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UAL news.........
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spinup
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DW,
UAL having good PR is a laughable notion, where in the world did you get that idea? Your position on UAL is fine by me, the more competitors caught on their heals with your thinking, the better for United. So by all means continue with your self-serving myopic views.
With 200,000 pax daily, the people who really matter are betting on UAL.
UAL having good PR is a laughable notion, where in the world did you get that idea? Your position on UAL is fine by me, the more competitors caught on their heals with your thinking, the better for United. So by all means continue with your self-serving myopic views.
With 200,000 pax daily, the people who really matter are betting on UAL.
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Sugardaddy
Active member
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- May 22, 2003
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- 26
I believe 2 years ago there was a snake oil sales man in Atlanta preaching that by 2010, we would need an increase in air capacity the size of another "United airlines". So... DW, you have to ask yourself.... was it Uniteds bloated contract that caused the decrease in demand for airtravel? Or was there a bursting of the tech. bubble followed by a terrorist attack in the fall of 2001 followed by a WAR in Afghanistan, followed by the collapse of several Large corporations, followed by months and months and months of WAR talk, eventually followed by a WAR in Iraq.
If you want to lay some blame on the state of the air industry, why not put it where it really belongs. I believe a rebound in the economy in general, coupled with some kind of world stability would do more for the industry than something inane and silly like the liquidation of UAL.
If you want to lay some blame on the state of the air industry, why not put it where it really belongs. I believe a rebound in the economy in general, coupled with some kind of world stability would do more for the industry than something inane and silly like the liquidation of UAL.
skykid
On Point
- Joined
- Jan 24, 2002
- Posts
- 759
Well said SugarDaddy - you can add the SARS hysteria to your list. It would be more convenient for alot of people if United liquidated, but that is not how the system works. Right before the war started when oil prices were thru the roof, I thought there was a 50% chance of survival. Now, the only thing that will pull United down is another major incident, like an airliner knocked down by a shoulder launched missle. Here are the things working in United's favor:
1. Oil prices came down fast! UAL wasn't hedged a barrel and a few months with those March prices would have been awful. Now hedging carries no advantage.
2. All the experts said labor would be the main obstacle to restructuring - didn't happen. 70% of the IAM voted to except the new terms - incredible! It took the war and SARS to scare those folks. The on-time performance being achieved is not possible with labor problems. When you think of who has labor problems NOW, it ain't UAL.
3. American didn't go Ch11 and probably wont unless there is another major incident. This is great for my friends at AMR - it is always worse in Ch11. Also good for United. First thing UAL did in Ch11 - slash prices and put pressure on AMR. Don't need the favor returned, and AMR can't get the same concessions from labor and others without Ch11.
4. There appears to be a modest recovery underway. The small price increase that stuck starting Jun1 is a good sign. As long as even a very modest recovery continues (in other words we don't have another major terrorist act soon) UAL is going to meet all the DIP hurdles. You can't focus on the inflated/write off everything but the kitchen sink losses - look at daily cash burn and cash on hand.
5. Cash inflow. Tax refund + Gov money + aircraft sales (rumor has it with the 747 cap & fo bids that just came out UAL isn't selling as many 400s) = about 1 billion dollars. Not good news for people who want UAL to run out of money. UAL "posted" a 375 million dollar loss in April when SARS and the war had the worst affect, but came out of the month with more cash on hand because of the tax refund.
6. Big bad creditors myth. Alot of folks who write on this board seem to think the banks can't wait to force liqudiation. Everyone has a friend who heard from a buddy that the banks are just about to strike. Do you also think the mortgage company can't wait to take away your house if you miss a payment? More likely the ahead of schedule cost reductions have bought leeway on the DIP goals. That's just what the Wall Street Journal thinks - they probably don't know as much as D Webster.
7. Bankruptcy court rulings. The bankruptcy judge has ruled in UAL's favor every single time. CH11 is about keeping the wolves at bay while the company reorganizes, and that is what this judge is allowing.
8. Leadership. This is something UAL hasn't had in a long time. Glenn Tilton has turned UAL into a LCC in 6 months and is now surrounding himself with people who can find revenue. You may not see the separate LCC (code name Starfish) because the whole freakin airline is a LCC now. When Tilton says UAL may come out of bankruptcy sooner than next Summer if the timing is right, he is not joking. 2 months ago he asked employees to get ready to take even more cuts if the war was more severe to ensure survival. He wasn't playing then either but it wasn't even close to being necessary.
