UAL Files CH 11

[chperplt]

http://money.cnn.com/2002/12/09/news/companies/ual_bankruptcy/index.htm




United flies into bankruptcy

No. 2 carrier seeks protection from creditors, largest bankruptcy in industry history.
December 9, 2002: 8:00 AM EST
By Chris Isidore, CNN/Money Staff Writer



NEW YORK (CNN/Money) - United Airlines, the world's No. 2 airline, filed for bankruptcy protection Monday, succumbing to continued losses and staggering debt payments it could no longer afford to make.


The decision to file for bankruptcy in the U.S. Bankruptcy Court in the Northern District of Illinois follows a weekend of meetings of the company's board of directors, and a warning from union leadership that the bankruptcy was "unavoidable and imminent."

The carrier says it has arranged for about $1.5 billion in loans, known as "debtor-in-possession" financing needed to fund operations during a court supervised reorganization.

The filing became a virtual foregone conclusion following rejection on Wednesday of United's request for $1.8 billion in federal loan guarantees. A three-member federal panel said that the airline's recovery plan depended on an unrealistic rebound in revenue, and that negotiated labor cost savings by the airline still left it with among the highest costs in the industry.

With United's parent, UAL Corp. (UAL: Research, Estimates), facing the expiration of a grace period Monday on a missed $300 million loan payment, the airline executives said they had no choice but to seek protection from creditors.

Travel advice

What United bankruptcy means for you

What to expect in travel in '03

CNN/Money Travel Center



The airline stressed it would continue to operate a normal schedule of flights and honor passengers' tickets and frequent-flyer mileage. The airline accounts for about 19 percent of U.S. air travel, with about 1,800 daily flights.

The airline had negotiated with union leaders for labor cost savings of $5.2 billion over the next 5-1/2 years in an attempt to win the $1.8 billion in federal loan guarantees. Those concessions disappeared with the rejection of the loan guarantee request by the Air Transportation Stabilization Board late Wednesday, leaving many of the employees receiving industry-leading wages.

Bankruptcy courts have the power to void labor and other contracts, though that can be a difficult and time-consuming process. UAL CEO Glenn Tilton told employees in a recorded message Friday that deeper cuts than those already negotiated and changes in work rules would be needed if the company was forced to reorganize in bankruptcy court. He didn't specify if management expected to win the deeper cuts in new negotiations or through court action.

Winning further negotiated concessions from the employees will be difficult. The airline's 13,000 mechanics voted against the concession package last week, despite strong support from their union's leadership. The Air Line Pilots Association said Friday it was surprised by Tilton's comments.

"We believe it is very premature to discuss these issues. ALPA is not interested in conducting our negotiations in the public forum," said the union's statement.

Series of problems over the last 2 years
The airline was once the world's largest and most successful. But it was hit with a series of problems starting in 2000 that led it down the road to the bankruptcy filing. The carrier has not reported a quarterly profit since the second quarter of 2000. It lost $1.7 billion, or $30.96 a share, in the first three quarters of this year alone. (Click here for Flight plan to trouble - a timeline of United's path to bankruptcy)


First management proposed a merger with US Airways Group, a deal that was eventually blocked by federal antitrust regulators. But the more than one-year effort to complete the merger distracted management and led them to negotiate an expensive contract with the pilots union in an attempt to win their support for the deal. The deal left it with the highest labor costs in the industry.

In 2000, pilots and mechanics at the airline also engaged in a series of job actions to put pressure on management for new contracts, actions that led to flight cancellations and helped chase away some business travelers.

When the country's economy slowed, it led to a sharp drop in business travel and business fares, hurting the company's finances. It also faced greater competition than other major airlines from the growing low-cost, low-fare carriers such as Southwest Airlines (LUV: Research, Estimates) or JetBlue Airways (JBLU: Research, Estimates) that did not operate the extensive network of flights of United or American Airlines (AMR: Research, Estimates) or Delta Air Lines (DAL: Research, Estimates).

Then came the Sept. 11 terrorist attack, which also sharply curtailed demand for air travel and fares. United was also unfortunate enough to have major debt payments come due before there was any meaningful recovery in the industry.

