What do we do Now?

[Meriel]

Admittedly, I''m not particularly familiar with this model Embrarer or that model Embrarer, which is probably something shared with the general public. All I know is that I flew SOMETHING with "Embrarer" listed as equipment to St. Louis last week and while the flight crew performed in the professional, courteous manner we''d all of us expect from our company and its affiliates -- it was the most uncomfortable flight I''ve ever taken in my life. So uncomfortable that I popped $100 to American for an ID-90 to fly a "big plane" back home.

I sure hope the planes y''all are talking about are more comfortable than whatever the heck that thing was I flew in, because if I won''t even fly them for FREE, you can bet there are loads of folks out there who won''t pay.

::sighs::

 

[ClueByFour]

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On 6/12/2003 10:06:29 PM Chip Munn wrote:

In March 2002 US had slipped from its traditional top spot to about a 93 to 94% revenue disadvantage, but now has a revenue premium. Furthermore, the company is now focusing on major initiatives to boost its revenue advantage (which is necessary to cover its higher than average unit costs) by focusing on big airline revenues, with a more modest route network. This will be accomplished with code sharing, RJs, East Coast focus city/airport dominance (BOS, LGA, & DCA), and its Corporate Travel Department.
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Chip, I must disagree with most of this particular statement, partiuclarly on the "how" front.

US has done nothing, and I do mean _nothing_ since Seigel took over to increase revenue. Zero. In point of fact, there have been:

1. Severe pullbacks in major cities. I believe DL is now the #1 carrier out of BOS, or soon will be, for instance. US won''t get anymore slots at DCA despite Dave''s Dangerfield routine. Heck, even in the bastard child hub (PIT), you see major yield erosion with HP''s success and now ATA coming to town.

2. This will lead an already ineffective corporate travel department to be unable to compete. Between the enourmous bad blood generated by Ben Baldanza last year (and the equally callous "demands" from US'' corporate travel folks during the BK process), many large and medium businesses have given US the boot as a preferred or recommended carrier (I have seen at least $1 million alone in PIT originated corporate travel leave US for this very reason). To suggest that jamming folks onto RJs on an already shrinking route network will allow dominance is laughable. Doing things like pulling the PIT international service, despite their force as a "negotiation" tactic, royally irk the corporate travel customers who basically justify the service (peek into the Envoy cabin on your next PIT-FRA flight and take a census--that particular corporation is now in talks with UA for it''s corporate travel needs). People can, will, and have been cutting deals with UA, AA, DL, CO, and NW because they all offer a superior route network and unlike Ben and Dave do not publically profess to want to continue to screw the corporate customer.

Corporate travel departments don''t want to have their customers have any more lumps in their travel experience. A "modest route network" and "code sharing" and lack of meaningful point to point service from major cities will only serve to make this problem worse. Combine that with the absolute arrogance on the part of the US corporate travel folks, and you have a losing combination.

This, BTW, is all before you consider the impact of the LCCs, whose presense has grown tenfold in the minds of corporate travel arrangers in the last 5 years.

 

[kiloromeo]

No need to worry...the real battle for the east coast will be between SWA and Jblue...US airways isn''t in the game. They will go into Bankruptcy 2 then 3 just like TWA.

 

[Diesel8]

Piney, I think you took that comment a little too serious

Oh, btw, people have been saying nay when it comes to jetBlue for three years now, proud to say, we are still here

 

[PITbull]

Clue,

I believe you have brought "light" to some major points with the lack of initiatives and "over sights" by our CEO thus far.

With everything we have in place to succeed, I see no movment upward or even plateuing. We are the first to successfully emerge from BK, have an ATSB approval, $2 Billion in cost cutting, and major infusions of "free" money from another bail out from the gov., RSA monies,GE Capital moneis, alliances galore...and what? Nothing positive that the CEO will publically admit.

They are either the "masters of deception" cause they just want more, OR they are just "clue less" (no pun) on how to make a surviving airline go from good to possibly great.

