UAL Seeks Lower Fees

[Mayday911]

United seeks lower fees from Regional airline partners
Dateline: Thursday February 20, 2003

United Airlines intends to use the Chapter 11 bankruptcy process to renegotiate its fee-per-departure service agreements with Regional airlines operating in the United Express feeder program to achieve substantial savings--up to 28% below current costs.

According to the airline's Plan for Transformation presented to its creditors committee at the end of Jan., United Express carriers Atlantic Coast Airlines, SkyWest and Air Wisconsin charge a premium over market rates. In the plan document, United said it is paying one partner $3,571 per departure on a 500-mi. stage length basis, another is receiving $3,132 and the third is getting $2,960. United added that it has received bids of $2,732 and $2,565 from airlines interested in providing the service.
One current United codeshare partner, ACA, has filed suit seeking to require the Major to declare by Feb. 28 whether it intends to honor the existing contract (ATWOnline, Jan. 3).

I wonder which of the bottom feeders are bidding that low. And so it starts!!

Mayday.

 

[Rottweiller]

Chautauqua and MESA. It's common knowledge.

 

[ACABlueridge]

Now maybe some can see how Chautauquas and Mesas bottom of the barrell are hurting ALL of us in the industry. All United has to do is redistribute their flying to another carrier. Their flying is shifted and pilots make LESS.

Looks like is is going to be a race to the bottom.

MESA guys/gals please vote NO!!

 

[FlyDeltasJets]

ironic

 

[Sleepyhead]

Maybe now some of you guys will realize we are all in this together. What effects one airline will eventually effect the others.

 

[IADBLRJ41]

HERE WE GO

Very well put!! I cannot believe what this industry has turned into. Who would have ever thought that a regional would be out bid by a low feeder like MESA.. It truly shows that airline management does not care about the future it is all short term goals and fat pocketbooks. So what is next for the UAX feeders=PAY CUTS!!!!

My 2cents

IADBLR

 

[ACABlueridge]

So what is next for UEX feeders=pay cuts?

Believe me, if management thought they could get them they certainly would try. Who knows what lies ahead though, after all it is a race to the bottom.

 

[Capt RJ]

Its bad enough that UAL's probability of survival is nil to none, but now they have to screw the lonely pilots at the bottom of the food chain. Co*k Suckers

 

[AAPilot]

Capt RJ, Just curious if this is just your opinion or you have facts to back up your statement?

 

[Capt RJ]

AA Pilot

Not quite sure the facts that your looking for, but if in regards to UAL survival chances-just read todays Dow Jones report, if its about screwing the regional pilots by pitting them against each other-just read the story that started this thread. How would you like it if AMR went into bankrupcy and all of the sudden decided to save money with "cheaper" crews, because Ch 11 gave the an out of your contract. We all need to stick together or we'll all get a bad deal in the end.

 

[IADBLRJ41]

AA Pilot I agree with CRJCA

If management had a dream come true AA wages would be like the wages of a CRJ CA. Honestly, I would have a really hard time in 10 yrs to jump to a major with 10+ yrs of senority. MY dream would be to fly a 777 or 767 but with what has happened to all the furloughed drivers is really sad. I really think this downturn is here to stay for a long while. I am just crossing my fingers that with all of this record change I am not given the big F ticket. What choice does it give you when you are on the street. I am still haunted by the stat on the furloughed UAL guys that 20% are actually flying and the rest are working odd jobs. (USA TODAY) At what point will this all settle down??? THat is the $$$ question anyone have the answer??



Tailwinds..

 

[boiler]

First off, I do not fly for Chautauqua or mesa and do not support or oppose them. But I have to ask do you really think they are able to bid that much lower because they are paying their crews that much less? I mean their bids are $1006 to $395 less than the current runs are being paid. For arguments sake, lets say that their captains make $25 less per hour and their FOs make $10 less per hour. On a 1.5 hour flight, that adds up to $52.50. Hey, let's even say that their benefits are much worse too! Ok, so we'll increase that $52.50 to $100 less in total pay and benefits for that 1.5 hour flight.

So, where is the extra $300-$900 in savings coming from? Assuming that they are not bidding to take a loss, this shows that ACA, AWAC, and Skywest are either making big profits or are run very inefficiently. I won't even guess which it is.

We could argue all day long that Mesa and CHQ don't pay their pilots very well, but from a financial standpoint it comes down to simple economics. It sounds as though Mesa and CHQ could pay their pilots as well as the other regionals and still clearly undercut the others fees.

