About the max-min prices - it sounds too much to me like a return to regulation - UNLESS the price band was really wide and in that case it becomes no different than todays mess.

If its the former (and lets say we agree that it is not really regulation) its clear that a) the $2400 transcon fare will not be the maximum - the majors are hurting because nobody is willing to pay that b) the backpacker $200 transcon is also a thing of the past.

One scenario: Capacity reduction - big-time - for the majors. No point flying those 767 transcons because you don't have that many bums (literally) in the back, also no need for the big F/C cabins - its being filled with upgrades anyway. So fly an A320 JFK-SFO with 12 First seats.
Similar thing for the shorter routes - mainline flying of EMB-170/CRJ-900/700 can become commonplace.
>>Implicit reduction of labor cost by reduction of MTOW.

Alternative scenario: If everybody thinks that having frequency is not important, a schedule cutback will follow - now 767-300's will fly LGA-ORD 5 times a day instead 733/A320/757 15 times/day.
How many furloughed and how many aircraft parked?

I argue that the first scenario will happen - slowly but surely and without any govt intervention (until the next economic boom - and then we will back to where we were 3 years ago)

Pause for thought ?
 

Fears have grown that United Airlines will be unable to escape bankruptcy, after staff at the US's second biggest carrier rejected a cost-cutting rescue package.

United urged its staff, which own 55% of the carrier, to back cuts totalling $1.5bn a year in the firm's wage bill. In all, United wants to cut $9bn in costs over six years.

But the proposal failed to impress two big unions, raising fears that United bosses would be unable to meet a 15 September deadline they have set themselves to negotiate a deal with employees.

The impasse raised fears in Wall Street that United would be forced to follow through with a threat made two weeks ago that it would file for bankruptcy unless it won agreements to slash its outgoings.

"Barring significant progress in the coming weeks that we simply do not believe is forthcoming, we continue to believe UAL has a 75-80% or greater risk of filing for [bankruptcy] protection," James Higgins, an analyst at Credit Suisse First Boston, said.

United gets coser to bankruptcy
 

From the BBC:

news.bbc.co.uk/1/hi/business/2225331.stm

Effect on International network?
 

Not being well read on the US bankruptcy code, I am wondering if they can file for bankruptcy if it still has saleable assets?

Its creditors, no doubt spurred on by the likes of DL/AA, might say, "look, force them to sell their Pacific/Atlantic network". Would a US bankruptcy court have the power to order sale of assets? I think so. And even if the likes of DL, AA, NW etc are cash strapped, the prospect of getting their hands on such a network would certainly be something they'd relish.

Also, as far as the US bilaterals are concerned, is there anything that requires US airlines to meet financial stability standards? Could a bankrupt airline be required to surrender its international network?

hope it gets fixed....hope U can spell better 2morrow:D ;)

Probably one of the most significant posts since this forum started.....

UAL & Chapter 11
 

Chapter 11 in the US is closer to what is called examinership in Europe, though it is technically filing for bankruptcy it is not winding up, all it is seeking is protection from its creditors while continuing to trade.

So are my UAL flights from LAX to OGG in danger in October??

EEeekkkk!

Doesn't look like the bailout loan will come in time, the unions are still in denial:


United's Flight Attendants Balk
At Pay Cut, Demand New CEO

Associated Press


CHICAGO -- United Airlines flight attendants on Friday lambasted the carrier's plan to slash labor costs by 15% as exorbitant and joined other unions in urging the company to name a new CEO to hasten financial recovery efforts.

The union representing United's 26,000 flight attendants followed the influential pilots' union in criticizing the airline's proposal to knock $1.5 billion off annual labor costs for the next six years as part of a restructuring.

But unlike the pilots, the flight attendants did not rule out agreeing to concessions -- particularly if the airline moves quickly to replace interim CEO Jack Creighton with a permanent chief executive.

"United management wants its employees to invest $9 billion of our hard-earned money in an airline with no plan and no leader," said Greg Davidowitch, president of the United master executive council within the Association of Flight Attendants. "While we will continue to meet with the company, there will be no concession talks under these circumstances."

Mr. Creighton, a board member of United parent UAL Corp. who was forced into short-term CEO duty last October, turns 70 on Sunday and the airline has been moving toward wrapping up its four-month search for a successor.

He has set a Sept. 16 deadline for the unions to reach agreements on deep cuts needed to persuade the government to approve a federal loan guarantee. Otherwise, he says the airline faces a Chapter 11 bankruptcy filing because of debt payments totaling $875 million that come due in November and December.

Mr. Davidowitch said "the math doesn't add up" when United says it needs $9 billion in labor cuts in order to obtain a $1.8 billion loan guarantee.

United spokesman Joe Hopkins said the company had no comment.

The world's No. 2 carrier has said the labor-related reductions -- in double-digit wage cuts, canceled raises and other changes -- would provide the bulk of $2.5 billion in annual savings it has targeted to stay out of the red and out of bankruptcy. It says the cutbacks would better align costs with anticipated future revenues.

