United "offically" up for Sale

[T-Bird76]

Interesting read and certanly a sign UAL's managers have given up. Not surprising though. Tilton and his team were a train wreck from the start.


Such A Deal: United Is Now "Officially" For Sale

It's official. United Airlines is now on the block. The For Sale sign is posted.

United employees: If you thought going through bankruptcy was a fun ride, a merger will be the emotional and financial equivalent of a supersonic ride on Disneyland's Pirates of The Caribbean.

'Cept in this case the Pirates win. You lose. As will communities and airports around the nation.

United grandly announced today that it had hired an investment bank to, as was stated in perfect Airlinese in Crain's Chicago Business: " ...explore a range of strategic options, including possible mergers with other carriers..."

Which means, United management appears to have tossed in the towel in regard to moving United forward as an airline system (not that they ever had a towel in the firstforsale4.JPG (34881 bytes) place) and is trying to merge the airline and then get out.

As another ominous sign, United officials have been quoted using the surefire buzzword that usually indicates that strategic planning is now on the shelf in place of fast gains: they've used the term: increase shareholder value. Not "competitive value." Not "airline value," but shareholder value, which means increasing the price of stock certificates, not necessarily the value of the airline as a vibrant, growing entity. It's often a term that indicates the management goal is to simply get stock price up, not necessarily increase the competitive value of the airline.

In reporting the story, Crain's made the mistake of parroting one of the Urban Legends infesting the airline industry: overcapacity. It's another buzzword that they and others have taken as gospel, regardless of the fact that today airlines are full, chocka-block, no room in coach. Selling all the product. But they and others in the media will earnestly read what's written elsewhere, and listen to folks like those at the top of United, and repeat it without a shred of investigation.

[Ari707]

what if we all chip in together ..... we can make an airline of all specialty planes...

[lijk604]

as a former UA employee this is the icing on the cake. Glad I got out when I did. I'm sure the COA speculation will start again, but I think the question becomes, WHO, in their right mind will take on all that debt.

[Tom_Turner]

Just think.... they might be gone before all the aircraft have been put in the new scheme.

Their problems went beyond the benefits of the "branding" ...

[hiss srq]

Perhaps the new US thinks they have the guts to do it but than again I think the whole antitrust issue would resurface. Wow could you imagine that fleet. T7's and 744's in US new colors let me not get all excited here lol

[mirrodie]

Now, in a perfect world, I'd hope some great airline, like Thai, Emirates or BA would buy United....but ...(yes, I know you are thinking I would have said AA should buy them)

Tom, you are pretty knowledgeable, what do you think will happen?

[Nonstop2AUH]

Sad to read this, but America is much better at doing quick-buck investment banking deals than it is at running operational businesses such as airlines, so I'm not too surprised this management team wants to cash out quickly at the expense of employees and the traveling public.

United has a great history and recently has been doing alot of interesting things like Economy Plus and p.s. but consumers demand lower and lower fares and executives and investors want to make more and more money, so not sure how this can be reconciled given the debt load and the cost structure.

Are there any bright spots in this picture? Could they downsize their domestic network and put more focus on international flying as other majors seem to be doing? Could they get together with NW, eliminate the overlaps and dominate routes to Asia?

[PhilDernerJr]

I'm noindustry genius, but I don't think this is a quick-buck thing. If it was, they had opportunities to get out several times over thelast five years since 9/11. I think it's pretty obvious that they've been struggling, and merging with another airline might be the best way to keep their employees employed.

[Alex T]

I think it's pretty obvious that they've been struggling, and merging with another airline might be the best way to keep their employees employed.

Phil- That was the exact words heard by TWA for AA, and look what happened there.

United may not be so quick to merge with the knowledge of what AA did to TWA (regardless of what caused it, it still happened).

I would honestly be very surprised to see United Merge, or could/would they be bought?

Or would each airline pick at United? Ie, WN buying the 733, for ATA or themselves, or AA getting UA's slots or B6 getting slots etc etc.

It will certainly be interesting to watch.

