UAL Fragmentation?

autofixer

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Aug 20, 2002
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I am hearing alot about UAL selling assets, or more or less fragmenting. What are the fragmentation protections in the various union contracts? Are there any penalties or requirements if UAL sells assets to other carriers? Or does it really matter, as the judge will allow fragmentation anyhow?
 

Falco

Member
Oct 29, 2002
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Essentially, in bankruptcy there are no protections, since the judge can abrogate any contracts in place. If it's good for the creditors, he can do it.
 

UnitedChicago

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Aug 27, 2002
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I think it's just a bunch of hot air.

I personally think UA is way too early in the process to look at asset sales. They're focused on creating a viable business plan and negotiating new contracts.

Take it all for what it's worth...just rumor.
 
Aug 20, 2002
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On 1/16/2003 12:34:31 PM Rhino wrote:

"They're focused on creating a viable business plan..."

Why the rush?
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LOL!
 

iflyjetz

Senior
Oct 2, 2002
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Autofixer, since you work for U, I'd think that you'd already know the answer to this question.
However, I'd recommend that you stop listening to Chip (he's the only one I've seen muttering about UAL fragmentation). He's been wrong so many times that he makes Mr Magoo look like a genius.
If you've got ANY sources OTHER than Chip Munn, I'd love to hear them.
 

iflyjetz

Senior
Oct 2, 2002
422
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On 1/20/2003 11:05:39 PM PineyBob wrote:

iflyjetz,
Let's review the video tepe from the recent past. When faced with huge losses and ultimately their very survival didn't Pan Am, Eastern & TWA sell assets to stay afloat prior to their ultimate demise?

UA isn't in all that different a position than those airlines. Do I see them having a fire sale of assets anytime soon? Nope! Situation not that desparate yet. What I think you might see is assuming that US does indeed emerge from BK then it is possible that some routes may be sold, swapped or contracted out to US. But a big outright asset sale? unlikely IMHO, who the hecks got the cash to do it, UA can't take an IOU. NW has some cash but do they want to spend it on UA? If the union situation gets really really ugly or we go to war with Iraq and it doesn't end in a few eeks then all bets are off as to what will happen
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PineyBob, I read the tea leaves the same as you. Once UAL starts selling gates, slots, buildings, route authority, simulators (of aircraft still in the fleet, like A320, 75/767, 777), etc, then UAL's in deep kimchee.
Sales of aircraft are less significant. I would expect to see UAL sell some -400s, since UAL currently has excess heavy lift capacity.
Another terrorist attack, protracted war w/Iraq, or some other economic shock, and all bets are off on UAL's survival. UAL is in a very fragile state, just as U, and other carriers aren't far behind.
 

767jetz

Veteran
Aug 20, 2002
3,286
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On 1/30/2003 7:30:05 AM cltvff wrote:

Could this be the writing on the wall?

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No. It means that USAir employees are once again having delusions of grandeur. If flying and aircraft are going to be done by a low cost subsidiary, it won't be USAir. It will be flown by pilots and F/A's on the United seniority list.
 

wings396

Veteran
Aug 20, 2002
3,672
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[blockquote]
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On 1/30/2003 9:22:06 AM 767jetz wrote:

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On 1/30/2003 7:30:05 AM cltvff wrote:

Could this be the writing on the wall?

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No. It means that USAir employees are once again having delusions of grandeur. If flying and aircraft are going to be done by a low cost subsidiary, it won't be USAir. It will be flown by pilots and F/A's on the United seniority list.
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If the Judge says that you mean. Being from US we know just how powerless any of the unions have become. I hate to say it, but you will soon see just how wicked things can get. If anything happens I am certain that ALPA will mesh things together as best as possible. I know you are not open to the idea of UA & US getting together, but both carriers need it to survive. We have PHL and CLT that would fill in the void at UA. You know as well as I that no other airline has been able to establish a southeastern hub other than US to compete with DL in ATL....why do you think DL was against the merge before and wants US to go away for good. AA was a failure with RDU. NW has not done much better with MEM and UA at IAD is nothing compared to CLT & ATL either. If we could combine and get CLT up to speed DL would be in tears.....
 

Pacemaker

Senior
Sep 3, 2002
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I don't think any BK judge with a brain is going to approve of handing over UAL planes and other asetts to US Airways without UAL employees. The result would make UAL's "summer of love 2000" look mild by comparison and destroying the company is not in anyone's interests.

As a US Airways pilot I don't want any part of a deal where we steal another carriers' routes and aircraft out from under their noses.

As someone pointed out, this is all more grasping at straws by certain US Airways employees who are desperate for some kind of way out of the current mess. We have more than we can handle here and our future is very much in doubt. If Dave doesn't find a way to satisfactorily address the pension issue then IMO there won't be a US Airways anymore anyway.
 

767jetz

Veteran
Aug 20, 2002
3,286
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Pacemaker & Wings396,

Thanks for your candid response. It's good to hear that there are some on the other side that don't subscribe to all the conspiracy theories. I do agree that U and UA systems complement each other nicely. However I believe that each airline needs to fix their own problems, and then we can work together through marketing agreements, much like NW&CO.
 

wings396

Veteran
Aug 20, 2002
3,672
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[blockquote]
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On 1/30/2003 3:03:41 PM Pacemaker wrote:

I don't think any BK judge with a brain is going to approve of handing over UAL planes and other asetts to US Airways without UAL employees. The result would make UAL's "summer of love 2000" look mild by comparison and destroying the company is not in anyone's interests.

As a US Airways pilot I don't want any part of a deal where we steal another carriers' routes and aircraft out from under their noses.

As someone pointed out, this is all more grasping at straws by certain US Airways employees who are desperate for some kind of way out of the current mess. We have more than we can handle here and our future is very much in doubt. If Dave doesn't find a way to satisfactorily address the pension issue then IMO there won't be a US Airways anymore anyway.
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I agree that the Judge would not permit that to happen. What I think we would see is some of the employees coming over with the assets as they did when UA purchased some of Pan Am’s routes. The only reason that I believe things would go this way is due to the contracts now in place at US for the next 6 years. By placing some or all of UA’s system under the work rules and wages we have in place is much quicker and easier that it will be to get UA to the same point. UA doesn’t not have a lot of time to get things in order. We now have the lowest costs possible…..At least for our sake I hope we do….Anyway US is much further along with its reorganization plan and is close to coming out of CH-11. This is the
quickest and most sensible way to get evertying on track. With some financing from RSA and others, the combined operation would be a force to reckon with. We would have the best route structure in the industry.
 

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