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Tugger
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UA Pilots To Munoz: $3B Buyback Not Best Use

Fri Oct 02, 2015 2:55 pm

It appears the new UA CEO Munoz has in fact gotten the attention of his airline and in particular its pilots, and a public discussion of what to do has begun:

Quote:
NEW YORK (TheStreet) -- In meetings, ads and letters, new United Airlines CEO Oscar Munoz made it clear he wants to improve labor relations and fix the troubled airline.

Now, United pilots are speaking out, saying that following Delta's example of profit-sharing is a good place to start, even if that impinges on United's previously stated plan to spend $3 billion on a stock buyback.
[...]

"This stock buyback does nothing toward reaching the goals you have recently stated you want," the letter said,
[...]

The carrier announced in July that it would buy back an additional $3 billion worth of its stock by 2017.

The pilots letter listed a half dozen better options for spending the $3 billion, including a new information technology system; new payroll technology; a better onboard product including improved Wi-Fi; joint contracts for flight attendants and for mechanics; and a better effort to comply with the pilot contract and to diffuse conflicts over when pilots should fly, conflicts that have seemed to threaten the standard of captain's authority.
http://www.thestreet.com/story/13310...ack-not-best-use-of-3-billion.html

It will be interesting to see where things go from here. We all know what road is paved with "good intentions".... I hope Mr. Munoz is ready, it certainly won't be easy with competing and entrenched interests.

Tugg
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Rdh3e
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Fri Oct 02, 2015 3:24 pm

Most would agree with them. The $3B figure is massive and was announced at a time when the leadership was embattled, thus it seems to have been a prop to curry some favor with Wall Street rather than a sound business decision.

In a company that is still suffering the effects of under-investment, how do you go out and say you have no better use for this capital?
 
silentbob
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Fri Oct 02, 2015 4:27 pm

How much of his compensation comes in the form of stock awards and options? As long as that is a significant part of executive compensation, a lot of executives will be more concerned with stock price than operational improvements.
 
commavia
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Fri Oct 02, 2015 4:37 pm

I don't necessarily disagree that United likely could find a better place to invest at least some of that $3B - particularly if it relaxes somewhat the risk assessment, and resulting hurdle rate, used to assess NPV relative to just giving it back to shareholders. As the letter apparently alludes to, I agree that - for instance - United could certainly afford some great investment in things like IT (both internal and customer-facing), aircraft, reliability, etc. On the flip side, conflating those types of "investments" with the "investment" in "joint contracts for flight attendants and for mechanics" is a bit disingenuous.

Either way, though, the letter is wrong in saying that, "this stock buyback did nothing other than put money in the pocket of a man who has done nothing for United other than make us the shame of the industry" (emphasis mine). That's ridiculous. In the scheme of the value delivered to share owners in a $3B stock buyback, the amount that flowed to Jeff Smisek via a golden parachute is a rounding error. For better or worse, United competes not only for customers but also for investors, and so when United shows up on Wall St and its largest competitors (AA, Delta and Southwest) are all becoming larger and larger dividend plays, United has no choice but to compete with that to some extent.

I think the key - for United like for the industry writ large - is the balance between investing in the future of the business and the return of cash to shareholders nearer-term.
 
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Fri Oct 02, 2015 4:56 pm

Quoting RDH3E (Reply 1):

Most would agree with them. The $3B figure is massive and was announced at a time when the leadership was embattled, thus it seems to have been a prop to curry some favor with Wall Street rather than a sound business decision.

I doubt Wall Street would react well to backing off of that plan.

Quoting commavia (Reply 3):
In the scheme of the value delivered to share owners in a $3B stock buyback, the amount that flowed to Jeff Smisek via a golden parachute is a rounding error.

Agreed

Quoting commavia (Reply 3):
On the flip side, conflating those types of "investments" with the "investment" in "joint contracts for flight attendants and for mechanics" is a bit disingenuous.

Agreed. It's basically "give us the money" and a little for WIFI. LOL

The new guy is really in a box. United's problem at its crux is that there are too many people from PMUA that are in senior management and middle management, survived the merger, and negatively influence decisions that have lifted Delta to higher heights. I would also question contracting out nearly all the station employees, although they are not alone in that and there is no putting that genie back in the bottle. Nevertheless, it didn't help with their customer service reputation.

Here's what they could do, if they want to change their reputation:
* Fire most of senior management
* Take a row of seats out of each airplane and drink in the PR from doing so
* Get rid of F class internationally immediately and just do J
* Make sure J is full lie flat ala DL or better
* Surpass Delta on passenger facing technology solutions using mobile phones etc
* IFE goal should be a screen on every mainline seat, a USB plug, and if you want to be really slick allow playing video from your phone on to the screen through the USB cable
* Cut base pay and institute profit sharing that would give people more now and less in tough times
* Figure out somewhere to expand because they are moribund. You can't just sit on your butt. People may dislike DL's aggressiveness, but they don't rest on their laurels. The obvious spot would be the Southeast somewhere.
 
masseybrown
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Fri Oct 02, 2015 5:14 pm

Quoting enilria (Reply 4):
* Cut base pay and institute profit sharing that would give people more now and less in tough times

This has been tried, by Eastern, for one. From the unions' point of view they always lose on these deals; times are always tough, according to management. In Eastern's case, it was true, but still, the unions are wary.
 
