Jim, spot on as usual.
But it's not as simple as supply and demand.
As Einstein once said, "Make something as simple as possible, but not simpler."
CASMs do have to come down at UAL, but that is only one part of the equation. It is almost impossible to make CASMs come down without affecting RPMs... in other words, lowering costs will inevitably drive some revenue away (as amenities are cut, etc.) UA has already cut as many amenities as competitively possible, so the last major block of cuts comes in labor.
However, Creighton sees the need to enhance revenue. The way you make something like this successful is to be aggressive with whatever concessions may come. That's why he's "reorganized the deck chairs on the Titanic" by taking away Dutta's duties over operations, and making him focus solely on revenue generation.
United has to find new markets to tap into, please existing customers, and gain additional customers in existing markets: if it expects employees to give concessions, employees must also expect to know and understand how those concessions will be used.
First of all, most of that wouldn't be used to pay off the debt. Paying off the money UA secured to fill its current war chest would have marginal effect on stock price right now. What investors like to see is performance. This means UA must make month-over-month increases in RPMs, Load Factor, Yield, and ASMs. Growth. This is the key to attracting investment. At the same time, decreasing CASMs will lead to enhanced growth. So, cut labor costs, but show them what the recovery plan is. This is exactly what Bethune did. Take a look at CO, highly leveraged, but investor preferred.
In other words, it is more efficient to grow and pay off debt with the extra profits, then to cut costs and use the concession money to pay off debt and fund growth.
* * *
As for the IAM contract. I have a creative solution to a small problem.
In the current contract, IAM's hammered out a stipulation where MECHANICS would handle aircraft reception & dispatch. At every other major carrier (with the exception of TWA, which is now gone, god bless her soul), qualified RAMPERS do this. What do mechanics do here? They marshall in aircraft, wand them in, push them back on the tugs.
Believe it or not, the mechanics that do this on a rotational basis do not spend most of their time at the hangar or fixing an airplane. They spend a good deal of their time travelling from the maintenance areas to an aircraft arriving/departing gate, waiting for the aircraft, waiting while there is any departure delay, etc.
In other words, they are not being paid what they are paid to do. Rampers can easily do this job, and would like to do this job, as every other airline has rampers that *do* do it. In fact, I have seen several arriving aircraft at SFO that have been waiting to pull into an empty gate, just because a "prima dona" mechanic was late.
It is a small cost, but significant when compounded. Like taking the olive out of the salad, squared.
The only reason why UA mechs want this still is that they feel it is their version of "SCOPE". Hardly. Pilot Scope Clauses are necessary because that affects their jobs. This does not affect mechanics' jobs because in the first place, it is not in their job description!
UA will recover faster if there are more creative solutions to new contracts, both posed by management and the frontline.
While pilots "say" they won't give any money back, in some way a way will be found for them to save the company a large sum of money, somehow.