Future of CAL

[AWACoff]

Just curious what everyone thinks may happen in the next few years at CAL. Are the pensions going to be around...bankruptcy...etc. Is there a limit to how many times an airline can be in bankruptcy? I have heard a LOT of positives. I am just wondering if there might be some negatives down the road. How are they going to compete with the LCCs? Outside of another 9/11, does any of that sound reasonable? Thanks for the responses.

 

[Green]

Just curious what everyone thinks may happen in the next few years at CAL. Are the pensions going to be around...bankruptcy...etc. Is there a limit to how many times an airline can be in bankruptcy? I have heard a LOT of positives. I am just wondering if there might be some negatives down the road. How are they going to compete with the LCCs? Outside of another 9/11, does any of that sound reasonable? Thanks for the responses.

They are going to merge with the new Us Airways.

 

[Captjiggles]

CAL will be Bought buy Gulfstream Int'l Airlines, and will downsize the fleet to just BE1900's. Its a beautiful future!

 

[propjob27]

Are the pensions going to be around

No new pensions are being "issued". I don't think the company can get rid of it's obligation to pay existing pensions w/o declaring bankruptcy.

...bankruptcy

Who knows.

Is there a limit to how many times an airline can be in bankruptcy?

No

I have heard a LOT of positives.

So far so good. We're doing OK right now.

I am just wondering if there might be some negatives down the road.

Yes. The same negatives every single other passenger carrying airline faces.

How are they going to compete with the LCCs?

The same way they've been doing it. I have no idea on the specifics of it, I don't think any pilot does. You'd have to ask someone in management that question, and they won't tell you.

 

[erj-145mech]

CAL will be Bought buy Gulfstream Int'l Airlines, and will downsize the fleet to just BE1900's. Its a beautiful future!

I can picture it now, a 757 that says "Gulfstream Connection" on the side.

 

[FurloughedTwice]

Just curious what everyone thinks may happen in the next few years at CAL. Are the pensions going to be around...bankruptcy...etc. Is there a limit to how many times an airline can be in bankruptcy? I have heard a LOT of positives. I am just wondering if there might be some negatives down the road. How are they going to compete with the LCCs? Outside of another 9/11, does any of that sound reasonable? Thanks for the responses.

It is impossible to say what is going to happen in the future but CAL and AA have avoided bankruptcy (for now) in the toughest environment in aviation history. I'm pretty optimistic for the future of both airlines considering the industry is starting to rebound.

As far as the low cost carriers go... CAL doesn't have the same exposure to the LCC's that a lot of other airlines have because 42% of their flying isn't done by LCC's. They also have a great reputation WORLD WIDE for business travelers who pay top dollar for their tickets.

There are no right decisions in this industry because it can change from year to year but like I said in an earlier post. "When was the last time a Major Airline actually went out of business?" It's been a long time. It's very hard to kill an airline so if you use that reasoning CAL and AA will be around for a long time.

Just my opinion!

 

[V-STALL]

Just curious what everyone thinks may happen in the next few years at CAL. Are the pensions going to be around...bankruptcy...etc. Is there a limit to how many times an airline can be in bankruptcy? I have heard a LOT of positives. I am just wondering if there might be some negatives down the road. How are they going to compete with the LCCs? Outside of another 9/11, does any of that sound reasonable? Thanks for the responses.

The person with the crystal ball may have the answers to this one. No one really knows what the future will hold, especially in aviation. All you can do is put your best foot forward and hope you made the right decision come the day you retire. Good luck :0

 

[Cactus73]

At our last earnings town hall, Doug Parker put up a slide with the airlines with the greatest RASM's in the industry.

CAL led the pack by a significant amount. Doug attributed this to CAL's strong hubs in Newark and Houston along with a significant international revenue advantage.

Now RASM's don't mean much when it costs the company more to fly a passenger per mile than they are bringing in. Subtract out high fuel costs, however, Parker noted that CAL would be making a significant profit.

Interesting to note that LCC (the new US Airways) was second on the RASM list. Unfortunately, the combined entities CASM's are significantly higher than the rest of the industry leaders such as LUV and AAI.

My point, I guess, is that CAL will be a survivor just on their high RASM customer base. They will have access to the captital markets and investors interested in their business plan.

As for BK, it may be an option for them in order to lower their CASM's and take advantage of their RASM advantage. But BK is costly too and it is not always the best option. Look at the billions of dollars Delta and United have been spending on restructuring charges.

Now as for a merger...a hookup with United or Northwest to expand the Pacific could create a full service airline that others would find hard to compete with.

Maybe they are waiting to see what happens at AAA before they talk merger. There was a great article in the AZ Republic yesterday about the labor disaster brewing at the new AAA. Every labor group has an open contract and the Company refuses to talk economic issues with any work group. Our FA's are planning to picket next week. You have seen the verbal altercations on this forum between the furloughed AAA pilots and us AWA guys. That is nothing. There have been fights on the ramp, crews yelling at each other while waiting for van rides, etc...

