United to be split up.

[flyhigh]

I'm still curious. The LCC competition isn't the answer. The numbers are the numbers. They can't shy away from them when everyone else is in the same boat and not doing as bad.

UA CASM - 12.67 cents
AA CASM - 12.63 cents

UA Non-Fuel CASM - 8.10
AA Non-Fuel CASM - 8.11

UA Ttl Revenue - +7.7%
AA Ttl Revenue - +5.0%

UA Ttl Expenses - +15.4%
AA Ttl Expenses - +13.6%

UA PRASM - +7.3%
AA PRASM - +6.5%

YES, UA's expenses rose more and fuel is partly to blame, but that simply doesn't seem to explain it all. I've tried looking at everything and it just isn't adding up to me.

 

[aapitbull]

True, but that was because AA was in the middle of building a all-new third terminal at the time.
It would have been a lot cheaper for them to have just taken over the DL gates, but hindsight is always 20/20...

Not true almost all airlines now in terminal E old delta gates where in fact in terminal B NWA,CO, AIRTRAN, ATA, FRONTIER etc. Only UA has remained in B all the rest of the gates have been taken over by American Eagle so in fact AMR has taken most of the space that Delta had only in a round about way. AA also now has more gates in the new terminal D than was originally planed & is installing more jet bridges to accomadate narrowbody aircraft.

 

[FWAAA]

YES, UA's expenses rose more and fuel is partly to blame, but that simply doesn't seem to explain it all. I've tried looking at everything and it just isn't adding up to me.

UAL's mainline yield was more than a third of a cent less (0.35 cents) than AA's mainline yield. AA's mainline RASM was a quarter cent more per ASM. That was a huge factor, when we're talking tens of billions of passenger miles and ASMs.

UA's mainline fuel cost a dime more per gallon than AA paid (all net of hedging gains). That adds up.

UA had lower unit revenue and higher unit costs. Adds up to much larger loss for UA.

 

[flyhigh]

FWAAA,

I get that, but they only blamed fuel and nobody has called them on it. Why is their unit revenue worse? Is it because of a weak dollar and their disproportionately higher Asian traffic? Why was fuel higher...worse hedging program? Just saying fuel is expensive is not the answer. Again, they were given a lot of money to get out of ch 11 and have not done a very good job since. With an oil guy at the helm you would expect a better management of that expense which also happens to be their largest...I'm not seeing that or an explaination why. That is what concerns me.

I guess that is why their stock sank so much more than everyone else's who lost money...they used the same excuse as everyone else but their numbers say they did a worse job of managing it. This isn't only an investor issue though. As we know, most on this board are employees...I would be asking these questions if I were them.

 

[jimntx]

FWAAA,

I get that, but they only blamed fuel and nobody has called them on it. Why is their unit revenue worse? Is it because of a weak dollar and their disproportionately higher Asian traffic? Why was fuel higher...worse hedging program? Just saying fuel is expensive is not the answer. Again, they were given a lot of money to get out of ch 11 and have not done a very good job since. With an oil guy at the helm you would expect a better management of that expense which also happens to be their largest...I'm not seeing that or an explaination why. That is what concerns me.

I guess that is why their stock sank so much more than everyone else's who lost money...they used the same excuse as everyone else but their numbers say they did a worse job of managing it. This isn't only an investor issue though. As we know, most on this board are employees...I would be asking these questions if I were them.

I agree that something is not kosher with their numbers. However, as a former Texaco employee let me add...please remember that Tilton spent a lot of time in Marketing at Texaco. His job was to get the highest price possible for the product, not the lowest.

 

[Fly]

Here is a wordy yet interesting read I found on another board.

Will The Wolf Survive?


Amid all the speculation and anxiety surrounding UAL's future course, it's important to remember that certain 'patterns' tend to rear their ugly head, each and every time this company finds itself in crisis. It's actually rather amazing to me, that people feel 'in the dark' about what's going on.

The evidence is everywhere:
An ill-advised quarter BILLION dollar payout in January. The skyrocketing price of oil. The failure of half a dozen airlines within the past six months. Our CEO's continual, myopic obsession with what he calls "consolidation." The merger at NWA/Delta.
The list gets kinda boring, after that...but you know very well, I could name another six factors.
Fact is, it's all out in the open, and nobody's been hiding anything--least of all, Glenn Tilton.

Some may call me a "conspiracy theorist," if I mention that the 'perfect timing' of Tuesday's MEC briefing at WHQ was very strangely 'synchronized' with
A.) The quarterly report of a half BILLION dollar loss at UAL B.) The resulting stock crash--wherein, United lost 36% of its total value. Breathtaking stuff, yes.
Not even the upcoming 'golden parachutes' could slow it down.

