DfwRevolution
Topic Author
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UAL... When Will They Fail?

Wed Dec 01, 2004 9:00 am

Who is getting tired of the UAL fiasco? They have been in bankruptcy for nearly 2 years and they are still posting massive losses-

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=6958169

Since other forms have speculated on how UAL survive, I'd like to start a discusson on how UAL won't survive. How much longer can they sustain these types of losses? How long can they stay in CH.11 before being forced to liquidate? What more can they do wrong?
 
DAYflyer
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RE: UAL... When Will They Fail?

Wed Dec 01, 2004 9:06 am

United must cut massive amounts of fat (executive positions at VP & above) in order to truly reduce costs; since they are unwilling to do that, they will be unemployed by the end of 2005. I don't think they will last beyond that.
One Nation Under God
 
legendDC9
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RE: UAL... When Will They Fail?

Wed Dec 01, 2004 9:28 am

UAL is going to be around for a while. Unlike US and more along the lines of AA and DL, they own endless expensive real-estate all over the world, not to mention aircraft. They have plenty of coladoral they can use to keep their business running. True, they will have to go through some tough cuts which they have been going thru but the road from that to collapse is very long.
 
YVR2SAN
Posts: 57
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RE: UAL... When Will They Fail?

Wed Dec 01, 2004 9:42 am

Everyone keeps bashing UA on how long they have been in Chapter 11. Wasn't HP in chapter 11 for close to 3 years before emerging back in the early 90's?
 
Cactus739
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RE: UAL... When Will They Fail?

Wed Dec 01, 2004 9:56 am

America West was in bankruptcy from June 27, 1991 to August 25, 1994.
You can't fix stupid.... - Ron White
 
isitsafenow
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RE: UAL... When Will They Fail?

Wed Dec 01, 2004 11:00 am

HP didnt keep losing the mega-bucks UA still is. $114 million bucks over 30 days is a ton of cash. Sooner or later the well will be dry. Payroll can not be met and its time to close up shop. UAL is in worse shape then most of you think.
The person that said end of 2005 is close. I think no later then Feb 1, 2006 unless UAL finds a sugar daddy someplace. Cutting the "massive fat" in the ivory tower is only a piece of the pie. You can fire 75 per cent of that "massive fat" and you still have a real big problem on your hands. It will not go away with that move.
safe
If two people agree on EVERYTHING, then one isn't necessary.
 
sccutler
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RE: UAL... When Will They Fail?

Wed Dec 01, 2004 11:24 am

Interesting game to watch, though the impact on the employees of this carrier of long tenure cannot be ignored.

I think UAL survives, but expect a lot of agonizing issues before the dust settles. I also believe that, if they ultimately fail, it will be Continental which will emerge as the big "winner," and I expect CO to reclaim Denver.

Just a feeling. Flame on.
...three miles from BRONS, clear for the ILS one five approach...
 
boeingbus
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RE: UAL... When Will They Fail?

Wed Dec 01, 2004 11:26 am

My personal view is that there is going to be foreign carrier who will save UA, my guess it will be Lufthansa... Supposedly, the Bush administration is looking to raise foreign ownership stakes, so why not???

If this does NOT happen UA will fail... But not until after Feb as I just purchased tix to MDV... lol...

That is just my 2 cents...
Airbus or Boeing - it's all good to me!
 
BIGBlack
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RE: UAL... When Will They Fail?

Wed Dec 01, 2004 11:28 am

UA survives. The bashing is getting old
Someone special in the air
 
SHUPirate1
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RE: UAL... When Will They Fail?

Wed Dec 01, 2004 11:31 am

Has anybody looked at the last paragraph of the press release? Pretty disturbing, if you ask me.

"The carrier said that as expected it did not meet the requirements of its debtor-in-possession financing for the month but that it received a waiver from its DIP lenders for the fourth quarter of 2004."

While I believe that United has too much going for it (namely, hubs, gates, slots, and route authorities in some of the most valuable airline real estate in the world) to not survive in some way, shape, or form, however, it seems somewhat likely that at least some of the airline will have to be gutted for United to emerge.
Burma's constitutional referendum options: A. Yes, B. Go to Insein Prison!
 
UALGSO
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RE: UAL... When Will They Fail?

Wed Dec 01, 2004 11:39 am

Maybe tonight, or tomorrow or the next day, maybe even next week who knows, nobody but judge gene and the boys at WHQ. Most of the employees here would just like to see an exit strategy from CH. 11! But until the locks are put on the doors and computers there is no use in bringing up when will we fail every other week until it occurs.
 
DfwRevolution
Topic Author
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RE: UAL... When Will They Fail?

