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UAL to file Chapter 11 this week.....

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UAL to file Chapter 11 this week.....

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Old 22nd Jan 2002, 19:57
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I know a United pilot who flew 727s as an FO up until the 727s were retired on November 1st. He is still being paid for 75 hours per month (or something near that) and not flying AT ALL... His United pay was already in the "high" range while he was flying - and now he is sitting and still being paid that same high rate - since November 1st...

Wow, that's got to be expensive. No wonder United is tanking...

Good luck to all involved!

. .Cheers
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Old 22nd Jan 2002, 23:47
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UAL will apply for Federal Loan Guarantees before they file for chapter 11. Remember. If an airline analyst said it, it aint gonna happen! Those guys are morons. If anybody is over paid in aviation it's those guys!
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Old 23rd Jan 2002, 00:05
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The raise for mechanics may be the most pressing personnel issue, and may well determine the outcome of the entire airline. A strike at a time like this would be disasterous for any business. It is really quite amazing that the combination of events in the last 12 months has developed into a "perfect storm"!

The pressure being put upon the stock and bond prices of UAL, may result in a liquidity and credit squeeze, forcing them into Bankruptcy, solely as a means of escaping crushing financial burden.

After the melt-down of Enron, there is going to be considerable caution exercised by any financial institution in propping up a business that is suffering serious financial difficulties, and the possibility of industrial action, thus taking the fate of the company out of the hands of the management.

Dangerous times for UAL.
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Old 23rd Jan 2002, 00:06
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There is a special meeting of the board of directors of United today to discuss the 34% wage increase demand of the mechanics. I stopped flying them several years ago when I had problems 6 times in a row on their flights. They are just sooo special. Think not ? Just ask them.
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Old 23rd Jan 2002, 03:21
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Hey Tim,

Heard anything new? Do you have any opinions? What's the latest word since you have the best contacts? Any facts?

Still out there Tim???????????????

What about the impending Alaska and Frontier merger - anymore news on that front? Any confirmations?

. .Cheers
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Old 23rd Jan 2002, 06:33
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You sure it wasn't K-MART you heard...... <img src="wink.gif" border="0">
 
Old 23rd Jan 2002, 07:37
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Well it looks like UAL mechanics are getting a raise:

CHICAGO (AP) -- United Airlines agreed Tuesday to accept a presidential panel's recommendation of a 37 percent pay raise for the carrier's nearly 13,000 mechanics.. . . .The announcement could end a long labor dispute with its mechanics, who had threatened to strike.

United announced its decision after calling an emergency meeting Tuesday.

The recommendation by a specially appointed Presidential Emergency Board, which said there was "no justification'' in not giving mechanics their first raise since 1994, was a victory for the mechanics' union and put the onus on the carrier.

"Although it has expressed serious reservations with detailed recommendations contained in the PEB report, United today has decided to accept the report's recommendations for contract settlement,'' United said in a statement. The company said it would have no further comment Tuesday.
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Old 23rd Jan 2002, 08:18
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OOOOOOOHHHH SNAP! SNAP!

Hey wait, that's good news. But, I am sure the pilots and the Flt attendants are gonna have to pay for it. But you know what? I think mechanics deserve the raise. UAL management has been screwing with them for years. It's time for management to understand that you can't run an airline without quality people. But, I hope they. .have time to spend the money before UAL files for Chap 11. Let's hope it all works out.

Thanks. Donkey Duke <img src="cool.gif" border="0"> <img src="cool.gif" border="0">
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Old 23rd Jan 2002, 09:20
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I have been watching this thread with some interest since I am close to the events taking place. That is, like in being affected - not by being behind the scenes.

Let me just say that big decisions do not happen in a vacuum. My understanding is that there is a conciderable amount of activity behind the scenes. All the employee groups are involved.

My take on it is that this sets the baseline for what is in our future - likely concessions to make sure United remains a viable and strong carrier.

If this is in fact in our future at United, anyone that has been around for a while must know that other carriers will soon follow.

Another likely event will be a departure of persons involved in United going from being the at or near the world's most profitable carrier to facing serious economic hardship in less than two years.

