US Air financial struggles

[Saabslime]

NEW YORK - High hopes, diminishing returns?

US Airways Group (nyse: LCC - news - people ) warned that its merger with America West will confront "significant challenges"--and that the hybrid firm may fall short of expectations.

Sure, every business venture involves risk, but this particular carrier combination has a lot riding on it: The merger was a key component in Chief Executive Douglas Parker's plans to pull US Airways out of bankruptcy.

In a regulatory filing Tuesday, Parker's firm said that while the airlines' synthesis will still create synergies and growth opportunities, US Airways' operating losses have not subsided and will likely grind on into 2006.

The carrier had augured some $600 million in operating cost savings and revenue synergies for the new entity. However, in a U.S. Securities and Exchange Commission filing, US Airways now says it "cannot assure" the synergies will be realized.

"We may not perform as well financially as we expect following the merger," Parker's company cautioned.



Well duh Parker. How many people tried to tell you and your crack management team this prior to signing on the dotted line!? I guess it doesn't matter anymore though since you got yours. Will there ever be anymore good news in this godforsaken industry again?

 

[Dennis Miller]

Will there ever be anymore good news in this godforsaken industry again?

Sure, how about this...............

UAL Reports $698 Million Net Loss for Oct.
Wednesday November 23, 2005 pm ET

UAL Reports $698 Million Net Loss for Oct. As It Nears Completion of Overhaul in Bankruptcy

ELK GROVE VILLAGE, Ill. (AP) -- United Airlines' holding company reported a $698 million net loss Wednesday for the month of October, continuing to lose money as it nears the completion of a nearly three-year-old overhaul in bankruptcy.

UAL Corp. said the loss consisted mostly of $584 million in reorganization expenses that resulted largely from the termination of its pilots' defined-benefit pension plan. It blamed the rest of the deficit on a 53 percent rise in fuel prices from October 2004 that caused the company to spend $169 million more on fuel than it did a year earlier.

The operating loss for the month was $71 million, compared with $65 million in the same period of 2004.

UAL said costs for its mainline unit, excluding fuel, were down 4 percent while passenger revenue rose 9 percent.

The company has now reported net losses of $14.9 billion since last turning a profit in the second quarter of 2000, including $5 billion this year and $9.7 billion since it filed for Chapter 11 bankruptcy in December 2002. But it suggested that the huge recent losses are somewhat misleading, since large non-cash reorganization expenses are common for companies closing in on emergence from bankruptcy. UAL noted that claims pending against it are expected to be settled for a fraction of the charges recorded, meaning much of the recent deficit will ultimately be overturned in the form of a multibillion-dollar gain upon exit from bankruptcy.

Chief Financial Officer Jake Brace said the company continues to make steady progress toward its goal of coming out of bankruptcy in February. "United's revenue performance and cost reductions were offset by record-high fuel costs," he said. "Our restructuring work has been effective and has equipped the company to manage through the challenges the industry presents."

The company said it ended October with $2.7 billion in cash -- $964 million of it restricted

 

[m80drvr]

Wonder when the consessions and furloughs begin. Great, on the street again, guess third time is the charm

 

[N1atEcon]

Please

When Parker and his gang were talking last spring about the "synergies" that would be gained I had a good laugh. I think that word is going to bite them in the A$$. If an airline CEO bases a business plan on a theory for the profits they should be tossed out at FL 410 without their golden parachute.

Doesn't synergy or synegism have to do with biology and organisms acting together?

 

[737 Pylt]

When Parker and his gang were talking last spring about the "synergies" that would be gained I had a good laugh. I think that word is going to bite them in the A$$. If an airline CEO bases a business plan on a theory for the profits they should be tossed out at FL 410 without their golden parachute.

Doesn't synergy or synegism have to do with biology and organisms acting together?

Organism is too good a word to describe airline management!
737

 

[PHXFLYR]

"We may not perform as well financially as we expect following the merger," Parker's company cautioned.


So this must be that "windfall for the AWA pilots" my good buddy Be Careful was trying to explain to me.... Now I get it!!


PHXFLYR

 

[capt. megadeth]

Great! Now the AWA pilots can give concessions while incompetent management continues to get raises, bonuses and golden parachutes.

 

[PHXFLYR]

Great! Now the AWA pilots can give concessions while incompetent management continues to get raises, bonuses and golden parachutes.

Hey kiddo....we got nothin' left to give.And what little we had is starting its way down the "shieter".

PHXFLYR

 

[capt. megadeth]

Hey kiddo....we got nothin' left to give.And what little we had is starting its way down the "shieter".

PHXFLYR

Oh, I am sure the slimeballs can squeeze a little more with their never ending "we need x million or we will liquidate" blackmail

 

[BeCareful!]

Hey kiddo....we got nothin' left to give.And what little we had is starting its way down the "shieter".

PHXFLYR

So tell us, PHX, where is your superior career judgement going to take you next? Or are you just going to sit there at US Airways and bitc#?

 

[vetrider]

Don't forget that those comments were boilerplate language attached to the press release of the raising of a hundred and some odd million dollars in a stock offering. Thats just standard SEC stuff.
I'm not discounting the challenges, but I wouldn't get to alarmed yet over SEC inspired boilerplate.

 

[mar]

Synergy vs. symbiosis

Doesn't synergy or synegism have to do with biology and organisms acting together?

Sorry for the tangent.

But Synergy is when you get a greater result from two things than you could've gotten from just one.

And Symbiosis describes the mutual relationship between the parasite and the host where both derive some benefit from the relationship.

As for the airlines I'm not sure who the parasites are and who the hosts are.

