Financial Analysis

[USA320Pilot]

On December 31 US Airways reported it had $1.84 billion in cash, including $1.29 billion in unrestricted cash. Today the company reported that it had paid down $250 million of guaranteed loans and that it had $925 million in unrestricted cash.

Therefore, from January 1 to March 12 the company’s unrestricted cash loss was about $115 million, with a large percentage of the loss due to higher fuel prices. That’s a daily unrestricted cash burn rate of about $1.6 million, although the total cash burn rate for that 72-day period will be higher and probably near $2 million per day. As the busy spring break season begins, the company is expecting higher traffic and revenue numbers for the remainder of March.

Although it’s not an apple to apple comparison, two other network carriers have provided financial guidance for all or some of the first quarter.

Today Delta Air Lines announced it now expects a $400 million loss for this quarter, $50 million more than a previous estimate, with about $47 million of the increase in loss estimate due to fuel costs. That’s an average daily cash burn rate of about $4.5 million per day for the quarter.

On February 26 United Airlines reported an operating loss of $191 million for the month of January. The airline said its net loss for the month, including $26 million in reorganization expenses, was $252 million. That’s a daily operating cash burn rate of $6.1 million and a net cash burn rate of $8.1 million per day.

Respectfully,

USA320Pilot

 

[Bear96]

And the point of starting this thread was....???

Oh, wiat, never mind, I get it.

Still mad at yourself for leaving UA, huh? (I know; I know... your life is MUCH much better at U than it would have been had you stayed at UA, etc., etc.... )

 

[USA320Pilot]

Bear96:

I'm not sure of the point of your last post. Would you care to comment on the cash burn rates of the three network airlines who have provided some first quarter financial guidance?

I ran some numbers to do a comparison, thus, based on the numbers provided by the companies, could you offer your opinion of the state of the industry and these three airlines?

Respectfully,

USA320Pilot

 

[Bear96]

Bear96:

I'm not sure of the point of your lat post. Would you care to comment on the cash burn rates of the three network airlines who have provided some first quarter financial guidance?

Respectfully,

USA320Pilot

Hmmmm...

OK. Despite what you are trying to get people to believe the numbers say by focusing on daily cash burn, the fact is that U is currently in a MUCH more precarious position than UAL, and of the three DL is the farthest away from shutting its doors and telling its employees "No paycheck for you!"

And how about this. You are extrapolating U's daily cash burn rate by subtracting the reported cash on hand on one date from the reported cash on hand on another date, while with DL and UA you appear to be using the actual reported losses from the official filings. While to the uninformed that would appear to be comparing apples to apples, you and I know that is not the case and is at the very least misleading, to be generous to you.

Beyond that, I prefer to comment on the postings of someone with a VERY strange obsession with UA.

Much more entertaining than boring old numbers.

 

[JayBrian]

Loss over a time period does not necessarily equal cash burn.


Jay

 

[pitguy]

USA320Pilot,

I notice you always use a US Airways logo in your avatar. Don't you need their permission to do that? Are you a spokesperson for them?

 

[USA320Pilot]

Pitguy:

I do not know.

USA320Pilot

 

[Cosmo]

USA320Pilot:

As usual, you are making an apples-to-oranges comparison. As JayBrian pointed out, cash flow does not equal operating (or net) results. Not only that, you used a different time period for each of the three carriers you cited, hardly a meaningful comparison. Why don't you just wait another 5-6 weeks until the 1st quarter 2004 SEC Form 10-Q's will be available in order to make proper comparisons?

More fundamentally, what was the point of your initial post in this thread? Was it to brag about US Airways' supposed financial prowess compared to Delta and United? If so, I believe that you are sadly mistaken. Virtually all industry observers view US Airways as currently being in the worst financial position of all the six network majors. In addition, only one of the three carriers that you discussed is contemplating the sale of assets -- and I'll give you a hint, it ain't Delta or United. Perhaps you can figure it out.

 

[FA4UA]

Yeah, this post is looking at apples vs. oranges. Loosing 1 million a day or loosing 8 mil a day, what matters is what your revenue is. UA is bringing in over a billion a month, so while it might seem grave, their loss isn't as bad as it seems. It's all relative.

Any loss is not acceptable and things had better turn around!