 

[USA320Pilot]

Chock, Daedalus, & Clue:


With all due respect, I disagree with your assesment. Furthermore, it appears the ATSB, GECAS, BOA, Fitch Rating, S&P, and RSA disagree as well, otherwise why would these business entities either have provided US with significant liquidity, backed loans, or provided US with a top tier credit rating?

For example, S&P just released its mature carrier credit ratings, which are listed below:


Airline 9/10/01 4/15/03

AA BBB- CCC
UA BB+ D
DL BBB- BB-
NW BB B+
CO BB B
US B B

Chock, Daedalus, & Clue, according to S&P US has the third highest hub and spoke carrier industry credit rating, behind DL & NW. Furthermore, the company had about $2 billion in liquidity on May 16 after the federal aid payment.

Can you tell me why S&P has provided US with a top tier mature carrier credit rating and the financial institutions above have "put their money where their mouth is", if US is a risk?

Best regards,

Chip

 

[ClueByFour]

Chip,

Of the parties you mention, GE and RSA loaned US DIP money, basically to ensure that upon liquidation they would get paid first. You will note that pre-Chapter 11, these two entities were owed rather large sums of money--loaning US money ensureds that they will be first in line get get paid if things fall thru. Outside of Chapter 11, nobody would have granted US credit--one of the big reasons for the original filing, no? As for the post Chapter 11 credit ratings, it stands to reason that US is behind DL and NW (who had more cash and less stupidity post 9/11) and in front of UA who is in BK and AA who just avoided it. Also, it''s not a good sign that fresh from Chapter 11, US'' credit rating is only on par with CO--who mortgaged anything the banks would take long before 9/11.

However, I''d suggest that we are running in circles here. You implied that US is starting to "focusing on big airline revenues, with a more modest route network." My issue was with that statement, not the likelihood that existing creditors whose best chance to get paid one way or the other is to loan US capital.

I''ve seen nothing to suggest that Seigel and the marketing team want to generate the revenue of a big airline. They are, in fact, driving large enterprise and corporate revenue away.

 

[USFlyer]

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On 6/14/2003 318 PM ClueByFour wrote:

I''ve seen nothing to suggest that Seigel and the marketing team want to generate the revenue of a big airline. They are, in fact, driving large enterprise and corporate revenue away.

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Excuse me? UA codeshare, LH codeshare, Star Alliance, RJ order, GoCaribbean, etc.?! Also, those were Siegel''s words himself, not Chip''s. He said that in a speech just this past week.

 

[PITbull]

Bob,

Well, at least you should have waited for my rsponse...instead you aswered yourself.

In short, if I were Seigel with his track record...I would look to find the best marketing experts (just like he did BK attornies) and learn how to run a damn airline and increase revenue.

As far as putting ones self in the other ones place, its hard to do that when the other person continues to make statments that are disingenuous, dishonest, and only operates in an arena where "bad faith" RULES THE DAY.

Clue,

Again, I agree with your latest post above.

 

[USFlyer]

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On 6/14/2003 418 PM PITbull wrote:

In short, if I were Seigel with his track record...I would look to find the best marketing experts (just like he did BK attornies) and learn how to run a damn airline and increase revenue.

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As I stated above, US already has been doing quite a bit to attempt to increase revenue. The environment is tough -- it''s not going to suddenly increase overnight!

Besides, I can see it now. If Dave hires some more senior management and/or outside consultants, people here would be screaming about the costs involved.

 

[Busdrvr]

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On 6/14/2003 1:08:59 AM Chip Munn wrote:


With all due respect, I disagree with your assesment. Furthermore, it appears the ATSB, GECAS, BOA, Fitch Rating, S&P, and RSA disagree as well, otherwise why would these business entities either have provided US with significant liquidity, backed loans, or provided US with a top tier credit rating?

For example, S&P just released its mature carrier credit ratings, which are listed below:

9/10/01 4/15/03
UA BB+ D
NW BB B+
CO BB B


It appears they've been wrong before (like less than 2 years ago)

"Chock, Daedalus, & Clue, according to S&P US has the third highest hub and spoke carrier industry credit rating, behind DL & NW. Furthermore, the company had about $2 billion in liquidity on May 16 after the federal aid payment."


