Goodwin to Resign from United; Chapter 11 Soon?

[The Guvnor]

Strong rumours out of Elk Grove suggest that James Goodwin will resign as CEO of United Airlines in the near future, possibly as soon as Monday.

This situation is not directly related to the events of September 11, but the fallout from those will leave United almost $1 billion in the red for Q3 alone. If insurance refuses to pay out (as has been hinted at), then UA could be bankrupted based on expectations of liability claims. Expect a Chapter 11 filing
from UAL as soon as those suits are filed and the insurance rumours confirmed.

My source also hints at large cuts in International routes, coupled with layoffs/furloughs for approximately 5-10% of the workforce. The plans for ORD-DEL nonstop service are dead in the water. Additionally, look for a wholesale grounding of some of the larger jets in a reduced schedule as soon as next week.

As far as succession goes, either Rono Dutta or Rick Dubinsky will take over the reigns in
the interim as the board seeks an outsider to step in. Favorites for the position include Greg Brenneman (ex-Continental) and Michelle Burns (CFO - Delta). Dubinsky would be an interesting choice based upon his background as ALPA MEC chairman, but he may be the only person who can extract the required massive concessions from labor.

Poor United. How fast the mighty have fallen.

[TowerDog]

Jeez Guvnor, that is some heavy duty rumor you have picked up.

No insurance coverage because of "Act of terrorism"? Is that the way most policies are written?

Any similar rumors about AA?

Sure hope not, but $1 billion would put a dent in anybody pockets.....

[zoru]

today listened to a guy on tv who was chief exec of the reinsurance industry...who stated that the hull losses would be paid out.maybe the guv knows better.

[TimS]

If 'The Guvnor' has got this one right then his credibility (somewhat knocked by many in recent days - and before) on here should go up a few notches !!!!!!!!!!!

[willbav8r]

Terrorism, and War are definately coverages sought by airlines the world over, both for hull and especially liability losses.

Being such a large airline, there can be a strong arguement that these policies must have been in place.

The premiums have been increasing in recent years, but still woefully inadequate to cope with something of this size.

Perhaps a more believable comment may be that there will be insurance and reinsurance companies *unable* to pay - because of bankruptcy.

As for the many industries and businesses affected, I believe that the governments of many countries will have to assist, contribute, and somehow ensure that these companies survive.

Just how it can or will be done, is something one cannot even begin to fathom.

[ 13 September 2001: Message edited by: willbav8r ]

[The Guvnor]

On the insurance liability side, both AA and UA (rather than Massport or the Federal Government) were responsible for their own security at BOS. Therefore, if that security failed - resulting in the hijacks - there's a liability. Not sure what the situation was at IAD or EWR - but as the two aircraft that his the WTC originated in BOS those will be the primary claims.

As we all know, insurers will do their best to avoid paying out wherever possible - or at least minimise their exposure - and this will be one major area of contention. As wilbav8r rightly says, the colossal amounts involved are such that some sizeable firms could well go to the wall - and they will therefore have little to lose by keeping it in court and passing the liability onto the airlines.

And of course this being America - where people sue McDonalds when they spill coffee over themselves and win millions because it's hot; and where smokers are awarded billion dollar settlements - you can bet your bottom dollar that every ambulance chasing attorney in the country is drafting lawsuits by the thousand at this very moment.

On top of that, as with Pan Am after Lockerbie, there will be a massive loss of confidence in both carriers. That, coupled with their extremely high overheads, could well be enough to tip them over the edge. I suspect that AA are currently kicking themselves over their acquisition of TWA - although they are financially somewhat stronger than UA, there are few companies in the world that could pay the amounts we're looking at and survive.

Government intervention? Very possible - especially with a Texan President that favours big business.

This particular rumour came from someone I respect and who is well connected in the industry - we'll see what happens over the next few weeks!

[InitRef]

TD,
It appears that the Guv got it from airliners.net -> ;) http://www.airliners.net/discussions/general_aviation/read.main/573506/

Cheers,InitRef

[ironbutt57]

Hey guv....maybe you're right...but the last thing we need are "naysayers"...especially ones trying to ressurect the dinosaurs of days gone by....

