Lakefield Throws Down Gauntlet

[WorldTraveler]

Then please explain how U made a profit this quarter.

It also must be noted that US and UA both showed significant cost reductions considering the current industry environment. Although it is hard to accept, the changes already imposed are having a positive effect on US’ results.

However, UA and US are clearly not where they need to be and neither is AA. One of the real liabilities that US faces is that they have had to impose cost cuts first because of their weakened financial state. Not only are US employees not interested in going through another round of concessions but, for most of them, their pay is now below what they could make elsewhere. There simply is no reason to keep US viable since US is well on the way to eliminating the only reasons why people will commit to a company – pensions and medical insurance, benefits that the airlines have typically provided much better than average coverage. UA will undoubtedly go through the same process (although it may only take 2 rounds instead of 3) but UA employees may simply say they too are unwilling to have their salaries and benefits reduced to levels which give no incentive to stay.

DL and NW clearly have an advantage in that they have seen what has happened at other companies and can structure their transformations in ways that do not require multiple rounds of concessions and keep some level of employee morale intact; DL is touting that a very sweeping restructuring is about to begin. AA and CO can also move much more methodically with a lot less focus on employee costs and more on efficiencies and the revenue side.

This phase of airline restructuring will come down to which carriers can do it with the least impact on employees and the overall operation and I still have to give AA, DL, and NW the advantage in that regard. There will be legacy carrier winners and losers (something has not happened since 9/11) and I still expect that AA and DL will prevail as the strongest and most viable US airlines.

 

[mweiss]

...I still expect that AA and DL will prevail as the strongest and most viable US airlines.

I agree with you on AA. I'm a bit less certain about whether DL, NW, or CO will be the other; it depends on a number of external market forces.

 

[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!!

 

[Reservation Agent]

When Mr Lakefield says he gonna throw down the gauntlet, sounds to me like he is "declaring war on all unions"!!!!

He is a relative newcomer...an outsider....Not an airline intelligencia...

Remember they replaced Dave Siegel, because he couldn't get along with the unons.......

Who are they gonna get to replace Mr Lakefield, who wants employees to go back to wages from the 1950's....

In the DEMAND TO CONCEED by the CWA , they add a line that says if your furloughed, and get called back you start back at $7.65 an hour....
Sounds like they would shut down an office for a week for repainting...lay everybody off....call everybody back the next week at $7.65 an hour...

That is almost criminal... h34r:

 

[mweiss]

That sums it up pretty well.

 

[wench]

***********yawns***********

 

[usair_begins_with_u]

Its funny watching the unions play into his hands.. Lakefield doesnt want a deal, he wants a scapegoat.

IAM is his pigeon.

 

[700UW]

Its funny watching the unions play into his hands.. Lakefield doesnt want a deal, he wants a scapegoat.

IAM is his pigeon.

The IAM is no one's pigeon

It has the Duty of Fair Represenation to enforce the current CBA.

You have a management team that has squandered two rounds of concessions from all employees, vendors and lesser to a tune of $1.9 Billion per year for almost two years, where has almost $ 4 billion gone?

Then you have a BOD that rewards ineptness, they paid $35 million to messers, Wolf, Gangwal and Nagin, that money could have been recovered legally through the chapter 11 process. Then they pay retainment bonuses for management who does not know how to manage an airline.

You also have a CEO who stood up at numerous Road Shows and told the employees "all furloghed US Airways employees will get employment with MidAtlantic". Has not happened and will not!

You have closed audience captive meetings where I and others were told vote for this contract the second time and you will save your scope language. Then the company blantantly violates the IAM M&R Contract and vendors out the Airbus work and the IAM takes the company to court and now arbitration.

You have the company make an RJ agreement with ALPA that restricts anything over 70 seats to W/Os. Then they buy CRJ-705's which are 76 seats to place at Mesa, then have the nerve to blame the pilots because they had to cancel that order.

Then you have F/A involuntary furloughs when their contract states the company has to offer voluntary furloughs before involuntarily laying anyone off and the AFA had to take it to arbirtration and won, when they had all ready one the same case before!

Then you have ALPA members laid off who were not suppose to be and ALPA had to take it to arbirtration and won.

Then Siegel gets fired, Cohen leaves along with him and US pays them $7 million for making the situation worse.

