Goodwin to Resign from United; Chapter 11 Soon?
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Goodwin to Resign from United; Chapter 11 Soon?
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.
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.
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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.....
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.....
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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 ]
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 ]
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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!
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!
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TD,
It appears that the Guv got it from airliners.net ->
http://www.airliners.net/discussions...d.main/573506/
Cheers,InitRef
It appears that the Guv got it from airliners.net ->
http://www.airliners.net/discussions...d.main/573506/ Cheers,InitRef
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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....
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 ]
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 ]
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.
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.
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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.
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.
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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.
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.
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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 ]
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 ]
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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.
Does anybody know how many "no shows" there were against the bookings??
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.
Does anybody know how many "no shows" there were against the bookings??
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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/bus...00/1544050.stm
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/bus...00/1544050.stm
Everything is under control.
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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.
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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/busine...business%2Dhed
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/busine...business%2Dhed
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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!
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!