Oil Rise Could Lead UAL to Ground Planes

[Smarta$$]

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.

Wow, your head is in the sand.

 

[luckytohaveajob]

The storm is coming, get ready

.....the company has the option of grounding planes......
.....planning at the biggest carriers said that other airlines are also talking about idling aircraft......
.....bigger airlines like United, American Airlines, and Northwest Airlines historically have had flexibility with their aircraft.



http://biz.yahoo.com/rb/071109/airlines_fuel_us.html?.v=3

 

[luckytohaveajob]

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.

I am as far left as one can get. Liberal Talking points. What are you talking about?

I really like your point about the economy surviving 911 with out a recession.

What did you call 2002, 2003, 2004, and the beginning of 2005? The stock market crumbled to half it value. The dollar deflated. The White House cut taxes to ease the recession, and the Fed cut interest rates down to an artificial 1%.

There is no easy fix for the current problems. The US govt. has already played all the cards.

 

[stillflyn]

Not going to happen

November 9, 2007​

Fear – Part Deux​

United’s “100 - 100 Plan”​

On Wednesday, November 7th at Goldman Sachs’ Investor Conference, United Airlines Executive Vice President and Chief Financial Officer Frederic “Jake” Brace postulated that United and its rivals have two major ways to deal with crude-oil prices approaching $100 per barrel:
“Either the industry passes on higher fuel prices or we're going to have to lower capacity. Jake went on to say that “We have a lot of flexibility in our fleet” intimating that United has more than 100 aircraft unencumbered that it could ground or sell if oil prices get too high.
Within hours, a retraction by Jake was released to employees from corporate communications noting that he wanted “…to put the story right and get the facts into the right context.” As the Bard would say, “methinks thou dost protest too loudly.”
Even in trying to calm the waters, Jake couldn’t help but let his true colors shine when he continued to babble on in his retraction email...“Because [our 100 aircraft] 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…” It really does make us smile when Jake makes our job so easy.
This is exactly what we warned you about in our Special Transition Update entitled “FEAR.” Make no mistake, you have now seen the top three corporate officers, Tilton, McDonald and now Brace, in as many weeks, trot out variations of a theme meant to manipulate your emotions, specifically your fear.
We’re going to call this latest management faux-pas the “100-100 Plan” because Jake seems to equate $100 oil with the need to park 100 airplanes.
For a senior management team that speaks incessantly of non-core asset sales in order to return cash to shareholders; who trumpets their cost controls and industry leading margins; who generally tells the financial markets that the place is hitting on all cylinders, it seems strange that they are now crying poormouth because of $100 oil.
It should be a given that the revenue presently generated by these 100 aircraft is essential if the company is to remain in compliance with the financial requirements set forth in the exit loan covenants. So let’s dig deeper into Brace’s statement and speak to the facts — facts that will demonstrate to you that gutting the fleet of 100 aircraft is easier said, by an Executive Vice President no less, than done.
1. Contractual prohibition: As pointed out in the MEC Friday update, your MEC negotiating committee recently concluded an agreement with the company on minimum block hours that must be maintained at the mainline. It is referred to as Section 1-F-1. In short, gutting 100 aircraft from the fleet, and the resultant block hour reduction, would put the company in violation of that agreement which was ratified by your MEC at their September special meeting.
2. Furlough/Training issues: To park 100 airplanes would require a massive furlough of roughly 1,000 pilots. This would require a massive downbid of the airline causing untold training events. How would that fit into Jake’s statement that such an event could occur “…without incurring ongoing costs?”
3. Marketing/Revenue: Unless our competitors match our reductions, customers would abandon us and move to other airlines. Unless the industry colludes in a reduction plan, the increases in fares brought about as a result of capacity reductions would be difficult to attain. In addition, cutting flights associated with a 100 aircraft reduction would ripple throughout the entire revenue structure, causing even greater revenue loss than that lost from the 100 aircraft reduction.
4. Exit financing loan covenants: As part of the exit loan financing package, the company is required to comply with several loan mandates that include minimum interest coverage levels and cash flow requirements. Such a severe reduction to the revenue base presently generated by these 100 aircraft would most likely result in the company being in non-compliance with these covenants.
We could go on but why waste your time or ours. Bottom line, Jake failed to engage his brain before opening his mouth. The result was a laugh on our part but should be a lesson on yours. This is what you will continue to see in the coming months in what we can only surmise is a calculated, conscious effort by the senior management group of this company to “herd” you in a direction of their choosing.
Plain and simple…..don’t allow it. Do not allow these people to control your emotions. Do not allow them to loosen your resolve. Do not allow them to cause you to take your eye off the ball.

