mrfish3726
Veteran
- Joined
- Jul 7, 2004
- Messages
- 931
- Reaction score
- 0
Some of the quotes in here are to FUNNY, but may turn out to be true! 
http://www.denverpost.com/business/ci_2914639
http://www.denverpost.com/business/ci_2914639
Nobody Wants To Say The L-word.
- Thread starter mrfish3726
- Start date
markkus757
Veteran
- Joined
- Jul 26, 2004
- Messages
- 598
- Reaction score
- 1
The longer they stay in, the more likely it is. I think it went from 70 - 30 in favor of surviving before the oil prices this spring, to where we are today. I think this latest setback is just another push towards a reversal in those odds. Good luck.
mrfish3726
Veteran
- Joined
- Jul 7, 2004
- Messages
- 931
- Reaction score
- 0
Some observers say any further delay initiated by United could be met with strong opposition.
Two banks representing $2.26 billion in United debt objected to the carrier's last request to extend its exclusivity period over concerns about its progress.
"They're going to have to do it soon, or people are going to lose patience," said Mike Boyd, an Evergreen-based aviation consultant.
"The problem is, they've been doing this for 2 1/2 years, and it's wearing thin." :blink:
http://www.rockymountainnews.com/drmn/busi...3982047,00.html
Two banks representing $2.26 billion in United debt objected to the carrier's last request to extend its exclusivity period over concerns about its progress.
"They're going to have to do it soon, or people are going to lose patience," said Mike Boyd, an Evergreen-based aviation consultant.
"The problem is, they've been doing this for 2 1/2 years, and it's wearing thin." :blink:
http://www.rockymountainnews.com/drmn/busi...3982047,00.html
JungleClone
Senior
- Joined
- Jan 9, 2004
- Messages
- 338
- Reaction score
- 0
No truer words have been spoken. UA will not liquidate. Simply not going to happen. But I think we're fast getting to the point where the creditors committee and maybe even the Board of Directors are realizing that this management team simply cannot get it done. My opinion is that within the next year, we will see another change in senior leadership at UA. And as much as I like Pete McDonald, he will NOT become the next CEO. Neither will John Tague or anyone else currently at United. This senior team at UA is tainted. Tainted by the inability to come up with a way to TRULY change the culture at United. The culture hasn't changed. Until someone comes in with the stones to finally prune the upper, middle and lower management ranks of all the dead, ineffective wood that is still in place, NOTHING substantial will ever change. I still laugh uncontrollably when Tilton and his team preach about accountability. If accountability really existed, the significant amount of bad management that still exists at United would finally be gone from the company. Simply changing out some VP's isn't good enough. It needs to filter all the way down. And it hasn't. And with this current ineffectual team in place, it won't!
casual rat
Senior
- Joined
- Aug 25, 2002
- Messages
- 413
- Reaction score
- 3
If Pete McDonald becomes UA's CEO, then I'm going to wear a paper hat and smile alot--'cause we're going to get fried...He's nothing more than an Administrator who rode on people's backs and covered his arse to get where he is. UAL is in dire need of a LEADER-- someone who is not afraid to make decisions or take risks (we don't have much to lose after all) Pete's no Leader--that's for sure. Good Administrator though.
JungleClone
Senior
- Joined
- Jan 9, 2004
- Messages
- 338
- Reaction score
- 0
casualrat,
I completely agree with you regarding Pete McDonald. He doesn't have what it takes to run United. In fact, there isn't an executive currently at United that has what it takes. It's a shame Bethune couldn't be brought in. Even if he didn't have a non-compete clause when he left Continental (which I'm sure he had), I'm not so sure he'd even be interested. Although for the right price, I suppose anyone can be had. But he'd be just the kind of guy to turn WHQ on its ear and finally usher all the spineless, leadership deprived, morale-killing upper, middle and lower management out the door for good. That's something that should have been done years ago. It's also evidence at how the more things change, the more they remain the same.
I completely agree with you regarding Pete McDonald. He doesn't have what it takes to run United. In fact, there isn't an executive currently at United that has what it takes. It's a shame Bethune couldn't be brought in. Even if he didn't have a non-compete clause when he left Continental (which I'm sure he had), I'm not so sure he'd even be interested. Although for the right price, I suppose anyone can be had. But he'd be just the kind of guy to turn WHQ on its ear and finally usher all the spineless, leadership deprived, morale-killing upper, middle and lower management out the door for good. That's something that should have been done years ago. It's also evidence at how the more things change, the more they remain the same.