"There is not one smoking gun for United," said John Heimlich, director of economic and market research for the Air Transport Association, the industry trade group. "There were a lot of factors that emerged. Some were controllable, some of them were not. Then 9/11 was the lighter fluid on the grill.

 

[bobbysamd]

Bankruptcies

It is depressing, and very reminiscent of times eleven years ago. Now may be worse. Hopefully, no more United pilots will be furloughed or laid off.

Don't look forward to improving hiring prospects in the near future, especially if you're regional meat. There's always hiring here and there, but don't expect to see any massive hirings for a long time.

 

[ClassG]

Which major airline do you think could be next?

 

[skyking1976]

NWA, DAL, CAL.... Pick one

 

[Jeff G]

Probably AA, more as a defensive move than anything else, not because they've run out of cash. It just smells like something they'd do. JMHO, of course.

 

[PCL_128]

Which major airline do you think could be next?

American would certainly be next. They're getting close already. If things don't improve in the next 6 months for them, they will probably be filing. After that DAL will probably come next. Then NWA within a couple of weeks. NWA and DAL are pretty much in the same financial situation and are the strongest majors right now. They could last over a year probably with things going the way they are now. We'll just have to hope that things pick up.

 

[banned username 2]

Airline Expert: United to stay in chapter 11 for several years
United will hover in chapter 11 bankruptcy for a "very long time." So says Darryl Jenkins, head of the Aviation Institute at George Washington University. He says United is "an airline out of control" and serious changes are needed -- changes that could impact the entire industry.

Sad....

 

[80drvr]

American would certainly be next. They're getting close already. If things don't improve in the next 6 months for them, they will probably be filing. After that DAL will probably come next. Then NWA within a couple of weeks. NWA and DAL are pretty much in the same financial situation and are the strongest majors right now. They could last over a year probably with things going the way they are now. We'll just have to hope that things pick up.

Pretty bold statement. You're basing this on what?

 

[ClassG]

So, let's say AA is next in line to file.

If that were the case, why wouldn't AA management say to it's employees:
"See United? We're next. We need to cut the airline by ?50%?, shut down all of our unprofitable operations immediately and reduce the cost structure BEFORE things get out of control"?????

Why don't you ever see this happen?

I think these airlines know that if they do nothing, allow bankruptcy to become their only option, then the changes THEY believe need be made can get done without much resistance from Labor. At the same time, the employee-owners of UNITED now own NOTHING and have either lost their job or will be taking a big hit in pay.

Then, in order to "compete," CAL, DAL, NWA all drop off one at a time.

It's looking pretty ugly any way you slice it.

 

[goldentrout]

First off, let us all take a moment of silence for the UAL employees. It's a sad day for them and our fellow aviators therein...

Now, let's start finding causes and solutions so that this never, ever happens again!

Excerpts from [email protected]

UAL bankrupt

"While the bankruptcy filing likely will have no immediate effect on passengers, it will come at a steep price for the 83,000 employees who own 55 percent of the company. A bankruptcy court judge is almost certain to order wage and job cuts and could dissolve the employee stock ownership plan."

"The carrier’s stock, which reached $100 a share in 1997, closed at 93 cents Friday on the New York Stock Exchange."

"On pace to lose an industry-record $2.5 billion this year, United had pinned its last hopes of avoiding bankruptcy on getting federal backing for $1.8 billion of a $2 billion loan that banks wouldn’t otherwise provide. But the Air Transportation Stabilization Board, created last year to help the airline industry recover after Sept. 11, rejected United’s request on Wednesday.

The linchpin to United’s proposal was $5.2 billion in labor cutbacks by 2008, but the three-member federal panel said the airline’s business plan was financially unsound and a loan guarantee would have risked U.S. taxpayers picking up the tab."

"United has struggled even more than other airlines during the industry’s worst-ever slump. The carrier already had lost about $1 billion since mid-2000 by the time of the attacks because of labor turmoil, the industry’s highest costs and several failed strategies, including a costly and time-consuming bid to acquire US Airways—itself now in Chapter 11 bankruptcy."

