Oil Rise Could Lead UAL to Ground Planes

[Rez O. Lewshun]

Where I come from, democracy is not a spectator sport.

It is at Skywest....

 

[Rez O. Lewshun]

Just wanted to throw the ALPA one in for Rez.

Thanks... it means allot...especially coming from you!

 

[GFunk20]

So how many furloughs could this amount to?

 

[pilotgolfer]

After the article was released, there was a littlebit of back-peddling..........not to mention that they may be posturing for contract negotiations. JMHO


Good evening. By now, many of you have read or heard reports that United is planning to ground 100 aircraft. The reports are based on comments I made at a Goldman Sachs conference yesterday in New York . I want to put the story straight and get the facts into the right context. First, let me be clear, we are not grounding airplanes.

At the conference, I was talking with analysts about how the industry would respond to an economic environment where oil is hovering near $100 a barrel. I was reinforcing to the analysts a point that I believe strongly: United has more flexibility to respond to economic challenges than our competitors. We have a great network that gives us the opportunity to move our aircraft around in response to changes in worldwide economics. We have managed our U.S. domestic capacity very well. We have a strong cash balance and good cash flow. We are in a very good fundamental position.

As part of that conversation, I also brought up, as one point about our flexibility, the fact that we have more than 100 aircraft that are debt-free. Because they are unencumbered, if oil prices stay high and if we cannot pass the costs on to our customers, one way to manage our capacity could be to ground aircraft, which we could do without incurring ongoing costs. It was one point in a larger conversation about the possible responses we would have in an extreme environment, which the analysts in the room understood. Unfortunately, the point was picked up by reporters listening to the webcast as something we were considering, rather than a possibility if certain conditions occurred.

There is no underestimating the impact the price of oil has on our industry. It’s a significant issue for every airline and something we are watching every day. Just today, we announced a $10 fare increase on U.S. domestic flights to offset higher fuel costs. We will continue to weigh our options to manage the impact the price of oil has on our business and we will certainly inform you in a much more deliberate way if we ever get to a point where decisions as serious as grounding 100 aircraft are necessary.

 

[Yuppyguppy]

don't panic new guys welcome onboard!

 

[RJAA]

Flexibility to respond to economic challenges?? and good fundamental position?? BS!! grounding airplanes=furloughs. It is the same as a talk of furlough possibility.

 

[luckytohaveajob]

Lucky,

Write your elected officials to tell them to have Bernanke and the Fed knock it off with the rate cuts. You can't have a sound economy with a Third World currency.

These sky-high oil prices are a result of the roaching of the US dollar by the Fed, so, yes Mr. & Mrs. Airline-pilot-in-denial, the actions of the Federal Reserve Banksters, DO affect you.

The American empire is falling with the dollar

Paul Craig Roberts
Online Journal
Thursday November 8, 2007​

The US dollar is still officially the world's reserve currency, but it cannot purchase the services of Brazilian super model Gisele Bundchen. Gisele required the $30 million she earned during the first half of this year to be paid in euros.
Gisele is not alone in her forecast of the dollar's fate. The First Post (UK) reports that Jim Rogers, a former partner of billionaire George Soros, is selling his home and all possessions in order to convert all his wealth into Chinese yuan.
Meanwhile, American economists continue to preach that offshoring is good for the US economy and that Bush's war spending is keeping the economy going. The practitioners of supply and demand have yet to figure out that the dollar's supply is sinking the dollar's price and along with it American power.
The macho super patriots who support the Bush regime still haven't caught on that US superpower status rests on the dollar being the reserve currency, not on a military unable to occupy Baghdad. If the dollar were not the world currency, the US would have to earn enough foreign currencies to pay for its 737 oversees bases, an impossibility considering America's $800 billion trade deficit.
(Article continues below)


