United Airlines Backtracks On Flight Cancelations

United Airlines Backtracks On Flight Cancelations

32

It’s shocking how quickly things are changing in the industry, and just how often airlines are changing their minds, as the situation continues to evolve.

Just over 24 hours ago United Airlines announced that they would cancel 95% of international flights, including all long haul international flights. That meant the 5% of international flights remaining were ones to Mexico, some flights from Guam, etc.

Well, United has now partially backtracked on that decision.

United Airlines maintaining some international flying

United Airlines is backtracking, and now has decided to keep some international long haul routes. The airline states that travel demand continues to drop, but that they know some people around the globe are displaced and still need to get home.

United Airlines is now reducing their April and May international schedule by 90% (rather than 95%), and will continue daily operations to and from the following six destinations in Asia, Australia, Europe, Latin America, and the Middle East:

  • Newark/New York – Frankfurt (Flights 960/961)
  • Newark/New York – London (Flights 16/17)
  • Newark/New York – Tel Aviv (Flights 90/91)
  • Houston – Sao Paulo (Flights 62/63)
  • San Francisco – Tokyo-Narita (Flights 837/838)
  • San Francisco – Sydney (Flights 863/870)

On top of that, United is temporarily reinstating the following flights through March 27, 2020, to help people get home:

  • Newark/New York – Amsterdam (Flights 70/71)
  • Newark/New York – Munich (Flights 30/31)
  • Newark/New York – Brussels (Flights 999/998)
  • Washington-Dulles – London (Flights 918/919)
  • San Francisco – Frankfurt (Flights 58/59)
  • Newark/New York – Sao Paulo (Flights 149/148)

Then the following flight is being maintained through March 29, 2020:

  • San Francisco – Seoul (Flights 893/892)

United is maintaining quite a bit of capacity in the coming days

What we should make of this

United Airlines has some of the brightest people working in network planning, so I think this situation really puts into perspective the struggle airlines are having right now.

Obviously demand is way down and airlines are losing billions of dollars as a result, but clearly there’s a real struggle in deciding how much it makes sense to scale down operations.

Just look at this situation — Friday evening United decided to cut all long haul international flights, and 24 hours later United reinstated flights to many parts of the world.

Network planning people are used to analyzing data for making these decisions, but this is so unprecedented that it almost seems like they’re just throwing darts at the wall and seeing what sticks:

  • We don’t know if government restrictions will get even worse
  • We don’t know how long this current situation will last
  • We don’t know the long-term economic impacts of all of this
  • We don’t know how much aid airlines will be getting, and what exactly that will be contingent upon
  • Even if there is demand for a particular flight, the process of rebooking existing travel is a massive hurdle, given how hard it is to get through to airlines on the phone

I imagine for many airlines numbers are currently being crunched on the economics of continuing to operate a “skeleton” schedule, rather than just shutting down altogether for a few weeks and seeing how the situation evolves.

Clearly airlines are struggling to strike the right balance

Bottom line

A couple of days ago United took the most drastic stance of any US global airline by deciding to end long haul international flying for a couple of months. Just 24 hours later they reversed that decision, and plan to maintain daily flights to six long haul international destinations. That’s quite a reversal, if you ask me.

I’d be curious to know what exactly prompted United to change their mind on this, though I doubt we’ll ever find out…

What do you make of United’s schedule change reversal?

Conversations (32)
The comments on this page have not been provided, reviewed, approved or otherwise endorsed by any advertiser, and it is not an advertiser's responsibility to ensure posts and/or questions are answered.
Type your response here.

If you'd like to participate in the discussion, please adhere to our commenting guidelines. Anyone can comment, and your email address will not be published. Register to save your unique username and earn special OMAAT reputation perks!

  1. Ivanna Neuhaus Guest

    @Janet, bless your little heart, I’m so glad you learned a basic concept about stock valuations, what any astute 14 year old might know. What a pity you didn’t learn basic math or logic: the reason the big 3 have asked for a no-strings bailout worth more than their market cap is simple. They’ve priced repeated bailouts into their projected operations, and therefore into their corporate valuations. This is the second time I’ve mentioned this....

