Everybody deserves a chance to be heard....

Hello All - thank you for your kind responses to the last posting - "United 685."  I hope some of you found it helpful and worth the read.  

It seems the games still want to be played by United management and make you all think that the United AFA is not playing fair.  I have not seen the whole document, but I did hear about Mr. McKeen's letter to Greg Davidovitch.  From the information I received, Mr. McKeen feels that sUA Flight Attendants have had every opportunity to keep their job with United.  Its just that you are expected to "cross-over" to sCO and work under the agreement negotiated with the former Continental Flight Attendants.  Mr. McKeen does not mention in his memo that the "cross-over" comes with a significant cost - the loss of seniority for bidding.  Most of the "685" Flight Attendants have worked with the Company for 6 and 7 years, some more.  That is a decent amount of time to build up some seniority, and those 685 were faced with a very difficult decision.  It was all very convenient for management to decide to focus on retiring older planes on the sUA side.  It opened a way for them to begin funneling Flight Attendants into working under an agreement that management favors.  That way they can avoid the messy talks still to come about integrating the three flight attendant groups, in particular, the tough issue of how to handle seniority.  For my non UA readers, I will write more later about how important seniority is in this business.

What I wanted for this post was to focus on the upcoming opportunity for you all to have your voices heard by management.  In about a month, UAL will be putting out its Proxy Notice for the 2014 Annual Shareholders' Meeting to be held in June.  This Proxy Notice is going to have Proposals that allow shareholders to vote "For" or Against any member of the Board of Directors, and to vote "For" or "Against" the "Executive Compensation Program."  

This is the time for Shareholders who do not like what is happening at United to express their "lack of confidence" in its leadership.  It does not take a majority of "Against" votes to drive change.  Back in the 80's, when Disney shareholders were asked to approve Michael Eisner to remain Chairman of the Board, that vote received 40% "Against;" not enough to pass, but it was enough to get the attention of the Board of Directors and he was asked to resign.  

A lot of you may still be holding shares in UAL, probably in your 401-K accounts.  When you get the Proxy Notice next month, don't just set it aside.  Take the time to cast your vote whether it is "For" or "Against."  What some of you may not realize is that if you do not vote, you automatically turn your proxy over to management to vote for you.  That is why you see so many Proposals passing in favor of management.  

For those of you that do not have any shares in UAL, consider buying some.  It is not a bad investment now, but more importantly, it gives you a right to stand up to management without reprisal.  Even if it is only one share, that one share can get you admittance the Shareholders meeting, and that one share gives you the right to question management decisions.  Don't waste this opportunity to be heard.  

To be able to vote on the Proposals on the agenda for the Annual Meeting, you must own your shares as of the date the Proxy notice comes out.  I expect it to come out between April 7 and April 18.  Act now or you will miss this chance to be heard.

What may not be on the Proxy notice you receive in April is a Shareholder Proposal that I submitted that was delivered to Brett Hart at World Headquarters today.  If the Proposal is accepted, it will be on the agenda for the Annual Meeting and you will be able to vote on it.  There are ways that management can have the Proposal excluded, but I do intend on challenging any requests they make to the SEC for such exclusion.  I have thought through this Proposal very carefully.    Assuming it does make it on the agenda, I will be able to have my voice heard at the Annual Meeting.  I will update you when I have confirmation that the Proposal is on the agenda.  The text of the Proposal is added below.  If you like what you read, then please share this with as many of your friends and associates that you can.  My thanks to you for reading it, and my sincere gratitude for making the effort to cast your vote.   Your feedback is always welcome.   Keep scrolling down to read the full Proposal --

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James T. Anderson, 17738 Superior Street #20, Northridge, California, owner of 500 shares of United Continental Holdings, Inc. common stock, proposes the following:

Proposal

That the shareholders of United Continental Holdings, Inc. (the “Company”) be allowed to enter into the Company records a vote “For” or “Against” the continued leadership by Jeffery A. Smisek as President and CEO of the Company and all related subsidiaries.  Results of this vote  are only intended to communicate to the Board of Directors any lack of confidence that the shareholders may have in Mr. Smisek, and in his ability to be an effective leader for the long-term benefit of the Company, its shareholders, employees and customers.

Supporting Statement

            December 31, 2013 marked three full years for the combined operations of the Company; all of them under Mr. Smisek’s leadership.  A summary of the results from that period are provided herein:

Merger Costs - As of December 31, 2013, “Merger and Integration-Related Costs” have reached $2.025 billion.  For comparison, with the Delta-Northwest combination, reported “Merger-Related” costs totaled just under $1.5 billion. 

