Should U be looking for another code-share partner

[PITbull]

[blockquote]
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On 2/18/2003 11:42:11 PM LGA Fleet Service wrote:

Interesting theory.

I suppose Delta,Northwest and Continental will all sit on their hands as this unfolds?

Not to mention jetblue,Air Tran, America West and others maybe wanting a piece of the action.

United hasn't given the death rattle yet here you guys are neatly divvying up the carcass.

Funny though, there was an awful lot of indignation on this board over the summer when U was being parted out to NWAC, AMR and others.

Have I missed the press release stating that the pilot pension issue has been resolved to the ALPA's satisfaction?

Is that money from the ATSB backed loans in the U corporate accounts yet?

The last $200 million frm RSA, the money from GECAS..any of that on the ledgers yet?

Counting fowl before eggs are laid,much less hatched is a tad premature wouldn't you agree?

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[/blockquote]

I'm with you, LGA.

That's no theory. That's nothing but "hogwash" and "would we" "could we" crap. No where, and I mean no where does the "new" restructuring agreement speak to growing "mainline". Not even on a hypothetical. Unless I missed somthing, was the "plan" rewritten?

What I do know is that ALPA gave U relief for 460 plus RJs and that's not to feed some shrunken down carrier.
Sooooo, if our restructuring "plan" doesn't speak to "main line" growth, but only speaks to Mid-Atlantic growth, who will we be feeding?

You guys are making a "funny" again. Right? You think maybe Dave and Dave would screw up a couple months ago when they wanted this alliance with UAL? Do you think they missed something...like UAL ledger? Maybe they forgot to ask UAL if they were in any kind of financial trouble or something? Maybe with their great business minds they didn't have the forsight that you all do....

You guys are too funny. UAL is not missing a beat here.

 

[funguy2]

LGA Fleet Service:

I agree that this might be premature. But, the airline CEO's should be thinking of such scenarios, and we are simply armchair quarterbacks... "Would-a, Could-a, Should-a." But it certainly is interesting SPECULATION.

That said, dfw79, I agree w/ LGA... Who says AA/USAir get all the spoils? And why would USAir be in a hurry to give up on ORD (assuming it gets it in the first place) for STL? If Southwest kicked me out of BWI, I would not be in a hurry to acquire a hub where they have a great deal of service (even with my new cost structure). If I had ORD, AA would need to entice me with something better than a codeshare and STL to move me out.

I think there would be a lot of fighting over each asset by everyone else... My GUESSES as to the winners:

ORD: CO - CLE scaled down - AA larger than CO at ORD, as AA can grow while CO gets set up.

DEN: US - after they lose ORD - F9 grows quickly while US gets set up.

SFO (Domestic): LUV moves back in.

LAX (Domestic): LUV acquires UA's (and CO's) Terminals 6/7/8, places a big order with Boeing. CO moves to Terminal 1 to be near NW and Terminal 2.

IAD (Domestic): AirTran moves back in... as does USAir (More limited)

Pacific: AA

Atlantic: Gets split up:
LHR: DL

IAD-Europe: US (solidify their Washington base, also not very expensive relative to other route authorities)

JFK-Europe: AA/DL picks up what they don't already have. Other route authorities lay dormant.

ORD-Europe: CO - goes with ORD hub

Latin America: Split Up:
JFK-SA: DL
MIA-SA: not sure anyone wants this right now. AA picks up what they don't already have (if anything)

Alliances: Star steals DL from NW/CO and Sky Team. Sky Team gets USAirways.

Now having said all this... I don't think I will ever see any of it... But anything is possible. I thought Eastern was too big to fall back then.

 

[PITbull]

Piney,

We can make conjectures, but the facts are the facts. U did make an alliance with UA just a few months ago as part of their "new business plan". That alone, the co. said would generate approx 2 to $300 million dollars of revenue per year. Using that one example, why would U do this? Why would RSA Bronner obviously go along with this as a "plan"? Who knows what else goes on behind the scenes. This is only what is known to the public. Why would these two bankrupt airlines get together? UA filed for Chapter 11 on Dec. 11. They just got approval for the alliance in October. You and I both know that in order for a corporation to file hundreds of motions in court, even on the first day of filing, they would have had to be prepared; which takes months. What? Did they decieve U? Was this suppose to be a snergestic alliance to help both co.s prosper or not?

IMO, I believe the bankruptcy and the threat of liquidation is as important as a stretegy for UA's Labor group concessions as it was for U. Remember, U had a head start with this, and we didn't anticipate the severity of the concession demand even in the summer. Believe me, we didn't get alot of press on Labors side of the field, and we didn't go into the night quietly either. Its just the public doesn't know how we suffered. Labor was quiet about alot of it because we didn't want to frighten away the public from flying us, as well. We also had nothing to "gage" by. These other labor groups in these carriers do...U.