Many of the comments made here have been understanding - others disappointing. All I can say is that most of us at United are happy and proud to be here and gladly do our professional best to run a safe and friendly airline.
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Old 23rd Jan 2002, 09:59
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Why should the fact that UAL engage in lease arrangements for their aircraft be a cause for concern? Is it any different from a vast number of airlines? <img src="confused.gif" border="0"> I thought it was pretty common practice.

BSP

[ 23 January 2002: Message edited by: BackSeatPilot ]

[ 23 January 2002: Message edited by: BackSeatPilot ]</p>
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Old 23rd Jan 2002, 10:07
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Aviator..... United is a great airline !!!! Until something goes wrong. Have you ever had to fly them several times as a mere passenger ? I have not seen a superior attitude from some, not all, employees like this since Pan Am.
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Old 23rd Jan 2002, 10:47
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polzin -- I completely agree, I almost always fly with them (I'm an aviation student right now, call me a newbie if you will, but I have a lot of flight time as a passenger! <img src="wink.gif" border="0"> ) and I've had nothing but great experiences with United.

It does come down to a matter of being courteous to the gate agents, etc... A smile can go a long way with them since they see so few and deal with pissed passengers all day long.

On the other hand whomever replies to the e-mails sent to their commercial web site could use a lesson in manners...

I hope to see UAL flourish and get past these hard times.
 
Old 23rd Jan 2002, 12:25
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Looks like UAL is going to settle with the IAM, then ask for the money back from all the unions. It that doesn't work, they file chapter 11 and take it from there...

. ._________________________________________________

. .January 23, 2002

UAL Directors Decide to Accept Proposals. .Of Presidential Panel to End Labor Dispute

By SUSAN CAREY . .Staff Reporter of THE WALL STREET JOURNAL

CHICAGO -- UAL Corp.'s United Airlines said that despite "serious reservations," it decided to accept costly recommendations made by a federal panel aiming to end a labor dispute between the company and its mechanics union without a devastating strike.

As a result, the International Association of Machinists said it will put the same recommendations to a vote of its 15,000 members in the next few weeks. If they reject the plan, they could strike Feb. 20 unless Congress imposes a settlement on them.

But it is unlikely the mechanics will turn down the recommendations, issued Sunday by a three-member panel President Bush appointed in December to forestall a work stoppage. The Presidential Emergency Board rejected United's position that the group's wages should be frozen until the carrier returns to profitability.

Instead, the board endorsed sizable raises -- for instance, a total 37% increase payable immediately for a veteran mechanic -- that would bring the group's wages to the top of the industry. The panel's numbers came within the ballpark of what the union itself had sought in more than two years of negotiations.

Alarmed by the prospect of higher labor costs, investors knocked down UAL's shares Tuesday. The stock lost 9.7%, or $1.55, to trade at $14.45 in 4 p.m. composite trading on the New York Stock Exchange.

Prior to the company's announcement, Standard & Poor's Corp. Tuesday cut its rating on UAL's corporate credit rating, already in "speculative" territory, to single-B-plus from double-B-minus, and also lowered its ratings on a number of other UAL and United debt issues and other securities. The corporate credit rating is a benchmark of a company's risk of default. S&P cited, among other things, "substantial ongoing losses and lack of progress in crucial negotiations aimed at containing the airline's high labor costs." United declined to comment on S&P's action.

United said the labor committee of UAL's board voted to accept the federal panel's report as the basis for a contract settlement despite "serious reservations" that it declined to explain. A spokesman for the Machinists union said the recommendations will now go to its members, "who will have the final say."

Jack Creighton, a retired paper-company executive and outside UAL director brought in as chief executive last fall, has been trying to persuade employees to voluntarily embrace pay cuts to help the company through its financial problems. Without that relief, United told the presidential board, it may be unable to stave off a bankruptcy-court filing.

But the mechanics insisted they wouldn't entertain any concessions until their pay caught up with other groups at United, who are paid top industry scales. The Machinists union also has 30,000 United ground workers in their second year of talks aimed at a new contract. Until those employees are brought up to top pay, it is unlikely that group would be open to Mr. Creighton's pleadings either.

