UAL WAR WARNING

skyflyr69

Senior
Dec 11, 2002
439
13
February 02, 2003
United could be first war casualty
By Paul Merrion

If war erupts in Iraq, one of the first casualties undoubtedly will be United Airlines.
The double-whammy of skittish passengers and soaring oil prices threatens to push an already-teetering United into liquidation, says Sanford “Sandy†Rederer, president of Virginia-based consultancy Aviation Planning & Finance. “It depends how bad the public reaction (to war) is in terms of travel demand.â€
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Short-term survival would become the order of the day, putting United’s long-term restructuring plans on hold.
In the event of war, all airlines would sharply reduce flight schedules immediately, as they did after the Sept. 11 terrorist attacks and during the Persian Gulf War in 1991. In addition, UAL Corp., United’s Elk Grove Township-based parent, could ask the Bankruptcy Court to impose emergency reductions in labor costs.
And there would probably be a call for federal relief to help the airline industry, perhaps by reopening the government-guaranteed loan program created after Sept. 11.
United’s failure to win such a loan deal pushed it into bank-ruptcy in December. That move gave the airline more breathing room with creditors and more leverage over unions to create real growth potential by slashing labor costs. Last week, UAL CEO Glenn F. Tilton unveiled the linchpin of his plan to dig out of bankruptcy: a controversial discount-airline subsidiary aimed at leisure travelers.
But an outbreak of hostilities overseas “will definitely make things more complicated†for United’s low-cost-carrier concept, says Ron Kuhlmann, vice-president of Unisys R2A Transportation Management Consultants, based in Hayward, Calif. “The leisure traveler won’t take vacations. All discretionary travel will be less. They may not have as many passengers as they thought they would.â€
United is already at war with its unions over the low-cost-carrier plan, which executives presented last week in substantial detail to the company’s board of directors and the bankruptcy proceeding’s committee of unsecured creditors.
Internally code-named “Star-fish,†according to several sources close to United, the low-cost-carrier plan is deemed essential if United is to compete against Dallas-based Southwest Airlines, New York-based JetBlue Airways and other growing carriers that now offer low-fare competition for 72% of the passengers flown by United.
Complete coverage of this story appears in the Feb. 3 issue of Crain’s.
 

gimbalimit

Member
Nov 15, 2002
20
0
Start the low cost airline. We need some new blood around here. We can't make any less than were at. (mechanics). If we got the pilots to work for Jetblue wages maybe we would be out of this quicker.

Dear Dr. Borescope,

So you can't make any less than you're at now, huh? Wait 'til you either get furloughed or the company liquidates and see how low your wage can go - have you checked the job listings lately? Jiffy lube, Mr Good wrench if you're lucky - you guys aren't in any more demand than any other professional group in this economy. Geez, some of you guys are IDIOTS!! Please, get a clue!! Now, i'm not advocating a summary cave-in to blatant union busting maneuvers which promise to rip the heart out of this airline and the careers of those who've planted a flag here. What I'm trying to say is that idiotic jealously comments like the above serve NO PURPOSE!! Dude, if you want my wage then apply for my job - if you can't do that then shut the &^%k up and focus on the real threat, OK?


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Borescope

Veteran
Jan 10, 2003
1,130
24
[blockquote]
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On 2/4/2003 9:19:32 AM skyflyr69 wrote:

February 02, 2003
United could be first war casualty
By Paul Merrion

If war erupts in Iraq, one of the first casualties undoubtedly will be United Airlines.
The double-whammy of skittish passengers and soaring oil prices threatens to push an already-teetering United into liquidation, says Sanford “Sandy” Rederer, president of Virginia-based consultancy Aviation Planning & Finance. “It depends how bad the public reaction (to war) is in terms of travel demand.”

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Short-term survival would become the order of the day, putting United’s long-term restructuring plans on hold.

In the event of war, all airlines would sharply reduce flight schedules immediately, as they did after the Sept. 11 terrorist attacks and during the Persian Gulf War in 1991. In addition, UAL Corp., United’s Elk Grove Township-based parent, could ask the Bankruptcy Court to impose emergency reductions in labor costs.

And there would probably be a call for federal relief to help the airline industry, perhaps by reopening the government-guaranteed loan program created after Sept. 11.

United’s failure to win such a loan deal pushed it into bank-ruptcy in December. That move gave the airline more breathing room with creditors and more leverage over unions to create real growth potential by slashing labor costs. Last week, UAL CEO Glenn F. Tilton unveiled the linchpin of his plan to dig out of bankruptcy: a controversial discount-airline subsidiary aimed at leisure travelers.

But an outbreak of hostilities overseas “will definitely make things more complicated” for United’s low-cost-carrier concept, says Ron Kuhlmann, vice-president of Unisys R2A Transportation Management Consultants, based in Hayward, Calif. “The leisure traveler won’t take vacations. All discretionary travel will be less. They may not have as many passengers as they thought they would.”

United is already at war with its unions over the low-cost-carrier plan, which executives presented last week in substantial detail to the company’s board of directors and the bankruptcy proceeding’s committee of unsecured creditors.

Internally code-named “Star-fish,” according to several sources close to United, the low-cost-carrier plan is deemed essential if United is to compete against Dallas-based Southwest Airlines, New York-based JetBlue Airways and other growing carriers that now offer low-fare competition for 72% of the passengers flown by United.

Complete coverage of this story appears in the Feb. 3 issue of Crain’s.

Start the low cost airline. We need some new blood around here. We can't make any less than were at. (mechanics). If we got the pilots to work for Jetblue wages maybe we would be out of this quicker.




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ZMAN777

Advanced
Aug 23, 2002
204
0
www.usaviation.com
[blockquote]
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On 2/4/2003 1:34:14 PM gimbalimit wrote:


What I'm trying to say is that idiotic jealously comments like the above serve NO PURPOSE!! Dude, if you want my wage then apply for my job - if you can't do that then shut the &^%k up and focus on the real threat, OK?


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Dude....nice post!!!

Cheers,
Z
 

autofixer

Veteran
Aug 20, 2002
1,804
241
www.usaviation.com
Info Only: Mr. Goodwrench, pays in excess of $100,000 per year. My starting transmission man/woman makes over $60,000. Jiffy Lube is unskilled, thus, pays under $10 per hour(It is a great place to start or for college students).
 

gimbalimit

Member
Nov 15, 2002
20
0
[blockquote]
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On 2/4/2003 6:03:31 PM autofixer wrote:

Info Only: Mr. Goodwrench, pays in excess of $100,000 per year. My starting transmission man/woman makes over $60,000. Jiffy Lube is unskilled, thus, pays under $10 per hour(It is a great place to start or for college students).
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Aurofixer,
No offense intended regarding employment at Goodwrench and i did not know the specifics of compensation. Just curious, what are the haelth care, travel and retirement bene's over at goodwrench? How many people are you hiring these days? Im not implying that goodwrench isn't a good job, merely that I would bet that the total compensation package is perhaps a bit less than that which is enjoyed by the typical UAL mech - hey, I could be wrong. Of course, it really doesn't matter to the current mech group at UAL if there are few openings. What is a typical work schedule? Thanks for your response.
Gimbalimit
Gimbalimit