This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Exclusive: United Airlines Newark-Based Pilot Leaders Call for CEO's Ouster

Stocks in this article: DAL UAL

NEWARK, N.J. (TheStreet) -- Leaders of the largest local chapter of the United (UAL) pilots union are calling for the ouster of the airline's CEO Jeff Smisek.

"It's time to find a new CEO who understands how to run an airline, not just make excuses for his failures," said the top three officers of Local Executive Council 5, the Air Line Pilots Association chapter that represents New York and Newark-based United pilots, in a strongly worded letter to the local's 2,300 members.

The letter was sent April 25, the day after United reported that it lost $489 million excluding items in the first quarter, which produced record profits for both American (AAL) and Delta (DAL) , its two key rivals. A copy of the letter was provided to TheStreet.

"No one else has a greater financial stake in United Airlines than the collective stake of our pilots," the letter said. "Our careers should not be jeopardized by the worst senior management in the airline industry.

"We have absolutely zero confidence in the ability of present management to lead a turnaround," wrote LEC Chairman Glenn Johnson, Vice Chairman Mark Leneski and Secretary-Treasurer Tim Boyens.

The three listed United's faults, including these: It has "a disengaged and incompetent CEO is leading a terrible management team." Also, "a merger that should have been completed in three years or less remains incomplete after nearly four years (and) interdepartmental communication and cooperation are nearly nonexistent."

Also, "terrible employee morale and excessive outsourcing have combined with chronic operational and IT issues to drive away our elite frequent fliers in droves, driving our revenue and (passenger revenue per available seat mile) downward," the letter said.

While PRASM has declined at United, it has increased at Delta and American. "Delta and American get the suits, we get the flip-flops and backpacks," the letter said.

"It is time to demand leadership that is actively engaged in employee morale, operational excellence, and service quality, which will always drive revenue far higher," the letter said. "United should be the industry leading airline. That will never happen under present management.

The three local leaders said they are "developing sound strategies that use all available resources to combat the feckless and ineffective managers" who lead the company.

Commenting on the first-quarter performance, the three noted that "by now, those of us paying attention have grown accustomed to UAL underperforming the rest of the industry.

"United should be the industry leader, with the largest population and origin/destination traffic demand in our hubs and as the largest airline across both the Atlantic and the Pacific," they wrote. "Instead, we are always the laggard. As in past quarterly updates, we once again hear excuses as to why United is unable to perform while we watch all of our competitors earn high and record profits."

United shares fell 10% on the day the carrier reported earnings, the letter said, reducing market cap to about $15 billion, about half of Delta's market cap. The letter also quoted four Wall Street airline analysts who expressed disappointment in United's results.

United shares closed Monday at $41.56, up 10% year to date.

Leaders from all of United's local ALPA chapters are scheduled to gather next week in Chicago for a quarterly meeting, where the topics raised in the letter are likely to be discussed.

Written by Ted Reed in Charlotte, N.C.

To contact this writer, click here.

Follow @tedreednc

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs