Excuses Galore at United

A week ago, United updated its Q1 investor guidance, blaming revenue weakness on the severe weather experienced these last few months. They noted that unit revenue will be down 0.5%-2.5% this quarter compared to an initial expectation of a 0%-2% gain. Adam Levine-Weinberg at the Motley Fool thinks this is just the “latest in a long line of excuses that United’s management team has used to explain away weak results. As has often been the case, United’s excuses don’t quite hold up to scrutiny. United’s weak Q1 performance is merely one symptom of a much bigger problem: bad management.” Check out his interesting read here.

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  1. You may eventually be right, but The Street seems to love all things airline, including UAL. At or near their 52 week highs.
    True the overall tone of the equity markets is favorable, but airlines have been on a massive run.
    Perhaps being part of an oligopoly is a good thing?
    Personally, I wouldn’t go near UAL common right now(might nibbel at DAL, who knows??), but someone sure seems to like them. Most price targets are much higher.
    We shall see.

  2. I’m not going to go so far as to say that the weather is responsible for the whole decrease in unit revenue, but when you cancel 23K flights, that unquestionably has an impact, those flights amount to 5% of total flights during the quarter.

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