How worried are you?

[Freight Dog]

The media says that this war will cost the U.S. airline industry 70,000 jobs, and losing $4 billion in revenue.
With two major airlines operating under Chapter 11, what do you think will happen with UAL, U, and others. Are you worried about getting furloughed?

 

[boeingav8r]

The media says that this war will cost the U.S. airline industry 70,000 jobs, and losing $4 billion in revenue.

That's just it..."the media". Who believes anything those people have to say in the first place. I think they just like to stir the pot a little.

I personally think things will get a little better. The economy and stock market for the most part hates uncertainty. I think there will be more consumer and investor confidence after we get things started over there.

 

[Freight Dog]

I wonder if UAL and U will survive this war. The industry is fragile as is, and this war won't help the matters.

Actually, the source of the losses and furloughs was Air Transportation Association. The media reported that... hence the worry.

 

[boeingav8r]

I hope they (UAL) makes it. Even though alot of my family and friends work/fly for AA, I hate to see UAL go CH7. This is a time for coming together and wishing the best for every pilot, regardless of where or what he or she flies. I do think AA is the next one to file Ch11. I did hear that UAL is starting to make a little $$ or at least break even.

I'm hoping that the war will bring the cost of oil down and we'll see it at the pumps AND in aviation fuel as well, thus maybe lowering operating costs a little.

 

[Hugh Jorgan]

So long as Sticky Bumps and Hinode stay in business, I'll be okay....

 

[bigr]

we all know UALs troubles and AA. however i did see on the news yesterday that US Air will emerge from bankruptcy in about a month. so maybe there is hope yet.

 

[skykid]

boeingav8r is right on that the uncertainty is the worst part - and that is over. Also, don't assume the airlines already in Chapter 11 are right on the brink and will be the worst affected by this war. Which is worse, already having your bankruptcy financing and not even using it all, or trying to line it up in the current environment? Let's hope American doesn't go CH11 and nobody goes Ch7. We'll have alot of answers in a short amount of time and there may be some good news if the war ends quickly.

 

[Airpiraterob]

my guess...

well,..."We're gonna call it...Desert Storm 2..."

depends if this war gets ugly. if it gets ugly, someone else will take a chance to join in and get us...good thing is Iran absolutely hates Iraq so they wont try anything....standing aside, but could get bad. this is assuming my avitar dosent scare everyone enough already.

but for us? well...passenger loads im not too optimistic about during the war. but if things go well, pax will be back. only after the war tho. the passengers will be thinking that during the war theres gonna be more people with bombs walking around them. and this depends on the terrorist threats. its orange now i hear. should i put on my orange alert strobe light hat and run around saran-wraping my house shut?...er..apartmenmt?

Cargo. there could be some good stuff. theres weapons parts contracts that will help the cargo market considerably. delivering missle parts and bomb parts <not the whole things at once> to the factorys. happened during desert storm for the cargo guys. PILOTYIP any comment about this?

 

[Sphincter Boy]

This is the same media that is blaming all the airlines woes on the backs of labor. I for one read what the media says with a grain of salt.

 

[abatista]

I will have to say the biggest problem we have is the Media. They are and will always report news like's it's the end of the world. They really do not think about us other then there ratings.

This war is coming and there is not much we can do to stop it. I will just say OK let me support my goverment. It's still the best in the world. I just want it go get done with fast so we can get back to normal news.

Besides in war no one really wins. It's bad all around. But what is worst. Letting it keep bleeding you slowly or go in and get it over with. I feel you go in and get it done will cost us less.

So no worries life goes on. NEXT!

 

[Freight Dog]

United Air says liquidation 'distinct possibility'

By Kathy Fieweger

CHICAGO, March 18 (Reuters) - 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.

UAL Corp.'s <UAL.N> United said domestic bookings are down and international bookings have dropped 40 percent in the last week alone, due to the impending Iraq conflict.

The world's second-largest airline turned much more pessimistic about its future this week as war appeared imminent. In papers filed with the bankruptcy court on Monday, United said it might cease operations altogether without labor cost reductions from major unions.

"With war-related jitters increasing and fewer people purchasing tickets, United's near-term revenue forecast through June 2003 has deteriorated by $298 million from projections made just weeks ago," the company said. "At the same time, the cost of fuel, United's second-largest operating expense, has gone in the opposite direction."

"In the wake of the deadlines that have recently been set for Iraq to disarm, United's bookings have begun to drop substantially," it said. "Domestic bookings have recently declined ... the drop in international bookings has been more dramatic."

