TED doing better....can you believe it???

[General Lee]

Ted meeting targets, gaining market share
Dateline: Friday July 02, 2004

Although it has been in the air for only a few months, Ted already is having an impact on the marketplace, according to United Airlines.

In the low-fare carrier's first three months of operations from Denver, it has gained roughly 10 points in market share from key competitors, moving from 41.5% to 51.6%. Since launching operations from Washington Dulles in April, Ted has increased its market share in its markets by 17 points from 29.3% to 46.1%.

"While we continue to be impressed by the terrific operational results that employees are delivering to customers flying on Ted, the competitive impact Ted is having on the marketplace is significant…As we gain market share we are also improving the financial performance in these markets and exceeding our financial targets," Ted VP Sean Donohue said in a message to United employees.--LF



Bye Bye--General Lee

 

[Flying Freddie]

It is sorta like dating. Set your goals real low and you will be happy with the results. You Navy guys out there know what I mean.

 

[Booster]

Just curious General, do you believe the TED numbers?

 

[General Lee]

Booster,


With the new Sarbanes--Oxley legislation created thanks to the Martha Stewart and Enron dealings---is there any reason why I should not? The new rules set up by Congress really put a penalty on anyone who says things to the public media and then it turns out that they were lying. Saying things to the public that could help your stock value-- are probably true these days--unless you want to spend 3-5 in the "pen" next to a guy named Bubba....

Bye Bye--General Lee

 

[jbucpt]

Booster,


With the new Sarbanes--Oxley legislation created thanks to the Martha Stewart and Enron dealings---is there any reason why I should not? The new rules set up by Congress really put a penalty on anyone who says things to the public media and then it turns out that they were lying. Saying things to the public that could help your stock value-- are probably true these days--unless you want to spend -------



so is this the excuse your delta is using for not showing SONG'S "great" numbers, i.e. load factor, casm, rasm??????????

----------
"We don't want to kill the golden goose; we just want to choke it by the neck until it gives us every last egg it has."

 

[MedFlyer]

Booster,


With the new Sarbanes--Oxley legislation created thanks to the Martha Stewart and Enron dealings---is there any reason why I should not? The new rules set up by Congress really put a penalty on anyone who says things to the public media and then it turns out that they were lying. Saying things to the public that could help your stock value-- are probably true these days--unless you want to spend 3-5 in the "pen" next to a guy named Bubba....

Bye Bye--General Lee

Sorry General, but the Sarbanes-Oxley legislation isn't all that strong. As long as you are vague in what you say, you won't get in trouble.

Notice UAL doesn't say if TED is making money or what financial targets UAL is hitting. I'm sure UAL is gaining marketshare because they've increased capacity, but that doesn't really mean Ted is making money.

 

[rudderdog]

Market share gained from "key competitors".....

Key competitors probably meaning UAL mainline.

 

[SWAdude]

I can't understand why TED is doing well now when the Shuttle loss their ass.

SWAdude

 

[F9 Driver]

Vague is the word for sure!

The short answer General is no.

http://www.denverpost.com/framework/0,1413,36~33~2247904,00.html

UAL spokesman Jeff Green from the above article;

"United officials have long called DIA the company's most profitable hub, with its highly efficient operation trumping its relatively high costs. But Green could not say Thursday whether DIA is profitable now."

But, I thought it was...

"While we continue to be impressed by the terrific operational results that employees are delivering to customers flying on Ted, the competitive impact Ted is having on the marketplace is significant…"

Back away from the facts and keep your hands where we can see them Mr. Donohue!

(DEN)"Airport marketing director Sally Covington said United's yield - the money it earns flying each passenger 1 mile - was higher at DIA than its other hubs last year. The airport also boasts the highest average load factor - or percentage of plane seats filled - of United's hubs."

These are pre-Ted numbers she is quoting. Now with their additional market share and yield trashing pricing I'd like a look at how DEN is doing relative to their other hubs. Looks to me like Denver can stop building off the West end of A. We may be able to save everyone a bunch of $$ and just take the Ted gates. I can't immagine that any lender is going to foot the bill for under utilized gate space just so UAL can have a place holder on A. IMHO

 

[General Lee]

Hey, dudes, I just posted this article from Air Transport World---I did not write the article, and I am not making it up. Thanks to recent legislation it IS HARDER to make comments in the media that could be false. Don't shoot the messenger.


Bye Bye--General Lee

 

[chperplt]

I realize LAS isn't a good example of system load factor, but it seems like every TED flight out of there is oversold.

While waiting for my DAL flight, I'm always hearing them ask for volunteers.

 

[Cheesemo]

Everyone's load factors are sky high out of LAS. Unfortunately, the yields are in the toilet because nearly every passenger is on a cheap fare or frequent flyer pass.


Cheers

 

[Indypilot]

One person already pointed it out, but I will repeat.

Who do you think they are taking market share from?

say there is 100 flights into an airport. United has 10, that means united has a 10% market share, (if you're looking at flights, the same works for people, but this makes my example easier). Now they replace those 10 flights with ted flights, and proclaim loudly that Ted has increased market share. Duh, you just replaced high yield service with very low yield service. Notice no mention on profitability, cause if they say, "were still losing money, but we're increasing the amount of flights that are losing money", the increased market share doesn't look so good anymore.

I also get a kick how they keep proclaiming the LF is great. What does LF have to do with making money. I can fill a plane with $1 tickets and proclaim 100% load factor, doesn't mean I made money. Until they break out Ted's numbers, I will continue to be extremely skeptical.

