As hairy as the last two years have been for United, the next several months could be the most treacherous.
Incensed by new cost cuts, United's largest union, the International Association of Machinists, recently asked the court to oust United's management team and install a trustee to run the company. The IAM backed off after United agreed to hire a consultant to analyze the business plan for the union.
Aircraft investors last month tried to repossess 14 United jets because of a dispute over the leases. The airline was forced to get an emergency court order to keep flying the planes.
But United's demand for new pay cuts and new, cheaper pension plans promises to be the most toxic battle. The flight attendants union has vowed to disrupt flights if that happens, and the IAM warns of repercussions as well.
"This airline cannot survive without loyal employees," says Robert Roach, IAM general vice president
United now hopes to exit bankruptcy in fall 2005, more than a year after original expectations. Between now and then, United must win new labor concessions, resolve its pension plans, get deals with aircraft investors and keep creditors satisfied.
"That's a big if," says airline analyst Philip Baggaley of credit rating agency Standard & Poor's. "This story could still end in any number of ways."
Thrust From United States of America, joined Sep 2003, 2691 posts, RR: 9
Reply 1, posted (10 years 11 months 4 weeks 16 hours ago) and read 3071 times:
Yikes. Hopefully they are able to accomplish all this. United is an airline the United States and the world cannot afford to lose. They are by far one of the most global airlines in the world, serving all continents except for Antartica and Africa. No other U.S. airline flies to that many continents. UA is the only U.S. carrier to serve Australia.
Jacobin777 From United States of America, joined Sep 2004, 15200 posts, RR: 59
Reply 4, posted (10 years 11 months 4 weeks 15 hours ago) and read 2936 times:
"The IAM backed off after United agreed to hire a consultant to analyze the business plan for the union."
the IAM probably realised the the consultants would have said it probably would be better to go with a trustee....and those trustees would REALLY shake down those unions (who I believe is driving UA down right now)....
Jafa From United States of America, joined Aug 2003, 782 posts, RR: 3
Reply 5, posted (10 years 11 months 4 weeks 15 hours ago) and read 2913 times:
OH, please! While I am not wishing that United goes out of business, the world would go on. People thought that about Pan Am and Eastern but the sun rose the next day. Other airliens would quickly pick over its carcas and the skies would get back to being overcapacity.
Uadc8contrail From United States of America, joined Sep 2003, 1782 posts, RR: 9
Reply 9, posted (10 years 11 months 3 weeks 6 days 22 hours ago) and read 2417 times:
The world would/will be just fine if UA does not make it. Pan Am, Eastern..NO one would have ever thought they would not be around.
UA is totally dragging their feet..they are abusing the Bk system by spending money in any an all directions they want instead of coming up to the plate and paying the people they owe money too.
you remember when NWA was on the verge of BK filing years back???the pilots finally agreed to a paycut to avert the filing......im sure you would be singing a different tune if it was NWA that was in judge genes courtroom of comedy......karma............
Ord From United States of America, joined Jul 1999, 1398 posts, RR: 1
Reply 10, posted (10 years 11 months 3 weeks 6 days 21 hours ago) and read 2373 times:
NWAFA - Talk about stepping up to the plate, what about your own NW management? Where are your complaints against them for giving themselves raises and new stock options while at the very same time telling other employee groups that their pay has to be slashed? It's interesting when NW does something bad you conveniently look the other way.
NWAFA From United States of America, joined Dec 2003, 1893 posts, RR: 14
Reply 11, posted (10 years 11 months 3 weeks 6 days 21 hours ago) and read 2319 times:
ORD & UAD
Hey, first of all we are NOT in BK like UA is. UA has YET to prove they have any type of business plan in place.
Trust me ORD, the employees are totally upset about the stock options that good old Doug received, however he is still making much less than the what UA's guy is making in BK...did he not get a sign on bonus while in BK? Did he not get an increase.
The topic here is that UA is dragging their feet in BK and totally using and abusing the system.
THANK YOU FOR FLYING NORTHWEST AIRLINES, WE TRULY APPRECIATE YOUR BUSINESS!
Cjuniel From United States of America, joined Dec 2003, 146 posts, RR: 1
Reply 12, posted (10 years 11 months 3 weeks 6 days 21 hours ago) and read 2298 times:
OBVIOUSLY quite a few of you did NOT read the article THOROUGHLY. A lawyer is quoted as saying something to the effect of "bankrupties of this size TAKE TIME". To the idiot that said AA/DL/CO fly to more populated areas of the US, United has HUBS in the (#2 (Los Angeles), #3 (Chicago), #4 (Washington Metro) and #5 Bay Area) largest metro areas in the US minus New York. Pan Am was not a TRULY domestic carrier when it failed. And Eastern was flying HEAVILY on the east coast with a large percentage of their Atlanta flying absorbed by Delta, and their Miami operation going to American.
Maybe a few of you should contact Tilton over at United and dazzle him with your aviation skills. I am sure you can do a much better job.