    @Janet, bless your little heart, I’m so glad you learned a basic concept about stock valuations, what any astute 14 year old might know. What a pity you didn’t learn basic math or logic: the reason the big 3 have asked for a no-strings bailout worth more than their market cap is simple. They’ve priced repeated bailouts into their projected operations, and therefore into their corporate valuations. This is the second time I’ve mentioned this. I realize it takes analytical skills that go beyond those you’ve demonstrated, but I’ll just lay it out there, just in case a better “Janet” wants to think about that.

    Despite your crocodile tears, the fact is that the unions agree with me: bailing out the buying 3 is a fools’ errand and contrary to the interests of their members. Agreements should take an equity stake and prohibit investor or executive bailouts. Your bizarre take on this situation not only marks you as a Trumpanzee, it also marks you as as a union busting, CEO backing stool pigeon. Sorry to blow your cover.

    I’ve provided numerous references to what is criminal about the US carriers: their mistreatment of their employees, their malfeasance with regard to pensions and their fraudulent intent with regard to Treasury funds. What a pity you don’t understand any but the most rudimentary legal concepts, but the burden of bringing you up to speed is not mine.

    Now that the bailout is failing and the unions are cheering, I suspect we will here a different version of “Janet”, one that doesn’t make the idiotic arguments about Americans wishing appalling service on themselves (after all, what volition do consumers have in an oligopoly?). Instead, we’re likely to hear more about the broader “ecosystem “ of travel since defending UA or AA is now beyond the pale. “Think of the jobs” Janet will sob. But why do the unions reject Janet’s view? Because their members do not benefit from bailouts of investors and executives.

    Good luck “Janet”. Maybe your next posts will be a tad more believable than your last few.

  2. Janet Member

    @Ivanna, A lesson in stock market 101. The market cap of a company is typically a reflection of the future earnings of a company. As those prospects have dimmed considerably, the market caps have declined sharply, It has nothing to do with how much might be needed to keep the airlines flying (once flying is allowed again). The funding requests of the airlines has nothing to do with the market caps. The challenge for any...

    @Ivanna, A lesson in stock market 101. The market cap of a company is typically a reflection of the future earnings of a company. As those prospects have dimmed considerably, the market caps have declined sharply, It has nothing to do with how much might be needed to keep the airlines flying (once flying is allowed again). The funding requests of the airlines has nothing to do with the market caps. The challenge for any airline is that there are high capital costs. As a result the operating leverage is severe. It is also a barrier to entry for any new operator looking to get started in the industry.

    As a result, it is more sensible for the benefit of the flying public to find a way to maintain the current airlines as ongoing enterprises. I have no problem with them being pushed into bankruptcy as part of the process as happened with GM during the GFC, but it is better that the 3 existing airlines continue, as we will immediately pay much higher fares if even one of them stops operating. I don't disagree that share buybacks were a less than good use of profits when times were good but unfortunately we have had a President who encourages this behavior. (It is worth noting that GM has rebuffed pressure to buy back shares since they were rescued in the GFC - full credit to Mary Barra for prudent management. Perhaps you call that a "criminal" bailout (please research the meaning of criminal - clearly you don't understand it) - but the US government made money from it and jobs were saved.)

    But rooting for the disappearance of the current airlines is a recipe for much higher costs for everyone who wants to fly. Everyone who complains about the deterioration in service at US airlines has only themselves to blame. The rise of low cost carriers has led to a race to the bottom in service. Prices go down and service suffers. Americans have voted for low prices over service.

    You still have not explained what is criminal? You clearly have no evidence of criminal behavior. I am not a fan of share buybacks, and you are right - often senior management compensation is tied to the share price - but this is all driven by what shareholders vote for. It is not criminal. So I don't have a problem if shareholders lose out from any support to the industry, but as a frequent flier, I would prefer that competition remain (though I personally would be happy to pay for better service; I avoid the LCCs).

  3. Ivanna Neuhaus Guest

    For someone claiming expertise in economics, Janet goes to great lengths to show complete ignorance of the aviation sector and of basic math.

