In case you missed it, United posted great financial results for the second quarter of this year. While I find it hard to proclaim that the management team has “clearly turned this carrier around,” as CEO Jeff Smisek said at the GBTA convention last week, it is most certainly a hopeful sign that things are getting better.
What was more interesting than the result itself was the discussion on the earnings call about the network and scheduling changes United is making. These are mostly good moves that copy what we’ve seen both Delta and American do. I just wish these had happened sooner. Best of all here? A lot of those pesky 50-seaters are finally going away.
Ditching the 50-Seaters
It seems like United flies more 50 seat jets on longer distances than anyone else and it’s particularly frustrating for travelers. It’s also not very efficient. A previous agreement with pilots indicated United was going to follow Delta’s lead and start paring down 50-seaters but it just wasn’t happening very fast.
This isn’t going to happen overnight, but we now know that by the end of next year, United will retire more than 130 of those airplanes. Actually, the airline will retire “the equivalent” of more than 130, so I don’t know what that means. But it’s a lot. Seventy of those will be replaced with Embraer 175s, and that’s a big improvement. The rest won’t be replaced. That means fewer flights on bigger airplanes.
Re-banking the Hubs
Just as American announced recently, United will be re-banking its hubs in Chicago, Denver, and Houston. (Denver and Houston were previously announced, actually.) Over the years, many airlines created rolling hubs as a way to cut costs. Instead of having airplanes all come in at once, move passengers around, and then depart again, the airlines tried to spread demand out throughout the day. That allowed an airline to have fewer gates with fewer employees and still service the same number of airplanes but it does mean longer connection times in many cases.
It all sounds well and good until you realize you take a revenue hit from it. Having shorter connections means your results show up higher in the reservation system display. And the higher up you display, the better those flights are likely to do. Sure, costs are higher but the revenue benefit is worth it. And shorter connections end up being better for travelers… for the most part.
I do have to wonder about reducing connection times in a place like Chicago. Both American and United are re-banking there, so you’re going to see more peaks with congestion. The airport’s new runway configuration means it has a lot more capacity but when the weather gets bad, well, you know how it goes. If United can get its operational act together, then people might like this. But I imagine that there will be a lot of concern in the near term since often United schedules connections that are too short already in a place like Chicago.
More Seasonal Scheduling
This is yet another move that is similar to what the new American team is implementing based on US Airways’ success with it over the years. United will add more flying during times of peak demand and cut flights when demand is lower. Want to hear an interesting stat? In 2012, United scheduled 13 percent more capacity in July versus February. Next year, July will have 25 percent more capacity.
United can do this by better scheduling maintenance and crew training during the softer times. Pull more people and airplanes off the line then and you don’t have to do it as much during the peak. Travelers get more capacity when they really want to fly, though it does mean that airplanes will be more full.
Simplifying the Regional Operation
Today, United has 11 regional partners (Cape Air, Chautauqua, CommutAir, ExpressJet, GoJet, Mesa, Republic, Shuttle America, Silver, SkyWest, and Trans States). While one of these will disappear on its own (when Chautauqua merges into Shuttle America), it’s still a lot of relationships to manage. To make it even more difficult, the operations aren’t really designed very well.
When Comair went on strike many years ago, it was the only Delta Connection operator in Cincinnati. The strike paralyzed Delta there, and airlines quickly learned to diversify their regionals. But United took this to an extreme. At Dulles alone, United has 8 of its regionals flying under the Express brand. By September, that will be chopped in half to only 4. Better plan.
Speaking of Dulles, this is a bit of a tangent, but someone asked about United’s thoughts on Dulles during the earnings call. Jim Compton, Vice Chairman and Chief Revenue Officer, gave a long-winded non-answer that ended with “we are very much focused on revenue initiatives that we’ve implemented, that we’re going to implement, and those that we’re researching, and that includes the overall look at the network.”
Sounds to me like there’s more to come.
51 comments on “United is Making Some Network and Scheduling Changes, and Most of Them are Good”
Some clarity on IAD would be real nice. It’s a dominant hub with massive international O&D and plenty of Star partners feeding it. Some sort of terminal would do wonders.
