New Flight Attendant Wages

you might want to check today's issue of Aviation Daily.

Sorry, I don't get Aviation Daily. Feel free to post the info and I'll compare the data against both airline's latest 10Q's (posted below).

It contains info on costs for the second quarter. For a company that has spent 3 years in bankruptcy, it doesn't speak very favorably about UA.

No way! There's a publication out there that doesn't speak favorably about United Airlines? You've GOT to be kidding!

And as an aside, World, Delta has been in a quasi-bankrupt state for well over a year now. So when you make a comparison between UAL's costs and DAL's costs (and even AMR's) and say that UAL's been in bankruptcy and DAL and AMR haven't been in "bankruptcy," I beg to differ. Remember several months back when DAL's executives were in the press saying that they weren't sure if DAL would be able to successfully reorganize in "bankruptcy" because they didn't know if they would have enough unencombered assets to obtain meaningful DIP financing? The reason they stated that is because instead of actually going down to the courthouse and filing Chapter 11, they just kept using the threat of bankruptcy against their creditors, employees, etc., to extract cost cuts through the much vaunted "transformation plan" while leveraging everything down to the kitchen sink in the employee cafeteria. DAL is just lucky that GE and AMEX were willing partners in the game until the recent filing. UAL's creditors weren't so accommodating, especially since we were the first ones in and didn't have anyone else to point to and use as a hammer for cost cutting. DAL and AMR's (among others) creditors/vendors/employees saw what was happening over at UAL and played ball.


In fact, it says that DL already has lower costs than UA - and that was 3 months before DL filed for bankruptcy. And it doesn't say that UA has a revenue advantage except on the domestic system which is exactly where UA is most vulnerable to further LCC incursion; in fact, UA's domestic revenue advantage amounts to about 9% over Delta - not exactly a commanding lead for a carrier that supposedly has such a great revenue advantage when compared with one that has LCCs in every one of its significant markets.

Last 6 months ending June 30, 2005 from their respective 10Q's.......Mainline CASM....

DAL 10.74 cents/seat mile
UAL 10.39 cents/seat mile

As far as the LCC competition goes, do you really think DAL is the only airline out there with significant LCC competition already?


Glad you're having fun. Sadly, though, you and Fly don't get it. You have every right to believe that your sacrifice has turned UA around but it just hasn't happened. Sadly, you won't know how deficient UA's reorg plan is until you are out of bankruptcy and see how well DL and NW reorganize.

Actually, I'm having fun flying airplanes and reading about airline financials and poking holes in your theories. Heck, I wouldn't even know your screenname and you hadn't posted some ridiculous stuff over on the UAL forum, so it's kind of funny that you're stating that I "don't get it." Unfortunately, I'm not sure you do. You think DAL is going to exit bankruptcy with SWA or JetBlue style costs and you're sadly mistaken. But don't believe me- I wouldn't. Just wait. 6 or 7 cents a seat mile, including fuel, ain't gonna happen for our boys in ATL, IF they exit bankruptcy at all.

And wow, our POR is deficient? Did you read about that in USA Today or Aviation Daily? In offices all over the world, there are bankers and MBA's and CFA's and high-priced consultants examing the airline industry and UAL's books, right down to the cell on each spreadsheet. They have computers, tables upon tables of spreadsheets and graphs with all kinds of big numbers all over them. Do you think, just for a second, that perhaps when examing (and heck, INFLUENCING) UAL's POR that maybe, just maybe, they took a stab at what the airline industry might look like when DAL and NWA exit bankruptcy in the up and coming months or years? Whaddya think? I bet they did. And despite these HUGE advantages that you claim NWA and DAL are going to have, they loaned us 2 billion dollars based upon our POR. Yet YOU think its deficient? No offense, but I'm going to think the guys with the thousand dollar suits are probably a little closer to airline economic reality than you. It's great, though, that you're such a big cheerleader for DAL. They're a great group of people and they need people to point out the many good things about their company.


Oh and I might also mention that the 800 pound gorilla from Texas (you know the one that overlaps on about 95% of UA's network) has considerably lower costs than UA's.

Hmmm........for the last 6 months of 2005 from each airlines most recent 10Q....

9.92 mainline CASM AMR
10.39 mainline CASM UAL

You could probably throw another 3/4 of a cent to a cent on there for both of them to include their express carriers. Just a wag, though. Includes fuel, too.