If Parker can somehow pull this off, then you may see other mergers.

 

[MK82Man]

Cactus73 .... "You have seen the verbal altercations on this forum between the furloughed AAA pilots and us AWA guys. That is nothing. There have been fights on the ramp, crews yelling at each other while waiting for van rides, etc..."

What are you talking about? I've seen spirited discussion (exchange of ideas) on the forum, but hardly call it a verbal altercation and where has there been any fight or yelling at van sites? I've seen nothing from the company or union that says fights or yelling is taking place. Every US crew I've met has been regular folks trying to get through the merger just like us. I've been impressed with US Air Gate agents, rampers, and ground support folks. I continue to look forward to working with them and creating the best possible carrier for the long run. I hope we bring the furloughed dudes back as soon as possible. From what I've seen, we are on a good road to creating a great airline for both groups ...

 

[Green]

You have seen the verbal altercations on this forum between the furloughed AAA pilots and us AWA guys. That is nothing. There have been fights on the ramp, crews yelling at each other while waiting for van rides, etc...

If Parker can somehow pull this off, then you may see other mergers.

I'm with Mk82man on this one. "Fights on the ramp, crews yelling at each other?" Where did you get that info Cactus? I've been doing a lot of PHL, Bos, and RDU trips recently and AAA crews, rampers, gate agents have been nothing but nice. You sound like one of the infamous 8 or 9 guys that got our webboard shut down from spreading half truths and fearmongering. Your intitials aren't HH by any chance are they?

 

[Pig]

Getting back to CAL, another important piece of the puzzle beyond good RASM, is the significant amount of debt maturities from 4th quarter '05 through the end of '07. It is close to 2 billion according to 1 article I read which included quotes of a interview from the CEO, Larry Kellner, about the debt. He admitted a significant amount of is coming due which will squeeze profits.

As a non-expert observer, the growth which CAL is planing I believe is aimed at growing out of this debt. CAL is trying to increase overall revenue over the next 2 years to make the debt which is coming due relatively smaller compared to the larger revenue which will be gained. As long as things stay on track without a protracted rise in jet fuel, a slowly growing economy continuing, and no significant terror/war related shocks, the plan should work. But any of these things could derail the plan. Also, the CEO has stated that '07 will be CAL's most difficult year to get though from the looks of things now, or actually 2 months ago when the interview was done.

 

[Cactus73]

I'm with Mk82man on this one. "Fights on the ramp, crews yelling at each other?" Where did you get that info Cactus? I've been doing a lot of PHL, Bos, and RDU trips recently and AAA crews, rampers, gate agents have been nothing but nice. You sound like one of the infamous 8 or 9 guys that got our webboard shut down from spreading half truths and fearmongering. Your intitials aren't HH by any chance are they?

No my name is not Herb H.

-There have been altercations on the ramp as per yesterday's AZ Republic. McClelland didn't even deny it in yesterday's article.

-We have had jumpseat incidents with some of the AAA pilots (you can PM me if you really want details and I'll fill you in). There have also been some incidents on crews vans. In fact, I had one myself last week in Denver where the Captain and the FO saw us and started talking about DOH and how it has to be the only way. We didn't respond and talked about non-flying stuff with ourselves and they eventually changed their topic.

-There was an incident with a commuting AAA FA and one of our FA's a few weeks back. The AAA FA is an ONT commuter if you heard the story.

-I'm not the one that got our web board shut down. In fact, I've never posted on the ALPA web board...never.

-There have been some very heated "discussions" on here on seniority integration and the recall rights of furloughed pilots. I wouldn't call some posts as debates. Also the "discussions" on who bought who. I can't stand him, but the guy that uses the handle Doug Parker on here hasn't exactly been debating.

Yes, it isn't all doom and gloom, but things aren't as rosy as the Company would like you to think. The CWA and IBT just reached an agreement with the Company today. That is good news for us. One less contract to negotiate.

Did you guys see the letter from Jerry Glass where he states the Company's belief that they have the right to impose AAA's contract on us? Or is this just "fearmongering" on my part.

I'm sure there are good stories out there. I went to Europe in October and took AAA both ways. I was treated like gold by both the outbound and inbound crews. They upgraded me when they found out I was AWA and on the return they took really good care of me. But I've also seen some of the bad parts of the merger. Have you guys been to STL lately?

 

[Green]

sorry to hijack the thread..

Cactus,

Hey I wasn't aware of those incidents. Unfortunate. The Herb H thing was a bad joke. Sorry about that. Anyways, I guess I've only had positive experiences so I assumed the majority must be that way. The other day we had some aaa fa's in the back non-revving and they gave our crew a batch of brownies. Of course they are going to screw our FA's in the integration so they can play nice and take the high road.