Mark Your Calendars...

UAL777flyer

Veteran
Aug 20, 2002
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MrMarky,

While it's true the "drop-dead" date is on or about September 14th, that doesn't mean UA will necessarily file for Chapter 11 on the 15th absent the necessary concessionary agreements. I think it wouldn't be long after that, but I doubt it would be on the 15th.
 

mancityfan

Member
Aug 20, 2002
57
0
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On 8/27/2002 6:40:18 PM

...for September 15. " United said it needs to have union concessions in place by Sept. 14 to forestall going into Chapter 11 bankruptcy."

This according to a story in today's SF Chronicle:

So my guess is they file on Sept 15 if they don't have the concession ducks lined up.
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MrMarky,

1. Why would you believe ANYTHING in the press about the current UAL situation?

2. Apparently, the reporters and editors of the SF Chronicle are having a hard time reading press releases, as Creighton said no such thing.

3. My guess is you are dead wrong with your guess.

mancityfan
 

mancityfan

Member
Aug 20, 2002
57
0
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On 8/27/2002 10:48:47 PM

The sooner you people lose you jobs --- the sooner I can make 75% of what you make! Oh and vacation too! I am looking forward to it!
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Flaptrack,

You are a classless act.

I suppose you are having a celebration on 9/11 to celebrate the loss of some REAL airline employees, so you can make 75% of their salaries sooner rather than later, too?

You are a small small person.

mancityfan
 

Busdrvr

Veteran
Aug 20, 2002
2,217
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On 8/27/2002 10:12:33 PM

MrMarky,

While it's true the "drop-dead" date is on or about September 14th, that doesn't mean UA will necessarily file for Chapter 11 on the 15th absent the necessary concessionary agreements. I think it wouldn't be long after that, but I doubt it would be on the 15th.
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Correct. The trigger would likely be the 345 million payment in Nov. The folks we owe refuse to refinance. they want to be paid in full on the date due. I think if the loan goes through, they get paid, if not they don't. Either they can then "renegotiate" or take it up with the judge. UAL is quite mum about current cash burn, I think still less than 1 mill per day, but it is entirely possible that as AMR and CAL cut back the fall schedule in concert with UALs, there is a potential for the cash bleed to not be quite as bad as expected. I'm not holding my breath though.
 
OP
M

MrMarky

Advanced
Hi Mancity,

First, let me say that I have the utmost respect for you and consider you to be one of the most high quality posters here. I think your perspective is invaluable. I hope sometime I can meet you because I already like you!

Now I would have to concur with your opinion about trusting anything the press says. However, I have also been following the situation at U, where I didn't buy all the threats of Ch 11. After all, they had over $600 million in cash, etc. But sure as he11, as soon as it became obvious they weren't going to get the union concessions they needed from two of the groups, they immediately filed as they had threatened to do.

My unfortunate conclusion has been that BK is inevitable for UAL. This is not necessarily a bad thing. It will enable them to lower their costs, since increasing revenue seems impossible for every carrier, and be more competitive. I think this may ultimately trigger a Ch 11 by AA, simply to remain competitive with their biggest rival, which would now enjoy a significant cost advantage.

The same kind of warning signals we are seeing coming from UAL were coming from U. When the clock they had set was up, they made good on their declaration and filed Ch 11. I have no reason to think UAL would behave any differently.

I'm sure not some "industry analyst" or pundit with superior knowledge. I'm just going on what I have observed and what my instincts tell me. I truly hope I am wrong and United can right its ship without depending on bankruptcy.

But I have just witnessed this exact same scenario unfold at U, not two weeks ago. I would like to think I'm a quick study, and my hope against hope is that the intransigent work groups at UAL {certainly not ALPA but some of the others) are quick studies as well. Somehow, I doubt it.

In any event, time will soon tell us the answer and however things turn out, I wish nothing but the best for you and for my long time friend UAL777Flyer, who like yourself, has United blood flowing through his veins.

In the meantime, I started this thread simply to provide information. The coverage of United here in the SFO area is intense as I'm sure it is in ORD, simply because they have such a major presence here and employ so many people. But ultimately, what they're printing here when it has a local by-line and not an AP or Reuters by-line, tells me it's what UAL fed to them and it was fed for a reason. United is sending a warning not only to its workgroups, but to the markets and the government as well. The message is not their imminent collapse, it's the lengths they will go to in order to get back on track and save the company.

If people like you and John were calling the shots perhaps none of this would be necessary.

Best of luck to you.

Your friend,

Marky
 

UAL777flyer

Veteran
Aug 20, 2002
730
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Ahoy MrMarky,

Glad to see your input continue over here and not solely on the AA board![:bigsmile:] Hope things are going well on the left coast.

There are good reasons for U declaring Ch. 11 with $600 million + in cash on hand. The more cash you have in a bankruptcy scenario, the better it goes because you're still able to make payroll and keep your operations ongoing without much interference or turbulence (pardon the pun). The same situation applies in UA's case. If bankruptcy is declared, they certainly will not wait until cash is practically drained out of the company. They will do it with as advantageous a cash position as possible.