Leverage does not just show up, unannounced, on one’s doorstep. Unified pilots create leverage.​

 

[MJ42]

"What did you call 2002, 2003, 2004, and the beginning of 2005? The stock market crumbled to half it value. The dollar deflated."

I must be very smart then because I've made a lot of money off my stocks, mutual funds and 401k the last few years. (or you're just wrong).

 

[luckytohaveajob]

"What did you call 2002, 2003, 2004, and the beginning of 2005? The stock market crumbled to half it value. The dollar deflated."

I must be very smart then because I've made a lot of money off my stocks, mutual funds and 401k the last few years. (or you're just wrong).

Stay fully invested and see what happens. I bet you lose your a$$, Mr. I'm So Smart.

For those of you interested in the truth I suggest watching this:
http://video.google.com/videoplay?d...308&start=0&num=10&so=0&type=search&plindex=0

Soft money has a huge price. Mr. I'm So Smart is going to find it out the hard way.

And all of you shills who think Greenspan is such a genius, get a clue. He is just a legalized criminal.

 

[luckytohaveajob]

"If the American people ever allow private banks to control their currency, first by inflation and then deflation, the banks and corporations that will grow up around them will deprive the people of all their prosperity until their children will wake up homeless on the continent their fathers conquered." Thomas Jefferson

Greenspan is making you and your children homeless and you don't even understand what I am talking about.

Oil is controlled by a cartel called OPEC. And money is controlled by a cartel just like the mafia called the FEDERAL RESERVE.

 

[DH106]

OK, my two cents.

UNITED IS NOT GOING TO PARK ANY AIRPLANES.

Why would they do their competitors such a huge favor by reducing industry-wide capacity? They wouldn't. They're not going to park their own airplanes, just so that their competitors can fill up theirs.

I mean, seriously... if they're genuinely concerned about costs (which they're not), wouldn't you expect the top clowns at UAL to attempt another BK filing? I think the industry learned that UAL can file BK all they want, and nothing bad will happen to them. I'm speaking from the viewpoint of their top management.

This whole thing is nothing more than a union scare tactic.

 

[kommutrdog]

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.

I apologize for the bold & large font, but sometimes I get so dumbfounded that I feel the need to start screaming from the rooftops.

There is no possible way that you are dumb enough to actually believe what you wrote here. No way. You fly a jetliner and were smart/persistent/driven enough to get hired by SWA.

Do you REALLY believe that it is the "liberal media" behind all that recession talk? Do you even remotely pay attention to the economic fundamentals shifting? Housing prices dropping, rapidly. $4.00 gas by Grinchmas time, $100 oil and the once-mighty US dollar sinking towards Peso status?

Homebuilder stocks and the Banks have been getting KILLED on Wallstreet. All the high-flyers in tech, RIMM, Google, Apple, Amazon...all cracked 7-10% in 2 days and now have broken charts.

You think that is just a reasonable pull-back? Countrywide Financial, the USA's largest mortgage issuer has gone from $60+ to $14 !

Rome is burning, you fool!

Come on. Turn off Fox & CNBS for just ONE WEEK and start digging on your own. Peel the onion...you won't like what you will find.

Homework assignment: Bill Fleckenstein & Peter Schiff. Use google & start reading. Your family will be better prepared. Mine is.

 

[kommutrdog]

"If the American people ever allow private banks to control their currency, first by inflation and then deflation, the banks and corporations that will grow up around them will deprive the people of all their prosperity until their children will wake up homeless on the continent their fathers conquered." Thomas Jefferson

Greenspan is making you and your children homeless and you don't even understand what I am talking about.

Oil is controlled by a cartel called OPEC. And money is controlled by a cartel just like the mafia called the FEDERAL RESERVE.

At least somebody else on this board gets it. I was getting lonley around here.

 

[MJ42]

Stay fully invested and see what happens. I bet you lose your a$$, Mr. I'm So Smart.