"United cut service and laid off nearly 20,000 workers after the terrorist attacks, but it hasn’t come close to making up for revenue lost from the drop-off in business travel."

"United’s filing dwarfs all other airline bankruptcies. The previous largest was by Continental Airlines in 1990. United listed almost $25.4 billion in assets as of Sept. 30 -- more than twice Continental’s when it filed.

It also is one of the 10 largest bankruptcies in U.S. history—a list topped by the recent failures WorldCom and Enron. It is the 11th time a major U.S. airline has filed for bankruptcy since deregulation in 1978, including TWA three times."

--------------------------------------------------------------------

This is what ALPA and the International Machinists Union and the AFL/CIO has done for the UAL pilots/mechanics/FAs?????????

Results matter folks...not a bunch of union propaganda about "brotherhood...solidarity...you deserve more...and more...and more...managment is screwing you, and we're here to save you."

After seeing what is transpiring at UAL, I don't see how any of you can dispute what I say anymore that

"ALPA's and the other unions' financial strategies have significantly contributed to the demise of UAL and US Air...and possibly more to come."

Management too is much to blame...for agreeing to such outrageous contracts that are not sustainable even under average economic conditions.

Something's got to give...and instead of us controlling, at least in part, our destinies, our greed has put our fate in the hands of the federal judiciary system.

BOHICA! (Bend Over, Here It Comes Again)

The question is just...who's next?


---------------------------------------------------------------
"Settle matters quickly with your adversary who is taking you to court. Do it while you are still with him on the way, or he may hand you over to the judge, and the judge may hand you over to the officer, and you may be thrown into prison. I tell you the truth, you will not get out until you have paid the last penny."

 

[TurboS7]

If AA feels that UAL being Chapter 11 gives them an unfair marketing advantage then AA will file. AA is bleeding even worse than UAL, UAL should have filed in the spring, I would not be surprised to see AA file very soon.

 

[328dude]

Whats your guys thoughts on the fact that since United filed today, this will hurt US Airways emerging from Chapter 11 since the two carriers formed an alliance? Do you think it will hinder USAirways?

 

[adam_jorgensen]

What is all this talk about bankruptcy's in the USA? Why are so many airlines going belly up? You go to Canada, and its very quite right now. No talk of bankruptcy or anything and we are actually hiring pilots in all of our major airlines. Maybe you guys should move to Canada? We did have one of our major airlines go belly up 2 years ago. It was called Canada 3000. Is anybody familiar with that airline? Well they not only went bankrupt, the whole airline shut down and no longer exists. We used to have an airline called CP air and greyhound air too which some of you might of heard of. CP flew a really long time ago and greyhound was finished in a matter of months of just after starting. But never have I heard of an airline this major going under. I couldn't see it happening to Air Canada because their owned by the government. Good if your a pilot, bad if your a passenger.

Some people might not know this, but how many more years do you think it will be before there are any more major hiring's for the majors? 10? 13? (I hope)

 

[V-1]

So, let's say AA is next in line to file.

If that were the case, why wouldn't AA management say to it's employees:
"See United? We're next. We need to cut the airline by ?50%?, shut down all of our unprofitable operations immediately and reduce the cost structure BEFORE things get out of control"?????

Why don't you ever see this happen?

It's happening:

http://www.accessatlanta.com/ajc/business/delta/1202/09american.html



[ The Atlanta Journal-Constitution: 12/9/02 ]

American Airlines asks employees for pay freeze


Associated Press

Dallas -- American Airlines, the world's largest carrier, asked employees Friday to forego pay raises they are due next year to help the company stem massive losses.

American, whose parent company lost nearly $3 billion in the first nine months of this year, said cancelling pay raises would save $130 million.

Chairman and chief executive Donald Carty has said the company needs to cut $4 billion in annual costs and has found about half of that by laying off workers, mothballing planes, cancelling orders for new jets, reducing food service and other changes.

"The restructuring of our labor agreements is inevitable and fundamental to our long-term goal of remaining competitive and restoring profitability," Carty and president Gerard Arpey said in a letter Friday to employee groups.