Ssides From United States of America, joined Feb 2001, 4059 posts, RR: 19
Reply 13, posted (10 years 11 months 3 weeks 6 days 20 hours ago) and read 2294 times:
The only city that would really be hurt by UA's going under would be Denver. Look at United's other hubs:
LAX: has plenty of other service, especially to international destinations
SFO: Also has a great deal of other domestic and international service; plus, from what I hear, it's already overcrowded. SJC and OAK are also nearby, with WN and plenty of other carriers.
ORD: Has an AA hub, and a good mix of international carriers. MDW is also close by, with WN providing hundreds of flights.
IAD: A crappy airport to begin with, but it still has BA, LH, Saudi Arabian, and countless other carriers. DC is a big enough market to attract enough service to replace UA, even if it were to BWI or DCA.
It would be devastating if both UA and US went under -- I used to live in the DC area, and I can't imagine what the aviation landscape would look like there if both these carriers were gone. I'm sure they make up at least 50% of the traffic in and out of the DC area. Other airlines would bid high to replace these airlines' gates and slots.
Cjuniel From United States of America, joined Dec 2003, 146 posts, RR: 1
Reply 16, posted (10 years 11 months 3 weeks 6 days 20 hours ago) and read 2199 times:
To begin with, MDW could NOT replace United's traffic at O'Hare. All of us arent in love with the LCC. Second, NO airline is really in a position to FILL IN for United if they were forced to liquidate at some point. Everyone has their own financial house to worry about right now. With that said, who is going to have the money to bid for the DC assets of US and UAL if they were to fail?
As far as LAX, United operates a handful of international routes out of Los Angeles, but they are the only major airline with a HUB at the airport.
And as a side note, if United were to go under people in Chicago would have NO CHOICE but to choose another carrier, but that doesnt automatically mean it would be American.
Ckfred From United States of America, joined Apr 2001, 5710 posts, RR: 2
Reply 17, posted (10 years 11 months 3 weeks 6 days 12 hours ago) and read 2047 times:
There was an article in today's Chicago Tribune that had some of the same sentiment. I don't think UA is abusing the bankrutpcy system. Management simply can't, for whatever reason, formulate a business plan to exit bankruptcy, and the creditors don't seem to be screaming to open up the process to 3rd parties bidding for UA.
UA said up front that it planned to spend 18 months in bankruptcy. It's now 2 years since the petition was filed. While the price of oil has significantly affected UA's costs, every other airline has pretty much felt the affects of oil prices. At some point real soon, UA either has to present an exit plan or see the bidding process start.
As for what happens at ORD if UA goes under, AA is going to get the majority of UA's business, initially. About 50% of the traffic for both AA and UA is O&D, so flyers aren't going to flock to carriers that serve ORD as a spoke.
But, UA has over 50 gates in Terminal 1. UA Express has about 15 gates in Terminal 2. I don't know whether UA or the UA Express carriers hold the leases in Terminal 2, but that certainly gives other carriers an opportunity to set up a hub or focus-city operation. I know B6 has been trying to get into ORD, and since HP has dropped out of bidding for TZ, it could add addtional gates.
CTHEWORLD From Mayotte, joined Dec 2004, 478 posts, RR: 2
Reply 18, posted (10 years 11 months 3 weeks 6 days 12 hours ago) and read 2028 times:
Well, I hope UA does make. NWAFA, I have suffered too much on the non-stop LAX-DTW flights with your airline. Cabin service was horrible, catering below prison level, no inflight entertainment and attendants that would rather pull the curtain on the galley and ignore the pax than get off their lazy butts and offer water to a -300 full of miserable passegers. Enjoy the monopolies your company has on snowtown, notown and motown. It almost makes me long for the days of Al Checci! NW was sooo bad, I purposely would book my entire project team through ORD on UA.
SHUPirate1 From United States of America, joined Sep 2003, 3670 posts, RR: 15
Reply 19, posted (10 years 11 months 3 weeks 6 days 12 hours ago) and read 2026 times:
Ckfred-I can't say for sure, but I would find it difficult to believe that the individual UAX carriers hold the leases on the T-2 gates. After all, Atlantic Coast had most of the operations in those gates before they told United to take a long walk off a short cliff, and if they were in fact Atlantic Coast Airlines' gates, wouldn't they have likely set up a second hub at ORD in addition to the one at IAD, or even set up the hub at ORD and totally forgotten about IAD except for ORD flights?
Burma's constitutional referendum options: A. Yes, B. Go to Insein Prison!
SFOMEX From , joined Dec 1969, posts, RR:
Reply 20, posted (10 years 11 months 3 weeks 6 days 11 hours ago) and read 1982 times:
United is a special airline. During my years at SFO it was awesome to see their gray planes. Even at MEX, where they have drastically reduced their presence, people knows that the Rhapsody in Blue airline is and always will be United. To all the folks working in United, thanks and keep the good work guys.