Wed Dec 01, 2004 11:44 am

UA survives. The bashing is getting old

Is it that unjustified? Two years in Ch.11, still bleeding like crazy, no exit strategy... when do the creditors and employees say enough is enough?
 
isitsafenow
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RE: UAL... When Will They Fail?

Wed Dec 01, 2004 11:49 am

BIGBLACK....Well, the bashing may be getting old, but fact is the fuse is getting shorter...the clock is winding down, and we are rounding third and heading for home.
Chapter 11 was the two minute warning and I'm not sure how many time-outs are left...........but its not many.
And that folks, is reality.
safe
If two people agree on EVERYTHING, then one isn't necessary.
 
BIGBlack
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RE: UAL... When Will They Fail?

Wed Dec 01, 2004 11:53 am

Well, we shall see wont we? I guess we can keep bashing or just watch. You guys act like you wanna see it as much as I wanna see Star Wars: Revenge of the Sith
Someone special in the air
 
UALPHLCS
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RE: UAL... When Will They Fail?

Wed Dec 01, 2004 12:02 pm

DFWRevolution,

I don't see AA or DL or NW making the big bucks outside of Chapter 11? So why should UA emerge when the conditions in the industry (fuel prices) don't warrant it.

Emerging too early would just land UA back into Bankruptcy and speed a demise. I can tell that this is what your rooting for, so it's all the more reason that UA sould take its time.

FYI HP did spend 3 years in Chapter 11 and Dow Corning spent 12 years under court protection, so anyone pushing for UA to emerge just doesn't understand the situation. It's not your decision anyway.
A little less Hooah, and a little more Dooah.
 
UA744KSFO
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RE: UAL... When Will They Fail?

Wed Dec 01, 2004 12:34 pm

I do like United a lot, but it does seem strange that after all the trimming that they've done, after all the concessions, renegotiating, and the like, they are still posting these big losses and haven't put forward some sort of plan for how to emerge from bankruptcy. They kept 14 jets from being repossessed by court order, and this scares me a bit.

While I definitely want to see UA around, I'm a bit worried that the current management is stalling for time, and that the employees are getting screwed while management can't put forth a good plan for reorganization. And there's no way anyone can call me a UA basher. In fact, I REALLY want them to stick around.
 
scotron11
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RE: UAL... When Will They Fail?

Wed Dec 01, 2004 12:38 pm

And they said the Titanic was unsinkable! Talk about real estate, I remember when PA used to own Inter-Continental Hotels and of course, the PA building in Manhattan.

In the end it was all sold, as was their Pacific, South American and London routes to raise cash, to no avail.

Are we there yet?
 
B4REAL
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RE: UAL... When Will They Fail?

Wed Dec 01, 2004 12:41 pm

I think we need to see what happens to US. Back in BK, and no emergence in sight from what we see. If US dissolves, and I think US would go before UA, so when/if we see this, we can see how the industry adjusts without one legacy carrier (something I think we need post 9/11), and then place bets on UA survival or sinkage.
B4REAL, spelled like it sounds
 
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mariner
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RE: UAL... When Will They Fail?

Wed Dec 01, 2004 12:47 pm

B4real:

"...and no emergence in sight."

Actually, there is - sort of. US has just negotiated a new deal with GE, but for it to take effect, the airline has to come out of bk by June 30, '05.

There are some other coniditions they have to meet as well - tough ones, like more staff cuts - so who knows if it will happen.

cheers

mariner
aeternum nauta
 
Thrust
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RE: UAL... When Will They Fail?

Wed Dec 01, 2004 1:14 pm

I really don't believe when UAL will fail is a question we can answer at this point. Seeing as how TWA bounced back from almost certain death six times, I would say we can never say when UAL will go down. That said, let's not debate when UAL will go down, but rather if UAL will go down. If TWA survived Carl Icahn, then UA certainly is capable of making a full recovery.
Fly one thing; Fly it well
 
BIGBlack
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RE: UAL... When Will They Fail?

Wed Dec 01, 2004 1:42 pm

Wouldn't a major airline like UA going under be bad for the industry as a whole? The the airlines are in competition but I would suspect they all want the industry to prosper once again. Someone please explain.
Someone special in the air
 
greaser
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RE: UAL... When Will They Fail?

Wed Dec 01, 2004 2:08 pm

This isn't a question on whether United will go, rather which Legacy will go. Unfortunately, its is going to be very hard for any Legacy to get back into healthy shape unless a Legacy fails. Yes, they all need restructering, yes, the airlines need to consolidate their aircraft types.
The extra-ordinary time calls for risky measures and lots of creativity.
But should any leagacy fail of which US is the closest to, UA, AA, DL,certainly CO & NW could survive.There are only 3 airlines teertering on the edge, US,UA and DL, of the 3 US is in the worst position, followed by UA and DL.
Now you're really flying
 
usatoeze
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RE: UAL... When Will They Fail?

