Open skies or back to government support.

[soullimbo]

On Dutch teletext just found that the Dutch unions are looking for support to KLM to get through this mess. Who's there for us LCC employees when times are bad? What happened to Open Skies and no government support? Sorry to sound harsh, but are there no other ways for this company to get through something like this?

[jcjeant]

Hi,

No one of the EU governements can act on his own .. and certainly not about a financial support.
They are bonded to the EU council decisions :)

[GAZIN]

We bailed out those crooks in the city, what could be wrong with giving the airlines a bit of help?:confused:

[411A]

We bailed out those crooks in the city...

A big mistake.

....what could be wrong with giving the airlines a bit of help?

Making the same mistake, twice, is not such a good idea.

Why do most airlines fall on hard times?
Marketing decisions, mostly and....the poor company management that goes with it.
Outragious salaries paid to these management types, together with poor overall accountability.
Add to this the top heavy salaries paid to many cabin crew (BA is a perfect example) and general poor cost accounting.

Of course, there are a few airlines who have seemed to weather the storm successfully, in Europe, Ryanair, in the USA, Southwest.


Continental Airlines is also is in this group, thanks largly to the cost containment policies instituted by...Frank Lorenzo, long ago.

IF an airline is poorly run, it deserves to fail, just like any company.

[M.Mouse]

Surely not the so called 'Low Cost' airlines who have done us all so proud in driving aviation down to the lowest common denominator?

[wiggy]

IF an airline is poorly run, it deserves to fail, just like any company

True, but that's not what we are talking about here.

We have pretty much the whole of commercial aviation in Europe grounded for the predictable future down to an act of nature, rather than poor management. Of course if this goes on long enough, in extremis, without Government support we could see the decimation of the European industry..all of it. Somebody would probably fill the shorthaul niche but that would leaving the US Carriers picking up the Atlantic traffic and the African carriers to fill that void and the............oh yeah,I get it:D

[AUTO/MAN]

Who should be there for you LCC drivers?
Call your union. None available check with your P2F bi...es.

[whatdoesthisbuttondo]

Ryanair will be fine, they'll get help from BALPA . . . . oh i forgot they voted not to have any.

[Human Factor]

We bailed out those crooks in the city, what could be wrong with giving the airlines a bit of help?

The money they would use to bail out the airlines has already been spent bailing out the crooks in the city.:oh:

What was the name of that truck driving school.......? :{

[Peter Ridley]

BALPA will loose all their subscriptions. Not enough left for hampers for members.

[WestWind1950]

as if it's only the airlines in trouble from this event. What about the travel agencies? The airports themselves.... they aren't getting any landing fees turned in, perhaps only parking fees? And all the other airport related businesses? Bail ALL of them out? :rolleyes:

[Montgolfier]

What was the name of that truck driving school.......?


Truckmaster, I think it was....I think I'm gonna need that.

[Dan Dare]

as if it's only the airlines in trouble from this event. What about the travel agencies? The airports themselves.... they aren't getting any landing fees turned in, perhaps only parking fees? And all the other airport related businesses? Bail ALL of them out?

and don't forget those poor heavily leaveragerd privatised ANSPs

the irony of Labour "our skies are not for sale" having to re-nationalise before handing the reigns of power back

[lurkio]

Why would the Dutch government bail out a French company or is that allowed under EU rules?

[CAT1 REVERSION]

Why would the EU bail out Greece - the whole economy is on a knife edge yet again......double dip recession here we come:ugh::ugh:

[Leo Hairy-Camel]

Surely not the so called 'Low Cost' airlines who have done us all so proud in driving aviation down to the lowest common denominator?
Hello Mouse Droppings. By "lowest common denominator", do you mean by seizing and maintaining dominance in a ruthlessly competitive market by offering consumers a more affordable product whilst creating highly paid, secure flying jobs for thousands along the way, who otherwise wouldn't have them? That common denominator?

Adapt or Perish, you mischievous little rodent.

[Permafrost_ATPL]

Holy crap, I approve of one of Leo's posts:)

[CLB-1]

It would surely by in the government's interest to support the industry if it looks like its going to go properly on its arse. The amount of tax reciepts lost by letting carriers fail would be phenomenal.

Now, which carriers would/should be supported? Discuss.....

[FE Hoppy]

Wonder how many of the recent strikers still think it was a good idea to put a little financial pressure on their employers?

[stilton]

411A,


The reason Continental is still around has nothing to do with Frank Lorenzo.



As an Airline manager, Lorenzo was useless, his 'forte' if you like to call it that, was the art of the leveraged buyout, just like Icahn.


He was in the business for personal financial reward and the ego boost he achieved by briefly operating the largest Airline in the world under the Texas Air umbrella.


This included, Continental, New York Air, Frontier, People Express and Eastern Airlines.



Eastern had major problems before Frank it's true but a talented CEO with good people skills might have stood a chance at turning them around. Frank had neither, so he simply used Eastern as a source of Aircraft for Continental while allowing them to fail.



Lorenzo threw this collection of Airlines together with no clue or interest on how to make the merged entity function. Operations suffered as he refused to spend adequately on maintenance or funding of any of the other myriad support functions required to operate successfully.


His attitude was just, 'make it work' without providing the resources or management skills to do so. He did not 'set up Continental with a low cost base' he drove us into the ground with his incompetent management and lack of funding, this he diverted to his own pockets.



It took another bankruptcy and the arrival of a new management team under Gordon Bethune to turn Continental around and provide a real base for our future success.



In the meantime, Lorenzo, one of the most despised figures in Aviation history (and rightfully so) was banned for life from being in any management position in an Airline by Congress


That action truly was an Aviation first.

