United Cuts Winter 2015 Capacity by 6.3 Percent

Discussion in 'United Airlines | MileagePlus' started by genemk2, Sep 23, 2014.  |  Print Topic

  1. genemk2

    genemk2 Gold Member

    Messages:
    5,830
    Likes Received:
    14,577
    Status Points:
    11,070
    Looks like UA will be cutting capacity more than it has in the past for the coming winter.

    NRT down 17%
    IAD down 14%
    DEN down 7%
    LAX down 7%

    http://www.bloomberg.com/news/2014-...ter-flying-months-before-snowflakes-fall.html
     
    Newscience likes this.
  2. Garp74

    Garp74 Gold Member

    Messages:
    2,324
    Likes Received:
    9,591
    Status Points:
    7,525
    Dislike!!!

    For selfish reasons, this drives me nuts. Last year from January until mid-March, UA took away my redeye from SEA to IAD. I lose basically an entire day when they do this, as I'm forced to wait until the next day to fly home, and with the wait + time change, I lose a day of productivity.
     
  3. HubletUAFlyer

    HubletUAFlyer Gold Member

    Messages:
    1,710
    Likes Received:
    4,373
    Status Points:
    2,425
    Wonder hoe much of the NRT loss will be offset by the new HND service
     
    Flyer1976 and Garp74 like this.
  4. Garp74

    Garp74 Gold Member

    Messages:
    2,324
    Likes Received:
    9,591
    Status Points:
    7,525
    Good question. I'm scheduled to fly DEN->NRT on the Dreamliner in February. Haven't booked it yet, and hope it doesn't drop off the schedule. I was looking forward to my first Dreamliner!!
     
  5. Wandering Aramean
    Original Member

    Wandering Aramean Gold Member

    Messages:
    28,201
    Likes Received:
    61,716
    Status Points:
    20,020
    That is a decent chunk of it.

    And I doubt DEN-NRT is gone by February.
     
    Flyer1976 and Garp74 like this.
  6. avflyer
    Original Member

    avflyer Silver Member

    Messages:
    735
    Likes Received:
    597
    Status Points:
    720
  7. lapointdm

    lapointdm Silver Member

    Messages:
    367
    Likes Received:
    537
    Status Points:
    575
    its never great to see fewer flights, but if the airline feels they can support the cost and there isn't enough demand to raise profit I guess I can see why they would do that.
     
  8. eponymous_coward
    Original Member

    eponymous_coward Gold Member

    Messages:
    1,901
    Likes Received:
    2,971
    Status Points:
    1,470
  9. redtailshark

    redtailshark Silver Member

    Messages:
    1,041
    Likes Received:
    875
    Status Points:
    895
    This isn't just about the winter reductions. The problem is, UA is shrinking its way...not necessarily to profitability, but into a hole. Commercial aviation is driven by hyper-economies of scale, including some not-very-obvious ones, and shrinkage exerts enormous pressure on the entity...to continue shrinking (e.g. lease terms become steadily less advantageous as the volume of frames diminishes; capital raising costs rise; customers begin abandoning the suddenly-too-thin airline with the suddenly-too-thin sandwiches; etc.).

    What's more, none of this organizational shrinkage occurs in a vacuum, much though Supreme Leader Jeff might like it to. Management seems bereft of any other concept, and although it might show some returns in the short-run, it's clear to all of us what is happening.

    F9 and WN are already on the plot... F9 with DEN service above, and WN reminding us with their new ad not only of their funky colorscheme but that they fly ONLY 737s. Yes, the big one (! But compared with the UX RJ, they are correct). In essence, WN is now competing on hard product basis for a higher proportion of non-OPM flyers and even some OPM folks. They are not by any means an airline of last resort. Actually, with free bag, some degree of ticket changeability for all customers etc. they're becoming AN AIRLINE OF FIRST RESORT for more people. And now they're beginning international service. It's only a matter of time before they become useful to a much higher proportion of legacy flyers. And let's not forget, Yolanda is hot... :D

    Meantime, when all we get from UA is RJ service, with no F cabins, there's reducing and non-meaningful Premier benefit, and at that point all customer tolerance for the other documented product shortcomings (e.g. connecting service at places like ORD, inconvenient schedules, not very opulent hardware, not-very-helpful CS staff, impossible irop handling with SHARES nightmares etc.) will be exceeded.