But one harkens back, to the pre-bankruptcy days...or even to the post 9/11 days....
and one clearly recalls a few similar "Come on over, let's talk" meetings, between union and management.
They were never pleasant affairs.
Nobody came to play paddy-cake.
In fact, what transpired at each and every such meeting was a "Presentation of Doom," designed to elicit 'cooperation' from the blood-enemy of management: its unions.

It has been a result of those meetings-- and not Section 6 negotiations--that our worst concessions have always come about.
Mind you, these 'presentations' only happen when management has all of its ducks in a row, including considerable publicly-acknowledged, fresh evidence of impending doom. They then declare it necessary to supposedly "open the books," and at the day's end, it's all about demanding even more concessions.
It usually goes something like this: "Either you let us postpone your raises and cancel any further ones for two years, or we close six domiciles tomorrow.
Your choice...get back to us!" Who's your buddy, hah? Who's tryin' to woik with ya, here!?!
(In reality, it's more of a "Who's your Daddy" situation...if you know what I mean.)
"Crisis concessions," as I'll call them here-- to distinguish them from those achieved through normal contract negotiations--
have exhibited a VERY predictable pattern, in this company's recent past.

I hate to bum you out, folks...but whenever there's going to be a merger (and for immediate reference, simply recall the UAL bankruptcy filing),
concessions are usually achieved on a three-tiered basis.
Not one time, nor two.
Three.
Three full rounds of serious concessions--in exchange for our vvery existence.

First, in order to create a more appealing scenario--be it for a bkk judge or (in the current situation) a potential suitor--
immediate, 'emergency' measures will be demanded.
So whether it's a pay freeze (in anticipation of our upcoming raise) or base closures,
or even a proposal to bend the rule on layoffs for foreign nationals--whatever form it takes, that is where we are at the moment.
At least, I think so.

No suitor (or merge partner) would go forward, without FIRST wringing a round of new concessions and 'belt-tightening measures' from their employees,
as well as demanding the same of its potential business partner, or "bride."
It's Standard Operating Procedure--allowing a kind of good cop/bad cop 'phasing in,' of the new realities--
and if, by some chance, the topic of new concessions (read: ultimatums) didn't come up yesterday, believe me...
It soon will.

What's particularly depressing is that, after those first measures, along will come the pre-merger negotiations to merge union contracts, and in that process--no matter what union prevails--there WILL be significant further concessions, or "efficiencies" demanded.
The pressure from Wall Street will be seismic, to immediately begin demonstrating that, in fact, this merger was a good idea.

In addition, believe it or not, your AFA-CWA has a vested interest in concessions.
I know...how can that possibly be?
Well, just suppose it comes down to NO AFA-CWA at the new company...or big concessions.
Who do you think they'll throw under the bus?
...themselves?
Hardly.

And in that connection, we have seen (over and over) evidence that concessionary contracts actually STRENGTHEN the union's grip on its membership.
(You will recall all of those comparative contracts we were shown. "It could be worse! Look what Continental's duty rigs look like!"
Ironic, eh?
"Without the AFA, we'd have lost everything...not just half of everything," seems to be the going line, in times of crisis.)

As counter-intuitive as it sounds, your union actually has, as its primary interest,
a third party at the negotiating table,
in addition to management and the employees:
...ITSELF.

So you can expect both new work rules (duty rigs, staffing, etc.), new disciplary rules, new pay charts,
pretty much everything you do not want to see--in advance of any merger.

But wait...that's only "Round Two!"

The coup d'etat comes after most operational systems have actually been combined,
a year or two down the line...and the company "suddenly' finds itself in a serious financial crunch, due to everything from oil prices
to unforseen ("one time") charges surrounding the merge itself, to balance sheet problems, to regulatory roadblocks, or even just...bad weather.
Whatever the story has to be, it will be.
But believe me, there will be a narrative--and it will be told with further concessions in mind.

And at every single stage of this process, these will NOT be requests.
They will be ultimatums.

Just like in the past:
"If you don't do this, this and this...we simply cannot save the company!"
Your choice is: "Job? Or no job!"
And you will vote, as even I probably will, to save the job...even as it goes further downhill.

How do I know that's how it goes?
...because, that's how it's already gone.

I can't help but think it doesn't have to be this way. But then, that's like asking the fox who watches the hen house not to get hungry.
It's as much a law of nature as anything else.
Survival of the fittest; the law of the jungle.