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Fri Oct 02, 2015 5:15 pm

Quoting Tugger (Thread starter):
It will be interesting to see where things go from here. We all know what road is paved with "good intentions".... I hope Mr. Munoz is ready, it certainly won't be easy with competing and entrenched interests.

It's nice to see some honestly on both sides and such a fast union response to his invitation to provide feedback and suggestions. He's at the top, and the unions are correct, it will take breaking up the silos within UA to be successful. Let's give him credit for jumping into the driver's seat and see what the coming months will bring.

Quoting enilria (Reply 4):
* Take a row of seats out of each airplane and drink in the PR from doing so

Good idea

Quoting enilria (Reply 4):
* Get rid of F class internationally immediately and just do J
* Make sure J is full lie flat ala DL or better

1. Why?? and 2. Isn't it fully flat already?

Quoting enilria (Reply 4):
* Surpass Delta on passenger facing technology solutions using mobile phones etc
* IFE goal should be a screen on every mainline seat, a USB plug, and if you want to be really slick allow playing video from your phone on to the screen through the USB cable

They can surpass DL if they want to, but the screens are going to continue to disappear. BYOD is UA's stated goal in Region 1.

Quoting enilria (Reply 4):
* Cut base pay and institute profit sharing that would give people more now and less in tough times

Profit sharing a la DL would be good. Not sure how that will translate if fuel prices go up, since they are the primary driver of UA profits at this time (as opposed to more sold J/F seats, more FFs, etc). UA seems to be doing really well with ancillary baggage fees and Y+ to be fair...
2020: DEN | DFW | EWR | FRA | IAH | LAX | MCO | MUC | ORD | PTY | SFO | TXL
 
thegoldenargosy
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Fri Oct 02, 2015 5:26 pm

Quoting ua900 (Reply 6):
Profit sharing a la DL would be good. Not sure how that will translate if fuel prices go up, since they are the primary driver of UA profits at this time (as opposed to more sold J/F seats, more FFs, etc). UA seems to be doing really well with ancillary baggage fees and Y+ to be fair...

Profit sharing is nice but it's not guaranteed income. If you're applying for a mortgage it doesn't count as part of your income. For a Delta FA with 8 years of service, thats about $5,000. Delta management realizes that and that was one of the reason they were a pay raise, not an increase of profit sharing.
 
Flighty
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Fri Oct 02, 2015 5:35 pm

This is why I don't invest in airline stocks. The shareholders don't own the company. Strategically, the pilots own the company. At any time, the pilots can command Munoz to deposit that 3B in their accounts. Around and around we go.

Quoting MasseyBrown (Reply 5):
In Eastern's case, it was true, but still, the unions are wary.

Well... the case perfectly illustrated why profit sharing would have provided them with careers whereas high salaries put them out to the curb. And the money's the same. Airlines are cyclical. If you push hard in a down cycle you no longer will work.

[Edited 2015-10-02 10:38:56]
 
Rdh3e
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Fri Oct 02, 2015 5:48 pm

Quoting enilria (Reply 4):
The new guy is really in a box. United's problem at its crux is that there are too many people from PMUA that are in senior management and middle management, survived the merger, and negatively influence decisions that have lifted Delta to higher heights.

I think you mean too many people from PMCO. There have been very few UA folks in the driver seat since the merger and that is what shows through. Think about the CO-isms that happened:

-Deployed 70 seaters into CO hubs against the pilot contract
-Chose the less-stable and less developed SHARES, setting the IT of the airline back 5 years (also cost 2 CIO's their jobs)
-Failed to integrate the workforce
-Retired the 752s, leaving UA short on mainline aircraft
-Got into a major spat with Houston Airport System, wasting millions in fighting a legal battle and losing lots of public good will in the process
-This whole PANYNJ mess

There are many more which I'm sure will be pointed out in due course.

Quoting enilria (Reply 4):
* Fire most of senior management

Basically happening. Positions have turned over a lot over the last year.

Quoting enilria (Reply 4):
* Take a row of seats out of each airplane and drink in the PR from doing so

That would last about a day. Not worth shrinking the airline over that, especially when the competition already has more dense configurations.

Quoting enilria (Reply 4):
* Get rid of F class internationally immediately and just do J
* Make sure J is full lie flat ala DL or better

Agreed that a decision should just be made and standardize the product. Would make marketing and product consistency much better.

Quoting enilria (Reply 4):
* Surpass Delta on passenger facing technology solutions using mobile phones etc

Pretty sure UA is on par with DL now.

Quoting enilria (Reply 4):
* IFE goal should be a screen on every mainline seat, a USB plug, and if you want to be really slick allow playing video from your phone on to the screen through the USB cable

I don't think that's really necessary, but as with the Business class seats, what ever is done needs to be consistent so customers know what to expect.

Quoting enilria (Reply 4):
* Cut base pay and institute profit sharing that would give people more now and less in tough times

Never going to happen, but I agree with the premise.

Quoting enilria (Reply 4):
* Figure out somewhere to expand because they are moribund. You can't just sit on your butt. People may dislike DL's aggressiveness, but they don't rest on their laurels. The obvious spot would be the Southeast somewhere.

It seems they're growing DEN and SFO relatively quickly. I'm sure they'd grow ORD but the airport (to my knowledge) doesn't have enough gates for either AA or UA to plan any meaningful expansion except for just larger gauge.
 
toxtethogrady
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Fri Oct 02, 2015 5:55 pm

Quoting Tugger (Thread starter):
It will be interesting to see where things go from here.

