USAirways announces quarterly results

[mentorforhealth]

Here is a link to the quarterly results anouncement[BR][BR][A href=http://cbs.marketwatch.com/tools/quotes/newsarticle.asp?guid={207E5FAC-EB05-4180-93F8-7B6A5F1FA89A}&siteid=mktw&dist=nbs]http://cbs.marketwatch.com/tools/quotes/newsarticle.asp?guid={207E5FAC-EB05-4180-93F8-7B6A5F1FA89A}&siteid=mktw&dist=nbs[/A]

 

[chipmunn]

[P]US Airways has burned through all of the initial $300 million debtor-in-possession financing.[/P]
[P]Chip [/P]

 

[chipmunn]

US Airways CASM figure reduction to 10.95 cents and $1.33 billion in cash on hand is positive, in fact, US Airways almost has more cash than UAL. The company has not received all of the savings from aircraft and facility rental reductions, improved employee productivity, the new PPO plan and for laid off employees who still receive severance payments.

I suspect the company can drive its unit costs down to 10.2 cents, which would be the lowest of the hub and spoke airlines.

The cash balance is intriguing and gives the airline breathing room, but the problem is the company no longer qualifies for the loan guarantee and further DIP financing, after reevaluating future revenues, which will be discussed at the November 7 Omnibus Hearing in Alexandria.

Also noteworthy, the company said continues to target a first quarter 2003 emergence from Chapter 11, which is extremely important to obtain the remaining $500 million in loan guarantees and the $240 million equity investment.

Chip

 

[ITRADE]

[P]
[BLOCKQUOTE][BR]----------------[BR]On 11/1/2002 1:49:52 PM USFlyer wrote:
[P]1.33 billion in cash?!  Exactly how did the cash build up this much, when I thought US only had about $500 million at the end of Q2.  I know the DIP facility accounts for $300 million of this, but is the rest from simply not paying bills?[/P]----------------[/BLOCKQUOTE]
[P]The company continues to target a first quarter 2003 emergence from Chapter 11. The company ended the quarter with total restricted and unrestricted cash of $1.33 billion, including $897 million in unrestricted cash, cash equivalents, and short-term investments. This cash balance includes $300 million drawn on the DIP facility.[/P]
[P]This is very wierd indeed...[/P]

 

[ITRADE]

CASM was down to 10.95. Thats a plus. Too bad RASM was 9.80.

 

[LDKIAM]

Chip you forget they had over $500 million in cash on hand before the bankruptcy filing and $75 million of that $300 million had to be paid back to Credit Suisse and BOA.

 

[USFlyer]

1.33 billion in cash?! Exactly how did the cash build up this much, when I thought US only had about $500 million at the end of Q2. I know the DIP facility accounts for $300 million of this, but is the rest from simply not paying bills?

 

[ITRADE]

Still, with cash burn rates like that, potential investors are not going to be bustin' down the doors.

 

[ITRADE]

[P]I agree that the CASM figure is a good step in the right direction. However, RASM continues to fall and there seems to be not much relief coming courtesy of either the economy or your friends at JetBlue, Southwest, and AirTran.[/P]
[P]And with fuel prices rising again, the CASM drop may meet the wall.[/P]

 

[atc]

Could you expand upon this?

[blockquote]
----------------
On 11/1/2002 2:08:08 PM chipmunn wrote:

...but the problem is the company no longer qualifies for the loan guarantee and further DIP financing, after reevaluating future revenues, which will be discussed at the November 7 Omnibus Hearing in Alexandria.
----------------
[/blockquote]

 

[usfliboi]

Yeah expand on that chip... No one has said that anywhere ? Is there something factual you can refer me to that says that in writing?

 

[LDKIAM]

Come on Chip lets see facts from the Company, ATSB, RSA and the Bankruptcy courts stating those facts!

 

[DLFlyer31]

[blockquote]
----------------
On 11/1/2002 2:08:08 PM chipmunn wrote:
I suspect the company can drive its unit costs down to 10.2 cents, which would be the lowest of the hub and spoke airlines.
----------------
[/blockquote]

Not quite.

CASM for 3rd qtr 2002.

US 10.95
DL 9.81
NW 9.24
CO 8.90

A CASM of 10.20 is a dramatic improvement for U, but I don't know if it is enough. It still isn't even close to being competitive with the low-fare guys whose CASM's are in the 7 cent range.

Also remember, the other hub and spoke carriers are cutting costs and reducing their CASM's.

 

[chipmunn]

[P align=justify][FONT face=Times New Roman size=3]Chip said: But, the problem is the company no longer qualifies for the loan guarantee and further DIP financing, after reevaluating future revenues, which will be discussed at the November 7 Omnibus Hearing in Alexandria.[/FONT][/P]
[P align=justify][FONT face=Times New Roman size=3]ATC asked: Could you expand upon this?[/FONT][/P]
[P align=justify][FONT face=Times New Roman size=3]Usfliboi asked: Yeah expand on that chip... No one has said that anywhere ? Is there something factual you can refer me to that says that in writing?[/FONT][/P]
[P align=justify][FONT face=Times New Roman size=3]Chip answers: On October 25 Dow Jones Newswires wrote, the nation's seventh-largest airline said it needs to tighten its belt more if it expects to regain profitability, win a federal loan guarantee and receive further debtor-in-possession funding. It filed the information Thursday with the Securities and Exchange Commission. Earlier this week, the company told creditors rising fuel prices and the industry's dismal outlook necessitate further trimming.[/FONT][/P]
[P align=justify][FONT face=Times New Roman size=3]To view the entire article click on the following link:[/FONT][/P]
[P align=justify][A href=http://www.quicken.com/investments/news/story/?story=NewsStory/dowJones/20021025/ON200210250326000179.var&p=UAWGQ][FONT face=Times New Roman color=#000000 size=3][A href=http://www.quicken.com/investments/news/story/?story=NewsStory/dowJones/20021025/ON200210250326000179.var&p=UAWGQ]http://www.quicken.com/investments/news/story/?story=NewsStory/dowJones/20021025/ON200210250326000179.var&p=UAWGQ[/FONT][/A][/A][/P]
[P align=justify][FONT face=Times New Roman size=3]Chip comments: With the revenue deterioration the airline can no longer provide a business plan the meets the ATSB requirement to provide a 7 percent profit margin within a 7-yer period. This must be proven to an outside auditor, Fitch Rating. [/FONT][/P]
[P align=justify][FONT face=Times New Roman size=3]Today USA Today wrote [STRONG]CEO David Siegel painted a bleak outlook in his weekly recorded telephone message to employees. We're busy reassessing the current softness and how that's likely to continue into next year, he said. Make no mistake, we have a steep challenge ahead of us. [/STRONG]The company may have to reforecast revenue for next year and look for new ways to boost revenue or save money, he said, noting that the environment is tough for most airlines. Quite frankly, the industry over the last several weeks has just completely fallen off a cliff. And that's caused every major carrier to scramble for ways to balance the equation by cutting more costs.[/FONT][/P]
[P align=justify][FONT face=Times New Roman size=3]Chip[/FONT][/P]

 

[LDKIAM]

[P][STRONG][EM]The nation's seventh-largest airline said it needs to tighten its belt more if it expects to regain profitability, win a federal loan guarantee and receive further debtor-in-possession funding. It filed the information Thursday with the Securities and Exchange Commission. Earlier this week, the company told creditors rising fuel prices and the industry's dismal outlook necessitate further trimming.[/EM][/STRONG][/P]
[P]Just an opinion not facts, anyone can say anything[/P]