Ukridge
Senior
Congrats United on the improving results. I had some time in the airport and thought this may be of interest.
Special to the Times Financial by correspondent Nigel Lawson
31 October 2003
Now that Concorde has alighted for the last time, airline observers must again cast their curious gaze to the more mundane features of the industry. While the glamour of supersonic travel slips into the museums and memories the rest of mortal man must content itself with the considerations of what is on the horizon in basic air transportation from A to B.
Those of us ensconced in the continental shuffle of the state owned carriers or their well-funded offspring would do well to look across the water to view the harbinger of perhaps our future. EasyJet and Ryan Air aside, it is the American market that is in an ever quickening transformation from the old to the new. Carriers such as AirTran, Southwest, and Jet Blue have caught the fancy of the public and with an ever-growing Internet savvy buying public, the pressure of prices has been ever downward. Is there hope for the once proud flags of American aviation industry? What can the future hold for the firms so unrelentessly assailed by the proclaimed “Low Cost Carriers?†A study case would be United Airlines. Almost as no other carrier in the United States has an airline been so buffeted by tragic events, labour unrest, dubious management, and a full-frontal, over the parapets, swarming attack by its competitors.
After languishing under listless management post 11 September United made an interesting choice in who was to wear the mantle of power. To listen the forces allied against United, Glenn Tilton, an oilman by profession, was an unlikely choice. Hearkening back to the Greek stage of antiquity, the chorus arose of serious accusations of his qualifications to accept such a post. According to these muses, Mr. Tilton was nothing more than a bib-overalled hillbilly who as he sat on his porch and chewed tobacco, ran his tongue over his toothless gums and let one of his crossed eyes rove over to his sister’s way. Never had the industry been so affronted or offended by an executive. In their rush to liquidate United, the competitors overlooked one seemingly obvious character trait – just perhaps there are indivuduals who actually posses skills and talents in restructuring businesses no matter how badly they are broken. Certainly not in line with the rouge gallery of typical American airline executives who execute the all too trite and predictable chop-shop job on their charges and walk off with a fat purse, Mr. Tilton actually portrayed one who quite possible had an interest in the task at hand. One can only imagine the shudders this sent through the corporate offices.
In the past year Mr. Tilton has made apparent strides in his effort to restructure the seriously flagging carrier. The earnings reports of yesterday, while still extraordinarily serious in their losses are at least an amelioration of the previous Old Testament stories of destruction. On-time performance is stellar, the staffs are friendlier and United’s Heathrow service is soon to enjoy the 747-400 on selected routes. The threat of immediate liquidation seems to have passed and although Mr. Tilton can enjoy this successful brush with danger many industry analysts warn of continued rough air. Employee retirement funds are most certainly on the chopping block, ever encroaching low-cost competitors, ongoing financing, lease negotiations seem only to be in mid-stream and the airline may have to shrink yet further, a forward business plan and other issues of import must be faced and dealt with expeditiously.
Interestingly enough, in a turn of events to make even the Bart Conner – Nadia Comaneci nupitals look bizarre, one quickly learns Mr. Tilton may in fact have no arrows at all in his financial quiver. For there bestrides the continent a colossus of such immense stature that classics scholars at Trinity College, Cambridge are quickly drawing parallels between that this power and that which stood guard at Rhodes. What is this behemoth that strikes terror into the soul of Mr. Tilton’s ambitious plans to be the savior of a ship that was not just listing but actually sinking? It is simply an on again off again marriage of convenience prospect called USAirways. Peeling away the complex layers of the industry reveals this font of power that although clothed in continuing losses and shrinking market share is ostensibly positioned to force Mr. Tilton into divestiture of United’s most valued assets. Rumours are rife with scenarios of United ceding its vital organs willingingly to this irrepressible force called USAirways that seems to be the real power behind the throne in this story. In fact, some observers maintain that Tilton, for all his energy in the task at hand, is simply the bystander in a cruel twist of a Calvinistic fate. He wishes he could run the airline, but fate dictates that USAirways has predestined his soul to be folded into theirs and nothing he does will free him from this quirky fait accompli.
For those of us on the eastern side of the water it is instructive to note that just as in Alice in Wonderland what is may not be, and what may not, quite often is. So it is with United as Mr. Tilton must arise and have to shout Hail Caesar to his new taskmaster. Armed by a phalanx of muses in that ever attendant chorus of gloom, those who wish United to fail are seemingly the only constant in this play that the ancient Greeks would have known only too well.