Wed Dec 01, 2004 2:20 pm

If I am not mistaken the great Swissair once owned a great deal of side business as well as PA and they both went under. I am saddened to think that it is possible, but it definitely is. Collateral isnt always a tradeoff as sometimes creditors and outside buyers realize that they can pick up those same assets after a Chapter 7 filing for pennies on the dollar rather than pay a higher price for them now.
War is a very poor political tool
 
ordpark
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RE: UAL... When Will They Fail?

Wed Dec 01, 2004 4:59 pm

I hope all of you 'experts' that want to kill off my airline will give me a few moments...

I've worked for UA for over 30years....I've weathered strikes...economic downturns that saw many of my co-workers lose there jobs....and Sep. 11th...when two of our aircraft and crews were destroyed by lunatics...

DFWrevolution...what gives you the right to even author such a post?

I work with some of the most dedicated, hard working people in the industry...we've raised our families together...and over the years worked our buts off for UA and many of you can't wait to see us fail - quite frankly, you disgust me.....

You may get your wish - but I don't think so...UA may end up a very different looking airline, but we WILL survive...I've seen a lot of people I've worked with for years lose there jobs - and there will be more unfortunatly..none of us knows what the future holds.

So, the next time you want to see my airline fold...just remember that there are thousands of jobs and lives hanging in the balance....and incidently, I don't know who you folks work for, but I hope your companies thrive!
 
aa777jr
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RE: UAL... When Will They Fail?

Wed Dec 01, 2004 5:58 pm

I give UA till Dec 05 before they go under. They need serious redevelopement of business plan and need to get an exit stradegy for Chp 11. How long will creditors allow them to hemorage funds on a monthly basis?

On a side note, what percentage of UA a/c are actually paid in full?

AA777jr
A liberal is a man who is right most of the time, but he's right too soon.
 
baw716
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RE: UAL... When Will They Fail?

Wed Dec 01, 2004 6:34 pm

This subject is silly.

Please go read my other posts on the subject of UAL to get my position in this matter. Suffice to say that I have very strong feelings about the current management at United and the changes they MUST make. That said, to have a discussion regarding when United will fail is just plain silly and will accomplish nothing, other to inflame the members of this forum who are United employees and deserve better than to have a group of vultures hovering over them talking about when they will lose their jobs and everything they have worked for (in some cases for a lifetime).

If we, as a community, cannot have positive discourse regarding a very serious issue, then it is better not to have the discussion at all. I do recognize your right to your opinions and to voice them in an open forum; however, only to the extent that it does not become hurtful to the people who will suffer if UA liquidates...and I am not just talking about United employees. The ripple effects of a UA liquidation will have implications throughout the industry and it is something that must be avoided at all costs.

So, a gentle reminder: Cast not the first stone...

baw716
David L. Lamb, fmr Area Mgr Alitalia SFO 1998-2002, fmr Regional Analyst SFO-UAL 1992-1998
 
PVG
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RE: UAL... When Will They Fail?

Wed Dec 01, 2004 8:10 pm

Hi Guys,

I read these forums a couple of times a week and finally decided to join and get in on the action.

Anyway, I fly on UA all the time (1K). I don't understand why certain people are waiting for them to fail. I enjoy the service and the employees are courteous and hard working (I have had an occasional bad apple, but unusual). I hope that they stick around.

Why do they need to fail? Now that the costs are down for most carriers across the board, why can't we start looking at mergers. This is the obvious answer if you ask me. There are too many seats chasing too few customers! With recent and possibly more employee give-backs, now is the time for these guys to start thinking about who is going to combine with whom. I propose a UA/CO tie-up, as I think that their networks compliment each other well and the CO management is top class. I also could see a DL/NW tie up for the same reasons.

I also think that the only employee group that should realistically be asked to give-back anything substantial are the pilots, as they are really the only ones left that can give something and still walk away making a respectable living. The FA's and Mechanics are just earning enough to survive and I don't think it's really fair to ask them to give back anything except maybe some work rule efficiency givebacks and maybe on the pension issue as the older employees are covered by the government insurance and younger employees are just going to have to deal with the fact that they will have a 401 plan like most of the rest of people who work in America.

Another thing: The justice dept and transportation dept. should declare a 12 to 24 moratorium on anti-trust issues related to airlines. Let the market decide who merges and lives without having the anti-trust issue hanging over potential investors.

The U.S. airline industry's financial situation needs to be cleaned up already so that everyone can get on with their lives and it can be run normally, with the investors making a reasonable return and consumers getting a good product for a fair price (not necessarily cheap)!