    Some remedial math for Janet: The total market cap of the big three is LESS THAN the bailout they’re asking for. What does that mean? That they’ve included government bailouts as part of their long term business strategy. Rubes who buy their “give us the money or we’ll fire these workers”...

    For someone claiming expertise in economics, Janet goes to great lengths to show complete ignorance of the aviation sector and of basic math.

    Some remedial math for Janet: The total market cap of the big three is LESS THAN the bailout they’re asking for. What does that mean? That they’ve included government bailouts as part of their long term business strategy. Rubes who buy their “give us the money or we’ll fire these workers” nonsense are supporting this socialize-the-costs, privatize-the-profits approach to big business. It’s a criminal model in which they hold their employees hostage while the US Treasury pays a ransom every few years. I’m sorry if people like Janet don’t see the bigger picture or understand the role they play in propping up this crooked system. It’s annoying to have to explain it to those who claim to have expertise.

    For comparison, public transit systems in this country employ roughly the same number of people as the airlines and have experienced a drop in revenue roughly similar to airlines. Yet they’re asking for only $13 billion. Why? Because their funding model doesn’t presuppose using 95% of free cash flow to compensate investors or asking for periodic bailouts.

    @Janet, please tell us why the big three spent 95% of their free cash flow on stock buybacks? Tell us how this isn’t part of executive compensation and then tell us why we shouldn’t just think of you as yet another ignorant rube with her pompons in the air, cheering on another criminal bailout.

  4. UA-NYC Diamond

    I wouldn't call them "criminal" by any means - but AA and UA in particular have strove over the past decade to make their base level product worse year over year over year (int'l business class excepted). DL has actually tried to improve it a bit at least.

    What other industries, if any, are comparable to this? Who else is continually seeking to make a worse experience for its consumers all in the name of...

    I wouldn't call them "criminal" by any means - but AA and UA in particular have strove over the past decade to make their base level product worse year over year over year (int'l business class excepted). DL has actually tried to improve it a bit at least.

    What other industries, if any, are comparable to this? Who else is continually seeking to make a worse experience for its consumers all in the name of endless higher profits?

    A classic example of the downfall of industry consolidation.

  5. Janet Member

    @Ivanna, Further you have not provided a shred of proof as to why you classify the airlines - or even UA - as a criminal enterprise. Literally you offer nothing but BS! I don't even know what you mean when you suggest I have crocodile tears. Please take a course in economics and revert. Or offer concrete numbers on the excessive executive compensation and proof of criminality. I can't believe you can even write this...

    @Ivanna, Further you have not provided a shred of proof as to why you classify the airlines - or even UA - as a criminal enterprise. Literally you offer nothing but BS! I don't even know what you mean when you suggest I have crocodile tears. Please take a course in economics and revert. Or offer concrete numbers on the excessive executive compensation and proof of criminality. I can't believe you can even write this with a straight face. The airlines are no saints, but few companies are. They are driven by a desire to generate profits for shareholders over the interest of consumers. Until the US government changes the rules of engagement, profit will continue to drive corporate decision making. And based on the comments that would prefer to throw the industry into turmoil than ensure a smooth emergence of the economy from this devastating Pandemic, you are not alone in wanting to throw the economy under the bus and let consumers suffer.

  6. Janet Member

    @Ivanna, I am definitely not a supporter of the Trump administration. Unfortunately it’s efforts to consistently “deregulate” have reduced the checks and balances put in by previous administrations to protect individuals. But I also know that it would take at least a decade for a new airline to achieve the scale of a big 3 carrier. Just look North to Canada, where WestJet is only starting to compete directly with Air Canada. Or Japan, where...

    @Ivanna, I am definitely not a supporter of the Trump administration. Unfortunately it’s efforts to consistently “deregulate” have reduced the checks and balances put in by previous administrations to protect individuals. But I also know that it would take at least a decade for a new airline to achieve the scale of a big 3 carrier. Just look North to Canada, where WestJet is only starting to compete directly with Air Canada. Or Japan, where it has taken over 2 decades for ANA to begin to compete on international routes with JAL, despite JAL’s bankruptcy.

