United Airlines announced that they wont take war defferal money from their employees

Aug 23, 2002
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I saw an article that stated that United Airlines was going to do a pay deferral of its employees like USAIRWAYS is doing with a 5 percent deferral... United stated that it is due for more funds from the federal government for lost revenue during the war, like the other airlines and that the war is about over and booking are starting to rebound...Saying that they see no need to take the war pay deferral money now from employees....Would be nice if U did the same...
 
United Air scraps war-related extra pay cuts


CHICAGO, April 17 (Reuters) - Bankrupt United Airlines said on Thursday it sees no need to go through with temporary pay cuts it threatened last month amid war jitters because bookings have picked up slightly and federal aid is about to kick in.

United, which filed the largest U.S. airline bankruptcy in history in December along with parent UAL Corp. , warned in March that it would be forced to cut pay at least 9 percent temporarily for all workers if it did not find relief from an added drop in travel because of the war in Iraq.

Those reductions would have been on top of temporary pay cuts set in January to satisfy tight monthly financial requirements set by lenders who provided crucial money for United''s restructuring.

"This (government) relief measure, along with United''s ongoing cost reduction efforts in matching flight capacity to demand, has allowed the company to postpone the additional employee pay cuts in its Iraq war contingency plan," United said in a taped message to employees.

May schedule cuts and unpaid leaves announced on Tuesday remain in place, United said. Unpaid leave, or authorized no-pay status, is not planned beyond May, it said.

"The company also is targeting a 5 percent cost reduction among salaried and management employees through ... authorized no pay and management reduced scheduling," United said.

United has reached at least tentative long-term agreements with all of its union groups on wage and nonwage cuts under a plan to reduce labor costs by $2.56 billion per year.

Pilots, flight dispatchers and meteorologists have ratified long-term cost cuts with United. Mechanics, ramp and customer service workers, and flight attendants are expected to report ratification vote results on April 29.

United did not indicate how much cash it expects to receive from the $3.5 billion government aid package for airlines signed into law by President George W. Bush on Wednesday with funding for the war in Iraq.

The plan includes $2.4 billion in cash reimbursements for security costs, and suspension of passenger security fees from June 1 through Sept. 30 valued at $520 million. An extension of insurance coverage totals about $600 million.

United cut capacity by 8 percent and put a number of workers on unpaid leave for April. On Tuesday, United extended April capacity cuts through May, added nearly 4 percent to the total and planned more unpaid leaves because demand remains depressed because of the Iraq war and SARS, or Severe Acute Respiratory Syndrome.

Union leaders for United''s flight attendants have told members that the airline''s April cuts led to about 2,300 unpaid leaves and May cuts could add 1,875 more unpaid leaves.

04/17/03 18:01 ET
 
I hope Dave is seriously reconsidering the pay defferal. US Airways is scheduled to receive an estimated $206 million in 2Q-03 in government funds.
The total "take" for the 18 month defferal is projected to be approximately $120-160 million, depending on who''s numbers you use. A comparison of load factors indicates virtually no effect of war on passenger loads.

LF April 2002 = 74.3%
LF April 2003 = 73.4% (April 1-23)

Last 4 Mondays: 69.5%, 71.7%, 72.0%, 83.0% (upward trend)
Last 4 Tuesdays: 57.4%, 63.7%, 66.3%, 73.2% (upward trend)
Last 4 Wednesdays: 62.7%, 68.5%, 73.6%, 73.1% (upward trend)

Based on actual passenger data, I think one can say that the "war effect" was clearly over estimated.
 
Below is an article about DL and their increasing their flying for June, but showing that they will still be operating at a reduced capacity for the remainder of the year due to the effects of the war. They stated that the effects of the Gulf War in 1991 took 9 months to recover to pre-war levels and that they feel that the same will hold true for this war.


http://biz.yahoo.com/djus/030424/1032000955_1.html


Just because the war is over, doesn''t mean that the effects just go away. The higher load factors this week are due to Easter Vacations and were bookings that have been on the books for some time. The thing I find encouraging is that less and less people are canceling trips that were booked, but new sales are still not up to pre-war leves. Another key is REVENUE! Revenue is still not up and we are having to offer steep discounts to get people to fly. For example: 57.00 for a flight from BUF-MCO and 89.00 to the west coast. We are not going to make money with this kind of fare, but we will put some butts in the seats. High load factors do not mean that we are making money, just that we have succeeded in making prices attractive enough to get some people to buy.
 