That's it! Best of luck to UAL and it's employees!
 
LY4XELD
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RE: UAL... When Will They Fail?

Wed Dec 01, 2004 10:25 pm

Wouldn't a major airline like UA going under be bad for the industry as a whole?

The market is saturated with overcapacity. Someone needs to go if the market stays where it is.

I work with some of the most dedicated, hard working people in the industry...we've raised our families together...and over the years worked our buts off for UA and many of you can't wait to see us fail - quite frankly, you disgust me.....

Defensive much? No one is saying the employees of UA are not hard working and good people. Unfortunately, the fate of the airline lies in the decisions of its management. You can have the best employees in the world, but with poor management decisions, you don't have much of a chance to survive.

DFWrevolution...what gives you the right to even author such a post?

He has every right to post this topic just as everyone else does who says "when will US liquidate?"
That's why we're here.
 
ultrapig
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RE: UAL... When Will They Fail?

Wed Dec 01, 2004 11:22 pm

Here is the bottom line-UAL corp's stock is worth nothing-the holders of bonds and the smaller amount of trade debt still owed from prior to the filing essentilly own the airline. Their goals in general is not to keep the airline going but to maximize thier return. If a liqudiation brings them the most money fine-if a reorganization give them a combination of new debt and stock which eqauls more than they would get in liquidation fine---How long will this thing go on?

It will go on so long as the operating losses which the debt holder are sustaining aren't worse that the prospect of liquidation.

When i say debt holders I'm using a broad brush-soem debt holders have different goals-ie some of the lessors may also have some unsecured debt and maybe happy to get littel for their unsecured claim if they can keep getting lease payments.

If the creditors think they are being dorked around they will move but so far they haven't with a few exceptions.
 
n9801f
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RE: UAL... When Will They Fail?

Wed Dec 01, 2004 11:27 pm

Barring labor disruption and geopolitical catastrophe, UA will almost certainly survive. Its route structure and fleet are outstanding and are inherently profitable given a reasonable cost structure, which they are creating.

Comparisons to US are irrelevant and misleading. UA has mass and diversification that US does not. And UA is the clear leader in some key markets (ORD, DEN, etc.) whereas US is not (CLT is tiny.)

Like it or not, UA is highly likely to survive.
 
isitsafenow
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RE: UAL... When Will They Fail?

Wed Dec 01, 2004 11:34 pm

Nobody WANTS United or USAirways to fold. Nobody WANTS people to be tossed into the unemployment line. Nobody is casting any stones.
What I am doing(cant speak for the others) is analysis what info I have
and make a call. Its not worth a plug nickel but its my opinion.
Both these carriers are like a hospital patients. They are sick...serious hoping to go to fair condition instead of critical. Everything I have read from business publications, wall street and even finance pages on the web show that things are bad for these companies. I want them to survive. I fly UA a couple of times a year and like the service. Living in Michigan, my main carriers of choice due to schedule(when I want to go) is Northwest and Delta.
I would list UA as my number three of choice. I have a few years of airline experience in my past...three carriers with three totally separate jobs.
Boy it that a way to learn the business or what?
I hope UA lives but I call it like I see it. They are going to need a lot of help and perhaps cash is not the answer. UAL has already blown through a mountain of that. Now you can see why the money guys are getting nervous about pouring more cash into UAL. The survival of the carrier must come from within. Relaying on someone else to help isn't going to cut it. All workers and support people must come together to turn the company around. Waiting for the Union or government or even upper level management to do it alone WILL NOT WORK!. Its a team attempt or its Braniff 83 all over again.
safe
If two people agree on EVERYTHING, then one isn't necessary.
 
ORD2PHL
Posts: 242
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RE: UAL... When Will They Fail?

Thu Dec 02, 2004 12:09 am

What drama...stop yourselves; don't pretend to know what's going inside the airline regarding their cash position or plans for the future.

The bottom line is that we have little to no idea when AND IF they will fail, while they may or may not be your favorite airline, I'm with BIGBlack except that it is the SPECULATION and unsourced rumors that are getting old


ORD2PHL
 
lh477
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RE: UAL... When Will They Fail?

Thu Dec 02, 2004 12:15 am

Based on the posts many of the a.netters have been putting on the board, I think some do want US and UA to fail......Most on the forum seem to look at the economic argument, not the human impact caused by such failures.....

Anyways, I think both US and UA should and will survive. Look at Air Canada,
it came out of CCAA(Cdn=Chap 11). It seems to be doing fine(one financial Qtr may not truly indicate complete success, but they did have a good qtr)...

As someone mentioned Lufthansa can always come and help...they seemed to have done that with AC through Deustche?? Bank.

Come on you gunners......!!!!!
 