The guy in the know though is Ty Webb. Ty says UAL doesn't have a rat's a$$ chance. He even posted a picture of a UAL plane crashing on this board. I don't think that is a bit tacky. So there you have it. Seriously, the bad news is it going to take a few decades to get pilots pay back up, if it ever happens. These new contracts at the majors will put a lid on everybody's pay, in my opinion.
1. Oil prices came down fast! UAL wasn't hedged a barrel and a few months with those March prices would have been awful. Now hedging carries no advantage.
2. All the experts said labor would be the main obstacle to restructuring - didn't happen. 70% of the IAM voted to except the new terms - incredible! It took the war and SARS to scare those folks. The on-time performance being achieved is not possible with labor problems. When you think of who has labor problems NOW, it ain't UAL.
3. American didn't go Ch11 and probably wont unless there is another major incident. This is great for my friends at AMR - it is always worse in Ch11. Also good for United. First thing UAL did in Ch11 - slash prices and put pressure on AMR. Don't need the favor returned, and AMR can't get the same concessions from labor and others without Ch11.
4. There appears to be a modest recovery underway. The small price increase that stuck starting Jun1 is a good sign. As long as even a very modest recovery continues (in other words we don't have another major terrorist act soon) UAL is going to meet all the DIP hurdles. You can't focus on the inflated/write off everything but the kitchen sink losses - look at daily cash burn and cash on hand.
5. Cash inflow. Tax refund + Gov money + aircraft sales (rumor has it with the 747 cap & fo bids that just came out UAL isn't selling as many 400s) = about 1 billion dollars. Not good news for people who want UAL to run out of money. UAL "posted" a 375 million dollar loss in April when SARS and the war had the worst affect, but came out of the month with more cash on hand because of the tax refund.
6. Big bad creditors myth. Alot of folks who write on this board seem to think the banks can't wait to force liqudiation. Everyone has a friend who heard from a buddy that the banks are just about to strike. Do you also think the mortgage company can't wait to take away your house if you miss a payment? More likely the ahead of schedule cost reductions have bought leeway on the DIP goals. That's just what the Wall Street Journal thinks - they probably don't know as much as D Webster.
7. Bankruptcy court rulings. The bankruptcy judge has ruled in UAL's favor every single time. CH11 is about keeping the wolves at bay while the company reorganizes, and that is what this judge is allowing.
8. Leadership. This is something UAL hasn't had in a long time. Glenn Tilton has turned UAL into a LCC in 6 months and is now surrounding himself with people who can find revenue. You may not see the separate LCC (code name Starfish) because the whole freakin airline is a LCC now. When Tilton says UAL may come out of bankruptcy sooner than next Summer if the timing is right, he is not joking. 2 months ago he asked employees to get ready to take even more cuts if the war was more severe to ensure survival. He wasn't playing then either but it wasn't even close to being necessary.
The guy in the know though is Ty Webb. Ty says UAL doesn't have a rat's a$$ chance. He even posted a picture of a UAL plane crashing on this board. I don't think that is a bit tacky. So there you have it. Seriously, the bad news is it going to take a few decades to get pilots pay back up, if it ever happens. These new contracts at the majors will put a lid on everybody's pay, in my opinion.
Boz
Well-known member
- Joined
- Nov 25, 2001
- Posts
- 176
Went to TK yesterday and heard from management its latest regarding furloughs...Sorry to say the news was not encouraging as S.F. reported at least 60-70/month for several months to come.
The LCO is getting very little attention from the creditors as they want to concentrate on running the UAL brand and attract back many lucrative business customers that they have lost to AA, DAL, NWA and others over the last 24 months.
They stated that UAL is going to emerge from CH.11 sooner then expected and if the summer traffic rebounds from last years levels than it looks like Fall or early 1st quarter of 2004 which is still ahead of the initail date announced back in Dec. 2002.
Also, as far as furloughs go they are painting a picture of the airline being manned by about 7000-7500 pilots and this could all change if the direction of management shifts to take back more flying from UAX. The fact is the decision as to which UAX carriers fly what and UAL takes back has not been announced yet.
UAL is carrying greater than 200,000 pax a day with an average of 1550 flights/day and a load factor around 75-85%. Combine this with operational excellence goals that have exceeded many company records has kept them on time and leading the industry so far.
The concessions where a major milestone as far as the company and the unions hammering it out instead of the judge doing it for them. Either way UAL was going to get the labor savings one way or another from the unions and UAX carriers.
All in all the Ch.7 talk is just that TALK! The company is going to emerge from CH.11 sooner than later and it seems like a road map to get profitable is taking shape. The goal has shifed from getting labor savings to aggressivly making the airline profitable. Plan on seeing a major advertising blitz in many UAL hub cities soon.
