United Airlines on the ropes........

[peanut pusher]

It looks very bleek for United Airlines and the staff of the worlds second biggest airline. Things are tuff in many company's around the world and getting tuffer. It will be a sad day when United file for chapter 11 this week. It's also a reminder to do what you can to keep your company as profitable as possible and insure your job. Look at the great names to leave our sky's in the last 10 years Pan Am, Ansett, TWA, Sabina, US Air to name a few and it looks very bleek for United at this stage. It will be a sad day when they go.

[Floaty]

I agree P.P.! More hard time ahead... no good for changes (and starters)...

The only thing I do not understand is: why is the American Government refusing to help these people? Employees (pilots and cabin crew, not engineers) accepted a pay cut and demonstrated awareness and spirit of sacrifice by doing so. I believe they deserved that loan to be renewed! Maybe it is more complex...

"United? Naaah... we need that money to bomb the s**it out of Irak!!!..." Could that be the reason??

Tax payers be ready for another few thousand to maintain...
What a shame, America...... :( :( :(

Mrs. FloatJockey

[GlueBall]

Hey, Floaty: You ask why the Government didn't help UAL?
Well, as one American taxpayer and flyer I'm telling you that any government bailout of a bankrupt private company is taxpayer fraud!

America is home of capitalism; it's where anybody can make lots of money and lose lots of money. UAL didn't get to this desperate state overnight. For three years UAL management had been sitting on its hands, doing nothing to adjust its operating culture to the new economics of budget air travel. Its employe owners had approved the largest compensation package in airline history; an overall payroll that is consuming 47% of operating revenue. Senior UAL 747 and 777 drivers are the highest payed pilots in the industry at a whopping $320,000 annual salary and benefits. The employe owners of UAL are living in a dreamland, completely out of touch with today's market realities...and recession.

UAL is so deep in the hole that it can't get financing on Wall Street. And it's not just about bloated employe payroll, it's about burning $7+ Millions in cash every day, it's about being $Billions in arrears to its creditors and to its pension fund commitments.

...And now the taxpayers were supposed to "cosign" 90% of a $2.2 Billion loan? (The company had received $900 Million free cash from the government last year, due to 9/11).

Do you believe in life after UAL? Was there life after EASTERN, BRANIFF, PAN AM...? Helooooo.

[Touch'n'oops]

One thing people don’t seen to realise is that many American airlines have gone into Chapter 11 and remerged to fight another day. In fact US Airways have done it more than once.

I agree that Chapter 11 protection goes against the idea of a free market.
If the airline does go into chapter 11, the courts will then have control over the administration of the airline. Creditors will not be able to collect debts, some companies such as fuel suppliers will be forced to keep fueling the aircraft at cut price. Employees can have their pay forcibly cut.

Plus I didn’t notice any European airlines getting the same thick and highly graspable lifeline!

I believe these methods of saving a business is out dated. Just another way which America thinks it can get away with it all.

[xaml]

Before everyone gets completely carried away, as per usual.... no european airlines have filed for chapter 11 because they can´t. It is for american companies only. Hence numerous companies filing for it when things get tough for protection.
Get your facts striaght and stick to what you do best before creating unease amongst the employees of companies like this.

[FormerFlyer]

xaml I think you may have missed the point the previous poster was trying to make - that it is an uneven (unfair?) marketplace where one company can get protection from its creditors and another cannot, simply because of the country which they are from.

Chapter 11 forces change on a company (by the court) when perhaps the company has been avoiding necessary change for a while, thus potentially giving it a renewed future, viz: Continental. While it's great that the employees are not out of work straight away it goes against free market principles.

It then comes down to whether you are worried about just the shareholders, or the stakeholders too.

[Touch'n'oops]

I never said that European airlines had the option of Chapter 11!

The sad thing is that once a business in America goes Chapter 11, there is no pressure on the boss to leave. A large number of bosses who have failed the company stay with it through chapter 11:(. I believe that this should be revaluated.

[CheerBear]

Oh..the govt didn't? I thought I read in the papers that the govt provided a US$1 billion payout or something like that to help the aviation industry. And UAL blew it on buying more planes!
Or was that just inaccurate news report?

But IMHO, UAL's staff threaten to go on strike several times over pay matters; doesn't look too good on the company. How do you expect UAL to increase their pay when revenues aren't coming in?
The load factor may be high but then fares are ridiculously low.

[Touch'n'oops]

There will be no question of pay rises!
If anything, it will be a pay cut. Under chapter 11, UAL has this power.

The main focus for the court is to push UAL out of chapter 11 A.S.A.P...

US Airways has announced it plans to emerge from chapter 11 early this year!:eek: :eek: FAT CHANCE!!!

[Touch'n'oops]

Brill, we've got another smart arse on the pages!!!

[vdd]

Dow Jones

Friday January 10, 12:14 PM
INTERVIEW: Air NZ/United -3: Cites Lower Costs

WELLINGTON (Dow Jones)--UAL Corp.'s United Airline's withdrawal from the U.S. to New Zealand route will make Air New Zealand more profitable, the New Zealand airline's chief financial officer said Friday.
United announced Friday it will stop flying the route from March 30 because it is losing money.

Air New Zealand's Shane Warbrick said Air NZ is turning a profit on the route and the United decision will make it more profitable.

"It's not an unprofitable route Auckland to L.A. for us," Warbrick told Dow Jones Newswires. "No doubt this will improve it."

Air New Zealand will increase its capacity on the route, he said.

"We'll have to find a way to increase capacity to make up for United," Warbrick said. Air New Zealand currently flies twice daily between Auckland and Los Angeles.

Warbrick said there has been a reduction in yields and passenger numbers between New Zealand and the U.S.

Warbrick said Air New Zealand had made a profit on the route where United had failed because it had lower costs. But he said he does not believe Air New Zealand squeezed United out of the New Zealand market.

Air New Zealand only heard of United's decision Friday and had not had time to plan by how much it would increase its capacity to the U.S., said Warbrick.

Following United's withdrawal, Qantas and Air New Zealand will be the only airlines flying direct from New Zealand to the U.S.

The two airlines signed a NZ$550 million deal in December for Qantas to take a 22.5% stake in Air New Zealand through the issue of new shares, and the deal will see the two airlines cooperate across all routes if it comes into force.

However, it needs approval from competition watchdogs in Australia and New Zealand and one of the factors they will be considering is the effect of the deal on competition.

Air New Zealand and United are both members of the Star Alliance airline group and Warbrick said Air NZ "will do everything we can to help United through this process," including taking passengers booked on United after it stops flying the route, said Warbrick.

Qantas currently flies once a day from New Zealand to the U.S., only half as much as Air New Zealand.