NWAFA
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RE: UAL... When Will They Fail?

Thu Dec 02, 2004 12:34 am

With the BK judge in bed with UA means UA will be around...

UA will be a much smaller airline if they are going to survive. They will also need to really START looking for ways to save money and not spend it.

There here to stay, but much smaller.
THANK YOU FOR FLYING NORTHWEST AIRLINES, WE TRULY APPRECIATE YOUR BUSINESS!
 
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727stretch
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RE: UAL... When Will They Fail?

Thu Dec 02, 2004 12:37 am

For those of you that say UAL does not have a business plan, I beg to differ. Many changes have been made while in Chapter 11.

*Diverse portfolio of products appealing to a wide array of customers. Premium transcontinental product, PS (offering high-yield customers an excellent product on New York to West Coast routes, which based on customer feedback of the product and what they are willing to pay, will generate a good profit). Low cost product for low to moderate-yield routes, Ted (has gained back market share on critical routes). United Express for feeder services (see more below).
*Expand international service, with a focus on new Asian routes (where money can be made and there is a huge demand due to the developing economy).
*Eliminate unprofitable domestic routes and/or transfer that flying to UAX where demand better matches capacity
*Restructure United Express. Air Wisconsin's flying is up for bid. If Independence is the chosen bidder, this will do a few things. #1 it will eliminate the overcapacity and congestion problem at IAD. #2 it eliminates a competitor at IAD. #3 it gives customers a better product than they had with Atlantic Coast.
*Reduce costs to sustain long term growth and profitability. This is what the 1113 process is about. Eliminate some long-standing, cash-eating union work rules (i.e, consolidate Ramp and Customer Service contracts at non-hubs). Reduce fuel burn given the high cost. Reduce distribution costs with more electronic ticketing agreements and online sales sources.

These are just a few examples of the restructured business plan. So please don't say that UAL hasn't come up with a new plan yet. Why would UAL exit Chapter 11 when the industry is still on rocky footing? That is the mistake US Airways made. There are people making tough decisions at World Headquarters, whether we as employees agree with some of their choices or not.
flightdiary.net/727stretch
 
jetdeltamsy
Posts: 2688
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RE: UAL... When Will They Fail?

Thu Dec 02, 2004 12:38 am

as for united's "vast real estate holdings", ual has hired a consultant to identify and liquidate real estate holdings. it's in their november report to the courts (available on ual's web site).

imo labor will ultimately destroy the restructuring at ual. the unions there are "old school". granted, the unions have allowed huge concessions, but it's still not enough to save ual. at some point, they are going to send their members to the picket line, and that will be the end.

the courts won't allow ual to burn through all their cash before shutting them down. they will be shut down while there is still a chunk left to repay creditors.

i think ual will be sold off in pieces and i think that will start within 6 months.

all of this is my opinion.
Tired of airline bankruptcies....EA/PA/TW and finally DL.
 
NWAFA
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RE: UAL... When Will They Fail?

Thu Dec 02, 2004 12:39 am

727,

Hence why UA will continue to not make it as it is..It is time to stop spending money!
THANK YOU FOR FLYING NORTHWEST AIRLINES, WE TRULY APPRECIATE YOUR BUSINESS!
 
ATWZW170
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RE: UAL... When Will They Fail?

Thu Dec 02, 2004 1:19 am

If Indy gets the routes they are going to offer a better product than ACA?? They are the same carrier...they were not the best UAX carrier and the service that Indy offers will not be the same that will be offered if they fly for UA. UA is not going to pay them anything close to what they were making before they went solo! Why paint your fleet, have to file for BK in order to break your Airbus order, and spend all that money in transition costs for a 5 year contract. AWAC will stay with UA.
Success is getting what you want...happiness is liking what you get
 
mm320cap
Posts: 162
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RE: UAL... When Will They Fail?

Thu Dec 02, 2004 1:26 am

To all my fellow UAL employees,

I read an interesting article last night regarding the endless stream of poop that seems to keep raining down upon us. It was written by a United pilot who had a friend at TWA, who is now a wide-body Captain at American. His observations of what transpired there during their 10+ year decline were fascinating. He noted that after awhile the employees just hunkered down and did their jobs. They got so used to hearing bad news that they finally just ignored it and actually became a much more unified family. There is something very bonding about going through such experiences together. The authors point was that the employees of TWA did an amazing job of operating a safe airline despite the enormous number of distractions facing them on a daily basis. I think it is a real accomplishment that we have all managed to make it through the last 3 years running an extremely safe and astonishingly efficient airline. From one of the thousands of us who are up there in the aluminum tube counting on your skills to keep us safe, THANK YOU. No matter what happens, you should all be DAMNED proud of what you have accomplished the last several years.

