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UAL - will it go down?

shon7

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Just read that UAL has confirmed that it has hired bankruptcy lawyers - http://money.iwon.com/jsp/nw/nwdt_r...173922&date=20020801&alias=/alias/money/cm/nw

Is this only to enable more concessions or is there a real threat that there might not be a UAL in the years to come?

Also under bankruptcy would they still retain their routes and rights to fly into airport like Heathrow?

Lastly, can the airline just lay off employees under bankruptcy or do contracts still hold?
 

HA25

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They may go under unless their skyhags join in the concessions! Their mechanics are no better!

Pilots once again step up to save the airline all alone.
 

spinup

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You have got to be kidding me.

UAL has big problems but even according to the CEO BK is not a recovery option. Moreover; It would be a very short sighted of any airline not to fully consider the implications of Sept. 11. This is not new news.

I suggest that instead of following the media like sheep, try to obtain all the pertinent information. Here is the broad stroke.

July 2.3 billion cash on hand.
3.4 billion unemcumbered aircraft.
900 million in debt comming due at the end of the year, that UAL would like to refinance.

I submit that even without the govt' loan and the ERP UAL stays clear of BK.

Govt' loan 1.8 billion, + 200 million from other avanues.

Loans from the private sector cost UAL 22 million dollas more than AMR and DAL for a 2.0 billion dollar loan, not a lot more.

The code share has placed UAL in a competitive position on the east coast to the detriment of its competitors, 300 to 400 million per year in additional revenue.

The sky is grey, but it is not falling.
 

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Will it go down? In a word, no. May it file for Chapter 11 protection? Possibly. As I said on this board several years ago, every- and I do mean EVERY company has a lifespan- birth, growth, flourish, decline, and death. Just like our lives, there are ups and downs. The key is to live through the downs and make the life as long and fruitful as possible.

Take a look at the companies that have filed for Ch. 11 protection and you'll see some pretty big names. I seem to remember our friends at CAL going through the process twice and yet look how they're doing now. Not bad, all things considered.

I do find the situation at my beloved UAL much like the ship that's sprung a leak. If you sit around and scratch your behind and do nothing, sooner or later, physics will take over. Unfortunately, for those on the ship, many choose to poo-poo those laws of nature. For myself, I'd just as soon get the pumps going early as it keeps the furniture and bedding dry now so you don't have to do a bunch of extra work later in perhaps a bit of a more urgent mode.

Seems to me like the pleasure quotient of the voyage is in the hands of the rank and file. Unfortunately, many of those who stand to lose the most are willing to defy those pesky laws. I hope they can tread water!

UAL 78
 

Wiggums

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To answers shon7's questions...

Even if United goes bankrupt they will still be around. Continental and America West went bankrupt in the past and they are still here.

Good question about the rights into Heathrow. Both TWA and PanAM sold their Heathrow rights before they disappeared. However, I believe that even if UAL goes bankrupt, if they are still flying they can keep their Heathrow slots. No matter how much the British complain.

If they do go bankrupt all the contracts will be void. As was proven in 1983 a stike againist a bankrupt airline doesn't work.

Will united go bankrupt? I don't think so.
 

HA25

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UAL 78,

How can the F/A's at UAL look you in the face? I don't see what the big deal is with a short term pay cut to bring back the very company that most of them want to spend 40 years touring around the world on? They are over paid, and more importantly they feel that they are more important than they really are. Just look at the way they handled the ALPA/APA fight to get guns in the cockpit, whether you agree with ALPA/APA or not, their union didn't like letting the pilots get something and they nothing. I am sure the only reason the FAA has such an emphasis on F/A's and safety is thru lobbying from F/A unions. The fact is they are sky waitresses!

It sickens me to see them act like children while their company failes.
 

publisher

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likely

While it may be likely that they will file for protection, the fact is that their demise is not.

On the other hand, there is severe damage being done to their market share. It is currently under attack from all sides.

If Don Carty from American is right and he has to get going at being competitive with Southwest and the other low price competition, United may find itself with a very strong American attacking along with SWA and the others.

United's basic cost structure is high and there favorite customer, the business traveler, has adapted to a new economy by going elsewhere.

All this said, they still have assets and strength to build on. We will see.
 

HA25

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Am I for real? What kind of stupid question is that? What exactly are you confused about? The fact that UAL's has 22000+ F/A's that are ready to sit there and watch a 90 year old company go the way of Pan Am and TWA becasue they don't think a pay cut is in their careers best interest? Have you been keeping up with this news story? Do you ever look at the financial pages?
 

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Although

put a bit indelicately for your sensibilities I assume, the gist of the sentiment is nonetheless spot on. Sad that they will be the ones that suffer the most if and when the ship goes down.

Insanity is doing something the same way over and over again and expecting different results. I think posturing has been tried before with checkered results. It was easy for Leonardo DiCaprio to stand on the bow and proclaim "I'm king of the world" on a CAVU day after getting lucky with Kate Winslet. He wasn't as cocky during the death plunge, and the AFA rank and file could learn something from that scene.