They have their priorities straight. Let's see if Munoz follows.
 
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Fri Oct 02, 2015 5:58 pm

Pick a new 100 seat mainline, C Series, ERJ-190/195, ERJ-190E2, and order at least 88 of them in order to fully realize the 76 seat regional jet fleet and speed the retirement of the 50 seat ERJ-145s, CRJs and CR7s.
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UA444
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Fri Oct 02, 2015 6:05 pm

Quoting enilria (Reply 4):
United's problem at its crux is that there are too many people from PMUA that are in senior management and middle management, survived the merger, and negatively influence decisions that have lifted Delta to higher heights

Dead wrong. The vast majority of managers are from CO.
 
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Polot
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Fri Oct 02, 2015 6:06 pm

Quoting RDH3E (Reply 9):
-Retired the 752s, leaving UA short on mainline aircraft

To be fair, UA being short on domestic mainline aircraft has little to do with the 752 retirements. It dates to PMUA's large 737 retirement with no mainline replacement.

Also not sure the whole PANYNJ issue can be pinned as a "CO-ism"/"UA-ism" thing, and some might argue deploying the 70 seaters into CO hubs was a good thing vs 50 seaters.
 
toxtethogrady
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Fri Oct 02, 2015 6:07 pm

Quoting commavia (Reply 3):
For better or worse, United competes not only for customers but also for investors, and so when United shows up on Wall St and its largest competitors (AA, Delta and Southwest) are all becoming larger and larger dividend plays, United has no choice but to compete with that to some extent.

It is for worse. The best way to create value for shareholders is to improve the company, and "hurdle rates" and risk assessments are largely artificial devices that can be set to any value the company wants to set them in order to justify a decision (including, as has been done since the merger, to justify focusing on cost-cutting instead of revenue generation). If United wants to keep with AA and DL, it can improve its service record, and ads in the newspaper only go so far.
 
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Fri Oct 02, 2015 6:09 pm

Quoting RDH3E (Reply 9):
I think you mean too many people from PMCO. There have been very few UA folks in the driver seat since the merger and that is what shows through. Think about the CO-isms that happened:

In 2009 and 2010, I did a lot of travel on a contract that required that I use UA. I'm not a fan of 2015 UA, but the immediate pre-merger UA was a lot better than many people remember. Sure, there were some issues (e.g. hard product on some widebodes), but it wasn't the mess that many folks want to believe. It was much, much different from the UA of 2000-2001.
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jacobin777
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Fri Oct 02, 2015 6:15 pm

Quoting RDH3E (Reply 1):
thus it seems to have been a prop to curry some favor with Wall Street rather than a sound business decision.

A lot of UA stock is held my institutions such as Fidelity, Vanguard, etc. This represents holdings of millions of people - not just "Wall St".

All things equal, decreasing shares increases earnings per share as well as potentially raising stock prices and increasing the portifolio(s) value of millions of people.

Quoting RDH3E (Reply 1):
Most would agree with them.

Certainly not me    -though I'm probably not with "most".

Quoting silentbob (Reply 2):
How much of his compensation comes in the form of stock awards and options?

How much stock do employees get (if any)?

Personally I would rather see UA spend the money (this particular sum of $3 billion) on paying down debt, refinancing debt as well as keeping a "slush fund" when the inevitable downturn comes.
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Rdh3e
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Fri Oct 02, 2015 6:16 pm

Quoting Polot (Reply 13):
To be fair, UA being short on domestic mainline aircraft has little to do with the 752 retirements. It dates to PMUA's large 737 retirement with no mainline replacement.

Today's shortage would have been solved by keeping the 80+ airplanes that have been sent to FedEx and to the desert.
 
Rdh3e
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Fri Oct 02, 2015 6:27 pm

Quoting Jacobin777 (Reply 16):
A lot of UA stock is held my institutions such as Fidelity, Vanguard, etc. This represents holdings of millions of people - not just "Wall St".

Technically you're right, but if you want to have your retirment fund managed then you give up most decision making power on the stock. You can't tell Fidelity "I want this index minus UA". You can vote your shares, but most choose not too.

Quoting Jacobin777 (Reply 16):
How much stock do employees get (if any)?

Rank and file gets none and it's not disclosed how much the "mid-upper" management gets.

Quoting Jacobin777 (Reply 16):
Certainly not me -though I'm probably not with "most".

So you don't agree with me that buying the stock back was a bad idea? Then you go ahead and say "yeah there is a better use". That's exactly what I said, 3B stock buy back was not the best use of capital.

Quoting Jacobin777 (Reply 16):
Personally I would rather see UA spend the money (this particular sum of $3 billion) on paying down debt, refinancing debt as well as keeping a "slush fund" when the inevitable downturn comes.


[Edited 2015-10-02 11:28:21]

[Edited 2015-10-02 11:29:01]
 
United1
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Fri Oct 02, 2015 6:29 pm

Quoting commavia (Reply 3):
United could certainly afford some great investment in things like IT (both internal and customer-facing), aircraft, reliability, etc.

In addition to the stock buyback they are investing billions in the airline including all of the things that you mentioned...I'm not sure what the pilots are fishing for in this case especially as they have a joint contract with UA already.