Myself and many other UAL pilots will be working hard to win back customers and get UAL growing again so the furloughed pilots have a stronger airline to come back to.
Hang in there !
The LCO is getting very little attention from the creditors as they want to concentrate on running the UAL brand and attract back many lucrative business customers that they have lost to AA, DAL, NWA and others over the last 24 months.
They stated that UAL is going to emerge from CH.11 sooner then expected and if the summer traffic rebounds from last years levels than it looks like Fall or early 1st quarter of 2004 which is still ahead of the initail date announced back in Dec. 2002.
Also, as far as furloughs go they are painting a picture of the airline being manned by about 7000-7500 pilots and this could all change if the direction of management shifts to take back more flying from UAX. The fact is the decision as to which UAX carriers fly what and UAL takes back has not been announced yet.
UAL is carrying greater than 200,000 pax a day with an average of 1550 flights/day and a load factor around 75-85%. Combine this with operational excellence goals that have exceeded many company records has kept them on time and leading the industry so far.
The concessions where a major milestone as far as the company and the unions hammering it out instead of the judge doing it for them. Either way UAL was going to get the labor savings one way or another from the unions and UAX carriers.
All in all the Ch.7 talk is just that TALK! The company is going to emerge from CH.11 sooner than later and it seems like a road map to get profitable is taking shape. The goal has shifed from getting labor savings to aggressivly making the airline profitable. Plan on seeing a major advertising blitz in many UAL hub cities soon.
Myself and many other UAL pilots will be working hard to win back customers and get UAL growing again so the furloughed pilots have a stronger airline to come back to.
Hang in there !
Full of LUV
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skykid
On Point
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LUV, I don't think Ch11 is a good thing at all. For one thing, you are going to lose some customers who hear "bankruptcy" and fly on somebody else due to ignorance of what Ch11 is or fear they will be stuck with tickets that are no good. It hurts the brand name for sure. The press is going to sell newspapers and t.v. time with stories about how you may be gone. You have to secure exit financing. There is a sense of failure. Look at the track record of bankrupt airlines. Anybody would claw and scratch to avoid Ch11
I do believe mgt will get better lease deals and concessions from all players under Ch11. At UAL, the gun was to the head. At AMR, it was - give concessions or we'll put a gun to your head. At Delta, its - we need concessions or we are going to put a gun to your head some time in the future.
What you are going to see now is reports of how United will secure somewhere between 1.5 and 1.8 billion in loan guarantees from the ATSB. Had AMR gone Ch11, they don't have that door open to them. Take care.
I do believe mgt will get better lease deals and concessions from all players under Ch11. At UAL, the gun was to the head. At AMR, it was - give concessions or we'll put a gun to your head. At Delta, its - we need concessions or we are going to put a gun to your head some time in the future.
What you are going to see now is reports of how United will secure somewhere between 1.5 and 1.8 billion in loan guarantees from the ATSB. Had AMR gone Ch11, they don't have that door open to them. Take care.
Speaking about the ATSB loan.....
Reuters
UAL Moves to Shore Up Loan Guarantee Bid
Saturday May 31, 5:09 pm ET
By John Crawley
WASHINGTON (Reuters) - United Airlines (OTC BB:UALAQ.OB - News) chief executive Glenn Tilton (News) said on Saturday he was firming up the carrier's $1.8 billion federal loan guarantee bid around a plan that would rely on substantial cost savings and several strategies to boost revenue and capture business travel.
Speaking with reporters at an industry event, Tilton also said he would not be pushed into setting a date for exiting Chapter 11 protection. He noted that a separate low-cost carrier remains an option but a potentially less competitive one, since the company was unable to secure key labor agreements it felt were necessary to maximize efficiency.
"We have to find a competitive response that works for United with respect to low-cost traffic, not necessarily low-cost carriers per se," Tilton said.
Nevertheless, he said United is sharply focused on winning back premium customers who have deserted big airlines in droves since mid-2001. "We're going to make sure we continue to focus on the core of United's passengers -- that is the business traveler."
The company's retooled application for loan guarantee assistance would include $2.5 billion in labor concessions and related work rule savings over the next six years; close to $700 million a year in savings from renegotiated aircraft leases and other mortgages that are close to being finalized, and a new revenue outlook, Tilton said.
Still to be determined as part of United's recovery plan is the amount of Chapter 11 exit financing and who will supply it, as well as the scope of a low-cost operation, and a final lineup of regional carriers.