Updated August 30, 2002 9:48 p.m. EDT

You never know! Got a feeling this week could be significant. By the way, how about the internet rumours of Bill Clinton for CEO at UAL. The only man in the world who could out-Kheller (SP?) the infamous Herb at SouthWest.

Glenn Tilton will be named chairman and chief executive officer as soon as Monday when the UAL board is scheduled to meet in Chicago, the Wall Street Journal reported Saturday on its Web site.

UAL Board Supports Tilton
For Top Job at the Carrier

By SUSAN CAREY and JOANN S. LUBLIN
Staff Reporters of THE WALL STREET JOURNAL


NEW YORK -- The difficult, months-long search for a chief executive for UAL Corp. is wrapping up now that Glenn Tilton, vice chairman of ChevronTexaco Corp., has won the unanimous support of the UAL board to take the jobs of chairman, president and CEO of the troubled, employee-owned carrier, The Wall Street Journal has learned.

Directors on UAL's search committee agreed on Mr. Tilton, a long-time oil executive, at a meeting earlier this week, and advised the full board of their recommendation the next day, according to people familiar with the situation. Mr. Tilton hasn't been formally endorsed yet, but that step could come as soon as Monday, when UAL has scheduled a board meeting in Chicago.

"Tilton became the overwhelming choice in the last several days," because directors felt "he has great leadership skills," said a person close to the situation. Mr. Tilton, 54 years old, edged out John Walker, a UAL director who is the CEO of Weirton Steel Corp., according to these individuals.

The choice, which had narrowed to the two men, was muddied briefly when Gerald Greenwald, UAL's former chairman and CEO, approached directors with a plan to help the carrier avoid a possible bankruptcy-court filing this fall. But his plan failed to win support.

Mr. Tilton couldn't be reached. Mr. Walker didn't return telephone calls. Mr. Greenwald declined to comment.

Mr. Tilton, who is expected to take the reigns at the Chicago-based airline within a week or two, has no airline experience. It is expected that Jack Creighton, UAL's interim chairman and CEO, will step down shortly, along with Rono Dutta, UAL's president, and Andy Studdert, the chief operating officer, knowledgeable individuals said.

UAL, which has posted losses of nearly $3 billion in the past 18 months and has threatened to filed for Chapter 11 this fall if it can't get its costs down dramatically and win a government loan guarantee, has been looking for a new CEO since May. That's when Mr. Creighton, a retired paper company executive who was plucked from the UAL board for the top jobs on an interim basis last October, said he wanted to step down. The search was conducted by recruiting firm Russell Reynolds Associates Inc.

Mr. Tilton, who joined Texaco as a sales trainee in 1970, worked his way up the corporate ladder, becoming president of Texaco Europe in 1992, president of Texaco USA in 1994, and CEO of Texaco in February 2001. He assumed his current post in October, upon the merger of Chevron and Texaco. At the moment, he also is interim chairman of Dynegy Inc., the beleaguered energy trader in which ChevronTexaco has a minority stake.

Updated August 31, 2002 2:05 p.m. EDT

Airbubba, With respect AFA ( Association of Flight Attendants) do not have their head in the sand about concessions. AFA has indicated at EVERY occasion that they are happy to come to the table to discuss concessions as long as UA brings a business plan with them that indicated that they do indeed have plans other than employee concessions to save the company. Please remember the AFA- 25% of the work force is not a part of ESOP and their wages are 6% of UAL budget. We could work for free and only save the company 2 days of cash burn at its current rate. As the only union with *NON* industry leading pay AFAs stance is that they are willing to make concessions but they should be less than those who have seen their pay shoot up by 25% in the last 2 years.

Galley Wench: Don't go out buying a new car any time soon; the slow travel season is starting...and the recession isn't over yet.:(

I think, Airbubba, your comment applies to the whole US air industry so I would not go out and buy a new pick-up truck if I were you.

If UAL gets a new CEO who is halfway capable its turnaround could be dramatic. It has the best US and international route system of the US carriers, it has a young very efficient aircraft fleet and, despite the economy, it has good load factors (around 81%). If the new CEO gets half of the concessions Creighton asked for UAL will probably not need ATSB financing in the long term. That would be a bonus. The reduced costs from the concessions, translated into ticket prices, is sure to put great pressure on the other US carriers. In six months American and possibly Delta will be pushing their employees for equal concessions.

I still do not think we have seen the last of the strange twists that will take place in the UAL story.

Putting in a new CEO is certainly a way to clean the slate of old animosities with specific union reps and regulators.

The reported fact that Mr. Tilton "has no airline experience", but is a "long time oil industry executive" suggests that he has a lot of mutual friends in touch with the current U.S. president and Vice President, both of whom are from the 'oil patch', the petroleum industry, especially that part in Texas - Oklahoma. That's a pretty exclusive club, where everybody knows everybody else and a person's word is his bond. So Tilton is likely connected in a way that will credibly facilitate the sought after Federal bailout if 'reasonable' terms can be reached with UAL employees.

