What ways? East is still stuck with that garbage Res system and east mtc is now stuck with and equal POS in Sceptre. All they keep telling us is that both systems are being enhanced. What a crock of S==t!
Next Big Thing in Oct- Merged Topics
- Thread starter phasersonstun2
- Start date
hula-flyguy
Veteran
- Nov 9, 2005
- 910
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sky high states: Hysterical. Eye.
Check this one out---> http://www.youtube.com/watch?v=x0-IOaWGuP8
LOL!
only stating opinions
UAL board looking at asset sales
Spinning off units could raise $16 billion
By Julie Johnsson | Tribune staff reporter
September 26, 2007
The board of United Airlines parent UAL Corp. is mulling spinning off several key assets, including the airline's popular frequent-flier program, as directors contemplate shrinking the carrier while substantially increasing its cash stash, United sources said Tuesday.
Among the options that United may consider, according to analysts, are shrinking its real estate portfolio, which includes the 66 acres that its former headquarters in Elk Grove Township sits on, and selling or leasing overseas routes, landing slots and airport gates. The Chicago-based airline also is exploring divesting much of its maintenance unit, known as United Services, as part of an effort to convert assets into cash, the Tribune previously reported.
Whether or not firm decisions will be made when the directors meet this week in San Francisco is not clear. United's directors meet each September to survey the airline's business environment, study its operations and discuss strategy. The three-day session this year, however, also is expected to include debate on large-scale spinoffs that would pare down the airline and at the same time build up its cash reserves.
A United spokeswoman said the company doesn't comment on board matters.
United Chief Executive Glenn Tilton told analysts during an earnings call in July that the airline was looking into strategic options for Mileage Plus, United's 45 million-member frequent-flier program.
And United last month confirmed to the Tribune that it was mulling a sale or joint venture of its giant maintenance facility at San Francisco International Airport. The airline has set up a detailed analysis of that business for potential partners seeking to do due diligence, says a source with knowledge of the company's plans.
Both moves represent a change in course for the second-largest U.S. airline, which until recently has seemed focused on building its business by pursuing a merger or acquisition. Tilton, a former oil industry executive, has been a vocal advocate of airline industry consolidation.
But mergers have been tough to pull off in the unpredictable airline industry. With few options to consolidate, Tilton may look to Plan B, analysts say.
"If you can't sell the company lock, stock and barrel, then maybe you look to sell it in parts," said Robert Mann, a consultant and principal with R.W. Mann & Co., based in Port Washington, N.Y.
Frank Boroch, an analyst with investment bank Bear Stearns, calculated in a July report that United could raise about $16 billion if it sought buyers or business partners for units that weren't integral to its core flight operations.
In the report, circulated widely within United as well as the airline industry, Boroch estimated that Mileage Plus, the second-largest frequent-flier program in the world, could attract about $7.5 billion from potential buyers, and United Services about $330 million.
He also valued the real estate portfolio at about $200 million and its international routes, domestic landing slots and airport gates at $2.2 billion.
"Now is the time when these units have a value that will decline at the end of the business cycle," said Mann. If United waits, he said, "it won't have an opportunity to do this again until when the next upswing occurs."
Doing so now would enable the highly leveraged airline to pay down debt and repair its balance sheet, pay shareholders a special dividend, build cash to help fund merger activity or perhaps attract a private-equity buyer, analysts say.
However, United's directors also will have to weigh potential benefits against the cost of losing direct control over divisions that long have supported its operations. Mileage Plus, for example, generated $600 million in revenue for the airline in 2006; United Services brought in about $280 million, Boroch said.
In a recent briefing to analysts, United's management deemed Mileage Plus "a greater challenge to spin off," wrote Credit Suisse analyst Daniel McKenzie in a Sept. 19 note.
United executives admitted to analysts that they have run the maintenance division poorly as a business, according to McKenzie. He said he believes an outside partner could rapidly build up the business.
Spinning off units could raise $16 billion
By Julie Johnsson | Tribune staff reporter
September 26, 2007
The board of United Airlines parent UAL Corp. is mulling spinning off several key assets, including the airline's popular frequent-flier program, as directors contemplate shrinking the carrier while substantially increasing its cash stash, United sources said Tuesday.
Among the options that United may consider, according to analysts, are shrinking its real estate portfolio, which includes the 66 acres that its former headquarters in Elk Grove Township sits on, and selling or leasing overseas routes, landing slots and airport gates. The Chicago-based airline also is exploring divesting much of its maintenance unit, known as United Services, as part of an effort to convert assets into cash, the Tribune previously reported.
Whether or not firm decisions will be made when the directors meet this week in San Francisco is not clear. United's directors meet each September to survey the airline's business environment, study its operations and discuss strategy. The three-day session this year, however, also is expected to include debate on large-scale spinoffs that would pare down the airline and at the same time build up its cash reserves.
A United spokeswoman said the company doesn't comment on board matters.
United Chief Executive Glenn Tilton told analysts during an earnings call in July that the airline was looking into strategic options for Mileage Plus, United's 45 million-member frequent-flier program.
And United last month confirmed to the Tribune that it was mulling a sale or joint venture of its giant maintenance facility at San Francisco International Airport. The airline has set up a detailed analysis of that business for potential partners seeking to do due diligence, says a source with knowledge of the company's plans.
Both moves represent a change in course for the second-largest U.S. airline, which until recently has seemed focused on building its business by pursuing a merger or acquisition. Tilton, a former oil industry executive, has been a vocal advocate of airline industry consolidation.
