United Airlines, Chapter 11 status
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UAL's pilots union has offered to take a pay cut (10%, as I recall). MX still is holding out though.
That being said, to the posted who said that pilot's were grossly overpaid. How many people in the world can take a 500,000 lb hunk of metal, fly it through the air for 7 hours, and put it down on a 150 ft wide piece of asphalt on the other side of the country or the the Atlantic? Not too many...
Doctors get paid a lot because it requires a lot of skill. So do engineers. So do pilots...
That being said, to the posted who said that pilot's were grossly overpaid. How many people in the world can take a 500,000 lb hunk of metal, fly it through the air for 7 hours, and put it down on a 150 ft wide piece of asphalt on the other side of the country or the the Atlantic? Not too many...
Doctors get paid a lot because it requires a lot of skill. So do engineers. So do pilots...
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Check This Out:
There would be no debate if UAL, its managers and its employe-owners, including its overpaid senior pilots who are pocketing $300,000+ annual salaries....if the company wouldn't be asking for a government bailout!
As it is, I am a citizen taxpayer who is not in favor of subsidizing the bloated salaries of employe-owners and executives of a nearly bankrupt private airline.
How dare do UAL management and its employe-owners authorize lavish stock options for themselves, and "golden parachutes" for its executives, and former execs like Goodwin who had pocketed $6.3 million in "severence pay",...and then ask taxpayers for a $1.8 Billion dollar bailout. Nuts.
To be sure, life will go on after UAL.
As it is, I am a citizen taxpayer who is not in favor of subsidizing the bloated salaries of employe-owners and executives of a nearly bankrupt private airline.
How dare do UAL management and its employe-owners authorize lavish stock options for themselves, and "golden parachutes" for its executives, and former execs like Goodwin who had pocketed $6.3 million in "severence pay",...and then ask taxpayers for a $1.8 Billion dollar bailout. Nuts.
To be sure, life will go on after UAL.
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Get your facts right Glueball.
What UAL is asking for is LOAN GUARANTEEES not a cash handout. Two very different things. While you may still have misgivings about even loan guaranteees , which would mean the government was left responsible if/when UAL finally fails, there is no cash out of your taxpayer pocket in the first instance.
With UAL's present business methods they do not deserve loan guarantees because it has been amply demonstrated that the company does not have an effective business plan to cope with the present market realities. The loan board is quite correct in expecting some fresh thinking before the guarantees are approved.
However, focussing purely on cost reductions to turn the company round is a mirage. Income must be generated. The present UAL management frittered away the competitive advantage they were presented by the employee pay concessions made during the ESOP years. There is no indication that the same managers will not waste the concessions they are now seeking.
At present the whole UA business plan is based on employee concessions to sell tickets more cheaply. What this means is any concessions the employeees may make would be poured down the drain following previous practices. Not until UA management admits that income generation is as important as cost reductions will the company have any credibility with its employees, Wall Street or the Loan Board.
By the way, you seem to have a problem with people getting paid what they negotiated by contract under fair and honest conditions. Before you mouth off about grossly overpaid pilots consider that these pay rates were approved by the company management team after open negotiations. Supply and demand. No pilot found it necessary to lie to the IRS, start a bogus off-shore holding company or cheat on the books to get their payrate. Save your bile for the managers who agreed to the pay rates and the lying, cheating business managers who stole many millions for doing nothing rather than the pilots who negotiated an open contract. I assure you, no pilot in UAL gets a "golden parachute" and no pilot thought that Goodwin's bribe to leave and shut-up was a good idea.
Pay rates are determined by supply and demand. If an airline thought they could fire all of its pilots during contract negotiations and replace them with new hires without hurting business they would do so, in a heartbeat. Pay rates are established, like it or not, by the tensions and perceived gains and losses for both sides exposed during contract negotiations.
If a company decides it is willing to pay $300,000 for a 777 Captain during negotiations it sounds pretty weak, and a reflection on their ability, to turn round later and say they made a mistake. If changed conditions require a genuine consideration of costs then negotiate down in the same way you negotiated up. The backdoor threat of bankruptcy just demonstrates how bankrupt UAL management is for ideas as well as cash.
What UAL is asking for is LOAN GUARANTEEES not a cash handout. Two very different things. While you may still have misgivings about even loan guaranteees , which would mean the government was left responsible if/when UAL finally fails, there is no cash out of your taxpayer pocket in the first instance.
With UAL's present business methods they do not deserve loan guarantees because it has been amply demonstrated that the company does not have an effective business plan to cope with the present market realities. The loan board is quite correct in expecting some fresh thinking before the guarantees are approved.
However, focussing purely on cost reductions to turn the company round is a mirage. Income must be generated. The present UAL management frittered away the competitive advantage they were presented by the employee pay concessions made during the ESOP years. There is no indication that the same managers will not waste the concessions they are now seeking.
At present the whole UA business plan is based on employee concessions to sell tickets more cheaply. What this means is any concessions the employeees may make would be poured down the drain following previous practices. Not until UA management admits that income generation is as important as cost reductions will the company have any credibility with its employees, Wall Street or the Loan Board.
By the way, you seem to have a problem with people getting paid what they negotiated by contract under fair and honest conditions. Before you mouth off about grossly overpaid pilots consider that these pay rates were approved by the company management team after open negotiations. Supply and demand. No pilot found it necessary to lie to the IRS, start a bogus off-shore holding company or cheat on the books to get their payrate. Save your bile for the managers who agreed to the pay rates and the lying, cheating business managers who stole many millions for doing nothing rather than the pilots who negotiated an open contract. I assure you, no pilot in UAL gets a "golden parachute" and no pilot thought that Goodwin's bribe to leave and shut-up was a good idea.
Pay rates are determined by supply and demand. If an airline thought they could fire all of its pilots during contract negotiations and replace them with new hires without hurting business they would do so, in a heartbeat. Pay rates are established, like it or not, by the tensions and perceived gains and losses for both sides exposed during contract negotiations.
If a company decides it is willing to pay $300,000 for a 777 Captain during negotiations it sounds pretty weak, and a reflection on their ability, to turn round later and say they made a mistake. If changed conditions require a genuine consideration of costs then negotiate down in the same way you negotiated up. The backdoor threat of bankruptcy just demonstrates how bankrupt UAL management is for ideas as well as cash.
