EA CO AS wrote:

millionsofmiles wrote:

In 2013, when I was speaking at an orientation of new-hire flight attendants, I made mention of Eastern Air Lines. All I got was blank looks.

I just had this last week when explaining to a group of new employees the difference between relatively good labor/management relations (AS) and extremely poor ones (EA). As you experienced, I had to explain how 42,000 jobs and over 300 aircraft were eventually out of work because of the egos of two or three guys who wanted to win at all costs, consequences be damned.

The people who killed EA were greedy unions refusing to negotiate a fair contract where everyone would win. It wasn’t bc of one or two or three guys who wanted to win. The unions were greedy and walked out. End of show. Consequences be damed to the fat-cat and greedy union leaders sitting upon high shepherding their flocks into suicide.

I know. I was there. I worked hand-in-hand with Lorenzo and the negotiators. Frank wanted EA to survive and he begged the unions for s fair contract. They refused.

I was there.

MD80Ttail wrote:

rbavfan wrote:

DfwRevolution wrote:

What does this even mean? Do you think TWA's surviving competitors like AA and DL were immune from "Wall Street greed" themselves? Of course not. As publicly-traded firms, AA and DL were under equally intense pressure to deliver returns to their investors. The only difference is that AA and DL made faster and deeper changes post-deregulation. PanAm and TWA didn't.

Investors have no obligation to preserve a firm as a going concern. If the firm management is perpetually unable to deliver value, then sale or shutdown is a perfectly legitimate option for the investors.

Carl Icahn and his greedy sell off assets & then file bankruptcy is what killed off TWA. He got a great bankruptcy deal to sell something like half the seats available through is travel service, at a price he could pic. He caused planes to leave with large loads of underpriced tickets. He should have got the same treatment as Frank Lorenzo.

Icahn systematically sold TWA's assets to repay the money he borrowed to purchase the company, which was described as "asset stripping." In 1988, Icahn took TWA private, gaining a personal profit of $469 million, and leaving TWA with a debt of $540 million.

I know both Ichan and Lorenzo are not popular. Both were and are brilliant businessmen. They both kept TW and EA alive for years when both would have failed much earlier. The real death to EA was greedy unions—they got what they deserved.

TW only survived as long as it did bc of Ichan. Same with EA. Lorenzo saved CO by drastically lowering CASM, getting rid of greedy union contracts and asset realization / reallocation. What Lorenzo did with Texas Air, Peoples Express, NY Air and CO was simply brilliant.

I stopped reading after "Both were and are brilliant businessmen."

Parasites generally need their hosts alive...at least for a period of time...to ensure their own survival.

Somewhere a village is missing its idiot.

MD80Ttail wrote:

EA CO AS wrote:

millionsofmiles wrote:

In 2013, when I was speaking at an orientation of new-hire flight attendants, I made mention of Eastern Air Lines. All I got was blank looks.

I just had this last week when explaining to a group of new employees the difference between relatively good labor/management relations (AS) and extremely poor ones (EA). As you experienced, I had to explain how 42,000 jobs and over 300 aircraft were eventually out of work because of the egos of two or three guys who wanted to win at all costs, consequences be damned.

The people who killed EA were greedy unions refusing to negotiate a fair contract where everyone would win. It wasn’t bc of one or two or three guys who wanted to win. The unions were greedy and walked out. End of show. Consequences be damed to the fat-cat and greedy union leaders sitting upon high shepherding their flocks into suicide.

I know. I was there. I worked hand-in-hand with Lorenzo and the negotiators. Frank wanted EA to survive and he begged the unions for s fair contract. They refused.

I was there.

The "greedy unions" didn't strip Eastern of its assets. The "greedy unions" didn't "sell" parts of Eastern to Lorenzo's side businesses for promissory notes due long after it was anticipated Eastern would be gone. The "greedy unions" didn't move routes and valuable aircraft from Eastern to Continental.

The Eastern of March 3, 1989...the date of the IAM LOCKOUT...was a mere shell of its former self. Eastern's epitaph was written the day Lorenzo took over. I wouldn't expect a SCAB to agree, however.

MD80Ttail wrote:

JRL3289 wrote:

MD80Ttail wrote:

TW had strong load factors and would have been solidly profitable if not for the Caribou deal. Caribou was a low bleed. TW had even made the gutsy move to open a small hub / major focus city at ATL. Rising fuel costs from the Gulf War didn’t help.

Not sure that I follow this. The Gulf War was in 1991. The Karabu deal was in 1993 following Icahn's exit. The ATL buildup started in 1992 and was gone by 1994. The three are note at all related. The only thing that would have played into TWA's downfall was the Karabu deal, but even then it was able to survive for eight years despite it. TWA failed because its central hub was located in a stagnate, medium-sized metropolitan area and its secondary hub lacked the critical mass required to maintain a competitive advantage. TWA attempted to shrink to profitability and as a result ceded marketshare and relevance to competitors. The fact that it ceded so much competitive territory negated any brand relevance it had in the past.

To be sure, arguably AA wasn't able to extract the full value of purchasing TWA assets in bankruptcy. Though it wasn't for lack of trying; it was because of bad timing. There's not much to be done with a reliever hub in STL when traffic declines post-9/11 other than to shutter it and redeploy assets to higher-yielding hubs at DFW and ORD. There was nothing to salvage or retain at that point - brand-wise or operationally. The best AA could have done - and what it did - was to migrate loyal TWA customers over to AA.

All three were related due to negatively effecting TW. TW had 800, Gulf War dramatically increased fuel costs and softened international travel and if this wasn’t enough Karabu was a bad deal for TW (but hella great deal for Ichan). I’m not sure how you can think all of these were not related. All occurred in a short 3-4 year period. Yes TW survived eight years in spite of Karabu....which if memory serves affected flights through STL only.

TW had all these negatives happen in a relatively short period of time. All were instrumental in what happened to finalize the end.

Incorrect...Karabu did not affect flights through STL only.

Karabu was only restricted from itineraries which originated and/or terminated in STL, and code shares. Karabu could sell its discounted tickets through lowest fare.com on flights system wide, including NY-transatlantic which drove the discontinuation of TWA service to such long-served cities as ATH, MAD, BCN, FRA, etc.

