UAL beats expectations. Tops analysts forecasts.

[jbguppy]

I am not impressed about those numbers especially when compared to AMR and CAL. Ual management needs to emulate AMR and CAL stragtegies of simplifying their operations to cut costs. UAL have Ted, P.S service, regular United service and similar aircraft with different layouts and by doing this it costs them money. All Ual management seem to do is complain about their labour costs and here we have it that AMR that has a higher labour cost is doing better than UAL. I think UA's mangement team need to be forced out by the unions and shareholders. They already get too much compensation when compared to their competitors and have not shown anything substantial to justify their worth.

So sorry, your analysis is too simplistic. Where we are inefficient is more in the airport operations, asset utilization, operational planning and execution areas. Our differentiated products do generate additional revenue, and I am told TED and PS are strong points. Up sell for economy plus generates a lot of cash. UAL is a work in progress, and has no doubt some work to do to match the margins of CAL and AMR, but I think you will see that gap narrowed and possible overtaken in the next 6 months.

Wait and see the new numbers next Monday. UAL has generated 900 million in positive operating cash flow in the last 6 months....

JBG

Don't just throw stuff at the wall to see if it sticks.

 

[Fly]

Think big grasshopper.

What does UAL have (or better yet, have NOT) that AA has?

Starts with a "P". Down the road, let's see who does better.

 

[spacewaitress]

Think big grasshopper.

What does UAL have (or better yet, have NOT) that AA has?

Starts with a "P". Down the road, let's see who does better.

Huh...I'm lost, Fly...oh, just got it...pension...how does that correlate with big grasshopper???

 

[FWAAA]

Think big grasshopper.

What does UAL have (or better yet, have NOT) that AA has?

Starts with a "P". Down the road, let's see who does better.

Although DB pensions are generally more expensive for employers than DC plans, that's not always the case.

For several years now, AA's pension costs have been a much smaller % of total employee comp and a much smaller % of total revenue than the DC costs at WN.

Seriously. WN spends more on contributions to its employee retirement plans (defined contribution) than AA spends on its defined benefit contributions.

UA did NOT terminate its plans because the annual costs were too high; UA was forced to cancel its plans because nobody would loan it the billions of contributions that were owed in the short term. UA could afford the monthly payments alright, but the unexpected balloon payment couldn't be satisfied. So you (and your coworkers) saw your DB plans terminated.

If Congress and the President don't agree on airline pension relief, AA will likely have to contribute $2.3 billion to its plans in 2007. While that's a lot of scratch, AA actually has the cash to do just that. And if the second half of 2006 is as lucrative as the first half, AA is likely to generate nearly $2 billion in cash flow from operations in the second half.

AA will have no trouble satisfying its pension plan contributions. UA, on the other hand, screwed its pilots (primarily) and everyone else (to a lesser degree) and is now on the hook for contributions to its employees' defined contribution plans. And if the WN experience is any guide, UA may end up spending more on those plans (on an annual basis) than AA spends on its DB plans. Wouldn't that be a hoot?

Yes, Fly, we'll see how that works out for UA.

 

[jbguppy]

Although DB pensions are generally more expensive for employers than DC plans, that's not always the case.

For several years now, AA's pension costs have been a much smaller % of total employee comp and a much smaller % of total revenue than the DC costs at WN.

Seriously. WN spends more on contributions to its employee retirement plans (defined contribution) than AA spends on its defined benefit contributions.

UA did NOT terminate its plans because the annual costs were too high; UA was forced to cancel its plans because nobody would loan it the billions of contributions that were owed in the short term. UA could afford the monthly payments alright, but the unexpected balloon payment couldn't be satisfied. So you (and your coworkers) saw your DB plans terminated.

If Congress and the President don't agree on airline pension relief, AA will likely have to contribute $2.3 billion to its plans in 2007. While that's a lot of scratch, AA actually has the cash to do just that. And if the second half of 2006 is as lucrative as the first half, AA is likely to generate nearly $2 billion in cash flow from operations in the second half.

AA will have no trouble satisfying its pension plan contributions. UA, on the other hand, screwed its pilots (primarily) and everyone else (to a lesser degree) and is now on the hook for contributions to its employees' defined contribution plans. And if the WN experience is any guide, UA may end up spending more on those plans (on an annual basis) than AA spends on its DB plans. Wouldn't that be a hoot?

Yes, Fly, we'll see how that works out for UA.

Do you mean to say that AA's cash balance will increase by 2 billion dollars during the next 6 months? Please define cash flow for us...

Oh and BTW, you left out another big problem upcoming for your beloved carrier, huge debt maturities coming due, and the oldest fleet of the legacies save NWAC. Over 350 MD-80's out there is a big upcoming problem for you.

