Friday, October 26, 2012

United News and 787 discussion

Given United's recent poor earnings announcement (and the accompanying spin) you'd think that they don't want to have these rumors swirling around

Courtesy of Seth, the Wandering Aramean:

The generally reliable @airlineroute account on twitter is reporting now that the one-time flights from Houston to Cleveland and Washington-Dulles will be scrapped. Additionally, the scheduled service to Newark, Los Angeles and San Francisco will see some substitutions.
Deployment of the Nightmare Dreamliner has been a cornerstone of CEO Jeff Smisek's plan for righting the ever listing Good Ship United.  Recently they've shown signs of returning to operational competence.  United is betting heavily on the 787 to place UA above their competitors in terms of in-flight experience. Having to drastically under deliver (in the beginning) on this service could potentially be crippling, especially when you consider (in many cases) 787 service can be significantly more expensive than service on Boeing metal flights.

The first article, courtesy of The Street, offers up a pretty good synopsis of where United stands currently, and opinions as to why they've lost revenue while their competitors have grown.  What remains clear, to me at least, is that United did lose substantial passenger traffic in many regions to their competitors.  Now that they have them, their competitors are NOT going to be willing to just let them go back.

Failure to properly anticipate operational issues stemming from the merger, the inability to solve labor disputes in a timely manner and a poor PR response to several issues (service problems, Houston, among others) has temporarily crippled the UA brand.  All of these are failures in strategy of the executive branch, leaving open to question whether or not Jeff Smisek is a competent enough CEO, and has surrounded himself with competent enough leadership, to run an airline the size and scope of UA?

Right now I'd say the jury is still out on UA's leadership.  If they don't get this mess sorted soon however it could come back negative.

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