Imperial Capital analyst Bob McAdoo downgraded United yesterday, saying it will take the carrier years to catch up with its competitors and recommended that the Dulles hub be closed. His chief arguments are the overlap with Newark (EWR), located 230 miles north and the fact that “local passengers prefer flying from DCA”.  Hmm, 230 miles is a long way (5 hours with current traffic conditions on I-95) and I’d imagine the last thing anyone in DC wants to do is fly up to New York to make an international connection. DCA of course has slot and mileage restrictions (1,250 statute miles in any direction nonstop).  Anyway, here’s his viewpoint. What do you think? Courtesy of TheStreet:

“From a trading perspective, shares of UAL may continue to move upward as sector sentiment remains positive,” McAdoo wrote. However, he said, “United’s presentations and published plans (indicate it) will take at least four years to close $2 billion of the gap on American and Delta .”Importantly, during those four years, Delta and American will be similarly working to increase earnings,” he wrote. Year-to-date, United shares are up 10%, while Delta shares are up 43% and American shares are up 76%.
Regarding the presentation United executives made at the November investor day event, where they outlined a $2 billion program of cost and revenue improvements:

It “seemed more likely to be found in a typical operating department’s annual budget presentation than in a corporate presentation as to how United’s results would be lifted to record levels,” he wrote, noting that adjustments such as reducing overtime “will not close the gap with Delta and American.” What United should do, McAdoo argued, is to close the Dulles hub, given its proximity to the hub in Newark, N.J. Other airlines have realized synergies by closing hubs that are close together, he said, and United has already moved to close its redundant Cleveland hub. Moreover, local passengers to Washington generally prefer to fly to US Airways’ hub at Reagan National. McAdoo estimated that at best, Dulles flights can get only 20% to 30% of local traffic to Washington.”United would not operate two payroll departments, so we wonder why it would operate two hubs only 211 miles apart?” McAdoo asked. “Both hubs connect traffic from the eastern third of the country to Europe (and) connect north/south domestic traffic. By eliminating the smaller of the two hubs, United would see outsized savings and improved profitability across the entire United route network.”

The Washington hub was created to compete with Continental’s Newark hub. The two airlines merged in 2010, yet “almost four years after the merger, it is still competing,” McAdoo said. “Today the Dulles hub is the smallest in the northeast, carrying fewer passengers to Europe than Newark, than Delta at JFK or American Airlines/US Airways in Philadelphia.” In fact, Newark, with 32 daily departures to Europe, is the largest and strongest of the four. Yet curiously, United flies Boeing 757s on two-thirds of its flights to Europe. “Typically a carrier would place its largest aircraft in its largest hub, especially if the hub were slot-limited,” McAdoo wrote. “By upgauging these aircraft, we believe United would be able to move traffic currently connecting to Europe over IAD to EWR.

“United’s cuts in Cleveland set the standard for whether to unwind the Washington Dulles hub,” McAdoo noted. In Cleveland, he said, 17 markets with less than 10 local passengers per flight and 16 markets with generally 11 to 30 local passengers per flight were eliminated as of next month. Using the same metrics in Dulles, 65 spoke routes would be cut.

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Posted by Adam | 19 Comments

The Association of Flight Attendants celebrated as United’s no-booze policy (implemented only 24 hours earlier) was canned. I first posted about the disagreement late last May but just discovered that the follow-up post a day later was mistakenly restricted. Thanks again to John from Brg for sharing:

A rule banning attendants from possessing alcohol while on duty, even in luggage, was withdrawn within a day after United announced the move, a union spokeswoman, Corey Caldwell, said in a phone interview yesterday.  “In less than 24 hours, AFA was able to pressure management into reversing the policy,” Caldwell said. While attendants accept existing rules against on-the-job drinking, they objected to the reach of United’s regulation, she said.

United “chose to update” its alcohol rules during a “regular review” of company policies, according to a statement from the carrier. “After we received feedback from our flight attendants, we rescinded this policy for further review.” Megan McCarthy, a United spokeswoman, declined to comment beyond the statement.

Caldwell said some attendants saw the alcohol regulation as infringing on their rights. For example, the policy would have barred an employee from buying a bottle at a wine shop during a long layover and taking it on board in luggage, Caldwell said. “No one knows where this came from,” Caldwell said. “There was no incident, no triggering factor. It just came out of left field.” The union learned of the change on May 21 when United disclosed it in an internal publication called “Inflight Services Weekly.” The regulation said flight attendants weren’t allowed to possess alcohol at any time while on duty without management’s permission.

