UAL Aircraft to be Repossesed This Week?

[h25b]

They weren't repossessed. They were returned to the lessors. The company was unable to negotiate a lease rate that made financial sense for UAL, so they had to return them.

Yep, that's the polite term for "repo'd"...

That's like me having a car that I could no longer afford and was "unable to negotiate a lease rate that made financial sense" ...

Heck, I think I'll start using that as an excuse why I'm not driving a Ferrari. "Hey baby, I couldn't negotiate a lease rate that made financial sense on the Ferrari... How 'bout a ride in my Civic instead ???"

 

[Mugs]

Originally there were 8 767-300s hanging in the balance on lease negotiations. Today, UAL anounced that one 767-300 is being returned. As a result, ORD-EZE service will end June 6th (it was to stop seasonally from August-December). If more of these 8 are being returned (re-po'd for those that prefer I use that term) it has yet to be announced. More could certainly go, just no announcement beyond the one aircraft thus far.

One thing is certain. Those airplanes will be headed over seas, most likely to China or India. I saw a picture of an Air India 777 not long ago that had just come out of the paint shop. It was still sporting a UAL N number. The leasing market over seas has improved and is now much better than here in the U.S. Therefore, the leasing companies now have more leverage to play hard ball and are demonstrating that now.

 

[Mugs]

Looks like now 4 of 8 are definitely gone. Still could lose all eight.


As UAL Corp.'s United Airlines faces an important day today in its pursuit of new labor agreements, the company acknowledged it must return four Boeing 767-300 aircraft to leasing companies because the airline and the lessors couldn't agree to new rental terms. Earlier this month, UAL was dealt a setback when the U.S. Seventh Circuit Court of Appeals reversed a November 2004 order by United's bankruptcy judge, who barred lessors from repossessing 14 of the airline's 460 jetliners. The three-judge panel ruled the planes could be taken back unless the airline makes the full rental payments. The number of aircraft in contention was down to eight because UAL had rejected leases on six others. Yesterday, a United spokeswoman confirmed that four of the eight planes will be taken out of service soon and returned to their owners. The spokeswoman said UAL remains in negotiations with the lessors that own the other four airplanes, which remain at risk of being returned.

 

[ualdriver]

Yep, that's the polite term for "repo'd"...

That's like me having a car that I could no longer afford and was "unable to negotiate a lease rate that made financial sense" ...

Heck, I think I'll start using that as an excuse why I'm not driving a Ferrari. "Hey baby, I couldn't negotiate a lease rate that made financial sense on the Ferrari... How 'bout a ride in my Civic instead ???"

Ummmm.....no, you're wrong. UAL could have afforded to pay the rates that were being asked for by the lessors. However, it did not make financial sense for the company to pay the rates being asked for, so the planes are being returned to the lessors, per the bankruptcy code. There IS a difference between repossession and returning aircraft under bankruptcy law.

A better illustration of your point (since yours was poorly made) would be as follows. H25B's budget has enough "slop" in it to be able to afford the $2500/month payment on a (used) Ferrari if he so chooses. However, if he/she chose to buy that car and make that payment every month, he/she would not have enough left over, for example, to put into his 401K or to have a little extra if an unexpected expense comes up. So even though H25B could buy that Ferrari if he really wanted to, it makes more financial sense for H25B to not be "car poor" and to buy the Civic instead. Further, since a few other "car owners" are having financially difficulties themselves, perhaps a long term deal or alternative for that Ferrari could be found down the road if a little patience is exercied?

 

[doh]

Still, I like what h25b is saying! If she's blond, she might believe it. Will she negotiate a rate that makes financial sense for you then too? Good luck!

 

[Boeingman]

Ummmm.....no, you're wrong. UAL could have afforded to pay the rates that were being asked for by the lessors. However, it did not make financial sense for the company to pay the rates being asked for, so the planes are being returned to the lessors, per the bankruptcy code. There IS a difference between repossession and returning aircraft under bankruptcy law.

You can paint that pig anyway you like. Bottom line, the aircraft are getting yanked from the UAL fleet. If UAL just wanted to "return" them, I would of guessed UAL wouldn't of bothered with all the legal fees fighting the "repossesion", excuse me return in the first place.

When your company has to start canceling routes (i.e. cutting off revenue) due to a reposs...er return, it is not a normal change of hands under bankruptcy law.

 

[ualdriver]

When your company has to start canceling routes (i.e. cutting off revenue) due to a reposs...er return, it is not a normal change of hands under bankruptcy law.

Actually, we haven't had to start cancelling "routes." One seasonal city pairwas cancelled two months earlier than it normally would have been. That is a more correct statement. Passengers on that city pair will now have to connect through IAD unfortunately instead of going non-stop out of ORD.

 

[skykid]

ualdriver, STOP IT!

Granted, both sides are playing hard ball and United has drawn a line where they aren't going to lease these aircraft. However, you are going to cause some of these folks to lose hope. The war, SARS, and cost of oil have let them down so far, if the IAM doesn't come through with a strike today these guys have the repos to hold on to for the short term.

 

[ualdriver]

What in the world are you talking about?????????? The lease holders for those 767's got their price at other airlines....The other stuff.....I have no idea what point you're supposed to be making about "losing hope."

 

[skykid]

SARCASM, see also cynicism, irony, mockery, derision, scorn, disdain.