Us Airways' True Problem Created By

[PITbull]

USA320,

.

No one said that getting big quickly was not a good idea. Getting big then totally, irresponsibly, undeniably botching the job was Colodny's first huge goof. He's responsible for setting up a conglomeration of airlines with cost structures that were unsustainable almost from the day the operations merged.

USAir's cost structure was a ticking time bomb, and Colodny didn't went cluelessly on with blinders firmly in place. He had a "regulated" mindset long after every other CEO in the business realized that the paradigms had changed in 1978 with the advent of the Airline Deregulation Act. Colodny's "generosity" in bringing the fat, bloated USAir pay and working conditions to the lean PSA and Piedmont operations was classic hubris. "We know how to run an airline."

Well, Ed, NO YOU DON'T and we are still reaping the seeds you sowed back in 1987.

How about using a grammer book.

Please check out your second paragraph, grammer-spelling genius. You must have been beaten with a stick silly and a ruler to the hands back in catholic school.

I suggest you go and get your money back in tuition of 16 years you pride yourself on. In the meantime, and since everyone knows you are the one who started this thread...(no lying), you need to go to a school for arrogant, pompous asses and get some training on how to address we common-folk.

 

[nycbusdriver]

Alrighty then - by his/her own admission Pitbull isn't the greatest at spelling or punctuation. However, that didn't stop you from attacking again.

Just for the record the news came out today that children accused more than 4,000 priests of sexual abuse between 1950 and 2002, according to a draft survey commissioned by the U.S. Conference of Catholic Bishops.

I bet they can spell, though. :down:

Lark -

I don't inhabit that particular world that she was referring to. If Pitbull wants to flaunt her limited langauge abilities, as she pointed out, I don't want to be included.

As for your post about the Catholic priest sexual abuse statistics, what does that have to do with the fact that, as educators, they run circles around the public school system. And sexual abuse of children occurs just as often by people in positions of trust other than priests. The sticking point of the entire scandal is how the church hierarchy mishandled the problem.

But you did manage to get your own non sequitur in, so I hope you are happy.

 

[JS]

How about using a grammer book.

Please check out your second paragraph, grammer-spelling genius. You must have been beaten with a stick silly and a ruler to the hands back in catholic school.

I suggest you go and get your money back in tuition of 16 years you pride yourself on. In the meantime, and since everyone knows you are the one who started this thread...(no lying), you need to go to a school for arrogant, pompous asses and get some training on how to address we common-folk.

It's spelled grammar, and speaking of grammar, it's "... and get some training on how to address us common-folk."


Signed,

King of Spelling and Grammar

 

[TheLarkAscending]

I do believe that you missed the entire meaning of my post. You are bragging about the benefits of the education you'd received from a particular denomination. One which I believed prided itself in teaching kindness, understanding, forgiveness, humility, etc. It surprised me that you chose to attack Pitbull. With your type of educational background, I would have thought you'd have chosen to turn the other cheek.

You are correct about my using a non sequitur. Again, it was merely to point out that no one is perfect, not even Uncle Ed.


Peace

Lark

 

[PITbull]

How about using a grammer book.

Please check out your second paragraph, grammer-spelling genius. You must have been beaten with a stick silly and a ruler to the hands back in catholic school.

I suggest you go and get your money back in tuition of 16 years you pride yourself on. In the meantime, and since everyone knows you are the one who started this thread...(no lying), you need to go to a school for arrogant, pompous asses and get some training on how to address we common-folk.

It's spelled grammar, and speaking of grammar, it's "... and get some training on how to address us common-folk."


Signed,

King of Spelling and Grammar

JS,

I'm not the one professing to be a grammer/spell queen. And I suggest you double check your writing from now on....I don't think you want to be corrected by a person who received U's in writing in grade school now would you? I'll be watching.

 

[Light Years]

I enjoyed the non-sequitur.

I'll tell you one thing, US Airways problems were not caused by poor spelling...


