Airtran At It Again!

[Speedbird]

Busdrvr:

Your statement that traffic levels are still down 25% is based on some very old data, or wishful thinking on your part. Industry traffic levels are up significantly. The FAA is making both AA & UAL reduce peak-time schedules at ORD to try head off growing air traffic delays at that airport. The following quote from the NYT is just one of many I've read in several recent articles which discuss industry trends and passenger activity:

"Robert W. Mann Jr., an airline industry consultant in Port Washington, N.Y., and a former airline marketing executive, agreed. "This summer we'll see passenger demand that will almost equal the summer of 2000," Mr. Mann said."

nwa dc-10 is right on the mark with his analysis. But as usual you're more than happy to slam it with your baseless caustic retorts. You spin pretty well for someone who doesn't fly a T-37! 😛

 

[Borescope]

You are correct...it is political. Phew.....Bush definitely doesn't want an additional 65,000 families on unemployment, right before an important election. And ATSB can't push this off until November. I bet we get the loan! and then vote him out of office 😛

I'll forward this to the White House for you.

 

[Bizman]

"Actually, no one is so important that others can't take their place."

Just curious, who is it that would take UAL's "place"? The truth is that no one COULD effectively take over the route structure.



Busdrvr,

You have the attitude like someone put in another post (all high and mighty). I'd be willing to bet that there isn't one city in the world that a person couldn't get to on another carrier. So, yes UAL could be replaced. It may inconvience some people, but it would be like a speed bump, they would get over it and never look back.

 

[Bizman]

Go back east some time and ask folks who were around when EAL tanked how that affected the economy. Ask them which major cities they lost service to, that has NEVER been replaced effectively.

Your looking at a time when we didn't have half the number of seats running around as we do today. No "major city" will lose service if you go under. There may be some smaller cities that only get 4 round trips a day verses 6 today, but I'm sure this won't drive the economy into a tailspin. On the contrary, investors in the other airlines would see their holding go up quite nicely.

BTW, why hasn't you company gone in and added flights to these "Major Cities that lost service and have NEVER been replaced effectively?" Seems to me you could make a killing if they have don't have very much competition. Maybe you wouldn't be in your current situation had you picked up the "Slack".

 

[Bear96]

Busdrvr,

I hate to break it to you, but UA could shut the doors tomorrow and in a few months no one would care except the ex-UA employees and their immediate friends and families. After a few short months of transition (which would certainly have some bumps and inconveniences), someone else will have snapped up UA's planes and start operating the profitable routes. Some routes may lose service if they are not profitable, and whatever reduction in capacity there may be will benefit the remaining carriers. Soon ex-UAL 747-400s will be zipping across the Pacific with non-union crews willing to work for peanuts who think they have it made because they don't know any better (except for the few ex-UA employees who hired on with them, which the new airline will only have hired as a last resort because of their cranky attitudes and propensity for forming unions), and at a CASM much lower than anything UA could ever have hoped to achieve. That is, unless NW and AA don't snatch them up first.

I don't remember EAL "tanking" the economy in any significant way if that is what you mean (unless of course you are referring to the people who were laid off and their personal or household "economies"). If any cities lost service, either from EAL's demise or from the post-9/11 pullback, they weren't profitable enough to sustain themselves. Do you think it is wise public policy to endlessly prop up unprofitable services with public funds? Or somehow require airlines to keep flying unprofitable routes?

I also think it is clear 9/11 was not the root of all of UA's problems. The problems really began to manifest themselves about 12 months before with the beginning of the end of the economic boom of the 1990s, exacerbated by the failure of UA's management and certain unions to recognize the seriousness of what was going on and effectively adapt to the changes. I am not trying to blame anyone; in mid-2000, no one could have been expected to recognize the seriousness of the fundamental changes that were only just beginning to manifest themselves; and certainly 9/11 made them much worse than they would otherwise have been.

The hubris of some UA employees who think we are too big / proud / legendary / whatever to fail is kinda sad. The market doesn't care about those things, and the LCCs will make sure anyone who is getting too sentimental or who refuses to deal with the realities of the current market will get a nasty wake-up call sooner or later. It's a brutal world we live in now.

Hopefully we will pull out of this relatively intact, but feelings of invincibility and putting down others who don't share the vision doesn't really help the situation and only set us up for a harder fall in the not unlikely event things get even worse.

 

[WorldTraveler]

The above responses only show that there are many people who think that the government should get out of the business of propping up failing business, despite UA employees' best efforts to convince us otherwise.