The bottom line is this management has proven time after time after time that they cannot be trusted, they would rather, lie, cheat and steal from the employees then to figure out how to run an airline.

No airline has ever been saved from going out of business from employee concessions alone. That is only a stop gap measure, you cant take the employees and cut their living down 50%, you can't make this airline a virtual airline, you all saw what happened to ValuJet.

The real issue at hand is revenue generating, and it shows this airline has no idea on how to accomplish this, they would rather destroy the employees standard of living (which by now is just barely surviving) then to run an airline.

US spent $233,000,000 on paying Mesa to fly 50 RJs in the US system, would it not be smarter to give our W/Os the RJs and keep the money in-house?

There are numerous opportunities to work other's airlines flights and we say no, that is throwing money away. Finally someone is waking up because US is working some of Independance Air's flights in certain cities.

US has proven they don't care about the passenger, F/C is a shame and the planes are flithy.

And still no one from the top addresses any of these issues.

I can go on for days, but I will stop here.

US Airways is a rudderless ship.

 

[DoctorChicago]

As usual.....Its always somebody else's fault.

Photo deleted by moderator

 

[700UW]

As usual.....Its always somebody else's fault.

Please explain to me how any of what I posted above is not the truth?

The employees have sacrifed 20,000 jobs and $1.9 Billion a year in concessions.

The employees do not run the company, management does.

 

[WestCoastGuy]

700UW.......well said. The truth....

 

[mweiss]

700, we don't often see eye to eye, but I agree with nearly everything you said there.

Only one minor quibble about

US spent $233,000,000 on paying Mesa to fly 50 RJs in the US system, would it not be smarter to give our W/Os the RJs and keep the money in-house?

Maybe, and maybe not. Certainly in terms of customer service, Mesa's been substandard. Hard to say about which is a better value, since so much of the numbers get blurred through the Mesa deal.

As for you, DoctorChicago, that was a really tacky choice of photo. :down: (OK, WCG, that was an opinion)

 

[WestCoastGuy]

 

[geo1004]

At what point do the unions and management stand up and address the fact that revenue is never going to return to the levels that used to barely support the language of the labor contracts. It's no secret to anyone that in years past, US's management would sign the future away to get a better deal on the paper for immediate return. That said, when do BOTH sides address the issue of labor contracts that realistically never should have been inked by responsible management in the first place?

 

[700UW]

Michael,

US is in the process of buying jets for Mesa now also.

Mesa and US have a revenue generating contract. Mesa is guaranted a profit on every single flight, if it has one passenger or 50.

Mesa on top of the flat rate which includes a profit also gets the following from US rembursed, cost of fuel, landing fees, ground operations, lease cost, insurance and Mesa does not have to operate a reservation system or issue tickets.

After running a bunch of tail #s through the FAA database on Mesa planes flying in the US system I come to find they are all leased.

Seems to me the money would be better kept in the group instead of making John Orenstein a rich man. Then at least you would have better quality control over the product.

Geo,

There are numerous opportunities for US to generate more revenue, look at the 5 of the 6 carriers bigger then US (southwest is the exception). All of them, CO, NW, DL, AA and UAL fly to many more international destinations in Europe and Asia. US is minimal in the international market. With US being the #1 carrier in the east and the large presence in the carribean, US could carry many more passengers and gain market share away from the big 5 and international carriers.

A bank of afternoon caribbean to carry the European passengers to the carribean is feasible. US also needs to enter the transcon market from BOS, NYC and WAS to the west coast, US needs a west coast express carrier again to feed the transcons and US all ready has a tremendous east coast presence. And US with the east coast presence, the caribbean and a west coast feeder could probably start flying to HNL, NRT and maybe Bejing.

But this management has no foresight on how to generate revenue, I remember back in the day US got NRT flight and had no plane to fly it and did not make an effort to get one. There are numerous widebodies in the MHV that with minimal effort could be converted to US Airways standards, leased cheap to add to the International and Transcon flight. AA, DL, CO and UA all fly widebodies coast to coast, US doesn't.

There are numerous opportunities for US to take on the big boys, but it takes vision and this management team only has one thing in their vision, to lower the employees standard of living and try and turn a profit out of their hydes.