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What If You Were In Control US Or UA

Fri Dec 17, 2004 4:19 am

I have read many a post that is rather critical of management of bankrupt airlines. Seems as though one major critical issue is always pay and union work rules. What would some of the armchair CEO's out there change about US/UA to make them successful and keep the rank and file happy? If I were in control I'm afraid I would be much tougher on the employees than current management. Not because I am some evil person out to screw the little guys, but because I think only drastic measures would save these airlines. In fact if I were in control of US or UA I would probably have to where a bulletproof vest to work! I'm looking forward to hearing any ideas that some of you may have since many out there speak of mismanagement.
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RE: What If You Were In Control US Or UA

Fri Dec 17, 2004 7:15 am

Quiet isn't it?

I'm sure someone will eventually bring up UAs failed attempts at expansion beyond the core business. How many said they would fail before it was tried might be a harder to find. What I think you want to know is what anyone thinks a new CEO might do that was brought aboard an already failing carrier. Is that correct?
Less sarcasm and more thought equal better understanding
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RE: What If You Were In Control US Or UA

Fri Dec 17, 2004 7:55 am

I'd drop the price of flight between Albany and New Zealand. Just kidding.
I'd immediately appoint a successor and get out of there. What do I know about running an airline?
learning never stops.
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RE: What If You Were In Control US Or UA

Fri Dec 17, 2004 8:08 am

We've lost count of how many times Continental was given the last rites...and yet it's still around. More lives than a cat.

America West was the worst airline in the United States at one time. Now it is a vibrant (albeit troubled like all other airlines) company winning loyalty and expanding point-to-point routes.

The problem, as I see it, has been administrators of the airlines running the companies into the ground with no incentive to keep the company going. Regardless of their actions, the golden parachute is always there, and untouchable by federal bankruptcy laws.

The airlines that have been snatched back from the jaws of death are ones where an outsider has been brought in with the sole intent of saving the company, not to pad his 401K.

Whatever else UA and US need, it is not some corporate suit looking for a quick fix. They need a Gordon Bethune or a Herb Kelleher - someone who knows what the h*** he (or she!) is doing!!

If I were a member of congress, and had a bazillion FF miles on an airline, I would definitely find it in my best interests to keep the airline afloat. But I do not believe that the money should come with no strings attached. That money should come with the stipulation to get your house in order, or heads will roll and you'll end up cell mates with someone named Bubba.

In other words, CEO's, you've got great people working for you - NOW GET YOUR HOUSES IN ORDER!!  Angry
Pan Am:The World's Most Experienced Airline - P(oor) S(ailor's) A(irline): San Diego's Hometown Airline-Catch Our Smile!
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RE: What If You Were In Control US Or UA

Fri Dec 17, 2004 8:44 am

I suppose you could call me one of those "armchair CEO's" that loves to throw in my two cents about what they would do differently to make an airline successful. In the case of this thread, I'll focus my attention on turning around US.

Like so many other troubled carriers, US has tried to recover by putting the burden on the backs of its various employee groups. There's a limit to the blood letting. US tried this approach in 2002 to avoid Ch 11. It failed because the execs at US turned around and placed a $4.3b order for RJ's. They expanded their US Express network beyond what the airline was capable of managing.

That's all history. As I see it, there are two viable options for US. In Option 1, I would re-structure the airline into a regional carrier, East only. I'd work the Eastern Seaboard from New York to Florida. I would continue utilizing CLT as a hub. I would keep my hub at PHL. As part of Option 1, the fleet would be restructured. Keeping the 762 for direct service between New York and Florida or PHL and US' major destinations in Florida. The middle-distance flights would be served with the A319. Short hops would utilize E170 aircraft.

Another element of Option 1 would be to suspend international service for 12-18 months to allow for domestic operations to regain their footing. Not only would US operate as a regional airline, but would offer discounted fares to compete with AirTran, JetBlue others operating along the Eastern U.S. In order to provide international service, I would remain in the Star Alliance.

As for Option 2, I see US dividing the United States into three zones: East, Central and West. There would be one hub in each zone. In the East, I'd stay with CLT. My choice for Central would be DFW. With the departure of DL as a major presence at DFW, enough gates might come available to establish a hub for US. My hub in the West would be PHX. US already has gates in Terminal 2. It might force the City of Phoenix to turn their attention from Terminal 4.

In Option 2, each hub would be supported by a feeder. The current USX network would be reduced from nine carriers down to three, one for each zone. US would be able to restructure its fleet considerably. For intra-zone service of less than two hours, the Express carrier would serve destinations with E145 and E170 RJ's as well as A319 jets. Mainline service within each zone would operate (flights of 2+ hrs.) A320's. Inter-zone flights less than three hours would utilize A320's and A321's. Inter-zone service exceeding three hours in length would utilize A332's.