Quoting ua900 (Reply 6):
Quoting enilria (Reply 4):
* Get rid of F class internationally immediately and just do J
* Make sure J is full lie flat ala DL or better

1. Why?? and 2. Isn't it fully flat already?

UA has had lie flat seats in F/J on the entire international fleet for a couple of years and are expected to announce a new product with the 77W deliveries.

Quoting Polot (Reply 13):

Quoting RDH3E (Reply 9):
-Retired the 752s, leaving UA short on mainline aircraft

To be fair, UA being short on domestic mainline aircraft has little to do with the 752 retirements. It dates to PMUA's large 737 retirement with no mainline replacement.

That's part of the answer the 737 retirement back in 2008 was drastic and did force UA to over rely on RJs. The other half of that equation is CO shot itself in the foot with their 50 seat RJ scope clause. UA is finally sorting out both of those messes with the delivery of the used 319/73Gs as well as the E175s.
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Tugger
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Fri Oct 02, 2015 7:55 pm

Quoting Jacobin777 (Reply 16):
All things equal, decreasing shares increases earnings per share as well as potentially raising stock prices and increasing the portifolio(s) value of millions of people.

Yes, but do those millions of people lead DIRECTLY to improving the airline, its employee relation, it's customer service, or its systems and processes?


In my opinion THAT is where the focus must be, if you improve the company and its performance, the success will ultimately translate to better stock performance.

Just read this, a recent interview with Mr. Munoz. Mostly just chatter but at least his message is consistent. It also means he will need to follow through somehow or the employees he is holding up as key to his success will never support him/trust him in a few... years? months?....
http://www.chicagotribune.com/busine...munoz-1004-biz-20151002-story.html

Tugg
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commavia
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Fri Oct 02, 2015 8:04 pm

Quoting Tugger (Reply 20):
Yes, but do those millions of people lead DIRECTLY to improving the airline, its employee relation, it's customer service, or its systems and processes?

Well, okay, but do investments in product, service, IT, equipment, training, etc. lead "DIRECTLY" to creating value for shareholders?

Quoting Tugger (Reply 20):
In my opinion THAT is where the focus must be, if you improve the company and its performance, the success will ultimately translate to better stock performance.

I think it's largely a question of risk perception and time horizon. It is certainly true that, all else being equal, investments in product, service, IT, equipment, training, etc. should "translate to better stock performance," and shareholder value creation, over some timeframe. The issue is whether United's shareholder base accepts that timeframe or wants their money sooner. In that sense, I think this is really less a failure on the part of United's management and more just the cycle-to-cycle-, quarter-to-quarter-driven investment decision-making that is so widespread these days and has had a pervasive - and, I agree, negative - impact on many industries beyond just airlines.
 
panam330
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Fri Oct 02, 2015 8:22 pm

Quoting United1 (Reply 19):
UA is finally sorting out both of those messes with the delivery of the used 319/73Gs as well as the E175s.

While I agree that the E75s coming online are solving the 50 seater debacle, the amount of 319/73G deliveries pales in comparison to what the airline needs on a daily basis. 3 or 4 dozen more 100-140 seat aircraft would alleviate most of the issues faced today, and allow for some genuine mainline expansion/regional contraction - both of which are needed. The larger problem here is actually being able to find them for a reasonable price. I think that the choices at hand are to overpay, or wait until the NEO/MAX start replacing some CEO/NGs, and pick them up for a song.

[Edited 2015-10-02 13:24:20]
 
mcg
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Fri Oct 02, 2015 8:50 pm

Quoting Cubsrule (Reply 15):
but the immediate pre-merger UA was a lot better than many people remember.

Pre-merger UA was way better than pre-merger CO. Three reasons:

1. UA's website was much more functional and easy to use;
2. UA's FF program was much better;
3 UA had E+.

It wasn't even close, I flew both quite a bit.
 
bigb
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Fri Oct 02, 2015 9:44 pm

Quoting mcg (Reply 23):
Pre-merger UA was way better than pre-merger CO. Three reasons:

1. UA's website was much more functional and easy to use;
2. UA's FF program was much better;
3 UA had E+.

It wasn't even close, I flew both quite a bit.

I agree with number 3 but disagree with 1 and 2 to be honest. I have flown both prior to the merger.
 
B737900ER
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Fri Oct 02, 2015 10:22 pm

Quoting UA444 (Reply 12):

Dead wrong. The vast majority of managers are from CO.

You are dead wrong. Get your facts straight. Most managers now are from neither UA or CO. Almost everyone important from both PMUA and PMCO left in the last few years. Most middle management now leans slightly more sUA

Quoting mcg (Reply 23):


1. UA's website was much more functional and easy to use;

You're speaking about .bomb? I guess we can look back at anything with warm nostalgia. UA had arguably the worst website of any airline. AA holds that title now. As much grief as UA gets for IT, they do have some of the most useful and user friendly systems out of the major U.S. airlines today
 
ual777
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Fri Oct 02, 2015 10:37 pm

Quoting enilria (Reply 4):

Agreed. It's basically "give us the money" and a little for WIFI. LOL

The new guy is really in a box. United's problem at its crux is that there are too many people from PMUA that are in senior management and middle management, survived the merger, and negatively influence decisions that have lifted Delta to higher heights. I would also question contracting out nearly all the station employees, although they are not alone in that and there is no putting that genie back in the bottle. Nevertheless, it didn't help with their customer service reputation.

