15 Years and 15 Trips...

In yesterday's Wall Street Journal (Friday, September 9, 2016), there is an Opinion piece written by Anita McBride who was the assistant to President George W. Bush back on September 11, 2001.  Ms. McBride briefly tells readers what it was like for her back on that fateful day 15 years ago, and how they were evacuated from the White House and set up make-shift offices in a building nearby where her husband worked.  What struck me most in this piece was something Ms. McBride had to say about today.  She currently works at American University and to quote "I am reminded that each new freshman class is further removed from the shock of that day and the anxiety of its aftermath.  They may have read about 9/11 in a history book, but as with other significant events in history, it's easy to lose a sense of connection to their impact without access to firsthand accounts."

I would like to know what history books are teaching those that were born after or are too young to remember the events of 9/11.  I remember that my history studies were merely learning about people, places, dates and events.  A lot of facts were memorized, and if you took an interest in one particular period or event, you could broaden your studies to include the social, economic and scientific impacts coming from that one period or event.  What was missing in those studies were first-hand accounts of thoughts and feelings for those who were witness to, either directly or indirectly, these significant events. 

What are young people learning in school about the attacks on 9/11?  I am not sure, but I hope it is more than facts and figures, or worse yet, dissections of how the United States government and military responded.  What I want young people to understand is how overwhelming it can be to be shocked into a realization that the world is never going to be the same.  Young people also need to understand the overwhelming helplessness that was felt as we watched events unfold on TV.  Young people also need to understand that we witnessed real evil that day, yet we were also witness to an unprecedented coming together of people and nations with a resolve to bring down that evil.  

First among the casualties of those attacks were the 265 passengers and crew on the four planes that were hijacked.  Immediately after the attacks, the nation's air traffic system was shut down and all flights were grounded for three days.  Employees at all of the airlines, but notably United and American, were all in shock.  The employees not only had to grieve the loss of their flying partners, but they had figure out how to get the planes back in the air and on schedule as quickly as possible.  They also had to face a new fear that there would be more hijackings.  That meant increased security, and everyone was under suspicion.  They all did it though, even though their world was never going to be the same.  

Over the years, employees at United Airlines have told me their stories of that day and the subsequent days after as they worked to get planes in the air again.  They had to set aside their own fears about their own futures and just focus on making the skies friendly again.  It is something they did well, and continue to do well.  This is something that I am grateful for, because as I watched the events unfold on TV, i not only grieved at the loss of life as it unfolded on TV, I grieved for the friends I had made over the years as a loyal customer for United Airlines.  There was nothing I could do for them on that day.

United and American Airlines have had their share of rough times since the attacks , but they bounced back and are still here when we want them.  Today there are a lot of new hires at both airlines, younger people who will not have the same perspective as their senior flying partners.  I want to use this post to say something to the new hires at United Airlines - consider yourself as very fortunate, and respect the honor you have been given to be a part of the Friendly Skies.  There is rich heritage here, and you can learn so much from your senior associates and flying partners.  Tomorrow, and on every September 11, you may notice a somberness and sense of mourning among the employees and customers that are flying on that day. That somberness you see comes from being witness to the events of 9/11 and losing people that they knew.  Respect that and give your very best when you go to work not only tomorrow, but every day.  You are the ones that need to carry on and not waste a rich heritage.  

Tomorrow I will be taking my 15th, September 11 trip.  Every September 11, I fly United Airlines to the east coast and back and will take a moment to thank the United employees and managers I come across on this trip.  For you new hires, 15 years from now you may still hear about this crazy old geezer making these trips.  Well for this old geezer, this is a way to remember and talk about those things you did not learn about in your history classes.  On September 11, 2001, the choice to fly United Airlines was taken away from me, but on September 11, 2002, I made the conscious decision to fly United Airlines, and have done so every September 11 since then.  These flights are my way of saying thank you for letting me be a part of the Friendly Skies.  

Tomorrow's trip has me leaving LAX for SFO at 6:20 in the morning.  I'll connect with a 10:20 AM flight from SFO to EWR, and the head back to LAX on the 8:40 flight that evening (whew, that's a long day).  I will have some Starbucks cards and wrist bands to hand out as my way of saying thank you.  For any new hires, I hope I get the chance to meet you and let you know how important United's Friendly Skies are to me and your flying partners.  For my friends that I will not be able to see tomorrow, I hope the day brings some good memories to help you deal with the bad.  

Closing Postscript
My last post talked about how United's Flight Attendants were voting to ratify a joint tentative agreement that would finally bring together the three working divisions into one.  No more UA metal vs. CO metal.  Congratulations to you all as the joint contract was approved by 53% of the voting members.  You all worked very hard to get to this point, and I think your AFA leaders and negotiating committee did accomplish the goal of achieving an industry leading contract.  I have supported and stood with you in this effort, and I do not think you would have done so well without the resources of the AFA.  As the airline works to integrate your schedules take some time to get to know each other.  You are all part of something that can surpass the competition by coming together and learning from each other.  Again - Congratulations - you all deserve the very best.

