I'm able see exactly what's going on). Look at any Frequent Flyer online forum and you will find HVFs are absolutely furious about this: first their supply of free upgrades has evaporated; and then to add insult to injury, these upgrades go to non-elite flyers for half the price that was offered to them.

If you look at UAL's investor presentations, you can see they're proud of the ancillary revenue growth. But they're ignoring the cost. To garner an extra $50 or $100 from an infrequent flyer, United is risking the business of HVFs who may spend tens of thousands a year. As awareness of this policy spreads, the cost to United will be high. Whenever an HVF is denied an upgrade, he's likely to blame it on United selling it to someone else for a few extra bucks. It doesn't matter whether or not that's what actually happened. It's the perception that matters. By contrast, HVFs are much happier with their upgrade success at Delta and American, which are not emulating United's TOD upgrade scheme.

No More Real First Class

HVFs, particularly in the Pacific market, tend to value, and pay for, genuine premium service. Many are coming to realize that United pretends to have it, but no longer does. As a case in point, I don't need to look any further than the United Global First wine list on my tray table. The featured French red wine is "Chateau Greysac" - a mediocre Medoc that I bought for around $7 at Trader Joe's not that long ago. That's right: for a $10,000 fare, you get a $7 wine! Contrast that with Singapore Airlines or Lufthansa, which feature Chateau Latour and Dom Perignon. That matters a lot to brand-conscious Pacific customers. For dessert, UAL serves the same rock-hard, cheap vanilla ice cream and Hershey's (HSY) syrup that it plunks on Business and Coach. The end result is that fewer flyers are willing to pay up for premium class seats on UAL. That helps explain why UAL's yield plunged 6.3% on Pacific flights last quarter.

United's "Dark Birds:" Bane of the HVF

While other carriers have rolled out power outlets and Wi-Fi services (Virgin is 100% Wi-Fi-enabled and DAL is nearly there), UAL lags desperately behind. In fact, with many of its newest planes, UAL has taken an enormous leap backward. Because of a problem with its seat vendor, it took delivery on a whole fleet of 737-900s ("dark birds") that not only have no Wi-Fi, but also have no power outlets in any class, and no in-flight entertainment whatsoever.

That's right: for the first time since the 1950s, a major airline is flying mainline planes that don't even have functional audio, let alone video. And it's using them on long-haul flights. I suppose the good news is that flyers are spared the smarmy videos telling them about the great service they're supposedly getting. Incidentally, if you're naive enough to pay for "BusinessFirst" on these planes: the last row of BusinessFirst seats doesn't recline - not even an inch. Now you get a sense of why HVFs are fleeing UAL.

 

[wms]

Well put. With the merger done, UAL needs visionary leadership to develop the airline into what passengers want. Not the group of "it is what it is and I don't care because I got mine" types.

 

[badog]

As long as the bean counters at united continue business as usual, ie out sourcing, then united is headed for ch 11, no doubt. They've already outsourced their out station express ops to eagle and dgs to save pennies. So what makes you think that will not continue ?
Again, pilot perspective would dictate bring everything in house but that's not the modern corporate way. The cheap ba$tard that I am, I would do it the same way and I do not blame management for doing this. I blame my colleagues for selling all of us out for the, " I got mine mentality." Until someone comes up with a better plan then the race to the bankruptcy court will continue, oh wait, united is the only legacy headed that way :-/

 

[paid4training]

United needs to bring in Gordon Bethune!!!