Carty also said he and other managers would go without raises for the second straight year.

American's flight attendants are scheduled to get a 3 percent raise on Jan. 1 and additional raises in July. Mechanics and others represented by the Transport Workers Union are due to get a 3 percent increase March 1.

Nonunion airport and reservations agents are scheduled for an average 90-cent hourly wage increase next year, the company said. Pilots are not due for an increase.

The major U.S. airlines are expected to lose about $9 billion this year and trace many of their difficulties to a weak economy and travelers' reluctance to fly after last year's terrorist attacks.

 

[bobbysamd]

Canadian airlines

What is all this talk about bankruptcy's in the USA? Why are so many airlines going belly up? You go to Canada, and its very quite right now. No talk of bankruptcy or anything and we are actually hiring pilots in all of our major airlines. Maybe you guys should move to Canada? . . . .

This is a highly complex issue and I wouldn't even pretend to have all the answers or analysis. I do have a couple of thoughts.

For one thing, the U.S. was already in a recession. My theory is the recession actually started in mid-2000, when stock prices started to fall. At the end of that year, electricity prices were doing strange things. Coincidentally, Enron, who was a major electricity broker, was a player. We know what's happened to Enron.

Like it or not, by 911 the country was going through recession. Then came 911, and that gave impetus to the recession. Very similar to the Gulf War era and that recession. During this time, airlines were having trouble and 911 gave impetus to their troubles.

United was one of the airlines which had an aircraft involved in 911. To put it mildly, 911 certainly didn't help its cause. Also, United was dealing with employees' salary givebacks which were in arrears. United has had some big debt come due, thanks to its expansion plans when times were good.

Those are a couple of my .02 ideas about why United has had trouble. U was having its troubles beforehand. United tried to acquire U, and that was a fiasco.

It's not that easy for Americans to get jobs in Canada. I asked about it when I was looking for a commuter airline job. For one thing, Canadians receive first consideration. The Americans in question would have to obtain the right to work in Canada. Finally, they have to convert their U.S. certificates to Canadian licenses.

Hope that at least partially answers your question.

 

[Publishers]

Now

A good deal of what happens here on out is the struggle for passengers between UAL and US. They can get into a competitive thing that tends to hurt those who are more secure like AA.

Meanwhile SWA will continue to pick off their better routes. Labor will change over all this.

No matter how this comes out, United has made the farthest fall from grace. The question is was it a suicide, a homicide, or manslaughter.

 

[goldentrout]

Suicide

The employees asked for outrageous compensation packages without apparently analyzing the long term viability of their requests.

And then all those super educated, Yale and Harvard management graduates agreed to their terms, along with trying to buy an airline that had almost as much debt as itself, if not more!

A UAL pilot told me today

"We and management did this to ourselves. Management pissed away a ton of money with the whole UAL merger thing, and then we in retaliation, stuck it to them with our demands in our last contract. Additionally, to "prove our point' to management, our work slowdown of 2000 drove off loyal business passengers, which have never come back."

Vengeance, greed, death (in the metaphorical sense)...this is starting to play our like a Greek tragedy.

 

[Majik]

I read an article several months ago that said, "During the year preceeding 9/11, had all of United's employees worked for free, United would have still lost money."
Sorry Hoss, but I gotta throw most of that blame in managements direction.

 

[VFR on Top]

I think it's time for these megabucks MBAs running these companies to start earning their keep; if they can't manage effectively, why should they make more than people who actually do their jobs effectively? The number of companies getting their money's worth out of their overpaid CEO has got to be pretty small.

 

[Dieterly]

One year ago...

 

[goldentrout]

Majik

Maybe...but they would have lost much less money without the 22-29% pilot pay hike of 2000.

Secondly, who knows how much revenue was lost due to the "employee induced" work slowdown? For all we know, had some of the employees not "proven their point to management," maybe the company might have acutally made money or at least broke even in 2000.

Third...if a company has a business plan, where even during average economic times, they can't pay their bills even if everyone worked for free...what kind of business plan is that????