[Ignition Override]

It might not be possible for the US Air Trans Assoc. to petition the government for a large tax refund, due to the enemy attacks. But it would certainly provide them with a chance to reduce their losses from this week and next...

Off the specific topic, but depending on what else happens to, or in Afghanistan or Iraq (what other countries' involvement is being kept confidential?), maybe that government(s) can be forced by some sort of world court or World Bank (freezes assets) to provide cash to the US airlines, although the victims and their families' should receive money first. It is also sad that the backlash from this will frighten or injure many innocent people in many countries. The guilty parties never considered this reality or cared about the aftermath while they plotted mass murder.

Maybe our constitution etc can finally be changed to allow assasination, whether the rest of the world likes this or not.

[ 14 September 2001: Message edited by: Ignition Override ]

[WhatsaLizad?]

Unfortunatley the tragedy has made even Guv's usual outlandish posts accurate this time;

Thursday September 13, 7:09 pm Eastern Time
US lawmakers consider airline liability protection
(UPDATE: Refiles to remove HOLD from slug line)

By Adam Entous

WASHINGTON, Sept 13 (Reuters) - At the urging of American Airlines and United Airlines, congressional leaders said on Thursday they were drafting legislation to provide the air carriers some protection from possible lawsuits stemming from this week's tragic attacks.


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


Four commercial airliners, two operated by UAL Corp.'s (NYSE:UAL - news) United and two by AMR Corp.'s (NYSE:AMR - news) American were hijacked on Tuesday. Two crashed into the landmark twin towers of New York City's World Trade Center, demolishing them. A third slammed into the Pentagon outside Washington, D.C. and the fourth crashed in a field near Pittsburgh.

Following the crashes, the airlines proposed legislation that would provide them sweeping protection from liability, lawmakers and aides said.

But Sen. John McCain, the top Republican on the Senate Commerce, Science and Transportation Committee, said the proposal floated by the airlines was "way too broad'' and that lawmakers would look to structure legislation that would provide limited protection from liability.

"What they were talking about is a great over-reach,'' McCain told Reuters, adding that they were seeking almost blanket protection from lawsuits.

"We think they may need some protections but certainly not the language we saw,'' he said.

House Republicans said they too were eager to move legislation to provide protection for the airlines. Both House and Senate aides said a measure could move as early as this week.

A Senate committee aide said lawmakers will propose a bill that would provide some protection from liability, specifically limit lawsuits by those not on board a flight, such as people in buildings or bystanders like those in the World Trade Center.

Lawmakers would push forward the proposal out of fear that a rush of lawsuits could potentially bankrupt the nation's two largest airlines, the Senate aide said.

Republican House Majority Leader Dick Armey of Texas said he spoke with airline executives and that his staff was reviewing possible legislation that would provide them with liability protection.

"We'll see what we can do for them,'' Armey said. "I do not think that airlines should be held accountable.'' Armey said he specifically spoke to American executives about the proposal.

"It seems to me that when they lost control of their aircraft, they lost control of their liability.''

When the four airliners crashed, 266 passengers and crew perished. The official death toll from the crashes into the buildings stood at 94 but more than 4,500 from were reported missing by family members and companies with offices at the World Trade Center in Manhattan.

Another 126 are missing from the crash at the Pentagon across the river from Washington, D.C.

UAL did not answer calls seeking comment and AMR was not immediately available for comment.

[heloplt]

A for whats it's worth guys....

In the early 1980's I was a Special Agent with the US Naval Investigative Service, a part of US Naval Intelligence at that time. Our charter was criminal investigation, and counter-intelligence and counter espionage investigations. While assigned to the Marine Coprps Logistics Base in Albany, Georgia, I submitted a counter-intelligence proposal to conduct covert surveillence and investigations of foreign flight students attending local area training schools. The purpose of the effort was to have been to identify, track, and maintain contact with these students to determine if any were involved in illegal or other acts detrimental to the national security interests of the United States.