Alex

[USAF Pilot 07]

I would be real surprised to see UA bought out by another airline, or disappear completely.

Although you can maybe cite TWA's case against me, I think UAL just has too big of a presence and too much of a "name" to completely go away. TWA was bought by AA in a period of generally positive financial cash flow. I'm not so sure if there are really any airlines that would be able to take the financial risk of acquiring UAL.
It seems that it would make more sense for UAL, if it needed to, to sell itself off in parts to different airlines.

[Nonstop2AUH]

I'm in Chicago this week and my college buddy here pointed out to me tonight the downtown office tower that UA is supposed to be consolidating its HQ at from various sites around the suburbs. Presumably, this riverfront building is in the 'high rent' district, as it's near the high end shopping and 5* hotels and such, so does anyone know if they intend to actually make the move given the announcement referenced at the start of the thread? Funny that Boeing justified its move to downtown Chicago largely on the basis of being close to a major customer, i.e. UA, and now it looks like they'd have been better off going with Beijing or Dubai.

[lijk604]

Keep this one fact in mind....the only people that the higer-ups at United care about are themselves. They do not care about the common workers there who toil on, day by day, doing what they do, because they love their job or the industry they are in. They PROMISED all cargo employees in 2002 that the cargo division was not going to be sold off, that it was their PROFIT center. Then, April 2003 comes and guess what is the FIRST complete division to get sold off. Cargo. Oh everyone was told they could have recall rights to their jobs, but, if they have vendors now working those jobs...what do you have a recall to? Even if the experiment failed, they would come up with new names for those jobs, and then again, you can only be recalled to the job were were furloughed from. So, new name, no recall rights. Want to work for the vendor? Sure we can do that, oh yeah, they pay minimum wage! So what's the moral of the story. The VP's got bonus's for trimming payroll, the employees they "CARE SO MUCH ABOUT" are all out on the street or working for peanuts.
The same thing happened to the catering division a few years before that. Those people all were gone, or had to start anew somewhere else, YET, the higher ups got commended for saving money, and were given bonuses or better job titles, which of course, paid more money.
In this case, its all about what can I do for myself, not how can I save this company and its hard working employees. I feel bad for those still at UAL who thought they had some new life after the bankruptcy, it was all a ruse. Company looks stable, now is the time to ditch & run. I think we are seeing the last of UAL, it will go the way of Pan Am & TWA...and Tilton and his gang will be richer tomorrow for it all.

[NcSchu]

To me, one of the big questions is, will whoever buys UA get the rights to the LHR slots, or will those be up for graps seperately? If the former, I could see some big shot airline buying UA despite the debt. LHR is where a majority of people want to fly into when they go to London; whichever airlines control the slots from USA-LHR will get the most business, me thinks. However if they're being sold separately, I could see CO being the biggest airline in the running to get them. They're only choice for the past ten years or so was to code-share with Virgin Atlantic. Freedom from that could yield them much more business.

[Nonstop2AUH]

United has made alot of subtle and unique service enhancements in the last few years, things like Economy Plus and entertainment on shorthaul flights and p.s. and BusinessOne etc., presumably in an attempt to gain market share or perhaps get premium pricing. Does anyone here know whether they have achieved these goals? As a passenger, I think these things are great and will go out of my way to fly UA and even pay a modest premium to have them, but I suspect most of the traveling public just wants the cheapest seat from point A to point B, and the exception to this would have the wherewithal to fly First Class or even a private jet. If these enhancements, which clearly cost UA money, can't be paid for by premium pricing or increased market share, the message is essentially that service is no longer a differentiator in non-premium air travel. Any thoughts?

PS if there are any UA employees here, just flew ORD-LGA last night on a very comfortable (if full) A320, with a friendly and attentive crew, and listening to Channel 9 all the way. The BusinessOne departure from an ORD gate near security as opposed to way down the end of the pier is a nice touch as well. I would say I got more for my money than on the AA flight I flew in the other direction 3 days earlier, and I hope others notice what I am noticing.