See USAToday on Friday 4/30/04 for a well done editorial (and I don't usually agree w/ the USAToday editorial staff) regarding the need for the government to get out of the business of regulating the airlines - including a statement that government financing of the airlines should be left to the private sector.

http://www.usatoday.com/news/opinion/edito...-our-view_x.htm

 

[nwa_dc10]

NWA took delivery of 25 of them since 2001. Guess the same level of idiots are running the show there....

And your point is? Just because NWA flies the same type of aircraft as UA doesn't mean their management is equally incompetent (I think most observers would agree that's hardly the case).

Yet NWA took delivery of two NEW 400's in 2002.... Hmm with nearly new modles selling for around 33% of new... Yup, they've got it figured out at NWA.... How many 747's does NWA operate (with less pac ASM's than UAL)?

Yes, NWA did take delivery of two new 747-400s in 2002, bringing their -400 fleet to 16 (as opposed to UA's 33). However, the orders for those were placed pre-9/11, and the aircraft were intended to start new nonstops to Asia from DTW. Yet with the decrease in traffic post-9/11, SARS, etc., they were instead used to replace older aircraft on existing routes. However, unlike UA, NWA isn't filling the desert with shiny, new jets they're still making lease payments on.

 

[Fly]

It's sad to see that some peoples lives can only be enhanced if they see others fail. Too bad we will be unable to make you happy, you see, we plan to make it. Last year things didn't look too well for United, now things are looking MUCH better. Too Bad, So Sad

🙄

 

[nwa_dc10]

It's sad to see that some peoples lives can only be enhanced if they see others fail. Too bad we will be unable to make you happy, you see, we plan to make it. Last year things didn't look too well for United, now things are looking MUCH better. Too Bad, So Sad

With the exception of a certain USAirways pilot, I don't think anyone on this board actually wants UAL to fail. Rather, they just want to make sure that as long as UAL does survive it doesn't drag the industry down with it.

 

[TJoe]

With the exception of a certain USAirways pilot, I don't think anyone on this board actually wants UAL to fail. Rather, they just want to make sure that as long as UAL does survive it doesn't drag the industry down with it.

You hit the nail on the head!!!

 

[Bigsky]

Rather, they just want to make sure that as long as UAL does survive it doesn't drag the industry down with it. undefined

I know this is a bit off the topic and belongs on another thread. Why did UA ALPA sign a contract that it not amendable until 2009. Did the pilots/ALPA MEC have a choice? I could understand taking dramatic paycut for a two year type of deal but until 2009!! It will be very difficult for other large ALPA carriers like NW to ask for wage increases when the soon to be signed NW contract expires in 2006.

cheers

bigsky

 

[Busdrvr]

"Yes, NWA did take delivery of two new 747-400s in 2002, bringing their -400 fleet to 16 (as opposed to UA's 33)."

UAL stopped tacking delivery LONNNNG before NWA did. NWA trying to play "catch-up"? In any case, I said 747's, NOT just 400's. NWA current owns 16 400's and 17 200's (10 of which are still on the books costing money but gathering dust....) Hmmm, 33 vs 33.... I guess the only dif is UAL is actually using all of it's 400's now. Of course the reason UAL has so many is that the launch customer (the company with the oldest most cramped 400's) was having severe financial diff's in the 90's that the STATE of MINN had to bail them out of with a loan, and couldn't take delivery of, so UAL got a deal on them. I see your rebuttals fail to acknowledge the roll of THE GOVERNMENT in NWA's survival, even going so far as to "renegotiate a lower interest rate and terms (at tax payer expense....) to "help" NWA through the post 911 crisis.

But since you are so enamored with UAL's 400's, it should be pointed out that UAL flew 45% MORE international RPM's (and took back substantial Pacific market share) than NWA in Mar, so they NEED more big iron. UAL's Pac market is also more DIRECT flights than NWA, so UAL can't put an A320 on a Hong Kong run.

Back to the "paying for parked jets" game. FWIW, UAL ISN'T paying for most of them, OTOH DYK that as of Jan 1, NWA had 4 757's, 4 A320's, 2 DC-10's, and 10 747-200's "temporarily" parked? That means they were STILL being paid for. Parking A320's when you have more coming in from the factory, now that just sounds silly.... But congrats, NWA has been one of the last customers for at least 2 jets, the 757 and the 747. Says something when you are among the last folks willing to buy a certain fleet type. What does everybody else know that NWA doesn't?

 

[Busdrvr]

"I know this is a bit off the topic and belongs on another thread. Why did UA ALPA sign a contract that it not amendable until 2009. Did the pilots/ALPA MEC have a choice? I could understand taking dramatic paycut for a two year type of deal but until 2009!! It will be very difficult for other large ALPA carriers like NW to ask for wage increases when the soon to be signed NW contract expires in 2006."