Here's what they could do, if they want to change their reputation:
* Fire most of senior management
* Take a row of seats out of each airplane and drink in the PR from doing so
* Get rid of F class internationally immediately and just do J
* Make sure J is full lie flat ala DL or better
* Surpass Delta on passenger facing technology solutions using mobile phones etc
* IFE goal should be a screen on every mainline seat, a USB plug, and if you want to be really slick allow playing video from your phone on to the screen through the USB cable
* Cut base pay and institute profit sharing that would give people more now and less in tough times
* Figure out somewhere to expand because they are moribund. You can't just sit on your butt. People may dislike DL's aggressiveness, but they don't rest on their laurels. The obvious spot would be the Southeast somewhere.
Quoting B737900ER (Reply 25):
You are dead wrong. Get your facts straight. Most managers now are from neither UA or CO. Almost everyone important from both PMUA and PMCO left in the last few years. Most middle management now leans slightly more sUA

J is flat already.

As far as IT, United's IT is far better. The United app absolutely smokes Delta's in features, functionality, and information.

The entire Airbus fleet has streaming and the other fleets are being equipped as well.

UA is getting new and used narrow bodies and has shifted many markets from RJs to mainline.

Some of the info here on anet is grossly inaccurate.
It is always darkest before the sun comes up.
 
UA444
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Fri Oct 02, 2015 10:38 pm

Quoting B737900ER (Reply 25):
You are dead wrong. Get your facts straight. Most managers now are from neither UA or CO. Almost everyone important from both PMUA and PMCO left in the last few years. Most middle management now leans slightly more sUA

Why don't you get your facts straight? 11 of the 20 top execs listed from the UAL biographies came from or were affiliated with CO. Of the rest, a few were at UA before while the rest were hired on after 2010.

[Edited 2015-10-02 15:45:05]
 
FlyHossD
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Fri Oct 02, 2015 10:54 pm

Quoting UA444 (Reply 27):
Why don't you get your facts straight? Five of the top 7 officers straight from the UAL biographies came from or were affiliated with CO. Of the other two, one has been with UA only since 2008, the other joined in 2013.

He was referring to "middle management," not senior management as you noted in your reply. Please re-read his reply (#25)

From what I've been told - I'm still in contact with both sUA and sCO employees - you're both right. Senior management is dominated by pmCO, MIDDLE management is dominated by pmUA.
My statements do not represent my former employer or my current employer and are my opinions only.
 
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LAXintl
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Fri Oct 02, 2015 10:58 pm

This was sent out to pilots today regarding the stock buyback question;


Why are we repurchasing stock rather than investing that money in the business?

Howard Attarian touched on this in his July 24 message to pilots following our second quarter earnings, so please reference that document for more detail. Greg spent a few minutes talking about this at the Standards meeting this week, and the main point he emphasized is that we aren't living in an "either/or" world. We can continue to invest in our business in a meaningful way, and fulfill a fiduciary duty to return value to our shareholders. He pointed out that we are investing in our operation at a pace we've never seen before, and that the stock repurchase doesn't inhibit our ability to continue to do that.


=

Howard Attarian is VP of Flight Ops and Greg is Greg Hart the EVP-COO.

[Edited 2015-10-02 16:00:01]
From the desert to the sea, to all of Southern California
 
jayunited
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Fri Oct 02, 2015 11:05 pm

This entire thread displays what UA's biggest problem is both internally and externally and it is people are still entrench in their sUA sCO corners, thinking that the sUA or sCO way was better. This is why UA can not move forward because we are still trying to sort out which way was better because very few people are willing to realize and accept that both Continental and pre-merger United are dead.

I like what Oscar Munoz said when he said it's time to move past subsidiaries we are now 5 years into this merger and we still internally talking about sCO or sUA. If there is one thing Oscar needs to get through to his senior executive staff is this there are no more subsidiaries its time to let the past go and if you can't let go of pre-merger United or Continental then perhaps its time for the individual to go. I hope Oscar can get this message through to not only the senior executive staff but every United employee as well it time to move forward and look to the future and leave the past behind.

As far as the $3B buyback I think the pilots are correct that money could be better spent investing in our customer experience and getting the FA's on a single combined contract. If UA wants to give something back to investors then investing in our passenger experience is the first place to start. Our operation while getting better is still not on par with DL or even the now merged AA. Smisek would ignore all the negative press and surveys if many of you had access to Flying Together when Jeff was there and read his comments he believed UA was great. I hope Oscar sees UA for the airline that it really is, then listens to what our customers are say and what improvements should be made in order to meek United better. If Oscar wants to give investors a return then the airline need to grow, improve, and attract new customers not constantly cutting, reaching for the bottom of the barrel and hope and pray oil prices stay low so that UA can stay profitable.

DL can afford to pay dividends because DL is actually profitable, UA on the other hand could find a better use for that money which may piss off Wall Street but if we improve our customer experience Wall Street will forgive us.
 
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enilria
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Fri Oct 02, 2015 11:43 pm

Quoting commavia (Reply 3):
I don't necessarily disagree that United likely could find a better place to invest at least some of that $3B
Quoting RDH3E (Reply 9):
There have been very few UA folks in the driver seat since the merger and that is what shows through. Think about the CO-isms that happened:
Quoting UA444 (Reply 12):
Dead wrong. The vast majority of managers are from CO.

Everybody I have seen at Director level on Wacker Dr is PMUA and many of the VPs.
 
