The Cranky Flier Interview with United SVP Global Network Planning and Alliances Patrick Quayle

Jun 19, 2023

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Listen on Apple, Spotify, or wherever you get your podcasts.

It was three long years ago in June 2020 when I last interviewed Patrick Quayle here. At the time, he was only in charge of United’s international network and it was obviously a… challenging time. We decided it was time to do a follow-up.

Patrick has now also taken on responsibility for the domestic network, and our discussion ranged from those small regional jets all the way up to global ambitions, including alliances where we talk about the new Emirates partnership.

Patrick is an optimist and right now in this demand environment, he sees nothing but opportunity for United. It’s hard to disagree.

You can find the episode on all the regular podcast providers, or you can just listen here:

Brett

7 responses to “The Cranky Flier Interview with United SVP Global Network Planning and Alliances Patrick Quayle”

Kilroy

Jun 19, 2023 at 4:45 am

Glad I listened to that interview; Patrick Quayle sounds like a really fun guy and a guy I’d love to have a drink with.

Patrick seems like he is out of a similar mold to that of Andrew Watterson (and I mean that as a compliment to both gents). I can only imagine the hijinks that might happen if those two are together in an informal environment.

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David C

Jun 19, 2023 at 6:41 am

I am relieved to hear that the high RASM small city markets are not going to be ignored, just in the ‘trough’.
SHV is my home city. UA can make it tough to stay loyal some days.

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DL

Jun 19, 2023 at 11:31 am

I think it’s interesting that there’s not a lot of enthusiasm towards Chicago. You would think with UA’s strong position there and AA’s focus on DFW and CLT there’d be more excitement. Perhaps its status quo for both until the construction is complete.

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Tim Dunn

Jun 19, 2023 at 3:33 pm

Well done interview and discussion of key issues facing UA and the industry.
There are several things that are characteristic of every time a UA exec gets in front of a microphone and that was true once again w/ Mr. Quayle.
1. United execs never miss an opportunity to brag about being the largest in whatever category they can truthfully claim.
I would have been and will be much more impressed if UA can make all of those other claims AND claim that it is the world’s most profitable airline. If they are achieving a bunch of goals but ending up as anywhere less than #1 in profits, then priorities or execution aren’t right.
2. A whole lot of UA execs seem to love to talk about what they found at UA after their arrival from AA and how they applied their learnings from elsewhere to make UA better. Is it really necessary to consistently throw UA’s former management teams under the bus and remind us that they learned what they know at AA? It would be nice to not hear a UA exec make a comparison- direct or veiled – to AA.
3. We all get that UA did not retire aircraft during the pandemic and was able to reap the fruit of abundant capacity last summer. That extra capacity translated into a financial advantage for precisely one quarter – 3rd quarter of 2022. UA did not turn that extra capacity into a profit advantage for 2022 and is not expected to do so in 2023. UA will spend more replacing its fleet – including the widebody aircraft that it did not retire – than any other airline in US aviation history. And other airlines do have a operating cost advantage because of their decisions to retire older aircraft and replace them.

As for Australia, despite talking about how the new alliance with Virgin Australia has worked well, Mr. Quayle finally admitted that Qantas is substantially smaller than it was and THAT is the reason why more capacity works – just as it does for some of UA’s competitors – with or without alliances in the market.

It’s great that United is doing well. Really. US airlines fared very well compared to the rest of the global industry in part because the US airline industry never shut down near as much as the rest of the world and because the US injected trillions of dollars into the US economy – including to the benefit of US airlines. Let’s keep that perspective front and center esp when talking about the global market.

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1. David C
  
  Jun 20, 2023 at 5:53 pm
  
  United’s former management teams deserve the honest critique. The profitability issue you like to point is directly related to the plans of the former teams to shrink to profitability.
  
  Reply
  1. Tim Dunn
    
    Jun 21, 2023 at 5:41 am
    
    David,
    I am in no way justifying or excusing some of the decisions that were made by UA management teams before Munoz and Kirby. It is inconceivable how any airline with global aspirations could be satisfied with single digit market share in scores of cities where AA, DL and WN each carried double digit share percentages – and still do. The overuse of regional jets and the inability to see the failures of that strategy is beyond mind-scratching. Among other strategic failures has to include handling of slots at both EWR and JFK as well as the now public relations with the Port Authority.
    
    However, Scott Kirby left AA to become the President of UA in 2016 and there is no indication that Oscar limited him in any way from acting as Scott saw necessary. He did quickly make changes to UA’s hub structures so that they operated more in line with the way AA and DL hubs had operated for years. But Kirby also continued to underperform its peers in a number of areas – including DL in international system profitability. Kirby was in his role for more than 3 years before covid and that period is actually when UA’s profitability compared esp. to DL was most divergent.
    And let’s also not forget that both AA and DL were far ahead of UA in removing small regional jets even as UA under Kirby created the CRJ550 which has worse costs than even 50 seaters. Given that other airlines could and still do carry as many premium passengers on mainline aircraft as UA does on its CRJ550s but also carry many more coach passengers, it was only the pandemic that forced Kirby to begin to deal w/ its excessive use of regional jets.
    
    Kirby said for a number of quarters on earnings calls that he intended to have United deliver profit margins as good as Delta so the profit comparison is not one that I dreamt up. There are clear reasons why DAL has a profit advantage now, heavily related to the strength of its Amex relationship, which Kirby has admitted UA cannot match. In addition, DL’s fuel management strategy including the refinery is a cost reduction strategy that UA tried unsuccessfully to copy. Finally, DL Tech Ops is both a cost reduction and revenue generation strategy that UA cannot match.
    
    UA and DL over the past 12 months are generating very similar income-related statistics but DL still has a balance sheet advantage which directly impacts its market capitalization.
    Given the time period that Kirby has been at UA and the reasons for differences in UA’s profitability compared to its peers, it is completely appropriate to expect UA to be as aggressive in closing its profit gap w/ its peers even as it touts its other advantages – esp. size-related.
    
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Tory

Jun 19, 2023 at 6:07 pm

Great interview Brett. Loved the hub dive on Denver and Chicago – would have been great to hear similar dives on Houston (they once said they aspired to 700 flights/day there), LAX (increased competition with Delta growth + AA joining w AS; Terminal 9 plan), EWR (how does the new Terminal A change things?), and IAD (terminal and growth plans, role vs. EWR). Maybe you can send him some written follow questions that turn into a blog post here?

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