MilesBuzz! - United mechanics reject contract

United mechanics reject contract

http://www.flyertalk.com/forum/Forum50/HTML/010634.html

ooops... darn, you beat me to it!

[This message has been edited by duxfan (edited 02-12-2002).]

Mechanics at United Airlines voted overwhelmingly last night to reject a contract settlement proposed by a White House-appointed panel, raising the possibility of new labor turmoil at the carrier.

Of the 13,000 mechanics at United represented by the International Association of Machinists and Aerospace Workers, 90 percent cast ballots; 68 percent of those voted to reject the proposed settlement, which would have raised the top hourly wage 37 percent upon signing and nearly 47 percent over the life of the four-year agreement. In a second ballot, 86 percent voted to authorize a strike.

http://www.nytimes.com/2002/02/13/business/13AIR.html

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So it aint a very pretty picture these days at UA! http://www.flyertalk.com/forum/frown.gif

http://www.flyertalk.com/forum/Forum50/HTML/010634.html

A friend of mine once said "never saw a union that didn't take a good man and make him mediorce. Guess you can add unemployed. I don't want to sound like a rabid anti-unionist, but the leadership needs to lead: Using 20th century mentality in the 21st century does not serve your membership at all in the long wrong. Guess the 140,000 miles I've got sitting in my MP account may end up being useless...unless someone has a suggestion...transfer them to something else perhaps? Any help appreciated. (UA Express pulled out of here, so I have gone to NW).

A friend of mine once said "never saw a union that didn't take a good man and make him mediorce." Guess you can add unemployed. I don't want to sound like a rabid anti-unionist, but the leadership needs to lead: Using 20th century mentality in the 21st century does not serve your membership at all in the long run. Guess the 140,000 miles I've got sitting in my MP account may end up being useless...unless someone has a suggestion...transfer them to something else perhaps? Any help appreciated. (UA Express pulled out of here, so I have gone to NW).

Ray Neidl, analyst at ABN Amro, said mechanics were on a ``suicide mission'' that could take the company down. ``This could be the straw that breaks the camel's back,'' Neidl said.

http://biz.yahoo.com/rf/020213/n13320333_1.html

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Also please note:

UA Statement Regarding IAM 141M Vote

"Although District 141M has rejected the PEB's recommendations, both parties have agreed to re-enter negotiations during which either an agreement will be reached or a new proposal advanced. If progress is made, and there is no reason to believe that it can't be, then we anticipate that another vote will occur by mid-March, without interruption of operations..."

http://www.ual.com/site/response/1,13497,,00.html

http://www.flyertalk.com/forum/Forum50/HTML/010615.html

http://www.flyertalk.com/forum/Forum50/HTML/010634.html



[This message has been edited by doc (edited 02-13-2002).]

I tell you, unions are trying to work with a 1950s mentality in the 21st century. It will not work. I don't know about you, but I think that a 37 percent raise is a lot better than not getting a paycheck. Yes, I know that they didn't get a raise for seven years, and that they might have to give some of it back, but I'm not sure what they want, seeing how they got everything the emergency board recommended.

If I were UAL, I'd start getting the names of all the mechanics who were laid off over the past few months, both those who were with UAL and those with other companies.

I think that those folks might want a paycheck more than they want union solidarity.

Unions have helped far more people than they've hurt. In any event, most threatened airline strikes seem to end on the last day of the cooling off period (which is on the 18th, perhaps??). Often in the last hours. Maybe a strike will come to pass, but I wouldn't bet on it. tls

mdtony -

i agree with most of your last post, with one exception:

while UA mechanics did not get a raise for the past 7 years, they didn't agree to it without some form of compensation. the compensation was the stock that exchanged the lower wages for. it seems to be getting lost in the liberal media that while UA mechanics PAYCHECKS were smaller that the average over the period of the ESOP, their OVERALL COMPENSATION was not when you factor in the stock at the price they agreed to pay for it.

