Will United Survive?

[Networ-King]

Publishers,

Man I know funny .......

and **CENSORED****CENSORED****CENSORED****CENSORED**it you post was funny........



and trueeeeeeeeee!!!!!!!!!!!!!!!!!

 

[120% Torque]

Thursday February 13, 6:36 pm ET
By Neil Weinberg
UAL's Chapter 11 reorganization may just turn into an outright liquidation. Lenders, lessors and competitors are ready to pick up the pieces.


Even by the sickly standards of the American airline industry, UAL Corp. is a mess. After losing $3.2 billion last year, the nation's second-largest carrier is confronting the distinct possibility that it will not emerge from Chapter 11. It may instead be auctioned off in parts, the airplanes and landing slots carted off and the corporation liquidated in the manner of Braniff, Pan Am and Eastern.


Valiantly presiding over the Chicago-based parent of United Airlines is Glenn Tilton, a 54-year-old former oil executive who took the chief executive job in September. Perhaps radical thinking is just what is needed at this desperate juncture. But so far some of Tilton's moves have been--to put it politely--counterintuitive. To increase traffic he cut unrestricted walk-up fares by 40% in January out of United's two busiest hubs, Denver and Chicago O'Hare. That gained it some passengers but lowered the take from last-minute travel by an estimated $30 million a month.

Even without the discounts UAL (NYSE:UAL - News) was burning through money faster than jet fuel. In the fourth quarter it had an operating loss (earnings before depreciation, interest, taxes and airplane rent) of $478 million. Lenders, of course, have very limited patience with funding such operating losses, and if there is no prospect for reducing them, then the company would be worth more to creditors dead than alive. Starting in March, UAL's loan covenants require it to meet a schedule of reductions in operating losses and to break even by October.

If UAL can't meet the timetable, then debtor-in-possession lenders Bank One, J.P. Morgan Chase, Citigroup and CIT Group can begin confiscating planes, spare parts, routes and landing slots. "If things go badly, J.P. Morgan and Citigroup have a big incentive to seek liquidation and get their money back by calling in their collateral," says a lawyer following the bankruptcy. Publicly, United isn't conceding it's in any kind of death-spiral scenario. "The changes we're making should enable us to strengthen our operations and make us competitive," says United spokesman Jeffrey Green.

*Includes charges/provisions. **Includes UAL and US Airways obligations. Sources: Company and UAL bankruptcy filings; SpeedNews; Back Aviation Solutions. LAID LOW
United declared Chapter 11 bankruptcy in December with $21 billion in debt. A sampling of holders runs the gamut.

UNSECURED CREDITORS Amount($mil)

Debt held in trust $2,900

Indiana government authorities 162

Airbus 48


SECURED CREDITORS Amount($mil)

GE Capital $1,700

Boeing 1,300

Bank of New York 630*

Altria (Philip Morris) 536**

Pitney Bowes 100**

Walt Disney 83



If, that is, the unionized workers accept the changes. In January Tilton proposed to split off a big chunk of the carrier later this year and turn it into a low-cost, no frills airline, rumored to be named Starfish, that could compete with JetBlue (NasdaqNM:JBLU - News) and Southwest (NYSE:LUV - News). Pilots now making $225,000 (down from $316,000 last year) could be forced to trade down to jobs paying a maximum of $153,000.

Continental (NYSE:CAL - News) and US Airways (OTC BB:UAWGQ.OB - News) have gone the low-cost route before, without success. "If this is what they want to do, it's a nonstarter," stated Paul Whiteford, chairman of the 8,500-member United chapter of the Airline Pilots Association. It would, he added, "lead to the death of United Airlines." In other words a strike would push the airline out of business via the same route Eastern traversed.

By mid-March United must get its unions to agree to permanently hack off $2.4 billion in annual pay, or about 34% of their total. (Labor consumed half of UAL's $14.3 billion in revenue last year.) Mechanics and flight attendants have been publicly assailing Tilton for not offering a concrete proposal for them to consider. If no agreement is reached, United must petition the bankruptcy court to impose concessions.

To line up $1.5 billion in debtor-in-possession financing, United had to pay an unusually large 5% commission for a $300 million portion, plus a percentage point more in interest than WorldCom, Kmart or Adelphia paid. The postbankruptcy lenders are first in line during a liquidation, but even so they are taking a significant risk. If the workers won't come to work for reduced pay, then no lender is going to come out whole.

So far United has yet to buzz-cut any of its aircraft leasing deals. In fact, it just agreed to hold on to 154 of its 463 leased planes under the same old terms. But if the carrier starts offering, say, 25 cents on the dollar, big aircraft lessors like GE Capital (which owns 20 United planes) may just repossess and try to redeploy the jets to overseas carriers. When that market is saturated, the only thing to do with a commercial jet plane may be to park it in the desert in the Southwest, along with the 1,800 other jets already there.