Unfortunately, Gordo would need help and the people he needs are employeed at Burger King and Continental. Gordo was the mouth at Continental. The brains behind the operation was Brennaman (Burger King CEO now) and Kellnher (Continental CEO). Gordon would undoubtedly do a better job than the current group of yahoos running the show, but he would definetly need help to pull it off. Maybe Continental will submit a plan with the court when the judge realizes that UAL doesn't have a plan. Merge the two and get rid of most of UA's domestic that is unprofitable.JungleClone said:
Borescope said:Unfortunately, Gordo would need help and the people he needs are employeed at Burger King and Continental. Gordo was the mouth at Continental. The brains behind the operation was Brennaman (Burger King CEO now) and Kellnher (Continental CEO). Gordon would undoubtedly do a better job than the current group of yahoos running the show, but he would definetly need help to pull it off. Maybe Continental will submit a plan with the court when the judge realizes that UAL doesn't have a plan. Merge the two and get rid of most of UA's domestic that is unprofitable.
[post="288935"][/post]
Naahh, Gordon will do just fine with what he brings, which is an enormous quantitative ability and a genius for highering help...
or at least that's what,
GENERAL ELECTRIC
BOEING
JPMORGAN
PRUDENTIAL INSURANCE
believe...
and most anyone that really knows him and what happened at CAL and everywhere he's been.
Oh Yeah, almost forgot....
It'll be a merger of 'equals', and those at the bottom of either side will have to learn to live with this for a very long time, some doing something else...
WorldTraveler
Corn Field
- Joined
- Dec 5, 2003
- Messages
- 21,709
- Reaction score
- 10,662
Bulscu,
NWA owns the only class B preferred share in CAL and through it has the right to approve or disapprove any mergers or strategic business transactions in which CO might want to participate. Given that CO/UA would dwarf every other potential airline combination in the US including anything that NW could participate in, it is highly doubtful that CO/UA will ever happen.
HP/US or DL are the only two likely merger partners for UA.
Given that most if not all of the remaining airlines not in bankruptcy will be there very soon based on the expectation that fuel will remain above $60/bbl, it will take time to sort the future of the industry out but in the meantime you can count on alot more cuts at every airline.
NWA owns the only class B preferred share in CAL and through it has the right to approve or disapprove any mergers or strategic business transactions in which CO might want to participate. Given that CO/UA would dwarf every other potential airline combination in the US including anything that NW could participate in, it is highly doubtful that CO/UA will ever happen.
HP/US or DL are the only two likely merger partners for UA.
Given that most if not all of the remaining airlines not in bankruptcy will be there very soon based on the expectation that fuel will remain above $60/bbl, it will take time to sort the future of the industry out but in the meantime you can count on alot more cuts at every airline.
WorldTraveler said:
Nope,
NWA has a say if someone else were to buy Continental, they have no say in Continental buying.
Also, I'm not saying maybe this or maybe that, Continetal and United will be merged soon enough and Continentals name survives.
The aforementioned companies, are behind Bethune and the industry to consolidate, which it is in the process of doing and no, wages will ultimately rise once again, on the next contract cycle, since the industries major players will join and ticket prices will rise rapidly....which will be more than enough to pay for fuel.
If fuel continues to rise, and after the lccs are crushed, except SWA, ticket prices will go up and ridership will incrementaly go down along with capacity.
There will be Three Huge Remnant Carriers left over:
SouthWest
American
Continental
You WILL be paying more and more for your air travel needs.....
WorldTraveler said:
WT, the merger part almost made me swallow my tongue!!! I do agree with the DAL part however. But the U/HP part doesn't bring anything to the table. CAL will not be able to afford UAL, and the prospect of some employees with pensions and some without would not go over well. Mark my word, in the next couple years UAL WILL be an aquiring airline, and I think there is a VERY good chance it will be a Debtless, low lease rates, ATL hubed airline with a HUGE Euro and SA network.... It simply does not make sense to shed huge amounts of debt, just to merge with a company with HUGE amounts of debt.
As to Gordo, he made a profit with the lowest payrates in the industry. I'm REAL impressed... 🙄 He's a washed up drunk and should stay retired.
