Dave's Friday Message

[A319FA]

The current business plan is working. We have achieved the best unit revenue and unit costs improvement in the entire industry in the last 12 months. Our operating costs are still too high. The LCCs have high productivity and a more efficient operation. WN connects 35% of their passengers.

Dave discusses why US does not adopt WN business model. If we duplicated WN business model we would have to tear up the entire airline. He gives several examples of what would happen and why we can’t adopt this model.

We would have to match capacity to the local market size-shrink the network, which would mean less passengers are connecting. Currently 2/3 of our passengers connect and 1/3 would connect after this shrinkage.

Drop service to about 100 cities, and eliminate 60% of the current fleet size. We would have to choose between the B-737/A-320 family as a common fleet and there would not be any room/need for the 757 a/c or wide bodies.

Eliminate 80% of our gates. A smaller and efficient operation/airline would mean that we would eliminate about 80% of our labor force. :unsure: Eliminate all maintenance bases. Would gut all of the remaining pension plans. We do not need or want to be a WN clone.

I hope that this is not the new business plan. Dave has already figured out how to shrink our airline and eliminate most employees.

 

[robbedagain]

dont forget to add that we could also eliminate a heck of a few screwballs in the ccy section. I dont think we need a 30 VP running this outfit. I think that SWA has probably about 15 or 20 (not sure) VPs. But at least they dont keep going back to their employees and ask for PAYCUTS!

 

[PITbull]

Folks,

If the revenue picture is improving, then if we can't make a profit, I would like to point out this:

The only thing U needs to change in their business model is NEW MANAGEMENT!

And start from there.....

 

[CLT-Douglas]

Sure,

Although what happens if you get your wish and new management comes in and decides Dave didn't cut nearly enough, or by pausing everything for new management to decide what route they want to go, it ends up putting U back into Chapter 11? Everyone will just put the blame on the new guy like everyone has done after Wolf left. If more jobs are lost or may pay cuts come for US Airways employees, it won't matter who is in charge, they are going to be looked at in a negative light.

 

[BoeingBoy]

" The current business plan is working." - yeah, right.

"We have achieved the best unit revenue and unit costs improvement in the entire industry in the last 12 months." - that's why we lost 1 million per day in 3rd quarter while CAL, NWA, & AMR showed profits.

"Our operating costs are still too high." - more concessions, anyone?

"The LCCs have high productivity and a more efficient operation." - something to do with not having a hub/spoke operation (and an ineffieient one at that) maybe

"We would have to match capacity to the local market size" - wasn't that the rationale for the RJ's?

"Currently 2/3 of our passengers connect and 1/3 would connect after this shrinkage." - what happened to our vaunted O&D traffic, especially at our premier hub?

"Drop service to about 100 cities, and eliminate 60% of the current fleet size." - or do something innovative like more point to point and rolling hubs.

"We would have to choose between the B-737/A-320 family as a common fleet and there would not be any room/need for the 757 a/c or wide bodies." - see above.

"Eliminate 80% of our gates. A smaller and efficient operation/airline would mean that we would eliminate about 80% of our labor force." - more downsizing to profitability? Why not fly the airplanes more, thus keeping the people & most of the gates. (Isn't LUV bigger than U?)

"Eliminate all maintenance bases." - didn't he try doing that with outsourcing?

"Would gut all of the remaining pension plans." - just give me what the average LUV employee of my longevity has in their 401K and stock and I'll be better off.

"We do not need or want to be a WN clone." - in other words, he would rather slash and burn than innovate.

Jim

 

[PITbull]

Jim,

You are absolutely correct. SW is larger than we are. More excuses from this management.

The reason why calling for new management makes sense, is that we already know the Motus Operandi of this one. Their aim IS NOT FOR EMPLOYEE SURVIVAL or a company , it is to downsize and take from employees to increase "shareholder value". THEIR value. Period. What ever makes sense in that arena is what this management will do, even sell us to the highest bidder. Difference here, IS EMPLOYEES WILL KNOW NOTHING ABOUT THE "PLAN" until consumation. My issue is this: If this is truly management's intent (and I believe it is) then mangement will do it without employee invovlement or vote to give up anything if I have anything to do with that. I will not affix my signature on something that will ultimately cause my own demise...make sense?

