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United Falling: Major Restructuring Of Airline  
User currently offlineLindy field From United States of America, joined Mar 2001, 3129 posts, RR: 14
Posted (13 years 1 month 2 days 10 hours ago) and read 1746 times:
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This article from Airwise:

United Airlines is headed for a turbulent restructuring that will fundamentally alter its flight operations, labor relations and, possibly, top management according according to Crain's Business News.

At best, the nation's second-largest carrier will emerge a much smaller, weaker competitor, probably falling to third place behind Atlanta's Delta Air Lines. At worst, United will join a long line of second-tier airlines that have gone through bankruptcy.

A larger-than-expected loss of USD$525 million reported last week by American Airlines was a bad omen for United, which already was losing much more than its archrival before the September 11 terrorist attacks.

Crain's reported that United parent UAL Corp. will report a third-quarter loss on November 1, probably far higher than the roughly USD$500 million loss Wall Street is expecting. Analysts expect losses for the year to be about USD$2 billion.

American Airlines executives said last week that it is still losing USD$10 million to USD$15 million in cash a day, and advance bookings are below par for November and December.
_______________________________________________

Anyone care to comment?


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27 replies: All unread, showing first 25:
 
User currently offlineDonder10 From Canada, joined Oct 2001, 6660 posts, RR: 21
Reply 1, posted (13 years 1 month 2 days 10 hours ago) and read 1591 times:

sad

User currently offlineJer32382 From United States of America, joined Apr 2003, 34 posts, RR: 0
Reply 2, posted (13 years 1 month 2 days 10 hours ago) and read 1578 times:

They need to talk to Herb down at SWA. He knows how to do it.

User currently offlineIAHERJ From United States of America, joined Jun 2001, 677 posts, RR: 7
Reply 3, posted (13 years 1 month 2 days 10 hours ago) and read 1565 times:

What a stupid statement. That's like comparing apples to oranges. They need new leadership but it's a little more in depth than getting a good ole boy from Texas in there.


Actually flown: EMB-120 EMB-145 B717 B737 B757 B767
User currently offlineJonPaulGeoRngo From , joined Dec 1969, posts, RR:
Reply 4, posted (13 years 1 month 2 days 9 hours ago) and read 1525 times:

...is it IAHERJ?

Again, there is only ONE consistently profitable airline, where most of the employees are glad to go work, where the unions are amicable with mgmt., where the customers are loyal, where the per mile seat cost is lower than EVERYONE else...gee and it used to overseen by a guy named Herb.

United is NONE of the above and that IS the problem.



User currently offlineLoneStarMike From United States of America, joined Jul 2000, 3861 posts, RR: 34
Reply 5, posted (13 years 1 month 2 days 8 hours ago) and read 1498 times:

Here's what I find amazing about United's current situation. I read an article the other day that mentioned UA's stock was trading at $73.50 back in May of 1999, which I believe was about the time that Goodwin replaced Greenwald. Back then they were the largest airline and had such a strong balance sheet.

Earlier this year, in January, UA was still at $45.50, yet some 9 months later (as of Friday) they're trading at $13.93. At that price, that makes their current market cap $752 Million. Compare that to WN at 12.20 Billion, AA at 3.060 Billion, DL at 2.94 Billion, NW at 1.108 Billion and CO at 989 Million. It's almost inconceivable that they could go down like that in a little over 2 years.

I also agree, to some extent that trying to compare Southwest to United is like comparing apples to oranges, but there are still a few things that the other airlines could learn from Southwest.

1) KISS - (Keep it simple, stupid). Southwest has been successful in large part because they have kept their operations simple. Southwest flies one type of aircraft. The other carriers have many more. I'm not suggesting that United go with one particular aircraft, but they could maybe reduce the number of different types in their fleets. Southwest may have some 10-12 fare codes on their city pairs, whereas some of the other guys have dozens of different fares for the same city pair that change on a daily basis.

Southwest concentrates on on thing and one thing only and that is providing transportation from point A to B. The other airlines do that, too, but then they try to branch out and go into other things like the hotel and travel industry (Alegis) or on-line booking agencies like Priceline, and Orbitz, or going into the corporate bizjet business (Avolar). It's better to do one thing and do it well than to try to do too many things and wind up doing all of them half-assed.