Your assertion that UA will spend more in DC than AMR, a much larger company in DB is pure speculative crap that one can only find on an internet bulletin board.

Your holier than thou attitude is funny. The supposed advantage that you feel so richly about is being eroded. Lets table this until the 3rd quarter numbers are in and lets see if your feeling as smug AA vs UAL in 90 days....

JBG

 

[Dave]

>>Although DB pensions are generally more expensive for employers than DC plans, that's not always the case.

For several years now, AA's pension costs have been a much smaller % of total employee comp and a much smaller % of total revenue than the DC costs at WN.

Seriously. WN spends more on contributions to its employee retirement plans (defined contribution) than AA spends on its defined benefit contributions.<<


Oh come on. Do you seriously believe that if Arpey had the choice, he'd continue with your current plan?

While your numbers may be acurate TODAY, they sure won't be going forward. Why is it we see a growing trend in this country of companies buying out DBP's from older workers, and hiring new workers with DCP's? Because companies want to spend more money?

I don't think so.

 

[FWAAA]

Do you mean to say that AA's cash balance will increase by 2 billion dollars during the next 6 months? Please define cash flow for us...

Nope. That ain't what I said, and it ain't what I meant. In the first 6 mo of 2006, AMR generated $1.6 billion of cash from operations. See the statement of cash flows for the second quarter. My prediction is that AMR's operations will generate $2.0 billion of additional cash in the second half of 2006. AMR has been cash flow positive every quarter since the third quarter of 2003, and the positive cash has been accelerating.

Have no idea what the unrestricted cash balance will be on 12/31/06. Could be much larger (sale of equity/additional financings/outstanding operating results) or could be smaller (paydown more debt/order airplanes/fuel at $5/gal). Dunno.

Oh and BTW, you left out another big problem upcoming for your beloved carrier, huge debt maturities coming due, and the oldest fleet of the legacies save NWAC. Over 350 MD-80's out there is a big upcoming problem for you.

Nope, I didn't leave those out. AMR's cash balance has grown by $1.35 billion in the first six months of 2006, despite paying down lots of debt and making 2/3 of its 2006 pension contributions by early July. Yep, there's lots of debt, but my post centers on the fallacy that termination of defined benefit plans suddenly lowers your costs. If you look at the numbers, that may not necessarily be the case.

Old fleet? Yep. They'll need replaced. Down to just 300 MD-80s now as over 60 have been parked since 2001. But what's that got to do with the very real possibility that UAL might spend more $$$ on its DC plan contributions in 2006 than AA will spend on its DB plan contributions?

AMR had $5.2 billion of unrestricted cash at 6/30/06; more than enough to cover the pension shortfall if necessary. Even without the cash flow from the second half of this year. You can arrogantly discuss all the flaws of AA's balance sheet, but that drivel doesn't change that fact.

Your assertion that UA will spend more in DC than AMR, a much larger company in DB is pure speculative crap that one can only find on an internet bulletin board.

Your holier than thou attitude is funny. The supposed advantage that you feel so richly about is being eroded. Lets table this until the 3rd quarter numbers are in and lets see if your feeling as smug AA vs UAL in 90 days....

I didn't assert that UAL would spend more - I raised the very real possibility that UAL might spend more. Your childish rantings can't alter that.

Table until the fall? Sure. But I'd prefer to deal with full-year results, since airlines typically don't disclose all the data in the 10-Qs. So why not wait until next winter when the 10-Ks are filed?

 

[jbguppy]

Nope. That ain't what I said, and it ain't what I meant. In the first 6 mo of 2006, AMR generated $1.6 billion of cash from operations. See the statement of cash flows for the second quarter. My prediction is that AMR's operations will generate $2.0 billion of additional cash in the second half of 2006. AMR has been cash flow positive every quarter since the third quarter of 2003, and the positive cash has been accelerating.

Have no idea what the unrestricted cash balance will be on 12/31/06. Could be much larger (sale of equity/additional financings/outstanding operating results) or could be smaller (paydown more debt/order airplanes/fuel at $5/gal). Dunno.
Nope, I didn't leave those out. AMR's cash balance has grown by $1.35 billion in the first six months of 2006, despite paying down lots of debt and making 2/3 of its 2006 pension contributions by early July. Yep, there's lots of debt, but my post centers on the fallacy that termination of defined benefit plans suddenly lowers your costs. If you look at the numbers, that may not necessarily be the case.

Old fleet? Yep. They'll need replaced. Down to just 300 MD-80s now as over 60 have been parked since 2001. But what's that got to do with the very real possibility that UAL might spend more $$$ on its DC plan contributions in 2006 than AA will spend on its DB plan contributions?

