N2805WWest From , joined Dec 1969, posts, RR: Posted (12 years 12 months 17 hours ago) and read 2535 times:
if it dissapears,
here is the entire article
NEW YORK (CNN/Money) - The head of embattled United Airlines told employees at the airline that even deeper cost cuts than those previously negotiated with the unions will be necessary if the airline files for bankruptcy court protections.
"Our plan will have to be more aggressive than it was out of court," Glenn Tilton, CEO of United parent UAL Corp., said in a recorded message to 80,000 United employees Friday. "We will need more cost savings. Work rules will have to be on the table. We have to take this opportunity to create a different and durable cost structure that allows us to compete and succeed in a different revenue environment."
The airline had negotiated with union leaders for labor cost savings of $5.2 billion over the next 5-1/2 years in an attempt to win $1.8 billion in federal loan guarantees. Those concessions disappeared with the rejection of the loan guarantee request by the Air Transportation Stabilization Board late Wednesday, leaving many of the employees receiving industry-leading wages.
Bankruptcy courts have the power to void labor and other contracts, though that can be a difficult and time consuming process. Tilton's message didn't specify if management expected to win the deeper cuts in new negotiations or through court action.
After asking himself the rhetorical question of whether a bankruptcy filing was now inevitable, Tilton would only say that with the ATSB rejection, "Chapter 11 becomes a more likely outcome."
Winning further concessions from the employees will be difficult. The airline's 13,000 mechanics voted against the concession package last week, despite strong support from their union's leadership. The Air Line Pilots Association said Friday it was surprised by Tilton's comments.
"We believe it is very premature to discuss these issues. ALPA is not interested in conducting our negotiations in the public forum," said the union's statement.
Tilton said United is prepared to go ahead with the widely expected bankruptcy filing if necessary, saying the financing needed to continue operations after a filing is in place.
"We have been preparing for a Chapter 11 filing for months, and we are ready if we decide that's the best course for the company," Tilton said.
The UAL bankruptcy filing is expected sometime over the weekend. Airline spokesmen confirmed the company's board of directors, which includes two union representatives, is set to meet Saturday.
On Monday a grace period expires for a missed $300 million debt payment that the company said it needed the loan guarantees in order to pay. Many major bankruptcy filings, including the two largest in U.S. history -- Enron Corp. and WorldCom Inc. -- as well as US Airways Group, were filed on Sundays.
Shares of UAL (UAL: Research, Estimates) closed down 7 cents at 93 cents in trading Friday, after losing more than two-thirds of their value in trading Thursday following the loan guarantee rejection.
STT757 From United States of America, joined Mar 2000, 17316 posts, RR: 50
Reply 1, posted (12 years 12 months 17 hours ago) and read 2508 times:
Just because an airline declares bankruptcy does not mean it's out of business, CO went through bankruptcy (twice!) and emerged a different company which today is one of the most successful in the industry.
Bapilot2b From United Kingdom, joined Mar 2001, 928 posts, RR: 19
Reply 2, posted (12 years 12 months 17 hours ago) and read 2493 times:
so please explain Pan Am, i think UA are going the same way as them.
Come on guys, lets start up a save UA fund! Personally I think it is one of the best American carriers, certainly for transatlantic flights, their price is low yet the provide an excellent service, unlike AA the overpricing theives!
AA737-823 From United States of America, joined Mar 2000, 6217 posts, RR: 10
Reply 4, posted (12 years 12 months 17 hours ago) and read 2422 times:
Seems to me like the root of the problem here is that their prices WERE so low. Were they charging comparable rates, they would have been making higher yields, and no need for a "save United" fund would have arisen.
