Is there discontent at US business partner UA?

[Cosmo]

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On 5/28/2003 4:22:29 PM PineyBob wrote:

Last conversation I had with them they told me it was still in Springfield, IL and that they would call me to make arrangements to return it.
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It sounds like you actually had your bag at the time of this phone call. So why didn''t you have the common decency to mention that fact to the United employee you were talking to?

 

[Busdrvr]

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On 5/28/2003 403 PM PineyBob wrote:


And for the record I did state that I thought UA would survive and I guess you're right survival is not a positive thing if your interested in arriving on time

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Bob,
If you are going to complain constantly about UAL, at least have a fact based arguement. For the 1st Q 2003 UAL was the number two on-time airline (number one for the majors and for ACARS reporters, second behind regional affiliate Skywest) with an on-time rate of 85.4% During the SAME period, U's rate was 78.9% (9th). Sticking with U over UAL for the "on-time" rate would be the equivilent of sticking to your "dependable" Yugo because you once had a flat with a Lexus. As for "lost bag" rates, UAL's IS higher (4.08 vs 3.29) but that rate is based on enplainments, not bags handled, so a "long haul" airline with customers on typically longer trips, SHOULD have a higher rate. Then again if you took the "I hate UAL" sticker off your luggage and treated the CSRs with the same respect you want to be treated with....

 

[ual06]

 

[PITbull]

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On 5/28/2003 228 PM 737nCH11 wrote:

To our UAL bretheren:

Piney was evidently burned during the summer of 2000, so anything that you do will never be good enough for him. His prejudice takes away any ability for him to formulate a rational argument, so just see his ranting for what it is. I'll bet if you find his suitcase he might change his tune.

I am also of the opinion that your operation is turning itself around swimmingly. One only needs to look at the sudden reappearance of old Chipper and his dire predictions to tell that. This is one U employee who is happy for you and for our codeshare alliance.

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I have been saying for months and months that UAL was definitely going to make it. All they needed and wanted was BK to get rid of the high aircraft lease payments and billions from their employees...same plan, same song, same station, just a different face. They got what they wanted by using the "trump cards" they needed, poof, a new reborn airline, once again. They will all end up doing this. Maybe not all will go into BK, but they will threaten to bring their labor groups to their knees to get billions.

UAL will emerge from BK early, my prediction, and probably won't even need no damn ATSB "bull****" guarantee. I believe that is why U management is coming back again to labor. Already, they are humming the tune of "force Majeure"...another "trump card". They met with members of the Labor coalition and all got to see another "slide show" from these yo yos, "instant replay" all over again with "doom and gloom" in our horizon.
How pathetic is that?

 

[USA320Pilot]

I have repeatedly said my only interest in UA is how can the Chicago-based company effect US and our employees, whether the parties are involved in a corporate transaction or the effects of the alliance on US from a business perspective. It’s no secret that UA and US have been involved in business combination discussions on and off for the last eight years; therefore, it should come as no surprise when people close to the companies discuss potential relationships.

If US was involved in similar discussions about business relationships with AA or NW, then that is where my interest would lie.

Regardless, the purpose of this thread was to discuss the discontent in the “executive suiteâ€￾, where my comments were confirmed over the weekend by Crain’s Business News and TheDeal.com.

Meanwhile, it appears as if almost everyday there is a major news story regarding UA and its formal reorganization, but today there are two major story’s – the decision by AC to defer CRJ delivery’s and UA’s April financial news.

Doesn’t it seem strange with UA’s increased RJ authorization AC would reach an agreement with Bombardier to defer aircraft deliveries? Wouldn’t UA want to increase its system feed and why is AC reducing its capital expenditures? Does AC know something the public does not?

Separately, UA announced on Wednesday a $375 million net loss for April, which equates to a cash burn rate of $12.5 million per day. During the first four months of this year UA has lost nearly $1.7 billion while not paying all of its bills and having labor W-2 cuts in place for most this period. If this does not place the company’s viability in question, what does?

The company’s monthly operating loss was $297 million and it ended April with a cash balance of about $1.7 billion, including $651 million in restricted cash. Thus the airline had about $1.05 billion in unrestricted cash on April 30. The airline’s liquidity position remained stable only because the company received a $345 tax refund.

These numbers are discouraging and continue to indicate UA’s revenue is lagging its peers, which is a problem that could become acute this fall when the airline must have a cash positive EBITDAR in October.

Going forward UA’s cash position received a boost on May 16 when the airline received about $300 million in federal aid, however, even with improved fundamentals, its clear UA has a long way to go to be cash positive during one of the slowest travel periods of the year – October.

