Will United Survive?

[bottomfeeder]

WOW

$12.3 million/day
$513,000/hour

Reuters
United Airlines Loses $382 Million in Jan
Tuesday March 4, 2:01 pm ET


CHICAGO (Reuters) - UAL Corp. (NYSE:UAL - News), parent of bankrupt United Airlines, said on Tuesday it lost $382 million for the month of January. The No. 2 U.S. airline reported in a filing with the Securities and Exchange Commission (News - Websites) that it had $1.17 billion in operating revenues and $1.51 billion in operating expenses before additional expenses were included.

The airline recorded $276 million in labor costs and paid $222 million for fuel.

United is trying to cement long-term contract changes before a March 17 deadline when it may formally ask that all labor agreements be scrapped.

 

[HA25]

how long can that last?

 

[banned username 2]

WOW

$12.3 million/day
$513,000/hour

That is $142.50 lost per SECOND! Or $8,550 lost per MINUTE!

That is simply amazing, I can't believe the creditors aren't knocking down the doors already to grab what they can before it evaporates... time will tell...

 

[General Lee]

Apparently there is some political pressure on the Banks from IL. Congressman Dennis Hasstert(sp?) who is Speaker of the House (I believe??). But, we all know that banks are in this for one thing----Money. The collateral put up by United for the $800 million loan was worht about $1.6 Billion at the time, so the 4 banks could make some serious money if they choose to liquidate.
It really is a sad story, and one that I hope is not repeated.

Bye Bye---General Lee

 

[AAsRedHeadedbro]

So they lost 382 million dollars in January yet their labor costs for the month were 276 million dollars. If they had paid NOTHING to their employees for the month, they still would have lost 106 million dollars. There are still some serious issues to deal with in addition to their labor costs.

Makes me wonder if UAL has any chance at all of avoiding Chapter 7 proceedings.

This is very bad.

 

[Yogi Bear]

Holy cr@p do these guys know how to lose money...is there any chance at all that they avoid ch 7?

 

[Boeingman]

It is unraveling over there:

http://biz.yahoo.com/djus/030304/1728001123_1.html

The financial rats are leaving the sinking ship.

Another point about this staggering loss. It does not take into account they are not making lease payments on their aircraft and no payments for other pre pettition debts.

We are hearing rumors they will not make it through the end of this month. It sure seems like it.

 

[HA25]

It is unraveling over there:

We are hearing rumors they will not make it through the end of this month. It sure seems like it.

Is it really that grave? EOM?

 

[KingAirKiddo]

Depressing.

 

[spinup]

Mar 05, 2003 (Chicago Tribune - Knight Ridder/Tribune Business News via COMTEX)
-- United Airlines lost $382 million in January, but its remaining pile of cash
barely declined thanks to drastically reduced employee wages.

The Elk Grove Township-based carrier ended January with $1.78 billion in cash,
down less than 2 percent from $1.81 billion on Jan. 1. That's good news for the
nation's second largest airline, which filed for federal bankruptcy protection
from creditors in December.

After the filing, United's pilots, flight attendants and salaried employees
agreed to temporary wage cuts to help the carrier through the immediate crisis.
A bankruptcy court judge later imposed similar cuts on United's mechanics.

Separately, some good news for United from the Internal Revenue Service may be
bad news for the company's employee owners.

In a private letter to United, the IRS said the sale of an additional 3.9
million shares of employee-owned stock would not jeopardize United's ability to
use massive tax-loss carry-forwards when it emerges from bankruptcy.

The sale of stock in United's employee stock ownership plan by the plan's
trustee, State Street Bank & Trust, had been halted after the bankruptcy court
judge issued an injunction at United's request.

If all the 3.9 million shares are sold, the percentage of employee ownership at
United could fall below 20 percent, the airline said Tuesday. That would trigger
the so-called sunset of the ESOP, which was not anticipated to occur for many
years as employee owners retired and cashed in their shares.

When the sunset occurs, the pilots and machinists unions at United would
continue to hold one board seat apiece. But their "super-veto" powers would go
away.

Under the original ESOP, the board members representing those two unions could
veto certain important actions such as acquisitions, divestitures and the
appointment of a chief executive. But to be able to use the super-veto, the
pilots' and machinists' representatives had to vote together.

In the past, the super-veto was the union's trump card over major management
decisions. For instance, it could have been used to prevent United's management
from selling off pieces of the airline or buying another carrier.

"If sunset happens, certain rights are going to be lost," said Elliott Sloane, a
spokesman for the Airline Pilots Association at United. "We are still opposed to
the sale of the shares that were negotiated as part of the collective bargaining
agreement, and we are disappointed the company endorsed and supported this
ruling by the IRS."

Still, United's common shares are likely to be wiped out as part of the
company's reorganization, prompting the sunset of the ESOP anyway. Even if some
form of employee ownership is reconstituted at a new United, the super-veto
power almost certainly will go away, union leaders admit, so its loss now
doesn't really mean all that much.

United's shares closed down 8 cents to 98 cents on the New York Stock Exchange
Tuesday.


By Susan Chandler