US/UA Official Merger Thread II

[Bill Brasky]

I can see it now........

Some airline "Fool" as you call it, is going to say to his board of directors.......

Lets pull those airplanes out of the desert, the ones we parked because they were so expensive to operate.

Then place them in service where we generate half the revenue of the cost.

We'll lose our a$$, but at least we'll take market share and we'll force the other airlines to lose money too.



History is just that HISTORY.

I can tell you this....

Anyone who haas been in this industry for any length of time, is glad you are not running the show at their airline.

History will serve as a lesson, not as a blueprint for the future.

SW is hiring 400 pilots this year. Just because YOUR airline is hurting, not all are. Go attack someone else.

 

[FA Mikey]

SW is hiring 400 pilots this year. Just because YOUR airline is hurting, not all are. Go attack someone else.

How many will be retiring this year? 400? 600? 800? Will it be a net loss or net gain?

 

[Hi-C-Camp]

How many will be retiring this year? 400? 600? 800? Will it be a net loss or net gain?

Exactly, It will probably cover their retirements etc... Also, SWA, profits are dropping dramatically, they are scrambling to find new ways to raise the revenue (just like the rest of us) ... Fuel hedging, definitely buys you time, but that time wont last forever, It will be interesting to see their profits in 2 years... I doubt seriously that they will continue to be profitable..

 

[sharktooth]

Exactly, It will probably cover their retirements etc... Also, SWA, profits are dropping dramatically, they are scrambling to find new ways to raise the revenue (just like the rest of us) ... Fuel hedging, definitely buys you time, but that time wont last forever, It will be interesting to see their profits in 2 years... I doubt seriously that they will continue to be profitable..

I think SWA fuel hedging runs out in 2013, according to a SWA crew I went with last night.

A little heads up.

SWA does not depend on fuel hedging to the extent everyone else does. I believe if SWA did their accounting the same way other airlines do, they would be forced to post unseemly "profits".

One is dealing with an organization that owns much of what you see, has an extremely tight and efficient marketing model and has an organizational model that actually trusts the end user, the FA/agent/pilot and is, therefore, extremely efficient and inexpensive, all the while supporting the highest compensation levels in the industry. The corporate culture makes seemingly insignificant employee upgrades into something one can remember, Captain upgrades include a paid dinner, your choice of time and place, with Herb. It is those memories that build an overpowering team.

Contrast that with grossly overpaid USAirways management, cruising concoursi on electric carts looking for pilots without hats and FAs whose skirts, um, skirt the limits. The employees call them management not because those people know anything about their job, but because the word has become a synonym for incompetence. Of course, in that respect, US seems to have a lot in common with UAL.

<sigh>

 

[Bill Brasky]

Exactly, It will probably cover their retirements etc... Also, SWA, profits are dropping dramatically, they are scrambling to find new ways to raise the revenue (just like the rest of us) ... Fuel hedging, definitely buys you time, but that time wont last forever, It will be interesting to see their profits in 2 years... I doubt seriously that they will continue to be profitable..

What? The age 65 rule that virtually stopped retirements at other airlines didn't do the same at SWA? Get real. If SWA is hiring 400 this year, it is a NET GAIN of almost 400 pilots. There will be a few retirements, but not all that many.

SWA does things the SMART way. The economics of airlines is gonna change. The fare structure, fleet structure, network structure, etc. has all got to evolve in this environment.

My point earlier is that those that think that just downsizing the fleet at a merged compny is going to make a huge difference in overall airline capacity are WRONG. You have to consider that that company IS NOT operating in a vaccuum, and that other companies WILL seize opportunities for themselves. The economy WILL change and the economic formulas that airlines use to make profits WILL CHANGE as well.

 

[Low&away]

Speak for yourself. You are defeating yourself before you've even tried to stand up to management. I'm gad you're not on our side.

Try telling your story of helplessness to the UA pilots of 1985, who stood up to Ferris and won, for the good of not just United but the profession as a whole.

There IS strength in unity.

You have missed my point completely. Your reference is 23 years old. Also to your groups credit you refused to fly 747's without a defined pay rate when Wolf was there. This is now, today. I see little to no resolve when it comes to protecting the good of the profession. If the powers that be want to merge UAL/US it will happen. I know of no recent example where a collective pilot group was willing to loose there jobs on an issue of principle. I sincerely hope I am wrong.

 

[FA Mikey]

What? The age 65 rule that virtually stopped retirements at other airlines didn't do the same at SWA? Get real. If SWA is hiring 400 this year, it is a NET GAIN of almost 400 pilots. There will be a few retirements, but not all that many.

Really? You have something to back that up. or should we all just take your word for it?

 

[Bill Brasky]

Really? You have something to back that up. or should we all just take your word for it?

Don't take my word for it. Go see what SWA's fleet plans are. Then get back to me. SWA just mortgaged $600 million in airplanes, but have NOT cancelled any orders. You don't know pilots if you think that they're still gonna retire at 60, given the opportunity to continue until 65.

