Some fine words from your CEO ((scary))

[Doc]

Now he says UAL will emerge in spring of 2004 how long can a company stay in bankruptcy......
.........................................................


Tilton said the key to survival for many energy companies was mergers. I find it peculiar from my vantage point to contemplate the combination of Exxon and Mobil, British Petroleum and Amoco, Chevron and Amoco. It''s remarkable that United and US Air is a reach too far against that backdrop.

The proposed link between United and US Airways Group Inc. was dashed in 2001 by the U.S. Justice Department.

Taking a broad-brush approach to the industry, Tilton said it was a false premise to suggest that the U.S. government would allow one of the big five carriers to go into bankruptcy to help consolidate the industry.

He said the demise of carriers such as Braniff, Pan Am, TWA and Eastern merely created re-aggregation of the industry rather than any wholesale, real or long-term consolidation.

No other industry thinks liquidation is a good means for consolidation, he said.

Tilton said the company would likely emerge from Chapter 11 bankruptcy protection in spring of 2004, refining previous guidance from the company that it was looking at exiting in the fourth quarter of this year or the first quarter of 2004.

We''re thinking long-term so that when we emerge from Chapter 11, we won''t fall back into the patterns that got us here in the first place, he said. Part of that new thinking involves putting in place $5 billion a year of sustainable cost cuts, he said, while becoming leaner and more nimble.

 

[ualflynhi]

Glen we are waiting patiently for 2009.

 

[Taipan]

Lets see US air does rjs galore, pulls out of the west, beefs up the caribbean,pulls down at Pit, looks like the replacement for Uniteds ACA operation, it really looks to me that they are right sizing for the on again off again merger. And thats before I read this little tid bit from Mr Tilton "I find it peculiar from my vantage point to contemplate the combination of Exxon and Mobil, British Petroleum and Amoco, Chevron and Amoco. It's remarkable that United and US Air is a reach too far against that backdrop." hmm

 

[Bear96]

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On 7/24/2003 9:24:16 PM Doc wrote:

Now he says UAL will emerge in spring of 2004 how long can a company stay in bankruptcy......

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This has been the plan from the beginning. Ch.11 was filed in Dec.2002; they said publicly at the time they were planning on being in Ch.11 for 18 months, which would be a June 2004 emergence.

There was a little talk by the CFO, Jake Brace, about maybe emering earlier for a while, but it just sounds like now they are going with their original plan.

 

[Doc]

It's crazy the longer a company any company stays in bk the more dangerous it gets.........

 

[Bear96]

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On 7/25/2003 4:02:18 PM Doc wrote:

It's crazy the longer a company any company stays in bk the more dangerous it gets.........

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More dangerous than emerging prematurely?

 

[iflyjetz]

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On 7/25/2003 4:02:18 PM Doc wrote:

It's crazy the longer a company any company stays in bk the more dangerous it gets.........

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Doc, there are certain court protections extended to companies while operating under chap 11. It also gives them huge leverage in negotiating with creditors and suppliers of goods and services.
WHQ is milking chap 11 for everything that they can. When UAL emerges, it will be a much leaner airline with a significantly lower cost structure.
In contrast, U was forced to emerge from chap 11 quickly because their agreements with its credit card companies was due to expire; U emerged from chap 11 on 31 Mar 2003. Here's a link: http://asia.news.yahoo.com/030224/3/seex.html
With those pressures, do you think that U was able to negotiate the most favorable long term conditions? Do you think that U would have liked to remain in chap 11 a bit longer, especially given the (at the time) looming war in Iraq? Granted, U's restructuring was less complex than UAL's.
UAL still has several loose ends to tie up before reaching an optimal point to emerge from chap 11. WHQ is not going to rush negotiations in order to emerge quickly. Time is starting to turn into UAL's enemy, not due to trying to emerge quickly, but because the airline industry is rapidly recovering. The healthier the industry becomes, the less leverage WHQ has in negotiations.

