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Old 05-07-2008, 12:02 PM   #1  
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Joined APC: Feb 2007
Posts: 79
Default Why United Is Failing Again

And I guess according to America West pilots' gorilla math and sense of entitlement; because United is in so much trouble and that a merger would save them, all United pilots should be happy to go to the bottom of a merged list. Bush-league antics.


By Joe Brancatelli

April 24, 2008 -- Even during a week of Big Six crisis, United Airlines' troubles stand out: On Tuesday, it registered a $537 million first-quarter loss, more than American and Continental combined. United shares then plunged by more than 35 percent. Yesterday it was forced to deny that it might default on key loan covenants.The 1Q loss, which offsets most of the profit that United registered since exiting bankruptcy on February 1, 2006, has sent the self-aggrandizing boobs who run the airline into full panic mode. On Tuesday, United imposed a blizzard of new fees and restrictions. It raised fares by 3-5 percent, or as much as $70 roundtrip, this afternoon. And the airline announced it would slash capacity again, ground more planes and lay off more rank and filers.

'The path to sustainable profitability requires us to fundamentally overhaul every facet of our business,' chief executive GlennTilton said Tuesday. He then once again begged someone to buy out his airline under the guise of industry-wide 'consolidation,' a strategy he has pursued since he called in Goldman Sachs six months after United emerged from
Chapter 11.

The problem with Tilton the Terrible's pronouncements? The every-facet overhaul will be on a business plan that is just 28 months old. It's the cynical, horrifically flawed 'strategy' crafted after a 38-month stay in bankruptcy. Tilton's comments are also a de facto admission that his merry band of airline killers got it wrong from Day One, have no business running the nation's second-largest carrier, and may have finally
doomed what I called 'a rotting hulk of an airline' as far back as the summer of 2000.

And that is no second guess. I said it before United exited bankruptcy. While the talking heads, mainstream-media stenographers and fawning airline analysts praised United's new clothes, I stated the painfully obvious: The airline was naked and doomed to fail again.

I reprint that column below. Not as a told-you-so taunt, but because it cogently and clearly analyzes United's current situation. The problems were there to see from the moment Tilton and friends loosed this nightmare on the world in February, 2006. All you had to do was look.

There is a plethora of financial and operational reasons why the United
Airlines that exits bankruptcy early next month will soon enough be back in Chapter 11 or desperately seeking a merger to keep itself afloat.

But United Airlines will fail again primarily because it has no organizational heart, no identity and no definable brand. Most of all, it has none of the vision and discipline that separates the winners from the losers in the deregulated skies.

Consider the airlines that have had success of any meaningful duration in the last decade. There is, of course, Southwest Airlines. Whether you like what it sells is beside the point: You know and understand the product that it sells. And you know that Southwest delivers it at every seat on every flight on every route that it operates. Southwest's management and employees are fanatically devoted to its standards of simplicity and its unabashedly mass-transit approach to air travel.

Ditto JetBlue Airways. You know what you buy every time: a leather with decent legroom; free in-flight satellite TV and radio; a sense of casual style; and rational prices. AirTran Airways has found success because it offers a definable and recognizable product: no-frills, two-class service at simple prices. It even did the unthinkable--dump
commuter flights--because they did not fit the image or the financial model. And before its corporate ego ran amok, Continental Airlines had a profitable run. Why? It crafted a demonstrably higher quality of 'traditional' full-service flying and then reworked its
management, crews, fleet and operations until the airline was a consistent and
marketable whole.

United has done none of those things during its 38 months in Chapter 11. In a market that has proven it will only support consistency, United Airlines is a bizarre amalgam of in-flight products, fleet configurations and service concepts. It cynically tries to be all things to all flyers and careens from idea to idea, cabin to cabin and fare to fare,
sometimes on a route-by-route basis.

In fact, United isn't. Not in concept or in execution. It is a disjointed collection of flights run by executives with no overarching vision, no unifying commitment and no marketing or brand discipline. In every conceivable way, United is the opposite of what works in the sky.

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