Are Uniteds' days numbered?

[canadflyau]

Are United's days numbered?

I was watching the news tonight and they said that UAL said that recovery may no longer be possible. My question, is this spin so the bk judge will let them nullify all labor contracts like they just asked for, or is this the truth?

I think this is a sad piece of news in either case.. If this is company spin, why would they do such a stupid tactic!! People will not buy tickets on an airline they think will not be able to honor the purchase down the road. I can't believe they would put that out on the news if it was merely to influence the bk judge..

http://www.foxnews.com/story/0,2933,81437,00.html

 

[Cardinal]

They certainly appear to have applied generous spin to the story with each step of the process. It is quite difficult to cull the wheat from the chaff. It's no newsflash to the industry the Ch 7 is a possibility, but one hates to frighten the public. Sigh. I think I'm gonna get that early spring vacation after all...

 

[Lrjtcaptain]

i don't want to sound like an idiot when i post this but how will this effect the regionals that do United routes such as ACA and Air Wisconsin. Dont they take up some of the slack?

A friend of mine called tonight and asked for job leads cause he thinks he will be out of a job with ACA flying his DOJET.

 

[canadflyau]

Cardinal- I agree, lots of spin... but this is some dumb spin, it could really affect bookings. I wonder how this will affect our little airline? We haven't been paid by UAL in many months and were still treading water... Did you get a furlough notice?

Lrjtcaptain- not bad questions at all.. I especially wonder what liquidation would mean to Air Whiskey? That is a great company! I am just unclear of their relationship with UAL, i thought they were a wholly owned at one point.

 

[skykid]

They didn't put it out on the news, it was picked up by news agencies from the court documents that are designed to influence a favorable ruling. UAL management knows it will get some bad press, but it is a necessary evil to get contracts voided. What did you think they were going to put in the court documents - things might be looking up, but please rule on voiding the contracts anyway?

 

[canadflyau]

"things might be looking up" skykid.... SAY WHAT?


Yeah I figured the press may have gotten it from the court docs but in the past when reporting from the court docs the headlines read "in court filings today" not "Bankrupt United Airlines forecast a first-quarter operating loss of $877 million and said for the first time publicly that going out of business altogether is a "distinct possibility" as war looms" and the article makes no indication of this, plus they asked the judge to void the contracts days ago and he might rule (unfortunately) in their favor without them needing to ruin their own name. They also just told everyone that they were reaching the preset benchmarks, now this... is it looking up or down? I'm confused, United Mgt sounds confused, I wonder what the judge is?

 

[skykid]

Right, let me put it another way. The news you are seing came from the 1113C filing documents on Monday, not some press release. What I am saying is, even if gold nuggets are dropping from the sky in Chicago, it is in UAL mgt's best interest to paint the worst possible picture for the judge. They know the press is going to use this to sell their papers, but no choice. This isn't even news. United may liquidate without permanent large concessions from all employee groups? Duh. I knew that a couple of Septembers ago. I'm an optimist though, and I still believe a quick and decisive war will do wonders for the economy. Hopefully the airline industry can hang on until that happens, if it happens. Did you see where the executive branch is talking about immediate help for the airlines if the war continues to adversly affect the industry? That would be nice - at least release some oil from the strategic reserve. My strategy is hope for the best and prepare for the worst. That's why I got into the Guard and started up a private business in the last 18 months. I hope nobody else in this business loses their job, but get your plan B and C going and it takes the pressure off.

 

[General Lee]

A major headline in the Economy section of the USAToday states that United may be forced to Liquidate-----That is not good advertising for future travel on United. They may be trying to force their employees into more concessions, but they are scaring future passengers in the process. They still do not have a plan on what they will do outside of bankruptcy---if they ever get there. They have asked for more time from the court to come up with some plan. They are asking their DIP lenders for more slack on their payments. They claimed they were "making" over $1 million a day in Jan after all of the employee cuts, but they forgot to say that they haven't made any lease payments on any of their planes since they filed. That $1million a day "profit" they were making would vanish when they would have to start making lease payments. They cannot hedge fuel---and even though fuel prices have gone down in the last couple days from $35 a barrel to around $31 a barrel, they still have to pay on the spot prices. The Denver blizzard has hit them at the worst time---during Spring Break--with thousands of people trying to get to Colorado Ski resorts etc. That will cost them a couple extra million $$. (That they don't have) IF UAL does go Chap 7, The regionals flying for United will have trouble at first, but will probably find other feed as other airlines take up the slack, but at huge discounts. (With Mesa and Chacaka waiting out there too) That will result in pay cuts and possible furloughs. (Something a lot of the regionals have not had yet---except ACA and CalEx) United may start selling off parts to get extra cash to try to stay alive through the covenent process. The only Major that has any cash to spare is Delta--and rumor has it that they MIGHT pick up the ASIAN routes and some planes (maybe with some UAL pilots--as long as they were picked up before Chap 7). This will all be interesting---and if UAL had some decent leadership---this might not have happened.

Bye Bye---General LEE

 

[Cardinal]

Cardinal- I agree, lots of spin... but this is some dumb spin, it could really affect bookings. I wonder how this will affect our little airline? We haven't been paid by UAL in many months and were still treading water... Did you get a furlough notice?

Not yet. We'll see. This storm can't really help any of the Denver airlines, I did a back of the napkin calculation and figured that United's DEN operation is worth about $10 million/day in revenue. They'll lose at least a solid 48 hours worth of flights.