unfortunately the management team that the employee owners put in place hasn't done a very good job maximizing shareholder value. and of course, the continued labor strife at UAL hasn't done anything for the stock either. UAL employees complained about Wolf until he left, but the whole labor/management situation hasn't changed a bit since the ESOP. It still seems that every labor group at UA is only concerned with their piece of the pie.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by duxfan:

...It still seems that every labor group at UA is only concerned with their piece of the pie. </font>

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Sadly, that appears to very much be the case. UA is having a kinda' civil war of sorts, and it is NOT a pretty picture emerging! http://www.flyertalk.com/forum/frown.gif

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by thelostshark:
Unions have helped far more people than they've hurt.</font>

I can tell you this. If the IAM decides to strike, they'll hurt -- well, how many employees does UAL have? Because those folks may very well find themselves without a job.

Do not jump all over the mechanics unless you are willing to do the same to the pilots. The pilots Union are the one's who are sinking the ship. They set the tone with their high demands. Why expect less from the other unions???

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Tango:
Do not jump all over the mechanics unless you are willing to do the same to the pilots. The pilots Union are the one's who are sinking the ship. They set the tone with their high demands. Why expect less from the other unions???</font>

There we go.... Another vote for "they got their egg from the golden goose, so there must be one left for us"...

The business has changed dramatically since 9/11, and the pilots contract was renegotiated prior to that date. I don't think the pilots agreement was a smart one either, but it wasn't nearly as obvious at that time that UA was in so much financial trouble. The fact that the mechanics can see the bleeding at UA, and have decided to act like sharks is inexcusable.

I am amazed that NOT ONE employee group at UA has stepped forward and said that it is time to act United and lead the way back to stability, if not profitability.

The employee owners at UA continue to act like employees, not owners. As a business owner myself, 9/11 meant NOT taking a paycheck, in order to keep employees on the payroll, when times were tough.

That poor golden goose... It has to be exhausted by now... I really don't see where UA could've signed the contract they agreed to and survived without a trip thru CH 11. But a more expensive contract? It's just asinine! Someone better pull up, 'cuz the ground is starting to come up really fast.....

Duxfan: Do not blame the unions. The problem can be laid 100% on the feet of faulty managment. United made serious money in the mid 90's and could have settled the pilots and other union contracts for far less money then the final settlement. It was no big secret that United was stalling becuase every day they kept the old rates in place the more money they made.

If United had settled on a timely manner, the following would have taken place:
1)The pilots contract would have been much cheaper.
2)Other unions would have settled for cheaper contracts and would have been in place by now.
3)There would not of been a pilot slow down in the summer of 2000. This slow down cost United major revenue and bad will with its customers.

For the record, the pilots union was fully aware that the economy was heading south before 9/11 --- that did not stop them from asking for the golden ring.

The bottom line is United management took a gamble and lost--do not blame the unions for this.

Tango -

You a speak like a UA employee. Are you?

Anyone who thinks either side should shoulder 100% of the blame is missing half the picture.

Questions for you:

1. Who owns a majority of the airline? The employees.

2. And who owns the majority of that share? The employees represented by unions.

3. Who picks the management team? The owners.

4. Who has a responsibility to replace the management team if it running the company in to the ground? The owners.

refer to questions 1 and 2, and repeat cycle until it sinks in.

yes, the pilot contract was a very bad one. and yes, the company was in trouble then. but you have yet to say how the mechanics can justify their demands when you take the current realities in to account. you continue to parrot the "the pilots got theirs, so the the mechanics must get theirs as well" mentality that is killing the airline. KILLING!

Let's play hypothetical here... Lets say the company gives the mechanics an even sweeter deal. The company obviously cannot afford it, and file CH 11 in hopes of renegotiating. The employee-owners become employees as the value of their investment has been erased. In anger, they decide to make no concessions. After all, in your eyes, management is 100% responsible for the bankruptcy, right?

In order to survive and emerge from CH 11, the company decides to sell some assets. Let's use the rumor of the LHR operation as an example. Lets say DL buys it. Why would they take the people? They have their own mechanics, pilots, F/A's and others on furlough or long term leave. Who would then hire an ex-UA employee? Ask a former EA employee how long it took to get a decent airline job after EA shut down. Between the early 90's economy and general reputation of EA employees, I'll bet the years were painful ones.

