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Quick Hits: Pilots Play Hooky


Brief scrutiny of today's headlines

File this under "cutting off the branch upon which your more than somewhat ample butt is parked."

Pilots at United Airlines (UAUA) are allegedly abusing sick leave and refusing to fly extra hours. The airline says this has resulted in the cancellation of 329 flights between July19 and July 27, cutting revenue about $8 million and reducing operating profit about $3.9 million.

This plays out against rising fuel prices that have hammered major airlines, including Delta (DAL), Continental (CAL) and Northwest (NWA). Southwest (LUV) artfully hedges fuel costs and has done better.

United Airlines may ask a federal judge on Thursday to issue an injunction to halt what it calls an illegal job action.

United's pilots want to reopen their contract, which isn't scheduled to be considered until the end of 2009. Pilots took pay cuts when the airline reorganized under bankruptcy protection and want to get back some of the money they lost.

Sure, who wouldn't?

But airlines aren't exactly robust enterprises in the current economy, and you'd think that a job with lower pay beats no job at all.

Customers are smart, and if they can't depend on United, they'll walk across the terminal to a competitor. This doesn't strengthen the pilots' argument for higher pay now.

More ominously, United - like other airlines - is cutting back and plans to furlough 950 pilots.

Today's study question for the pilots: What does the saying "you can't squeeze blood from a turnip" mean?

Today's study question for investors: Which sector has grimmer long-term prospects – newspapers or airlines?
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