For more than a year, we have been sounding the alarm on our current CEO’s inability to manage and secure a future for United Airlines (recall: prepayment of large amounts of debt at par in order to pay large dividends to common shareholders ; mismanagement of fuel hedge programs amidst a sharp spike in commodity prices, incurring losses of over $1 billion in part by aggressively expanding hedges at the top of the market with contracts that had significant downside exposure; over-paying for financial covenant relief relative to peers; failure to re-invest in the airline; failure to execute on a UA-CO merger in a common-sense and widely-anticipated parry to DL-NW; failure to effectively manage non-fuel unit costs; terrible customer satisfaction scores; ceding further territory to low-cost competitors; continued attempts to shrink to profitability; and failure to motivate employees in a service industry). Our initial warnings were met with skepticism by both outside readers and, frankly, by too many of our own pilots. The Company labeled our alarm a “ploy” to open contract talks early, without even once refuting the facts demonstrating the financial failings which we had brought to light. As recently as last month, we were criticized by some of our members for highlighting management’s failures at a recent shareholder meeting because they said it conveyed the wrong message. Ladies and Gentlemen, this is the message: Glenn Tilton’s inabilities are systematically taking this airline on a course that cannot be sustained.
Considering all of the sacrifices made by the employees upon exiting bankruptcy, a valid question is why are we in this position? The answer to that question is simple: Tilton and this management group in exiting bankruptcy were and are focused on one strategy — a merger. All of their decisions were based on that with no attention to the operational side of the business. That management decision has put us where we are. The pilots and employees had no input into that decision and it has been the pilots who have repeatedly pointed out that if the operational side is taken care of, the rest will follow. Instead, United finds itself in a tight liquidity position awaiting the return of its core premium passenger
Our competitors, however, continue to execute their plans. American Airlines CEO Gerard Arpey wrote to his employees last week:“As challenging as things are today, our task would be far more daunting had we not met so many challenges head on during the last several years. Moreover, I want to stress once again that our objective is not to simply endure the latest crisis. It is to make sure our airline is positioned to compete and win over the long haul. That's what our fleet renewal program is all about, and one of the important highlights of the second quarter was the deployment of the first wave of new 737s we will receive in the next two years. In addition to new planes, we are continuing to prudently invest to refurbish our aircraft interiors and airport facilities in a variety of ways.”
Delta meanwhile has used the downturn in the economy to accelerate its integration with Northwest Airlines to capture an estimated $2 billion per year synergy. United’s senior management group has done nothing comparable because it lacks the vision, skill, ability and personality to guide this airline
So, what can we do as individual pilots and employees? First, we will continue to negotiate our contract resolutely under the Railway Labor Act for our Section 6 negotiations. Second, read thoroughly the “Focus on 5” article. If you are now truly convinced, as is your MEC, that Glenn Tilton is the root cause of United’s problems, then write to [URL="http://www.glenntilton.com/focus-on-five-email-form/"UAL’s Board of Directorsand encourage others you know to do the same. Third, we will continue our flight operations in full compliance of the RLA and the court injunction. These quarterly results and our discussion of them come at a sensitive moment. As you know from recent communications, sick leave rates right now are high. If rates continue to be high, management will surely blame those rates on ALPA and, after-the-fact, point to this letter as a cause. Finally, be assured that your MEC is there for all of us and all of you, that they know where United is and where it is heading. You may feel like you are behind the cockpit door, not able to see much of what is being done in the cockpit, but your MEC and its leadership are not passengers in the back of the airplane. They are in the cockpit, fighting to keep this airplane upright and level, working on many avenues to secure the future of this airline. As specified in every United Flight Manual, “Fly the Airplane, Silence the Warning, and Confirm the Emergency.” They’re doing exactly that. In Unity