...and it's Icahn.

millionsofmiles wrote:

MD80Ttail wrote:

EA CO AS wrote:

I just had this last week when explaining to a group of new employees the difference between relatively good labor/management relations (AS) and extremely poor ones (EA). As you experienced, I had to explain how 42,000 jobs and over 300 aircraft were eventually out of work because of the egos of two or three guys who wanted to win at all costs, consequences be damned.

The people who killed EA were greedy unions refusing to negotiate a fair contract where everyone would win. It wasn’t bc of one or two or three guys who wanted to win. The unions were greedy and walked out. End of show. Consequences be damed to the fat-cat and greedy union leaders sitting upon high shepherding their flocks into suicide.

I know. I was there. I worked hand-in-hand with Lorenzo and the negotiators. Frank wanted EA to survive and he begged the unions for s fair contract. They refused.

I was there.

The "greedy unions" didn't strip Eastern of its assets. The "greedy unions" didn't "sell" parts of Eastern to Lorenzo's side businesses for promissory notes due long after it was anticipated Eastern would be gone. The "greedy unions" didn't move routes and valuable aircraft from Eastern to Continental.

The Eastern of March 3, 1989...the date of the IAM LOCKOUT...was a mere shell of its former self. Eastern's epitaph was written the day Lorenzo took over. I wouldn't expect a SCAB to agree, however.

“Scab”. THIS is why negotiations were IMPOSSIBLE. Frank had a viable plan. EA had a promising future IF we could get costs under control. Our CASM was off the charts. We had baggage handlers making INSANE salaries. Pilots. FAs. They wanted more. Frank and management knew the future belonged to the lean and the greedy unions refused to understand and accept this.

Business is super easy. Take in more than you pay out. The union contracts at EA were insane and they wanted more. The assets were sold and reallocated. It was obvious way before the strike the union leaders were hell bent on suicide. They refused to negotiate for 2 years BEFORE the official strike. Frank wanted EA to thrive. Just like CO. If the unions would have been fair—and fair is a contract that works for BOTH parties—EA would probably still be here today.

We should have done a better job at ramping up non-union replacements and gotten more management pilots into cockpits.

Why do you need to pay baggage handlers and pilots insane wages when there are rows and rows 50 deep that will work for less? Supply. Demand. Pilots and baggage and FAs can all be had at or slightly above minimum wage. They are happy for job and the opportunity. There is a reason J7 was and now G4 is the most profitable airline in the entire country.

I'm surprised nobody pointed out United as proof that branding amalgamation doesn't mean anything. People no longer associate the Continental livery or the BusinessFirst cabin with its reputation during the Bethune era; people associate it with David Dao getting smashed in the face.

So I don't really see how AA & DL could have used the branding elements from PA & TW and transfer whatever association they might have had to the new entity.

MD80Ttail wrote:

millionsofmiles wrote:

MD80Ttail wrote:

The people who killed EA were greedy unions refusing to negotiate a fair contract where everyone would win. It wasn’t bc of one or two or three guys who wanted to win. The unions were greedy and walked out. End of show. Consequences be damed to the fat-cat and greedy union leaders sitting upon high shepherding their flocks into suicide.

I know. I was there. I worked hand-in-hand with Lorenzo and the negotiators. Frank wanted EA to survive and he begged the unions for s fair contract. They refused.

I was there.

The "greedy unions" didn't strip Eastern of its assets. The "greedy unions" didn't "sell" parts of Eastern to Lorenzo's side businesses for promissory notes due long after it was anticipated Eastern would be gone. The "greedy unions" didn't move routes and valuable aircraft from Eastern to Continental.

The Eastern of March 3, 1989...the date of the IAM LOCKOUT...was a mere shell of its former self. Eastern's epitaph was written the day Lorenzo took over. I wouldn't expect a SCAB to agree, however.

“Scab”. THIS is why negotiations were IMPOSSIBLE. Frank had a viable plan. EA had a promising future IF we could get costs under control. Our CASM was off the charts. We had baggage handlers making INSANE salaries. Pilots. FAs. They wanted more. Frank and management knew the future belonged to the lean and the greedy unions refused to understand and accept this.

Business is super easy. Take in more than you pay out. The union contracts at EA were insane and they wanted more. The assets were sold and reallocated. It was obvious way before the strike the union leaders were hell bent on suicide. They refused to negotiate for 2 years BEFORE the official strike. Frank wanted EA to thrive. Just like CO. If the unions would have been fair—and fair is a contract that works for BOTH parties—EA would probably still be here today.

We should have done a better job at ramping up non-union replacements and gotten more management pilots into cockpits.

Why do you need to pay baggage handlers and pilots insane wages when there are rows and rows 50 deep that will work for less? Supply. Demand. Pilots and baggage and FAs can all be had at or slightly above minimum wage. They are happy for job and the opportunity. There is a reason J7 was and now G4 is the most profitable airline in the entire country.

I think it's fair to say the rank-and-file union members didn't do this. Charlie Bryan did this; why else would he agree to a deal to save EA from a Chapter 11 filing or a sale to Frank Lorenzo only if it came with Borman's head? The IAM, thanks to Charlie Bryan and his rhetoric, killed any chance EA had by getting ALPA and TWU to walk off in sympathy.

Of course back then Chapter 11 carried a far greater stigma than it does today, so I often wonder how EA would have fared going through the bankruptcy process instead of selling to Texas Air. You'd have SODA, you'd have the Shuttle, you'd have South America, etc.

MD80Ttail wrote:

Both TW and PA were seeing what I would call a resurgence before “the end”. Both airlines were seeing positive indicators and results before 800, Lockerbie and the Gulf War.

Right but then Lockerbie and the Gulf War did happen and the brands were tarnished, so no, that resurgence was only up until those events and thus there was no good will or value to capitalize upon.

MD80Ttail wrote:

Both airlines had made major improvements and were in better positions than they had been in the past 10 years before their demise. Both airlines....but mostly TW...had made gusty calls and taken risks. Planes were full, gas was cheap, travel to Europe was was strong at record levels and things were improving. Compared to the previous 5-10 years performance both TW and PA were improving. Simply stated, things were looking up.