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When you say that "management" had approved the current high salaried contracts in "fair negotiations" aren't you saying in fact that the 53% employe-owners have selfsatisfied themselves by voting themselves the biggest industry pay? Think about it. UAL has a numbers problem when 49% of its operating revenues are eaten up by payroll!
The fact is that UAL's numbers are so bad that it can't get a loan on Wall Street, that's why the company is knocking on Uncle Sam's door. Since 9/11 management had sat on their hands while UAL's stock had melted into junk status. Not to mention wasted Millions on Avolar.
The fact is that UAL's numbers are so bad that it can't get a loan on Wall Street, that's why the company is knocking on Uncle Sam's door. Since 9/11 management had sat on their hands while UAL's stock had melted into junk status. Not to mention wasted Millions on Avolar.
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Suspect that UAL will fold and fade away within one year...unless the situation is turned around, pronto. This means MASSIVE salary reductions for pilots, mechanics, cabin crew...AND senior execs. IF this this does NOT transpire, goodbye UAL. And it will not be missed by all that many. A weak sister cannot survive forever.
Looks like DAL will rake in the business.
Looks like DAL will rake in the business.
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GlueBall. If you are going to make comments verify your facts. In no way did the UAL pilots "vote themselves a pay raise". In fact, the pilots were in severe confrontations with UAL management over the management's failure to fulfil the "on time" part of their promises about the year 2000 contract.
If the pilots could have voted themselves a pay raise, or in any way influenced the pace of contract negotiations, they surely would have done so as soon as possible. They would have used their supposed power to have a contract in place in MAY 2000 when the ESOP expired. Instead, because of UAL management's lying and stupidity the UAL pilots made the summer of 2000 a nasty time for the aviation industry.
Your contention that the UAL pilots voted themselves a pay raise does not reflect the facts or the history of the situation. The UAL pilots got a fat contract purely because Goodwin had got himself into a deep hole over the US Air merger and he needed to bribe the pilots to get their support for his plan.
The pilot negotiators knew Goodwin was in trouble and took him to the cleaners. Is that not how our great free enterprise system works? Is UAL management not trying the reversal of this tactic now they think that they have the upper hand? Methinks you are you one of the people who thinks free enterprise only applies to management.
411A. You are wrong about UAL fading within a year. If UAL declares Chapter 11 they will continue to fly 90 % of their present routes under the protection of the bankruptcy court. This will, of course, involve large pay cuts for the workforce which will, I am sure, cheer you up greatly. Unfortunately for the rest of the aviation industry Chapter 11 at UAL will give UAL a temporary operating advantage over the other airlines. UAL management as now structured will use this cost advantage to keep ticket prices low. UAL could drag on for a considerable time based on bankruptcy court protection and lowered costs.The damage done to the other major carriers by this further period of enforced low fares will be enormous. It could be enough to force another major carrier into bankruptcy. Then the whole house of cards will fall down.
I assure you that although a bankruptcy at UAL seems like a great emotional success to people like you the effect on the airline industry will be horrific. Do not take my word for it. Look at the article on the subject in todays Wall Street Journal.
If the pilots could have voted themselves a pay raise, or in any way influenced the pace of contract negotiations, they surely would have done so as soon as possible. They would have used their supposed power to have a contract in place in MAY 2000 when the ESOP expired. Instead, because of UAL management's lying and stupidity the UAL pilots made the summer of 2000 a nasty time for the aviation industry.
Your contention that the UAL pilots voted themselves a pay raise does not reflect the facts or the history of the situation. The UAL pilots got a fat contract purely because Goodwin had got himself into a deep hole over the US Air merger and he needed to bribe the pilots to get their support for his plan.
The pilot negotiators knew Goodwin was in trouble and took him to the cleaners. Is that not how our great free enterprise system works? Is UAL management not trying the reversal of this tactic now they think that they have the upper hand? Methinks you are you one of the people who thinks free enterprise only applies to management.
411A. You are wrong about UAL fading within a year. If UAL declares Chapter 11 they will continue to fly 90 % of their present routes under the protection of the bankruptcy court. This will, of course, involve large pay cuts for the workforce which will, I am sure, cheer you up greatly. Unfortunately for the rest of the aviation industry Chapter 11 at UAL will give UAL a temporary operating advantage over the other airlines. UAL management as now structured will use this cost advantage to keep ticket prices low. UAL could drag on for a considerable time based on bankruptcy court protection and lowered costs.The damage done to the other major carriers by this further period of enforced low fares will be enormous. It could be enough to force another major carrier into bankruptcy. Then the whole house of cards will fall down.
I assure you that although a bankruptcy at UAL seems like a great emotional success to people like you the effect on the airline industry will be horrific. Do not take my word for it. Look at the article on the subject in todays Wall Street Journal.
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If nothing else BOING, it will indeed force other carriers to severely reduce costs, which for most, is LONG overdue.
Surely hope that the big paychecks and perks for senior managements will be reined in, together with reductions in the "overstuffed" pilot salaries.
Who knows, perhaps make room for a new start-up or two.
Surely hope that the big paychecks and perks for senior managements will be reined in, together with reductions in the "overstuffed" pilot salaries.
Who knows, perhaps make room for a new start-up or two.
JSkiffington: You put it in a nutshell, although you mentioned only when things somehow go perfectly. The amateur pilots out there might have trouble with factoring whether the Flight Release plan of twenty five minutes contingency fuel (no alternate or extra/tanker) for two hours through bumpy skies to a busy airport hub is adequate; whether the Captain should refuse a two-engine plane (with an inoperative APU which must be replaced-I refused one this week, and appreciated the FO's quick input) when the radar summary in front of the Dispatcher (during the second phone call) suddenly gets worse, with a planned return flight in the dark; what to do on an instrument takeoff with an engine fire light and very loud bell, and less than required visibility to return for a Cat 1 ILS, or a "Slat Assymetry" caution light stays on, not to mention a thousand other things.
A former Eastern pilot at dinner described some of the scabs who were hired by Eastern, and it was an interesting story. Those pilots do whatever mgmt tells them to do, no matter whether it includes falsified maintenance logbooks (I have an article as proof). How about the Continental "fuel bonus (money)" program a number of years ago, in which Captains were paid extra to be released with as little fuel as possible? We had better not go into what was reported to "Aviation Week".
My FO said that several years ago he had a compressor stall (in a 737) at a thousand feet when departing Midway and his fO was brand new-his plane suddenly yawed (jerked) to one side-we can rest assured that any experienced Private Pilot could have handled this with a simple simulator course at Flight Safety. Not even the dynamite new computer sim game, "IL-2 Sturmovik", includes the many realistic variables.