Avek’s comments about UA and its lack of a POR, no clear cut exit strategy, no equity plan sponsor, no exit financing, and a management/consultant/unsecured creditors committee that is in total disagreement, while “Rome is burningâ€￾. Avek’s comments are accurate and should be a concern for both UA and US employees because each airline’s business model relies on the success of its partner.

Meanwhile, while Speaking at the Greater Washington Initiative''s annual meeting at the Washington Convention Center today, US CEO Dave Siegel took a shot at UA. According to the Charlotte Business Journal, Siegel suggested other airlines, particularly United, get preferential treatment by local government officials. United may be concerned about US Airways'' flights out of National affecting its business at nearby Dulles International Airport, where it is the No. 1 carrier. US Airways operates the most flights out of National.

"I don''t see why United''s opinion should matter more than ours," Siegel said.

United officials would not comment.

In an interview, Siegel said United is blocking US Airways'' attempts to boost its flights out of National.

In conclusion, UA’s future appears to be uncertain at best and the airline has bought itself about six months of time to figure out how to emerge from bankruptcy because of the $645 million in April-May one time gains, before the airline could become in EBITDAR default.

Also noteworthy, I find it interesting that AC is reducing its financial exposure to UA by deferring aircraft deliveries and Siegel took a shot at its business partner UA. Maybe there is not only dissension within WHQ, but also between the WHQ and CCY “executive suitesâ€￾. If true, I wonder why that could be?

Best regards,

Chip

 

[Busdrvr]

Sorry Bob,
I have to base my opinion of you on the same "snap shot" you base your opinions of UAL on. You are spinning throught the roof over a bag we didn't lose and then make factually incorrect comments regarding our inability to be ontime, despite setting the standard for the entire industry for over a year now. Kind of makes your anti-UAL crusade seem irrational. But in person, I'm sure you're a good guy. realize that 98% of UAL employees are also just good ole folks trying to make living. Most have good days and bad days. are there some bad apples? sure! But to lambast the whole company for a few bad experiences is IMHO irrational. They ARE doing it right at UAL, and I think the statistics show that to be true.

 

[Busdrvr]

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On 5/28/2003 9:43:47 PM Chip Munn wrote:

Just one more thing...

Today Reuters reported UA defaulted on $16 million interest due April 1 on unsecured special facilities bonds for airports in Denver, Los Angeles, New York and San Francisco.

Do any of these airports resemble the locations discussed in the "unique corporate transaction" months ago? Moreover, how about what US & UA Marketing Departments refer to as Chicago West?

Best regards,

Chip

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Maybe DEN. They also have something else in common, like all our other creditors, WE OWED THEM MONEY, AND WE WANT TO WEAZLE OUT OF PAYING IT!! That, my friend, is what BK is ALL ABOUT (but you should know that by now, hows the pension doing?)

 

[Busdrvr]

"The company’s monthly operating loss was $297 million and it ended April with a cash balance of about $1.7 billion, including $651 million in restricted cash. Thus the airline had about $1.05 billion in unrestricted cash on April 30. The airline’s liquidity position remained stable only because the company received a $345 tax refund.

These numbers are discouraging and continue to indicate UA’s revenue is lagging its peers,"

Who has reported April results? What makes you think U''s performance (despite no Pacific SARs exposure), was any better in April? AMR?, NWA? UAL had the ability tho contractually cut pay even more due to the war, they didn''t, but yet someone else did. Who would that be Chip?

"Doesn’t it seem strange with UA’s increased RJ authorization AC would reach an agreement with Bombardier to defer aircraft deliveries?"

What makes you think we are going to rely on ACA more? With substantially lower wage rates, there are many routes that will know get mainline service back. Besides, we now have U to pick up some of that traffic (example, DEN-CAE before DEN-ORD, ACA ORD to CAE, now DEN-CLT, U CLT-CAE). In addition, UAL is shopping for cheaper service from MESA (i''d rather we not, but the service in ORD couldn''t get any worse than that provided in the F concourse by ACA)

 

[USA320Pilot]

Just one more thing...

Today Reuters reported UA defaulted on $16 million interest due April 1 on unsecured special facilities bonds for airports in Denver, Los Angeles, New York and San Francisco.

Do any of these airports resemble the locations discussed in the "unique corporate transaction" months ago? Moreover, how about what US & UA Marketing Departments refer to as Chicago West?

Best regards,

Chip

 

[737nCH11]

Chip,

Your posts seem to be nothing more than diversionary tactics. You referenced "Rome burning" earlier in your posts. You seem to be content pointing out UAL''s flaws while your airline burns down around you.