The point I'll make again is that there is no leadership at United Airlines. The employee-owners don't act like owners, the owners haven't hire competent management, and the management has the difficult task of managing the owners. and it's complicated by the fact that the employee-owners can't sell! But someone has to be big enough to put the interests of the company first. And I satand by my statement that nobody has done that!

The UA employee/ownership relationship is a joke and makes a very poor arguement. unions took major wage roll backs in exchange for stock ownership in the company and for some of the seats on the board. Not all unions agreeded to this and the majority of the board is not made up of UA employee's.

It is very obvious that if the employees were true "owners" then why did it take so long to settle just the pilots contract?

You can make the argument that anyone who owns stock in the company that they work for could be called owners. Since most 401k plans use their own company stock then just about everyone who has a 401k plan is a "owner" of their employee.

UA management has never treated the employee's as "owners". They have been very hostile torwards the unions and only put up with the pilots being on the board becuase they had to.

The employees have never had much of a say as to the management team that runs United. If you make the argument that it is the "employee's/owners" job to ensure this then do you blame the employee's of Enron for the fall of that company?

The other issue is only employee's hired before 1993(not sure of the exact year) were opted into the "employee/ownership" tittle. All people hired after that date were hired under different contracts (except the pilots) at half the pay and no benefits to speak of. It was only recently did managment realize this was a major mistake since the turn on these new hires was much greater then the older employee's. This also created friction between employees and generated poor customer service. Do you really think if the employees were true owners that they would let this happen?

I doubt United is going to go out of business. The company is too big and the other airlines do not have enough slack to pick up all of the pieces. Even if United goes Bankrupt, they will not go out of business but use the courts to rewrite contracts and discharge debt.

For the record I am not an employee of United and I have only flown them once in the past year--and that is becuase Alaska canceld their flight and put me onto United.
The rumor that United is going to sell its London Heathrow slots is a joke. Those slots are a cash cow. Business people want to fly into Heathrow, not Gatwick and business fares is where the airlines make their money. The revenue generated from those flights each year is greater than what Delta would be willing to pay for them.

The people who are killing the airline are the pilots. If they wanted to "save" the airline they would be walking up to the table and asking to renegoiate their contract. The top tier wage of a mechanic is only a fraction of what the pilots earn.


[This message has been edited by Tango (edited 02-13-2002).]

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Tango:
Do not jump all over the mechanics unless you are willing to do the same to the pilots. The pilots Union are the one's who are sinking the ship. They set the tone with their high demands. Why expect less from the other unions???</font>

Because in case you haven't noticed, things are different. We do not have a booming economy with lots of business travel. We had terrorists destroy buildings with planes and people who are now afraid to fly.

You can't compare what happened with the pilots to what's happening now with the mechanics. In one situation, you've got a very profitable company, in the current one, you've got one bleeding red ink.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Tango:
You can make the argument that anyone who owns stock in the company that they work for could be called owners. Since most 401k plans use their own company stock then just about everyone who has a 401k plan is a "owner" of their employee.

UA management has never treated the employee's as "owners". They have been very hostile torwards the unions and only put up with the pilots being on the board becuase they had to.

The employees have never had much of a say as to the management team that runs United. If you make the argument that it is the "employee's/owners" job to ensure this then do you blame the employee's of Enron for the fall of that company?
</font>

There is one glaring difference between the "employee-ownership plan" and a 401(k) plan. United employees own a majority of the company. It doesn't matter if they were pre-1993 or post 1993. United employees own 55% of the company. There is nobody who could stop them if they decided WITH ONE VOICE to replace the board.

This whole scenario reminds me of the person who so badly wants a new car that they take a bad deal from the salesperson. Then a few years later when the bug bites again, they realize they got screwed on the original deal. United unionized employees so despised Stephen Wolf that they would pay ANYTHING to be rid of him. And they did.

The post-1993 employees hired on knowing that they were getting paid a lower wage, without benefit of ownership. They made the choice. Who forced them to accept the job?

