UA to Cut 950 Pilots

[Mike Scott]

CHICAGO (WLS) -- There's more fallout from rising fuel prices for Chicago-based United Airlines.
The company is cutting jobs for almost 1,000 pilots. Most of those jobs will be gone by the end of the summer.
Pilots are feeling it Monday, the impact of sweeping painful cuts at United Airlines.
The Elk Grove-based United announced Monday it will eliminate about 950 pilot jobs beginning at the end of the summer.
Story continues belowAdvertisementThe nation's second-largest carrier intends to send furlough notices to about 1,450 pilots with the least seniority.
In a statement, United says, "As we reduce the size of our fleet and take actions companywide to enable United to compete in an environment of record fuel prices, we must take the difficult, but necessary step to reduce the number of people we have to run our business; and today, we notified our pilots about expected furloughs."
After years of agreeing to deep concessions when United was in bankruptcy, the Airline Pilots Association says the shrinkage can't be blamed entirely on oil prices, but rather, the lack of a business plan.
"For a lot of pilots and their families, it's a very disruptive and disheartening time. And it's unfortunate that the company's business plan or lack thereof has led to this," said Dave Kelly, APA.
The layoffs announced Monday are part of a downsizing plan announced a few weeks ago. United plans to ground 100 gas-guzzling planes over the next 18 months, about 22 percent of its aircraft fleet.
United is also cutting as many as 1,600 salaried and management jobs. Many of those job cuts will be at its large operations center in Elk Grove Township.
Also certain to be impacted are flight attendants, mechanics and other union positions. But those cuts have not been announced yet. Joe Schweiterman, aviation expert at DePaul University, says shrinking is the only option for United right now, but even this may not go far enough.
"The numbers here are staggering and this may not be the end yet. There's certainly flight attendant workforce issues. The price of oil remains strong, which may mean more management jobs. Clearly, Wall Street's making a statement it wants bold action and it means a smaller airline," said Schweiterman.
Schweiterman says to expect other airlines to make similar cuts, including Chicago's other O'Hare hub airline, American.
United pilots seemed reticent to comment on the situation for fear of their jobs. Even with seven years at United, one pilot said he feels vulnerable he could be cut.
But the APA says after making steep concessions during the bankruptcy years, these cuts are not being shared enough by management.
"I think the time has come for this airline's management to show leadership and to demonstrate that they're willing to share in the pain as much as the pilots and other employees," said Kelly.
Pilots at other airlines are anticipating cuts, too, indicated by a billboard on I-294 near O'Hare paid for by the union representing American Airlines' pilots. With more than 250,000 late and cancelled flights last year, pilots at American are also critical of their management.
United spokeswoman Megan McCarthy says the initial furlough notices will go out in mid-July and take effect in September. She says the cuts will continue into next year.

PS: You can probably add three times as many F/A's that will be cut also

[Andrew M]

Sad times indeed Mike!

I assume you'll be safe from these cuts as your higher up the ranks ?

Not to turn this into an oil debate, but oil still around the $135 mark, no matter what seems to happen or be talked about the price doesn't drop.

We all need oil back down below $100 ASAP

[Greg McDonald]

We all need oil back down below $100 ASAP

Doubt that will ever happen again unfortunately.

[Andrew M]

Doubt that will ever happen again unfortunately.

Depends, we are not at Peak Oil in my opinion

Too much money being thrown around the oil markets, and out of the financial and other areas.

The US economy is not helping

[Nigel C]

Nor is China's unwillingness to slow its economy.
Just a couple of days ago they agreed to pay up to 96.5% more for iron ore from Rio Tinto, so they obviously will try to get their hands on whatever resources they need at almost any cost. This doesn't bode well for the short to medium term price of crude.

[Ben W]

Doubt that will ever happen again unfortunately.

I wouldn't be so sure about that. It may not happen in the very near future but I think it will happen sooner than most think. The biggest factor on world oil prices is the weak US dollar. A stronger dollar translates to lower oil prices. The other factor that may help lower oil prices is if the US starts drilling for massive amount of oil they have here on their own soil. I think the governments 'weaker dollar" policy, and their refusal to drill for the oil we already have (estimated to be at least a 100 year supply) is ridiculous considering what we're currently paying ($4.20 a gallon when I filled up yesterday). Public pressure is already showing with Bush and McCain wanting to open offshore drilling by state choice again....but we'll see if that happens!

