Subject:

True story re: surviving a sinking ship

Thought you might enjoy reading this account of the cruise ship that sank just recently. This comes via Sandy, from her friend, who is a travel agent. I don't know these people, but Sandy would not send it out, if it was not authenticated.

Shirley

 Glenn on "Foreign Ownership".

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 The Amazing Airbus Collapse

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The Gimli Glider - Good complete Story.

                         click!

Moderator Pete Sofman's comments:

Bob Beavis has forwarded this Travel Adventure. This strays slightly from the narrower interests of our group, but since many of us take cruises, I thought it would be worth posting. If you'd prefer not to receive occasional travel items like this, please email Denis, Charles and me at: retup-owner@ yahoogroups. com

Mahalo, Pete

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Subject: True story re: surviving a sinking ship

Yesterday (Tuesday) when we went through immigration in San Francisco, the immigration agent asked us the usual question: occupation, what did you like best/least about your trip? To the former we replied retired/dietitian. To the latter we replied: the ship sank/we're alive. Suddenly this lethargic civil servant woke up. He wanted to hear all about what happened.

Before I go on, you must understand one thing. While we went through the same experience, shoulder to shoulder and often hand in hand, we have different feelings about it. Indeed, everyone who went through it with us has their own unique and personal feelings. While I was cold, wet, shivering, and throwing up, it never occurred to me that I could die. Lynne however was thinking about: what if the weather suddenly changed, if we hit ice or took a big wave and were swamped, if we would capsize. Therefore, in writing this I can only write for myself. Whatever I write is filtered through my perceptions which could be quite different for Lynne.

Thursday night we were tired. Instead of watching the 9:15 movie we showered and were in bed by 10:00. I fitfully tried to go to sleep. We were going through brash ice - little pieces of ice. Since we were on the third deck, as low as you could go, half our cabin was below the waterline. I could hear the pieces of brash ice scraping against the hull, which was only a single hull. Once and a while a more sold piece would strike. I finally fell asleep.

About 12:30 I was roused by what sounded like the gang plank slapping against the hull. Then I heard what sounded like water pouring down a drain. In my sleep I was thinking to wake Lynne and ask her about the sound. I didn't remember hearing it before. I touched the bulkhead. It was dry. I put my hand on the floor.

From half asleep I went to full awake. I bolted up and pushed the emergency button and woke Lynne. I threw on some clothes. We pulled the suitcases out from under the bed; I took my laptop out from the low drawer it was in. The water continued coming in. I decided I should move things up to the second deck. I started with my laptop.

The people in the next cabin had also notified the ship. By the time I stuck my head out of the cabin a crew man was coming down. A few minutes later he was followed by the captain. The captain was a solidly built, forty-ish Swede. When he came down the stairs his comment (in English) was: "My god; We're sinking." The alarm sounded.

When I returned to the cabin I quickly opened up the drawers of the nightstand between our two beds. I scooped out my wallet, the recently filled 2 gigabyte memory from my camera, the backup flash drive with my journal on it and Lynne's hand cream. I tossed clothes and camera into the suitcase and took them up to the second deck.

By the time I returned to the cabin, the boat was listing and the water was ankle deep in one end of the cabin. I picked up one of my tennis shoes and put it on a stool. I watched the other float under the bed. It floated back out and I grabbed it. The word came down: "get warm clothes." I grabbed some of our clothes that were on the bed. Lynne had gone up to our muster station in her night gown carrying our Wellington's (high rubber boots) and some clothes. I also grabbed our Gore-Tex jackets and fleece liners and made my way to our muster station in the lecture hall.

When everyone was assembled in the lecture hall they took roll. Periodically the captain would come on the intercom and tell us what was happening. We knew that a mayday had been sent, and that there were two ship coming but they were 10 and 6 hours away. At first there was hope the leak could be fixed. Then the mood in the lecture hall became somber and quiet. At the end of hour one the captain lowered the lifeboats into position. At the end of hour two the captain said that we were coming into ice. The lifeboats could not be lowered in the ice. Therefore, he decided to abandon ship. Then we heard those words that no one on a ship ever wants to hear the captain utter: "abandon ship; abandon ship; abandon ship."

At 2:30 in the morning we quietly filed out of the lecture hall. There was no crying; there was no pushing; there was no panic. One of the staff members directed us to the port (left) or starboard (right) side to go the life boats. Initially we went to the port side. When the word went out that they needed 8 people on the starboard side we went there. I didn't appreciate how much the ship was listing, perhaps 30 degrees, until I had to walk down across the fantail.

I was the last one into number one life boat. It was at this point that I was most anxious. I felt that once I was in the lifeboat I would be safe. However, there was only enough room for my feet! I stepped in, sat on the gunwale for a moment, and then wiggled my bottom onto the seat, my back against the hull. There was a problem with the engine, but it got started.

They lowered us away. Once in the water we pushed away from the ship. Our boat was overloaded! Fortunately the seas were relatively calm and there was no wind. We were very far south where it gets dark very late and light very early. It was not dark out, but twilight. Fortunately we had zodiacs - rubber boats with outboard motors. While the electric generators had stopped working we had emergency power so they were able to use it to run the winches to lower the zodiacs. After a while they off loaded people from our lifeboat to a zodiac

Once in the lifeboat Lynne and I sat huddled together. While the Gore-Tex jackets kept our topsides dry, our bottoms were wet and there was water in our Wellingtons. There was little talking in the boat. People were somber and cold. The only sound was from the two cylinder engine and an occasional order from the first mate, who was in charge of our boat.

At 3:41 I watched the sun rise. It was a small, round, golden orb that came out of a gray sea and disappeared into a gray sky.