You doubt that United could disappear? Ask a former PanAm employee who felt that way. Even up until the sale to Delta, they were the biggest trans-atlantic carrier, by far. Or ask a former Braniff employee, for that matter, they were once the biggest carrier to South America. Delta's been known to overpay before, and still has plenty of cash. Heck, WN could buy the DEN hub and every 737 UA still has and Herb wouldn't notice a change in the thickness of his wallet. Anyone who thinks UA is "too big to fail" is only deluding themselves.

You are right that the pilots are hurting the airline. But they have plenty of help. Mechanics, flight attendants who got a new contract halfway thru the existing one, and management who never improved the relationship with employees after they bought the company.

Why are you so anti-pilot, Tango? I still think there's something about you that you are not telling. Very rarely is there anyone on here so willing to place blame squarely on one group....

Just to interject, FWIW:

Northwest Mechanics Urge Government to Stay Out of United Airlines Contract Negotiations

Aircraft Mechanics Fraternal Association (AMFA) Local 33, serving Northwest and Mesaba Airlines in the Twin Cities, today voiced support for United Airlines mechanics, custodians and cleaners by urging the President and Congress to stay out of United contract negotiations.

The United employees, members of the International Association of Machinists and Aerospace Workers (IAM), by a substantial margin yesterday rejected a contract offer with terms imposed by a Presidential Advisory Board.

http://biz.yahoo.com/bw/020213/132431_1.html

Personally, I agree that the Bush administration should no longer intervene. I think UA should come back with its "last, best" offer, based upon the current realities of the industry, and let the union do the same. But both sides should make both offers fully available to the public. If UA decides not to accept the mechanics offer, and the union decides not to put the company's offer to a vote, then let both sides engage in self help.

Whats the point of threatening to strike if nobody will let you?!?!?!?!

[This message has been edited by duxfan (edited 02-13-2002).]

MDTONY: The pilots knew of the downturn in business when they got their contract. They realized this their contract was one big pill that United had to take.

Duxfan: I agree that 55% stock ownership in principal would be enough to vote out the board but in reality this is all but impossible to do.

Braniff and Pan Am went bust in a different time. These were two airlines that did not have major domestic feeds and did not adapt to the changing times in the 80's. United is a very different airline and I do not understand how you can compare it to Pan Am and Braniff.
I question why would United sell its Heathrow slots when the amount they would earn from these routes is far greater than what they would realize in the sale of these routes. If United did sell these routes (and I doubt they will) then they deserve to go under.

You are correct in questioning why people would work for United at a subpar wage after 1993. Many people quit after they realized the people they were working next to were getting paid twice as much. I do not blame the fellow employee's for this but lousy management(they even admit it was a mistake).

I am not anti-pilot. I only call it as I see it. Most pilots(not all) that I have talked to come across as arrogant and over paid. Even if the mechanics got a contract of a top wage of $50.00 an hour, this is only 1/6 of what the top tier UA pilots make! Does that make sense?

I am sure the mechanics are fully aware of the risks involved in what they are doing. Should they not be given the right to decide?

So Braniff and PanAm were victims of changing times? Just what do you think has happened in this industry in the past 2 years? The airlines themselves have destroyed the pricing model that they relied so heavily on for years. The airlines (UA included) have relied on the full fare paying traveller to subsidize the travel of the super saver fare paying customer. The problem is that in the chase for more and more revenue, the airlines have created sites like Orbitz, and owned sites like Priceline, which encourage travellers to pay less, not more for their product. I also think it is fair to say that the industry changed significantly in the wake of 9/11.

Then top off the decline in yields with increased low fare competition. Southwest, JetBlue, and Airtran are eating away at yields by offering low fares which they make money on! Their costs are in line with their yields. Most of the majors have watched costs spiral out of control, while at the same time watched yields take a huge hit.