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On 4/25/2003 7:58:00 AM MarkMyWords wrote:


Just because the war is over, doesn''t mean that the effects just go away. The higher load factors this week are due to Easter Vacations and were bookings that have been on the books for some time. The thing I find encouraging is that less and less people are canceling trips that were booked, but new sales are still not up to pre-war leves. Another key is REVENUE! Revenue is still not up and we are having to offer steep discounts to get people to fly. For example: 57.00 for a flight from BUF-MCO and 89.00 to the west coast. We are not going to make money with this kind of fare, but we will put some butts in the seats. High load factors do not mean that we are making money, just that we have succeeded in making prices attractive enough to get some people to buy.

MarkMyWords,

How exactly has the war in Iraq effected US Airways? It seems to me that there has been very little effect. Let''s not forget that because of the war, US Airways will receive $206 million! Revenue is a whole different story. That has been a major problem for the last two years. The ball is clearly in managements court.
 
Bob,

The point of the concern here is that there does not appear to be any obvious effect of the war on US Airways. Can you provide specific detrimental effects? With the information I can access, I cannot find any evidence of reduced demand beyond slight variances. The 5% hurts most employees. If there was a dramatic drop in demand as a direct result of the war, most employees would probably understand the need for the defferal (intrest free loan). Please don''t tell me about fare sales for the summer, because there have ALWAYS been fare sales. Fares and revenue were not the rational behind the 5% defferal. It was the belief of significantly reduced passenger demand for an extended period of time. I personally think management should communicate the NEED with employees. Yes, it was in the contract that labor agreed to, but the NEED needs to be clarified in my opinion. Or simply come out and say..."It was in the contract, we are cash strapped, we need the money, and we will abide by the terms of the contract PERIOD."
 
Just because the war is over, doesn''t mean that the effects just go away. The higher load factors this week are due to Easter Vacations and were bookings that have been on the books for some time. The thing I find encouraging is that less and less people are canceling trips that were booked, but new sales are still not up to pre-war leves. Another key is REVENUE! Revenue is still not up and we are having to offer steep discounts to get people to fly. For example: 57.00 for a flight from BUF-MCO and 89.00 to the west coast. We are not going to make money with this kind of fare, but we will put some butts in the seats. High load factors do not mean that we are making money, just that we have succeeded in making prices attractive enough to get some people to buy.

The war effected the industry SO MUCH that Jetblue HAD to run out and buy 65 more Airbus'' with options on 50 more.....
 
Ok Bob, here you go. The employees of U have given their life’s blood to this company. If the management of USAirways has ONE OUNCE of integrity left, they will not take this money from the employees.

GIVE IT BACK!!!!!!!!!

A320 Driver
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On 4/25/2003 9:21:08 AM PineyBob wrote:




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On 4/25/2003 8:55:53 AM A320 Driver wrote:

Ok Bob, here you go. The employees of U have given their life’s blood to this company. If the management of USAirways has ONE OUNCE of integrity left, they will not take this money from the employees.

GIVE IT BACK!!!!!!!!!

A320 Driver


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Why is it when a union signs a contract it becomes a "Stone Tablet" and when the company seeks to enforce what the employees negotiated it becomes unethical. I frankly would submit to you that their integrity is just fine, it is you that are asking for modifications to an existing contract that gave US Airways a vehicle that allows them to deferr 5% of your earnings. When O''when will you get it that it''s not what''s fair! It''s what you negotiate!!!

YOU sir through your elected officials negotiated the contracts that are currently in place. You very easily at anytime refused to "go along" with managements contention that it was a liquidate or else situation. You could have "called their bluff" and many on here urged that. But YOUR elected officials CHOSE to do the deals as negotiated. And now you''re living under the conditions negotiated by YOUR reps! Frankly I don''t want to hear it! US Airways offered you a Sh*T deal and you took it. Get over it!

