Ruling Frees Ua Of Some Airport Bond Payments

[whatkindoffreshhell]

Today's WSJ Page 2 Article (highlights):

--BK judge rules UA doesn't need to make $248mil payments for so-called special facilities revenue bonds related to projects at LAX, SFO, JFK

--these bondholders' debt will be classified as unsecured claims

--David Plavin, Airports Council Prez stated "this makes it almost impossible now for an airport to be supportive of an airline that wants a particular facility for its own operation"

--other analyst quoted "this structure will never work again....since people wouldn't be willing to put their money in these kinds of bonds" in a ruling that was closely anticipated in municipal bond circles.

--BK judge determined that these UA payment obligations were financing agreements and not leases

 

[Dizel8]

Well, suppose the airports can start ripping up contracts for the airline gates as well. Would only seem fair!

 

[JFK777]

Does that mean British Airways can finally get rid of United from its own T7 at JFK? BA hates this arrangement, Ua cold always go to T4; I don't see Lufthansa welcoming them with open arms at T1. There aren't enough gates at T1 for all of UA's flights. UA is now a JFK orphan( or soon will be one).

 

[boeing787]

Right and they just added a 7th daily nonstop from JFK to LA. What a bunch of crap your spewing!

 

[WorldTraveler]

United has got to realize that stiffing LAX and SFO for a couple hundred million dollars does nothing to endear California politicians to them. This is so typical of UAL management - fight to win a battle but never have the foresight to see the implications it will have later on in the war.

 

[UnitedChicago]

WorldTraveler

With all due respect - "a couple hundred million dollars" could very well mean a successful or non-successful reorganization.

ch11 is ugly for all creditors period. United is fighting for survival so - while they'd never want to piss off important hub partners - they have to eliminate as much debt as possible to successfully reorganize.

The business for legacy carriers has fundamentally changed for good. United has no choice here.