United Airlines Delays Bankruptcy Exit (again)

[USA320Pilot]

United Airlines Delays Bankruptcy Exit

After Jake Brace called Susan Carey and said United could eixt bankruptcy this fall, who was the first person who said this could not happen and was widely criticized on this board? Is this person a prophet or could he of had inside information? Now it comes true...hummm...how can that be?

Who first said United management was stuck in a "quagmire" and now others in the industry are making the same point?

In the article above Kevin Mitchell, chairman of the Business Travel Coalition and a critic of United's tactics, said of the once-again rejigged timetable: "On one level, it's yet another data point of United's going from here to there."

United bankruptcy attorney James Sprayregen told the court a number of issues in the United bankruptcy need to be resolved, including contributions to pension plans.

Who first reported this on this board only to have 767jetz, Iflyjets, and others say that the labor concessions met pension obligations. How could they be wrong?

In regard to the pension, Reuters reported the pension contributions that would require a significant portion of the airline's cash flow going forward.

How's the ATSB going to view this? I'll tell you first hand -- big time.

Sprayregen said United will soon submit a court motion to extend the period in which the company has exclusive rights to file its reorganization plan.

Why? Because United cannot emerge from bankruptcy and the airline is concerned another party could come in with a plan such as a corporate raider or the airline will need to sell assets to emerge.

What's interesting is that United missed its first 180-day exclusive period to exclusively file its POR and now could miss its second period to file its POR. By the way, who noted on this board just this week all of the items and the almost impossible task to complete the outstanding issues before early December.

However, here's my favorite, "It still remains to be seen when the revenue recovery will be short or long-lived," Sprayregen said. 737nCH11 and others who on this board first said this? Furthermore, Kevin Mitchell, chairman of the Business Travel Coalition and a critic of United's tactics, said of the once-again rejigged timetable: "On one level, it's yet another data point of United's going from here to there."

767jets, Zman, 737nCH11, and Cosmo, how is this going to effect United's October and November DIP financing requirements?

In conclusion, I'm not trying to pour salt into wounds and there is certainly enough to be concerned about, but stop "shooting the messenger". There has nothing I've said that is not true and instead of fighting on this board, I believe everybody should work and communicate together.

Best regards,

Chip

P.S. Cosmo, by the way, I understand the UCT/ICT is alive and well and may be United's best option to emerge, versus other options.

 

[USA320Pilot]

United slows exit talk on bankruptcy - Phrasing now points to 1st half of '04

James Sprayregen, United's lead bankruptcy attorney, told the judge a long list of things is complicating United's reorganization.

United continues to negotiate new, less expensive deals with companies that own some of its aircraft. It also hasn't figured out what to do with an estimated $6.4 billion pension deficit, and is heading toward a nasty court fight over $1.7 billion in municipal bonds issued by several airports around the country for United's benefit.

Then, of course, there's the important matter of submitting an updated business plan to the Air Transportation Stabilization Board, which United is hoping will provide a $1.8 billion loan guarantee that will be the core of its exit financing package. The ATSB twice before has rejected United's application.

In addition, United wants more time to see if the upturn in air travel this summer will continue in the fall and winter, Sprayregen said.

Chip comments: Who first predicted all of these issues on this message board?

Best regards,

Chip

 

[767jetz]

Chip,

You're so predictable. Once again there is nothing new here. It has been said all along that UA could take up 18 months or more to emerge. It has also been said that we will emerge when the time is right, and preferably not into a slow economic environment as US did. Even if we emerge in late spring, it is still earlier than 18 months. No one has set any date in stone. It is a constantly changing environment. What was true on Monday may no longer be true on Wednesday. The timeline can, and I'm sure will, change several more times back and forth.

Could it be that these comments are to control people's expectations, and meant for public consumption, or maybe to throw off our competition? Or does that excuse only apply to your company?

You are such a hypocrit my friend. You would have us believe that any positive news about UA is just "cheerleading" by management, any negative news is "Gospel" and proof that you are right. With US however, anything negative is just "to control expectations" and anything positive is the "Word according Chip."

