United’s 3rd Quarter Revenue Call: Oscar Munoz Has a Plan, But It’s a Secret Plan

United held its quarterly call on financial results this morning. And the consistent message throughout the call was that they’re going to do a lot of things differently, they just won’t tell us what yet.

They’re want to talk about things like basic economy fares and about new IT investments. They’re going to talk about how they’re forecasting revenue. But over and over they punted to say they’d talk about those things at next month’s investor day… the refrain got so old that CEO Oscar Munoz made a chuckle out of punting to investor day.

Here’s what Oscar Munoz’s office looked like after the call:

I did find interesting in response to a question from Hunter Keay (Wolfe Research) that United doesn’t have a process to measure forecast revenue versus actuals on a market-by-market basis. According to new President Scott Kirby, for instance, Christmas this year is on a Sunday and since they don’t have historical data on that, they also don’t have much computer input into that and they’re hand-managing.

According to Kirby the ‘fundamental architecture’ that the system is built on can handle planned improvements so they need to build on top of the current architecture versus replacing it. So it sounds like United is stuck with SHARES.

He described the pricing environment having started to change in favor of airlines, dating to mid-August, and he refused to explain further publicly.

At American, Kirby claimed 87% of customers fly once a year or less driving half of revenue. He was asked for similar numbers at United and reported it was 85% of customers. The flip side of course is that 15% of customers are flying more frequently and driving and outsized portion of revenue.

And beware United customers, they’re already talking about their performance vis-à-vis “D0”.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. The gutting of their Frequent Flyer programs and their other little nickel-dime stunts caused me to have 100,000+ AA miles this year, 20+ Southwest flights, 10+ on Virgin and only 2-3 flights on UA or DL. Hearing that their other moves are not well-thought out, not enough to disclose “at this time” during a major media event, makes me think they are just as clueless as I’ve suspected. Glad I’m not an investor.

  2. Agree with SST above. How many long time UA flyers (since 1988 for me) have left UA for other airlines?

  3. Gary being the astute individual that you are you should know that public companies tend to share the bare minimum required on SEC filings and in their public interactions with shareholders. Would you rather them blabber about all kinds of things that are still being evaluated and are therefore subject to change? Sounds like much of the new management team’s vision and direction for the company will be shared in November, a few short weeks away. For someone who claims to have such strong business and financial acumen it’s amazing you can’t understand this simple concept.

  4. And Gary you kvetch about how bad you think the U.S. carriers are yet you say nothing about how the Emirates/Etihad/Qatar carriers of the world say virtually nothing about their financial performance, growth, bench-marking, outlook, etc. What UAL shared today is eons more than anything you could get beloved Etihad or Qatar to share. You deem what UAL says as salient to your readership, so presumably the financial condition and performance of Gulf Carriers is also relevant. Doubt we will see a posting about that.

  5. Kicking the can down the road to an investor call was a hallmark of United’s Q1 call this year, and on that call, we really didn’t get much information, again. I’m not expecting much in the way of juicy revelations on this upcoming Investor Day.

  6. @colleen – thanks, sweet suggestion and I appreciate it. I decided not to campaign for this. But I appreciate readers who value the site enough to say so — here, there, or anywhere 🙂

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