Important Election Year Decision to be made...

Dear Readers -

Thank you again for all of your kind messages and support.  I apologize for not being able to update the blog more often, but I know you understand that work and life's other challenges just sometimes get in the way.  Since the last post, I have been to the Shareholders' meeting in Chicago, and I received a response to my letter to Mr. Munoz.  I will write about those in a post to come out soon. The biggest news is that a Joint Agreement has finally been worked out for United's Flight Attendants.  It is a good contract, and at this time, United AFA members are casting their "Yes" or "No" votes for contract ratification.  I know there isn't much time left to vote, but I wanted to weigh in and hopefully help some of you that have not voted to make your decision.

Joint Tentative Agreement Announced for United's Flight Attendants

It took six years, A LOT of hard work and time, but on June 24, 2016, after a marathon final two days of hammering out the last details, the Joint Negotiating Committee (JNC) for the United-AFA announced that a Joint Tentative Agreement (TA) had been reached. AFA leadership and the JNC were all committed to coming up with an industry leading contract and as details were released, it became clear that they had achieved that goal. On the "Our Contract" web site  at www.ourcontract.org, the AFA has posted a chart summarizing the key points that make this contract "Industry Leading."  You can check it out here - www.ourcontract.org/docs/ta/industrypdf.

I have read the full text of this TA, and I will admit I do not understand every detail.  However, after reading all of it, I finally feel like I can exhale.  The JNC actually did it, they worked out a contract that is far better than the agreements the three working subsidiary groups are working under, and a contract that by all appearances is better than the contracts for the Flight Attendants at Delta and American.  United's Flight Attendants now have until noon eastern time on Friday, August 12, 2016 to ratify the new contract.  

If the contract is approved, the new pay scales and work rules will go into effect in September of 2016.  United management is saying that it will take eighteen months to fully integrate the seniority lists and actually have all Flight Attendants working together.  Pre-merger United and Continental Flight Attendants have different scheduling systems and it is going to take time to update the programming and migrate the United Flight Attendants over to the system currently being used by Continental Flight Attendants.  United Flight Attendants will need to be trained for the new Boeing 787's flying as Continental metal, and Continental Flight Attendants will need to be trained to work on United's AIrbus and Boeing 747 metal.   Then there will need be joint training for the new scheduling system, and for the new Polaris® Business Class product being introduced into the fleet.  Most importantly, during this time, the three groups are going to finally have to bring down some walls, come together, and define for themselves and as a group, what it means to be a United Airlines Flight Attendant.

From what I have seen and heard, the majority of pre-merger United Flight Attendants are voting "Yes" for the contract.  It is hard to gauge how pre-merger Continental and Continental Micronesia Flight Attendants will vote, but those that are speaking out are saying to vote "No."  There remains some animosity toward the AFA by pre-merger Continental Flight Attendants, and there is a grass-roots effort underway, focused in Houston and Newark, to form a new union, the United Flight Attendants Association (UFAA).  Those leading the effort behind the UFAA are sending out the message that the AFA and its JNC have thrown the Continental Flight Attendants under the bus, so to speak, and that they can negotiate a better contract.  I have also heard that it is just an accepted position to vote "No" on the first go-around and by doing so you force management to make more concessions.  

I have been publicly standing behind United's Flight Attendants since 2004, and have made many new friends in this time.  I have been there as they were forced to make concessions in order to save the company, and I have stood with them on the picket lines as they began to speak up and say enough is enough.  I have always encouraged United's Flight Attendants to stand their ground because they deserve better.  I have also stood up to United management and challenged them on their misguided efforts to keep seeking concessions from these employees that spend the most time with the customers.  Contract negotiations were going nowhere while Mr. Smisek was running the ship.  It was not until after he resigned and Mr. Munoz stepped in that real progress was made.  

I say all of this because my experience is telling me that this is a contract that should be approved.  For my Flight Attendant friends that are reading this, if you have not yet voted, I encourage you to vote "Yes."  Here is why - economic winds are changing and airlines are facing new challenges that are affecting profitability.  All of the airlines are seeing declines in Unit Revenue, and if those declines are not reversed soon, management is going to be looking at costs.  The longer it takes to come up with any joint agreement, the greater the chance that management is going to be pressured to take back some of what they have given in this proposed TA you have in front of you now.  