2) Never try to get too big, too fast, or you'll usually wind up falling on your face. Take it slow and steady. This doesn't just apply to the airline industry, but to other industries as well. Remember after deregulation when Braniff went ape hog wild ordering planes and adding destinations right and left? Look what happened to them. Then look at all the mergers that have gone on. A merges with B and for some time afterwards it's like the right hand doesn't know what the left hand is doing.

Employees at A did things one way and employees at B did things another way and everyone gets confused on how they're supposed to do their jobs now, and the customer gets frustrated because one employee will tell them one thing and another employee will tell them something different and it's just mass confusion all around.

3) Know what your priorities are. Most airlines take the view that their first responsibility is making their shareholders happy, their second responsibility is making their customers happy and their third responsibility is making their employees happy.

At Southwest, it seems as though their first priority is making their employees happy, not necessarily with pay, but in the way they are treated. Happy employees give it their all and seem to go that extra mile to provide good service to the customers. The customers like it (well... most of them  Smile ) and they become loyal customers and give Southwest repeat business and that, in turn makes the sharehoders happy because the price of the stock keeps going up.

4) Save money for a rainy day. Even in the boom times, act like disaster is right around the corner and plan accordingly because you never know what tomorrow might bring. Don't over-extend yourselves, financially speaking.

In conclusion, I sincerely hope that UA can overcome all the obstacles and recover, but it's going to take more than new management, IMHO. It's going to require that employees and management work together as a TEAM and if that is accomplished, then the company can go forward and hopefully better times will soon prevail. But if different employee groups start having work slowdowns, and sickouts, and start threatening to go on strike or start Creating Havoc Around Our System (CHAOS) that's just going to drive more of your customers away and United will continue it's downward spiral.

United was once one of the best and I know if the employees and management put their minds to it they can again be the best. So good luck and get going and I'll get down off my soapbox now.

*This peptalk has been a public service announcement brought to you by

- LoneStarMike Smile

User currently offlinePolAir From United States of America, joined May 2001, 893 posts, RR: 2
Reply 6, posted (13 years 1 month 2 days 8 hours ago) and read 1479 times:

I have ticket booked with UA OMA-ORD-FRA-WAW for next year. I wonder what will happen with my ticket if they go out of business?

User currently offlineLindy field From United States of America, joined Mar 2001, 3129 posts, RR: 14
Reply 7, posted (13 years 1 month 2 days 8 hours ago) and read 1476 times:
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Pol Air,

At least some of the legs of your trip are going to be operated by Star Alliance partners. I don't think you'll have to worry about the Lufthansa leg. I'd be very surprised if UAL went totally out of business; airlines do continue to operate while under bankruptcy protection.

Funny that my post came only hours before news broke about Goodwin's resignation. I'm glad that there's a little good news about United today. What do people know about Goodwin's successor? He's got an enormous challenge ahead of him!

L. Field


User currently offlineAerLingus From China, joined Mar 2000, 2371 posts, RR: 0
Reply 8, posted (13 years 1 month 2 days 8 hours ago) and read 1447 times:

This isn't a bad thing.

As far as I am concerned, keeping United in business is better than it dying all together. I have a lot of respect for the second tier airlines and their service tends to be far superior to that of larger carriers.

With a smaller United, the airline will be forced to take better care of passengers. They will gain a new loyal following and they will be a better financial institution.

This isn't sad. This is great.  Smile



Get your patchouli stink outta my store!
User currently offlineAloha 737-200 From , joined Dec 1969, posts, RR:
Reply 9, posted (13 years 1 month 2 days 7 hours ago) and read 1444 times:

GOODWIN RESIGNS!!! YAY!!!!


You knoww, wouldn't it be nice if CO bought out United, kept all the employees, and ran the corporation well?

I would only wish, it probably won't happen, but if Bethune was in charge the problems would only be a fraction of what they are now. I hear CO is in fantastic shape.

Aloha 737-200!!  Wink/being sarcastic


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User currently offlineRC Pilot From , joined Dec 1969, posts, RR:
Reply 10, posted (13 years 1 month 2 days 4 hours ago) and read 1383 times:

This is somewhat sad. I was plannig to apply for them once i got out of the regional airlines. Not to say they wont be big.