    I have no financial interest in the US aviation industry, but I have a strong background in financial analysis and economics. I am pretty sure you have no idea what percent of airline profits go to executive compensation. Hint. It is very small. Airlines are notoriously unprofitable businesses. Personally I would never invest in one. But they provide essential services that keep the economy going. This is an opportunity for the government to demand improved services to consumers, and yes, limit executive compensation until the government is paid back. But we will all be paying double or triple what we have been if one or two of the big 3 go bust. Sleep on that.

  7. Ray Gold

    While I don't classify the airlines as "criminal enterprises", they did abuse the last bailout. That said, there will be a nightmare trying to return to some level of positive growth without them. While it does disgust me to bail them out again after the greed they exhibited since the last one, the US continues to allow to do this. I can only home this next bailout will include no buyback options of their stock,...

    While I don't classify the airlines as "criminal enterprises", they did abuse the last bailout. That said, there will be a nightmare trying to return to some level of positive growth without them. While it does disgust me to bail them out again after the greed they exhibited since the last one, the US continues to allow to do this. I can only home this next bailout will include no buyback options of their stock, some protection for travelers, maybe even a piece of ownership for the masses as collateral. Some arrangement must be made to make this resemble an equitable deal. But I have zero belief this will be the case since this administration and the GOP seem hell bent on protecting corporate America at the expense of the people. I am sorry @Ivanna, your anger and hate should be directed at the government just as much as the airlines. They structured these deals to allow the greed. Isn't that the basis of Capitalism? My hope is America starts to see they are digging their own hole and need to rethink their idea of Democracy and Capitalism since the two haven't/aren't taking it in the right direction. And please don't start with your Socialism/Communism comments, my point is the current system without protections is disaster and this pandemic is bringing to a head. Changes need to take place.

  8. Ivanna Neuhaus Guest

    @Janet, your crocodile tears do not convince me or anyone with any sense. Your airlines have been raking in cash that they’ve used to pay execs and buy back stock. Otherwise, if you care about labor and the plight of working people, you’d be the first to realize that a giveaway to the airlines is a boondoggle.

    - Airlines have screwed over working people, repeatedly, and often at the expense of taxpayers. Perhaps your...

    @Janet, your crocodile tears do not convince me or anyone with any sense. Your airlines have been raking in cash that they’ve used to pay execs and buy back stock. Otherwise, if you care about labor and the plight of working people, you’d be the first to realize that a giveaway to the airlines is a boondoggle.

    - Airlines have screwed over working people, repeatedly, and often at the expense of taxpayers. Perhaps your head is so far up the rectum of the Trump administration that you no longer recall how pension funds and union contracts have been treated in the past two decades. Many of us recall all too well.

    - If you actually cared about the viability of the US aviation or travel sectors, you’d be forced to conclude that a second bailout for US carriers is a bad investment. That Chicago to Des Moines route, like hundreds of other city pairs, is likely twice as profitable as trunk routes because of diminished competition and inflated prices. It’s the SFO-JFK route that’s still competitive and likely to attract less interest should slots be made available to any interested carrier. Perhaps you could use a crash course in the history of airlines in the US since deregulation.

    In most of Europe, what airlines did to their pension funds would have resulted in criminal prosecutions. So keep those tears flowing. Keep those pom-poms in the air because you’ll need to distract the public from the criminal greed and mismanagement of airlines as you try to persuade your Trump administration buddies to turn on the firehouse of taxpayer cash.

    I do not care to subsidize the slothful, greedy and criminal ways of your industry. You should have learned your lesson in 2001. And I do not want government handouts to support your horrible mistreatment of the tens of thousands of employees you’ve already threatened with layoffs if you don’t get the cash grab from the treasury that you want. Enough is enough.

    United’s recent drama is nothing but a desperate ploy for undeserved pity.

  9. Janet Member

    @Ivanna, criminal enterprises is a serious charge. Please be more specific. I am quite sure you have little tangible proof to offer.

    I believe you have absolutely no idea how hard it would be for foreign carriers to enter the US market (not sure who you think would do a better job - not like Singapore wants anything other than say SFO-NYC). Most would have little interest in anything other than major long-haul routes....

    @Ivanna, criminal enterprises is a serious charge. Please be more specific. I am quite sure you have little tangible proof to offer.