~puts on bob dylan CD~ times, they are a'changin....

remember, the most profitable part of PanAm in 1985 was the Pacific division, and they sold it. I used the LHR rumor as an example about the labor, which you conveniently missed.

you don't blame "fellow" employees (your words) for the differences in wage scale following the ESOP? fellow employees? methinks you are not being 100% truthful with all of us here. HOWEVER, that being said, was this two-tiered wage scale imposed on UA mechanics? no..... It was approved in a vote of UA mechanics. UA mechanics voted to screw over their fellow employees hired after them. At the time it was better than having to give them a share of the company when they hired on. That way the UA employees who were in the ESOP from the start got 100% of the benefit! Sounds a little greedy to me....

Your question of the top mechanic making 1/6 of what the top pilot makes reveals your true gripe. From each according to their ability, to each according to their needs, huh? It's just not FAIR that one person makes more than another, right? Then why is it fair that the most senior mechanic make more than the most junior? Thats just not FAIR either, is it?

Airlines shouldn't be socialist experiment centers....

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by duxfan:

Airlines shouldn't be socialist experiment centers.... </font>

Thank you!

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by mspman:
Thank you!

</font>

And neither should any other business! There are still a few European socialist paradises left in the world. All socialists are invited to live and practice their philosphies there to their hearts content!!

Duxfan:

The airlines created Orbitz to compete and someday drive Expedia and Travelocity out of business. They got into this problem in the first place becuase they cut online commissions to $10 a pop forcing all of the online travel agents to close or merge(thus creating Expedia and Travelocity).

Many may disagree but may I be so bold as to state that with the exceptions of Hotwire and Priceline (that sell distressed inventroy) the airlines love online booking engines becuase it costs them less and people on average end up paying more for their tickets.

I am getting tired of people using 9/11 as an excuse. 9/11 was a very bad day but it did not change anything. The problems the airlines faced after 9/11 were there before 9/11. Many (not all) of the airlines and Boeing, used 9/11 as an excuse for the massive layoffs that took place. I admit the airlines did not ask for the shutdown of the entire airways system for 4 days but the US goverment did give them more than enough compensation for that. The airlines have been wanting to get out of the security business for a very long time. Now they have their wish. This cost transfer is going to be passed onto the consumer---that my frined, is the only real big change from 9/11.

Pan Am did sell its Pacific routes to United (with all of the planes and people who were assigned to them) becuase they were backed into a corner and had no choice. If Pan Am had the same domestic feeder system that United has, they would not have been in that situation. The lack of a feeder system is what doomed Pan AM. Why do you think the world airline alliances are so important to the airlines?

The two tier wage system I mentioned was for the gate/ticket agents--not the mechanics. This is a very common tactic used by management. It is called divide and conquor and happens all of the time.

Again I must stress that I am not anti pilot. Everyone in the airline industry took big paycuts in the early 90's becuase of the downturn in traffic caused by the Gulf WAR. At that time the airlines promised that when times got good again the airlines would make it up to them. Guess what, the airlines stalled and stalled and broke their promise. The pilots, after work slowdowns and strike threats were able to get a very good raise. The only thing the other unions want is the same percentage increasse in their wages and benefits.

I only mention the disparity between the pilots and mechanics wages becuase some people have posted that this is not the time for the mechanics to be making such big demands. If United is on the ropes, they should be asking the pilots to give back some of their wages to save the company. That would make much more sense then letting the mechanics go on strike.

You keep on thinking that I work for an airline. Sorry to let you down but I have never worked for the airlines. If you research all of my past posts you will see that I am telling the truth.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Tango:
The other issue is only employee's hired before 1993(not sure of the exact year) were opted into the "employee/ownership" tittle. All people hired after that date were hired under different contracts (except the pilots) at half the pay and no benefits to speak of.</font>

Not true I was hired in Sept. 1999 and recived UAL stock, I also recived all the same benefits as someone hired before 1993(both are covered under the same contract). I don't know where you got the 1/2 pay firgue it's not the pay cut my classification took.

I am glad that UA fixed the problem. Management even admited that it was a mistake. Two tier wage contracts have always been a bad idea.