Right but then Lockerbie and the Gulf War happened... and then things were very much not looking up, and once again there was no marketing good will or nostalgia to extract... so their acquirers didn't.

MD80Ttail wrote:

Both of my statements have merit and are not contradictory. They were in better shape than they had been in precious years until “bad” things happened. That’s not arguing against myself.

You're wrong, and you are arguing against yourself. They were in better shape for some time yes, but at the time of their acquisitions there was Lockerbie and the Gulf War, which, again, undid all the progress they made and completely erased any value to be extracted by maintaining elements of the brand or marketing. Plain and simple - there acquirers (rightfully) erased the brands as quickly as possible, and it was a prudent business decision, AGAIN, thanks to Lockerbie and the Gulf War. The end.

The story of Eastern's ending is a sad one but even if Byran had agreed to a deal with Borman and no Frank Lorenzo owning EA would it have survived ? For some time yes but EA was a leisure airline with AA and UA( of the day) costs. Florida and the Caribbean are vacation destinations. Chicago is a business destination. EA never fly routes where it had a chance for decent J class revenue apart from a shortlived Miami to gatwick route that lasted only the summer of 1986. The only way EA would have survived was with a merger and its sad none ever happened because TWA & EA or UA & EA would have made great merger partners. Eastern's north to south operations with other east to west would have been great. To be or not to be , sadly it was not to be.

jfk777 wrote:

The story of Eastern's ending is a sad one but even if Byran had agreed to a deal with Borman and no Frank Lorenzo owning EA would it have survived ? For some time yes but EA was a leisure airline with AA and UA( of the day) costs. Florida and the Caribbean are vacation destinations. Chicago is a business destination. EA never fly routes where it had a chance for decent J class revenue apart from a shortlived Miami to gatwick route that lasted only the summer of 1986. The only way EA would have survived was with a merger and its sad none ever happened because TWA & EA or UA & EA would have made great merger partners. Eastern's north to south operations with other east to west would have been great. To be or not to be , sadly it was not to be.

Not so fast; had EA not been sold to Texas Air, they would have been a potential bidder to take over Frontier (FL) instead of PE in late 1986. EA would have had much larger mass, an established hub in DEN, and a huge gateway to the west. They would have potentially been a force to be reckoned with at that point.

Frank Lorenzo was a genius. He wanted to build an airline. Richard Anderson who brought back Delta worked for him, as did a long list of other airline execs. Did he do everything right? Absolutely not.

Carl Icahn wasn’t. He was just a leveraged buyout king. No interest whatsoever in building an airline.

DfwRevolution wrote:

AAvgeek744 wrote:

By the 80's, Wall Street greed took over TWA.

What does this even mean? Do you think TWA's surviving competitors like AA and DL were immune from "Wall Street greed" themselves? Of course not. As publicly-traded firms, AA and DL were under equally intense pressure to deliver returns to their investors. The only difference is that AA and DL made faster and deeper changes post-deregulation. PanAm and TWA didn't.

Investors have no obligation to preserve a firm as a going concern. If the firm management is perpetually unable to deliver value, then sale or shutdown is a perfectly legitimate option for the investors.

Hey “I’ve got it all figured out” Coppell look up leveraged buyout. There’s a difference between looking for returns and buying out a company for nothing because you agree to assume all of its debt. It was easy in the 1980s because airlines had no cash. Don’t be so glib.

atypical wrote:

Wall Street greed in the personification of Carl Icahn. No airline could have survived what he did to TWA. At one time TWA was the largest stockholder in Texaco and Pennzoil. He used TWA cash flow to enrich himself and bleed the airline dry. If I saw Icahn dying on the street I'd kick him in the teeth and let someone else clean up the trash.

jetero wrote:

Carl Icahn wasn’t. He was just a leveraged buyout king. No interest whatsoever in building an airline.

rbavfan wrote:

Icahn systematically sold TWA's assets to repay the money he borrowed to purchase the company, which was described as "asset stripping." In 1988, Icahn took TWA private, gaining a personal profit of $469 million, and leaving TWA with a debt of $540 million.

jfk777 wrote:

TWA ended because of Carl Icahn, everything that happened there was Icahn related, remember that the other bidder for TWA was Frank Lorenzo( Darth Vader) himself so they sold to the nice New York Wall Street dude. So they thought.

Perhaps Icahn wasn't one of the "good guys" and I'm sure he wasn't acting out of altruistic reasons, but you guys are totally mixing up things and you are distoring history. TWA was already running out of cash and near bankruptcy beofre Icahn bought the airline in 1985.

Icahn tried to turn the airline around. He sold some assets, bought Ozark and hubbed at Ozarks STL. The whole deal was done to shrink the airline back into the black numbers, but what he tried failed. So everyone is blaming Icahn these days for TWAs failure, totally ignoring the fact that the airline would have been out of business by 1985 or 1986 without Icahns cash injection and asset-sales. Also no one here is considering that despite the low-cash situation in the mid 80s and Icahn coming in, the airline kept flying for another 16 years. Icahn was NOT the reason TWA failed. Perhaps another manager, an expert for turn-arounds, would have saved them. But this is highly speculative and theoretical...

JRL3289 wrote:

Not sure that I follow this. The Gulf War was in 1991. The Karabu deal was in 1993 following Icahn's exit. The ATL buildup started in 1992 and was gone by 1994. The three are note at all related. The only thing that would have played into TWA's downfall was the Karabu deal, but even then it was able to survive for eight years despite it. TWA failed because its central hub was located in a stagnate, medium-sized metropolitan area and its secondary hub lacked the critical mass required to maintain a competitive advantage. TWA attempted to shrink to profitability and as a result ceded marketshare and relevance to competitors. The fact that it ceded so much competitive territory negated any brand relevance it had in the past.

Regarding Icahn & Karabu, listen to this guy. That post at least makes some sense. Thank you JRL...