I love United. I have only taken two roundtrips on them, but they were bettern than my dozens of experiences on AA (who supposedly prides themselves on appealing to businessmen). But I think that they brought this on through a series of bad decisions; decisions which could not be corrected for by a good CEO in the short time he had. I have an idea- let's take our ailing airline and agree to pay our pilots more than any other airline in the world. Sound good? Hey, flight attendants too. And, let's throw in a terrorist attack and the preceeding recession. You get the idea. UA's number came up. Will they go the way of Eastern, Pan Am, TWA (all four of them), and Braniff? I hope not, but it's likely, considering the low success rate of getting out of chapter 11.
If the majors would stop trying to compete with Southwest, AirTran, Frontier, and JetBlue, and raise their prices and service levels, they would be better off. They'd make more. They'd be smaller, yes, but more profitable.
That's my opinion- feel free to hold it up or shoot it down for discussion.
Goingboeing From United States of America, joined Dec 1999, 4875 posts, RR: 15
Reply 6, posted (12 years 12 months 16 hours ago) and read 2359 times:
AA737 - I kind of disagree. If UAL were to restructure their fares - offer no more than 5 fare buckets, raise the low end to cover costs, lower the high end (dramatically), get rid of the restrictions that charge you a hundred bucks for any changes (what's next, a hundred dollar fee to use the lav??), then they might see a turnaround. All these airlines talk about business travel being their bread and butter, but every one of them is acting like the leisure traveller is their saviour. Businesses are buying advance purchase fares. Nickle and diming them won't help your bottom line much. Traffics down all over - Southwest was the first to do something to try to entice more business flyers by dropping their one way unrestricted fares to no more than $299. From what I've heard, it's working. AA has announced a simplfied fare structure on certain routes, and has cut last minute fares just about in half. They don't have to match Southwest on every point, but here's some differences that make Southwest far more consumer friendly than UAL:
1. No more than 5 fare buckets - each segment displayed to the customer.
2. Changes to a ticket result in an upcharge on that segment to the current available fare...no $100 penalty to change.
3. Standbys just upcharge to full one way - no penalty
4. Any ticket or segment not used is valid for full value for up to one year.
Look at what UAL and others have done - run "fire sales" to get leisture travellers, implement penalty fees for changes. Implement use it or lose it policies. Implement a $100 stand by fee. It's like they are daring someone to buy a ticket.
My wife was stranded in ORD last Monday. She was talking with a gentlemen waiting for his 11:00 a.m. flight to depart. It was 5:00 p.m. at this time. HE needed to get out and asked to try to stand by on an earlier flight. He paid the $100. Each flight was full, and the flight he finally was going to get on was the one he was originally booked on. He asked for a refund of his $100. They told him that it wasn't refundable. Do you think he'll be anxious to fly United again anytime soon?
Price rules in most travel decisions. But the airlines still seem to think that the model of selling 21 day advance purchase tickets at a loss and hoping to cover them with outrageous unrestricted business fares is still viable. It's not. They need to change - but unfortunatly for UAL - it's too late.
BR715-A1-30 From , joined Dec 1969, posts, RR:
Reply 10, posted (12 years 12 months 4 hours ago) and read 2018 times:
Actually CO went thru Bankruptcy 3 times. And they are stronger than ever before now.
No, Gordon was just a lucky break. If it wasn't for Gordon, CO would either be dead or would still have some planes in the old Red and Gold Livery. I hate to say it, but before Gordon came along, CO SUCKED. And after the friendship days with united, they started going down the tubes.
Why is it that all of the CEOs who take over UAL can never seem to pull it out of trouble. Gordon did great with Continental. If only he wasn't such a snob, he could help UAL out.
AA717driver From United States of America, joined Feb 2002, 1566 posts, RR: 13
Reply 14, posted (12 years 11 months 4 weeks 1 day 23 hours ago) and read 1840 times:
CO had the advantage of being non-union when Bethune took over. He could do whatever he wanted to get things implemented. He is a great CEO and has done a wonderful job but he knows when to stay out of a bad situation. That's why TWA could never attract CEO's worth spit. With the IAM to deal with, turning TWA around was impossible.