We agree on the change in distribution and distribution costs. The airlines have done just about everything they can to shift the cost of distrubting their product on to the customer. Yes, they've tried to drive both traditional and online travel agents out of business. Smart travel agents of both types have changed their business model and survived. However, travel agents in general still issue over 70% of airline tickets.

The problem comes from the yield the airlines generate compared to as short as 2 years ago. As Southwest has grown, they've put fare pressure on the mainline carriers. At the same time, the mainline carriers themselves flood customers with e-mails and ads telling them that they don't have to pay too much for that ticket!

The mainline carriers have created a business model which no longer functions. Much like our income tax system, it relies on a small percentage of people providing the lion's share of the revenue. Unlike our tax system, airline customers have learned how to avoid the system. They now stay over Saturday nights, buy last minute "low yield" seats, and run afoul of the airline police by purchasing throw away tickets.

You state that these new websites to sell distressed inventory actually increase yield. If that were the case, airlines would report increased yields. They haven't been! All you need to do is look at quarterly reports to see that. That's a fact, Tango.

Your theory that the pilots should bear a bigger share of the burden because of their pay scale is flawed. It's very obvious that every employee group at UA is interested in protecting their own interests, and not in protecting the value of their investment. The employee groups at UA cannot work together to exercise their majority shareholder muscle and take control of their investment. How sad is that?

Your right, United probably isn't doomed, yet. They have the domestic feed to keep a few parts of the company profitable. But as more and more of that domestic feed becomes unprofitable, UA will continue to contract. That domestic feed currently needs a 90%+ LF to break even! How does a new mechanic contract like the one rejected by the mechanics help address this situation? As the domestic feed contracts, it will make it harder and harder for UA to maintain the yields on the cash cows.

United is on the edge of the death spiral. how do they pull away from the edge when the OWNERS keep saying that it is more important to "get theirs" first? Who will lead United back to profitability?

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Tango:
MDTONY: The pilots knew of the downturn in business when they got their contract. They realized this their contract was one big pill that United had to take.</font>

What are you talking about? At the time that the negotiations were going on a few years ago, we were looking at a booming economy and things looked good. Hell, things looked so good that the mechanics were willing to say, okay, take care of the pilots first and then come take care of us.

A recession is one thing, and if that were the only thing that was going on, maybe what the mechanics are doing would be okay. Unfortunately, the equation changed drastically due to the terrorist attacks. Now you weren't just dealing with a downturn in the economy, which airlines have dealt with for a while, you were dealing with a completely different thing -- people scared to fly because of terrorism.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Andrew14302:
All socialists are invited to live and practice their philosphies there to their hearts content!!</font>

You don't have to go very far to see that. Congress' airline bailout bill provided more cash to the airlines with the most expensive labor. Funny how that happened...

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Tino:
You don't have to go very far to see that. Congress' airline bailout bill provided more cash to the airlines with the most expensive labor. Funny how that happened...</font>

The grants were based on traffic, so American got the most, followed by United, and so on down the line.

I am not a fan of unions, either, but for God's sake, if you want to rant about them, at least get your facts straight.

I still do not think 9/11 changed anything. People were afraid to fly during the Gulf War and the airlines went into a nose dive. They lost more money then they had made in the previous 50 years combined!. Doom and Gloom was everywhere and people were saying the airlines were not going to make it. Some did not but most did and they enjoyed a very healthy 90's. As the economy improves, so will the airline fortunes.

I disagree about Southwest forever changing the landscape of things. Just becuase Southwest is offering $99 specials, does not mean that every seat on the aircraft is being sold for $99.00. Yield management insures that only a fraction of these seats are sold at these prices. Some people refuse to fly Southwest and Southwest will not enter expensive markets. Southwest is only a domestic airline and the international fares is where the United's and American's make most of their profit. South America is a good example of this. The main reason people fly between the US and South America is family or business and therefor the prices tend to be higher then fares to Europe that has a higher tourist mix. American is now operating flights out of MIA (their main hub to Latin America) above pre 9/11 levels.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Tango:
I still do not think 9/11 changed anything. People were afraid to fly during the Gulf War and the airlines went into a nose dive. They lost more money then they had made in the previous 50 years combined!. Doom and Gloom was everywhere and people were saying the airlines were not going to make it. Some did not but most did and they enjoyed a very healthy 90's. As the economy improves, so will the airline fortunes.
</font>

