UAL ALPA Confirms Interesting Corporate Transaction

[Bear96]

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On 1/30/2003 10:55:27 AM chipmunn wrote:

Reports indicate if a fragmentation occurs, US is interested in DEN, LAX, SFO, and ORD gates; as well as unspecified equipment that could include B737, A320, and B757 aircraft.


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Chip,

Let's see... DEN, LAX, SFO, and ORD gates... plus B737, A320, and B757 aircraft... that's a lot of assets... would that cost more or less than the $3B the pilot's pension is underfunded by and that U claims it cannot pay?

How does this make the U pilots feel, if apparently there is enough cash lying around right now (or that at least is easily accessible) to enable U to purchase huge chunks of "the Elk Grove-Township based airline's" assets, but not to properly fund the pilot's pension plan?

I would think it would not be acceptable to you if U went ahead with whatever "unique / interesting corporate transaction" scheme du jour you are dreaming up and seem to be constantly cheerleading while your pension is being decimated. But that's just me.

Or are your priorities THAT out of whack?

BTW I echo the postings of others here that there has been no mention of U or any other existing airline in the context of being part of "the Elk Grove-Township based airline's" newest brainstorm of an idea with the new LCC. All accounts I have heard indicate that the new entity would be wholly-owned by UAL Corp., if any "spin-off" were to occur.

Of course I don't have the luxury of my CEO behind me on the jumseat whispering confidential corporate planning into my ear the way you apparently do, so I could be wrong.

"Separately, I find it interesting UA employees never post on the US message board unless a transaction with US is discussed. Why is that?"

Not speaking for any other "Elk Grove Township-based airline" emplolyees here, but if there is something relevant enough to me to motivate me to post, and if I can add something to the conversation, I do. Otherwise, I try to stay out of U business. What is so "interesting" about UA employees only posting when "the Elk Grove Township-based airline" is the subject of conversation? Aren't these the mirror of your guidelines for posting as a U employee-- or not posting-- on the "Elk Grove Township-based airline's" board?

(And it's kind of silly to refer to UAL as "the Elk Grove Township-based airline" like that, isn't it, unless you are writing a newspaper article, or the geographical location of the corporate HQ is relevant to the topic in some other way? Plus you might want to check your use of "'s" and the grammar rules of plural vs. possessive. Just trying to help you with your clunky writing style, in case writing for the media is your post-U Plan B.)

 

[Busdrvr]

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On 1/30/2003 11:05:33 AM chipmunn wrote:

Captain Paul Whiteford, Chairman of United's branch of the Air Line Pilots Association, told Reuters, "But ALPA will not agree to put an airline within an airline that would have a separate seniority list, a separate employee list and a separate collective bargaining agreement and then have that possibly be spun off."

Chip

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Chip, I actually gave your "unique corporate trans" theory about two seconds of thought with ref to the deep south. It would not have surprised me to see U (with it's caribean strength and CLT banking hub) takeover some SA routes from UAL and UAL take Europe from U, but your U2 theory really doesn't hold water. Please explain to me why GT would "give" U2 (shuttle) to U? because he likes you? What sense would it make to transfer a low cost unit from one airline to another airline WITH HIGHER COSTS. This is the scenario UAL's pilots are worried about. UAL starts U2, but puts it under a seperate certificate. Current UAL pilots (and other employees) are given the opertunity to "transfer" to the new unit by resigning mainline seniority. company offers significantly lower wage rates (gotta match the rates at jetblu ya know) plus the benefit of "profitsharing" and "stock options" Company then does IPO on subsidiary to sell maybe 25%. Stupid employees are happy due to short term huge gain in U2 stock price (as are the BOD and senior management who have huge amout of stock options in new venture. Company gradually expands scope of U2. Soon U2 is larger than UAL. Company then lets UAL "die on the vine". Net result, UAL becomes "new" airline with 1/2 the pay and no retirement. Stupid employees realize too late that they got played.

Now what ALPA wants (IMHO):
A low fare product that has similar if not same (now significantly lower) payscales to fly operation that actually competes in the low fare market with properly configured modern jets that are untilized properly. Operation in some cases feeds mainline, and offers a much more diverse product for our customers (GM doesn't just sell Chevy's). Bob the business man is now able to sleep in comfort on the way to his business meeting in SIN or NRT in his "united first" suite, then use his miles to take the family to disney on a "high density seating" A320 using his FF miles or taking advantage of a simplified LC fare structure. Somewhat free flow of employees between mainline and LCC.

 

[Cosmo]

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On 1/30/2003 10:55:27 AM chipmunn wrote:

It appears UA may make three changes: Lower mainline costs; create an airline within an airline, and possible fragment some of UA's domestic network.
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While the first change will certainly happen (if UA is to emerge from bankruptcy) and the second change will probably happen, what factual basis do you have for saying UA's domestic network might fragment? Or is it just your opinion that it might happen?

