Ual Lobby‘s For Industry Consolidation

[RowUnderDCA]

Guys-

Some of these 'posters' maybe public relations firms. Hey, it's marketing in the 21st century.... you're not supposed to know that someone is 'selling' you.

Maybe, even... ?

That would be a reason why UAL-centric posters aren't posting on UAL's board... there's no one to influence over there. However, this board IMPLIES that U's management reads these board.

I'm a firm believer that posts are simply electrons dancing on your computer screen, when you start believing that they are people, you get into trouble. They're just ideas.

 

[767jetz]

Great point Doc...some people just don't see the "Big Picture"...their EGOS get in their way. I personally would rather MERGE and get strong and COMPETE then be out of work. At this point I don't care what the name is on the side of the airplane as long as everyone in treated fairly!!!

The problem is, UAL doesn't NEED a merger to become stronger and survive. As time goes on it appears that US NEEDS UA to lower cost and survive. That's the difference.

Would it be good for UA as a company? Maybe, maybe not.
Would it be good for the UA employees? No.
Would it be good for US employees? Probably.
Does US need it to survive? Again, probably.

 

[AOG-N-IT]

The problem is, UAL doesn't NEED a merger to become stronger and survive. As time goes on it appears that US NEEDS UA to lower cost and survive. That's the difference.

Would it be good for UA as a company? Maybe, maybe not.
Would it be good for the UA employees? No.
Would it be good for US employees? Probably.
Does US need it to survive? Again, probably.

A think a reality break is in order here.

Since when the heck has a merger ever insured a job in this industry or any other for that matter?...least of all in the last ten years or so?

If a Co-Munn-ist merger ICT or UCT were to ever take place between U and UA..or U and XYZ ? , you can bet your house cat and cowboy hat both , that numerous jobs would be lost post haste due to duplications of effort in many cities and departments.

Mergers in this day and age are taking as many jobs as off-shore cheap labor is. rest assured...a merger will not protect or insure your future at U or anywhere else...kid yourself if it works for you? That facts and historical record speak differently in regards to the entire job market..and airlines tend to be at the worst end of this observation , well maybe next to textiles and banking?

767jetz...BTW this reply was not directed at you...but the person whom you last replied too. hoped it woold have picked up the quote on both. My apologies for any confussion. AOG-N-IT

 

[USA320Pilot]

767jetz, you're kidding, right?

If that's true why has UA not been able to get an exit financing? In regard to UA employees, without a corporate combination with US, UA could liquidate.

767jetz, I was just wondering, what's your opinion of the recent Denver Post statement that in “the fourth quarter, when air travel slows and operating costs rise, is likely to be tougher for United and other major carriers. Although United said its planes are booked more fully and at higher fares than last year, analysts predict a fourth-quarter loss in the range of $400 million to $500 million, not including bankruptcy costs."

By the way, what will happen to UA and its DIP financing if the company reports losses of $600 to $700 million this quarter (bankruptcy costs included)?

AOG, you're right when you said, "Mergers in this day and age are taking as many jobs as off-shore cheap labor is. est assured...a merger will not protect or insure your future at U or anywhere else..."

Regardless of the industry, mergers are designed to do more with less people by increasing productivity.

Regards,

Chip

 

[AOG-N-IT]

AOG, you're right when you said, "Mergers in this day and age are taking as many jobs as off-shore cheap labor is. rest assured...a merger will not protect or insure your future at U or anywhere else..."

Regardless of the industry, mergers are designed to do more with less people by increasing productivity.

Regards,

Chip

AOG Replies...Well Duh Chip !!

....and my post implied that a merger was good for Labor how??

I could give a rats red rump what a proposed merger does for some beancounters productivity figures. My caloric intake and shelter needs are what matters to me and the majority here.

My only concerns are whats good for the masses in terms of job retention...as should yours be in light of the industries condition.

I know it's all a big playground for the executives and self proclaimed industry analysts to move the pieces around like childs game board...but too many are being affected negatively by these board games.

Maybe if the game players focused on running what's theirs instead of playing monopoly..or roll the dice with peoples lives...we just might not be in this fix to begin with?

Running a company....what a phugging novel idea for a change Huh???

 

[USA320Pilot]

AOG:

I too am concerned about jobs, at both US and UA, however, my comments on a corporate transaction are strategic in nature and what management (publicly) and "informed sources" have said is occuring between the business partners.

Respectfully,

Chip

 

[AOG-N-IT]

AOG:

I too am concerned about jobs, at both US and UA, however, my comments on a corporate transaction are strategic in nature and what management (publicly) and "informed sources" have said is occuring between the business partners.

Respectfully,

Chip

Chip,
You will just have to forgive me on this one. I don't find anything Unique or Interesting about any merger talk between U and even the corner bakery...the corner bar would be another story (LOL).

I'm just a realist on these subjects...and the realist knows that real people , working people , good people are going to suffer under the ideas you frequently post about.

I realize that you find the subject interesting and thought provoking...but I see it in tangible terms as lives ruined...not just as collateral damage as "The Harvard Game Players" view us as.

I try to be forthright and pragmatic about things...and that keeps me spouting and drumming my beat about fixing what's ours Vs. a merger into another abomination such as what has taken place between U , PI and PSA of the past.

I see a U / UA merger doing 10 times more collective harm than the AA/TWA merger/takeover ever began to consider or realize postmortum.

This in my view and humble opinion is niether unique or interesting..it's morbid and ghoulish in my eyes.....I think I'll go out on the porch now and watch the traffic..maybe a unique or interesting car wreck will take place...reliable sources and historical fact leads me to believe it could happen?

 

[767jetz]

767jetz, you're kidding, right?

If that's true why has UA not been able to get an exit financing? In regard to UA employees, without a corporate combination with US, UA could liquidate.

767jetz, I was just wondering, what's your opinion of the recent Denver Post statement that in “the fourth quarter, when air travel slows and operating costs rise, is likely to be tougher for United and other major carriers. Although United said its planes are booked more fully and at higher fares than last year, analysts predict a fourth-quarter loss in the range of $400 million to $500 million, not including bankruptcy costs."

Chip,
It is your ASSUMPTION that UA does not have exit financing. There is strong reason to believe that when UA submits it's POR, it will be ATSB compliant and several investors (not equity sponsors like RSA or TPG) will be announced. Therefore your claims are inconsequential. What we have here is a case of your sources versus my sources. I guess we'll just have to wait and see who is right.

A "corporate combination" as you describe it is simply not in the cards in the short term. US may need something creative to survive, but UA does not. As I said, a UCT may or may not be good for UA's bottom line, but it is certainly not a necessity. And Tilton knows better than to open that can of worms.

And since you asked about my opinion of the Denver post's statement, all I can say is these are the same analysts who were so far off about UA's Q3, I would not put much weight in their predictions. You and your sources have been wrong so many times, I wonder why you even bother to post much of what you do. UA will continue to meet it's DIP covenants and will not loose $400 million in Q4. UA's bookings remain high and we are now approaching the busy holiday season. No matter how you spin it, the forecast for Q4 is very encouraging.

How many times have we heard you claim that UA will miss it's DIP covenants, when we haven't missed one yet? What was the quote you were posting for weeks from your close buddy Duane Woerth? I find it interesting that you never admit when you or your sources are wrong.

By all means though, Chip, please keep the speculation coming. If nothing else you are very entertaining.

 

[USA320Pilot]

767jetz:

We'll see, but there is reason to believe you’re wrong.

I guess a UA executive's public comments last Friday was ill informed too. You'll probably dismiss this too, but, were comments by Jeffrey Stanley, manager of economic analysis and regulatory affairs at United, coincidental or purposely timed to occur shortly after Siegel's speech? Stanley's interesting comments were:

1. "We haven't seen recognition by the federal government that low-cost carriers have moved in."

2. Stanley said to avoid extinction, the network carriers have to adapt to compete in revenue and costs. On the revenue side, the carriers are developing lower-fare airlines, tapping into new markets with regional jets and linking with other carriers through efforts like code sharing. On the cost side, the network carriers have to deal with wage and over capacity issues, Stanley said, along with shrinking hubs and reducing flight schedules.

3. "If things stay the way the are now, there will be several Chapter 7 (bankruptcy liquidations) down the road, and that's not good for anyone," he said. The most feasible solution to the situation is consolidation in the domestic airline industry, he said.

767jetz, there is something going on between UA and US regarding a corporate transaction, but due to the changing environment and challenges there are multiple options.

If UA can over come all of its obstacles I now understand Bronner has agreed to put the companies together, although the ultimate outcome will be determined by UA's restructuring or lack thereof.

By the way, why don't you post on the UA board instead of desperately trying to dispute every post I make about US and UA? I was just wondering, if my comments will not happen, than why do you even bother posting on the US board. Moreover, why don't you post very often of the UA board?

Regards,

Chip

 

[Cosmo]

If UA can over come all of its obstacles I now understand Bronner has agreed to put the companies together, although the ultimate outcome will be determined by UA's restructuring or lack thereof.

Chip:

Would you be so kind as to provide some proof to support your unsourced allegation about Bronner's intentions? Or is this another case of "secret sources" telling only you and nobody else? Or perhaps Bronner recently took a ride in the jumpseat of your aircraft and whispered in your ear? Or as I suggested yesterday, maybe you're just playing the airline equivalent of fantasy football. Inquiring minds want to know!

 

[USA320Pilot]

Cosmo:

I wish I could tell you the source, but I can't.

Regardless, let’s put things in perspective.

US Airways had a $37 million operating loss and United a $19 million operating profit in the third quarter. That’s a net difference of $56 million. United has about three times more revenue than US Airways and is not paying all of its bills, primarily the debt at the UCT airports of Los Angeles, San Francisco, Denver, Chicago, plus the money owed to the Port Authority of NY and NJ. In fact, United has not paid these airport authorities since last April according to S&P. How bad would have United’s results have been if it had meet all of its financial obligations?

