aircraft_artificer
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It has to improve they are laying off another 1000+ people. All lower level of course.
UAL employees only please
- Thread starter aircraft_artificer
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I find it hard to believe that we can lose that much money and meet DIP conditions. I think the numbers can be anything they want. I want to know how the ATSB loan is going. Haven't heard much about that lately. I think they will want more out of the employees. But who am I?
I see very full planes. For the most part what I see is all good. With one exception. Management still can't see that it's the employees that make it happen. We have too many old school guys still around. They need to go.
I see very full planes. For the most part what I see is all good. With one exception. Management still can't see that it's the employees that make it happen. We have too many old school guys still around. They need to go.
I''ve been on vacation for the past week, so please count that as my boycott of the board.
On a more serious note, I have a question for UAL employees. I would like to limit it to them to prevent another verbal pier-6 brawl that seems to break out all to often on this board.
I first heard of your Q2 financial results by listening to CEO Tilton''s message to employees. Hearing his message first blunted media reports of UAL''s 600+ million loss.
My question is this: Tilton cited positive operating cash flow, improved cash position, decreased expenses, and improved unit revenue. All of this is extremely impressive for a company that was on Death Watch (Forbes Magazine) in February. With all of these positive developments, how is it possible to lose so much money and still improve your cash position? Do you guys and gals, as UAL employees, see this loss as a problem?
My opinion is that UAL has included expenses and write-offs related to BK filing in this loss, so it really isn''t as bad as it seems on the surface. Several analysts, and some posters on this board, were quick to jump on UAL''s posted loss, but Tilton seemed very upbeat.
I think SARS and the war in Iraq played another huge role in this loss, and both of those problems have abated. Assuming no other global catastrophies do you guys expect Q3 results to be much improved?
737nCH11
On a more serious note, I have a question for UAL employees. I would like to limit it to them to prevent another verbal pier-6 brawl that seems to break out all to often on this board.
I first heard of your Q2 financial results by listening to CEO Tilton''s message to employees. Hearing his message first blunted media reports of UAL''s 600+ million loss.
My question is this: Tilton cited positive operating cash flow, improved cash position, decreased expenses, and improved unit revenue. All of this is extremely impressive for a company that was on Death Watch (Forbes Magazine) in February. With all of these positive developments, how is it possible to lose so much money and still improve your cash position? Do you guys and gals, as UAL employees, see this loss as a problem?
My opinion is that UAL has included expenses and write-offs related to BK filing in this loss, so it really isn''t as bad as it seems on the surface. Several analysts, and some posters on this board, were quick to jump on UAL''s posted loss, but Tilton seemed very upbeat.
I think SARS and the war in Iraq played another huge role in this loss, and both of those problems have abated. Assuming no other global catastrophies do you guys expect Q3 results to be much improved?
737nCH11
If Ual is making 2 million a day, July and August should do well, but Sept. might fall off some. With school starting back.
The biggest hurddle now will be how Ual handles the pension underfunded problem.
This is the biggest reason the loan will not happen, untill this is fixed.
If given to the PBGC everyone will take another hit down the line with how much they will get for retirement. It will affect pilots big time and the mechanics some.
Not sure how management would fare since they seem to protect themselves from harm most of the time.
This is just my opinion here. Please correct me if I am making the wrong assumptions.
The biggest hurddle now will be how Ual handles the pension underfunded problem.
This is the biggest reason the loan will not happen, untill this is fixed.
If given to the PBGC everyone will take another hit down the line with how much they will get for retirement. It will affect pilots big time and the mechanics some.
Not sure how management would fare since they seem to protect themselves from harm most of the time.
This is just my opinion here. Please correct me if I am making the wrong assumptions.
Ukridge
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737nch11 - I as well have the same exact question as you and although I am breaking the spirit of the thread title that said "Ual Employees only." I think you will let a customer add comment.