A good sign for UAL shareholders, and probably for all concerned.

I believe that United still has flt. attendants based in London (-"calling"...).


Let's don't forget the McCain/Trent Lott bill, hoping for baseball-style arbitration (without the Nat. Board of Mediation), written partly by the former POW who claimed that US airline pilots are not patriotic. How many of the present pilot force flew or fly now in Southeast or Central Asia, Desert Storm, Bosnia, Panama, Grenada...This fall, or later, the outcome of this bill will have a major impact on your airline career, either good or very bad.


So many industry "experts" who are quoted in our US rags often seem to be in academia. Have any of these so-called experts ever worked in the industry, or only in consulting firms or on an ivory-bedecked campus while protected by their clouds of pipe smoke and fortifications (Maginot lines) of large heaps of research papers (and grants) ?
One of our pilots has a father-in-law who is a university "expert", and the gentleman apparently thinks that he knows all about our workplace environment, but has no real idea of what decisions are involved with our cockpit jobs (in the industry-but our academic knowledge must be quite faulty) and the stress of rapid decisions when unanticipated holding is required right now for unplanned weather, with no alternate fuel planned in the dispatch fuel. The know-it-alls believe that the jobs consists of simple programming steps.

These are the wiseguys who are quoted on a daily basis in the US media. If some of them have all the answers, they might be invited to interview for various airline management jobs. Or many have been afraid to apply.

And the original Braniff airlines? Maybe the newspapers select quotes from academia, not wanting quotes from Mr. John Nance, an airline pilot (former Lockheed C-141 pilot), attorney, and safety investigator. Read about why Nance's first edition of "Splash of Colours", the Braniff Airlines story, was required to 'disappear' as part of the 'deal'; how he used documentation to depict how (former CEO) Robert Crandall's software drones at American "allegedly" programmed false bookings into their Sabre computer system for many Braniff flights-"allegedly" preventing many actual ticket sales, thereby "allegedly" crippling certain revenue potential for Braniff. Crandall was able to give inducements, if untraceable, to the Airport Authority and other local politicians. Read about the Wright Amendment, which requires Southwest (operating from Dallas Love) to takeoff from Texas and the SW jets must land in any adjoinging state, before continuing further from Texas-preventing Dallas Love from competing with DFW Airport on longer flights. This protection began many years ago. I did use the word allegedly in the correct places, this time.


Good luck United employees and stockholders.

It wasn't the customer service agents or the FA's who got this company into the sorry mess it is so why should they have to pay the price & take salary cuts. I'm familiar with the salary of customer service agents working for UAL in Ireland & I wouldn't be at alll surprised if knocking 10% off their meagre salary would put their salary below the legal minimum wage.

It's pilots & above all the beancounters that are responsible for much of this sorry mess using their position & bargaining power to milk the company for all it's worth till there's been nothing left to milk. 10% off their massive salaries is nothing compared to 10% off the grossly underpaid & underappreciated employees way down the rung of the ladder. And who has the more difficult job. While I appreciate that pilots have alot of responsibility & pressure from the constant performance & medical checks lets face it, most of the time they just have to sit on their ass in the cockpit maintaining situational awareness (fancy name for keeping an eye on the instruments) they are shielded by their reinforced, locked cockpit doors from difficult pax's. It's the FA's who are on their feet & on show all the time running up & down the aisle tending to the pax's whims, having to smile & look dandy no matter how sh*t they feel. It's the customer service agents who have to deal with irate, difficult, angry pax venting their spleen, not the pilots. :mad:

Why is it that some airlines i.e. the low cost ones have thrived since September 11 while airlines like UAL who fleece the business pax are floundering. It's because aviation has changed, people are no longer willing to be financially screwed for a few pathetic perks, the future of aviation is in the low cost model, it's about time UAL started to realise this & stopped blaming all their troubles on September 11. It's also time to stop a noble profession being destroyed by greed & selfishness & the bottom line being the pursuit of the big green buck regardless of the good of their fellow less fortunate employees or the good of the company cause at the rate their going there won't be any company left. :mad:

Emerald

>>It's the FA's who are on their feet & on show all the time running up & down the aisle tending to the pax's whims, having to smile & look dandy no matter how sh*t they feel. <<

Sounds like you haven't flown on United lately...

UA Close to Chapter 11 - will it survive??
 

Have read about United Airlines and their financial woes and the threat of Chapter 11 which apparently wasnt all attributable to 9/11.
They were apparently in trouble prior to this.
I have also heard that American airlines isnt doing that flash at the moment either.

Any specualtion on how they would perform under Chapter 11 and how many airlines in US history have emerged from CH11 bankruptcy proctection in their same shape and form??
Or would United possibly emerge a shadow of its former self?

Also would the US government bail them out or would they be sacrificed in order to save the other US Airlines.
Any punters??