Less? Sure. Considerable? Well........above you talk about the 9% unit revenue premium that UAL commands as "not exactly a commanding lead." So I guess the 4.5% advantage of unit costs that AMR enjoys falls in that "not exactly a commanding lead" ballpark as well?

And actually, UAL used to be referred to as the 800 pound gorilla, not AMR. But the doctor said we had to lose some weight. Now we're just a 400 pound gorilla that eats salad and does yoga. But we're better for it. Really.


This is a marathon, not a sprint.

Oh good. So now you finally understand why UAL took its time in bankruptcy.


We'll see where UA ends up in 5 years but I don't think I would be buying any shares in that reorganized company just yet.

I wouldn't buy a dime of UAL stock either, reorganized or not. I'll promptly be selling the stock I will be receiving if UAL ever gets out of bankruptcy! (which means it should skyrocket the day after I sell it)
 
It won't let me add to my previous post:

3 months ending June 30th, excluding fuel and GAAP stuff from UAL and DAL press releases:

DAL 7.11 cents/seat mile
UAL 7.53 cents/seat mile

UAL's non-fuel CASM is not done going down yet, neither is DAL's. With all the big "low hanging fruit" already picked from the much vaunted transformation plan (i.e. quasi-bankruptcy) it will be interesting to see how much lower DAL's CASM goes although obviously it will decrease more than UAL's. Sorry, WT, still not scared yet, especially when DAL has to make up for the lack of revenue premium UAL enjoys over DAL. Herb and Neeleman still want gates in ATL :)
 
uh, ualdriver, bankruptcy is like pregnancy. You either are or you aren't. Period. There is no such thing as a quasi-bankruptcy other than in your mind. DL dramatically cut costs outside of bankruptcy just as AA has but AA is certainly not "quasi-bankrupt" and neither is DL.

Your adjustments to CASM for express carriers are not necessary. Data filed with the DOT is for the mainline carrier only. Apples to apples. All carriers also publicly report the same info - which you are quoting.

AA is not and has not been in bankruptcy so comparisons of UA's performance vs. them only indict UA if AA can do what they've done w/o resorting to bankruptcy.

I'm glad you took the time to dig up the CASM statistics. Aviation Daily slices and dices it a bit differently but it's essentially the same story.

As I have said, UA has done a herculean job in cutting costs and I COMMEND you for enduring hardship in order to turn UA around.

However, UA is at the end of its bankruptcy but its costs are still not competitive w/ AA (its archrival which overlaps more of its network than any other carrier) or DL or NW - industry peers which are both bankrupt and will be able to cut costs much faster than the incremental steps UA can make.

DL and NW have the advantage of BK which UA has used. NW hasn't released statistics yet but DL expects to cut $1B/yr in expenses through lease renegotiations and termination of unsecured debt (court processes). UA has already had the opportunity to do all of that. If you do the math, you'll see that DL can knock 1/2 cent of CASM off just through BK court processes which they couldn't have done when they were "quasi-bankrupt". Another cent of CASM comes off from employees and network changes so DL is looking at a fuel-ex CASM near 5.5 cents or about 8 cents with fuel (which is kinda necessary for all airlines).

the bankers will give UA the money it needs to get out of BK because it appears based on current circumstances that UA will be capable of paying the loans which these banks will make. Plain and simple. It's not a vote of confidence in UA's future or an endorsement of UA's management. It's simply a belief that UA can reasonably be expected to pay its new debts with the restrictions that will be placed on those loans.

As we have seen over and over in the industry, what looks good today doesn't look so good after the industry changes. In a few respects, UA benefitted from going through BK first but more often than not in this follow the leader industry, the carrier than responds is in better shape than the one who is first out of the starting gate.

We'll have to put this discussion on the back burner but I am pretty confident that history will show that UA's POR as it stands right now is not sufficient given the continued downward pressure on costs which other airlines will exert and which UA has not done to the extent they probably should - or will be able to do once they are outside of bankruptcy.
 
