United Revenues Increasing

[Busdrvr]

In regard to RSA owning United EETC's, the information was provided to me by US Airways senior management. Specifically, which tail numbers? I do not know nor do I care because that's not the point.

Meanwhile, United did narrow its July net loss to $112 million in July from a $310 million in June, but the fall travel season will be a challenge for all ATA companies. I believe it’s good news that the company’s revenue climbed 10% in July year-over-year, which exceeded the ATA average of 8.1 percent, but I believe this needs to be put into perspective. Let’s not forget that United was dead last for hub-and-spoke RASM for Q2, so it’s difficult to analyze a 10% jump for the same period last year. What I would like to know, which is only reported on a quarterly basis (except for Continental), what’s the Chicago-based airlines RASM in relation to its peers?

Regardless, the in-court restructuring clock is ticking because the company has just about three months to submit its POR, settle major disputes at Denver and Dulles, answer a motion filed with the court by the hub cities (Los Angeles, San Francisco, Chicago, Denver, and New York City) probably apply and hopefully receive a loan guarantee, fund its pension plans where Tilton told employees in a recorded message the retirement concessions are not enough to meet its obligations, find some sort of exit financing, or find an equity plan sponsor. Furthermore, if the face of post Labor Day traffic declines, United must continue to meet more stringent DIP financing requirements to be cash flow positive, obtain certain revenue targets, and have a cumulative EBITDAR of $46 million in October and $112 million in November.

Can it be done? Yes, but with the seasonal decline in fall travel, the amount of work that needs to be done quickly, and the need to emerge, the company may be forced to sell assets to emerge.

Again, is it better to sell assets to US Airways to keep the revenue within the alliance, sell assets to other competitors, or liquidate the company if the airline cannot obtain exit financing? Let’s be honest here, if United had such a strong POR then why, up to this point, has the airline been unable to obtain exit financing, since up to $1.5 billion in DIP financing will have to be repaid to emerge from court protection?

Best regards,

Chip

you make me laugh!!!
1. So in other words, you have no earthly idea if Davie has the pink slip for 1, 5, 10, or 32 UAL 757/767s. Interestingly, if you look at the cash disbursements for July for lease payments, RSA doesn't show up on the list.
2. This may be a little bit complicated Chip, but to get an approx figure for UALs current yield, you take the yield from last year and multiply it by 1.1. If the rest of the industry is reporting a YOY increase of 8.1%, then you could get approx numbers by multiplying their yeilds from this period last year by 1.081. Sure, some will be higher and some will be lower (U), but it should give you an approx number. When UAL says "a 10% yoy increase in yields", then the revenue performance in Q1 or Q2 are IRRELEVENT. Was UAL bottom for Q3 in 2002? Yet they are doing better YOY vs the industry average. Now read this slowly, If UAL was middle of the pack last year, and has a better YOY bump than the industry average, then it follows that they are likly NOT the bottom yielding carrier.
3. Why do you continue to cite "net", then use it to show how UAL will have trouble meating EBITAR? UAL's EBITAR for the month of June was likely in the range of 200 MILLION PROFIT, with a positive cash flow of nearly 4 million a day. Is this stuff that hard to understand?

 

[737nCH11]

Last month's reasons for UAL's demise included the fact that their unit revenue was lagging the industry. Has anyone from Crystal City congratulated UAL on their 10% unit revenue improvement? I believe that this puts them ahead of some of the other majors. 😱

 

[767jetz]

Chip,

As for UA having to sell (significant) assets to emerge... Keep dreaming. Even if it were true, it would go to the highest bidder, who I guarantee wouldn't be USAir.



You keep claiming that UA doesn't have exit financing, yet you will not admit that you really don't know what's going on within United. All you claim is to know what some secret USAir managment source tells you. Yet you have no proof that what they tell you is true or factual. You are really in denial of the fact that your sources don't know UA's plan. And As Tilton has been quoted saying, our competition will not know until we're good and ready to let them know. Why is this tactic so hard for you to comprehend? Good Grief, Charlie Brown!!!



How can you continue to overlook the obvious signs that UA has turned the corner?? If UA's outlook is so bleak and they're plan is so incomplete, why is Reuters saying "United Airlines says on brink of China marketing deal" ??? Expand into China, yet sell assets to emerge?? Your logic doesn't follow. Your grand plan and wishful thinking is sinking faster than the Titanic.



Who cares if RSA holds any paper on UA aircraft. If they do, then they are lessors just lke the rest and will be dealt with just like all the rest. Negotiate a deal or take the planes. Good luck getting a deal elsewhere with a saturated aircraft market. Either way it doesn't affect the outcome of UA.



