Deadline for lease extensions

[Ukridge]

United Chicago wrote to Syncronicity: "In the end, I'm willing to bet all parties will come to an agreement...and it will be in UA's favor. Bankruptcy is an ugly ugly process and you can't expect all parties to be nice. Rhetoric and threats are all part of the process.


I could not agree more. Syncronicity introduced the subjunctive mood in his reply to me stating "if" United pushes too far then the lessors will take their aircraft back. The point is not to push "that" far. United management has to be well atuned to what pressure to apply. Also, United may have a feeling that many of the paper holders such as Disney and Phillip Morris are not cognizant of United's strengths and weaknesses in the BK process. Each side is testing the other and in the end a solution will be found. I cannot imagine that the spectre of American and Continental entering the fray adds strength to the lessor's position.
You are correct about the melodramitic nature of some of my posts. On this side of the pond we enjoy disputation (not argument but disputation) as an art form. This thread has been free of the rancor found in some of the other topics. I find it rather dispiriting that a lively discussion often takes a turn for the worst. Probably the only thing that will raise our hackels is why Murdoch is pumping that poor excuse of a channel (Fox News) into our homes and offices here in the Old World. For Europeans who are still in living memory of WWII, being told that we are bed-wetting cowards ten times a day does not engender high marks!

 

[synchronicity]

Oh, and BTW, it's synchronicity! There's an "h" in there. OK, so you aren't into Jung, but at least some of you might happen to have been fans of The Police. (grumble grumble grumble) [img src='http://www.usaviation.com/idealbb/images/smilies/2.gif']

-sync[b]h[/b]ronicity

PS- you can just call me "synch" for short.

 

[synchronicity]

[blockquote]
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On 2/6/2003 2:59:48 PM UnitedChicago wrote:

syncronicity:

Again...I agree with some of what you say.

But...

First off, I would only imagine that faced with the reality of a plane being taken away, and if that plane is vital to ops - that UA would relent and cut a deal. I highly doubt they're going to sit back and hide behind a demand and watch their vital aircraft be taken away. If faced with this situation, they can get current in lease payments and continue to negotiate. I doubt UA would "go naked" on aircraft vital to ops.

Second off, I do think United is in the position to make certain demands. Look at the aircraft market and the alternatives. U did the exact same thing. Maybe their holders didn't rip them as much in the press and before the judge as UA's are but there's a good reason for UA holders to make a huge stink.

UA is far bigger than U - we're talking many more planes. All of this is setting precedent for the other airlines. Even without CH11 filings...all will seek to renegotiate with holders in order to compete with UA. Also, if AA goes CH11 - things get much worse for the holders.

I think much of this is a war of words, posturing, and trying to see who is truly in the position to make demands.

In the end, I'm willing to bet all parties will come to an agreement...and it will be in UA's favor. Bankruptcy is an ugly ugly process and you can't expect all parties to be nice. Rhetoric and threats are all part of the preocess.

I hope you don't take my comments the wrong way - I don't want to start a battle...just want to respectfully make some observations and rebut some of what you stated.

I think it's important to debate and disagree to the top of our intelligence so that we don't waste time and emotion being nasty.
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[/blockquote]

I hope that you're right about the posturing. But...

I happen to work for a company that has leased jets to UAL. (No, it’s not Phillip Morris or anybody that big). I’m not directly involved with the leases, although I know a bit about one lease for tax purposes, but do communicate with the people whose department handles the leases. We’ve been rather amenable to United’s demands, yet UAL has still been playing “hardball†to an amazing degree. In addition, they’ve been very late to contact us with modifications to lease terms, both before bankruptcy and after. Last, UAL was very demanding and antagonistic back when the lease was initially being negotiated. The people in that department just roll their eyes.

Also, as I mentioned awhile back, I happen to know a corporate BK attorney, and he is representing a few of UAL’s creditors. He has also been amazed at UAL’s less-than-hurried approach to negotiating extensions or modifications to leases, as well as UAL’s attitude of “hey, the market stinks, so we can get away with whatever we wantâ€.

OK, you might argue, I’m getting things from a creditors perspective. Perhaps this is true. But the parties I’ve been able to hear from have generally not been terribly antagonistic towards UAL, yet have still been surprised by the (hate to use the term again, but…) institutional arrogance exhibited by them. And these people aren’t like Philip Morris/Altria, which reportedly (per an article in today’s Chicago Tribune) is filing to repossess 16 of 24 757’s they’ve leased to UAL.

As I said, it’s one thing to be a strong negotiator. It’s another to actively piss off every party you’re working with. UAL seems to be following the latter strategy. I hope I’m wrong.

-synchronicity

 

[UnitedChicago]

Sorry synch! My spelling stinks! I do like the police. Even play a drinking game to the song Roxanne??

 

[whatkindoffreshhell]

Gentlemen, do not confuse movement with progress. They are very different.

UnitedChicago -- please, I never even came close to suggesting anybody was 'sunning on the beach' for the past eight weeks.
You are capable of better retorts!

Segue -- ummm, yeah, I do know the anxiety of working 24 hour days. Trying to avoid bankruptcy. Yes, amazing. If I was a UA creditor I wouldn't care how many people were working round the clock. Not my problem. I'd just want my money.

Synchronicity -- good post. Good luck.

Tell me gentlemen: when in the past 18 months has UA demonstrated 'ahead-of-the-curve behavior'?

Again I say -- UA and their clown BOD will not act until they are forced to act. That is the problem!!

 

[UnitedChicago]

mr. hell:

very true...there are better retorts. i guess i'm just sick of everyone implying management isn't doing anything or being critical of them ... and then not suggesting what they should be doing or should do. i ask everyone...if you were Tilton...what would you do differently? what's the "transformation" plan you would propose?

i'm hesitant to say this (because i don't want an ugly management vs. labor debate), but i think creightons original august deadline should have been followed. who knows if the $9 billion in cuts would have granted the loan. me thinks it would have. his concession demands seem like peanuts compared to what is being demanded now.

my point is that labor BOD members have a certain amount of responsibility to bear in terms of criticism of what lead to the here and now. for christ sake, they were owners! they cry about poor management, but labor BOD members enabled it to occur. greenwald endorsed edwardson, but when edwardson asked for a compromise (he agreed pilot deserved a pay raise) for increased productivity - poof he's gone and goodwin is in place. no one could have predicted what goodwin would do - but for christ sake...as owners and board members - labor BOD members should be held responsible too. i've never heard of a partial owner (pilots represented by Dubinsky) wanting to "choke the golden goose for every last egg".

you've got to consider that what the labor coalition (including 2 bod members) came back with - $5 billion per year - did not win the loan. they knew the formula the ATSB sought.

how should they be shielded from the same criticism that brace and tilton got after the failed loan?