EA CO AS wrote:

jfk777 wrote:

The story of Eastern's ending is a sad one but even if Byran had agreed to a deal with Borman and no Frank Lorenzo owning EA would it have survived ? For some time yes but EA was a leisure airline with AA and UA( of the day) costs. Florida and the Caribbean are vacation destinations. Chicago is a business destination. EA never fly routes where it had a chance for decent J class revenue apart from a shortlived Miami to gatwick route that lasted only the summer of 1986. The only way EA would have survived was with a merger and its sad none ever happened because TWA & EA or UA & EA would have made great merger partners. Eastern's north to south operations with other east to west would have been great. To be or not to be , sadly it was not to be.

Not so fast; had EA not been sold to Texas Air, they would have been a potential bidder to take over Frontier (FL) instead of PE in late 1986. EA would have had much larger mass, an established hub in DEN, and a huge gateway to the west. They would have potentially been a force to be reckoned with at that point.

We cn speculate that if this didn;t happen then this other thing would have. What would have been so great between EA and a small Colrado based airline. EA and TWA would have merged a large east coast airline with Latin America and an airline with a midwest hub and a large European system. Hey a TWA 747 might have flown from Miami to LHR daily what a concept ?

MD80Ttail wrote:

millionsofmiles wrote:

MD80Ttail wrote:

The people who killed EA were greedy unions refusing to negotiate a fair contract where everyone would win. It wasn’t bc of one or two or three guys who wanted to win. The unions were greedy and walked out. End of show. Consequences be damed to the fat-cat and greedy union leaders sitting upon high shepherding their flocks into suicide.

I know. I was there. I worked hand-in-hand with Lorenzo and the negotiators. Frank wanted EA to survive and he begged the unions for s fair contract. They refused.

I was there.

The "greedy unions" didn't strip Eastern of its assets. The "greedy unions" didn't "sell" parts of Eastern to Lorenzo's side businesses for promissory notes due long after it was anticipated Eastern would be gone. The "greedy unions" didn't move routes and valuable aircraft from Eastern to Continental.

The Eastern of March 3, 1989...the date of the IAM LOCKOUT...was a mere shell of its former self. Eastern's epitaph was written the day Lorenzo took over. I wouldn't expect a SCAB to agree, however.

“Scab”. THIS is why negotiations were IMPOSSIBLE. Frank had a viable plan. EA had a promising future IF we could get costs under control. Our CASM was off the charts. We had baggage handlers making INSANE salaries. Pilots. FAs. They wanted more. Frank and management knew the future belonged to the lean and the greedy unions refused to understand and accept this.

Business is super easy. Take in more than you pay out. The union contracts at EA were insane and they wanted more. The assets were sold and reallocated. It was obvious way before the strike the union leaders were hell bent on suicide. They refused to negotiate for 2 years BEFORE the official strike. Frank wanted EA to thrive. Just like CO. If the unions would have been fair—and fair is a contract that works for BOTH parties—EA would probably still be here today.

We should have done a better job at ramping up non-union replacements and gotten more management pilots into cockpits.

Why do you need to pay baggage handlers and pilots insane wages when there are rows and rows 50 deep that will work for less? Supply. Demand. Pilots and baggage and FAs can all be had at or slightly above minimum wage. They are happy for job and the opportunity. There is a reason J7 was and now G4 is the most profitable airline in the entire country.

Eastern was dead the moment Lorenzo came on the property. There was no viable plan and no promising future for Eastern under Lorenzo. The ONLY plan Lorenzo had for Eastern was to suck the lifeblood out of it and feed Continental. Examples include the "sale" of System One to Texas Air for a promissory note and then charging Eastern to use it; forcing Eastern to pay a fuel management fee to Texas Air, raising the cost of fuel for Eastern; and transferring the MIA-LGW route to Continental when MIA was a hub for Eastern AND giving Continental the plane (DC-10-30) to fly it with.

Eastern did not have a chance under Lorenzo.

MD80Ttail wrote:

EA CO AS wrote:

millionsofmiles wrote:

In 2013, when I was speaking at an orientation of new-hire flight attendants, I made mention of Eastern Air Lines. All I got was blank looks.

I just had this last week when explaining to a group of new employees the difference between relatively good labor/management relations (AS) and extremely poor ones (EA). As you experienced, I had to explain how 42,000 jobs and over 300 aircraft were eventually out of work because of the egos of two or three guys who wanted to win at all costs, consequences be damned.

The people who killed EA were greedy unions refusing to negotiate a fair contract where everyone would win. It wasn’t bc of one or two or three guys who wanted to win. The unions were greedy and walked out. End of show. Consequences be damed to the fat-cat and greedy union leaders sitting upon high shepherding their flocks into suicide.

I know. I was there. I worked hand-in-hand with Lorenzo and the negotiators. Frank wanted EA to survive and he begged the unions for s fair contract. They refused.

I was there.

You may have been there but you clearly had no idea what was going on. I'm going a Frank Lorenzo yes man (probably without much of a management education) for 500 Alex....

basically everything you have said is completely false and its pretty well documented.

MD80Ttail wrote:

millionsofmiles wrote:

MD80Ttail wrote:

The people who killed EA were greedy unions refusing to negotiate a fair contract where everyone would win. It wasn’t bc of one or two or three guys who wanted to win. The unions were greedy and walked out. End of show. Consequences be damed to the fat-cat and greedy union leaders sitting upon high shepherding their flocks into suicide.

I know. I was there. I worked hand-in-hand with Lorenzo and the negotiators. Frank wanted EA to survive and he begged the unions for s fair contract. They refused.

I was there.

The "greedy unions" didn't strip Eastern of its assets. The "greedy unions" didn't "sell" parts of Eastern to Lorenzo's side businesses for promissory notes due long after it was anticipated Eastern would be gone. The "greedy unions" didn't move routes and valuable aircraft from Eastern to Continental.

The Eastern of March 3, 1989...the date of the IAM LOCKOUT...was a mere shell of its former self. Eastern's epitaph was written the day Lorenzo took over. I wouldn't expect a SCAB to agree, however.

“Scab”. THIS is why negotiations were IMPOSSIBLE. Frank had a viable plan. EA had a promising future IF we could get costs under control. Our CASM was off the charts. We had baggage handlers making INSANE salaries. Pilots. FAs. They wanted more. Frank and management knew the future belonged to the lean and the greedy unions refused to understand and accept this.