Finally, my biggest gripe is that you keep quoting Q2 results. Here's a news flash... Q2 is gone. It's past. It certainly has nothing to do with right now or going forward. During Q2, costs were WAY higher than they are now, and the cost continue to fall. Furthermore, the revenue picture is improving every day. Nothing is stagnant. Sure a seasonal downturn is coming. But so are new markets and oportunities, such as China. So comparing present day UA to Q2 UA is apples and oranges. Things are changing daily and changing for the better. Again your logic is flawed by saying Q2 was bad, so Q3 & Q4 will be just as bad or worse. That ignores the continuing progress on the cost and revenue side.



You keep clinging to that liferaft if it makes you feel better. But let me point out something to you. While you're paying so much attention to UA and secret corporate transactions, your own company may very well be sinking. Is USAir profitable these days?? No, it's not. Have you noticed all the infighting among the USAir employees?? I'm sure your customers have. When people look at USAir they don't see a group of employees who have any confidence in their leaders. They don't see employees standing together and standing behind their management.



In the end I would wager any amount of money that it's the people and their spirit that will make the difference, not your wishful thinking.

Best regards jetz

 

[tadjr]

:jerry: :jerry: :jerry:
I guess as long as there is an audience the shows will continue......

 

[USA320Pilot]

I find it interesting that the UA employees feel the need to "shoot the messenger" or try to cut down US Airways in response to my posts. This internet sparring match is not something I value, however, I will make one more point.

There is nothing I have posted that is not fact and if I post an opinion, then I use the phrases "I believe" or "In my opinion". If I make a mistake, I publicly admit when I am wrong.

Regardless, the end of the busy travel season is upon us and UA must meet more stringent DIP financing terms in October, fund its pension, complete countless restructuring agreements. find exit financing, and file its final POR/Disclosure Statement in three months, among other things.

As I have said before, an informed airline analyst, who you all have seen his name in the national news media, told me last week that UA may have to sell assets to obtain exit financing and the US - AGAA Pittsburgh airport negotiations are being held hostage to the UA restructuring. Why? Dependent upon the US-UA negotiations, US may opt to move some of its resources westward from Pittsburgh if it takes custody of UA assets.

Separately, let's not forget David Bronner, the US chairman of the board, speculated that United has a 50-50 chance of surviving and if United were to sell assets, he would consider backing the purchase of some "if it would be beneficial to US Airways."

Will it occur? Maybe, maybe not, but it's being discussed at WHQ and CCY.

Best regards,

Chip

 

[767jetz]

Chip,

I find it interesting that you claim not value this internet sparring match, yet you continue to have a need for the last word, and a need to keep posting the same old claims over and over again. Why are you so emotional about this issue and singlemindedly attached to what some analyst tells you, to the exclusion of all other information? Especially an analyst with no information from with in United Airlines?Are you really that closed minded to other possibilities?

And why do you keep repeating that the USAir chairman stated that UA had 50-50 chance of survival? Does he know more about UA than our own CEO? Is his SPECULATION gospel? There are many who have said that USAir has a less than 50-50 chance of survival. Should everyone believe this statement to be true just because it's been stated and talked about? Don't go shooting the messenger now.

Chip there is plenty that you have stated on these message boards that is SPECULATION and OPINION, and not fact. Whether you say it's opinion or not. And you rarely, if ever, publicly admit when you are wrong. That's why your posts receive so much attention. No other reason. And the people here have been specifically pointing it out for a long time now. No need to review it again.

Why do people "shoot the messenger?" Did you ever hear the story of the boy who cried wolf? I think he eventually got shot too.

Chip, IF you are so sure that your crystal ball is accurate, and IF you really don't value the sparring, and IF you understand that no one here is going to be convinced that your speculation is valid, and IF you really don't just have some need top get the last word in... Then prove it by letting the subject go without further repetition.

No one on this board, including you, know for sure how things in this industry will turn out. You have your theory, we have ours. Why don't we just leave it at that?

Best regards

jetz

 

[Fly]

767jetz:

Why do people "shoot the messenger?" Did you ever hear the story of the boy who cried wolf? I think he eventually got shot too.

Nope, he was eaten.....hey Chip!, get in my belly, I want to EAT you. 😉

 

[novaqt]

Chip:

I find it interesting that the UA employees feel the need to "shoot the messenger" or try to cut down US Airways in response to my posts. This internet sparring match is not something I value, however, I will make one more point.

There is nothing I have posted that is not fact and if I post an opinion, then I use the phrases "I believe" or "In my opinion". If I make a mistake, I publicly admit when I am wrong.

Novaqt responds:

In reponse to your above quotation, Chip, UA employees who post on the United Airlines board are simply BORED and TIRED of your over-and-over-and-over repetitiveness.