When the dollar ceases to be the reserve currency, foreigners will cease to finance the US trade and budget deficits, and the American Empire along with its wars will disappear overnight. Perhaps Bush will be able to get a World Bank loan, or maybe one from the "Chavez bank," to bring the troops home from Iraq and Afghanistan.
Foreign leaders, observing that offshoring and war are accelerating America's relative economic decline, no longer treat the US with the deference to which Washington is accustomed. Ecuador's president, Rafael Correa, recently refused Washington's demand to renew the lease on the Manta air base in Ecuador. He told Washington that the US could have a base in Ecuador if Ecuador could have a military base in the US.
When Venezuelan president Hugo Chavez addressed the UN, he crossed himself as he stood at the podium. Referring to President Bush, Chavez said, "Yesterday the devil came here, and it smells of sulfur still today." Bush, said Chavez, was standing "right here, talking as if he owned the world."
In his state of the nation message last year, Russian president Vladimir Putin said that Bush's blathering about democracy was nothing but a cloak for the pursuit of American self-interests at the expense of other peoples. "We are aware what is going on in the world. Comrade wolf knows whom to eat, and he eats without listening, and he's clearly not going to listen to anyone." In May 2007, Putin criticized the neocon regime in Washington for "disrespect for human life" and "claims to global exclusiveness, just as it was in the time of the Third Reich."
Even America's British allies regard President Bush as a threat to world peace and the second most dangerous man alive. Bush is edged out in polls by Osama bin Laden, but is regarded as more dangerous than Iran's demonized president and North Korea's Kim Jong-il.
President Bush has achieved his dismal world standing despite spending $1.6 billion of hard-pressed Americans' tax money on public relations between 2003 and 2006.
Clearly, America's leader and America's currency are poorly regarded. Is there a solution?
Perhaps the answer lies in those 737 overseas bases. If those bases were brought home and shared among the 50 states, each state would gain 15 new military bases.
Imagine what this would mean: The end of the housing slump. A reduction in the trade deficit. And the end of the war on terror.
Who would dare attack a country with 15 new military bases in every state in addition to the existing ones? Wherever a terrorist turned, he would find himself surrounded by soldiers.
All of the dollars currently spent abroad to support 737 overseas bases would be spent at home. Income for foreigners would become income for Americans, and the trade deficit would shrink.
The impact of the 737 military base payrolls on the US economy would end the housing crisis and bring back the 140,000 highly paid financial services jobs, the loss of which this year has cost the US $42 billion in consumer income. Foreclosures and bankruptcies would plummet.
If this isn't enough to turn the dollar around, President Bush's pledge not to appoint an attorney general if Michael Mukasey is not confirmed offers more promise. If the Democrats will defeat Mukasey's nomination, there are other superfluous cabinet departments that can be closed down in addition to the US Department of Torture and Indefinite Detention.
The American empire is being unwound on the battlefields of Iraq and Afghanistan. The year is two months from being over, but already in 2007, despite the touted "surge," deaths of US soldiers are the highest of any year of the war.
The Taliban are the ones who are surging. They have taken control of a third district in Western Afghanistan. Turkey and the Kurds are on the verge of turning northern Iraq into a new war zone, another demonstration of American impotence.
Bush's wars have endangered America's puppet regimes. Bush's Pakistani puppet, Musharraf, is fighting for his life. By resorting to "emergency rule" and oppressive measures, Musharraf has intensified his opposition. When Musharraf falls, thanks to Bush, the Islamists will have nukes.
American generals used to say that the wars Bush started in the Middle East would take 10 years to win. On Oct. 31, General John Abizaid, former commander of US forces in the Middle East, put paid to that optimistic forecast. Speaking at Carnegie Mellon University, Gen. Abizaid said it would be 50 years before US troops can leave the Middle East.
There is no possibility of the US remaining in the Middle East for a half century. The dollar and US power are already on their last legs, unbeknownst to Democratic leaders Pelosi and Reid who are preparing yet another blank check for Bush's latest request for $200 billion in supplementary war funding.
There isn't any money with which to fund Bush's lost war. It will have to be borrowed from China.
The Romans brought on their own demise, but it took them centuries. Bush has finished America in a mere seven years.
Even as Gisele throws off the dollar's hegemony, Brazil, Venezuela, Ecuador, Bolivia, Argentina, Uruguay, Paraguay, and Columbia are declaring independence from the IMF and World Bank, instruments of US financial hegemony, by creating their own development bank, thus bringing to an end US suzerainty over South America.
An empire that has lost its backyard is finished.

