PlaneBuzz-December 07, 2007

UAL777fan,

I'm not so sure. UA has a very strong brand and identity throughout the world. But, of the 3 obvious merger partners for UA (CO, DL, US), CO and DL both have built very strong brands in Europe and Latin America. So I don't think it's necessarily a certainty that if UA were to merge with either of those two carriers that the UA name would remain. As for US, I think clearly UA has a stronger brand and the UA name would remain. And I honestly can't envision a scenario where UA merges and their senior management becomes the surviving leadership. I think it's well-known throughout Wall Street and the industry how incompetent UA's senior leadership team is in truly turning UA into a leaner, meaner airline. It's amazing. They have arguably the best global network of any airline, and, in most cases, among the best customer service. And their Mileage Plus program is top notch. Unfortunately, beyond that, Tilton and his team seem more focused on merging the company and cashing out than they do in turning UA around. Like it or not, they wasted 3 years in bankruptcy. They picked all of the low hanging, obvious fruit. They took the easy way out and pulled muscles in their necks patting themselves on the back for it. Unfortunately, they left alot of bloated infrastructure and inefficiency on the table, which is an inexcusable waste. They are sitting on a huge horde of cash that promises to get higher if/when they spin off Mileage Plus and UA Services. But other than that, are they really that much better positioned for the long-term future than carriers like AA or CO, who didn't have to file for bankruptcy protection?

The BEST outcome for all UA employees is to get rid of the management team that is currently in place. Until someone is truly interested in running the airline successfully as their first priority, instead of enriching themselves further with a merger, nothing of substance is going to change for the better at United.

And the amount of carve-outs that are required in any merger is going to depend on who the merger partner is. I'm not so sure there would be such large cuts required. If there isn't much overlap, you're talking about basically reducing some point to point frequencies in common markets and divesting some gates and slots. Not that big of a deal. UA's franchise has extreme value to almost any carrier. But not everyone is willing to do the heavy pruning in a merger with UA that Tilton and his gang should have dealt with during their 3 year stay in bankruptcy. That, to me, presents the big sticking point for UA merging with anyone.
 
I knew the time to leave United was in 1994 when the ESOP was voted in. I stayed for another 9 years and didn't leave until 2003. Life after United is no easier but it is less stressful. I have moved on and life is great. I would tell anyone who will listen to update the resume and move on. It has worked for me. I still have alot of friends at UAL and can't resist the urge to look in and see whats happening at the Lazy U but it is much easier to look at the train wreck when you are not in the middle of it.

The people at the top have not changed the way they act or treat their employees. Quit fighting for their scraps. Take your skills and experience and sell them to some who will appreciate them.
 
Tim Thorpe said:
I knew the time to leave United was in 1994 when the ESOP was voted in. I stayed for another 9 years and didn't leave until 2003. Life after United is no easier but it is less stressful. I have moved on and life is great. I would tell anyone who will listen to update the resume and move on. It has worked for me. I still have alot of friends at UAL and can't resist the urge to look in and see whats happening at the Lazy U but it is much easier to look at the train wreck when you are not in the middle of it.

The people at the top have not changed the way they act or treat their employees. Quit fighting for their scraps. Take your skills and experience and sell them to some who will appreciate them.
Click to expand...


Anybody in their 40's worth their salt should have left already.
For those that see a 'future' working for the 'Lazy U' deserve what they get. :down:

B) UT
 
Just got word from employee at the airport. Tilton, et al. is offering ANP at the airports from January thru March. He needs to pay for the $250 million shareholder dispersement Jan. 23.
 
JungleClone said:
UAL777fan,

I'm not so sure. UA has a very strong brand and identity throughout the world. But, of the 3 obvious merger partners for UA (CO, DL, US), CO and DL both have built very strong brands in Europe and Latin America. So I don't think it's necessarily a certainty that if UA were to merge with either of those two carriers that the UA name would remain. As for US, I think clearly UA has a stronger brand and the UA name would remain. And I honestly can't envision a scenario where UA merges and their senior management becomes the surviving leadership. I think it's well-known throughout Wall Street and the industry how incompetent UA's senior leadership team is in truly turning UA into a leaner, meaner airline. It's amazing. They have arguably the best global network of any airline, and, in most cases, among the best customer service. And their Mileage Plus program is top notch. Unfortunately, beyond that, Tilton and his team seem more focused on merging the company and cashing out than they do in turning UA around. Like it or not, they wasted 3 years in bankruptcy. They picked all of the low hanging, obvious fruit. They took the easy way out and pulled muscles in their necks patting themselves on the back for it. Unfortunately, they left alot of bloated infrastructure and inefficiency on the table, which is an inexcusable waste. They are sitting on a huge horde of cash that promises to get higher if/when they spin off Mileage Plus and UA Services. But other than that, are they really that much better positioned for the long-term future than carriers like AA or CO, who didn't have to file for bankruptcy protection?

