FlyerTalk Forums - View Single Post - Mechanics reject contract-- vote to strike
Old Jan 28, 2005 | 9:58 pm
  #31  
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Originally Posted by venk
And they can make plans for world peace as well that will bring all nations together while they are at it.



I am very amused at the naivete of the above.

The reality is that none of the legacy airlines have a viable business plan at the moment. If any of them were in bankruptcy, none of their current business plans would be accepted to get them out because you cannot convince a judge of a loss-generating business plan for the forseeable future unless events beyond their control happens. While they are still out of bankruptcy, they stumble along hoping one of the items out of their control will happen to make their business plans viable. But the status quo will eventually bring them to BK. That stumbling along is a luxury UA doesn't have.

If UA were to write a business plan that might actually make a profit any time in the forseeable future then that would need to include elimination of all pension benefits, serious reduction in workforce and wage structures, flattening of salary curves, flexible scheduling, etc., to wring out maximum efficiency from the system. This would be much, much more than what is being asked of today. No union would accept this plan even if they could see very clearly why it was needed because from where they are at the moment, it would simply be just too much to accept. It might even mean the unions themselves become irrelevant in its current structure.

So what is UA to do? The only path left is to see how much they can get in concessions without losing the ability to run the airline and see if they can create a believable business story out of it. So you are correct in your suspicions that this will not be the last of the concessions but I also think it is a head-in-the-stand attitude to believe that any of the concessions being asked now are anywhere near sufficient to make UA a viable business.

I don't think they will be able to do a "credible" plan until the airline has a "near-death" experience because that is the only way they will get even remotely close to what they need to in terms of their cost structure to have a viable plan. If that is a management failure, then so be it....
There is no naivete in my prior post - note that I remained silent on the odds that UA could come up with a plan that could be accepted by financiers and the unions. Truth be told, I think we're actually in very close agreement on the fact that a plan to change the way United does business for the better would require a financial and operational restructuring that would make the last two years seem like blatant amateurism.
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