    I believe you have absolutely no idea how hard it would be for foreign carriers to enter the US market (not sure who you think would do a better job - not like Singapore wants anything other than say SFO-NYC). Most would have little interest in anything other than major long-haul routes. They certainly wouldn’t be competing on Chicago to Des Moines. It is far better to try and improve what we have than rip it up and start over.

    And given we could face up to 20% unemployment and a whole new retail landscape, it’s not like there will be plentiful jobs around. Perhaps you have been drinking Trump’s KoolAid that there will be huge pent-up demand for flights and restaurant meals once the pandemic passes, but when a fifth of the population or more has struggled to pay rent, mortgages and make car payments, not to mention lost substantial amounts of retirement savings, typically the reaction is to tighten spending, not book a trip to Disneyland.

  10. Ivanna Neuhaus Guest

    @Janet, so many crocodile tears! Yes, the legacy carriers in the US have morphed into criminal enterprises, only their employees seem surprised by this news.

    Let’s allow foreign carriers to compete on domestic routes and see how long it takes for UA and AA to fade into oblivion. The sooner, the better.

    Yes, the legacy carriers hold tens of thousands of workers hostage. They’ve already threatened to let turn them loose. Why wouldn’t...

    @Janet, so many crocodile tears! Yes, the legacy carriers in the US have morphed into criminal enterprises, only their employees seem surprised by this news.

    Let’s allow foreign carriers to compete on domestic routes and see how long it takes for UA and AA to fade into oblivion. The sooner, the better.

    Yes, the legacy carriers hold tens of thousands of workers hostage. They’ve already threatened to let turn them loose. Why wouldn’t anyone working for them today look for a better job at a better company ? The sooner we liberalize competition, the sooner these folks find new jobs at better companies.

  11. Janet Member

    @Ivanna, I can only laugh at your suggestion that airlines “gouge” the public or are “criminal”. What absurd and baseless accusations! Air fares have risen well below the rate of inflation. It often costs less to fly in economy from Tokyo to the US than it did in 1983.

    I don’t even want to imagine the chaos that will result if even one major airline goes bust. The net result will be that we...

    @Ivanna, I can only laugh at your suggestion that airlines “gouge” the public or are “criminal”. What absurd and baseless accusations! Air fares have risen well below the rate of inflation. It often costs less to fly in economy from Tokyo to the US than it did in 1983.

    I don’t even want to imagine the chaos that will result if even one major airline goes bust. The net result will be that we will all pay a lot more for travel in the future. It takes years for new airlines to emerge. If you don’t realize this, you have zero understanding of basic economics and business. It is much better if aid comes attached with strings to improve service and consumer protection.

    But make no mistake: this is a global crisis. Governments may print money now to mitigate the economic disruption, but it doesn’t come for free. We will all have to rethink the way we live our lives in n the future. Prices and taxes will have to rise. But hopefully we can reduce the human toll in lives lost and people pushed out of their homes and losing their jobs.

    I am shocked at the venom directed at airlines by some comments. No, they are not perfect. But millions of jobs across the economy will be lost. I for one am happy for any effort the minimizes the human suffering of the thousands of people who turn up for work in the service sector, including airlines, to make our lives easier.

  12. Ivanna Neuhaus Guest

    @Adam, I'm not interested in crocodile tears from criminal enterprises that have made record profits by gouging the American public.

    I'm sorry so many lower level workers will lose their jobs. But let them find honest work in decent companies that don't depend on ripping off the public to break even. AA and UA aren't decent companies, they do not deserve public support. The implicit threat in your message ("just wait to see how...

    @Adam, I'm not interested in crocodile tears from criminal enterprises that have made record profits by gouging the American public.

    I'm sorry so many lower level workers will lose their jobs. But let them find honest work in decent companies that don't depend on ripping off the public to break even. AA and UA aren't decent companies, they do not deserve public support. The implicit threat in your message ("just wait to see how bad we can make things for you") only confirms my theory that AA and UA are criminal enterprises.

    No sympathy for criminals. None at all.