Operational Performance – When looking at four key operational performance measures - Yield, PRASM, CASM, and On-Time performance, and comparing them to results published for Delta Air Lines, United lags well behind in all of them.  For the Company, the percentage increase in unit costs (CASM) exceeds that for unit Revenue measures (Yield and PRASM).   On-time performance at United is off over five percentage points from 2010 to 2013.

Stock Performance – From January of 2011 to March of 2014, the market value for UAL shares has increased nearly 81%; however, that increase is fueled only by momentum behind Delta stock which has gone up 169% for the same period.  Delta, the smaller carrier in terms of traffic, has a market capitalization that is 170% more than that for UAL.

Market Share and Customer Satisfaction - Comparing 2011 to 2013, RPM’s (Revenue Passenger Miles) flown at Delta have increased while capacity (ASM’s) decreased.  Conversely, at United, capacity cuts have led to a decline in RPM’s, and those cuts, as a percentage, have exceeded any proportional increase in load factors.  This signals a loss in market share, and that loss translates into an estimated $375 million in annual passenger revenue going to other carriers.  Customer satisfaction at United, as measured by the DOT, J.D. Power, and other third-party surveys is the lowest among U.S. carriers. 

Labor Agreements – After three years, there are still some employee groups that remain divided among three named working divisions – United (sUA), Continental (sCO) and Continental Micronesia (sCM).  Notable among them are the Flight Attendants where talks to negotiate a combined contract have been stalled.  Management has used this segregation to “urge” sUA Flight Attendants to either “cross-over” to sCO; thereby losing their seniority for bidding, or be furloughed.

Conclusion – The Company needs a leader that the customers and employees can support; a leader with a vision for unity, innovation and expansion; a leader that truly understands the value behind the brand that is United Airlines. 

United 685

Hi Everyone - my thanks to those that have provided some clarification and correction to some facts presented in this story. I hope I was able to address them in this revised post.  My thanks to you all for support - Jim.
                                                                                                                                            

Some of you may have noticed that on my Facebook profile is a picture of the United Airlines tulip sign with the number "685" hand-written below the tulip.  This is not referring to a non-existent United flight number.  The 685 represents the number of United Flight Attendants facing Involuntary Furlough (IVF) starting April 1, 2014.  Nearly 700 of the least senior Flight Attendants, working under the United Airlines subsidiary, were now going to be without a job.  This was not going to affect just those recently hired, this was going to hit Flight Attendants that were hired as far back as 2008.  

Although customers may not see it, United Airlines is still operating with three (3) subsidiary companies.  There is still a United Airlines ("sUA") subsidiary, along with the well as a Continental Airlines (sCO") and Continental-Micronesia subsidiaries.  Sadly, with the senior management ranks made up largely of executives from Continental, it follows that major decisions regarding staffing are going to favor the Continental side.  This is what is happening with the United Flight Attendants.  Last fall, management announced that with scheduling and equipment changes, the sUA side would have a surplus of nearly 1,700 Flight Attendants.  At the same time, the sCO side is actively recruiting and training new Flight Attendants.  It doesn't seem fair, and doesn't make sense, does it?  The other question is, how can this happen?

With any merger, integrating employee ranks is probably the biggest challenge.  Neither side wants to give up anything.  It is hard to accept the other side's way of doing things.  The new management that came in from Continental has not handled this part very effectively.  They wanted and hoped that sUA employees would just accept the same terms and conditions that sCO employees had under their respective collective bargaining agreements.  

At the time of the merger, the Pilots from both sides were represented by the same union (the Airline Pilots Association-ALPA); therefore, they were able to fairly quickly reach a joint agreement.  It also helped them in that a new FAA mandate was coming out requiring new hire pilots to have 1,500 flight hours experience (up from 250).  Airlines are now facing pilot shortages.  

It took nearly 3 years for management to reach an agreement with Customer service workers.  On the sUA side, customer service employees are represented by the IAM (International Association of Machinists), but at sCO, customer service workers are not unionized.  That is a big challenge, but an agreement that was amenable to workers on both sides was finally approved in 2013.

This brings us to the Flight Attendants.  At the time of the merger, sUA Flight Attendants were being represented by the AFA (Association of Flight Attendants), and sCO Flight Attendants (Continental and Continental-Micronesia) were being represented by the IAM.  The first thing to be taken care of was to decide which union would represent the combined groups.  It was a hard-fought fight, and the AFA did prevail.  sCO flight attendants would become AFA members; however, there would still be three distinct groups with different leadership.