Several times I threw up as the result of the fumes from the engine that I was sitting next to and the motion of the lifeboat. At times I started to shiver, sometimes violently. The though of hyperthermia crossed my mind, but I knew from my Boy Scout training that as long as my upper body was dry and warm I was okay. Through out this my mind was a blank, thinking on the cold, listening to the engine, always concerned that it would stall.

After about two hours in the boat the first mate told us that the rescue ship was about 2 hours away. (The first mate had a radio.) About an hour after that a helicopter flew over head and circled us. Even thought we knew that people around the world knew exactly where we were, our spirits were greatly lifted. Somewhere between hour four and five someone spotted a glint of light in the distance. Soon after that we could see it was a ship bearing down on us.

We got not one, but two rescue ships: the National Geographic's Endeavor, and the Nordnorge. The former ship was small, the size of the Explorer; the latter ship could hold 600 passengers though there were only 229 on board.

What a wonderful sight it was when the Nordnorge removed the covers from its gigantic lifeboat and lowered their lifeboat down to us. After four or five hours we were stiff. Hands reached out to us and help us into Nordnorge lifeboat. When everyone was transferred we were raised up to the forth deck. When we went into the ship we were greeted by a crew member giving each of us a blanket. We were sent up to the seventh deck were we were given a hot drink and then pointed in the direction of the lounges. The call went out over the ship's intercom for clothes. Soon the couches and chairs in the lounge were covered with wet clothes that we exchanged for dry ones donated to us. Both the ship and the passengers of the Nordnorse were unbelievably generous. From large deck to ceiling windows of the seventh deck lounge we could watch our ship as it listed. (Unlike the pictures you have probably seen, there was no ice surrounding the ship - that happened later.)

We were served breakfast and lunch on the Nordnorse. The Nordnorse tried to offload us at the Chilean Frei Base. Due to the weather, blowing snow and high seas, it couldn't. We had to wait offshore several hours before we could finally be landed.

Why did the boat sink? While it is true that there was a hole in the hull, the water tight doors were shut. The compartment where our cabin was should have filled up with water, but the boat should have continued to float. My understanding was that the problem was with the toilets. The water went into the toilets and then into the holding tank. When the holding tank filled up the water backed up into the other cabins thus bypassing the watertight doors.

Why was this not another Titanic? Relatively speaking we had good weather and a calm sea. The captain launched the lifeboats at the right time. We had the zodiacs. We were all fit people: there were no children or infirmed. We were used to being out on the sea in the cold. We had good leadership. We were dressed for the cold. And, above all, we were lucky.

This had been a truly amazing week. I could go on and on. How wonderful the Chilean government was. What it was like flying in a C130 (a military cargo plane) where our knees were intertwined with the knees of the person opposite us. How helpful Debbie, the US Consul from Santiago was. How well we were treated by GAP, the company that ran the tour. What it was like to give interviews to the world press. How basically everything we brought with us is now 1500 meters under the sea. Above all we are thankful to have the most important thing of all, our lives. We appreciate all the e-mails you have sent as they have brought us comfort and support.

Barbra Nystrom
Landmark Travel, Ltd
Virtuoso 335 Village Square Orinda, CA 94563-2505 PH(925)253-2600; FAX(925)254- 8130
bnystrom@sbcglobal. net www.landmarktravel. com
CST #2014050-10 IATA #05511693

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By Julie Johnsson | Tribune staff reporter

October 19, 2007
http://tinyurl. com/225k9b

Believing that his airline needs deep, wrenching changes to remain
competitive, United Airlines Chief Executive Glenn Tilton wants to pursue everything, from a merger to charging passengers who want their luggage to come first off the plane, as part of a major overhaul of the nation's second-largest airline.

In one of his first interviews since laying out a provocative five-year strategy approved by United's board last month, Tilton
maintained that change is difficult, but necessary, if the airline is to remain competitive on the global stage and survive the next downturn in an industry famous for its ups and downs.

His willingness to examine new ways to wring money out of the carrier may be winning him kudos on Wall Street. But he's getting nothing but brickbats from United's unions and some longtime industry observers.

"All those difficult decisions, it's why we're here," Tilton said during the interview Wednesday in his Wacker Drive office.

United plans to invest 4 billion in complex new information systems and to upgrade its planes, check-in areas and other aspects of the
business that affect passengers, Tilton said.

To improve operations, it has launched 250 initiatives, including investigating whether to divest United's $750 million cargo business
as well as its frequent-flier program and San Francisco maintenance base; introducing a la carte fees for economy passengers who want to purchase new services, like ensuring their luggage is first off the plane; and exploring mergers, a favorite Tilton pursuit.

If major U.S. carriers don't seek large-scale partnerships to compete with global competitors, they are "not even going to be in the top 10 in a little while," he warned.

United appears to be following a strategy set by Air Canada, which gained billions of dollars after it emerged from bankruptcy in 2004 by spinning off its maintenance division and frequent-flier program into separate businesses, analysts say.

"Every management team needs to address it," said Kevin Crissey, senior analyst for U.S. airlines with UBS Investment Research.

The Chicago-based carrier is also the first in the U.S. to navigate the disquiet, even anger, that these strategies engender in employees.
Many United workers are dismayed that the company didn't explore the
spinoffs during its bankruptcy, when the proceeds could have been used
to fund pension plans that were terminated.

Union raises questions

In an Oct. 15 letter to United's board, the president of United's flight attendants union questioned why the company is mulling selling
assets that it insisted were vital during its three-year stay in bankruptcy.

"It has only now become clear that the sale of these assets is not only a viable option, but that a timely sale would have avoided the
need for severe concessions and, perhaps, avoided the bankruptcy altogether," wrote Greg Davidowitch, president of the United master executive council of the Association of Flight Attendants, which represents 17,000 United workers.

Davidowitch called on United's board to direct management to engage in
"meaningful negotiations" to restore wages and benefits that workers
gave up during bankruptcy and to allocate a proportionate share of the
proceeds of any asset sale to the flight attendants. "We're giving
notice that we're laying claim to a portion of that money," he told
the Tribune.