A former Eastern pilot at dinner described some of the scabs who were hired by Eastern, and it was an interesting story. Those pilots do whatever mgmt tells them to do, no matter whether it includes falsified maintenance logbooks (I have an article as proof). How about the Continental "fuel bonus (money)" program a number of years ago, in which Captains were paid extra to be released with as little fuel as possible? We had better not go into what was reported to "Aviation Week".
My FO said that several years ago he had a compressor stall (in a 737) at a thousand feet when departing Midway and his fO was brand new-his plane suddenly yawed (jerked) to one side-we can rest assured that any experienced Private Pilot could have handled this with a simple simulator course at Flight Safety. Not even the dynamite new computer sim game, "IL-2 Sturmovik", includes the many realistic variables.
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Those former pilots of EAL will go down in US aviation history as the greatest loosers of post Airline Deregulation. They stabed Frank Borman in the back then went to bed with Frank Lorenzo only to believe in Duffy (who was a Delta capt that make a ton of money when EAL went under). The pilots destroyed the future of 45,000 employees and a great airline to defend the $50,000. a year IAM ramp Rats. Great stuff and now you want UAL to follow in their footsteps?
Those former pilots of EAL will go down in US aviation history as the greatest loosers of post Airline Deregulation. They stabed Frank Borman in the back then went to bed with Frank Lorenzo only to believe in Duffy (who was a Delta capt that make a ton of money when EAL went under). The pilots destroyed the future of 45,000 employees and a great airline to defend the $50,000. a year IAM ramp Rats. Great stuff and now you want UAL to follow in their footsteps?
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Yes 411A, it will force airlines to reduce costs. Just look beyond the end of next week though. Read the WSJ article I referred to.
The implications of a "death spiral" by the airline industry are enormous. Say UAL goes bankrupt, they continue flying under court protection and avoid paying several major creditors. Pricing pressures are forced on the other majors who cut ticket prices to keep their passengers. Eventually, another major, say American cries enough and also files for bankruptcy. This airline also gets court protection from its creditors. Now the companies who supplied services to two major airlines are not being paid so they start laying off workers. The remaining airlines now face two competitors who are desperately cutting ticket prices to maintain cash flow. How long is it going to be before the other airlines are in an untenable position? What start up airline is going to find backers to enter a market where this bloodbath is taking place? It would be cheaper to buy one of the majors than finance a start up. This is not a doomsday scenario. Several elements of this idea have already been discussed in public.
Boeing takes a hit, General Electric and Pratt and Whitney take a hit. Finance companies get leased aircraft returned that they cannot get rid of. The implications for the national economy in this situation cannot be ignored. Remember, election time is coming up. What about the Civil Reserve Air Fleet? The nations ability to wage its war on terrorism could be effected by major airline failures.
I know you would love to see the major airlines in trouble and in particular their employees laid off. Better just be careful what you wish for.
"He who sows the wind shall reap the whirlwind"
The implications of a "death spiral" by the airline industry are enormous. Say UAL goes bankrupt, they continue flying under court protection and avoid paying several major creditors. Pricing pressures are forced on the other majors who cut ticket prices to keep their passengers. Eventually, another major, say American cries enough and also files for bankruptcy. This airline also gets court protection from its creditors. Now the companies who supplied services to two major airlines are not being paid so they start laying off workers. The remaining airlines now face two competitors who are desperately cutting ticket prices to maintain cash flow. How long is it going to be before the other airlines are in an untenable position? What start up airline is going to find backers to enter a market where this bloodbath is taking place? It would be cheaper to buy one of the majors than finance a start up. This is not a doomsday scenario. Several elements of this idea have already been discussed in public.
Boeing takes a hit, General Electric and Pratt and Whitney take a hit. Finance companies get leased aircraft returned that they cannot get rid of. The implications for the national economy in this situation cannot be ignored. Remember, election time is coming up. What about the Civil Reserve Air Fleet? The nations ability to wage its war on terrorism could be effected by major airline failures.
I know you would love to see the major airlines in trouble and in particular their employees laid off. Better just be careful what you wish for.
"He who sows the wind shall reap the whirlwind"
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BOING
If one or two weak major carriers fold it would certainly not be necessarally bad (except for their respective employees of course) because it would leave the stronger survivors in a much better position. Once the dust had settled, ticket prices would rise once again. Has happened before. If managements allow their companies to throw cash away in record amounts, bankruptcy cannot be far behind. Leasing companies are already offering aircraft at record low prices, good news for new carriers who have a solid business plan. Why would/should anyone suggest the UAL (for example) be bailed out with federal loan guarantees, when their management has done such a lousy job.
OTOH, if those loan guarantees are offered, perhaps the present management should be booted out completely, and new brought in...certainly they could do a much better job. Failure should never ever be rewarded, especially with public funding, loan guarantees or otherwise.
If one or two weak major carriers fold it would certainly not be necessarally bad (except for their respective employees of course) because it would leave the stronger survivors in a much better position. Once the dust had settled, ticket prices would rise once again. Has happened before. If managements allow their companies to throw cash away in record amounts, bankruptcy cannot be far behind. Leasing companies are already offering aircraft at record low prices, good news for new carriers who have a solid business plan. Why would/should anyone suggest the UAL (for example) be bailed out with federal loan guarantees, when their management has done such a lousy job.
OTOH, if those loan guarantees are offered, perhaps the present management should be booted out completely, and new brought in...certainly they could do a much better job. Failure should never ever be rewarded, especially with public funding, loan guarantees or otherwise.
Tsgas: I forgot to mention the reason for my reminding folks of the Eastern situation. JSkiffington pointed out some interesting things about our unique training and experience, and it was my intention to portray just a little more, along with a tiny part of what can happen to flight safety during and after a strike: these events are well-documented. Eastern guys will tell you (we have many of them-none were hired by Delta) what a shame that ALPA was run by that "Dilbert" Duffy at that time.
I only read about United in the newspapers, and can't offer any well-informed recommendations or comments. Isn't it quite interesting that our federal government seems to have the role of "backroom" negotiator, in the sense that if unions don't all give up XX percentage of salaries, then the airline does not qualify for a certain type of federal loan? So much for GOP's classic platform stance regarding the "laissez-faire" system of economics: it applies except when labor can be kicked around, for whatever reason. Let's hope that United mgmt and all labor groups there can put together a deal whereby they don't need to file Chapter 11, unless that is in their best interest, as seems to be the case at USAirways. It looks like certain segments of our government presume to use an airline loan as a reward for what THEY see as enough contract concessions, does it not?
