I have been looking at some interesting data, specifically fundamentals like Q1-04 statement of cash flows, and BTS Q1 2004 Airline Financial Data. What is particularly disturbing is the negative trend in cash flow generated from operating activities. In the short term, I don’t see how this can be reversed, and now with the higher avg fuel costs, and lack of meaningful cost reduction most of the way through Q2. I don’t expect much of Qtr over Qtr increase in cash flow from operating activity, in what should be a great Qtr. This spells a real liquidity problem going into Q3, which almost guarantees the need to sell assets by the fall to maintain reserved cash balances. Furthermore, with the reduction of fares "Go Fares", I expect even more negative pressure on cash flow from operating activities, albeit mainly in the short term, 3-6 months. I don’t know if UAir can survive or move forward with "the new plan" while playing catch up for 3 or 6 more months. What’s more scary about Q1, is that the company posted it's highest first quarter load factor 70.1% ever on record, and yet still posted OPERATING loss of over $100 Million. I really think a turn around at this point may be too late. I expect the stock will waffle between $1-$2 until 2Q results are posted.. If there is an equal or greater loss posted for Q2, I expect liquidation plans to move ahead full steam.
An abnormally strong Q2, and accounting games may buy an extra quarter of time, but cash suffocation will send UAir back into a BK I doubt it will ever climb out of.. I expect a sell off/absorption exit strategy much like TWA.
An abnormally strong Q2, and accounting games may buy an extra quarter of time, but cash suffocation will send UAir back into a BK I doubt it will ever climb out of.. I expect a sell off/absorption exit strategy much like TWA.
That is by far the most logical and educated post I ever read from you. 