United says it couldn't have sold Mileage Plus, the world's second-largest airline loyalty program, while the carrier's future was
in jeopardy.

"Who is going to buy the loyalty program of a company in bankruptcy when the whole value of the program is tied to creating a connection
to the company," said spokeswoman Jean Medina. "The increase in value of Mileage Plus is directly related to our exit from bankruptcy and subsequent successful execution of our performance agenda."

Although it hasn't decided whether to spin off Mileage Plus, United plans to treat the $800 million program as a stand-alone business by
year's end. United also is developing new products for its members.

The airline has other initiatives under way to boost revenue, offsetting the brutally competitive environment that makes it
difficult for airlines to push through sizable increases in ticket prices. It is examining services it could provide passengers for a
nominal fee. Among those under consideration: curbside-to- curbside
baggage service, fees to check a second bag and allowing mainstream passengers to "rent" for a day the perks available to elite customers.

Fees could backfire

While a la carte pricing is successful for some budget carriers, it could backfire for United if passengers feel like they're being forced
to pay for something that was once free, said Michael Boyd, president of the Boyd Group, an Evergreen, Colo.-based consulting firm.

Then there's the large-scale merger that Tilton believes United needs to remain a global player. He said he would like to pull off a merger of equals, preferably with an airline with a strong presence in New York and a Latin American route network that United could exploit from its hub at Washington-Dulles International Airport. Analysts say that
Delta Air Lines and Continental Airlines would best fit this scenario.

While such deals make sense on paper because they eliminate overhead, they are notoriously difficult to pull off successfully. Workers
shudder because of the specter of lost jobs and bitter fights over seniority, which determines job assignments and pay levels.

"Would you rather merge or wind up in bankruptcy, again?" Tilton said
he bluntly told United employees when the topic was broached in an open forum this week. "Can we agree on one thing: We all want to grow."
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Plane Business Banter

Holly Hegeman, Editor
Dec 6, 2007

... More on this week's many "true confessions" from a number of industry movers and shakers from the analysts' point of view in today's Market Review.
Meanwhile, after all this sound and fury, Friday morning United Airlines released its expected "shareholder friendly" news. The airline announced a $2.15 per share special dividend to be distributed on Jan. 23, 2008 to holders of record as of Jan. 9, 2008. We're talking about $250 million. The airline also apparently has the okay to dole out another $250 million without having to get additional lender approval.

I'm sure I don't need to weigh in with my comments here. But that's what I'm supposed to do, right? I think the move is boneheaded on more than one front. One, 2008 is not looking like one of the more promising years in terms of airline profits. While United Airlines is admittedly printing cash right now-- that might not be the case to such an extent in 2008. While the airline was successful in negotiating a deal with its creditors that allowed them to do this, does that make it the right thing to do? Two, here you have a company that has gone through bankruptcy, extracted millions from their employees in concessions, and now it is going to award its shareholders a $250 million bonus?

Let's just take the screws and tighten them even further on an employee culture that has been asked to take more than its fair share of shocks over the last few years. And, the same employees, I might add, that are responsible for delivering the "high-end" service product that United Airlines is so quick to say that it is now capable of producing on a day in, day out basis.

Bill Greene, analyst with Morgan Stanley wrote Friday morning, "With oil prices hovering at $90/bbl, free cash flows at United and all the airlines will come under significant pressure in 2008. Although we see UAUA's dividend as a positive for the shares of the stock, we note that, given the current economic outlook, we wonder whether a more conservative stance toward excess cash would be more appropriate going forward."

Subject: Fw: UA for sale??

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Back in 2005, United Airlines -- later reincarnated as UAL  (Nasdaq:  UAUA) -- terminated its employee pension plans, creating the single largest corporate pension default in U.S. history.

The belief was that it simply had more liabilities than assets and was under bankruptcy protection already. If it was going to emerge from bankruptcy (which it did in February of 2006), it would need to reduce costs further. Putting the federal taxpayer on the hook for the $6.6 billion in  pension plan costs through the federal Pension Benefit Guaranty Corporation, or PBGC, was an easy out.

It seems, though, that the unions, shareholders, creditors, government -- and, ?most importantly, the retirees -- got hoodwinked. United had an asset on its books that could have paid for the entire cost of the pension obligations -- and then some -- but according to the financial statements at the time, it was a negative asset, a cost.

Only now that United is considering profiting handsomely from those assets, maybe someone should go back and take a look at what was going on -- and make the airline responsible once again for its retirees' benefits.

  Getting mileage from miles programs
Like a number of airlines these days, United is looking to spin off its customer loyalty program to raise money, because these programs are about the only thing making money for the major carriers. Although it's not a stand-alone company reporting results, the Mileage Plus program is estimated to have generated $600 million last year for United, and a Bear Stearns  (NYSE:  BSC) analyst figures it could be worth more than $7 billion if it's spun off.

American Airlines parent AMR  (NYSE:  AMR) may also spin off its AAdvantage program, as one large investor wants, as a way to better value the two businesses. AAdvantage is the industry's?largest loyalty program, followed by Mileage Plus.

The airlines sell the mileages to merchants, who in turn use them as rewards for their customers. American Express  (NYSE:  AXP), Citigroup  (NYSE:  C), MasterCard  (NYSE:  MA), and Visa all use mileage programs as inducements for consumers to use their cards. They're so profitable because the airlines sell the miles for pennies, getting revenue up-front, and then the fliers later redeem the points at prices higher than what they probably would have paid for the tickets. It can also take years before they're redeemed, if at all.

Ever since Air Canada spun off its Aeroplan loyalty program, the programs have become a hot commodity for the airlines, and a potential quick fix of cash.