United made an exception for alcohol bought between flights at a duty-free shop, and required a receipt in such cases, according to the airline’s statement.

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Duty Free

Posted by Adam | 4 Comments

It’s time to find a new CEO who understands how to run an airline, not just make excuses for his failures

No one else has a greater financial stake in United Airlines than the collective stake of our pilots. Our careers should not be jeopardized by the worst senior management in the airline industry.

We have absolutely zero confidence in the ability of present management to lead a turnaround

A disengaged and incompetent CEO is leading a terrible management team. A merger that should have been completed in three years or less remains incomplete after nearly four years. Interdepartmental communication and cooperation are nearly nonexistent

We have terrible employee morale and excessive outsourcing have combined with chronic operational and IT issues to drive away our elite frequent fliers in droves, driving our revenue and PRASM downward

United should be the industry leader, with the largest population and origin/destination traffic demand in our hubs and as the largest airline across both the Atlantic and the Pacific. Instead, we are always the laggard. As in past quarterly updates, we once again hear excuses as to why United is unable to perform while we watch all of our competitors earn high and record profits.

Delta and American get the suits, we get the flip-flops and backpacks

It is time to demand leadership that is actively engaged in employee morale, operational excellence, and service quality, which will always drive revenue far higher. United should be the industry leading airline. That will never happen under present management.

Pretty interesting…these are a few of the quotes from a letter sent by three top officers of the largest local chapter of the United pilots union representing NY/NJ based pilots to their 2,300 members. The letter was sent one day after UA reported a loss of $489 million excluding items for Q1. 

HT – Thanks to Mark from Yahoo! for providing the quotes!

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Posted by Adam | 6 Comments

The Fidelity promos for AA, DL, and UA have been around for some time and offer an easy way to earn up to 50,000 bonus miles for depositing $100,000 in a new or existing account each year. Back in 2010/2011, the promos were extremely lucrative as you could double-dip by signing up for more than one partner promo per year and you were even able to cycle your money into and out of your account to reach the “100,000″ requirement. However, in recent years Fidelity has placed more scrutiny on both the rolling 12 month limitation and the cycling of funds to reach the 100k threshold (some still report this working but others have been warned). One positive change is that all three offers are now open to existing account holders and no longer limited to new customers (though there were ways around this requirement as well).  I followed the rules on this promo and signed up for the AA promotion in December 2011 and received 50,000 miles after maintaining 100k in the account for six months. I then pulled the funds and redeposited them in December 2012 to take advantage of the UA promotion. While the miles took almost eight weeks to post in 2012, in 2013 they posted to my United account after only 5 1/2 weeks. Back in December, I repeated the process again but went back to the AA offer (it had been well over the 12 month mark since my last December 2011 AA offer).  Though it’s rare for Fidelity to try to pull the miles back, I’m maintaining the funds in the account until the nine month mark as I want to be able to take advantage of the promo again next year. Yes, for 2014 Fidelity has changed the T&Cs to require that you keep the funds in your account for 9 months instead of the former 6 month requirement. They may clawback the miles if you do not meet the new terms. Note that there is still no requirement to actually engage in the purchase or trading of any stocks.

Remember, the bonus limitations are based on your social security number, so you can withdraw the funds, sign your spouse or significant other up for the promo, and then redeposit those same funds to qualify them for the bonus. An Apple $500 gift card offer is also available.

AA Offer 
DL Offer
UA Offer
Apple Gift Card

Questions? Check out this flyertalk thread for further details.

Posted by Adam | 7 Comments

United Airlines is preparing to launch a brand-new service for in-flight movies that will be exclusive to Apple’s iOS devices. The service will allow passengers to stream around 150 movies and 200 TV shows to their devices completely free while mid-flight. United plans to start rolling out the service as soon as April for some flights. The hardware to support the system needs to be installed in each plane individually, but United is hopeful that its entire domestic fleet will be outfitted with the technology by the end of the year. The service will be accessed through the free United Airlines app. Laptop computers will also be supported with a browser plugin, but other types of mobile devices, such as those running Android or Windows Phone, will not be supported at launch.

Thanks to 9To5MAC for sharing!