  13. Bnegirl New Member

    As an Aus citizen living in the US with aging parents in Australia, I am relieved there will be some way to get to SYD if necessary - even if I faced isolation once I got there

  14. Adam Guest

    @Ivannah.

    The most hated companies in America? Spare be the hyperbole.

    Your nearly outright celebrating the destruction of 10’s of thousands of jobs of hard working people. But you’ve made yourself clear as far as your opinion on that matter. So you destroy two of the big 3 and leave one? No. No monopoly there at all. But nice try.

    Maybe some education on the deregulation and history of the airlines is in...

    @Ivannah.

    The most hated companies in America? Spare be the hyperbole.

    Your nearly outright celebrating the destruction of 10’s of thousands of jobs of hard working people. But you’ve made yourself clear as far as your opinion on that matter. So you destroy two of the big 3 and leave one? No. No monopoly there at all. But nice try.

    Maybe some education on the deregulation and history of the airlines is in order for you.

    Again. I hope nothing in your business depends on air transport. Because you’re about to find out exactly how important those big airlines are. And have been.

  15. Scott Hastings Guest

    Ivanna, I'm sure you had a bad experience at one time on United and American but have you thought about all the people they employ? If you think that not providing some loans to the aviation community would help you personally feel better, think of the over 250,000 people that would be out of work. Does that make you feel good? What do you think would replace those two airlines? There isn't a single airline...

    Ivanna, I'm sure you had a bad experience at one time on United and American but have you thought about all the people they employ? If you think that not providing some loans to the aviation community would help you personally feel better, think of the over 250,000 people that would be out of work. Does that make you feel good? What do you think would replace those two airlines? There isn't a single airline in the country that could cover their routes. SWA flys 737s they can't cover international flying in those. Same for Alaska, Jet Blue and Spirit. I suppose every company that has given you a bad experience at one time or another should not be given a loan. You fail to understand the loans are there to give people a job to come back to and to help prevent the country from falling into a depression.

  16. Janet Member

    I think the original announcement was a mistake. My husband was booked on a Tokyo-Newark flight, which had been changed to via SFO. We received no notification that the flight had been cancelled and when we checked after reading your initial report, there was no change. As it turns out, we will rebook for a later date as the pandemic in the US seems a lot more out of control than in Japan. Better to stay safe here.

  17. Linda Guest

    United Airlines is Greed! When I booked a flight United said I could get refund if I had doctor letter. So I was guaranteed to get a refund. The. corona virus started getting worse I called to cancel flight and asked if I’d get refund. United said yes with dr letter. I have stage 4 cancer w short life expectancy and my Dr said flying was too risky I decided we should drive to MD...

    United Airlines is Greed! When I booked a flight United said I could get refund if I had doctor letter. So I was guaranteed to get a refund. The. corona virus started getting worse I called to cancel flight and asked if I’d get refund. United said yes with dr letter. I have stage 4 cancer w short life expectancy and my Dr said flying was too risky I decided we should drive to MD Anderson in Houston instead of flying. Sent a dr letter to United and now they have told me no refund for me. They straight out lied and I’m out of nearly $1000. I’m just sick. Critically ill no income and they have no conscience. How do these people sleep at night? J

  18. David Diamond

    So much of the forecasting for demand comes from historical data, so in the absence of it they really are probably just throwing darts.

  19. Ivanna Neuhaus Guest

    There’s no reason to use public money to prop up private enterprises that have done little more than create and benefit from a near monopoly. No tax money should go to United or any other carrier without explicit guarantees that none of it will end up in the pockets of shareholders or executives.

    The reason people are calling for the liquidation of UA and AA is simple: they’re among the most hated companies in...

    There’s no reason to use public money to prop up private enterprises that have done little more than create and benefit from a near monopoly. No tax money should go to United or any other carrier without explicit guarantees that none of it will end up in the pockets of shareholders or executives.

    The reason people are calling for the liquidation of UA and AA is simple: they’re among the most hated companies in America and for good reason. They’re simply appalling in their service, worse in their management.

  20. flyingrohit Member

    Im certain that as soon as the travel ban is lifted on India, you can be sure they’ll be adding all their India routes back too, at least from EWR.

  21. Sharon Guest

    Glad to see Tel Aviv continues to be served with 3 daily flights from NYC.