Now that there was one union, the task before AFA leadership was to work with United management to come up with a joint agreement for all three groups.  Separate Tentative Agreements were quickly drafted, but they each had differing pay scales and work rules.  sCO flight attendants got paid more, but sUA flight attendants were able to keep in work rule protections that kept the company from forcing them to put in long days with a lot of unpaid time, or overnight layovers of less than 8 hours, both of which affected the health and safety of the flight attendants.  The sUA side also kept in hard fought protections for their most junior members flying "on reserve," which is an important component missing from the sCO agreement.  

After the tentative agreements were reached, the AFA formed joint bargaining committees to sit down with United management to come up with a joint permanent contract.  These talks were going nowhere, United management wanted concessions from all sides, and they appeared in no hurry to come up with an agreement.  These stalled talks were sadly leading to divisiveness among the AFA leadership from all sides.  It became more apparent that a "divide and conquer" strategy was was how United management was going to deal with the Flight Attendants.  This was hard for me to watch as I did publicly advocate for the AFA (and took some heat from the sCO side for doing so).  I still think the AFA is the right group to represent the flight attendants; however, to be truly effective, leadership among the three groups had to work together and not let themselves be divided.

This brings us to the present and the "685."  Of the 1,700 planned layoffs for the sUA side, just over 1,000 opted for either the Voluntary Furlough, or the a "cross over" arrangement to go work on the sCO side, or entered into partnership arrangements with those facing layoffs.  Under a partnership arrangement, both parties would work fewer hours, but it meant both would keep their jobs and benefits.  In January, United management came out with their list of those who would be Involuntarily Furloughed in April.  However, not just the list, United management also announced that they had reached a "last chance" arrangement with the leadership of the sCO AFA for the "685" to cross over to the sCO side.  Under this "last chance" arrangement, those crossing over would not be able to take their seniority with them.  They would have an April 1, 2014 hire date and become the most junior members among the Flight Attendant ranks.

This is where things got really ugly, and the sUA AFA leadership immediately rallied together their ranks to rally support for the "685" facing a very difficult situation.  What was more problematic was the ability for United's senior management to make a "back room" agreement with the sCO AFA leadership for the cross over.  This meant that United management would remain entrenched in their position that they only wanted to work with sCO AFA leadership and that they (management) were going to leverage their position with the sCO side to come up with a joint agreement that would lead to concessions from both sides.  

sUA AFA leadership immediately filed a grievance with the Department of Labor citing that United management was violating the terms of their contract.  They also took the sCO AFA leadership to task and complained to the national AFA about the actions of sCO leadership.  AFA's National President, Veda Shook, needed to act quickly to put a stop to this effort to further divide the United flight attendants.  

The last Friday, the sUA President, Greg Davidovitch, announced that an agreement had been reached with United management for the "685" to cross over to the Continental side and retain their original hire date for seniority.  I should and do feel happy that the "685" have the chance to keep their jobs; however, I cannot help but feel concerned that United management still has so little regard for their Flight Attendants.  If they were unable to garner concessions from other employee groups, they are now hell-bent on doing so from the Flight Attendants.  If a joint agreement that would come with concessions was not possible right now, United management is going to thin out, and at the same time de-moralize, the sUA side to the point where they can work with a more amenable sCO membership.  

The United Flight Attendants, from all three groups, went through a hard fought election to be jointly represented by the AFA in order to prevent management actions like this from happening.  I have become friends with many sUA AFA leaders and members, and I can sense their frustration.  I am not on the inside, but I think  AFA Leaders need to become more pro-active in this bargaining for a joint agreement, and take action to prevent United management from dividing their membership.  

As a shareholder, I do have the power to bring some small voice to this problem.  This divisiveness and "Frank Lorenzo - Texas Air" inspired way of forcing concessions is not in the best interest of this airline for the long term.  Before March 1, I will be delivering to the Board of Directors my shareholder proposal that will force a discussion and vote of "no confidence" in this type of leadership at this year's Annual Meeting of Shareholders.  I am going to ask all of you reading this that hold UAL shares to back me up on this.  If you don't own any UAL stock now, please consider acquiring some now so that you can have a voice and a vote at the Annual Meeting this year.  My proposal has no chance of passing, but if not in the number of shares if there are enough in number of voices in favor, the Board may pay attention to what is going on. I tried this before with Glenn Tilton and John Tague, but I let them talk me into withdrawing my proposal.  I cannot let Mr. Smisek do the same.  Some times a fight that you have no chance of winning still has to be fought, if only to keep the battle going.  

