Nice Job United

[NavinRJohnson]

That is an unbelievable amount of cash hemorrhaging. Even with an instantaneous management changeover, it will be tough to last through the year.

I know a lot of these losses are 'one time charges', but I believe I saw similar large sums of charges last quarter as well. Who knows what they'll have lost on the books next quarter.

United ALPA should be going into DEFCON 1! I don't know how much they can do, but this is not a storm that can be rode out.

Good luck you guys.

 

[ualdriver]

It is quite a burn through of cash- a negative 1.1B cash flow for the quarter. That's obviously unsustainable but also not likely to continue at that rate into the future (hopefully).

What killed UAL this quarter was a couple of things. They "mark to market" their hedging contracts every quarter, so just that loss alone was 580M, with more (but much less) coming until April 2009. Other airlines may/may not use the "mark to market" method, so they may not show that sort of large loss all at once, but one way or the other, if an airline hedged, it will be taking massive losses as they are required to put collateral up for these contracts (assuming the commodity they hedged stays low). We won't be alone in that regard unfortunately. And the collateral/loss is pure cash burn for the airlines- bad when the guy who runs out of cash first loses.

Throw in another 400M in debt that was paid down during the quarter and the regular loss for the traditionally weak 4th quarter, and you get just over 1B *poof* gone.

There's 2B in unrestricted cash left and 2B in unencombered assets. Obviously they're not going to be burning through 1B per quarter over the next several quarters, but certainly you can't bleed through cash forever, no matter what the reason.

 

[Yuppyguppy]

Just wait until they have to deal with all 4 unions at once at the end of this year....Chapt 11 is a sure thing.

 

[whatitdoing?]

Chapt 11 is a sure thing. Without a doubt.

 

[contrail67]

It has been a sure thing for quite some time here on all knowing FI.com. Has not happened.

 

[dooork]

Good point Jon, but it's going to happen....I suspect this is the year....UAL will get absorbed..CAL would be crazy to go anywhere NEAR UAL except after a Ch. 7 filing....

Mesa will loose it's legal battles....

There is still WAY too much capacity out there...

What are you seeing? I see loads of 80% all the time...thats too much capacity?

 

[bluefin]

What are you seeing? I see loads of 80% all the time...thats too much capacity?

What, in the 50 seater? cause thats all UAL is now. U boyz at the regionals are now the new United. Enjoy that 50 seater cause thats all the future holds.

 

[Whine Lover]

From a previous post/thread ( as relates to UAL ):


" going down the toilet in rapid fashion."

GOING?

LOL, as the Kids say....

YKMKR

--------------------------------------------------

In NO WAY do I mean to make light of the fact that ANOTHER Great Airline/Aviation Institution may be about to hit the skids.

I wish we could all take up Arms and remove the vermin that have caused this to happen.

I am not happy with the state of My Country ( And this Industry ) at the present time.

May fairer winds prevail in the years to come.

YKMKR

 

[aircowboy]

The stock went UP???????? I don't get it.

 

[Rick James]

The stock went UP???????? I don't get it.

I don't either, it just shows the lack of logic in the stock market.
Good luck to UAL, there are alot of great folks that are the victim of a few.

 

[DiverDriver]

What, in the 50 seater? cause thats all UAL is now. U boyz at the regionals are now the new United. Enjoy that 50 seater cause thats all the future holds.

Since I can't see your facial expression I could take that comment a few ways. Which way did you intend it? Are you blaming regional pilots for 50 seat jets?

 

[zman]

Out of all honesty without the bashing, how long do you guys give United? I mean how much time do you think they have left with the cash they are burning through on an everyday basis. I mean if you do the calculations of the 4th quarter divided by the number of days its insane!

 

[bluefin]

Since I can't see your facial expression I could take that comment a few ways. Which way did you intend it? Are you blaming regional pilots for 50 seat jets?

No, with the parking of the 737 and the increase of 50 to 70 seat aircraft, I can see why there are load factors of 80%. The future for UAL if Chp 7 doesn't occur is, Express doing all the flying a few wide bodies or 757 doing hub to hub and trans con and international. Next they'll park the 319, cause it is an inefficient aircraft. Regionals will get the 90 - 100 seater within the next few years. UAL MEC will cave in to the pay raise they will receive in contract talks to allow these aircraft on property and to be flown by express pilots. Hell SkyWest or someone else can get a great deal for a 737, it's even painted in UAL colors, just paint express on it and it's good to go.

 

[bluefin]

Out of all honesty without the bashing, how long do you guys give United? I mean how much time do you think they have left with the cash they are burning through on an everyday basis. I mean if you do the calculations of the 4th quarter divided by the number of days its insane!

Forever, they have not gone anywhere yet. At this rate the UAL brand will be around for a long time, just in the form of tickets flown by other carriers.

 

[Skippy]

1. there has only been 10 70 seaters awarded to blowjet-- that is it--- if there are any others getting new planes-- please let me know-- we do get dibsies on the first officer seats at second year pay-- woohoo-- and there is no way in hell im going to work at hojets- never

2. if you park the 100 of the most inefficient planes in the fleet and take away 14% of the market--- you will have to be profitable regardless of the economy-- they have all those other BD programs, like upgrades, econ plus, fed ex baggage delivery buy on board schit too.

just remember: when they lose money-- they lose big, but when they make it, they make it big too

they just need to be careful not to furlough too many and hten have to recall for summer AKA airtran--- b/c some guys would come back b/c they have other stuff going, then they would - dare i say it hire-- which then , what moron would go , knowing they'd be furloughed in a year-- oh ... wait... DOH!