UAL Furloughs..

[A-V-8R]

Another 600 to hit the street soon.

844 on the street already.

The active pilot population is expected to trend down to about 7800 from slightly over 10,000

Fleet plan is 520 aircraft, 400 Narrow bodies and about 120 widebodies. A 767 is not considered a widebody at UAL for pay purposes.

It wouldn't surprise me if there was another 1000 laid off in 2003 - this is just my two cents, but for every 3 RJs delivered the Mainline loses another station. The Company Word has it that every station within 700 miles of a hub that is not a hub will be RJ Express.

All of the 767-200s to be grounded, and only to operate 20 of the 747-400's.

Right now the pilots are voting on ERP II (Economic Recovery Plan) which includs an 18 % pay cut........



And I think it will pass.

For me, a 17 Year 767 Captain, goes from $242.55 to $197.05 per hour. Fortunately, I never owned a new car in my life and I never bought the Captains house, so I will be ok. Just three lazy ex wives to support.

[Avius]

A-V-8R,

funny how you write about 3 ex-wifes. But, ironically, I have to meet yet a wide-body captain, who does not have an ex-wife. I don't think, it will happen.

Anyway, a funny but very real reason, why pilots should earn much more than they do. Ex-wifes are VERY expensive.

Cheers

[saudipc-9]

A-V-8R,
Just curious to know what your thoughts are for the future of UAL.
Was this something that was destined to happen, based on huge salaries and an over reliance on the business pax?
We seem to see the airlines hit financial woes every few years but none seem to change the way they do business.
I'm going to guess that if UAL survives then it will take another 4-5 years to recover.
Over to you.

[A-V-8R]

Saudi PC,

Overall, I think that UAL as an Airline will not exist in five years.

I think that the salaries were not the reason for the troubles at UAL.....

It might surprise you, but there was a time when United pilots volunteered to fly *FREE* for one day a month. Management declined the offer.

And the salaries certainly won't be a problem with the ERP II

That there is much more going on than meets the eye with the transfer of flying to the Express carriers, both at my company and other US carriers as well.

Over 5 billion dollars was wasted by UAL Management in the last 3 years. The US AIR Merger, which was nothing but an attempt to pay "structure fees" to the CEO's of both companies for concluding the deal. Hundreds of millions of dollars were to be paid there.

The failed AVOLAR, a businessjet operation. Just folded up and tanked, and now the company is being sued for all the aircraft it ordered but will never buy. After the first cash assistance from the goverment after 911 UAL cut a check out of it to buy business jets.

I could go on and on, but UAL Corporation, as opposed to UAL Air Line, is transforming itself from operating an Airline to operating a Ticketing Agency, selling tickets for scheduled air travel on aircraft it does not operate, either thru the express operation or the Deathstar Alliance.


Notice I did not say aircraft owned, for United has provided the financing for Express Operators to buy RJ's and paid their crew training costs.

(You think I think the Deathstar Alliance is bad? Just do some research on what Oneworld has done to their pilot forces...Just a hint of things to come for the Deathstar pilots.)

Then there is the problem of stock. Many people have sold short, but the problem is that as an ESOP company, stock was lent to sell short that was not in existence. Right now the SEC is looking into this; search Yahoo business for United and short selling for the complete story.

There is no business plan at United, except to shrink until profitablility. That will not happen, as it did not at Pan Am and TWA. Eastern was a different story, with the upstreaming of cash to Continental and the subsequent looting of the airline.

Remember, there is a fundamental difference between UAL Corp and United Air Lines. United Air Lines is a subsidary of UAL Corp, who is calling the shots.

United could run a profitable airline, if they change from a Travel Agency to an airline. Imagine what would happen if we yanked first class out of all the narrowbodies, increased the seat pitch, utilized the aircraft ten hours a day, and charged $39.00 a seat for an hour flight.

Do you think the furloughed UAL pilots would fly at the same wages as SW or Jet Blue? You bet they would.....

There would be no more Southwest or Jet Blue. They could not compete with the economies of scale.