The job of a Flight Attendant is difficult enough without the worry of more cuts in pay and benefits, working long hours that affect health and safety, or not knowing if you are job is secure.    United is a now a profitable operation and shareholders are happy, but a blatant disregard for those on the front-line is not good for the company in the long-term.  United management still feels they have more work to do in cutting costs and sadly the Flight Attendants are in their cross hairs.  I just wish the all of the employees work groups would display more solidarity with the Flight Attendants.  That solidarity is what will truly make United the "Friendly Skies" airline.

The "Friendly Skies" are back...

Again, please accept my apologies for being gone so long.  There has been a lot of work and family stress over the holidays, plus I have been down with what has turned out to be a viral infection in the middle ear.  After a round of prednisone I am feeling better.  There is less pressure, and my hearing is coming back.  This has kept me from flying and I miss all of my friends at United.

Last fall United brought back the "Friendly Skies," in their advertising that is.  Print, television, radio and internet advertising now carry the tag lines of "flyer....friendly," "land in more places....friendly," "work and play....friendly," "staying a step ahead....friendly" and for those of us watching the Winter Olympic games United is also "team USA....friendly."  Along with the tag line will be a drawing of what looks like a route map with one of the route lines in the shape of a smile before the word "friendly."  We are all then invited to "Fly the Friendly Skies."  You can check it out at the United Hub at hub.united.com.

This is good news as it is the first time since the merger that this senior management team, largely made up of executives from Continental Airlines, has recognized that there is a United Airlines.  At the outset, Mr. Smisek and his team brought with them an off-putting arrogance that this new airline will be nothing more than a larger Continental with the United name slapped on the planes.  That arrogance has turned away customers and disheartened employees.  You cannot let 90 years of quality, innovation and memories just go away with a journal entry on some ledger.

The "Friendly Skies" slogan was dreamed up back in the 1970's by the Leo Burnett agency in Chicago.  It was brilliant, and just those two words gave United Airlines a brand identity that no other airline could replicate.  Back then, when the airline industry was still regulated by the government, carriers could not compete by lowering fares, it was their service reputation that drove the customer's choice.  The "Friendly Skies" campaign put a unique spin on marketing a service driven business.  Television and radio jingles invited customers to "Fly the Friendly Skies."  United employees would say "Thank you for Flying the Friendly Skies."  United did not just offer non-stop 747 service, they offered 747 "Friendship" service.  It was a magnificently simple way of offering something special for the customer, and when you flew United it did make you feel special. That all changed when Mr. Tilton came in and some bone-headed suits in Marketing put the "Friendly Skies" in storage, citing them as being out-of-date and not keeping with the times.  There was also the sad fact that while under Mr Tilton's leadership, United's reputation for service was in the crapper.  How can you advertise "Friendly Skies" when they really are not that friendly.

Then came the merger in 2010, and for the last 3 years Mr. Smisek and his team from Continental appeared to remain steadfast in their position that that this new United would be just another Continental.  I do not think they were prepared for not only the loyalty and dedication of United employees and the pride they had for their airline, but the loyalty and pride that United customers had for their airline.  To be an elite member of the Mileage Plus program was something to brag about.  That kind of loyalty carries with it an almost immeasurable value to the business; however, when you discount that loyalty, the value diminishes at a rate that far exceeds the time and effort it took to build it.  More than anything, the value behind "Friendly Skies" campaign was how it so successfully tapped into that pride and loyalty.

It remains to be seen if bringing back the "Friendly Skies" now will pay off, but it is nice to see them again.  Yes, United continues to rank last in many customer service surveys, but Mr. Smisek will tell us that it is all a result of merger-related growing pains.  It will take time for improvements in service quality to take hold and translate into new business and better survey results; but for right now, these "Friendly Skies" are a sign that this management recognizes that maybe there was and still is a United Airlines.  Mr. Smisek, you let the "Friendly Skies" back in, why not take another baby step and bring back the tulip?

September 11, a day for remembering, a day for mourning, a day for good deeds, a day for ACTION...

This Wednesday marks the 12th anniversary of the terrorist attacks on the United States that claimed nearly 3,000 lives.  For some of us, the horrors of that day are so ingrained in our memories that there has not been one day since then that we have not thought about it in one way or another.  If you are like me, there is just an overwhelming sadness that will not go away, and it should not go away.  We have to remember, because if we do not, we once again allow a complacency to overtake us that will mire us down in partisanship and self-interest.  That opens the window for those that would like to see us hurt again.

