UAL takes advertising aim at Southwest

[Busdrvr]

Please, PLEASE: Somebody kindly remember this and rub Pompous Ass' face in his ludicrous prediction when January '07 rolls around...
As usual, what an IDIOT!

Hey MORON, they'll have a profit in excess of 11 BILLION for the first Q ALONE. But I'll make a deal with you, if UAL posts a quarterly profit over 10 billion, you'll start a string anouncing to the world what we already know, that you're an IDIOT. If the profit for Q 1 is less than $10 billion, I'll do the same. Deal?

KC, what's good for the goose is good for the gander. You've been one of the accountingly challenged individuals who consistantly pointed out the "losses" UAL was recording when you were repeatedly told that the losses were primarily paper only, and that they'd be "corrected" at BK exit. Yet you continued the insanity. So are we to understand that you'll be proclaiming on these boards that UAL is the greatest airline to ever have exisited because YOUR standard of what makes an airline great is PROFIT and UAL will record the LARGEST quarterly profit EVER produced by an airline in Q1 2006?

 

[Busdrvr]

Just a thought here.

If UAL makes a 10B profit in 2006, would it be too much to ask for them to send some of that to all the creditors and suppliers they stiffed thru the bankruptcy courts?

Would it be too much to ask for them to send some of that progit to their pension plans so that the federal insurance that covers those sorts of things doesn't have to?

We should still have some money left, so let's throw a little bit at the shareholders who got hosed by the bankruptcy.

The 10 billion in profit will be largely (if not entirely) made up of a huge writeoff of debt that UAL will impose on the creditors. This is that same "debt" that was being added to the balance sheet for the past 3 years through 'special charges related to BK'. The claimholders will get stock that will likely be worth somewhere between 15 and 25 cents on the dollar. That's how BK works, and THAT'S WHY UAL BONDS PAID A HIGHER RATE THAN THE DISCOUNT RATE. It's called RISK. Funny though, when it was pointed out how UAL was performing OPERATIONALLY, the mental giants all came out saying "a loss is a loss". Funny how KC can FINALLY begin to understand "fresh start" accounting rules as they begin to benefit the "net" at UAL. <_< Just goes to show how far up his biased arse his head is. If SWA crashed a jet full of elderly nuns, KC would be telling us how it is good for the country by reducing SS and medicare expenses, and, oh yeah, SWA posted a profit. What a fricken joke. While I don't agree with Mag's attacks, you SWA pots need to look in the mirror before you start attacking the kettles. I post a simple response to KC merely pointing out that the CORE business (flying airplanes) was, in fact, more profitable at UAL last quarter than at SWA, and this c**ks**ker SWA smoe 707 starts throwing insults. Just curious, how many SWA posters are even capable of discussing the issues? Now we'll get to here Whino tell us all how he would have "kicked me out of his squadron". While I hate to see the fortunes of anyone turn south, I won't feel quite as bad for some people as for others.

 

[ELP_WN_Psgr]

Do I detect a lot of hostility here or what?

But no matter. It will be very interesting to see what Q4 of 2005 looks like for our friends with the 737s.

Load factor was UP.
Yield was up.

So perhaps they did better than Budriver is giving them credit for. I guess we will see in a week or two when the numbers get released.

In the meantime, Busdriver.....why in the world is it any concern of yours what us deluded WN passengers think?

According to any number of UAL employee/posters...we are all the great unwashed....trailer trash......imbeciles too stupid to recognize a good airline when we see one.

As far as I'm concerned, my last trip on UAL was my last trip on UAL. MCI to DEN on business. Wretched service. Nasty plane. Channel 9 was nice but I'll pass before I do that again. Driving would have been better and I detest Kansas. If anything, Grant Wood made it look better than it really is.

I guess Busdriver's basic point here is that Southwest's management may know how to run a profitable airline, but United's management is much better at eviscerating employee wages and benefits, gouging business travelers, screwing creditors thru the court system, and paying off their debts at a nickel on the dollar.

I wish he could convince the Infernal Revenue Service to take a nickel on the dollar for my income tax bill. Despite (or maybe because of) my preference for the WalMart of the skies, I seem to have put away enough money to have a little tax liability every now and then.