Bulscu said:Naahh, Gordon will do just fine with what he brings, which is an enormous quantitative ability and a genius for highering help...
or at least that's what,
GENERAL ELECTRIC
BOEING
JPMORGAN
PRUDENTIAL INSURANCE
believe...
and most anyone that really knows him and what happened at CAL and everywhere he's been.
Oh Yeah, almost forgot....
It'll be a merger of 'equals', and those at the bottom of either side will have to learn to live with this for a very long time, some doing something else...
[post="289384"][/post]
WorldTraveler
Corn Field
- Joined
- Dec 5, 2003
- Messages
- 21,709
- Reaction score
- 10,662
busdrivr,
I'm not proposing that UA would combine w/ HP/US, but merely mention it as one of the possibilities.
I don't disagree that a DL/UA merger is a distinct possibility but I think you are jumping the gun just a bit if you think that UA will be the surviving entity. DL hasn't even filed for BK but they already have lower costs; they should not only be able to get rid of alot more costs in BK but also get rid of alot of debt. The United brand probably has more worldwide equity than Delta's so I would guess it would be kept. If both companies go through bankruptcy before a combination happens, I don't see that there is anything great in saying which company is the surviving company since the new company is completely recapitalized and the employees have all given up huge amounts. As long as my frequent flyer miles are kept from both companies, I don't really care whether DL or UA is the survivor since I have significant balances with both airlines. In order to survive, the combined entity needs to be run with the employee and customer focus that was Delta in its heyday but with the marketing and strategic focus that is characteristic of American or Continental (since I don't think either DL or UA has had the sharpest strategic thinkers or managers).
DL-UA would be the strongest airline in the US and perhaps the world; DL has much more potential to develop Latin America, esp. from NYC and Florida while DL's continental Europe focus blends very well with UA's LHR focus. UA's weakness is in the east where DL would add a considerable amount of strength without triggering the anticompetition concerns that UA-US caused (since DL isn't as dominant in any NE market as US is). UA could add a number of new routes to Asia from NYC given the additional strength DL has there.
bulscu,
You have a very CO-centered view of the world and one which is probably not in touch w/ reality. Yes, CO can probably buy another entity without consulting shareholders but a merger of large companies almost certainly involves an exchange of ownership which does require votes by the shareholders in both the acquired and acquiring companies. The owners of the acquired will not simply give up the their ownership without significantly larger amounts of cash, something CO could not afford to do. NW may have screwed itself by trying to control CO's outcome and may actually drive DL and UA together which is certainly not a scenario NW would want.
You are also sorely optimistic if you think that huge amounts of capacity can be removed from the air transportation system and not be replaced by upstart or LCC airlines and that employee wages will return to much higher levels. The legacy carriers do almost exclusively control capacity that is used for connecting passengers since most of the LCCs have that as a fairly small part of their business model; that connecting capacity will be pulled down and you can expect that DL and NW will probably lead the charge since they probably carry the most connecting passengers and have several medium to small hubs. All carriers have aircraft that are not economical to operate given current fuel prices and are at or near the end of their economic life; that capacity will come out of the system. Markets that are served on a connecing basis will end up being much more expensive than nonstop markets and that's the way it should be.
Wages won't go up for a good long time, if ever. We are currently at the peak of the business cyle in terms of traffic yet yields are low and costs are high. The restructuring of the industry has to shift into very high gear now or the industry faces certain implosion when traffic starts to fall off.
While the industry may be headed toward evenutal consolidation the final phase is only just beginning. While some would like to argue that one carrier or another will be the surviving carrier because of their "strength" every airline will be struggling just to survive and certainly won't have money laying around for investments. Consolidation will be driven by investors and creditors who want to protect their investments. Most of it not all of the legacy airlines will be owned by creditors and investors who were burned through the bankruptcies that were started by UA and US and which will undoubtedly spread to at least the majority of the remaining legacies. Given that every legacy airline will be reduced to financial ruin, the surviving airlines will be those that can develop the most compelling business cases and can attract financing. There are investors that will be able to make money because of airline restructuring but in most cases they will be companies that are already invested in or exposed to the airline industry now.
Over the next couple years, there will undoubtedly be a considerable amount of pain for all airline employees and alot of cities as they lose service.
Sadly, we will have spent almost thirty years growing alot of airlines and their capacity that could never be profitable given expected very high fuel prices and low yields. In many respects, all deregulation will have accomplished is to have consoidated the legacy segment into a couple larger global carriers and allowed a couple of well-run LCCs to grow up with a business model that is focused solely on nonstop markets. Make no mistake about it, though, costs at all large airlines (LCC and legacy) are about to come very close together. And, of course, the biggest impact from deregulation will be that airline employees will have gone from being compensated above the average American worker and unionized to being at or below average compensated with ineffective unions at best.