Now, regarding bankruptcy, I will certainly grant you that it helps UA get rid of many problems: debt, high costs, unions seats on the BOD, etc. But there is a strong downside to it that many people overlook. The creditors committee will hire consultants and efficiency experts who will analyze everything about the company and every decision you attempt to make. That will inevitably slow down strategic decisions and problem-solving as you play "mother, may I" with the creditors. You basically lose almost all control over how the company is run. That is not a good thing. I remember all too well the two TWA bankruptcies I went through and the kind of ridiculous stuff that went on there. I don't want to go through that again EVER! I continue to hope that when the 11th hour approaches, the AFA and IAM will wake up and realize they are fighting the inevitable, and they will choose to negotiate givebacks that they have some control over, instead of calling the company's bluff and watching a bankruptcy judge wreak havoc with their contracts. However, even though I'm hopeful, I would characterize it better as being cautiously optimistic. We shall see in a couple of weeks what happens.
 

mancityfan

Member
Aug 20, 2002
57
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Mr Marky,

Appreciate the kind words.

As for the BK scenario at UAL, I think everyone knows it is a strong possibility, based largely on just a few factors:
1. Will the unions at UAL provide the cuts necessary to satisfy the ATSB?
2. Will the ATSB ask for "too much" from the company in the guarantee package?
3. When will the potential guarantees be forthcoming?

I disagree with busdrvr that the first ($375M) payment is the trigger, but rather sometime after that event, if it becomes clear that the later, significantly larger sum ($800M or so) is not going to be refinanced. In either case, it is an admission by the comapny that it has failed in its primary duty to protect the investment of its shareholders. Thankfully FOR THEM, the shareholders they have been running the company for for the last 5-7 years were NOT the employees, but AXA, which has left the dance already!

I think the AIM and AFA will BOTH come to the realization that the company needs the concessions, and that they will come in one form or another anyway. It is always better to bargain than be told by a Judge, so hopefully, the ATSB loan guarantees will be forthcoming. IF they are, then I DO NOT think UAL will declare Chapter 11. This may run counter to some people's opinion, but I think USAir was in MUCH WORSE shape than UAL is, and that UAL needs a short-term financil fix that the ATSB can help provide. When combined with lower costs of operations, I think UAL will weather the storm and come out swinging...aggressively. Notice it is all our competitors that are saying, "NO, NO, NO!" to the ATSB!!!

mancityfan
 

novaqt

Senior
Aug 20, 2002
488
0
Mr. Markey:

It is my understanding that the reason U filed for bankruptcy was that one of the creditors filed a lawsuit so U had no choice but to file for Chap 11. Correct me if I am wrong? The same could be true for United in Nov. if the creditor will not negotiate new terms such as interest only payments for a few months until the Thanksgiving/Christmas travel season bookings are in and/or the Spring/Summer bookings are in.

As a sidebar, I do believe United will have to raise paper ticket charge also to $25.00. I think that United should raise the penalty for nonrefundable unused tickets from $150 to $200.
 

mancityfan

Member
Aug 20, 2002
57
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UAL is quite mum about current cash burn, I think still less than 1 mill per day, but it is entirely possible that as AMR and CAL cut back the fall schedule in concert with UALs, there is a potential for the cash bleed to not be quite as bad as expected. I'm not holding my breath though.
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I have heard it is back in the 3-4 million per day range, as July was a BAD month as summers go. As for the fall pullback, I think it allows the carriers to cut capacity, firm up pricing and ALL weather the Q4/Q1 dip that ALWAYS occurs. Come next year's Q2, I FULLY expect pricing to be back to sustainable levels and the widespread concessions being taken today (for the long term!) to be paying dividends to the bottom line of most carriers. We will soon find out who does and does not have their operational house in order, as when the ink starts to turn black, some carriers will go forward quickly and others might sputter.

mancityfan
 
E

Eagle

Guest
Heard that as we get away from the summer flying (as we seem to have done per daily loads), we quickly return to the 5m-a-day burn rate. Bookings are dropping fast, esp. since announcing BK plan. More customers are avoiding us until they sees that they will not be stranded.
 
U

UAL24

Guest
If they are going to file it would be in the companies best interest to file immediately after the deadline if ALPA/AFA/IAM don't appear likely to come to a resolution soon. The more cash we have the friendlier the creditor comittee will be and the stronger we might emerge from the other side. The employee's will still be pillaged but probably not as bad as if they wait until the bitter end to file. Mancity I believe you are dead on when you say the players will kick into high gear when the rebound occurs but the pretenders will fall by the wayside. I am hopefull of an 11th hour miracle here but it seems highly unlikely given the IAM's total non-grasp of the current situation and it's own political problems. I believe it would be very prudent for union leaders to begin a two front negotiation. One to solve the current dilema and a second to secure a BK pre-nupt. USAir is setting the current precedant and it is so far being favorable to those who played ball before the BK. The IAM and CWA did not play ball and are crying foul now because the company is coming after them guns blazing. To date I believe we should look at them as an accurate display of what our BK will be like.

MrMarky,

You are correct. Mancity and UAL777 are two of the best posters anywhere here and they should be commended. There are many of us who have United Blood running through our veins but few of us are as articulate as those two. Salute.
 

Taipan

Advanced
Aug 20, 2002
132
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Well now that the IAM went 1-1 today things will get real interesting over there , and everyone should keep there eyes peeled to see what happens ,if I am not mistaken the company (Us air) told the IAM that all of the votes had to be yes or they would try to abrogate all the IAMs contracts at US air , fleet service said yes the mechanics said no , we will see soon.
 

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