Max Q
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Fri Oct 02, 2015 11:44 pm

There was and is a FAR better use of these billions in profit and that is to pay down the massive
long term debt that UA is still saddled with.


Amazed this has not even been brought up.
The best contribution to safety is a competent Pilot.


GGg
 
T5towbar
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Sat Oct 03, 2015 12:00 am

Quoting Max Q (Reply 32):
There was and is a FAR better use of these billions in profit and that is to pay down the massive
long term debt that UA is still saddled with.

I thought that one of the major reasons for the 2 billion dollar cost cut in the first place, was to pay down some debt.
A comment from an Ex CON: Work Hard.....Fly Standby!
 
United1
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Sat Oct 03, 2015 12:03 am

Quoting Max Q (Reply 32):
There was and is a FAR better use of these billions in profit and that is to pay down the massive
long term debt that UA is still saddled with.


Amazed this has not even been brought up.

It hasn't been brought up because UA has been spending billions over the last few years paying down the debt...they have paid off $5.3 billion since the merger and are continuing to do so. As it stands UA is in a better position than either DL or AA is when you add post retirement obligations (pension funding ect) and debt together....
I know the voices in my head aren't real but sometimes their ideas are just awesome!!!
 
Gabrielz
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Sat Oct 03, 2015 12:03 am

I've said it before and it bears repeating: UA has the best customer-facing software of any airline on earth today. When people complain about their IT issues, they can't possibly mean the customer-facing side of the company and have any context to compare it to.

Simply unimpeachably the best right now. Even simple airlines - eg Ryanair - can't execute basic things like flight status as well as UA. Other majors can't search awards or ticket as well (and via mobile), and few can make the kind of complex itineraries and changes online that UA can.

Shares may be clunky for operators, but for customers: it's magical.

-G
 
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mercure1
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Sat Oct 03, 2015 12:18 am

Quoting jayunited (Reply 30):
If UA wants to give something back to investors then investing in our passenger experience is the first place to start.

IIRC both AA and DL have superior onboard efforts in their domestic fleets? e.g. seatbeak AVOD or IFE, +wifi, +internet, +in-seat power nose to tail?
Doesn't UA still have new 737-900s that have zero AVOD, IFE, or wifi?
mercure f-wtcc
 
FlyHossD
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Sat Oct 03, 2015 12:27 am

Quoting mercure1 (Reply 36):
IIRC both AA and DL have superior onboard efforts in their domestic fleets? e.g. seatbeak AVOD or IFE, +wifi, +internet, +in-seat power nose to tail?
Doesn't UA still have new 737-900s that have zero AVOD, IFE, or wifi?

According to United.com, ALL 737-900s have wifi. IIRC, all new -900s get it immediately after delivery from Boeing.
My statements do not represent my former employer or my current employer and are my opinions only.
 
dc10lover
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Sat Oct 03, 2015 12:39 am

United is going to buy back stocks and give those stocks to all the United Executive Cronies. I will no longer fly United.
Why endure the nightmare and congestion of LAX when BUR, LGB, ONT & SNA is so much easier to fly in and out of. Same with OAK & SJC when it comes to SFO.
 
United1
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Sat Oct 03, 2015 12:39 am

Quoting mercure1 (Reply 36):
Doesn't UA still have new 737-900s that have zero AVOD, IFE, or wifi?

No...there are no more "dark" aircraft...all 739s have at least some form of IFE or WiFi.

Quoting mercure1 (Reply 36):
IIRC both AA and DL have superior onboard efforts in their domestic fleets? e.g. seatbeak AVOD or IFE, +wifi, +internet, +in-seat power nose to tail?

Worldwide UA actually has more aircraft with inseat video than AA and DL do combined. Domestically UA has inseat video on 242 aircraft. 87% of the mainline fleet has WiFi and the balance will be completed inside of the next 6 months or so (most will be done by December but the 788s will take a bit longer.) The vast majority of AAs and DLs aircraft do not have nose to tail inseat power...most just have F and a few rows up front in Y. UA has nose to tail power on their 737-900ERs and P.S. 752s as well as power in F/Y+ on the 753s and 739/738/73G....they have started installing power on the Airbii. Except for the 3 cabin 763s all of the international fleet has nose to tail power and the 3 class 763s will get it as they are modified to the two cabin standard.
I know the voices in my head aren't real but sometimes their ideas are just awesome!!!
 
United1
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Sat Oct 03, 2015 12:46 am

Quoting DC10LOVER (Reply 38):
United is going to buy back stocks and give those stocks to all the United Executive Cronies. I will no longer fly United.

Not how a stock buy back work...
I know the voices in my head aren't real but sometimes their ideas are just awesome!!!
 
MaverickM11
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Sat Oct 03, 2015 12:54 am

Quoting Gabrielz (Reply 35):

I've said it before and it bears repeating: UA has the best customer-facing software of any airline on earth today. When people complain about their IT issues, they can't possibly mean the customer-facing side of the company and have any context to compare it to.

   nothing comes close

Quoting United1 (Reply 39):

Worldwide UA actually has more aircraft with inseat video than AA and DL do combined.

   I don't know where people are getting this idea that UA has not already invested billions and continues to do so. Other than the on time performance, UA is competitive with or better than AA or DL standards, especially once a new J seat is rolled out.
I don't take responsibility at all
 
commavia
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Sat Oct 03, 2015 12:56 am

Quoting Max Q (Reply 32):
There was and is a FAR better use of these billions in profit and that is to pay down the massive
long term debt that UA is still saddled with.