I'm not proposing that UA would combine w/ HP/US, but merely mention it as one of the possibilities.
I don't disagree that a DL/UA merger is a distinct possibility but I think you are jumping the gun just a bit if you think that UA will be the surviving entity. DL hasn't even filed for BK but they already have lower costs; they should not only be able to get rid of alot more costs in BK but also get rid of alot of debt. The United brand probably has more worldwide equity than Delta's so I would guess it would be kept. If both companies go through bankruptcy before a combination happens, I don't see that there is anything great in saying which company is the surviving company since the new company is completely recapitalized and the employees have all given up huge amounts. As long as my frequent flyer miles are kept from both companies, I don't really care whether DL or UA is the survivor since I have significant balances with both airlines. In order to survive, the combined entity needs to be run with the employee and customer focus that was Delta in its heyday but with the marketing and strategic focus that is characteristic of American or Continental (since I don't think either DL or UA has had the sharpest strategic thinkers or managers).
DL-UA would be the strongest airline in the US and perhaps the world; DL has much more potential to develop Latin America, esp. from NYC and Florida while DL's continental Europe focus blends very well with UA's LHR focus. UA's weakness is in the east where DL would add a considerable amount of strength without triggering the anticompetition concerns that UA-US caused (since DL isn't as dominant in any NE market as US is). UA could add a number of new routes to Asia from NYC given the additional strength DL has there.
bulscu,
You have a very CO-centered view of the world and one which is probably not in touch w/ reality. Yes, CO can probably buy another entity without consulting shareholders but a merger of large companies almost certainly involves an exchange of ownership which does require votes by the shareholders in both the acquired and acquiring companies. The owners of the acquired will not simply give up the their ownership without significantly larger amounts of cash, something CO could not afford to do. NW may have screwed itself by trying to control CO's outcome and may actually drive DL and UA together which is certainly not a scenario NW would want.
You are also sorely optimistic if you think that huge amounts of capacity can be removed from the air transportation system and not be replaced by upstart or LCC airlines and that employee wages will return to much higher levels. The legacy carriers do almost exclusively control capacity that is used for connecting passengers since most of the LCCs have that as a fairly small part of their business model; that connecting capacity will be pulled down and you can expect that DL and NW will probably lead the charge since they probably carry the most connecting passengers and have several medium to small hubs. All carriers have aircraft that are not economical to operate given current fuel prices and are at or near the end of their economic life; that capacity will come out of the system. Markets that are served on a connecing basis will end up being much more expensive than nonstop markets and that's the way it should be.
Wages won't go up for a good long time, if ever. We are currently at the peak of the business cyle in terms of traffic yet yields are low and costs are high. The restructuring of the industry has to shift into very high gear now or the industry faces certain implosion when traffic starts to fall off.
While the industry may be headed toward evenutal consolidation the final phase is only just beginning. While some would like to argue that one carrier or another will be the surviving carrier because of their "strength" every airline will be struggling just to survive and certainly won't have money laying around for investments. Consolidation will be driven by investors and creditors who want to protect their investments. Most of it not all of the legacy airlines will be owned by creditors and investors who were burned through the bankruptcies that were started by UA and US and which will undoubtedly spread to at least the majority of the remaining legacies. Given that every legacy airline will be reduced to financial ruin, the surviving airlines will be those that can develop the most compelling business cases and can attract financing. There are investors that will be able to make money because of airline restructuring but in most cases they will be companies that are already invested in or exposed to the airline industry now.
Over the next couple years, there will undoubtedly be a considerable amount of pain for all airline employees and alot of cities as they lose service.
Sadly, we will have spent almost thirty years growing alot of airlines and their capacity that could never be profitable given expected very high fuel prices and low yields. In many respects, all deregulation will have accomplished is to have consoidated the legacy segment into a couple larger global carriers and allowed a couple of well-run LCCs to grow up with a business model that is focused solely on nonstop markets. Make no mistake about it, though, costs at all large airlines (LCC and legacy) are about to come very close together. And, of course, the biggest impact from deregulation will be that airline employees will have gone from being compensated above the average American worker and unionized to being at or below average compensated with ineffective unions at best.
Similar threads
