Cal About To Collapse...

[wwiiairliner]

Now, how long before Continental declares CH11?


http://biz.yahoo.com/prnews/040518/datu066_1.html

 

[coolflyingfool]

Well, I certainly hope not. CAL is my preferred airline to Hawaii and New York. I think they can pull through. They have looked to be pre-emptive so far, so I hope that continues. Best of luck. Just my thoughts........

 

[johnnyfleet]

I wonder what kind of wage and benefit concessions Gordon is talking about

 

[lpbrian]

BOHICA!

 

[LaBradford22]

Interesting. Bethune had been emphatic for a long time that he would NOT ask for concessions. I wonder what caused him to finally cave...

 

[C54Capt]

Maybe some posturing going on, on the eve of the ATSB decision on UA's loan application. The industry picture may not be as rosy as Glen Tilton is leading on.

 

[funguy2]

With $1.5B to $1.6B in unrestricted cash, a stake in ExpressJet which can be sold, and one of the lowest CASM's in the "legacy" category, and the most comprehensive NYC area hub, I think CAL will find a non-BK way to survive. My guess is that with AMR and UAL's costs coming down to CAL levels, CAL needs to lower costs to stay ahead of them and ensure they are a legacy survivor. Also, didn't CAL announce that Bethune would retire soon? Nothing like making your retiring CEO be the bad guy so the "new" management that steps in can be the "saviors".

 

[NewHampshire Black Bears]

I wonder what kind of wage and benefit concessions Gordon is talking about

This may turn out to be ANOTHER(possible) scenario(like DL) where the CO ramp, and agents will wish they had (years ago) voted in the union, to soften the "concession blow" $$$$$.

NH/BB's

 

[FWAAA]

This may turn out to be ANOTHER(possible) scenario(like DL) where the CO ramp, and agents will wish they had (years ago) voted in the union, to soften the "concession blow" $$$$$.

NH/BB's

Bears: You and LiveInAHotel keep saying this, but realistically, how, exactly, did the TWU, APFA and APA "protect" the AA employees from concessions or soften the blow?

Beyond that, how, exactly, did the unions at US and UA "cushion" the blow of concessions at those carriers?

Many AA mechanics, of course, think that the concessions would have gone differently at AA had the AMFA been representing them (instead of the TWU). But since all unionized employees at the 3 airlines named above took it on the chin in the last 2 years (not to mention the CO experience of 10-15 years ago), how can you keep claiming that unions are the great savior? History has shown they are not.

Each work group thinks their union sucks (and that's why they suffer concessions). But since all airline unions seem to suck when it comes to concessions, it can't be just one or two bad unions. Face it, unions are impotent when the employer is running out of cash.

I'm not anti-union. I'm just a realist (pragmatist) when it comes to bankrupt (or nearly bankrupt) companies.

Enjoy the retirement. B)

 

[Bear96]

Beyond that, how, exactly, did the unions at US and UA "cushion" the blow of concessions at those carriers?

Well, speaking just from the point of view of a UA F/A, I can tell you that without the work of my union, our concession hit would have been much much worse.

At the very least, union input is important if management is seeking a certain dollar amount in givebacks. If a union cannot actually negotiate to reduce that figure, at least they would be more sensitive than management would be as to where to get the most savings with the least amount of pain. For example, management might impose a 5% pay cut across the board and drastic work rule changes. A union might realize work rules are very important, and suggest a 6 or 7% pay cut but keep most work rules intact, giving the same net savings to management but at a less painful sacrifice. (Or vice versa-- that was just an example.)

 

[JetClipper]

Many AA mechanics, of course, think that the concessions would have gone differently at AA had the AMFA been representing them (instead of the TWU).

And they're probably right. AMFA would have stonewalled, AA declared Chapter 11, and the mechanics taken an even bigger hit.

Unfortunately, I suspect that's where NWA is headed, too.

 

[JAMAKE1]

FWAAA:

Just to expand on what Bear96 said; The value of having a union is that there is some leverage on the part of the employees. For me, I think the importance of being represented by a union became especially valuable when United entered Chapter 11. Yes, we had to give concessions, but through the collective baragaining process, the union negotiators were able to influence where the cutbacks would occur.

I am by no means a cheerleader for unions but having worked for a non-union airline at one point in my career, I have come to realize that they are necessary within this industry since our labor laws fall under the National Railway Act and not OSHA, like most American workers. Unfortunately, FAA guidelines for flight time and duty regulations and minimum rest requirements are vastly inferior to guidelines in other industrialized nations. They are minimal but serve as a platform in which to build from in the collective bargaining process.

I strongly believe that our workrules would have been gutted had it not been for the fact that we had some negotiating leverage at the concessions table. I was actully amazed at how well our AFA negotiators managed to soften the blow. In spite some work rule changes, cuts in hourly base pay rates, and more expensive medical premiums, we mangaged to keep 5 paid holidays (down from 10) and the majority of our work rules and duty rigs. I am really grateful to have had representation through this process.

 

[cob777200]

I find it amazing that Continental would ask for furloughs at this time since the pilot force is way understaffed right now. I can only see them reducing service to accomodate this endevour.

 

[Whadayano]

"Also, didn't CAL announce that Bethune would retire soon? Nothing like making your retiring CEO be the bad guy so the "new" management that steps in can be the "saviors". "

I don't know, maybe he feels free to mention some hard truths. If fares don't go up (and looks to me that they're still going down year-year, overall), and fuel stays nicely north of $30, none of the "legacy" carriers will make money. Then it becomes a contest of attrition. Who has the most resources, biggest cash flow (least deficit)? It's not Continental, unless it goes back into bk, which no one wants. Delta in bankruptcy would be formidable, UA will be tougher post bk, and AMR will be quite tough, with costs recently lower than Continental's. There are no unpledged assets or hidden assets at CAL, once the rest of Express is sold. It will take time, but then the Titanic didn't sink in a second, either. I don't mean to be alarmist, but if LUV and Jetblue keep fares down and everyone keeps matching, something has to give. OK USAir will probaly be the first to go Ch 7, but that will take time and how much money does CAL want to bleed in the meantime?