    Lots of technology flow between the two countries

  22. Adam Guest

    I’m amazed at some of your callousness. Classic point scheming public.

    “No one is flying you TLV!”

    My brother just bought a first class ticket today. To get home.

    “Liquidate UA and AA!”

    And destroy hundreds of thousands of jobs for hard working people who make sure they do their best to get you to where you want to go for your incredibly cheap airline tickets.

    You all should be a shamed...

    I’m amazed at some of your callousness. Classic point scheming public.

    “No one is flying you TLV!”

    My brother just bought a first class ticket today. To get home.

    “Liquidate UA and AA!”

    And destroy hundreds of thousands of jobs for hard working people who make sure they do their best to get you to where you want to go for your incredibly cheap airline tickets.

    You all should be a shamed of yourself. Wishing for the destruction of hard working man and women’s lively hoods because of the decisions of a few executives mean you may be inconvenienced.

    I’ll remember these comments and those like you who make them when these people are on the street. Hopefully your business doesn’t depends on it because there a chance you could be joining the.

  23. Ivanna Neuhaus Guest

    United did this to make a better case for a bailout. I have little hope but that the Thug-in-Chief will oblige and hand over some cash.

    It’s a pity because we’d be better off liquidating United and American. They’re worthless as carriers and we can do much better.

    The one hope I still have: this pandemic will thin the herd of travel and points bloggers who republish press releases to speculate on point valuations. If...

    United did this to make a better case for a bailout. I have little hope but that the Thug-in-Chief will oblige and hand over some cash.

    It’s a pity because we’d be better off liquidating United and American. They’re worthless as carriers and we can do much better.

    The one hope I still have: this pandemic will thin the herd of travel and points bloggers who republish press releases to speculate on point valuations. If there are 100 of these, I’d like to see it narrowed to 3 or 4.

  24. Last call Guest

    They need to meet their bail out obligatioms and once the airlines have got their money see you later!

  25. Stvr Guest

    I have a feeling the trump administration got involved

  26. Ernest Alleva Member

    The Government cant give them the bailout funds to pay their loans to Goldman Sachs if they are not flying. It's as simple as that. What's funny is that once they and the other airlines get those funds, they will cancel most flights and lay off most workers because they won't need to operate as much.

  27. James s Guest

    My theory is that they have their greedy hands out for tax bailouts and all the tweets from people stranded around the world doesn't help. Hard to justify being essential when you aren't actually helping Americans get home.

  28. Chrispy New Member

    Business customers screaming they still need to travel. Although that doesn’t explain Sydney and Tel Aviv as well.

  29. John Guest

    I wonder if this relates more to the politics of US govt aid for the airlines than it does to changing appraisals of demand.

    They might be getting pressure to keep a few routes open to help bring stragglers back, including foreign service and others serving the country abroad.

    That might be good public policy but it’s probably not based on raw numbers. Already most flights are flying with row after row of empty seats.

  30. Levi Lobl Guest

    They're doing this not to give refunds !!!!
    No one is flying to tel Aviv.

Featured Comments Most helpful comments ( as chosen by the OMAAT community ).

The comments on this page have not been provided, reviewed, approved or otherwise endorsed by any advertiser, and it is not an advertiser's responsibility to ensure posts and/or questions are answered.