If UA is entering a zone of high probable liquidation, then what was U's point with the Alliance?

 

[PITbull]

Piney,

For a guy who is not an employee, you sure know alot about us and the plight of labor and management.

I thank you for your posts and for caring enough about our industry to help us mentally and philosophically get through this.And thank you for sharing your opinions; they give much light where there is dimness.

 

[chipmunn]

PineyBob & PitBull:

PineyBob said: "I will tell you that I think that Mr. Seigel has a "Plan B" for the eventuallity of a UA liquidation".

Chip comments: Piney, he does and we have discussed it - although Siegel has been vague with specific details. However, I do know plans could include DEN, SFO, LAX, ORD, and maybe even some of the Pacific and South American operation(s).

Let's also not forget in a few months US will take control of the new PHL International terminal that will provide 19 additional gates capable of 12 widebody aircraft. In regard to feed, PHL has the new commuter terminal that has 38 gates (26 with jetways) and the need for more Express RJ operators, if a carrier becomes available to join the US Express network.

By the way, did you see that Dow Jones reported today UA is seeking bankruptcy court approval to amend terms of a $300 million loan to avoid breaching DIP finance agreements?

If the court rejects the company's motion, liquidation may be much closer than we realize if the DIP financing is called in. Apparently, Bank One, CIT Group, Citigroup, and J.P. Morgan are not to happy and the war has not even started, yet.

PITBull said: "If UA is entering a zone of high probable liquidation, then what was U's point with the Alliance?"

Chip answers: To begin the process of obtaining additiional incremental revenue and transitioning to the "unique" and maybe now the "interesting" corporate transaction.

Regardless, this should be an interesting year, watching all of this unfold, starting with the US Omnibus hearing on February 21.

Chip

 

[LGA Fleet Service]

[blockquote]
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On 2/19/2003 6:51:13 PM PineyBob wrote:

So what if UAL fails and is liquidated? One thing that had best NOT happen is IF US picks up any pieces of the operation the employees DON'T Come with it!
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[/blockquote]

Then exactly how would these newly acquired assets be staffed?

 

[LGA Fleet Service]

[blockquote]
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On 2/19/2003 9:44:47 PM chipmunn wrote:

Chip comments: Piney, he does and we have discussed it - although Siegel has been vague with specific details.
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[/blockquote]

Maybe because he doesn't want to field calls about long range plans showing up on an internet message board?

 

[chipmunn]

United's profit plan includes smaller fleet

CHICAGO (USA TODAY) - United Airlines would return to profitability in 2004, but its fleet would shrink 5.3% over the next five years, according to a management plan outlined for the carrier's creditors.

The plan does not consider potential effects of a war with Iraq on UAL, United's parent company.

United now has 526 jets and would reduce that by 32. The plan presumes that 134 narrow-body jets, such as Boeing 737s or Airbus A320s, would move to a low-cost carrier United plans to compete against discounters such as Southwest Airlines.

A copy of the 278-page briefing document, used by management at the Jan. 31 creditors' committee meeting, was obtained Wednesday from a Web site for airline mechanics.

Details of the restructuring plan remain sketchy despite the length of the briefing document. But management projects that passenger revenue will rise 3.6% over the next five years to about $13.5 billion annually. Previously, management had projected annual passenger revenue would reach $16 billion to $20 billion in the same time frame.

United's management also projects a $1.8 billion improvement in the company's operating earnings this year.

The restructuring plan is based around the creation of a four-pronged marketing effort:

United, the second-largest airline, would still provide a global network of service through its major hubs and alliances with foreign carriers. Its wide-body fleet, such as Boeing 777s and 747s, would grow by one jet over five years to 119, most of which would be used in international service.

Its narrow-body fleet would shrink to 241 planes from 408 and would fly primarily on domestic routes with significant business-travel demand.

United's low-cost carrier would use its hubs.

United Express, United's network of affiliated regional carriers, would expand from 199 regional jets in 2003 to 275 by 2008.

 

[chipmunn]

Initial reports of a "unique" or now an "interesting" corporate transaction included the reduction of 30 to 35 percent of the UA domestic system, while keeping UA's international system largely intact. UA's feed and revenue could largely be kept intact with the domestic alliance and RJ connections.

Apparently, this is part of the plan developed by UA executive vice president of strategy Doug Hacker and senior vice president of planning Greg Taylor.

However, 241 out of 408 aircraft represents about 40 percent of the mainline narrowbody fleet, which could mostly be A320 family aircraft.

Click onto http://www.ual.com/page/article/0,1360,1427,00.html

PineyBob & DCAflyer, there is no question the multiple attempts to bypass and change national union seniority integration policy, by UA unions, has left a bitter taste in the mouths of US employees. It is very possible the attitudes of the the UA employees could come back to haunt them.

