United's Future

[Boeingman]

Re: UAL's Future - It Ain't Over Yet

Was it a surprise that UALs loan was turned down right after COAs chief Gordon Bethune ( a long time Bush buddy ) testified to the ATSB that [he] "dosen't need the government giving UAL 2 billion bucks so that they can beat me to death in my back yard."

That is complete bull$hit. UAL was turned down because their business plan was not impressing anyone but the people who wrote it. They also seriously misrepresented what their actual financial conditions are. Finally there was unrealistic future revenue and finacial expectations.

You're telling us that it was ok on one day to try and get a loan stating their losses were only 7 million per day, but later in the same week, under oath they conceed it was approx 20 - 22 million per day?

Bethune was the only one that had the balls to tell it like it is. The truth does in fact sting a bit no matter where it comes from.

 

[Draginass]

Unfortunately, airline leadership is sorely lacking in almost all the airlines. I'll beg to differ that the "summer of discontnent" in Denver was the fault of the pilots. Goodwin, who is probably the most stupid CEO in recent memory caused it by drawing up a schedule that he KNEW he couldn't fly without voluntary overtime by the pilots . . . then slow rolling the contract negotiations. What did he THINK was going to happen? In the end he could have had a cheaper contract at the beginning of the summer if he had bargained in good faith.

Also unfortunately, CEO talent to replace the present set of incompetents isn't there, so we're stuck with who we have. Interesting to note that W&G got their $30 million, courtesy of Siegel, despite the dire straits of US Air.

Somewhat in defense of leadership, though, is the fact that the industry simply CANNOT adjust to wild swings in the economy and world political situation. Even if labor worked for FREE, some airlines would still be losing money.

The salient question for government is if they want a coherent national air transportation system or not. Like I've said before, if left on it's own to morph into whatever the market will bear right now, you're not going to like what it turns into.

No policy is not a policy, Mr. Bush.

 

[mackinhoes]

So according to 460 driver, only farmers should have any help for business cycles? When was the last time anyone saw grocery stores without food on the shelves? Or a Mickey D's without Big Macs? Last time I read anything about food in America, we were the most obese country in the world.

It is not about the family going to Disney world. Having safe, reliable air transportation is a big part of what makes our economy the best in the world. It is about getting business people where they want to go. It is about creating jobs and economic growth in every other industry in America. How many people with real jobs have told you since 9-11 that their companies were cutting back on travel? Don't you think for a second in your little pea brain that may have something to do with the recession we're in? Or, to give you an analogy to make things easy to understand: Did you take any American History classes in school? Do you remember the huge government concessions the railroads received? Did they "deserve" them? Did the growth of the railroads help or hurt the American economy?

Getting this country flying again would be a big start towards getting the economy going again. Bush made a big mistake by not getting on the airline band wagon.

 

[SDF2BUF2MCO]

From mackinhoes:

"It is about getting business people where they want to go. It is about creating jobs and economic growth in every other industry in America. How many people with real jobs have told you since 9-11 that their companies were cutting back on travel? "

Want to add it's also about losing jobs to other countries such as China. Between the lawyers, taxes, and various government agencies (compliments of our politicians both Dems and Reps) American businesses and/or workers can't compete against other countries who don't have the same burden. Big business wants the quickest and easiest profits while the politicians keep passing laws that make doing business in America more cumbersome. If the politicians aren't careful their tax base is going to dry up. Doubt if they even care as long as their butts are parked in the ivory tower.
Oh well, at least the Chinese are making door knobs rather than nuclear bombs (yea right).

 

[46Driver]

Mackinhoes,
Thank you for the insult - I know my drill instructors would have been impressed by such witty remarks.
I never said that farmers should be the only ones to receive govt aid - I did say that they face more difficult challenges with a lesser ability to manage the market. The govt should step in to occasionally stabilize markets (which is distinct from letting a company fail while others in the country are providing a simliar service) The fact that self sufficiency in core areas (i.e., the nation should be able to feed itself) is important to national security; of course as a liberal, I am sure you would prefer to leave US national security to Kofi Annan and the UN....
Safe, reliable transportation is good - and vital to business. However, you left out affordable which is why the Pensacola Chamber of Commerce and quite a few others are paying AirTran to fly into the city. Delta had a stranglehold on our town and with exorbitant rates was choking off business. Businesses are not necessarily cutting back on the amount of travel but on what they are willing to pay for it - if Delta can't deliver than fly AirTran, if United can't deliver than fly JetBlue.
There are quite a few areas of growth: Southwest, JetBlue, AirTran - not to mention the regionals like Comair, ASA, ACA, SkyWest, etc..... The public relations problem for ALPA is: the American public objects to bailing out companies whose employees (primarily pilots) are perceived as overpaid and underworked. (Try to explain to Joe SixPack why his tax dollars should go to support a $300k United/Delta/American pilot when an Air Force One pilot makes only $100k)

Finally as to that history lesson: Univ of South Carolina, B.A. - History - Phi Alpha Theta History Honor Society.

 

[mackinhoes]

If airtran is the pinnacle of efficient capitalism, why does it need or even accept payments from the Pensacola Chamber of Commerce? Sounds like government help - I would think hard-core, Ayn Rand spouting, died in the wool, blue blooded arch conservatives would be upset about something like that.