The one difference between the Gulf War and 9/11 is that the Gulf War was oversees and 9/11 was on U.S. of A soil. We continue to have "threats" issued and the public still has a lingering fear of flying. We can not predict what the economy will be like over the next year or even the next month for that matter but suffice to say that UA continues to lose money under the current system and will continue to lose even more money with a new contract.(Assuming one can be achieved) Not only is all the negative publicity about a possible strike hurting the company with people booking away from UA but with all the different unions fighting for a piece of the sinking ship no one is interested in plugging the hole or bailing water to keep it afloat.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Tango:
Southwest is only a domestic airline and the international fares is where the United's and American's make most of their profit. </font>


You really can't see the forest for the trees, can you? On one hand, you say that United can't fail as PanAm did, because of their domestic flying to support the Int'l flying. Yet then you turn around and say that United and American can survive without the domestic flying because of the profits the Int'l flying generates! So which is it?

True, WN doesn't put every seat on the airplane at $99. But the seats they do, they make money on when they sell. Therein lies the major difference. WN has the cost structure which allows them to pay among the highest wages in the industry, yet still turn profits during economic downturns. Even if you look at the highest fares in competetive markets, you'll see that WN Y fares average 50% below UA Y fare.

True, WN doesn't enter expensive markets. There will come a point when those expensive markets will have to review their cost structures to become competetive with other nearby airports. New traffic simply will not go to high cost airports. Look at how WN gets people to drive out of their way to fly them? Ryanair and EasyJet in Europe do the same. VirginBlue is taking advantage of the collapse of Ansett to offer service to new cities in Australia, in exchange for lower ground costs.

People didn't fly overseas during the Gulf War because they were afraid of being targets in foreign countries. While that is happening to a lesser extent today, people are afraid to fly because AIRPLANES WERE USED AS WEAPONS! The nervous flyer is staying home, or driving. Domestic flying didn't take the hit during the gulf war that it has taken since 9/11. The new "security" has made frequent travellers (myself included) less apt to fly. All this is a scenario previously unseen in the industry. So what is the industry doing? Nothing. Hoping to ride this out, with some help from the American taxpayer.

I'll put money on this one... 2 years from now, at least 2 of the current mainline carriers will either be gone completely, or less than 50% of their pre-9/11 size. I'll even go so far as to say that I suspect UA and US will be those 2 carriers. I'll also bet that WN is in the top 3 or better in terms of both Revenue Passenger Miles and Passengers carried.

What happens if, for example, the US and EU negotiate a true open skies agreement? Lets say David Neeleman of JetBlue and Sir Richard Branson decide to raise $200 million dollars to start the Southwest of Int'l carriers. Low fares between major US and European cities. The yields on domestic flying don't cover UA's costs. The Europe flights take the hit, how long can they survive with their current biz model?

They can't. And the first mainline carrier to see that will be the one best positioned to survive. UA sure isn't that carrier right now....

Duxfan: Here we go again. . . .

It does not take a rocket scientist to predict that US airways is on the ropes. I do not consider US airways to be one of the big players---that is reserved for UA, AA and Delta. If any two airlines are going to go under then it would be US and HP.

I never stated UA did not need its domestic routes. It is the domestic routes that feed into the profitable international markets that makes the whole thing work. Please do not misquote me here. PanAM never had a domestic feeder operation and that is what sank the ship.

Many people will drive out of their way to fly southwest buy many others are not willing to do so. Southwest will only go into city markets where they know they can make money. Southwest is unlikely to start international service becuase the cost is too high.

The landscape is littered with bankrupt airlines. Some were very noble such as Pan Am and others were no frill like people's express. The common reason why these airlines went down was lousy management (yes I did say Pan AM went down becuase they did not have a domsetic feeder route system but the reason they did not have one is becuase Management did not pursue one).

Good management will ensure an airlines survival. Southwest has great management. United needs another make over.