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Squawks & HeadlinesUnited downsizing - will cut 1,300 Houston jobs, IAH-AKL dead, no 787 in Houston

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United downsizing - will cut 1,300 Houston jobs, IAH-AKL dead, no 787 in Houston

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Buyouts, transfers or pink slips oh my! I still don't understand how LUVs Latin America expansion has anything to do with UA's Auckland route :( bye bye 787 (www.chron.com) More...

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dbaker
Daniel Baker 22
It is just misdirection and avoiding admission of the reality of mergers. UAL knew they'd lose the HOU debate and the layoffs/787/etc were happening regardless; this is just a great opportunity to play the victim.

Obviously, flights between Latin America and Houston Hobby (in 2015) have nothing to do with next year's previously scheduled launch of 787 service between IAH and AKL. UAL had likely decided long ago that they weren't going to be operating this route; notably it was never in the schedules or available for sale, unlike the 787 service of DEN-NRT.
flyCLE
Roger McHugh 18
LOL they never were going to fly IAH-AKL on the 787...smoke and mirrors and the blame game. It was a fake route to make Houston feel good despite the HQ moving to Chicago and the inevitable layoffs. This plan was in action a long time ago.
bishops90
Brian Bishop 16
So UA is planning on laying people off YEARS before the Hobby expansion and competition on a handful of routes? And the NZ route thing has what exactly to do with anything but their own business model? Sounds like an obvious attempt to blame somebody else for what they were gonna do anyway since the merger. That's pretty shallow water - which makes it very easy to see right through.
chiphermes
Chip Hermes 10
You're right and I don't know why they're playing this game. They can't possibly thing we're stupid enough to fall for this.

Everyone knew that this was the entire point of the merger from day one.
preacher1
preacher1 5
Sad part is, most of us that followed it knew it, but we apparently are in the minority as it is newsworthy to some folks and a complete surprise. They(UA mgt.) are probably thinking it will go largely ignored or a little rhetoric for a couple of days so a politician will look good and then die down.
homburge
homburge 7
Chip, I actually think UA's management DOES believe its customers are stupid.

Tilson and his followers have got to rank among the worst of US managers who have no clue as to their own business or how to run it. Start with pricing for example -- these clowns can't price their own product properly, not that it has much in the way of "value proposition" anyway... They have forgotten the basic model of business that customers pay for value and profits flow from that.

I basically am done with flying on UA for reasons that I am sure every flyer in this community can understand and probably articulate themselves; even if it means buying a more expensive ticket or a longer routing: at least I don't have to put up with UA anymore.
preacher1
preacher1 5
You know, it just seems that United has been in the toilet for years as far as customer service and unable to do well financially, for whatever reason, but you have to lay most of that at the feet of management. When you are at the top, you either get the crap or the glory for whatever happens. That being said, it seemed like, or at least the impression was given, that CO was taking them over and would put things in place to cure all those ills. The first shock was the HQ moving to Chicago and with that, it seems that the United folks, and their losing ways, have become the dominant force in this merger. If that be the case, then what was once a sucessful looking merger and good for the industry, will just land us with another legacy in Bankruptcy somewhere down the line. IMHO
slgordon3
slgordon3 2
Very interesting comment Preacher.. i'm starting to believe that the legacy carries are simply unable to consistently make a profit, as some people in the financial world have been saying for years. Especially in this era of discount airlines like WN and big nationalized airlines handling so much of the international traffic to US airports. It's a sad thought for someone like me, who deep down inside wants to root for the mainline US carriers, Boeing, etc.
preacher1
preacher1 3
What gets me about the whole thing, DAL and CO by itself were doing pretty decent. AMR will come out strong if left alone and even US Air is limping along bit by bit, but with very few transfers out of Houston on the corp move, It just left a bunch in charge that were already in the loser category. Even a losing side in a merger generally gets something minor so as not to feel left out but in this case it seems like the UAL folks got the lions share, hence not much change and a further downhill slide.Again,IMHO
slgordon3
slgordon3 2
Smart points again. In a merger (or takeover if you will) involving two big old airlines, that both have big hubs in the central time zone, there's going to be redundancies that get the ax. It seems that civic leaders in places like Houston are naive to welcome the new merged company with open arms; but on some level i can't blame the management for making what is, at least to them, the right business move.

