Google "Glenn Tilton", buying another airline seems to be his singular focus. Comments about UA merging are based on the UA's stated intention.

 

I have to shake my head when I see the intentions of a legacy to buy anything when their debt to asset ratio is over 4 to 1. Their ability to borrow money to cosumate the deal alone would be prohibitive. Then again if it doesn't work out I guess there is always bankruptcy to bail you out.

I feel for the employees of legacies who have lost their pensions and now have management trying to leverage what future they still have.

 

I have Googled Tilton B4, one time to see if the rumor about his divorce was true, I was curious after my UAL buds mentioned it.

But I had asked Ryane a CFII why he hoped there would be another merger of Legacies. I was a CFII a long time ago and knew even back then that mergers result in less jobs.

I'm just here asking and reading. I've learned alot here. And i've been a comm airline pilot for 22 years.

 

Because management (Tilton in particular) has no interest in running a viable airline. Their only goal is to inflate the stock price, cash in options, get filthy rich, then move on.

It's the BOD of the airlines who allow it who should be jailed as accessories to fraud.

 

Making the news latley - Tilton is quoted to say that UAL is investing billions to increse the value and position United for consolidation. It is his view that that's the only way to avoid the up and down cycles in the industry. I don't know - doesn't sound all bad.

 

I dunno Oscar. Five billion in cash goes a long way with the banks. And don't feel sorry. At SWA, you never had a pension to loose.

 

JSLED,

I wondered when you might chime in and insult SWA and deflect from the original question. If it isn't an insult, it is ridicule for grammar and spelling errors that you point to instead of addressing the issues facing UAL. So I won't point out your spelling error and will assume like I have that you didn't have time to proof read.

Fact is no responsible lending institution would lend money to an individual (or even a corporation) with the debt to asset ratio UAL has. I am sure they are looking at lending at a large percentage with this client as opposed to lending to someone with a good credit rating. So you go right ahead and keep fooling yourself and trying to fool others as to how good UAL's financial condition is. Oh! and that 5B in so called cash you keep referring to is free and not encumbered cash is it? I seriously doubt that and if you can show me that it is collecting interest without some other debt dragging it down I would love to see evidence of that. Dream on!

While I do feel sympathy for those who lost their pensions, I did not say I felt sorry for them. Everyone must deal with what life throws at them. So if a defined benefit program is again in the future for UAL go for it. The crime is reaching back and taking 60% of the retirees retirement.

As for the non existent pension plan that SWA has, don't you worry. After 17 years plus of maximum contributions by myself and little 'ol SWA (15% by me and 7.3% by the Co.) into my 401k, our profit sharing program, and our stock option program I will be okay.

P.S. Our 401k is completely separate from the Co.

 

All things considered, I'd rather have a defined contribution plan than a defined benefit. A DB plan is always at risk- not just a market risk, but the risk inherent in relying on an airline's health. It also ties you to the company, by making it greatly to your advantage to not only stay until age 60, but to work your butt off during those last three years (when you should be slowing down).

 

FWIW, it the early 1980s, United stopped buying annuities for their retirees.

They were under no legal obligation to advise the union or retirees of that fact and, of course United being what they are, did not. When ALPA found out about this, they waited to long to file a grievance, and it was thrown out for untimeliness. Whether it actually had a chance is another issue.

 

The above article in “The Motley Fool” by a reporter named Rich Duprey has provoked a substantial response from the pilot group. His article picks up on a theme which has been an item of some interest for the last month or so, and seems to be prompted by a recent letter from a group entitled the “Committee for the Restoration of Pensions at United Airlines 2007” to Senator Akaka from Hawaii. The UAL-MEC asked its lawyers and advisors at that time to review those materials and to report to it at its Special Meeting in September. That report did take place, and the MEC was fully briefed on the facts.

A number of critical facts are absent in Mr. Duprey’s article. First, and most significantly from a legal standpoint, the PBGC specifically waived its rights to take the action which Mr. Duprey asserts it can under Section 4047 of ERISA. That waiver was a key component of its agreement with United, which itself was a key part of United’s Plan of Reorganization as approved by the Bankruptcy Court. Were the PBGC to now act in the face of that waiver, the PBGC would have to prove that United committed fraud in the negotiations with the PBGC to induce it to give that waiver. If that were proven to be the case, the entire bankruptcy could unravel and all of United’s creditors would be seeking any monies which might be generated by the sale of Mileage Plus, not just employees.

The sale of Mileage Plus is a subject which has been considered by United from time to time over the years. Mileage Plus is not at this time and was not during the bankruptcy a separate legal entity, but simply part of the airline. During the bankruptcy, the inherent value of Mileage Plus was fully understood by the creditors, and in fact was part of the AFA pension rejection analysis. It is important to understand that any value of Mileage Plus depends totally upon how viable the airline is, and at the time the of the PBGC waiver, United’s was much less viable than today.

From the employees’ perspective, any Mileage Plus transaction is problematic and should be examined closely. Among the issues to be considered is to what use United intends to dedicate the proceeds. That issue is one the MEC will discuss next week during its regular meeting. The entire range of possible actions, legal and otherwise, will be closely examined by the MEC and we will have further information for you as a result of that examination.

The restoration of the pension plans in the manner suggested by Mr. Duprey is simply not currently legally possible. The result he suggests could only be achieved with the passage of a new law by Congress, and that is another avenue the MEC has and will continue to consider.