Tilton would not identify parties that have expressed interest in providing exit financing.
United plans to submit a business plan to creditors and lenders in the early part of June and will then file a formal restructuring proposal with the U.S. bankruptcy court in Chicago later this year -- probably in the early fall.
Tilton said he is working closely with the government's Air Transportation Stabilization Board to replace those aspects of the company's original loan guarantee bid -- rejected as inadequate in December -- with new figures.
While promoting the economic merits of exiting bankruptcy at the start of the spring travel season next year, Tilton would not yield on whether United would emerge at that time.
"We want to exit Chapter 11 after we are sure there is precious little value left on the table," he said. "My plan is to sweep the table of all the benefits available to us rather than be expedient."
United reported last week that it sustained a $375 million net loss for April as demand weakened because of the war in Iraq and the SARS virus that has hurt Asia travel. That followed a $1.3 billion loss in the first quarter.
Reuters
UAL Moves to Shore Up Loan Guarantee Bid
Saturday May 31, 5:09 pm ET
By John Crawley
WASHINGTON (Reuters) - United Airlines (OTC BB:UALAQ.OB - News) chief executive Glenn Tilton (News) said on Saturday he was firming up the carrier's $1.8 billion federal loan guarantee bid around a plan that would rely on substantial cost savings and several strategies to boost revenue and capture business travel.
Speaking with reporters at an industry event, Tilton also said he would not be pushed into setting a date for exiting Chapter 11 protection. He noted that a separate low-cost carrier remains an option but a potentially less competitive one, since the company was unable to secure key labor agreements it felt were necessary to maximize efficiency.
"We have to find a competitive response that works for United with respect to low-cost traffic, not necessarily low-cost carriers per se," Tilton said.
Nevertheless, he said United is sharply focused on winning back premium customers who have deserted big airlines in droves since mid-2001. "We're going to make sure we continue to focus on the core of United's passengers -- that is the business traveler."
The company's retooled application for loan guarantee assistance would include $2.5 billion in labor concessions and related work rule savings over the next six years; close to $700 million a year in savings from renegotiated aircraft leases and other mortgages that are close to being finalized, and a new revenue outlook, Tilton said.
Still to be determined as part of United's recovery plan is the amount of Chapter 11 exit financing and who will supply it, as well as the scope of a low-cost operation, and a final lineup of regional carriers.
Tilton would not identify parties that have expressed interest in providing exit financing.
United plans to submit a business plan to creditors and lenders in the early part of June and will then file a formal restructuring proposal with the U.S. bankruptcy court in Chicago later this year -- probably in the early fall.
Tilton said he is working closely with the government's Air Transportation Stabilization Board to replace those aspects of the company's original loan guarantee bid -- rejected as inadequate in December -- with new figures.
While promoting the economic merits of exiting bankruptcy at the start of the spring travel season next year, Tilton would not yield on whether United would emerge at that time.
"We want to exit Chapter 11 after we are sure there is precious little value left on the table," he said. "My plan is to sweep the table of all the benefits available to us rather than be expedient."
United reported last week that it sustained a $375 million net loss for April as demand weakened because of the war in Iraq and the SARS virus that has hurt Asia travel. That followed a $1.3 billion loss in the first quarter.
Ty Webb
Hostage to Fortune
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Think what you wish, skykid, but most of what you have posted is wishful thinking, pure and simple.
The most important thing you have posted is that UAL, with its planes "75-85% full" is still hemorrhaging money- over $4 million a day. That is miles away from turning a profit, which they need to do by October, according to your lender's covennants.
Even with an improvement in fuel prices and SARS gone (?) there is no way UAL will make money in this pricing environment, and they must start making money soon, or they either run out of cash or bust a covenant.
BTW, a one time shot-in-the-arm like the tax refund doesn't represent anything other than a fortunate circumstance, just as SARS was an unfortunate one. Welcome to the airline industry.
The picture, on another message board, which I posted a link to, was a picture of a UAL plane "tanking". If your skin is so thin, perhaps you shouldn't be on this board. Maybe Dr. Phil has a board you could find more soothing.
The most important thing you have posted is that UAL, with its planes "75-85% full" is still hemorrhaging money- over $4 million a day. That is miles away from turning a profit, which they need to do by October, according to your lender's covennants.
Even with an improvement in fuel prices and SARS gone (?) there is no way UAL will make money in this pricing environment, and they must start making money soon, or they either run out of cash or bust a covenant.
BTW, a one time shot-in-the-arm like the tax refund doesn't represent anything other than a fortunate circumstance, just as SARS was an unfortunate one. Welcome to the airline industry.