Speaking of US Air, they are (somehow) the big dog in my town. They've really had to make the shift to a discount airline--they cannot compete in the same way as the Big 3 because of economies of scale. It's sorta sad to see what was once a decent airline turn into a cheapo one. Customers have extremely high dissatisfaction levels, but hey i see lots of full planes because the price is right. Even with their international service, which is very bare bones (their A330s are nicer, but man their int'l 767s and 757s have seen better days), they do really well with loads cause it's so cheap. Perhaps this is the direction all the US airlines are going?
bishops90
Brian Bishop 3
In my experience AWE has had crappy customer service for years. They are about my last resort.
slgordon3
slgordon3 1
No argument there. Back, say, 15 years ago i felt like they were decent, but over the past 10 years things have really gone downhill, just based on my own experience with them.
mhlansdell00
Mark Lansdell 1
Y'all must be younguns. At one time Eastern and American were the big domestic dogs and Allegheny which later became U.S. Airlines was a feeder that carried the short hauls with Mohawk. Back then they were known as "Agony Airlines" and after the became U.S. Airlines were AKA "Usless Air" They have always been a cattle car operation and have flirted with bankruptcy numerous times. In the 60s you didn't buy a ticket with them you took a chance. They have never had a top drawer reputation. The look good now because all the others have come down to their level.
preacher1
preacher1 1
I ain't that young Mark.LOL. I can remember most of that but you are correct in talking that it was a whole 'nuther world back then and the others have kinda came down to that level.
mhlansdell00
Mark Lansdell 2
I wasn't taking issue with you, Capt. I was addressing the comments made by slgordon3. The industry has never completely adapted to deregulation when their routs were little fiefdoms and chattel. People Express got the discount operations off the ground and SWA is carrying the ball now and doing a good job. This latest nonsense of charging extra for the isle and window seats is an invitation to the Government to step in and NO BODY wants that. I expect SWA to lead the way on that issue like they have on bag charges.
slgordon3
slgordon3 1
I think the "youngun" observation is correct.. i had no idea that US Air had such a long and colorful history of being terrible. I started flying with them frequently in the later part of the 90s and back then i did feel that they were decent and adequate (not great but not terrible); but now i feel like they are atrocious, and could see it going downhill. When i read about how UA's service is rated at the bottom my reaction is "huh? they are head and shoulders above AWE!" Hey, thanks for explaining the history of it, definitely interesting for me.
DaveLloyd
DaveLloyd 1
I think you're exactly right! UAL is the crapper of the airline industry. They deserve to go down!
jsjamieson33
John Jamieson 0
United is being run by CO management, It was called a merger but seems now like it was a buyout for the name.
waderoberts
wade roberts 2
You're correct, from my understanding: CO bought UA. The CEO is from CO. Seems that the culture, though, is UA through and through. I'll never comprehend why they abandoned the CO identity (CO scored reasonably well in customer satisfaction, while UA historically has been in the toilet. Maybe because UA is a more familiar brand around the U.S. and the world? If that was the case, I still don't understand it. It would be like Ford deciding, "Hey! Edsel has a high recognition rate. Let's name our new model 'Edsel'!"
preacher1
preacher1 1
abnd they did and look what happened, toilet cit.LOL
preacher1
preacher1 1
The CEO is from CO but I don't know how many of his people came with him out of Houston, but I doubt it was enough to overcome what they found in Chicago. I can agree on the name recognition and in that regard CO has had a checkered past. I can remember when it used to be Hq in Denver and while all the advertising was "the bird with the gold tail" on the street it was
the "bird with the brass a%^". Times do change.
jsjamieson33
John Jamieson 0
Its a CO colture. And I seem to be on the other end where my CO experiences are bad and my United flights are fine . Through after the merger I now try to avoid Houston or Liberty based on my interactions, I also book Star Alliance for international, International Carriers coach products beat some domestic first offerings. If United goes the way of the Edsel, then I'm glad I'm working on my private pilot.
waderoberts
wade roberts 2
John,
Best of luck. It's hard to fly commercial after you get your certificate, particularly if you get your own aircraft, even a C172. I can make it from Houston-Chicago in my C177B in about 6 flight hours (not counting one stop for refueling). UA flies from IAH to ORD in about 3 hours. But figure in early airport arrival (still a recommended 2 hours before flight), gate-to-baggage claim, waiting on baggage, etc., and the total times start to get pretty close. Counting taxi, climb, cruise and dsscent, I burn about 9.5 gph. Figure out avgas at $5.50/gal, and I'm looking at $313.50. No TSA, no cattle-chute lines. Once you start to fly, it's difficult to take being flown.
conortodd
conortodd 1
What about fixed costs on your Cardinal? Insurance, maintenance reserve, hangaring, etc.? Airlines are still cheaper by a good margin once you factor in all the costs of your personal plane, unless your time is very expensive. The value of personal flying can't be talked about in purely monetary terms; you have to factor in the joy of doing it on your own, too.
waderoberts
wade roberts 1
That's all entirely true, and I guess I was taking the enjoyment factor for granted (and it's hard to assign a dollar value to that). I do know that arrive at my destination in a far better mood after flying instead of being flown commercially. My hangar rent could be more reasonable, but I prefer to base at a field 10 minutes from my house. So far, maintenance, including the annuals, have been what you'd generally spend maintaining a new car and returning to the dealer for suggested service. The insurance is an interesting thing: I carry pretty much the maximum coverage for a single-engine land aircraft, insure the aircraft for within breathing distance of six figures, and my annual premium is last than what I pay for my car.
preacher1
preacher1 1
If you say so, but if they are, something sure changed or they had a heck of a lot of people fooled while they were in Houston
WyomingCowboy
J C Hancock 1
Hey folks....you might be interested to know....there is no more UA. It is a name only. Everything is run by CAL management people, from the top down.....so anything you see happening is of Continental Airlines origination. Flight attendants still call it Continental on the PA as do some pilots. Employees are even called CO-Workers, obviously for Continental. Don't believe it?? Check out any of the "NEW" United's emails and letters to co-workers. Yup! No more United.....just a name. The culture is gone! PERIOD! Check out the CEO, Jeffery A. Smisek. United was at one time a great airline. Continental was a great airline too....but together, nada!
chiphermes
Chip Hermes 14
I'm flying to Latin America next week on United out of IAH....despite a >21 day advance purchase, the fare was $996 for the three hour flight. United is the only way to get there. If I had a monopoly like that, I'd do whatever I could to keep it, too!