I think it will be very interesting to see what happens over at DL. They have been so seemingly aloof of all the drama that the rest of the Legacy Carriers have faced with cutbacks, concessions, etc etc. It's now thier turn and they better hop to it!

FA4UA

PS: USA320Pilot I love talking financial analyis and despite others opinions I think your theories about UA/US merger and general finance are always interesting!

 

[atlmd80]

How is comparing cash loses between two airlines like comparing apples and oranges? Are we talking different currency? It doesnt matter what the airline revenue is. The only thing that matters is how much cash each airline has in the bank. And then You can figure how long the airline can go before that cash runs out.

 

[usfliboi]

And the point of starting this thread was....???

Oh, wiat, never mind, I get it.

Still mad at yourself for leaving UA, huh? (I know; I know... your life is MUCH much better at U than it would have been had you stayed at UA, etc., etc.... )

im assuming you like causing trouble. BTW whos is in bk and may never come out?

 

[Bear96]

im assuming you like causing trouble. BTW whos is in bk and may never come out?

You know what happens when you assume. I call "foul" when I see it. You can call it "causing trouble" if you want to.

Yes, UA is in BK and may never come out. Maybe you are mixing me up with other UAL employee posters but I have never made any bones about UA's condition-- we are in bad shape, no doubt about it.

However at the moment my future as a UAL employee is looking rosier than yours as a U employee, both in terms of who has given what in terms of concessions, and who is closer to having their employer simply shut the doors and liquidate. So lets not pretend that just because things are bad at UA (and, again, they certainly are), that somehow means things are rosy at U.

But I am not sure what that has to do with USAir320Pilot's incessant distortions and never-ending message that "UA = bad; U = good?"

 

[USA320Pilot]

Bear96:

The industry is in bad shape and there needs to be shift in the way network airlines distribute their product, otherwise they will fail.

Nonetheless, one issue not being discussed in this thread, which has once again been hijacked by United employees, is how US Airways' loan guarantee financial performance in regard to ATSB loan guarantee requirements will effect United's application.

One of the reasons United's previous application was rejected was due to overly optimistic revenue projections. In light of this problem, the board may reject the Chicago-based airline's application, which then would require United to obtain an equity investor to bring the airline out of bankruptcy, if possible.

Who could that be?

Regards,

USA320Pilot

 

[Bear96]

Bear96:

1. The industry is in bad shape and there needs to be shift in the way network airlines distribute their product, otherwise they will fail.

2. Nonetheless, one issue not being discussed in this thread, which has once again been hijacked by United employees, is how US Airways loan guarantee financial performance in regard to ATSB loan guarantee requirements will effect United's application.

3. One of the reasons United's previous application was rejected was due to overly optimistic revenue projections.
4. In light of this problem, the board may reject the Chicago-based airline's application, which then would require United to obtain an equity investor to bring the airline out of bankruptcy, if possible.

5. Who could that be?

Regards,

USA320Pilot

1. Agreed.

2. If that is what you wanted to say by starting this thread, why didn't you just say it? [And, I think you are misusing the word "hijacked," as some of the UA employees who knew some of the crew on the doomed UA 9/11 flights would tell you. But that is a different story.] Rather, you started this thread with the clear intention of seizing an opportunity to post something negative about UA, even if you had to make a misleading comparison to do it. You know it, I know it, and objective observers familiar with your "work" know it. Your games are, by now, very transparent.

3. Agreed.

4. I am having trouble seeing the connection between #3 and #4. Are you saying that the ATSB will not look at the new numbers UA is providing and objectively act on that data, but will instead somehow hold some sort of grudge for something that happened a couple of years ago (kinda like the way you do) and reject UA's 2004 ATSB application because they didn't like the numbers UA provided in 2002? If so I don't think I agree with that.

Connect the dots for me here....

5. I have no idea. And neither do you. AND, your guess is (at best) as good as anyone's. Not that this will stop you from telling us your wild guess of course...

(And BTW if by some crazy wild chance you are alluding to Bronner / RSA, don't you think that with the horrible experience of investing in U under his belt, he will run not walk away from any further airline investments?)

 

[johnnyfleet]

USA320Pilot,

Keep up the posts, I always enjoy reading them, you even though I don't always agree.

Johnnyfleet