[whatshouldiuse]

My friend;

The significant difference between Jet Blue and Southwest is they were founded as low-cost airlines with a business plan. United is the exact opposite. It will literally take years to transform United to a new business model. My main fear is that United will be long gone before we get to enjoy the fruits of their labor if that's the avenue they decide to follow.

One very upset Premier-Exec member;


Take care;

Andy

[Ignition Override]

The generic newspaper "USA Today", in the business section article on UAL, stated that the federal ATSB, which loans money to airlines (and is way 'too big for its britches', in my opinion, presuming to tell the unions indirectly, what sort of pay cuts are needed...as if THEY were upper mgmt...talk about government meddling in private industry...so much for 'de'-regulation !) released a letter to the public, in which it supposedly revealed UAL's or United's lack of an adequate business plan for the airline. Or at least this was my impression from having read it.

Why would the ATSB leak such confidential information? To embarass UAL? I read this during a two-hour stop in PHL, and was/am still wishing the best also for good old USAirways.

Good luck, UAL employees-

[411A]

As for the ATSB, IgnitionOverride, it never should have been established in the first place...either that OR it should have been handing out funds to ALL carriers. National is an example, suspect that they "would" have had a better prospect to survive (than UAL) if funded.

[saudipc-9]

A-V-8R,
It is all very sad but it does not sound like you are surprized by what is happening. With luck perhaps this shake up will result with a healthy industry, but it looks like I should not hold my breath for that to happen.
There is a saying we had in the Air Force which is "You will be promoted to the level of your incompetency" Seems alot of CEO's fit that profile.
Best of luck

[Wino]

Unfortunately it is impossible to shrink an airline to profitability.
Yes you can lay off people and slash salaries. Its a drop in the bucket. The big structural costs remain. If you lay off pilots and ground aircraft, you still have to pay the mortgage on the aircraft, the rent on the gates, the insurance etc.
The list goes on. So when you shrink an airline, even if you enforce draconian pay cuts, your seat mile costs continue to rise making you even less competative.

Every major recession has a dead airline buried at the bottom of them, as that is the only thing that will fix the industry. What the ATSB has done is preserve the two airlines that would have gone this time (America west and USAir) and irreperably harmed the balance sheet of the rest of the industry as a result.

Its not just the business ticket reliance that is the problem. It is the nature of the industry, and the industry would have continued to function has it has had the government not interferred. The big network carriers provide a service that the Southwest's and the JetBlue's never can and that is the ability to connect any two cities in the world with one stop. If you want to go from Long island to Los Angeles on SOuthwest, you can do it, but its about 6 stops...

Unfortunately those big networks which are so valuable to business are expensive and the ablity to make a misstep is enourmous. They do provide an important service however, which everyone is overlooking right now.

Cheers
Wino

[Dan Winterland]

The problem comes when you try to find enough paying passengers to justify those expensive services.

And $197.05 an hour? Consider Virgin Atlantic pays a 744 Captain $95000 a year - and made a loss post 9/11. Not saying a 744 Captain doesn't deserve that sort of cash - I'm just trying to put it in perspective.

[Silver Tongued Cavalier]

Wino, very good post. I heard the US airline industry could lose an airline the size of Continental , and it would not be missed as there is that much over capacity in the market.

The US Government loans are damaging the industry beyond belief, keeping afloat too many carriers, skewing the normal business models, and more carriers will fall into the abyss due to this tampering with the normal laws of business.

At least in Europe governmemt subsidies are banned to ensure the survival of the fittest, the industry over here in general being better for it.

[tsgas]

EAL weny under thanks to the IAM and ALPA. Col.Borman was forced by these unions to go to Frank Lorenzo.Then,only then did CAL milk,rape and destroy EAL.

[seacue]

Sorry Wino, but Southwest has 3 flights a day from Long Island (Islip) to LAX, with only a plane-change at BWI - no other stops.

[Airbubba]

>>EAL weny under thanks to the IAM and ALPA. Col.Borman was forced by these unions to go to Frank Lorenzo.Then,only then did CAL milk,rape and destroy EAL.<<

That's a politically incorrect version of the events, but so very true...

