UAL announces $1.3 billion loss for 4th quarter, 2008

[jimntx]

Yahoo article - click here

I'm not trying to start interairline war, but I am surprised that no one from United has commented here on today's announcement. I have several friends who work for United; so, I am concerned. (And, we didn't exactly cover ourselves (AMR) with glory either during the quarter. )

I don't put much stock in the hedging "losses" because they don't really represent a dime going out the door. They are nothing more than a FASB accounting requirement. But, even excluding the hedging losses, United lost $547 million in 4th quarter. What now?

 

[whatkindoffreshhell]

Same shell game, nothing to see here folks, just keep moving along.

Did the announcement include any word on the size of Glenn-the-oil-industry-expert bonus size?

 

[jimntx]

Surely, Mr. Tilton is too ethical to accept a bonus after this announcement.

 

[Freighterguynow]

Yahoo article - click here

I don't put much stock in the hedging "losses" because they don't really represent a dime going out the door. They are nothing more than a FASB accounting requirement.

Pretty sure you are wrong about this. United is required to buy that hedged fuel at $100 ( or so ) per barrel. Those on the other end of the transaction want monetary deposits - after all, if you hedge at $40 and it goes to $80 then the airline wins, if the reverse then the other guy wins.

United's hedging loss included $370 million in cash for fuel hedges that settled during the quarter. United also had to record non-cash charges of $566 million on fuel hedges that show a loss but have not yet settled.

So, United paid $370 million now and will be required to pay an additional $566 million soon when future hedge deposits become due in the near future.

Sorry to be negative, I'm in the same boat.

 

[FA Mikey]

UAL's hedge disaster story here


Kathryn Mikells, senior vice president and CFO said. "The cash impact, while significant, is now behind us, and we are well positioned to manage through a challenging 2009 with good expected cost performance building on our momentum from this past year."

OK that’s the CFO, she should know.

Then read note 10 to the financial statements.

....based on the hedge portfolio as of January 16, 2009...... at an illustrative $35 per barrel the Company's January 16, 2009, required collateral provision to its derivative counterparties would be approximately $780 million.

All we have is management’s comment that the losses from hedging seem to be over. We have no idea what the future hedge strategy is to be, if there will be one. The only certainty is that UAL does not know how to manage that risk and it will probably continue to bite them over and over again.

 

[rotate]

When will this stop?

Why is it that when professional management loses shareholders' money the solution is always more layoffs? Labor did not make incorrect bets on crude, the shareholders didn't, United's vendors didn't...United's management did. Who should be held responsible?

Who knew where the oil markets would go? Evidently, no one. But who should be accountable? How can the 1000 employees who will lose their livelihoods be responsible for this? In all industries American management continues to collect millions, whether they are right or wrong.

Ladies and gentlemen, this is not the way America was managed in more honorable times. Can you imagine this travesty during Eisenhower's administration? Eisenhower was an honorable leader in a time when America had many honorable leaders.

Indeed, if contemporary American management had run the invasion of Normandy in WWII we'd all be speaking German and wearing little brown uniforms!

 

[gatemech]

Yahoo article - click here

I'm not trying to start interairline war, but I am surprised that no one from United has commented here on today's announcement. I have several friends who work for United; so, I am concerned. (And, we didn't exactly cover ourselves (AMR) with glory either during the quarter. )

I don't put much stock in the hedging "losses" because they don't really represent a dime going out the door. They are nothing more than a FASB accounting requirement. But, even excluding the hedging losses, United lost $547 million in 4th quarter. What now?

I just don't feel anything anymore. Don't worry about it anymore. When I get a notice I move on.

 

[JS]

Jay Leno joked about this on the Tonight Show. He said "United is laying off 1,000 people. Do they even have 1,000 people?" So true! You have to check yourself in, and if there's a problem with your flight, forget about getting anyone to help you.