Chairman''s Report
Renewed Opportunity
There has been a plethora of negative news and few positive opportunities for the pilots to latch onto a light at the end of the tunnel for a very long time. But with the second-quarter financial improvements at most airlines - coincidentally after the large government cash infusions for tax and security refunds - possibly the tide is turning. If the Bush administration, along with the TSA, would temper its constant alarmist warnings from its so-called clandestine sources, intimidating the traveling public against flying on commercial airlines, yield improvements could signal a turnaround. The wild card is still the economy, which must improve to allow corporate America to hire back employees at good wages and increase their corporate capital spending.
In the last week, a number of other events have also given hope around opportunities that have been handed to UAL management - not by their choosing - that will give insight into the future direction of our airline. Atlantic Coast''s foolish decision to break ties with United and venture into the low-fare East Coast bloodbath portends risks for both United and ACA. Ironically, ACA''s
decision vindicates many in ALPA who have been warning UAL management for years about putting all its trust, operational integrity, corporate reputation, and finances into an independent third party with no equity control over that company''s decisions or commitment to UAL. This is precisely what the entire Buy and Fly or equity ownership battles historically fought on this property are all about. ACA leaves United in the lurch by controlling all the gates and being the primary feed to a major part of our network. With Dulles an important hub for UAL''s future and our East Coast gateway to Europe and South America, UAL has the opportunity to vigorously add A-320/B-737 flying to select Florida, Northeast, and Southeast markets. Quickly using the inherent advantages of our costs per available seat mile, available pilots, and aircraft to squash ACA like a bug will send a stunning message to the airline industry: United is back and is prepared to dominate our markets! This must happen before ACA can team up with a slimy competitor or irrationally take us on in a cash-flow war that would jeopardize a cog in our network. The answer is not with Mesa, Trans States, Air Wisconsin, or even US Airways. The answer is to use United employees and airplanes to respond at Dulles, adding the huge benefit of improving morale and hope for the future of United!
Second, AMR''s announcement that it will dramatically downsize St. Louis portends both problems and opportunities for UAL if we are willing to respond. Clearly, American will allocate surplus equipment and crews to Chicago and other hubs, including DFW and Miami, adding to its strengths. United''s largest hub, located in our company''s hometown of Chicago, requires a competitive, aggressive, and decisive response. We must increase our market presence and ultimately take more market share from American while blunting competitive forays by ATA and Southwest at Midway and St. Louis. The diversity of our mainline aircraft gives United and advantage to restart old routes and initiate new growth opportunities. The UAL-MEC again pointed out to Mr. Tague and Captain Forte the furor among many pilots about not even flying from O''Hare to Hawaii nonstop, although American serves Honolulu and Maui daily. American''s actions must be blunted and countered for United to have any legitimate self-respect.
Third, Frontier has announced new routes to a number of markets that overlap with United in Denver. Their growth is becoming more insidious; the announcement of more service from DEN to five Mexican markets not served by United is a direct in-your-face shot by #2. United has a great opportunity to grow DEN with its across-the-board strengths while competing against an airline in a fleet transition, including a poor aircraft choice in the A-318. With strong name recognition, a powerful frequent flyer program, terminal capabilities, and exceptional crews and airplanes, we must silence the squeaking noise from the Front Range. The lack of respect shown by the previous Denver mayor is indicative of how far we have fallen, but, if we are willing, we have the opportunity to improve our relationship with the politicians and citizens of Denver.
Fourth, Alaska Airlines continued its sinister growth into UAL markets on the West Coast, affecting the San Francisco, Seattle, and Los Angeles bases. Look at an OAG and see how many flights from our bases are being flown by an Alaskan jet with higher seat-mile costs than United. Their management has a penchant for competing and taking advantage of United''s lack of interest or withdrawal from many popular, profitable markets. From SFO alone, Alaska flies nonstop to Ixtapa, Los Cabos, Palm Springs, Puerto Vallarta, and Tucson, with no response from United. In the opinion of the SFO LEC, Alaska keeps pushing into United''s markets, along with Horizon, because they can, knowing full well there will be no fallout from UAL. According to the Alaska MEC, senior management at Alaska believes there is huge growth potential in the Bay Area in numerous markets, due to UAL''s lack of response.
Fifth, Southwest''s announcement that it will add 92 aircraft in the next 4 years, amounting to 37 percent growth, is indicative of how the landscape is changing into the haves and have-nots. The shakeout in the U.S. airline industry is coming, and we have the ability to be a strong survivor if given the right tools and leadership. The impending labor problems at Delta, American, Northwest, and US Airways can be countered and taken advantage of with a motivated, trustful United workforce. Employees looking for a legitimate road map and leadership from Chicago must believe Tilton and the Board have the acumen and commitment to contend. Dangling a carrot is not going to repair the many years of mistakes and distrust on the property. United employees have already proven with the Shuttle the ability to take on Southwest. When the Shuttle was growing, LUV took their resources to Florida and initiated their Sunshine State plan, allowing United to grow California and the West. When the decision was made to kill the Shuttle, Southwest returned with all its resources to strategically swarm over the under-served West, undermining United''s historical strengths up and down the coast.