Option 2 would allow US to operate aircraft from only two manufacturers: Airbus (319, 320, 321, 330) and Embraer (145 and 170). It would significantly reduce the types of aircraft in the fleet, which should reduce maintenance costs as well as the time and expense of pilot training.

US would remain part of Star Alliance and would also develop codeshare agreements with its USX carriers for service to smaller communities that the feeder line operates independently of US. This would put the burden of aircraft acquisition and maintenance as well as pilot recruitment and training on the feeder lines rather than US.

Long live the RJ!
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RE: What If You Were In Control US Or UA

Fri Dec 17, 2004 1:13 pm

I find it rather amusing that many people on here are quick to bash the management about how they have ran these airlines into the ground, but are silent when it comes to solutions. I guess the truth is that there are no easy answers. Well here is my solution.

Get the courts to void all contracts with labor. Offer employees a wage comparable to LCC's. At this point the employees could accept the offer or quit. It might be a little bumpy for the airline at first, but I think they could hire plenty of people at these rates. This would be roughly similar to what CO did. I think I read that some of CO's union members picketed for something like 6 months before they realized that others had taken their jobs and that there was no job for them to return to. A friend of mine was hired by CO as a sort of scab if you want to call him that. With labor costs under control I think US could concentrate on its stronghold in the east.

UA has some valuable assets. I would sell the LHR rights as well as the pacific routes. I would them continue an orderly liquidation of the airline (sort of like Pan Am). This liquidation could stop at some point if it could be proven that a severely cut back UA was viable. I bet AA would love those pacific routes. Not sure who would get the LHR access.
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RE: What If You Were In Control US Or UA

Sat Dec 18, 2004 12:43 am

I would shed some weight. Start back at the basics, and simplify the fleet. The airlines are still eating too many carb dinners, when they should be going Low Carb!!!

Alright, I guess I am hungry.. (Off to the refrigerator!!)
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RE: What If You Were In Control US Or UA

Sat Dec 18, 2004 1:14 am

US: Shed 1/3 management.. cut remaining management salaries by 25%... Invest in more E170.. maintain international as it is a good moneymaker.. maintain CLT and PHL.. cut BOS, FLL focus city status.. maintain DCA,LGA ... add west coast focus city.. perhaps the newly re-opened Palmdale.. Initiate international service Pacific bound... have PMD build a 20 gate facility with customs and US club..

PHL will be EastWest hub with Atlantic/Caribbean/Canadian International
CLT with be NorthSouth hub with Atlantic/Caribbean/SouthAmerican International
PMD will be focus on WestCoast/Pacific Interanational

Mainline will consist of 734/757/767/319/321/.. eventually getting to.. E190/321/757/787 (E190 replaces 733/734/319)(321 replaces 320/767)(787 for Atlantic/Pacific international flights only)
Express will consist of E170/145/Dash-8

Fade out all non-USAirways express carriers.. make PSA the west coast feeder with E170/145/Dash-8... make MidAtlantic the Northeast feeder with E170/145/Dash-8.. make Piedmont the Southeast feeder with E170/145/Dash-8... make Alleghany the midwest feeder with E170/145/Dash-8

More P2P.. P2P will use the express for up to 1200nm.. mainline for up over 1200nm.. Ensure each station has at the minimum 2 NS destinations and 2 flights to each station..

In lue of upgrades of aircraft, use frequency.. Only deviation: for NYC-SoFL, NYC-West Coast, SoFL-West Coast.. use 321 only..

[Edited 2004-12-17 17:24:44]
Aiming High and going far..
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RE: What If You Were In Control US Or UA

Sat Dec 18, 2004 2:49 am

Alright, let me try being an armchair CEO.

1. Eliminate routes that are losing money. Routes that are breaking even, reduce capacity. Routes making money, add capacity with aircraft used to reduce capacity. Routes making money, slightly raise fares by a few bucks each way. Convert the airline to an all Low Cost Airline.

2. Eliminate the GO Fares Hummers. Why did they invest into Hummers as a campaign vehicle anyways? Seems like a poor idea to me. Increase advertising, and hook up contracts with "Wheel Of Fortune", and some other popular gameshows.

3. Reduce everyones pay by 12% across the board. Why 12%? Just sounds fair, and it will save the company some money. Cut the Executives pay, for example the CEO makes $400,00 a year. Why not cut that to $200,000? I would be happy to make that kind of cash!!! Heck, right now I would take $150,000!!!! LOL!!!

4. Bring up employee morale. I mean, lets face it, employees make an airline what it is. Offer profit sharing, and good recognition programs. Why not pat a hard working employee on the back, and add some green in the employees hands.

