United's Future

[FlyDeltasJets]

Yep, we saw the same thing. Let's just say that I'm glad my future does not depend on the mgt team that put that together. After 270 slides, I did not come away with a single idea that made me feel better about the future of UAL. I won't post links, because others could come up with stories of their own that contradict mine. However, suffice it to say, there are many in the industy today who are pretty disappointed in the content of the presentation.

 

[TWA Dude]

Let's not forget that my beloved former carrier, TWA, existed for over ten years with just one profitable quarter and two Chap 11 bankruptcies. Were it not for Carl Icahn TWA just might have turned things around. Things look very grim indeed for UAL right now but things are rarely as clear cut as they seem. I wouldn't be at all surprised to see UAL come out of this viably.

 

[Boeingman]

Let's not forget that my beloved former carrier, TWA, existed for over ten years with just one profitable quarter and two Chap 11 bankruptcies.

Totally different environment and economy back then.

 

[JayDub]

The real question is actually "what will happen to ALPA". UAL had the best contract, and the most ALPA pilots of all the carriers. How can ALPA absorb that kind of loss? My big fear is that the member's services will suffer. Although I don't have access to these services, they are by far the best out there, from what I have heard.

Respectfully,

JayDub

 

[resistance]

I don't know what services ALPA will lose? As far as ALPA helping other members getting jobs at other carriers I can tell you from experience (my father was Eastern 1011 Cpt.) You can forget it! They promised the Eastern pilots if "things don't work out" they will assist them getting jobs at other ALPA carriers. BIG LIE.

As a second generation ALPA (in disgust) member I can say that ALPA is only looking out for ALPA. I know the big boys at DAL and UAL will slam me but look at the way ALPA has treated the regional ALPA members. They have treated the RJ guys and gals like "field hands" even though we are members of the SAME UNION!!!

Rule number one: Look out for number one.

Rule number two: watch out for dagger in back!

 

[pipers]

It would be interesting to see how the Bush administration would react to a possible Chapter 7....(I doubt that they would let it happen)....that would be a pretty bad capstone to a four year term, especially if things dwindle any further with AA or Delta. I hope they make it.

 

[Draginass]

Bush doesn't give a rat's butt about the US aviation industry, nor does the American public . . . as long as the ticket prices are low.

When the first bomb drops in Iraq here is a couple of weeks, you can expect force majeure declared and massive permanent layoffs to occur in the industry. An awful lot of Reserve pilots that get called up for Gulf War II are going to get rewarded for their service with a furlough notice.

I used to be a republican . . . . but not anymore.

 

[Daedalus]

Draginbutt-

You might as well take down your B-1 avatar and replace it with a picture of your favorite liberal politician, or an ALPA logo.

It seems that you are one of those fickle voters who only vote with their pocket book. I hope that wasn't the case when you flew for the Air Force.

Brother, I'd be ashamed if I were you to make your declaration and then leave up a picture of a weapon system that the democrats tried to kill until Ronald Reagan properly restored it back into existence. It looks like if it weren't for the Republicans you would have never been able to serve in the military; get that multi-milliion dollar, world-class training and then be able to go out and find yourself a nice airline job.

Hmmm....how quickly some people forget where they come from.

Above all the most troubling part of your post is that it is just factually incorrect and reveals your fundamental ignorance of what is happening to this industry. Sorry to slam you like this on my first post, but you've got to have some better perspective on the issues, and not be another ALPA drone who spouts off the usual spin of why things are. JMHO.

 

[pipers]

Draginas...my point was,

I don't think that Bush would like (or let) United to file chapter 7.....not out of any loyalty to pilots or aviation, but as a political move on his part....one can only have so many of the largest companies fail during a presidency.....

and Daedalus.......I don't even know where to begin with your post.......but welcome to the board anyhow...

 

[100LL... Again!]

Know what? It isn't Bush's job to worry about the state of the airline industry. I'll worry about that for myself. That sort of interventionist socialism is what got us here in the first place. To quote an industry expert "let the market dicipline these carriers." More corporate welfare will make the eventual fall even more painful.

Create a survivable business model, or be overrun by someone who can.

 

[surplus1]

Daedalus

I often butt heads with Dragin, but you got my attention so I have to ask.