And Hank Duffy, a Delta captain, was leading the ALPA cheers from the sidelines. "Hold the line brother..." At least Randy Babbitt got a job out of the deal.

It is supreme irony to see UAL on their knees begging for a government bailout after they argued so forcefully against help for Pan Am a decade ago.

The ERP II document is geared totally toward getting the ATSB bailout, in fact it is void if the bailout doesn't come. "The commitments in this letter shall not become effective except upon the funding the ATSB loan." it says.

If UAL gets the ATSB bailout but still goes chapter 11, UAL agrees not to try to void the contract for at least a year. However, there is more than a little wiggle room in the line that says "...In the event of a war in Iraq or a sudden, unforeseen event that substantially disrupts air travel (e.g., an act of God, act or threat of terrorism, war or government sanction), the commitment contained in the preceding paragraph will become null and void in its entirety..."

This late in the game, anything is worth a try...

[Wino]

Fine bad example.
WIthout checking myself. HOw about SWF (Stewart Newburg) to San Fransisco.

But you get the idea...

Cheers
Wino

[AA717driver]

Gave up the extra $100k/yr. so they could fly with great looking FA's! The UAL guys deserve the extra money--ever seen a UA Int'l FA?::eek: TC

[Airbubba]

>>ever seen a UA Int'l FA?

Yep, the flight service crew consists of three hags, a bag and a fag... (not that there's anything wrong with that).

[seacue]

From Wino:
--------------------------------------------------
Fine bad example.
WIthout checking myself. HOw about SWF (Stewart Newburg) to San Fransisco.

But you get the idea...
--------------------------------------------------

Correct in that WN serves relatively few airports in the eastn and not SWF AFAIK. They do, however offer 3 services a day from many of their east-coast cities to LAX, and one a day to OAK, all with just a change of plane and no other stops. More service if allow one additional stop as well as the change of plane. You're right that WN has only recently even semi-seriously entered the transcontinental market.

Enough, and now back to UAL....

[BOING]

The difference is that UAL flies JFK to LAX in 767's, SW does it in 737's. Customer surveys claim that pax on the New York to LAX route prefer wide body aircraft. Apparently not enough pax prefer wide body aircraft enough to pay the extra ticket costs of UAL. You do not think pax would lie on a customer survey do you? Good Heavens!

Seriously, if UAL gets its ticket prices anywhere near to the low cost carriers why would anyone fly New York to the West Coast in a 737 at .75 when they can fly in a wide body at .80?

[ironbutt57]

airbubba..accurate post about ual cabin crew...they night stopped a dulles-based 767 crew at the hotel we used in brussels, and the hotel receptionist once comment that "we are considering putting life-support machines in their rooms"...:D :eek: :D

[InitRef]

BOING,
I understand the 762's are primarily used on the "premium" transcons - with an occasional 763 thrown in.

Any ideas what UAL will be operating these routes with instead?

Granted - the old 762's are not well liked by the biztravellers (and I suspect there are quite a few of those on the transcons) because of the old Biz Class seats, and lack of Econ Plus - but replacing them with A320/757 is only going to mean even more lost revenue for UAL?

Cheers

[shopsywhopsy]

Maybe even DC 3 qualified :D

[A-V-8R]

InitReg..

767-200 usually go from JFK to the west coast, sometimes a -300.

Nothing is written in stone around here, but the beancounters think that that Airbus should do the job......

But I hear the pilots say the A-321/20/19, of which I am not rated does not have the wing to do this with a full load.

We run 757's to the west coast out of EWR, not 767's.

By the way, you book 30 days ahead on the Net and you will find United maches most of the discount carriers on competing routes. I have bought several BDLSFO round trips for $199 for the in-laws who are not covered by passes.

I love the thought of my mother-in-law in the last center seat :)

Rumors, and rumors everywhere, some of the people say be may go down to 7700 pilots, from a little over 10,000, to about 8400 now as we continue to "Shrink to Profibility...." as they park more 747-400s and the bumps trickle on down.....