The other reason to vote "Yes" now is that you have new management that has a greater vision for United Airlines.  They know how important the Flight Attendants are to the success of the company; however, they also have to answer to shareholders.  Airline stocks have taken hits this summer, and United Continental has two large shareholder groups that have taken a more active position.  So much so that they have been able to force changes to the Board of Directors.  If United's Flight Attendants do not ratify this TA now, there are shareholders that have demonstrated that they can force management to change their position.  For these shareholders, having an industry leading contract for the Flight Attendants may no longer be as important as doing what is necessary to turn the share price around.  

Most importantly, vote "Yes" now because you have something that is concrete in front of you and it cannot be changed if times get tough.  You will see bigger paychecks, be able to keep your benefits, and have industry leading work rules and protections.  You will also have the pride that once again comes with being part of something special; where three groups with rich and proud heritages have come together, and that you played a part in making sure that this new United Airlines is better than ever.

If you have any questions, go to the "Our Contract" web site where you can find a lot of information about the TA and the improvements that are coming with it.  In addition you can always contact your local AFA representatives.  Volunteers are out there now at every domicile making themselves available to answer your questions.  In addition, MEC officers are still out there conducting road shows that you can attend to ask your questions and voice your opinions.  

Your local MEC officers and volunteers, and the JNC have worked so very hard in this last year to get to this point, so when you see them, no matter how you have voted, take the time to say thank you.  In addition, you have a powerful advocate in Sara Nelson as head of the International AFA.  She has stood by you on the front lines and she is a proud and dedicated United Flight Attendant.   I first met Sara in 2008 at the UAL Shareholders' Meeting here in Los Angeles, and I have watched her work very hard for United's AFA members since that time.  I do not think you would be here now voting on this Industry Leading Contract had it not been for the AFA.  

Dear Mr. Munoz -

Dear Readers -

Below is a letter that went out to Mr. Munoz today.  I hope to see many of you at the Shareholders Meeting on Wednesday!   Have a good weekend...

------------------------------------------------------------------------------------------------------------------

June 3, 2016                            ** Via Fedex Overnight **

Mr. Oscar Munoz, President

United Continental Holdings, Inc.

233 South Wacker Drive

Chicago, Illinois  60606

RE:  Polaris ^® is nice, but….

Dear Mr. Munoz:

This letter is long overdue in going out to you.  The first order of business is to thank you for stepping up to take over for Mr. Smisek after his resignation.  The last nine months have obviously been stressful for you, and despite your health setback, you have remained committed to your vision for United Airlines.  You are to be admired and respected for making such a commitment, and sticking to it at a time when I am sure you were being advised to take more time off to recover and not risk your health.

When you took over for Mr. Smisek in September of 2015, the first thing you did was to publicly acknowledge to your employees and customers that mistakes had been made by management ever since the merger between United and Continental was completed in 2010.  Unfortunately, five years of those mistakes have led to a pretty sizable defection of premium customers to the competition, and a very noticeable decline in employee morale.  You do not know how long and hard I have been trying to get the attention of management and the United Continental Board of Directors that those mistakes were being made.  No one seemed to listen as I was saying that the merger was not going as smoothly as Mr. Smisek and his team would have wanted us to believe. 

By way of introduction and so that you know where I am coming from, I am a long-time loyal premium customer as well as a shareholder.  From the late 1990’s until the merger in 2010, I held either 1K or Premier Executive Status in the Mileage Plus program and I spent an average of $xx,xxx per year on travel for just myself through the Pass Plus program.  Since September 11, 2002 I have flown on United every September 11 to show my support for the front-line employees that still mourn the loss of their flying partners on that awful day.  When the airline entered bankruptcy, I started to hand out Starbucks gift cards to employees I encountered, because I want them to know that the customers do see how hard they work and the sacrifices they have made to keep United flying. In 2006, employees and managers for United Airlines at LAX named me their “Customer of the Year.”  I remain humbled by that honor because it is I who admires their dedication and pride in making sure the customers know how uniquely special it is to fly the Friendly Skies. 

Under Mr. Smisek’s leadership, United Airlines lost sight of customers such as myself and I no longer looked forward to my trips.  I am now down to only 4 trips per year, and spend less than one-fifth of the amount I used to spend every year.  I still pay for First Class seats, but the United First product is disappointing and I always seem to regret my decision to spend so much.  Boarding lanes at the gates, like horses being lined up at the paddock, are degrading; and now anyone with $50 can buy Premier Silver status or access to the United Clubs.  I long for the days when status had to be earned and the Red Carpet Clubs were a haven for weary road warriors.  Despite the disappointing changes, what I still look forward to is my interaction with the employees when I travel.  It is because of them that I have remained loyal to United.

Yesterday’s unveiling of Polaris ^® was exciting news.  As a customer, I look forward to the chance to try it out, and as a shareholder I hope it is what will do the trick in bringing back premium flyers lost to the competition. However, as a shareholder I am concerned by how long it is going to take for customers to actually experience Polaris ^® and the lack of news about what improvements are going to be made now to win customers back.  Most lacking is any news about substantive improvements to the domestic product, especially trans-continental flying which is important to me.  I do hope you will let shareholders in on the cost of the Polaris ^® rollout at the Annual Meeting on Wednesday (June 8, 2016). 