Business is super easy. Take in more than you pay out. The union contracts at EA were insane and they wanted more. The assets were sold and reallocated. It was obvious way before the strike the union leaders were hell bent on suicide. They refused to negotiate for 2 years BEFORE the official strike. Frank wanted EA to thrive. Just like CO. If the unions would have been fair—and fair is a contract that works for BOTH parties—EA would probably still be here today.

We should have done a better job at ramping up non-union replacements and gotten more management pilots into cockpits.

Why do you need to pay baggage handlers and pilots insane wages when there are rows and rows 50 deep that will work for less? Supply. Demand. Pilots and baggage and FAs can all be had at or slightly above minimum wage. They are happy for job and the opportunity. There is a reason J7 was and now G4 is the most profitable airline in the entire country.

yikes. Two things, I seriously hope you have nothing to do with the industry and you say business is "easy" but its pretty clear with your post you don't know much about it.

Also J7 and G4 are you examples of good airlines? airlines with HUGE safety issues and one that killed people due to those safety issues?

MD80Ttail wrote:

Both PA and especially TWA were seeing a rennasasance at the time of their shut down / aquisitions. PA made substianial strides and performance had improved substantially before Lockerbie and then the Gulf War.

TW had strong load factors and would have been solidly profitable if not for the Caribou deal. Caribou was a low bleed. TW had even made the gutsy move to open a small hub / major focus city at ATL. Rising fuel costs from the Gulf War didn’t help.

I would argue both airlines were in better shape with better outlooks than at anytime in the previous 5 years and probably in the 10 years prior.

The comment only aviation buffs know of PA and TW while true today was absolutely NOT true at the time of the demise of both airlines. Both brands had amazingly strong name recognition worldwide. They both were one of the top most recognizable companies in the world in both name and logo. These are facts. Perhaps once could argue they were like Sears, Kenmore and Kmart—everyone knows them but they were underperforming in twilight years.

I would argue their notoriety was even greatly with business travelers, travelers in general and with people world wide. I remember reading something written by Bob Crandel at AA and he said on many occasions it was the norm to be introducing himself to foreign officials trying to negotiate a new route for AA and he would say he was president of American Airlines and the response universally was which one, Pan Am or TWA. You can’t buy this kind of recognition.

.

Well Sir, no. I really do beg to differ.
Internationally both PanAm and TWA were both literally dead brands by the late '80s, and there never really was any renaissance in the '90s, although I do concede that TW did a good few (ineffectual) tries in the last few years. But their reputation was tarnished, and travelers -at lest in Europe- were doing all sort of thing NOT to fly with both PA and TWA. They were both known for bad service, frequent delays, old equipment, unenthusiastic/tired/old/'past their prime' staff.... TWA 747s were a bit of a joke around the airports in their network that had the misfortune of receiving them... their were ancient and in evident bad shape.
PA was no better. In the UK people were VERY happy and relieved to see UA and AA arrive, trust me. Same in Italy: Delta was exceptionally welcomed from day one, and no-one -apart from us avgeeks- ever looked back to those amazing PA blue billboards...... Sad, but fact.
By the time the two companies folded both names were virtually done. By the time you mention neither DL or AA would have wanted to associate their brand to those belonging to the two dying dinosaurs. "Clipper" or "Ambassador" class were names that belonged in the past, and nowhere else unfortunately.
In the ultimate years their transatlantic service was a pale shadow of their former glory. TW had a single lonely 747 flying into LGW from Saint Louis - that was the extend of their London operation.....
I was terribly saddened to see the end of these two proud names, but the stark reality has precious little to do with our sense of nostalgia....

MD80Ttail wrote:

The people who killed EA were greedy unions refusing to negotiate a fair contract where everyone would win. It wasn’t bc of one or two or three guys who wanted to win. The unions were greedy and walked out. End of show. Consequences be damed to the fat-cat and greedy union leaders sitting upon high shepherding their flocks into suicide.

I never quite understand this "greedy union" thing. What their employees were making was the result of a CBA that was agreed to by both sides. The unions have attorneys who are trying to get the best deal they can for their clients, and the airline has attorneys trying to get the best deal for theirs. Both sides need to agree to the CBA before it is ratified. If you think the CBAs were too generous, that's the fault of management for failing to negotiate effectively. It's hard to fault workers for demanding that their employer stick to the CBA that both sides agreed to. Flip it around, and you'd be calling the workers selfish if they decided to go on strike for a pay raise not outlined in the CBA. It's not really fair to call workers selfish or greedy for refusing to take a pay cut, especially when they see people like Lorenzo and Icahn making millions of dollars.

millionsofmiles wrote:

MD80Ttail wrote:

rbavfan wrote:

Carl Icahn and his greedy sell off assets & then file bankruptcy is what killed off TWA. He got a great bankruptcy deal to sell something like half the seats available through is travel service, at a price he could pic. He caused planes to leave with large loads of underpriced tickets. He should have got the same treatment as Frank Lorenzo.

Icahn systematically sold TWA's assets to repay the money he borrowed to purchase the company, which was described as "asset stripping." In 1988, Icahn took TWA private, gaining a personal profit of $469 million, and leaving TWA with a debt of $540 million.

I know both Ichan and Lorenzo are not popular. Both were and are brilliant businessmen. They both kept TW and EA alive for years when both would have failed much earlier. The real death to EA was greedy unions—they got what they deserved.

TW only survived as long as it did bc of Ichan. Same with EA. Lorenzo saved CO by drastically lowering CASM, getting rid of greedy union contracts and asset realization / reallocation. What Lorenzo did with Texas Air, Peoples Express, NY Air and CO was simply brilliant.

I stopped reading after "Both were and are brilliant businessmen."

Parasites generally need their hosts alive...at least for a period of time...to ensure their own survival.

Somewhere a village is missing its idiot.