Chip is probably somewhere over the rainbow "dead on". Something is going on, and most of the U employees will not be included when all is said and done. Through all these concessions in just our group alone (f/a) ranks are down approx 50% ; 20,000 jobs across all labor groups. Those who give more in productivity enahancements will lose their jobs permanently OR worse off, go to MDA. That's where the growth will be for U until we are sold, merge in bits and pieces, or cease to exist as mainline.

"They that can give up essential liberty to purchase a little temporary safety; deserve neither liberty or safety". Ben Franklin.

 

[BoeingBoy]

Pit,

You're probably right - assuming that there IS a plan other than cut, cut, cut. Our biggest hurdle in the short term is the liquidity requirements of the ATSB - about 200 million to go before we hit the limit thru June 30, 2004.

Who knows, the Mesa purchase of Midway's assets could prove interesting. Midway operated mainline equipment in the past & I assume that authority to do so is still part of their certificate. Maybe Ornstein wants to run a "real" airline.

By the way, the talk of C11 BK could be off base. The ATSB documents make interesting, though long, reading. One of the things U committed to is not to seek voluntary BK, and to fight involuntary BK. RSA is a signatory.

Jim

 

[Walmart Greeter]

Sure, we can all sit around and blame Dave and the management team. They were the ones over the past few decades that agreed to give us all the in-efficient work rules and created all these problems -NOT.

If we could get rid of the current management team, what are we left with? We are still left with high labor costs and the next group that comes in is going to deliver the same news that we don't want to hear. The only thing we need to get rid of are our in-efficiencies. We keep hearing about productivity issues, but let's see some real examples about what we are talking about - and then we can decide.

In looking at a lot of these comments I don't see the same opinions here that I hear on the line. Surely we have a solution that is not as dramatic as Dave's message eluded to - there's probably cuts involved - but lets get it done and move on - aren't you guys tired too? Let's just get it over and move on. There's a lot of fight left in us, we just need to be efficient enough to win.

 

[pitguy]

The New Lorenzo (a.k.a. Dave) has lost the trust of employees, investors, and the politicians. He MUST go! He can no longer lead effectively.

 

[Walmart Greeter]

So if Dave is out, will we trust the new guy when he tells us we can fly the same airplanes with 10% less pilots??????

I just want to find a solution before I end up at the bottom of the seniority pile at WN.

 

[Light Years]

Well Walmartgreeter,

You're apparently no spring chicken at U seeing how you keep talking about "cutting and moving on". What about the people who dont get to move on? Already some have had to take jobs similar to your "funny" screen name.

 

[PITbull]

Walmart,

Oh, so the real YOU comes out.

Again, just ANOTHER one worrying about me, me, I. As long as your saved, the hell with everyone else at the bottom. When does it end? Do you know? Can you guess? this cocession #3 or #4 or perhaps maybe #5? How many have to lose their jobs to save your ###, anyway and make your life secure? What is this, post #5 for you "newbie"? Trying to get your "message" across to us loud and clear...to what? Save you?

This management took all the efficiencies they needed in Concession #1 and #2. What we got to keep, WE BOUGHT!!!!!!!!!!!!!!!!!!

We already lost 20,000, and hell your still here. No more cuts in personnel. They can have all the work rule changes to be efficient, NO MORE JOB LOSSES.


So, now you were talking efficiencies? What can I do you?

 

[Walmart Greeter]

Sorry to offend: I don't think we have to cut people - and shouldn't. Isn't it obvious? If we agreed to be more efficient, our costs go down and we should be able to grow and add planes and routes.

 

[PITbull]

Yea, you would think so, wouldn't you, or anyone. BUT, we are dealing with "professional union busters". In their mind's eye, shrinkage is good, downsize is good, cheap labor is good, growing small jets with poverty-wages is great!!!

That's where we are at with this management. All for the sake of increasing "share holder value" at the expense of "human value".

In case you haven't noticed the "restrucuturing business plan" does not call for growth in mainline. Now, You want us to choose what?

 

[Walmart Greeter]

If we have in-efficiencies we should agree to fix them only if they agree to grow the airline. Now poo poo that statement - fine. But that's what should be on the table. Just looking for a way out the clouds.