Maybe, maybe not. It all depends on the cost of capital. Depending on factors ranging from global macroeconomic conditions, to management (board, shareholder) risk tolerance, to forward-looking financial projections, to covenant requirements, to the present capital structure and liquidity, it may well be advantageous for a company to not only not pay doubt debt but actually even take on somewhat more. At least in the last 18-24 months, for example, with the cost of capital at historic lows for creditworthy corporate borrowers, many companies - including airlines - have taken advantage of the opportunity to "roll over" debt (borrow at today's lower rates in order to pay off older debt at higher rates from the past) rather than pay it off.

Quoting Gabrielz (Reply 35):
I've said it before and it bears repeating: UA has the best customer-facing software of any airline on earth today. When people complain about their IT issues, they can't possibly mean the customer-facing side of the company and have any context to compare it to.

Simply unimpeachably the best right now. Even simple airlines - eg Ryanair - can't execute basic things like flight status as well as UA. Other majors can't search awards or ticket as well (and via mobile), and few can make the kind of complex itineraries and changes online that UA can.

Shares may be clunky for operators, but for customers: it's magical.

Don't necessarily agree - everyone's experiences differ. I think it's somewhat debatable, but even if one agrees that United has the "best customer-facing software of any airline on earth," and contends that, "Shares may be clunky for operators, but for customers: it's magical," the problem is that in certain situations - particularly OSO - the "clunkines" of SHARES for "operators" can very rapidly become an issue for customers.

I've experienced it myself. "I've said it before and it bears repeating," at least from my perspective: give me an experienced AA agent behind a native SABRE set in an OSO any day of the week and twice on Sunday compared to just about any other combination of employees and technology I've experienced on just about any other U.S airline. The speed and efficiency with which a well-trained and seasoned agent can take care of me in SABRE is impressive to say the least.

Quoting DC10LOVER (Reply 38):
United is going to buy back stocks and give those stocks to all the United Executive Cronies.

As said, that's now how stock buybacks work.

Quoting United1 (Reply 39):
Worldwide UA actually has more aircraft with inseat video than AA and DL do combined.

While perhaps true, I still personally contend that the direction the industry is heading - for both economic and technological reasons - is wifi on every plane and powerports at every seat, and ripping PTVs out except on longhaul.

[Edited 2015-10-02 18:05:37]
 
United1
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Sat Oct 03, 2015 1:03 am

Quoting commavia (Reply 42):
Quoting United1 (Reply 39):
Worldwide UA actually has more aircraft with inseat video than AA and DL do combined.

While perhaps true, I still personally contend that the direction the industry is heading - for both economic and technological reason - is wifi on every plane and powerports at every seat, and ripping PTVs out except on longhaul.

Agree completely and that seems to be the way that the industry is headed....UA seems to be committed to PDE on all aircraft where they are not tied by the DTV contract.
I know the voices in my head aren't real but sometimes their ideas are just awesome!!!
 
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CALTECH
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Sat Oct 03, 2015 2:15 am

Quoting RDH3E (Reply 9):
I think you mean too many people from PMCO. There have been very few UA folks in the driver seat since the merger and that is what shows through. Think about the CO-isms that happened:

Best forget the-ism, it was a merger-ism, and it was from the new United.

Quoting RDH3E (Reply 9):
-Deployed 70 seaters into CO hubs against the pilot contract
-Chose the less-stable and less developed SHARES, setting the IT of the airline back 5 years (also cost 2 CIO's their jobs)
-Failed to integrate the workforce
-Retired the 752s, leaving UA short on mainline aircraft
-Got into a major spat with Houston Airport System, wasting millions in fighting a legal battle and losing lots of public good will in the process
-This whole PANYNJ mess

SHARES is fine, can go back and forth, and even today, show you agents that have not learned the system as well as they should.

That was not a CO-ism. You had two different unions from all the groups, except TechOps and first those work groups had to decide who would represent them. That became a UAL-ism if you will, as they unions voted in were the ones at pre-merger UAL. Flight Attendants union is going to be the pre-merger UAL also. The CAL employees were outvoted enough for these changes. The mess since of the labor contract talks, can be called UAL-isms. Some of these unions are still fighting over what to represent. Now it will remain to be seen how the labor contracts go.

Major spat with Houston ? If United didn't keep it's HQ in Chicago, a UAL-ism, then Houston would have supported the hometown airline as they always supported Houston based Continental.

The PANYNJ mess would have turned into a spat and might have wasted millions in fighting a legal battle and losing lots of public goodwill from NYNJ in the process.

It is United now, has been through the mess of a merger, lets go forward.

Quoting RDH3E (Reply 17):
Today's shortage would have been solved by keeping the 80+ airplanes that have been sent to FedEx and to the desert.

They were being replaced with the 737-900ERs. Some of those old 757s were coming up on big expensive maintenance checks. Sssshhh, I do wish they were kept though.

Quoting United1 (Reply 19):
That's part of the answer the 737 retirement back in 2008 was drastic and did force UA to over rely on RJs. The other half of that equation is CO shot itself in the foot with their 50 seat RJ scope clause. UA is finally sorting out both of those messes with the delivery of the used 319/73Gs as well as the E175s.