So how is the bankruptcy judge going to look at this? If these other bids are true, it's almost clear as day...If ACA, AWAC, and Skywest want to keep their contracts, the fees will have to go down some. If the fees are not lowered, they risk losing business to Mesa or CHQ.

Is this good for pilots in general? No it isn't. Is this good for the airline industry? For United, absolutely. For ACA, AWAC, and Skywest, no. But we have to remember, the law of supply and demand usually prevails, and ultimately, it is the major airline that calls the shots.

 

[azpilot]

Soon you may have even more to worry about since United is very close to going under entirely. So that would mean no flying for anyone. I heard a rumor that Great Lakes was going to take over all the flying. Just kidding. I agree that the lower pilot pay at Mesa does not add up to the entire lower bid.

Good luck to everyone....

 

[easy spirit]

.........On a 1.5 hour flight, that adds up to $52.50. Hey, let's even say that their benefits are much worse too! Ok, so we'll increase that $52.50 to $100 less in total pay and benefits for that 1.5 hour flight.

So, where is the extra $300-$900 in savings coming from? Assuming that they are not bidding to take a loss, this shows that ACA, AWAC, and Skywest are either making big profits or are run very inefficiently. I won't even guess which it is.

.........

100 (less pay)X 10 (avg hrs util) X 75 (RJs) X 365 (days in yr) = $21,900,000 in annual savings!!!
Thats HUGE for a company (Mesa) that LOST $600,000 (0.02 cents per share) in it's latest fiscal quarter.

Pitting the regionals against each other is just bad news for UAL or any other major. We are such a drop in the bucket for them. We are not going to make or break them!

Regionals will be enticed to bid something they will not be able to back up and will either lose the business later or go out of business themselves!!

 

[rightrudder]

It would be interesting to know what type of aircraft is being used to fly that 500 mile stage length. Is is an EMB120, or a BAE 146? Is it a CRJ? These three airlines each fly different aircraft with different markets and number of seats.

On another note, wouldn't it be ironic if Mesa and Chat got some of the 70 seat flying for UAL. Then you might see USAir pilots flying United Routes in RJ's.

 

[Dieterly]

Again, ironic.

 

[A4Forever]

Ladies anad Gentlemen.. From my prespective as a retired UAL guy, let me say that the future doesn't look very promising. Mgmt's proposed changes to the UAL pilot's contract include everything from eliminating night (back side of the clock)pay, overwater pay, a reduction in expenses back to 1985 levels and elimination of downtown layovers and on and on. Probably approaching a 40% reduction in pay and benefits if the bankruptcy judge buys off on all of this, in which case I could foresee major changes to all pilot contracts. Mgmt will force the cuts or declare bankruptcy inorder to abrogate the contracts. Hold on for what may become a bumpy ride for everyone.

 

[easy spirit]

A4Forever,
Have you ever seen things this bad in your career?
Do you think somewhere down the road things will imporve (pay/benefits) or do you think these are fundamental changes that will stick with UAL and the industry forever (lower pay/benefits)? Low cost providers to rule the earth??

I heard those LA Rapid Transit Bus Drivers make good money!
Maybe I should drive trains instead. You don't hear about Union Pacifics's or Burlington's constant trials and tribulations. The media leave them alone!

 

[A4Forever]

Spirit... UAL, as have the other carriers, has gone thru periods of tuburlence during the past 35 years. In my humble opinion, a combination of events has brought us to what UAL faces today. 1. High labor costs: AA gets this $$, Delta wants that +$, then UAL wants to top Delta by $$$. I guess everyone thought it was a never ending spiral. The "Goose that laid the Golden Egg". Well, sombody shot the goose! Ups and downs in the economy, then WHAMO, 9-11. 2. UAL management: Giving into the labor demands without the business plan to support it. Failed attempts at questionable ventures: US AIR merger and Avolar. 3. The high cost of doing business: Fuel, facilities, ect. It all plays a part. If UAL does go down the tubes, there will be a lot of finger pointing and enough blame to be shared by lots of folks. Wages will rise, abet slowly. JB, SWA, Airtran will experience the same problems as they grow. Somewhere down the road, another LCC will emerge to challange them. Then it will most likely start all over again.

 

[Boz]

Capt RJ

Good Luck at the bottom of the food chain as you certainly are a bottom feeder. You remarks reek of the immature pilots that work at express carriers that are not old enough to even realize what the implications of a major airline going down will do to the industry.

Just be prepared to battle for the already slim jobs with more marketable pilots than ignorant ones like yourself.