In Europe very few if any companies "go bankrupt." They simply get to a position a where they cannot meet their financial obligations and are forced to cease operations and liquidate. There are of course some variations on this theme but this is more often the case than not. I mention this because I find the concept of a Chapter 11 reorginization quite the beneficial mechanism in which the company can emerge again as an ongoing business interest. I therefore asked what it was that allowed a company to exit bankruptcy protection - was it a solid cash position? Was it marked and proven potential to now generate revenue etc.? I learned that it often was many such reasons but the answer I most often received (and mind you this was British business and lending reps making these comments so they may not to entirely accurate to the U.S. law) was that "cash is king."
The U.S. law seems to allow a company to liberal write downs. In fact 'liberal' could be subsituted with "extreme" and still apply. This is what United seems to be doing. They are writing off/down anything that would have to be carried as a liability on their books going forward. Not bad for a few reports, but what surprises the reader is that this is taking place quarter after quarter with United. What do they have left to write down? "Throwing in the kitchen sink" is what seems to be occuring so the new start at bankruptcy exit will be unencumbered from these expenses. There are also costs inherant with the bankruptcy process itself.
The real test is the "cash is king" concept or how much cash is generated from operations (as opposed to asset sales and other one-time gains). This is the reason for Mr. Tilton's sanguinuity and optimism. United moved from a negative 2 million a day cash flow from operations to a positive 4 million cash flow from operations. (at least this is what was published - I am not priviy to his recorded message) This is a significant shift in fortune and I am told that this is what the lending institutions and houses look at when determining the potential of the airline as an ongoing concern. Coupled with the end of the war and the diminishment of SARS, this cash flow speaks well for the coporation if costs are maintained in check. A 4 million dollar a day swing is significant and this I believe is the true test. So it seems that the "loss" was chock-o-block full of valuation write-downs but cash flow was positive and added to the cash balance. There were also monies received from the government but I do not believe they alone are singular cause for the increase in cash balances.
Also, did you know that you can only book a ticket on United approximately 330 days ahead of time? We in the office made a mistake with this and so learned. I mention this by saying that United Airlines probably has no passangers at all booked for this time next year - horror! They will be out of business!
If my suppositions are incorrect I would appreciate correction.
Cheers
In Europe very few if any companies "go bankrupt." They simply get to a position a where they cannot meet their financial obligations and are forced to cease operations and liquidate. There are of course some variations on this theme but this is more often the case than not. I mention this because I find the concept of a Chapter 11 reorginization quite the beneficial mechanism in which the company can emerge again as an ongoing business interest. I therefore asked what it was that allowed a company to exit bankruptcy protection - was it a solid cash position? Was it marked and proven potential to now generate revenue etc.? I learned that it often was many such reasons but the answer I most often received (and mind you this was British business and lending reps making these comments so they may not to entirely accurate to the U.S. law) was that "cash is king."
The U.S. law seems to allow a company to liberal write downs. In fact 'liberal' could be subsituted with "extreme" and still apply. This is what United seems to be doing. They are writing off/down anything that would have to be carried as a liability on their books going forward. Not bad for a few reports, but what surprises the reader is that this is taking place quarter after quarter with United. What do they have left to write down? "Throwing in the kitchen sink" is what seems to be occuring so the new start at bankruptcy exit will be unencumbered from these expenses. There are also costs inherant with the bankruptcy process itself.
The real test is the "cash is king" concept or how much cash is generated from operations (as opposed to asset sales and other one-time gains). This is the reason for Mr. Tilton's sanguinuity and optimism. United moved from a negative 2 million a day cash flow from operations to a positive 4 million cash flow from operations. (at least this is what was published - I am not priviy to his recorded message) This is a significant shift in fortune and I am told that this is what the lending institutions and houses look at when determining the potential of the airline as an ongoing concern. Coupled with the end of the war and the diminishment of SARS, this cash flow speaks well for the coporation if costs are maintained in check. A 4 million dollar a day swing is significant and this I believe is the true test. So it seems that the "loss" was chock-o-block full of valuation write-downs but cash flow was positive and added to the cash balance. There were also monies received from the government but I do not believe they alone are singular cause for the increase in cash balances.
Also, did you know that you can only book a ticket on United approximately 330 days ahead of time? We in the office made a mistake with this and so learned. I mention this by saying that United Airlines probably has no passangers at all booked for this time next year - horror! They will be out of business!