Could you help me by clarifying what part of his post you found to be "factually incorrect" and revealing of his "fundamental ignorance" of what is happening in the industry? What does your wisdom or crystal ball, whichever it may be, reveal to you that the rest of us may have missed? I'm not agreeing with him, just wanting to know your perspective.

Is it his announced coversion from Republicanism that disturbs you? I note that you appear to be another believer in the Reagan myth. Any chance you also believe in the Bush myth?

I admit the B-1 is a beautiful aircraft but perhaps you could tell us what exactly the billions spent to acquire it contributed to the welfare of the US? Or, if you can't do that, what detrimental thing would have occured if we had not bought it would suffice.

Is it the inference that Bush's adventurism and dumbfounding foreign policy (or lack thereof) and the potential impact that war may have on the industry that annoys you?

By the way, Dragin is a member of the APA not ALPA. However, it just might be beneficial if ALPA's drones paid a bit more attention to what ALPA's queen bees regurgitate and call manna. Sometimes it is good to clean the hive of the egg layers.

 

[JayDub]

I don't know what services ALPA will lose?

They provide legal help and medical advice to their members. Hopefully your father never had to use these services.


JayDub

 

[100LL... Again!]

Surplus1-

I guess you are an expert on foreign policy?
What are you doing in this business?
Denouncing Reagan is revisionistic. Anyone can ignore the truth if it happened far enough in the past.
Leftists will get us all killed with peacenik gullibility.

 

[aewanabe]

Well said, Daedalus


On another note, you can always look at the B-1 as a deterrant. The very existence of the B-1 bomber may have prevented the Soviets and other enemies from attacking. That is how countries have justified having navies for centuries.

 

[skykid]

We might be getting a little of track here... Bush will let United or any other carrier fail. I starting hearing "experts" say soon after the Sep 2001 attacks that Ch7 for a major or two would be good overall for the industry - they are saying that even more now. I'm still glad I voted for Bush, and I work for United. What he may not do is let unions strike. United will make the first financial deadline easily, then it will get tougher, esp if we keep putting the war off. On the bright side, if Saddam gets hung/buried in rubble in the first few days of bombing, things are looking up for everybody. If we don't start dropping bombs for another 3-4 weeks, then have to slug our way into the Saddam Bunker and it lasts more than a few weeks, its going to be tough for all the carriers that fly overseas.
Alot of you seem to be picking the only option that doesn't make sense - survive but be much smaller. The current management has figured out shrinking drastically to profitability doesn't work.
Counting the LCC as part of the operation, the plan isn't to get much smaller. As soon as some of the nice routes get sold off, it is already over. I give United a 50% chance. This is what happens when you work for someone else!

 

[Draginass]

First of all . . . Daedalus . . . . I entered the USAF under the Carter administration, not a Republican one. I pulled nuclear alert and flew military airplanes for 22 years in defense of all the people of this country . . . . . not the Republican Party.

Secondly, I'm not a liberal, nor a Democrat. I am now an independent. My point is that the Republican party has alienated me AND an awful lot of closet Republicans . . . like most airline pilots.

Thirdly, I'm not a member of ALPA, nor am I in favor of my union joining with ALPA. BUT, I am a union man, even though Mr. Bush's friend, Don Carty, would like to emasculate American unionism and repeal the RLA.

Fourth, I am a proponent of seeing Sadaam and his henchmen swinging slowly from Bagdad lamposts. It's disgraceful that some of the guys that will make that happen will lose their civilian jobs as a result of Mr. Bush's inability or unwillingness to lead the economy or preserve a vital industry.

Fifth, I understand very well the problems of this industry, and Mr. Bush has done virtually NOTHING to preserve the US national air transportation system. The FAA and the TSA are a joke. The industry is so capital intensive that it cannot adjust to wild swings in demand and capacity. When you have a industry like the airlines that is vital to the overall economy, it must be somewhat managed with some competence at a national level. When virtually every major carrier is bordering on BK, there's something fundamentally wrong with the way the "gubment's" been managing the industry. I'll bet that if things keep going in the direction that they are, nobody's going to like what the industry looks like inside 2 years . . . i.e. Walmart compensation, poor quality attitudes among workers, packed airplanes, less frequency, sky high ticket prices, serious maintenance issues, and A LOT more corners cut by managment. Unions will be emasculated and safety WILL suffer.