    UA is turning itself into a WN competitor. They overlook the fact that if that happens, WN will win. With UA's decline and WN's ascent, WN will churn a high proportion of UA's existing customer base. Meantime, UA will continue the descent....towards NK's level.

    What makes me laugh is how the most egregious OPM flyers believe this will happen for them in a vacuum - as if DL or UA or any legacy will continue to operate 767s and 330s with their J cabins intact if they lose a significant proportion of their Y customer base.... more room for us etc. arguments we see on FT. But the first thing to be parked/cut/returned to lessors when margins dip are the widebodies....the CR7s will remain.
     
    stephenbgarvan likes this.
  10. eponymous_coward
    Original Member

    eponymous_coward Gold Member

    Messages:
    1,901
    Likes Received:
    2,971
    Status Points:
    1,470
    Er, so WN's going to fly 737s to LHR and CDG? Or do you mean NK's going to fly A320s?

    I might note that even FR (who's even better at WN and NK's LCC game than they are) admits that you need business class to make TATL work. Even if the CEO admits it in not work safe language.
     
    redtailshark likes this.
  11. redtailshark

    redtailshark Silver Member

    Messages:
    1,041
    Likes Received:
    875
    Status Points:
    895
    As you know (and as the Leprechaunian mods over on FT don't like :)) I have respect for MOL's forthright delivery and lack of hypocrisy. Unlike many other CEOs, airline or no. As an occasional customer, I like FRs product - it delivers exactly what it claims and not a bean more and it's cheap, safe and reliable. Value is added in other ways. I love it that MOL wears an actual Leprechaun outfit while battling customers directly on Twitter.

    http://www.dailymail.co.uk/news/art...s-Michael-OLeary-takes-questions-Twitter.html

    Anyway...to the discussion points.

    It's not narrowbodies that prevent WN or others from operating TATL. You must be aware that 737s are used for TATL commercial services, and so are 319s including to LHR itself (e.g. AC YYT-LHR). As things stand, I doubt that WN would operate ISP-LHR, even with 73G, and it's unlikely that they will offer a product for those used to TATL J. However, they may well convince CUN/SDQ/SJO flyers to use them and erode the domestic customer base of OALs. It doesn't take much of a drop in widebody load factors to destroy the economics. The operational profit is not driven solely by J pax, but by the combo of J/Y/freight. When any of those are reduced significantly, the economics of the service must be reconsidered. Downgauge is the first option, followed by service suspension. My point was, even if paid J pax think those who switch to WN have no impact on TATL 767/777 flying, systemwide I bet they do. PanAm believed they could shrink their way back to profitability.....

    UA's shrinkage strategy with no end-game in clear sight suggests the initial "economies of rationalization" of merging UA/CO ops have now been superseded by a "shrink to profitability" calculus and there are good arguments why that is a risky plan in a competitive market with fewer captive customers. But they choose their path and we choose how to respond.

    From my perspective, I foresee with limited and reducing value on offer via UA Premier status, even 1K, the switch to kayaking/Optiontowning is very near. As many have said here and elsewhere, following the same logic, that won't show up fully in UA revenue until the market grows again. When it does, UA may find it harder to grow again than it now believes.
     
  12. Photonerd71

    Photonerd71 Silver Member

    Messages:
    762
    Likes Received:
    973
    Status Points:
    770
    Must be nice to have access to the inner workings of the big office building in Chicago and knowing exactly what their plan is or is not. ;)

    Sent using a small piece of fruit.
     
    Flyer1976 likes this.
  13. redtailshark

    redtailshark Silver Member

    Messages:
    1,041
    Likes Received:
    875
    Status Points:
    895
    I don't need any more access than the mandated 10-K filings to know that net fleet capacity is shrinking ;) It's true that fleet size grew by 12 aircraft between the 2012 and 2013 filings but the available seat miles (“ASMs”) (millions) declined by ~1.5% over the same period, and declined by ~3.0% between 2011 and 2013.

    ASMs from 10-K:
    2013 213,007
    2012 216,330
    2011 219,437

    2012 10-K: "Including aircraft operating by regional carriers on their behalf, United and Continental operated 629 and 624 aircraft, respectively, as of December 31, 2012. UAL’s combined fleet as of December 31, 2012 is presented in the table below:"

    2013 10-K: "Including aircraft operating by United’s regional carriers, United operated 1,265 aircraft as of December 31, 2013. UAL’s combined fleet as of December 31, 2013 is presented in the table below:"

    Load factors have increased systemwide to 83.6% in the meantime. Fewer ASMs, higher load factors - we all see and feel it if we use UA.

