Song won't be the only one!

[Bill Nelson]

That is if UAL makes it at all.



UAL to unveil reorganization plan

Bankrupt carrier expected to detail restructuring plan to unions, creditors Thursday.
January 28, 2003: 1:06 PM EST



CHICAGO (Reuters) - UAL Corp.'s United Airlines, facing pressure to explain how it will emerge from bankruptcy as a strong competitor, is expected to present details of its restructuring plan to its unions and creditors this week.

The plan -- which is expected to include details on the launch of a new low-cost carrier -- is the product of weeks of meetings between UAL executives and financial advisers representing unions and creditors. UAL, the No. 2 U.S. airline, filed the largest bankruptcy in aviation history in December.

The airline has submitted a business plan to its lenders in exchange for $1.5 billion in financing to help it operate while in bankruptcy, but few details have been released to the public or the airline's employees.

One of the few known specifics is a strategy to launch a low-cost carrier to compete with rivals such as Southwest Airlines (LUV: up $0.15 to $12.97, Research, Estimates), which have been eating away at market share.

UAL (UAL: up $0.01 to $1.10, Research, Estimates) Chief Executive Glenn Tilton said two weeks ago that management planned to present the full business plan to union leaders before Thursday's scheduled meeting of the company's board of directors.

"In the next few weeks we'll all be seeing and hearing more about United's plan for transformation in the future," Tilton said Tuesday in a recorded message to employees. "As we move forward with these various discussions with all of these groups, this strategy will become the basis for our final plan for exiting Chapter 11."

UAL is also expected to report another round of losses when it issues 2002 fourth-quarter and full-year results Friday. Analysts expect the Elk Grove Village, Ill.-based carrier to report a loss of $13.81 a share for the fourth quarter and a loss of $38.92 a share for the full year, according to Thomson First Call.

American Airlines parent AMR Corp. (AMR: up $0.10 to $3.22, Research, Estimates) last Wednesday posted a $3.5 billion loss for 2002, the largest annual loss in aviation history, which surpassed UAL's industry record loss of $2.1 billion in 2001.

 

[flx757]

It appears the pilots aren't interested in a UAL version of "Song".


.UAL pilots reject idea of separate low-cost carrier


Wednesday January 29, 6:47 PM EST

By Meredith Grossman Dubner

CHICAGO, Jan 29 (Reuters) - The union representing pilots at bankrupt UAL Corp.'s (UAL) United Airlines on Wednesday said it opposed the possible creation of a separate low-cost carrier and accused the airline of seeking to break up the company.

United, which filed for bankruptcy in December, has said it would disclose details of its restructuring plan to its unions and creditors before a Thursday meeting of its board of directors. The plan is expected to include specifics on a new low-cost carrier.

The pilots said they recognize that a low-cost unit within United is important for the airline's recovery strategy. But they said any attempt to sell off routes, aircraft and other assets to a low-cost carrier with separate management and collective bargaining agreements would not be tolerated.



"They appear to be proposing a plan to break up United Airlines by giving United routes, aircraft, and other assets to another company -- with a whole set of new managers and employees. If so, United's management is now telling us to give up on United Airlines as we know it," Captain Paul Whiteford, Chairman of United's branch of the Air Line Pilots Association, said in a statement.

UAL Chief Executive Glenn Tilton has been criticized by employee groups for not offering more details about how the No. 2 U.S. airline plans to emerge from bankruptcy as a strong competitor. The pilots union, which represents 8,000 United pilots, said it has been locked out of negotiations.

A UAL spokesman was not immediately able to comment on the statement by the pilots, who have taken a temporary 29 percent pay cut to help save United millions of dollars in labor costs as the airline works on a long-term recovery strategy.

A spokesman for the International Association of Machinists, which represents 37,000 United workers, said IAM leaders continued to meet with UAL executives on the recovery plan but would not comment on the proposed low-cost carrier.

A spokeswoman for the Association of Flight Attendants said she could not immediately comment.

Elk Grove Village, Illinois-based UAL is also expected to report another round of losses when it issues fourth-quarter and full-year results on Friday. Its shares closed 6 cents lower at $1.09 on the New York Stock Exchange on Wednesday.

AIRCRAFT PAYMENTS

United also said on Wednesday that a 60-day window after its bankruptcy filing that prevented aircraft financiers from taking back planes may close before the airline finishes negotiating what it hopes are steep cuts in aircraft payments.

United has said it could save perhaps hundreds of millions of dollars by slashing aircraft payments to match current rates, which have plunged since the Sept. 11 attacks.

The airline, which suspended aircraft payments after the bankruptcy filing, said in a message to employees on Wednesday that renegotiating the complex agreements that cover up to 450 of its roughly 550 airplanes could take months.

If United wants to continue to use the planes, it must either resume the payments, and pay back amounts due, or strike an agreement with the financiers to extend negotiations.

Barring payments, or an agreement, financiers could move to seize the planes. United does not have to make a permanent decision on the planes until later.

United said it plans to announce extensions on Feb. 6. It did not specify how many airplanes would be covered by the extensions. It also may choose to return some planes.

On Tuesday, United sought bankruptcy court approval to drop six leased Boeing Co. (BA) 757-200 airliners by Feb. 6

 

[rapidD]

I also saw today on CNN Business that UAL is proposing another 25% cut in its pilot force, down to 6000. Pick your poison.

 

[Sleepyhead]

"It appears the pilots aren't interested in a UAL version of "Song"."


Wrong.

What the UAL pilots are not interested in is forming a separate company with a separtate seniority list and separate contract, but
use United airplanes.

The pilots have been talking about a LCC divison for a long time.
Way before management decided it was a good idea.