Likely Winter BK filing?

usfliboi

Veteran
Aug 20, 2002
2,070
270
UBS still sees UAL bankruptcy likely
NEW YORK, Nov 8 (Reuters) - UBS Warburg airline analyst Sam Buttrick said on Friday he still believes a bankruptcy filing this winter is most likely for United Airlines parent UAL Corp. [UAL.N], despite a recent cost cutting agreement with pilots and a debt restructuring.
Buttrick wrote that he believes the government board overseeing UAL''s request for 90 percent backing of a $2 billion loan will find United''s cost cutting plans fall short given the chronic weak yield environment. UAL cannot get access to sufficient capital without that loan guarantee, he wrote.
Neither of these views is swayed by events of the past week -- which we believe have bolstered the market more than close scrutiny merits, Buttrick wrote in a research note.
Shares of UAL, the No. 2 U.S. air carrier behind American Airlines parent AMR Corp., fell 32 cents, or 8.2 percent, to $3.59 Friday on the New York Stock Exchange. The shares have lost more than 70 percent of their value this year.
A letter from the government board to United on Nov. 6, which was also sent to the press, confirms that UAL has some heavy lifting to do with the federal panel, Buttrick wrote.
The Air Transportation Stabilization Board asked United to explain further assumptions underlying revenue forecasts and proposed labor concessions. It also sought more information on pension obligations and capital costs.
The stabilization board oversees the loan guarantee program established to help struggling airlines following the Sept. 11, 2001, attacks. It has demanded significant cuts from United before considering the airline''s loan guarantees request.
United and pilots struck a tentative agreement last weekend for cuts totaling $2.2 billion over 5-1/2 years and United said this week that it has reached an agreement in principle with German development bank KfW agreed to restructure about $500 million of debt payments due in November and December.
Notwithstanding the positive headlines of the past week ... our view distinctly remains that a bankruptcy filing at UAL Corp this winter remains the most likely outcome, Buttrick wrote.
Buttrick also widened his forecasts for U.S. air industry losses in the fourth quarter to $2.4 billion from $1.8 billion and for all of 2002 to $7.3 billion from $6.2 billion.
The fourth quarter outlook is poor, at least from a profit perspective, Buttrick wrote.
Despite the forecasts, and volatile swings in U.S. airline stocks, Buttrick recommends buying shares of carriers he sees as likely to avoid bankruptcy and holding for two years to await an industry recovery.
His buy recommendations, in order, are Northwest Airlines [NWAC.O], Continental Airlines [CAL.N], American Airlines'' parent AMR Corp. [AMR.N] and Delta Air Lines [DAL.N].

11/08/02 11:34 ET

Copyright 2002 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon. All active hyperlinks have been inserted by AOL.
 

Busdrvr

Veteran
Aug 20, 2002
2,217
0
[blockquote]
----------------
On 11/8/2002 1:31:22 PM UAL777flyer wrote:

Yeah. Assemble 10 of these analysts and you'll get 10 completely different opinions. So take it with a grain of salt. One way or the other, this company is going to restructure itself into a leaner, more competitive force within the industry. I'm confident we'll get the ATSB loan guarantee and avoid Ch. 11.
----------------
[/blockquote]


Here's another Buttrick quote from the WSJ

Some analysts believe UAL is getting a bum rap on Wall Street. Its labor costs, liquidity, access to capital and current losses are not materially different from American's, said Sam Buttrick of UBS Warburg, referring to AMR Corp.'s American Airlines. Yet the market has United going bust and is giving American a free pass.

You have to give him credit for consistancy...not.
 

UAL777flyer

Veteran
Aug 20, 2002
730
0
Yeah. Assemble 10 of these analysts and you'll get 10 completely different opinions. So take it with a grain of salt. One way or the other, this company is going to restructure itself into a leaner, more competitive force within the industry. I'm confident we'll get the ATSB loan guarantee and avoid Ch. 11.
 

UAL777flyer

Veteran
Aug 20, 2002
730
0
Yeah. Assemble 10 of these analysts and you'll get 10 completely different opinions. So take it with a grain of salt. One way or the other, this company is going to restructure itself into a leaner, more competitive force within the industry. I'm confident we'll get the ATSB loan guarantee and avoid Ch. 11.
 

UAL777flyer

Veteran
Aug 20, 2002
730
0
Uhhhhhhhhhhhhh, last time I checked, EVERY airline stock was volatile. Since when is stock volatility confined to United Airlines?

The entire industry is a crap shoot these days, save for maybe Southwest and JetBlue. War in Iraq will bring what's left of this industry to its' knees. At least UA and US are already into their restructuring. Once the M1A1 Abrams start rolling over from Kuwait, it's going to put the pressure on EVERYONE. At least we'll have a head start on AA!
 

UnitedChicago

Veteran
Aug 27, 2002
756
0
www.usaviation.com
Agree with you UAL777. I have long loathed these analysts. I could easily find quotes and outlooks from several that have contradicted themselves multiple times. My favorite was the guy (his name escapes me) that originally changed his outlook on UAL shares to sell citing a likely CH11. That was back in June I think. Now he has changed to hold citing the potential for UAL to avoid BK.

In terms of the coverage of AA...who cares. Everyone should remember that they have the same problems...if not greater than UA. They just have more money and resources. Once UAL restructures...the spotlight will turn to them.

AA is exposed in latin america where demand is very bad where UA is seeing Pacific revenue climb.
 

Segue

Senior
Oct 31, 2002
276
0
www.usaviation.com
UAL is hanging on a thread. All of you folks think a $200MM market cap is undervalued, well, vote with your wallet and buy some.

For most of the street, its a yes or no situation. Stock is worth zero or it is worth something more. Tilton farts and the value rises 50%.
 
Aug 20, 2002
10,015
675
www.usaviation.com
UAL777flyer,
I think you know me to be sincere when I say that I wish you(UAL) guy/gals) EVERY possible best wish.
UAL is a giant in this nutty industry, and in NO cir***stance, should EVER be mentioned in the same breath with BK Court NEVER !!!!!!!!!!!!!!!!!!!!!

As someone posted above( AA getting a free pass), I've watched for 20+ years, as AA has fell into a bucket of SH*T, on numerous occasions, and has emerged with a new suit on, a lot of times.
I honestly wish I could explain why ? Because like a lot of you, I still don't know.

Again, Best of luck, REALLY !!!!!!!!!!!!!!!!!!!!!!!!

regards,
NH/BB's