LCC's concerned for UAL

[flyguppy]

I'm sure the LCC's are really concerned that UAL hasn't done enough to cut costs. Just an ad and a paint job, eh? Sounds like someone is taking a little more notice now.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>


Low-fare carriers call for United cuts. Frontier, others beseech loan board.
By Louis Aguilar
Denver Post Business Writer
Thursday, April 22, 2004

Frontier Airlines is one of four low-fare carriers that want United Airlines to cut back on its flights and pull out of some cities before it secures a $1.6 billion federal loan guarantee.

The Air Carrier Association of America, which represents Frontier, AirTran, Spirit and Sun Country, says it's trying to persuade the federal loan board to make bankrupt United give up gates at various airports, and even leave certain markets, to prove it is serious about cutting operating costs.

"If you would compare this to any other business, you would expect a company to close some stores and maybe pull out of certain markets," said Edward Faberman, the Washington-based executive director of the discounters' association.

"While United has taken some steps to cut operating costs, they are not doing everything they can to lower their costs and ensure that (their costs) will stay under control," Faberman said.

United is seeking the loan guarantee from the Air Transportation Stabilization Board. The Chicago-based carrier originally applied in June 2002 and was denied loan guarantees. The board was formed after the Sept. 11, 2001, attacks to provide $10 billion in loan guarantees to the airline industry, which was devastated by the attacks.

United, which wants to emerge from Chapter 11 bankruptcy by the end of this year, said scaling back or leaving competitive markets is not going to happen.

"The premise is illogical," said Jean Medina, United spokeswoman. "We are on track for cutting costs by $5 billion annually by 2005. Through a consensual agreement, our annual labor costs have been reduced by $2.5 billion. We reduced our workforce 38 percent. We improved productivity 25 percent. We've identified $900 million in savings through aircraft leases."

Airline industry analyst Ray Neidl of Blaylock & Partners in New York, said the discounters efforts to sway the safety board will not work.

"The ATSB is not really influenced by politics," he said.

"While from (the discounters) viewpoint, it may make sense for United to pull back, it's not in United's business plan," Neidl said.

United and Frontier have plans to expand at Denver International Airport.

In November, the city settled a long-running dispute between the two airlines by agreeing to major expansions on two DIA concourses. Under the agreement, the airport will build United a $40 million expansion on Concourse B. Frontier gets a $77.3 million addition to Concourse A.

 

[Dizel8]

Or maybe, they just want to gain access or more acess to airports where they believe they can make money and where UAL is losing, but staying to keep the LCC's from gaining ground.

I think the verdict on Ted is yet to be seen.

 

[skykid]

This is getting funny now! These are the same LCCs that lobbied against the pension legislation that the House and Senate voted yes for in landslides, and Bush was in such a hurry to sign he did it on a Saturday. I wonder if they have any pull now? It wasn't very long ago Frontier mgt was saying United and TED would have absolutely no impact on their future. I don't know if that is true or not, but you ought not waste money lobbying against the irrelevant. These are the same domestic only carriers that wasted no time gobbling up market share after Sept 11 when the international carriers had empty overseas flights and were pretty much powerless to defend their turf. United didn't shrink to the size you hoped so now you want to dictate which markets they should be in? Not going to happen.

Dizel 8, I'd wait until United comes out of CH11 to try and figure out where they might be losing money. United lost a ton of money on paper in Feb, but put 205 million cash in the bank. In other words the bankruptcy paperwork is a little tricky. Also, I know of at least one member of the Air Carrier Association of America that is losing money this year.

This is just a business, that is for sure. But when you start messing with somebody's job, it gets personal. Pulling out of markets means losing jobs, and the folks over here aren't going to forget this one. One of the reasons United is still around is because gordon bafoon had such a good time predicting their demise. "United is HIV positive," remember? I would pay to fly just to prove him wrong.

 

[Ty Webb]

It's not a matter of "being funny". It's a matter of the federal government using tax dollars to basically subsidize United.

If they want to emerge from bankruptcy, great, but don;t use my tax dollars to enable them to stay in markets at a loss, unless you're going to give that same money to my carrier.

When United tanks, guess who's going to be on the hook for billions of dollars? That's right . . . .you and me.

 

[Dizel8]

"Dizel 8, I'd wait until United comes out of CH11 to try and figure out where they might be losing money.'

Sorry, but that is way above my paygrade, just posting a different point of view.

"This is just a business, that is for sure. But when you start messing with somebody's job, it gets personal. Pulling out of markets means losing jobs, and the folks over here aren't going to forget this one. One of the reasons United is still around is because gordon bafoon had such a good time predicting their demise. "United is HIV positive," remember? I would pay to fly just to prove him wrong."

Gordon "foot in mouth" Bethune says a lot of silly things, but that is just the way he is. The "personal" part works both ways, remember, FRNT as a corporation is trying to grow as are all the LCC's, UAL as a corporation wants them all to disappear and could not care less about the loss of jobs.

Now, we both know, that you and I are just pawns in a big game. I would hope, that you do not view employees of other airlines as the enemy, because they are not, as a matter of fact, they are just like you.

 

[Boeingman]

United lost a ton of money on paper in Feb, but put 205 million cash in the bank. In other words the bankruptcy paperwork is a little tricky.

It would be interesting to see the increase on the accounts payable ledger during this time period.

This is just a business, that is for sure. But when you start messing with somebody's job, it gets personal. Pulling out of markets means losing jobs, and the folks over here aren't going to forget this one.

You mean like the way UAL employees hassled CAL employees in Denver? The very public TORQUE program? Your agents pulling our passengers out of our ticket lines? What your MEC did to the FAL pilots? Shall I continue? Probably not because I know with you guys this doesn't count.

But I know what you mean by not forgetting. Ask any one at CAL from the early 90's and you'll get the same type of emotion that you have mentioned.

One of the reasons United is still around is because gordon bafoon had such a good time predicting their demise. "United is HIV positive," remember? I would pay to fly just to prove him wrong.

As far as the HIV positive comment, yep that's Gordo, but the analogy is the same. You're waiting for a cure (ATSB) which may not be found and the patient gets sicker and sicker (losses while in BK) while hospitalized (Bankruptcy). I don't see you being released anytime soon (UAL asking for more extensions).

On a more serious note, you're grasping. UAL is still around because several lenders were convinced to lend cash at the BK filing. UAL's financial position had deteriorated to the point it would of collapsed had these loans not of been negotiated.

Does it not concern you guys that so far after 19 months in bankruptcy your only plan is TED? Not withstanding that, the continued requests for extensions for reorganization is not a good sign. No matter how you try and spin it.

Incidently....did you read what the WSJ said today about the ATSB loan for UAL?

 

[Boeingman]

I think the verdict on Ted is yet to be seen.

Hence the reasons for the continued requests for extensions.

I think this is the only plan and their management is banking on it's success. The extensions are not to come up with anything different but buying time to see if it works.

It had better because the creditors and the courts are not going to wait forever.

 

[MW44]

Do you think that Ual is possibly just dragging their feet in BK as long as they can so they emerge in a better economy. Every month the economy is getting better (according to the Bushies) so why would Ual be in any hurry to get out of BK and have to play by the same rules as the other guys?