UAL has three difficult unions. But they do have the history lesson provided by EAL,PAA and TWA to learn from.TC
SegmentKing From , joined Dec 1969, posts, RR:
Reply 16, posted (12 years 11 months 4 weeks 1 day 22 hours ago) and read 1756 times:
because chap 11 will actually help ua get its costs down.. the unions are gonna be screwed (leaders, not members)... and the members will take pay cuts that will drop them from industry leading to -normal pay- that allows them to do what they do, get paid a nice amount, and not rape the company w/ their work restrictions and high pay.
Alpha 1 From , joined Dec 1969, posts, RR:
Reply 17, posted (12 years 11 months 4 weeks 1 day 21 hours ago) and read 1742 times:
Kaddyuk, a question for you: if United has never gone bankrupt, how can they go bankrupt "again"?
Don't over-dramatize the situation.
Maybe, they COULD make it through, but as always Bush and the fat cats in washington lied. Didnt they say that theyw ould protect united from bankruptcy. They are a national airline (Like BA is to the UK). Shouldnt they be protected?
Noooo-Bush and the "fat cats" (good grief) never said they would shield UA from Chapter 11. And how is United a "national" airline? They are not part of the United States Government? Why should they be protected when other airlines are not? But I will give you the benefit of the doubt for not knowing that, since you are young. I hope this helps you understand this a little more.
And CO has been in Chapter 11 twice: in 1983, when Lorenzo "reinvented" (cough cough) the airline, and in 1991.
Alpha 1 From , joined Dec 1969, posts, RR:
Reply 18, posted (12 years 11 months 4 weeks 1 day 21 hours ago) and read 1718 times:
Dont say you will forgive me because I am young.
I am not young.
Your profile says you're between 16-20. That makes you young.
The US Aviation industry wouldnt be able manage without UA.
Actually, in the long run, for the aviation industry in the U.S. the loss of all those seats would probably not be a bad thing. To say the industry cannot survive without UA, is a gross overstatement.
It employs too many people and also, Star Alliance rely HEAVILY on UA.
For the overall economy of the U.S. this would NOT be a good thing, I grand you. Maybe you're on to somethng about the Star Alliance. They'll take the biggest hit if UA goes under, which, I'm convinced, they will not.
If you had actually READ the story (In betweeen the lines), then you will have noticed that they were already filling as bankrupt..
That is not true. They have not, at this moment, EVER filed for bankruptcy under U.S. laws. Have they been flying while losing a lot of money? Yes, but they have not, to THIS moment, ever been in bankruptcy.
N839MH From United States of America, joined Mar 2001, 379 posts, RR: 0
Reply 20, posted (12 years 11 months 4 weeks 1 day 18 hours ago) and read 1625 times:
Kaddyuk....."The US Aviation industry wouldn't be able manage without UA. It employs too many people and also, Star Alliance rely HEAVILY on UA. UA being the only US Airline in the Star Alliance."
I disagree with you on that the US Aviation Industry wouldn't be able to mangage without UA. All it would take to pickup the pieces of UA would be a fire sale in bankruptcy and DL/CO/NW & maybe AA would purchase the intl. routes. The domestic part of UA could be absorbed by the rest of the industry.
Star Alliance could pickup AA if AA wanted to be a trunk US carrier for Star and let OneWorld dissolve. BA could join SkyTeam along with QF.
Overall, if US and UA go completely out of business, the rest of the industry will strive and even thrive. It may take awhile, but it would. Who really knows what is going to happen, UA could reorganize and cut back its domestic operation other than into its HUBS to feed its INTL routes.
Apollo13 From , joined Dec 1969, posts, RR:
Reply 21, posted (12 years 11 months 4 weeks 1 day 18 hours ago) and read 1617 times:
Maybe my uncle can find work as a commerical pilot for American or Delta. This is really sad news for my family. And hopefully another airline will hire him near SFO, OAK or SJC. as for he flies the 767