Otherwise, I’m glad to see those 50-seaters go. UA was putting them on segments that were way too long (i.e. anything IAH-Upper Midwest)
I used to fly to Texas quite often and back in the good ol’ days of the DL/NW/CO codeshare I could always fly mainline metal from IAH to MSP. After the DL/NW merger everything was 50 seaters to IAH so I started flying AA to DFW on MD80’s and connect anywhere throughout TX on mainline AA metal. Haven’t flown those routes in a few years but I’d guess CO (and DL to a lesser degree) lost tens of thousands of revenue dollars on me alone in my quest to not fly on CRJ’s.
Half the time if I’m headed West, United thinks I’d really like to fly from HSV to Denver on a crj200. Although the upshot is that nobody wants those flights so there are always award seats available.
Also of note, I believe in the conference call United stated that they would be looking at the preowned market for added mainline capacity – with a slant towards used 319/320s vs. 737NGs due to residuals on the Airbus being lower.
Quite a departure from the legacy CO strategy of buying state of the art planes and upgrading them to push them to their limits. Legacy UA also liked new planes and was a launch customer for a number of models.
When was the last time that either carrier bought or leased “pre-owned” aircraft?
All I can think of was the ATA 757-300’s CO picked up which are perfect for high demand leisure markets like FL and HI.
Did I miss a post on American’s hub situation? I’ve been curious for a while what their plans are for phx. As a side note I’m glad United is ditching the 50 seaters. I always found it interesting that sometimes they would use these on routes that could support a larger aircraft. I know the argument is increased frequency but it also increases delays and congestion. So definitely a good change there. Now if they could improve the passenger experience. I personally think they should send out a survey to all United plus members and ask what they would change, select the top answer and go from there.
The latest for PHX is, nothing really. American plans on keeping PHX as a hub, leaving it has a banked airport. With the high amount of O&D traffic, I don’t see PHX going anywhere for awhile, and Cranky will agree with me on that.
Rebanking will drive employee costs higher as the gate and ramp will have to be staffed for peak times.
pilotaaron1 – Rusty is correct. I’ve written about this multiple times, but here’s one:
http://crankyflier.com/2013/02/18/my-best-guess-on-what-will-happen-to-americans-hubs-post-merger/
My thinking hasn’t changed on any of those except for NYC and LA. In NYC, American is going with a more surgical approach, finding cities that need service to NYC and then adding it to round out the airline’s presence in the out-station. It’s smart.
In LA, ugh. American says LA needs to be the Asian gateway so it is far more bullish than I ever would be.
Thanks cranky. I do remember reading that one now. Sometimes everything just runs together.
Funny how it’s mentioned that UA is doing things because DL/AA have done these things already. You mean UA can’t think of thinigs to do on their own to help their operations, but must wait until another airlines ‘gives’ them the idea?
Well they certainly aren’t listening to their own employees**. Employees have been complaining loud and clear on United’s own employee website (oddly enough they allow for employee comments on daily United updates specific to changes, employee issues, etc.) but many of the comments are “screaming” at United to listen to them and do something about their concerns. UAL employees are very much aware of all the problems, changes, loss of high value customers, changes in policies, reduction in service and the 67% use of RJ’s.
**To clarify,they only recently starting writing articles on the employee website explaining why they are making these changes – only the pros, never the “cons”. Hopefully United will still keep the comment section open to employees….but over three years and still heading down hill ???
I read these as a forced moves on top mgt. I don’t mean customers or employees forced top mgt. to move; I think the BOD forced this move. Forced in the way of show me what you will do differently or else you are on your way out. How many more and what type of moves will the BOD bring out of a top mgt that generally is unwilling to be responsive to customers/employees? We’ll see.
I’d like to note that i don’t mean that employees/customers are always right and should dictate everything, but that they should feel that their concerns and solutions are heard and if wise to do then are implemented.
What do you think will happen to an airport like ALB? I would imagine it would be tough to justify a E175 on most routes there. Wouldn’t it be a 50 seater or nothing?
