Aa757first From United States of America, joined Aug 2003, 3338 posts, RR: 9 Posted (9 years 5 months 6 days 3 hours ago) and read 2171 times:
CHARLOTTE BUSSINESS JOURNAL
Union calls for US Airways CEO to resign
Leaders of the pilots' union at US Airways Group Inc. are calling for the resignations of top executives of the airline, including Chief Executive David Siegel.
Pointing to a financial loss in the third quarter and renewed calls by Siegel for cost cuts, the pilots' Master Executive Council, a unit of the Air Line Pilots Association, says it has "lost faith" in the company's leadership.
"Considering their track record, we've lost confidence in their ability to make a plan, any plan, work," says Captain Bill Pollock, chairman of the council. The Air Line Pilots Association represents more than 5,000 pilots at US Airways, which is based in Arlington, Va. The airline operates its largest hub at Charlotte/Douglas International Airport.
The union also called for the resignation of Chief Financial Officer Neal Cohen.
A US Airways spokesman did not immediately respond for comment.
US Airways filed for Chapter 11 bankruptcy protection in August 2002 and completed its restructuring in March. The company received about $1.9 billion in concessions from employees, vendors and lessors.
In addition, US Airways won the approval of the court and the union to replace the pilots' defined-benefit pension plan with a less generous defined-contribution plan. The plan will be financed by annual contributions from the pilots totaling $850 million over the next seven years.
US Airways reported profits for the first two quarters after emerging from bankruptcy protection. Excluding unusual gains from restructuring, which included a $1 billion government-backed loan and a $240 million investment by the Retirement Systems of Alabama, the airline posted losses in both quarters.
US Airways posted a loss of $90 million in the third quarter.
Siegel said in November the airline needed to cut annual costs by as much as $300 million, especially in the face of competition from low-fare carriers such as Southwest Airlines, which plans to serve Philadelphia, one of US Airway's largest hubs.
US Airways is widely expected to ask employees for more concessions. But Pollock says the pilots are not willing to go down that road again.
"The concession window is closed for this management team," he says. "We have seen absolutely no accountability from management for the tremendous investment we have already made, yet we keep hearing their tired refrain that they need labor costs like those at Southwest Airlines."
Pollock says US Airways is already operating with a cost structure in line with Southwest's. In the first half of 2003, he says, US Airways applied 38% of revenue to labor costs, while Southwest spent 40%.
USAir330 From United States of America, joined Mar 2002, 787 posts, RR: 1 Reply 2, posted (9 years 5 months 6 days 3 hours ago) and read 2134 times:
Here's the response from US Airways Chairman.
STATEMENT OF US AIRWAYS CHAIRMAN DR. DAVID BRONNER
ARLINGTON, Va., Dec. 16, 2003 -- Dr. David G. Bronner, chairman of the board for US Airways Group, Inc. (Nasdaq: UAIR), today issued the following statement after the Air Line Pilots Association (ALPA) called for the resignation of President and Chief Executive Officer David N. Siegel and the senior management team:
“The US Airways Board of Directors has complete confidence in the management team, and Dave Siegel in particular. It is regrettable that ALPA would suggest that a change in management is the solution, when this management team has done a remarkable job and earned the confidence of the investment community for their leadership in tackling difficult issues. The shareholders, management and employees of US Airways all want the same thing: a successful airline. We are all frustrated with the reality of the airline industry and the need for significant change by the legacy carriers, but it is reality.
“ALPA’s action does nothing to address the bigger issue of how we complete our restructuring and become a successful company, and ignores the fact that shareholders rely on management and union leaders to work together to solve problems, rather than looking for someone to blame. Personally, I believe that US Airways has thousands of great employees who want to see this airline succeed, and we are going to focus on them, and not the unconstructive statements of those who fail to recognize that the world is changing and that we must adapt.
“Over the last year, this team has successfully emerged from Chapter 11, secured a federal loan guarantee to enhance the company’s liquidity, implemented a business plan that has achieved the greatest revenue and cost improvements in the industry, and financed a significant regional jet order. To accomplish these goals, Dave Siegel and his team have had to earn the confidence of investors, government agencies, and the banking and financial community.
“The Board of Directors will continue to work with Dave Siegel and this management team to revise the business plan, to maintain the confidence of all stakeholders and ensure the company’s success and growth.”
Reporters needing additional information should contact US Airways Corporate Affairs at (703) 872-5100.
N670UW From United States of America, joined Jul 2003, 1595 posts, RR: 8 Reply 3, posted (9 years 5 months 6 days 3 hours ago) and read 2106 times:
I don't think it would mean the end for US Airways. Siegel was proficient in carrying US Airways through bankruptcy, but has done little to propel the airline post-bankruptcy. Other carriers are making money, but US Airways is still losing money hand-over-fist. The LCC problem is getting significantly worse for US, and it doesn't seem as though they're doing a lot to fight them. Maybe new management wouldn't be such a bad thing.