I believe that you are wrong in your analogy. Many parasites ultimately kill the host, and what do they care if they have already drained everything valuable out of the host? It broke my heart what happened to Northwest Airlines after the Al Checchi buyout. But Al survived with enough cash for the rest of his life. That's all they care about.

millionsofmiles wrote:

Eastern was dead the moment Lorenzo came on the property. There was no viable plan and no promising future for Eastern under Lorenzo. The ONLY plan Lorenzo had for Eastern was to suck the lifeblood out of it and feed Continental. Examples include the "sale" of System One to Texas Air for a promissory note and then charging Eastern to use it; forcing Eastern to pay a fuel management fee to Texas Air, raising the cost of fuel for Eastern; and transferring the MIA-LGW route to Continental when MIA was a hub for Eastern AND giving Continental the plane (DC-10-30) to fly it with.

Eastern did not have a chance under Lorenzo.

My boss used to work for Continental, and I remember him telling me that when he was hired by CO, Eastern actually paid for his relocation package.

[

I was there.[/quote]
You may have been there but you clearly had no idea what was going on. I'm going a Frank Lorenzo yes man (probably without much of a management education) for 500 Alex....

basically everything you have said is completely false and its pretty well documented.


[quote="MD80Ttail"][quote="millionsofmiles"]


I guess I’m just a dumb uneducated idiot that lucked into an executive position with more than one airline. Sometimes its good to be lucky.

I graduated form the University of Florida with a degree in Public Relations concentrating in Labor Relations. I went back to college after a few years in the workforce and earned an MBA also from UF.

I worked for both Texas Air and Eastern as well as a couple of other airlines. I had a nice office with a window at the American General Center.

I worked directly for and with Frank Lorenzo—sheer brilliance. The man could rub two nickels together and make you a dollar. He put himself through school driving a Coca-Cola delivery truck.

The unions are a hinderence to most businesses especially airlines. There was a viable plan for Eastern but the unions were hell-bent on suicide. The sale of assets was two-fold. We knew the unions were going to strike most likely. We knew from due diligence to acquire EA the likelihood of a compromise was almost nil. We made a fair offer based on business numbers which the unions refused.

All business plans were predicated on a strike scenario from the very first considerations of the EA deal. Selling assets was strategic to protect the overall corporation (Texas Air). The model was similar to CO to make EA non-union with a low cost structure. The LGW route made no sense for EA to operate at all and no sense with DC10s. The 10 was an oddball in the fleet and only increased operating costs and complexities. CO had more international routes and the infastructure to support the DC10. Getting rid of the DC10 was NO loss to EA and absolutely a benefit.

SystemOne was considered more valuable than all of EA—after all there was really nothing special EA had other than shuttle and SystemOne. EA brought littleto the party. Yes South American routes, ATL and north-south ftraffice but all of that could be had via other means. The cream at the top was SystemOne and shuttle. The whole deal no matter what made sense just by getting SystemOne and shuttle.

From the very beginning the entire acquisition of EA was driven by getting SystemOne. No matter what SystemOne was going to be transferred to Texas Air on a lease back arrangement to EA. Many companies do exactly the same—even today—Sears Holdings anyone?

EA had a future but the unions wanted to draw a line and they did. EA was the biggest training program for pizza and delivery truck drivers in history—that’s what an awful lot of former highly paid and skilled workers ended up doing. They got what they deserved.

I faught for a lot of things while at EA. Some I won. Some I didnt.

Early on I was a huge proponent of 2.2.25. That was an internal effort to structure the fleet as (2) engines, (2) pilots and save 25% labor, fuel and maintenance costs. Had the strike not happened or had we been successful breaking the unions, EA would have flown A300, DC9 and probably MD80s, 767s. We all wanted 767s exepcially having the 75 but money and credit being such it was Airbus practically giving us the A300 to us to try out an then provided terms we couldn’t refuse. Tough to say what the fleet would have been but it would have become all twins. I think COs DC9s / MD80s would have come to EA since CO was big on the 73.

And yes, eliminating the FE and third engine roughly translated—back then—to a 25% savings or so. Today of course engines are more efficient ect but before I get slammed those were rough numbers we tossed around as “rule-of-thumb”.

The A300 was a money maker. It could take full pax and cargo and handle whatever we needed to throw at it, especially on South American routes.

I thought CO's 733s were originally supposed to go to EA.

[/quote]
Also J7 and G4 are you examples of good airlines? airlines with HUGE safety issues and one that killed people due to those safety issues? [/quote]

Fake News and distorted facts.

J7 was immensely profitable, growing and serving an untapped market. Everyone blames J7 for 592 but the real fault lies with SabreTech and Mauro Ociel Valenzuela. Valenzuela was the A&P mechanic still to this day on the FBIs MOST WANTED listed for being responsible for the crash.

597 experienced a minor runway excursion and fire due to a failed compressor disk that was missed by Turkish Airlines when the plane was operated by them—not by J7. The certifed non-destructive testing was not properly performed. No one died.

G4 has never had a crash or killed anyone.

Both J7 and G4 had a slightly higher than industry average overall of unscheduled landings. These landings were made due to an abundance of caution and never resulted in any injures to passengers. Moreover, these resulted from operation of aging DC9/80 planes and NOT in newer makes. G4 des not have a higher than average incident with their A320s. As aircraft age they have more maintenance issues. Delta had a higher average of precautionary landings with their DC9s before retirement. (No I’m not saying they are unsafe but they do need more care and have more issues.)

Yes J7 and G4– both excellent airlines and I have flown both—many times.

Yes, I still work in the airline industry.

>>>>>yikes. Two things, I seriously hope you have nothing to do with the industry and you say business is "easy" but its pretty clear with your post you don't know much about it. <<<<<

Yes, in its simplest form business is easy. Make sure you take in more money than you pay out. It’s just that simple at the end of day.

The offer made to EAs unions were based on real numbers that woul keep EA operating allowing them to earn a profit. The unions wanted a number that would have made it impossible for EA to have any future. Creative accounting goes a long way but at some point you have to actually make some money.

Take all the theory and bull out of how businesses operate and you will find taking in more than paying out works every single time.

I’ve had a long career in airline management and its slowing coming to an end at my age. You may not agree with my opinions on unions. I know the industry well and have a proven track record. I have been recruited more than once.

DL_Mech wrote:

I thought CO's 733s were originally supposed to go to EA.

They were supposed to move some over, but it never happened. I'm amazed at the number of Lorenzo apologists in this thread.