  No accounting for United's plan
Yet one has to wonder why United didn't consider the loyalty program back in 2005 when it was putting the onus for paying its retirees onto the government.

Look through its annual report for 2004, and you won't find the loyalty program listed as a richly valued asset. In fact, it's not mentioned anywhere at all under assets. United  does say it recorded an $840 million liability to account for miles being redeemed in the future, so you'd think that the Mileage Plus program was costing United money. You would, of course, be wrong.

In 2005, when Air Canada sold off a 12.5% stake in its Aeroplan loyalty plan for a price that valued the entire frequent flier program at about $2 billion Canadian, United's management must have had a pretty good idea that it, too, was sitting on valuable asset.

  Putting the toothpaste back into the tube
Now United wants to profit from this richly valued asset. I have a better idea: Let's give the pensions back to the airlines, rather than letting them benefit at taxpayers' expense.

Executives were granted millions of dollars in stock awards upon the company's emergence from bankruptcy. CEO Glenn Tilton alone received more than half a million shares valued at more than $20 million -- and selling the loyalty program would certainly enhance the stock's value for him and other top executives.

Can the PBGC give the pensions back? Sure it can!

Under Section 4047 of the Employee Retirement Income Security Act of 1974 (ERISA), the PBGC can order a company to restore its pension obligations when the company's financial health has improved. In fact, it did that with steelmaker LTV back in 1990.

It's hard for me to believe that in the year and a half that United has been out of bankruptcy, its loyalty program has skyrocketed in value so much. Instead, this has been a dormant asset that's only now being brought to light, because of the value it can return to current shareholders. Of course, pre-bankruptcy shareholders will realize nothing.

Yet if the PBGC is to ensure that current shareholders don't unduly profit at taxpayers' expense, it'll have to move quickly, before the loyalty program is spun off.?If the?PBGC blithely allows a spinoff to go forward, I'd consider it in default on its obligations --?a situation at least as bad as United's own role in this.

The Motley Fool is dedicated to Educating, Amusing, and Enriching all visitors to their website at http://msn.fool.com/indexhtm?ref=Yo.

Interview with Ryan Air Chief Mike O'Leary.

click Ryan Air

85-year old UAL Flight Attendant

Iris Peterson Retires

Received from Cliff Sanderson:
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Wow I think she looks great.....

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Subject: Virgin America

4/1/2007

"The Airline of the Future"

Buddy of mine got a call to help with the Virgin America training start up. He just laughed
when he saw who was running it and what he wanted the airline of the future to look like.

HIGHLIGHTS:

Hourly pay rates: $95/hr for captains, $44/hr for
FOs

Upgrading captains return to Year 1 pay
(so if it takes 10years to upgrade to
CA, you go back to first year pay)

Monthly guarantee unknown

Upgrade to captain is merit-based
(let's do away with that ridiculous seniority list, ass kissing line starts on the right)

$5/hr yearly raise

Two 5-day blocks of vacation per year

Focus will be on transcons

Inaugural route: SFO-JFK

Fleet plans: 34 A319/A320s

Eight seats will be First Class

A319/A320 proposed interiors

and last but not least ....

Chairman of Virgin America is Donald "The Bonus Man" Carty, ex-AMR CEO

Battle royale: Airbus's fortunes fall as Boeing's rise  -

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Pete Sofman
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Boeing Scores With Dreamliner Order
By NICOLA CLARK NYTimes June 20, 2007

PARIS, June 19 — International Lease Finance Corporation, the world's largest commercial jet leasing company, signed an agreement Tuesday with Boeing for an order of 52 787 Dreamliners, raising the total number of orders for the hot-selling wide-body plane to 634.

The deal, which was announced on the second day of the Paris air show, brings the value of Boeing's order book for the 787 to more than $100 billion at published list prices, dwarfing the 127 firm orders for Airbus's rival plane, the A350 XWB.

Airbus, meanwhile, announced orders for 20 new A330-200 freighter jets and 23 A330-300 planes, valued at a combined $7.9 billion.

The leasing company's order for the 787 adds to a previous purchase of 22 of the planes and will make the company, based in Los Angeles, the largest operator of 787s, surpassing the plane's initial customer, All Nippon Airways, which has ordered 50. It was part of a 63-plane deal by the leasing company for Boeing aircraft worth $8.8 billion at published list prices.

Airbus has been in an intense competition with Boeing for the
contract. Steven F. Udvar-Hazy, the chairman and chief executive of
International Lease, is considered to be one of the most influential
players in aviation. Mr. Udvar-Hazy's sharp criticism of Airbus's
initial version of the A350 is understood to have been central to the
European manufacturer' s decision to overhaul its design last year.

The 787 and the A350 will be the first commercial jets to consist more than 50 percent of extremely lightweight plastic composites rather than aluminum. Both Boeing and Airbus say that these new-generation planes will reduce fuel consumption and carbon dioxide emissions by 20 percent compared with jets of comparable size that are flying today, like the A330 and the Boeing 767.

As recently as last week, Louis Gallois, the Airbus chief executive,
had been hoping to persuade Mr. Udvar-Hazy to include the A350 in its fleet. "I respect his opinion," Mr. Gallois said Friday. "I shall try to convince him that we have made the right choice" with the redesign of the plane.

Mr. Udvar-Hazy confirmed that he would meet with Mr. Gallois onWednesday. His company had made a provisional order for 12 of the A350s before the 2006 redesign, which analysts said he could still convert into firm orders for the new version. Even so, the 787 would still have a six-to-one advantage over the A350 in the leasing
company's fleet.

The 787 is to enter commercial service next May, five years ahead of the A350. Boeing expects to unveil the first assembled Dreamliner on July 8 at its factory in Everett, Wash. The plane's first test flight is expected to take place by the end of September.

Mike Bair, general manager of the 787 program, said Tuesday that the production slots for the plane were sold out almost through the end of 2013, which means new customers would most likely not get their first planes before 2014.
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Glenn on "Foreign Ownership".

