Could Us Airways Merge?

[Twicebaked]

I recently had the privlage of spending time with Mr. Tilton, CEO of UAL, last Tuesday in ORD. I asked him directly about US Airways and here are HIS comments

You must be a pilot for United!!! Denial
I am so sure that he told all that to just a normal Joe.
He will tell you anything you want to here.
He would not let on anything that could possibly leak out.
Of course it WOULD be what you want to here.

 

[Twicebaked]

The UAL f/a's have already begun a signing to dump AFA so that we will not have to accept U f/a's into our seniority (of course, I think a blending of seniority is the fairest way, but not slotted in. Perhaps 1 for 2)

Get rid of AFA then. See what happens to United f/a's if in fact US Airways takes United over. You will be screwed ROYAL. You will be crying a different tune then won't you?

 

[Cosmo]

If the Denver Posts comments today (that United's planes are booked more fully and at higher fares than last year, analysts predict a fourth-quarter loss in the range of $400 million to $500 million," not including bankruptcy costs) come true, than United could be in deep, deep trouble by the first week in March when the POR must be filed, where the airline could lose about $1 billion in Q4 and Q1, not including bankruptcy costs.

Chip:

Are these the same analytical geniuses that predicted United's 3rd quarter financial results? According to an article about United in Friday's Wall Street Journal (authored by Susan Carey, one of your favorite jounalists), United's actual results before special items were much better than the analysts predicted. As the article stated, "Without those [special] items, ... the loss for the quarter would have been $37 million, or 36 cents a share. Analysts polled by Thomson First Call were looking for a loss of $1.52 a share, excluding [special] items."

So in other words, these Wall Street "analysts" missed predicting United's actual 3rd quarter net loss (excluding special items) by a factor of more than 4-to-1. What makes you think that their 4th quarter prediction is any more accurate?

 

[N628AU]

N628AU said: "US has no cash to buy UA."

Chip comments: I agree, but RSA and the ATSB does.

N628AU said:"US restructuring agreements return everyone to pre concession contracts upon a change in ownership."

Chip comments: In regard to ALPA, this is untrue and I suspect the other labor agreements do not contain this clause. Regardless, in the scenario I disucssed US would be the survivor.

Chip,

How is the ATSB going to pony up cash to US to buy UA? I hope for your career you are not in line for a random drug test if you believe that.

As for the IAM agreement, the last time I saw it, if another company buys US, the pay rates and everything go back to the old contract.

 

[Cosmo]

Furthermore, just yesterday in an Omnibus hearing Judge Wedoff approved United’s Orbitz sale overriding an objection. Why? United needs the cash. In fact, Dow Jones reported "This IPO (Orbitz) will undoubtedly be of assistance to the debtor," Wedoff said. UAL needs liquidity and is constrained by its ability to raise cash by other means, he said.

Chip:

Nice attempt to spin this news in the most negative anti-United way possible. But according to this article in the October 15, 2003, edition of the Denver Post, United is actually going to use the proceeds from the sale of some of its Orbitz stock to pay down bankruptcy debt. As stated in the article's second paragraph, "The sale of stock would help the airline reorganize more quickly and efficiently, spokesman Jeff Green said today. Proceeds would be put toward paying off bankruptcy loans."

This doesn't sound like the actions of an airline desperately in immediate need of cash. So yet again, the facts contradict your pre-conceived notions about United's progress while in bankruptcy.

 

[Cosmo]

Chip:

One last comment. Also in yesterday's Wall Street Journal article about United by Susan Carey that I mentioned in a previous post, she writes in the article's penultimate paragraph (with regard to the DIP monthly EBITDAR thresholds), "UAL also expects to meet those covenants in October, a month when it will for the first time be required to show that its cumulative operating results since December [2002], when it filed for Chapter 11, are positive."

You have been saying for months now that you expected United to miss its October DIP EBITDAR requirement. In light of the above quote, which Ms. Carey based on comments made by both Glenn Tilton and Jake Brace, have you now changed your opinion about United's prospects for October?

 

[iflyjetz]

Chip:

You have been saying for months now that you expected United to miss its October DIP EBITDAR requirement. In light of the above quote, which Ms. Carey based on comments made by both Glenn Tilton and Jake Brace, have you now changed your opinion about United's prospects for October?

