2.5 Billion Loan Sources

[uafa21]

Ok, so we have proposals for financing. What does that mean? It means that several lenders are interested in loaning Ua money.

The funds will come with covenants and conditions. Has Ua disclosed what these are?

I would want to know what else we are going to have to give up.

 

[UnitedChicago]

Don't you think if UA decided to go after another $2.5b in addition to latest round - all six unions would have already had press releases out?

Obviously none of us know for sure - but i'd assume they're referring to the current $2.5 that is inclusive of the recent wage deals plus pensions, plus operational changes.

I'm most curious about the operational changes. Think they'll finally go to a rolling hub?

Either way - good news.

 

[UnitedChicago]

One more thing...

Moreover, any such agreement would be based upon United realizing the $2.5 billion in cost savings the carrier has laid out, Medina said.

"They are contingent on us completing the work we've identified in our business plan," she said.

United expects to learn more about when it could receive the funds in about 90 days, after it resolves pension and other business issues with union employees.


If you look at this quote...it says COST SAVINGS THE CARRIER HAS LAID OUT. Also...AFTER IT RESOLVES PENSION AND OTHER BUSINESS ISSUES WITH UNION EMPLOYEES.

No where does this give me the impression that further cuts are in store in the immediate future.

 

[gatemech]

I read two articles. One didn't say anything about additional cuts the other did. Wait and see. Round 3 on the way. Get out the steel shorts & don't bend over.

Gotta love aviation

 

[Busdrvr]

I read two articles. One didn't say anything about additional cuts the other did. Wait and see. Round 3 on the way. Get out the steel shorts & don't bend over.

Gotta love aviation

[post="248098"][/post]​

you don't suppose the papers got any of the story wrong.... Nah! 😛

round three, simply put, is your pension. The avail of funding was something that was being whispered at the union level. Why release it? First, i think they had to wait until the money was a "done deal" before releasing it (hard to "tie" in money for something 6 months to a year from now, no matter the terms). Now that that's taken care of, it is the "carrot" part of the routine. Accept pension termination, and we have money to finally exit BK. It kind of takes away some fo the "they'll just be back for more in a year" argument. In addition, it puts the PBGC (and the judge) on notice that trying to make UAL retain it's pensions or incur some long term financial penalty for termination is not compatable with UAL's departure from BK. Expect the "hard sell" road show in a couple months.."we wanted to save the pensions, but those evil banks said no way"...

 

[ualdriver]

As I and many others have said repeatedly in many-o-threads, there was never a shortage of banks willing to give money to UAL to exit bankruptcy assuming the appropriate cuts were made and nothing catastrophic happened or happens in the future (plane crash, terroist attack, major labor strife, $100 oil, etc.). I think it's pretty clear from what I've been hearing from union meetings and such that this past paycut "should" be the last round (but anything is possible I guess), and the finalization of the pension issues should be one of the last remaining obstacles to obtaining exit financing, at least from labor's point of view. Other non-labor bankruptcy issues still exist that need to be resolved.

And will you guys stop with the "no business plan" stuff? Do you really think that banks are going to hand UAL a big bag of money and just say, "don't spend it all in one place!" Just because Glen Tilton didn't personally call YOU or YOUR union leaders on the phone and say, "SShhhhh. Please don't tell anyone, but once we exit bankruptcy we plan on really really going after Frontier in Denver by accomplishing X, Y, and Z. Just don't tell them OK so they can't prepare in advance. And we really want to expand our Asian market share out of LAX starting this fall but please please don't tell American so they can't mount a competitive response." I mean, c'mon guys. You and I will NEVER know UAL's plans for the future. Our management team would be morons for releasing that kind of information to us minions. Yeah, yeah, they're already morons. Save the keystrokes.

 

[mrfish3726]

Busdrvr Says, "SShhhhh. Please don't tell anyone, but once we exit bankruptcy we plan on really really going after Frontier in Denver by accomplishing X, Y, and Z.


