Exit Financing A La Francaise?

[Ukridge]

You will have to take my word for this one unless you can read French and then I will find the link to the French squid in which I read this. There was mention that United, within the confines of the Star Alliance, is seeking significant exit financing from a house in conjunction with EADS. EADS as we all know is the "parent" company of what used to be Airbus Industries. (Yes, I know that parent is not really the correct word but that is not germane in this context)
It was implied that Airbus wishes to further erode the status of Boeing in North America and is eagerly seeking to stake a claim. Lufthansa was also mentioned in this context though foreign ownership rules may prevent an outright > 25% purchase.
I know that this thought stands in stark contraposition to the chimings of a prognosticator who is afflicted with prolixity when it comes to assuring us that exit finanancing is simply not available........
Any ideas? Could Mr. Tilton be seeking ways to get a "JetBlue" type deal on Airbusses to replace his narrow body fleet and simultaneously obtain the funds necessary to go forward?
Thoughts? Comments?

 

[737nCH11]

UK,

I have also heard this through the UAL rumor mill. Apparently Airbus loans us money in exchange for buying exclusively from them. Stranger things have happened!

737

 

[Fly]

undefinedUK,

undefinedI have also heard this through the UAL rumor mill. Apparently Airbus loans us money in exchange for buying exclusively from them. Stranger things have happened!

Exactly.......isn't that how JetBlue got started? Airbus basically gives away their planes to break up the Boeing stranglehold.

 

[N628AU]

How would the board be structured? It could not be done like the US/RSA arangement with current ownership laws, that I doubt anyone would be likely to relax given the security climate. With the hatred of the French in the US right now, I wonder if it may trigger a backlash against United ala Freedom Fries and Freedom Toast.

 

[UnitedChicago]

Great post UK. It makes a lot of sense.

Props out to 767Jetz for metioning this concept a while back.

 

[Dea Certe]

How many Boeings does UA have? Would the training costs of switching a fleet over be prohibitive?

What is the lifetime of an Airbus compared to a Boeing?

I really hate to see Americans buying foreign-made products when so many Americans are out of work in the US. I doubt there would be any serious backlash as long as the fares are low.

Dea

 

[Ukridge]

"With the hatred of the French in the US right now"

The hate must not be so virulent that Vivendi remains unbetrohed! I read that they were at the altar with an American firm this very morne. Which leads me to my point that I am sure that Mr. Tilton is not concerned about the frothing hate fomented by American media outlets against the denizens of Gaul. His mandate is to restructure the business enitity that is United Airlines. If, (and please note the use of the subjunctive in this) there is any credence to be lent to what I read, then it will remain with the directors of United to consider any and all options regarding the acquisition of adequate funding for an exit from BK. Whether this option is real, viable, and marked by efficacy will be known by us only post facto.
I must say that I was reluctant to even bring this subject to the fore as it was either in Voyage d'affaires or Le Monde. It may have weight, or it may be speculation although I find that the European business press to be rather marked by rigour when it comes to restraining pure speculation. Three months hence we may look back and say this was unfounded yet I find 737nch11's remarks rather interesting that the same thoughts are extent within United's workforce.
BTW, for those who struggle with the words sanguine and sophist - "prolixity" is not a French word.

 

[Ukridge]

Another word. Before we go to far in this discussion I must note that the article merely mentioned financing and a replacement for the narrow body United fleet within the larger picture of the Star Alliance. It is no secret that the European consolidation has begun and I think that the Star is loking to cement its postion as the "shakeout" plays out. I solicit comment for the sole reason that from what I have read on this board there are numerous issues that play in such a scenario. How and when would United get rid of its Boeings? Do they wish to? To whom would they sell them? Each question is fraught with layers of complexity that I certainly as a humble observer cannot answer. There certainly was no mention of the United divesting itself of wide-body Boeing aircraft.
If however, you enjoy watching trends. There certainly must be something to a common narrow body fleet at least in terms of cockpits. I look at EasyJet and Ryanair and see the simple fleet plan that is an emulation of Southwest's model.
Cheers

 

[ringmaruf]

I can read French, and I'd love to read the article if it's not too much trouble to find the link.

 

[bankernclt]

Je parle francais. Veuillez fournir acces a l'article. Merci!

 

[Dilligas]

Je parle francais. Veuillez fournir acces a l'article. Merci!

As Steve Martin said a long time ago...

"It's like those French have a different word for everything!"

 

[whatkindoffreshhell]

Can you imagine the reaction if a Boeing subsidiary offered financing to a bankrupt European airline?

Airbus is buying market share, pure and simple. What is more troubling is that UA is even entertaining such possibilities -- obviously UA cannot secure other financing, even via the ATSB.

Airbus (EADS) should avoid these types of financing deals to protect their worldwide reputation. If you're the CFO of an Asian airline how are you going to react next time when Airbus solicits your business?

Through it all, Jake Brace continues to draw a paycheck. Little wonder the financial markets have little faith in UA management!

 

[Busdrvr]

"Airbus is buying market share, pure and simple. What is more troubling is that UA is even entertaining such possibilities -- obviously UA cannot secure other financing, even via the ATSB."

"Obviously"? Hardly. The diff is the ATSB wants a "no-growth" plan that is inconsistant with a hub and spoke airline that MUST maintain market share to thrive. Airbus would likely be more than willing to send over as many tail as UAL wants.

"Can you imagine the reaction if a Boeing subsidiary offered financing to a bankrupt European airline?"

Why would they need to? Most european gov's would just write a check to the one "national" airline. But if Boeing wants to back UAL (a former subsidiary of boeing itself), they'd be more than happy to switch to 737NG's.

 

[Ukridge]

bankernclt and ringmaruf

Salut,
When I have a moment this weekend I will search for the aritcle. It is one that I read in a print version so I will have to match the day (or issue week in case of Voyage d'Affaires) with the online. I am having the same problem finding an article that I read last week on the formation of hydrogen ions in lactic acid so I need to match up my reading of the hard copies with that of the online version. Frankly, I thought someone would have said this is already old news in the American financial press or within the airline community.

Whatkind,
I do not necesarrily believe that Mr. Tilton looking for the best financing arrangement he can is prima facie evidence that the ATSB has denied United again. Money has its "costs." He is merely looking for the best deal.

 

[aircraft_artificer]

The "French Connection" is old news though under a different guise this time.

Check out this link
http://amfa2000.org/watchdog/watch1220.htm