By Adrian Schofield/Aviation Daily

United CEO Glenn Tilton yesterday fired a broadside at critics of transatlantic open skies and domestic airline mergers, saying they are helping to keep U.S. airlines from competing with their foreign competitors.

The dilemma facing the industry is whether it can find a way to compete effectively, or "default to the same cycle of dysfunction and bankruptcies, and continue to lose ground to our foreign competitors, " Tilton said at an American Bar Association conference. This question has been addressed in Congress recently and needs further debate, Tilton believes.

Deregulation has delivered significant benefits to the U.S. economy, but "has yet to be comparably effective in the international arena .... U.S. carriers are losing competitiveness globally because of such international restrictions, " said Tilton. "Completing the job of deregulation" will help the industry break out of the recurring pattern of "financial crisis and bankruptcy."

Proposals to increase foreign investment in U.S. airlines have been defeated over the past year, and "those who favor the status quo are having some success," said Tilton. Among this group are those "celebrating the disruption" of U.S.-EU open-skies talks, as well as those who fought to kill the Transportation Dept.'s attempt to reform airline ownership rules or are attempting to block domestic consolidation.

These "status quo" proponents need to propose another way for the U.S. industry to compete better at home and abroad, Tilton said. Since the status quo has resulted in the loss of more than 170,000 jobs and $35 billion from U.S. carriers since 2001, this begs the question of whether the status quo is worth defending, he said.

"The only winners in this situation are our foreign competitors, who would enjoy nothing more than to see the U.S. network carriers remain in a state of fragmentation and relative weakness, unable to invest in our product and aircraft, falling further behind in the competition for the global passenger," said Tilton.

Asked about the prospects for further airline merger attempts after the apparent collapse of US Airways' bid for Delta, Tilton said the next wave could see different types of merger. He pointed out that US Airways essentially launched a hostile bid, but now airlines may consider mergers that are in the interests of both companies.

Plane Business Banter
Holly Hegeman, Editor       

On United's 3rd Quarter

United Airlines opened up this week of earnings with good numbers. But – going forward, the airline's cost guidance was less than encouraging.

For the quarter, UAL Corp., parent of United Airlines announced better than expected results, as third quarter earnings came in at $295 million, or $1.96 per share adjusted to exclude one-time items, on $5.5 billion in revenue. Consensus had the airline coming in at $1.88 a share.

Including special items, the airline posted net income of $334 million or $2.21.

Operating revenue was up 6.8%, while operating expenses were up 5.9%. Operating income was up 96% to $656 million.

Revenue passenger miles dipped 0.3%, while available seat miles were down 1.5%. Load factor increased 1.1 points to 84.7%.

Yield was up a hefty 9.1% to 13.73 cents/mile, while passenger revenue per ASM was up 10.6% to 11.67 cents/ mile. Both very impressive numbers.

Cost per ASM was up 1.3% to 11.28 cents/mile, while cost per ASM, excluding fuel and special items was up 5.8% to 7.71 cents/mile.

The airline ended the quarter with $4.2 billion in cash.

This call opened up with fairly long intros from CEO Glenn Tilton, CFO Jake Brace, and EVP of Marketing and Sales John Tague.

Maybe it's my imagination, but it seemed that the intro comments from Glenn were more pithy than in the past. Instead of expounding with too many "corporate speak" platitudes, Glenn actually gave us a little bit of useful information this time. Nice change. Thanks.

I had no reason to worry though. Glenn redeemed himself later in the call.

On the call for the airline were Glenn, Jake, John, Pete McDonald the airline's COO, and Graham Atkinson, the airline's Chief Customer Officer. (CCO?)

No surprise that leading Tilton's comments was the fact the airline led the industry in its RASM performance for the quarter. Excluding special items, the airline's RASM was up 9.7% over last year.

Glenn was also fairly quick to point out that employees have earned more than $100 million in profit-sharing so far this year. While actual payouts will vary, depending on how well the airline does in the fourth quarter, given the employees' feelings toward the mega-payouts that management received as part of the airline's bankruptcy stay, I was not surprised to hear Tilton talk about the profit-sharing numbers so quickly in his comments.

In addition, as blatantly greedy as management was during the bankruptcy exit, Tilton did make one point that bears repeating. The profit-sharing plan at the airline now shares the same metrics for all employees -- with pay-out accruing essentially with the first dollar of pretax profit.

Unfortunately, Glenn then turned his attention to the business of "portfolio management" as opposed to running an airline, as he launched into his discussion of industry consolidation and how by "eliminating cross-subsidies we will strengthen these businesses and our core business." Speaking of portfolio management, I had to laugh when he actually used the word portfolio, as he said, "We are looking at every segment of our business to determine what is core and what is not, to eliminate cross- subsidies that mask inefficiencies. We are identifying how to unlock the value associated with the portfolio of businesses such as Mileage Plus and our maintenance division."

So, sports fans, there you have it. United Airlines is not an airline. It's a conglomerate of portfolio assets just ripe for the picking.

Obviously, this is where Glenn and company and I part company. Probably where I part company with a lot of investment bankers as well.

But that's another issue that we talk about almost every week. (See the US Airways, Republic, or JetBlue calls for calls that discuss running an airline, not an extension of a Wall Street investment house.)

Jake then took over the intro portion of the call and went into detail on many of the financial aspects of the airline's quarterly results.

Of course, no discussion would be complete without a look at the airline's amazing cash flow. As we all knew was going to happen, after the airline shed its pensions and less-than-advantageous leasing agreements, the airline is literally swimming in cash. This quarter it socked away another $342 million in cash flow -- 161% higher than last year. Free cash flow came in at $60 million this quarter, up from $38 million last year. Excluding the effects of the airline purchasing three aircraft during the quarter (they had been leased previously), the airline would have posted more than $200 million in free cash flow for the quarter.