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On 1/30/2003 10:55:27 AM chipmunn wrote:

Reports indicate if a fragmentation occurs, US is interested in DEN, LAX, SFO, and ORD gates; as well as unspecified equipment that could include B737, A320, and B757 aircraft.
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What reports, other than your own postings on this board and PB before it? Specifics please.

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On 1/30/2003 10:55:27 AM chipmunn wrote:

What's important to note is UA has very stringent revenue and cash flow requirements as part of its DIP financing. If UA is forced to sell assets to fund operations, especially with yesterday's news the Elk Grove Twp-based airline is having difficulty lining up lenders, it is clearly better for UA to "spin off" assets to US and keep revenue under the alliance umbrella, versus transfer revenue to the competition.

Such revenue transfer to a competitor could cause UA to end up not meeting its revenue and cash flow targets required by its DIP lenders, which could lead to the liquidation of the airline.
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I believe that your logic here is faulty. IIRC, under the current UA/US code-sharing arrangement, all revenues from a flight go to the carrier that actually operated the flight. So the revenues from any UA operations "spun off" to US would disappear from UA's books just as certainly as if those operations had been bought by AA, DL, NW or any other carrier. So not only would such a "spin off" of some part of UA's operations eviserate the overall network benefits that UA could offer to its passengers, it would also push UA further away from meeting the operating revenue requirements of the DIP financing, thereby hastening the carrier's liquidation. So IMHO, your idea would simply make UA's current situation much more precarious.

And incidentally, even in the unfortunate event that UA needs to sell some or all of its assets, what makes you think that UA would have any control over where they would go or whether any such assets (or at least the most desirable ones) would be acquired by US? UA's creditors would demand that such assets be sold to the highest bidder, and there are plenty of potential purchasers out there (airline and non-airline alike) with much deeper pockets than US has, even with the RSA's backing.

Finally, I suggest that you and your fellow US employees get your own house in order first. As long as you and other pilots are talking about shutting US down over the pension issue, you're in no position to be speculating about how US would benefit from UA's possible framentation or demise. To be honest, it's rather unseemly. JMHO.

 

[mlt]

Chip,
I am not attempting to start a fight; in fact, if you were a personal friend I would say the same thing: MOVE ON! These same reliable sources have lied to you and used you for their own gain. Is it possible they are telling you 'supposedly positive future transactions' in an attempt to sway the vote? If ALPA votes yes on giving up their pension, look at what the future holds.

Chip, this is like an abused woman syndrome. Do not trust them. The first opportunity management has to clobber you over the head, they will do it.

 

[PITbull]

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On 1/30/2003 8:36:12 AM tug_slug wrote:

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On 1/30/2003 6:43:13 AM chipmunn wrote:

Two Unions Say United Plans to Create Low-Cost Airline

NEW YORK (New York Times) - The pilots' and flight attendants' unions at United Airlines lashed out yesterday against the company's plan to create a low-cost carrier, accusing executives of dismantling United.

The unions said they were vehemently opposed to the proposal, under which the new carrier would operate with separate pay scales, work rules and seniority lists.

In a letter to the union membership, Paul Whiteford, chairman of the United chapter of the Air Line Pilots Association, said that even though United had not made any announcements about its new carrier, it had told the union of its plans. The letter said executives had proposed "giving away some of our most modern narrow-bodies to another company and allowing that company to operate a large part of the United network with non-United employees."

Complete Story:

http://www.nytimes.com/2003/01/30/business...artner=MOREOVER

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Why should this concern us? U still has a major obstacle to over come.
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I don't know, but we all better be paying attention here,
Management is asking AFA for "relief" in the change of control language from our "ratifed" agreement of July 2002. They said ALL the other Labor groups gave co. this relief. Is this true? Does anyone know this?

You know what I think about that? Management can go _ _ _ _ themselves.

 

[DakotaHC8]

I think that an "interesting corporate transaction" is a great idea, but precedent has been set already. Im sure that in any aquistion of aircraft that the UAL pilots can expect full rights to the same privledge that the Airways pilots set up for themselves.

It would only be fair for half of the positions created by bringing new aircraft over from UAL should go to furloughed UAL pilots, no...?

Whadda ya say Chip, willing to play the jets for jobs game like we were forced to do? Doesnt sound like such a neat-o deal when the shoe is on the other foot.

Does it..?

 

[Cosmo]

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On 1/30/2003 12:15:38 PM Bear96 wrote:

Let's see... DEN, LAX, SFO, and ORD gates... plus B737, A320, and B757 aircraft... that's a lot of assets... would that cost more or less than the $3B the pilot's pension is underfunded by and that U claims it cannot pay?