Am I good or what? I should have been a newscaster, what with my clever segueways back to the topic.

 

[TheLarkAscending]

I enjoyed the non-sequitur.

I'll tell you one thing, US Airways problems were not caused by poor spelling...


Am I good or what? I should have been a newscaster, what with my clever segueways back to the topic.

Yes, you're the best!

 

[MrAeroMan]

Because I take him at face value until I see a reason not to. So far I believe him.

BTW I happen to agree with you that the whole UA merger and pay escalation issue is a huge part of US's current problem.

Answer me this? How much of Colodny's apparent lack of forward thinking do you think helped create the US/UA Merger fiasco. I'm looking for a sort of history first hand from someone who was there prior to reading Bethune's book which I just ordered. I do value your insight and opinion on this. It may be one sided but that's OK. We've debated enough I can figure it out. Thanks in Advance.

I'll give you a little insight to Colodny's visions of life after the PI/US merger. I heard him speak to a group of us and he was adament about not flying large aircraft such as the B-767 or the B-757 to the West coast cities. He said he didn't want to fly such large airplanes because we could afford 2 small 737's for each big jet we bought. (his words, not mine) He said if pax wanted to wait to fly a large jet to the West coast they were welcome to do so on another airline but at US Air they would get frequency. He also said people in LA would have to adjust to flying to NYC by going through SYR. Why and where he came up with that is beyond me since that flying would NEVER have been profitable and never happened but even then it was so ridiculous it was funny. I remember when he said that we all looked at each other and wondered if he'd been in the bar before he chatted with us.
The hole that was dug when he was CEO was survivable but a leader was needed when Big Ed retired and unfortunately all that was available was Schofield who was mentored by Big Ed and you see where that got U.

 

[PITbull]

AeroMan,

Since U was in such bad shape from Colodny's days as you imply...

Explain the $$$$$ billions made between 1995 through 1999????? Fluke?

 

[MrAeroMan]

AeroMan,

Since U was in such bad shape from Colodny's days as you imply...

Explain the $$$$$ billions made between 1995 through 1999????? Fluke?

Pit....First of all I didn't say U was in bad shape. I gave an example of what his vision was after the merger that he conveyed to a group of us that met him.
Now, to answer your question as to the profits it is quite simple. It was the economy. Business was so good that even the worst business people with the worst business model could make money...even the dynamic duo. Just because they made billions doesn't mean there wasn't structural defects in the business model to begin with. 9/11 came along and all those weaknesses were magnified.
Ed Colodny was a nice man....maybe too nice imo. What he wasn't was the man to head up US Air after the merger. I don't think he really wanted to do the merger but as you have stated Icahn was hungry and looking to feed again so Ed did it to stop him. The problem was the food (US Air) that Icahn was looking at had so much fat on it even Carl didn't want to attempt to feed on it. Ed should have trimmed the fat and left a lean company that could compete and instead he planted seeds that have morphed to what is left today.
No one has ever tried to fix the core problem with the airline until this group came along. Schofield was so far in over his head he couldn't think straight and everyone knows WolfGang came in to make money selling the joint. Siegle is the one who is actually trying to fix the problem that has existed since cutover day. The problem now is he's made so many mistakes and his trust meter has bottomed out it's most likely to late to actually fix what is wrong.

 

[skyflyr69]

Colodny’s Blunders:

· Mirror Image, imposing US Air’s business methods upon Piedmont and PSA, instead of looking at each respective airline and adapting their successful practices. Some examples would be dismantling of the Piedmont Shuttle which accounted for 32% of Piedmont’s Gross Revenue.

· Not furthering International Service and canceling the last three 767s on order from Boeing, then realizing how much money was made serving international destinations and paying Boeing a $30 million penalty to reorder the three planes.

Schofield’s Blunders:

· Business select, $50 million on wasted seats that never worked properly and we eventually removed from the 737-200 fleet. Operation Highground.

