UAL 2 quarter losses bigger than last years

[b737drivr]

UAL Second Quarter Still Red

Robert P. Mark
7/29/2005
​

United Airlines Thursday reported wider losses in the second quarter this year than a year ago. The airline said its net loss increased to $1.43 billion, or $12.33 per basic share, from $247 million, or $2.25 per share.



In a company statement, the carrier also said a threatened strike by United Air's flight attendants is illegal and "will not be tolerated." It said it would do whatever necessary to ensure the continued smooth operation of the company. The airline currently faces strike threats from its flight attendants' union if the workers' pension plans are not reinstated.



One analyst – airline consultant Michael Boyd - said United's cost cuts in Chapter 11 have made it viable, but that the company needs a change in management if it is to compete long-term with key rival AMR Corp's American Airlines. America last week said its second-quarter profit rose to $58 million.

 

[FlyBoeingJets]

Can you say Operating profit? UAL can.

 

[Buck450]

Operating profit?! That's great if you don't have any debt. How many billions in debt does UAL have again?

 

[Gofish]

American diddn't make a profit...they just showed eagle as a 66 million dollar loss.

How do you like your books cooked?

 

[FlyBoeingJets]

Charges Batter UAL's Bottom Line

By Ross Snel
TheStreet.com Staff Reporter
7/28/2005 3:08 PM EDT


Losses ballooned at United Airlines' parent UAL (UALAQ:OTC BB - commentary - research) during the second quarter as the bankrupt carrier absorbed a slew of restructuring charges.

But UAL, which has been operating under Chapter 11 protection for two-and-a-half years, saw unit revenue improve on reduced capacity and higher fares. The company also said operating earnings improved.

The Chicago-based carrier, which is the nation's No. 2 airline, Thursday reported a second-quarter loss of $1.43 billion, or $12.33 a share, vs. a year-ago loss of $247 million, or $2.25 a share.

Of the latest quarter's loss, $1.39 billion came from reorganization items. Among them were a $602 million noncash loss related to UAL's handing over of pension plans to the federal pension insurer, $212 million in noncash charges for the rejection of airplanes and $509 million in noncash contract-rejection charges. UAL expects to resolve these charges in the bankruptcy process and eventually reduce them.

Excluding special costs and reorganization items, UAL lost $26 million. Operating earnings rose to $47 million from $7 million a year ago.

The company has taken drastic restructuring measures. During its time in bankruptcy, UAL has wrangled $3.2 billion in annual labor savings from its workers, battled with aircraft lessors and gotten the federal Pension Benefit Guaranty Corp. -- which itself is running a huge deficit -- to agree to take over its traditional pension obligations.

During the second quarter, UAL's mainline operations, which exclude smaller regional flights, saw unit revenue increase 5% from a year before, boosted by a 3% increase in yield, or average fare. Although passenger traffic decreased 1% across all of UAL's flights, the airline reduced capacity even more -- by 3% -- allowing it to better fill its planes. The load factor, or average percentage of seats filled, was 83%.




I don't argue that BK isn't expensive. I don't know how much debt UAL will leave BK with. Some will be forgiven.


But the investors waiting on the sidelines are looking at cost, revenue and the ability to make a profit. Operating profit stats help paint that picture because it takes out all the special items. Debt servicing payments will definitely be made with the HUGE changes UAL has worked. All they need is someone to take a chance on them and offer financing. I won't bet against them anymore.


UAL is almost transformed into the 800 lb. legacy carrier with LCC costs and lucrative international routes. Even with huge debt they will work over DAL and NWA. I'm not looking forward to the coming storm created by their new ability to compete with EVERYONE else.


On the positive side, my buds at UAL are looking at a chance to finish their career there. I wish them well.

 

[jamesslally]

PETA??
Is that People Eating Tasty Animals??

 

[Palerider957]

FA strike "will not be tolerated." That's hilarious! Threaten your employees, that will make them want to work hard--this sounds more like a regional than a legacy.

 

[banned username 1]

FA strike "will not be tolerated." That's hilarious! Threaten your employees, that will make them want to work hard--this sounds more like a regional than a legacy.

Hmmmm...the only ones who are making threats are the flight attendants. "Will not be tolerated" is simply making your position clear. I may be incorrect, but I believe the pension issues are done deals. Why are they thumping their chests now? What do they expect to accomplish?

