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UAL to not make it through the Winter???

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Redtailer said:
There are triggers around $2.2 bil $2.1 bil and lower. Each number activates a higher percentage of holdback by the credit companies. Yes, it will turn in to a death spiral because at the $2.0 bil trigger it gets really ugly (Read BK filing). FYI the reported unrestricted cash on hand was just $2.3 bil.
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You also need to keep reading just a bit deeper into those 'triggers' and follow the money.

Who is UA's largest credit card processor? A: Chase

Who is UA's largest creditor? A: Chase (they participated in the DIP financing during BK and the BK exit financing after)

Who runs UA Mileage Plus CC program? A: Chase

Who is UA's largest single customer? A: Chase (they buy 'miles' in bulk for the cc program)

See a trend yet?

UA may very well go T.U. in the next year, but credit card triggers won't be the culprit. Chase is not going to induce a crisis that unless there is a benefit to Chase and triggering a CC holdback crisis only hurts Chase. Actions are louder than words: Chase has already made advance payments on miles to provide UA cash.

And if encumbered assets of 'only' $1B are an issue, how are Continental or JetBlue ever going to make it with ZERO unencumbered assets?

Obviously the issues are complex and challenging for UA, but simply stating that there is a magic 'bingo' number for BK due to cc issues is a gross oversimplification.
 
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2.5 billion unrestricted cash sets the first trigger of 15 percent. The way that United has their agreements, this will automatically trigger the death spiral because of the huge financial obligations that United can't cover. This numbers aren't made up, they're out there. I can't remember the second trigger, but it's either below 2.5 or 2.1 billion, but it requires around 35 percent withholdings. United only has 2.6 Billion unrestricted with 2 quarters to lose 100 million. SO what do you think will happen? Chase won't put anymore money into United. United appealed to Chase twice this year with Chase declining their requestions. That's why United put up spare parts for collateral. United is done unfortunately. When, who knows!! But Obama won't bail them out because of public opinion and will be satisfied with a breakup with hiring happening from the aquiring airlines. Best of luck!!
 
bluechunks said:
You also need to keep reading just a bit deeper into those 'triggers' and follow the money.

Who is UA's largest credit card processor? A: Chase

Who is UA's largest creditor? A: Chase (they participated in the DIP financing during BK and the BK exit financing after)

Who runs UA Mileage Plus CC program? A: Chase

Who is UA's largest single customer? A: Chase (they buy 'miles' in bulk for the cc program)

See a trend yet?

UA may very well go T.U. in the next year, but credit card triggers won't be the culprit. Chase is not going to induce a crisis that unless there is a benefit to Chase and triggering a CC holdback crisis only hurts Chase. Actions are louder than words: Chase has already made advance payments on miles to provide UA cash.

And if encumbered assets of 'only' $1B are an issue, how are Continental or JetBlue ever going to make it with ZERO unencumbered assets?

Obviously the issues are complex and challenging for UA, but simply stating that there is a magic 'bingo' number for BK due to cc issues is a gross oversimplification.
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I wouldn't trust Chase to keep UAL afloat. When UAUA exited BK in 2006 they pretty much gave all their assets to JP Morgan as collateral for their loans. Do a google search or read the 10K's
"The loan is secured by substantially all of United's assets, including aircraft, spare parts, rights to international routes and real estate."

If UAL goes TU then Chase gets the Pacific routes.

Chase just like the Star partners has covered it's as, Chase is also the credit that Continental uses for it's FF program.
 
Whether you agree with obamas politics- the potus has earned the right to address our kids. If there's something you disagree with, an adult would talk to their kids and explain that it's ok to disagree with authority- republican, democrat, or communist- and explain why you think differently on whatever subject. A great opportunity to show your kids what america is all about.

But that's not what the right is doing. You're throwing a fit about this and villifying Obama. Just like you did on the stimulus, which he inherited. And just like you're doing now with healthcare, a major platform of the Obama campaign. He won the election- dems resoundingly defeated republicans with that platform.

He has absolutely reached out and demanded bi-partisanship in a country where the right only cares about tearing him down. You throw a fit on every issue- villifying him at every turn- never coming up with your own solutions and you expect us to listen to you. Your attempting to pull off 1994 again in a completely different political environment. My generation sees your tactics- and is very turned off. We're also not ex-hippies and could care less about punching bullies in the nose. It's the only way to deal with a bully. And the only way to deal with a child throwing a fit is to put em in timeout.

Go to the corner now- people are dying and there are real problems to solve that the right has ignored for too long
 
ualdriver said:
I think redtailer's synopsis was a little overdramatic, but some of the points I think were OK.