For those of you interested in the truth I suggest watching this:
http://video.google.com/videoplay?d...308&start=0&num=10&so=0&type=search&plindex=0

Soft money has a huge price. Mr. I'm So Smart is going to find it out the hard way.

And all of you shills who think Greenspan is such a genius, get a clue. He is just a legalized criminal.

I watched your video and it states the obvious.

So you think I'll find out the hard way, huh? As you know, you can't depend on any airline for retirement planning. I've done quite well for myself and will continue to invest SMARTLY! Your fully invested losing "my a$$" BS is only true if you are not diversified as well as greedy. You believe what you want, you can always find supporting info on the internet for any opinion you might have. That does not mean it's reality.

FWIW I agree with your OPINION on Greenspan. As for everything else, we disagree. I didn't attack you in my original post, I just did not agree with your opinion. Yet you chose to attack me...classless!

 

[AWACoff]

[

"Greenspan is making you and your children homeless and you don't even understand what I am talking about."




Who is this Greenspan person you are talking about?!

 

[climbhappy]

help me out here. first, the dems are in disarray. pelosi and her pals can't agree on a funding measure for the war. language too soft, too hard. that deal is falling apart. somebody said the Bush was right all along. hey, they have admitted to colossal blunders along the way. all their foreign policy has changed diametrically with n korea, iran. they have reversed course. he has been like a pilot asking for 180 degrees right for weather the last four years.

a falling dollar will lower the trade deficit and our gov't securities will be unattractive? if nobody finainces our debt, we'll be debtor nation.?
we have sold so many assets here to foreigners it is pathatic.

now, as long as corp profits are strong, the market will be fine? right? if interest rates go up, the market will tank and bonds become popular? with the market tanked, all the wealth created by the market will make folks think they're not as rich and they quit spending, the economy tanks, we get laid off?

do i have this half right?

 

[freightdogfred]

"If the American people ever allow private banks to control their currency, first by inflation and then deflation, the banks and corporations that will grow up around them will deprive the people of all their prosperity until their children will wake up homeless on the continent their fathers conquered." Thomas Jefferson

Greenspan is making you and your children homeless and you don't even understand what I am talking about.

Oil is controlled by a cartel called OPEC. And money is controlled by a cartel just like the mafia called the FEDERAL RESERVE.

Could you provide a link to where you got this quote?
I don't think the word or concept of "corporation" existed in 1776.

 

[luckytohaveajob]

Could you provide a link to where you got this quote?
I don't think the word or concept of "corporation" existed in 1776.

I got it out of a video I was watching called the Fiat Economy.

 

[AWACoff]

Freightdogfred, this guy still thinks Greenspan is running the show. Anything he types you can pretty much throw out the window. He has no credibility.

 

[luckytohaveajob]

As for everything else, we disagree. I didn't attack you in my original post, I just did not agree with your opinion. Yet you chose to attack me...classless!

I apologize for attaching you personally. I did not express my disagreement tactfully enough. Thanks for the correction.

 

[luckytohaveajob]

Freightdogfred, this guy still thinks Greenspan is running the show.

I know Greenspan has retired. But I also know who got us to where we currently stand.

And why did you ask who Greenspan is earlier?

Will Ben Bernake leads us out. Not likely as a secret organization has no credibility. The Open Market Committee has ZERO oversight by any American.

 

[AWACoff]

I know Greenspan has retired. But I also know who got us to where we currently stand.

Will Ben Bernake leads us out. Not likely.

I retract what I originally posted. I also whole heartedly agree with the last sentence of your post. In honor of Veterans' Day, I believe we have a "SNAFU".

 

[luckytohaveajob]

In honor of Veterans' Day, I believe we have a "SNAFU".

And that this the worst part about all this tragedy. The blood spilled is not for America but unknown bankers controlling the Open Market Committee who could careless about any American.

 

[luckytohaveajob]

I watched your video and it states the obvious.

I picked a simple one because I did not know how much you could take. Most people won't accept the truth if it is presented.

But the video I chose gives you an idea of the inherit risks to investors and Americans in a soft money system.

And as this relates to the airlines, the downside of a FLEXIBLE money supply is sure to effect all our lives as airline pilots.

Every airline I know of except SWA is playing with this virtual money beyond its fuel costs. And even SWA requires a large reserve to operate its owned aircraft because of the high consumption of fuel to run 500 B737s. So it to is vulnerable although to a lesser extent hopefully lasting a little long in the cycle.