The picture, on another message board, which I posted a link to, was a picture of a UAL plane "tanking". If your skin is so thin, perhaps you shouldn't be on this board. Maybe Dr. Phil has a board you could find more soothing.
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spinup
Well-known member
- Joined
- Jan 14, 2002
- Posts
- 115
Ty Webb,
Since you appear to be "in-the-know", concerning UAL financially, perhaps you could answer a few questions.
1. Since UAL met previous DIP hurdles by a "wide margin", how many losses did they post early as opposed to later when DIP hurdles are more stringent? Outside of EBITAR for cash on hand purposes.
2. Why will UAL be forced into Chapter 7 if it misses a DIP hurdle, when US Airways missed all of theirs?
3. Why is it a bad thing for UAL to have the 4th best load factor in the industry, and the best on time performance? Will this somehow effect revenue adversely?
4. Do your $4m per day losses in April (the month most damaging due to War, Fuel cost, and SARS), accurately reflect future revenue earnings at UAL?
5. Will the $15.1b savings from labor (over six years) and the $700m savings from re-negotiated leases (annually) play no role in recovery?
6. Are all the cost savings, and increased efficiencies fully implemented, and $4m daily loss is the best UAL can hope for?
7. I thought that like DIP financing, exit financing was the norm. If it is not then what is?
9. Will the recent $10.00 dollar increase on tickets have no effect? At 200,000 pax daily that is a $2m daily increase in revenue. Will UAL still be loosing $4m daily? I guess technically the summer revenue picture would have to drop to $6m daily losses to keep with your $4m daily. Will this happen?
8. Most importantly, where is the industry heading? Is low fare the long term future, Hub and spoke network carriers, or is it a mix of the two?
Thanks in advance,
Spinup
Since you appear to be "in-the-know", concerning UAL financially, perhaps you could answer a few questions.
1. Since UAL met previous DIP hurdles by a "wide margin", how many losses did they post early as opposed to later when DIP hurdles are more stringent? Outside of EBITAR for cash on hand purposes.
2. Why will UAL be forced into Chapter 7 if it misses a DIP hurdle, when US Airways missed all of theirs?
3. Why is it a bad thing for UAL to have the 4th best load factor in the industry, and the best on time performance? Will this somehow effect revenue adversely?
4. Do your $4m per day losses in April (the month most damaging due to War, Fuel cost, and SARS), accurately reflect future revenue earnings at UAL?
5. Will the $15.1b savings from labor (over six years) and the $700m savings from re-negotiated leases (annually) play no role in recovery?
6. Are all the cost savings, and increased efficiencies fully implemented, and $4m daily loss is the best UAL can hope for?
7. I thought that like DIP financing, exit financing was the norm. If it is not then what is?
9. Will the recent $10.00 dollar increase on tickets have no effect? At 200,000 pax daily that is a $2m daily increase in revenue. Will UAL still be loosing $4m daily? I guess technically the summer revenue picture would have to drop to $6m daily losses to keep with your $4m daily. Will this happen?
8. Most importantly, where is the industry heading? Is low fare the long term future, Hub and spoke network carriers, or is it a mix of the two?
Thanks in advance,
Spinup
acarpe3448
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- Apr 16, 2002
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- 647
General Lee
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- Aug 24, 2002
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Ty Webb
Hostage to Fortune
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- Dec 10, 2001
- Posts
- 6,524
(Originally posted by spinup)
Ty Webb,
Since you appear to be "in-the-know", concerning UAL financially, perhaps you could answer a few questions.
I am not "in the know". I am simply someone who is following the issue and an only calling it as I see it. I am not a financial guru, but I used to be a pretty successful businessman in another life, enough to know the difference, say, between an Income Statement, and a Balance Sheet.
1. Since UAL met previous DIP hurdles by a "wide margin", how many losses did they post early as opposed to later when DIP hurdles are more stringent? Outside of EBITAR for cash on hand purposes.
UAL met its earlier covenants because at that point in the process, they did not have to pay most of their bills (to put it in the simplest terms). If I gave you two months where you didn;t have to pay your mortgage, utilities and credit card payments, you would have a lot of extra cash on hand, too.
2. Why will UAL be forced into Chapter 7 if it misses a DIP hurdle, when US Airways missed all of theirs?.
I don;t recall that USAirways missed "all" of theirs, but they were dealing with the Alabama Retirement Board, who basically "upped" their ownership, and, as an owner, had more of a vested interest in keeping the company a going concern. UAL's debt is held by a wider variety of entities, making it more complex. I think that if they miss their future requirements (namely, to start making money by October) Citigroup and the others may decide to cut their losses and stop throwing good money after bad.