Interesting choice asking about ALB because I think it’s a great representative of United’s operation for medium-sized cities. As other posters have mentioned, I think it could mean fewer flights, but United only said the 50 seaters were going away not the Q200s.
Today, United’s summer schedule shows three mainline flights to ORD. Last summer it was two Express flights (-200 and -700) and two mainlines. There were previously two flights to Cleveland. One became a mid-morning Express flight to IAD and another just went away.
ALB also saw service on the Q400 to IAD and EWR. I’d look for that to continue to EWR and likely IAD although new operators of the E175 may fill the void for Republic.
The Q200 could also continue working up and down the East Coast. They’re efficient enough and United has to do something with them since it signed a contract with Commutair.
After all the changes I think you’ll see a loss of one or two Express flights. Nothing too noticeable. Financially, it probably makes sense to move ORD flying to mainline or all 175/-700 (I noticed OO picked up a few -700 flights to ALB this summer for the first time). A mainline aircraft won’t do well ALB-EWR, but the Q400 would work okay (the distance isn’t great for any aircraft).
Everyone is rejoicing at the removal of all these pesky 50 seaters. What said audience fails to realize is that it’s not a one-for-one replacement. More like 3 to 1. So what, you say? Well, the new larger aircraft are capped at 76 seats due to scope clauses with the mainline partners. So take some common city-pairs like Houston to Lafayette, LA, Chicago to Grand Rapids, MI, or Newark to Burlington, VT, for example. All of these city-pairs get 5-6 flights a day with the pesky 50 seaters. When these much maligned aircraft are retired and replaced 3 to 1, these same cities will only get 2 flights a day or not at all. That’s 300 seats reduced to 160 seats. That means much less choice of time of day to fly and much higher airfares. But hey, those shiny new jets will sure have lots of room for that 40 minute flight.
I’ve flown those 50 seaters from Houston to Toronto. Painful.
Ive been a pilot on the ERJ for 8 1/2 years (%$%!@$#) and flying IAH-YYZ is painful!!
I have made that trip several times. Twice they were under catered and there was no food for several passengers and this qulafies even by US standards requiring meals over three ane one half hours.
Great job ruining the lives of the thousands of pilots and employees out there….
Let it run its course, by 2020 when Delta AA and UA are each retiring 800 year over year, its going to be fun watching regional airlines melt into nothing.
http://www.usaviators.net/images/career/trends-retirement.jpg
You can’t polish turds and you can’t polish United
I just completed a 3-leg journey on United: 1) MSP – EWR – BOS; 2) B0S – EWR -BWI; and 3) BWI -ORD – MSP.
#1 was late on the last flight; #2 late on the first flight with a missed connection; and #3 late on the first flight with another missed connection.
First leg was okay, as I reached my destination only an hour late. Second leg, due to the missed flight, I took a train from EWR to Baltimore to ensure I had the time I had planned in Baltimore. Third leg, as the first flight too late for my connection in Chicago, I managed to book the last flight out of ORD to MPS.
United sent me a survey for the first leg, and I managed to include information on the other two legs in my response. My main complaint is the lack of realistic scheduling. I experienced delays and/or missed flights on each leg of my travels, I conclude that United is playing hit or miss with its scheduling and letting the consequences fall on the back of its passengers. Are they running an airline or a lottery?
All three city pairs you mentioned are served with nonstop service. I’m amazed at the punishment passengers inflict on themselves for FF points or status. If there is no nonstop service, go wild. If there is a nonstop, take it and make your travel experience much better.
airwolf, I generally agree with that point, but you fail to acknowledge the dreaded corporate travel rules many companies impose on their employees. I have worked for large Fortune 500s where you were forced into the cheaper connecting option, even if the difference was only $30. Convincing the bean counters that lost time and productivity is worth far more never seemed to work. Thus, I spent many a day connecting and wasting a ton of time to “save” the company $25.
Fair enough. That’s a reasonable explanation for an unreasonable practice.
The real failure here is not selecting the best mode of transit! BOS to BWI is much better done on Amtrak; cheaper and easier and no missed connections… even if it’s a little late, you’re better off. Chances are also good that the train station is closer to the work destinations at either end too. MSP to BOS, fly. BOS to BWI, train. BWI to MSP, fly.