WorldTraveler said:
DL and NW have the advantage of BK which UA has used. NW hasn't released statistics yet but DL expects to cut $1B/yr in expenses through lease renegotiations and termination of unsecured debt (court processes). UA has already had the opportunity to do all of that. If you do the math, you'll see that DL can knock 1/2 cent of CASM off just through BK court processes which they couldn't have done when they were "quasi-bankrupt". Another cent of CASM comes off from employees and network changes so DL is looking at a fuel-ex CASM near 5.5 cents or about 8 cents with fuel (which is kinda necessary for all airlines).
WorldTraveler:

I believe that your math is a bit fuzzy. It appears that you have recognized Delta's forecast cost reductions of about 18% in your calculations showing a reduced CASM, but it also appears that you have ignored Delta's projected reduction in capacity (ASMs) of about 8%. When you take the carrier's capacity reduction into account as well, non-fuel/non-special-item CASM should drop by about 10%, from 7.1¢ as reported in the second quarter of 2005 to roughly 6.4¢ when these changes have taken effect. While still a significant decrease in CASM, it's nowhere close to the level you were indicating it would be.

And there's something else you should think about. The ASM reduction of 8% that I mentioned above assumes that Delta is able to meet its goal of increasing international capacity by about 25% in 2006. But remember that United lost about 20% of its international widebody fleet (B747-400s, B767-300ERs and B777-200ERs) while in bankruptcy because not all of its aircraft lessors would agree to United's proposed lower lease rates. If the same thing happens to Delta, which is certainly a distinct possibility since lease rates have firmed up in the past year, the carrier's planned international expansion would be greatly impaired and Delta's CASM reduction would shrink dramatically or perhaps even be eliminated.
 
uh, ualdriver, bankruptcy is like pregnancy. You either are or you aren't.

Sorry, don't agree. The "quasi" term was a term I read elsewhere (wish I could take credit) and PERFECTLY describes what has been happening at DAL. Yes, they weren't physically in Chapter 11- I agree. But they have been taking all the same steps, with DAL drawing its quasi-DIP financing from GE and AMEX along the way while using the threat of bankruptcy to extract $$ from vendors/creditors/employees. I like the word "quasi."


Your adjustments to CASM for express carriers are not necessary. Data filed with the DOT is for the mainline carrier only. Apples to apples. All carriers also publicly report the same info - which you are quoting.

Actually, I think it is important to take a look at ones express carriers as well. They're a very important part of the hub and spoke network for both carriers, and their associated costs vs. the revenue they bring in + the value they may or may not add to unit revenue can't be ignored in my opinion. Especially when you have a relatively expensive feeder like Comair.


However, UA is at the end of its bankruptcy but its costs are still not competitive w/ AA (its archrival which overlaps more of its network than any other carrier) or DL or NW - industry peers which are both bankrupt and will be able to cut costs much faster than the incremental steps UA can make.

Wow. A 4.52359% advantage in unit costs across the system, just looking at mainline unit costs alone (UAL vs. AMR) is the difference between success and failure? Hmmmm.....I guess we'll agree to disagree.


DL and NW have the advantage of BK which UA has used. NW hasn't released statistics yet but DL expects to cut $1B/yr in expenses through lease renegotiations and termination of unsecured debt (court processes).

I can't "do the math" because I don't know how many ASM's DAL will produce when they exit bankruptcy nor would I believe a number produced by any "expert" only a couple of weeks into the bankruptcy process. I have to know what the relationship is between the mainline cost cuts and the mainline ASM's ultimately produced in order to determine how it will affect average CASMs upon their exit.

In 2004, DAL paid around 1.5 Billion total to service their debt and pay for aircraft leases. You say they're going to cut 1B/yr. out of that 1.5 Billion through bankruptcy court? A 66% cut in interest expense and aircraft leases? I don't know about that. If they could do that I'd be damned impressed though.

I'm not sure it's "kinda" necessary to have an average CASM of 8 cents if your unit revenue exceeds 8 cents? I'm not sure where you got 8 cents from, but I don't think it's some sort of magic number that determines whether your company is viable or not? I'd agree that if your expected unit revenue is 8 cents and your average unit costs are something more than 8 cents that you have a problem.


.....DL can knock 1/2 cent of CASM off just through BK court processes which they couldn't have done when they were "quasi-bankrupt". Another cent of CASM comes off from employees and network changes so DL is looking at a fuel-ex CASM near 5.5 cents or about 8 cents with fuel (which is kinda necessary for all airlines).

I think you're going to have to be a little more specific than "network changes." 1 cent from employees and network changes? What does that mean? Labor costs were about 33% of DAL's total expenses for the full year of 2004. If they knocked 25% ACROSS THE BOARD in labor expenses (salaries, benefits, work rule changes, etc.), they could probably get several tenths of a cent off their CASM.

the bankers will give UA the money it needs to get out of BK because it appears based on current circumstances that UA will be capable of paying the loans which these banks will make..............It's simply a belief that UA can reasonably be expected to pay its new debts with the restrictions that will be placed on those loans.

