UAL takes advertising aim at Southwest

[SegmentKing]

Just a comment about bankruptcy & bills.

Under the BK laws, the airlines are *required* to pay their bills and keep them current according to the terms of each vendor... its when they're out is when they can start slippin again...

 

[HighFlyerMiami]

The profit of UAL's JETS IS higher than the profit from Herbs "turd birds". WN's "profit" was NOT from it's jets, it was from it's INVESTMENTS. Big differance. And if it matters, UAL will report a profit in 2006 that EXCEEDS $10 BILLION.

Ha ha ha...that's so funny. The $10 billion figure is mainly the result of a large gain from the elimination of certain debt! No matter how hard you try, you can't make this bad business come up roses.

 

[sfb]

Wow -- I am surprised that UA is as close as it is to WN in terms of employee productivity -- only a 5% difference. I would have guessed a bigger margin considering the many relative inefficiencies in UA's route system compared to WN's (i.e., many locations only having one or two large planes a day instead of more frequencies spreading out the workload over more employees instead of having a few "spikes" of activity).

Well, as I'd mentioned, the higher average stage length not to mention bigger aircraft helps out a lot; a 747-400 flying ORD-NRT generates about 2.2 million ASM's per trip. A 737-700 flying OAK-LAX only generates 46,000 ASM's. But the longer stage length also kills yields -- you can get a discounted ORD-NRT ticket for $649 round-trip which only works out to a bit over 5 cents/mile. A $49 one-way ticket from OAK to LAX gives you nearly three times the yield. United's unrestricted round-trip coach ORD-NRT fare gives a yield of 27.6 cents/mile. Southwest's unrestricted round-trip OAK-LAX fare has a yield of 34.7 cents/mile.

The three main reasons jetBlue's unit costs have been the lowest in the U.S. market are a very junior work force, large average aircraft size, and very long average stage length. The maintenance holiday has helped, as have back-loaded leases and an unrealistic depreciation schedule on heavily-utilized A320's; who really thinks that a 25-year-old A320 with over 100,000 hours will retain 25% of its value?

Of course productivity is a factor only on the cost side of the equation. The hope is that the more inefficient parts of UA's network are made up for with higher yield to address the revenue side. Just looking at a single productivity measure at two airlines with vastly different route systems is a start but only addresses part of half of the equation.

That's the business model that has to be viable for a network carrier to make it. Because the hub-and-spoke model is inherently less efficient, you have to make up for it with higher stage-adjusted yields. The long-term problem is that there are still too many hub-and-spoke airlines out there to compete in a market that will face more and more LCC penetration. Two or at most three network carriers with hubs at the largest current hubsites will suffice to give coverage comparable to what's offered today. Those network carriers can incrementally improve productivity with rolling hubs and larger aircraft in competitive markets -- but they need to be able to fill those larger planes.

 

[magsau]

Ha ha ha...that's so funny. The $10 billion figure is mainly the result of a large gain from the elimination of certain debt! No matter how hard you try, you can't make this bad business come up roses.

HA HA HA. No matter how hard you try you can't stop your jets on the runway surface.

 

[ClueByFour]

HA HA HA. No matter how hard you try you can't stop your jets on the runway surface.

Unlike UA, who came up short at MDW in 1972 due to pilot error.

But for the grace of god go I. Learn it.

 

[mga707]

Unlike UA, who came up short at MDW in 1972 due to pilot error.

But for the grace of god go I. Learn it.

Pilot error? You mean you don't subscribe to the "everything's a conspiracy" kook theory that holds that the evil shadow government brought that plane down due to it's Watergate connection? Wasn't the wife of someone involved on board carrying a large amount of cash?

 

[magsau]

Unlike UA, who came up short at MDW in 1972 due to pilot error.

But for the grace of god go I. Learn it.

Where was SWA flying in '72? Were they not ink in a pen at that point in history?