But this problem will effect all airlines. Resulting in the consolidation and lowering of working conditions as a result of the indentured servitude at all levels of all carriers who must endure as a debtor to the banks or the oil companies.

America's superpower status rests in the dollar not in its army. And that power is quickly fading as planned by the central banks.

America will be defeated without a shot ever being fired on its current path.

America's wealth is shifting and we are not part it.


http://www.washingtonpost.com/wp-dyn/content/article/2007/11/09/AR2007110902573.html?hpid=topnews

"High oil prices are fueling one of the biggest transfers of wealth in history. Oil consumers are paying $4 billion to $5 billion more for crude oil every day than they did just five years ago, pumping more than $2 trillion into the coffers of oil companies and oil-producing nations this year alone."

 

[climbhappy]

lucky,
when you say america will be defeated. by whom? are we taken captive or do we become cheap labor for the foreigners who become rich and need cheap labor to make their goods?

 

[jetflyer]

Most people don't know the Federal Reserve, created in 1913, is a Private Entity with shareholders that include all the nations major banks.

The Federal Reserve does what is good for the nations banks and corporations not the American people like Thomas Jefferson warned......

The Federal Reserve is going to continue to cause inflation which helps the banks and cover it up with their manipulated figures to help the banks. We will all become very poor by the acceleration of this trend in the next few years as prices of goods increase exponentially as the dollar is being killed at this very moment.

Learn the truth about the Federal Reserve.
You must watch this video!!!
I beg you to learn how it was created and what they're doing:
Watch this video: The Truth about the Federal Reserve is here

Become enlightened and watch the video.

By watching the video above you'll learn so much about the Founding Fathers and their feelings on money and central banks and why they found central banks criminal.

We've been manipulated by the banking interests to think the central bank is good. This couldn't be further from the truth.

Only one Presidential candidate dares talk about the criminality of the Federal Reserve and wanting to shut it down: RON PAUL.

Jet

 

[climbhappy]

my sunday paper had a great story on this very thing. the Fed is in a "bind" It wants to lower rates to help stagnant or low growth, but if does, the foreigners will run from our securities.

if they do, the economy goes to crap, chinese goods in all the Wal marts become pricey like macy's and all the wal marts close. then mom n pop can open their stores again and we'll have the dream back.

this housing bubble (worse yet to come) could make the dot com bubble look pale the story said... nobody at all the financial cos know the value of their portfolios...they keep falling...so will the stocks

 

[Andy]

Could you provide a link to where you got this quote?
I don't think the word or concept of "corporation" existed in 1776.

I got a bunch of hits by googling it.
Here's one: http://www.alternativereel.com/conspiracy/American_Conspiracy.php

I'm too lazy to pursue your question by googling letters to gallatin, but I'd bet that if you did a minute or two of research, you could find a clean source document.

Wiki would also have answered your question about the origin of corporations: http://en.wikipedia.org/wiki/Corporation

"If the American people ever allow private banks to control the issue of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children will wake up homeless on the continent their fathers conquered."
—Thomas Jefferson, letter to Albert Gallatin, 1802

 

[Andy]

Gents, anyone who thinks that mentioning parking aircraft at an investor conference is meant to be a threat to union labor is completely out of touch with the economy and what's happening in the markets.

The huge housing bubble is finally bursting, and it's going to take the rest of the economy down with it. This is not just a subprime loan problem; it's much deeper than that. Once the option ARM resets kick in full force, it'll make subprime seem like a minor bump in the road.

In another year, oil prices will be in decline due to decreased demand for petroleum. (ie worldwide recession) The demand for air travel will have a major dropoff.
The consumer is tapped out; forecasts of Christmas spending are indicating a huge drop in sales.

I'm chuckling at those that think this statement was made just to screw the pilots. There is a fear developing across the markets due to what's happening in the commercial paper markets. And it is going to spill over into the entire world's economy very soon.