Competition is always good there Busdrvr! We'll see how the DENVER customer market will react to UniTED exiting BK. You probably won't see any change in who flies what airline here out of DEN. I really don't see them flocking to UniTED in droves. There are still many here in DENVER who remember the days of UniTED robbing them because they were the biggest carrier in DEN. Know with Frontier in their 11 th year of service here we still have a VERY LOYAL customer base here that will keep Frontier in business for a long, LONG TIME.

And as far as the financing is concerned, it will be interesting to see what they (private lenders) require in covenants and repayments. Hell if Uncle Sam (ATSB) was unwilling to lend UniTED money, I can only imagine what the private sector will be asking UniTED to CUT NEXT ! It will still be a wait and see, nothing new for UniTED. Kind of like the military, HURRY UP AND WAIT. And if UniTED continues to lose 200+ million a month I don't see how ANY financial institution will want to sustane continued losses like that month after month.

 

[C54Capt]

Busdrvr Says, "SShhhhh. Please don't tell anyone, but once we exit bankruptcy we plan on really really going after Frontier in Denver by accomplishing X, Y, and Z.
Competition is always good there Busdrvr!

[post="248223"][/post]​

Mr. Fish,

That was ualdriver that you quoted not busdrivr. Busdrivr would not post this kind of nonsense, in fact Busdrivr has had some fairly balanced posts as of late.

 

[ualdriver]

What part of what I wrote was non-sense C54? If you're referring to the second paragraph, you can relax because those examples were only hypothetical. Feel free to replace "Frontier" and "Denver" with "Independence" in "IAD" or any other airline/hub city makes you feel less slighted. I'm sure your airline will be spared when we exit bankruptcy (he-he). I was simply trying to illustrate the point that just because we (UAL employees) weren't all handed UAL's business plan for the up and coming months (and years) that one doesn't exist. AMR out of LAX can breathe a sigh of relief as well. All hypotheticals........

 

[Borescope]

I don't see how ANY financial institution will want to sustane continued losses like that month after month.

[post="248223"][/post]​

Fish,
These guys(Citibank, JP Morgan, Deutsche Bank, General Electric's Aircraft Leasing Unit) have very deep pockets and some have a lot of money invested already. They probably feel that even if there are continued losses they will get a better return on their investment by keep UA afloat. JMO.



United receives four offers for up to $2.5B in financing
Four investment institutions have separately offered up to $2.5 billion in debt financing to United Airlines. United's financial chief, Jake Brace, said the offers could quickly be turned into firm commitments that would allow the airline to exit bankruptcy. The Financial Times reports the four institutions are Citigroup, JPMorgan, Deutsche Bank and General Electric's aircraft leasing unit. The Washington Post/Associated Press (free registration) (2/15), Financial Times (London)

 

[mrfish3726]

Borescope, Yeah they have probably written off bigger losses just in personal bankruptcy (credit cards, housing and aircraft defaults ect.) debt over the past few years. So if UniTED defaults it's just another write off to them I suppose. Still, there are A LOT of obstacles for UniTED to overcome though, before any of them will be foolish enough to lend them that kind of cash. It will continue to be VERY interesting as the saga continues!

 

[aafsc]

The banks are willing to lend UA money because of the decimation of wages, benefits, work rules, and pensions. When you cut your employment expenses by more than half the banks will do back flips for you.

 

[mrfish3726]

aafsc, All that's not in place YET. As they say, "Don't count your chickens before they've hatched!"I still don't see the mechanic group at UniTED playing games with management anymore! They could be the straw that breaks that camels back!

 

[Fly]

Keep wishing!

 

[WorldTraveler]

all the labor cuts in the world don't do United any good if the revenue continues to fall..... UAL is about the only airline that hasn't publicly said how much Simplifares and Indy's entrance into IAD-west is going to cost them. I'll go out on a limb and guess the two will amount to close to $1B annually.... assuming Indy survives.