 

[Busdrvr]

ELP, your reference to "imbeciles" at SWA reminded me to post a link to this post by Cosmo (who actually KNOWS a little about airlines) refering to what the outlook at UAL will be for 2006.

http://www.usaviation.com/forums/index.php...ndpost&p=341664

But yet the IMBECILE attacks me personally for even mentioning such heresy. It's that kind of unmitigated lack of class from SWA employees like 707 that spin me up and give me the beak. What makes it worse is he is completely uninformed about the issue, and shows himself to be an idiot as well as a jac**ss.

In all honesty, I HOPE SWA's RASM IS up significantly for Q4. A rising sea raises ALL boats. If the "low fare leader" is charging MORE for tickets, and still selling them, it's good for EVERYBODY.

With respect to UAL's service, I'm sorry you had a bad experience. It happens at EVERY AIRLINE. Heck, if you check the latest DOT stats (at least the ones they can't "fudge") you'll see that SWA lost more luggage per pax and had more involutary bumps. I'm sure quite a few of those folks with lost bags have the same feeling about SWA as you have about UAL. Unfortunately for you, SWA chooses not to serve most of the country, so you'll have to do a bunch of driving to avoid the economy plus seats in the 737, or the WIDER economy plus seats in the A320. Be careful though, they've been know to close I-70 for extended period though western KS/eastern CO. It ain't fun sleeping in the NG armory in some little KS town. FWIW, if you don't like UAL, I'd recommend you give FRNT a shot on the MCI-DEN trip.

Yes, UAL declared BK after terrorist commadered 2 jets from the two airlines most associated with the US. This followed over 70 years of operation without a BK and extended periods of time as the worlds largest airline in terms of ASMs. For all that time, UAL paid good wages and gave good retirement benefits. The market won out, and UAL had to match costs with other airlines WITHOUT significant retiremtn benefits, and lower pay. Now pilots are even having to use proceeds form company stock to supplement the income. But I'll make a deal with you. When SWA has grown to the worlds largest airline, and provided good jobs for over 100,000 people and survived for 70+ years, you can then tell us how they have it all figured out. Until then, let me point out that this is an AVIATION MESSAGE BOARD. We talk about AIRLINES. We have differant opinions. If you want all SWA all the time, then got to www.IFLYSWA.com (or even SWASUCKS.com), and you'll get the company PR. But HERE, we express OPINIONS, and you might be wise to consider some of the dissenting ones every now and then.

 

[dc3fanatic]

Hmmm...seems I recall that SWA considered a 75% load factor to be on the high side. How's UAL's profits compared to Herbs turd birds? What will UAL's profits look like when/if they ever energe from bankruptcy?

UAL's 3Q OPERATING Margin (excluding fuel hedges) was better than SouthWest's.

How do you like THEM apples?

 

[KCFlyer]

UAL's 3Q OPERATING Margin (excluding fuel hedges) was better than SouthWest's.

How do you like THEM apples?

That's great. I realize I might be accountingly challenged, but it seems to me that accountants actually DO include fuel hedges in the profitablity equation. But I do know that if you work with numbers long enough, you can make them look as good as you want.

 

[magsau]

That's great. I realize I might be accountingly challenged, but it seems to me that accountants actually DO include fuel hedges in the profitablity equation. But I do know that if you work with numbers long enough, you can make them look as good as you want.

So now it is interpetation of the numbers that you don't like. I suppose you are right. Just looking at numbers- cost of living, etc. KC is probably a decent place to live. But then you get there, meet the egotistical mental retards that think the city is something to be snobbish about and you realize numbers are not everything.

I remember laying over there a few years ago at the hotel that came crashing down years before. The f/o and I walked down to the Hereford (sp?) House for dinner on a Friday night. You could have shot a cannon off downtown and not hit anyone. They would have had to import a horse to make it a one horse town.

 

[dc3fanatic]

That's great. I realize I might be accountingly challenged, but it seems to me that accountants actually DO include fuel hedges in the profitablity equation. But I do know that if you work with numbers long enough, you can make them look as good as you want.

Fuel hedges run out. What I was pointing out is a measure of operational and revenue effeciency. Fuel hedges are a measure of a few guys gut on market future market conditions when they have money to spend. Fuel hedges gains are not a measure of operational efficiency and they do run out.