Fourth...as long as us aviators keep totally blaming management, instead of taking partial responsibility for causing the current state of the industry, we'll just see more and more and more and more of us on the street every month...as is happening now...and as it will happen for at least the next six months, maybe longer.

Rumor is that UAL might knock off another 25% of their list. That would take them from a pre 9/11 total of about 10,000, to about 7,000. A 30% cut in 2 years.

Fine...sit around and blame mangement...I hope you're high enough up on someone's seniority list (that won't go bankrupt) to have that luxury.

 

[goldentrout]

Right after 9/11, I had this same discussion/argument with senior UAL guys on this very board.

I told them the company's business plan was broken and not sustainable.

I told them ALPA needed to be proactive and work with management then (not now) to reduce costs, before it was too late

I told them the other employee unions had to be on board too, because cost cutting was going to have to be across the board.

I told them who at Eastern or Pan AM or Braniff would have thought their company would cease to exist? (not that UAL is yet facing this prospect)

It didn't take a genius to figure this out...it's just business 101... revenues have to meet or exceed costs for a business to be viable. How the heck can a company lose 8,000,000 dollars a day and remain solvent? This bleeding didn't just start last month...the UAL MEC and UAL managagement should have been all over this 2 years ago!

Here's the typical response I got from the UAL senior guys:

1. It's management's fault...we helped them out with our contract in 1994...they've bungled it from then, it's not our fault.

2. We deserve every penny of our 22-29% raise...we deserve it because of our last concessionary contract.

3. We have to keep what we have to "preserve the profession." Otherwise, it will just be a free fall of wages and benefits (implying they're doing the rest of the UAL pilot list and all the other UAL employees a favor...that worked out well).

4. I deserve every penny I earn, and I'm not giving up a cent to anyone. I used to live 10 pilots to a crash pad, eating peanut and jelly, flying freight. I've paid my dues, and now I'm going to enjoy the rewards!

Not once in any of their commentary did I hear one word of concern for their fellow pilots...or their fellow UAL employees...or the viability of the company as a whole.

just me me me...I I I

Here's another lesson from business 101:

You're only worth what the market will pay you to produce your product or perform your services.

The large discrepancy between what many airline pilots think they "deserve" and what they're really worth, is now being dramatically demonstrated.

Pride goeth before the fall.

 

[PCL_128]

Right after 9/11, I had this same discussion/argument with senior UAL guys on this very board.

I told them the company's business plan was broken and not sustainable.

I told them ALPA needed to be proactive and work with management then (not now) to reduce costs, before it was too late

I told them the other employee unions had to be on board too, because cost cutting was going to have to be across the board.

I told them who at Eastern or Pan AM or Braniff would have thought their company would cease to exist? (not that UAL is yet facing this prospect)

It didn't take a genius to figure this out...it's just business 101... revenues have to meet or exceed costs for a business to be viable. How the heck can a company lose 8,000,000 dollars a day and remain solvent? This bleeding didn't just start last month...the UAL MEC and UAL managagement should have been all over this 2 years ago!

Here's the typical response I got from the UAL senior guys:

1. It's management's fault...we helped them out with our contract in 1994...they've bungled it from then, it's not our fault.

2. We deserve every penny of our 22-29% raise...we deserve it because of our last concessionary contract.

3. We have to keep what we have to "preserve the profession." Otherwise, it will just be a free fall of wages and benefits (implying they're doing the rest of the UAL pilot list and all the other UAL employees a favor...that worked out well).

4. I deserve every penny I earn, and I'm not giving up a cent to anyone. I used to live 10 pilots to a crash pad, eating peanut and jelly, flying freight. I've paid my dues, and now I'm going to enjoy the rewards!

Not once in any of their commentary did I hear one word of concern for their fellow pilots...or their fellow UAL employees...or the viability of the company as a whole.

just me me me...I I I

Here's another lesson from business 101:

You're only worth what the market will pay you to produce your product or perform your services.

The large discrepancy between what many airline pilots think they "deserve" and what they're really worth, is now being dramatically demonstrated.