On the balance sheet side, the airline saw its total debt reduced by $210 million. The airline ended the quarter with total debt of $12.2 billion. Year to date the airline has reduced its debt by $1.6 billion.

John Tague then came on the call and started talking about operational performance. Clearly, again, international is where the RASM sweet spot was, as the airline saw international PRASM up 10.8%. And here is an interesting stat. If you remember,American Airlines did not do that well this quarter on its trans-Atlantic RASM. United didn't have the same problem. United posted a 12.2% growth in trans-Atlantic PRASM. This was on top of a 4.4% increase in international capacity.

Anyone have a potential explanation for this? I do, but I'll wait and see what your great minds can come up with.

Speaking directly to American's numbers, Tague told those on the call that flights into Heathrow did quite well, with year-over-year RASM growth in the low double-digits.

As to the ever-asked question concerning declines in the economy and how this is affecting the airline industry, Tague told analysts this week, "From our perspective, we are not seeing any evidence of a slowdown in demand. Looking close in at the fourth quarter, we expect strong and balanced unit revenue growth both internationally and domestically. Bottom line is that we are encouraged about our revenue performance as we look forward to 2008."

John also came out with a notable phrase describing the industry's penchant for throwing capacity into a market -- but that will come up again later, as analyst Gary Chase had the same reaction to it as I did, apparently.

On the guidance side, Jake came back on the call at this point to tell analysts that the airline is purposely being conservative with its fourth quarter forecasts. Having said that, he then said "For the fourth quarter, we expect North American capacity to be down 4.5 to 5.5% while international capacity is expected to be up 4.5% to 5.5%. Overall for the quarter, main line capacity is expected to be down one-half to one and a half percent. Express capacities are expected to be up 2.5 to 3.5% resulting in fourth-quarter consolidated capacity flat to down 1%. For the full-year 2007, we expect main line capacity to be down .5% to 1.5% and consolidated capacity to be flat to down 1%. For 2008, we expect main line capacity to be flat to up 1% with domestic main line capacity down 3 to 4% and international capacity up 5.5 to 6.5%. We expect United Express capacity to be up 1 to 2% leading to consolidated capacity being flat to up 1%. Having said all that, we retain the abilities to further reduce capacity if necessary, as we have a large number of unencumbered aircraft and as well as some that come up for lease renewal next year."

On the cost side, Brace said, "We estimate that main line CASM, ex-fuel, and special charges, will be up 6 to 6.5% in the fourth quarter. Approximately half of the year-over-year increase is driven by higher maintenance cost due to increased heavy maintenance volumes, both air-frame and engine as well rate increases in some of our outsourcing contracts. Another one point of the increase is due to lower operating expenses in the fourth quarter of 2006 from the two favorable insurance settlements. Higher profit sharing expenses is causing one point of the year over year increase. Since the end of the second quarter, our earnings forecast has risen causing a substantial increase to our profit-sharing expectation. While we didn't provide explicit cost guidance in the fourth quarter, if you used the data we provided for the three quarters and the full year, you would have backed into an increase in fourth quarter CASM ex-fuel of 4.8% based on our previous guidance. That obviously at midpoint is being raised to 6.25%, an increase of some 1.4 points. There are three things that drive that. One, is we have further lowered capacity versus the previous guidance we gave you. Second, I just mentioned our profit-sharing expectations have grown for the year. I would note that we book profit-sharing a little differently than some of our competitors in that we estimate our full-year profit and then we book a proportion of that in each quarter and since our full-year profit expectations have gone up, the amount that we will book in the fourth quarter has also gone up. And then the third piece that has increased our guidance somewhat modestly is maintenance expenses and we can talk about that more in the Q & A. For the full-year 2007, CASM, ex-fuel, special charges and severance is expected to be up about 2.5%, slightly higher than our prior guidance, reflecting higher maintenance cost and increased profit sharing I just mentioned."

With that, the floor was open.

Frank Boroch with Bear Stearns was first on the call, as he asked Glenn to "maybe shed some light on the 250 initiatives you alluded to. Sort of what is first up in the five-year strategic plan you can share with us today?"

I couldn't help but stifle a choke.

Yes, tell us more about those 250 initiatives. (Notice, I left that out of my initial Tilton notes overview.)

Glenn responded, "Frank, there are two types of initiatives -- we appreciate the question -- that we are focusing on. Strategic as I mentioned in my comments and I think Jake and John have both referred to them. We discussed with the Board. We are further along in developing the possibility of the MRO transaction than we are with Mileage Plus. We've said previously that we are focusing both as businesses within the portfolio of businesses at United so we can clearly make a distinction as to their value. We hope to have a P&L for Mileage Plus developed by the first of the year and then we will run the business accordingly. But we are further along with the maintenance division. The 250 initiatives really speak to the issue of the core business. We have initiatives all across the business that are a function of the $4 billion capital budget we have allocated across the strat plan, and they cover the full spectrum of the margin from revenue, all of John's initiatives he alluded to in his comments, to Peter and the management of the operation and Graham in the customer experience initiative we have under way. The point we want to make with 250, we have reached the point that the improvement we expect of ourselves throughout the five-year plan is going to come in smaller increments than those you might be accustomed too. For a company that has just come out of restructuring we got used to talking of increments of value in large numbers. These are going to run the full spectrum from tens of thousands up to millions. And I think that is the point we wanted to make with 250. We also wanted to make the point that we are very transparent in the way we account for the accountability around these initiatives, Frank."

Got that?

We had a great example of "Glenn-Speak" on the next response as Glenn responded to another question from Frank. Frank asked, with oil at $90 a barrel, has the likelihood of industry consolidation increased?"