 

[Andy]

After the article was released, there was a littlebit of back-peddling..........not to mention that they may be posturing for contract negotiations. JMHO

You don't get it. Read my previous post. Brace was talking to Wall Street. That wasn't backpedaling or posturing; it was merely explaining those unable to comprehend the economic consequences of high fuel costs on airlines.
Why do so many pilots think that everything revolves around them?

 

[Andy]

Flexibility to respond to economic challenges?? and good fundamental position?? BS!! grounding airplanes=furloughs. It is the same as a talk of furlough possibility.

Not BS. Simple economics.
The consequences of grounding aircraft is furloughs. Do you think that management wants to ground aircraft if they're profitable just to furlough pilots?

 

[luckytohaveajob]

UAL management is not about running an airline.

And UAL management could careless about saving jobs.



United MEC Officers-Elect
Transition Update #6

November 7, 2007
THE REAL EARNINGS REPORT
“This morning, we are announcing our third quarter earnings, which are among the best in the industry across nearly every financial metric: profit, margin, cash flow and revenue... Our operating profit, excluding special items, was $589 million, up 93 percent from a year ago, for an operating margin of 10.7 percent, 5 points ahead of the margin we achieved last year…
"We delivered these results by driving fundamental improvements in our core business, both financially and operationally."
Glenn Tilton, October 23, 2007 in announcing UAL Corporation's 3rd quarter earnings

While this is great news for shareholders and of course, our senior management group, it is nothing but disturbing news to the employees and especially the pilots. If you recall, during bankruptcy, our portion of the $2.56 Billion dollar annual labor cost savings demanded by management amounted to $1.1 Billion. Yes - - that’s $1.1 BILLION DOLLARS each and every year from 2003-2010. If one factors in these cost reductions to the present earnings parade you’ll see a dramatically different “earnings” story.
Remember what the pilots were forced to disgorge from their collective bargaining agreements during the bankruptcy process:
Pilots’ C2003 wage, benefit and work rule changes $ 1.1 Billion per year
Pilot’s contribution from A plan discontinuation $ 500 Million (2007)
Pilots’ C2005 average annual Savings from the Bankruptcy Exit $ 180 Million per year
Pilot Total $ 1.78 Billion for year 2007
or looked at from a different perspective
pilot contribution to quarterly earnings $ 445 Million
And let’s not forget the other labor groups’ contributions to these “earnings,, an additional $1.46 Billion per year or $365 Million per quarter.
Total quarterly labor contribution to earnings $ 810 Million
Let’s re-calculate UAL’s earnings taking into account the savings from our bankruptcy contracts:
Third Quarter
UAL Q3 Operating “earnings” $ 589 Million
Pilots’ C2003 wage, benefit reductions $ (275 Million)
A plan reduction $ (125 Million)
Pilots’ C2005 Bankruptcy Exit wage reduction $ ( 45 Million)
Other labor groups’ wage and benefit reductions $ (365 Million)
You do the math!
The next time Glenn Tilton or any other senior manager crows about UAL’s “earnings," realize that it has nothing to do with how they “...[drove] fundamental improvements in [their] core business, both financially and operationally." It has nothing to do with them managing their most key asset – the employees. Rather, it has everything to do with their ability to mine one asset and one asset only, your pocketbook! Without the draconian concessions wrought during bankruptcy, this management group has absolutely no idea how to run an airline.
Wall Street knows these people are not long term planners nor are they airline managers. They are nothing more than portfolio managers. Glenn admitted as much during the HYPERLINK "http://seekingalpha.com/article/51071-ual-corporation-q3-2007-earnings-call-transcript" \o "http://seekingalpha.com/article/51071-ual-corporation-q3-2007-earnings-call-transcript" 3rd quarter analysts call, when he said: “We are identifying how to unlock the value associated with the portfolio of businesses such as Mileage Plus and our maintenance division." So we have to ask this latest group of carpet baggers, when did we stop being an airline and become, as one industry analyst put it “…a conglomerate of portfolio assets just ripe for the picking?” Is this why management wants to sell the maintenance center? Is this why management wants to spin-off and eventually sell the Mileage Plus program? Is this why management is looking for a dance partner? Maybe, this is why management has no interest in “managing” the airline?
Never forget that it is the employees who have suffered the most under this management group. Never forget that it is the employees who have toiled and continue to toil under draconian bankruptcy contracts. Never forget that it is the employees who are paying for the company’s earnings and management’s obscene bonuses. Never forget that it is the employees who are the true asset of this company.
And most importantly, NEVER FORGET that if any of the assets are picked, THE EMPLOYEES WILL DEMAND THEIR SHARE.
Leverage does not just show up, unannounced, on one’s doorstep. Unified pilots create leverage.
UNITY OF PURPOSE BRINGS POWER
THERE IS POWER IN UNITY