Pride goeth before the fall.

You have to keep this in mind: pilots are willing to give concessions once or twice to help the company maintain viability, but if the mgmt won't fix the business model, then why continue to give concessions? Concessions will not fix a rotten business model. As usual, Eastern is a perfect example. In the early 80's Eastern was already losing enormous amounts of money. So what does Frank Borman do? He buys a bunch of brand new A300s for millions and millions of dollars!! How does this make sense? But again and again mgmt does these same stupid things. They beg for concessions and the employees give in. Then mgmt goes and spends a bunch of money or institutes a bad new policy that wastes money and the concessions end up doing nothing. At some point the employees have to put their foot down and say no more! Mgmt has to be accountable. In the end, if mgmt doesn't change the business model, the company will go out of business anyway whether the employees take concessions or not. Therefore, you might as well keep your current contract and hold mgmt accountable for the changes. If I've said it once, I've said it a million times, concessions have never saved a failing airline and they never will.

You're only worth what the market will pay you to produce your product or perform your services.

I guess I should work for free then, sense there are so many pilots out there just starting their careers that are willing to fly for free just to get multi time? You're not worth what the market dictates, you're worth what you negotiate.

 

[Publishers]

ownership

Let's blame it on the owners and who owns the 55%. Even if they, management is at fault, the employee slow down killed the business traffic that will end up being the fatal bullet.

 

[dogg]

I have a question. Can a company file for chapter 11 just because they feel that they are at a competitive disadvantage. I thought, as in United case, that there had to be dire straits. As in 875 million worth of lease payments that are due with no money to pay. It seems that all of the other Majors have cash on hand and are making their payments etc.. I don't think that they can file just to give them a competitive edge or to save money. Maybe one of the lawyer/pilots can comment on ch 11 requirements

 

[PCL_128]

Re: ownership

Let's blame it on the owners and who owns the 55%. Even if they, management is at fault, the employee slow down killed the business traffic that will end up being the fatal bullet.

Work slow downs and strikes are the only things at our disposal to threaten mgmt during negotiations times. If we refused to use these self-help actions then mgmt wouldn't even pay attention to us. Mgmt threatens us with pay cuts, furloughs, contracting out flying, etc... What are we supposed to do to counter this without self-help actions such as stikes and slow-downs? In the end work slowdowns really are mgmt's fault because we only resort to them when mgmt refuses to bargain in good faith.

 

[B1900DFO]

Anybody read where Ual announced that they have implemented a 2.8%-10.7% wage cut for management employees? Doesn't that seem grossly inadequete especially when they are about to ask pilots for 25%+. Reminds me of US airways giving out 6 million in bonusses to top managers while in bankruptcy because the money was "promised to them" before Ch11.

 

[goldentrout]

PLC_128

You say

"You're not worth what the market dictates, you're worth what you negotiate."

Well, the current UAL situation proves you absolutely wrong.

They negotiated a 22-29% pay raise. They negotiated a no furlough clause.

What they are going to get is probably a 20-25% pay cut, and 2000-3000 pilots on furlough.

They got paid what they "negotiated' for about 2 years. Then market forces came to bear...now they'll get what the market dictactes they are worth.

Same thing at US Air...they negotiated a certain pay scale...now, to remain competitive, they had to take a significant pay cut, and lose about 20% of their pilot list..

And as for strikes...at least at the major airline level...what are they striking for...to top out at $300,000/yr instead of $275,000/yr? To get a minimum of 13 days off rather than 12 days a month? To get a work rule that says if my vacation touches my trip, my trip is dropped, and I get paid to sit at home and do nothing?

Come on.. major airline pilots are not the proletariat masses... fighting against the evil capitalist industrialists, who are working them to the bone for meager wages, under horrible work conditions.

As for work slowdowns...again the evidence proves you wrong, as evidenced by the significant decrease in UAL business traffic during and after their work slowdown.

Sounds good, "we'll who management we're serious!"

Meanwhile the customers loyaltly is shot after he misses two or three business meetings or weddings or whatever...and he figures out that, though he may not get free alcohol, SWA or Jet Blue will get him consistently to his destination for about 50% less than UAL.