Good thing BUR and MDW were not pilot error, :blink: :blink:

Are you guys really getting a tail hook conversion?

 

[mga707]

Where was SWA flying in '72? Were they not ink in a pen at that point in history?

DAL/SAT/IAH/HOU (all Houston flights were out of Hobby as of May '72)

...but I'm sure you know that, since you're just fulfilling your usual 'wind-up artist' role.

 

[BoeingBoy]

Just a comment about bankruptcy & bills.

Under the BK laws, the airlines are *required* to pay their bills and keep them current according to the terms of each vendor... its when they're out is when they can start slippin again...

Correct for debts accrued post-bankruptcy filing.

However, debts owed on the day of filing can (and for those that are unsecured, very often do) end up being wiped out in BK for a few cents on the dollar (and that's usually paid with stock in the reorganized company, not cash) - hence they are largely unpaid.

Just like US, UA (plus DL & NW when the time comes) will realize very large "income" from writing off those unsecured debts when they emerge from BK.

Jim

 

[ClueByFour]

Where was SWA flying in '72? Were they not ink in a pen at that point in history?

Good thing BUR and MDW were not pilot error, :blink: :blink:

Are you guys really getting a tail hook conversion?

Don't work for them, but do me a favor and slap a sticker with your handle on your flight bag, so I can make it a point to bail if I ever find myself in the unfortunate situation of having you driving me from one point to the next.

 

[WNjetdoc]

Where was SWA flying in '72? Were they not ink in a pen at that point in history?

Good thing BUR and MDW were not pilot error, :blink: :blink:

Are you guys really getting a tail hook conversion?

Do you post on the SWA yahoo financial board? Is your name 5K? Come on, tell me the truth. I don't come here much anymore as it seems this bb is filling up with anti SWA posters...being dillweeds...making posts that are full of hate and incorrect info. FYI magsau, SWA started to fly in 1971, ok? Do some research man, lol.

I know lots of you SWA trolls have nothing but time on your hands as you are not working but please get a life. Sure, the airline industry has changed but don't blame SWA for your ills.

It seems like half the threads started on here are derogitory threads about SWA started by employees or former employees of other airlines. I can just "feel" the anger and hate in the posts.

Bubbleboy asks me why I don't come here much anymore, I told him I don't need all the "drama" on these boards. I don't have time to read stupid #### posted by former airline pilots that worked at UAL or wherever, and are now out of work and blame SWA for their situation. I don't have the time on my hands, like they do, to respond to every little post, to find ground incidents involving SWA and post them every chance I get. In short I don't have the time to be a message board troll...get a life fellas.

You people make me want to hurl!!

 

[KCFlyer]

I told him I don't need all the "drama" on these boards. I don't have time to read stupid #### posted by former airline pilots that worked at UAL or wherever, and are now out of work and blame SWA for their situation.

They blamed SWA 3 years ago for their plight. Today however, they seem to take a weird kind of pride in undercutting SWA pricing which causes them to still lose money, but point to a 10 billion dollar "profit" that comes at the expense of screwing creditors as proof that SWA should be shaking in their shoes. I wonder who they'll blame after they emerge from their 3 years in bankruptcy court and find managment knocking on their door asking for more cuts and concessions in order to "compete".

 

[magsau]

Today however, they seem to take a weird kind of pride in undercutting SWA pricing. I wonder who they'll blame after they emerge from their 3 years in bankruptcy court and find managment knocking on their door asking for more cuts and concessions in order to "compete".

Oh you want cheap tickets yet you don't want UAL to sell cheap tickets. UFB!!! I wonder who YOU will blame when SWA winds up TU in 3 years. Top of the mountain means everyone is looking for you. The legacy carriers are reorganizing and according to Air Transport World this month: "the lcc's are the ones that will be in trouble".

