United Looking At Home Stretch

[FWAAA]

"Since filing for Chapter 11 bankruptcy protection in December 2002, United has wrangled about $5 billion in annual cost cuts through wage and benefit reductions and a host of operational changes, including the creation last year of a new low-cost carrier called Ted.

The moves helped United - a unit of Chicago-based UAL Corp. - shift from a $2.8 billion loss in 2003 to a $1.6 billion loss last year.

Although that marks a significant financial improvement, the airline remains a long way from profitability."
If we look at these amounts of savings, it appears that they will need at least $5 Billion more in annual cost cuts through wage and benefit reductions and a host of operational changes to just break even. BOHICA

[post="261767"][/post]​

Exactly. $5 billion in cuts yet the loss shrunk by a piddly $800 million? Added fuel expense didn't account for the other $4.2 billion, so where did it go?

Oh, yeah, revenue has plunged over the same timeframe as well. B)

 

[kcabpilot]

SWA is an example of employees making less and working significantly harder...

[post="261745"][/post]​

Really? Since when does a Southwest mechanic make less than a UAL mechanic.? Last time I checked they were making significantly more. And where do you get off saying they work 'significantly harder'? Really?, care to enlighten us on how you've determined that?

There are some glaring differences between SWA and UAL. If you were to really look at them you'd realize that frontline labor costs are not the problem. It's only when a pervertedly bloated management structure with equally perverted compensation and bonus levels gets figured in with 'labor costs' that it all goes to shiit.

Maybe UAL will survive in one way or another but the FIRST thing that has to happen is to END the exclusivity rights of the current management team and send them packing. There are no guarantees that what will happen after that will be pretty for any of us but I'd be satasfied just to move on. This current situation is rediculous.

 

[Busdrvr]

Really? Since when does a Southwest mechanic make less than a UAL mechanic.? Last time I checked they were making significantly more. And where do you get off saying they work 'significantly harder'? Really?, care to enlighten us on how you've determined that?

It's all about "productivity".

Simply put, the SWA agreed top have less mechanics to man the airline. They agreed to significantly more outsourcing. They agreed to no A-plan. They agreed to no D&R. If I have 5 mechanics accomplishing the same amount of 'work', ie PRODUCTIVITY, than 10 mechanics somewhere else, then even if the mechanic's make a little more in W-2 wages, from the companies perspective, I've got cheap labor. Same goes for every workgroup. It ain't about what guys used to get paid per hour to play hearts between banks, or what I got paid to deadhead to a layover followed by a 1 hour hop home (6 hours), it's about what You and I and everyone else costs per flight hour. how that is 'divied up' is what you have a problem with.

Maybe UAL will survive in one way or another but the FIRST thing that has to happen is to END the exclusivity rights of the current management team and send them packing.

Do you know anybody chomping on the bit to take over? anybody, who someone with money to loan us, thinks would be better? If you put up 2 billion in exit financing, they'll let you pick the boss. Got your checkbook?

There are some glaring differences between SWA and UAL. If you were to really look at them you'd realize that frontline labor costs are not the problem. It's only when a pervertedly bloated management structure with equally perverted compensation and bonus levels gets figured in with 'labor costs' that it all goes to shiit.

so what you're saying is that if we had the same numebr of non-union management types per ASM, making the same green as SWA, we'd rule the world? Doubtful. From a practical standpoint, that's EASY to fix, and if it were that easy, you'd see SWA out trying to buy us up so they could fire management, the watch the money roll in. sounds good though...

 

[kcabpilot]

It may be about productivity bus but I've got news for you - UAL doesn't have five mechanics doing the equivalent work of one SW mech. We don't do R&D or HMV's or any of that other stuff. We only do a couple of light C-checks outside of line maint. One difference is that we spend the first day of a check robbing parts off the inbound to replace the ones that were robbed off the outbound when it came in. If you want to lay that 'productivity' hit on us - up yours pal.

 

[Borescope]

Bus is right it's the productivity. If you read his post he didn't say there were 5 UA wrench turners for every 1 at WN. He was just using and example of 10 to 5 workers. The problem isn't your fault though, it's that the union is a business also and when they lose jobs they lose revenue. I'm sure that the union would accept less jobs thru increased productivity as long as they could increase our dues to make up the short fall in revenue they get. <_<

 

[Busdrvr]

Bus is right it's the productivity. If you read his post he didn't say there were 5 UA wrench turners for every 1 at WN. He was just using and example of 10 to 5 workers. The problem isn't your fault though, it's that the union is a business also and when they lose jobs they lose revenue. I'm sure that the union would accept less jobs thru increased productivity as long as they could increase our dues to make up the short fall in revenue they get. <_<

[post="261831"][/post]​

Thanks Scope.
Cab, it's not our "fault". It's economic reality. The airline was built around the old rules. At places like SWA, there were no rules. At what point in our history should we have said "hey fella's, I know we hired you under the way things used to be, but now that SWA is here, half of you need to get your things and leave". It's been a paradigm shift. Who's fault is it? Is it the Union's for trying to provide as many good jobs as possible? Is it SWA's for trying to make as much money as possible? I'm not here telling you which way is right (I prefer the old way), just that economic realities have changes the game. In truth, you guys may already be there when it comes to productivity, but you weren't 5 years ago. We'll see when we exit BK and fuel costs equalize.

 

[Bigsky]

The most significant rule breaker at Southwest has been the management/employee relationship. Treat people well and they'll work hard for you. Traditionally not something you would see at a legacy carrier especially UA or NW(probably the worst).

 

[JungleClone]

Everyone needs to take a step back and come to grips with what is happening here. The price of oil is not sustainable for anyone. And it's not going to come down in price. It is only going to keep going up. That's because peak oil production is upon us. The rate of discovery of new oil fields and production of same cannot keep pace with the continued increase in consumption. It's only going to get worse as the economies of India and China demand more and more oil.

This means that what we've gone through in the last 5 years is only the BEGINNING. It's going to get a lot worse for EVERY U.S. airline out of sheer necessity of survival. United is going to be forced to make changes that are dramatic even when you consider the changes we've made in Chapter 11 already. We're going to see some radical changes. Things that would have seemed unimagineable and far-fetched a few years ago are going to become quite possible. The much-talked about industry shakeout is going to happen. There is absolutely no alternative. Given the continued surplus of capacity in the U.S. market and the continued downward pressure on fares, there isn't an airline that can sustain for the long haul with oil prices at current levels, let alone higher levels.

Things are going to get a whole lot uglier before we see any realistic light at the end of the tunnel. My advice to anyone out there is that if you have a shred of opportunity to leave this industry and better your situation for the long-term, you should seriously consider doing it. None of us has even begun to see the worst yet. But make no mistake. It's coming. Faster than any of us would like.