 

[Andy]

my sunday paper had a great story on this very thing. the Fed is in a "bind" It wants to lower rates to help stagnant or low growth, but if does, the foreigners will run from our securities.

if they do, the economy goes to crap, chinese goods in all the Wal marts become pricey like macy's and all the wal marts close. then mom n pop can open their stores again and we'll have the dream back.

this housing bubble (worse yet to come) could make the dot com bubble look pale the story said... nobody at all the financial cos know the value of their portfolios...they keep falling...so will the stocks

While it seems like inflation is lurking, the big problem is the possibility of substantial deflation. Bernanke & the FOMC are making the best possible choice by lowering interest rates. While it is causing a short term spike in inflation, it is to fight off future deflationary forces. I'd talk more indepth on this subject, but most here consider the looming recession as an unlikely scenario. They're in for a very unpleasant 2008.
The rest of the world may initially resist the US efforts to cut interest rates, but they will eventually have to match the rate cuts as their economies slow and they have the same problems in their housing sectors. The housing bubble in the US is small compared to some other EU countries - less so in Asia, except for China. China's setting itself up for a HUGE fall.

Our economy is going to go to crap no matter what the Fed does; it's now a question of how bad it will be. I personally think that Bernanke's making the right decision, in spite of the fact that my short positions occasionally get burned.
If you've got a bunch of money tied up in equities, now's the time to shift that to defensive stocks. It's getting ready to get very bloody in the markets.
I'd recommend that anyone who wants to learn from some very sharp people visit the following forum: www.tickerforum.org. They've got some of the best investment minds posting on those boards that I have ever run across.

Kommutrdog, you're not Krush on that forum, are you?

 

[climbhappy]

this paper said to buy NIke. growing profits at a 20% clip in asia. world markets.

as to your comment about the recession, martin barnes, managing editor of the Bank Credit analyst said, " the economy faces a protracted period of subpar growth rather than a recession."

" the biggest risk to our view is that the contagion, ( i looked it up-contagious influence) from housing to consumer spending (proves to be ) greater than we expected."

with the outlook for corp profits good, this says to me that poor will get poorer and the rich richer.

slow growth means no growth in wages, income

 

[luckytohaveajob]

lucky,
when you say america will be defeated. by whom? are we taken captive or do we become cheap labor for the foreigners who become rich and need cheap labor to make their goods?

We become servants of the creditors who hold our personal and public debt.

We lose our freedoms, we answer to those who do not have our best interest, we lose our lives, and we get put in situations we should never have to face leading to our death without a shot being fired.

 

[Andy]

as to your comment about the recession, martin barnes, managing editor of the Bank Credit analyst said, " the economy faces a protracted period of subpar growth rather than a recession."

" the biggest risk to our view is that the contagion, ( i looked it up-contagious influence) from housing to consumer spending (proves to be ) greater than we expected."

with the outlook for corp profits good, this says to me that poor will get poorer and the rich richer.

slow growth means no growth in wages, income

Climbhappy, the US consumer is the key to the world's economic health. And the US consumer is tapped out. Savings rates went negative a couple of years ago due to cheap money available from HELOCs, introductory credit card rates, subsidized auto loans, and other cheap consumer credit.
The party's finally over and we've got a huge hangover and mess to clean up.

Now that the commercial paper market is tanking, those cheap sources of money are evaporating. A case in point is the residential mortgage markets. In spite of a 75 basis point cut in the fed funds rate since mid-Sep, 30 year fixed rates have moved up approximately 10 basis points. The only mortgage product that's moved down, and only nominally, is the 5/1 ARM. http://mortgage-x.com/general/average_rates.asp
Risk premiums are shooting through the roof.

All of that cheap money powered the American consumer to spend, spend, spend. Now those cheap sources of credit are disappearing. Worse yet, they're not even available to a majority of the big spenders. With home prices dropping, HELOCs are rapidly becoming a dinsaur due to tighter LTV ratios on HELOCs.
There has recently been a noticable spike in 401k borrowing. This is the consumer's last place to find more money; the couch cushions were overturned this last summer and all of that change has been spent.

While a slow growth period would be nice, I do not see this as a likely outcome; we're staring squarely into a recession. A rate cut in December is all but certain and there will likely be a Fed intervention prior to that.

As far as Martin Barnes, he is likely looking at a slow growth period as a best case scenario, he's already hedged his statement by mentioning consumer spending. I can tell you that retail numbers last week weren't good, in spite of earlier Christmas sales. We'll have to see how the season plays out, but if you see/hear that Black Friday (the day after Thanksgiving) does not fare well for the retailer, a recession will be all but a foregone conclusion. And don't even think that a recession will be confined to the US; it will rapidly spread throughout the world.