Lessors now allowed to repo UAL airplanes

[Boeingman]

Not a good sign:

http://www.ca7.uscourts.gov/tmp/IH15DL1J.pdf

Does UAL have the cash to cure the defaults? Is there a plan in place to make up for the lost airframes?

 

[juan2go]

Thanks for the post.

 

[labbats]

Interesting link, but the last paragraph is the summation.

 

[AA717driver]

It's only 14 planes. Or is this just the start?TC

 

[skykid]

Is there a plan in place to make up for the lost airframes?

Where did the airframes go? Negoitations often take place in court.

 

[Boeingman]

Where did the airframes go? Negoitations often take place in court.

Ok, let me rephase it. If UAL does not have the cash do you think the lessors are going to let UAL keep the airplanes out of the goodness of their hearts? UAL is behind on payments for the airframes.

It sounds to me like this has gone far beyond the negotiations stage. When you have to sue the leasee to enforce the terms of the lease, I don't think they are going enter in negotiations unless the past due amounts are cured. That was the whole point in litigating in the first place, to get their airplanes back from UAL because of an arrearage.

Good management would have a plan in place if the ruling went against the company. I already see the problem with that last statement.

 

[Boeingman]

It's only 14 planes. Or is this just the start?TC

Agreed on the 14. However, the ruling should set a precedent for immediate repossesion by the lessors if there are other financial snafus down the road.

During the CAL bankruptcy, Frank was able to buy time using similar legal tactics (stalling) to give himself some breathing room (time). In the mean time the financial health of the company was improving to the point of making the lessors whole at a later date. The reverse is the case with UAL regarding financials.

Assuming things pan out for UAL, my guess this little escapade will cost them dearly in the future for leases.

 

[skykid]

United won the early legal battle in court. Since then, the lessors have refused to even negoitate out of court. Now the lessors have a hammer to negoitate with, we'll see what happens.