But why not fly direct? I avoid connections whenever possible and find I’m MUCH happier. My company forces us to supply a reason for non-policy-compliant non-stop flights, but “unacceptable schedule” is a perfectly acceptable reason, and management even three levels above me agrees that an extra couple hundred bucks cross-country is money well spent.
Just a subtle distinction, but direct doesn’t mean non-stop. A lot of folks use the two terms interchangeably, but a direct flight can have intermediate stops with no flight number change. I found that out the hard way many years ago when my LAX-BWI red-eye “direct” flight landed in ORD. Passengers got off and got on. Instead of a 5 hour sleep, I got two short naps.
I hope they look at connection times at IAH in this rebanking. For some reason a 35 minute connection is considered fine connecting to the regional/express terminal. I don’t book those connections, but UA has changed their schedule on me resulting in a 35 minute connection more than once. The first time I barely made it, but it was only because I caught a ride on one of those carts they use to shuttle mobility impaired passengers. They closed the doors as soon as we boarded. The next time I changed my flight to avoid it. Same in ORD. You need a minimum 45 min. for connections requiring a change of terminal in IAH or ORD.
I’ll be curious to see what happens at CLE. UA cited reduction of the RJ fleet as part of the reason for closing the hub (one of the more legitimate reasons they cited for the closure), but to date CLE is still a mostly-RJ operation.
So is United getting rid of all the 50 seaters or are they keeping some for certain short distance flights. I guess I’m a bit confused here.
*** – No, not all of them. Just reducing the number on hand.
who is the guy next to smisek?
One of “the Bob’s” from the movie Office Space.
I just do not under stand why it took UA to realize they needed to change things other wise they were going to go under. Now on the 50 Seat thing are they going to replace some with Q-400s say on ABQ-IAH (ABQ-DEN) is all Q-400 I think even though they could do it w/ CR7s or ERJ-170s
Y’all, are very inconsiderate with respect to the regional pilots who will be losing their jobs next year…All for a little more leg room.
From what I’ve heard there is a pilot shortage. I’m sure those regional pilots will find jobs that are as good, if not better than what they have already.
I glad that you are impressed, that United’s stockholders are getting happier and that at least a few of their FF members are sort of pleased. My no apologies, I just don’t like them.
Even for routine flights UAL’s agents are difficult to deal with, their favorite is some variation of “No,” and once aboard, consider yourself fully paid and captive. Once UAL has your money, the theory seem to be, ‘gotcha’ and we’re not changing anything.
Long-haul coach, domestic or international: starve, sit down and shut up. Business/First, domestic: It is only five or six hours and it won’t kill you.
Business/First, International: They may feed/water you a little bit, but if old enough, think coach class, 1975. On the very few flights that still retain genuine First Class (first of three or now four classes), the food and seats get a little bit better, but service is restricted (Sir, you do understand that we also have 250 OTHER passengers back there ( slight not to the rear)? No wonder UAL cannot get out of the First Class market fast enough; the don’t want it and they don’t want to serve it.
Perhaps my biggest annoyance with UAL is their apparent turn procedures: If the FAs don’t gather it (trash) it will remain at least until the overnight stop. They seem to turn all domestic flights without cabin cleaning and I’ve also seen it the utter lack!) on a few long haul flights, even up front. If the turn is already running late, the first thing to go is cleaning and fluffing. Sad but true: For the best long haul experience, in ANY cabin, check the aircraft’s expected turn time and their on-time performance. If under 120 minutes for a wide-body, –with a carrier that understands a little bit of CLEANING, look elsewhere. My apologies for being a bit negative about UAL, but what can I say? In my recent experience 1) they are more than sloppy and 2) They truly do not care what 99.7% of their clients think. They Do Not Care! In most cases, we have other options. -C.
I like the CRJ’s. I kind of feel like I’m on a large corporate jet instead of an airline / airliner. I like the seating configuration with no middle seats.