The CEO hasn't quantified the savings sought but did say recently that the overall amount needs to be "several billion" dollars "over the next few years." The presidential board said it supports a financial-recovery plan in which workers cut their wages, so long as all domestic United workers participate proportionately. Some union strategists say privately that such givebacks are inevitable but warn that members will have to ratify such big changes to their contracts.

The presidential panel recommended that top pay of a United mechanic be raised to $35.14 when the new contract is signed. That would put the group a few cents an hour ahead of mechanics at AMR Corp.'s American Airlines, currently the top paid. But because United can ill-afford to pay in one cash sum the difference between what the group would have earned and what it did earn back to July 2000, when the previous contract became open for renewal, the federal panel suggested that "retro pay" expense be deferred and paid in eight quarterly installments starting in April 2003.
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Old 23rd Jan 2002, 13:00
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It's interesting to read about the many reasons why United (and other US airlines too) have such financial problems. . . . .One major reason, which is never mentioned here, but which I am very well aware of - being a travel agency owner - is that the US airlines have alienated their distribution system, by not only cutting commissions to near zero since 1995, but also bullying the travel agency community with their arrogant behavior (and- United is one of the leaders, trying to run travel aegncies out of business).

You see- when people are afraid of flying then they will not buy an airline ticket just because there is a special deal on the internet - they still will not fly. But- when sitting down with another person, your favorite travel agent, and discussing your fears and concerns, you may very well end up with an airline ticket to a far away destination. Some of us are fearful fliers ourselves, but can persuade customers to fly, since we can symphathize with them. But - we can't do it for free.

Example: The cruise lines have lowered rates and increased commissions, to lure travalers back after September 11, and the ships are sailing full. They know that you get more business by incentivizing your sales force.

Airlines, especially since they got the 5 billions from the taxpayers, behave more arrogantly than ever, and have actually increased their hostility against travel agents, since September 11.

The result is absolutely no motivation for us to sell their services. Example: being originally from Austria I loved selling ski vacations to the Alps. Now, if someone books a ski vacation, we mostly send them to Colorado (they drive!!!) . .and we book them a nice condo.

Result: Customer does not worry about flying, our travel agency earns a commission and can stay in business, we avoid shabby treatment by the airline, and - airline has just lost another sale.

Show me ANY other business where the principal treats their agents so badly! There isn't any!

The bean counters at United and the other US airlines think that above lost sale was actually good, because it saved them the commission to the agent (average 3.5%!).

Businesses like that deserve to go out of business!
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Old 23rd Jan 2002, 13:15
  #35 (permalink)  
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To all of those who did not like my rumor:. .Cutting and pasting news clips is not rumor its news and for the most part factual.....If that is what you like then visit airliners.net and sign up for e-mail airline news.. <img src="tongue.gif" border="0">

So we all know UAL has agreed to pay....Seems a bit quick...YES? Well what I hear is that UAL accepted and is going to keep this as their own top news story....So at the same time the upper management can cover their asses and shred some papers. etc..Sound familiar....If you don't agree then why did they accept and the mx weren't even pulling crap with the flight schedule yet......

And the word is still cut cities, cut flights, cut more people.......
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Old 23rd Jan 2002, 17:19
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Typically International Association of Machinists (IAM) contracts look good (to union members) in the high-light sheets passed around before a contract vote for the membership and in the press releases, but lose their gloss when the actual contract books are published and distributed to the membership. So far the press releases make it sound like a good deal, but the devil tends to be in the small print. In the past UAL have negotiated impressive contracts, only to take concessions immediately after signing. Hopefully the IAM will pass out full contracts to the membership to read before they vote.

