- Thread Starter
- #46
World says: "let's put this revenue issue to bed once and for all. Refer to the link below, flip to item 6 (page 14) and you will see that UAL in 2004 generated just 79% (actually rounded up but I'm being generous) of the revenue they had in 2000...."
Yeah World, no kidding. I knew that. The problem I had with your recent revenue "predictions" was that you were telling everyone on the forum that revenue declined YOY from '03 to '04 and that was clearly not the case. I could care less what the relationship between revenue between '00 and '05 is as obviously we know the relationship between those numbers sucks because WE'RE IN BANKRUPTCY!! And, more importantly, neither do the 4 banks who have offered us exit financing. They're looking forward, not back.
World says : "UA has not been paying towards its DB plans for months and you know that. "
No World, I don't know that. You said we haven't been paying our pensions. Two DIFFERENT STATEMENTS. You see, World, for some employees on UAL property, their pension consists of two parts, qualified and unqualified. For some people on the property, particularly pilots, the unqualified portion (i.e. the portion that is paid directly from UAL's treasury), is up to 1/2 their total pension payment. So when you say UAL hasn't been paying towards its DB plans, you are not entirely correct. And when you say UAL hasn't been paying any of its pension obligations, you're flat out wrong. Get it?
Here's the problem I have with the rest of your analysis. Everything you say may or may not turn out to be true. Do you know what I do? Instead of trying to analyze every little section of the industry and its effect on UAL I look at the "end result." The end result to me, are the company's financial results. Despite the picture painted as to how UAL is screwed and DAL is so wonderful, I look at our first quarter results. First of all, but for fuel, excluding bankruptcy items (because we won't be paying bankruptcy items when/if we exit) we would have made an OPERATING and NET profit.
But you know what? To sit around with our fingers crossed, hoping fuel prices go down is no way to run a business. We "lost" a little over 1B for the quarter. A little over 700M of that figure is due directly to bankruptcy costs (see previous paragraph). Remove it to evaluate a post bankruptcy UAL. 213M of that was due to depreciation and amortization. Does that mean 213M flew out the bank account? Nope. We can have years to make up for the effects of depreciation. So removing that figure, as it isn't a direct drain on our day to day bank account, we're looking at about a 85M net loss. Do you think we're going to save 85M/quarter on shedding the pensions? I think so but I'm not entirely sure. We'll definitely save a good chunk of that, at least. Do you think we're going to reverse the 120M loss for the quarter due to regional operations over time as high cost express carriers like Air Wisconsin are replaced over time(http://biz.yahoo.com/prnews/050513/cgf004.html?.v=9)? Yes, we will. And these numbers are from a traditionally weak first quarter. Further, the non-fuel cost cutting is not even done yet. I know of a few things, just in Flight Operations, that are still being implemented and when fully implemented by the end of the year, should save millions.
So despite your predictions of future revene erosion, yields getting trashed, Independence adding a couple of Airbuses to the transcon markets, DAL entering markets with "superior" service, etc., etc., I'm just going to sit and wait and watch and see what the final results have to say. If we keep going in the direction we're going, we don't have a major strike on the property, we don't have a hull loss, and we don't have a major terroist attack or other US economy changing event, this pessimist actually sees the light at the end of the tunnel getting a little brighter.
Yeah World, no kidding. I knew that. The problem I had with your recent revenue "predictions" was that you were telling everyone on the forum that revenue declined YOY from '03 to '04 and that was clearly not the case. I could care less what the relationship between revenue between '00 and '05 is as obviously we know the relationship between those numbers sucks because WE'RE IN BANKRUPTCY!! And, more importantly, neither do the 4 banks who have offered us exit financing. They're looking forward, not back.
World says : "UA has not been paying towards its DB plans for months and you know that. "
No World, I don't know that. You said we haven't been paying our pensions. Two DIFFERENT STATEMENTS. You see, World, for some employees on UAL property, their pension consists of two parts, qualified and unqualified. For some people on the property, particularly pilots, the unqualified portion (i.e. the portion that is paid directly from UAL's treasury), is up to 1/2 their total pension payment. So when you say UAL hasn't been paying towards its DB plans, you are not entirely correct. And when you say UAL hasn't been paying any of its pension obligations, you're flat out wrong. Get it?
Here's the problem I have with the rest of your analysis. Everything you say may or may not turn out to be true. Do you know what I do? Instead of trying to analyze every little section of the industry and its effect on UAL I look at the "end result." The end result to me, are the company's financial results. Despite the picture painted as to how UAL is screwed and DAL is so wonderful, I look at our first quarter results. First of all, but for fuel, excluding bankruptcy items (because we won't be paying bankruptcy items when/if we exit) we would have made an OPERATING and NET profit.
But you know what? To sit around with our fingers crossed, hoping fuel prices go down is no way to run a business. We "lost" a little over 1B for the quarter. A little over 700M of that figure is due directly to bankruptcy costs (see previous paragraph). Remove it to evaluate a post bankruptcy UAL. 213M of that was due to depreciation and amortization. Does that mean 213M flew out the bank account? Nope. We can have years to make up for the effects of depreciation. So removing that figure, as it isn't a direct drain on our day to day bank account, we're looking at about a 85M net loss. Do you think we're going to save 85M/quarter on shedding the pensions? I think so but I'm not entirely sure. We'll definitely save a good chunk of that, at least. Do you think we're going to reverse the 120M loss for the quarter due to regional operations over time as high cost express carriers like Air Wisconsin are replaced over time(http://biz.yahoo.com/prnews/050513/cgf004.html?.v=9)? Yes, we will. And these numbers are from a traditionally weak first quarter. Further, the non-fuel cost cutting is not even done yet. I know of a few things, just in Flight Operations, that are still being implemented and when fully implemented by the end of the year, should save millions.
So despite your predictions of future revene erosion, yields getting trashed, Independence adding a couple of Airbuses to the transcon markets, DAL entering markets with "superior" service, etc., etc., I'm just going to sit and wait and watch and see what the final results have to say. If we keep going in the direction we're going, we don't have a major strike on the property, we don't have a hull loss, and we don't have a major terroist attack or other US economy changing event, this pessimist actually sees the light at the end of the tunnel getting a little brighter.