Under Chapter 11, don't unions have little influence with a Bankruptcy Judge regarding salary and work rules? Good luck to all the employees at United.
Excuse me while I go fly the 'IL-2 Sturmovik' simulator game-it lets me do so many things which I can't do in the real airplane at work (max desired bank angle 25*, takeoff power 5 minutes max., no attacks on enemy bombers permitted).
I only read about United in the newspapers, and can't offer any well-informed recommendations or comments. Isn't it quite interesting that our federal government seems to have the role of "backroom" negotiator, in the sense that if unions don't all give up XX percentage of salaries, then the airline does not qualify for a certain type of federal loan? So much for GOP's classic platform stance regarding the "laissez-faire" system of economics: it applies except when labor can be kicked around, for whatever reason. Let's hope that United mgmt and all labor groups there can put together a deal whereby they don't need to file Chapter 11, unless that is in their best interest, as seems to be the case at USAirways. It looks like certain segments of our government presume to use an airline loan as a reward for what THEY see as enough contract concessions, does it not?
Under Chapter 11, don't unions have little influence with a Bankruptcy Judge regarding salary and work rules? Good luck to all the employees at United.
Excuse me while I go fly the 'IL-2 Sturmovik' simulator game-it lets me do so many things which I can't do in the real airplane at work (max desired bank angle 25*, takeoff power 5 minutes max., no attacks on enemy bombers permitted).
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Here's another analysis of the current industry situation from today's MCO paper:
CHANGE IN THE AIR
Airlines on the edge
By Tim Barker | Sentinel Staff Writer
Posted August 18, 2002
It seems incredible, looking back to the 1990s, that the airline industry would find itself today at death's door, its financial lifeblood escaping through wounds too numerous to count.
Just two years ago, the industry was coming off the most profitable streak in its 64-year history, racking up six straight years of multibillion-dollar profits. It's best year ever was 1999, with $5.4 billion in profits -- or nearly double the industry's entire earnings since 1938.
So why, now, are there almost daily stories about this or that airline slashing routes, discarding workers, pleading for government handouts or threatening bankruptcy?
The answer is not Sept. 11.
Undoubtedly, the terrorist strikes have hurt the industry, helping it to $7 billion in losses last year. For some of the weakest carriers, the attacks may be the hammer that drives the last nail into place.
But the industry was on its way to this dismal place long before hijackers struck -- thanks to bloated labor costs, high debt, rising fuel costs, the country's fast-approaching recession and competition from discount carriers.
Quite simply, this is an industry that has not paid heed to the lessons of its roller-coaster past. And, some experts say, it may need to fundamentally change the way it does business.
"This is a cycle that's been repeated for 30 years," said Richard Gritta, a University of Portland finance professor and airline expert. "It's like a yo-yo. Up and down. Up and down. You'd think they'd get a clue."
The industry has been thrashing about since Sept. 11, trying to get a handle on its costs in the face of a fall-off in demand that failed to reverse itself as fast as once hoped. Those financial woes erupted anew last week with a bankruptcy filing by US Airways, layoffs by American Airlines and dire warnings from United Airlines.
In a sense, the industry's problems are directly related to its successes of the mid- to late '90s.
During those boom years, the industry found itself blessed by low interest rates, a red-hot economy, low fuel prices and labor concessions gained during the more turbulent early part of the decade.
Eyes turned toward expansion. More routes were added. Unions demanded, and got, increasingly generous contracts. New planes were ordered.
The problem, Gritta said, is that the latest expansion wave was funded by billions of dollars in loans. For a cyclical industry -- one in which revenues are known to fluctuate wildly from year to year -- high fixed costs can be a killer.
Indeed, those loans have caught up with several of the major carriers, including United Airlines, which warned last week that it may seek bankruptcy protection. The nation's second-largest carrier is facing $900 million in debt payments this year. The company has $2 billion in cash but is losing millions every day.
Already, US Airways has fled into bankruptcy court, joining a trio of smaller carriers, Midway, Vanguard and Sun Country.
But aside from the crushing debt, many of the top carriers also are burdened by the labor deals they negotiated during the last boom cycle -- when each successive deal topped another airline's deal.
"You don't have to be a mathematician to realize that something has to give," said Terry Trippler, a Minneapolis-based airline expert.
Cutting those labor costs will be critical for airlines, which have few options available. Fuel costs, for example, are well outside their control.
United has made it clear -- giving a 30-day deadline -- that it needs to cut the pay of its pilots, machinists and flight attendants if it hopes to stave off bankruptcy. The company also is seeking concessions from creditors and suppliers.
"The changes we need to make are urgent, significant and immediate," Jack Creighton, United's chief executive officer, said in prepared statement.
The Chicago-based carrier, which lost $2.1 billion last year and expects to lose $1 billion this year, may have a hard time persuading workers to give in. It is not clear exactly what the company is seeking, but it needs a good showing to convince regulators that it is worthy of the $1.8 billion in federal loan guarantees being sought through last year's $15 billion airline bailout package.
The workers do, however, have a strong incentive to avoid bankruptcy, considering that they own 55 percent of United's stock. Typically, bankruptcy erases existing shares, making them worthless, and puts new shares -- and control of the company -- in the hands of creditors. That would leave the workers empty-handed.
But that might not be such a bad thing, said Aaron Gellman, a Northwestern University professor.
"It would get rid of the unions' control over the airline," Gellman said. "United would be a lot stronger if it shucks the power of the unions."
Airline workers have a different take on the labor issue.
Since Sept. 11, they have borne the brunt of the industry's cost-cutting, with some 100,000 workers laid off in the months following the attacks.
Unions for many carriers, including US Air, already have agreed to concessions aimed at keeping their employers, as well as their own jobs, afloat.
But they are well aware of the industry's up and down cycles -- they were, for example, asked for massive concessions in the early '90s. Al Aitken, of the Allied Pilots Association, which represents 14,000 American Airlines pilots, said employees are sensitive to the positions of their companies.
"But it seems to me like this is a pattern. This is what we do every time there is a major labor contract," Aitken said. "The company tends to try and paint the most dismal picture it possibly can."
Aitken and others say the industry's problems go much deeper than simply slashing labor costs.