Those were the non-negotiable terms demanded by management under threat of having the current contract voided and another (with even worse terms) unilaterally cramed done their throats under the umbrella of BK. If you've ever actually read an annual report, you'd see that ALL the unions have the same ammendable date. As to making it "tough for NWA" to get a good contract, do you think maybe one of the reasons UAL's unions had to agree to these contracts was the actions of other groups like NWA? Do you think NWA ammending it's pilot contract with significantly LOWER rates than UAL's might have actually pulled the rug out from under UAL's pilots? Do you think the level of outsourcing allowed by NWA AMFA might have had something to do with UAL gooing after it's mechanics.

"Rather, they just want to make sure that as long as UAL does survive it doesn't drag the industry down with it."

You got a lot of Nerve DC-10. :angry: UAL got drug to this BY NWA, CAL, AND AMR. UAL wanted and got pay rates that (when TOTAL contract costs are considered) MATCHED the ones set by the afore mentioned groups. Then to top it off, when UAL agreed to pay rates and benefits HIGHER than those groups, with the help of a loan, YOUR CEO's with YOUR APPROVAL launched a lobbying effort to stop it.. Do you think that some of UAL's market share in the hands of an even lower paying company would be good or bad? What a disgusting and uninformed thing to even insinuate.

 

[Busdrvr]

Your looking at a time when we didn't have half the number of seats running around as we do today. No "major city" will lose service if you go under. There may be some smaller cities that only get 4 round trips a day verses 6 today, but I'm sure this won't drive the economy into a tailspin. On the contrary, investors in the other airlines would see their holding go up quite nicely.

BTW, why hasn't you company gone in and added flights to these "Major Cities that lost service and have NEVER been replaced effectively?" Seems to me you could make a killing if they have don't have very much competition. Maybe you wouldn't be in your current situation had you picked up the "Slack".

RTFP Biz, I said "to major cities".

Let's look at DEN. Lets pretend UAL went away. How quick do tyou think somebody else would come in (considering the VERY high costs)? Do you think just one airline would come in offering identical service (despite no one else having the assets top pull it off, and even if there was a "purchase", ask STL how that works....")? Or do you think all the majors would drastically bump up service to their hubs? UAL is the sole provider of service to many small markets from DEN. The only thing that makes all this service possible is "S-curve" economics. Additional service adds an incrementally higher level of revenue than it normally would have. IOW, Without DEN-ICT, DEN-ELP would result in less revenue, and likely NOT meet the threshold at which it's profitable. Some cities simply WOULD'T work meet the revenue threshold and LOSE service to the DEN markets. Lets pretend you own a business in a smaller city that only UAL serves. You get 20% of your business from the Front Range. You RELY on UAL to carry you product. UAL tanks. Lets even pretend that AMR will eventually add back that service. How long can your business survive until they do? Do you move your business and it's JOBS to the big city? What does that do to the economy of that small city?

UAL is NOT perfect, and quite frankly, I don't se myself ever flying there again. The pay is too low and the work rules are BRUTAL. There are apparently loads of monkey's, who meet the minimums to be deemed qualified to fly you loved ones (despite being nowhere near the experience and training level of a major airline pilot 4 years ago) who are willing to do it for Taco Bell wages. I DO want to see UAL overcome this SHORT TERM crisis. And I DO see UAL, NWA, AMR, DAL, and U all contributing something positive to the communities it serves that will NOT be duplicated fully if they go away. JMHO.

 

[Busdrvr]

"Your statement that traffic levels are still down 25% is based on some very old data, or wishful thinking on your part. Industry traffic levels are up significantly. The FAA is making both AA & UAL reduce peak-time schedules at ORD to try head off growing air traffic delays at that airport. The following quote from the NYT is just one of many I've read in several recent articles which discuss industry trends and passenger activity:

"Robert W. Mann Jr., an airline industry consultant in Port Washington, N.Y., and a former airline marketing executive, agreed. "This summer we'll see passenger demand that will almost equal the summer of 2000," Mr. Mann said.""

OK, I'll make a deal with you then. UAL wants the loan to give themselves liquidity, not to have money to "bleed" for the next ten years. Two choices

a. offer a line of credit that gives them the same liquidity they had on 910 (4.3 Billion)

b. Since traffic will be "recovered" by this summer, and you contend UAL had problems before, take the lose for the entire year PRIOR to 911 (all of which was under the "new" pilot contract), and was for the most part the entire pre 911 aviation recession (ie, the worst days UAL could have expected to see). Take that annual loss, and subtract it from the annual losses at UAL from 911 til you say traffic has "recovered" (and even subtract post 911 government grants) and loan UAL that amount.

Fair enough?