The proposal was rejected because it would have violated the Church amendment prohibitions regarding domestic surveillence and gathering of intelligence of US citizens and aliens.

In light of current events, I guess I was just a bit ahead of my time there. How much you want to bet the Congress changes that law as a result of this tragedy.

[AirWolf]

Hi All,
Just heard that NWA may cut flying by 25 to 50 percent. Layoffs to include pilots!
The impact on American an ALL Aviation is unmeasurable. We need to take appropriate action against the guilty, not the innocent.
This is the third time that I have been affected by *((&^%%$#@#$#%%%^*(&^& *&&^#^&&^%^&&*&*@##$@# Terrorists!
When will the world punish the guilty and not the workers or passengers.
My job is at risk as are most of pilot community. We are under increased observation, but we are the good guys!
What makes the security guard the good guy? Has any one checked him in the detail that us pilots undergo?
Just extremely frustrated these days.
Cheers Mates,
R.

[RogerTangoFoxtrotIndigo]

indeed airwolf, quis Custodiet Ipsos Custodes?, who will watch the watchers.

while im being over literate i might add "The only thing necessary for the triumph of evil is for good men to do
nothing." - Edmund Burke

[ 14 September 2001: Message edited by: RogerTangoFoxtrotIndigo ]

[Willit Run]

What was this guy smoking?

[innuendo]

Initref,
amazing how the Guv's post and the post on the site you quoted are virtualy word for word!!!!!!!

[gaunty]

Geez where is it ever going to end.

Can't believe that could happen, surely the Govt would have to take some action, it was a crime against the State after all.

Must admit though, my eyebrows went up a bit when the total pax numbers on the 4 flights were reported. Dunno how you make money with those loadings.
The upside of course is that there were fewer pax involved.

There was a suggestion that the terrorists had manipulated the pax load to reduce the risk to themselves. :mad:
Does anybody know how many "no shows" there were against the bookings??

[Airbubba]

From the BBC:

Friday, 14 September, 2001, 16:26 GMT 17:26

Airlines bankruptcy warning

US airlines face tough new safety measures

Losses are mounting for airlines around the world, and the bankruptcy of some carriers is looking increasingly likely, following the terrorist attacks on the US...

http://news.bbc.co.uk/hi/english/business/newsid_1544000/1544050.stm

[Eboy]

Sad rumor about UA if true. I have a couple friends in UA at Washington Dulles and National, and it's not like they are living like kings now. Their jobs sparked my interest in the industry and I've been a groupie/wannabe since. I'm behind UA and other airline employees adversely affected by this disaster-related downturn in your business.

[Airbubba]

United Airlines bears heavy financial burden

By James P. Miller. Tribune staff reporter John Schmeltzer and wire services contributed to this report
Published September 14, 2001

Even before the World Trade Center disaster, United Airlines parent UAL Corp. was facing significant profit problems. In the wake of this week's terrorist attacks, experts say UAL's woes, along with those of the entire airline industry, are sure to deepen.

Laboring beneath the twin burdens of an economic slowdown and rising fuel prices, UAL and its rivals have been under financial pressure for more than a year. Now, suggests UBS Warburg's veteran airlines analyst Samuel Buttrick, the industry's already shaky bottom line is about to take an additional cumulative $2.1 billion hit in the final four months of this year.

UAL, because of its high labor costs and other factors, appears likely to suffer a disproportionate amount of the pain the industry is undoubtedly about to endure...


http://www.chicagotribune.com/business/chi-0109140077sep14.story?coll=chi%2Dbusiness%2Dhed

[scroggs]

I understand that, unlike in Europe, an American commercial organisition could (up to now) insure against acts of war or terrorism.
While airlines at Boston, and I think all US airports, are responsible for their own security, is it not possible that this responsibility is contracted out to the airports? If true, and if Boston (or Dulles) failed to fulfill the terms of that contract, we could be in for a monster complicated court case of the WTC owner and the insurance companies (the WTC was not fully insured) sueing the airline who in turn sue the airports. Scary!

[Airbubba]

Yep, look for the inevitable headline "First Lawsuits Filed..." in the next couple of days.

