Lakefield Throws Down Gauntlet

[mweiss]

The IAM will not change its position as we are going to win the arbitration

A truly classic case of winning the battle and losing the war.

 

[Reservation Agent]

We will see ya in Bankruptcy court...Be sure to take your $35 million dollar profit sheet with ya!!!

And the announcements of the increasing load amounts...and a list of all the concessions totaling a billion dollars the company workers gave to the company...And a list of all the money spent on brand new airplanes, brand new card readers, brand new kisosk machines, etc...

And, mabey a list of the millions of dollars given to Seigel, Wolfe, & Gangwal as parting gifts....

How about a list of the bonuses given to managers in the last 3 years...

Oh, and a list of the givebacks by managers to the company..Oh, sorry..There aren't any by them there.....

Oh and since you took public taxpayer guaranteed loans, the public has the right to see how the money has been spent, counselor...


You better be ready to OPEN ALL YOUR BOOKS to the public....

"Your cross-examine, counselor...."


Anybody want to buy some ENRON stock?

 

[WestCoastGuy]

I suspect U is going to make another profit in Q3 with the load we've been carrying July August and Sept is strong. They better start looking real fast for ways to hide the money! Opps..how embarassing....profits in 2 straight quarters!

 

[ExUAW]

The way I see it, none of us want to work for peanuts just to make money for stock holders and corporate big wigs. This company has just cried "wolf" too often and too many of us don't believe anything management says even though 80% might be true. I'm sure we're headed for bankruptcy and that one mildly profitable quarter does not an airline make. I don't think bakruptcy will help anyone especially us union people. The thing is ... if we're going to be making peanuts then it's going to be somewhere else ... not at "US Airwa_s".

Bob

 

[mweiss]

I suspect U is going to make another profit in Q3 with the load we've been carrying July August and Sept is strong.

It doesn't matter how many times you say it...high load factors still don't mean profits.

 

[burghlaw1]

UAIR is attempting to use the threat of bankruptcy to force the unions into submission precisely because no one knows what a bankruptcy court is likely to do when faced with a 1113/1114 motion. It simply hasn't been tested (or at least that's the claim, and I haven't researched it enough to know). Second, the unions in essence have until the judge rules on any such motion to negotiate a settlement with UAIR.

Persuing all of the discussions here, it seems to me that the employees, by management design, have been singularly focused on the proposed labor concessions. UAIR, however, has also claimed that it needs $700 million in non-labor savings in order to be profitable but hasn't even outlined where these savings are coming from, or the schedule for their implementation. I would think that a judge would have a hard time ordering the rejection of labor contracts when this amorphous $700 million in savings has not even been implemented or disclosed. It demonstrates UAIR's lack of good faith.

 

[networking]

It doesn't matter how many times you say it...high load factors still don't mean profits.

Then please explain how U made a profit this quarter. I agree with you that not load factors, but yield determines profitability...so maybe a few higher yield stations are carrying those lower yield stations?

 

[oldiebutgoody]

The Transformation Plan requires labor support, principally in increased productivity, or the plan will fail.

The intent is to dramatically increase the utilization of front-line employees and aircraft to average down unit costs and increase revenue.

You cannot have one without the other and still have a meaningful effect on profits.

Respectfully,

USA320Pilot

So use them already. There's NOTHING in ANY of the contracts that precludes this. What management wants is a double whammy; shove lower wages down the employees' throats, THEN increase productivity. That way, they get to furlough EVEN MORE, while working the arses off those that are left. I'll tell you, from where I sit, it'll be a tough sell even IF the unions come up with TAs.

 

[mweiss]

Then please explain how U made a profit this quarter.

Higher yield in Q2 relative to the other three quarters. Demand is higher because of the end of the school year.

By the way, it might be useful to mention a few things about load factors here. In theory, if yield management were truly perfect, load factors would always be 100%, assuming that the empty seats could have been sold at a price above the marginal cost of carrying the additional passenger.

The thing is, it's possible to have a load factor of 100% and still lose money on the flight if each passenger paid less than the marginal cost plus the amortized fixed costs associated with running the flight at all. The higher the unit costs are, the higher the threshold that must be overcome to turn a profit.

 

[usair_begins_with_u]

The thing is, it's possible to have a load factor of 100% and still lose money on the flight if each passenger paid less than the marginal cost plus the amortized fixed costs associated with running the flight at all. The higher the unit costs are, the higher the threshold that must be overcome to turn a profit.

OMG some one really gets it!!

 

[WestCoastGuy]

It doesn't matter how many times you say it...high load factors still don't mean profits.

Im still betting we're making money. If Apr/May/June was good....then Jul/Aug/Sep loads are even better. That said, I think the company will still be looking for ways to show a loss. Would be very bad for them to show another profit while still picking the pockets of it's workers.

 

[mweiss]

If Apr/May/June was good....then Jul/Aug/Sep loads are even better.

If last year is any indication, yields will fall in Q3 relative to Q2, despite high load factors. This is why Q3 is typically worse for US than is Q2.

That said, I think the company will still be looking for ways to show a loss.

Funny, I've asked several times for someone to give an example of how the company can show a false loss. All I get are examples of how to show a decrease in cash. I'm still waiting, though.

 

[700UW]

By paying down $250 million on the ATSB loan.

Paying $500 million dollars to Embraer and Bombardier.

Taking charges all the time.

Buying EMB 170s, paying for it with a loan, then selling them to Wells Fargo and lease them back. They now have double payments on one airplane. This is done on numerous mainline fleets. Then they take the procedes of the sale and usually put it in the general treasury.

Spending $1.5 billion on buying back stock that was made worthless.

I think that is a few ways.

Ever hear this?

Figures don't lie but liars figure?

Just look at WorldCom, Enron, Tyco and Adelphia.

 

[Fubijaakr]

It doesn't matter how many times you say it...high load factors still don't mean profits.

Eastern Airlines PROVED you can go out of business flying full airplanes.

 

[mweiss]

By paying down $250 million on the ATSB loan.

Reduces cash and reduces debt by the same amount. No change in profits.

Paying $500 million dollars to Embraer and Bombardier.

For airplanes, which are capital assets. Cash drops by $500M, and capital assets rise by $500M. No change in profits.

Taking charges all the time.

For what? I'm waiting.

Buying EMB 170s, paying for it with a loan, then selling them to Wells Fargo and lease them back. They now have double payments on one airplane.

They can only do this if the loan wasn't collateralized by the aircraft. But even if they do, they bought the airplane with debt, so capital assets rose by the same amount as the debt. When they pay down that debt, it comes from cash, so cash and debt drop by the same amount. None of this has any effect on profit.

Selling the aircraft to Wells Fargo increases cash and decreases capital assets by the same amount. No effect on profit.

Paying for a lease on an airplane is essentially an operating cost, just like paying the electric bills. Its closest analog in the capital asset world is depreciation. The differences between the two in terms of profits are minimal. Which method is more profitable depends on numerous factors, but neither is inherently more profitable than the other.

Then they take the procedes of the sale and usually put it in the general treasury.

As opposed to what? Burying it in a box in the backyard?

Spending $1.5 billion on buying back stock that was made worthless.

Of course, it was made worthless because of a bankruptcy filing...which would have happened anyway, albeit later. The $1.5B would have been gone in the end either way. More importantly, it still doesn't change profits, because it's reducing cash by $1.5B, and reducing equity by $1.5B. No change in profit.

I think that is a few ways.

Then you think wrong.