With the announcement yesterday, I had a sense of déjà vu as I recalled Glenn Tilton’s enthusiasm over the $350 million commitment to the “International Premium Travel Experience (IPTE).” Like with Polaris ^®, the new seats were to be industry leading and premium customers would see improvements in meal service and amenities.  The IPTE conversion for the wide-body jets started in the fall of 2007, and Mr. Tilton made this product the centerpiece of his presentation at the Annual Meeting in 2008.  At that meeting I questioned Mr. Tilton on the wisdom of committing so much to this product while he and the Board were failing to address their promise to return so much of what was given up by the employees as it struggled through bankruptcy.  I will paraphrase what I said to Mr. Tilton at that meeting when I say “Polaris ^® is nice, but I do not think it is going to put smiles on the employees’ faces.”  It was not until 2011 that the IPTE rollout was completed, and Continental management felt that it was something that was not going to fit in for their vision of the airline and IPTE was forgotten.

So much of the success of Polaris ^® is going to be dependent on the experience that is delivered by the Flight Attendants; therefore, I think it is critical that you make it a priority to come to an agreement for a joint contract for the Flight Attendants.  Flight attendants from the three operating groups, pmUA, pmCO, and pmCMI, have all had to endure too many negative changes over the last six years.  There have been furloughs and then recalls, forced cross-overs, loss of seniority, more inefficient dead-heading, non-responsive crew and hotel desks, sub-standard layover hotels, and I could go on with more. 

Mr. Munoz, if you want to be an industry-leading airline, you now have your chance by accepting an industry-leading contract for the Flight Attendants immediately.  If you want to deliver a premium experience, you need Flight Attendants that are rested, well-trained and not held back by managers that can only look at cutting costs and how big their profit sharing check will be.  You need to back the effort that calls for minimum 10-hour rest periods for the industry, and you have to give your Flight Attendants the choice to say that a 13-hour or more duty day is too long.  They also need quality uniforms that are well-designed, flattering, and convey a premium image. Senior Flight Attendants need to be honored for the years they have put in, and Junior Flight Attendants need more respect when it comes to scheduling.  They also need more mentoring by supervisors once they start flying.  I cannot think of a better way of showing your commitment to winning back the customers by announcing that United Flight Attendants will have a contract that bests the competitors and once again makes these hard-working professionals proud to be a part of the Friendly Skies. 

I will be there at the Shareholders Meeting on Wednesday and I hope there is a chance for us to meet in person.  Thank you, once again, for acknowledging that management had made mistakes and that there was a lot to make up for with employees and customers.  It was encouraging for me to hear someone at your level agree with what I had been saying ever since the merger was completed.  I just caution you not to lose sight of what you first set out to do.  There are a lot of improvements that can be made now to win back customers and accelerate United’s ascent to the top.  Keep focusing on your front-line employees; and beyond that bring back the red, white and blue United tulip; refer to the planes as Friendships and Proud Birds, and serve Starbucks coffee.  I think you would be surprised how far those little steps will take you.  Thank you for your time and attention to this long letter, it is sincerely appreciated.

Kind Regards,

 James (Jim) Anderson

Mileage Plus #HVC21479

Finding my Mojo - Part 2

For months now, I have tried to sit down to write, yet could not find the energy or drive. My day job has been kind of a nightmare, things at home are a little unsettled, and new medications have had their side effects.  All of the crap that comes up in our lives can distract us from some things we do care about, and I have learned that in order to not lose my mind altogether, I have got to make the time to focus on something I enjoy.  It is time to get my mojo back, and it is time to get back to the Friendly Skies.

_________________________________________________________________________________

In Part 1 of this post, I recapped everything that has gone on over the last ten months at United.  So much has happened, confusing the employees and customers.  Would there ever be a truly great United Airlines once again?

Flight Attendant Contract Negotiations

I want to bring this up first as it has been six years since the merger of United and Continental was announced and the three Flight Attendant groups, pre-merger United ("pmUA"), pre-merger Continental ("pmCO) and pre-merger Continental Micronesia (pmCM), are all still working under separate contracts.  A federal Mediator was brought in after talks with management had stalled, and it appeared there was still divisiveness among the three flight attendant groups.  Mediated negotiations sessions have been going on since the summer of 2015.

