Bronner In Post-gazette - We're Doomed!

[usair_begins_with_u]

.. Is that a fat lady I hear singing?? Could this really be the end? Or..? Is all the media gloom and doom dribbling out of Bronner's mouth just another sleezy trick by Dr. B and his cronies at EnronAir to strong-arm the Unions?

Stay tuned....

 

[BoeingBoy]

"Although the rate of change is going slower than many observer’s desire...."

Since I've been one of the most vocal critics of the company's pace of change, I'll take this one....

As I've said before, what happens to this company is of little import to me personally. Would I like to continue receiving a paycheck for the next 27 months - sure I would. But I can start receiving my PBGC guaranteed pension as soon as the paperwork is done and that plus my personal savings will let me live pretty comfortably the rest of my life.

The problem is that the company doesn't have the time to drag it's feet. I liken U to a compulsive spender who maxes out their credit card. They get another credit card and make minimum payments on the first. When the second is maxed out, they get another, and so forth. Eventually they're unable to make minimum payments of all the cards and nobody will give them another. At that point, their financial world collapses around them. Telling their creditors that they'll reform their ways sometime in the future if those creditors will only let them have "just one more card" stops working.

U is now at the point of not being to make "the minimum payments" and nobody will give us more "plastic". Are we at the point that pleas for "just a little more time" will fall on deaf ears - maybe. After all, even Wimpy couldn't get away with "I'll gladly pay you on Tuesday for a hamburger today" forever.

Jim

 

[sfb]

The issue is not that the transformation plan is not currently going fast enough. The issue is that this company, amid a failed merger, yields dropping through the floor, and unit costs at nearly double of that of some competitors, needed a transformation plan in late 2001, not late 2004.

[post="169931"][/post]​

The company needed a "transformation plan" in 1994, let alone 2004. You can read statements in the 1993 Form 10-K which are nearly identical to what's being said today:

During the recent economic recession, some observers of the travel industry speculated that the business traveler became less reliant on air transportation as teleconferencing, telecopying and other technological developments gained wider acceptance. In addition, some observers have speculated that corporate restructuring and furloughs in the U.S. have reduced the number of business travelers and that the leisure traveler has become conditioned to waiting for promotional fares before making travel plans. The Company is unable to determine whether these structural changes have occurred in the air transportation market or if these changes have occurred, how long-lived these trends will be. However, the Company believes that for the foreseeable future the demand for higher yield "business fares" will remain essentially flat and relatively inelastic while the lower yield "leisure" market will continue to grow with the general economy. This trend could make it more difficult for the domestic airlines, including USAir, to sustain meaningful yield increases in the future.

In March 1994, USAir announced that it expected a pre-tax loss for the quarter ended March 31, 1994 of approximately $200 million and that it expected a pre-tax loss for the full year of 1994 in excess of the $350 million loss reported for 1993. USAir, whose operating costs are among the highest in the domestic airline industry, believes that it must reduce those costs significantly if it is to survive in this low fare competitive environment. The largest single component of USAir's operating costs, approximately 40 percent, relates to personnel costs. USAir also announced in March 1994 that it had initiated discussions with the leaders of its unionized employees regarding efforts to reduce these costs, including reductions in wages, improvements in productivity and other cost savings.

...the dramatic expansion of low fare competitive service in many of
USAir's markets in the eastern U.S. during the first quarter of 1994 and USAir's competitive response in February 1994 by reducing its fares up to 70 percent in those markets and other affected markets in order to preserve its market share led the Company to announce that it expected to experience greater losses in 1994 than it experienced in 1993.

Read the text of Item 1, "Significant Impact of Low Cost, Low Fare Competition" which talks about Southwest entering BWI and Continental's Continental Lite. It really is eerily familiar -- and yet it was written over ten years ago.

The fact is that successive management teams at USAir(ways) failed to heed the warning signs of what was coming in the industry. The failure of Continental Lite and the late 1990's boom economy simply postponed the day of reckoning for USAir. Hindsight is 20/20, but many industry observers foresaw the continuing expansion of Southwest and the appearance of copycats. It is clear in retrospect that Wolf's
"management" of the airline amounted to little more than dressing it up for a sale before the bottom fell out.

I agree with Jim, though. This does appear to be the end of the line unless some miracle occurs. And while I'm no huge fan of organized labor, just plain poor management takes the blame for most of this company's problems. The ones who will suffer are the employees, whether they accept industry-leading concessions or the company shuts down.

 

[funguy2]

sfb:

I do not disagree at all with your statements... I just didn't have the handy quotes from 1994 that you did, and I am getting used to backing up all of my points with facts. The problems at US Airways are a long-time coming indeed.

I am not a pilot, but I do know that plane crashes are generally the result of several successive errors. Plane crashes are not usually one single uncorrected incident...

I think the same can be said for US Airways... the problem is not lack of recognition of LCC's in 1994, or lack of merger in 2000, or 9/11/01, or the poor BK process... US Airways failure is the culmination of all of these other failures... Not one specific incident, but a series of poor decisions.

There is not much a transformation plan in 2004 can do to change 10+years of bad decisions.