Ready to feast on any leftovers are rivals like American, which would benefit from O'Hare's slots and routes. Continental lusts after United's Denver hub and its London Heathrow routes. Other hubs up for grabs would include Washington Dulles, San Francisco and Los Angeles. Delta, US Airways and Northwest would likely jump into the fray. With 20% of traffic already, and a strong tailwind at their backs, the discounters like Southwest, JetBlue and AirTran may be the biggest winners of all.

 

[Alaskaairlines]

Very depressing. I wish UAL the best - time will show what happens.

 

[120% Torque]

Another indicator? I dont know. Many "analysts" have been known to be wrong.

Dow Jones Business News
Analysts' Lowest-Rated Stocks
Wednesday February 19, 12:24 pm ET


This is a weekly ranking by First Call of the Lowest-rated stocks, based on analyst comments contributed within the past month to First Call's database.
To be included on the list, a company must be rated by at least five analysts.

First Call Consensus Recommendation Scale

1 = Buy

2 = Buy/Hold

3 = Hold

4 = Hold/Sell

5 = Sell


Least Attractive Issues
---- ---------- ------
Latest # Analysts Previous
Consensus Covering Consensus

(UAL) 4.1 8 4.1
(GAP) 4.0 5 3.6
(OGE) 4.0 5 4.0
(MICT) 4.0 6 3.9
(MTON) 4.0 10 3.8
(RLRN) 3.9 7 3.7
(ECO) 3.9 8 3.6
(SIRI) 3.9 8 3.7
(KEM) 3.9 9 4.0
(PDQ) 3.8 5 3.6
(HUBB) 3.8 5 3.5
(RKT) 3.8 5 3.4
(EEX) 3.8 5 3.6
(INRG) 3.8 6 4.0
(CRY) 3.8 6 3.6
(DEG) 3.8 6 3.7
(TECO) 3.8 6 3.9
(GT) 3.8 8 3.9
(PMTR) 3.8 8 3.9
(NU) 3.8 9 3.6
(PHSY) 3.8 14 3.8
(CGO) 3.7 6 3.6
(NOVT) 3.7 7 3.4
(LVLT) 3.7 7 3.6
(SAPE) 3.7 9 3.6
(AVX) 3.7 11 3.8
(LDG) 3.6 5 3.5
(PCSA) 3.6 5 3.7
(TXCC) 3.6 5 3.7
(CHZ) 3.6 5 3.4
(TCR) 3.6 5 3.4
(MSW) 3.6 5 3.5
(QGENF) 3.6 9 3.4
(AGE) 3.6 9 3.4
(APS) 3.6 9 3.5
(DJ) 3.6 10 3.8
(ADVS) 3.6 10 3.4
(BRW) 3.6 12 3.5
(DYN) 3.6 14 3.7
(TE) 3.6 16 3.5
(SCH) 3.6 17 3.5
(TCN) 3.5 6 3.7
(SMT) 3.5 6 3.2
(CRGN) 3.5 6 3.0
(CR) 3.5 6 3.2
(DES) 3.5 6 3.4
(ETS) 3.5 6 4.0
(CEL) 3.5 6 3.1
(ACNAF) 3.5 8 3.3
(ABF) 3.5 10 3.4
(MNY) 3.5 10 3.6
(GLK) 3.5 11 3.6
(RBAK) 3.5 14 3.4
(ELN) 3.5 14 3.5
(DV) 3.5 16 3.4
(MXT) 3.5 17 3.6
(ITWO) 3.5 31 3.6
(WPL) 3.4 5 3.6

 

[canyonblue]

I grew up in Detroit with both parents in the UAW. I am for unions.

So a Flight Attendant should not make 50K a year but a Autoworker who quit school in the 10th grade should make 75K. The UAW is the reason we pay 30K+ for new cars while they shower their masses of uneducated workers with compensation not seen by many laborers in this country. I'm pro-union, but the UAW is the worst example of people being overpaid for their skills. I am sure many pilots would love to have the layoff pay that UAW workers enjoy, almost 100% of pay while sitting at home. All that compensation will be included in the price of your fancy new car.

 

[Boeingman]

So a Flight Attendant should not make 50K a year but a Autoworker who quit school in the 10th grade should make 75K. The UAW is the reason we pay 30K+ for new cars while they shower their masses of uneducated workers with compensation not seen by many laborers in this country. I'm pro-union, but the UAW is the worst example of people being overpaid for their skills. I am sure many pilots would love to have the layoff pay that UAW workers enjoy, almost 100% of pay while sitting at home. All that compensation will be included in the price of your fancy new car.

