Ual Global Network

[Bigsky]

I was flying on UAL a few days ago and took a look at their Global route structure in the inflight mag. What surprised me was that the coverage looks very much the same as it did before 9/11. Well times have changed and it seems very odd to say the least that United still flys to most of these destinations(with decreased frequency). With a fairly strong group of alliance partners (Star Alliance), why not let some of the other airlines completely handle some parts of the world where United is losing money hand over fist. Is it possible that UAL is showing a profit in South America, Asia, Europe and Australia? I seriously doubt it. UAL should focus in areas of the world where at least they have a fighting chance and let the international code share partners pick up the slack. UAL is in Chap 11, time to pull in the reins and start trying to make money. It probably wouldn't hurt to UAL to choose their partners a little more wisely next time either.

cheers

big sky

 

[avek00]

Actually, the devolution of UAL international flying to the Star Alliance is arguably one of the biggest factors behind UAL's descent into financial ruin.

 

[Bigsky]

That would be hard to believe. A good example on what UAL should be doing internationally is to take a look at NW. Example NW won't fly you anywhere in South America but they will gladly sell you a ticket to IAH/ATL and let DL or CO take it from there. And visa versa in the Pacific where NW is the strongest link. As Richard says, alliances are great, you get 80% of the benefit, with none of the headaches. Watch and learn UAL.

cheers

bigsky

 

[mweiss]

True, but you don't do it willy-nilly. One of CO's issues with allying with NW and KL was KL's insistence that CO do all of it's TATL flying to AMS. CO makes a ton of money flying TATL directly to many European cities, and they weren't going to give that up just because KL told them to. And they didn't.

Might that be one of the reasons they have the second-highest RASM in the industry?

 

[avek00]

That would be hard to believe. A good example on what UAL should be doing internationally is to take a look at NW. Example NW won't fly you anywhere in South America but they will gladly sell you a ticket to IAH/ATL and let DL or CO take it from there. And visa versa in the Pacific where NW is the strongest link. As Richard says, alliances are great, you get 80% of the benefit, with none of the headaches. Watch and learn UAL.

cheers

bigsky

Keep in mind that NW did not originally offer service into South America, while UA did. The point is that the devolution of flying to Star partners has left United with a glut of jumbo jets (nearly 100 747/777 aircraft, which would have suited UA just fine if Star Alliance never came into existence) and without places to fly them.

 

[UnitedChicago]

please - star is not one of the "biggest" reasons for united's financial mess. Um hello - goodwin, contrat 2000, avolar, etc.

i don't know all the details regarding star - but if united turns an international route over to a star partner - they still provide service via star and get revenue. any international routes abondoned were not profitable.

i dont get you avek.

 

[JFK777]

UA looses its shirt in the USA against SW, JB, ATA & Frontier. UA does just fine on its international trips. UA has suffered in Asia because of Sars, but that area is coming back to pre - crisis levels. In Europe UA flies to many places but LHR & FRA are the two main points served profitably. In Latin America moving away from Miami to Iad and Ord is smart, let AA and the latins nut it out in Miami. Australia gets served twice daily to Syd from Lax and SFO, With the increasing service level from Qantas UA should add service with some of those desert 744's. Australia is limited entry with high fares, just what UA needs.

 

[Borescope]

Australia is limited entry with high fares, just what UA needs.

Your whole post makes it sound as if the only way we can make money is to go to places that are capacity controlled with high fares. Most all airlines intl routes are performing well. It's the domestic side where we need to work.

 

[whatkindoffreshhell]

Hey folks, Avolar was the right thing, just over-mangaged and poorly executed.

UA should've remained steady with Avolar. Warren Buffet thinks fractional jets are a great investment. Can you imagine how much revenue UA would be drawing now if they bought Executive Jet to feed all their int'l widebodies?

Boeing themselves confirm the long-thin-efficient-highrevenue trend with the 7E7.

Avolar appealed to the high-fare business flyer, unlike TED.

I'm sure Busdrvr can spin this.

 

[UnitedChicago]

fresh - here's a non-spinned reply to avolar.

the fractional jet business is very lucrative...and maybe it could have grown so within United. However - there was a report out as Avolar was winding down that said United's consultants (i know how you love them) grossly underestimated the amount of capital united would have had to inject to get it going and make it a profitable group.

add the labor turmoil it caused and you have an even greater hurdle to cross.

either way - they had absolutely no other choice but to close it down. they simply didn't have to money to inject - let alone meet their debt obligations.

as i recall - they actively sought (hacker later stepped in) outside investors to remove them as the primary capital source to no avail.

united learned before that as soon as you take your eye off the core airlines unit - you're asking for trouble: Allegis. How much labor turmoil did that cause? CEO departed, and United stagnated and lost their #1 rank. They refocused on UA and grew again and became #1 again.

So - that's my 2 cents. Spinless 2 cents

 

[whatkindoffreshhell]

Well said United Chicago. What if Goodwin had instead used the bucks burned in the USAir merger to get Avolar off the ground??

Lufthansa is running a very nice fractional biz using 320's out of EWR to HAM. Why couldn't UA couldn't have done the same on say MUC-ORD?

Years ago a prominent UA cargo competitor exec told me if he had the resources he'd offer the USPS a daytime haul of their mail and use the same equipment at night on UA freight. Guess what -- a few years later Fedex wins a multi-billion contract with the Post Office to do just that!

And what's that you say about taking the eye off the ball? Does that include TED?
Tell me TED is less expensive then Avolar -- I don't think so!

Allegis was a hoot! I liked Dick Ferris and his moves (Pan Am Pacific routes, Westin, Apollo) were visionary. So he threw a clunker in Allegis, everyone has an off day!

My point -- every day is change and change is good.

Maybe tomorrow there will be a change with Jake Brace!

 

[UnitedChicago]

Good point about the U acquisition.

Also agree Ferris made a lot of strategic, visionary moves - best of all was PanAm pacific. He went too far and paid for it with his job.

I really go back on forth with Ted. I will say it's not as expensive to launch Ted as it was to launch Avolar.

That's ashame about the missed opp with USPS! It's this type of deal-making and thinking that the legacies need to do.

This industry does give one a big headache many a time.

 

[JFK777]

Borescope,

The first line of my post states how bad the domestic business is for UA. But Limited entry and high fares are just what the doctor from Wall Street ordered. If I had an airline I would have only big international airplanes, no wonder Virgin Atlantic is so wonderful.

 

[boeing787]

DICK FERRIS...that name should be banned!!! Ever hear of the strike of '85. Pathetic individual.

 

[ual777fan]

Yes the strike of 1985 was under Dick Ferris reign at United. He was a decent CEO who felt threatened by the American "B" scales and wanted them. Ferris thought that one would need "B" to stay competitive. He made a series of great moves for United including the purchase of PanAm Pacific, Westin, Apollo, as well as the creation of Mileage Plus. However his fatal mistake was pressing the pilots to hard- the pilots revolted and chose Durbansky as their new leader, and the rest is history.

* edited: United bought westin(hotels), not western(airline)-typo on my part