Strangely, I have an almost perverse wish to see it happen- just to see what all of those "experts" have to say to those who have blindly listened to them all of these past months. No doubt, they'll have some sort of pretzel-logic reasoning about some "vast right-wing conspiracy" and how it was all scripted from the beginning. I suppose they'll even proclaim that there was once a fellow named Atta who worked at World Headquarters in the early '90s.

Time will tell.
 

HA25

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UAL78, as always you are a wise man, 22000 hours of flying tends to do this. And You deal with UAL's FA's all the time.

xXpress1,

I don't know what it is about F/A's that hit a soft spot with you (you were one, you married one, your mother was one). Either way, I worked at UAL for a while in the CS side of the house, and can tell you that the airlines in general, and UAL specifically are in a situation where the pilots are no longer their biggest labor cost. Especially when you consider the availablity of qualified labor for the respective job.

Over the last 30 years or so F/A's real wages have risen at rates far greater than pilots. Pilot have historically made good wages as they require tons and tons of training, clean professional records, dues paying, etc... F/As used to require a nursing degree, or some kind of education, but over time that changed to just a pretty face. Now again, due to litigation, the pretty face isn't even required. Under intense lobbying from F/A groups and unions that were formed over the last 30 years, their job has be re-described in FAR's as more relating to safety and less to service, so they effectively have the airline by the balls. They have always played a small roll in safety, but again this emphasis has been totally refocused. This has allowed them to increase their numbers significantly over this time period at a rate greater than otherwise with out the language written in the FAR's regarding the minimum required. Also they are (as any frequent flyer today can tell you) less service oriented than they used to be. They are usually sitting out of the sight of the passengers reading books, or magazines, and are now not even expected to serve food on most domestic flights. So they're job has become easier, and their wages have skyrocketed to the detriment of the airlines. I have written about this in previous threads, and everything I have seen confirms it.

I have two very close friends who work for UAL, one has been there 10 years and the other only 2, and both of them are frustrated that they and management have made significant agreements to reduce their wages and to give back RJ's etc...while the F/A's who are always the first to do work slow downs etc, now the best paid in the industry (upwards of $75K/yr) refuse to accept that their airline is in a graveyard spiral unless the Govt backs their $900,000,000 debt payment coming due. The TSB has stated that they will not consider any such guarantees unless there is labor concessions, and airline analysts are very concerned for UAL, however their F/A's are still clueless. The company IS in trouble and needs this bailout NOW! Look at their stock, from $60 to $4.29!!!!!!

Can you see why I may be a little angry with them now?

V7
 

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You Need

look no further than 1-800-DEAR AFA to see the reality of the situation. That's their Code-A-Phone number for the union hotline. Unfortunately, you need a Flight Attendant employee number to have it playback to you and it would be improper to put one up for public consumption. Suffice it to say that you hear a little rhetoric poo-pooing the latest news reports and deflecting any sort of stares towards them in other directions. Otherwise, they're talking about filling out surveys regarding post-tramatic stress and how it's affecting them. If you fill yours out in a timely manner, you even could win one of 25 CD players!

Talk about heads in the sand!

Now, let's go back to college for a minute and re-visit Mr. Maslow and his hierarchy of values. They work equally well for an individual or an organization. Remember, basic survival is on the bottom and altruistic work is on the top. When times are good, you always flow from the bottom up, and vice-versa. To anybody that has a stake in this, you're going to fall somewhere in this pyrimid. As the situation gets more serious, the upper sections get discarded and attention paid to the more basic principles. Right now, I'd say we're about at the bottom two in the stack. To my friends and colleagues in the 844, I'd say that I (we) haven't forgotton about you and never will, but we have the airline itself to care for right now in order to have a place to recall you back to. BTW, I still truly believe that recalls will begin in 2003. UAL is not going to shrink, because we can't. We have to stay the size that we are and slog and fight our way out of this fix.

And we will.
 

Lifestyle

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V7,
I'm know your upset about the F/A's but there behavior is nothing new. Remember there lack of participation in the ESOP. Enough said, F/A will always be takers and not givers. Its just a fact of life and it's too late in the game to get upset about it.

Sincerely,
One of the 844
 

HA25

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I was there during the ESOP and I know exactly what you are talking about. I wanted to participate becuase I understood corporate finance and the situation at hand. With no UAL, there are no jobs at UAL!

Today, I think that the AFA has really shown its colors.

AMR and UAL both must continue to seek marketshare or they will be horibly punished in the market, this is why ultimately they will both recall pilots. No airline can survive by shrinking. This has been proven over and over.

I sure hope Greenspan drops rates by .50 next meeting!
 

F/O

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Sad that they will be the ones that suffer the most if and when the ship goes down.

UAL78

How do you figure that? I think you'd agree that the pilots at UAL have far more invested in their careers than the flight attendants. Look at the Eastern guys. That's what happens when your airline tanks, you go to another airline after having as many as 20 years seniority, and you start at the bottom.