I’m not an apologist. I am from the Lorenzo “coaching-tree” and damn proud of it!

As a former EASTERN and SYSTEM ONE employee I’ll add that it was definitely the IAM what destroyed Eastern.
I hope that Charlie Bryan is roasting in hell.

If DL had taken over chunks of PA in the 1970s, and AA had done the same with TW in the same time frame, the the thesis that both acquiring carriers failed to build on the names and reputations of the acquired carriers is valid.

But, DL bought PA assets in the 1990s, and AA bought what was left of TW in 2001. Because of deregulation, a lot of people were flying to Europe, Asia, and Latin America on airlines other than what were the two major U.S. international carriers of the 1960s and 1970s. People who aren't aviation enthusiasts don't remember PA and TW as fondly as those of us on A.Net.

Pan Am was the carrier that was losing to the likes of AA, UA, DL, CO, NW, and such to Europe, because every new route to Europe was from hubs such as ORD, IAH, DTW, CVG, and ATL, flown by the carrier with the large domestic hub. Pan Am's merger with National didn't work that well, and trying to develop a domestic route structure to feed into JFK and its other gateways proved problematic against the entrenched domestic carriers who were rolling out F/F programs. PA was fine for getting from ORD to CDG, with a connection at JFK. But, it couldn't get you from ORD to DFW, MCI, TPA, or SLC the way AA and UA could.

TW was in a bit better shape than PA, because of its hub at STL. Still, if you were flying from BOS to PHX and the weather went south at STL, you were kind of stuck. The other major U.S. carriers had multiple hubs to deal with the problems of weather.

MD80Ttail wrote:

Both brands had amazingly strong name recognition worldwide. They both were one of the top most recognizable companies in the world in both name and logo. .

Geez, man, Chipotle has amazingly strong name recognition but nobody wants to go near it.
As you said, "These are facts"
For all your touting your education and experience helping executives, you sure can't spell.

Lorenzo was a crook, a shyster, cut from the same cloth as trump

He was in the airline business to enrich himself at the expense of everyone else
and destroyed almost everything he touched including Eastern


Continental survived only because he was
forced out after it became known he sold
most of his shares before SAS invested in
us, then he promptly declared bankruptcy wiping out their position


Those Lorenzo lovers should be reminded he’s the only airline CEO that’s been banned from the business for life by Congress

MD80Ttail wrote:

I’m not an apologist. I am from the Lorenzo “coaching-tree” and damn proud of it!

If you find that an admirable trait, then I'm glad I don't work for you. Lorenzo did more harm to the airline industry than anyone, and every airline he managed went through bankruptcy (some more than once) or shut down. He came out with a bundle of cash and all employees of CO, EA, PE, FL got screwed royally - and yes EA's unions helped it's demise, but he finished them off..

MD80Ttail wrote:

I’m not an apologist. I am from the Lorenzo “coaching-tree” and damn proud of it!

If you find that an admirable trait, then I'm glad I don't work for you. Lorenzo did more harm to the airline industry than anyone, and every airline he managed went through bankruptcy (some more than once) or shut down. He came out with a bundle of cash and all employees of CO, EA, PE, FL got screwed royally - and yes EA's unions helped it's demise, but he finished them off.. There's a reason why he is banned from managing another airline.

MD80Ttail wrote:

I guess I’m just a dumb uneducated idiot that lucked into an executive position with more than one airline. Sometimes its good to be lucky.

I mean you said it not me.

MD80Ttail wrote:

I graduated form the University of Florida with a degree in Public Relations concentrating in Labor Relations. I went back to college after a few years in the workforce and earned an MBA also from UF.

Ha. so basically I was right. You had no real management background then got an MBA. i.e. cancer to those who get an MBA with an actual management back ground.

MD80Ttail wrote:

I worked directly for and with Frank Lorenzo—sheer brilliance. The man could rub two nickels together and make you a dollar. He put himself through school driving a Coca-Cola delivery truck.

He was so brilliant he is banned from the airline industry and has actually been turned down from operating another airline (ATX or something along those lines) by the DOT, basically because he couldn't find a single shit to give about passengers, employees and safety. Just the dollar.
Yeah man, he sounds like a true angle. I can only hope the DOT one days finds out about you and does the same.

MD80Ttail wrote:

The unions are a hinderence to most businesses especially airlines. There was a viable plan for Eastern but the unions were hell-bent on suicide. The sale of assets was two-fold. We knew the unions were going to strike most likely. We knew from due diligence to acquire EA the likelihood of a compromise was almost nil. We made a fair offer based on business numbers which the unions refused.

Because you guys were running the airline into the ground and instead of actually doing your job all you were worried about was milking the cow, bringing your friends and yes men in, and trying as hard as you could to blame it on labor. You even got it to the point that all of the IAM members could have worked for FREE and it wouldn't have made a difference in saving the company.

MD80Ttail wrote:

EA had a future but the unions wanted to draw a line and they did. EA was the biggest training program for pizza and delivery truck drivers in history—that’s what an awful lot of former highly paid and skilled workers ended up doing. They got what they deserved.

Wow.

MD80Ttail wrote:

I faught for a lot of things while at EA. Some I won. Some I didnt.
.

clearly god help us all had you "won" the battles you lost.

MD80Ttail wrote:

Yes, in its simplest form business is easy. Make sure you take in more money than you pay out. It’s just that simple at the end of day.

yeah.....no. Not at all how that works because you simply can't look at something so complex

MD80Ttail wrote:

The offer made to EAs unions were based on real numbers that woul keep EA operating allowing them to earn a profit. The unions wanted a number that would have made it impossible for EA to have any future. Creative accounting goes a long way but at some point you have to actually make some money.

No the offers made the unions were set up so you could milk more money out all while setting them well below their peers and for the most part wouldn't have done a single thing the save the airline. Frank was betting killing Eastern, moving the assets over to CO and then bankrupting CO to win the war against the employees. Milk that cow dry and leave. Which is exactly what he did. The only thing he didn't successfully do is kill CO for good.