Though not made public, it was rumored that a thorn in the negotiations was the Continental MEC President, Marcus Valentino.  He was Union President when Continental and Continental Micronesia Flight Attendants were represented by the IAM, and was also rumored to be a close confidant for Jeff Smisek.  He fought hard against the vote to have the the two Continental groups join the AFA alongside the United Flight Attendants.  With contract negotiations being hampered by Mr. Valentino, AFA's International Office, and International President, Sara Nelson (herself a United Flight Attendant) stepped-in.  Mr. Valentino was asked to resign as MEC President and step away from the negotiations. With this settled, United's AFA releases a joint announcement that the three groups are standing together in the negotiations and vow to get an industry leading contract for United's Flight Attendants.

United's Flight Attendants have the Our Contract web site (www.ourcontract.org) where you can find information about the negotiations.  United management has set up their own United Negotiations web site (www.unitednegotiations.com) to present their side in the ongoing negotiations.  It is interesting to read the releases from both sides, who blame each other for the lengthy negotiation process.  

These negotiations are especially important to the pmUA Flight Attendants.  They fought hard to set in place protections that would limit the length of duty days, set minimum rest periods between trips, and put into place an A/B Reserve rotation system.  This rotating system allows junior Flight Attendants the opportunity to hold lines every other month rather than be "on reserve" all the time and not have the security of knowing when they would have to report for duty.  Limits on duty days, and minimum rest periods are needed to ensure that Flight Attendants are well rested and alert, and are able to properly respond in the event there is an emergency in flight.  On the Continental side, their duty days are longer, minimum rest periods are shorter, and they do not have the rotating reserve system.  This allows the company to set their schedules such that in the event of irregular operations, they may not get the proper rest periods, which compromises safety.  All United Flight Attendants, and I certainly agree with this, should not be asked to give up protections that are in place to ensure the safety of crew members and passengers. 

It was not until April of 2016 that any real talks about compensation began.  Both sides have offered proposals that they say are comparable to the wages paid to American and Delta Flight Attendants.  United management immediately responded saying they thought that the AFA proposal would have a negative impact on United's financial performance, something they could not accept.  Management was supposed to come back with a revised proposal in May, yet there is no indication that the two sides are close to an agreement. Contract talks are resuming today in Reston, Virginia. 

Compensation for United management is dependent upon profitability of the airline and so many managers feel that the Flight Attendants do not deserve much more than they are getting now.  The AFA delivered their compensation proposal to management on April 21, 2016, the same day first quarter results were released.   With the release of the first quarter results and dimmer outlook, UAL's share price has taken a significant hit.  Part of the compensation for United management is determined by share price performance. Management is now under pressure to get costs down and any proposal by the Flight Attendants is going to be deemed as having a negative impact on United's financial performance.     

It is ironic that management complains about compensation demands, given the amount they themselves make and are worth.  When UAL's share price stared to drop dramatically, United managers and Directors started to buy up shares to publicly show their confidence in the company.  One of those managers is Michael Bonds, Executive Vice President for HR and Labor Relations, and the one who rejected AFA's compensation proposal back in April.  On April 26 he purchased an additional 2,000 UAL shares at a cost of $96,766. The Form 4 that was filed with the SEC says he directly owns 52,865 shares in UAL, which at today's trading price is worth $2.4 million. Those shares would have been worth $3.3 million back in February, so Mr. Bonds has taken quite a hit.  I only bring this up to point out that Mr. Bonds and most of United's management, at the Senior Vice President level and above, are millionaires.  Their compensation, including profit sharing and other incentive payments, are all at six figures and above.  It is hard for me to accept Management's complaints about the negotiations while Flight Attendants are struggling to make ends meet with average compensation below $50,000 per year. 

Since mediated talks began last summer, United Flight Attendants have held a "Day of Action" every month, with informational picketing at the hubs and major airports to show their unified resolve to get the contract they want and deserve.  The next "Day of Action" is being held this Thursday, May 19.  I am taking the day off to go out to LAX and offer my support.  I need to get involved again as these negotiations are so important to the success of United Airlines.   If you are flying United on that day, or any day soon, please take a moment to thank your Flight Attendant as they are putting a lot on the line to ensure your safety and to make United Airlines great again.

There is much more I wanted to write about, but my day job is getting in the way again. Now that I have my mojo back, I am more motivated than ever to keep writing, and more importantly I want to get back into the Friendly Skies.  The Annual Shareholder's meeting is coming up on June 8, 2016.  I am hoping to make the trip so that I can address this new Board of Directors and once again voice my support for the Flight Attendants, Technicians, and all front line employees.  Thank you again to all of you for your support, I am looking forward to seeing you soon.

P.S. - I still have some "More than a Co-Worker" wrist bands to share.  If you are interested in any just e-mail me at jimfrompicon@gmail.com.  There is no cost, all e-mail addresses are kept confidential and used only for this purpose.  - Thank you!

Finding my Mojo - Part 1...