Special to the Times Financial by correspondent Nigel Lawson
31 October 2003
Now that Concorde has alighted for the last time, airline observers must again cast their curious gaze to the more mundane features of the industry. While the glamour of supersonic travel slips into the museums and memories the rest of mortal man must content itself with the considerations of what is on the horizon in basic air transportation from A to B.
Those of us ensconced in the continental shuffle of the state owned carriers or their well-funded offspring would do well to look across the water to view the harbinger of perhaps our future. EasyJet and Ryan Air aside, it is the American market that is in an ever quickening transformation from the old to the new. Carriers such as AirTran, Southwest, and Jet Blue have caught the fancy of the public and with an ever-growing Internet savvy buying public, the pressure of prices has been ever downward. Is there hope for the once proud flags of American aviation industry? What can the future hold for the firms so unrelentessly assailed by the proclaimed “Low Cost Carriers?†A study case would be United Airlines. Almost as no other carrier in the United States has an airline been so buffeted by tragic events, labour unrest, dubious management, and a full-frontal, over the parapets, swarming attack by its competitors.
After languishing under listless management post 11 September United made an interesting choice in who was to wear the mantle of power. To listen the forces allied against United, Glenn Tilton, an oilman by profession, was an unlikely choice. Hearkening back to the Greek stage of antiquity, the chorus arose of serious accusations of his qualifications to accept such a post. According to these muses, Mr. Tilton was nothing more than a bib-overalled hillbilly who as he sat on his porch and chewed tobacco, ran his tongue over his toothless gums and let one of his crossed eyes rove over to his sister’s way. Never had the industry been so affronted or offended by an executive. In their rush to liquidate United, the competitors overlooked one seemingly obvious character trait – just perhaps there are indivuduals who actually posses skills and talents in restructuring businesses no matter how badly they are broken. Certainly not in line with the rouge gallery of typical American airline executives who execute the all too trite and predictable chop-shop job on their charges and walk off with a fat purse, Mr. Tilton actually portrayed one who quite possible had an interest in the task at hand. One can only imagine the shudders this sent through the corporate offices.
In the past year Mr. Tilton has made apparent strides in his effort to restructure the seriously flagging carrier. The earnings reports of yesterday, while still extraordinarily serious in their losses are at least an amelioration of the previous Old Testament stories of destruction. On-time performance is stellar, the staffs are friendlier and United’s Heathrow service is soon to enjoy the 747-400 on selected routes. The threat of immediate liquidation seems to have passed and although Mr. Tilton can enjoy this successful brush with danger many industry analysts warn of continued rough air. Employee retirement funds are most certainly on the chopping block, ever encroaching low-cost competitors, ongoing financing, lease negotiations seem only to be in mid-stream and the airline may have to shrink yet further, a forward business plan and other issues of import must be faced and dealt with expeditiously.
Interestingly enough, in a turn of events to make even the Bart Conner – Nadia Comaneci nupitals look bizarre, one quickly learns Mr. Tilton may in fact have no arrows at all in his financial quiver. For there bestrides the continent a colossus of such immense stature that classics scholars at Trinity College, Cambridge are quickly drawing parallels between that this power and that which stood guard at Rhodes. What is this behemoth that strikes terror into the soul of Mr. Tilton’s ambitious plans to be the savior of a ship that was not just listing but actually sinking? It is simply an on again off again marriage of convenience prospect called USAirways. Peeling away the complex layers of the industry reveals this font of power that although clothed in continuing losses and shrinking market share is ostensibly positioned to force Mr. Tilton into divestiture of United’s most valued assets. Rumours are rife with scenarios of United ceding its vital organs willingingly to this irrepressible force called USAirways that seems to be the real power behind the throne in this story. In fact, some observers maintain that Tilton, for all his energy in the task at hand, is simply the bystander in a cruel twist of a Calvinistic fate. He wishes he could run the airline, but fate dictates that USAirways has predestined his soul to be folded into theirs and nothing he does will free him from this quirky fait accompli.
For those of us on the eastern side of the water it is instructive to note that just as in Alice in Wonderland what is may not be, and what may not, quite often is. So it is with United as Mr. Tilton must arise and have to shout Hail Caesar to his new taskmaster. Armed by a phalanx of muses in that ever attendant chorus of gloom, those who wish United to fail are seemingly the only constant in this play that the ancient Greeks would have known only too well.