   The mess is sorting out. Maybe now it will go quicker than it has.

Quoting mcg (Reply 23):
Pre-merger UA was way better than pre-merger CO.

All the awards and passenger ratings disagree with your claim. Maybe it was better for frequent flyers, but United was rated near the bottom for many years prior to the merger.

Quoting bigb (Reply 24):
I agree with number 3 but disagree with 1 and 2 to be honest. I have flown both prior to the merger.

  

Quoting FlyHossD (Reply 28):
He was referring to "middle management," not senior management as you noted in your reply. Please re-read his reply (#25)

From what I've been told - I'm still in contact with both sUA and sCO employees - you're both right. Senior management is dominated by pmCO, MIDDLE management is dominated by pmUA.

He is of the misinformed. Same old broken record. LAX, SFO, DEN, ORD, IAD are dominated by those who were there before the merger, the other subsidiary did not have the size. On the other hand, those at IAH, EWR and even MCO on the MX side, are dominated by those who were there before the merger, the other subsidiary did not have the size. Though there is some mixing going on in management.

Quoting enilria (Reply 31):
Everybody I have seen at Director level on Wacker Dr is PMUA and many of the VPs.

Wacker Drive is dominated by premergerUAL in the middle management ranks. They are all United now.

Quoting United1 (Reply 39):
No...there are no more "dark" aircraft...all 739s have at least some form of IFE or WiFi.

Shame on you for busting that myth.

Quoting United1 (Reply 39):
Worldwide UA actually has more aircraft with inseat video than AA and DL do combined.

You need to quit stating the facts. Not good for myth building.

With Delta giving their employees a 14.5% pay raise the other week, and hearing a rumor that the American CEO promised American employees 'Delta plus 7%' for their contracts, if true or not, that pay raise has thrown a monkey wrench into TechOps negotiations at United. The industry bar has been raised, and to get close to it, negotiations have been stopped and will resume mid-October. The negotiations will be a good bellwether to see how and if things are a changing at United Airlines.
You are here.
 
luv2cattlecall
Posts: 817
Joined: Fri Sep 28, 2007 6:25 am

RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Sat Oct 03, 2015 2:41 am

Quoting enilria (Reply 4):
* Take a row of seats out of each airplane and drink in the PR from doing so

Adding a row of seats and switching to the uncomfortable Evolve design didn't hurt WN. On the other hand, MRTC didn't necessarily help AA. Also, wouldn't making Y- more comfortable give pax less incentive to pay up to Y+?

Quoting thegoldenargosy (Reply 7):
If you're applying for a mortgage it doesn't count as part of your incom

I don't mean to sound crass, but the reality of the industry is that it's cyclical. If your pay isn't tied to profits, you're either getting underpaid when oil is $50/barrel, or the company is going to be in a world of hurt when oil is over $100 again.

Given that, I'm not sure it's wise to get a 15 or 30 year mortgage based on your pay when your company is relatively fresh out of bankruptcy and oil is at an unsustainable low. It's much easier to spend $100,000 less on a home up front than it is to deal with a furlough, bankruptcy (assuming you have company stock), or pay cuts.

Also, as base pay goes up, so does the competitive advantage enjoyed by third party contractors and competitors (Spirit, in particular).
.
 
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christao17
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Sat Oct 03, 2015 4:21 am

Quoting jayunited (Reply 30):

This entire thread displays what UA's biggest problem is both internally and externally and it is people are still entrench in their sUA sCO corners, thinking that the sUA or sCO way was better. This is why UA can not move forward because we are still trying to sort out which way was better because very few people are willing to realize and accept that both Continental and pre-merger United are dead.

Good lord, someone speaking with a level head! Will wonders never cease?
More than a dozen years flying in and around Asia...
 
catiii
Posts: 3413
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Sat Oct 03, 2015 6:15 am

Quoting enilria (Reply 4):
Here's what they could do, if they want to change their reputation:
* Fire most of senior management

Such a tired argument. Yeah, leave the company with no leadership.

Quoting ua900 (Reply 6):
Profit sharing a la DL would be good. Not sure how that will translate if fuel prices go up, since they are the primary driver of UA profits at this time (as opposed to more sold J/F seats, more FFs, etc). UA seems to be doing really well with ancillary baggage fees and Y+ to be fair...

Take a look at the new DL profit sharing and then see if you think it would be good.

Quoting enilria (Reply 31):

Funny, everyone I've seen is PMCO.
 
justloveplanes
Posts: 1014
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Sat Oct 03, 2015 6:38 am

Quoting ual777 (Reply 26):
As far as IT, United's IT is far better. The United app absolutely smokes Delta's in features, functionality, and information.

Here's a website that ranks airline apps that supports your premise. It's from March. Not sure about the new website, but it looks a lot like the new app.

http://memeburn.com/2015/03/airline-...-the-one-that-makes-you-feel-good/
 
b747400erf
Posts: 3135
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RE: UA Pilots To Munoz: $3B Buyback Not Best Use

Sat Oct 03, 2015 7:13 am

Quoting Flighty (Reply 8):


This is why I don't invest in airline stocks. The shareholders don't own the company. Strategically, the pilots own the company. At any time, the pilots can command Munoz to deposit that 3B in their accounts. Around and around we go.

This is a new one, airline stocks are a bad investment because the eeevil unions control airlines! The hits keep getting better at middlemanagementers.net

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