Unbelievable! Do you really believe yourself??? Can you be any more obvious??

 

[767jetz]

One more comment Chip,

Even if it takes the full 18 months or more to emerge, who cares? The point is that it is going to be done right the first time so we don't have to make another trip throught the courts in the future (ala TWA & Continental).

USAir is still bleeding money after it's trip through BK, and from what I read on that board, it sounds like US is falling apart at the seams. The possibility still exists that US could follow in TWA and Continental's footsteps with a future BK.

But you know what, I don't care because US does not concern me, and I have no urge to post there over and over about all the problems at US.

The thing I find most interesting, (and probably the reason you are so emotional and obsessed about UA) is that US keeps hanging it's future on UA. (and so do you) To UA, USAir is like a rash that just won't go away. They did it in 2000 during the PURCHASE plan, and now they're doing it again with UA's BK.

Before it was, 'If only UA would buy USAir all our problems would be solved.' Now it's, 'If only UA would fragment and sell USAir it's assets for a song and a dance our problems would be solved.' To me, this is striking evidence that US never could and never will be a viable entity on it's own.

I am done with this thread.

best regards,

jetz

 

[novaqt]

Chip:

Who first predicted all of these issues on this message board?

After Jake Brace called Susan Carey and said United could eixt bankruptcy this fall, who was the first person who said this could not happen and was widely criticized on this board? Is this person a prophet or could he of had inside information? Now it comes true...hummm...how can that be?

Who first said United management was stuck in a "quagmire" and now others in the industry are making the same point?

I told you so, I told you so, nah, nah, nah, nah, nah!

It is statements like the quotes above that most who post on this board object to Chip. Its your arrogance and smugness which is childish and totally inappropriate for an adult your age and who pilots an airplane. PAAHHLEASE grow up and speak to the board like an adult. Even if your posts are negative and incomplete through cutting pasting, the board can do without your "I told you so" comments. Like I said before, it getting very old and boring.

Just to set you straight, again you are repeating old news. I remember Jake Brace's comments were back in May or June sometime when, at the same time, some other senior management said UA was EXPLORING the option of POSSIBLY emerging from BK in the fall or first quarter of '04. Other seneior management, including Mr. Tilton also added that UA would emerge when the time was right. It is becoming obvious that UA will not emerge until the banks, the lawyers and the Company are sure that the airline industry is in a full recovery.

It would be very wise of you before you post to check your sources to make sure that they are providing you with up-to-the-minute information. It certainly is not beyond them to report old news as news as new news.

 

[USA320Pilot]

737nCH11, Cosmo, 767jetz, Iflyjetz, Zman, Bear 96, Busdrvr & Others

I’m not trying to throw stones, but let’s do a comparison between the two business partners.

During US Airways formal restructuring, the airline had its DIP and exit financing in place before it filed for court protection. In addition, the company had RSA (or TPG), GECAS, and Bank of America all invest in exit financing, as well as the federal government backing a loan guarantee.

Post bankruptcy, Aviation Acquisition, L.L.C., an entity managed by Farallon Capital Management, L.L.C., and OCM Principal Opportunities Fund II, L.P., a unit of Oaktree Capital Management, LLC and Goldman Sachs & Co. are all buying US Airways stock in a private offering to boost share liquidity, until the company qualifies for a national exchange listing.

Why are these firms buying up to 5 million shares of US Airways’ stock at $7.34?

By comparison, United has none of these issues resolved after nearly 9 months of operating under court protection and yesterday the company’s bankruptcy counsel said United’s early exit from bankruptcy may not be so early after all. The court was told a number of issues in the United bankruptcy case need to be resolved, including contributions to pension plans.