That out of the way, I would like to also suggest that we all read these posts with a stiff drink (as long as you aren't flying, of course) and a shrug of the shoulders. NOONE posting on this forum has ANY idea of what is going on behind the scenes with the restructuring of United. Even we the employees really don't know, and we have access to information channels those on the outside don't. Is management telling us the truth when they say that the lenders are ready to finance our exit as long as they get the requested concessions? Who knows? Are they bluffing? I guess we'll find out. But rest assured, the estimates of the timeline of our demise are based on less information than what you yourself have.

To those of you that like to continue the verbal vomit regarding these types of posts - you make it very difficult to run a safe operation. I'm not just talking about United. I'm talking about Indy Air, USAirways, Delta, American... all of us. We are all working hard during very difficult times when the entire industry is in peril. There aren't more than a handful of airlines out there that aren't exposed to possible liquidation. Don't think so? Pick your favorite airline and then add a couple of crashes over the next few months. Add another terrorist attack, whatever your favorite disaster is. Noone is exactly rolling in the profits. My point is that in this business distractions kill. We have enough on our plate right now trying to absorb the changes necessary to feed and care for our families with our decreased pay and increased time away from home. There will be plenty of time to Monday morning quarterback this thing to death when the time comes. In the meantime, you are making it difficult to keep our focus on the safe transportation of you and your families to your destination.

Miles
 
ord
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RE: UAL... When Will They Fail?

Thu Dec 02, 2004 2:04 am

"They will also need to really START looking for ways to save money..."

NWAFA - As was said above, there are numerous things being done that you don't know about. If you think United has not started looking for ways to save money you don't know what you're talking about. United has been making a lot of improvements resulting in saved money. I am not a United employee, but I understand that Glenn Tilton has been including other execs on his weekly messages to employees explaining many of the efforts being done to save money. Things you obviously don't know about. For example, United has cut airport expenses by over $200 million through process improvements alone.

Perhaps you should focus on your own airline before bashing United. Earlier this month it was reported that despite trying to beat $950 million of concessions out of its unions, Northwest awarded $3.7 million in restricted stock to its top five execs and also gave them salary increases after Richard Anderson left. How nice of them to take raises while telling everyone else they need salary cuts.
 
baw716
Posts: 1460
Joined: Thu Nov 20, 2003 7:02 pm

RE: UAL... When Will They Fail?

Thu Dec 02, 2004 2:19 am

Mm320Cap.
Bravo. Your post is exactly what needs to be said to your fellow employees. There are quite a lot of people who want to see UA fail. It is interesting to note that a number of them are employees of other airlines and/or people who are very uninformed about the goings on at United.

You are especially to point out that none of us (including myself) know exactly what is going on at WHQ. All of us (including myself) who are "arm chair quarterbacking" the situation at United have no more insight than anyone else about the inner workings of the airline, especially its business plans.

With this said, I think its important to point out that some of us do offer a balanced opinion of the state of affairs at United. Yes, we need to be mindful of the effect that it has on you and the other employees of United who are doing everything you can to save your airline. However, it is also correct that your management team are the ones who will ultimately decide the fate of your airline. I have always maintained that while Tilton is an outsider, most of the management team are the same group of individuals who have ran United for the past 20 years. These people ARE the problem. They are the ones who made the decisions which have led to your current situation.

Having a different strategy and a different leader are good things...to a point. If the management who are exercising that strategy are the same players who got you all in the situation in the first place, then the strategy is weakened to the extent that these individuals cannot engender the confidence of the employee groups. The Flight Attendant union is a great case in point. If UA management were doing what they should be doing, why would Patricia Friend and AFA be proposing CHAOS? Another example are the aircraft lessors, who are trying to repossess your aircraft because of the "perceived" arrogance of UA management.

As an ex-UA analyst and management employee, I am keeping informed to the extent I can with my contacts within UA. I have also challenged everyone on this forum who say that UA are going to fail to put up an alternative strategy or shut up. I have put my ideas on the table. Some of these ideas are plans that are being put in place. Others are ideas that are really outside of the box. However, my statements and criticisms are designed to forward the discussion about how to help United survive...NOT fail.

So to you and the rest of the United family: Hang in there. I hope that the UA employees on this forum follow your example and rise above these discussions; especially the ones that serve only to inflame and demean your efforts. United, and the other legacy carriers, have the opportunity to reinvent themselves to cope with the radical changes in our industry. It is my continued hope that those of you who see an idea here that may be useful take them to your management team...hopefully they will listen.