I'm not sure where he got the triggers, unless you read some analyst's opinions and those were his/their guesses. If you listen to the quarterly conference calls, very often reporters will ask the executives about covenants and they won't answer. But somewhere in the 2B area there are probably some triggers where credit card suppliers, for example, will require a larger holdback for future purchases.
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There is a reason why the execs would not answer. When the conference call took place the analysts hadn't had a chance to go through the 10-Q thoroughly enough and they only had a chance to glance at the numbers. Anytime execs start eluding questions like that there should be a red flag the size of Texas waving.

Just for the record unless I noted differently, all of the numbers I provided were not made up or are any type of subposition. They came straight from UAL's 2Q 10-Q filing. The numbers are buried but they are there.
 
waveflyer said:
Whether you agree with obamas politics- the potus has earned the right to address our kids.
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He has absolutely NOT earned any such right. The rights of the government are limited to what the people have given them in the Constitution.

Therein lies the crux of the difference between liberalism and conservatism.
 
It is always some DORK that is picking his nose wishing UAL will go out of business so "his" airline will grow and he can advance!

Karma is a beeyotch LOSERS!



Good luck to the fine Employees at ALL THE AIRLINES!

and good luck to the UAL pilot group...lord knows you been through hell and back!
 
All that matters is that UA maintains a positive cash flow for now. That $150 million dollar injection from the spare parts loan will be on the Q3 report; not Q2. Personally I think UA will be ok. If not through weathering the storm, then through BO.
 
Bringupthebird said:
He has absolutely NOT earned any such right. The rights of the government are limited to what the people have given them in the Constitution.

Therein lies the crux of the difference between liberalism and conservatism.
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So the military recruiters / ROTC get unchecked access to address my son's class anytime they want but the Commander and Chief of the military does not? WTFO...

IMHO you people are WAY out there with this one. Last week a gentleman was caught on my son's school campus during school hours (a security violation since he did not check in). He did not even have any kids enrolled in the school. He was attempting to recruit support for the district to boycott the speech. If your group's previous behavior is a predictor, I have to believe you will show up this week at schools with side arms and Hitlerbama signs to shout down the oppositon.

Bottom line if he's the pres he gets to address them just like Bush #1 in 1991 and W reading the goat book during 9/11. I would welcome any president to address the students of this nation especially with a stay in school message.

Good luck to United's employees BTW. I think this thread was about that originally.
 
Wildmanny said:
Guys:

I'm NOT trying to stir up a hornet's nest or pi$$ in anyone's Cheerios. Please don't take it that way. I don't want this to happen and am not advocating a position either way.

I'm just wondering if anyone else is hearing this. Yesterday, I had a talk with a bud about consolidation in the industry vis a vis DAL and NWA and the topic turned to UAL and whether they will make it at all. His theory was that they shouldn't and I disagreed simply on a jobs front. We were talking about UAL having to pledge spare parts as collateral for their loan covenants and I thought that definitely didn't sound good. He said that he is hearing that Lufthansa and others are hovering around trying to figure out which parts they want, planes, routes, ops, gates, systems, etc.

So what is the scoop over there? Is there a load factor issue? Is there no money or advance bookings to make through the Winter? Are there rumors of parting out the company?

Just wondering. No flamebait. Best of luck to all the UAL bros and buds that I have over there. This industry is proving to be a mother!

WM
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This "friend" you have does not know what he is talking about...just his hopes....
 
And Bush jr, Clinton, and Reagan. Reagan even asked them to support his tax cut. Talk about politicizing the discussion with kids.
 
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waveflyer said:
That's what republicans would do
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If you want to compare politics, I can move this thread to the N-A forum and you can have at each other!
 
Wow. According to the little thingy in the top right, I haven't been here for a long time: Welcome, Andy.
You last visited: 03-07-2009 at 13:01

I see UAUA's demise is still the top thread. It's entirely possible. What's UAUA's cash burn? How about other airlines?
I haven't analyzed that sch!tt in a while but I'm sure that someone will post each airline's cash burn rate.
UAUA's been proactive on making cuts. I know; I was furloughed again back in April. They've made more cuts than their competitors and are miles ahead of them in that area. Those cuts translate into lower cash burn rates.

I won't view United as dead until I see a lot of asset sales. That's always the precursor. So far, no asset sales. Don't get me wrong; United's in a very, very bad financial position - it's double plus ungood.
As for the pilots at United, I think that they're a bunch of self-serving idiots. The company's in dire straits, yet you're jonesing for a pay raise. Wake up and smell the java. Gawd, I wish that I had applied to Southwest - at least I'd be flying with people who didn't find supplemental work on the movie set of 'Idiocracy.' I'm pretty sure that the Secretary of Education's role was filled by a ranking member of UAUA's MEC.
 

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