Sixth, the shakeout and financial problems of global airlines in Asia and Europe have weakened the marketplace for new and used aircraft. Some analysts have suggested that Boeing and Airbus will not see deliveries of new airplanes until at least 2006. The supply-and-demand equation has severely depressed lease rates and customers. This is a golden opportunity to reevaluate the fleet plan and take advantage of lessors'' newfound religion about market demand. Using United''s excess capacity and employees will generate increased revenue and profits, while crushing the competitors threatening our future. We are beginning to see criticism of the RJ proliferation policies that the large airlines are so enamored of. ATC delays and negative customer reactions are only part of their liabilities. These aircraft were effectively designed to be scope and salary busters. Taking a stretched corporate jet platform and making it the airplane of United''s future is unconscionable. United management must embrace the golden opportunity to restructure our aircraft costs in the 1110 process while maximizing the profit and market potentials these airplanes bring to United. The cessation of furloughs and surpluses would allow flight operations to be an effective part of the financial turnaround at United. As your LEC succinctly stated to Mr. Tague at the recent MEC meeting, The pilots are angry and want to slap the living s--t out of someone - preferably not you in management or the MEC, but our competition! Fully utilizing our pilots and aircraft with a sound business plan will do just that.
While continued downsizing to impress the ATSB for a loan appears to be the business plan du jour, a continued lack of competitive response in our hubs and core markets will ultimately capsize this airline. Opportunities abound on the landscape. The industry''s competitive decisions and the constant undermining of United''s position, including the application for the ATSB loan, is akin to a stranger coming in your home threatening to ransack your house and mortally harm your family. Let us hope Mr. Tilton and Mr. Tague will not sit there idly, frozen by fear or ignorance. We must defend ourselves and return our employees to work, get our jets in the sky and fully utilize them, and restore the pride and soul of United. Everyone employed by United has the ability and opportunity to take advantage of the events before us. The pilots of United saved this airline and made the transfusion needed to get healthy, if only we have a management that can understand opportunity!
Fly safe, support your fellow aviators, respect your fellow employees, and don''t carry the trash!
Captain Dan Ashby Chairman, Council 34
Renewed Opportunity
There has been a plethora of negative news and few positive opportunities for the pilots to latch onto a light at the end of the tunnel for a very long time. But with the second-quarter financial improvements at most airlines - coincidentally after the large government cash infusions for tax and security refunds - possibly the tide is turning. If the Bush administration, along with the TSA, would temper its constant alarmist warnings from its so-called clandestine sources, intimidating the traveling public against flying on commercial airlines, yield improvements could signal a turnaround. The wild card is still the economy, which must improve to allow corporate America to hire back employees at good wages and increase their corporate capital spending.
In the last week, a number of other events have also given hope around opportunities that have been handed to UAL management - not by their choosing - that will give insight into the future direction of our airline. Atlantic Coast''s foolish decision to break ties with United and venture into the low-fare East Coast bloodbath portends risks for both United and ACA. Ironically, ACA''s
decision vindicates many in ALPA who have been warning UAL management for years about putting all its trust, operational integrity, corporate reputation, and finances into an independent third party with no equity control over that company''s decisions or commitment to UAL. This is precisely what the entire Buy and Fly or equity ownership battles historically fought on this property are all about. ACA leaves United in the lurch by controlling all the gates and being the primary feed to a major part of our network. With Dulles an important hub for UAL''s future and our East Coast gateway to Europe and South America, UAL has the opportunity to vigorously add A-320/B-737 flying to select Florida, Northeast, and Southeast markets. Quickly using the inherent advantages of our costs per available seat mile, available pilots, and aircraft to squash ACA like a bug will send a stunning message to the airline industry: United is back and is prepared to dominate our markets! This must happen before ACA can team up with a slimy competitor or irrationally take us on in a cash-flow war that would jeopardize a cog in our network. The answer is not with Mesa, Trans States, Air Wisconsin, or even US Airways. The answer is to use United employees and airplanes to respond at Dulles, adding the huge benefit of improving morale and hope for the future of United!
Second, AMR''s announcement that it will dramatically downsize St. Louis portends both problems and opportunities for UAL if we are willing to respond. Clearly, American will allocate surplus equipment and crews to Chicago and other hubs, including DFW and Miami, adding to its strengths. United''s largest hub, located in our company''s hometown of Chicago, requires a competitive, aggressive, and decisive response. We must increase our market presence and ultimately take more market share from American while blunting competitive forays by ATA and Southwest at Midway and St. Louis. The diversity of our mainline aircraft gives United and advantage to restart old routes and initiate new growth opportunities. The UAL-MEC again pointed out to Mr. Tague and Captain Forte the furor among many pilots about not even flying from O''Hare to Hawaii nonstop, although American serves Honolulu and Maui daily. American''s actions must be blunted and countered for United to have any legitimate self-respect.