 

[Hello Newman]

i hope that the tpg comes in and saves usair and put a slap right in the face of bronner and i'd love to see a court appointed trustee run the airline's day to day operations and see how that will fly in the face of this inept mgmt team.
oh yes, deleted, i noticed how the midatlantic got off to a wonderful start--according to yesterdays' emb conference, only one cancellation outbound--my city the newest plane a/c817 couldnt even get out of phl the other night which then canceled our morning dept to phl with what should have been roughly around 40 or 50. so mid titantic should be the great savoir of this airline but the buigs must be worked out before it becomes the great savior

[post="170061"][/post]​

I LIKE THAT "MID TITANIC" IT SOUNDS TO ME LIKE MESA DISPATCH IS RUNNING THAT OPERATION AS WELL. I GUESS DR DOOM HASN'T REALIZED THAT THIS SLOPPY
SERVICE IS ERODING OUR CUSTOMER BASE AND DOING MUCH MORE DAMAGE THAN CAN EVER BE BLAMED ON LABOR.....

MESA=MAKE EVERYONE SIT AROUND
PSA= PITIFUL SERVICE AIRLINE

 

[cavalier]

"I'll gladly pay you on Tuesday for a hamburger today" forever.

Jim

[post="170078"][/post]​

Very good analogy in this post Jim, you put it right into focus for everyone to see who believes we are just sitting on a hidden gold mine and they are bluffing. U probably is sitting on a gold mine but that gold mine is unreachable because of the debt problem which is v-e-r-y big.

I wonder how many on here don't even know who Wimpy is? But then again most of the young people are already history so most probably do know.

Sadly I still believe U is fast becoming a story in the history books, and one reason is just what you say Jim. They can do this and that but don't do that until this is done. Wasted time, precious time U doesn't have.

 

[BoeingBoy]

Cav,

"Wasted time, precious time U doesn't have."

I hate to keep holding up AMR as an example, but from the 1st quarter of '03 thru the 2nd quarter of '04, they cut their CASM from over 12 cents to 9.5 cents (both excluding special items and costs of regional affiliates).

Where would we be today if our management had accomplished as much?

Jim

 

[funguy2]

Cav,

"Wasted time, precious time U doesn't have."

I hate to keep holding up AMR as an example, but from the 1st quarter of '03 thru the 2nd quarter of '04, they cut their CASM from over 12 cents to 9.5 cents (both excluding special items and costs of regional affiliates).

Where would we be today if our management had accomplished as much?

Jim

[post="170177"][/post]​

BoeingBoy... great question and on target. People in US Airways senior management ranks owe an explanation of this to the employees.

Another way to look at it, AMR's CASM decreased 20% (based on BoeingBoy's numbers)... UAIR, over the same period, saw a decrease in mainline CASM from 11.99cents to 11.18cents... or 7%.

 

[BoeingBoy]

Guys,

I'm sorry. I took the numbers above from AMR's website version of the quarterly reports and there seems to be an error in a footnote. Instead of saying "including express expenses", it said "excluding express expenses".

From the full filings at Edgar the numbers are 11.39 cents and 9.50 cents for the two quarters mentioned.

Jim

 

[funguy2]

Guys,

I'm sorry. I took the numbers above from AMR's website version of the quarterly reports and there seems to be an error in a footnote. Instead of saying "including express expenses", it said "excluding express expenses".

From the full filings at Edgar the numbers are 11.39 cents and 9.50 cents for the two quarters mentioned.

Jim

[post="170183"][/post]​

... A 17% CASM reduction at AMR vs 7% at US Airways.

 

[crazyincanton]

I think this just shows what happens when you have airline vs. non-airline people running the company. This industry is hard enough for people who know the business and have been around it their whole lives. But just because you're successful managing investments does not mean you can turn an airline around without some inside knowledge of the business. The airline business is a different and unforgiving beast.

 

[whatkindoffreshhell]

I think this just shows what happens when you have airline vs. non-airline people running the company. This industry is hard enough for people who know the business and have been around it their whole lives. But just because you're successful managing investments does not mean you can turn an airline around without some inside knowledge of the business. The airline business is a different and unforgiving beast.

[post="170272"][/post]​

Are you referring to Herb Kellerher or perhaps Glenn Tilton?

 

[youngblood]

You sir, need to open your eyes. what do YOU and your unions want to see done.
you guys haven't offered any money saving ideas.
the sad part is U will disappear but the good news is other LCC carriers with happy employees will fill the void.
Please supersize my order with lots of ketchup.

[post="170057"][/post]​

No we just gave up a billion a year in concessions. I guess that amounts to absolutely nothing. I guess you haven't been reading the forums during the last 10 months when there have been numerous cost saving ideas that were proposed by each union. However, the moronic group we call management did not have the insight to figure them out for themselves and implemented them a little too little too late.

 

[youngblood]

P.S.

Did you get that? If not, let me reiterate.

1. Over a billion dollars in concessions.

2. Numerous cost saving ideas from each union.

3. A little too little too late.

Mr Boner can take his Cohiba ba bibba cigars and shove them where the sun don't shine and blow smoke out of his rear cause his words are like farts in the wind to me. I turn my nose the other way and don't care to smell the stink.

His arrogant thumping of the chest makes me want to vomit, puke, upchuck, retch etc. etc. etc

 

[jaq01]

Sky I am glad to see you know what money saving ideas the IAM has offered the Company. I guess you can tell me WHY none of them have been acted upon? Maybe you are part of the problem......not the solution. Good Luck to you too, I think you will need it. And while you are at it, can you explain to me WHY a station needs four gates to operate 13 flights a day? That is not a waste of money is it?

[post="170068"][/post]​

How about 1 gate to service 18 flights. Check out the Saturday schedule at PWM.
And we're already at $13.10, thank you mainline express :angry: :angry: