mwereplanes
Senior
- Jan 21, 2004
- 302
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The following is from a UAL pilot council letter. Pay close attention to how they perceive and quote their management then compare it to what we have. It is amazing!
July 1st, 2004
Pilots of Council 12,
Yesterday, your MEC concluded a Special Meeting in Chicago. At that meeting, we received presentations from numerous MEC advisors including our financial advisor, bankruptcy counsel, and ALPA International's
Retirement and Insurance and Economic and Financial Analysis professionals. Our own MEC Communications Committee also provided us with an update.
As you can imagine, we received a very thorough briefing regarding the ATSB process and how the ultimate decision was determined. As was made clear from the presentation by the company officers, UAL has been made a victim
of its own success and the ideological predisposition of those with the ability to affect the eventual outcome. Regardless, all concerned are impressed by the achievements UAL has made to date and the soundness of
UAL's future plans. This is perhaps the silver lining in this whole ordeal.
So, the big question your LEC representatives keep receiving is: "What next?"
The leadership of the company has instituted a multi-pronged strategy to address the needs of the airline. Exit financing will then be the next
priority. As the company has made clear, the banks that have supported us thus far will continue to be the foundation of our exit strategy. They have developed a strong relationship with the company during this recent
scrutiny and are keenly aware of the strength of this company once it
emerges. It is noteworthy that the two largest and strongest banks in the world have been in United's corner throughout this whole process. This will
continue and enables us to say that UAL WILL survive and we WILL be a fierce competitor.
As you have seen in the media, those same competitors have done everything
in their power to try and bleed UAL dry. It will not happen and they have much to fear.
The officers of the company spoke at length to the MEC about where we are,where we are going and how we intend to get there. Others in the media,without the intimate knowledge of the company that your officers have,
believe that we cannot do it. They are WRONG!
We receive a constant barrage of misinformation from the media. Much of it revolves around the fact that airlines such as JetBlue and Southwest have a different cost structure than UAL. This is a fact. However, the
analysis of
why is wasted on the media, as it does not make for a good sound bite
and it does not set up the antagonistic view of the world on which the media lives. Those so-called low cost carriers are NOT United Airlines. They do
not have multiple fleets, international destinations or worldwide operations. They outsource much of their operations to the lowest cost provider and, in some
cases, do not even pay for the maintenance of their operations. They also receive sweetheart deals from airports and local government authorities that believe that they bring something to their community. In effect,
the taxes that UAL and others pay subsidizes the operations of these carriers!
Regardless, some in the media believe the airline industry is in a drive to the bottom. UAL disagrees. We clearly believe LCCs have a place in the industry and Ted has found a sweet spot. It is taking share from the
other carriers in its markets, is running unbelievable load factors and is ripe for further expansion. We have answered that question emphatically and successfully. Now, we are poised to attack the rest of the industry and the
world with the same vigor, as evidenced by our recently announced expansion in China, the Caribbean and Mexico. All of this has only been made possible by YOU.
The operational excellence of United Airlines has stunned everyone in the industry. The "broken" airline seen by our competition is now beating them all in almost every metric. This is a huge advantage to us as we seek
the capital to exit bankruptcy. Being ranked at or near the top of every
metric is unheard of for a carrier with a route structure as convoluted as ours.
To see the way the employees have responded to this crisis has opened people's eyes to the possibilities that we have known all along. Namely,United Airlines is one of the best airlines in the world and is uniquely positioned to leverage its route structure, its alliances and its
modern fleet to become one of the strongest airlines in the world.
But what does all that mean to the pilots' bottom line?
Our investment banker, as well as our other advisors, believe United's basic approach is sound. The capital markets will shortly make clear what they think. The sensationalist media has already made known what they
think: concessions, concessions, concessions. But, the media does NOT
make those decisions and they have little knowledge of our internals. When good news surfaces they ignore it. When apparently bad news surfaces, it becomes
the fodder of multiple columns and editorials. As we said, when someone is willing to provide a few hundred million dollars to help finance our exit,we will listen to them. Until then, they are just selling newsprint toanyone who will buy their crossword puzzle.
In the interim, Mr. Tilton and his staff are turning over every stone in the airline to find savings and revenue opportunities. They are strongly focused on the NON-labor portion of our costs (CASM), both domestically and
internationally. This is an area where we lag our competitors. The company acknowledges it, is focused on addressing it and is committed to improving
it. As you may have seen, yesterday, the company instituted a price increase/fuel surcharge on international flights in an attempt to address
one of those issues.
However, one of the things the company has NOT done is suggest that we, the employees, and more specifically the pilots, have not done enough. It is clear from the letter sent out to employees by our COO, Pete McDonald, that
they remain fully engaged with your MEC leadership. They understand and openly recognize the massive sacrifices we have already given and the levels of continuing effort being expended to keep this airline operation
at its current level. They have NOT requested ANY further concessions from us, nor are we expecting to receive such a request, as they strive to address theREAL issues facing the corporation.
At the conclusion of these two days of briefings, the MEC took no action and looks forward to further discussions and updates at our regular July meeting in Chicago on the 19th. In the meantime, those pilots who may have
specific questions are welcomed to join your Council Officers at the regularly scheduled LEC meeting at the Sheraton Four Points, Schiller Park at 10:00am on July 6th. We look forward to hearing from you then and
receiving both your questions and input.
Have a safe Fourth of July weekend!
Fraternally,
Your Council 12 Leadership
John Briggs, Neil Swindells, and Margie Freeman
July 1st, 2004
Pilots of Council 12,
Yesterday, your MEC concluded a Special Meeting in Chicago. At that meeting, we received presentations from numerous MEC advisors including our financial advisor, bankruptcy counsel, and ALPA International's
Retirement and Insurance and Economic and Financial Analysis professionals. Our own MEC Communications Committee also provided us with an update.
As you can imagine, we received a very thorough briefing regarding the ATSB process and how the ultimate decision was determined. As was made clear from the presentation by the company officers, UAL has been made a victim
of its own success and the ideological predisposition of those with the ability to affect the eventual outcome. Regardless, all concerned are impressed by the achievements UAL has made to date and the soundness of
UAL's future plans. This is perhaps the silver lining in this whole ordeal.
So, the big question your LEC representatives keep receiving is: "What next?"
The leadership of the company has instituted a multi-pronged strategy to address the needs of the airline. Exit financing will then be the next
priority. As the company has made clear, the banks that have supported us thus far will continue to be the foundation of our exit strategy. They have developed a strong relationship with the company during this recent
scrutiny and are keenly aware of the strength of this company once it
emerges. It is noteworthy that the two largest and strongest banks in the world have been in United's corner throughout this whole process. This will
continue and enables us to say that UAL WILL survive and we WILL be a fierce competitor.
As you have seen in the media, those same competitors have done everything
in their power to try and bleed UAL dry. It will not happen and they have much to fear.
The officers of the company spoke at length to the MEC about where we are,where we are going and how we intend to get there. Others in the media,without the intimate knowledge of the company that your officers have,
believe that we cannot do it. They are WRONG!
We receive a constant barrage of misinformation from the media. Much of it revolves around the fact that airlines such as JetBlue and Southwest have a different cost structure than UAL. This is a fact. However, the
analysis of
why is wasted on the media, as it does not make for a good sound bite
and it does not set up the antagonistic view of the world on which the media lives. Those so-called low cost carriers are NOT United Airlines. They do
not have multiple fleets, international destinations or worldwide operations. They outsource much of their operations to the lowest cost provider and, in some
cases, do not even pay for the maintenance of their operations. They also receive sweetheart deals from airports and local government authorities that believe that they bring something to their community. In effect,
the taxes that UAL and others pay subsidizes the operations of these carriers!
Regardless, some in the media believe the airline industry is in a drive to the bottom. UAL disagrees. We clearly believe LCCs have a place in the industry and Ted has found a sweet spot. It is taking share from the
other carriers in its markets, is running unbelievable load factors and is ripe for further expansion. We have answered that question emphatically and successfully. Now, we are poised to attack the rest of the industry and the
world with the same vigor, as evidenced by our recently announced expansion in China, the Caribbean and Mexico. All of this has only been made possible by YOU.
The operational excellence of United Airlines has stunned everyone in the industry. The "broken" airline seen by our competition is now beating them all in almost every metric. This is a huge advantage to us as we seek
the capital to exit bankruptcy. Being ranked at or near the top of every
metric is unheard of for a carrier with a route structure as convoluted as ours.
To see the way the employees have responded to this crisis has opened people's eyes to the possibilities that we have known all along. Namely,United Airlines is one of the best airlines in the world and is uniquely positioned to leverage its route structure, its alliances and its
modern fleet to become one of the strongest airlines in the world.
But what does all that mean to the pilots' bottom line?
Our investment banker, as well as our other advisors, believe United's basic approach is sound. The capital markets will shortly make clear what they think. The sensationalist media has already made known what they
think: concessions, concessions, concessions. But, the media does NOT
make those decisions and they have little knowledge of our internals. When good news surfaces they ignore it. When apparently bad news surfaces, it becomes
the fodder of multiple columns and editorials. As we said, when someone is willing to provide a few hundred million dollars to help finance our exit,we will listen to them. Until then, they are just selling newsprint toanyone who will buy their crossword puzzle.
In the interim, Mr. Tilton and his staff are turning over every stone in the airline to find savings and revenue opportunities. They are strongly focused on the NON-labor portion of our costs (CASM), both domestically and
internationally. This is an area where we lag our competitors. The company acknowledges it, is focused on addressing it and is committed to improving
it. As you may have seen, yesterday, the company instituted a price increase/fuel surcharge on international flights in an attempt to address
one of those issues.
However, one of the things the company has NOT done is suggest that we, the employees, and more specifically the pilots, have not done enough. It is clear from the letter sent out to employees by our COO, Pete McDonald, that
they remain fully engaged with your MEC leadership. They understand and openly recognize the massive sacrifices we have already given and the levels of continuing effort being expended to keep this airline operation
at its current level. They have NOT requested ANY further concessions from us, nor are we expecting to receive such a request, as they strive to address theREAL issues facing the corporation.
At the conclusion of these two days of briefings, the MEC took no action and looks forward to further discussions and updates at our regular July meeting in Chicago on the 19th. In the meantime, those pilots who may have
specific questions are welcomed to join your Council Officers at the regularly scheduled LEC meeting at the Sheraton Four Points, Schiller Park at 10:00am on July 6th. We look forward to hearing from you then and
receiving both your questions and input.
Have a safe Fourth of July weekend!
Fraternally,
Your Council 12 Leadership
John Briggs, Neil Swindells, and Margie Freeman