Keep IAH strong? Give me a break.
bishops90
Brian Bishop 0
Good friend of mine is in Honduras now. Same story.
barsotti
barsotti 4
Who runs that airline? Just shows the incompetence of the executive management in my view ...
lionudakis
well said ! That's what's coming
preacher1
preacher1 3
Well, you have 2 major aiports in DC, Dallas and Chicago, not to mention NYC and the general LAX area. Why would a metro the size of Houston be any different?
acmi
acmi 3
CO got their South-Central American rites from the old Texas International Air route authorities. CO flew them at a reasonable price if not an inconsistant service level...but that is the way these places operate.
Now UA is just trying to grab $ out of the deal. Screw them...fly TACA/LAN/COPA and let UA starve.
snoopyloopy
Marven Norman 2
Umm, there's only one real international airport here in Los Angeles GMA and that's LAX. I'm sure a couple of international flights land at the other airports around here once a season, but the lion's share of international traffic is through LAX.
kenish
kenish 1
Although I understand your point, SNA has flights to SDC, MEX, YVR, and YYC. They're really trying to get more international routes. Unfortunately ACA dropped SNA-YYZ last year; not a huge surprise since they never advertised in either the LA or Toronto markets.
houtxpilot
houtxpilot 0
All of these cities are different though because you have a distinctive airport in each of these cities that dominate the international markets. In NY, it's JFK and EWR. DFW is the primary international gateway in Dallas and IAD is the international gateway in DC.
preacher1
preacher1 3
Ya'll are both correct but as SWA goes, I look to see the domestic side beefed up over there and other carriers start coming in there with a bigger prescence as well. The planes will go where the people want to
cheshire
Cal Keegan 5
The Southwest thing is a done deal and United's ex pos facto posturing is transparent, spiteful, and counterproductive to their interests.

I think politically it's really valuable to recognize when you've lost and to change your strategy, because you just look stupid trying to stop something that can no longer be stopped.

Start filings to provide service from HOU, jack with Southwest at the Latin America end, stuff like that.