United has stemmed its bleeding, but according to the Denver Post “although United said its planes are booked more fully and at higher fares than last year, analysts predict a fourth-quarter loss in the range of $400 million to $500 million, not including bankruptcy costs.â€￾

Jeffrey Stanley, manager of economic analysis and regulatory affairs at United, speaking at The Future of the Airline Industry conference at Washington University in St. Louis on October 31 said, "A series of events changed the competitive landscape of the airline industry, including the Sept. 11, 2001 attacks, a sluggish economy and the outbreak of severe acute respiratory syndrome, or SARS, Stanley said. Those factors have helped the growth of low-cost carriers," he said.

Those carriers face plenty of issues, he said, including security, international aviation and air traffic management. But the most important challenges they face are the change in the industry's competitive environment and getting the federal government to recognize it, Stanley said.

"If things stay the way the are now, there will be several Chapter 7 (bankruptcy liquidations) down the road, and that's not good for anyone," he said. The most feasible solution to the situation is consolidation in the domestic airline industry, he said.

Without a corporate combination between the two companies to remove fixed costs, it appears both airlines could liquidate. Therefore, the decision appears to be integrate or die!

Bronner is said to be willing to integrate the companies if United can successfully resolve its enormous challenges and US Airways can meet the ATSB minimum cash on hand requirements. The business opportunity of the combined carrier is significant with major potential cost carve outs and "S" curve economics, which would dramatically improve revenue.

Regards,

Chip

 

[Fly]

Chip Munn Posted on Nov 5 2003, 10:39 AM

I wish I could tell you the source, but I can't.

I know who it is......it's the Tooth Fairy, right?

 

[USA320Pilot]

Fly:

Fly, it's no secret that our two companies continue to integrate and we see it on the front line. I'll write more about this in a minute, but economics and the marketplace are driving events between our two companies.

US Airways chief executive officer Dave Siegel and Jeffrey Stanley, manager of economic analysis and regulatory affairs at United, both made comments last week regarding consolidation -- indicating the only true way to obtain enough cost cuts for our two companies to survive by creating economies of scale and significant additional incremental revenue. The cost gap between legacy carriers and the LCC's is to great to compete, unless something dramatic occurs because cuts in labor expense cannot do it alone.

United had a net loss over $300 million last quarter, which was the largest loss in the industry, and US Airways was not much better at $90 million. Both companies continue to lose money and are facing problems going forward, unless something changes.

Let me give you an example of how economies of scale are currently being implemented between our companies, which could provide enormous savings going forward.

On October 1 US Airways moved its operation from Seattle's South Terminal to the North Terminal where United is located. US Airways took custody of two of United's gates, N10 and N11. The logistic benefits are visibily evident, but one of the keys is that United lowered its Seattle lease expense by divesting of two of its gates to US Airways.

With consolidation, you could have millions of dollars in cost cuts (like the one just implemented in Seattle), improved productivity, and a better passenger experience.

In addition, United's EF&A department conducted an analysis prior to the last merger attempt and said the combined business entity would generate between $1.6 to $1.9 billion per year in additional revenue. Post September 11 and in today's environment that number would be lower, but it could easily be $1.2 billion.

Will something occur? I believe so, but before it does United's pension problem must be addressed, the UCT airport municipal bond litigation must be resolved, United must reach agreement on or reject aircraft EETC's, and the Dulles/ACA/Mesa fiasco must be resolved. In addition, US Airways must maintain a minimum cash balance to satisfy the ATSB, which holds a gun to the head of the loan guarantee recipients to force airlines to perform -- one way or another.

Fly, we are in a New World and both of our companies are at risk.

That's why Siegel told the Washington Aero Club last week that there may be corporate combinations between network airlines. "Again, I don't have all the answers, but I do sense that increased cooperation, coordination, and potentially consolidation between and among network airlines must be another source of strength through enhanced efficiencies, in both marketing and operations," Siegel said.

Interestingly, a few days later Stanley in a speech said, "If things stay the way the are now, there will be several (not one or two, but several) Chapter 7 (bankruptcy liquidations) down the road, and that's not good for anyone. The most feasible solution to the situation is consolidation in the domestic airline industry," he said.

Considering US Airways and United are considered the two weakest legacy carriers and the only ones to file for bankruptcy, whom do you think Stanley was referring to when he talked about liquidations?

Regards,

Chip

 

[Fly]

Chip Munn Posted on Nov 5 2003, 01:28 PM

Considering US Airways and United are considered the two weakest legacy carriers and the only ones to file for bankruptcy, whom do you think Stanley was referring to when he talked about liquidations?

Undoubtably US Air and United. Unfortunately, the airlines will have to continue to walk the tightrope (at least for a few more years) before labor is going to allow this merger. I believe that if we have this one forced down our throats, we will spit it right back at em. THE END

 

[Bradly71]

Chip,

I'm not an employee.....

Use the internet what is was designed for..................PORN..............you might be a bit happier!!

YOU ROCK!