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UAL Liquidation?

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Kugelblitz

Kugelblitz

Well-known member
Joined
Jan 12, 2006
Posts
287
Not to make light of this notion, nor to treat it with some sense of detached amusement, but has anyone out there heard about United ceasing operations sometime next month? I know this is a sensational statement (not that one would expect that to happen on this website) but we have had some company management types (CAL) make remarks along these lines and just last night a furloughed UAL pilot stated the same thing.

Anyone else hear about this?
 
I think you mean Chrysler.
 
You would expect that things would be better among the airlines with lower fuel prices (although UAL may have hedged higher). I guess business travel is really starting to scale back and that's hurting everyone...

UAL has been a ship without a rudder for a very long time.
 
WOW!!! I doub it....but if this is tru it will put tons of people on the street!!! mainline, regionals, IAD, ORD, hope the goverment intervine...

I really hope is not true!!!
 
Highly doubt it. there would be rumors of a Ch 11 filing first, and while UAL is cutting a lot more than others, I don't think they're that close to the edge.
 
aa73 said:
Highly doubt it. there would be rumors of a Ch 11 filing first, and while UAL is cutting a lot more than others, I don't think they're that close to the edge.
Click to expand...

My thoughts as well, but hearing this from 2 different sources gave me some pause about outright discounting this rumor. I had heard that UAL did not have enough cash to get through the winter, and I would assume that they would need a large chunk of liquidity on hand to satisfy their bankruptcy exit - so you could see where this is not a complete impossibility. Nonetheless, you would think the business media would already be all over this one.

Barrak being from Illinois or not, I doubt the gov. intervention idea. Further runs on the money printing press are going to get more and more difficult to obtain as time goes on. At some point the government is going to have to let some painful realities of our economy heal itself and continued sustenance of failing companies won't last forever. For our part at CAL, the internal scuttlebutt is that our management has told our training department to prepare to retool itself and to anticipate getting all of our furloughees back by spring and to hire by this fall.

My understanding is that the hiring is partly in response to CAL managements reaction to the situation at UAL. Only time will tell, but I can tell you that the notion of a merger between us 2 is seeming more distant as time goes on and UAL continues to deteriorate. There are absolutely no rumors of talks between the 2 airlines in this area and our unions haven't spoken since last spring when the merger was discussed.
 
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There are absolutely no rumors of talks between the 2 airlines in this area and our unions haven't spoken since last spring when the merger was discussed.[/quote]




The two unions have been talking in the last few months. There was a picture taken not too long ago of both communication committees meeting at UAL ALPA's office.
 
UAL will not liquidate they are just putting themselves in a dire situation so when we do merge the DOJ will not object. This is a crappy way to do business but that is what UAL management has reduced themselves to.
 
I heard rumors that UAL was having a lot of trouble with liquidity. With the recent news that LUV had to borrow at a 10.5% interest rate (yowza!) with stellar credit and a strong balance sheet, I wonder if the capital markets are simply closed to UAL.

A year ago, I would have thought that a UAL liquidation was a fantasy, but I also would have thought that LUV borrowing above 10% was a fantasy too.

Less than a year ago, UAL's market cap was some $400 million, yet the unrestricted cash in the band was $1.8 billion. So you could buy the whole airline, throw away all the physical assets and still have $1.2 billion profit.

Of course, you really couldn't, that ignores the debt, but don't you think UAL should trade for at least the value of the cash in its checking account?
 
aa73 said:
Highly doubt it. there would be rumors of a Ch 11 filing first, and while UAL is cutting a lot more than others, I don't think they're that close to the edge.
Click to expand...

A company can file for chapter 11 but it's not automatically granted. UAL would have to have the funds to support the chapter 11 plan. If not enough funds from would be investers, then move on to chapter 7 (liquidation).

Many people think that chapter 11 is an automatic give me, and that's not true.

I've heard the same rumor a few months back, predicting early in 2009 UAL is doomed. Seem's like airlines can always find investors no matter how bad it looks or scarce the funding is. Time will tell.
 
I know that other airlines (not going to name names) in their independent analysis of UAUA have predicted that they will be in CH 7 before too long. I do not know where they get that from, but that is first hand info.
 
Somehow I can't see our Government bailing out the automakers and a few months later watching UAL shutdown.
That said I could see them parted out ala PanAm.
 
Dan Roman said:
Somehow I can't see our Government bailing out the automakers and a few months later watching UAL shutdown.
That said I could see them parted out ala PanAm.
Click to expand...


I agree. There's a lot of things attractive that UAL is sitting on (Pacific routes, slots, etc)...the issue will be whether parting with those leaves an operation that can still survive. Let's hope for the employee's sake that they hold on.

stlflyguy
 
ACL65PILOT said:
Cutting service completely to MIA and maybe a few other cities. Lots going to the RJ's
Click to expand...

And I see that as stupid as TWAs sale of the London Routes, PAAs sale of their Pacific Ops...

And now that I think of it, neither one of those operations is around either. Hmm...
 
Hey, pilots generally realize this. You can't keep management from being stupid.

stlflyguy
 
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Just pure conjecture... but what about liquidation followed by CAL buying the assets and paying off a negotiated reduction in debt. That would give them all the routes and growth they need/want...
 
In my mind (not talking about the people losing their jobs and careers...just talking moving people and planes business here) losing United will be a good thing for other airlines. Others will pick up the routes and people and thus may be able to charge higher fares which will equal profits..expansion...more hiring..etc. Yeah it would suck for those involved losing thier jobs but it has happened to other airline in the past it can happen to United...sad but the industry will move on as if it were never here.
 
Dan Roman said:
Somehow I can't see our Government bailing out the automakers and a few months later watching UAL shutdown.
That said I could see them parted out ala PanAm.
Click to expand...

The government is basically bailing out the ENTIRE US auto industry - UA is not the entire US airline industry. I would be surprised if the government were to step in on a UA chapter 7.
 
RedDogC130 said:
In my mind (not talking about the people losing their jobs and careers...just talking moving people and planes business here) losing United will be a good thing for other airlines. Others will pick up the routes and people and thus may be able to charge higher fares which will equal profits..expansion...more hiring..etc. Yeah it would suck for those involved losing thier jobs but it has happened to other airline in the past it can happen to United...sad but the industry will move on as if it were never here.
Click to expand...

The exact same thing could be said about Southwest.

disclaimer... In no way meant to insult Southwest, its employees, shareholders, etc, etc
 
Good to hear the CAL furloughs may be all back this year. Hope that true.
 
I don't think UAL has much unrestricted cash. Their assest went from 3 billion to 2 billion, why? and who is to say they could convert these assets to cash.

There was a time when i thought, "No way" will they liquidate. But now, I am not too sure. Managment there put all their eggs in the "merger basket." A merger in the near future is highly unlikely.

So what is next? IMHO, UAL stopped running an airline back in 2000.
 
If you retired from UAL or are anywhere near the bottom of that list, it has been a form of hell. Except i know there are good guys in the middle of their list- but it would also be nice to just get it over with. Noone's happy there. And if you are-you did it by insulating yourself from the problems by outsourcing and making your narrow-body pilots fly under different, harsher rules.
 

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