I really like united. Dont know why. i havent even flown with them.

Maby it was their majestic look. or the fact that they were the biggest when i started to like them.

I think that they will pull out of this and become the worlds biggest again. They are one of the oldest and im sure have been through worse than this.

But i dont know for sure. Im just a teenager.

it be really said if they went out of buisiness.

what are second tier airlines. Is Northwest one.

regards


User currently offlineCedarjet From United Kingdom, joined May 1999, 8171 posts, RR: 54
Reply 11, posted (13 years 1 month 2 days 3 hours ago) and read 1374 times:

What the hell happened? This Goodwin bloke must be some kind of nutter. UA were in such good shape, I'm staggered to see these numbers now. Does anywhere know where the money went? I don't recall them buying ANYTHING except topping up on a few 777s, 757s and 744s, and some Airbus that probably don't even appear on the UA balance sheet at all, knowing the way Airbus sell planes. Getting so big didn't cost that much in the first place - Pan Am took half a century to build the Pacific routes UA bought from them for $500m (AA valued the network at the time at $3b). And speaking of Pan Am, it took them another 20 years to come apart in the spectacular fashion UA have done in 2 years.

Lindy Field, something you said made me giggle: "Pol Air, At least some of the legs of your trip [FRA-WAW] are going to be operated by Star Alliance partners. I don't think you'll have to worry about the Lufthansa leg." No, me neither, unfortunately the journey with United starts in Omaha so if UA aren't there to take Mr Pol Air to Frankfurt, I don't think he's going to care too much if the FRA-WAW flight operates or not.



fly Saha Air 707s daily from Tehran's downtown Mehrabad to Mashhad, Kish Island and Ahwaz
User currently offlineTango-Bravo From United States of America, joined Jun 2001, 3806 posts, RR: 29
Reply 12, posted (13 years 1 month 2 days 3 hours ago) and read 1354 times:

Excellent post LoneStarMike. You know whereof you speak and say it well.

Southwest's "secret" of consistent success through good times and bad boils down to having the courage to base all of its decisions, large and small, on "doing the right thing" without wavering. Herb Kelleher indeed has stated that Southwest's priorities begin with their People (i.e. employees) who, if  Smile make their Customers  Smile who then keep coming back to fly with Southwest, which makes their shareholders  Smile

In spite of being at "the bottom of the food chain" Southwest's shareholders have plenty of reason to be  Smile According to an article titled "Smile! It's Recession Time!" by Geoffrey Colvin in the Oct. 29, 2001 edition of Fortune magazine: "...you won't believe this but it's true--Southwest is now worth more than all the other airlines in America combined." As recently as May, 2001, Southwest was worth more than "only" American, United and Continental combined.

The only statement made by LoneStarMike with which I do not concur is Southwest may have some 10-12 fare codes on their city pairs... In Sabre, I rarely see Southwest having more than 6-8 fare codes for any city pair--and certainly nowhere near the outrageous disparities between the high and low end of the coach fare spectrum represented by dozens of fare codes shown by the other majors on most city pairs.

Whether I were an employee of Southwest (I'm not), a Customer (occasionally I am) or shareholder (I'm not) I would respond to those who never cease to grasp at straws in their futile attempts to discredit Southwest or to explain away the real reasons for their success as Liberace did to his critics early in his career: "Well gentlemen, I will be feeling hurt by your comments all the way to the bank."

In spite of Southwest's proven strategy that has consistently produced win-win-win results for its People, Customers and Shareholders for 30 years, the other U.S. majors have remained in a state of denial, with consequences that had begun to be seen months before 9/11 and were hastened by the effects of the tragic events that occurred on the day America was attacked.


User currently offlineLindy field From United States of America, joined Mar 2001, 3129 posts, RR: 14
Reply 13, posted (13 years 1 month 2 days 3 hours ago) and read 1345 times:
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Cedarjet,

Well, I'm not always logical and I don't always agree with what I think but my message for Pol Air was that his flight will probably fly. I don't think UAL will collapse completely, so he'll probably be able to get out of Omaha o.k. If UAL did collapse, some of its competitors would probably take the high road and honor the UAL tickets. Well, maybe.