· The IAM Mechanic and Related Strike of 1992 in which US Air lost $35 million and agreeing to pay all the pilots during our strike regardless if they flew or not.

· The hiring of Joe Gorman from United Airlines. Gorman stayed a few months then went right back to United, then United started taking us on head to head in numerous markets where we did not compete before Gorman’s tenure.

· The alliance with British Airways to infuse quick cash, but not on favorable terms to US Air, BA got more out of the alliance then we did.

Wolf and Gangwal:

· Canceling all the Boeing orders and having to pay a substantial penalty to Boeing to this day the dollar amount is not known as it was a confidential out of court settlement after Boeing sued US Airways, but it is believed to be hundreds of millions of dollars.

· Closing of three maintenance bases and trying to accomplish all the work in just three bases, which caused a backlog of airplanes awaiting “Q†and “C†checks and Mod visits. At one point you could see numerous airplanes parked in Charlotte, Pittsburgh and Tampa awaiting maintenance.

· Buying back over $1.5 billon of US Airways stock instead of using the money as operating capital or paying down debt or just having it around for a downturn.

· Selling the company to United Airlines and then for the next 14 months having no direction and running the company into the ground.

· Overreacting to the September 11th tragedy and shrinking the airline by 23% and increasing costs by putting larger airplanes on shorter routes.

Seigel's Blunders

Lying to employees.
Stealing their work.
Violating all contracts.
Keeping inept management in place.
Closing Tampa hangar
Outsourcing Airbus work
Fighting its greatest assets the employees.
Not getting back the $35 million from Wolf, Gangwal and Nagin

you guys LOVE to live in the PAST more so than any airline i know.
ydou had better wake up and smell the coffee! ranting on about the past does no good for whats needed ahead. And you will need lots.... :rant:

 

[ktflyhome]

Skyflyer69: Think about it. Most people live in the PAST. It is human nature. It's much easier to sit on our butts drinking a cup of coffee or having a beer and reminiscing about the past, then getting off our butts and doing something about our future. How many times do you hear people talking about the "good ole days", or "war stories" or how much the price of a loaf of bread "used" to be????

Heck, I'm sitting on my lazy butt right now on these forums instead of doing something productive and thinking of what I shoulda done yesterday instead of what I will do tomorrow.

 

[javaboy]

yeah a heated topic for sure, north/south/west all were good airlines. plenty of blame for finger pointing. just a items for digestion.

usair was not looking for any mergers, the orginal plans called for small but controlled growth (5-10 planes per year at its peak).

Piedmont was not profitable at the time of purchase, they were subsidised by thier owners (a railroad) also most of their equipment (airplanes) had 7 year balloon loans that the railroad did not want to pay which is why they (the railroad) began shopping the airline.

PSA was not profitable at the time of purchase either.

U was coming off a 16 consectutive quarter of increasing profits (just for measure on the time line)

Against the backdrop of the mid to late 80s (a fare bloodbath was taking place) growing to a self sustaining size was the theory at the time, (bob crandell)
AA orders 200 757s using the theory they did ordering 300 MD80s lock up the line sell the later planes to other airlines use that money to lower the cost of buying your own planes.

Mergers/aquistions became the order of the day. as U was looking at other airlines for possible merging. TWA under carl ichan came into to buy U, and did so that in a way put pressure (essentially a weekend) the deal must be completed by then.
U did not want Ichan getting control over the pension monies (in those days you were allowed to use any overages to pay down company debt) ie you could use overfunded pensions to buy the airline or reduce the cost of acquistion. there was not enough outstanding (float) nor shelf stock to prevent this so buy purchasing PI at a premium this could increase the cost beyond Ichans abilities for the short term the amount was 1.0billion additional dollars. which was immediately followed by AA buying Aircal and SWA annoucing CA expansion, U during this time went after PSA to "create the nations 4th big airline" (like the auto big 3 dal/amr/ual were considered the big 3).

