United Edges Closer To Exiting Ch 11

[Fly]

Bloomberg News

August 10, 2005


United Edges Closer to Exiting Chapter 11

By BLOOMBERG NEWS
United Airlines said yesterday that it had finished reworking its aircraft lease agreements with creditors who hold debt backed by 105 planes, providing the carrier with $300 million in annual savings.

The airline's parent, the UAL Corporation, said total annual fleet costs had been cut by $850 million since the company filed for bankruptcy protection in December 2002. That excludes the airline's decision this month to buy 14 planes from creditors.

The company, based in Chicago, has said that wrapping up the talks was the largest remaining task before exiting bankruptcy protection.

Last week, UAL said it may not emerge from Chapter 11 until early next year because unsecured creditors wanted more time to review the reorganization plan. The agreement with the holders of debt backed by the planes would need to be approved by the bankruptcy court in Chicago.

In another airline bankruptcy, the judge overseeing the reorganization of US Airways, which plans to emerge from protection this year by combining with America West Airlines, ruled that the airline could send its reorganization plan to creditors for a vote.

The judge, Stephen Mitchell, in Alexandria, Va., scheduled a hearing for final approval on Sept. 15.

Under the plan, creditors owed $50,000 or less will receive cash payments of 10 percent of the allowed amounts. Creditors with unsecured claims will receive stock in the reorganized company. The hearing on final approval is scheduled to take place two days after shareholders in America West vote on whether to approve the planned merger.

 

[TheDog2004]

But what about the reorganization plan?

What are they going to do in order to make money?

 

[WorldTraveler]

After years of glacial progress in reorganizing, UA is moving at lightning speed AND doing what is necessary to emerge from bankruptcy. I commend the progress made although everyone at UA knows it has been and will continue to be very costly.

While UA has settled many issues which prevented its reorganization, it still faces higher costs relative to other legacy airlines, including archrival AA. Historically, LCCs have strengthened their attacks against carriers as soon as they emerge from BK so UA can expect the sledding won't get easy any time soon. At the same time, Independence is very close to departing this world which will probably add a couple hundred million to UA's revenues.

The final story is not written but UA may well be one of the few airlines that has the * next to its name indicating the airline is still operating on the long list of airline bankruptcies. THAT is a major accomplishment.

 

[UnitedChicago]

Once again World, thanks for your unsolicited, non-expert opinion and commentary. It was a thinly veiled attempt to criticize UA, while attempting to appear genuine.

Just curious what factual information you have when you say:

it still faces higher costs relative to other legacy airlines, including archrival AA.

[post="287204"][/post]​

The business plan hasn't been released which will include final revenue and cost figures. How about we wait till everything's factual before making these statements?

You've got a lot on your plate over at Delta - but I'm not like many that would instantly race over to the Delta board to post the lastest negative headline or come in with my opinion about "what this says...".

 

[novaqt]

Delta and probably Northwest are about to enter bankruptcy before the new law takes into effect. Operating in bankruptcy is more favorable under the current bankruptcy laws.

 

[767jetz]

It was a thinly veiled attempt to criticize UA, while attempting to appear genuine.

[post="287219"][/post]​

True, but don't expect any more. It is the closest we will see to WT eating crow. At least it's something.

 

[ualdriver]

Hey World Traveler, I cut and pasted a couple of paragrahs for you. Perhaps you remember when you wrote this a few months back? However, I fixed it for you so that it makes more sense in today's "World"...........

"2005 is now upon us. We will finally begin to see the restructuring and consolidation that experts predicted 25 years ago and which has been blocked for many of those years by the very government which is now willing to let market forces do their thing. The letter D may be eliminated from the US airline alphabet.

You've had a great run, Delta Airlines, but the end is in sight and you aren't heading for the winners circle. The airline industry will now be run by companies that recognize that competition is a good thing, airlines are service businesses, and employees are the greatest assets. All those juicy routes will find homes in other airlines' networks."

The last part of World's quote that I omitted referred to the receiving of my pension check from the PBGC vs. United Airlines (and he was quite the wise a$$ about it). Have I ever thanked you, World, for funding part of my retirement for me? It will make a nice sailboat payment for me someday. I think I'll name her "World Traveler" just so I can remember how it's possible I can afford her. Maybe we can arrange for you to send me my retirement check directly from your Federal Income taxes or even perhaps your checking account and we can bypass all this PBGC bureaucracy?