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Posted by Adam | One Comment

Not that stealing passenger luggage is ever OK, but this just seems in particular bad taste and includes impersonating a passenger in order to return luxury clothing items to Nordstrom…all by a United customer service representative. Flyer-friendly! From the SFGate:

A man who worked for United Airlines and his wife have pleaded no contest to grand theft and possession of stolen property for stealing the luggage of passengers who were supposed to fly into San Francisco International Airport but were diverted because of the Asiana Airlines crash, prosecutors said Tuesday. Sean Sharif Crudup, 44, of Richmond and his wife, Raychas Elizabeth Thomas, 32, entered the pleas Monday in San Mateo County Superior Court. They face up to a year in jail when they are sentenced May 13. Among their victims were a Richmond couple returning home from vacation who were to have flown into SFO on July 8 but were unable to because of the crash of Asiana Airlines Flight 214 two days earlier. But their luggage made it to the airport, and when they went there to pick it up, it was missing. Surveillance video captured Crudup, who was employed as a United customer service representative, stealing the bags and handing them off to his wife and another woman, authorities said. Among the items inside the bags were valuable clothing, and Thomas — posing as the person who bought it — returned “a large quantity of it” to the Nordstrom at the Stoneridge Mall in Pleasanton for about $5,000, Guidotti said. The two were arrested when Thomas was catching a flight to Hawaii, Guidotti said. More property from the victims was found at their home, authorities said.

United-Campaign-billboard_524x210

Posted by Adam | 4 Comments

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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UATP

Posted by Adam | 4 Comments

United Airlines today announced that they will introduce nonstop flights between LAX and Melbourne, Australia (MEL), effective Oct. 26, 2014 (westbound). They’ll fly the route six times weekly with Boeing 787-9 Dreamliner aircraft.  United is the North American launch customer for the 787-9, and this will be its first international deployment of the aircraft type. They’ll also announced they will be canceling their Sydney (SYD) - Melbourne flights. From the press release:

“We are excited about using the newest version of the Dreamliner, the 787-9, to provide nonstop trans-Pacific service to Melbourne,” said Jim Compton, United’s vice chairman and chief revenue officer.  “Our customers on these new flights will enjoy a more convenient itinerary, as well as improved inflight comfort and amenities. At the same time, we will seek to make changes to our Sydney schedule which will enable faster connections via our San Francisco and Los Angeles hubs from points throughout the Americas.”

Flight Schedule
Flight 98 will depart Los Angeles at 10:30 p.m. daily except Tuesday and Thursday and arrive in Melbourne at 9:15 a.m. two days later (all times local).  On Thursday, flight 98 will depart Los Angeles at 9:30 p.m. and arrive in Melbourne at 8:15 a.m. two days later (all times local). The flights to Melbourne will not operate on Tuesdays.

On the return, flight 99 will depart Melbourne at 11:15 a.m. daily except Thursday and Saturday and arrive at Los Angeles International Airport at 6:50 a.m. the same day. On Saturday, flight 99 will depart Melbourne at 3:15 p.m. and arrive in Los Angeles at 10:50 a.m. the same day. The flights to Los Angeles will not operate on Thursday.

Flying times will be approximately 15 hours, 45 minutes westbound, and 14 hours, 35 minutes eastbound.

Convenient Connecting Flights
United has timed the new flights to conveniently connect at Los Angeles with an extensive network of service throughout the United States, Canada and Latin America.  United and United Express jointly operate nearly 200 flights daily from Los Angeles to more than 65 destinations. With this new service, United will provide convenient one-stop service to Melbourne from more than 37 U.S. cities.

Sydney Schedule Changes
With the launch of nonstop Los Angeles-Melbourne service, United will end service between Melbourne and Sydney.  The airline will seek to retime its daily departures from San Francisco and Los Angeles to Sydney in order to allow a greater range of connections beyond the hubs and to provide more convenient arrival times for customers on connecting flights from Sydney to New York and other East Coast destinations.

Onboard Products and Services
The Boeing 787-9 aircraft operating the new Los Angeles-Melbourne service will offer a total of 252 seats – 48 in United BusinessFirst and 204 in United Economy, including 63 Economy Plus seats with added legroom and increased personal space. United BusinessFirst offers a superior business-class service. The BusinessFirst flat-bed seat reclines 180 degrees and features an on-demand entertainment system with touch-screen monitors. BusinessFirst amenities include power outlets, USB ports and multi-course meals with complimentary premium wines and spirits. Economy Plus seats offer up to five inches of extra legroom, and both Economy Plus and United Economy seats feature adjustable headrests, power outlets and personal seat-back monitors delivering a multi-channel inflight entertainment system on demand.