Got to wonder how many mechanics might still be on the property (if they wanted to be) if they'd been a little more in the mood to play ball in the early stages.

Just a thought.

 

[Dangerkitty]

American diddn't make a profit...they just showed eagle as a 66 million dollar loss.

How do you like your books cooked?

It's not cooking the books. Since Eagle has obtained the RJ's they have been nothing but a huge cash drain on AMR.

Actually I am suprised that it was only a 66 Million dollar loss.

 

[WillowRunVortex]

UAL Second Quarter Still Red

Robert P. Mark​

7/29/2005

United Airlines Thursday reported wider losses in the second quarter this year than a year ago. The airline said its net loss increased to $1.43 billion, or $12.33 per basic share, from $247 million, or $2.25 per share.



In a company statement, the carrier also said a threatened strike by United Air's flight attendants is illegal and "will not be tolerated." It said it would do whatever necessary to ensure the continued smooth operation of the company. The airline currently faces strike threats from its flight attendants' union if the workers' pension plans are not reinstated.



One analyst – airline consultant Michael Boyd - said United's cost cuts in Chapter 11 have made it viable, but that the company needs a change in management if it is to compete long-term with key rival AMR Corp's American Airlines. America last week said its second-quarter profit rose to $58 million.

" It said it would do whatever necessary to ensure the continued smooth operation of the company."

1.43 Billion in losses?,,,real fu_ckin smooooooth operation.

 

[Palerider957]

Hmmmm...the only ones who are making threats are the flight attendants. "Will not be tolerated" is simply making your position clear. I may be incorrect, but I believe the pension issues are done deals. Why are they thumping their chests now? What do they expect to accomplish?

Got to wonder how many mechanics might still be on the property (if they wanted to be) if they'd been a little more in the mood to play ball in the early stages.

Just a thought.

"Will not be tolerated" sounds like a threat to me. What can the company do, fire them? What I'm getting at is this is a poor approach to managing your labor. People with any backbone (and very little to lose) tend to stiffin their resolve when this kind of language is used. Of course the FA threat will probably also stiffen management resolve (also people with guaranteed pensions and golden 'chute--very little to lose).

What the hell do I know, I'm just a regional slave--chained to a soon-to-be-bankrupt master. But I do have friends at United. I guess I have to ask when is enough, enough?

 

[Mugs]

" It said it would do whatever necessary to ensure the continued smooth operation of the company."

1.43 Billion in losses?,,,real fu_ckin smooooooth operation.

There is still no guarantee of future success here. However, to clarify what you might be thinking of a 1.4 billion loss:


Yesterday we released our financial report for the 2nd quarter. I am
sure most of you have seen the headlines in the newspaper this morning
that focused on our net quarterly loss. But if you go beyond the
headlines, you get a better picture of our financial situation.

· Most importantly, we generated quarterly operating earnings of $48
million, a $41 million improvement over the period last year,
despite a $262 million increase in fuel expenses.

· Our mainline unit revenue was up 5 percent and competitive with our
leading network competitors.

· Our cost per available seat mile (CASM) was up 6 percent including
fuel costs, but was down 3 percent if fuel is excluded - even though
capacity decreased 3 percent.

· Our unrestricted cash balance improved by $295 million for the
quarter to $1.7 billion. Including restricted cash, we now have a
total cash balance of $2.6 billion.

There is also more to the story of our net loss of $1.4 billion. $1.39
billion of that loss is reorganization expenses that will be resolved as
part of the bankruptcy process and settled for a minor fraction of the
amount of the charges. These are non-cash charges, and are common for
companies progressing through Chapter 11, particularly as restructuring
work nears completion.

Hope this helps. Now flame away.

 

[skykid]

What the hell do I know,

Palerider, doesn't seem like very much on this subject. With the exception of the CEO's package that got him to United, the management at UAL all had their pensions turned over to the PBGC, same as the FAs. So when you say "people with guaranteed pensions," it is because you don't know what you are talking about.

The reason they are threatening to fire the FAs is because there is no real precedent for this situation, and a CHAOS action could very well be ruled illegal. I'm sure they will fire them if it comes up, and let the court decide. Regardless, less than 1% participated in the informational picketing - doesn't seem like a lot of support. What it does seem like is part of an on-going negotiation with the FAs, where mgt is going to posture just like the union.

