UA has a date with a Banckruptcy Judge

[F9 Driver]

I don't think that F9 is in danger from UAL. Even in Chapter 11 I don't think UAL's CASM will be as low as ours, and we have the ATSB loan if the bleeding gets excessive.

Rationalizations are more important than sex. When was the last time you went a week without a rationalization!

The real question is if they can come up with a plan that shows the BK judge that they can emerge from Ch 11. The relationship between management and labor will be a real challenge in any post BK rebuilding also.

The real cost of CH 11 in my opinion is the loss of the ESOP shares. This is a bitter pill for those who gave the concessions back in the 90's to keep UAL alive.

I have many friends across the field and wish them well!

 

[Boeingman]

What you are saying is true in a typical BK scenario. UAL is light years from a typical BK.

Their achilles heal is going to be the lack of ability to secure DIP financing. They have jacked around for so long and burned through so much cash, without DIP they are finished.

So ask yourself this. If Uncle Sam was far from impressed with their business plan, what makes anyone believe a bank or creditor is going to loan them money or extend credit?

I know the assets etc. etc. They will be attached post haste to cover debt already owed. Also, an asset is only as good as its liquidity. The vultures will not pay anything if UAL tries to sell since they can wait for them to go for pennies on the dollar in an 11 or most likely a 7 proceeding.

Finally aircraft. LOL, used 747's? Anyone been to the desert parking lots lately? I have....not a pretty picture.

We haven't even discussed the underfunded pensions yet.

 

[AAflyer]

F9,

Lighten up, this is my opinion, don't take it so personally, I don't wish any company or pilot trouble. I am merely looking at the possible fall out, and one is we have no idea how low their CASMs will go, will it drive F9 out of biz, probably not, but you would be a FOOL not to look at this as possible trouble.

Two airlines in BK in the US (both majors) is spooky, and no one knows the problems this is going to cause for the other majors and LCCs (particulary the LCCs that are not that financially healthy).

Everything in the past 2 years has been NON normal, I wouldn't expect UALs BK to be any different.

AAflyer

 

[TurboS7]

Avbug,nice post, I only have one question....what happened with EAL and Panam???? I think that the government should just start their own airline with civilian pilots for the CRAF program. They could have a nice DOD airline just with everything that is parked at Victorville alone. It should be non-union and every pilot must have an A+P and be willing to really work. Leave the FAA out of it and run it like a Marine operation, at least we would get something done.

 

[cocknbull]

I don't know anything about UAL's CEO, but do you think UAL will "force" salary cuts if it files for CH11 to attrack investors(band aid). Will it be like a Lorenzo and CAL. Or will UAL try to adjust its business model and become profitable in the long run.

If UAL files CH11 will this allow their management to work "around" the present scope clauses.

What do you guys think will hapen to ACA?

I wish the best to all UAL pilots.

 

[Boeingman]

I don't know anything about UAL's CEO, but do you think UAL will "force" salary cuts if it files for CH11 to attrack investors(band aid). Will it be like a Lorenzo and CAL. Or will UAL try to adjust its business model and become profitable in the long run.

If UAL files CH11 will this allow their management to work "around" the present scope clauses.

What do you guys think will hapen to ACA?

I wish the best to all UAL pilots.

UAL will not have to adjust the contracts. The BK judge will under 1113 proceedings. If ALPA and the IAM were hesitant about cutting their pay, they will have tears in their eyes when the courts get a hold of their contracts....at the urging of management no less. The rest of the contracts are toast as well. It will all be up to the judge and that includes scope. Historically, BK judges have given management and the creditors committee carte blanch in BK proceedings.

Investors in UAL? You're kidding right? They are going to be pleading for people to loan them money for DIP financing. There is not many assets left after the current creditors sink their teeth into them.

Their business model submitted to the ATSB was flawed. I don't think they have the time to come up with another plan given an 8,000,000 a day cash burn.

Then there is the pension issue.

If UAL fails, their Regionals are toast unless they line up with someone quick.

 

[cocknbull]

Thanks Boeingman

Sorry guys more questions.

What did CAL do right that others did not after declaring BK?

I've seen that Delta, CAL, and to some extent AA have used fleet simplification to lower costs. I also see that they own there own regional airlines. Although AA seems to be taking flying away from Eagle. USAir and United have many different types of aircraft and many different regionals working for them. Is this a valid quarelation or not that big of a deal?

Thanks