3. Why is it a bad thing for UAL to have the 4th best load factor in the industry, and the best on time performance? Will this somehow effect revenue adversely?
Didn't say that.
4. Do your $4m per day losses in April (the month most damaging due to War, Fuel cost, and SARS), accurately reflect future revenue earnings at UAL?.
I, too, will be interested to see if they can make money when these issues have been resolved.
5. Will the $15.1b savings from labor (over six years) and the $700m savings from re-negotiated leases (annually) play no role in recovery?
They won't if they don;t get the chance to . . . in other words, if UAL isn;t making money by October, and the DIP decide to pull the plug and liquidate, then all of those things won;t matter.
6. Are all the cost savings, and increased efficiencies fully implemented, and $4m daily loss is the best UAL can hope for?
Geez, I hope not, but who knows? Only time will tell. It's not just the costs, of course, it;s also the revenues, which, right now, may not be able to support UAL's (reduced) cost structure.
7. I thought that like DIP financing, exit financing was the norm. If it is not then what is?
The question is really will they get to the point where they can exit?
9. Will the recent $10.00 dollar increase on tickets have no effect? At 200,000 pax daily that is a $2m daily increase in revenue. Will UAL still be loosing $4m daily? I guess technically the summer revenue picture would have to drop to $6m daily losses to keep with your $4m daily. Will this happen?
This assumes that the pricing sticks. It is not enough on its own to enable them to do what they must- and that is, again, be making money by October.
8. Most importantly, where is the industry heading? Is low fare the long term future, Hub and spoke network carriers, or is it a mix of the two?
Much smarter people than you and I are wondering the same thing. When business travel comes back in a few years, we will see how they vote with their dollars.
Ty Webb,
Since you appear to be "in-the-know", concerning UAL financially, perhaps you could answer a few questions.
I am not "in the know". I am simply someone who is following the issue and an only calling it as I see it. I am not a financial guru, but I used to be a pretty successful businessman in another life, enough to know the difference, say, between an Income Statement, and a Balance Sheet.
1. Since UAL met previous DIP hurdles by a "wide margin", how many losses did they post early as opposed to later when DIP hurdles are more stringent? Outside of EBITAR for cash on hand purposes.
UAL met its earlier covenants because at that point in the process, they did not have to pay most of their bills (to put it in the simplest terms). If I gave you two months where you didn;t have to pay your mortgage, utilities and credit card payments, you would have a lot of extra cash on hand, too.
2. Why will UAL be forced into Chapter 7 if it misses a DIP hurdle, when US Airways missed all of theirs?.
I don;t recall that USAirways missed "all" of theirs, but they were dealing with the Alabama Retirement Board, who basically "upped" their ownership, and, as an owner, had more of a vested interest in keeping the company a going concern. UAL's debt is held by a wider variety of entities, making it more complex. I think that if they miss their future requirements (namely, to start making money by October) Citigroup and the others may decide to cut their losses and stop throwing good money after bad.
3. Why is it a bad thing for UAL to have the 4th best load factor in the industry, and the best on time performance? Will this somehow effect revenue adversely?
Didn't say that.
4. Do your $4m per day losses in April (the month most damaging due to War, Fuel cost, and SARS), accurately reflect future revenue earnings at UAL?.
I, too, will be interested to see if they can make money when these issues have been resolved.
5. Will the $15.1b savings from labor (over six years) and the $700m savings from re-negotiated leases (annually) play no role in recovery?
They won't if they don;t get the chance to . . . in other words, if UAL isn;t making money by October, and the DIP decide to pull the plug and liquidate, then all of those things won;t matter.
6. Are all the cost savings, and increased efficiencies fully implemented, and $4m daily loss is the best UAL can hope for?
Geez, I hope not, but who knows? Only time will tell. It's not just the costs, of course, it;s also the revenues, which, right now, may not be able to support UAL's (reduced) cost structure.
7. I thought that like DIP financing, exit financing was the norm. If it is not then what is?
The question is really will they get to the point where they can exit?
9. Will the recent $10.00 dollar increase on tickets have no effect? At 200,000 pax daily that is a $2m daily increase in revenue. Will UAL still be loosing $4m daily? I guess technically the summer revenue picture would have to drop to $6m daily losses to keep with your $4m daily. Will this happen?
This assumes that the pricing sticks. It is not enough on its own to enable them to do what they must- and that is, again, be making money by October.