But mergers have been tough to pull off in the unpredictable airline industry. With few options to consolidate, Tilton may look to Plan B, analysts say.
"If you can't sell the company lock, stock and barrel, then maybe you look to sell it in parts," said Robert Mann, a consultant and principal with R.W. Mann & Co., based in Port Washington, N.Y.
Frank Boroch, an analyst with investment bank Bear Stearns, calculated in a July report that United could raise about $16 billion if it sought buyers or business partners for units that weren't integral to its core flight operations.
In the report, circulated widely within United as well as the airline industry, Boroch estimated that Mileage Plus, the second-largest frequent-flier program in the world, could attract about $7.5 billion from potential buyers, and United Services about $330 million.
He also valued the real estate portfolio at about $200 million and its international routes, domestic landing slots and airport gates at $2.2 billion.
"Now is the time when these units have a value that will decline at the end of the business cycle," said Mann. If United waits, he said, "it won't have an opportunity to do this again until when the next upswing occurs."
Doing so now would enable the highly leveraged airline to pay down debt and repair its balance sheet, pay shareholders a special dividend, build cash to help fund merger activity or perhaps attract a private-equity buyer, analysts say.
However, United's directors also will have to weigh potential benefits against the cost of losing direct control over divisions that long have supported its operations. Mileage Plus, for example, generated $600 million in revenue for the airline in 2006; United Services brought in about $280 million, Boroch said.
In a recent briefing to analysts, United's management deemed Mileage Plus "a greater challenge to spin off," wrote Credit Suisse analyst Daniel McKenzie in a Sept. 19 note.
United executives admitted to analysts that they have run the maintenance division poorly as a business, according to McKenzie. He said he believes an outside partner could rapidly build up the business.
Wow ..... US Airways hocked everything to just get out of BK ........ Doug Parker thought he impressed everyone with his credit line and offer for Delta. What would United do with $16 billion?
JAMAKE1
Veteran
My take on the United asset sales is that the company will likely divest of its non-core assets in order to enhance shareholder value in the short term as well as position the airline to be a major player in the next round of consolidation by having as much cash as possible in its coffers. Company officers have publicly stated that the two airlines that best fit United's needs are CO and DL. Specifically, they seek a company with a southeastern hub in order to funnel flights to South America and in a city with strong O&D traffic, which is UA's criteria for hub operations (think Atlanta). Secondly, United knows that they must have a strong market position in the New York area. Having said that, Delta is likely the best fit, but I won't be so presumptuous as to suggest that United will even be a surviving carrier. Doug Parker's unsuccessful hostile bid for Delta likely inspired the numbers crunchers at the other network carriers to come up with their own what-if scenarios in order to maximize shareholder value. In the mean time, I am going to sit back, put my feet up and just watch the entire saga unfold. It's going to get interesting, if not entertaining...
donttouchthebeauty
Veteran
- Jan 11, 2006
- 545
- 0
Well from reading the article it seems as if they sold MPLUS and SFO Maint. then that would bring around 16 billion. Definitely not a small chunk of change.
Selling those alone don't seem to add up to $16 billion. The somewhat nebulous domestic and international gates etc... (correct me if I have it wrong) seem to be the interesting parts. Are they part of the core assets? What are the core assets?
JAMAKE1
Veteran
To answer your question, the core assets are those assets that relate to running UAL Corp.'s primary business, which is United Airlines. Assets such as route authorities to China, LHR slots, facilities and leaseholds, any owned aircraft, etc. As an aside, it does make me a bit sad to witness United's maintenance division having gone by the wayside. Historically, UA's maintenance division set industry standards and was a significant supplier to third parties. Since bankruptcy, it has been reduced to a skeleton operation with so much of the company's own maintenance being outsourced to other vendors across the globe. To give you an example, the 777's now go to China for their heavy checks. One cannot get sentimental about how it once was, anymore. I continually remind myself that we are in the throws of a super-capitalistic era and at the end of the day, it seems to be all about maximizing shareholder value. But hey, I am United prodigy and admittedly it does pull on my heartstrings once in a while...
donttouchthebeauty
Veteran
- Jan 11, 2006
- 545
- 0
I am sure that isn't the whole 16 billion as well, there are many parts that I am sure aren't divulged. That is some of the main things that I understood they want to spin off.. Real Estate seems to be in play as well.. Mileage program seems to be the biggest though.
Air Canada was interested in selling Aeroplan, I know they sold 35% of it, I'm not sure if they sold the rest.
As I understand it, if Mileage Plus was sold it would be transparent to customers. The Mileage Plus program would simply be owned and administered by someone else, but remain United's frequent flyer program.
As I understand it, if Mileage Plus was sold it would be transparent to customers. The Mileage Plus program would simply be owned and administered by someone else, but remain United's frequent flyer program.
JAMAKE1
Veteran
If I'm not mistaken, they make money from the users fees paid by banks for frequent flyer program credit cards, car rental companies that allow customers to earn miles, hotels, mortagage lenders, 1-800-FLOWERS, etc. Essentially, from all companies that participate in an airline's mileage program that allow customers to earn credit from non-flight activities. The loyalty programs have become big businesses as they have evolved to allow companies to access a large, but specific target audience. Usually this target audience has a fair amount of disposable income and has helped to shift customers toward certain behaviors because of the incentive to boost their mileage points.
Travelpro72
Veteran
- Jan 30, 2005
- 4,964
- 455
Well I guess it's safe to say we have our "Next Big Thing in October". Nobody said it was going to be a good announcement. This really blows. 
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