[gaunty]

I'm no international lawyer, but given the nature of the attack and that even the good guys didn't or couldn't see it coming in quite that form, surely the US Government has to enact a moratorium to stop the greedy and the bottom feeders in the legal profession :rolleyes: from enriching themselves at the expense of the dead.

The "plan" was beyond the imagination and wildest fantasies of even the Tom Clancys of this world.
Assymetric War is what they are calling but it was an act of War nontheless.
OK so there may have some negligence and errors in some areas.
But surely this is a time for fixing the system rather than recrimination.

To tip any company into "bankruptcy" due a unilateral act of WAR by a third party simply defies common sense or justice.
OK so UA was a bit wobbly but so were the rest of them.
They like AA had the misfortune to be "chosen" as an implement of war. They don't therefore deserve to be trashed.
Maybe the scum should have been more democratic and shared the spoils amongst all the operators.
Time to start calling a digging implement a spade methinks.

[The Guvnor]

The problem is that both UA and AA were partially to blame for Tuesday's events - they didn't profile the hijackers and obviously if they had followed the rules then they would at least have subjected them to further scrutiny and may well have averted the entire incident.

If the US government is going to bail out its airlines, then it should also compensate those foreign carriers that were affected - otherwise, under WTO rules, it's illegal.

[pilotrtjones]

Is their any possibilty that UA and AA will merge? I heard in another post that BA and VS could merge. Is this is stupid idea or what? :confused: I'm only 13 and want to be a pilot. Is it worth it? I am quite intelligent, no i'm not big headed, and i could do other things if i wasntd, but i love flying. What do real world pilots see urself in 15 years...

[Eboy]

RTJ, I'm no pilot, but I know a little about U.S. antitrust law. A UA and AA merger? Normally, no. The federal government would determine there would be a lack of competition at major markets which would increase prices unfairly to consumers. (Not that I necessarily agree, but that is what the government would say.) Long term, there would be no merger, in my view. Short term, the government might allow some combining of operations or sharing of information that would normally be considered in violation of antitrust law.

As for your piloting interests, the older I get, the more important I see it is to do what makes me happy. The money will follow. If you are very intrested in something and work hard, you can get it.

[ 15 September 2001: Message edited by: Eboy ]

[Wino]

GUV,

The king ******** speaks again.

Profiling is ILLEGAL in america in the wake of the scandal on the New Jersey Turnpike.

Wino

[hometown]

Profiling is ILLEGAL in america in the wake of the scandal on the New Jersey Turnpike.

Excuse my ignorance but do you think you could expand on this a little.

[Wino]

In the war on drugs profiling was used by the police so as to help them find drug smugglers.

On the New Jersey turnpike blacks and hispanics were getting arrested in larger number than whites, even though whites were a larger part of the population. This was found to be racial discrimination (of course the question never answered was what percentage of the CRIMINALs, not the general population were white) and the practice of racial profiling has become a hot button item. Furthermore, Arabics sued for discimination in the aftermath of the gulf war because more arabs were being searched than caucasions when boarding aircraft.

So as a result of those cases Profiling became a dirty word. I suspect that the pendulum may be about to swing the other way, but don't count on it.

Wino

[Huck]

It is not right to "profile" folks due to their ethnicity, but you can damn sure scrutinize someone if they pay cash for a one way ticket, just before departure, with no checked bags (as some of these terrorists did). You can also use an El Al-type questionaire to search for suspicious types.

RTJ: Do it, man! Get your degree first, though. And stick to cargo - the only way to fly, IMHO.

[The Guvnor]

Actually, US passenger airlines do use an FAA profiling system, which has 25 questions on it. Apparently the terrorists would have scored on at least five of the points - which would have been enough to have them investigated further.

[BOING]

One point here is to remember that, literally, thousands of airport employees do not pass through any form of security check on their way to work each day. They arrive at the airport car park and get on to a shuttle bus which oftentimes drives straight into the secure airport area. The only check required is possession of an airport employee ID card.