That is so true.

 

[hawkowl88]

BS

You know what's included in the price of your SUV? A $10,000 - 15,000 PROFIT MARGIN. Profit, meaning money net of expenses including labor.

Let's keep the topics to aviation industry. Most pilots are barely knowledgeable about this field. If we digress you make us all look like horses *ss's

 

[HA25]

Re: BS

You know what's included in the price of your SUV? A $10,000 - 15,000 PROFIT MARGIN. Profit, meaning money net of expenses including labor.

Let's keep the topics to aviation industry. Most pilots are barely knowledgeable about this field. If we digress you make us all look like horses *ss's

This is a very true statement..

as for F/A's making 50K (And more)... it, along with the wages of ramp and gate people is totally out of proportion with their education and work value in the business world, where Restaurant managers with years of experience and $1,000,000 in sales with in their stores are making $40,000 and Purchasing managers of mid sized building firms with MBA's are making $50,000 (two examples I know of personally)...

F/A should be a $25,000 year job for a few years and then you move onto other things...

 

[Meister Brau]

F/A should be a $25,000 year job for a f

Hear hear V70T5!! Well said.

 

[Falconjet]

FA

Wow: I usually find that V70T5 has pretty interesting things to say on this board. But I have to disagree a bit on this one, and many of the other ideas about limiting anybody's pay to some arbitrary level. Our forefathers fought to make this a free country, where the market place decides what "the job is worth". If anybody wants to start setting acceptable salaries for certain professions I'll volunteer to step in line right after professional athletes and CEOs of major corporations. We don't want anybody arbitrarily setting our salaries, FAs are no different. What are they suppossed to do after a few years, marry some Captain? Come on, I'm only a man of the 90's (thats 1890s!) but even I think that the FAs have every right to collective bargaining and making what the market will bear that we do.

Take it easy.

 

[HA25]

Re: FA

Wow: I usually find that V70T5 has pretty interesting things to say on this board. But I have to disagree a bit on this one, and many of the other ideas about limiting anybody's pay to some arbitrary level. Our forefathers fought to make this a free country, where the market place decides what "the job is worth". If anybody wants to start setting acceptable salaries for certain professions I'll volunteer to step in line right after professional athletes and CEOs of major corporations. We don't want anybody arbitrarily setting our salaries, FAs are no different. What are they supposed to do after a few years, marry some Captain? Come on, I'm only a man of the 90's (thats 1890s!) but even I think that the FAs have every right to collective bargaining and making what the market will bear that we do.

Take it easy.

Some good points FalconJet, and I totally agree with the free market setting price... And my comments weren't so much meant to say that the Government should regulate wages. However, the fact is that Unions are there to artificially modify the cost of labor in favor of the labor. They off set the tyranical tendency of managment to demand a lot and give a little.

For example, we know as pilots that if there were no pilot unions, there would be no 6 figure wage pilots. But for the unions keeping wages artificially high, the supply and demand curve for guys who want to fly for Delta, American, and Fedex would make for cheap labor for those guys, as many people think the job is cool, irrespective of what it pays...

I for one think a Union for jobs like Pilot, and other skilled careers is good and helps insure quality pilots. But unions for unskilled labor artificially cause high costs to airlines and other companies that have similar labor.

New F/A's can go from working a retail job, or being a home maker, to working the line within a month... Pilots can't (far from it).

They are unskilled labor and their safety value is minimal (mostly FAA lobbying by the AFA, otherwise there would be a mandetory retirement age). While, I acknowledge that they have some safety value, the fact is once the wheels are up, there isn't much they can do to stop panic if it starts. Usually passengers are enlisted to stop other passengers who have become unruly.

IMHO

 

[Ty Webb]

Re: Re: BS

Purchasing managers of mid sized building firms with MBA's are making $50,000 (two examples I know of personally)...

F/A should be a $25,000 year job for a few years and then you move onto other things...

Uh, hold on there, Chief. A Wal-mart manager makes between $85K-$100K. If you have friends with MBA's that are making $50K it's for a reason. Maybe they're just out of school, or won;t move to where the money is, or just plain ol' don;t have the drive, but to use that as a prism through which to view the worl of compensation . . . . well, that's a little distorted.

FA's should make, after a few years, some decent coin, certainly enough to live on . . . . IF they do a good job, and CONTINUE to do a good job (as opposed to becoming senior, disgruntled "Galley Hags". They are THE customer contact. When the people get off the airplane, and they are happy, it's not because of your landing, Sporto. It's because they were treated well in the back by their point of contact with the company.