The other ridiculous government mandate over here is the Ethanol one- let's take the main ingredient in over 60% of the nations food supply and mandate it's use as fuel.....which then drives the price of wheat and soybeans through the roof because there are more corn crops....which accounts for the 40% of food ingredients. Crazy!!!!!

Those two subjects account for the majority of the so-called recession over here. Higher food prices and higher fuel prices have a huge trickle down impact on everything and everyone- the airline industry being one of the hardest hit unfortunately.

Cheers,

Ben

[Greg McDonald]

$4.20 a gallon when I filled up yesterday

Wow...that's AUD96.5 cpl. I'd love to see that price gain but that DEFINITELY won't happen.:(

[Ben W]

Wow...that's AUD96.5 cpl. I'd love to see that price gain but that DEFINITELY won't happen.:(

I work it out to $1.05 cpl. Which ever way you cut it, you guys are paying a lot more for fuel than we are. I left Australia 10 years ago and it was at .68 cpl. My Dad was saying the other day that it's at about 1.60 cpl now!

[Grant Smith]

Ben,

In some places it's cracking $1.70+ a litre...

[Rhys Xanthis]

and diesel is 1.80cpl+

[Greg McDonald]

From NEWS.COM.AU:

WORLD oil prices smashed through the $US140 a barrel barrier for the first time today after the president of OPEC predicted fresh price spikes.

Algerian Energy Minister Chakib Khelil said crude, which has already rocketed in value in the past year, could hit $US170 later this year because of the ailing US dollar and geopolitical unrest.

New York's main oil futures contract, light sweet crude for August delivery, closed up a hefty $5.29 at $139.64 a barrel, marking a record finish.

The contract had earlier struck an all-time intraday price peak of $140.39 as the market digested the OPEC president's outlook.

In London, Brent North Sea crude for August delivery jumped $US5.50 to settle at an all-time closing peak of $US139.83. Brent had earlier streaked to a record $US140.56 in frenzied intraday trading.

Prices rebounded strongly after tumbling more than $US3 yesterday in volatile trade. Spiking prices are causing inflation angst in many world capitals.

"I predict probably prices of $US150 to $US170 this (northern) summer," Mr Khelil said in an interview with the France 24 news channel.

"It (the market) will probably fall a bit towards the end of the year," he said.

The OPEC president said that a weak US dollar was the main cause behind surging oil prices. The weakened US currency has made goods priced in the dollar, like oil, cheaper for purchasers armed with stronger currencies, stoking speculative oil demand.

Mr Khelil also cited Western "threats against Iran" over its nuclear power drive as another key reason for prices spiking on world markets. Oil prices have more than doubled in the past year.

"If (the threats) increase, I think the price of oil will rise further this (nortrhern) summer as it would coincide with stronger demand for gasoline, particularly in the United States," Mr Khelil said.

Petrol demand traditionally rises in the US, the world's largest oil importer, during the summer months as Americans take to the roads on holiday.

The OPEC chief said that the Organisation of the Petroleum Exporting Countries was ready to meet any additional demand for crude in the future. OPEC produces about 40 per cent of the world's oil.

Oil prices had cooled yesterday after a US Government survey showed an unexpected rise in energy stockpiles in the US.

The US Department of Energy said that reserves of crude had risen for the first time in six weeks, by 800,000 barrels, in the week to June 20. Analysts had expected a drop of 1.1 million barrels.

"The report also showed four week average gasoline demand is 2.1 per cent down from a year ago; this goes to show more and more people are reacting to high oil prices," said Nimit Khamar of the Sucden brokerage.

[Adrian B]

Monty’s deleted comment regarding alternative fuels is spot on. Biofuels and other power alternatives need to be investigated and fast...I have personally seen advances in alternative fuels canned due to not my problem or not in my back yard mentalities.

From an aviation perspective, the time has arrived when airlines will shut down because they cannot sustain services on lean profits, or continue to sustain temporary losses. As we have seen, airlines are now looking at generating alternative revenue (i.e. non fuel related activities such as food and drink, 'services' like booking fees,) These are easy ways to raise money without additional cost, charging for what used to be free. Unfortunately, the traveling public will not like it, but I feel it is a given that the industry will go down this path. You can only cut so far without raising prices before your product starts to suffer, yet some will say that these alternative charges will harm the product anyway.