United in Australia
United started service to Australia in 1979 and today operates more flights to more destinations in Australia than any other U.S. carrier, with daily flights from its San Francisco and Los Angeles hubs to Sydney and Melbourne and twice-weekly service to Cairns from Guam.  The airline will begin introducing Boeing 777-200 aircraft to replace Boeing 747-400s on its trans-Pacific services to Australia at the end of March 2014.

UA Dreamliner

Posted by Adam | One Comment

Earn 600 United MileagePlus miles for joining another survey site and completing your first survey. The offer is only open to United MileagePlus credit cardmembers and Premier members. I signed up and completed my first survey yesterday but have no idea how long these will actually take to post. The T&Cs state that you should allow 6-8 weeks for posting. Click here to sign up and for full details.

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Posted by Adam | 3 Comments

Last week United sadly announced that they were de-hubbing Cleveland (CLE) and yesterday they detailed their exit strategy by month:

  • April – Hartford, Conn.; Burlington, Vt.; Manchester, N.H.; Madison, Wis.; Oklahoma City; Philadelphia; Providence; Raleigh/Durham; and Montreal
  • May – Nashville, Charlotte, Minneapolis and Louisville
  • June – Atlanta; Austin; Bradford, DuBois, Erie, Franklin, Harrisburg and Pittsburgh, Pa.; Columbus; Dayton; Flint and Grand Rapids, Mich.; Greenville/Spartanburg, N.C.; Indianapolis; Buffalo, Jamestown, Rochester and Syracuse, N.Y.; Parkersburg, W.Va.; Phoenix; Richmond, Va.; and Toronto.

The Cleveland Plain Dealer adds the following:

However, Bradford, DuBois, Franklin, Jamestown and Parkersburg are “essential air service” destinations, towns where flights are subsidized by the Department of Transportation as part of a federal program to serve rural communities across the country that otherwise wouldn’t have scheduled air service. That means that United’s decision to quit those flights needs a DOT signoff. Hopkins spokeswoman Jackie Mayo said the airport is evaluating the impact of the flight reductions on all airport projects, including plans to spend about $57 million to buy Airport Fast Park and Park Place, two lots on Snow Road that are served with shuttle buses to the terminal about a mile away. “Given the recent nature of the announcement and the complexity of many of our projects and initiatives, no determination has been made as to a change in direction relevant to our projects at this point,” Mayo said in an email. Except for the flight to Phoenix, the non-stops that United is cutting were flown by regional jets and turboprops, mostly 50-seaters that are uneconomical to operate. United last week also cited a shortage of pilots for regional airlines as one reason for its Cleveland downsizing. Average daily departures on United regional planes at Hopkins will decline from 174 to 47.

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Vintage CLE UA

Posted by Adam | One Comment

This is part one of a fifteen part trip report from my travels to the Maldives and Dubai. This report covers my award positioning flight from JFK-LAX on United in Economy Plus.

The one-way flight was priced at 12,500 miles in Economy Plus and we were using it in order to connect to my first ever Emirates First Class A380-800 flight, LAX – Dubai (DXB). Why the additional flight when Emirates has two daily flights to Dubai from JFK…and there was award availability in Business? Simple, I wanted to experience Emirates First on the A380 with private suites and in-flight shower, take the 3rd longest flight in the world(no more EWR-SIN or LAX-SIN), and 12.5K miles extra to do all that seemed reasonable enough. Plus I got to sample the new Economy Plus - United Completes Transcon 757 Renov – Comparing to AA & DL Upgrades.

UA BP JFK-LAX

Now, a few questions I know will come up.

1) How did you get Premier Access and Economy Plus seats after recently writing about United downgrading your status? That’s thanks to my friend Michael. He has Premier status and booked the JFK-LAX flight for me after I transferred him 25K UR for two tickets …thanks Mike!
2) Why didn’t you combine your Emirates flights with Alaska operated flights to save points and get yourself to LAX? Well, there’s only one flight per day and we would have had to fly EWR-SEA-LAX with a layover in Seattle overnight.

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The flight boarded a bit early and all seemed nice enough. The Economy Plus seats had decent legroom, a USB input to charge my iPhone, a standard outlet to charge my laptop, and a great selection of complimentary in-flight movies, especially new releases . The  9″ monitor was much clearer and had better quality than the screen found in most domestic economy seats. Row 21 had even more legroom than the other Economy Plus rows.