For months now, I have tried to sit down to write, yet could not find the energy or drive. My day job has been kind of a nightmare, things at home are a little unsettled, and new medications have had their side effects.  All of the crap that comes up in our lives can distract us from some things we do care about, and I have learned that in order to not lose my mind altogether, I have got to make the time to focus on something I enjoy.  It is time to get my mojo back, and it is time to get back to the Friendly Skies.

It has been 8 months since Mr. Smisek "resigned" amid the Port Authority scandal, and so much has happened.  The news shocked everyone.  I made a trip to New York right after this happened, and everyone I spoke with at United was overjoyed.  They were looking forward to getting their airline back.  Oscar Munoz, one of the UAL Board Directors, was appointed as President and he hit the ground running.  Right away he went out to the hubs and other stations to talk to customers and employees.  He wanted to find out what was needed to make United Airlines great again, and he recognized that this information was only going to come from the front lines.  He was having success in rallying the troops, and earning their trust and support.  However, all of the traveling and long days took their toll, and Mr. Munoz was sidelined by a heart attack just six weeks after he started.

The elation that the employees felt then quickly dissipated as the sudden uncertainty of what was going to happen next took hold.  Would Mr. Munoz be back?  Who is going to replace him?  It took a couple of weeks before UAL's Board of Directors made any announcement of an interim plan.  For Mr. Munoz, recovery prospects were good and he would be back to work In January of 2016.  Until that time, Brett Hart, UAL's General Counsel would step up and take the title of interim President.  Mr. Hart pledged to continue the plan that Mr. Munoz had laid out for the airline.  A plan that would stop customers from defecting and garner the support of the front line employees.

Side note #1 - about Mr. Hart, my first impression of him comes from the Shareholders Meeting held in New York City back in 2012.  He was curt, and acted like the whole thing was an imposition.  Then, in 2014, I had submitted a Shareholder Proposal to be put on the agenda at the next Shareholder's meeting.  The proposal called for an advisory vote for shareholders to weigh in and cast a vote of "no confidence" in Mr. Smisek, and his management team.  Not long after Investor Relations received the proposal, I was asked to go to Chicago and sit down with Mr. Hart and other managers to discuss what is going on at the airline and convince me to withdraw my proposal.  I went out, and met Mr. Hart.  This time, I found him to be very gracious and personable.  When it was announced he would step in as interim President, I was surprised.  James Compton was Mr. Smisek's right hand man, and Vice Chairman, and he came over from Continental with Mr. Smisek. He seemed to be the logical choice.  Brett Hart was a new hire after the two airlines merged, and I think the Board made the best choice in him because he was not a Continental manager and he pledged to carry on the work that Mr. Munoz had started.

Another surprise comes on January 6, 2016 when it was announced that Mr. Munoz had undergone heart transplant surgery.  What now?   Assurances were put out there that he was going to be better than ever and would be returning to work late in late March or early April.  Business news television and newspapers interviewed physicians and other executives who had undergone transplant surgery.  They all felt Mr. Munoz should take a year off.  That would mean looking for a new President and the positive momentum that Mr. Munoz was able to get started would be halted.  In February, Mr. Munoz was back at the Willis Tower on a part-time, advisory basis and he returned to full-time duties on March 14, 2016.  There are critics who say he pushed himself to get back in order to receive a cash incentive bonus that was promised when he was made President.  That may be part of it, but I do think Mr. Munoz is the type of person that needs to be working and he was dedicated to getting his plan for the airline out there.

Just as Mr. Munoz is getting back to work, along comes another distraction.  Two of UAL's largest shareholder groups, PAR Capital Management ("PAR") and Altimeter Capital ("Altimeter"), announce their proposal to nominate six new Directors of their choice. They felt that more airline and travel experience was needed on the Board, and one of their choices just happened to be Gordon Bethune, the former President and Chairman of Continental Airlines.  He is credited with the turnaround of Continental in the early 1990's.  He also hand-picked Mr. Smisek and hired him as Continental's General Counsel. Just as UAL's Board was finally doing something to make changes in management and right the ship, comes the news that someone wants to bring in the "savior" of Continental Airlines.  Continental managers have had five years to make this merger successful, and Mr. Smisek's ouster is a definite sign that their style of management was not going to unite the two distinct carriers.  Letting PAR and Altimeter succeed in bringing in Mr. Bethune was not the right thing for UAL.  Reaction by employees was swift.  I received calls from employees asking me what I thought was going to happen, and the pilots and technicians made their opinions very public by protesting outside the offices of PAR and Altimeter. 