A couple of minutes after the press release comes out saying that UAL met Oct DIP requirements, you can bet that Chip will be saying 'United won't be able to meet November DIP requirements.' So, so predictable.

 

[iflyjetz]

Get rid of AFA then. See what happens to United f/a's if in fact US Airways takes United over. You will be screwed ROYAL. You will be crying a different tune then won't you?

This is EXACTLY why I hate to see psychotropic drug-induced threads. It rapidly degenerates into a verbal battle between each airline's employees. Neither airline is buying the other.

Good luck to all U and UAL employees; don't stress or lose sleep over this farfetched topic.
A U/UAL merge will happen when pigs fly. Oh crap, I forgot about the pig that flew on U from PHL to SEA in F. 😀 OK, OK, when pigs fly AGAIN. 😛

 

[Retired1]

iflyjetz


I enjoy seeing what Chip has to say but after 67 posts and over 3,000 hits i agree with you. Dont stress or lose any sleep over this topic.

 

[LGA Fleet Service]

You must be a pilot for United!!! Denial
I am so sure that he told all that to just a normal Joe.
He will tell you anything you want to here.
He would not let on anything that could possibly leak out.
Of course it WOULD be what you want to here.

So exactly how is this any different than Chip's constant innuendo of "People in the know" telling him "Things"?


I find it hard to believe that strategic corporate level decisions are shared over coffee with a line pilot,especially one who seems to post every rumor and supposition as carved in stone gospel on an internet message board.

 

[Tim Nelson]

Chip,

your discussion is interesting and plausible. I don't know how things will shake out but I believe tons of US AIRWAYS employees, including myself believe that we haven't heard the last of a US/UA combo. Working in ORD I can tell you most assuredly that at least on the United ramp, the talk is that United is going to pick up US AIRWAYS before it leaves bankruptcy. It's just a big rumor and as far as I know there is no substance. Unclear at best.
Now regarding US AIRWAYS 'Top" execs coming to Chicago. You are wrong, they came here for JD's [ramp person] retirement party only! They even brought edible items they freshly baked. Just joking of course.

 

[Busdrvr]

"It's much easier to cut your loses in bankruptcy when you do not pay your bills, such as the municipal bonds at all of United's hubs except Dulles. In fact, I bet if US Airways did not pay its bills at its hubs it would have been profitable."


Chip, how many times must it be pointed out to you that your statement is simply NOT true. In BK, until an agreement is rejected or amended and signed, it's ON THE INCOME STATEMENT AND BALANCE SHEET. The place it won't be is the cash flow statement. This is basic stuff. Therefore, your costs will only get LOWER as you progress through BK

"US Airways had exit financing lined up before it filed, however, here we are nearly 11 months after United's filing and it still does not have exit financing. How come?"

Not true Chip, you had TENTATIVE financing. It took an 11th hour termination of your pension to secure financing.


"If the Denver Posts comments today (that United's planes are booked more fully and at higher fares than last year, analysts predict a fourth-quarter loss in the range of $400 million to $500 million,""

UAL's operating loss for Sept, excluding special items, was $50 million. October may be marginally worse, but do you REALLY believe that Nov and Dec, with even lower costs by then, will be worse?

"I doubt a bankrupt company, who is forecast to lose an incredible amount of money, will have a POR in place in four short months."

But yet a company who LOST money operationally in Q3 , and will face significantly higher competative force going forward will have such a banner finances in Q4-Q1 that they could pull it off. Big Dave values his job as the RSA, I don't think he wants to lose it.

 

[firstamendment]

Listen folks

Neither airline is in a position to buy pencils, much less each other.

US and it's management team have their hands full with keeping the doors open and keeping the employees from storming the gates. Fences need to be mended, strategies need to be revised to combat LUV in PHL. Who has time to buy UA and what will US shareholders take? An IOU from the vertically challenged leader of the Rodney Dangerfield of the skys?

Think! Your boat is sinking! Waiting for rescue will afford you the same fate as Titanic

PineyBob

Your post wins "Post of the Year". It is truely the only one that has really made any sense in anyway what-so-ever.

Thank you. 😉

 

[ClueByFour]

1. UAL might be restricted from selling the entire stake by various covenants and other obligations entered into when Orbitz was created. Additionally, UAL could stand to benefit from subseqent Orbitz sales if the Orbitz stock should rise in value in the future.

And, prey tell, which of these agreements could not be broken by the judge?