New UA PS 5

 

United JFK-SFO Economy Plus11 United JFK-SFO Economy Plus10 United JFK-SFO Economy Plus02 United JFK-SFO Economy Plus09 United JFK-SFO Economy Plus07 United JFK-SFO Economy Plus06 United JFK-SFO Economy Plus08

About 30 minutes into the flight we began to notice a burning smell coming from the galley. Five minutes after that the TVs shut off and the power ports stopped working. We next noticed that the flight had gone from being extremely smooth to having rough air over the wings and there was a strange sound. A flight attendant soon came on the PA to tell us that there was an “oven smoke event” which had cut the cabin power. He told us that out of an abundance of caution we were going to dump fuel and return to JFK. The crew made several announcements to explain the bumps caused by the fuel discharge and to assure everyone that we were never in any danger. I found the announcements to actually be quite strange, they definitely weren’t “as per the manual”. Every 3-5 minutes, the same flight attendant would come back on the PA and say “I am letting you know that you are currently not in danger nor at any time during this flight were you in danger. We are dumping fuel and returning to JFK out of an abundance of caution. Again I repeat, you are not in any danger”. Hmm, I’d say those constant announcements stressing “danger” made things more tense rather than providing a calming effect. However, I think it’s important that during an event like this United made announcements every few minutes to keep everyone updated and informed. About 20 minutes later we landed heavy and safely back at JFK to a fire escort.

United JFK-SFO Economy Plus01 United JFK-SFO Economy Plus03 United JFK-SFO Economy Plus04 United JFK-SFO Economy Plus05

Aircraft maintenance boarded the plane and inspected the ovens while we were all kept in our seats. After 30-45 minutes they decided that we would have to switch aircraft. The pilot informed us that we would be taking one of the jets that was bound for SFO and those passengers would have to wait for a replacement aircraft. I didn’t exactly believe him as that flight was scheduled to leave within one hour, the plane was already parked at the gate, and the screens were showing an on-time departure. I checked with the agent when I got back into the gate area and she told me that there were “plenty of spare planes at JFK” and that we were definitely going to be boarding soon.  Hmm, really, lots of UA spare planes at JFK? I still didn’t believe it and found the pilot in the gate area. I told him about our LAX-DXB flight (he wanted to know why we weren’t just flying from JFK ;-)) and he said there was one extra plane and that we would be boarding within 30 minutes. In the end it was a 2 hour delay back at the gate with a new anticipated departure at 2:35 pm. Wow, we went from having a long connection in LAX to less than 1 1/2 hours. I knew that we couldn’t’ have any further delays or we would likely miss the connection. Once we returned to the gate, status was enabled again, here’s what it looked like at first before the additional delays.

United JFK-SFO Economy Plus12

One thing United needs to work on in situations like this is their flight status communication online and via the phone. My Mom did not appreciate  the “call united for flight information” message she received when checking our flight online or the “we have no updated status” she received over the phone.

Now luckily when checking in at JFK, I asked the United agent to interline our luggage, traveling on UA from JFK-LAX and then on a separate Emirates award ticket from LAX-Dubai and Dubai – Male. I knew it was a bad sign when she asked me what interlining was. I explained the concept and she responded “ohhh you want me to check your bag to your final destination including the other carrier portions”. She had no idea where Male was and was having problems getting the dates to work out (leaving on Monday and connecting to a Weds. 3am flight), but I pressed ahead anyway. I was worried at first, but checked the baggage sticker and decided to give it a go. If we had not done this, it’s likely our bags might have missed the connection as we arrived with just over an hour to spare.

Luggage 21

When checking in with Emirates at LAX they could “not yet see the bags” but told me to check again at the gate. The gate agent said the bags had just then been received and we were good to go. He didn’t sound all that confident, so when the bags actually arrived in the Maldives (as the first two bags on the conveyor belt) I was relived and a bit surprised..and of course thankful that we wouldn’t be buying bathing suits at the Conrad Maldives for $150 a person ;-)

Luggage1

Upon deplaning, the UA flight attendant gave us a website to visit in order to select a compensation item for the delay. Here’s what the options were – 10,000 bonus miles, $250 e-certificate, or 20% off certificate for economy travel:

United

I went with the 10,000 bonus miles per person, making our positioning flights from JFK-LAX in Economy Plus only 2,500 each! Up next – Korean Air Lounge LAX.

United 2

PS – I was given the option to upgrade this 12,500 reward ticket to First for just $2,359 a person… ;-)

UA Upgrade JFK-LAX

Posted by Adam | 6 Comments

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