8. Most importantly, where is the industry heading? Is low fare the long term future, Hub and spoke network carriers, or is it a mix of the two?
Much smarter people than you and I are wondering the same thing. When business travel comes back in a few years, we will see how they vote with their dollars.
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They are losing $400 million a month without making any aircraft lease or facilities payments? You have to wonder how much, longer the lenders and creditors are going to watch this company burn through money.
What was also interesting was their cash balance change. Factor out the governemnt grant and tax refund, the picture does not look good.
What was also interesting was their cash balance change. Factor out the governemnt grant and tax refund, the picture does not look good.
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General Lee
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UAL April Summary:
(A month that Boeingman and Gordo said UAL would never see a few months ago).
---------------------------
* Meets third DIP covenant despite impact of Iraq War and SARS
* Maintains strong cash position
* Challenging revenue environment drives loss from operations of 297 million dollars and net loss of 375 million dollars for April
* Operational excellence continues
* Company implements improvements in travel experience and plans to dedicate resources to re-engaging core customer base
UAL Corp. today filed its April Monthly Operating Report (MOR) with the United States Bankruptcy Court, and said that it met the third monthly requirement of its debtor-in-possession (DIP) financing. As part of its DIP financing agreements, United's lenders required the company to achieve a cumulative EBITDAR (earnings before interest, taxes, depreciation, amortization and aircraft rent) loss of no more than 849 million dollars between Dec. 1, 2002, and April 30, 2003.
The company reported a loss from operations of 297 million dollars and a net loss of 375 million dollars for April. The revenue environment for the entire airline industry was very difficult during the month, due to the full impact of the war in Iraq and the fear of SARS in Asia.
UAL improved its cash position for the month and reported an increase in cash of approximately 150 million dollars for April, ending the month with a cash balance of approximately 1.7 billion dollars, which included 651 million dollars in restricted cash (filing entities only). During the month of April, the company made a 64 million dollar quarterly retroactive wage payment, including taxes and interest, to employees who are members of the International Association of Machinists and Aerospace Workers (IAM) union. The company also received a 365 million dollar tax refund from the Internal Revenue Service. UAL began April with a cash balance of approximately 1.6 billion dollars, which included 633 million dollars in restricted cash (filing entities only). Excluding the tax refund and the quarterly IAM retro payment, the company's cash balance decreased approximately 150 million dollars for the month.
United's Executive Vice President and Chief Financial Officer Jake Brace said, "April marked the high point of the Iraq War and SARS impacts on revenue. Our cash burn was significantly higher in April as compared with March. We are pleased that our cash receipts have now returned to pre-war levels. We have stayed on track with our efforts to reduce our cost structure significantly and we continue to move our business forward. Early planning for the effects of the war in Iraq and our new flexibility to respond to market shifts helped us to meet our cumulative EBITDAR requirements and maintain a healthy cash position. We are confident at this point that we will also meet our EBITDAR requirements for May."
Brace continued: "We are pleased to have recently announced the resumption in June of 162 flights and are encouraged by bookings for the summer months. However, the revenue environment continues to be challenging."
In May, the company announced the appointment of John Tague as executive vice-president-Customer, and the company plans to dedicate significant resources to re-engaging its core customer base.
Tague said, "The company has made enormous progress in restructuring its costs. Looking forward, United is now turning its full attention toward revenue enhancement. The company is currently finalizing aggressive and focused plans across all of its revenue disciplines so that we can fully address visible opportunities for improvement through refining and investing in our marketing and revenue management strategy."
United's operations continued to demonstrate strong on-time performance, as well as improvements in customer service and satisfaction. In addition, United is continuing to demonstrate its commitment to investing in customers through a number of recently announced enhancements to the travel experience, including the introduction of online Web check-in (EasyCheck-in Online) for customers, the accelerated introduction of EasyCheck-in self-service kiosks, and the reconfiguration of our remaining Boeing 777 aircraft to deploy Economy Plus seating, and to increase leg room and increase seat recline in Business Class. United is also introducing JetConnect technology, so passengers can send and receive email from the plane.
(A month that Boeingman and Gordo said UAL would never see a few months ago).
---------------------------
* Meets third DIP covenant despite impact of Iraq War and SARS
* Maintains strong cash position
* Challenging revenue environment drives loss from operations of 297 million dollars and net loss of 375 million dollars for April
* Operational excellence continues
* Company implements improvements in travel experience and plans to dedicate resources to re-engaging core customer base
UAL Corp. today filed its April Monthly Operating Report (MOR) with the United States Bankruptcy Court, and said that it met the third monthly requirement of its debtor-in-possession (DIP) financing. As part of its DIP financing agreements, United's lenders required the company to achieve a cumulative EBITDAR (earnings before interest, taxes, depreciation, amortization and aircraft rent) loss of no more than 849 million dollars between Dec. 1, 2002, and April 30, 2003.