Good luck.

 

[Saabslime]

It's kind of funny how up until now management has billed this as the best thing to come along since sliced bread, and now after we just started negotiations for a combined contract we start to hear how tough the times ahead are going to be speech. Hasn't management revised their playbook yet? This is getting old real fast.:angryfire

 

[Doug Parker]

.


As for the airlines I'm not sure who the parasites are and who the hosts are.


Well, according to, ahem, Doug Parker - It sounds like AWA is the Host and AAA is the parasite..............



.

 

[Swaayze]

vetrider is spot on.....they've said this before and will say it again.

 

[JetMonkey]

I guess Dougie finally took a good look at what's going on at PHL.

 

[TheDonger]

Funny, I listened the the 3rd quarter conference call with Doug and the gang and they sounded optimistic and I kept hearing that things are 'better' than they anticipated. Go hear for yourselves: http://www.americawest.com/awa/content/aboutawa/investorrelations/web_cast.aspx

 

[PHXFLYR]

So tell us, PHX, where is your superior career judgement going to take you next? Or are you just going to sit there at US Airways and bitc#?

Ohhhhh I don't know...... Maybe come over to PSA and swipe a Captains seat from one of there Senior F/O's....just like you did .



PHXFLYR

 

[PHXFLYR]

I guess Dougie finally took a good look at what's going on at PHL.

Quite an eye opener...especially the F Concourse. Maybe Be Careful can share some stories with us.


PHXFLYR

 

[PHXFLYR]

Oh, I am sure the slimeballs can squeeze a little more with their never ending "we need x million or we will liquidate" blackmail

Liquidate??? That means I can go home? Never having to set foot in an airliner again???? You're such a tease!!!!!


PHXFLYR

 

[LowlyPropCapt]

Liquidate??? That means I can go home? Never having to set foot in an airliner again???? Your'e such a tease!!!!!


PHXFLYR

Who's stopping you from leaving now? Don't let the door hit you on the way out, ya wuss!:uzi: :bawling:


...all in good fun! Happy Turkey Day folks.

 

[Swaayze]

PHX, maybe you should realize that those J4J seats were actually "swiped" from the mainline pilot (effectively, YOU!). And don't forget that those carriers had to agree to J4J, it wasn't forced on them (please leave the "MEC did it, no pilot group vote" whining out). Fact is, the affiliate carriers got 50% of a bunch of jobs that they never had before scope was relaxed (actually more since the J4J slots were not filled completely by APL pilots). Realizing this might be a help in maintaining/increasing the value of a job at U mainline.

 

[Lawman]

America West buying a dead cow named US Airways has got to be one of the dumbest moves ever in corporate America. Why would you want to incorporate a bankrupt company into one that was just getting by on its own? United, Delta, Northwest, and US Airways cannot compete in todays airline climate without drastically changing and the employees will not let them do that. As a result, it is the rest of us who pay our bills who have to suffer from the both the management and employee crybabies in the industry. Some of them on this board.

 

[Saabslime]

As a result, it is the rest of us who pay our bills who have to suffer from the both the management and employee crybabies in the industry.

You obviously don't work for Jetblue.:laugh:

 

[Steeler Fan]

Sure, how about this...............

UAL Reports $698 Million Net Loss for Oct.
Wednesday November 23, 2005 pm ET

UAL Corp. said the loss consisted mostly of $584 million in reorganization expenses that resulted largely from the termination of its pilots' defined-benefit pension plan.

Did anyone else see this and wonder how terminiting UAL's pilots' pension would actually COST $584 million? I don't get that.

 

[charterpuke]

US Airways should have been allowed to die. They are a parasite on the industry. Every airline they have touched has been taken down the sh!tter with them. I feel sorry for the folks at AWA. Just like I feel sorry for those at Piedmont and PSA. I give the "New US Airways" 5 years to BK and another year to liquidate. Bye bye US Airways...rest in peace.

 

[Green]

It's kind of funny how up until now management has billed this as the best thing to come along since sliced bread, and now after we just started negotiations for a combined contract we start to hear how tough the times ahead are going to be speech. Hasn't management revised their playbook yet? This is getting old real fast.:angryfire

Why revise the playbook when it works every time..??? A few more press releases and we'll all be reaching for our wallets.

 

[hoover]

Dumping the pilot pension cost the company 584 million? I thought it was supposed to be cost saver.

I love how United implies that they would have made money if it weren't for those darn fuel prices. Doesn't matter what the price of fuel is. They lost money because they didn't charge enough money for the product they provided. Break it down any way they want, in the final analysis, they are losing money because they aren't charging enough money.

Yeah I know, if they raise the fares there will be less passengers flying and the company will lose money and blah blah blah. Might be true, but since but they have been trying for over 4 years to make money via reduced costs. So far it ain't happening, so why not try something else?

 

[Bosley]

You obviously don't work for Jetblue.:laugh:

Judging by his posts, I don't think he is even a pilot!
Happy Thanksgiving all!

 

[jetfo]

I guess Dougie finally took a good look at what's going on at PHL.

LOL But believe it or not, by what I've seen things may have started to improve there when came through PHL last week. Some of the rampers were actually awake, I didn't smell any pot and maybe that helped them find their wands. Also, no gunshots and no one was wearing colors. Oh, how I miss Cibo's, although not that much

And, I wouldn't count Parker and his team out yet. He's done reasonably well at AW coming in a week before 9/11 and he hasn't yet had much of a chance to turn things around on the US side. Now that the Tempe team is beginning to run the show maybe things will start turning around.

Stay tuned and don't believe everything you read.