Atsb Denies Loan

[JetClipper]

I think it's funny that Frontier, et al were so opposed to the loan. United will now achieve an even lower cost structure and be that much more of a competitive threat.

Ummm, how do you figure that?

 

[UnitedChicago]

Figure what...not sure what part of the statement you're questioning.

At the end-of-the day United will most likely cut more expenses - therefore lowering their CASM. The result is a stronger, more viable United.

Many speculated that United wouldn't have propsered if they had been granted the loan.

SO - this whole process results in a more competitive United. Make sense?

 

[ACrazy8]

UAL is sooooooo gone. What a shame.

 

[UnitedChicago]

UAL is sooooooo gone. What a shame.

No they're not. I haven't read one analyst say that this is anything but good for United in the long run.

 

[Busdrvr]

Well, that's at least two folks who won't be getting a Christmas Card from me....

 

[Walmartgreeter]

This may actually be a blessing in in disguise. We may be better off without the rerstrictions imposed by them.

You are so right. You are better off NOT having to get the loan backing, especially if you can work the deal and go it alone. That indeed is going to be tough, but at least you have a chance. I never heard the board say U could go it alone, so you are better off there. Good luck.

 

[firstamendment]

Blame US Airways? Come on, It is very easy to point fingers but remember when you do, you have three fingers pointing right back at the one responsible. Please don't go using US Airways as a scapegoat for the denied ATSB application. :rant:

Listen, I work for US Airways and can say whatever the hell I want. If our management team had done a better job with their bankruptcy, the atsb would probably be willng to consider another quarantee. Also, look at the effect we have had with the DAL pilots. Time after time we are mentioned as the reason for their hesitations to take cuts...why? Because "look what happened at US Airways." To somehow pretend we haven't negatively influenced this industry is an understatement. :angry: :angry: :down: :down:

 

[C54Capt]

I think it's funny that Frontier, et al were so opposed to the loan. United will now achieve an even lower cost structure and be that much more of a competitive threat.

Maybe United should thank them in the end. HAHAHHAHAH

Chicago,

C'mon, you don't really believe Frontier convinced the ATSB not to give UAL the loan do you? The media liked the story about a bunch of small carriers lobbying against the loan guarantee, but the real dogs in the fight were all the other legacy carriers. NWA, CO, AA were probably the strongest anti-UA lobbyists with their full-time staffs in Washington working tirelessly spending millions of dollars against UA's cause. So don't be duped by the media and if you really want to thank somebody for UA's loan denial, at least thank the appropriate culprits.

 

[PhillyFlyGuy]

Listen, I work for US Airways and can say whatever the hell I want. If our management team had done a better job with their bankruptcy, the atsb would probably be willng to consider another quarantee. Also, look at the effect we have had with the DAL pilots. Time after time we are mentioned as the reason for their hesitations to take cuts...why? Because "look what happened at US Airways." To somehow pretend we haven't negatively influenced this industry is an understatement. :angry: :angry: :down: :down:

I agree with you on the bankruptcy issue however to blame US Airways is not totally fair. Past US Airways management can be blamed but overall the airline industry is it's own worst enemy. US Airways had an effect on the DAL pilots give me a break they have their own cost structure to deal with just like all the legacy airlines. Air Tran is smelling DAL blood in ATL I have to say the LCC's are winning with expansion, high crude oil prices are taking thier toll and the LCC's cost structure is low. All US Airways is trying to do right now is to get out of the sinkhole they find themselves in. Try the LCC's are winning and have negativly affected ALL legacy airlines.

 

[UnitedChicago]

Chicago,

C'mon, you don't really believe Frontier convinced the ATSB not to give UAL the loan do you? The media liked the story about a bunch of small carriers lobbying against the loan guarantee, but the real dogs in the fight were all the other legacy carriers. NWA, CO, AA were probably the strongest anti-UA lobbyists with their full-time staffs in Washington working tirelessly spending millions of dollars against UA's cause. So don't be duped by the media and if you really want to thank somebody for UA's loan denial, at least thank the appropriate culprits.

C54:

No I don't blame Frontier or any airline for that matter for United's denied application. I'm merely saying that I think it's funny that they do make the stinks that they do - whether through the media or privately - considering that the end result of a denied loan will be a stronger United with lower CASM.

If they had been granted the loan - many speculated it would be a temporary fix to still unresolved problems.

Does this clarify things?

 

[Busdrvr]

SVQ has it correct in an earlier post. forget FRNT, forget U, forget ATA and Airtrash. The letter SPECIFICALLY cites the lack of "need". It does NOT say "you need to cut pay" or "terminate your pensions". It basically says "get your own loan". the modifications I'd expect to see in short order would be for UAL to offer a package with HIGHER participation on the part of the JPM ect. I'm thinking they want to back a LOWER percentage of the total loan value. Is it possible that another loan shark would blood more like pension changes, lower pay? CERTAINLY, however, the ATSB does NOT attack the business plan or cost structure in ANY way. Chins Up!!

 

[firstamendment]

Try the LCC's are winning and have negativly affected ALL legacy airlines.

Well, we can agree on this one. All of us at US and UAL should look at JB, Airtran, and SWA as the enemy.

I'm glad UAL has been looked at in a positive manner. What is the opinion of the employees of UAL? DOES this set UAL back? ARE you guys out of the woods? Just take your time. Don't try to be a hero like Seigel at U attempted.

 

[Busdrvr]

"Brace reiterated the company's view that the stabilization board, when it rejected United's application, was not fully aware of the company's willingness to produce "enhancements" to its proposal.

Asked about the panel's assessment that the airline's cost-cutting moves and improved access to capital markets might allow it to survive without the loan guarantee, Brace demurred.

"We don't think we have access to $2 billion of exit financing, absent the ATSB (loan guarantee) at this time," he said. "We are focused on going through the ATSB process and when we're through with that we'll talk about what happens next."

Brace would not give details about what specific changes or cost cuts the airline would make in its proposal, beyond the roughly $5 billion in cuts the airline has made since filing for Chapter 11 bankruptcy in December 2002.

"We're going to keep those discussions between us and the ATSB private," he said. He has previously suggested the company could emerge from bankruptcy without the guarantee."

Reading between the lines, I'd say the changes are in the percentage of the loan backed by the government. IOW, UAL may feel that they could get $1 billion on the open credit market, just not two.

 

[tumbleweed]

Its' quite amazing the amount of bottom dwellers that come out from beneath their rocks to dance in the street at the prospect of our demise. After further review however it might not be time to pop those corks just yet.

What happened yesterday most likely will simply escalate the pace of the "great race to the bottom". This could essential be the worst thing for the entire industry, maybe moreso than for UAL. I don't forsee any radical route or asset sales as those would simply raise our CASM. We are not in need of immediate cash. Anything that would fetch a decent buck would probably also be our most profitable segments which the company would not be inclined to sell.

More realistically, a worst case senario is that they come after our pensions. Yea, it beats closing the doors but it would sure suck... Lets, for argument sake, imagine UAL in their present form without the burden of pension payments. What would this do to our competition with AMR. Could they afford to compete? What about Frontier in Denver? How long could they survive without massive cuts themselves?

I think the effects of this decision could be further reaching than what appears at face value.

 

[UnitedChicago]

however, the ATSB does NOT attack the business plan or cost structure in ANY way. Chins Up!!

They didn't say the business and cost structure was great either now did they? This is obviously political and I'm sure that they spared embarassing United outright.

United's CASM's are higher than American's. This must change.