    Their plan behind these facts, however, is not known to me. I draw the analogy with previous efforts to shrink large airlines, which rarely end well.

    Next, I'm not the one who says they fear MOL and his ilk. From the 2013 10-K, p.17.

    "The airline industry is highly competitive and susceptible to price discounting and changes in capacity, which could have a material adverse effect
    on the Company. The U.S. airline industry is characterized by substantial price competition including from low-cost carriers. The significant market presence of low-cost carriers, which engage in substantial price discounting, has diminished the ability of large network carriers to achieve sustained profitability on domestic and international routes."

    As you see, Jeff and his cohort publicly state they believe lo-co competition already has "diminished" what they term "sustained profitability." We can debate what they mean by that but anyway this document proves they fear such competition and they acknowledge it already happens. Well duh....at least that part of the market works. UA's response to all this is what is interesting to us, right now as vested Premiers but ultimately as citizens and consumers.
     
    flyforawg and eponymous_coward like this.
  14. Flyer1976
    Original Member

    Flyer1976 Gold Member

    Messages:
    28,247
    Likes Received:
    33,912
    Status Points:
    20,020
    I was mildly surprised to see UA not operate EWR-HKG on some dates in late February. I attributed it to the Chinese New Years and the LFs being lower than average demand but there's absolutely no service to HKG on the 18th from EWR/ORD/SFO.
     
  15. redtailshark

    redtailshark Silver Member

    Messages:
    1,041
    Likes Received:
    875
    Status Points:
    895
    When major airlines stop serving HKG (e.g. DL ex-NRT, and occasional UA service suspensions) you know they're giving up on the entire intra-Asia market.
     
  16. ahappyelite

    ahappyelite Silver Member

    Messages:
    193
    Likes Received:
    79
    Status Points:
    310
    United declares war on its passengers, raises fares to absurd levels, creates a revenue miles system (easy for me 0x- = 0) the last six months and all of next year), raises reward levels to nose bleed levels, jams people into their planes, runs a schedule based only on their convenience, employs an army of minimum wage contractors with no investment in their company (Leaving out tons of other degrades here.) They can't be surprised to learn that 2015 is going to be one bumpy year for them
     
  17. Photonerd71

    Photonerd71 Silver Member

    Messages:
    762
    Likes Received:
    973
    Status Points:
    770
    Nothing like a little hyperbole to make me laugh before I go to bed. If nothing else the "sky is falling" crowd does make me laugh. :)

    Sent using a small piece of fruit.
     
    Flyer1976 and eponymous_coward like this.
  18. eponymous_coward
    Original Member

    eponymous_coward Gold Member

    Messages:
    1,901
    Likes Received:
    2,971
    Status Points:
    1,470
    I don't have problems with LCCs either, if they give me what they say they will. I've even flown on... gasp... NK. :eek:

    I'm agreed, but someone is going to fly those pax to LHR. It ain't gonna be WN/VX/NK/B6 with a fuel stop in YYT.

    I think DL is in far better shape than UA is, regardless of the *en major su clase* you go on about. For a lot of people, the FFP is way down the list below schedule, price, on time, operational reliability, and service recovery when the fecal matter hits the rotating blades. DL is demonstrably better than UA in many of these categories (though I agree that UA is in poor shape in some respects- the rounds of capacity cuts in a market where by all rights they should be doing pretty well aren't a good sign). So I would distinguish DL from UA here.

    AA is sort of a dark horse; we'll see if they pull through their merger like DL did and actually get synergy out of it (note that DL has managed to grow the airline post merger, actually adding a completely new hub in organic growth out of SEA), or if they flub the merger badly like UA has (where there are rumblings that they may pull back in places like IAD and DEN, markets that a healthy airline should have no trouble handling).

    In DL's case, dropping NRT-HKG makes sense, it's low-yielding connecting traffic, mostly. Might as well dump the NRT Interport and pull back to the USA, funnel the HKG-bound traffic from the USA through their shiny new SEA hub. I think both DL and UA are making the right move here at dumping intra-Asia for more point to point flying from the USA.
     
    Last edited: Oct 1, 2014

Share This Page