United (Airlines) says liquidation a "possibility"

MSNBC ^ | March 18, 2003 | Reuters

[Timesink]

United Airlines said domestic bookings are down and international bookings have dropped 40 percent in the last week alone.

CHICAGO, March 18 ?  Bankrupt United Airlines forecast a first-quarter operating loss of $877 million and said for the first time publicly that going out of business altogether is a ?distinct possibility? as war looms. UAL Corp.?s United said domestic bookings are down and international bookings have dropped 40 percent in the last week alone, due to the impending Iraq conflict.

Excerpt-

[Timesink]

Couldn't happen to a nicer airline.

[teancumspirit]

I wont lose anny sleep over this one.

[goldstategop]

The unions would rather see workers lose their jobs than accept temporary layoffs and short-term reductions in pay. Talk about saving the airline by making it go belly-up.

[Dialup Llama]

Dear Airlines,
For years you bought the cheapest security that your lobbyists to congress could buy. In Austrian terms you regarded expenses for security and a non-productive expense. Since 9-11 we all know just how expensive not having security really is.

[Sunnyvale CA Eng.]

Market forces at work. If their business model didn't work somebody else's will. The airlines either need to charge more and realize fewer people will fly or figure out how to manage costs and still provide reasonable fares. A gubment bailout will make the airlines into a flying Amtrak(sp?).

[goldstategop]

Au contraire my friend. The airlines need to charge even LESS and provide better service. What with internet booking sites, no one wants to fly across the country for a premium fare today. People want to get there and still have enough pocket money for their vacation.

[Arkie2]

Well, I see the lunatic fringe is out at FR again. Every analysis I read says the management has no viable recovery plan and no bank is going to front them the money until they do. The mgt at this airline has consistently erred from it's proposed merger with US Air to it's inhouse corporate airline to it's most recent fiasco, an in house low fare airline. The bashers here on FR are content to blame it all on labor though. Why don't people educate themselves before they voice their opinion? Nah, it's too much fun to slam labor.

[Thebaddog]

UAL is the emloyee owned company with trained puppy CEO's and the highest labor costs of all airlines. The model was fatally flawed all along.

[gulfcoast6]

I am just a ole boy from Mississippi so will someone please tell me how a business can NOT make a profit for years and years and years and still stay in business? Doesn't work that way for us here in Mississippi.

[tm22721]

They have lost the occasional business traveler, who no longer considers air travel a perk but a liability.

BUMP

[CatoRenasci]

Can they wait a month -- I've got my frequent flyer free tickets for a trip abroad next month (not on United, but the tickets need to be honored)

[eno_]

The unions would rather see workers lose their jobs than accept temporary layoffs

Tell 'em to keep at it.

I want SouthWest, Jet Blue, etc. to get those planes. That union attitude really shines through at United.

[Beck_isright]

LOL, can you imagine the panic of the demorats pissing all over themselves in Chicago. A multi-billion union run facility (O'Hare) that the demorat taxpayers will be paying for, for years, and all the airlines who were denied gates for the last 4 decades of demorat control saying blank you to the crooked Chicago political machine. And since the airlines are cutting back service, they don't need all those empty gates and handing money to the democrooks which run that city. It doesn't get any better than that.

[fight_truth_decay]

Now for some good news: March 19, 2003

European, Asian and U.S. airline stocks have risen as crude oil prices slump, lowering the cost of fuel.

http://edition.cnn.com/2003/BUSINESS/asia/03/18/newairlines.biz/index.html

[eno_]

Oh heck no, I won't let managment off easy. They had the choice to fight the unions or not, and, as you point out, they added their own idiocy.

It's just that most of us are at the sharp end of the stews' PMS. So they get the lash first.

[Beck_isright]

It's not all labor's fault. But $75 per hour for a mechanic who spends half his day playing on the internet is just a bit steep, dontchya think?

[cynicom]

UAL now needs a meat clever, not a scalpel. We have to wonder what part of "downsizing" they do not understand.

For years, they and they other majors thought "big", that did not work. Southwest proved the others were wrong.

[tcostell]

Actually, when I was in college "Labor Economics" was the flavor of the day(it was the Reagan years). My Graduate thesis was on the net economic effect of collective bargaining, and Pan Am (Pan American Airlines for those of you too young to remember) was one of my case studies.

I think I can argue that I'm as educated on the issue as anyone, and regardless of what the airline may have done in the short term to try to save themselves, their long term problem is runaway labor costs, and low productivity.

In other words, the unions.

Management can still make poor decisions, but even if they do everything right, unionized labor will kill even the best run airline eventually. And not only could I predict that 20 years ago, I did.

[cynicom]

Arkie....

I do not place it on labor at all. That is the name of the game, for labor or management, get all you can, when you can.

In recent times labor was the major owner, therefore they must share the blame.

What needs to be done is to slash the number of airplanes, employees and routes. There is no other alternative.

My last trip out of ORD was on UA, AA had a competing flight schedualed ten minutes later to same destination. Both flights had less than 50 per cent seated. That is not competition these days, that is stupidity looking for liquidation.

[fight_truth_decay]

Back in the late 90's United said to the SEC:

...the Air Line Pilots Association and the International Association of Machinists declared, "We believe that our plan will catapult the company light-years ahead of its competitors by enabling it to serve the global community more flexibly and efficiently than any other major American carrier and to compete head to head with 'low-cost carriers' in the short-haul marketplace."

Plus to say the employees own the company is false. The banking institutions own United. The union bureaucrats(three airline unions each obtained one seat on the company board of directors) see the money not the workers.