The average F/A just doesn't have that much invested in this airline. Many have made careers of it, but a far, far lower percentage than with the pilots.
 

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All true, but...

there are a zillion ways to look at it. Here's one: honestly, and I don't wish to hurt anybody's feelings or insult anyone, but what marketable skill has being a flight attendant given a person over let's say... a 15 year career? Also, what job can a flight attendant do that would give them the same pay and benefits that they have as working as a flight attendant? Most people conform to the lifestyle that their income affords them. When the real world hits them, they're going to be looking at a lot of 20K per year jobs. Now I do remember my stint on the bricks too, and there is some truth to the fact that there is nothing more useless than a pilot without an airplane. Yes, pilots have a lot to lose, but you'll also notice that when "the rubber meets the road" the pilots are the first (and so far, only) ones that have voluntarily moved to protect their careers.

Another way to view it would be that there are too many $$ in assets sitting out there in the form of airplanes to just continue sitting out there. There would be a giant sucking sound for the void to be filled- planes have to be flown and pilots have the skill. True, cabins have to be staffed by flight attendants, but do they have to be staffed by THOSE flight attendants? Let's face it, the industry is watching to see who the "troublemakers and knuckleheads" are (I'm going to live to regret that statement) and sadly, a lot of fine people are going to be painted by a very broad brush. In this economy it's far easier to replace a cabin crewmember that's viewed as being from a group of "Non-Team-Players" than it is a flight deck crewmember that at least tried to "play ball".

You're absolutely correct about the pilots having a lot to lose. That's why they're doing something about it. It's also true that many in the IAM having a lot to lose. That's why it's so puzzling to this writer that they're so adamant against joining in the recovery effort.

In my previous post, I contemplated the relative seniority and marketable skills of the various job groups versus their acknowledgement of a problem and willingness to do their share.
I don't think UAL will vanish. If that were the case, of course I'd put the pilots right at the top as far as having the most to lose. In the more probable scenario, the less skilled (sorry) and more junior in the ranks of their job group get shafted. Those are unfortunately...the very ones going along, business as usual.

Clear as mud, eh?

and I stand by my "recalls in '03" forecast

UAL78
 

canyonblue

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V70T5 said:
so they effectively have the airline by the balls


I quess they do if a group of, as you put it, "skyhags" can mow down a major airline.

Maybe ALPA shouldn't of gave them the boot 50 years ago.

P.S. Before you fire back go read "Flying the line" pts 1&2
 

HA25

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I have read the book, and I am a member in good standing of ALPA. But don't go down the road of comparing pilots and F/As. I won't even go there. From a professional standpoint they are night and day, apples and oranges.

Going on a 6 day trip, see you all later!
 

Tweetybird

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UAL78 (et Al),

Thanks for working your A$$ of for the 844 of us out here. We/I really appreciate it. I've been flying my tail off with the good old USAF and watching diligently as our company's issues have followed the sin-wave. As a result of listening to the code-a-phone every day I realize what da^n hard work you and all the rest of the Pilots at UAL are doing to keep the company alive. Yeah, like always, I'm a big cheer-leader, but THANKS!

Cheers,

Tweetybird

AKA: Former UAL ThunderGuppy Jockey!
 

shagadelic

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UAL78,
Just a question; I know the MEC has recommended the concessions, but as I understand from pilots I have jumpseated with this thing is far from a done deal. I'm not arguing pros or cons, just wondering what are your opinions on whether or not you guys will actually vote to approve these concessions? When does the vote close on this subject??

Thanks.
 

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The vote is supposed to happen later this month. As I go around the system, I seem to hear most from the prople who are against it. I don't know if they're the vocal minority or what. I've gone back and forth seeing the merits of both sides of the argument, but as time goes by and outside pundits and events chime in, I don't see the option for us. Gang, it ain't the company that values the stock where it is. View that as a vote of confidence- or lack thereof. Somebody doesn't have much faith in you right now. Hello??!! Sure there are things in it that specific people won't like, but I view it as an important part of the puzzle in order to get UAL back on track financially- and right now, that's all that matters. And to be honest, these are less harsh concessions than I would have envisioned, given the current state of the industry. Finally, it doesn't kick in unless everybody else joins in the effort!! Read the tea leaves. What are the chances right now? Oh, and one more thing... why vote to officially depict yourselves as the selfish, uncaring prima donnas that the public (and some labor groups) think you are? DUH!!!??? The real question to me right now is WHY this is even a question?

If the majority of pilots turn the agreement down, they are playing a game of "Chicken" that I for one, don't feel comfortable at all in playing- but I guess I'll have no other choice. If they loose, they can take comfort in the fact that "they showed 'em" as we all take a 40% pay cut with NO contract whatsoever. Yeah, they "showed 'em", alright! I'll ride this bad-boy out because at long last, I'm very senior. But I do have real concern for my not-so-fortunate friends.

Compare it to the old gag, "bad breath is better than no breath at all". I think that sums it up pretty well.

UAL78
 
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