[InitRef]

Thanks AV8R,

I had heard that the JFK-SFO/LAX routes (primary mission for the 762) were very profitable - lots of paid Biz and full-fare Econ tickets - in part due to wide-body 3-class aircraft.

Of course if the hypothesis is that the biztraveller is either mythical these days, or is buying tickets months in advance with Sat night stays (like your ma-in-law :-), then 757 makes sense - heck a CRJ-XXER will do....

Now that UAL can operate upto 268 RJ (from current limit of 133) -from a cost perspective OK - UAL *may* get a lower CASM from UX RJ ops, but from a revenue perspective - the RJ explosion sounds problematic. So now a pax can choose between Southwest Guppies and the UX CRJ... :confused:

Everybody talks about costs at UAL, but I think too many people - espp UAL mgmt - don't worry enough about revenue!

[Ignition Override]

It was rumoured that a US major airline CEO was interested in some of United's 744s, if the price went from about 60 down to about $40 million, which causes me to wonder...

I'm sure that he could also find a good deal on buckets of red paint. Don't forget the fashionable "submarine gray", so that they can be hidden from IL-18 "Coot" patrol planes, or Nimrods, whenever these "whales" surface in the Atlantik, or Pacifik: "Ship ahoy, Comrade Lieutenant!"...[The US Navy might make a large profit on this transaction-heck, they use S-3 Vikings to look for drugs: these planes could be subsidized with logos for Texaco, Wal-Mart's day-glow designer underwear, or McDonalds' Glistening Earthworm-Burgers ("avec frommage et pommes frites, s'il vouz plait") on the fuselage...]

And just why does an airline need each cockpit configuration to be 100% standard? If an airline ends up with one fleet having only two layoouts, with differences consisting ONLY of relatively minor things, i.e. position light switches, altitude hold buttons, rotating beacons, coffee holders, what is the big deal? If you can get a batch of planes, even with different galleys, whose service is spread out over an 8-hour flight to AMS, or an awful 14-hours to Narita or nonstop to the New Chang Ying Restaurant, is it really so important to delay the introduction to line flying? Just tell the flight attendants (nothing personal, 'Wagon Dragon') to get "uuused to it". "Hold them by the ears", if necessary, said Ole after he returned from his frozen honeymoon with Lina...

The FAA allowed Connie Kalitta's DC-8s to operate in several cockpit layouts with various engines, which were reportedly interesting combinations.

[redtail]

"The FAA allowed Connie Kalitta's DC-8s to operate in several cockpit layouts with various engines, which were reportedly interesting combinations."

Connie probably just kept showing them the same airplane over and over again. The Kalitta folks liked to brag about getting things over on the FAA.

[ironbutt57]

aa717 driver..i'm gonna tell your wife...and I KNOW her.....shopsywhopsy...that new? try the wright-flyer....some of those folks were already old when I was born...and I'm old..and they're still flying......"are you gonna go in for some shopsy-whopsy?":D :D

[BOING]

Loads out of the three New York airports seem to be the slowest to recover throughout the US. Many other routes are showing pretty full loads with high proportions of "mileage plan" passengers. I know because I always make sure I get a passenger list. What I do not know is how much these business passengers are paying for their ticket. The business travellers are back in the sky but are they helping the airline revenues?

[Fenchy]

"At least in Europe governmemt subsidies are banned to ensure the survival of the fittest, the industry over here in general being better for it"

I am sorry ,but I had to reply to that BS.

Air france was subsidized for the past 30 years, it never made money but yet was still bloodsucking the French citizens, and beeing obnoxious as well, and severals other airlines in the same sack.
And how about Airbus sponsored by europe for 20 years, and making deals that allows them to give airplanes away only with the support of the governments.

[BOING]

I remember a BOAC flight that went from Nairobi to Lusaka, Zambia. Usually carried about 4 pax but the UK Government picked up most of the cost of the leg because the aircraft carried a diplomatic pouch.