United CFO’s Presentation to Bond Investors

Pursuant to Regulation FD, United filed its presentation to the JPMorgan Annual High Yield Conference with the SEC. It makes for interesting reading.

United has cut labor costs per available seat mile by 32%. Only USAirways — which went through two bankruptcies — has gone further. Northwest, just entering the bankruptcy process, has only cut their labor costs 3% over the same period of time. Northwest has the highest costs of any major carrier.

Shocker — United has far less debt after bankruptcy. The reduction is all centered around rejecting pensions, retirement benefits, and some leases.

Playing with numbers — United compares its operating margins with Southwest’s by removing Southwest’s fuel hedges.

Going forward United plans to de-peak hubs (more continuous flow of aircraft so they don’t pay people to sit around, people wait for planes rather than planes waiting for people) and continue outsourcing call centers and automating them (“agent agent agent”).

Mileage Plus has 45 million members and contributes over $800 million in revenue. That makes the frequent flyer program even bigger than flying cargo.

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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