Ivanna Neuhaus Guest

@Janet, bless your little heart, I’m so glad you learned a basic concept about stock valuations, what any astute 14 year old might know. What a pity you didn’t learn basic math or logic: the reason the big 3 have asked for a no-strings bailout worth more than their market cap is simple. They’ve priced repeated bailouts into their projected operations, and therefore into their corporate valuations. This is the second time I’ve mentioned this. I realize it takes analytical skills that go beyond those you’ve demonstrated, but I’ll just lay it out there, just in case a better “Janet” wants to think about that. Despite your crocodile tears, the fact is that the unions agree with me: bailing out the buying 3 is a fools’ errand and contrary to the interests of their members. Agreements should take an equity stake and prohibit investor or executive bailouts. Your bizarre take on this situation not only marks you as a Trumpanzee, it also marks you as as a union busting, CEO backing stool pigeon. Sorry to blow your cover. I’ve provided numerous references to what is criminal about the US carriers: their mistreatment of their employees, their malfeasance with regard to pensions and their fraudulent intent with regard to Treasury funds. What a pity you don’t understand any but the most rudimentary legal concepts, but the burden of bringing you up to speed is not mine. Now that the bailout is failing and the unions are cheering, I suspect we will here a different version of “Janet”, one that doesn’t make the idiotic arguments about Americans wishing appalling service on themselves (after all, what volition do consumers have in an oligopoly?). Instead, we’re likely to hear more about the broader “ecosystem “ of travel since defending UA or AA is now beyond the pale. “Think of the jobs” Janet will sob. But why do the unions reject Janet’s view? Because their members do not benefit from bailouts of investors and executives. Good luck “Janet”. Maybe your next posts will be a tad more believable than your last few.

0
Janet Member

@Ivanna, A lesson in stock market 101. The market cap of a company is typically a reflection of the future earnings of a company. As those prospects have dimmed considerably, the market caps have declined sharply, It has nothing to do with how much might be needed to keep the airlines flying (once flying is allowed again). The funding requests of the airlines has nothing to do with the market caps. The challenge for any airline is that there are high capital costs. As a result the operating leverage is severe. It is also a barrier to entry for any new operator looking to get started in the industry. As a result, it is more sensible for the benefit of the flying public to find a way to maintain the current airlines as ongoing enterprises. I have no problem with them being pushed into bankruptcy as part of the process as happened with GM during the GFC, but it is better that the 3 existing airlines continue, as we will immediately pay much higher fares if even one of them stops operating. I don't disagree that share buybacks were a less than good use of profits when times were good but unfortunately we have had a President who encourages this behavior. (It is worth noting that GM has rebuffed pressure to buy back shares since they were rescued in the GFC - full credit to Mary Barra for prudent management. Perhaps you call that a "criminal" bailout (please research the meaning of criminal - clearly you don't understand it) - but the US government made money from it and jobs were saved.) But rooting for the disappearance of the current airlines is a recipe for much higher costs for everyone who wants to fly. Everyone who complains about the deterioration in service at US airlines has only themselves to blame. The rise of low cost carriers has led to a race to the bottom in service. Prices go down and service suffers. Americans have voted for low prices over service. You still have not explained what is criminal? You clearly have no evidence of criminal behavior. I am not a fan of share buybacks, and you are right - often senior management compensation is tied to the share price - but this is all driven by what shareholders vote for. It is not criminal. So I don't have a problem if shareholders lose out from any support to the industry, but as a frequent flier, I would prefer that competition remain (though I personally would be happy to pay for better service; I avoid the LCCs).

0
Ivanna Neuhaus Guest

For someone claiming expertise in economics, Janet goes to great lengths to show complete ignorance of the aviation sector and of basic math. Some remedial math for Janet: The total market cap of the big three is LESS THAN the bailout they’re asking for. What does that mean? That they’ve included government bailouts as part of their long term business strategy. Rubes who buy their “give us the money or we’ll fire these workers” nonsense are supporting this socialize-the-costs, privatize-the-profits approach to big business. It’s a criminal model in which they hold their employees hostage while the US Treasury pays a ransom every few years. I’m sorry if people like Janet don’t see the bigger picture or understand the role they play in propping up this crooked system. It’s annoying to have to explain it to those who claim to have expertise. For comparison, public transit systems in this country employ roughly the same number of people as the airlines and have experienced a drop in revenue roughly similar to airlines. Yet they’re asking for only $13 billion. Why? Because their funding model doesn’t presuppose using 95% of free cash flow to compensate investors or asking for periodic bailouts. @Janet, please tell us why the big three spent 95% of their free cash flow on stock buybacks? Tell us how this isn’t part of executive compensation and then tell us why we shouldn’t just think of you as yet another ignorant rube with her pompons in the air, cheering on another criminal bailout.

0
Meet Ben Schlappig, OMAAT Founder
5,163,247 Miles Traveled

32,614,600 Words Written

35,045 Posts Published

Keep Exploring OMAAT