In my view, UAL shot itself in the foot in the summer of 2000 with its prolonged labor dispute. The inability of management and labor unions to reach an agreement in an expedient manner alienated a large number of customers and ruined employee morale. Someone else can give a more detailed view.

Lynn D. Field


User currently offlineCedarjet From United Kingdom, joined May 1999, 8171 posts, RR: 54
Reply 14, posted (13 years 1 month 2 days 3 hours ago) and read 1337 times:

Lindy Field, I meant no disrespect, I agree that UA will probably be around.


fly Saha Air 707s daily from Tehran's downtown Mehrabad to Mashhad, Kish Island and Ahwaz
User currently offlineSegmentKing From , joined Dec 1969, posts, RR:
Reply 15, posted (13 years 1 month 2 days 3 hours ago) and read 1337 times:

so you all basicly think United should fly 737s only, charge only 3 or 4 fare bucketes, and kill everything else?

Southwest is an apple.. United is corn. You can't do something at one airline and expect to do it at another. I think you'd have better chances of making your dog talk before United turns into Southwest Airlines...

-n


User currently offlineIndianicWorld From Australia, joined Jun 2001, 3014 posts, RR: 0
Reply 16, posted (13 years 1 month 2 days 3 hours ago) and read 1333 times:

Star is dead without United....

User currently offlineAirCanadaMan From Canada, joined Feb 2000, 465 posts, RR: 0
Reply 17, posted (13 years 1 month 2 days 3 hours ago) and read 1334 times:

Has anyone else noticed some striking similarities?

It seems that the members of the Star Alliance are slowly dying.

1. Air Canada, losing lots of money, made some BIG mistakes.
2. Ansett/Air New Zealand, we all know the story.
3. Lufthansa, parking a whole bunch of jets.
4. Singapore, restructuring their orders.
4. And Now United.

Now dont get me wrong, I fly Star and I like it a lot, but in time of crisis, it seems that the once most powerfull alliance is failing, miserably!



User currently offlineRC Pilot From , joined Dec 1969, posts, RR:
Reply 18, posted (13 years 1 month 2 days 3 hours ago) and read 1323 times:

Are you all sure that united is falling.

I dont think that they have downsised any.

In fact if you go to their site you'll see that they added some more routes. And i think that they are the first to have there entire fleets cockpit doors reinforced.

Im not sure who to believe here. but i think im going to go with the untited site.


User currently offlineWatewate From Canada, joined Nov 2000, 2284 posts, RR: 1
Reply 19, posted (13 years 1 month 2 days 2 hours ago) and read 1297 times:

"It seems that the members of the Star Alliance are slowly dying."

That's an unfair assessment, don't you think? Virtually all other airlines are downsizing at this moment. Even OneWorld carriers, with the understanble exception of Qantas, are cutting capacity much like your so-called 'dying-carriers'. AA, BA, EI and others have cut back in light of the 9-11 incident. They're hardly going down as you suggest.


User currently offlineAirCanadaMan From Canada, joined Feb 2000, 465 posts, RR: 0
Reply 20, posted (13 years 1 month 2 days 1 hour ago) and read 1260 times:

Watewate,
You are entirley right, and I was afraid this kind of thing would be posted as a reply.

From where I sit, it just seemed to me that the carriers of Star are making the financial headlines a lot more than the other alliances, although there is talk of them
Keep in mind I wasnt implying that Star was dying, just some of the key players arent in a healthy condition.

I aplogize if I upset you in anyway.


User currently offlineN178UA From United Arab Emirates, joined Jan 2001, 1710 posts, RR: 65
Reply 21, posted (13 years 1 month 2 days ago) and read 1244 times:
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Hi All

Seems I am still holding lots of United Assets. If United is going down, I am going down with it!

1 My share of UAL now at rock bottom $13.93 (have some at$40, $50...too much to mention)

2. My United Premier Executive 1K status will be gone if they out of busniess. My 160000 odd miles is in danger also. and my family members all have some mileage from United.

3. Have collect 1:100 Pacmin UAL models, 1:400/500 Herpa and Gemini Jets and Dragon Wings All different United releases throughout all these yrs.