They are part of a chorus of voices calling for drastic overhauls of everything from ticket pricing to route structures.
In the eyes of some observers, the roots of the industry's troubles can be traced back to 1978 and the end of the government's 40-year role in airline regulation. Until that time, the government controlled fares, routes and the number of airlines allowed to fly between states.
When regulation ended, there were just 10 major airlines operating around the country, including United, American, Eastern, Braniff and PanAm -- primarily an international carrier.
But with the locks off the door, a host of small carriers -- including some that had been limited to intrastate flights only -- jumped into the fray, applying pressure on wages, fares and routes.
Several top carriers, including Braniff and Eastern, were too slow to adapt to a world without a government safety net. For those carriers, deregulation would spell disaster and demise.
"It was like an adolescent being away from home for the first time. They didn't know what to do," said Harry Lawrence, a professor at Embry Riddle Aeronautical University and an expert on airline deregulation.
It was out of this deregulation storm that today's hub-and-spoke system emerged. The system -- which takes all passengers to a large airport, such as Atlanta or Chicago, and then dispatches them to their final destinations -- was designed to keep costs down while moving as many passengers as possible.
But such a model may be on its way out, or at least due for a revamping.
Making a strong case for a departure from pure hub-and-spoke systems have been the successes of Southwest and youngster Jet Blue. Both have snubbed the traditional model in favor of a simple point-to-point system. The fact that Southwest was the only major carrier to make money last year may force its competitors to give serious thought to how the Dallas-based airline does business.
The company benefits from cheaper labor costs, as well as the simplicity of its fleet. By flying only one type of airplane, the Boeing 737, the carrier keeps its maintenance and training costs lower.
A key industry measure -- cost per available seat mile, or what it costs to take one passenger one mile -- helps illustrate the challenge faced by other carriers in tight economic times.
In the latest quarter, Southwest reported a seat mile cost of 7.5 cents, compared with United at 11.3 cents, American at 10.8 cents and Delta at 10.1 cents. Orlando-based AirTran Airways reported a cost of 8.5 cents. Earlier this week, American became the first major carrier to move away from the traditional model, announcing plans to dramatically alter its hub system.
The airline will use fewer planes at its hubs, spreading flights throughout the day, a move that will increase delays for passengers, but also cut labor costs and allow for the retirement of unneeded planes. The airline expects to save $1 billion a year.
"We must get our costs down in order to compete and must focus on the products our customers want and are willing to pay for," Donald Carty, American's chairman, said in a statement.
Orlando International's dominant carrier and the nation's third largest, Delta, also is making moves to combat incursions by low-cost carriers. The company is developing a new discount carrier to fend off, in particular, Orlando-based AirTran, which has been chipping away at Delta's market share along the East Coast.
Still, there are limits to what the larger carriers can accomplish and how far they can depart from the traditional hub-and-spoke model.
The Uniteds, Americans and Deltas do not enjoy the freedom of smaller carriers such as Southwest that focus more narrowly on specific regions. The larger carriers, for example, need to have fleets capable of handling everything from short instate hops to coast-to-coast excursions to international jaunts. But the biggest question to be answered during this latest industry crisis is whether it will emerge stronger and more resilient.
"Absolutely," said Gellman, the Northwestern professor.
Or whether it is doomed to repeat the past.
"It may be that this is finally dawning on them," said Gritta, from Portland. "But I'll believe it when I see it."
http://www.orlandosentinel.com/busin...802aug18.story
Yet another analysis from the New York Times:
http://www.nytimes.com/2002/08/18/bu...t&position=top
CHANGE IN THE AIR
Airlines on the edge
By Tim Barker | Sentinel Staff Writer
Posted August 18, 2002
It seems incredible, looking back to the 1990s, that the airline industry would find itself today at death's door, its financial lifeblood escaping through wounds too numerous to count.
Just two years ago, the industry was coming off the most profitable streak in its 64-year history, racking up six straight years of multibillion-dollar profits. It's best year ever was 1999, with $5.4 billion in profits -- or nearly double the industry's entire earnings since 1938.
So why, now, are there almost daily stories about this or that airline slashing routes, discarding workers, pleading for government handouts or threatening bankruptcy?
The answer is not Sept. 11.
Undoubtedly, the terrorist strikes have hurt the industry, helping it to $7 billion in losses last year. For some of the weakest carriers, the attacks may be the hammer that drives the last nail into place.
But the industry was on its way to this dismal place long before hijackers struck -- thanks to bloated labor costs, high debt, rising fuel costs, the country's fast-approaching recession and competition from discount carriers.
Quite simply, this is an industry that has not paid heed to the lessons of its roller-coaster past. And, some experts say, it may need to fundamentally change the way it does business.
"This is a cycle that's been repeated for 30 years," said Richard Gritta, a University of Portland finance professor and airline expert. "It's like a yo-yo. Up and down. Up and down. You'd think they'd get a clue."
The industry has been thrashing about since Sept. 11, trying to get a handle on its costs in the face of a fall-off in demand that failed to reverse itself as fast as once hoped. Those financial woes erupted anew last week with a bankruptcy filing by US Airways, layoffs by American Airlines and dire warnings from United Airlines.
In a sense, the industry's problems are directly related to its successes of the mid- to late '90s.
During those boom years, the industry found itself blessed by low interest rates, a red-hot economy, low fuel prices and labor concessions gained during the more turbulent early part of the decade.
Eyes turned toward expansion. More routes were added. Unions demanded, and got, increasingly generous contracts. New planes were ordered.
The problem, Gritta said, is that the latest expansion wave was funded by billions of dollars in loans. For a cyclical industry -- one in which revenues are known to fluctuate wildly from year to year -- high fixed costs can be a killer.
Indeed, those loans have caught up with several of the major carriers, including United Airlines, which warned last week that it may seek bankruptcy protection. The nation's second-largest carrier is facing $900 million in debt payments this year. The company has $2 billion in cash but is losing millions every day.
Already, US Airways has fled into bankruptcy court, joining a trio of smaller carriers, Midway, Vanguard and Sun Country.
But aside from the crushing debt, many of the top carriers also are burdened by the labor deals they negotiated during the last boom cycle -- when each successive deal topped another airline's deal.
"You don't have to be a mathematician to realize that something has to give," said Terry Trippler, a Minneapolis-based airline expert.
Cutting those labor costs will be critical for airlines, which have few options available. Fuel costs, for example, are well outside their control.