Glenn responded with a fairly long rambling response, at the end of which he concluded, "With respect to recession, John spoke to the fact that in our business anyway, we aren't seeing any evidence of it, Frank, but my view is that at some point, we are all going to do the work that we are able to do -- independent of one another -- and at some point we should turn our attention at the synergies that exist between us in the industry which we would classify at our vernacular here at Unitedas unnecessary waste."

To which Frank responded, "Great, okay."

Gary Chase from Lehman Brothers then came on the call and wondered about the "slavish reliance on marginal economics" that John had mentioned earlier. Ah...could he explain this a bit more.

To which Glenn said, "That is exactly what he said."

At which point Gary responded,"Ah, well, can you explain to us on the international side, what is the opportunity that is driving, you know, the need to dial up the growth there, because it seems like that is what you are doing is supplanting domestic for international."

John responded,"Yes. I think as it relates to the capacity guidance, while we are not providing quarterly guidance for next year, you should assume the capacity reduction is coming out of the first six months of next year as we dialed our capacity down throughout 2007."

To which Gary said, "Right."

John then followed up with, "We think that is the right place to be. We simply reject the idea that capacity plans should remain stagnant regardless of the price of fuel. It just doesn't calculate, but we are quite comfortable but retain the flexibility as Jake said to move up or down. We have been relatively cautious in terms of international growth as compared to some of our peers but are growing at a rate that is greater than others. I think as Glenn pointed out we continue to have significant opportunities to re-optimize within the existing fleet so we are eliminating some marginal performing routes in favor of greater opportunities. We are also improving our asset utilization as we relook at some of our maintenance criteria. So we are getting good economics out of the existing fleet. We, too, are cautious as to whether these unit revenue growth rates will continue to run at the level they are, and consequently, I think that is reflected in a relatively modest growth rate for international next year. But international margins are recovering quite nicely."

Gary was undaunted in his quest. "Is there any way to characterize what you are doing domestically? Does it come disproportionately from one area?"

John answered, "I think as we have done really throughout the last three to four years, we have worked very hard to maintain the depth and breadth of our schedule and the scheduled quality particularly for our corporate customers. That has been achieved by effectively utilizing the 70-seat regional jet capability, moving our wide- bodies into more effective use internationally and consequently, simply down gauging the domestic network and that has been the answer in terms of margin performance. Others are pursuing up-gauging in pursuit of lower marginal cost to then again in our view accept unprofitable marginal demand. We are just going to continue down this path, and we are very pleased with the results. I will point out that we don't think we are executing as well as we will be able to in the future on the revenue side, and there are lots more make our luck opportunities on the revenue side of United."

Gary then asked, "So, no big red zones we need to be aware of, right?"

John said,"We are seeing a very, very balanced outcome across the entities that tells us our capacity allocation is on target right now. But you know, we are, you know, we are very, very keen to re-evaluate. The wonderful thing about airplanes is that they are movable."

There's a quote.

Gary then asked John to clarify on the airline's strong trans-con performance: "And then just a quick question on the 13% trans-con gain, is that in Virgin overlap markets only or is that for the entire trans-con entity for United?"

John responded that it was for the entire trans-con entity. The only info he would give concerning Virgin overlap markets was to say that during the quarter both JFK and San Francisco, which would have the most Virgin overlap, posted positive revenue growth year-over-year. But he did not say how much.

There was a funny moment in the call when the speakers went dead. Robert Barry from Goldman Sachs was trying to ask a question. Everything was finally fixed, and he came back on. "Let me see if I can remember my question."

Glenn responded, "Robert, it wasn't anything you said."

On the issue of selling off Mileage Plus, Jake reaffirmed that the airline wants to get a more transparent accounting of the unit done by the first of 2008. "Where we go from there we haven't determined yet because the first step really, want to see what that business looks like, what the opportunities are, but we will look at that and move quickly beyond -- once we have visibility into the P&L and what that entity really looks like. Not -- we don't have a specific timing. We haven't decided what to do and whether to share the P&L information. Obviously our bias is to both share the information and to do something that creates shareholder value with that entity. That is our bias and we intend to act pretty quickly after January 1."

Mike Linenberg from Merrill Lynch came on the call and asked a question that helped to explain why it was that United could have outperformed American to such an extent on its trans-Atlantic, and particularly Heathrow, service.

Last year, United still had its New York service in place.

John agreed that the airline is benefiting from the elimination of its New York service.

Bill Greene from Morgan Stanley brought up the question of dividends. While Glenn kind of waffled and wandered around on the topic, Jake came in and explained pretty quickly that the current covenants in the airline's bank agreements prohibit the airline from paying a dividend or doing a buyback. "We are talking to them right now about that. Obviously don't have a resolution yet. So we are pushing the ball down the field in that regard. So obviously with what happened to the -- with the sub-prime meltdown -- this didn't help our situation in getting an amendment, but we are trying to work through those issues with the bank."

Not too long after this we had another Tilton tidbit for the growing archives, as, in answering a question from analyst Ray Neidl in connection with pricing, Glenn opined, "Ray, we think it triangulates back to the benefit of disaggregating the businesses so you don't have the intrinsic subsidy issue in the portfolio which could actually extend to the subsidizing effect of a fuel hedge."

Glenn, we love you.

Kevin Crissey from UBS came on the call and asked a number of questions concerning a possible Mileage Plus spin-off. Nothing really new in the back and forth between Kevin and Jake on that matter.

Jamie Baker from JP Morgan then came on the line with a little bit of humor, as he said, "Good morning gentleman. Your earlier technical delay would have been more entertaining if you piped in channel 9."

Baker then asked a few questions concerning a possible MRO spinoff, which concluded with Jake saying, "It wouldn't be any commitment until we actually had a deal with the union."

Glenn added, "Jamie, when you think about it, the answer to your question is probably contingent upon who the interested party that succeeds would be and what their perception would be about the economics of such a transaction, including the labor transaction."