AMR had $5.2 billion of unrestricted cash at 6/30/06; more than enough to cover the pension shortfall if necessary. Even without the cash flow from the second half of this year. You can arrogantly discuss all the flaws of AA's balance sheet, but that drivel doesn't change that fact.
I didn't assert that UAL would spend more - I raised the very real possibility that UAL might spend more. Your childish rantings can't alter that.

Table until the fall? Sure. But I'd prefer to deal with full-year results, since airlines typically don't disclose all the data in the 10-Qs. So why not wait until next winter when the 10-Ks are filed?

You really think that AMR is going to take half it's unrestricted cash and put it in the DB plans? That 2 billion in cash flow you are so proud of will be used to finance your pilots new contract, or at least to finance part of that, and the rest of the new contracts.

Debt maturity, new labor deals, old fleet, huge DB contributions, and costs going up when your main competitor has cost going down, newer fleet, no DB's and labor costs locked in for over 3 more years.

Yes we will compare notes, in the fall, next year whatever...

The story is only going to get worse for AMR and better for UAL.

JBG

 

[AIRBORN1]

You really think that AMR is going to take half it's unrestricted cash and put it in the DB plans? That 2 billion in cash flow you are so proud of will be used to finance your pilots new contract, or at least to finance part of that, and the rest of the new contracts.

Debt maturity, new labor deals, old fleet, huge DB contributions, and costs going up when your main competitor has cost going down, newer fleet, no DB's and labor costs locked in for over 3 more years.

Yes we will compare notes, in the fall, next year whatever...

The story is only going to get worse for AMR and better for UAL.

JBG

 

[Imagolfer]

The story is only going to get worse for AMR and better for UAL.

JBG

Who had to use the Bankruptcy Courts to resturcture, screw their employees by shedding their pensions, move their executives to a high rent building in downtown Chicago (while whoring themselves to the City of Chicago) and sheltering themselves from the rest of their HDQ staff so Glen can continue his cronyism for his daily Four Seasons breakfast in downtown Chicago so he does not have to make the daily commute to Elk Grove Villiage?????????

I am sorry, but AA HAS a much better business plan than U-Haul. Don't go flapping your wings over 1 good (a traditionally good quarter in the industry I might add) quarter.

U-Haul has screwed it's employees, investors and BOD with their false sense of security over 1 quarter (with projections of $50.00 oil...what a braintrust :down: :down:

 

[jbguppy]

Who had to use the Bankruptcy Courts to resturcture, screw their employees by shedding their pensions, move their executives to a high rent building in downtown Chicago (while whoring themselves to the City of Chicago) and sheltering themselves from the rest of their HDQ staff so Glen can continue his cronyism for his daily Four Seasons breakfast in downtown Chicago so he does not have to make the daily commute to Elk Grove Villiage?????????

I am sorry, but AA HAS a much better business plan than U-Haul. Don't go flapping your wings over 1 good (a traditionally good quarter in the industry I might add) quarter.

U-Haul has screwed it's employees, investors and BOD with their false sense of security over 1 quarter (with projections of $50.00 oil...what a braintrust :down: :down:

Great points, none of which will help AMR's increasing costs and debt burdens.

Good Luck cheerleader, you and AMR are going to need it.

JBG

 

[barbeetantrums]

EXACTLY

Don't get me wrong - the old timers here know I'm very loyal to United and to her great people.

However, it is way past time to dump this lame management team being lead by Tilton who's only proven skill is to hire the best bankruptcy attorneys money can buy.

I know many of you will point to the continued cost cutting, blah blah blah. Why are they only now starting to cut non-labor?

IT'S TIME FOR NEW LEADERSHIP

Darth Parker is watching your planet from the Death Star.

 

[artiefufkin1]

I don't get the point where they say non-fuel CASM will drop when it actually rose to 7.64 cents on a 1700 mile length of haul. That's got to be the highest adjusted costs in the industry.

Had they paid income taxes their net would have been 92 Million. A 1.8% margin compared to Southwest's (hedges excluded) 5.8% and LCC's (corrected for taxes) 6.2%.

A 5% net margin gap is huge. They have much more cost cutting to do. Revenue gains have run their course.

 

[x15]

How can anyone "Congratulate" an employee at a bankrupt airline which turned a profit via stiffing creditors, investors, tax payers, and shredding their own employees pay, benefits, and contracts. It's like congratulating a baseball player for setting a home run record after taking steriods. He got artificial help that the competition didn't get.

 

[Dave]

How can anyone "Congratulate" an employee at a bankrupt airline which turned a profit via stiffing creditors, investors, tax payers, and shredding their own employees pay, benefits, and contracts. It's like congratulating a baseball player for setting a home run record after taking steriods. He got artificial help that the competition didn't get.

That is perhaps the dumbest analogy I've ever heard.

Congratulations.