UAL to eliminate 1,000 jobs
 

United Airlines Eliminating 1,000 Jobs
Wednesday June 14, 1:21 pm ET
By Dave Carpenter, AP Business Writer
United Airlines Eliminating 1,000 Salaried and Management Jobs

CHICAGO (AP) -- United Airlines will eliminate at least 1,000 salaried and management jobs by the end of the year as part of its efforts to reduce costs, CEO Glenn Tilton said Wednesday.

The employees to be laid off from the nation's second-largest airline represent about 11 percent of its 9,400 salaried workers and nearly 2 percent of the company's work force of approximately 57,000.

United, a unit of UAL Corp., acknowledged last month that its costs were too high, even after the completion early this year of its three-year bankruptcy restructuring. It set a target of $400 million in additional cost reductions but had not cited the number of salaried and management jobs it plans to cut.

Tilton told analysts in New York that the job cuts are part of a $100 million reduction of general and administrative overhead expenses. In addition, he said, the Elk Grove Village, Ill.-based company is reducing purchase services by $200 million and cutting advertising and marketing costs by $60 million, among other moves.

"We're going to reduce our costs further, we're going to take full advantage of the network that we have preserved to optimize our revenue, and we are going to deliver to our customers a consistently superior and consistently improving customer experience," Tilton said at the Merrill Lynch Global Transportation Conference.

Soaring oil costs have continued to hurt the bottom line for United and other carriers, and Tilton said the airline is refining its route schedule accordingly, although he did not specify flights to be dropped.

"Said simply, some long-haul routes that worked at $50 a barrel don't fly at $65 a barrel," he said. "We'll continue to redeploy assets to other opportunities, such as the recently announced Washington-Kuwait route, which we'll initiate in the fall."

Tilton also said United's second-quarter cost numbers are somewhat better than the guidance it gave during a May 8 conference call. Costs per available seat mile, excluding fuel and special charges, are 7.52 cents, which he called competitive. Cash flow is "very strong" and revenue performance is competitive, he said, without giving specifics.

United shares, which had lost a third of their value since they began trading in February, rose 62 cents, or 2.3 percent, to $27.65 in afternoon trading on the New York Stock Exchange.

http://biz.yahoo.com/ap/060614/unite...cuts.html?.v=2

It's amazing to me that an airline can have more managers than pilots. Delta's no different.

Same airline... different paint job.

Okay, once again. . .

I have a serious issue with companys firing / laying off people to reduce costs. Labor costs are not the issue.

Flying people for dirty cheap is the issue. Raise the prices, and make people pay the correct wage to fly. Rediculous.

all this after there expecting a pilot shortage during the busy summer months? idiots

That is a ridiculous statement. I don't know how old you are, but I can remember when I was a kid in the seventies and flying was a big fu$%ing deal. People dressed up nice and planned trips months in advance. It was the tail end of a great era. That era, however, meant that flying was a luxury and one that didn't happen often. Because people didn't fly as often, there wasn't a demand for as many pilots.
Now that you can get a plane ticket for cheaper than a bus pass, more people fly. More people flying means more pilot positions. Without cheap tickets, not as many people fly......catch my drift?

I dig your link in your signature. Well said. Perhaps this young generation of pilots can honestly get together and either make ALPA stronger, or create a new union with a much more intelligent process for getting the dignity of this job back? NATCA is facing the same problems. We are being forced to just flop over and take it in the rear by way of the FAA.

I'm 21, 22 next month, and I too remember dressing up nice as a child to go on an "airplane trip." I get disgusted walking through airports these days. Cut-off t-shirts, dirty jean shorts. . . christ people, put on some real cloths for once in a while. You're not in your trailor.

You never said why you think my post was ridiculous, but that's fine.

You stated the simple fact that plane tickets are cheaper than bus passes. Here lies the problem. This is an airplane, not a damn greyhound bus. Agree?

Yes, cheaper tickets, more planes, more pilots, working at a MUCH lower wage than what they should be making. Agreed?

No FO should be making less than the poverty level, I don't give a rats ass if it's because they are a first year FO or not. Unfortunately that is the environment we find ourselves in. I'm not asking to make 150k a year, but it would be nice to be able to support a family (my wife) when you move from CFIing to FO on a RJ, 40k a year for the first year is reasonable to me, so much more than 20k at some regionals.

yours is a ridiculous statement.

yea more pilot positions with payscales like yours. could you even support a family with your pay.

if oil continues to rise will you take a pay cut so that the customer doesn't have to pay more.

more people are flying now then before 9-11, but I'm sure your happy with $35 hour payscales.

Exactly.

If the customer can not afford the fare, then that is their problem, not the employees. People are going to fly no matter what we charge them, there is no sense in reducing the fare to the point where it is cheaper than taking a greyhound bus across country. That is ridiculous.

If you raise the ticket prices, less people will fly. PERIOD.

Why? Because they can't afford to do it in the first place?

So since they can't afford to fly, we as employees should suffer? Please.

If prices are raised, we are not going to lose even 10% of the flying population. Your fear of people all of a sudden, no longer flying, is ridiculous. I'm not saying raise prices significantly in one solid swipe. But a gradual increase in prices is what will save the legacy airlines. Yes it'll hurt the customer, but it makes no economical sense to keep lowering prices and firing employees in the hope to increase the bottom line.