United's latest assessment was a stark departure from its recent announcements that daily cash flow was positive in January and it was beating the first set of financial requirements set by bankruptcy lenders.

"Liquidation is a distinct possibility if United does not receive its proposed labor cost reductions," the airline said. "The consequences of liquidation for all United stakeholders would be catastrophic. In particular, liquidation would mean that all of United's employees would lose their jobs."

The credit rating agency Standard & Poor's on Tuesday said it might downgrade nine U.S. and two European airlines, excluding United, because of the impending Iraq war. "Airlines, already battered by the effects of the Sept. 11, 2001, attacks and their aftermath, now face further financial damage from a war," said analyst Philip Baggaley.

WASHINGTON READY

Washington is apparently watching. U.S. Transportation Secretary Norman Mineta on Tuesday said the Bush administration stood ready to aid the industry if airlines suffered further from the war. Immediately after the Sept. 11. 2001, attacks, the federal government doled out $5 billion in direct aid and set up a program to provide up to $10 billion in loan guarantees.

"We will be ready to move very quickly if the need arises," Mineta said at an aviation industry conference.

Elk Grove Village, Illinois-based United -- which lost an earlier bid for such loan backing -- said initiatives so far to cut costs will not return it to profitability. UAL lost a record $3.2 billion in 2002, about a quarter of the $11 billion in net losses by all top eight U.S. carriers combined.

United is planning to create a low-cost carrier division that it hopes will recapture traffic lost to discount rivals like Southwest Airlines Co. <LUV.N>. In the court filing, however, it said it was willing to consider alternatives to that plan, which has been sharply criticized by its unions, especially the pilots.

SOARING FUEL COSTS

Unhedged on its jet fuel purchases for the entire year, United now sees fuel prices in 2003 19 percent higher than it projected in December, when it filed for bankruptcy.

As a result of the higher costs and lower revenues, United would violate its debtor-in-possession financing covenants starting in May 2003, even with temporary wage cuts that are saving $70 million monthly.

Following the Sept. 11 attacks, United cut about 20 percent of its work force and 20 percent of its flight schedule, reduced other expenses and tried to restructure its financial obligations.

But those efforts could not offset weak revenue, and after the U.S. government denied an application for $1.8 billion in backing for private-sector loans, the airline filed the largest aviation bankruptcy in history on Dec. 9, 2002.

REJECTING CONTRACTS

After winning temporary wage cuts from its unions, United is now seeking to throw out its collective bargaining agreements altogether. Weeks of talks yielded no deal on $2.56 billion annually of longer-term concessions the airline wants.

United said it is not alone in its troubles, noting Continental Airlines Inc. <CAL.N> also recently forecast rough times ahead in transatlantic travel.

"Other carriers, such as Delta (Air Lines Inc. <DAL.N>), Japan Airlines (Co. Ltd. <9205.T>) and others, have also felt the conflict's effect on bookings," it said. "The difference between United and its competitors is that, because the company is in Chapter 11, United must disclose its Iraq contingency plans."

United said it has already met with a representative of its debtor-in-possession lenders to ask for a relaxation of the loan covenants. Four financial institutions have put up $1.5 billion in financing for United -- J.P. Morgan Chase & Co Inc. <JPM.N>, Citigroup Inc. <C.N>, CIT Group Inc. <CIT.N> and Bank One Corp. <ONE.N>.

Lenders said they needed hard data from United on the effects of the war, which they assumed would not be available until after it started, according to United. More meetings are scheduled for this week.

UAL shares, which traded at more than $100 each in the late 1990s, were off 3 cents each or 3.5 percent on the New York Stock Exchange to 83 cents. Shares of its biggest competitors, AMR Corp. <AMR.N> and Delta, were higher.

 

[Lrjtcaptain]

well, all i know, is with war comes a nice boom in the economy. I figure it might actually help the industry if people just start putting money back in the market.

 

[mar]

Whistling past the graveyard

Hey man, like Lennon said, "Whatever gets you through the night."

War = More terrorism

More terrorism = Increased uncertainty

Increased uncertainty = weak economy

Weak economy = higher fuel prices; more furloughs.

The worst is yet to come.

Nothing good comes from war.

Period.

 

[Sniper Bob]

Re: Whistling past the graveyard

[B

Nothing good comes from war.

Period. [/B]

I don't believe we are speaking Japanese or German as our native tongue, are we?