Attn. United Haters

[AA717driver]

Just as being in Ch.11 and up to their a$$ in angry creditors doesn't mean a company is doomed, receiving exit financing doesn't assure a successful recovery.

It doesn't matter if UAL has an exit plan or not--conditions change with the wind and plans are worthless as soon as they are committed to paper.

The UAL employees who have a few years left before retirement have had their lives turned upside down. They are scrambling to figure out where their next source of income will be after mandatory retirement at 60 (since it doesn't look like that's going anywhere soon). Those with a long time to go at UAL will spend the rest of their careers looking over their shoulder wondering where the next crisis will come from.

You might as well get a subscription to the WSJ because you will open it to the index of companies every day to see if UAL is in there. You'll keep up on the price of fuel and look at competitor's ads to see what they are charging. You'll bust your butts to save fuel only to see the savings pi$$ed away by management on some stupid scheme or program to a.) gain customers b.) retain frequent flyers or c.) improve employee morale through team building...blah, blah, blah.

Welcome to the world of the shaky airline. It's not temporary and the chances of another Continental happening are slim. Better get comfortable with the above circumstances.

Oh yeah, just wait till you're on the jumpseat and the JetBlue guys are lecturing you on dragging down the industry! Haaaaahaaaahaaaa! Yep. It's cold out there.TC

 

[ualdriver]

CHICAGO, Feb 14, 2005 (AP Online via COMTEX) -- United Airlines said Monday it has received four offers of debt financing worth as much as $2.5 billion to help the nation's No. 2 carrier emerge from bankruptcy......

http://www.marketwatch.com/tools/quotes/ne...FEE19C348EF1%7D

That WAS the link from Feb 14, which was the first time I saw any bank publically come out and say they were willing to give us anything. There might have been something sooner, but I didn't see it if they did. Someone else might have a link. Unfortunately, it was cut off after the "ne." That was the first sentence though, above the link.


Update 1: United Gets Four Offers of Debt Financing
02.14.2005, 11:07 PM

United Airlines said Monday it has received four offers of debt financing worth as much as $2.5 billion to help the nation's No. 2 carrier emerge from bankruptcy.

United spokeswoman Jean Medina would not say which financial institutions had made the offers and said there was no schedule for when any final deal might be reached. Moreover, any such agreement would be based upon United realizing the $2.5 billion in cost savings the carrier has already laid out, she said.
There's another but I don't have a link unfortunately. Sorry!


References to "new" business plans existed because things were changing so rapidly that the "old" one no longer applied!

 

[skykid]

You have a little trouble with reading comprehension.

What I said was comical was YOUR analysis of the pension situation, to including your insistance that the PBGC could and would actually liquidate United. Remember that thread where other posters (not me) were commenting on how nonsensical your posts were? That's what I'm talking about, and you know it.

I never said banks were willing to loan United 3 billion last Jan or Feb. What I said was "and the competitive offers for 2.5 billion in exit financing were well documented in the first months of this year." I heard that straight from mgt and also read it in United's hubs newspaper business sections. This is the same thing ualdriver posted on this thread - he may be right that it was somewhere between 2-2.5 billion. No I wont find it for you. If you did some research yourself you would know more. I don't believe anything I read and only about half of what I hear or actually see, so luckily I'm smart enough to realize these deals were contigent on a lot of issues - like the lease battle that just got resolved.

You would have to be a real dumb$ss to think United just formulated a business plan this Summer. Obviously a lot of things fell into place this Summer, but the business plan has been in affect and part of an ongoing process for several years. If you want to get caught up in when documents are filed and the semantics of calling additions "a new business plan," that really shows your level of comprehension. There are formal documents that include scheduling and notices of details that must be filed that have little to do with WHEN the actual business plan was formulated.

 

[skykid]

Welcome to the world of the shaky airline. It's not temporary and the chances of another Continental happening are slim. Better get comfortable with the above circumstances.

AA717, welcome aboard yourself! Give it a few more years and let's hope your company name isn't the one you're looking at for the wrong reasons in the WSJ. That's the way it works around here, but from what I've seen of your previous posts, you already know that. Good luck to us all!