Just think about this though.

I cannot see how the cost of oil production has risen; therefore someone is getting very rich out of all of this

[Mike Scott]

Other than fuel prices the article below lays out the terms in human costs. :(
MS

CHICAGO - United Airlines pilot Todd Coomans has yet to fully recover from a painful furlough five years ago that set his airline career back several years and, along the way, also cost him his marriage.

Now the 46-year-old first officer, who returned to United just a year and a half ago, is bracing for another layoff. And this time he thinks the prospects are even worse. "I can't believe I'm going through it again," said Coomans, who now may look for work in China.

Coomans is convinced he will be among the 950 pilots that United, a unit of UAL Corp, will eliminate as part of a downsizing effort that the No. 2 U.S. carrier hopes will offset skyrocketing fuel prices.

"This is all I've done my adult life. I love flying," Coomans said. "I don't know if I can do this up and down every few years."

The last time he was furloughed, he found work at an air charter company. But the sudden job loss put such a strain on his marriage that it ended in divorce.

Coomans and his colleagues are not alone. While UAL, which plans to cut up to 1,600 jobs, is the first big airline to detail the impact of cuts on pilots, layoffs are planned at all major carriers as they try to offset record-high fuel prices.

AMR Corp's American Airlines said in May staff cuts were coming, and said on Wednesday it would shed 900 flight attendants. Continental Airlines Inc plans to cut 3,000 jobs and US Airways Group Inc plans 1,700 cuts.

Delta Air Lines Inc, which plans to merge with Northwest Airlines, said earlier this year it would eliminate 2,000 jobs. Northwest also expects job cuts.

Downsizing may be the last hope for airlines to avoid potential devastation as fuel costs threaten to negate the progress they made during years of restructuring.

Fuel costs — linked to record-high oil prices — have more than offset a series of fare hikes that led to profits in 2006 and 2007 after five years of losses. The Air Transport Association sees a $10 billion loss for airlines this year.

Clearly, it's as gloomy a time as anyone who works at a major U.S. airline can remember.

Thousands of workers — from management down to baggage handlers — face imminent jobs cuts and a terrible job market. Many airline employees will have to switch careers.

But some employees, like pilots and flight attendants, are in a particularly tight spot because their careers are so closely connected to seniority at a single airline, which dictates pay, work rules, and routes they are assigned to fly.

A further complication is that seniority does not transfer between airlines. A United pilot who takes a job at American, for example, goes to the bottom of American's seniority list.

If a furloughed pilot wants to keep flying for an airline, the options are limited, especially in the United States.

Some airlines have arrangements with regional partners to give preference to furloughed employees for open positions. Often, however, the pay is much less for a regional pilot, and those jobs also are scarce.

Regional carriers flying 70-seat aircraft, such as Republic Airways Holdings Inc, continue to see some growth.

Airline consultant Robert Mann noted hiring opportunities for pilots in the Middle East and Asia. Many of those jobs, however, are contract positions, meaning the job is not guaranteed once the contract ends.

Some pilots who are in the U.S. National Guard also may consider flying for the military, Mann said.

"So, there are options for those who had the foresight to create options," he said. "I think it's a function of what foresight you've had to create a safety net."

Anger is simmering among pilots about the prospect for unemployment after they and other work groups made steep sacrifices to help save their companies in recent years.

Unlike the last downturn — triggered in large part by the September 11, 2001, attacks — this one could have been avoided, said United Capt. Jay Happner.

He's not buying management arguments that no one could have predicted oil prices would rise to $140 a barrel. Airlines could have been better prepared, he said.

"We're very angry that it's come to this," Happner said.

Happner, 54, who believes his job is safe for now, said simply ducking a round of layoffs does not preserve a pilot's lifestyle.

For every large aircraft eliminated from the fleet, pilots who flew that plane lose status that they worked hard to achieve. Senior pilots find themselves flying smaller planes on less-desirable routes or large planes with a lower rank.

"It just cascades," he said. "It ripples throughout the whole airline

[Joe Frampton]

Ben,

In some places it's cracking $1.70+ a litre...

I win
I live in Ireland
Unleaded here right now is about €1.40 litre (AUD 2.28 litre)

The world hasn't stopped yet...