So put on your best "Goldilocks" outfit, grab that picnic basket, and start skipping through the woods!

Only one question remains:



Will the wolf survive?

 

[bigbusdrvr]

Here is a wordy yet interesting read I found on another board.

Will The Wolf Survive?


Amid all the speculation and anxiety surrounding UAL's future course, it's important to remember that certain 'patterns' tend to rear their ugly head, each and every time this company finds itself in crisis. It's actually rather amazing to me, that people feel 'in the dark' about what's going on.

The evidence is everywhere:
An ill-advised quarter BILLION dollar payout in January. The skyrocketing price of oil. The failure of half a dozen airlines within the past six months. Our CEO's continual, myopic obsession with what he calls "consolidation." The merger at NWA/Delta.
The list gets kinda boring, after that...but you know very well, I could name another six factors.
Fact is, it's all out in the open, and nobody's been hiding anything--least of all, Glenn Tilton.

Some may call me a "conspiracy theorist," if I mention that the 'perfect timing' of Tuesday's MEC briefing at WHQ was very strangely 'synchronized' with
A.) The quarterly report of a half BILLION dollar loss at UAL B.) The resulting stock crash--wherein, United lost 36% of its total value. Breathtaking stuff, yes.
Not even the upcoming 'golden parachutes' could slow it down.

But one harkens back, to the pre-bankruptcy days...or even to the post 9/11 days....
and one clearly recalls a few similar "Come on over, let's talk" meetings, between union and management.
They were never pleasant affairs.
Nobody came to play paddy-cake.
In fact, what transpired at each and every such meeting was a "Presentation of Doom," designed to elicit 'cooperation' from the blood-enemy of management: its unions.

It has been a result of those meetings-- and not Section 6 negotiations--that our worst concessions have always come about.
Mind you, these 'presentations' only happen when management has all of its ducks in a row, including considerable publicly-acknowledged, fresh evidence of impending doom. They then declare it necessary to supposedly "open the books," and at the day's end, it's all about demanding even more concessions.
It usually goes something like this: "Either you let us postpone your raises and cancel any further ones for two years, or we close six domiciles tomorrow.
Your choice...get back to us!" Who's your buddy, hah? Who's tryin' to woik with ya, here!?!
(In reality, it's more of a "Who's your Daddy" situation...if you know what I mean.)
"Crisis concessions," as I'll call them here-- to distinguish them from those achieved through normal contract negotiations--
have exhibited a VERY predictable pattern, in this company's recent past.

I hate to bum you out, folks...but whenever there's going to be a merger (and for immediate reference, simply recall the UAL bankruptcy filing),
concessions are usually achieved on a three-tiered basis.
Not one time, nor two.
Three.
Three full rounds of serious concessions--in exchange for our vvery existence.

First, in order to create a more appealing scenario--be it for a bkk judge or (in the current situation) a potential suitor--
immediate, 'emergency' measures will be demanded.
So whether it's a pay freeze (in anticipation of our upcoming raise) or base closures,
or even a proposal to bend the rule on layoffs for foreign nationals--whatever form it takes, that is where we are at the moment.
At least, I think so.

No suitor (or merge partner) would go forward, without FIRST wringing a round of new concessions and 'belt-tightening measures' from their employees,
as well as demanding the same of its potential business partner, or "bride."
It's Standard Operating Procedure--allowing a kind of good cop/bad cop 'phasing in,' of the new realities--
and if, by some chance, the topic of new concessions (read: ultimatums) didn't come up yesterday, believe me...
It soon will.

What's particularly depressing is that, after those first measures, along will come the pre-merger negotiations to merge union contracts, and in that process--no matter what union prevails--there WILL be significant further concessions, or "efficiencies" demanded.
The pressure from Wall Street will be seismic, to immediately begin demonstrating that, in fact, this merger was a good idea.

In addition, believe it or not, your AFA-CWA has a vested interest in concessions.
I know...how can that possibly be?
Well, just suppose it comes down to NO AFA-CWA at the new company...or big concessions.
Who do you think they'll throw under the bus?
...themselves?
Hardly.

And in that connection, we have seen (over and over) evidence that concessionary contracts actually STRENGTHEN the union's grip on its membership.
(You will recall all of those comparative contracts we were shown. "It could be worse! Look what Continental's duty rigs look like!"
Ironic, eh?
"Without the AFA, we'd have lost everything...not just half of everything," seems to be the going line, in times of crisis.)

As counter-intuitive as it sounds, your union actually has, as its primary interest,
a third party at the negotiating table,
in addition to management and the employees:
...ITSELF.

So you can expect both new work rules (duty rigs, staffing, etc.), new disciplary rules, new pay charts,
pretty much everything you do not want to see--in advance of any merger.

But wait...that's only "Round Two!"

The coup d'etat comes after most operational systems have actually been combined,
a year or two down the line...and the company "suddenly' finds itself in a serious financial crunch, due to everything from oil prices
to unforseen ("one time") charges surrounding the merge itself, to balance sheet problems, to regulatory roadblocks, or even just...bad weather.
Whatever the story has to be, it will be.
But believe me, there will be a narrative--and it will be told with further concessions in mind.

And at every single stage of this process, these will NOT be requests.
They will be ultimatums.

Just like in the past:
"If you don't do this, this and this...we simply cannot save the company!"
Your choice is: "Job? Or no job!"
And you will vote, as even I probably will, to save the job...even as it goes further downhill.

How do I know that's how it goes?
...because, that's how it's already gone.

I can't help but think it doesn't have to be this way. But then, that's like asking the fox who watches the hen house not to get hungry.
It's as much a law of nature as anything else.
Survival of the fittest; the law of the jungle.

So put on your best "Goldilocks" outfit, grab that picnic basket, and start skipping through the woods!

Only one question remains:



Will the wolf survive?

------------------------------------------------------------------------------------------------------------------------------------------------

I think this post is the mst concise and accurate explaniation of airline/labor negotiations at least in the last decade... Thanks for the heads up. All legacy labor should read and reread this....It will undoubtly be part and parcil to managments nearterm doomsday scenerio...Thanks

 

[jimntx]

Ditto. Very insightful look at the "concessionary" cycle, but that's just the "mechanics" of the process. However, I think there is an additional (if not entirely different) motive behind this process.

IMO, the management concessionary demand cycle over the past years since 9/11 is not only a financial move against the unions, I think it is also a philosophical one. But, the philosophy is NOT anti-union. It is anti-career-flight-attendants. I think the long-term goal is to return the job of flight attendant to what it once was with one major difference, and that the airlines are attempting to make the job of f/a as untenable as possible to accomplish that goal.

I.E, they want the job of f/a to return to something that young ladies (and gentlemen in these days) of good family and nice legs do for 3-5 years until they A. get traveling out of their system, B. find a real job or a spouse, or C. just get sick and tired of trying to live on practically nothing.

The major difference being that people like me who have had careers in other fields and who have an income would do the job for a few years prior to retirement for fun/travel/etc. In either case, the company would not be looking at major pension obligations for either group of employees, or anything other than most f/as being on new hire pay steps.

 

[ual777fan]

Not true almost all airlines now in terminal E old delta gates where in fact in terminal B NWA,CO, AIRTRAN, ATA, FRONTIER etc. Only UA has remained in B all the rest of the gates have been taken over by American Eagle so in fact AMR has taken most of the space that Delta had only in a round about way. AA also now has more gates in the new terminal D than was originally planed & is installing more jet bridges to accomadate narrowbody aircraft.

O/T:Just as a side note... Terminal B's facilities are the WORST at DFW if not the worst I've seen at most major airports. That terminal needs some TLC and quickly. The bathrooms are nasty, the terminal is dark and dank, many of information TV screens don't work properly anymore etc. It's one of the many reasons I hate flying on Eagle out of DFW.

 

[StewGuy86]

I.E, they want the job of f/a to return to something that young ladies (and gentlemen in these days) of good family and nice legs do for 3-5 years until they A. get traveling out of their system, B. find a real job or a spouse, or C. just get sick and tired of trying to live on practically nothing.

You hit the nail directly on the head, Jim!!

 

[FWAAA]

Ditto. Very insightful look at the "concessionary" cycle, but that's just the "mechanics" of the process. However, I think there is an additional (if not entirely different) motive behind this process.

"Motive" is a little stronger term than I'd use. "Unintended side benefit" would be my choice of words.

IMO, the management concessionary demand cycle over the past years since 9/11 is not only a financial move against the unions, I think it is also a philosophical one. But, the philosophy is NOT anti-union. It is anti-career-flight-attendants. I think the long-term goal is to return the job of flight attendant to what it once was with one major difference, and that the airlines are attempting to make the job of f/a as untenable as possible to accomplish that goal.

I.E, they want the job of f/a to return to something that young ladies (and gentlemen in these days) of good family and nice legs do for 3-5 years until they A. get traveling out of their system, B. find a real job or a spouse, or C. just get sick and tired of trying to live on practically nothing.