 

[G4G5]

CHICAGO, Feb 14, 2005 (AP Online via COMTEX) -- United Airlines said Monday it has received four offers of debt financing worth as much as $2.5 billion to help the nation's No. 2 carrier emerge from bankruptcy......

http://www.marketwatch.com/tools/quotes/ne...FEE19C348EF1%7D

That WAS the link from Feb 14, which was the first time I saw any bank publically come out and say they were willing to give us anything. There might have been something sooner, but I didn't see it if they did. Someone else might have a link. Unfortunately, it was cut off after the "ne." That was the first sentence though, above the link.


Update 1: United Gets Four Offers of Debt Financing
02.14.2005, 11:07 PM

United Airlines said Monday it has received four offers of debt financing worth as much as $2.5 billion to help the nation's No. 2 carrier emerge from bankruptcy.

United spokeswoman Jean Medina would not say which financial institutions had made the offers and said there was no schedule for when any final deal might be reached. Moreover, any such agreement would be based upon United realizing the $2.5 billion in cost savings the carrier has already laid out, she said.
There's another but I don't have a link unfortunately. Sorry!


References to "new" business plans existed because things were changing so rapidly that the "old" one no longer applied!

Linky no work, but I'll take you word on it.
Thanks for digging it up.
The research that I came up with stated that those loans were ALL predicated upon cost cut, wage cuts and pension reform. The loans were offered but the lenders were well aware that UAL could not comply with the terms (as of the begining of the year).

Your quote about the business plan is dead on accurate. Everytime I turn around it's the new plan. My concern is that UAL mgt got wind of the judges verdict, no more extensions beyond 11/1. Which forced them to come out with another New Plan.

The timing is kind of suspect. Thursday they announce they have a $3 billon dollar loan and friday the judge says, no more extensions.

 

[G4G5]

You have a little trouble with reading comprehension.

What I said was comical was YOUR analysis of the pension situation, to including your insistance that the PBGC could and would actually liquidate United. Remember that thread where other posters (not me) were commenting on how nonsensical your posts were? That's what I'm talking about, and you know it.

I never said banks were willing to loan United 3 billion last Jan or Feb. What I said was "and the competitive offers for 2.5 billion in exit financing were well documented in the first months of this year." I heard that straight from mgt and also read it in United's hubs newspaper business sections. This is the same thing ualdriver posted on this thread - he may be right that it was somewhere between 2-2.5 billion. No I wont find it for you. If you did some research yourself you would know more. I don't believe anything I read and only about half of what I hear or actually see, so luckily I'm smart enough to realize these deals were contigent on a lot of issues - like the lease battle that just got resolved.

You would have to be a real dumb$ss to think United just formulated a business plan this Summer. Obviously a lot of things fell into place this Summer, but the business plan has been in affect and part of an ongoing process for several years. If you want to get caught up in when documents are filed and the semantics of calling additions "a new business plan," that really shows your level of comprehension. There are formal documents that include scheduling and notices of details that must be filed that have little to do with WHEN the actual business plan was formulated.

I have to admit I would have prefered to see UAL liquidated by the pBGC then see the pensions dumped onto the public. My guess is that every DAL and NWA employee feel the same way I do, within the up coming months. All UAL did was open the door for massive pension liability default. The other Legacy carriers will no doubt follow suite. To some how feel that you won the argument is pathetic, you lost your pension and opened the door for all the others to follow. Nothing their to be proud of.

Thanks for not looking it up, I did and foundout what a bunch of BS the loans were. The loans from last Jan/Feb that you refer to were meaningless, they all had caveats like, pension refrm, wage concessions, lease restructuring, yada yada attached. All of which every lender knew they could not meet.

So you seem to be the only one who thinks that UAL mgt had a business plan all along. I find you articles stating the opposite and you brush them aside. Ok 11/1 is just 60 days away and you seem to think that the timing of the new business plan just happen to coincide with the judges ruling. Oh that's right their is no new business plan, they ment for it to happen this way.

 

[G4G5]

Just as being in Ch.11 and up to their a$$ in angry creditors doesn't mean a company is doomed, receiving exit financing doesn't assure a successful recovery.

It doesn't matter if UAL has an exit plan or not--conditions change with the wind and plans are worthless as soon as they are committed to paper.

The UAL employees who have a few years left before retirement have had their lives turned upside down. They are scrambling to figure out where their next source of income will be after mandatory retirement at 60 (since it doesn't look like that's going anywhere soon). Those with a long time to go at UAL will spend the rest of their careers looking over their shoulder wondering where the next crisis will come from.

