Transformation Plan Cash Flow.will It Be Enough?

[us0004us]

some are saying that no one will invest money that will allow usairways to exit chapter 11.

is bronner "banking on" only the cash flow provided by the transformation plan to be

enough to pull out of ch 11?


any number crushers out there?

is it possible?

 

[RowUnderDCA]

Isnt the current ATSB-backed creditors (with the concurrence of the ATSB) agreeing to let U spend down it's cash balances effectively providing DIP financing? Clearly, the creditors requirements are going to be 'transformation:' meaning lower labor costs. If U gets them, they'll go forward with financing, if they don't they'll pull the plug. Am I seeing this wrong?

 

[us0004us]

thus....no financing required?

once the tp is implemented fully....the cash flow will have to be huge...

but how much?

 

[PhillyFlyGuy]

Isnt the current ATSB-backed creditors (with the concurrence of the ATSB) agreeing to let U spend down it's cash balances effectively providing DIP financing? Clearly, the creditors requirements are going to be 'transformation:' meaning lower labor costs. If U gets them, they'll go forward with financing, if they don't they'll pull the plug. Am I seeing this wrong?

[post="179362"][/post]​

That's the way I understand and read as well.

 

[MrAeroMan]

I think you're right and another thing is if they are going to do this UAIR won't be in Ch. 11 very long because the longer they are in the more at risk the money is. The ATSB as 1.4 billion of collateralized assets of UAIR's tied up for the 725 million they are owed. They are going to get their money one way or another. By the first quarter this will be playing itself out or it will be forced into Ch. 7 proceedings imo.

 

[WorldTraveler]

I don't think "spend down" is the correct term. Since the ATSB is collateralized by both US' restricted cash and slot assets, it is likely that US is being allowed to use the cash that essentially serves as double collateral. We'll know more by today's hearing when the ATSB documents are filed.

US still has much less working cash than they should, particularly given that this isn't a pre-packaged filing and will require significant negotiations by a number of lenders and labor. Further, there are (or were) aircraft deliveries scheduled for the next few months; only if they were 100% financed in advance will there be no cash drain due to the deliveries.

Sept-Nov is also one of the slowest periods in the airline industry.

It is also worth noting that the election is under 60 days from today. It is not likely that US will materially change its fleet during the next 60 days since they have a 60 day window before lessors can start repossessing a/c. Once the election is over, the ATSB may get more tough and US will probably move more aggressively to implement the transformation plan.

 

[Whitestoneclimb]

The USA Today article states.... "Virtually all its (USAIR) assets are pledged to the government under terms of the ATSB loan agreement, meaning an outside financer would have no collateral."

Now, you tell me. Who, in their right mind, would ever loan U any money at all without having collateral. Unfortunately, I think when the cash runs out, we're done.

 

[PITbull]

I think the co. has an opportunity to get relief from the a/c 170 deliveries. As these increase our overall CASMS.

I can't tell you where I got this info, but it wouldn't surprise me if some of the a/c leases and deliveries that get "canned" are the EM170.

Good news is that the hurricanes in the carribean didn't hurt us as much as Air Tran or Amican. Our exposure is not that great presently. If we had a huge presents if FLL now, it would have hurt us greatly, right about now.


World Traveler,

Actually for U, the slowest time is the first quarter.

 

[MrAeroMan]

I think when they get the cost structure under control it might open up the lending markets to UAIR again. You might also see a partial paydown of the ATSB loan again which may free up some assets that are currently collateralized. The cash situation is not good but they know this is risky at best when the filed. It's a crap shoot and they're hoping it doesn't come up snake eyes.

 

[Seatacus]

I wonder if there will be enough money left for some management retention bonuses. :huh:

 

[robbedagain]

I wonder if there will be enough money left for some management retention bonuses. :huh:

[post="179527"][/post]​

of course only the inept mgmt whom are experts on how to not run the airline will have ch11 protection against their money while they come after the labors so i would expect to see mgmt and their huge golden parachutes leave