Side Note #2 - about Mr. Bethune.  In the early 1990's, while Frank Lorenzo was still at the helm, Continental was my only choice to fly to my home town in Wyoming to see the family.  It was always an uncomfortable experience with not so friendly employees, so many new hires, and an overall less than classy feeling.  Mr. Lorenzo was ousted by the Continental Board and Gordon Bethune stepped in.  He simply recognized his first goal was to improve the morale of the employees, then upgrade the fleet and facilities.  He closed competitive hubs and took advantage of hubs they could monopolize, Houston, Cleveland and Newark.  Continental quickly showed improvement in customer service and returned to profitability.  I flew Continental again after Mr. Bethune took over, and even though he made a lot of positive changes, he held on to some of Mr. Lorenzo's ways of running things.  For example, he raised wages, but they were never brought up to the level other airlines were paying.  That made it hard to recruit experienced talent to work the front lines.  CNBC has Mr. Bethune on a lot as commentator and contributor, and I did gain some respect for him with his last interview a couple of weeks ago.  The segment was on the airline business in general, and he was asked what he would do if he were asked to step in again and run an airline, i.e. United Airlines.  His response, and I am paraphrasing, was to get middle and senior managers out of their ivory tower offices and have them on the front line more often.  You can only effectively manage if you are working side by side with the employees you are managing and have the chance to talk with the customer yourself. Read back to some of my earlier posts and you will find that I have said the same thing many times.

PAR/Altimeter and UAL go back and forth with press releases and making themselves available to television and newspapers.  Brad Gerstner, Founder and CEO of Altimeter, gets out there with the message of how important it is to have more airline and travel industry experience on UAL's Board, and this is the only way to make effective changes. He tries to reassure employees that Gordon Bethune, as Chairman of the Board, would only have an advisory position and that Mr. Munoz would continue as President. Shortly after the announcement of PAR and Altimeter's proposal and possible proxy fight, UAL's Board announces three new Director appointments, James Kennedy, Robert Milton, and James Whitehurst, all of whom have airline experience.  PAR and Altimeter are not not entirely convinced by the new appointments and keep moving forward with their proposal. However, they are showing some signs of compromise.  Through a phone-in interview with CNBC, Mr. Gerstner states that the appointment of Mr. Bethune is not critical to their plan.  They are once again trying to reassure United employees and customers that they do not want to disrupt the momentum behind Mr. Munoz.

There are weeks of uncertainty and lots of back and forth public announcements by UAL's Board, PAR and Altimeter.  Then on April 20, 2016, the day before the release of the first quarter 2016 earnings, UAL announces that a settlement has been reached.  Robert Milton, a former executive from Air Canada, is going to take over as Non-Executive Chairman, succeeding Henry Meyer.  In addition, two of PAR and Altimeter's nominees would be added to the Board, and there would be a third addition to be chosen by both sides.  This brings the total number of Directors to 14 - 11 "independent" Directors, Mr. Munoz, one Director from the ALPA, and one Director from the IAM.  PAR and Altimeter withdraw their proposal and a proxy fight is avoided.  Mr. Munoz is now free to get on with the business of running United.

The First Quarter, 2016 Earnings Release comes out and Mr. Munoz himself participates in the conference call with investors and the media.  Even though the results show a profit, largely coming from lower fuel prices, the numbers show a continuing decline in market share and weakening demand.  Weakening demand puts pressure on Revenue and forward looking projections paint a less optimistic picture for United.  As of Friday, May 13, UAL stock is trading at $43.54, nearly 30% lower than the $60-$63 dollar range we saw in February of 2016.  These numbers are evidence that all of the changes and distractions at United have eaten away at employee morale and have chased customers away.

So - to recap the last ten months:

1. July 2015 - John Rainey, UAL's Chief Financial Officer, announces his resignation and that he has accepted a position at a technology startup.  His reason is that this new position offers a track to top leadership making it evident that UAL's Board does not see him in line for succession to Mr. Smisek.  Red flags are raised - if you recall, Mr. Rainey, shortly after he took over as CFO in 2012 (after Zane Rowe's sudden departure), at the JP Morgan Aviation Conference, makes the announcement of the changes to the Mileage Plus program.  These changes would reign in the number of free-bees given to United's over-entitled customers.
2. September 2015 - The surprise announcement of the resignation of Jeffrey Smisek, Nene  Foxhall, and Mark Anderson.  UAL's Board cites Mr. Smisek's, Ms. Foxhall's, and Mr. Anderson's involvement in a bribery scandal involving a New York Port Authority official.  One of the bribes is supposedly the awarding new slots at Newark International Airport in exchange for United adding a non-stop flight from Newark to Columbia, South Carolina, which close to a getaway cabin that is owned by the Port Authority official under investigation.  The route is unprofitable and United pulls it from the schedule after the announcement that this Port Authority official is being investigated, along with Mr. Smisek and Ms. Foxhall.  Oscar Munoz, one of UAL's Directors is named President, succeeding Mr. Smisek, and Henry Meyer is named Non-Executive Chairman.
3. October 2015 - Mr. Munoz suffers a heart attack and after two weeks, UAL's Board chooses Brett Hart, UAL's General Counsel, to step in as interim President until Mr. Munoz can return to work.
4. December 2015 - Mr. Munoz' family announces that his recovery is going well and that he is expected to return to work in January of 2016.
5. January 2016 - Right after the new year comes the surprise announcement that Mr. Munoz has undergone heart transplant surgery.  His return is pushed back to March or April of 2016.
6. February 2016 - PAR Capital Management and Altimeter Capital announce their proposal for the appointment of six new Directors and begin the process of soliciting proxies from shareholders.  Key among their nominees is Gordon Bethune, former President and Chairman at Continental Airlines.  Also in February, Mr. Munoz comes back to work, on a part time advisory basis.
7. March 2016 - Mr. Munoz returns to work full time, and right away, in response to the proposal submitted by PAR and Altimeter, the UAL Board announces their own selection and appointment of three new Directors, all with airline and travel industry experience. This does not convince PAR and Altimeter and they move forward with their proxy fight.
8. April 2016 - UAL reaches a settlement with PAR and Altimeter and they withdraw their proxy fight.  Gordon Bethune is out of the picture.  Robert Milton, formerly of Air Canada, will be taking over as Non-Executive Chairman.  The earnings release for the first quarter of 2016 paints a dimmer picture which dampens forward looking projections.  UAL's trading price drops 30% from it levels in February.