5. Major simplifiaction of the fleet. I would sell off the 737's, and 767's. Goal would be to convert to an all Airbus fleet within 3-4 years. Airbus A319, 320, 321, and A330. Less training costs, and a simpler pay scale for pilots.

6. Merge all owned Express affiliates. Then simplify the fleets. Lets admit, too many aircraft types flying in US Airways colors. E170, EMB 145, and a few Dash 8's for the smaller airports that dont work well with jets. Drop the B1900's, and eliminate the airports that can only utilize them. Gotta do something to simplify that mess!

7. Now that we have sold off so many planes, we have money to put away. Why spend it? Eventually regrow the airline. Do it nice and slow, and slowly choose your growth. Gotta start back at the basics, which is running a good airline. Maybe use some of the extra cash for training a new Customer Focus program.

8. Eliminate one of the Hubs. PIT was a start, so finish it. Start a focus city further west. There is opportunity in STL. Great central location in the US, and they lost a great airline to AA. Now AA is reducing service there, now would be a great chance to add 30-40 flights a day. Sound familiar? That seems to be the start of what WN does when starting a new city.

9. If all else fails, sell the airline in parts. Give the money to the 28,000+ employees, and admit it was a good try. If I am President, I would go out with a bang. Imagine selling off your owned aircraft, and giving it to the employees? They have 280 or so planes, 28,000 employees, and well, do the math!!!! Wait, how many do they own? If they owned 100 airplanes, and sold each plane for 28 million each. That would give the employees almost a MILLION!!!!!!! Step aside Lakefield!!! LOL!!!

(Alright, just having fun!!!!)
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RE: What If You Were In Control US Or UA

Sat Dec 18, 2004 2:53 am

For UA I would agressively expand Ted domestically utilising all the A320s and A319s in the main fleet now jus to keep fleet commonality. I would have no choice but to lay off operational staff from UA tho giving them the option to join Ted but at lower salary structure. I would also aggressively expand internationally going into more code-share agreements with Star alliance partners so that flights would be hopefully near capacity. But thats jus me...
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RE: What If You Were In Control US Or UA

Sat Dec 18, 2004 4:16 am

I would stop trying to compete with the low cost carriers and stop trying to whittle every expense to the bone - you're an airline - not a bank! Instead, I would start focusing on providing a better product - better service, more amenities, more space, more availability, and more focus on the business traveler. Make it easier for them to change flights and times, make it so that people aren't afraid the price is going to go down later if they purchase their ticket now.

I would also stop all this budget cuts stuff. Short sighted, and it hurts more than it helps. Airlines are service based - you can't fix them but cutting out the service. Every cut you try to make to the people who provide the service only hurts both the level of service your company can provide, and then makes those who do remain even less productive. Try and increase revenues and give people a reason to choose the airline over others.
"Six becoming three doesn't create more Americans that want to fly." -Adam Pilarski
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RE: What If You Were In Control US Or UA

Sat Dec 18, 2004 5:37 am

Since I threw in my .02 on US, guess I'll take a stab at trying to fix UA. For starters, transform the entire domestic operation over to Ted. Fly A19,320 and 321 for mainline service. Go with E170 and 145 for commuter routes to medium and smaller airports. Eliminate all routes currently served solely by turboprops.

Divide nation into three regions: East, Central and West. Eliminate hubs and go with point-to-point service. Focus destinations would be SFO (West), ORD (Central), and IAD (East). All flights will be single class, low-fare, low frills.

International service will operated as United. Utilize 772 and 763 for all transoceanic service. No more 744's. Have aircraft configured for three classes on all overseas flights, two classes for service to South America, Mexico and Canada.

I know it's a pretty simplistic plan, but it would achieve several objectives:

1. Position to compete with LCC's on domestic routes, especially WN.
2. Reduce size of fleet and improve commonality so as to reduce maintenance and pilot training expenses.
3. Maintain a reasonable international presence, but with a more streamlined fleet.
Long live the RJ!
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RE: What If You Were In Control US Or UA

Sat Dec 18, 2004 6:45 am


Where have you been? If cutting employee compensation is your big solution, then the management teams at UAL and USAirways should be your heros! With our new tentative agreement for the pilots of UAL, I challenge you to find me an airline out there bigger than USA3000 that pays its pilots less, or has worse work rules. Hell, we have 18 year Captains making less on the A320 than several regional Captains make flying the CRJ700. Push these groups any harder and you will not have an airline. You need to remember how much time and money it takes to train a crew. Your assessment that there will be "tough times" for awhile if all the crews just walk is probably the biggest understatement I've ever read. If any employee group strikes right now, it's allllllll over.

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