If this all works out as advertised by the IAM, well then, good for the UAL union members, the IAM has finally learned their lesson about representing their members.
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Old 23rd Jan 2002, 20:34
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Spudskier.............. Sould you be from Idaho ? I say again, its a good airline until something goes wrong, and it often does. 6 times in a row I had big problems, thought it might be just me ,checked with numerous friends to find out I was not alive. Often they do show a superior attitude. On the other hand I have had great service from Continental WHEN THERE WERE PROBLEMS.
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Old 23rd Jan 2002, 21:45
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There goes Tim Melland--back peddaling again. So, what is the big announcement set for tomorrow? That is what you said. Who is feeding you this info? Thank God you are not my stock broker.

Andreas in SAF---so, you own a travel agency. And you don't think anyone in Santa Fe would want to fly into LHR on Delta, NW, CO, or USAir? Next thing you know you will be sending your customers to Fankfurt Hahn airport instead of Frankfurt Intl. .becasue it's cheaper. (ooops. It's 100km from Frankfurt...I didn't know that...duh)

I believe United will survive, but in a smaller. .shell. If Chap 11 is inevitable, I hope UAL doesn't pull the rest of the industry (excluding Southwest) down with it.

Thanks. Donkey Duke <img src="cool.gif" border="0"> <img src="cool.gif" border="0">
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Old 23rd Jan 2002, 23:31
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Angel

Polzin... was from Idaho, living in Ohio now...

I've had great experiences even when things go bad, and yes, they usually do. But I've always managed to find someone helpful to work with me, get me rebooked or at least explain the situation to me. I've gotten a ton of free stuff from them and I can't complain about free!

I've also had great experiences with Continental except when there are more than 20 people flying at a time... they can't handle mass numbers of people, especially if something goes wrong. One time 2 of their agents even had a breakdown and started crying right there when we found out our flight was cancelled! I don't know what they do to those poor ticket takers etc... but they don't do customer service well. However I do commend Continental on their decision to put in thinner seats giving more leg room and the fact that they are looking at possible profitability this year if United and U.S. Air don't bring them down first!
 
Old 24th Jan 2002, 01:09
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Donkey Duke: I am the first one who would love to see DL, CO, NW, US etc. flying into LHR!

This monopoly situation with only AA UA BA VS is terrible.

But- the price we would have to pay to get these. .other airlines into LHR is WAAAAAYY TOO HIGH (yes - I AM shouting!) To give AA/BA anti-trust immunity is a disaster. The few slots that the others will get, will increase competition a lot less than the loss of competion by letting AA/BA work together.

There must be another way to get these other airlines into LHR, than to let AA/BA conspire regarding flights, fares, commissions, customer service.

Unbelievably - the anti trust laws were supposed to protect small businesses against large, to enhance and ensure competition. But- it's only the BIGGEST companies that are being granted anti-trust immunity, to work together to kill off the small ones. Travel agencies have run against a wall trying to get limited anti-trust immunity to negotiate commissions and other issues with the airlines, but the big companies are allowed to set policies against small mom-and-pap companies together. It's a disgrace!

And don't belive for one minute that this does not hurt the consumer, the traveler. Try to get an upgrade seat or free seat NYC-LON AFTER AA/BA have been granted their anti-trust immunity. That will be even harder than now.

Also - the mega airlines claim that these alliances bring "seamless" (Ha ha ha) service to far away places. Baloney! Your agent at the UA check-in counter in ABQ has no clue about far away LH destinations, neither before the Star alliance, nor after. You could get a "joint-fare" long before these alliances were allowed, and that system worked just fine.

Leo Mullin from DL told congress that they should be granted even more anti-trust immunity, so the real biggies could merge, to better be able to weather crises like Sept. 11.

Unbelievable! It is the smaller airlines, like Southwest, Frontier, Alaska, that could handle the downturn in business, not the big ones. The big dinosaurs are the loudest begging for more money from the taxpayers. And- United is of course one of these behemoths that need to go.

And do you professional pilots think that these "mergers" are an advantage for you? Of course not -you are getting screwed too, while the Stephen Wolff's pocket another merger bonus (even if it kills the company).

No more mergers, no more anti-trust immunity to ANY airline cooperation! Let's lobby the politicians to eventually put an end to already existing pacts, which are all anti-competitive. . .This disastrous trend must be stopped!
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