[DingerX]

Somewhere, there's a play in the management playbook for this situation.

First, the companies furlough the senior staff that eats up payroll, along with dumping any known routes and cancelling any contracts and arrangements that have gotten more expensive over the years than they're worth.

Second, they use these legally and morally questionable "emergency actions" as evidence that they're "in extreme financial distress" and seek government subsidies.

Third, management gives themselves a nice raise.

[411A]

His attitude was just, 'make it work' without providing the resources or management skills to do so. He did not 'set up Continental with a low cost base' he drove us into the ground with his incompetent management and lack of funding, this he diverted to his own pockets.


Makes for interesting reading, however, not exactly on point.
I knew Bob Six personally, and when he passed away, Continental was in a severe bind...the smallest of the trunk carriers and UAL was eating them for lunch at DEN and ORD, and they would have rapidly gone under, if Lorenzo had not pumped in urgent cash.
That Lorenzo was later a lousy manager has nothing to do with it...no Lorenzo with cash, CO goes away and Gordon B would have never been heard from.
EAL was waaaay overburdened with debt, had lousy management (the astronaut) and a high cost militant union workforce.
Frank mearly took advantage of the situation, to his (and Continental's) benefit.

I would have done exactly the same, re EAL.

[dustyprops]

Soullimbo,

What exactly is your problem? I don't want to see anymore draconian measures to cut T&C's in this industry thanks very much. You banging on about it and whinging about nobody being there for poor old FR is gonna get you very little sympathy from anybody as there are people in worse positions than poor old you.

Where are you going to start this thread next? Cabin crew forum maybe?

[stilton]

On the contrary 411A, Continental was not in a 'severe bind' when Lorenzo came calling.



Frank had made a lot of money in 1979 by running up the stock price of National Airlines with his take over attempt. Pan Am ended up buying 100% of the stock to gain control in one of many ill considered moves that brought that Airline to it's knees eventually.



With over $100 million dollars in his pocket from this 'failure' Frank went shopping for another Airline. He wanted to vault his tiny little Texas International into the big time.



His reputation preceeded him however.



He was shown the door at every attempt to even discuss the possibility of a merger with another Airline. Bob Six rejected him, as did Edwin Smart, the head of TWA at the time.



Six had handed over control of Continental to Alvin Feldman by the time Lorenzo made his next take over attempt, realising his attempts at merger would not be welcome he initiated a hostile take over, purchasing a Million dollars worth of Continental shares starting a tender offer and within days owned nearly half of Cal's stock.



Incredibly, with the existing laws at the time he was able to secure collateral for the money he borrowed by pledging Continentals own aircraft.



Despite the best attempts of Continentals management and their Pilots with their ESOP plan they were out maneuvered by Lorenzo and his sidekick Phil Bakes who succeeded in taking control.




Lorenzo did not 'pump in cash' to Continental, it was strictly his 'skills' as a backroom deal maker that gained him control.




Continental would have done just fine without him. If you really knew Bob Six and the Airline he handed off to Al Feldman you would also know, even then, it was still the premiere Airline in the country.



Continental barely survived Lorenzo's tenure over the ensuing years, with two bankruptcies, his abrogation of all Pilot Contracts and subsequent strike, the hiring of hundreds of scab Pilots, the lowering of maintenance and service standards to the point that no one who had a choice would ride on them.



Frank had also cost the Airline a lot of money in legal expenses fighting off his take over attempt. He recouped this by firing a large portion of the workforce and reneging on labour contracts with the others, a familiar pattern with him.




To summarise, he was a destructive and toxic individual. He did not 'save' Continental but nearly destroyed it. The employees of Continental saved the airline with Gordon Bethunes leadership and competent management team.



Frank Lorenzo was and is the only Airline Executive to be banned from being in any management position by Congress, permanently.



Your 'version' of history is completely incorrect 411a.



I suggest you stick to discussing the L1011 :=

[411A]

starting a tender offer and within days owned nearly half of Cal's stock.


Hmmm, it would seem that the Continental shareholders liked Lorenzo's ideas, otherwise, they would not have tendered their shares.

We'll just have to agree to disagree, stilton.
I know several ex-Continental folks, some walked away and were bitter, some stayed and were later rewarded for doing so.
Also rewarded were the new hires during the strike, accepted right back into the ALPA fold, thereby making ALPA a laughing stock.
Which it mostly still is, oddly enough, especially after they blindly followed the IAM on strike at EAL.
What a fiasco that was...:ugh:

[stilton]

The share holders were along for the ride.



The scabs were not accepted 'back into the Alpa fold'



Continental Pilots went without a Union for many years until the independent association of Continental Pilots was formed.



Several years after that ALPA was vote back onto the property. If you think they are a joke as a Union that's fine but working for a major US Airline without Union representation is an exercise in complete futility while management screws you to the wall.



As Lorenzo did.



I know, I was there.



Your admiration of Lorenzo is as puzzling as your complete distortion of the facts.

[CLB-1]

Thread drift?

[Bratko]

Well said Stilton!!!! Lorenzo and the CAL scabs have put such a dent in our industry we will never recover....the race to bottom started right there, and continues to this day.... Off topic but how do those CAL 83-85 "new hires" feel about a CAL/UAL merger.... I don't think ALPA or it pilots ever "forgot".

[stilton]

Thanks Bratko,


Well, it's been over 25 years now since the strike and the number of scabs left at Continental is slowly shrinking although RA65 has slowed this process down considerably.



None of us at Cal want to see a merger with UA, least of all 'Lorenzo's boys' as they would be ostracized in a mixed seniority list.



By the time this would take place however they would probably all be retired or the debt laden dysfunctional disaster that would result if this deal is approved will already have failed.