The dueling experts diametrically opposed findings were mildly amusing as well.
mhlansdell00
Mark Lansdell 1
Cal, I think your right. Every market that SWA has entered they have excelled at. American is doing Central America out of MIA. It's the same flying time as most domestic flights from Houston to Costa Rica. The next stop after that is South America. I think SWA can compete with an advantage over AAL and UAL in that market. The only problem I see is from an ops standpoint, Central America is a cul de sac operation. There is no where to go from there other than back to somewhere on the Gulf Coast and routes go best in circles.
mduell
Mark Duell 2
IAH-LOS is stil supposed to be 787, downgauging from 777.
redmdz
Mike Ziemann 2
UAL has never, ever, taken responsibility for their own bad business decisions. They constantly have someone else to blame for any unprofitability, service cut, furloughs, etc... They just found a scapegoat in Southwest this time. The real travesty is that this is EXACTLY what happens every time two airlines "merge". The airline trumps up public/government support for the merger by boasting the "increased service" that the merger will bring, but shortly thereafter the incorporated airline (in this case Continental) starts getting its old hub gutted. Just look at STL after American bought TWA, or MEM after Delta bought NWA, as two examples. Apparently, however, most people seem to drink the koolaid that the airline serves.
gradypilot
UAL job cuts were going to come anyway because they just recently admitted they had been running many unprofitable routes out of IAH....the Hobby decision just gave them an excuse to blame someone else rather than their own poor management. Sad thing is, many UAL employees I have spoken to believe the corporate line....but those are the union guys on the line.
silentworld
Where is Braniff International? I want it back in business! I hope American Airlines and United go out of business!
mhlansdell00
Mark Lansdell 2
Just curious, what equipment will they, SWA be using to "Latin America" The 73 has been their back bone for a lot of years and it solved a lot of problems for them. I can't imagine them flying anything other than the same old workhorse
preacher1
preacher1 1
It would almost have to be since DAL took or is taking all the AirTran stuff. They seem to have the attitude of "if it ain't broke, don't fix it" and the 73 has worked well for them as you say, plus the destinations they are talking about aren't going to require anything with ultra long range. All their newer stuff is ETOPS certified as standard anyway so that won't be a problem time they start the new service.
mhlansdell00
Mark Lansdell 1
I spent some time in Ops and maintenance. It sure make things less complicated when a machine breaks and you can replace it with the same thing. Parts are easier to manage, maintenance is quicker and more routine, crews are working the same equipment for the most part and the doors match up to the jetways. Need I go on? There is something to be said for consistency and continuity. If you have a plane that's broken and one on the ground departing in 2 hours, ops can get the first swapped out and in the air and still have 2 hours to replace the one you borrowed when the only difference is the tail number.
conortodd
conortodd 1
Not if you're conducting ETOPS, from what I understand of AC120-42.
preacher1
preacher1 1
I'll have to dig that up and read the fine print, but I was a thinkin' that if it was the same equipment and certified, that there shouldn't be a problem. That said, and in the vein that Mark is talking about, not all there equipment is ETOPS certified. Seems like they just started taking delivery on some 738's a few weeks ago and those would be among their first certified, and I think the question was asked then as to why ETOPS and they had International service of some kind on their mind then.
bkz6365
Robert Zinser 1
Sour grapes for sure.
owen44
owen thorsen 1
Can't wait for the message from UAL telling me this is actually for the benefit of the frequent traveler. Like they did when 1K status went from 100 to 120 segments. I'm still so thrilled with that benefit that I couldn't take anohter one so soon.
wbannan
My 4 year old nephew throws tantrums when he doesnt get his way either... UA just using this as excuse for layoffs... nobody buys the fact that AUK is cancelled because WN will fly to Mexico or Latin America in 3 years.
tweatherred
Sometimes I miss the days of the CAB. I used to have several tickets in my pocket to places I traveled routinely and could use them on any airlines that went there. Maybe it would cost more, I doubt it, but there was a lot to be said for orderly and available transportation. I bet those 1300 employees dismissed because UA doesn't want competition would agree.
dmurphyairman
Dan Murphy 1
UAL has always sucked.Now they are just spreading it around!
aat0783
Andrew Taylor 1
Things definitely have been heating up pretty quickly! I wouldn't be surprised to see a few more announcements in the near future.
kayjay58
Dear Southwest employees,
Be careful about your celebrating your victory at IAH, one of your competitors was notoriously famous for such act of overt celebration and now stands at the brink of bankruptcy. Sometimes what appears to be favorable turns out to be not so favorable.
njnut
Todd Shaw 1
United is reacting the same way my kids do when I say "no, you can not have a cookie"
hwearsch
Henry Wearsch 1
When Continental acquired/merged with the mismanaged for years and miriads of obsolete legacy aircraft changing the identity to United, Jeff Smisek has gotten his wish an achieved his goal of being CEO to the "largest" airline. Unfortunately for all, Smisek doesn't hold a candle to Gordon Bethune who brought Continental back from its previous ashes.