You might as well get a subscription to the WSJ because you will open it to the index of companies every day to see if UAL is in there. You'll keep up on the price of fuel and look at competitor's ads to see what they are charging. You'll bust your butts to save fuel only to see the savings pi$$ed away by management on some stupid scheme or program to a.) gain customers b.) retain frequent flyers or c.) improve employee morale through team building...blah, blah, blah.

Welcome to the world of the shaky airline. It's not temporary and the chances of another Continental happening are slim. Better get comfortable with the above circumstances.

Oh yeah, just wait till you're on the jumpseat and the JetBlue guys are lecturing you on dragging down the industry! Haaaaahaaaahaaaa! Yep. It's cold out there.TC

You are not the only one who feels this way, todays Rocky Mtn News:
http://www.rockymountainnews.com/drmn/business/article/0,1299,DRMN_4_4034533,00.html

 

[B6Driver]

"Oh yeah, just wait till you're on the jumpseat and the JetBlue guys are lecturing you on dragging down the industry! Haaaaahaaaahaaaa! Yep. It's cold out there.TC"

Tim,
Poor attempt at humor if that was your goal.
JetBlue is not dragging down anything and you know it. You and I have heard that line before about our past home and we missed the punch line then to.

 

[ualdriver]

Linky no work, but I'll take you word on it.
Thanks for digging it up.
The research that I came up with stated that those loans were ALL predicated upon cost cut, wage cuts and pension reform. The loans were offered but the lenders were well aware that UAL could not comply with the terms (as of the begining of the year).

Your quote about the business plan is dead on accurate. Everytime I turn around it's the new plan. My concern is that UAL mgt got wind of the judges verdict, no more extensions beyond 11/1. Which forced them to come out with another New Plan.

The timing is kind of suspect. Thursday they announce they have a $3 billon dollar loan and friday the judge says, no more extensions.

Well of course any loan to UAL will have strings and will be predicated on something. Just like the loan many have on their house or their car. We still can't meet the terms of any money RIGHT NOW as the pensions (some if not all, I don't know) are still in tact until a court date in September. I still think there's a few bonds they're trying to sort out as well.

There was nothing to "get wind of." UAL tried to submit a plan to exit bankruptcy like a month ago and the creditor's committee wanted more time. Obviously the bankruptcy case can't go on forever (remember one year at the beginning was wasted trying to obtain the ATSB loan). Barring any major catastrophe (hull loss, terrorist attact, severe economic downturn, etc.), a plan will be submitted (again), deals will be cut in the back rooms, the banks will come with briefcases full of money, and everyone hopefully will walk away feeling just peachy.

P.S. I wouldn't quote The Rock Mountain News for ANYTHING technical regarding the airline industry. It's absolutely unbelievable the stuff they and others write to grab headlines.

 

[Mugs]

I have to admit I would have prefered to see UAL liquidated by the pBGC then see the pensions dumped onto the public. My guess is that every DAL and NWA employee feel the same way I do, within the up coming months. All UAL did was open the door for massive pension liability default. The other Legacy carriers will no doubt follow suite. To some how feel that you won the argument is pathetic, you lost your pension and opened the door for all the others to follow. Nothing their to be proud of.

Thanks for not looking it up, I did and foundout what a bunch of BS the loans were. The loans from last Jan/Feb that you refer to were meaningless, they all had caveats like, pension refrm, wage concessions, lease restructuring, yada yada attached. All of which every lender knew they could not meet.

So you seem to be the only one who thinks that UAL mgt had a business plan all along. I find you articles stating the opposite and you brush them aside. Ok 11/1 is just 60 days away and you seem to think that the timing of the new business plan just happen to coincide with the judges ruling. Oh that's right their is no new business plan, they ment for it to happen this way.

So liquidating UAL would have saved the defined benefit pension plans in the U.S. airline industry. Further growth by LCC's (current and future upstarts) would not have affected the future viability of those plans at the remaining legacy carriers. Is that your opinion?

The ATSB, in denying UAL's final request for the ATSB loan, said that UAL had sufficient access to the capital markets for financing. Thus, there was no need for UAL to receive an ATSB loan. However, the ATSB knew that the captial markets were not willing to loan UAL anything with the pension obligation in place. It can be assumed that given the UAL situation and the apparent lack of enthusiasm in Washington to pass any meaningful pension reform (as far as the airline industry is concerned), the Government had already accepted the reality of the collapse of the defined benefit pension plan in the U.S. airline industry. Afterall, it was the Government that deregulated the airlines to begin with, while making no requirement that new entrants offer pensions and other traditional benefits to their workforces.