USAIRWAYS321 From United States of America, joined Jul 2001, 1806 posts, RR: 10 Reply 4, posted (9 years 5 months 6 days 1 hour ago) and read 2038 times:
Siegel leaving won't be the end for US Airways. It will give the airline one more chance to be profitable and turn things fully around. I do, however, believe that if the replacement CEO fails to make significant progress within a year, US Airways will be done for. Any potential investors will steer clear of an airline that has had this many chances to come back and failed.
I believe that Bronner's statement is simply a delay tactic to see if a) the unions back off, and b) he can find a replacement for Siegel. I truly think that Dave will be gone by April 2004.
As for a replacement, I have not a clue. Bronner has no experience in actually running an airline, so that basically eliminates him from even stepping in for a short time. B. Ben Baldanza (Senior VP, Marketing and Planning), the 'genius' behind the lovable and laughable US Airways consumer policies of the last year will most likely leave with Dave if it comes to that. It's also extremely likely that the Executive VP, Finance and CFO Neal S. Cohen will leave if Siegel does, so there are 2 less people to promote from the inside. The only 2 current US Airways executives that I can see moving to the CEO spot, even for a short time, are Alan W. Crelin (Executive VP, Operations) and N. Bruce Ashby (Senior VP, Alliances & President of US Airways Express). Crelin is IMHO, the best choice, having been with US by virtue of PSA. He's one of the longest serving executives with the company (signed on with PSA in '77) and has steadily climbed the ranks. Ashby has been with US since 1996, and Delta prior to that. He was largely responsible for securing the UA alliance and the Star deal.
My fingers are tired, and I didn't even brush on outside replacements. Oh well, I'm done now.
Flyguyclt From United States of America, joined Aug 2005, 537 posts, RR: 9 Reply 5, posted (9 years 5 months 6 days 1 hour ago) and read 1982 times:
Whoever is the next. They must MOVE that airline forward. Pump up the employees and celebrate the revival of a great airline. Move it forward. Expand it. And if the cost of labor is in line as the article says. GO After SWA. In PHL. Give the employees pride and SWA will soon find out. They can't make it everywhere. Promote USAirways as an outstanding, efficient, safe way to fly. Maybe even try an America West price structure. Too many people are driving all over NC for a cheaper fare outside of Charlotte.
Flyguyclt From United States of America, joined Aug 2005, 537 posts, RR: 9 Reply 6, posted (9 years 5 months 6 days 1 hour ago) and read 1973 times:
Pull some of those Boeings out of the desert and Make STL or MCI an East/West hub...And be agressive like Piedmont was. MCI can support a 737-300 sized airplane. Advertise. Motivate. Satisfy employees and customers will love ya !
N670UW From United States of America, joined Jul 2003, 1595 posts, RR: 8 Reply 9, posted (9 years 5 months 6 days 1 hour ago) and read 1914 times:
Wasn't PIT designed tp be an East/West hub for US?
Yes, it was, and still is. I would image it's the leading connecting hub in the US Airways system between the Northeast and the western U.S. The problem is PIT (or any of the US Airways hubs for that matter) is too far east to support a considerable network to the west.
Flyguyclt From United States of America, joined Aug 2005, 537 posts, RR: 9 Reply 10, posted (9 years 5 months 6 days 1 hour ago) and read 1906 times:
PIT and PHL are too close...MCI can handle 737-300's. And SWA can't have STL and MCI. When I worked for Braniff. MCI made money. The planes were packed. And today...Good Lord ....15 years later. MCI's economy is good and they have more runways. And the place is under renovation (the airport that is).
Plus ....Look at how Piedmont worked.....BIG HUB. FAST CONNECTIONS. OUT of the WAY HUB. Not a heavily congested airport....See what I mean?
John From United States of America, joined Sep 1999, 1366 posts, RR: 6 Reply 11, posted (9 years 5 months 5 days 22 hours ago) and read 1822 times:
US Airways is now backed into a corner and can NO longer RETREAT from the competition. The CARDS are now stacked on the table and they must DEAL with it! I'll give Siegel another year and if the airline isn't in the black by then...well??
StevenUhl777 From , joined Dec 1969, posts, RR: Reply 12, posted (9 years 5 months 5 days 21 hours ago) and read 1787 times:
First of all, I want to see US survive, as I believe there are many dedicated employees who believe in the airline and want to see it succeed. With that said, I don't believe the management team at US has done enough to restructure the company whilst in Ch. 11, and while initially profitable, that was largely due to a strong summer season for all the airlines.
However, now Siegel is asking for more employee concessions, which means management's initial projection for labor cuts was inaccurate and obviously not enough. It was tough to just get the first round, and the "concession stand" is now closed...and rightfully so! Employees have done their part to contribute to US' future success by agreeing to short term wage and benefit cuts, as well as work rule changes...it's not their fault management didn't know how much it would really take to really turn things around. Management has not executed a solid business plan to keep US viable long term, hence their current situation. So they've ordered RJ's...will that be enough to compete against the likes of Song and this new ACA venture, let alone operations by SWA out of PHL? Their route structure is inferior, and with the exception of a strong Carribbean market, the rest of their international routes are left to be desired, and they depend on a codeshare with UA to generate additional revenues. They need to cut another $300 million, huh? Well why the hell didn't they do that while still in Ch. 11? The cardinal rule of bankruptcy is that you leave NOTHING left on the table that could otherwise be cut...and you don't exit a day too early or a day too late. US left too early and didn't cut enough and restructure the way they needed to, and now they're in the situation they're in. Stay in too long and you lose the faith of potential investors and the flying public, and more doubts arise of long term viaibility. A very delicate situation indeed. Everyone seems to claim Siegel is an expert at restructuring, well?