Which means there is plenty of time for downgrades before you run out of cash. S&P also realizes that DAL, NWA, and CAL can and WOULD file BK if they found it benefitual. U on the other hand would likely sell just about anything and everything to avoid a return trip.

"Can you tell me why S&P has provided US with a top tier mature carrier credit rating and the financial institutions above have "put their money where their mouth is", if US is a risk? "

U's credit rating is below UAL's prior to Sept 11, yet 1 1/2 years later UAL was/is BK. A B credit rating is like being the cutest puppy in a very ugly litter.





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[PITbull]

US,

This is what has been proven by our CEO in just one year...

a) His statements are disingenuous, and often down right dishonest. I can cite instances, starting with my labor group and working out to others.
B) He has proven to not be a man of his word. He made statements earlier last year that his mangement would "respect" labor and all employees or they wouldn't work here.
c)He has proven that he views labor as a liability, and mangement as an Asset to the company.
d)And, he is not a team player with an employee team concept. The only team he ever refers to is HIS mangement team.

And, this company WILL MAKE MONEY IN THE NEAR FUTURE.But, it is not his leadership and TEAM that made it happen, it will be Labor that makes it happen, inspite of this mangement. Hopefully, he won't keep opening his mouth and piss off the public, local and state officials of not just PA but everywhere, with his arrogance.

 

[USFlyer]

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On 6/14/2003 6:53:47 PM PITbull wrote:

Don''t say how difficult it is in this environment, when other airlines ARE making a profit, and didn''t have the advantage of screwing the stock holders, lease holders, vendors, and emplyees that U had. Nor do they have the liquidity from an ATSB Guarantee.

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Look at the airlines making a profit: WN, AirTran, jetBlue, etc. You cannot possibly turn a corporation the size of US into one of those types of carriers overnight. Find me one hub-and-spoke carrier that is actually turning a consistent profit and we''ll talk. 🙂

Seriously, though, those other airlines you mention have been well managed from the start. US has not had good management for many years, so it will take time to correct this. It''s easy to cut costs (the company I work for did the same) but rebuilding revenue is hard (ditto with the company I work for).

Also, for what it''s worth, rumor is there is a major reorg coming to CCY. Siegel said he is not done rebuilding this company, so let''s not assume CCY will remain as is! We really need to look at US 2-3 years down the road and see what Siegel has done. He hasn''t been around long enough to begin saying he''s incapable of running an airline.

 

[PITbull]

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On 6/14/2003 502 PM USFlyer wrote:

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On 6/14/2003 418 PM PITbull wrote:

In short, if I were Seigel with his track record...I would look to find the best marketing experts (just like he did BK attornies) and learn how to run a damn airline and increase revenue.

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As I stated above, US already has been doing quite a bit to attempt to increase revenue. The environment is tough -- it's not going to suddenly increase overnight!

Besides, I can see it now. If Dave hires some more senior management and/or outside consultants, people here would be screaming about the costs involved.

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US,

Now don't start falling in love with me or anything when I say this, but if you have been following my threads for the past 6 months, you know what I meant above is..."GET RID OF SOME OF THOSE DEAD WIEGHT, GOOD FOR ABSOLUTELY NOTHING MANGEMENT" brought in, and REPLACE them with the top notch folks that are out there (pay them better) and go make money, already. Would you like me to name who to get rid of????

Don't say how difficult it is in this environment, when other airlines ARE making a profit, and didn't have the advantage of screwing the stock holders, lease holders, vendors, and emplyees that U had. Nor do they have the liquidity from an ATSB Guarantee.

 

[USFlyer]

PITbull,

I hear you! But, just as Siegel put a gun to labor''s head, he had one being put to his head by creditors, investors, etc. If he had not gone back on his word, it''s VERY possible U would not be here today and all 30,000 people would be unemployed. It''s very easy for us to sit here on a message board and criticize, but, let''s be honest, we really don''t know what goes on at the Siegel/BOD level. For every piece of rumor and/or detail we hear about, there are probably dozens of tidbits we don''t hear about!