United has made it clear -- giving a 30-day deadline -- that it needs to cut the pay of its pilots, machinists and flight attendants if it hopes to stave off bankruptcy. The company also is seeking concessions from creditors and suppliers.
"The changes we need to make are urgent, significant and immediate," Jack Creighton, United's chief executive officer, said in prepared statement.
The Chicago-based carrier, which lost $2.1 billion last year and expects to lose $1 billion this year, may have a hard time persuading workers to give in. It is not clear exactly what the company is seeking, but it needs a good showing to convince regulators that it is worthy of the $1.8 billion in federal loan guarantees being sought through last year's $15 billion airline bailout package.
The workers do, however, have a strong incentive to avoid bankruptcy, considering that they own 55 percent of United's stock. Typically, bankruptcy erases existing shares, making them worthless, and puts new shares -- and control of the company -- in the hands of creditors. That would leave the workers empty-handed.
But that might not be such a bad thing, said Aaron Gellman, a Northwestern University professor.
"It would get rid of the unions' control over the airline," Gellman said. "United would be a lot stronger if it shucks the power of the unions."
Airline workers have a different take on the labor issue.
Since Sept. 11, they have borne the brunt of the industry's cost-cutting, with some 100,000 workers laid off in the months following the attacks.
Unions for many carriers, including US Air, already have agreed to concessions aimed at keeping their employers, as well as their own jobs, afloat.
But they are well aware of the industry's up and down cycles -- they were, for example, asked for massive concessions in the early '90s. Al Aitken, of the Allied Pilots Association, which represents 14,000 American Airlines pilots, said employees are sensitive to the positions of their companies.
"But it seems to me like this is a pattern. This is what we do every time there is a major labor contract," Aitken said. "The company tends to try and paint the most dismal picture it possibly can."
Aitken and others say the industry's problems go much deeper than simply slashing labor costs.
They are part of a chorus of voices calling for drastic overhauls of everything from ticket pricing to route structures.
In the eyes of some observers, the roots of the industry's troubles can be traced back to 1978 and the end of the government's 40-year role in airline regulation. Until that time, the government controlled fares, routes and the number of airlines allowed to fly between states.
When regulation ended, there were just 10 major airlines operating around the country, including United, American, Eastern, Braniff and PanAm -- primarily an international carrier.
But with the locks off the door, a host of small carriers -- including some that had been limited to intrastate flights only -- jumped into the fray, applying pressure on wages, fares and routes.
Several top carriers, including Braniff and Eastern, were too slow to adapt to a world without a government safety net. For those carriers, deregulation would spell disaster and demise.
"It was like an adolescent being away from home for the first time. They didn't know what to do," said Harry Lawrence, a professor at Embry Riddle Aeronautical University and an expert on airline deregulation.
It was out of this deregulation storm that today's hub-and-spoke system emerged. The system -- which takes all passengers to a large airport, such as Atlanta or Chicago, and then dispatches them to their final destinations -- was designed to keep costs down while moving as many passengers as possible.
But such a model may be on its way out, or at least due for a revamping.
Making a strong case for a departure from pure hub-and-spoke systems have been the successes of Southwest and youngster Jet Blue. Both have snubbed the traditional model in favor of a simple point-to-point system. The fact that Southwest was the only major carrier to make money last year may force its competitors to give serious thought to how the Dallas-based airline does business.
The company benefits from cheaper labor costs, as well as the simplicity of its fleet. By flying only one type of airplane, the Boeing 737, the carrier keeps its maintenance and training costs lower.
A key industry measure -- cost per available seat mile, or what it costs to take one passenger one mile -- helps illustrate the challenge faced by other carriers in tight economic times.
In the latest quarter, Southwest reported a seat mile cost of 7.5 cents, compared with United at 11.3 cents, American at 10.8 cents and Delta at 10.1 cents. Orlando-based AirTran Airways reported a cost of 8.5 cents. Earlier this week, American became the first major carrier to move away from the traditional model, announcing plans to dramatically alter its hub system.
The airline will use fewer planes at its hubs, spreading flights throughout the day, a move that will increase delays for passengers, but also cut labor costs and allow for the retirement of unneeded planes. The airline expects to save $1 billion a year.
"We must get our costs down in order to compete and must focus on the products our customers want and are willing to pay for," Donald Carty, American's chairman, said in a statement.
Orlando International's dominant carrier and the nation's third largest, Delta, also is making moves to combat incursions by low-cost carriers. The company is developing a new discount carrier to fend off, in particular, Orlando-based AirTran, which has been chipping away at Delta's market share along the East Coast.
Still, there are limits to what the larger carriers can accomplish and how far they can depart from the traditional hub-and-spoke model.
The Uniteds, Americans and Deltas do not enjoy the freedom of smaller carriers such as Southwest that focus more narrowly on specific regions. The larger carriers, for example, need to have fleets capable of handling everything from short instate hops to coast-to-coast excursions to international jaunts. But the biggest question to be answered during this latest industry crisis is whether it will emerge stronger and more resilient.
"Absolutely," said Gellman, the Northwestern professor.
Or whether it is doomed to repeat the past.
"It may be that this is finally dawning on them," said Gritta, from Portland. "But I'll believe it when I see it."
http://www.orlandosentinel.com/busin...802aug18.story
Yet another analysis from the New York Times:
http://www.nytimes.com/2002/08/18/bu...t&position=top
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Soon as we get the maintenance done Capt U, why do you ask? Need a job perhaps?
Back on subject...
Of course, there is the other side of the coin. If one or two major carriers fold, this would, in the long run, be bad news for passengers, as generally much higher ticket prices would follow.
But I wonder for how long? Market share is the name of the game for the big boys, they need as much as possible.
There is in actual fact really no way that the variations in pricing can be controlled, as existing (and a few new entrants) jocky for the available business. In the long run, many more flights are going to be shifted to regionals, with their lower overall costs, and there is not much that pilots (at the majors) can do about it, ALPA included.
Back on subject...
Of course, there is the other side of the coin. If one or two major carriers fold, this would, in the long run, be bad news for passengers, as generally much higher ticket prices would follow.
But I wonder for how long? Market share is the name of the game for the big boys, they need as much as possible.
There is in actual fact really no way that the variations in pricing can be controlled, as existing (and a few new entrants) jocky for the available business. In the long run, many more flights are going to be shifted to regionals, with their lower overall costs, and there is not much that pilots (at the majors) can do about it, ALPA included.
