My last plea for cooler heads to prevail.

atabuy

Senior
Oct 13, 2002
419
0
Once again we are forced to make a decision which will affect our future in ways we cannot even imagine.
We are being asked once again to trust a management that has not had a good track record for trust worthyness.
There are many issues before us; AMFA, parity, concessions, trust, respect for one another, frustration, leadership, and many more, which put a big emotional equation into our decisions.
My decision is based on my life circumstances just like all of yours are based on your own self interests.
I just hope your decision is based on reasons and not just emotion.
I will vote yes because I think BK gives us the worst chance of ever having the opportunity to help to change this culture.
I am putting my faith and trust in someone who could be the leader we have been seaching for, Mr. Tilton.
Ual will survive BK but you might not like what you see when this happens.
I think I would rather try now and if the loan is not approved, go from that point, then just put a gun to my head now.
Good luck to us all.
 

UAL777flyer

Veteran
Aug 20, 2002
730
0
atabuy said: Ual will survive BK but you might not like what you see when this happens.

I don't think you realize how true those comments really are. Bankruptcy for UA will be downright ugly for all involved, including changes that may be downright shocking.
 
U

UAL24

Guest
UAL will not survive bankruptcy. Bush won't let us and Labor won't put up with the devastation the creditor committee will lay upon us under the authority of the judge. Amercican will threaten it might have to file after we do and Bush will insist that the government must step in to stabilize the industry and AA. UAL will die with a rejected application on the table and AA will get our loan without ever having applied.
 

novaqt

Senior
Aug 20, 2002
488
0
Atabuy:

I agree with you and also intend to support the concession package for D141. Do I like what has brought us to this point? No, however, I am smart enough to know that going into bankruptcy court will result in far worse ramifications for all of us. Like I said before, I like what I see so far in Mr. Tilton's razor-sharp leadership. He has been working 7 days a week working to keep us out of Bankruptcy court. If I was a vendor that United owes money to, I would want to work out a favorable payment schedule for the repayment of United's loan obligations and get paid rather than a court order establishing a much lower repayment schedule. Attorney's fees are also involved with a court case and we all know what their fees are like. What our competitors have been engaging in by doing all possible to lobby the ATSB to deny the loan guarantee is disgraceful and disgusting vulture-like behavior on their part.
 

GGpillow

Advanced
Aug 19, 2002
103
0
www.usaviation.com
I myself am a yes vote. I have met so many of my co workers that are a no vote though, that it makes me think this will not pass. I really wish the company would put out some facts about ch 11 and what it really is. Far to many of my co-workers think in ch 11 a bk judge will be the granfatherly figure, who wouldn't dream of taking poor CS's vacation away. Or that he will selectively adjust items in contracts. Or that he will compare contracts against the pilots and give them 80% of the damage and leave other groups unscathed. If they only knew. If they had some idea of what will REALLY happen in ch 11 they would rethink their positions. Nobody is putting these facts out though. Neither the IAM or WHQ.
 

oldpilot

Newbie
Aug 22, 2002
14
0
I too believe BR would be a disaster for us all. Doesnt matter where you work! From what I read in the news, the betting is our chance of ATSB apporval is 50/50. I also read the IAM is worried that 141M will vote no and dictate BR and they are trying to convice the mechs it in their best interest to vote yes. Unfortunately the ATSB charter is to not bail out a failing airline, but to save one that has a viable business plan that will actually pay back any loans without the goverment footing the bill.Have you seen any business plan yet?

I suspect what is going to happen is the ATSB will approve our application but with some onerous conditions. It will then be up to the company/unions to agree or declare BR.

There is a lot of pressure to approve and a lot of pressure to disapprove our application. Most of the disapproval pressure is coming from our competition. there is even a rumor going around that the AA pilots are trying to exert pressure on the board to disapporve our application.

We all need to keep our fingers crossed and hope for the best no matter what the ATSB does.
 

Bob Owens

Veteran
Sep 9, 2002
14,274
6,112
Who says that if UAL declares C-11 that it will automatically be the end of United? Did anyone ever hear of an Airline called Continental? I think they did it twice. The first time their contracts were abrogated but the law was changed afterwards.
A five and a half year concessionary deal, given the history of this industry is excessive and unreasonable. In order to abrogate the contract the company must show that it has attempted to negotiate with the unions and made a reasonable offer. They have not negotiated, they dictated. During the two previous downturns since deregulation the airlines quickly recovered to the point that within a few years of their worst ever years they had better than ever years.
I agree that cool heads should prevail. Look at the history of the industry. Look at the worst case scenario as just that, the worst possible case, not as a certainty, there are several less horrible outcomes that are much more likely to occur. Vote NO because a lot can happen before 2008 and you would hate to have to live with a bad deal for the next 6 years. We have already been working under concessionary contracts for two decades. Air-Con has done an outstanding job at keeping wages down. Now they are trying to exploit the poor economy (which is not really that bad; 5.5% unemployment) and Sept 11 andcause you as much fear as possible. Vote No because even if United does go chapter 11 your pay and contract will remain as is. If the Judge abrogates it you are free to strike. The government has already said that due to the economy that a strike would not be permitted. In order to keep you working, under the RLA the status quo must be maintained. There is no precident under law where the government can force you back to work under any other condition. The longer this is dragged out the more likely it is that the economy, and with it the airline will start to recover.
Doesnt it strike anyone strange that the airlines are doing the same thing they did in the early nineties, and eighties?
 