The BEST outcome for all UA employees is to get rid of the management team that is currently in place. Until someone is truly interested in running the airline successfully as their first priority, instead of enriching themselves further with a merger, nothing of substance is going to change for the better at United.

And the amount of carve-outs that are required in any merger is going to depend on who the merger partner is. I'm not so sure there would be such large cuts required. If there isn't much overlap, you're talking about basically reducing some point to point frequencies in common markets and divesting some gates and slots. Not that big of a deal. UA's franchise has extreme value to almost any carrier. But not everyone is willing to do the heavy pruning in a merger with UA that Tilton and his gang should have dealt with during their 3 year stay in bankruptcy. That, to me, presents the big sticking point for UA merging with anyone.
Click to expand...

I think we can all agree that Tilton and company have done an absolutely horrendous job at taking the airline through bankruptcy and have shown nothing but a general disregard for all key aspects of the UAL's core business, United Airlines. I remember reading an interview that Jack Brace (how does he still have a job?) openly bragging about how United wasn't going to make any significant investment or expansion into its domestic capacity for at least decade. Are they aware that they have 737's and 757's/767's (especially the 37's and 67's) flying around that haven't seen any significant interior work since Stephen Wolfe ran the airline?

So with needs for massive capital investment into the product they choose to take $1.25 Billion and pay down debt and offer a large special dividend to the share holders. To me that's just stupid. You can use that money much more effectively to further reduce your debt load and free up money your having to pay in interest on that debt (improving cash flow) or they could invest it in the product which would improve customer loyalty (which in the long run would also improve cash flow).

Not to mention Ted which has to be one of the dumbest ideas I think I've ever seen leave the "outside the box" meeting and actually become some sort of policy. Gee, lets take our newest and most efficient narrowbody aircraft and consign them to low margin hyper price sensitive markets (from key hubs to Florida and Las Vegas), spend millions on marketing only confuse consumers with inconsistent product offerings (since customers were expecting United service and get TED instead and I'm sure the FF's love the TED experience). TED also reduces fleet flexibility by configuring the A320's differently than the rest of the United fleet and just to make the whole matter worse... it has lower load factors and yields than the mainline service it replaced. Brilliant.

As for the whole merger point; the amount of divestment that would have to made and the number of cutbacks that would have to take place with a Delta or Continental merger (especially a Delta merger) would bring that to a full stop by the regulators. If they were to merge you would have one airline basically controlling both Denver and SLC dominating the Mountain West. I can see CVG and ORD coexisting just because there is no space to expand at ORD and if they were smart they would move some of the regional flights to CVG to reduce congestion at O'Hare.

You would probably run into trouble in New York at LGA since UA and DL have large presences there and the same could be argued for DCA and IAD. Although the dynamic has changed alot in these markets since the UA/US merger fell apart. In the DC market, SWA has become a major player at BWI and JetBlue has launched service out of Dulles competing with UA. You also have the Amtrak Acela Express which has made rail a viable competitor to the shuttle. US still has its shuttle and American launched a AE shuttle service to JFK and CO offers similar service into Newark.

Same goes for the New York market where American has spent a ton of money expanding its JFK facilities, JetBlue's emergence and completion of the rail link between the city and EWR have significantly increased the amount of competition in the NYC.

But I still think the smartest thing UA could do is 1)invest in its product both internationally and domestically and 2) continue to improve its balance sheet by reducing its debt load. A merger would be an unnecessary distraction and could very well sink both airlines especially with the integrating of seniority lists and whatnot.
 
Good Post....I think outsourcing our 'crack-head' Management team wouldn't be a bad idea either...
 
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