Saturday, January 29, 2005

Thanks For Playing!

Welcome back my friends, to the show that never ends. The Airline show, that is. In case anyone hasn't kept up on current events, I work for an airline. Specifically I work for an airline that works for another airline, that airline being United.

It's been happy fun times for the last few weeks here. For those of you unfamiliar with the Chapter 11 Bankruptcy laws in the United States and what it means to people who hold contracts with the bankrupt company, here it is in a nutshell.

You, the contractor, must continue to follow the rules of your contract. They, the contractee and bankrupt, are under no obligation to do the same.

Delightful, eh? Anyway, a year ago United decided to put our work up for bid to the lowest bidder. We managed to "win" our work back, but given our prices and reluctance to put a bunch of money into more airplanes for a bankrupt company, we weren't invited to add any more airplanes to the operation. Well, it appears that, since we're the only carrier United contracts with that didn't substantially change our contract (read: didn't add airplanes) we were prime for the "fucking with" again. Two months ago, United again put our work up for bid to the lowest bidder.

Now, here's where it gets a little fuzzy. When this initially happened, it seemed that the brass at the top were trying to sort out whether United was serious about this or whether they were just putting pressure on us to lower our costs by using threats. My opinion is that they guessed United was bullshitting them and put up a marginally lower bid. United said that we had a month to put in our bid, then they would take a month to review it. That put the deadline of when United was supposed to make a decision at January 10th. Of course, the 10th came and went and United said.... They need more time. Imagine that. Meanwhile, apparently they were in contact with the brass asking "clarification" of the bid, whatever that means.

Dateline January 13th. The COO of our airline puts up an email stating that United had come to town and that it was "clear we had significant work to do to win our work back". Read: We guessed wrong.

The next day, the COO didn't show up at work. Concerned, the other brass eventually went with the police to his home to find him dead. No one is saying how. In fact, since this event, we've heard pretty much dick from Mahagony Row. Well, that's not entirely true. We returned one of our airplanes to the lease holder and are going to return another one in March. Oh yeah, and on the 25th we were told that we had until the 28th to put in another bid.

So, not to draw any conclusions or anything, but no good can possibly come out of this. By making us rebid, they're clearly indicating that they've sent our first bid to the round file. This, combined with the leaseholders now reclaiming their airplanes paints a dismal picture. I'm not going to speculate on the death of the COO, but I can't completely discount the possibility that the two events might be connected.

Not that this makes much difference. The mechanics at United decided that they weren't interesting in giving any more concessions to the airline. Further, they've indicated that, should United decided to throw out the collective bargaining agreement between the airline and the mechanics, they're going to go on strike. Nevermind that it's probably not legal for them to do so, it'll only take about a two or three day strike to end United.

United plans to go to court on Monday to ask permission to end the contract, which the court will allow. Look for the contract to be wadded up shortly thereafter, and the mechanics will walk within a week. The Bush Administration will take a week from that point to realize that even though they think the airlines should stand or fall on their own merits, the total collapse of United will completely screw about 45% of the travelling public domestically, and will effectively shut down many International routes, since existing airlines that might have the ability to cover the void lack the liquidity to do so. Meanwhile, at least 3 "regional" carriers will flat go out of business, as well as several subcontractors. Since the market will also be flooded with a glut of used airplanes that lease holders desperately want to get moving again, look for stock in Boeing to completely shit itself, as those who would have bought new commercial aircraft instead find holders of United airplanes wheeling and dealing with the potential new owners. Airbus will probably feel some pressure too, but not nearly as hard as Boeing will be hit.

Look for Presidential intervention around the 3 week mark... Maybe.... Oh, wait, nevermind. United would be well into rigormortis by then.

Can anyone say "Eastern Airlines"?

Saturday, January 08, 2005

Shovel, Shovel, Shovel....

So, this is what corporate desperation looks like.

Jesus wept.