 

[USA320Pilot]

United pushes for pension-plan help, airline wants to defer payments to ailing fund
Company will probably wait until the second quarter of 2004 to exit bankruptcy
DENVER (Post) - United Airlines is pushing aggressively for legislation that would allow the company to defer payments to its massively under-funded pension plans, the company's chief executive said Thursday.
Complete Story: [url="http://www.denverpost.com/Stories/0%2C1413%2C36~26385~1531665%2C00.html"]http://www.denverpost.com/Stories/0%2C1413...31665%2C00.html[/URL]
Chip comments: According to ALPA Legal Advisors from Cowen, Simon, and Weiss, who advised both US and UA ALPA during the in-court restructurings, a company wants to get out of bankruptcy as fast as possible because it does not control its own destiny. First UA said it was going to get out of bankruptcy early in Q4 2003, then Q1 2004, now its Q2 2004. Who first said on this board, when Jake Brace called the WSJ's Susan Carey for a telephone interview to state the airline would emerge early, that this wasn't going to happen and UA management was stuck in a quagmire of mud?
Furthermore, the fourth quarter 2003 and first quarter 2004 have weak industry wide revenue and bookings, per the ATA. Therefore, I believe this delay will put further pressure on UA because of its stringent bankruptcy financing. Regardless, those parties interested in UA will find out more on August 1.
It has come to my attention UA & US will combine operations at San Diego, Los Angeles, San Francisco, Seattle, and Phoenix in the near future. In addition, there are reports within US management that the Arlington-based airline could take custody of some UA B767s and B757s because RSA holds the EETCs, which could be rejected. These aircraft could be used for more US European, Caribbean, and South American service where the two business partners would then code share these new routes. Reports indicate US could add service from Philadelphia to Milan, Glasgow, Milan, and Zurich, with the new aircraft additions.
In regard to the alliance, US reported US and UA have deepened their code share relationship and are now code sharing on more than 2,400 daily departures, including transatlantic flights and flights operated by each airline’s express carriers.
United's code now is on flights operated by US Airways throughout our system, and US Airways Express carrier Piedmont Airlines from Charlotte and Washington Reagan National Airport. US Airways' code now appears on United flights from San Francisco to Hong Kong and United Express carrier SkyWest flights out of San Francisco.
US Airways’ code now appears on United Express carrier SkyWest flights to San Francisco and Seattle from Boise, Idaho; Eugene and Portland, Ore.; Spokane, Wash.; and Fresno, Monterrey, Santa Barbara and Sacramento, Calif.
Transatlantic code sharing has also begun. The US* designator code now appears on United flights from Washington Dulles to Amsterdam, Brussels and Paris.
The UA* designator appears on US Airways flight from Philadelphia to Rome, Madrid, Paris and Amsterdam.
"Code sharing on express carriers and transatlantic flights broadens the relationship between US Airways and United. These important next steps illustrate a commitment from both carriers and will continue to generate revenue opportunities for US Airways and United," said Bruce Ashby, senior vice president - Alliances & President - US Airways Express.
US Airways and United Airlines began their code share relationship on Jan. 7, 2003. Since then, customers traveling on either carrier can reserve and redeem award travel on either carrier, access airport lounges operated by both carriers, and enjoy the benefits of through check-in.
In conclusion, the Department of Transport Inspector Generals Airline Industry Metrics report, dated 12/31/2002 (somewhat dated material), provided individual airline actual versus breakeven load factors. For the business partners, US was 68% & 82% and UA was 72% & 106% for the fourth quarter 2002.
Best regards,
Chip

 

[Busdrvr]

Thanks for the laughs this morning Chip!!! But in any case, here are a few points you left out.

BK exit. Glenn Tilton has REPEATEDLY said he wouldn't exit until he'd squeezed every last drop of blood out of the turnip. When the time comes, and not under the pressure of losing our credit card financing, or having Guido the dip financier from Alabama dictate terms, UAL will exit. Not a moment before.

4th Q 2002 BE load factor: Was that an operation BE load factor? Or does that figure include the hundreds of millions in BK writeoffs UAL put on the books in December? Do you care? Are you just trying to find stats, no matter how inaccurate or out of context that will somehow give credibility to your argument.