Furthermore, I like the fact that they have made routes on UA possible that otherwise UA has not had the traffic to support, such as DFW to LAX, DFW to ORD, that are dominated by AA.
Which airline are you flying? Most have no leg room, no overhead space, no under seat space, no pitch….what’s to like about that?
Unfortunately the jumping for joy at the demise of the 50 seat RJ isn’t warranted ! Most are simply being replaced by CR-700s and CRJ-900s. Exactly the same miserable aircraft, just a longer fuselage with 75 or 90 seats rather than 50 !
The seats on these aircraft are absolute torture to sit in. I am an averaged sized guy and I find them extremely uncomfortable. The cabin is so small and cramped you feel like your taking an MRI for 3 hours when you ride on these aircraft. I’ll go out of my way to avoid riding on them. Even if it means a stop enroute rather than a non-stop.
I’ve also had the misfortune of riding on the cockpit jumpseat of both the CRJ-200 and the EMB-45. The weather radar on these aircraft stinks ! I have actually heard controllers tell RJ pilots. “All the Airbuses are going 15 degrees left ahead ” because they know how poor their radar is.
Steve L – While the CRJ-700/900 are derivatives of the CRJ-200, they are more comfortable. They lowered the floor a little which makes for better window alignment and more room at eye level. The systems on the aircraft are upgraded as well and it does make for a better ride, from my understanding.
Of course, the Embraer 170/175/190/195 are more comfortable, and those are replacing a lot of these.
CF
I have riding on both much more than I wished I had. They are miserable, pathetic pieces of crap and embarrassment to aviation. The flying public should not have be be exposed to such misery !
I’d argue that the entire CRJ lineup is not passenger friendly. I’ve flown the 700 quite a bit and think it totally bites. The 900 had a slightly better interior (I realize some of this is carrier specific) but also was NO comparison to the E-series. E-series is almost as nice as mainline for most passengers and no middle seat makes up for smaller bins.
Interested in what United has in store for IAD as the schedules and fares out of there are starting to show a lack of interest in the Washington market. With Southwest, Virgin America and then a zillion Star Alliance carriers working out of IAD, United is routinely $250-$400 higher per round-trip when compared with others. They still have a large presence, it just appears the routing and scheduling along with fares out if IAD to almost anywhere make it challenging to be loyal to them even if I didn’t have corporate limits on travel choices. As an example, US Airways is easily hundreds less than United for connection routes to the West Coast and even for non-stops on the East Coast. Seems it is only getting worse these days. Making it VERY hard to be loyal indeed.
well well well its finally coming righ down to the niddy gritty this is really going to look very interesting!!! My guess is that the largest regional 50 seat provider will most likely be hurt the most as they have the most and there employment Will be greatly effected as for those who have the least of the 50 seater jets. but over all its all about the reduction of cost over all sadly some jobs will be effected that’s the nature of the beast in the airline industry. I know I was an laid off frontier airlines outstation employee so I know the feeling.
I don’t mind flying “region” jets, in fact I’d love to own one (wouldn’t that be cool) but….I don’t like to fly on one for more than about 2 hours. Which makes sense as they are suppose to be Regional not half way across the USA. I wonder if United would sell me one cheap?
Re-banking makes a lot of sense, if done well. I currently go to law school in Milwaukee, and my parents (as well as friends from undergrad) live in Omaha. United via O’Hare is most often the cheapest option between the two. I was looking at options for a weekend trip when I had a couple of Friday classes canceled. There was a flight that left ORD around 3:00 and arrived in Omaha around 4:15, which was perfect for my purposes. The only MKE-ORD flight that would get me to ORD in time left at about 11:30, which is a problem since my last class that day ends at 10:20. However, I could very easily jump on a bus at 11:40, get to ORD around 1:40, and have plenty of time to get through security and to my gate. Thus, it was cheaper AND more convenient to take the bus to ORD than to fly out of MKE. If United banked properly such that my time commitment (including security, i.e. departing MKE around 1:30 for a 1:50 arrival at ORD) was at least equal to the bus, I’d be more willing to give United the extra revenue so I could avoid the hassle of the bus and security at ORD.