Many of you already know about all of these events, but I wanted to go over them myself as they are important to what is going on now at United.  Especially critical are the ongoing contract negotiations with the Flight Attendants and Technicians. These two groups still do not have unified contracts and continue to work under the pmUA and pmCO divisions.  The time to take care of these is now as they are critical to the success of this United Airlines.  I will write about this in the post titled "Finding my Mojo - Part 2."  Thank you again for reading and thank you for all of your support.

It is time -

Dear Readers - 

I have to apologize for being out of touch.  This time of year is crunch time at my day job and there has been a lot of health and other personal crap that saps the energy out of me.  This post I had started while traveling in December.  Nothing like posting it four months later, but I think it has something to say.  I have started a post about all of the recent shenanigans and hope to finish it this weekend.  Thank you again for all of your support and encouragement.  It means so much to me and it is a testament to how dedicated you are to United Airlines.   

December 2015

As I write this, I am sitting in the United Club West at Denver International.  I am waiting for my flight home after visiting family in Colorado for a few days.  It has been three months since Mr. Smisek was shown the door.  His successor, Oscar Munoz, was sidelined with a heart attack less than six weeks into his new job.  Brett Hart, United/Continental Holdings (UAL) General Counsel was appointed interim CEO until Mr. Munoz' anticipated return in January.  Around January 20, 2016, UAL will be posting its fourth quarter 2015 results and many will be waiting to see how this newer United is performing. 

I traveled on United in September shortly after the Smisek ouster and the employees were shocked and elated at the same time.  For five years under Smisek's leadership so many of the employees tried very hard to let management know of the mistakes that were being made.  United was going downhill at a faster clip and they were powerless to make any changes, until "he who shall not be named ("HWSNBN")" was defeated.  Right away Mr. Munoz took to the road to visit the hubs and many other stations to actually hear what the employees had to say about what was happening to their airline.  

Mr. Munoz was listening, and he responded by placing full page ads in the Wall Street Journal, USA  Today, and many other newspapers publicly apologizing to both United's customers and its employees about how bad things had gotten, and he pledged to make things right once again.  This was the first time in the 5 years since the merger was completed that someone from senior management was acknowledging that United was losing its most loyal customers to the competition.  I get a little angry thinking about how much time I have spent writing this blog, attending shareholder meetings, and standing with employees on the picket lines as they try to get the attention of management.  I have been saying for 5 years that the numbers proved United was losing customers, yet the arrogance that was the hallmark of HWSNBN would not let him do the right thing and accept that the Continental way was not going to work with the merged carriers.  

Back to today and I am sitting here in the United Club - I have not really noticed any of the positive changes that were promised by Mr. Munoz and Mr. Hart.  Employees appear happier, but their enthusiasm has waned.  Crappy fare is still being served in the United Clubs.  Mr. Munoz - please, the Mediterranean fare is disgusting.  Nobody wants to eat cubes of cheese or hummus that have been sitting uncovered out in the open air, or soup that has lingered all day in the tureen to turn into salt.  

Most importantly, and most noticeable, is that United's Flight Attendants still do not have a joint contract.  Mr. Munoz - your Flight Attendants spend the most time with the customers, and they are very unhappy and frustrated by lack of any progress in the negotiations.  It baffles me why Mr. Keen and Mr. Risoli go to the bargaining table expecting concessions from a group that has already given up so much.  Pilots, engineers and technicians, customer service and other groups all made net gains with their joint contracts.  Why must the Flight Attendants be expected to move backward?