757's, 767's; Come and get them then (don't hold your breath). It is entirely possible that old Guido is making that threat, just like the 747 lease holders did. He's trying to get every last dollar out of those EETC's. but let's see, UAL's 757 are significant newer (differant avionics) than your first off the assembly line worn out vintage Eastern jets, and are powered by a differant power plant. Getting rid of them was one of the first things on UAL's agenda when we were interested in wasting money by buying that money pit. How many EETC's does he have? You gonna bring over 5 jets that have little to no commonality with your own? Dream weaver. 767's? Our 200's are owned, and were to be parked (powered by 747-200 engines, now that they are gone, expensive to maintain for just 19 jets). Luckily, a high yield business customer steped in and insisted they stay for the transcons (they wanted their employees riding first or business in a widebody, wondersw never cease). That leaves our 767-300s. Completely differant engine, avionics and even size than your jurasic 200s. If U had a use for some 757's or 767's they could get all they wanted for bargain basement prices on the open market. There are plenty out in Arizona and California. You may not be familiar (since you don't/won't be doing much flying there) but just head southwest. Oh never mind, you guys put a lot of your jets there, so you probably know the location.

 

[USA320Pilot]

Busdrvr:



I appreciate your passion and I understand your emotion, but the bottom line is US Airways' chairman of the board is the CEO of the company who holds the UA B767/B757 EETC's, which makes for an interesting arrangement. Which company do you believe David Bronner is more concerned about and interested in strengthening? US or UA?



I believe there is much more in play here than we know and there are multiple possible outcomes, but UA is extending its time in bankruptcy, the company must lower its pension obligation, and its uncertain if there will be a legislative solution of the DB Plans.



Also noteworthy, UA chief executive officer must make these type of public comments to keep passenger confidence high, just like Siegel did at US, otherwise passenger confidence will erode and UA could then be "sunk". As I have said before, we'll know more on August 1 and after the October when UA must meet the bankruptcy financing covenants, which could make for an interesting fall.

Best regards,


Chip

 

[Busdrvr]

"but the bottom line is US Airways' chairman of the board is the CEO of the company who holds the UA B767/B757 EETC's, which makes for an interesting arrangement. Which company do you believe David Bronner is more concerned about and interested in strengthening? US or UA?"

How many? you saying he owns ALL the 757's and 767's? Do you REALLY think Dave the lesser wants ANYTHING to do with 767's and 757's? That makes SOOOO much sense, replace the 757 and 767 with the 321, 330 to lower costs and then turn around and add more 767's and 757's, especially ones that would require a complete new set of spare parts? If he wanted 75/76's speedview has 92 up for sale or lease. some are even owned by LH. Since you think LH as some wierd long range dump UAL for U plan, I'd think they'd give you the jets. U taking on UAL jets ranks up there with some of the more luny things I've seen on this board.

 

[Borescope]

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On 7/25/2003 750 PM iflyjetz wrote:

Time is starting to turn into UAL's enemy, not due to trying to emerge quickly, but because the airline industry is rapidly recovering.
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The only ones who are recovering rapidly are the LUV's and the Jet Blue's. Everyone else showed a loss if it wasn't for the handouts from the tax payers. Airlines are showing record LF's, but if it costs you $90 to fly a pax and you charge $70, you can fill all the seats you have and not have anything to show for it. The truth will come when the summer is over and people slow their travel down. That's when we'll really see who's doing the "rapid recovery".

 

[Borescope]

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On 7/26/2003 8:32:18 AM Busdrvr wrote:

Glenn Tilton has REPEATEDLY said he wouldn't exit until he'd squeezed every last drop of blood out of the turnip.
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Busdrvr,

Did you ever think that we may be that turnip?

 

[Busdrvr]

"but if it costs you $90 to fly a pax and you charge $70, you can fill all the seats you have and not have anything to show for it."

See, we're making up for it with volume!!

. And Yes you are the turnip!!

 

[iflyjetz]

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On 7/28/2003 7:08:25 PM Borescope wrote:
The only ones who are recovering rapidly are the LUV's and the Jet Blue's. Everyone else showed a loss if it wasn't for the handouts from the tax payers. Airlines are showing record LF's, but if it costs you $90 to fly a pax and you charge $70, you can fill all the seats you have and not have anything to show for it. The truth will come when the summer is over and people slow their travel down. That's when we'll really see who's doing the "rapid recovery".
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Borescope, UAL's cash position has increased since Jan 03.
Yields have increased greatly over the last 3 months, so I'd find it hard to believe that UAL's losing money. More of a book cooking exercise to squeeze us turnips a bit more.