United Airlines is the best operational airline in the world. It is my hope that it survives and over time, returns to its position as the largest carrier in the world and the primary leader of Star Alliance. To the extent that my comments can further that cause, I will continue to contribute to a positive discussion of the issues. I hope that the rest of the a.net forum members will read this and take this to heart and keep our discussions to how to help United and not how to kill it.
David L. Lamb, fmr Area Mgr Alitalia SFO 1998-2002, fmr Regional Analyst SFO-UAL 1992-1998
 
mm320cap
Posts: 162
Joined: Wed Jul 14, 2004 12:35 pm

RE: UAL... When Will They Fail?

Thu Dec 02, 2004 3:02 am

Baw716,

Thanks for the thoughtful post. Your observations about United's management team are spot on, in my opinion. As an ex-analyst, you must muse about the same things that I do sometimes. How can different groups with the same basic goals view things so completely differently? The disconnect between managment and the employees at UAL is real and substantial. Plenty of blame to go around for all of us, I supposed. Here's to a brighter future for the industry and thanks for all the supportive thought and suggestions.
 
AADC10
Posts: 1507
Joined: Sat Nov 13, 2004 7:40 am

RE: UAL... When Will They Fail?

Thu Dec 02, 2004 3:07 am

Many people are waiting for UA to fail because that will presumably restore the rest of the industry to health. However, it seems likely that UA can string it out for years. US is in much worse shape but they are still operating and are still being extended credit.

UA will probably stay in bankruptcy for a while longer. The earlier indications that they would emerge early were killed by rising oil prices. They need to dump the pension plan, make additional wage and benefit reductions and reach consistent earnings on operations (which does not include debt service).

They still have valuable slots at Narita and Heathrow. If they have to sell those, they are cooked but everyone knows that and lenders seem willing to continue loaning them money. Even US, which is in much worse shape, is getting more financing.

I think the first sign of a death spiral would be the closing of a hub, currently SFO, DEN, ORD and IAD. They call LAX a hub but it does not seem to match most definitions of a hub. Either DEN or IAD would be the target. DEN has high landing fees and IAD is probably the smallest of the four and both have LCCs hubbed there.
 
UALramperORD
Posts: 165
Joined: Fri Nov 19, 2004 8:59 am

RE: UAL... When Will They Fail?

Thu Dec 02, 2004 3:09 am

Well said Mm320cap, Its nice to hear that even the pilots appreciate even the ground handlers work, as do we appreciate your work as well. We will get through this. BTW, I am in R&D training now and every plane i have pushed back from the gate the pilots have been pleasant, patient, and polite (except for one). Anyways keep em flying safe up there and see you when you hit in ORD!  Smile.

Ryan
"Roger, cleared to push spot 3"
 
NWAFA
Posts: 1843
Joined: Wed Dec 31, 2003 10:30 pm

RE: UAL... When Will They Fail?

Thu Dec 02, 2004 3:34 am

Contrail,

I am far from bitter, old, well I have been around a bit. Bitter-nope sorry, thats why I received over 233 positive letters from passengers for 2004, and will receive (two years in a row too I might add) a president's award for service.
THANK YOU FOR FLYING NORTHWEST AIRLINES, WE TRULY APPRECIATE YOUR BUSINESS!
 
Ken777
Posts: 9048
Joined: Thu Mar 11, 2004 5:39 am

RE: UAL... When Will They Fail?

Thu Dec 02, 2004 3:54 am

As someone who has worked for a company that liquidated the last thing I want to see is UA employees facing the same situation I went through. I personally don't think they well. Like AA the people at UA are providing a very good product at a reasonable price and they certainly have my respect and support.

While some think that a shakeout would be good for the industry there are a lot of problems for the rest of the industry with the loss of a carrier like UA. Planes? The 744s would probably be resold without too much trouble and the 777s a little slower. What impact, however, would the dumping of the Airbus planes have on A's sales over, say, the next 5 years? No winners there. In fact there would be very few winners.

I'm hoping that UA works through their problems, continues to provide an excellent product and continues to offer employees a suitable job with excellent career paths. Passengers need them and so do their employees.
 
frugalqxnwa
Posts: 550
Joined: Sun Apr 25, 2004 3:18 am

RE: UAL... When Will They Fail?

Thu Dec 02, 2004 3:56 am

I personnally believe UA will survive in one form or another, they are currently suffering economic factors beyond their control right now. First, oil prices are sky-high and do not look to be returning to decent levels for some time yet. Second, there is an unwillingness accross the industry to raise fares so yields can go up. Gordon Bethune said it best on Neil Cavuto's show last week: "Our industry is only as good as our dumbest competitor." Whoever that dumbest competitor is (I do not know which airline he was thinking of and I don't want to speculate on this), they are keeping the airline industry from making money, especially the legacy carriers.
 
rwylie77
Posts: 322
Joined: Fri May 28, 2004 6:11 pm

RE: UAL... When Will They Fail?

