UAL to not make it through the Winter???

[waveflyer]

That's what republicans would do

 

[Colonel Savage]

Is it true if the company's cash position drops below a certain level then the credit card companies (or someone) can withhold money from them and then it is just a spiral down affect because that just lowers their cash position more and then the bigger amounts can be heldout....a buddy of mine at UA was saying something like this but I was not paying too much attention...now I am a bit confused about what he said....anyone know of such a thing?

I believe that's what they call your classic "death spiral financing". It's a for real business practice taught at Harvard, Yale and Wharton these days. Really.

 

[Jar Jar]

United needs a bailout, but bailed out does not need a hyphen.

Damn it!

 

[Bringupthebird]

so keep blaming Obama for cleaning up the messes you made)

There was a crumb of truth in what you said. We are all cleaning up the messes left by the same folks who elected Obama- folks who ignore the reality of how broke they really are.

The audacity of hope is that people are really beginning to benefit from the clarity that comes with suffering. They are seeing that they made a grave error in supporting someone without the experience or politcal maturity to govern.

It remains to be seen whether this nation has the will to change and not merely borrow it's way back to false prosperity.

 

[densoo]

You've got some big-ol' political theory *there*, who knows what *they're* going to do with United. Maybe UAL will be bailed-out to ensure *their* survival.

They will get bailed out. Right after Christmas they'll merge with CAL, drain it of all its cash, borrow against most its hardware, sell the rest, staple all the employees to the bottom of their lists if they're lucky, then furlough everyone below the staple. Bonuses all around for the senior management, lawyers, and all the many CAL union officers who are now in management.

 

[waveflyer]

There was a crumb of truth in what you said. We are all cleaning up the messes left by the same folks who elected Obama- folks who ignore the reality of how broke they really are.

The audacity of hope is that people are really beginning to benefit from the clarity that comes with suffering. They are seeing that they made a grave error in supporting someone without the experience or politcal maturity to govern.

It remains to be seen whether this nation has the will to change and not merely borrow it's way back to false prosperity.

You mean like when your king bush increased spending, started a war, cut taxes and borrowed money from china to make up the difference?

Republicans are truly the party of irresponsibility. You can't accept that your views were proven wrong. You were wrong. It's that simple. Now all you hold onto is villifying those in power. The problem is... You spent the whole of the Clinton years doing just that. Crying wolf has it's consequences. Now- we are in power. We've reached out way more than republicans ever did. Now it's simply time to ignore your yelling. Children should be treated like children.

 

[nwaredtail]

You mean like when your king bush increased spending, started a war, cut taxes and borrowed money from china to make up the difference?

Republicans are truly the party of irresponsibility. You can't accept that your views were proven wrong. You were wrong. It's that simple. Now all you hold onto is villifying those in power. The problem is... You spent the whole of the Clinton years doing just that. Crying wolf has it's consequences. Now- we are in power. We've reached out way more than republicans ever did. Now it's simply time to ignore your yelling. Children should be treated like children.

Don't try to spew facts to the head burying, "we are safer under Bush" crowd. Remember, these are the people that watch entertainer's like Glenn Beck, Fat Ass Limbaugh, etc and think they are journalists.

 

[ATR-DRIVR]

You mean like when your king bush increased spending, started a war, cut taxes and borrowed money from china to make up the difference?

Republicans are truly the party of irresponsibility. You can't accept that your views were proven wrong. You were wrong. It's that simple. Now all you hold onto is villifying those in power. The problem is... You spent the whole of the Clinton years doing just that. Crying wolf has it's consequences. Now- we are in power. We've reached out way more than republicans ever did. Now it's simply time to ignore your yelling. Children should be treated like children.

Really??? Please show us how, oh high and mighty one...

 

[tathagatha]

yawn, republocrats!

 

[Redtailer]

Is it true if the company's cash position drops below a certain level then the credit card companies (or someone) can withhold money from them and then it is just a spiral down affect because that just lowers their cash position more and then the bigger amounts can be heldout....a buddy of mine at UA was saying something like this but I was not paying too much attention...now I am a bit confused about what he said....anyone know of such a thing?

You heard correctly. Before anyone else comments on this thread they should REALLY look at UAL's last quarterly report and balance sheet.

There are triggers around $2.2 bil $2.1 bil and lower. Each number activates a higher percentage of holdback by the credit companies. Yes, it will turn in to a death spiral because at the $2.0 bil trigger it gets really ugly (Read BK filing). FYI the reported unrestricted cash on hand was just $2.3 bil.

UAL's position is NOT common amongst the other airlines. Have you guys even seen all of the balance sheets and cash flows? UAL by far is in the worst position followed by LCC and then AMR. Everyone else is on pretty solid footing. For now.

The differences are that UAL is at least 50% upside down on their debt to equity. Very few sources for them left to raise cash. I believe they have about $1.1 bil of unlevered assests to use because no one will give them unsecured credit at this point. How fast was that cash burn rate again?

UAL tanks it is chapter 7. No credit, no plan, new rules, no management and nothing left to negotiate. Leases? Nope, no new acft since the last BK. The lessors, still smarting from the last BK, will tell them to go pound sand and send the acft overseas. The employee group? LOL. That one speaks for itself. The only thing they can cut is the current liabilities with the vendors. Not much help. No bailout. The public is already too fed up.

LCC BK will be 50-50 of a chapter 7, but if it makes it there will be a lot of pain felt by the employees and the airline will be a shadow of its former self ala TWA.

AMR is the only one that will actually benefit from the BK process. Lots of fat to trim. My sympathies to the employees if this happens, but it won't be pretty. They will be a tough competitor coming out of the other side.