The major difference being that people like me who have had careers in other fields and who have an income would do the job for a few years prior to retirement for fun/travel/etc. In either case, the company would not be looking at major pension obligations for either group of employees, or anything other than most f/as being on new hire pay steps.

In some ways, if management succeeds in its plan, wouldn't that success help open the door for other retired Baby Boomers (like yourself) to retire from other occupations/professions/vocations etc. and play flight attendant for a few years for the fun of it?

A natural consequence of the flight attendants' success in transforming what used to be a starter job to hold until you got married or hit 30 into a "career" to occupy until death or incapacity is the current stagnation in seniority that some of you have discussed on the AA forum. As attrition slows to a crawl, you'll be in your 90s before you can hold the really great international lines, right?

If management can keep slashing pay and work rules until the career mommas can't take it anymore, then AA (and other legacies) will eventually have to hire off the street. And with our country's population growing by 2-3 million a year, it won't be impossible (it won't even be difficult) to hire some young men and women who long for the "glamour" and "fun" of doing what you do. For the very reasons you applied at AA. Travel and fun.

The AFA's success (changing the rules so that young men and women to hold onto their entry level FA job forever) may prove to be the "profession's" undoing.

I don't advocate slashing FA wages further. But the lack of retirements and other attrition at AA tell management all they need to know: FA pay is still too high (in their view) since those senior mommas haven't left yet. So my prediction is that the next decade sees further pay reductions. Unless airlines are profitable, the threat of a strike doesn't carry the same weight. Threatening to take unpaid leave when red ink is flowing might even be welcomed by some in management. And who knows - a strike might even give management ideas about permanently replacing the APFA flight attendants. Accelerating the plan you outlined. Get rid of them all in one day.

To be sure, flight attendants are safety professionals. When the need arises, they almost always shine in helping to save lives. But nobody ever wants to have to use those skills. So what we have is an army of men and women harping about seat belts and other rules while serving soft drinks (and very rarely, meals) to airline passengers. Paying old men and women lots of money just because they've served soft drinks for 40 years doesn't make all that much economic sense when you've got young ones (and young at heart, like you) who'd give anything to fly AA's 777s to Europe, S America and Asia.

As has been posted before, age and experience don't even make FAs more productive, since federal rules say you've gotta have one per 50 pax (or fraction thereof). Pilots, on the other hand, tend to fly bigger airplanes with more seats the older they get, so they can sorta justify their higher pay with pseudo-productivity improvements that accompany advancing age. Two young people flying a 50 seat RJ on 150 mile segments making almost nothing compared with two old people flying a 777 to London making big bucks is almost proportional. Not so with FAs.

 

[aapitbull]

O/T:Just as a side note... Terminal B's facilities are the WORST at DFW if not the worst I've seen at most major airports. That terminal needs some TLC and quickly. The bathrooms are nasty, the terminal is dark and dank, many of information TV screens don't work properly anymore etc. It's one of the many reasons I hate flying on Eagle out of DFW.

There has been some improvment over the last year or so but you are correct it's definetly the REDHEAD STEPCHILD at DFW. Still it was a defensive move in my mind just like the leasing of the old Delta Hangar very large 90 odd mechanics there. That said under the new FAA ramp space & hangar have come in handy!

 

[RowUnderDCA]

FWAAA is right.

For myself, I think it's a waste to see wise, senior, experienced airline workers inappropriately employed in a metal tube 30,000 feet in the air. When I board, I aways look at these folk and think to myself, "why can't you be in the airport solving problems or on the phone fixing snafus, where I need you, instead of making me wonder if you can physically open an emergency exit or exercise authority over a disruptive passenger, while you're handing me a diet coke?" thanks a lot AFA.

 

[Fly]

I can tell you why. Because we take a look at their crappy job and tell each other that we'd quit if we had to do that day after day. Pretty simple. We don't want their job. We like our job.

Here's an idea: you help us open the exits and we'll help you with that question you needed solving. How's that sound?

 

[UAL_TECH]

FWAAA is right.

For myself, I think it's a waste to see wise, senior, experienced airline workers inappropriately employed in a metal tube 30,000 feet in the air. When I board, I aways look at these folk and think to myself, "why can't you be in the airport solving problems or on the phone fixing snafus, where I need you, instead of making me wonder if you can physically open an emergency exit or exercise authority over a disruptive passenger, while you're handing me a diet coke?" thanks a lot AFA.

I would agree if you would sign a contractual indemnification agreement that you fly at your own risk and you hold no parties liable for your loss of life.

Maximum liability is a can of 12 oz soda of your beneficiaries choice.

B) UT