Here, I got this from their first quarter report:

"For 2009, we have decided to reduce our fleet growth. Prior to today's announcement, we had 28 737-700 aircraft (25 firm and three options) scheduled for delivery from Boeing in 2009. Our revised plan is to grow our fleet in 2009 by no more than 14 737-700 aircraft, which is half our previous plan, assuming no retirements, and will bring our 2009 year-over-year ASM capacity growth to two to three percent. As a result of this change, 14 aircraft deliveries (11 firm and three options) have been deferred to 2015. We have also moved 12 2010 deliveries into 2013-2015 (one option in 2013, eight options in 2014, and three options in 2015). Further, we have exercised a total of 12 options with Boeing for delivery in 2010-2012 (six firm in 2010, three firm in 2011, and three firm in 2012), bringing our firm orders for 2008 through 2015 to 125. We now have 67 options, with delivery positions available in 2010 through 2015, and 54 purchase rights for delivery through December 31, 2018 (see accompanying Revised 737-700 Delivery Schedule)."

Yea, looks like they're shrinkin' pretty fast!

 

[FWAAA]

I think SWA fuel hedging runs out in 2013, according to a SWA crew I went with last night.

Not exactly. In 2004, lotsa people looked at the WN financials and declared that their hedging program was gone by 2009. Now, a WN crew thinks it runs out in 2013.

WN has put hedges in place that go 4-5 years into the future. And each quarter, WN extends their hedging out a little further. It's very likely that in 2013, WN will have hedges that go to 2018 or so.

And about the WN accounting: WN accounts for its fuel hedges just like every other airline. Last quarter, WN would have posted a sizable net loss had it not had its advantageous hedges. Its hedging gains dwarfed its tiny quarterly profit. So without the hedging gains, huge net loss. WN has been trying to raise its revenue, with limited success.

 

[Bill Brasky]

Not exactly. In 2004, lotsa people looked at the WN financials and declared that their hedging program was gone by 2009. Now, a WN crew thinks it runs out in 2013.

WN has put hedges in place that go 4-5 years into the future. And each quarter, WN extends their hedging out a little further. It's very likely that in 2013, WN will have hedges that go to 2018 or so.

And about the WN accounting: WN accounts for its fuel hedges just like every other airline. Last quarter, WN would have posted a sizable net loss had it not had its advantageous hedges. Its hedging gains dwarfed its tiny quarterly profit. So without the hedging gains, huge net loss. WN has been trying to raise its revenue, with limited success.

Why would hedging run out? You either do it or you don't. You can hedge any time you want, the only thing that changes is the price. It's essentially a bet on a certain price point for fuel. LCC and ALL major airlines do it to some extent.

It's a tough time for ALL airlines, but they all won't go under. The smart ones will make it work. Personally, I think the LCC/UAL negotiations are an act of desperation, not solid business sense. Mergers don't happen in a vaccuum, so there's no real way to predict exactly what market forces will do when the carriers "rightsize" to make the merger happen.

Who cares whether the profit came from operations or hedging. Making money sure beats losing it every time.

The only thing for sure is, nothing happens like you think it will. The truth is stranger than fiction.

 

[EastUS]

The only thing for sure is, nothing happens like you think it will. The truth is stranger than fiction.

Fully agreed. "Interesting Times" these.

 

[sharktooth]

Not exactly. In 2004, lotsa people looked at the WN financials and declared that their hedging program was gone by 2009. Now, a WN crew thinks it runs out in 2013.

WN has put hedges in place that go 4-5 years into the future. And each quarter, WN extends their hedging out a little further. It's very likely that in 2013, WN will have hedges that go to 2018 or so.

Completely agree. A snapshot is pretty artificial and that is what I did to counter those who think the high price of fuel will kill the airlines.

And about the WN accounting: WN accounts for its fuel hedges just like every other airline. Last quarter, WN would have posted a sizable net loss had it not had its advantageous hedges. Its hedging gains dwarfed its tiny quarterly profit. So without the hedging gains, huge net loss. WN has been trying to raise its revenue, with limited success.

Well, I will have to work with you on how accounts are operated. Airlines are not, with few exceptions, mom and pop operations.

To say that a loss would occur if no hedging is rather presumptive and ignores the tremendously efficient operation at SWA. If SWA wants to show a loss, they will show a loss. If they wish to show a profit, they will. I am not saying it is easy but that SWA has the depth of operation to adopt, pretty much, whatever stance they wish, even with high fuel costs. Their Boeings seem to be more fuel efficient than US airbusi.

Those SWA calls managers, truly are.

 

[Richard]

Let me remind you folks that the creation of multiple screen names is a direct violation of the rules of the board and will be dealt with very harshly.

Also, the creation of a new screen name to skirt a suspension will result in a PERMANENT ban from the boards. Those to whom this warning applies know who you are.

We're not kidding--don't test us.

Thank you.

 

[freedom]

Let me make this explicitly clear for United’s BOD in the off chance they might be reading this thread ..

Parker needs to be the man running this operation , otherwise it will fail .

Do you want it to fail ? Do you want to lose your investments ? The choice is in YOUR hands , remember the choice you make will affect not only you , but all of the thousands of employee’s who rely on this company for their livelihood ..

 

[Iheartflying]

At first I was kinda for this merger but as time passes I hope it doesn't happen. I commute a lot on other airlines and I always end up with United crews and they tend look down their noses at us and say what does US have to offer UAL? I'm just a FA and I don't have the answer...I'm not some wallstreet analyst etc. I do know from the little that I've read that UAL isn't in the best financial situation and I keep wondering why the heck would US want to get in more debt by getting in bed with them?

Can someone tell me why UAL would be good for US? What exactly do they bring to the table besides glassware in FC and massive debt? It's nice to have the route structure that they have but if you're broke and hemorrhaging money does it really matter?
Educate me please...