Ual Nears Financing Package

[cltvff]

Article here

 

[whatkindoffreshhell]

Yes, I read the full article on the way in this morning.

UA is pledging all sorts of hard assets, landing slots and route authorities.

I believe the term used was 'hunker down for a long stay in BK'.

No word from Jake.

 

[FWAAA]

The assets mentioned above already secure the current DIP financing; the collateral would not change.

 

[USFlyer]

So much for exiting Chapter 11 in 2004 ... at least this will hopefully buy UAL some time, assuming the creditors don't get the opportunity to submit their own reorganization plan first.

 

[Segue]

Jake must be one busy guy...............

 

[jimntx]

Not trying to start something, but isn't there some limit to how long a company can stay in bankruptcy? It does give the company an unfair advantage against competitors who are not in bankruptcy. The others have to pay their bills and pension payments, etc.

 

[magsau]

Which bills has UAL not paid? You seem to know? Also, then pension deferral is just the first step of cancelling all the pensions and turning them over to the PBGC. The advantage of BK? The only advanatage is the ability to renegotiate with the lease companies.

If you at AA would like to review the timeline you will find that AA was able to renegotiate the last minute contracts (F/A's said no, then the Florida hanging chad routine took place and you voted it in). If not for UAL being in BK, IMO AA would be right here doing the same things we are doing. AA had the advantage of UAL BK to convince their creditors to renegotiate prior to a filing.

Having spent too much time in BK already there is absolutely no unfair advantage. Also, while in BK an airline is not allowed to hedge on fuel. Is that an advantage also?

 

[UnitedChicago]

well said maq!

 

[Busdrvr]

Not trying to start something, but isn't there some limit to how long a company can stay in bankruptcy? It does give the company an unfair advantage against competitors who are not in bankruptcy. The others have to pay their bills and pension payments, etc.

Guess they should of thought of that when they were lobbying against UAL's ATSB approval BOTH times....... :rant:

 

[WorldTraveler]

The statistics actually say that the longer a company (not just airlines) is in bankruptcy, the less likely they will emerge and survive. While it is prudent for UAL to secure financing out for nearly another year, they clearly need to make immediate substantial movement in restructuring their business if they wish to survive.
Given that nearly all of the route authorities are pledged as collateral, it is unlikely that UAL will be selling flight assets unless they believe lenders will be willing to renegotiate the terms of the loans. I believe it is very unlikely that UAL will emerge from bankruptcy without selling off something to raise cash or by significantly changing the structure of the company. The assaults on UA by competitors will only increase as they try to ensure that United does not emerge from bankruptcy.

 

[The Ronin]

Not trying to start something, but isn't there some limit to how long a company can stay in bankruptcy? It does give the company an unfair advantage against competitors who are not in bankruptcy. The others have to pay their bills and pension payments, etc.

Jesus, the guy is only asking a legitimate question. Is ist unfair, depends whos shoes your in. There is lots of money to be made, just look at our BK payouts to be there. They almost match our operating costs. Busdrvr would know, he's our financial guru on the board

The assaults on UA by competitors will only increase as they try to ensure that United does not emerge from bankruptcy.

Hate to say it bubba, but those competitors are getting some bloody noses out there right now. Neck and neck with NWA in the far east, smacking FRNT and a few others out Dulles way around there. SWA is having its own problems with its latest contracts and costs. CAL is losing money, DAL is on very very shaky legs as is AA. Its a race to the finish line, and they are all praying this beast does not get back up again. And I think you are about to see a MAJOR restructure soon.

 

[WorldTraveler]

Ronin,
I agree that a major restructuring is about to occur but I don't think lenders are going to be very willing to help UAL lead the effort. UAL's lenders are interested in protecting their investment, not in facilitating a transformation of the industry. Many of UAL's current investors also have interests at other US airlines as well.

Would you like to predict how the industry restructuring might play out?

 

[crossfeed]

GE needs to send some management types with that money, if they expect to see United tranform itself. "Change before you have to". -----Jack Welch.

 

[UAL_TECH]

Not trying to start something, but isn't there some limit to how long a company can stay in bankruptcy? It does give the company an unfair advantage against competitors who are not in bankruptcy. The others have to pay their bills and pension payments, etc.

CAL was in BK (2nd time) for almost three years.
Looks like we could be in BK for awhile before we beat their record.

B) UT

 

[latreal]

Shaky legged AA made a PROFIT (net) this quarter!!!!!!!!!!!!!

(I have been waiting since the TWA acquisition to say that!!!!)