So enjoy KC. Let's wait and see what happens. You predicted UA would not exit along time ago. So you have been proven wrong on more occasions than you have ever been WRIGHT. Oh hate to bring up that word......Wonder what will happen when AA comes to DAL and kicks the herb turd$ all over the block.

 

[KCFlyer]

Oh you want cheap tickets yet you don't want UAL to sell cheap tickets. UFB!!! I wonder who YOU will blame when SWA winds up TU in 3 years. Top of the mountain means everyone is looking for you. The legacy carriers are reorganizing and according to Air Transport World this month: "the lcc's are the ones that will be in trouble".

So enjoy KC. Let's wait and see what happens. You predicted UA would not exit along time ago. So you have been proven wrong on more occasions than you have ever been WRIGHT. Oh hate to bring up that word......Wonder what will happen when AA comes to DAL and kicks the herb turd$ all over the block.

Do I want cheap tickets? Sure. Would I like to see all airlines make a profit? You betcha. Do I want to see airline employees subsidize low fares. Nope. But when your "strategy" has been to cut costs to compete with the Southwest's, Airtrans and JetBlues of the world, then promptly proceed to undercut the fares they offer, then one has to wonder how long it will be before managment approaches you yet again for more cuts and concessions, and to wonder if this "pride" in undercutting fares was worth it all.

You predicted UA would not exit along time ago.

Key phrase..."a long time ago". Because UAL has been operating in Chapter 11 for a long time. Much as I disdain bankruptcy protection, I have to admire US for at least not lingering in bankruptcy court for 3 years, as UAL has done. IMHO, if you couldn't get your act together in 365 days, then you should have shut your doors.

Wonder what will happen when AA comes to DAL and kicks the herb turd$ all over the block.

Not sure that coming to DAL is a real smart move for AA...but if they come in and don't use it as an excuse for filing bankruptcy, more power to them. Indeed, if AA opts to stay at DFW and eventually DOES kick SWA's butt, I'd applaud them for competiting - without screwing their creditors. AA could have just as easily entered bankruptcy along with UAL...remember that a couple of the jets on 9/11 bore the AA logo, and AA was in the middle of digesting what I still believe was an ill advised "merger/purchase" of TWA at the time. Yet they didn't opt for bankruptcy, and they are one helluva strong competitor...and they aren't going to be able to show any "profit" from writing off debts that they had on their books.

As a matter of fact, if SWA doesn't fly where I'm going from my one horse town, AA is my next choice. Due in large part to two things - one, they didn't stiff creditors in order to compete, and two - I haven't noticed any AA pilots on here spouting hatred of an airline, hatred of a community, and an overall condescending attitude towards their customers or potential customers. You've done more to keep my travel dollar from going towards a ticket on UAL than anything else. Of course, UAL is too good for my travel dollar, and apparently, the travel dollar of Kansas Citians. Y'all just oughta cede the KC market to Frontier and American - why waste the jet-A flying into a place with customers you find less than desireable?

 

[magsau]

Key phrase..."a long time ago". Because UAL has been operating in Chapter 11 for a long time. Much as I disdain bankruptcy protection, I have to admire US for at least not lingering in bankruptcy court for 3 years, as UAL has done. IMHO, if you couldn't get your act together in 365 days, then you should have shut your doors.

You must have misssed the ATSB process in 3 year timeline, the renegotiations of all contracts, the SARS, the bird flu. The ATSB was the longest drawn out process if you remember. Sure you don't but you can do find the info if you need. The ATSB said no, told UAL to redo the offer, UAL revamped and then said no again. You should be happy they said no, right? But of course facts are lost on you.

Here is fact you might be able to wrap your bean around. Another AFC Championship day and no Chiefs. Good thing you have the SOD GOD in KC. At least somebody gets to go the big show.

As for AA. Go right ahead. I hope you waste your money on them and your waste your time on LUV. Bet you fit right in with the drunks and convicts that they feature on the tv show.

Gotta go. Watching a couple of teams play championship football.