after that anybody still employed at UAIR today LIVED what happened.
but you can see the roots of excessive debt begining there.
compounded by a war/oil/recession in the early 90s after all this debt was acquired did not help. followed by a guy that decided he could by airplanes at one price refinance them at a HIGHER price and take the difference and add to the cash balance (thus strengthing the balance sheet on the surface) calling it positive cash flow (balance went up each month) thus a profit??? then sell it off (like republic to NWA, or Tigers to FedEx or UAL to UAL employees) brings you to more recent history. then you can fill in the time frame post 9/11 by yourself.


not saying good bad or indifferent just recalling backdrops and what was happening at the time from mid 80s to present.

it was a bad time for most airlines but which ones became succesful? the ones that adapted to the changing market conditions. those that exploited it grew stronger those that managed it had better balance sheets to weather the storm, those that didnt have a plan nor adapt suffered the worst (eal, pan am, twa, braniff,) ect.

 

[MarkMyWords]

Whew....what a thread. Sorry I missed all the excitement over the past few days. It wasn't until today that I had an opportunity to read it.

First and foremost, I believe there is enough blame to go around. Each and every CEO of the company has made more then their fair share of blunders. For those that think that Colodny is blameless in this I would offer you a couple of opposing views.

The topic of mergers have been beaten to death in this and other threads, but it is a fact that the merger of the 3 airlines was where most of the trouble started. It wasn't until Wolf came to town that many of the operational offices in the airline were located in the same city! Departments that were supposed to talk to one another and work collectively were hundreds of miles apart.

Once the 3 airlines were merged together, Uncle Ed lacked the vision of how great the airline could have been. He was used to thinking regionally, not nationally. What worked in the NE wouldn't necessarily work in the west or down south. What we really needed was someone with a global vision. Uncle Ed's actions with the fleet of 767's is a perfect example of his regional thinking.

Schoffield also lacked much of the business sense that was going to make or break airlines. The constant slashing of assets and "right sizing" the airline were probably some of the worst decision he ever made. Whoring the airline to BA for a quick buck was also a lame attempt to grab cash for the quick fix, but no one ever addressed the real underlying issues.

Wolf and Gangwal, as everyone has said, just wanted to put a prettier dress on the pig and sell it. It was that plain and simple. A few cosmetic changes here and there, the great fortune of a boom in the economy and every shareholder makes a quick buck and the problems shift to a larger company.

Dave and company......well we are living the blunders and nightmares daily. Employee relations (or lack there of) will be his greatest downfall.

All in all, with all of these "leaders" there is one underlying common thread. No one ever addressed how we operate as an airline and the business model had remained pretty consistant. We continue to make the same mistakes over and over and fail to adapt quickly to changes in the operating environment. We conitnue to hope that things will change in our favor and really fail to plan if they don't. Every one of the leaders of this company are to blame for where we are today. yes, it is easy to see that looking back and it is harder to see what the future holds and the course of action that we should take. There is a risk in every decision that was made along the way.

Hopefully our course will be changing. If Dave is really talking about changing things from the ground up, who knows what will happen. Could it be the final nail in the coffin, or could it be the actual turning point for the company. Check with me in a couple of years and I will let you know.

 

[USA320Pilot]

Ed Colodny was a great person, but he created a merged airline with the highest CASM in the industry, the highest labor expense when expressed as a percentage of revenue in the industry, and the worst hub pattern in the industry.

According to the Charlotte Observer, Among the six major hub airlines, US Airways is the only one without a hub at any of the 18 busiest airports. Philadelphia International is the 19th busiest, Charlotte/Douglas is the 20th and Pittsburgh International ranks 27th.

The hubs are not only small, but also close together. So while US Airways dominates its hubs, it can't rely on them to provide enough passengers to feed large domestic and international networks.

Charlotte and Pittsburgh offer "few of the benefits of a hub," said aviation consultant Mort Beyer. "They don't generate a lot of local traffic. Usually, what airlines do is control their hubs and then charge (higher) fares to their local passengers."

Respectfully,

USA320Pilot