1.43 Billion in losses?,,,real fu_ckin smooooooth operation.

If that is what you take away from the quarterly results, you have absolutely no understanding of how this process works and the numbers in the report.

 

[MJG]

One analyst – airline consultant Michael Boyd - said United's cost cuts in Chapter 11 have made it viable, but that the company needs a change in management if it is to compete long-term with key rival AMR Corp's American Airlines. America last week said its second-quarter profit rose to $58 million.

Hey, Boyd might actually be right about something for once....

 

[Gofish]

Dangerkitty...not picking a fight but...

Seems to me pensions are a huge cash drain on AMR. I don't advocate them going away but the folks over at Eagle work awful hard and for allot less.

No matter how much the Allison 3007's burn per seat, it is hard for me to fathom that they havn't contributed in a favorable way to AMR's bottom line.

Seems to me its just a number shuffle...makeup for the pig

 

[pipejockey]

It's not cooking the books. Since Eagle has obtained the RJ's they have been nothing but a huge cash drain on AMR.

Actually I am suprised that it was only a 66 Million dollar loss.

So does this mean that American should have taken the CRJ700's? I have always felt that regional affiliates should have been restricted to 50 seats and we wouldn't be seeing the proliferation of the regionals while mainline, where the career positions can be obtained, are shrunk.

 

[NuGuy]

It's not cooking the books. Since Eagle has obtained the RJ's they have been nothing but a huge cash drain on AMR.

Actually I am suprised that it was only a 66 Million dollar loss.

Same at NWA. RJs have been a huge vortex of cash. After the subsidies for fuel and landing fees, not to mention "forgiven" 15 million dollar debts, the ink is pretty red despite the bottom drawer wages.

This doesn't even include midnight "revenue" flights with no passengers because they couldn't find a FA just so they can get their handout from the mothership. Oh yea, NWA has to pick up the tab for putting up the stranded pax for the night as a bonus.

The only things revenue positive at either of the Airlinks are the Saabs.

It's right in the 10k if you want to look it up.

Nu

 

[Gofish]

Interesting perspective...

maybe we should all just merge

 

[Dangerkitty]

Dangerkitty...not picking a fight but...

Seems to me pensions are a huge cash drain on AMR. I don't advocate them going away but the folks over at Eagle work awful hard and for allot less.

No matter how much the Allison 3007's burn per seat, it is hard for me to fathom that they havn't contributed in a favorable way to AMR's bottom line.

Seems to me its just a number shuffle...makeup for the pig

Gofish,

1. Pensions are not a huge drain on AMR right now. The "A" fund that AMR contributes to is as of right now about 75% funded. Much much better than any other legacy carrier. The "B" fund HAS to be contributed to each month. Infact AA and the APA have been lobbying Congress to not do a thing about Pension reform. This is the exact opposite tactic than the other legacy carriers are enganged in. While NWA, DAL, and UAL lobbyists are trying to get Congress to leglislate some type of pension reform, AA is asking them not to. That to me states that the Pension situation is fine at AA.

2. The APA Board of Directors was given a VERY VERY detailed briefing by Michael Boyd on the problems with the RJ's. Luckily it was recorded so that the pilot group could see it as well. To say it was eye opening is an understatement. Like him or not Michael Boyd does his homework and he is right many many more times than he is wrong.

He gave detailed analysis on why the RJ's cannot and will not work in the manner in which Eagle has employed them. He stated that AMR should get rid of everything except the EMB-145 and the CRJ-700. And then have maybe a MAXIMUM of about 100 RJ's total. In most cases the RJ is nothing more than a huge cash hole for AMR. So much so that they have actually cancelled most if not all of their RJ options.

3. Finally this isn't a slam at Eagle or any of their pilots. I was a Regional Pilot for almost 4 years. I know how hard these guys work and how little they are paid. But the fact is Eagle has become something that it was never intended to be. Regional or Commuter airlines were started to provide feed to Mainline from small markets where bigger aircraft could not be justified. Now you can fly almost coast to coast and not see a Mainline aircraft.

Until RJ's are put back into their intended role the cash drain will continue.

I could be wrong but I have seen some very convincing evidence that leads me to realize that I am right.

 

[Dangerkitty]

Interesting perspective...

maybe we should all just merge

I agree 100%. One seniority list will stop ALOT of problems IMO