Cheers
Ukridge
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Bear, Although Mr. Tilton had to take an admitadly upbeat public stance of the numbers, I believe your pessimism may be a little too deep. It appears that May and June saw enough of a rebound that the company reported a 2M a day cash flow positive figure for the quarter. This of course means that June was probably even better than that to make up for April and the first half of May.
As traffic falls off after the summer the cash flow from operations may fall back from the 2M a day average as well. If however, it even retreats to zero, then it is neutral and still not in loss territory. On of the important hurdles seemed to have been getting out of the negative territory.
What we need is for someone to explain if I am correct in my assumption concerning the importance of cash flow in the first place. The secret may well lie in the lending houses confidence in United's ability to generate revenue apart from all the valuation write-downs.
As traffic falls off after the summer the cash flow from operations may fall back from the 2M a day average as well. If however, it even retreats to zero, then it is neutral and still not in loss territory. On of the important hurdles seemed to have been getting out of the negative territory.
What we need is for someone to explain if I am correct in my assumption concerning the importance of cash flow in the first place. The secret may well lie in the lending houses confidence in United's ability to generate revenue apart from all the valuation write-downs.
UAL is reporting positive cash flow "from operations." But that's before the payment of any interest on its debts. Ch 11 reorganization permits a company to temporarily defer its interest payments, but not forever.
UAL cannot emerge from bankruptcy until it finds an equity investor (like RSA for USAir).
Unfortunately, UAL's current flight path reminds me of some other airlines that failed to emerge from Ch 11 but were liquidated instead.
UAL cannot emerge from bankruptcy until it finds an equity investor (like RSA for USAir).
Unfortunately, UAL's current flight path reminds me of some other airlines that failed to emerge from Ch 11 but were liquidated instead.
United has turned the corner...almost. There is one "painful", as Mr Tilton put it, decision yet to make and 767jetz ain't going to like it. The pension has to go, plain and simple. And it will, regardless of what we like. We were informed that at least 200 more mechanics will go by October at SFO. Oh, we are adding a management layer though, a "new" form of planner to take the leads job. Thank God we have the best leadership in such dire times, look at all the incredible ideas we get from them. We're down to almost nobody and yet we can create more management positions
Ukridge, unfortunately I think FWAAA is correct. Constantly trumpeting the $2M daily operational cash flow is like me saying I have a large enough income to pay my monthly grocery and utility bills and I still have $20 left over, so everything is going swimmingly with no worries.
What about the house payment or rent? (Especially when I have a big balloon payment coming up in October.) What about new clothes every so often? What about my $500 monthly credit card bill because I am in so much debt?
Can't ignore those things forever. Especially when I am about to take a big cut in income in the form of the post-summer seasonal drop off.
What about the house payment or rent? (Especially when I have a big balloon payment coming up in October.) What about new clothes every so often? What about my $500 monthly credit card bill because I am in so much debt?
Can't ignore those things forever. Especially when I am about to take a big cut in income in the form of the post-summer seasonal drop off.
Ukridge
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Bear - Unfortunately I am someone who always has "just one more question."
What I am trying to determine is that leaving aside the write-offs (yes, I know one cannot merely push all of this aside. For discussion purposes however.), what are the expenses compared to the positive cash flow? Is this even the proper methodology to address the question or I am making an apples/orngaes comparison?
I do see the point in that even positive cash flow can be swamped by expense. I can make 100 Euros a week but I have expenses of 200. In this case would it not be a matter of the banking houses' confidence in United further getting its expenses under control with lease negotiations and productivity gains? My question is one of the financial community looking at costs that are progessively lowered and cash flow that remains nuetral or positive.
Do not mistake my questions as being anything other than serious enquery. I have made mention that I am not an expert in this field but merely an observer.
As for the pensions. Unfortunately did anyone expect that they would remain intact? I find this the saddest part of the drama. I do not think it is denial on the part of the United employees as some claim. I think of the blokes who used to defuse the fizzed German bombs in London during the war. They knew the danger but best left some things unsaid.
Cheers.
