Matthewonlive and let's fly

United Airlines Reports Mixed 4Q Results

Both good news and bad news for United today.

United Airlines is seeing a strong recovery in international passenger traffic, especially on transatlantic routes, executives of the Chicago airline said Wednesday.

"Clearly, international strength is playing a disproportionate role" as passengers return to the skies, said John Tague, president of United Airlines.

On Pacific routes, the recent bankruptcy of Japan Airlines Corp. "is a big opportunity for our company, and you can expect that we are going to execute very aggressively," Tague told analysts on a post-earnings conference call. "Now's our time to go to work and take full advantage of the position JAL is in."

Japan Airlines, which is expected to downsize as it undergoes a lengthy financial reorganization, is a competitor to All Nippon Airways Co., United's Japanese partner in the Star global airline alliance. 

I like Tague's confidence. I hope UA and ANA are diligently working to steal away once-loyal JAL customers. Although Open Skies is coming to the Japan-US market, UA and ANA have a combined substantial presence in Japan--with CO waiting in the wings.

UAL said it faces challenges this year: even though passenger revenue is growing, premium ticket prices are still low, and costs are expected to increase.

If costs are expected to increase, I hope that reflects United's promise to continue to set a higher bar for their international premium cabins. On my trip to Moscow on United last week, I was fully satisfied with the seat, but the lackluster service really dampened the experience. I'll address this more in my upcoming trip report, but UA's Business and First Class products still have a long way to go--especially in terms of ground service and refinement of flight attendants.

UAL reported a narrower fourth-quarter loss Wednesday, after taking heavy losses on wrong-way fuel hedging last year.

That's gotta hurt.

"With business and premium traffic strengthening and the benefit of an improved cost structure, we are well on the road to closing the profitability gap," said Chief Financial Officer Kathryn Mikells.

We've heard that before. I only hope Mikells is correct this time.

I'm still bullish about UA's long-term prospects, but the more I watch operations at UA and the way they run their business, I have to wonder.

 

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