wts54

Senior
Sep 16, 2002
374
0
www.usaviation.com
There several additional areas of risk that need to be considered by the ATSB and Congress, who authorized the ATSB.

1. It is pure myth that in bankruptcy United would be able to simply nullify labor contracts and pay employees wages and benefits it deemed competitive. There is not a single case of where there was labor – management animosity during a period of bankruptcy where the airline survived (e.g. Eastern Airlines). Management would have to enter into a negotiation process with each of its labor groups.

2. United could expect an immediate loss of revenue of 10% to 15% from leisure and business travelers booking away. These travelers would come to know that unlike in the past, competing airlines would not likely honor their tickets were United to fail because of these airlines’ own financial problems. Additional revenue erosion would also likely occur as corporate incentive meetings and national conventions book away because large deposits are usually required upon signing contracts for such group movements.

3. Whether financial restructuring happens outside or inside bankruptcy protection, the same order of magnitude of borrowing would be necessary to stabilize the firm, i.e. $2 billion. There is no guarantee that United would be able to secure such lending. Indeed, once in bankruptcy, US Airways was unable to interest a single lending institution in participating in a loan.

4. United should not want to exploit its creditors under Chapter 11 as such a practice would limit United’s access to capital markets for years while driving up its long-term cost of funds.

5. United would be ceding significant control to a bankruptcy Judge whose job would be to balance competing stakeholders’ interests. The enterprise would surely change but in uncontrollable and unforeseeable ways. For example, would United exit bankruptcy without its Pacific or Atlantic routes, or with or without its wide-body jets?

6. A United bankruptcy would put airport services at risk at some of the country's busiest airports including Chicago, Denver, San Francisco and Los Angeles. United provides substantial portions of the operating revenues and capital budgets for those airports through landing fees, project expenditures and bond issues. Were United to default on those obligations, airports would likely curtail services.

7. The prospect of United and American operating under court protection raises the serious problem of defaults on airport bond payments. A collapse of the airline bond market would impact millions of individual investors who participate in these bond funds as part of their retirement planning.

8. A United bankruptcy would disrupt an already shaky financing market. United backs more than $4 billion of public market secured bonds and more than $2 billion of unsecured bonds. The unsecured bonds would be wiped out in a bankruptcy and one could expect United to default on most of its secured bonds. An American bankruptcy would mean even more bond defaults. The airline financing market has never experienced anything approaching such a disruption. Some experts believe a series of defaults would likely shut down the public capital markets for two to three years for every major U.S. airline other than Southwest.

9. An uncertain bankruptcy process would negatively impact suppliers and vendors and their employees up and down the airline industry supply chain.

10. If unsuccessful, and United is liquidated in a Chapter 7 process, competition would suffer over the short and long terms. The customer needs as many viable airline competitors as possible. Losing a strong competitor such as United, especially on a global basis with its industry-leading STAR alliance, would damage the industry irreparably.

Conclusion

BTC believes that United Airlines, and its numerous stakeholders, would be far better off if a financial restructuring takes place outside of bankruptcy protection. It is not just an urgent matter due to United’s cash position. The prospect of hostilities with Iraq, where United would be required to redeploy aircraft to carry U.S. troops, and absorb an upward spike in jet fuel costs, also points to a need for the ATSB to move with great dispatch in approving United’s application for a loan guarantee.

The main concern of the ATSB should be whether United would be able to repay a $2 billion loan. It might be useful to put this loan application in the context of the larger public policy framework. The current guiding U.S. public policy, with regard to commercial air transportation, is deregulation, as opposed to government regulation.

United arguably has the best franchise of the major U.S. network airlines. If after significant cost reduction and productivity improvements United fails, then it is exceedingly probable that the top six major network airlines would likewise fail, in which case, we would require a new public policy. Put another way, if United fails, a $2 billion loan default would be the least of our government’s problems.


http://www.btctravelogue.com/btcatsbpaper.htm
 

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