To all of the naysayers:
When was the last time YOU went to a meeting at your local?
When was the last time YOU registered to vote in an election?
When was the last time YOU made an effort to improve your situation?
When was the last time YOU went down on the picket lines? when there were picket lines? I''ll bet some of you have spent less time on the picket line then I have and the last time I went was when I was 8 with my dad!
A union is only as strong as the weakest member, so once again I point the finger back. During the negotiations, US Airways beat you like a red headed step child and that''s your fault. Not the company''s, not the PAX. It falls on each and every union members shoulders that never attended a meeting or did anything other than complain.


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Bob you I do all the things you mentioned, I attend every single union meeting, I vote in every election and try to register as many members as possible and whenever there is a picket line in the area I go down and bring them snacks and beverages.

But you fail to realize one thing, the two Dave''s had a gun pointed at our heads, this was not traditional collective bargaining it was do this our we will liquididate, we heard it hundreds of times. For one person I am privy to a lot of what happened in the Mechanic and Related and Fleet Service "negotiations" and you would be surprised how the company treated our negotiators and the lack of professionalism displayed by Labor unRelations.

The employees at US were in a no win situation, we were treated like crap, still are treated like crap and there is nothing labor friendly about Dave and Dave.

Let me poise a question to you Bob, in the CLT Distribution Center (Parts and Supplies) since 9-11-01 we have lost over 80 stock clerks but yet not one manager or foreman has been given a pink slip. For example you have four foreman at distribution in charge of 30 clerks on first shift, you have two foreman in charge of about 30 clerks on second shift, you have two foreman in charge of less then 20 people on midnight shift, you have a foreman at the GSE (ground support equipment) in charge of 3 people on day shift, no foreman on 2nd or 3rd and you have on foreman in charge of 4 clerks on 1st shift at the Offsite facitlity and no foreman in charge of 4 clerks on second shift and no one on third shift.

Where is the logic?
 
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On 4/25/2003 10:02:01 AM gilbertguy wrote:


The war effected the industry SO MUCH that Jetblue HAD to run out and buy 65 more Airbus'' with options on 50 more.....

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And if we had a cost structure of JetBlue we would be making money too.....
 
To Bob and the others. You are correct when you say that the company does not have to give the 5% back until they show a profitable quarter. It would be the proper thing to do based on UA''s decision. I can tell you that since the war started our system bookings have been higher most days than they have been for months. We all gave and gave and gave until it hurt and then some. The war has gone better than expected and fuel prices have gone down as well. Point blank, with these factors as well as the government funds our 5% is no longer needed. Will they give it back, probobly not based on past practice. I just think that this COULD be a turning point in the MORALE department for once.
 
Mark get your facts straight, UA did not close all their heavy maintenance bases and contract it out. SFO and OAK are still open and performing work, IND has been put on hiatus and UA has the ability to farm out 20% of their maintenance work from the budget which they do not even farm out the full 20%. UA does farm out some heavy maintenance but 80% of it must be performed inhouse, unlike Southwest who farms out 69% of their maintenance.
 
Gene,

You are equating todays load factors as an indication of the effects of the war. These booking have been on the books for a while and it is encouraging that 99.9% of our customers chose to fly rather then postpone trips due to the war. But when you look at future date bookings we are still below previous years levels. In the first week of the war, future date booking were down 30%. Most airlines reduced their short term flying schedules to better align capacity with demand. US reduced their flying schedule 5%, DL 12%, UA 12%, AA 8% (don''t quote me on that....they are from memory). That was strictly to accomodate the immediate knee jerk reaction of our customers. Businesses canceled business flying, leisure travelers postponed vacations, etc. Yes we are seeing increases in future date bookings, but they are not back to the pre-war level yet. That is evident by the fare sales that are out there to try and get csutomers wanting to fly again. Yes we do always have summer fare sales, but have you ever seen a fare of 57.00 to Florida? 89.00 to the west coast? How do we make money at that level, even with the concessions in place? The effects of the war will far exceed the duration of the war.

As for the 206 million dollars of federal money we are supposedly going to receive......that is a reimbursement, not free money. That is money that we have already paid out to do cockpit door modifications and other security related expenditures. There is still no word on how much of this we will recoup and when. We could see only a portion of that money, not the whole thing. And who knows, we may not get that as cash, but as tax credits over an extended period of time. All of the details have not been worked out yet.


Bob -

Thank you, Thank you , Thank you! I couldn''t have said it better myself....and I have been trying! LOL