HEY PINEYBOB!,

Whatever improved efficiency Southwest has for there operations is more than offset by revenue premiums realized by United - hence they have a better operating margin.

I'd like to point out that United isn't directly competing on COST. If they were, then they would get rid of economy plus to have a lower CASM. United has chosen to maximize operating profits, not minimize costs. There is a difference.

Again, how do you like them APPLES?

 

[KCFlyer]

So now it is interpetation of the numbers that you don't like. I suppose you are right. Just looking at numbers- cost of living, etc. KC is probably a decent place to live. But then you get there, meet the egotistical mental retards that think the city is something to be snobbish about and you realize numbers are not everything.

I remember laying over there a few years ago at the hotel that came crashing down years before. The f/o and I walked down to the Hereford (sp?) House for dinner on a Friday night. You could have shot a cannon off downtown and not hit anyone. They would have had to import a horse to make it a one horse town.

Mags...we may have to import a horse to be a one horse town, but your town is already a one ass town...

Fuel hedges run out. What I was pointing out is a measure of operational and revenue effeciency. Fuel hedges are a measure of a few guys gut on market future market conditions when they have money to spend. Fuel hedges gains are not a measure of operational efficiency and they do run out.

But fuel hedges are a sign of management competence, and they ARE factored into results. My point is that if you wanted to play with numbers enough, Independence Air was a moneymaker. Let's see what real world 2007 holds, shall we? But Southwest will still have hedges in place, so I guess we'll still have to play with numbers, won't we?

 

[dc3fanatic]

NO! you can't make flyI look like a money maker. When you talk about operational performance and operational efficiency, then you would factor hedges out.

Yes, they do count to the bottom line. United has been in B, so it's ability to hedge has been limited. (granted). My point is that United is fully ready to compete against Southwest given their comparatives for Q3, 2005 as a signpost.

excluding hedge gains to compare operational efficiency IS the right way to look at operational efficiency for operating margin.

Hedges do count towards bottom line, but are generally the result of 10 people making a bet and making it right.

Operating margin results are the result of the entire organization, both mgmt and front line employees.

It's a valid comparison and most of Southwest hedges will unwind in 2006, so it's not the competitive advantage it once was.

I'm looking forward. Why do you keep looking back? Their hedging won't benefit them in the future like it has in the past.

Oh, and flyI was just pure stupidity. They gave up guaranteed margins to try and compete with the nation's 2nd largest carrier hub over hub on 50 seaters, which passengers love (note sarcasm).

you won't find me defending flyI.

By having a more cost efficient business model which allows them to have much better fundamentals.

see other posts about operating margin.

Two glaring examples would be:

20% HIGHER A/C utilization on average

Employee to A/C ratio that is about 20% lower.

please cite source. I don't particularly believe this. If they are real, then are they old?

 

[KCFlyer]

United has been in B

, I'm sorry, I thought United was STILL in B. And when they emerge from B...wa la...10.5 billion "profit".

It's a valid comparison and most of Southwest hedges will unwind in 2006, so it's not the competitive advantage it once was.

Minor technicality...it's 2009.

I'm looking forward. Why do you keep looking back? Their hedging won't benefit them in the future like it has in the past.

I guess in the future, SWA will follow UAL's lead and rape employees and creditors. Helluva way to "compete"

 

[wnbubbleboy]

The 10 billion in profit will be largely (if not entirely) made up of a huge writeoff of debt that UAL will impose on the creditors. This is that same "debt" that was being added to the balance sheet for the past 3 years through 'special charges related to BK'. The claimholders will get stock that will likely be worth somewhere between 15 and 25 cents on the dollar. That's how BK works, and THAT'S WHY UAL BONDS PAID A HIGHER RATE THAN THE DISCOUNT RATE. It's called RISK. Funny though, when it was pointed out how UAL was performing OPERATIONALLY, the mental giants all came out saying "a loss is a loss". Funny how KC can FINALLY begin to understand "fresh start" accounting rules as they begin to benefit the "net" at UAL. <_< Just goes to show how far up his biased arse his head is. If SWA crashed a jet full of elderly nuns, KC would be telling us how it is good for the country by reducing SS and medicare expenses, and, oh yeah, SWA posted a profit. What a fricken joke. While I don't agree with Mag's attacks, you SWA pots need to look in the mirror before you start attacking the kettles. I post a simple response to KC merely pointing out that the CORE business (flying airplanes) was, in fact, more profitable at UAL last quarter than at SWA, and this c**ks**ker SWA smoe 707 starts throwing insults. Just curious, how many SWA posters are even capable of discussing the issues? Now we'll get to here Whino tell us all how he would have "kicked me out of his squadron". While I hate to see the fortunes of anyone turn south, I won't feel quite as bad for some people as for others.