Actually, under current circumstances we'll continue to lose money and I think everyone knows that despite declining non-fuel CASM. I heard from our CFO's lips that the entities that are lending money have great confidence in the long term prospects of UAL and THAT'S why they're lending us money despite what's happening with fuel prices. Was he blowing smoke up my butt? Were the banks blowing smoke up UAL's butt? Who knows. But people far smarter than me decided to float 2B UAL's way when they could have just cut and run. That's gotta say something about what they think of UAL and its competitiveness in the industry.
 
couple point.

first, thank you for taking the time to analyze the data and come to your own conclusions. Neither of us has access to alot of info that is used in making decisions but there are very few people on this board who can access and analyze much of the complex data that is part of this business. I commend you for being one of the few and want you to know that I appreciate the dialogue.

Yes, there are risks in C11 and UA has certainly shown them. If I have reason to be optimistic, it is precisely because UA has proven alot of naysayers wrong. I have no doubt that DL can do at least the same if not more.

I can't provide more details on network changes because that is all DL has said. I expect that they expect to reduce CASM by reducing staff necessary to support domestic operations since you know that fewer ground staff of most kinds are necessary to produce the int'l transoceanic ASMs than the comparable amount of domestic ASMs due to length of haul differences.

As for debt calculations, you have to be careful about assuming DL's debt payments are linear. As you know, expected repayments have grown as debt has increased. Also, I believe DL had the highest percentage of unsecured to total debt so there will be significant reductions. As for lease reductions, UA is touting $800M in annual savings; not sure what DL can achieve but 60% of what UA has achieved doesn't seem such a stretch. Yes, DL will have a greater challenge in reducing lease payments because of the strong market. As for the international plans, most of DL's international fleet is owned, not leased - all of the 777s and about half of the 763 ERs. All of the 764s are owned and they are planned to be converted to int'l. DL has considerable capacity to grow international by shifting aircraft from domestic to int'l but could probably still reject some of their 76Ls. I also expect that DL will reject some of their non-ER domestic 763s, some of which are close to 20 years old.

As I have said before - even though many people seem to ignore it - is that UA has done a remarkable turnaround and you have a right to be proud of it. I and alot of other people were ready to call UA dead. I believe UA has a very good chance of being viable and successful.
Also, UA and CO have touted their revenue advantage but they are about ready to get whacked by B6 out of EWR and that will surely show up in their P&Ls. UA still has significant revenue premiums out of SFO and IAD and the LCCs somehow are very good at finding out where those exist and going after them.
However, I am concerned about UA's fairly high costs relative to other legacy carriers - esp. since UA is nearing the end of bankruptcy but DL and NW are on the verge of significantly reducing their costs (how much we'll have to see but I think we can agree that ti will be significant). AA is already talking about cutting costs further. No, the current 5% won't make a huge difference but if that 5% difference becomes a 15% difference, UA will be much harder pressed to compete. I am sure you are very aware of how deeply US cut during their 2nd BK - a process I would not want any carrier or its employees to have to go through.
 
"Holding Pay - $16.20 per hour - Reduced by 9%

Delay Pay - $10.80 per hour - Discontinued "


WHATTTTT!!!!!!!!! you guys get paid for delaying a flight and holding a fight?
no wonder your bankrupt.

:angry:
 
skyflyr69 said:
"Holding Pay - $16.20 per hour - Reduced by 9%

Delay Pay - $10.80 per hour - Discontinued "
WHATTTTT!!!!!!!!! you guys get paid for delaying a flight and holding a fight?
no wonder your bankrupt.
:angry:
[post="307655"][/post]​

I think that you have misunderstood these pay types.

Delay pay was when we show up to work a flight and it is delayed more than an hour past departure. The theory was since we are paid by the flight hour we should be compensated for any time when we were on duty but waiting for a flight.

Holding pay is when the flight is delayed one hour or more and we have passengers on board. The theory is that since we are only paid by the flight hour and we are on duty with passengers on board, we should be compensated a bit more than for delay pay because we are on duty and dealing with the occasional passenger who gets emotional about a delay and becames histrionic. :D

I hope that this helps.

ah
 

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