I don't know how old you are, but a reading of recent history should show you that unions have all but destroyed a number of industries in this country...steel...automobile...airline.

I see even with only 900 hours, you've already bought into the "us against management mentality."

That concept has resulted in 11 major airline bankruptcies in the last 20 years...and thousands upon thousands of pilots/mechanics/FAs/ticket agents/baggage handlers etc. losing their jobs...many permanently.

The last twenty years of the airline history since deregulation proves your theory wrong...very wrong...unless you consider the state of the industry today a success story.

 

[PCL_128]

PLC_128

You say

"You're not worth what the market dictates, you're worth what you negotiate."

Well, the current UAL situation proves you absolutely wrong.

They negotiated a 22-29% pay raise. They negotiated a no furlough clause.

What they are going to get is probably a 20-25% pay cut, and 2000-3000 pilots on furlough.

They got paid what they "negotiated' for about 2 years. Then market forces came to bear...now they'll get what the market dictactes they are worth.

Same thing at US Air...they negotiated a certain pay scale...now, to remain competitive, they had to take a significant pay cut, and lose about 20% of their pilot list..

They are still getting paid what they negotiate. They are negotiating concessions. The labor contracts are not being thrown out the window because of the filing. Mgmt still has to go to labor and negotiate for the pay cuts. Everything is about negotiations.

Mgmt can't simply go to the pilots and say "I can find 1,000 pilots willing to fly the 737 for $10 an hour, so that's what we're going to pay you." That is what the market dictates and that is what it seems you would support. Thanks to ALPA we don't have to worry about this. We know we are worth more than $10 an hour even though that's what the market will bear, so we negotiate for it. And strikes and work slow-downs are what enable us to do this.

I hate to tell you this, but the magical utopian world of your fantasies doesn't exist in the real world. Mgmt will pay you nothing if they can get away with it. They won't pay you a fair wage because that's what you deserve. Maybe 300k a year is a little much. Maybe not. I'm not going to tell the 747 CA what he deserves to get paid for his job. I'm not in his shoes. But the fact remains that mgmt doesn't care what you deserve for your hard work, they only care about how little they can get away with paying you.

As I said, the market will bear $10 an hour 737 pilots, but we shouldn't settle for that just because that's what the market dictates. We should negotiate for a fair wage.

I see even with only 900 hours, you've already bought into the "us against management mentality."

Yes, that because after my "only 900 hours" I've already worked for a non-union carrier that paid it's first year FOs $10 an hour. The owner of this company had 3 private aircraft, a yaucht, several houses (one of which is on a private air strip), and several luxury cars. Meanwhile his employees are struggling just to eat. This is the way all mgmt would behave if they had the opportunity. Thank God for ALPA or all of us would be that way today.

That concept has resulted in 11 major airline bankruptcies in the last 20 years...and thousands upon thousands of pilots/mechanics/FAs/ticket agents/baggage handlers etc. losing their jobs...many permanently.

No, the Airline Deregulation Act of 1978 resulted in all of that. How many major airlines applied for bankruptcy during the years of regulation? The answer is none. The airline industry is a public service that is highly dependant on safety. As such, the regulated environment was the perfect fit for it. When regulation was removed all hell broke loose (Braniff, Eastern, Pan Am, etc...). Now it's picking back up again and the majors are dropping like flies.

 

[Publishers]

Argue

It is difficult to debate with those who see such an adversarial role between managment and labor.
In my experience in business, we paid our employees because we wanted the best employees. We treated them fairly and we all worked together.

You see I think you should not be working for someone who you do not respect nor should they employ someone who views his employment with the distrust you do. Where we differ is that I do not think that we should be forced to employ someone on the basis that they make the rules.

The key word here is balance. We get out of balance in situations where labor or management totally fail to read the other sides position and hence pursue it to a fault.

United's labor should have had more regard for the life blood of their business traffic and never put it in a situation where they win but lose. They own 55% of the company they killed. Sure management has a place in the blame game but they caved trying to protect the business customer.