Excuse my "profiling" but it is quite apparent that many of these people are recent immigrants (very little english) and are from states which are not friendly to the USA. We know most of these people are perfectly reliable but this situation is an open door for terrorists to gain access to any aircraft they wish.

It does not challenge the intelligence to see that a planted employee could bring a bomb or firearm onto the airport and leave it a position where it can be retrieved later by a passenger terrorist accomplice.

There is as yet no proof of how the terrorists got their "weapons" onto the aircraft so speculation about airport or airline security failures is premature. In the US each aiport designs a security system which is then approved by the FAA as meeting its standards. In some cases individual airlines are responsible for TERMINAL access security which covers passengers, airport terminal employees and crew members. I have no idea about what type of pre-employment screening is needed for airport ground workers who do not go through this terminal security before they are issued with an ID card which allows them virtually unrestricted airport area access. Clearly this complicates the allocation of responsibility because hundreds of separate companies could be granting airport access to their various employees.

Ironically, the FAA's "window dressing" security checks prevent a crewmember from possessing any sort of weapon at work, the very situation which in this case could have saved 5,000 lives.


[ 15 September 2001: Message edited by: BOING ]

[ 15 September 2001: Message edited by: BOING ]

[The Guvnor]

In the House of Representatives at the moment, there's a bill being shotgunned through which will make up to US$15 billion available for government loans and guarantees to businesses hit by this action - including in particular airlines.

However, it appears that there are a number of Representatives who object to rubber-stamping legislation of this magnitude without proper consideration - and they are blocking it. Click here (http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7B4BA1697F%2D5D9A%2D425E %2DA7DD%2D6370095C4DC5%7D) for further information.

At the same time in the Senate, Missouri Republican Kit Bond is drafting legislation that would let the federal government assume liability for non-passenger-related damages faced by UAL Corp. and AMR Corp for Tuesday's events.

A Bond aide said the legislation would aim to protect the airlines from liability from claims ranging from non-passenger victims to loss of business and the destruction of the World Trade Center towers and damage to surrounding buildings. Such claims would have the potential to drive the carriers out of business, he said.

This legislation is also drawing fire from some senators who believe that if indeed the airlines were partly to blame for Tuesday's events, then they should be forced to pay for their negligence.

[TARFU]

Guvnor they need to stick a nuke up your rear end and send you to the moon, because whatever you have been smoking has certainly sent you there already.

next you will be telling us that Ben laden has his own simulators.

You &^$$##@#@$!!!! :eek: :mad:

[Trinflight]

Sounds more like wishful thinking Guv.

[Capt. Horatio Slappy !!]

For HeloPlt,
Not to pee on your fire for feeling good about the fact that people died to justify your security suggestion, but you're barking up the wrong tree.
What would you have been able to find out had these surveillance measures been instituted?
This wasn't a highly skilled operation, it was based on Religious Fanatisism:
Equiptment? One twenty dollar watch, calling card and flight schedule per group.
You wanna know why the Intelligence community failed so completely?
No paper trail, no-body bought large amounts of nitrate based fertiliser, Diesel or heating oil, strange rentals of storage property or movement of rental vehicles across state lines.
Unless you come up with a : Religious Suicidal Maniac detector at your local airport, you're just P issing in the wind.
And you may consider that one doesn't need a shortlist of known terrorists, you need a shortlist of known Religious Zealots with the frightening possibility that those threatening the security of the United States number in their MILLIONS !
SO, In review, we need a Crazy Suicidal Idiot detector...or... we need to completely erradicate the threat ( For some idea of what that means read the part above" MILLIONS")
Or we need to withdraw our assistance to Israel ( Never happen of course but one must point out that THEY are the invader in Palestine and that they will always be the motivating force behind Arab terrorism in the US )
This will doubtlessly become another ' Vietnam' and also one of the saddest chapters in human history, begun, not closed , with the horrific, inhuman attack on the World Trade Center,

[thewwIIace]

if i was an investigator, the first person i would investigate would be the lunatic redneck above me, capt horation slap head, he is not to clever on the goings on in world politics with his extreme views!!