The industry is simply evolving as the Government intended. Thanks to the internet, it is finally happening. The pension defaults are viewed as a relatively small cost for a longer term benefit. Nothing to be proud of, but the economics of it all are unstoppable with or without UAL in the picture.

 

[skykid]

I have to admit I would have prefered to see UAL liquidated by the pBGC then see the pensions dumped onto the public. My guess is that every DAL and NWA employee feel the same way I do, within the up coming months. All UAL did was open the door for massive pension liability default. The other Legacy carriers will no doubt follow suite. To some how feel that you won the argument is pathetic, you lost your pension and opened the door for all the others to follow. Nothing their to be proud of.

You miss the entire point!! I didn't win any argument! All I'm doing is pointing out you have no knowledge on a subject you love to jump in on. Come on guy, at least Ty Webb, Boeingman or some of these other guys know what they are talking about. The PBGC NEVER had the capability to liquidate United! That's the point. The pensions weren't dumped on the public. You don't have a clue what you are talking about. United didn't open any doors for the other legacy carriers. All the Legacy airlines are going to have to match the cheaper retirement plans of the LCCs - with or without United. I'm not blaming anybody, that's the way business is done in this century.

 

[Redmeat]

United didn't open any doors for the other legacy carriers.

This is not entirely true. United established a court precedent by successfully being relieved of it's (WAY!) under funded pension funds. Bankruptcy is very expensive for a major airline. It USED to be considered a last resort. When suddenly being able to "chuck" huge debt (under funded pension funds) became the precedent in the courts, BK instantly became more attractive to NWA, DAL. NWA immediately devised a plan to take its labor groups to the wood shed by threatening the pilots with BK/their pensions.

 

[WatchYourElbows]

You people should really know the reality before you start spouting off. Are you really this unaware of the truth?

FYI-United did NOT start the pension dump. You may not like the fact that they did it, but once US Air was successful, United just followed suit (just like your company is going to do to YOURS! LOL)

 

[Redmeat]

(just like your company is going to do to YOURS! LOL)

UAL must be very proud of you Captain WatchYourElbows.

 

[Widow's Son]

>>All the Legacy airlines are going to have to match the cheaper retirement plans of the LCCs<<

The retirement plans at SWA aren't cheaper. It would have been cheaper for SWA to have traditional pension plans over the last couple of decades compared to what they have paid in 401k match and profit sharing.
The reason the legacy plans don't have any money in them is because when the market started soaring, the companies didn't make any contributions and when the market tanked the continued not making contributions saying they couldn't afford it.
All the while SWA dutifully paid every dollar of its commitments every month, and the combined contributions as a percentage of employee income almost always exceeded even the most generous legacy pension program of the good old days.

 

[G4G5]

You miss the entire point!! I didn't win any argument! All I'm doing is pointing out you have no knowledge on a subject you love to jump in on. Come on guy, at least Ty Webb, Boeingman or some of these other guys know what they are talking about. The PBGC NEVER had the capability to liquidate United! That's the point. The pensions weren't dumped on the public. You don't have a clue what you are talking about. United didn't open any doors for the other legacy carriers. All the Legacy airlines are going to have to match the cheaper retirement plans of the LCCs - with or without United. I'm not blaming anybody, that's the way business is done in this century.

http://msnbc.msn.com/id/7804770/
“Taxpayers had better buckle up because we will be in for a bumpy ride of bailout after bailout, as more and more corporations dump their pension plan obligations on the PBGC,” said U.S. Rep. Jan Schakowsky, D-Ill., referring to the Pension Benefit Guaranty Corp. that already is operating at a more than $23 billion deficit

Who do you think is making up the difference in the underfunded pension? Sure UAL offered up $1.5 billion is stock but it doesn't cover the deficit

http://www.cegelisforcongress.com/UAL
But the PBGC has now assumed billions in new liabilities. The UAL pension fund is underfunded by $9.8 billion--only $5 billion of which is covered by the PBGC. But that's $5 billion in new debt in exchange for $1.5 billion in UAL securities.

It will take extraordinary stock performance for those securities to increase in value so that they cover the $5 billion PBGC payout. If the value of the stock stays steady or decreases, it will not begin to meet the financial obligations the PBGC has now assumed.