Sixth . . . GFY.

aewannaabe . . . . the heavy bombers were a deterrent, however, the real strategy (IMHO) was to force the Soviets to spend enormous amounts of money defending their vast border against air-breathing threats. We knew we could never fight a nuclear war with them, but we sure could break their bank . . which is what ultimately happened. And BTW, the Soviets WERE scared sh**less of the Buffs and Bones. Ronnie was right on that one.

 

[mackinhoes]

I second Draginass' points. I am tired of the GBush/Republican billshut about not helping the airlines. Bush nixed relatively small loans to the airlines because he did not like their recovery plans. What's this about the market policing the airlines? What does 9-11 have to do with market economics? Why can't the federal government help pay for all the security/TSA billshut?

Why does george bush manage to find HUNDREDS of billions of dollars to help out farmers year after year? Why doesnt he let the market police them? Why is he willing to ship off 15 billion to Turkey at the drop of a hat. I don't know too many turkish people. Why do I care about giving them money? My tax dollars?

Daedelus and 100LL don't have a clue.

 

[46Driver]

Why do they bail out farmers? Because a country being self-sufficient in growing food (and farmers having to endure much worse cycles - drought, genetically enginered crops, world politics, diseases, insects, etc) is MUCH more important than whether or not the family flies to Disneyland for vacation.

 

[LXApilot]

UAL's Future - It Ain't Over Yet

Well, since we are doing my two favorite things; bashing airline management, and bashing the Bush administration... allow me to jump in with my two cents. I might be a 20 year old low timer who weaseled my way into a jet cockpit, but hear me out...

United Airlines... long the free world's largest and most prolific airline... the first airline to introduce jet ways to airports, baggage carousels, flight attendants, food and beverage service, launch customers of the DC10, 767, 777, 727, DC8 and 737... still considered to have the most lucarative and profitable route structure in the industry... annonced today (according to a news link on cnn.com) that managements 'reorganization' plans call for shutting down the DEN, LAX and IAD hubs... selling off aircraft (the entire -400 fleet), shifting the assets to the non-union LCC, arranging further wage concessions, and increasing the role of UAX.

Is it just me? or does this sound like inept, misinformed, flawed and arrogant management , AGAIN.

Let's look at a few key issues to what a succesful 'reorganization' plan would call for at UAL...
1) a change in management ; Tilton's hinchmen in Elk Grove can only come up with wage concessions, a LCC, fleet reductions, and a few nickle and dime savings 'recommendations'. And they are asking the bankruptcy court to protect their BONUSES? The bloated, money sucking management team must be replaced by a skilled, motivated management team that has long-term goals and the perspective to see the real cost/revenue implications of their decisions. Does it occur to them that the real reason for Southwest and JetBlue success is not their low fares or low cost structure... but it is their able, enlightened, charismatic, eager management teams? This trickles down to improving labor attitude, and labor relations with management. Tilton is a great CEO with many of these qualities; but his management team is the same misguided pack of hypocrits that have been in charge of the day to day at UAL for some time now.
2) reallocation of assets ; instead of paying lease notes on the 8 747-400s sitting idle on the blocks at the SFO maintenance base, why not aggresively be seeking new revenue markets and new city-pairs? This will cost money to open new city pair markets, but it costs money to make money, also known as capital investments (and a HUGE tax advantage). The reallocation of over 100 narrow-body airplanes to the new non-unionized LCC is a HUGE mistake. The short sighted management are jeopardizing the mailine narrow body feed and are creating a vaccum that will take away United cockpits that will NEVER come back! management has to understand that "little airplanes go out and bring passengers into the hub so that they can fill up those great big airplanes that fly a long way and make a lot of money". Ignoring the scope clause takes jobs away from United and also pours revenue into the Express carriers pockets. The actual dollar revenue amounts are never seen by UAL, (or any major for that matter) and pisses off loyal customers who are getting increasingly frustrated with the RJ and the Express carriers. These people are eager to take their money elsewhere. FOR GOOD.
3) An aggresive marketing/reorganization plan that can be resubmitted to the ATSB and a federal loan application approved. No this is a long shot, but definately a requirement... President 'El Fascisto' Bush and his buddies are so dedicated to making the Spring release of 'Clone of the Attacks: the Gulf War Part II" that they have turned their back on domestic air commerce. Not to mention that Bush was an oil baron and governor of Texas. Some of his largest campaign contributors were airline/oil execs from Texas. Bush has no qualms about letting UAL (the liberal Chicago based, heavily unionized airline that competes directly with American) go down the tubes. He is very good friends with Gordon Bethune, Don Carty and Herb Kelleher from his days as 'County Sheriff' in Texas. 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." I doubt American Airlines would have had their ATSB application rejected with such prejudices. The ATSB has this tax money sitting in a fund ready to release it to the airlines, yet they have only spent 9% of these alloted funds. I believe the ATSB was set-up to impliment unrealistic wage - cost concessions and to promote the creation of non-union subsidiaries in accordance with 'union busting' policy.
4) Real cost cutting strategies that SAVE ... instead of asking UAL pilots and employees to use their own home phones when calling the company, instead of calling the 800 # that cost UAL ... why not impliment meaningful cost savings plans? such as upgrading the pilot's to the electronic flight bags that they were promised? This feature alone would cost United very little, yet save the company MILLIONS in expenditures. Or perhaps implement a new 'brake release' policy that will acurately reflect what is going on at the gates during departure time and stop the waste of MILLIONS of $ in lost flying revenue>? But mostly, United's bulging and misinformed management needs to adjust to salaries paid out by the board of directors in accordance with their on-the-job performance... VPs for VPs don't work either... the cost savings from paperwork alone will save UAL millions of dollars. And what about fully utilizing the assets/employees/managers to their full abilities? How can management ask for wage concessions when the company is not yet being pushed towards operation at a maximum level of effiency or utilization of it's currently unused productivity?


