Bad news

[Ukridge]

BREAKING WIND!

Ah, er, uh, make that breaking news

Broken here for the first time by Ukridge!

All right. I just could not resist. Although I certainly cannot make heads or tails of the latest financial news by United, I noticed that on another pitch our erstwhile prognosticator was eager and quick to assure the gentle reader that United was indeed in line to miss its DIP targets and face a destruction and liquidation so swift and complete that it would make the eradication of Sodom and Gomorrah look like a slap on the wrist. Ignore the fact that the DIP targets have steadily been met – October is the new “end of the worldâ€￾ day.
Now admittedly, your frequently dyspeptic and wind breaking correspondent Ukridge does not have the slightest idea if United actually made or lost money in May. In fact he would be grateful if someone could explain the numbers. The important point is rather that those in high places in the sanctums of airline knowledge know that they only spell gloom for United as the DIP lenders are already forming a cabal to discuss which day the plug will be pulled. In fact, rumour has it that certain USAirways pilots are staying in their room and holding their breath until this very event occurs. Additional rumour has it that no exceptions will be made to the breath-holding exercise even to take meals. “They better hurry up an liquidate – I cannot hold my breath foreverâ€￾ were the last words heard coming from aforementioned seer. Inside sources however, revealed that this crewmember actually enjoys holding his breath as it adds legitimacy to the breathless pronunciations so frequently made concerning United.
So workers of United. Whatever those pesky numbers really meant. You just knew in your hearts that they could not portend well.
Sally on!

 

[737nCH11]

Yeah!! I wanna fly one of those shiny new 777s. JUST KIDDING!!!!

 

[novaqt]

Ukridge:

Are you referring to USAirways 320 pilot Capt. Chip Munn, The self-proclaimed UA negative analyst who is hoping UA goes under so he can increase his seniority over at USAirways? He only cuts and pastes the negative from all his self-centered research.

 

[Ukridge]

Yes novaqt, the target of the sendup was indeed Mr. Munn. Although my attempt at humour may have been a bit sophomoric, I just knew that he would weigh in with a negative spin regarding the latest financial news. As I mentioned, it would be nice for someone to explain these numbers and if they are good or they are bad. Irrespective of that, I found Mr. Munn trumping the near certainty of the DIP lenders pulling the plug this fall. He remains convinced that there is no possible rework of the agreements or that the ATSB will provide additional lending opportunites.
I am simply an observer who has grown fascinated with the consuming glee that appears to run through these "cut and paste" jobs. Will United survive? It is not for me to even venture a guess as it lies far outside my expertise. I do notice though, a strain that one finds in those who breathlessly write about our royals and I must admit that I find it rather in poor form. When one so takes to the stage, then one must be ready for the pen of the critic. As Lark so aptly states, "breaking" a story has a completely different conotation than posting it on a free-for-all reader forum.
Cheers

 

[TheLarkAscending]

When informed that one could not break news or information on a message board, a new technique was employed. Underscoring the word first. This insured that readers would understand that by stating that one placed the information on the message board before anyone else (to his knowledge) meant it was indeed broken by that poster.

Gee thanks, I didn''t know that if I''d read it elsewhere I had to congratulate and bestow honor upon the person that did the copy and paste job, rather than the actual professional journalist that did the grunt work to get the story and have it printed.

 

[novaqt]

Ukridge:

UA did, indeed, make a profit in May. However, UA was negative in April. We will have to see what UA posts for June when the quarter ends. I will be willing to bet that June will be profitable also due to summer travel. The profitable summer should enable UA to qualify for the Oct. DIP financing. Right now UA is hiring again in the US. Don''t know about internationally. Reservations is really understaffed and call volumes are going through the roof. The airline in the past has been slow to respond to the market, but not any more. The airline, under Mr. Tilton, is rapidly responding to the market place. We pull flights where the market is soft and are putting flights back on in the markets where they are needed. The SFOTPE flight has been discontinued for now due to the lack of customers travel to the Pacific market due to SARS. In Europe, due to the demand, UA is putting back into service the flights that were pulled after 9/11.

I hope this answers some of your questions.

 

[iflyjetz]

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On 6/30/2003 9:09:36 AM 737nCH11 wrote:

Yeah!! I wanna fly one of those shiny new 777s. JUST KIDDING!!!!

----------------​

You fricking U pilots keep trying to steal my seat!
737nCH11, I know that you''re kidding and hope that the rest of my UAL brethren realize that you''re not serious. I wish you guys at U all the best. Seriously. You guys have been through some tough times and deserve some good karma.
As for a certain pilot at U who has red curly hair and wears floppy shoes, I am aware that we have some pilots at UAL who also carry squeaky bicycle horns and wear water squirting flowers in their lapels. But you gotta love their neon polka dot clothing and face paint.
When reading an unnamed person''s posts, I try to keep in mind that every village needs an idiot. He makes it easy to figure out who''s got a lock on the job on this forum.

Tailwinds,
Iflyjetz

 

[Cosmo]

Following up on novaqt''s post above, here''s more "bad news" from United regarding increased Transpacific flights in August. See this United press release issued earlier this afternoon.

 

[lownslow]

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On 6/30/2003 402 PM Cosmo wrote:

Following up on novaqt''s post above, here''s more "bad news" from United regarding increased Transpacific flights in August. See this United press release issued earlier this afternoon.