MD80Ttail wrote:

I’ve had a long career in airline management and its slowing coming to an end at my age. You may not agree with my opinions on unions. I know the industry well and have a proven track record. I have been recruited more than once.

the faster the better.
Thankfully the people who were the yes men to people like Franks are finally starting to leave and as we are seeing the airline industry is in the best shape it has ever been. Cancer is finally getting cured.

MD80Ttail wrote:

Fake News and distorted facts.

actually for those of us who know how airline/aircraft safety is suppose to work.....no its not. From an HR person who doesn't care about anyone looking for a cent even if it kills people....might be fake news.

MD80Ttail wrote:

J7 was immensely profitable, growing and serving an untapped market. Everyone blames J7 for 592 but the real fault lies with SabreTech and Mauro Ociel Valenzuela. Valenzuela was the A&P mechanic still to this day on the FBIs MOST WANTED listed for being responsible for the crash.

*sigh* one of the first things you learn when you take a class on maintenance FARs, thanks to those idiots at J7, THE AIRLINE IS ULTIMATELY RESPONSIBLE FOR SAFETY. J7 went with the cheapest and crap vendor they could find. QA was non-exsisiten and had issues in the past but didn't do anything about it. Y'all(or people with your mindset) killed those people.
Airline is responsible if it is done in their hangar or a vendors hangar.

MD80Ttail wrote:

597 experienced a minor runway excursion and fire due to a failed compressor disk that was missed by Turkish Airlines when the plane was operated by them—not by J7. The certifed non-destructive testing was not properly performed. No one died.

Ah, no one died so who cares?
again, not at all how this works. Its basic FAR stuff, it really is.

MD80Ttail wrote:

G4 has never had a crash or killed anyone.

Read above. Not how this works.

MD80Ttail wrote:

Both J7 and G4 had a slightly higher than industry average overall of unscheduled landings. These landings were made due to an abundance of caution and never resulted in any injures to passengers. Moreover, these resulted from operation of aging DC9/80 planes and NOT in newer makes.

exactly why Delta and American are having MD80s with issues all the time. Even to the point that they fire employees for calling for an evacuation.

oh wait, that doesn't happen because both of those airlines have management teams who understand safety. Understand proper maintenance. Understand proper QA. Understand proper labor relations. etc. etc.

MD80Ttail wrote:

G4 des not have a higher than average incident with their A320s. As aircraft age they have more maintenance issues.

Yeah I mean again, Delta's airbus's with older motors than the G4 birds, are tossing disks in PHX all the time. Oh wait. no, not they aren't.
Oh and the CFM56-5As are a vendor motor. Its almost like Delta has a QA team that makes sure things go right.

MD80Ttail wrote:

Delta had a higher average of precautionary landings with their DC9s before retirement. (No I’m not saying they are unsafe but they do need more care and have more issues.)

You can go ahead and back that one up with proof.
Delta had a few issues on the ground with the DC9, for a host of different reasons, but I never saw an increase of issues that happened after the aircraft left the gate.

MD80Ttail wrote:

Yes, I still work in the airline industry.

Im assuming G4 or possibly somewhere that is having huge labor issues like B6.

Either way, they should have banned all of y'all with Frank.

MD80Ttail wrote:

I’m not an apologist. I am from the Lorenzo “coaching-tree” and damn proud of it!

and again.
wow.

AAvgeek744 wrote:

MD80Ttail wrote:

I’m not an apologist. I am from the Lorenzo “coaching-tree” and damn proud of it!

If you find that an admirable trait, then I'm glad I don't work for you. Lorenzo did more harm to the airline industry than anyone, and every airline he managed went through bankruptcy (some more than once) or shut down. He came out with a bundle of cash and all employees of CO, EA, PE, FL got screwed royally - and yes EA's unions helped it's demise, but he finished them off.. There's a reason why he is banned from managing another airline.

A lot of his people are still around and they all need to be washed out of the industry.

I guess airlines should be run by union pilots and machinists and not management?! Oh ya. That’s how we got KP. How’d that work out?

For those who battlecry how dangerous J7 and G4 were / are remember more passengers have been killed by union crews / airlines than non. The body count just doesn’t support any correlation between pay and safety. It just doesn’t.

SabreTech was at fault for 597, not J7 or my style of management.

Argue what you want but how many times did the union boys at AS check and recheck the play in a jack screw assembly? Keep trying till it passes. And the 3hr grease jobs they got done in 30 mins. Wow. Efficient workers.

What about those AA geniuses, forlifts and engine pylons on DC10s.....191.

UA 232 detectable cracks in a compressor disk missed for years. You want to crucify J7 for the same exact thing yet forget to mention UA. DL had the same problem on an M88. I remember a poor kid got his throat punctured and died from the debris entering the cabin when that engine came apart. Someone help me out..Pensacola?

The list goes on and on but don’t try and make the union guys to be any better than any other worker.

EA was set up by the machinists hoping fines and maintenance violations would help their cause. Most of the violations were paperwork issues directly caused by the unions to garner support for their strike.

I have seen this tactic time and time again from unions.

MD80Ttail wrote:

EA had a future but the unions wanted to draw a line and they did. EA was the biggest training program for pizza and delivery truck drivers in history—that’s what an awful lot of former highly paid and skilled workers ended up doing.

Just how skilled were these future pizza drivers? If they were really highly skilled, those skills should have been transferable and valued by many employers in many industries. And not just useful to one company in one industry where they happened to be in a union.

CARST wrote:

Icahn tried to turn the airline around. He sold some assets, bought Ozark and hubbed at Ozarks STL. The whole deal was done to shrink the airline back into the black numbers, but what he tried failed. So everyone is blaming Icahn these days for TWAs failure, totally ignoring the fact that the airline would have been out of business by 1985 or 1986 without Icahns cash injection and asset-sales. Also no one here is considering that despite the low-cash situation in the mid 80s and Icahn coming in, the airline kept flying for another 16 years. Icahn was NOT the reason TWA failed. Perhaps another manager, an expert for turn-arounds, would have saved them. But this is highly speculative and theoretical...

I supposed if you ignore the sell off of the transatlantic authorities, use of assets to buy oil company stocks, conversion of TWA cash to debt, and KARABU this would make sense. Unfortunately reality paints a vastly different picture. Discarding everything else, an analysis ignoring KARABU has no credibility.