Both items are from Forbes. It seems in fact that Jan. 18th in an important date for both companies:

Item one:

CHICAGO (AFX) - United Airlines' parent UAL Corp said it had reached an agreement with all its creditors that will allow it to emerge from bankruptcy protection in February.

The agreement resolves a number of outstanding issues with the airline's reorganization plan and its decision to default on its pension obligations.

'Today's agreement with the Creditors' Committee, which represents the new owners of United, is a major step forward in concluding our restructuring,' Jake Brace, United's chief financial officer and executive vice president said in a statement.

'We look forward to confirming the plan next week and exiting bankruptcy next month ready to compete with the strongest carriers.'

On Monday, UAL said it had secured three bln usd in loans and credit as part of its plan to emerge from bankruptcy.

The financing by JP Morgan and Citigroup is secured against all of United's assets.

United is scheduled to present its reorganization plan at a Jan 18 hearing, with an official Chapter 11 exit coming two weeks after that.

UAL sought bankruptcy protection from creditors in December 2002, overwhelmed by operating costs as well as health-care and pension obligations to its 55,000 employees, not to mention fierce competition from low-cost carriers in the wake of the Sept 11, 2001, terrorist attacks.

UAL has turned over its pension obligations to the federal Pension Benefit Guarantee Corp. Until that move, it had left underfunded its defined-benefit retirement plan by about 9.8 bln usd.


Item two:

When to watch: Wednesday, Jan. 18. Now arriving in oblivion: Eastern Airlines, TWA, Pan Am and Independence Air. That's just for starters in the cutthroat airline sector. But Southwest Airlines (nyse: LUV - news - people ) operates more like a bus line without reserved seats and is solidly profitable. On Wednesday, Wall Street analysts expect Gary C. Kelly, chief executive officer of the Dallas-based no-frills airline, to report fourth-quarter 2005 earnings of 12 cents a share, up from 7 cents for the same period a year ago. Southwest Airlines pioneered senior discounts, Fun Fares, Fun Packs and ticketless travel, and it operates its own reservation system. Last year's sales were $6.5 billion, up about 10% from the year before. But earnings, hammered by increased fuel prices, fell nearly 30% to $313 million. Southwest began as a regional airline in 1971, serving Dallas, Houston and San Antonio. It now carries about 70 million passengers a year to 60 cities throughout the nation. JetBlue Airways (nasdaq: JBLU - news - people ) built on Southwest's success while older carriers such as United, a unit of UAL (otcbb: UALAQ.OB - news - people ), struggle to cut costs following a Chapter 11 bankruptcy filing. High fuel costs will continue to challenge the sector, and the elephant in the terminal concourse is, of course, terrorism. --Scott Reeves

 

[whatkindoffreshhell]

This followed over 70 years of operation without a BK and extended periods of time as the worlds largest airline in terms of ASMs. For all that time, UAL paid good wages and gave good retirement benefits.

Dinosaurs. General Motors. Protected markets.

See "Big Bang" theory.

Terrorists did not cause UA to go BK. Your BOD and management did. And your former customers.

Say, didn't the unions have a BOD rep?

Where was the BOD from '96-'00 when they didn't pay $billions into the pension plan? (source: WSJ)

Enjoying those flight bennies I suppose because they sure as hell weren't watching the books.

Good luck to all the UA'ers, hope you make it.

But until you folks discard the 'everyone-else-is-to-blame-but-us' attitude I don't see you surviving.

Please choose and act to live.

 

[Fly]

Sure looks like some people are worried that United is going to emerge a much more competitive competitor. Watch out.

I personally am thrilled that the terrorists weren't able to succeed in destroying United.

 

[magsau]

My point is that if you wanted to play with numbers enough, Independence Air was a moneymaker.

Oh I got to see how you could do that! If so you should have applied to be the PR spokesman for flyi. KC you are now on the clock.