 

[WorldTraveler]

I'm sure you all feel so smug. I call 'em like I see them. UA languished for years in bankruptcy and is showing signs of life once again. If you think the sailing will be smooth just because UA gets out of bankruptcy, I suggest you board that boat now and head as far from the real world as possible.

DL is on the verge of the bankruptcy process that UA managed to use to become a viable company once again. DL has pulled a few rabbits out of its hat and could well do so but I can't say I'm holding out a lot of hope.

In reality, I doubt if the picture for UA is as bright as you'd like to paint it or DL's picture is as grim as you'd like to paint it. Time will tell but I expect the final story will show both companies showing alot of scars for a long time to come - but both are probably likely to be around for a good while to come.

 

[Fly]

Wasn't it you, World, that said very few airlines can even survive bankruptcy? What makes you think Delta will survive? HAHAHA

Must stink to have it thrown back at you. Sad part is, I would never have gone to someones forum and shoved this sort of thing in their face (especially since this is all of our livelyhoods.....except YOURS) but you have made it sooooo appealling that I think I will!

 

[ualdriver]

Actually World, I feel far from smug. UAL could liquidate tomorrow all I know. I wish my fellow professionals no ill will. ZERO ill will.

All I did was cut and paste what YOU had the nerve to put on our forum back in our darkest days. I would NEVER have the ordacity to go on another airline's forum and post the misrepresentations and half-truths that you have put on this thread over the past couple of years. If I was half as bitter as you are, I'd be on the Delta forum right now cutting and pasting from their most recent 8K and bashing the crap out of Delta. And believe me, from a financial standpoint, there's plenty. But I'm not going to do that. I don't want to take away your reason for getting up in the morning.......

 

[ZMAN777]

Okay, how about everyone take a deep breath and chill for a bit. Right now I'm glad we (UAL) are doing the things that need to be done to exit BK. While this is good news I certainly wish only the best for our brethern at DAL and perhaps NWA. Having been through this for the past 2 1/2 years it's no fun. Take a moment and think about what some others may be facing soon.

At this point many of us at UAL are "battle hardened" from the years of seemingly endless bad news. We all relish a bit of good press even when we know in our hearts that there is still much work to be done. I don't think anyone in this industry can ever really settle back and relax in today's economic environment.

So having said that I suggest we all recognize what this industry has become and let it not make fools of ourselves, our integrity, or our compassion for others who may soon follow the same unfortunate path.

Here's hoping for better times for all.

Cheers,
Z B)

 

[ualdriver]

Hey! He started it........he-he

 

[UnitedChicago]

I'm sure you all feel so smug.

[post="287298"][/post]​

No - I don't feel smug at all. I do - however - take pleasure in pointing out when people are clearly wrong in their opinions. Opinions that are so clearly biased.

You've got to be prepared to accept that you may be proven wrong when you post strong opinions.

Facts always beats opinions.

 

[UnitedChicago]

If I was half as bitter as you are, I'd be on the Delta forum right now cutting and pasting from their most recent 8K and bashing the crap out of Delta. And believe me, from a financial standpoint, there's plenty. But I'm not going to do that.

[post="287316"][/post]​

Very well said. That's what is different between many of us (not all) and World.

 

[767jetz]

Time will tell but I expect the final story will show both companies showing alot of scars for a long time to come - but both are probably likely to be around for a good while to come.

[post="287298"][/post]​

HA! LMFAO!

You sure changed your tune buddy.

Let's be clear about this. No one here wishes any ill will toward our airline brothers and sisters. (Even after NWA and others petitioned against our ATSB application!) Especially after what we've been through.

However it sure feels good to rub our successes in the faces of those like World Traveler, Fish Face, Straaight Jaacket, and even our old nemisis USA320pilot. After all the crap we've taken, and all the BS we've heard about the doom and gloom, and all the predictions of lost aircraft, liquidation, stolen assets, shunning, etc. etc. etc. I for one will sleep well knowing we've disappointed the bottom feeders, pond scum, and vultures who were praying and hoping for our demise.

What goes around comes around!