So, sorry, put me down as one pilot who thinks FA's should be compensated well. How well? Well, we start ours in the mid $20K's . . I think they should probably be able to get into the mid $30K range, but only if they deliver.

 

[KDA or DEATH]

KORRECT!

Mr. Falcon is RIGHT.

The MARKET determines the WAGE.

PERIOD.

END OF STORY.

That wage may be out of line with others in DIFFERENT job categories and/or professions...BUT GUESS WHAT?...An APPLE is NOT an ORANGE.

I know this may be a hard concept for some of you...Perhaps you have a future in Management?

Love,

YKW

 

[HA25]

Re: Re: Re: BS

Uh, hold on there, Chief. A Wal-mart manager makes between $85K-$100K. If you have friends with MBA's that are making $50K it's for a reason. Maybe they're just out of school, or won;t move to where the money is, or just plain ol' don;t have the drive, but to use that as a prism through which to view the worl of compensation . . . . well, that's a little distorted.

FA's should make, after a few years, some decent coin, certainly enough to live on . . . . IF they do a good job, and CONTINUE to do a good job (as opposed to becoming senior, disgruntled "Galley Hags". They are THE customer contact. When the people get off the airplane, and they are happy, it's not because of your landing, Sporto. It's because they were treated well in the back by their point of contact with the company.

So, sorry, put me down as one pilot who thinks FA's should be compensated well. How well? Well, we start ours in the mid $20K's . . I think they should probably be able to get into the mid $30K range, but only if they deliver.

I would think you are talking about a Walmart Store Manager??? or Assistant? These are multi million dollar revenue centers. Those are usually well trained and educated managers..

Cause I can tell you that at Target, our neighbor's kid is a 4 year degree holder and a dept. manager for Clothing and she makes $35ish.... can't remember exact amount. She said the only way to get more money is to move up the management chain to assistant manager and then store manager which "can" break $100,000.... And I would hardly compare an F/A and her/his job duties with that of a department store or major retail store manager.. For that matter, I think the cashier at Walmart is more in line..

 

[HA25]

Re: KORRECT!

Mr. Falcon is RIGHT.

The MARKET determines the WAGE.

PERIOD.

END OF STORY.

That wage may be out of line with others in DIFFERENT job categories and/or professions...BUT GUESS WHAT?...An APPLE is NOT an ORANGE.

I know this may be a hard concept for some of you...Perhaps you have a future in Management?

Love,

YKW

KDA, surely you don't think the market is operating in a vacuum? And surely you don't think that Unions are not modifiers of the natural supply and demand curve of labor?

See my post a few lines above about what jobs at the majors would pay if it were not for unions.... and I assure you that I am not a pro-management pilot, read my history of posts from past debates..

 

[Falconjet]

Back on track

V70T5 isn't slamming unions, but I don't think that just because you label one work group (FA in this case - your label not mine) as unskilled that they don't deserve to earn what the market will bear. Just my opinion, but I think all labor groups ought to have the right to bargain for their compensation. Hopefully United will be around long enough for us all to look back on this and go "phew, I remember when United almost went down the tube" and their employee/owner groups will save the company by changing their perception of what the new market really is.

Peace!

 

[HA25]

yeah.... I just hope UAL makes it... I know too many guys that will have a tough time getting back on their feet if not.

BTW I am a 7 year member of ALPA (now inactive member).. so Yes... I am for Unions.

 

[KDA or DEATH]

"KDA, surely you don't think the market is operating in a vacuum? "...

No Sir. Absolutely not. The Market will determine , and NECESSARILY, adjust the wages as applicable to any one group within it's sphere.... Point being: WITHIN this Industry.

"And surely you don't think that Unions are not modifiers of the natural supply and demand curve of labor?"...

Well, I agree, to a point. They (Unions) ARE "modifiers", but not of the "natural curve'" as you politely put it....

Rather,(They) UNIONS are a semi-corrective action to the thievery of Managements that will prey upon the willing nature of "mission oriented" types that ALL Pilots are by nature...

Just MY Humble Opinion.

Submitted Respectfully, (This Date)

Douglas C. Niedermeyer

 

[HA25]

I wonder why it is that when the airlines had very little unionization of unskilled labor, they had no problem paying their pilots high wages (very high, when adjusted for inflation), and continue to operate..... while today they simply can't do it...

and, no, its not just deregulation... it's $50,000 F/A's and $40,000 bag throwers..

 

[atpcliff]

Hi!

From another website:

Username: MD88Captain

A UAL pilot friend just attended a in house briefing at UAL saying that a shutdown by 1 MAR is a very real possiblity.

http://www.airliners.net/discussions/general_aviation/read.main/1028419/

Cliff
GRB

:-(