You can't lower prices, inturn getting less of a profit, and firing employees, in hopes of increasing your YTD profit. It doesn't work that way.

If people can not afford to fly, they don't fly. The flying population will adjust to increased prices. They have certainly adjusted to increased gas prices, I still drive past gas stations and see a bunch of middle class wannabe upper class individuals with their SUVs filling up when gas is >$2.90 a gallon. People in this country are still going to pay for gas if it reachs $3.50 a gallon, trust me. And sure enough, if the Airlines got some balls, and actually WANTED to make money, they could increase ticket prices and people would still fly. Yes the shock the flying public would have to deal with after the press releases come out would last 2 weeks or so, ticket purchases would drop 2-5% for those two weeks, and after that. . . people would realize that they still have to fly if they want to get from ATL - ORD in less than 4 hours.

So sure, if we raise prices, less people will fly. . . period.

You lose that 5% of the population that cant afford to fly, and you turn a profit on everyone else, and the 3% of the 5% that still think they can afford to fly.

What about swa? they have cheap tickets. Are their pilots underpaid? lol. You guys are wrong

Labor market supply and demand forces.
 

End of discussion.

Plenty of "qualified" labor out there ready willing and able to work for current wage levels. Until that changes, wages will stay the same in an semi unregulated labor market.

You or I may not be willing to work for $20/hr, or even think it's right, but there are plenty of "qualified" people that are.

I'm afraid it's a simple as that.

Can I finally get some numbers??
 

Ok, theres something I've been wondering for a long time now. When it comes to raising ticket prices, exactly how much are we talking about? Just to make things easy and to give me a better idea, lets do it based on the following:

I recently booked a round trip, non-stop flight between EWR and PHX on Continental. Since PHX is so freaking hot, summer could be considered the "off season", and I booked the ticket exactly 2 months in advance. In both directions I'm taking the first flight of the day (approx 7am), and in both directions the aircraft is a Boeing 737, either a -700 or an-800.
Continental Airlines charged me $306 + taxes/fees. How much "should" they have charged me???

My theory has always been that the actual increase in the price for a ticket would not even have to be all that much. That 737-800 carries about 160 people, so if each person paid only $20 more, that would be an additional $3200 in revenue for the round trip (assuming each pax books a round trip ticket), or $1600 in each direction.


On a side note, while it's terrible for anyone to loose a job, at least it's nice to finally see managment being forced to take it in the @$$ instead of just pilots and other "lowly labor".

My airline claims that for every dollar increase in oil it costs them $40 million more in fuel a year. They carry over 50 million passengers a year so that would be about a $1 dollar increase per ticket per $1 increase in oil.

that's very primative math.

you know, i'm not sure that the number of people that fly would decrease dramatically. It definately would decrease, but by how much is the question.

Gas prices have been increasing more and more, but are people driving less? Some, but most people drive the same amount, and look how well the oil companys are doing because of it.

The employees can work for free and the airlines would still lose money by trying to undercut each other.

More people flying does mean more jobs, but quality and quantity need to be properly balanced.

Welcome to the forum.

True, and honestly, a lot of us will have no choice but to work for $20/hr as a junior FO. Just ridiculous that that is how it is. I'll suck it up like so many before me, but I will be working hard to see that it changes for those that follow behind me. Which is something that I can't quite say about the current pilot work force. The "I got mine, and you'll have to do it just like I did" mentality just doesnt sit well for me. We need to band together to help EVERYONE out.

In regards to SWA, they minimize their cost anyway they can, since day one. I praise them for that. SWA is a great airline, for what they provide (or lack there-of) and I certainly hope they continue to benefit.

I'm no 150 IQ type person when it comes to the Airline industry, I've just grown up around it. These subjects are simple economics to me. As someone's previous example, a $20 increase in ticket prices are reasonable, and would increase money coming into the company . Whatever company it may be. All the company has to say is it is due to raising fuel costs, and blame the government. It works for every other sector, would work just fine for the airline industry. Who knows, maybe then our government will get off of their ass and actually do something about OPEC and put more time and research into other fuels so that the aviation industry can utilize more of the raw oil for production of avgas and jeta, etc.

I'll let all of you guys discuss this situation further. I'm going to go back to flying a 172 for hours towards my PPL, and continue upward in the dispense of money. Once I get on with a regional and I see the day to day workings first hand, then perhaps my opinion will change, but I doubt it.

Thanks guys. Ok, so then I'm not that far off in estimating that the actual increase in ticket prices would be pretty minimal. In fact, I've even argued on this forum that the required increase in ticket prices would probably be barely noticable by frequent fliers, and probably unnoticable by infrequent fliers. As I've argued earlier, just a relatively benign increase per ticket would generate alot of additional income when multiplied over all the passengers carried.

Looking back on my origional question, can anyone give an opinion as to how much I "should" have been charged for that EWR-PHX round trip?

I'm sure you could find a rate online from say, 10 years ago. That's how much you should of paid :)

I'd venture a guess of close to $800-900.

Can't answer for PHX, but I lived in Wichita for a few years in the mid-90's and remember paying $350-375 for tickets a few times while there. I just looked up the same fare ICT-LGA and total is $303. Ridiculous given today's fuel costs. So my answer would be late 1990's prices adjusted for inflation and an added fuel surcharge.