 

[PBRstreetgang]

It is at Skywest....

Rez,
As a veteran of 3 organizing committees and 3 failed drives, I do not consider myself a spectator, remember 35% voted for representation. I would urge every major airline pilot to seriously consider banning the hiring of SKYW pilots who weren't on the OCs. ALPA can provide this info quickly and easily. Everyone says they are a fence sitter, BS you are either with us or against us, and if you are against us, you are the enemy and should be treated as such!
PBR

 

[AA717driver]

Keep in mind that all the pilot groups are agitating for higher wages and a return of the givebacks (or takebacks for the Ch. 11 airlines).

I don't believe in conicidences. TC

 

[whymeworry?]

US Recession is going to be official at the end of the second quarter of the declining GDP numbers in December 07.

Expect other carriers to announce similar plans.

Get ready for the down cycle.

And remember all those who poop pooped my US Recession thread. Greenspan is the worst man to have ever run the federal reserve.

1) We just finished the downturn cycle in aviation. If one is to come it will likely only be an extention of the one we have been in since 9/11.

2) Greenspan is brilliant. Economists are consistantly wrong because they are making highly educated guesses at everything. They can't possibly be right all the time. Go buy Greenspans book (Age of Turbulence), it's highly informative reading.

3) The Bush administration is responsible for the current economic debacle. His admin has consciously allowed the dollar to get pummeled (to help big business compete globally) while driving the deficits (both budget and trade) to catastrophic proportions. The Iraq war was quoted by Rumsfeld as only a $20-50 billion dollar job. It's now approaching a cost of $1 trillion. The US economy, with a weak dollar, is in no position to handle this burden. The only thing Greenspan had to do with this wa advising the Bush admin to reign in the deficits, which played on deaf ears.

 

[swa737-700]

US Recession is going to be official at the end of the second quarter of the declining GDP numbers in December 07.

Expect other carriers to announce similar plans.

Get ready for the down cycle.

And remember all those who poop pooped my US Recession thread. Greenspan is the worst man to have ever run the federal reserve.

I cannot help but notice that the "recession" card is being thrown around by the press just as the news out of Iraq/Afghanistan is getting better, much better. The media can't scare folks into voting Democratic because of the war (heck the news is good and folks would actually realize that the present administration has been correct all along...therefore making the present Dem controlled Congress look even worse). So, now the media has locked on to RECESSION thinking that will cause the voters to elect a Democratic president. This too will backfire as folks realize that is recession is not right around the corner.
Bottom line, this economy survived 9/11 w/o a recission and will do just fine. Might I suggest that folks stop spouting off liberal talking points.

 

[Rez O. Lewshun]

Rez,
As a veteran of 3 organizing committees and 3 failed drives, I do not consider myself a spectator, remember 35% voted for representation. I would urge every major airline pilot to seriously consider banning the hiring of SKYW pilots who weren't on the OCs. ALPA can provide this info quickly and easily. Everyone says they are a fence sitter, BS you are either with us or against us, and if you are against us, you are the enemy and should be treated as such!
PBR

The 33% are the majority... the 66%Klub is the minority....