A signal from the ATSB?

[DB Cooper]

BusinessWeek 11/04/02
United May Yet Avoid Bailing Out
UAL (UAL ) could dodge the bankruptcy bullet after all. The parent of United Airlines has refiled for $1.8 billion in federal loan guarantees needed to pay debt due in November and avoid Chapter 11. Its first application, which included $520 million in pilot pay cuts over three years, was rejected in August. This time, UAL''s unions agreed to $5.8 billion in concessions over 51/2 years. The unions still must hammer out details, but the Air
Transportation Stabilization Board has signaled that the wage cuts and the savings from firing 1,250 employees will be enough.

 

[767jetz]

Sounds like good news for UA, but bad news for the 1250 furloughed employees. I just pray that we can rebuild this place so those folks have a career to come back to one day, if they want to.

 

[UnitedChicago]

Hi DBCooper...thanks for the info. Do you have a link? I went to business week wesbite and couldn't find the article. With such a potential important and crucial development...just want to make sure...

Thanks!

 

[Flydrive1]

When on the Business Week site, click on magazine in the left margin.

You can scroll for the headline, but unfortunately it's a subscriber-only site. Couldn't access the entire article.

 

[UnitedChicago]

One more thing...thanks to GE for releasing their exposure to UA in terms of leases and other obligations. Ticks up the political pressure a bit.

 

[UnitedChicago]

Thanks flydrive. Hope they're right! Now we just have to beat the clock.

 

[Eagle]

Last I heard the critial date is in mid-Dec. Back date 30 days for unions esp. AFA whom has not been doing many road shows lately to get their members up to speed that gives us about two more weeks to dot the i's and cross the t's.

 

[UAL777flyer]

I think that the critical date is actually around the 1st of December. That is when Tilton has said that we need ratified agreements from all the unions, because if we don't have the ATSB loan guarantee by then, our cash position would be such that we'd probably have no choice but to file for Ch.11. Even though nothing has been formally announced, it would appear that they've gotten an extension to the Nov 17th debt payment.

I think the Business Week article is a positive for UA. People can say what they want about the ATSB not being a political process, but we all know that when it comes to Washington D.C., everything is political. UA has a lot of political muscle. And many companies stand to lose big with a UA bankruptcy filing. Now let's hope that the company and unions reach T/A's quickly and that they end up being ratified so that we can finally begin to restructure and turn this ship around. Then, maybe the economy and industry will support growth again and we can bring back those unfortunate folks who've been furloughed.

 

[stlslim]

I would encourage you to not assume that just because the government sent a signal that $5.8B is acceptaable, that the worst is over. There will be no loan money given until and unless the unions sign an agreement that provides for the advertised cost savings. And therein lies the rub. Each union feels that the other ones should bear the largest amount of cuts. This could mean that no one signs an agreement first, each one trying to hold out until the last minute to get the best deal. Meanwhile, the clock continues to tick and time is running short.

 

[Oliver Stone''s Apprentice]

Something else you need to remember... UAL may still have to file Ch.11 with or without the ATSB loan.

Does it make sense to get all the loan money, and just use it to pay off the debt that is coming due, or to take the money, file Ch.11, and use those funds to restructure?

 

[UAL777flyer]

I never said the worst is over. I just said that the Business Week article is a positive for UA. We've been getting nothing but negative press for the last 2 1/2 years. We still have a major uphill climb to fix what's wrong, but I finally think we're headed in the right direction.