4. Nov 1 is the date UAL Corp boradcast 3Q financial result through web. I think they lost colse to 700m-1 billion

5. I once remember I am so proud flying United, L1011, B747SP, DC-10-10 service out of Asia to US. then the new B744, 772 types. Just don't understand how United turned so bad after 1 yr, (worse than all others even every US major suffered 9-11 attack)

6. If you look at United Traffic reports or ATW magazine, Internationally speaking, United is doing better than ever before the attack. Just domestically lost high yield pax to other majors.

7. I was thinking if United then CEO Jim Goodwin, won't sign a big pay out to its employee, United will go strike last summer, (like Northwest did before). Now I know this deal is hurting UAL, but I am thinking , it will eventually hurt others like AAL or NWA, as now the industry pay level is aiming "United plus 1 %" or more like Delta just paid out that increment.
So won't all other US major suffer eventually because of the United last summer benchmark?

8. If United would sale route right or asset, I will suggest spin off its S. America and Central America routes and rights, they are really not profitable and have strong contenders like AA and CO and newcomers like DL. Better concentrate Asia,(Japan) and Eurpoe, in Asia/Pacific, United still hold a very large market share reflecting in the RPK/RPM and ASM/ASK statistic released by DOT.

Finally, I am not sure what I will feel if United go down just like Swissair did not long ago. But it's gonna be real sad, as all my life been flown on United in and out US. Hope the new CEO, John Creighton brings some light on UA. Above are my personal feelings and thoughts.


United we stand

Sam Chui


User currently offlineLindy field From United States of America, joined Mar 2001, 3129 posts, RR: 14
Reply 22, posted (13 years 1 month 2 days ago) and read 1246 times:
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Star has perhaps been hit harder than the other alliances, but certainly other airlines are hurting... need I say the word "Qualiflyer?"

However, Aer Lingus, Alitalia, Continental, Delta, Korean, Canada 3000 and others are cutting back as well. These are hard times. I hope that no one got the impression from my posting that I enjoy United's troubles or derive any pleasure from them.


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User currently offlineAlexinwa From United States of America, joined Sep 2000, 1155 posts, RR: 0
Reply 23, posted (13 years 1 month 1 day 19 hours ago) and read 1185 times:

Alot of great reading and insight in here.

My two cents.

As we look at AA/DL/CO/NW/UA some have changed big time others haven't.

One reason I believe UA is hurting is something that I have said for a while in the posts. It has never made any sense to me for UA to run double or triple flights at the same time. For example SEA-ORD having two flights that leave within 5 mins of each other. I notice that one of the 1st changes they made after 9/11 was this. They cut back on the double flights.

UA got its butt kicked with its sad attempt to match AA's more room with it economy plus.

It's Customer service, which is a reflection of its upper management is in the tank.

Alot of wasted money as far as I can see is the main reason. More A/C then is needed, which means more expense than needed.

DL runs 4 daily non-stops to ATL from SEA. All WIDE-BODY. UA runs still 8 or 9 SEA-ORD flights ALL NARROWBODY. Big exspense difference there. How many seats is UA gaining? Not many. But the exspenses are much much higher. More fuel, crew pay, food, etc.




You mad Bro???
User currently offlineImkeww From , joined Dec 1969, posts, RR:
Reply 24, posted (13 years 1 month 1 day 11 hours ago) and read 1135 times:

Alexinwa--

Biz travellers prefer frequency. AA followed UA with MRTC, not the other way around! Although, it is to UA's detriment that you didn't know UA was the one who started expanding personal space in economy.

United was doing horrendously prior to 09-11 due to several factors: unreasonable pilot's wages (which made a lot of 744 flying unprofitable), a loss of formerly loyal biz travllers from last year's debacle, and on top of that-- a loss of even more business travellers due to the economy and United's larger reliance on them.


25 DCA-ROCguy : The Airwise article only makes clearer the nature of the new business environment since Sept. 11. Simply put, the House of Cards--the high pre-deregul
26 777d : I was once married to a f/a who worked for UAL and I read some of the company's and union's propaganda regarding labor issues, wages, and etc and foun
27 SFOintern : Jim-- The major cartel six's "voracious" cost structures are the result of trying to meet demand for air travel. Yes, biz fares are exhorbitantly high
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