 

[skykid]

Gen, Ted is doing better? When was it doing badly? Only been around about 3 months. The information from United in the article you posted was taken from a message to employees, not some kind of press release.


F9 Driver, you are mixing apples and oranges when you compare an article that speaks of United's overall performance at DIA, and Donohues message which was just about TED. United has a couple gates on the B concourse too. By the way, the article you linked to is almost an exact duplicate of one published in the Denver Post soon after the Ch11 filing, complete speculation round 2.

Is Donahue going to lie in an update to employees? If you want TED to fail for some reason I guess you are going to think he is. Here's the deal - the TED buses have 18 more seats than the bus that was on that route before and they are being filled. There have only been a couple TED flights that weren't already a mainline flight, so the gained market share is almost entirely coming from preexisting flights. That's what the message is saying, and United employees don't have to be told anyway, just try nonreving on a TED flight. It is unfortunate the pilots up front make less than the 737 Shuttle pilots back in the day did,with about 4 less pilots per plane, but that's the way things are headed.

 

[F9 Driver]

Sorry Skykid, but...

Incomprehensibility is exactly what Donohue is aiming for, and its what he got if you don't follow closely.

From the initial post;
"In the low-fare carrier's first three months of operations from Denver, it has gained roughly 10 points in market share from key competitors, moving from 41.5% to 51.6%. Since launching operations from Washington Dulles in April, Ted has increased its market share in its markets by 17 points from 29.3% to 46.1%."

Yet in the subsequent article I quoted UAL claims that DEN is the most profitable of all hubs. The numbers quoted to get that conclusion are from 2003 - pre-Ted - and with Ted diluting the profits (loss) in Denver we get some contradiction in what UAL says.

Like I said - VAGUE

Nobody has a gripe with those B gates by the way. The gates on A were left empty 'till the birth of Ted. Now if Ted replaced mainline flights, with the exception of FLL, it could easily fly off the B gates saving DEN, F9, and UAL a bunch of money.

 

[skykid]

F9, what? I'm trying to get a handle on what your point is. I think Donahue is simply trying to point out TED is gaining market share. Gaining market share means taking customers from competitors. For example, DEN to FLL is a TED route. Go to Spirit's web site and try to book a flight DEN to FLL in late September. It's on their route map. If they stop flying there, do you think TED's market share will go up, or down? Try Frontier's site for a DEN to ONT flight Oct 10. United flies a ton into LAX from everywhere, TED flies into ONT, which is where I like to fly into Cali for my other business because it is so easy to get in and out of if your business is north or west of LA. If Frontier quits flying into ONT with Horizon, will TED's market share go up, or down?

Don't get me wrong - I wish you well as always. This is not a zero sum game, there are plenty of pax in Denver for everybody.

 

[buzzer]

Why is it that some of you take the time to express doubt that TED might be doing ok? It's not likely that any of us actually have the facts as I'm sure UAL keeps it in close. It looks like some of us are scared of TED? I'm not certain why.

Happy 4th!

 

[crashpad]

It's not likely that any of us actually have the facts as I'm sure UAL keeps it in close. It looks like some of us are scared of TED? I'm not certain why.
QUOTE]

I agree 100%. From what I've seen (and I'm a very nosey neighbor), there is very, very little activivety at the TED gates on any given day.
Ted's more of a loose pop-gun than a cannon.

 

[46Driver]

I find it ironic that some people claim TED is making a profit - and then claim COMAIR and ASA are not making profits because you can't differentiate costs between mainline and the subsidiary. Well, which is it????

 

[buzzer]

Crashpad. I have seen the opposite that you have. Looks to me like the Ted flights are packed all the time.

 

[TWA Dude]

TED isn't a separate company from UAL so I don't see how SEC regs apply as long as UAL's results are accurate. As for how TED is doing, well, it's no surprise that cheaper seats sell. Are TED's CASM so much cheaper than Mainline that they're profitable? Only UAL knows. Wasn't Song doing great up until the moment they decided to stop growing it?

Dude

 

[merikeyegro]

Sarbanes-Oxley only makes the CFO or CEO sign the audit sheets and makes them liable for anything the accountants drum up. It attempts to promote internal policing. It doesn't force every release to be truthful. It simply allows the feds to put someone behind bars that was at the top if $hit goes south.

Since Ted is part of UAL, Ted does not likely have its own financials. Therefore, UAL can do whatever they want to make flights look profitable or whatever. Load factor, market share, blah blah blah. Let's see the income statement and statement of cash flows and we'll see where the money is. Until you are making money on operations and have a positive net cash flow, all the rest means squat. It doesn't matter if I have a business with 100% market share (monopoly). If I don't turn a profit and create cash, I will go out of business. This release is fluff.

Considering that UAL is currently running on negative equity and has negative working capital (current liabilities exceed current assets by a bunch), they're not doing too hot. $4.2B in unfunded pension alone. When was the last time an airline made $4.2B in a LIFETIME, better yet in a few years? This is going to be their Achilles' heel unless the BK judge allows it to be drastically changed. After that's done, they have to figure out how to make money again. And compete. And manage well. And have good labor relations...Best of luck, I say...

 

[vc10]

Whole TED thing is a sideshow. At the end of the day, the only thing that matters is how UAL as a whole is doing. TED is just a different coat of paint.

 

[becket]

METROJET....need i say more?

 

[buzzer]

Good point VC10. I saw UAL made the news today with some very high load factors. They just give the airline wide numbers though and don't separate out TED.