No...this management team at US is a FAILURE. ALPA is right here...though it's going to be difficult (at best) to find a team willing to take on US' challenges given the current situation that wants to keep it intact. If they're going to make changes, it should be done now, so that US can make changes in time to capitalize on the peak summer season.
FYI ~ I'm not a member of ALPA or any other airline union.
BigB From United States of America, joined Nov 2003, 593 posts, RR: 3 Reply 13, posted (9 years 5 months 5 days 21 hours ago) and read 1780 times:
PIT and PHL are too close...MCI can handle 737-300's. And SWA can't have STL and MCI.
Sure, SWA can have both cities, watch and learn
When I worked for Braniff. MCI made money. The planes were packed. And today...Good Lord ....15 years later. MCI's economy is good and they have more runways. And the place is under renovation (the airport that is).
How many airlines tried to base themsevles there and failed?
FA4UA From United States of America, joined Nov 2003, 812 posts, RR: 22 Reply 14, posted (9 years 5 months 5 days 21 hours ago) and read 1763 times:
All my non-airline friends look at me and ask why I love this business so much. I simply state "Cuz there's ALWAYS drama going on!" And this is another perfect example!
US could always just waive a white flag and let UA just gobble them up with money from a magic piggy bank found lodged in the APU of a 777?!?!
I mean come on... US has an efficient fleet, great network, great North/ South Routes, in the number one air market in the world, in the most populous half of that ! If they can't make money there then there's no hope! Move over and let UA have a try! Not immediately, maybe we can pencil in a takeover in say.... 2006? Sounds good to me!
As far as the impending WN US war at PHL... as long as WN's CASM is nearly 40% less than that of US, they'll win. No matter how dedicated the US employees are, no matter how pretty their planes are, no matter what advertising they do, the bottom line is that today's traveler is more cost conscious then ever and US has a CASM that is embarrassing for a company that just left Chapter 11!
The debate continues... Starwood or Hyatt... which is better
Brons2 From United States of America, joined Sep 2001, 2969 posts, RR: 5 Reply 15, posted (9 years 5 months 5 days 20 hours ago) and read 1740 times:
As a non-industry observer I see the problem as this:
Sigel has not lead post Ch 11. He came in, he slashed and burned, got RSA on board, made the numbers work in the eyes of investors. OK, fine and dandy. But now they are at the point where they need some strong leadership to provide differientation in the marketplace, and they aren't getting it. I would say at most he gets another 2 quarters to make his business plan work.
OTOH, at least the losses have narrowed considerably.
Firings, if well done, are good for employee morale.
FA4UA From United States of America, joined Nov 2003, 812 posts, RR: 22 Reply 17, posted (9 years 5 months 5 days 19 hours ago) and read 1704 times:
UA expects the post chapter 11 CASM being around 8.5-8.8. We are still in the trenches right now and have a lot of additional bankruptcy costs at hand. Also we're having to write off a lot of special items as we restructure, hence our CASM is, as you said, around a dime.
Our CASM is headed south fast... with five billion in concessions a year, we'll get that CASM under control yet!
The debate continues... Starwood or Hyatt... which is better
Flyguyclt From United States of America, joined Aug 2005, 537 posts, RR: 9 Reply 18, posted (9 years 5 months 5 days 16 hours ago) and read 1692 times:
The airlines that were in MCI failed because: Just my opinion,
EA: Well enough said about how mixed up management was. If they would have just used DC9's and 727's it could have thrived. But they used 757's and A300's as well. The market even today can't handle it.
BN Part 2: The owners went to jail for fraud for 18 months. Our load factor was in the high 70's. Was it really bankrupt or corrupt?
Vanguard: If you are going to compete with SWA you can't just fly once or twice a day in a market.
If USAirways went there to make it an East/West hub and stuck to the Piedmont attitude on how to run a hub. It will thrive. It is all in the business plan. I think SWA is a great company don't get me wrong. But, There are a lot of markets that SWA can't or won't serve from MCI that business passengers fly to in groves. Ie: LGA EWR BOS DCA ATL IAD DFW DEN. If US's cost are inline with SWA as the earlier post mentioned. Of course they can compete. Everyone is just afraid of them. Yes they are strong. But the USAirways people are just as capable. Any airline employee can be as good as an SWA employee. The problem is. Do they have the management to lead the way. After all . People do what you do. Not what you say. That is why SWA is so strong. Herb led by example. And I do think if PI was still around today. They could have competed with SWA. And been a very formidable competitor.
Just my two cents. For any Legacy US Airline to survive. Management must be innovative, supportive, and get outa that old box thinking. And oh, the economy will come back. Set up your business plan for the worst economy. Then when it thrives. Get off the bonus band wagon and invest in the future of your employees and company itself !