WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #76
Jungle,
I'm not doubting that UA's employees will not get a pension. But that is not the issue. The issue is that not having pension liabilities has always been an almost universal requirement for a merger in the airline industry. While known, pension liabilities are liabilities nonetheless and investors would rather see NO liability and allow management to develop plans to compensate people than have to inherit liabilities and figure out what to do with them.
Cosmo,
You’re really getting desperate.
To argue that UA is not competitive but someone, somewhere will find money to invest in this fabled merger which cannot be backed up by evidence demonstrating that UA and CO can together run a winning airline is hallucinogenic at best. Sure, someone has money but to expect them to part with it and invest it in two sinking stars is fanciful at best.
Yes, DL’s consolidated CASM went up but its RASM went up over twice as fast because DL has shifted some domestic flying to Delta Connection carriers.
You and I know that the best comparison of airline operations is mainline to mainline among the six network carriers. On that basis, and on others as well, UA is simply not generating the revenue premiums necessary to overcome UA’s costs which are the industry’s highest. UA employees should be absolutely livid that they gave up so much – way more than other carriers’ employees – and yet UA still cannot get its costs under control.
UA can talk until the cows come home that they know they have a cost problem but they lost their opportunity to get it right. Instead of getting their operational costs down in bankruptcy, they beat their employees, lessors, and municipalities to a pulp, eliminating any possibility of good will to help in the future. The reason UA can’t get its costs down is because they have a no-growth business model in a seniority based system where labor costs are only going to rise. UA’s costs cannot go down outside of another bankruptcy.
I know what is happening at UA is your worst nightmare but it’s also exactly what I predicted would happen. UA has languished in financial purgatory for a decade now except for a couple years of grand performance at the end of the 90s – at a time when anyone that could find Jet-A could make money. When times got bad, UA fell first among the biggest carriers and it fell hardest. Other analysts are saying exactly what I’ve been saying: UA’s fundamentals are abysmal right now but UA can get by because there is enough decent paying business to be had. We all know that there will be downturn because there always will be whether it comes from a new competitor like Virgin America or from a military or economic or health crisis but it will come. And UA will be first to fall again.
The next bankruptcy will not be as nice to UA. Investors will demand new management and will be forced to entertain selling the company in order to recover some of the value they still have in the company. UA is still run by some of the same clowns that presided over it during its failed ESOP era and its bankruptcy so it’s obvious they can’t figure out how to turn the company around. Don’t get mad at me – get mad at the board of directors and tell them to throw those rascals out. If you care about United Airlines, it’s time to act. – and it may even be too late already since we never know what the future holds – which for the airline industry is as likely to be disastrous as not.
There’s no excuse why UA should continue to be performing as badly as it is.
I'm not doubting that UA's employees will not get a pension. But that is not the issue. The issue is that not having pension liabilities has always been an almost universal requirement for a merger in the airline industry. While known, pension liabilities are liabilities nonetheless and investors would rather see NO liability and allow management to develop plans to compensate people than have to inherit liabilities and figure out what to do with them.
Cosmo,
You’re really getting desperate.
To argue that UA is not competitive but someone, somewhere will find money to invest in this fabled merger which cannot be backed up by evidence demonstrating that UA and CO can together run a winning airline is hallucinogenic at best. Sure, someone has money but to expect them to part with it and invest it in two sinking stars is fanciful at best.
Yes, DL’s consolidated CASM went up but its RASM went up over twice as fast because DL has shifted some domestic flying to Delta Connection carriers.
You and I know that the best comparison of airline operations is mainline to mainline among the six network carriers. On that basis, and on others as well, UA is simply not generating the revenue premiums necessary to overcome UA’s costs which are the industry’s highest. UA employees should be absolutely livid that they gave up so much – way more than other carriers’ employees – and yet UA still cannot get its costs under control.
UA can talk until the cows come home that they know they have a cost problem but they lost their opportunity to get it right. Instead of getting their operational costs down in bankruptcy, they beat their employees, lessors, and municipalities to a pulp, eliminating any possibility of good will to help in the future. The reason UA can’t get its costs down is because they have a no-growth business model in a seniority based system where labor costs are only going to rise. UA’s costs cannot go down outside of another bankruptcy.
I know what is happening at UA is your worst nightmare but it’s also exactly what I predicted would happen. UA has languished in financial purgatory for a decade now except for a couple years of grand performance at the end of the 90s – at a time when anyone that could find Jet-A could make money. When times got bad, UA fell first among the biggest carriers and it fell hardest. Other analysts are saying exactly what I’ve been saying: UA’s fundamentals are abysmal right now but UA can get by because there is enough decent paying business to be had. We all know that there will be downturn because there always will be whether it comes from a new competitor like Virgin America or from a military or economic or health crisis but it will come. And UA will be first to fall again.
The next bankruptcy will not be as nice to UA. Investors will demand new management and will be forced to entertain selling the company in order to recover some of the value they still have in the company. UA is still run by some of the same clowns that presided over it during its failed ESOP era and its bankruptcy so it’s obvious they can’t figure out how to turn the company around. Don’t get mad at me – get mad at the board of directors and tell them to throw those rascals out. If you care about United Airlines, it’s time to act. – and it may even be too late already since we never know what the future holds – which for the airline industry is as likely to be disastrous as not.
There’s no excuse why UA should continue to be performing as badly as it is.