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Of course, if you read the beginning of the press release, it appears that UAL will only be offering 3349 flights in August, or about 108 flights a day. Compare that to the "more than 3300 daily flights" the same press release says they''re flying now, and either they''re dramatically cutting capacity, or going out of business on August 2nd...

 

[Bizman]

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On 6/30/2003 12:00:58 PM novaqt wrote:




UA did, indeed, make a profit in May.

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Actually, according to their press release, they did show a profit. But it wasn''t from selling tickets.
It was from the money the government sent to all the airlines. Without that it was another losing month.

 

[737nCH11]

Actually the government gave money to the airlines to cover losses associated with the war. Without the war, UAL would have been profitable.

 

[iflyjetz]

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On 7/1/2003 1:08:27 AM Bizman wrote:
Actually, according to their press release, they did show a profit. But it wasn''t from selling tickets.
It was from the money the government sent to all the airlines. Without that it was another losing month.

----------------​

Bizman, here''s the press release:
http://biz.yahoo.com/prnews/030627/cgf017_1.html

Notice the following: Excluding the government assistance and approximately $45 million received from large one-time asset sales, the company''s cash balance increased approximately $111 million for the month or $3.5 million per day.


UAL was cash positive PRIOR to one-time additions. One thing that we don''t know about the $300 million received from the government is how much of that money was due to UAL''s CRAF flying.

 

[USA320Pilot]

Ukridge:

It came to my attention via an email message that I have become a popular figure on the United Airlines message board, and low and behold its true. I find this fact interesting and somewhat flattering that those parties interested in United would discuss my internet posts.

However, I take exception to some posters who simply "shoot the messenger" or misrepresent my comments. To set the record straight, I have continually said I believe United will not liquidate, but could be forced to sell assets to fund "on-going" operations. In addition, I have said the two United federal government one-time gains, the April $365 million tax refund and the May $300 million bailout, likely enabled the Elk Grove Township-based airline to meet its DIP financing requirements. However, going forward in my opinion the company could violate these covenants in October when the carrier must be cash flow positive.

US Airways chairman of the board David Bronner has said in three separate interviews that he is interested in acquiring United assets. In an interview with Ted Reed of the Charlotte Observer Bronner speculated that United has a 50-50 chance of surviving. He said that if United were to sell assets, he would consider backing the purchase of some "if it would be beneficial to US Airways."

I believe there are four important business arguments that fuel the speculation that another corporate transaction could occur between US Airways and United, the new domestic business partners. US Airways due to its relationship with RSA has acquisition capital, whereas virtually every other U.S. network carrier has significant liquidity issues, a junk bond rating, and limited if not non-existent access to the capital markets. However, on the other hand, with its $25 billion in assets, Bronner with the stroke of a pen can purchase assets for US Airways if he so desires.

Also noteworthy, I believe a strong business argument can be made that if United is forced to sell assets, its Plan of Reorganization can be strengthened by divesting of assets to US Airways because a portion of the lost revenue could be retained within the alliance, unlike if a divestiture occurs to a non-United business partner.

Meanwhile, I find it interesting that in ERP I and II United ALPA reached an agreement with management to have a pre-nuptial clause in their contract, but the recently ratified concessionaire agreement provides merger and fragmentation language identical to that of the US Airways pilot contact. The only exception is the United agreement would only require their airline to transfer employees if 50% or more of the assets are sold and the US Airways agreement requires management to transfer pilots to the surviving business entity if 15% or more of the Arlington-based airline’s assets are sold.

Finally, former United president Rono Dutta serves as a RSA consultant and was appointed to the US Airways board of directors in April. What’s interesting about this appointment is that Dutta told a friend of mine at dinner in the fall of 2001, just a few short months after United’s attempt to acquire US Airways was terminated, that he would "not sleep until he put United and US Airways together."

Best regards,

Chip

 

[Fly]

US Air and United together.....US air flying the RJ''s and UAL flying all the rest. Yes, I can see that part as true. Now is the time for the UAL groups to dump their unions and find independant unions so we can staple US Air to the bottom like American did.

 

[FWAAA]

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On 7/1/2003 3:00:43 PM iflyjetz wrote:

----------------
On 7/1/2003 1:08:27 AM Bizman wrote:
Actually, according to their press release, they did show a profit. But it wasn''t from selling tickets.
It was from the money the government sent to all the airlines. Without that it was another losing month.

----------------​

Bizman, here''s the press release:
http://biz.yahoo.com/prnews/030627/cgf017_1.html

Notice the following: Excluding the government assistance and approximately $45 million received from large one-time asset sales, the company''s cash balance increased approximately $111 million for the month or $3.5 million per day.


UAL was cash positive PRIOR to one-time additions. One thing that we don''t know about the $300 million received from the government is how much of that money was due to UAL''s CRAF flying.

----------------​

UAL was cash flow positive because its calculation of cash flow included no payments of interest (since it is in Ch 11). Its cash increased because it didn''t pay any interest payments. UAL''s EBITAR calculation isn''t exactly the same as real world cash flow positive.

If UAL''s cash flow were analyzed like other airlines not in Ch 11, it likely would not have been cash flow positive.

Nevertheless, good news for UAL.