With Bronner indicating he would finance such a transaction, US confirming its plans to exit bankruptcy in 39 days, a critical component may be finding an acceptable solution to the US ALPA retirement problem.

Chip

 

[SFOJFK]

When LUV left SFO, they blamed it on the weather delays. The fog really screwed up the ops causing delays at many points in their system. That's why they beefed up OAK and SJC because those two airports aren't affected much by Bay Area weather.

[blockquote]
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On 2/19/2003 7:40:05 PM funguy2 wrote:
SFO (Domestic): LUV moves back in.
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[/blockquote]

 

[DCAflyer]

PineyBob said:

Are there not 1,827 pilots on furlough? What about the other workgroups? US had 49,000 employees and 33,000 now. That leaves about 14,000 folks who may wish to return to the industry.

For me if I am a manager and I get a UA resume it goes immediately into the "Only if I'm really stuck" pile. As a PAX and observer I see the primary problem at UA is its people, management and front line. They are different and IMHO would poison the attitudes of far to many US workers to make it worth the risk.

Mr. Siegel would do well to observe the net results at UA peoplewise. Somehow management at UA has managed to pizz off every work group over there to the point that NO ONE trusts a word that comes out of the others mouth. It shows in the rude behavior on these boards and to the PAX.

All of the majors have laid off highly skilled staff. There are plenty of people to choose from that DO NOT work for UA!


DCAflyer replies:

Well said, Bob! Very well said!

And to take it up another notch, given the unmitigated arrogance of labor groups at UA, which during the UAL/U merger debacle were pulling out NO stops to tack U people to the bottom of the seniority list, ala AA/TWA, even though the union bylaws require integrated mergers whenever two airlines with the same parent unions merge (at least with the case of AFA, and I believe also this is the case with CWA, TWA, and ALPA) I will lose no sleep if UAL folks are not merged in with U. That is, of course, if any of this happens at all.

But I am with you, Bob. It would disturb me to have UAL folks, and their attitudes, on U property. I have witnessed their unprofessionalism and poor customer service first-hand. That is not to say we don't have some of that at U, all airlines do. But all in all, U folks treat our passengers very well, even in the most adverse of times. It shows in the compliments of people like you, Bob.

 

[chipmunn]

Schwanker:

Schwanker said: Correct me if I'm wrong (I'm sure you will), but my understanding is the removal of 1/3 of their fleet is basically the transfer of 1/3 of their aircraft to the LCC.

Chip answers: It could be, but it has been discussed, since last spring, that about one-third of the UA domestic system could be a "spin off". In fact, UA ALPA MEC Chairman Paul Whiteford has openly discussed the potential to sell this portion of UA and Bronner has publicly expressed his interest twice in acquiring UA assets.

Bronner told Ted Reed of the CLT Observer and Tom Olson of the PIT Tribune-Review of his interest to acquire some of UA's assets for US.

Specifically, On February 7 the Charlotte Observer reported "We don't run from fights," said David Bronner, chief executive officer of Retirement Systems of Alabama, which is US Airways' principal partner in bankruptcy court and principal owner if it emerges. Bronner speculated that United has a 50-50 chance of surviving a war. He said that if United were to sell assets, he would consider backing the purchase of some "if it would be beneficial to US Airways."

UA management has a conundrum in that its LCC plan is facing enormous opposition, the company is running out of money, and the airline has begun discussions with DIP financiers to ammend terms of its loans. In fact, yesterday the Associated Press reported UA is seeking bankruptcy court approval to amend terms of a $300 million loan to avoid breaching (DIP financing) agreements, according to court documents.

If the financial terms cannot be adjusted to satisfy Bank One, CIT Group, Citigroup, and J.P. Morgan, UA may need to sell assets to fund on-going oeprations, because the carrier is on the verge of violating its DIP financing revenue and cash flow targets.

We'll see how this turns out.

Chip

 

[ITRADE]

Not to get morbid here, but what would US acquire? A320s? A319s?

SFO? LAX? DEN? ORD doesn't make sense. Chicago is already a hub for three other airlines.

 

[Schwanker]

Chip,
I don't see the significance of your highlighted portion. What I can see is their narrow body fleet goes from 408 to 375 jets(134 + 241)while they increase rjs by 76 jets. Also, I believe they expect the "utilization rate" of these narrow-body aircraft to increase to offset the fleet size reduction (especially in the lcc division).

 

[Schwanker]

[blockquote]
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On 2/20/2003 9:13:58 AM chipmunn wrote:

Schwanker, Hacker and Taylor have been discussing the removal of more than one-third of UA's domestic system with Wall Street and Administration officials since last spring, that's the significance.

Chip
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[/blockquote]
Correct me if I'm wrong (I'm sure you will), but my understanding is the removal of 1/3 of their fleet is basically the transfer of 1/3 of their aircraft to the LCC.