How does this make the U pilots feel, if apparently there is enough cash lying around right now (or that at least is easily accessible) to enable U to purchase huge chunks of "the Elk Grove-Township based airline's" assets, but not to properly fund the pilot's pension plan?

I would think it would not be acceptable to you if U went ahead with whatever "unique / interesting corporate transaction" scheme du jour you are dreaming up and seem to be constantly cheerleading while your pension is being decimated. But that's just me.

Or are your priorities THAT out of whack?
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Excellent point!

 

[a320av8r]

It is amazing to me how people will believe ANYTHING they read. UAL will keep there operation within UAL. USA will continue codesharing within the alliance and it will be seamless. Just remember though when the merger was being crafted and the UAL pilots with 4 years seniority couldn't wait to displace a 19 year USA captain and put the 13 year guy on the street. I am continually amazed and saddened by the LACK of integrity displayed by some, not most, people wanting to feed on the distress of others.

 

[chipmunn]

Dlflyer, I disagree with your post. If UA elects to fragment the company US is a better suitor because of the code share agreement.

The combined ASMs whether UA remains intact or "spins off" part of its domstic system, to another airline as indicated by Paul Whiteford, would be part of the combined US-UA domestic alliance if the assets went to US. Therefore, UA could keep code share revenue on the "carve out" portion of their present system, versus transferring these ASMs to a competitor.

Interestingly, this could be a crucial part of UA surviving to help the carrier meet its stringent DIP financing commitments.

Chip

 

[chipmunn]

Paul Whiteford's letter said executives had proposed "giving away some of our most modern narrow-bodies to another company and allowing that company to operate a large part of the United network with non-United employees."

Chip comments: Whiteford's letter said "give away" versus "sell" narrow-bodies and operate a "large part of the United network with non-United employees". Note - I did not make this statement, the UAL ALPA MEC chairman did.

The challenge for UA and US employees is that both of our companies are bankrupt and the unsecured creditors committee/bankruptcy court will decide our future.

Chip

 

[DakotaHC8]

Chip wrote: according to Whiteford's letter, the pilots would transfer to the airline who obtained the UA assets and I believe for the pilots involved, this would then fall under ALPA Merger and Fragmentation policy.

ALPA merger/fragmentation policy should not apply to the pilots of US Airways. It was overlooked in the case of dealing with 3 fellow ALPA carriers already, so why start now.

Go ahead, try to explain why UAL pilots do not deserve at least half of those flying positions brought to US Airways, Id love to hear you try...

 

[retread]

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On 1/30/2003 12:58:39 PM DakotaHC8 wrote:

I think that an "interesting corporate transaction" is a great idea, but precedent has been set already. Im sure that in any aquistion of aircraft that the UAL pilots can expect full rights to the same privledge that the Airways pilots set up for themselves.

It would only be fair for half of the positions created by bringing new aircraft over from UAL should go to furloughed UAL pilots, no...?

Whadda ya say Chip, willing to play the jets for jobs game like we were forced to do? Doesnt sound like such a neat-o deal when the shoe is on the other foot.

Does it..?
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Actually, if the aircraft are UAL aircraft then they should be all UAL pilots. Just like the Replacement Jets should be flown by ML pilots. Same situation.

 

[A320 Driver]

Can't argue with the reasoning!

A320 Driver

 

[magsau]

Bottom Feeder:"That sounds good, except when UAL bought Pan AM assets, they put the Pan Am pilots in a preferential interveiw pool. Seems the same would be a reasonable if the roles are reversed. I have quite a few friends who ended up on the street because of the UAL deal."

A major portion of that statement if false!!!! UAL hired and placed in the seniority list at doh the PAN AM pac pilots. UAL hired without interviews the number of pilots that staffed the LHR routes. The remaining PanAm pilots that did not come WITH assests were given preferential hiring. How many Pan Am pilots did DL take? Did they give them preferential hiring when they bought the JFK and FRA hubs? The answer is NO.

Speaking of taking crews with aircraft. How many EAL pilots did U take when they bought the EAL 757's and the PHL operation? NONE . Not one EAL pilot was given any thing other than newhire status at U.

The go's around comes around can swing right back in the face of the U pilots.

 

[BottomFeeder]

Actually, if the aircraft are UAL aircraft then they should be all UAL pilots. Just like the Replacement Jets should be flown by ML pilots. Same situation.
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That sounds good, except when UAL bought Pan AM assets, they put the Pan Am pilots in a preferential interveiw pool. Seems the same would be a reasonable if the roles are reversed. I have quite a few friends who ended up on the street because of the UAL deal.

Earlier when UAL bought the Pacific routes from Pan Am they took a few of the very senior guys who had only a few years to go till mandatory retirement. They did not make the same mistake twice.

What comes around goes around.