Third, Frontier has announced new routes to a number of markets that overlap with United in Denver. Their growth is becoming more insidious; the announcement of more service from DEN to five Mexican markets not served by United is a direct in-your-face shot by #2. United has a great opportunity to grow DEN with its across-the-board strengths while competing against an airline in a fleet transition, including a poor aircraft choice in the A-318. With strong name recognition, a powerful frequent flyer program, terminal capabilities, and exceptional crews and airplanes, we must silence the squeaking noise from the Front Range. The lack of respect shown by the previous Denver mayor is indicative of how far we have fallen, but, if we are willing, we have the opportunity to improve our relationship with the politicians and citizens of Denver.
Fourth, Alaska Airlines continued its sinister growth into UAL markets on the West Coast, affecting the San Francisco, Seattle, and Los Angeles bases. Look at an OAG and see how many flights from our bases are being flown by an Alaskan jet with higher seat-mile costs than United. Their management has a penchant for competing and taking advantage of United''s lack of interest or withdrawal from many popular, profitable markets. From SFO alone, Alaska flies nonstop to Ixtapa, Los Cabos, Palm Springs, Puerto Vallarta, and Tucson, with no response from United. In the opinion of the SFO LEC, Alaska keeps pushing into United''s markets, along with Horizon, because they can, knowing full well there will be no fallout from UAL. According to the Alaska MEC, senior management at Alaska believes there is huge growth potential in the Bay Area in numerous markets, due to UAL''s lack of response.
Fifth, Southwest''s announcement that it will add 92 aircraft in the next 4 years, amounting to 37 percent growth, is indicative of how the landscape is changing into the haves and have-nots. The shakeout in the U.S. airline industry is coming, and we have the ability to be a strong survivor if given the right tools and leadership. The impending labor problems at Delta, American, Northwest, and US Airways can be countered and taken advantage of with a motivated, trustful United workforce. Employees looking for a legitimate road map and leadership from Chicago must believe Tilton and the Board have the acumen and commitment to contend. Dangling a carrot is not going to repair the many years of mistakes and distrust on the property. United employees have already proven with the Shuttle the ability to take on Southwest. When the Shuttle was growing, LUV took their resources to Florida and initiated their Sunshine State plan, allowing United to grow California and the West. When the decision was made to kill the Shuttle, Southwest returned with all its resources to strategically swarm over the under-served West, undermining United''s historical strengths up and down the coast.
Sixth, the shakeout and financial problems of global airlines in Asia and Europe have weakened the marketplace for new and used aircraft. Some analysts have suggested that Boeing and Airbus will not see deliveries of new airplanes until at least 2006. The supply-and-demand equation has severely depressed lease rates and customers. This is a golden opportunity to reevaluate the fleet plan and take advantage of lessors'' newfound religion about market demand. Using United''s excess capacity and employees will generate increased revenue and profits, while crushing the competitors threatening our future. We are beginning to see criticism of the RJ proliferation policies that the large airlines are so enamored of. ATC delays and negative customer reactions are only part of their liabilities. These aircraft were effectively designed to be scope and salary busters. Taking a stretched corporate jet platform and making it the airplane of United''s future is unconscionable. United management must embrace the golden opportunity to restructure our aircraft costs in the 1110 process while maximizing the profit and market potentials these airplanes bring to United. The cessation of furloughs and surpluses would allow flight operations to be an effective part of the financial turnaround at United. As your LEC succinctly stated to Mr. Tague at the recent MEC meeting, The pilots are angry and want to slap the living s--t out of someone - preferably not you in management or the MEC, but our competition! Fully utilizing our pilots and aircraft with a sound business plan will do just that.
While continued downsizing to impress the ATSB for a loan appears to be the business plan du jour, a continued lack of competitive response in our hubs and core markets will ultimately capsize this airline. Opportunities abound on the landscape. The industry''s competitive decisions and the constant undermining of United''s position, including the application for the ATSB loan, is akin to a stranger coming in your home threatening to ransack your house and mortally harm your family. Let us hope Mr. Tilton and Mr. Tague will not sit there idly, frozen by fear or ignorance. We must defend ourselves and return our employees to work, get our jets in the sky and fully utilize them, and restore the pride and soul of United. Everyone employed by United has the ability and opportunity to take advantage of the events before us. The pilots of United saved this airline and made the transfusion needed to get healthy, if only we have a management that can understand opportunity!
Fly safe, support your fellow aviators, respect your fellow employees, and don''t carry the trash!
Captain Dan Ashby Chairman, Council 34