I strongly believe the two biggest issues are the exit financing and pension. In my opinion, the pension may have to be terminated, without H.R. 2719 -- the Airline Pension Act of 2003, becoming law within the next few weeks, and the company may be forced to sell assets to emerge. Furthermore, I have been told by an informed source that US Airways’ Pittsburgh hub negotiations are being held hostage to the United bankruptcy, and US Airways’ assets could be headed westward to some of the airports identified in the UCT, if a suitable deal with the AGAA is not negotiated.

Furthermore, I can confirm today that the UCT, which now can be called an ICT, is alive and well. In my opinion, United will eventually emerge from bankruptcy, albeit a smaller airline than today, and there will be fairly dramatic changes to the retirement plans and network.

Best regards,

Chip

 

[Busdrvr]

During US Airways formal restructuring, the airline had its DIP and exit financing in place before it filed for court protection. In addition, the company had RSA (or TPG), GECAS, and Bank of America all invest in exit financing, as well as the federal government backing a loan guarantee.

Post bankruptcy, Aviation Acquisition, L.L.C., an entity managed by Farallon Capital Management, L.L.C., and OCM Principal Opportunities Fund II, L.P., a unit of Oaktree Capital Management, LLC and Goldman Sachs & Co. are all buying US Airways stock in a private offering to boost share liquidity, until the company qualifies for a national exchange listing.

Why are these firms buying up to 5 million shares of US Airways’ stock at $7.34?

Yes Chip, U had a loan shark lined up as DIP instead of a BANK. when you want a mortgage or car loan, do you go to "guido" or a Bank? U left BK when they did BECAUSE THEY WRE RUNNING OUT OF CASH AND OPTIONS. Dave the greater was cutting you off. you left during a bad revenue period. you telling us thats a good thing?

As to the company selling it's EMPLOYEES SHARES to other firms in a sleazy sweetheart deal at below the potential market rate using the excuse of "taxes", well I'll let YOU explain away your sleazy self-centered, getting extremely rich at you expense, management.


I'll ask one more time Chip, but you usually ignore questions that don't support you Roswell space alien theories, How many months did U meet DIP requirements? How many did they make them? Why would a company exit BK expecting to lose money? <_<

 

[Bear96]

737nCH11, Cosmo, 767jetz, Iflyjetz, Zman, Bear 96, Busdrvr & Others

Dude...

Why are you bringing ME into this thread?!?!

You know full well that I too am pessimistic about UA's future.

And I think I have made my opinion about your bizarre postings, methods, agenda, and running-fingernails-down-the-blackboard-sounding abuse of the English language quite clear (though you are probably not even aware of all the grammar, syntax, and spelling errors you make which make many of us cringe and feel embarassed for you).

And I don't have much more to say about it.

(OK I'll add one more thing-- YOU NEED HELP!)

 

[UnitedChicago]

This is a very prudent move on United's part. United is an enormous airline and there are many issues to resolve. The worst mistake would be to exit without everything settled. Just look at UA's partner's ongoing issues with PIT.

United isn't a regional carrier - therefore they can't and shouldn't fast-track through ch11. It also allows them to focus on exit financing that doesn't basically require management and employees to take it up the you-know-what.

P.S. I'm loving the PM thread on you-know-who. It's the right approach.

 

[767jetz]

U had a loan shark lined up as DIP instead of a BANK. when you want a mortgage or car loan, do you go to "guido" or a Bank? U left BK when they did BECAUSE THEY WRE RUNNING OUT OF CASH AND OPTIONS.



How many months did U meet DIP requirements? How many did they make them? Why would a company exit BK expecting to lose money? <_<

Busdrvr,

Loan Shark is right! It's so much better dealing with banks. I think our management team is on the right track taking the slow and methodical route. No need to leave any stone unturned. Being former TWA, I certainly don't want to see 3 trips to the BK court.

As you and I (& most people) know, meeting DIP requirements is all that really counts while in BK. I think We're doing a better job than another airline did in that department.

Feedback I've been getting has been very positive. I was told last week that UA expected around $500 Million per year in savings from leases. That goal alone has been FAR exceeded, and we are not even done negotiating leases yet. I heard we are already pushing close to $1 BILLION in savings per year. Progress in most areas is either on track or ahead of schedule.