I do see the point in that even positive cash flow can be swamped by expense. I can make 100 Euros a week but I have expenses of 200. In this case would it not be a matter of the banking houses' confidence in United further getting its expenses under control with lease negotiations and productivity gains? My question is one of the financial community looking at costs that are progessively lowered and cash flow that remains nuetral or positive.
Do not mistake my questions as being anything other than serious enquery. I have made mention that I am not an expert in this field but merely an observer.
As for the pensions. Unfortunately did anyone expect that they would remain intact? I find this the saddest part of the drama. I do not think it is denial on the part of the United employees as some claim. I think of the blokes who used to defuse the fizzed German bombs in London during the war. They knew the danger but best left some things unsaid.
Cheers.
UAL's 2002 interest expense was $590 million and aircraft rent was $851 million. While both items will be reduced (perhaps substantially) due to the reorganization, the interest alone threatens to consume all of the current "positive cash flow" since revenues will probably fall this fall and winter (they always do).
It may be $2 million/day positive cash now in the busy summer season, but what will it be on November 5? I don't think you can multiply $2 million by 365 to determine UAL's positive cash for the next 12 months.
From what I have read, the DIP lender-imposed cash flow test for UAL (EBITDAR) excludes interest and rent. So encouraging as the recent releases are, it is hard to overlook the items not included in the rosy cash flow reports. Gotta pay interest at some point, and gotta pay rent eventually. Sure, lessors and creditors don't really want the planes back, but I don't think UAL will get them for free from now on.
It may be $2 million/day positive cash now in the busy summer season, but what will it be on November 5? I don't think you can multiply $2 million by 365 to determine UAL's positive cash for the next 12 months.
From what I have read, the DIP lender-imposed cash flow test for UAL (EBITDAR) excludes interest and rent. So encouraging as the recent releases are, it is hard to overlook the items not included in the rosy cash flow reports. Gotta pay interest at some point, and gotta pay rent eventually. Sure, lessors and creditors don't really want the planes back, but I don't think UAL will get them for free from now on.
Bear96 says:
"I think this will be a very ugly winter for UA."
Only UA? Do you really believe that we are the only airline who will hurt from the traditionally slower travel season? AA averted bankruptcy-for now. And DL is TRYING to get concessions from it's pilots-CO certainly knows a thing or two or three about bankrupcy. Most if not all US carriers will feel a pinch this winter.
Just who DO you work for? Quite frankly we employees at UA defenitely do not need outsiders to try to undermine our commitment to our company.
"I think this will be a very ugly winter for UA."
Only UA? Do you really believe that we are the only airline who will hurt from the traditionally slower travel season? AA averted bankruptcy-for now. And DL is TRYING to get concessions from it's pilots-CO certainly knows a thing or two or three about bankrupcy. Most if not all US carriers will feel a pinch this winter.
Just who DO you work for? Quite frankly we employees at UA defenitely do not need outsiders to try to undermine our commitment to our company.
I am a UAL Flight Attendant.laura62 said:
I don't think I said this wouldn't be an ugly winter for other airlines.
But of the ones you mentioned, we are the only ones who are currently BANKRUPT, and therefore by definition in a much more precarious situation.
Bear96,
You mentioned no one but UA in your post.
I believe that you're right about you being pessimistic and cynical. I don't choose to live my life that way, it's a waste of time. I have dedicated 18 years of my life to this industry and I still love it.
I know that UA is in trouble but I believe that we can get out of it a financially better company. We are in a better position in bankruptcy to renegotiate with our debtors than any company not in bankrupcy who is financially hurting ie; AA and others I mentioned.
I prefer to have faith in myself and the company I work for. And I believe that most people at our company would prefer that too.
You mentioned no one but UA in your post.
I believe that you're right about you being pessimistic and cynical. I don't choose to live my life that way, it's a waste of time. I have dedicated 18 years of my life to this industry and I still love it.
I know that UA is in trouble but I believe that we can get out of it a financially better company. We are in a better position in bankruptcy to renegotiate with our debtors than any company not in bankrupcy who is financially hurting ie; AA and others I mentioned.
I prefer to have faith in myself and the company I work for. And I believe that most people at our company would prefer that too.