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I missed the date of the article in WSJ but an analyst recently stated that he thought the RJ boom was already reaching its limits if it was not already there. The problem is airport capacity.
Point to point operation would likely to be unaffected but major airports could have a serious capacity problem during bad weather. We have already seen that SFO tried to put a limit on the minimum number of seats on aircraft flying into that field. They failed last time around but the idea has been planted in the heads of several airport operator.
The critical test will probably come in Chicago or La Guardia. Both tend to suffer severe ground congestion as well as critical landing slot availability. Chicago recently lost the use of several of its ground holding areas which could be the straw which breaks the camel's back. The problem may arise due to Chicago reducing landing slots during bad weather or the airlines may finally be forced to realise that RJ's are not the most cost effective way of using available landing slots. Of course, the airlines will try to employ larger RJ's rather than use the aircraft they already own to solve the problem.
It will be an interesting winter if we get a real Chicago season.
411A. I seem to have managed to convince you that the loss of major carriers is not a totally great prospect (reference ultimate ticket prices). The best all round solution is to have as many weak airlines in the business as possible with all of them fighting each other ferociously to keep ticket prices down. As soon as one or two carriers come out on top the passenger is dead meat! This is however a totally unstable situation.
On the other hand, I do not buy your idea that pricing cannot be controlled. Indeed, I see it as vitally necessary in the nation's best interests. For example, why not impose a federally mandated maximum/minimum pricing structure based on stage length. This would force the high cost carriers to control their overall costs. It would ensure a minimum ticket cost which would allow the high cost carriers to compete with minimal profit margins but would create higher margins for the lower cost carriers.
Under this system no one would go out of business. Jobs would be retained. The economy would not be harmed. Carriers would be rewarded in proportion to their efficiency. Importantly, the passengers would get their choice of carrier and would not be blackmailed into high ticket prices because competition would be maintained.
If you want to use my idea I will not tell anyone it was not yours, OK.
Point to point operation would likely to be unaffected but major airports could have a serious capacity problem during bad weather. We have already seen that SFO tried to put a limit on the minimum number of seats on aircraft flying into that field. They failed last time around but the idea has been planted in the heads of several airport operator.
The critical test will probably come in Chicago or La Guardia. Both tend to suffer severe ground congestion as well as critical landing slot availability. Chicago recently lost the use of several of its ground holding areas which could be the straw which breaks the camel's back. The problem may arise due to Chicago reducing landing slots during bad weather or the airlines may finally be forced to realise that RJ's are not the most cost effective way of using available landing slots. Of course, the airlines will try to employ larger RJ's rather than use the aircraft they already own to solve the problem.
It will be an interesting winter if we get a real Chicago season.
411A. I seem to have managed to convince you that the loss of major carriers is not a totally great prospect (reference ultimate ticket prices). The best all round solution is to have as many weak airlines in the business as possible with all of them fighting each other ferociously to keep ticket prices down. As soon as one or two carriers come out on top the passenger is dead meat! This is however a totally unstable situation.
On the other hand, I do not buy your idea that pricing cannot be controlled. Indeed, I see it as vitally necessary in the nation's best interests. For example, why not impose a federally mandated maximum/minimum pricing structure based on stage length. This would force the high cost carriers to control their overall costs. It would ensure a minimum ticket cost which would allow the high cost carriers to compete with minimal profit margins but would create higher margins for the lower cost carriers.
Under this system no one would go out of business. Jobs would be retained. The economy would not be harmed. Carriers would be rewarded in proportion to their efficiency. Importantly, the passengers would get their choice of carrier and would not be blackmailed into high ticket prices because competition would be maintained.
If you want to use my idea I will not tell anyone it was not yours, OK.
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Don't think your idea will fly. Most don't want to return to the bad 'ole days of the CAB regulating fares and traffic rights. Those airlines that now and in the future control costs will survive, the others will surely fall by the wayside.
As it should be, IMHO.
Don't think your idea will fly. Most don't want to return to the bad 'ole days of the CAB regulating fares and traffic rights. Those airlines that now and in the future control costs will survive, the others will surely fall by the wayside.
As it should be, IMHO.
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No regulation on traffic rights. Fly where you think you can make money.
Ticket prices are not strictly regulated. A "band" of ticket prices is specified. First benefit is that the slimy mess of present ticket prices goes. No conditions on purchase. No advanced/last minute differential. Since the airlines can fly when and how they want and charge any ticket price within the "band" if you think about it the system would soon be self regulating. The trend would be towards stability instead of chaos.
Any airline that cannot discipline itself to stay within the maximum ticket price on most of its routes will go out of business. However, the carrier still has the flexibility to deliberately take a loss on a certain route, for example, to provide feed to a hub and to a route where it can make money. This carrier also has the flexibility to charge a higher than minimum price for valuable services such as good connecting flights. For example, a passenger might want to pay a little extra for a flight to avoid a five hour ground wait to make an international connection.
"Predatory pricing" to force another carrier out of business would be a thing of the past, taken care of by the minimum legal ticket price. Passengers are protected from excessive ticket prices, due to there being only one carrier on a route, by the maximum ticket price. A carrier can charge a higher price for travel in peak periods or drop the price to the minimum during a slack time.
You will not like this idea until you think about it for a while but give it a try. Let's face it . Anything is better than the chaos the airline industry is facing now. Nobody wants to see full regulation return. However, the US airline industry has shown itself incapable of self discipline. My "band" proposal involves far less government interference than we presently see in many other business and industries.
I bet you passengers would love the idea. Any comments from passengers.
Ticket prices are not strictly regulated. A "band" of ticket prices is specified. First benefit is that the slimy mess of present ticket prices goes. No conditions on purchase. No advanced/last minute differential. Since the airlines can fly when and how they want and charge any ticket price within the "band" if you think about it the system would soon be self regulating. The trend would be towards stability instead of chaos.
Any airline that cannot discipline itself to stay within the maximum ticket price on most of its routes will go out of business. However, the carrier still has the flexibility to deliberately take a loss on a certain route, for example, to provide feed to a hub and to a route where it can make money. This carrier also has the flexibility to charge a higher than minimum price for valuable services such as good connecting flights. For example, a passenger might want to pay a little extra for a flight to avoid a five hour ground wait to make an international connection.
"Predatory pricing" to force another carrier out of business would be a thing of the past, taken care of by the minimum legal ticket price. Passengers are protected from excessive ticket prices, due to there being only one carrier on a route, by the maximum ticket price. A carrier can charge a higher price for travel in peak periods or drop the price to the minimum during a slack time.