Momentum is building!

jetz

 

[737nCH11]

Guys and Gals,

I may be eating my words at a later date, but I honestly believe that UAL CEO Tilton is working hard to find a pension solution that is acceptable to all parties involved. I think this is one of the reasons he is delaying the exit from CH11.

The man seems to be a straight-shooter. UAL and UAL ALPA negotiated a concessionary contract that kept the retirement funds intact. Both sides knew that the pension plans were underfunded at that point, so all of the latest headlines on the subject are nothing new. I honestly don't believe that Tilton would accept ALPA's concessions and then turn around and screw them. In the words of Paul Whiteford, it would indeed cause a meltdown on the UAL property.

I think the pension issue is another reason that UAL doesn't want someone taking an equity stake in the company. Look at the screwing the USAirways pilots got. Bronner gets rich, and these hard-working men and women get the shaft. The key is getting the ATSB loan guarantee. UAL management seems pretty optimistic this time around. USAirways had to accept Bronner's offer because they were running out of time. UAL has the option of a little time, and with it's improved financial and system performance it should get the backing of more than a few lending institutions.

737

 

[FA Mikey]

Good news indeed. AA's 4 billion in cuts and its rebounding revenue is expected to produce an operating profit for the full year 04. I am sure UAL is not far behind, being able to exceed, in cutting capital expenses.

 

[USA320Pilot]

Busdrvr:

Busdrvr asked: "How many months did U meet DIP requirements? How many did they make them? Why would a company exit BK expecting to lose money?"

Chip answers: To my knowledge, US Airways did not have any public DIP requirements. In regard to losing money, due to one-time gains US Airways has posted a profit the last two quarters. In fact, last quarter US Airways took a $92 million charge related to the stock granted to employees as part of its restructuring, however, the stock has yet to be distributed. Without this unusual charge, net profit including other one-time items would have been $105 million, the highest of the network carriers.

Meanwhile, Goldman Sachs has joined Aviation Acquisition and OCM Principal Opportunities Fund to provide liquidity to US Airways' stock and to buy shares from sellers. Can you tell me why these financial entities will invest in US Airways and not another airline?

Also noteworthy, today I called some "informed friends" after news surfaced from Friday's Omnibus Bankruptcy Hearing and I now am much more sanguine regarding United's future. I suspect the future news regarding United will clearly speak for itself because one report said the company is burning through $6 to $6.5 million per day.

Regards,

Chip

 

[767jetz]

I honestly believe that UAL CEO Tilton is working hard to find a pension solution that is acceptable to all parties involved.


I honestly don't believe that Tilton would accept ALPA's concessions and then turn around and screw them.

I think the pension issue is another reason that UAL doesn't want someone taking an equity stake in the company.

UAL has the option of a little time, and with it's improved financial and system performance it should get the backing of more than a few lending institutions.

737

737,

I agree again with these statements. I've thought all along that waiting it out until a solution can be found for the pension and other issues would be prudent. Tilton is definitely a straight shooter.

Funny, I just finished watching The Sopranos and it made me think about the difference between borrowing money from a bank and borrowing it from "Big T."

Another interesting note is that UA may want to see what USAir does in PIT. It looks like US might not commit to PIT, and may withdraw to concentrate on PHL. If this occurs, the city of PIT is already looking for other airlines to come in and service their airport. UA may be looking into moving some lift into PIT to keep that traffic within STAR.

With US in retreat, the chance of any corporate transactions involving significant UA assets going to US is pretty much dead in the water.

Also looks like US may be preparing for a show down with the mechanics. Do you think Tilton might want to wait and see how that plays out?

 

[767jetz]

Good news indeed. AA's 4 billion in cuts and its rebounding revenue is expected to produce an operating profit for the full year 04. I am sure UAL is not far behind, being able to exceed, in cutting capital expenses.

That's good news for AA! And you're right, UAL is not far behind.