There will be many events and memorials on Wednesday commemorating the anniversary and honoring those lost either in the attacks themselves, or those lost in our responsive military actions against Afghanistan and Iraq.  Unions representing pilots, flight attendants and other employee groups from both United, American and many other U.S. carriers will be holding their own events across the county to remember their co-workers that were not only lost, but more importantly they come together to honor those crew members and passengers as the front-line in defending our country against the terrorists who hijacked those four planes.   September 11 is a painful reminder, but nonetheless should be at least one day for us customers and passengers to understand how vital flight attendants, pilots, customer service, ramp workers, mechanics, TSA screeners and so many others on the front lines of our airlines and in our airports, are in terms of our comfort and safety. 

Over the last 12 years, movements have sprung up that calls for September 11 to be a day of not only remembering, but a day where we do a good deed.  It is a great way to honor those that were lost and a great way to keep the day in our hearts and minds.  As I was puttering around in my garage yesterday, I got to thinking about taking this a step further.  Make September 11 a day of ACTION.  Do something that gets people thinking; do something that gets your voice heard.  For example, if you have an opinion on what the U.S. should do in terms of any military action against the Assad regime in Syria, call or e-mail your Senator, Congress person, and the White House.  Don’t just yell back at pundits on TV weighing in with their own partisan opinions, you as a citizen have the right to speak your mind directly to those who will be making any decision to act, so do it.  You can use the excuse that your voice will not be heard, but you know what, it will not be heard if you do not use it.

If you are an airline employee and you have a concern about passenger safety or comfort, you have a union, and you have a voice, use them both.  Your union leaders are there to listen, but they can only act on facts.  When an incident comes up, no matter how minor, that forces conditions upon you that are outside the scope of your contract, or more importantly present problems with the safety and comfort of passengers and crew members, take the time to make sure your union knows about it.  Urge your flying partners and associates to do the same.  Your union is powerless without the collective voice of its membership, and that all starts with one voice, your own.  You have to take action, or nothing gets accomplished.

There are so many other ways we can take action.  If you are a shareholder in a public company and do not like how management is running things, you have the right to question and you have the right to bring a voice for change.  It does not matter how few shares you may own, you have a guaranteed right to make sure you are heard by an independent Board of Directors.  If you feel that Board is not acting in the best interest of the shareholder owners, then you have a right to ask for a change to that Board.  If enough individual shareholders get involved and act, then and only then will change happen.  You cannot sit on the sidelines waiting for someone else to act.

This Wednesday, I will once again be flying to New York and back on the same day on United Airlines.  I will probably regret this on Thursday, but it will be a long day with my itinerary taking me up to San Francisco, then over to JFK airport in New York, and then back to LAX.  I will check-in at LAX at 6:00 AM, and then land at 11:30 PM that evening.  I hope I can catch a nap somewhere in there.   As I have done on other trips I will hand out some Starbucks gift cards and “More than a Co-Worker” wristbands as my way of saying thanks to those that are keeping our skies friendly.  For me it is a day of remembering, and a day for a good deed, but more importantly as a customer and shareholder, I want the front line employees at United to know they are appreciated.  Its not like the typical lip service in memos from management, it is an action that gets an important message out that there are many of us out there who appreciate the commitment of those on the front line at United, American, Delta, Southwest, US Airways and all the other U.S. carriers that get us to our destinations safely every day.

Musings from the Friendly Skies - I am still here

Hi Everyone -

I am not sure what happened, but for some reason the URL http://keepingtheskiesfriendly.blogspot.com has been taken down.  With that, gone are all my postings.  I am trying not to get too upset, but it is kind of like losing a diary or some other written record of how I spent my time.  I am waiting to hear back from Google to find out if I did something to delete the blog, or if it was taken down for some other reason.

I will be drafting my annual September 11 anniversary post over the next couple of days.  I am keeping with my tradition of flying to New York and back and doing what I can to say thank you to those on the front lines at United Airlines.  It is only by their efforts and sacrifices that this great airline is still flying.

Thank you everyone for all your support.  This blog has had over 20,000 unique views, far surpassing my expectations.  You all have read and shared my postings with so many others.  I want to keep this going.  

For now, just bookmark http://keeptheskiesfriendly.blogspot.com.  I will resume posting here.  I am crossing my fingers that I recover some or all previous posts.  I will then repost them here.

Be safe everyone, my thanks to you for keeping the skies friendly.