Got that Jamie?

Dan McKenzie with Credit Suisse then came on the line and asked if the airline had seen any cutbacks in corporate travel spending.

Answer? No. In fact, as Glenn said, the airline has been actively looking for them. But nothing substantial had been seen. "It actually seems the economic concern is driving them to compete on a face-to-face basis looking for an edge, such at least in the near term in this period as to we are not yet able to call the next economic cycle as to when it begins and when we now experience significant change. We are actually seeing a sustaining experience."

Glenn, you're killing me.

Dan then asked about the "c" word again. "United has clearly been a strong advocate of industry consolidation, but two counter arguments have been that the political window has closed and then separately, concern has been expressed about consolidating at the peak of the earnings cycle. I am just wondering how do you respond to these industry concerns."

Glenn replied, "Two -- two points, first is, I think I said in the last call that we haven't really tested the political window at all other than in the context of a hostile attempt. So -- any perception that is consistent with that which you mentioned a moment ago is hypothetical. We haven't gone to Washington and tested the antitrust and the political window with the proposition of a constructive and accretive to all stakeholders transaction. Until we do, until the industry does, I don't think we are going to know the answer or not going to know the outcome. I do think at the smaller airline level, there has been some activity that led to constructive consolidation that was resolved with the various regulatory authority. So I am still of a mind that there is a tremendous amount of redundant overhead and redundant expenditure that amounts to waste that we, independent of consolidation, are pursuing on our own. It would be hugely accretive to stakeholders if we pursued it in context of consolidated industry to run that waste out of the industry."

Bad waste. Bad, bad waste.

Sorry, I couldn't resist.

Jake then added, "I would just add that the case where the economy is slowing and fuel is high, if that's all true, then that only makes the case for consolidation even stronger."

That was about it for the call.

My take on the airline's results? Revenue was clearly good. You can't argue with this, but expenses were higher than expected and going forward that is not going to change in the fourth quarter. The biggest news here was the continued shift in capacity from domestic to international markets. The airline has stepped up its 2008 targets in this regard.

Listening to all the airline's talk about its "five-year plan" reminds me of a failed run for governor that just took place here in Louisiana. One candidate never did give hard and fast responses to what he would actually do if elected. He would merely steer people to his "plan" that was posted on his website.

I found the whole thing rather uninspiring, as did the rest of the voters as he fell to defeat in the primary. I find repeated allusions to United's "five-year plan" similarly disengaging. And enough of the potential 250 ways to improve the airline.

Let's concentrate on maybe...10. And tell us what they are.

Other than that, we have to love Glenn Tilton. He gave us more entries in our expanding collection of Tilton Tidbits. Clearly I'm going to have to work on my "disaggregating of my triangulation of waste."

Good quarter for the guys in Chicago. Just wish we could have heard more about IT improvements, passenger enhancements, and other things that improve the life of an airline passenger -- and revenues -- instead of ways to spin off assets.

Global Airliner Forecast Update
The Boyd Group, Inc.

Mid Is In. Due to retirements and entry of new-generation airliners, the strongest demand is for mid-size airliners. For example, at the lower end of the 11,248 new jet airliners required globally over the next ten years, over one third of that figure will be comprised of mainline-cabin airliners between 75 and 125 seats. Most of the demand for widebody airliners will be driven by retirements of older airliners as new-technology models, particularly the 787, the A-350, and the 747-8, come on line. (Turboprops indicate only “trickle” demand, and are therefore not included in the forecast.)

Retirement Bubble - 2010 - 2013. In the mid-years of the forecast, over 50% of all new airliner demand will be the result of retirement activity, overtaking demand increases caused by traffic growth. In the last years of the forecast, however, this rate drops below 40%. In most cases, retired airliners will remain that way, particularly widebodies, where the replacement drive will be the result of the arrival of higher-efficiency 787s and A-350s, making older-technology airliners obsolete.

RJs - Demand Is Evaporating. The Boyd Group Fleet Demand & Trend Forecast segregates "regional jets" separately, regardless of capacity. This is because RJ-cabin airliners (ERJ and CRJ) are platforms aimed specifically at the small lift provider segment of the air transportation industry. Demand for these "regional jets" will not rebound, and will taper off to almost zero by 2012. Higher-capacity “stretched-cabin” versions - even 90-100 seat variants - will likely be mostly limited to follow-on orders from small lift providers, as their main – although likely substantial - operational advantage is commonality with smaller, earlier CRJs. New demand: under 300 units globally. In fact, the forecast indicates a decline of over 850 RJ units in global fleets.

Replacement Demand For Retired DC-9s/F-100s/ 737-200s. Of note is the demand forecast for lower-capacity mainline-cabin jets in the 75 to 100 seat range, which will be approximately 15% of total jet airliner demand over the next ten years. The Embraer E-170/190 platform is currently the only player firmly within this mainline-cabin category, as smaller versions of Boeing and Airbus airliners do not have competitive economics. Wildcard: a next generation composite 737 or A-320 platform, with variants that would encompass this size range, at least in terms of operating economics, could emerge as a major competitor to the Embraer E-Jets.

Growth Everywhere. Particularly China. Total global passenger airliner fleets will expand by 34.5% between 2007 and 2017, with China being responsible for almost one third of that increase in fleet size. China will also be responsible for 21% of global demand for new jet airliners, essentially equal to that of Europe. North America’s share of global demand will drop to just under 34%.

US Airports: Prepare For Larger Aircraft. But Not The A-380. The average unit size aircraft operated by North American carriers will increase markedly, to 158.8 seats, by year 2017, while China will see average passenger airliner size decline by 8% during the same period.

The LCC Frenzy In Europe Coming Back To Earth. Capacity increases in Europe will flatten substantially - below 2% per year - subsequent to 2010. The clear indications are that the low-fare airline phenomena will slow in that region.