The company reported a loss from operations of 297 million dollars and a net loss of 375 million dollars for April. The revenue environment for the entire airline industry was very difficult during the month, due to the full impact of the war in Iraq and the fear of SARS in Asia.
UAL improved its cash position for the month and reported an increase in cash of approximately 150 million dollars for April, ending the month with a cash balance of approximately 1.7 billion dollars, which included 651 million dollars in restricted cash (filing entities only). During the month of April, the company made a 64 million dollar quarterly retroactive wage payment, including taxes and interest, to employees who are members of the International Association of Machinists and Aerospace Workers (IAM) union. The company also received a 365 million dollar tax refund from the Internal Revenue Service. UAL began April with a cash balance of approximately 1.6 billion dollars, which included 633 million dollars in restricted cash (filing entities only). Excluding the tax refund and the quarterly IAM retro payment, the company's cash balance decreased approximately 150 million dollars for the month.
United's Executive Vice President and Chief Financial Officer Jake Brace said, "April marked the high point of the Iraq War and SARS impacts on revenue. Our cash burn was significantly higher in April as compared with March. We are pleased that our cash receipts have now returned to pre-war levels. We have stayed on track with our efforts to reduce our cost structure significantly and we continue to move our business forward. Early planning for the effects of the war in Iraq and our new flexibility to respond to market shifts helped us to meet our cumulative EBITDAR requirements and maintain a healthy cash position. We are confident at this point that we will also meet our EBITDAR requirements for May."
Brace continued: "We are pleased to have recently announced the resumption in June of 162 flights and are encouraged by bookings for the summer months. However, the revenue environment continues to be challenging."
In May, the company announced the appointment of John Tague as executive vice-president-Customer, and the company plans to dedicate significant resources to re-engaging its core customer base.
Tague said, "The company has made enormous progress in restructuring its costs. Looking forward, United is now turning its full attention toward revenue enhancement. The company is currently finalizing aggressive and focused plans across all of its revenue disciplines so that we can fully address visible opportunities for improvement through refining and investing in our marketing and revenue management strategy."
United's operations continued to demonstrate strong on-time performance, as well as improvements in customer service and satisfaction. In addition, United is continuing to demonstrate its commitment to investing in customers through a number of recently announced enhancements to the travel experience, including the introduction of online Web check-in (EasyCheck-in Online) for customers, the accelerated introduction of EasyCheck-in self-service kiosks, and the reconfiguration of our remaining Boeing 777 aircraft to deploy Economy Plus seating, and to increase leg room and increase seat recline in Business Class. United is also introducing JetConnect technology, so passengers can send and receive email from the plane.
General Lee
Well-known member
- Joined
- Aug 24, 2002
- Posts
- 20,442
Mugs,,
Don't get me wrong--I want United to do well. I have many friends over there who are hanging on tight. I just am a little wary about a couple things. #1 being whether or not United has paid anything on their airplanes lately (lease payments), and #2 do they have a plan for their LCC etc? I have heard that they will mix it in at the hubs with their mainline. I would think that it might be really confusing for the passengers---United, United Shuttle, United Express, etc. The SARS thing cannot be helping when you need strong summer traffic. I hope you come out of this. It just proves that an airline can already being doing poorly before 9-11, then lose two planes on national TV during that day, survive a nasty bankruptcy, and have 1/2 of your Intl traffic be gone due to a disease (SARS), and still be able to survive. That really is amazing. I hope it works.
Bye Bye--General Lee
Don't get me wrong--I want United to do well. I have many friends over there who are hanging on tight. I just am a little wary about a couple things. #1 being whether or not United has paid anything on their airplanes lately (lease payments), and #2 do they have a plan for their LCC etc? I have heard that they will mix it in at the hubs with their mainline. I would think that it might be really confusing for the passengers---United, United Shuttle, United Express, etc. The SARS thing cannot be helping when you need strong summer traffic. I hope you come out of this. It just proves that an airline can already being doing poorly before 9-11, then lose two planes on national TV during that day, survive a nasty bankruptcy, and have 1/2 of your Intl traffic be gone due to a disease (SARS), and still be able to survive. That really is amazing. I hope it works.
Bye Bye--General Lee
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