I apologize for the insult, it was uncalled for.

 

[Ty Webb]

If airtran is the pinnacle of efficient capitalism, why does it need or even accept payments from the Pensacola Chamber of Commerce? Sounds like government help

OK, I'll play. First of all, the Chamber of Commerce has nothing to do with government. It is an organization of local businesses, so let's make sure we have that straight.

Second, they (the PNS business community) put together an incentive package to woo us away from nearby Ft. Walton Beach, where we were doing just fine, thank you. While we sure appreciate the PNS community's show of support, we aren't taking handouts, period.

The money is actually only a guarantee (it's a "ticket bank"). I believe there was some money actually given to us to do some intitial "AirTran is coming to PNS" type advertising" but that was it.

I don't know why you chose to accuse us of accepting "handouts" when you don't know the facts, and I don't appreciate you simply slinging mud out of ignorance.

AirTran was the first airline to say that we would NOT be asking the gov't for any loan guarantees after 9/11.

Howsabout your carrier?

 

[delivery100]

Not my thoughts, just copied it off a message board:


It seems the only strategy AMR had was to let UAL liquidate. However, UAL just renegotiated most its leases, got pay concessions and is technically cash-flow positive. UAL has now decided to crank up it's 747-400's again in the Pacific because with paycuts and lower leases they can make a profit with the 85% load factors out there.

With the second half of its DIP financing now in place I'm sorry to say that UAL will be around a long time. AMR is moving too slow. UAL can now withstand a drop in traffic (due to a war) and has the option and ability of
a bankruptcy judge to ORDER more short term cuts to insure survival.

Without renegotiating the notes due in June AMR will have less than $1B later this spring. A quick BK and liquidation may be the only course left. A company the size of AMR cannot let their unrestricted cash drop below $1.5B.

Even if they renegotiate the June notes they will still be below this number. Carty should have been working faster with the unions months ago instead of spending all his time lobbying for the ATSB to ignore UAL.
Great strategy huh?

The Administration says there are just too many seats in the sky. We all thought a UAL liquidation would take care of that. Looks like they will now qualify get the $1.9B loan to pay off the DIP people and will emerge lean and profitable next year. I now think AMR will be the one to eventually liquidate and solve the nation's capacity problems. Thanks Don.

24 yr. AMR Captain

Regrettably I must agree with your synopsis and prognosis. AMR being a Texas corporation, I initially thought the administration would be inclined to play favoritism ... lubricate the gears to effect the demise of UAL if you will.

Then realization set in that the administration can ill afford to soil it's integrity as nearly happened a year ago with Chenney and the oil interests.

Carty gambled all on the probability of UAL liquidating thus solving the over capacity problem.

In my opinion the White House will now practice laissez-faire and allow market forces to play out this battle of the giants unimpeded.

As you say UAL can still refile for Govt. backed loan guarrantees whereas AMR allowed the deadline to pass. This I believe may be the critical factor now which will determine which airlines will liquidate. This and the fact that UAL's newly won labor concessions reduces it's CPM relative to AMR and DAL coupled with it's superior route structure almost guarantees UAL's survival.

My regrets and best wishes for all, except Carty.

25yr. UAL CSR with three kids in college

 

[surplus1]

I notice you made no attempt to answer any of the questions and neither did Dadelus. That's typical. You can''t take criticism of your ideas and you resent everyone that questions the concept that the hawks know best what is "right" for the rest of us. Maybe you do, but in that case, it should be easy for you to justify it. It seems you can't, so you call dissenters names.

Surplus1-

I guess you are an expert on foreign policy?

No, I'm not an expert, but I'm also not in the White House. From my perspective, there don't seem to be any experts there either, especially in the oval office. It appears there is only one voice of reason in that group and the rest don't listen enough to his voice.

What are you doing in this business?

I'm stupid enough to like airplanes. What is your reason again?

Denouncing Reagan is revisionistic.

I didn't denouce Reagan, I just don't believe the myths and I'm radical enough to read beyond the script. Since you chose the term "revisionistic", you might do well to note that revisionism is precisesly what caused the collapse of the Soviet Union --- not Ronald Reagan. If you want to thank someone, try Gorbachev. Revisionistic ideas may also have resulted in the collapse of colonialism and the creation of the Republic that we call the United States.

Anyone can ignore the truth if it happened far enough in the past.

Agreed. Why then do you seem so bent on doing just that?

Leftists will get us all killed with peacenik gullibility.

Perhaps they do. Now please tell me what good thing does extreme right wing war mongering do for us?

Those who ignore history may be doomed to repeat it.

 

[FlyDeltasJets]

Surplus,

I absolutely REFUSE to get into a political discussion with you, so I'll make one short comment and let you have the last word.

Gorby deserves credit only for seeing the writing on the wall. Believe me, you do not achieve the position he did without being a career, hard-line communist. Ronald Reagan forced USSR to spend into insolvency if they wanted to keep up with us in the arms race, and it hastened the demise of the Soviet Union (which, truth be told, was doomed anyway). Since it was doomed, Reagan deserves some, but not all of the credit. As does Gorby. However, when Time magazine and the rest of the mainstream media fawn all over Gorby, they fail to recognize that his genius lies only in recognizing the collapse of his county. More credit should be given to the man who accelerated that destruction.