United Has Flown Past Merger Disruption: Analysts

Discussion in 'United Airlines | MileagePlus' started by sobore, Jul 23, 2012.  |  Print Topic

  1. sobore
    Original Member

    sobore Gold Member

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    http://www.thestreet.com/story/1163...erger-disruption-analysts.html?cm_ven=GOOGLEN

    Among airlines, United(UAL_) probably reported the most disappointing first-quarter results. But some analysts now believe that United's tough merger transition is behind it.

    In the first quarter, the world's biggest carrier said it lost $448 million primarily because of costs associated with the integration of reservations and revenue management systems following the merger with Continental. The conversion required 1.7 million hours of training, upgrades to more than 12,000 workstations, migrations of more than 17 million passenger records and reductions in booking levels in order to better manage the transition.

    Rival Delta(DAL_) and United had nearly identical first-quarter revenue of around $8.5 billion (American(AAMRQ.PK) had $6.5 billion.) yet Delta reported a loss excluding items of $39 million.
    Nevertheless, United's July 10 schedule change announcement prompted two veteran analysts to conclude that UA's problems may be behind it.

    Read More: http://www.thestreet.com/story/1163...erger-disruption-analysts.html?cm_ven=GOOGLEN
     
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  2. HeathrowGuy
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    HeathrowGuy Gold Member

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    The analysts are wrong. History shows that it takes at least six months for a large merged airline to work through merger related disruptions. And that will hold true here, too - United will not begin to operate at normal levels of performance until September/October at the earliest, once redeployment has increased to a large enough degree to rebuild flexibility back into the system, new procedures in multiple departments become fully known and adopted throughout the workforce, and the IT folks get a better handle on the remaining gremlins that wreak havoc at the worst possible moments.
     
  3. Sedosi

    Sedosi Gold Member

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    Analysts are like economists, reporters can always find one whose opinions will dovetail with the main thrust of their story.
     
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  4. 2soonold
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    2soonold Gold Member

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    I agree with Heathrow Guy.
    I learned my lesson with Delta/Northwest.
    Having a merger?; I think I'll pass.
    Having a bankruptcy?; see ya later.
     
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  5. Captain Oveur
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    Captain Oveur Gold Member

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    And not to mention a reservations system that is the equivalent of going from Windows to DOS.
     
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  6. tommy777
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    tommy777 Co-founder

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    LOL.. No more drugs for the analyst. They have flown past merger disruptions? If we set aside all the things that annoy us, the airline is dead last of all US domestic carriers when it comes to ontime performance, luggage etc etc.

    They are pretty far from being out of the woods yet.
     
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  7. radonc1951

    radonc1951 Gold Member

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    Let's not forget that labor union negotiations have to be included in any airline merger. US is still, years later, dealing with those issues and I am sure they are still impacting the bottom line.
    I fly plenty with UA and I have noticed that things are running more smoothly now then several months ago, but I know better. I also see that they cost a whole heck of a lot more, too.:mad:

    I will allow at least 1 year if not more to allow things to gel.
     
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  8. 8MiHi

    8MiHi Silver Member

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    I agree with the points made here. While all of my flights since 3/3 have gone well, I have had significant on-line glitches (pre and post flight) and pricing is becoming a concern. The labor issues are likely to be very consequential or they may surprise us and show that they are working things out. We can hope...
     
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