The airline industry has always been defined by key players making decisions that seemed hopeless ; this trend to 'go against the grain' has led to more successes than follies, and it is direly needed at UAL these days! However, UALs misguided management should take one quick history lesson before considering the sale of UALs pacific assets, closing the IAD, DEN or LAX hubs, or chopping the -400 fleet from service. And that is this; no airline has ever won a battle in which they lost their 'crown jewels'. TWAs sale of Atlantic routes, Pan Am's sale of it's pacific and latin american route systems, only led to the collpase and failure of those companies! UALs pacific route system contributes 27% of the companies annual revenues, and they are thinking of selling it off? WOW.

So, what's my prediction for UAL? I have no reservations about their ability to remain a key market player for years to come. United WILL stand, in some form or another. The size/importance of that remaining enterprise will be decided now by the bankruptcy courts and United's management team. I hope to see the blue and grey birds flyin' for a long time to come, and can only look back on the days of "Songs of the Pacific", "Arrivals by United" , "Service with Aloha", and "Business One" as the 'good old days. Maybe one day in the future UAL will once again be 'the airline that's Uniting the world' I long for the 'friendly skies'.

 

[46Driver]

For every action, there is an equal and opposite reaction.

Rigidly enforce the scope clause and you limit the careers of the UAX pilots - not to mention trying to compete with all of the other carriers who are providing service with 5 RJ flights a day while you try and fly 1 mainline jet...

Customers are pi$$ed off by mainline too - do you know how cramped it is in a 757 - 3 across? I jumpseat alot and dread it. Maybe its the service: you only get pretzels and water on an RJ but on a mainline jet you get, uh, nevermind.....

Don't want to fly United because you might be stuck in an RJ? Great, go fly American, no wait, Continental, no lets try again Northwest - hmmm lots of RJ's there too, over to USAir arghhh they are buying RJ's and putting mainline pilots in them, must try Delta - NOOOO, I'm in RJ hell....

And as for President Bush, can you imagine Gore? I know, I know, all of the terrorists would be in a "LockBox".... Nostalgic for Bill... he had his chance after the terrorists bombed the World Trade Towers the FIRST TIME, and the USS Cole, etc, etc - at least he could send them some aromatic cigars.....

United's problems are large enough for all to share in: management that just couldn't make the right decisions, labor greed that resulted in the "Summer of Love", and changing times (internet fares, Business traveller revolt, and popular low carriers to name a few.) I have no beef against United - my company is tied to them so of course I want them to prosper - but I don't think they were as quick and flexible as Delta to adapt.