READ MY LIPS...UA employees have no interest in the constant rantings of a USAirways employee.

Please do not repeat yourself or, if you find that too difficult, go elsewhere. I frankly am only interested in what my UA bretheren have to say!!!

 

[Cosmo]

There is nothing I have posted that is not fact and if I post an opinion, then I use the phrases "I believe" or "In my opinion". If I make a mistake, I publicly admit when I am wrong.

Chip:

The first ten words of the above quote is an outright lie!

As I pointed out to you yesterday, you have (on several occasions) used a bogus number of $1.096 billion to describe YOUR idea of United's "real" net loss in the second quarter of 2003. So I'll say it again -- the $365 million tax refund was a CASH FLOW item, not an INCOME STATEMENT item, and thus had NO IMPACT on the carrier's second quarter net loss. I even provided you with a link to United's press release outlining its second quarter financial results so you could see this with your own eyes, but you apparently have not availed yourself of it. Why is this concept so difficult for you to understand, or at least to accept?

As of this writing, you have neither corrected your "estimation" of United's second quarter net loss nor admitted that your calculation was WRONG. So that makes the second sentence in the above quote a lie, too. :angry:

Two lies in one short paragraph -- you're on a roll, Chip! Please explain why we should believe anything else you say on this board, especially when it's from your "secret" sources.

 

[Cosmo]

Regardless, the end of the busy travel season is upon us ...

Chip:

If you really understood the airline industry in the U.S., you would know that while overall traffic does indeed drop after the Labor Day holiday, business travel (even as anemic as it is this year) usually increases in the Fall. And despite your predictions to the contrary, I've seen no reason to expect that such a trend wouldn't continue this year. In a previous post, I even provided you with a link to a recent Washington Post article discussing the rebounding U.S. economy.

In general terms, the economy seems to be picking up, which is always good for business travel. Specific to airlines, while the ATA may be forecasting a drop in traffic in the Fall, the yield should increase to some extent, reflecting the increased business component of overall traffic numbers. More specifically to United, traffic to and from Asia appears to be returning with a vengence, causing the carrier to announce yesterday that virtually all of its pre-SARS Transpacific service (except SFO-TPE, IIRC) will be in place by the end of October. This should have a substantial positive impact on United's financial results in the third and fourth quarters of this year, even if the carrier's domestic traffic weakens during that time.

So, can you at least entertain the possibility that the next two quarters might not be as bleak for United as you would have us believe?

 

[USA320Pilot]

I am tired of this thread as well and for those who respectfully post, let's just agree to disagree.

Cosmo, I have never purposely lied, mislead, or otherwise intentionally provided false information. However, like all human beings I have made mistakes and if I do I have always admitted my error.

Regardless, everything I have posted, that could be considered "inside information", has come from leading Wall Street Analysts, people in the National News Media, ALPA officials, Dave Siegel, senior US Airways management personnel, and two people in United management.

As we all know, each U.S. citizen has the constitutional right to believe what I write or disregard it, but every word is true to the best of my knowledge.

Regards,

Chip

 

[Cosmo]

Cosmo, I have never purposely lied, mislead, or otherwise intentionally provided false information.

Chip:

With all due respect, that is precisely what you have done regarding United's second quarter 2003 net loss! In yet another attempt to show United in the worst possible light, you "manufactured" a 50% increase in the carrier's quarterly net loss after special items so that you could dramatically (albeit erroneously) claim that it totaled nearly $1.1 billion. Despite evidence that proves you fabricated the $1.1 billion figure (contained in United's press release discussing its second quarter financial results, where there was NO tax credit amounting to $365 million shown on its income statement), in your most recent post you have not acknowledged even the possibility that your calculation was WRONG. And IMHO that makes the claim that you "have always admitted [your] error" somewhat dubious, to put it charitably.

You're tired of this discussion and you want to end it? Fine, consider it ended (at least from my perspective). But don't try to claim the moral high ground in this debate -- as far as I'm concerned, you've ruined your credibility by playing fast and loose with the facts, even when presented with evidence that contradicts your assertions. After all, why let the truth spoil any of your pre-conceived notions? And BTW, doesn't that make you a "sophist"?

 

[767jetz]

OH NO!!!!!! Please don't call him a sophist :unsure:

It will only encourage him to continue.

 

[767jetz]

Fly,

Now that's funny!!!!!

You made my day! Thanks...

jetz

 

[USA320Pilot]

Cosmo:

There is nothing I said that wasn't true and with all due respect, I believe your comments are inaccurate and off base. The principal issue is you and others do not like the remarks and the potential outcome, however, another respected airline consultant recently told a colleague of mine that for United to emerge the airline must sell assets.

Hummm????

Chip