UA Liquidation - Who Gets What?

Connected1

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Aug 20, 2002
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Given that UA needs $2.4 billion dollars per year worth of concessions, a revenue turnaround, and positive EBITDAR all in the span of two months in order to survive, let''s pretend that they will file Chapter 7 towards the end of the first quarter.
In that situation, who will snap up which of UA''s assets, and how will they pay for them?
 
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[BLOCKQUOTE][BR]----------------[BR]On 12/19/2002 2:09:22 PM Connected1 wrote: [BR][BR][BR]In that situation, who will snap up which of UA's assets, and how will they pay for them?[BR][BR]----------------[BR][/BLOCKQUOTE][BR]
[P align=left] [BR] [FONT size=1]Guilford Transportation (with secret financing from Microsoft) will in the [BR][/FONT] [FONT size=1]"Mother of All Interesting Corporate Transactions" announce on Friday[BR] the purchase of World Airways, US Airways and it's intent to merge the[BR] two entities into it's existing Pan Am franchise.It will also announce its[BR] purchase from UAL of the NRT and beyond rights as well as the LHR[BR][/FONT] [FONT size=1]authorities.It also disclosed its intent to rename the hodge podge of [BR] airlines and routes Pan American World Airways, restoring the world[BR] famous "Blue Ball" logo to true international status.[BR][BR] Calls to Guilford were not returned.[/FONT]
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Connected1

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Aug 20, 2002
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[blockquote]
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On 12/20/2002 8:29:51 AM AAquila wrote:
NWA will increase their presence in the Pacific, AMR fortifies ORD, CAL moves into DEN.
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And what about the most important of UA's assets - the LHR slots?
 

WingNaPrayer

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[BLOCKQUOTE][BR]----------------[BR]On 12/20/2002 8:29:51 AM AAquila wrote:
[P]NWA will increase their presence in the Pacific, AMR fortifies ORD, CAL moves into DEN. JetBlue and Southwest pick up the rest. There's no money just hanging around for purchases of large blocks right now. The integration will be swift, fares will rise, hopefully with some much needed profits for AMR and the remaining carriers.[/P]----------------[/BLOCKQUOTE]
[P][/P]How can you possibly think that a rise in fares means more profits? Normally, a rise in fares means LESS customers. They simply won't pay.....as history has shown time and again.
 

AAquila

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Sep 22, 2002
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NWA will increase their presence in the Pacific, AMR fortifies ORD, CAL moves into DEN. JetBlue and Southwest pick up the rest. There's no money just hanging around for purchases of large blocks right now. The integration will be swift, fares will rise, hopefully with some much needed profits for AMR and the remaining carriers.
 

ITRADE

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[P]
[BLOCKQUOTE][BR]----------------[BR]On 12/20/2002 9:31:07 AM WingNaPrayer wrote:
[P][BR][BR]
[BLOCKQUOTE][BR]----------------[BR]On 12/20/2002 8:29:51 AM AAquila wrote: [BR][BR]NWA will increase their presence in the Pacific, AMR fortifies ORD, CAL moves into DEN. JetBlue and Southwest pick up the rest. There's no money just hanging around for purchases of large blocks right now. The integration will be swift, fares will rise, hopefully with some much needed profits for AMR and the remaining carriers.----------------[/BLOCKQUOTE][BR][BR]How can you possibly think that a rise in fares means more profits? Normally, a rise in fares means LESS customers. They simply won't pay.....as history has shown time and again.
[P][/P]----------------[/BLOCKQUOTE]
[P][/P]What's $5 or $5 there??
 
Dec 20, 2002
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All overseas routes are sold to various STAR alliance partners and are operated under the UAL codeshare. Proceeds from the sale are used to retire debt and build up a cash reserve. Widebody aircraft are grounded; UAL operates only narrowbody aircraft as a massive domestic operation. All other airlines sit in the corner sucking their thumbs.
 
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Connected1

Senior
Aug 20, 2002
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[blockquote]
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On 12/20/2002 9:16:52 AM justanemployee wrote:

All overseas routes are sold to various STAR alliance partners and are operated under the UAL codeshare. Proceeds from the sale are used to retire debt and build up a cash reserve. Widebody aircraft are grounded; UAL operates only narrowbody aircraft as a massive domestic operation. All other airlines sit in the corner sucking their thumbs.
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UA will not exist after liquidation.

My guess is that AA/DL will split UA's Pacific routes, and CO will get the LHR slots and operate most of them out of EWR. That way, DL/AA/(NW+CO) will all have similar networks, with the exception that AA will still be a giant in Latin America and DL will still be shut out of LHR.

AA may be interested in a few UA 777s to operate the Pacific routes (not sure how many are parked right now). Not sure, but I think we have space in SJC to operate old UA SFO routes, and I know that we can use IT5 in ORD for int'l departures if we run out of space there.

Domestically, AA will probably try to fill some west coast gaps left by UA, but not much. I'm not certain that any other carriers will be interested in filling in 100% of the vacuum either.

DEN will be left for the dogs. Congratulations, Frontier.
 

AAquila

Senior
Sep 22, 2002
357
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[blockquote]
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On 12/20/2002 9:16:52 AM justanemployee wrote:

All overseas routes are sold to various STAR alliance partners and are operated under the UAL codeshare. [/blockquote]

The cornerstone of STAR, as it is with all airline alliances is the US Flag carrier, in this case UAL. When it fails, the alliance does too. The Luftwaffer, has little political clout on the hill, they being the number two, means the alliance is DOA. As for LHR, AMR already has too much lift, the Brits will balk at any such increase.

UAL's LHR may be lotteried out to a smaller carrier(s). That's years away, in this wacko economic/political climate we're facing.
 
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AA may be interested in a few UA 777s to operate the Pacific routes (not sure how many are parked right now). ----------------
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Wrong. AA's 777 fleet is Rolls-Royce powered. I believe UA's is Pratt powered.

Operating two different engine types on the same aircraft is plane stupid. That's one reason why AA got rid of the remaining TWA 767-300's (AA uses GE power for its 767s, TW used Pratt), and will eventually get rid of the Pratt powered 757s.
 
Gee, thanks, but who says we'd have to fly every route UAL does?

NRT is pretty much already covered (move SJC to SFO, perhaps), so by focusing on TPE, HKG, PEK and SHA, we could probably make do with the 43 aircraft we already have.

7 acft alone are used up on JFK/BOS-LHR, another 3 on DFW/RDU-LGW, 2 on JFK/DFW-CDG, and 1 on DFW-FRA.

That's 13 routes which could be flown (again) with 763's.

If that doesn't work, go after parked RR powered 777's before taking on the new engine type...
 
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Connected1

Senior
Aug 20, 2002
332
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On 12/20/2002 2:30:58 PM eolesen wrote:
Wrong. AA's 777 fleet is Rolls-Royce powered. I believe UA's is Pratt powered.
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I'm impressed with your knowledge of engine types, but your analysis of what we will use to fly those routes leaves something to be desired.