You will not like this idea until you think about it for a while but give it a try. Let's face it . Anything is better than the chaos the airline industry is facing now. Nobody wants to see full regulation return. However, the US airline industry has shown itself incapable of self discipline. My "band" proposal involves far less government interference than we presently see in many other business and industries.
I bet you passengers would love the idea. Any comments from passengers.
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As SLF can but agree that, some form or free-form regulation has a high probability of success.
I personally could see it as being - each airport has a take-off and landing charge - that is based say on a 50% load factor of PAX seats (forget freight for the present). Add to that a climb charge and a descent charge and a direct line miles charge (that would equate also to any loyalty program unit).
That's basically without profit - so add say 5%, 10%, 15% or whatever covers the needs for that (but here its got to be same for all).
Then build a factor from the legal minimum seat pitch (set that at say 34"), so as to have a conversion to better seat pitch and the 'upper classes'.
That's the lowest fare for a sector at a given pitch - now give it an inflation factor of say 25% to the upper fare.
If you then charge more for landings and take-off's for the ecologically worse machines - you will get 3 things happen...
[list=1][*]The gas guzzlers and loud equipment will be improved or junked - getting more modern and thus possibly safer equipment[*]The fleets will be modernised - and thus will drive the manufacturers[*]The PAX will have better than cattle-class conditions and less risk of bankrupcy[/list=1]
Prices will stay within the fork and will still be flexible. The only other solution would be to return to gvt. imposed RPM, which probably would be based on similar logic.
I personally could see it as being - each airport has a take-off and landing charge - that is based say on a 50% load factor of PAX seats (forget freight for the present). Add to that a climb charge and a descent charge and a direct line miles charge (that would equate also to any loyalty program unit).
That's basically without profit - so add say 5%, 10%, 15% or whatever covers the needs for that (but here its got to be same for all).
Then build a factor from the legal minimum seat pitch (set that at say 34"), so as to have a conversion to better seat pitch and the 'upper classes'.
That's the lowest fare for a sector at a given pitch - now give it an inflation factor of say 25% to the upper fare.
If you then charge more for landings and take-off's for the ecologically worse machines - you will get 3 things happen...
[list=1][*]The gas guzzlers and loud equipment will be improved or junked - getting more modern and thus possibly safer equipment[*]The fleets will be modernised - and thus will drive the manufacturers[*]The PAX will have better than cattle-class conditions and less risk of bankrupcy[/list=1]
Prices will stay within the fork and will still be flexible. The only other solution would be to return to gvt. imposed RPM, which probably would be based on similar logic.
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I don't think that American, Continental, Delta, Southwest, Jet Blue, AirTran, Spirit are in a chaos situation. Just because some larger carriers are mismanaged and driven into bankruptcy is no excuse to bring back pre 1978 government regulation and government subsidies in any shape or form. This is not a glamour industry, it's a business. And in the largest free market capitalist system, competition is a fact of life. The opportunity to make a Billion dollars, or to lose two Billion dollars is a undeniable right.
Our aerial transportation system did not enter a state of chaos after the passing of Braniff, Eastern and Pan Am.
Passengers are interested only in getting from point A to point B at the best price and at the least inconvenience. They are not interested in what livery the airplane is, or whether they are seated on a Boeing or on a Bus. There is no brand loyalty and nobody will lose more than five minutes sleep upon the passing of a major carrier. Sad but true.
Our aerial transportation system did not enter a state of chaos after the passing of Braniff, Eastern and Pan Am.
Passengers are interested only in getting from point A to point B at the best price and at the least inconvenience. They are not interested in what livery the airplane is, or whether they are seated on a Boeing or on a Bus. There is no brand loyalty and nobody will lose more than five minutes sleep upon the passing of a major carrier. Sad but true.
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Since I was at one time going to join this airline I have been following these developments with interest. Apart from reading about crap management, bad policies & greedy pilots I read to my horror that a 10% reduction in employees salaries across the board was what was needed to follow the example of the eh benevolent pilots.
Now I don't know what everyone else in the company outside the position I applied for & got is being paid but I can guarantee you that if they reduced the pathetic salary I was offered by 10% I'd be better of & no doubt better paid working as a lavatory cleaner, infact even without the 10% reduction I'd probably have been better off working as a lavatory cleaner anyway
For such a meagre sum I would have had the privilege of working the most unsociable shift patterns imaginable & working weekends for an equally pathetic Sunday bonus.
Oh of course I had the juicy incentive of free travel all over the world. Lost it's shine when I heard from one former very disgruntled employee that her & her friend had spent two days sleeping on the floor of Heathrow airport waiting on standby. Not realistic for someone who lives in Dublin, hardly one of their touted hubs (UAL doesn't fly from there), nor worth it, travel is stressful & cheap enough these days without having to put up with such c rap.
UAL may have a problem because of high labour costs (it doesn't take a crystal ball to see why, greedy selfish pilots & management for starters who put themselves before the good of the company) but it is certainly not the people who are at the bottom rung of the ladder who are part of this equation & to suggest that they should take a pay reduction adds insult to injury. Infact I'm amazed that anyone would work for the
cr ap money they offer.
Needless to say I turned down the job
Emerald
Now I don't know what everyone else in the company outside the position I applied for & got is being paid but I can guarantee you that if they reduced the pathetic salary I was offered by 10% I'd be better of & no doubt better paid working as a lavatory cleaner, infact even without the 10% reduction I'd probably have been better off working as a lavatory cleaner anyway
For such a meagre sum I would have had the privilege of working the most unsociable shift patterns imaginable & working weekends for an equally pathetic Sunday bonus.
Oh of course I had the juicy incentive of free travel all over the world. Lost it's shine when I heard from one former very disgruntled employee that her & her friend had spent two days sleeping on the floor of Heathrow airport waiting on standby. Not realistic for someone who lives in Dublin, hardly one of their touted hubs (UAL doesn't fly from there), nor worth it, travel is stressful & cheap enough these days without having to put up with such c rap.
UAL may have a problem because of high labour costs (it doesn't take a crystal ball to see why, greedy selfish pilots & management for starters who put themselves before the good of the company) but it is certainly not the people who are at the bottom rung of the ladder who are part of this equation & to suggest that they should take a pay reduction adds insult to injury. Infact I'm amazed that anyone would work for the
cr ap money they offer.
Needless to say I turned down the job
Emerald