As usual, the employees and the customers bear the brunt of this poorly thought out and planned "merger".
mikeyates
mikeyates 0
Smisek is a child.

houtxpilot
houtxpilot -1
There is no such thing as competing fairly when SWA is concerned. Their "good ole boy" club down in Texas controls their interests for them. They can't sustain their business model with their high wages, high fuel costs and their high CASM.
waderoberts
wade roberts 1
Um . . . did you happen to see the recent Texas Monthly article about Southwest? Are you aware of WN's really smart fuel hedging? Efficiencies: only one model of aircraft; industry-fastest turn-around times? Safety record? Employee morale? On-time arrival rate? Customer-satisfaction rating? Profits vs. the rest of the industry? Just wondering . . . .
jsjamieson33
John Jamieson 1
I thought that Southwest fuel contracts are not as strong as they use to be, hence higher fares.
preacher1
preacher1 1
They are stronger than the others and the bottom line to the whole thing is that they(management) and all involved, have taken it upon themselves to follow Herb's example and run and Airline & business, rather than just see what they could get out of it for themselves.IMHO
preacher1
preacher1 0
They can talk about the Texas "good ole boy" club if they want but they just jealous cause they ain't got one. To boot, look at Interstate 40 and the States that it runs through and those below. They call it the South and Southwest. KATL / KDFW / Boeing / Grummann / Research Triangle
and a who-o-o-o-le bunch more.And believe it or not, we have a few unions down here too. LOL
jcisuclones
IAH is United's largest hub, so count on the 787 being in Houston.
slgordon3
slgordon3 -2
I'm really surprised at how critical people are of United management in this squawk, when just the other day in the thread about UA pilots sleeping in RVs at LAX the United executives were roundly praised. Just sayin'. As soon as UA and CO merged it was almost a forgone conclusion that IAH and CLE would be on the chopping block, in my opinion.

The RVs at LAX squawk is here: http://flightaware.com/squawks/view/1/7_days/popular/26822/United_Airlines_Pilots_Invite_Execs_to_Tour_Their_LAX_Ghetto
bishops90
Brian Bishop 1
Just callin' em like I see 'em. Completely different topic. The other thread was the typical Union blather aboit the poor mistreated pilots at ghettoville or whatevee they call it. This thread is about something completey different. This is more of a PR issue because UA is trying to make political points that nobody is buying. Hence the criticism.
slgordon3
slgordon3 1
Hey that's fair. I didn't mean to single anyone out, i was just going on the overall tone of the comments.
silentworld
not only the UA. rest of airline industries Worldwide should fire all islam/muslim religious workers.
silentworld
BLAME OBAMA! BLAME BUSH BLAME MIDDLE EAST islam religious people. UNITED Airlines should FIRE all islam/muslim religious workers NOW.
preacher1
preacher1 1
Dang Son, who pee'd in your post toasties and how did they get into this string?????
aat0783
Andrew Taylor -1
(Duplicate Squawk Submitted)

United Announces 1,300 Pending Layoffs

Following the recent coup by Southwest Airlines' approval for international flights, United has announced it plans to layoff 1,300 Houston employees. United has also cancelled their plans for service between Houston, Texas and Auckland, New Zealand.

http://blog.chron.com/houstonpolitics/2012/05/united-to-cut-houston-jobs/
lionudakis
Whether all planned or not, This layoff announcement sounds like the fallout from a sore looser. Were going to have to lay all these people off because of what those people did.
preacher1
preacher1 1
I'm like some of the others here. I think it was planned in some form or fashion and this was just a good excuse to get it out there and have WN and City of Houston as scapegoats. That said. Would the expansion have been so favorable if they had kept the HQ in Houston????????????
mhlansdell00
Mark Lansdell 1
Yup. I'm taking my ball and I'm going home.
bkz6365
Robert Zinser 1
Sour grapes for sure!