FutureTEDpilot
Well-known member
July 28th EyeOnUA
Glenn Tilton
Chicago July 28 /UAL Communications/ It is Thursday morning, July 28th, and
I'm calling today from Chicago.
Today, we reported our financial results for the second quarter, and they
are solidly competitive. Despite the fact that fuel costs were $262 million
higher than in the second quarter of last year, we earned an operating
profit of $48 million.
Of the major network carriers, only three - ourselves, American and
Continental - reported an operating profit this quarter. Delta and
Northwest reported operating losses.
Our mainline unit revenue was up 5 percent, and mainline costs, excluding
fuel, were down 3 percent, year-over-year. These performance measures also
put United in line with our leading network competitors.
Three years ago, Continental was viewed as the leading network carrier in
terms of cost per available seat mile. In the time we have been in
restructuring, we have virtually closed the mainline cost gap ... excluding
fuel ... going from a 16 percent disadvantage to virtual parity today.
Although by no means sufficient, these results show significant progress for
the company, particularly given the dramatically uncompetitive position we
were in three years ago.
In this quarter we have taken a predominantly non-cash charge of $1.4
billion for reorganization items, covering the transfer of pensions to the
PBGC, the rejection of aircraft and other creditor claims.
This non-cash charge will receive some attention and can be confusing, but
because non-cash charges do not affect our operations or our liquidity, the
important number to focus on is our operating earnings, which is the correct
measure of the underlying strength of our business. The non-cash items
will be addressed in the normal bankruptcy process as we exit from Chapter
11.
During the second quarter we also achieved ratified, consensual collective
bargaining agreements with AMFA and the IAM -- meaning that we now have
ratified contracts with all our labor groups.
We also have replacement retirement plans in place for all of United's union
and non-union groups, with the exception of the AFA.
We sustained our strong operational performance during the quarter, improved
productivity and reliability, and continued to see the benefits of aircraft
utilization efforts, with a significant improvement. This means that we
have been able to reduce the size of our fleet by 13 percent while
maintaining 97 percent of our available seat miles for the public.
These results make clear that we have put in place a solid foundation, and
we are ready to move ahead as a much more competitive company.
This progress was made evident by the fact that we were able to increase the
size and reduce the interest rate of our debtor-in-possession financing
agreements in the second quarter.
And, we will soon file United's plan of reorganization -- or POR -- and our
disclosure statement with the court.
The POR filing is not a business plan - it is a court document designed to
initiate the formal process towards exit from Chapter 11. The POR will be
supplemented with additional information when it is filed at a later date.
This information will include a high-level financial forecast for the next
five years, which we are currently discussing with major financial
institutions interested in providing the company with exit financing.
We have used the bankruptcy process to build a competitive foundation for
the future. We now have the opportunity to continue to build on that
foundation and to move toward our goal of becoming the best network carrier
in the United States.
We have earned the opportunity to compete, and that's exactly what we're
going to do.
That's all for now on this call. Until next time, stay United.
Glenn Tilton
Chicago July 28 /UAL Communications/ It is Thursday morning, July 28th, and
I'm calling today from Chicago.
Today, we reported our financial results for the second quarter, and they
are solidly competitive. Despite the fact that fuel costs were $262 million
higher than in the second quarter of last year, we earned an operating
profit of $48 million.
Of the major network carriers, only three - ourselves, American and
Continental - reported an operating profit this quarter. Delta and
Northwest reported operating losses.
Our mainline unit revenue was up 5 percent, and mainline costs, excluding
fuel, were down 3 percent, year-over-year. These performance measures also
put United in line with our leading network competitors.
Three years ago, Continental was viewed as the leading network carrier in
terms of cost per available seat mile. In the time we have been in
restructuring, we have virtually closed the mainline cost gap ... excluding
fuel ... going from a 16 percent disadvantage to virtual parity today.
Although by no means sufficient, these results show significant progress for
the company, particularly given the dramatically uncompetitive position we
were in three years ago.
In this quarter we have taken a predominantly non-cash charge of $1.4
billion for reorganization items, covering the transfer of pensions to the
PBGC, the rejection of aircraft and other creditor claims.
This non-cash charge will receive some attention and can be confusing, but
because non-cash charges do not affect our operations or our liquidity, the
important number to focus on is our operating earnings, which is the correct
measure of the underlying strength of our business. The non-cash items
will be addressed in the normal bankruptcy process as we exit from Chapter
11.
During the second quarter we also achieved ratified, consensual collective
bargaining agreements with AMFA and the IAM -- meaning that we now have
ratified contracts with all our labor groups.
We also have replacement retirement plans in place for all of United's union
and non-union groups, with the exception of the AFA.
We sustained our strong operational performance during the quarter, improved
productivity and reliability, and continued to see the benefits of aircraft
utilization efforts, with a significant improvement. This means that we
have been able to reduce the size of our fleet by 13 percent while
maintaining 97 percent of our available seat miles for the public.
These results make clear that we have put in place a solid foundation, and
we are ready to move ahead as a much more competitive company.
This progress was made evident by the fact that we were able to increase the
size and reduce the interest rate of our debtor-in-possession financing
agreements in the second quarter.
And, we will soon file United's plan of reorganization -- or POR -- and our
disclosure statement with the court.
The POR filing is not a business plan - it is a court document designed to
initiate the formal process towards exit from Chapter 11. The POR will be
supplemented with additional information when it is filed at a later date.
This information will include a high-level financial forecast for the next
five years, which we are currently discussing with major financial
institutions interested in providing the company with exit financing.
We have used the bankruptcy process to build a competitive foundation for
the future. We now have the opportunity to continue to build on that
foundation and to move toward our goal of becoming the best network carrier
in the United States.
We have earned the opportunity to compete, and that's exactly what we're
going to do.
That's all for now on this call. Until next time, stay United.