United Airlines Pilot Defined Benefit Plan - covers 14,100 participants and has $2.8 billion in assets to pay $5.7 billion in promised benefits. United Airlines Ground Employees Retirement Plan - covers 36,100 participants and has $1.3 billion in assets to pay $4 billion in promised benefits. United Airlines Flight Attendant Defined Benefit Pension Plan - covers 28,600 participants and has $1.4 billion in assets to pay $3.3 billion in promised benefits.
Management, Administrative and Public Contact Defined Benefit Pension Plan - covers 42,700 participants and has $1.5 billion in assets to pay $3.8 billion in promised benefits

So who were the pensions dumped on?
Sure the employees are feeling the brunt but you are kidding your self if you don't think the tax payers are not going to get hit with a PBGC bailout.

All the Legacy airlines are going to have to match the cheaper retirement plans of the LCCs - with or without United?
How do you explain AMR meeting their pension liabilites with nearly $4 billion in cash?

"United didn't open any doors for the other legacy carriers"
Really the director of the PBGC seems to disagree with you

Indeed, the pensions agency seemed to accept that it will end up allowing further defaults. PBGC executive director Bradley Belt says the agreement "under the circumstances is in the best interests of the pension insurance programme and its stakeholders" because the corporation has an "obligation to reduce its losses" and because the settlement is superior to the recovery that the agency would have received as an unsecured creditor in bankruptcy.
http://www.flightinternational.com/Articles/2005/06/01/Navigation/258/198186/Pensions+battleground.html

 

[G4G5]

>>All the Legacy airlines are going to have to match the cheaper retirement plans of the LCCs<<

The retirement plans at SWA aren't cheaper. It would have been cheaper for SWA to have traditional pension plans over the last couple of decades compared to what they have paid in 401k match and profit sharing.
The reason the legacy plans don't have any money in them is because when the market started soaring, the companies didn't make any contributions and when the market tanked the continued not making contributions saying they couldn't afford it.
All the while SWA dutifully paid every dollar of its commitments every month, and the combined contributions as a percentage of employee income almost always exceeded even the most generous legacy pension program of the good old days.

Your wasting your time trying to explain it to him.

 

[Mugs]

>>All the Legacy airlines are going to have to match the cheaper retirement plans of the LCCs<<

The retirement plans at SWA aren't cheaper. It would have been cheaper for SWA to have traditional pension plans over the last couple of decades compared to what they have paid in 401k match and profit sharing.
The reason the legacy plans don't have any money in them is because when the market started soaring, the companies didn't make any contributions and when the market tanked the continued not making contributions saying they couldn't afford it.
All the while SWA dutifully paid every dollar of its commitments every month, and the combined contributions as a percentage of employee income almost always exceeded even the most generous legacy pension program of the good old days.

Completely wrong. There is such a thing as a funding limitation, thus under the law you can't over contribute.....

As for the rest of your post, I don't believe it either.


Strengthening Pension Funding

In addition to the special funding rule for certain airline plans and the replacement of the 30-year Treasury bond rate, ALPA believes that the funding rules for defined benefit plans should be strengthened by permitting employers to make larger contributions to plans when they are able to afford them. One way to achieve this result is to allow employers to take into account expected cost-of-living increases in the limitations under Code Sections 415 and 401(a)(17) when calculating the plan's funding obligation. The current funding rules do not permit the plan actuary to anticipate such increases.

Additionally, the current full funding limitation should be replaced with one that permits employers to contribute more to defined benefit plans. Under current law, contributions cannot be made to a plan if the assets exceed the plan's accrued liability (including normal cost). Employers should be permitted to make deductible contributions to a plan until the plan's assets equal the greater of the present value of all future benefits or 130% of the current liability.

 

[WatchYourElbows]

The PBGC is nothing more than an insurance company. If they couldn't afford to pay on default, then they shouldn't be in the business. This doesn't (shouldn't) fall to the tax payer, it should fall directly onto the PBGC. THAT is why the companies have been paying premiums for years and years and years and years.......


Ever wonder how much $$$$ United has paid the PBGC?

 

[Widow's Son]

>>Completely wrong. There is such a thing as a funding limitation, thus under the law you can't over contribute.....

As for the rest of your post, I don't believe it either.<<

You obviously don't understand how SWA's 401k and profit sharing program works. When total contributions exceed funding limitations the excess can either be paid in cash or captured in an additional deferred compensation plan.

My point was simply while the legacies stopped making contributions both in good and bad times, SWA made its matches month in and month out, so the plan wasn't "cheaper" as the original poster implied.