Thu Dec 02, 2004 4:04 am

I think it is a fair topic to discuss to be honest. I love United Airlines - they flew me regularly from London to St Louis when I first met who is now my wife. We now live over in London and regularly fly back with United.

However, it is also unfair on the other airlines such as American who are working hard to make a profit. Airlines in chapter 11 have a real competitive advantage, can offer cheap fairs and make it harder for the other airlines who are not in chapter 11.

In my opinion, United are either abusing Chapter 11 and taking advantage of the courts protection or their management are so incompetent, they do not have the guts to do what is needed and are just hoping something will come along and change such as oil prices of $15 a barrell.

They need to make tough decisions and be given a time limit - in 12 months time either exit chapter 11 or enter chapter 7. If they stay for too long they will just drag everybody else down with them.
 
mm320cap
Posts: 162
Joined: Wed Jul 14, 2004 12:35 pm

RE: UAL... When Will They Fail?

Thu Dec 02, 2004 5:08 am

UALramperORD,

I'll listen for you on the other side of the radio during pushback! You guys have always had my respect, but after days like the Wednesday before Thanksgiving, where you guys spent all day out there busting butt in a blizzard, it makes me appreciate the work you do even more. Thanks!

RWylie77,

First of all, congrats on your marriage - I personally adore British women! Thanks for your business as well. One thing that I do want to mention is that CH 11 is no picnic - except for the lawyers! It is hugely expensive to operate in CH 11, and the longer we stay in, the worse shape we are in financially. Tilton mentioned this the other day to one of our pilots who had him on the airplane. I think if you take a look historically at the past 2 years, you will see United was one of the carriers consistently trying to RAISE ticket prices. Most of the time we were blocked by Northwest who refused to follow along. There is a reason American and Delta worked so hard to avoid CH 11. It is hell on earth. Everyone loses. The shareholders lose their stock value, employees lose, well, their contracts most likely, and management loses some if not most of the control of their airline. It is a difficult and painful process. Once you are in, it seems wise to take your time and make sure that you have COMPLETELY reorganized before you get out. Otherwise you end up back in again, ala USAirways. United is a huge company and the case is very complicated. I think that you will see an exit just as soon as the exit financing can be lined up. That is the key. You have to convince someone to lend you money. Once that is in place, I expect the exit to proceed quite rapidly.

Enjoy London! I love that city.
 
ScottB
Posts: 5447
Joined: Fri Jul 28, 2000 1:25 am

RE: UAL... When Will They Fail?

Thu Dec 02, 2004 5:58 am

US Airways' problem was not that they exited their first bankruptcy too soon -- it was that they exited bankruptcy with a half-a$$ed business plan. The executive summary: "We're going to do what we were doing before, just smaller and with more high-cost RJ's." People conveniently ignore that their mainline cost structure has been at or below the target numbers from the business plan. Unfortunately for US Airways, their revenue numbers have been MUCH worse than the business plan envisioned. I suppose management felt that the LCC's were going to stay out of their hubs and focus cities. Then again, jetBlue had already started service at BOS before US Airways emerged and AirTran was operating a dozen flights a day or so at PHL. It should also have been clear that Southwest would continue to beef up its presence on the high-fare East Coast.

In any case, US Airways had little or no choice as to when it would emerge from bankruptcy protection. Their credit card processing agreement was due to expire on March 31, 2003, and no one was willing to enter into a credit card processing agreement with them (due to all the potential financial liabilities if US Airways were to liquidate). Since you cannot do business as a major airline without the ability to accept credit cards, they faced either exiting from bankruptcy by March 31 or shutting down.

I know it's a bit off-topic, but the amount of time spent in its first bankruptcy is irrelevant to why UAIR has done so poorly since. I guess perhaps if they had stayed in bankrputcy longer they might have realized how stupid the business plan was, but I doubt it. The new plan is still (more or less) more of the same, just with lower fares on more routes due to LCC competition, more high-cost RJ's, and more flying internationally where LCC's don't compete.

As for United, I remain unimpressed with what some tout as an "innovative" business plan. The p.s. product is more marketing than anything else; the 762 fleet needed to be retired and 763's are too large for United's traffic on the transcons without reducing frequency, which would have handed AA even more of the market. Using Ted to maintain or increase market share is only sensible if United is losing less money on those routes than it would have by leaving the product the way it was. People talk about Ted increasing market share but little is made of if losses are greater or smaller.

And the fact remains that even with the pluses cited by boosters of the airline (attractive international routes, strong hubs, etc.), United is still losing money hand-over-fist. Until the company comes up with a viable business plan (and the current one seems to basically be, ditch the pensions and cut pay), speculation as to its fate is entirely valid.