Sniff, sniff. What''s that smell? I think it''s Chippers short curlies being singed.

 

[USA320Pilot]

Busdrvr:

Chip asked: Today Reuters reported UA defaulted on $16 million interest due April 1 on unsecured special facilities bonds for airports in Denver, Los Angeles, New York and San Francisco. Do any of these airports resemble the locations discussed in the "unique corporate transaction" months ago?

Busdrvr said: "Maybe DEN. They also have something else in common, like all our other creditors, WE OWED THEM MONEY, AND WE WANT TO WEAZLE OUT OF PAYING IT!! That, my friend, is what BK is ALL ABOUT (but you should know that by now, hows the pension doing?)"

Chip comments: As explained to me by an airline analyst with direct ties to the CCY "executive suite", the UA fragmentation discussed by the parties included about 30 to 35 percent of UA's domestic operations (ASMs) and focused on Denver, Los Angeles, and San Francisco, as well as Chicago gates/facilites and aircraft.

Nobody knows if and when a transaction could occur, but I find it interesting UA continues to have disputes with these airports, where three of the four were mentioned in the UCT thread.

Best regards,

Chip

 

[Oliver Stone''s Apprentice]

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On 5/28/2003 10:30:54 PM Chip Munn wrote:

Nobody knows if and when a transaction could occur, but I find it interesting UA continues to have disputes with these airports, where three of the four were mentioned in the UCT thread.

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Sheesh. Haven't been in this forum for months, and the first thing I see is Chip still talking about his fabled UCT...

Never mind the facct that all of the places mentioned except for NY are hubs, and the only place where UAL can get away with threatening to leave as a way of driving their rent down. Expect the Port would say "see ya!" in a heartbeat regarding JFK.

They can't do that at ATL, SEA, MSP, or anywhere else where they don't have a fortress presence. Even at ORD, it is questionable how much they can play hardball with the City. The City likes having UAL as a major tenant, but there are lots of other airlines who would love to get their gatespace.

 

[Cosmo]

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On 5/28/2003 9:28:09 PM Chip Munn wrote:

Separately, UA announced on Wednesday a $375 million net loss for April, which equates to a cash burn rate of $12.5 million per day.
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Chip:

In the interest of accuracy, which you say you strive for ...

In the above quote, you equated United''s cash burn with its net loss. While it is theoretically possible that those two numbers can be the same, in this case it''s not true. According to today''s issue of Aviation Daily, a respected trade journal, United had a daily cash burn rate of $5 million in April when the tax refund and IAM retro payment are excluded from the calculation. While even $5 million is still a major problem, that is a substantially smaller number than you indicated in your post.

United says its revenues have returned to pre-Iraq war levels so far in May. We will have to wait to see if these improved revenues, combined with the effects of workrule and staffing changes and reduced aircraft lease rates (for at least some of the carrier''s fleet) introduced this month, will be sufficient to bring United''s cash burn rate in May back down closer to $0.

 

[Busdrvr]

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On 5/22/2003 11:13:16 PM PineyBob wrote:



I do think that Lufthansa''s decision to proceed with a code share with US outside of Star Alliance tells us something about UA''s viability from Lufthansa''s point of view. Seems like hedging ones bet to me.


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"Other airlines in Star include Air Canada (Toronto:AC.TO - News), All Nippon Airways (Tokyo:9202.T - News), Mexicana Airlines, and Singapore Airlines (SES:SIAL.SI - News). The vote by Star Alliance leaders must be unanimous, Castelveter said.

United Airlines, a unit of UAL Corp,. which is currently operating in bankruptcy, sponsored US Airways'' bid to join Star."

This from todays business wire. It appears United is bringing in U and could veto it if they wanted.

 

[USA320Pilot]

United Reports $375 Million Net Loss

CHICAGO (AP) - United Airlines said in a bankruptcy court filing Wednesday that it lost $375 million in April, when the war in Iraq and fallout from SARS combined to wallop the air travel business.

The world's second-largest carrier said it had met its lenders' financial requirements for the month and ended April with more than $1 billion in restricted cash -- back at prewar levels.

Chief financial officer Jake Brace cautioned, however, that "the revenue environment continues to be challenging."

United's financial outlook has improved this month, with labor costs dramatically reduced in contracts that took effect May 1, the war over and the consequences of SARS on Asian travel having decreased. The airline has restored 162 flights for the summer travel season, and Brace reiterated that it is "encouraged" by bookings.

"We have stayed on track with our efforts to reduce our cost structure significantly and we continue to move our business forward," he said.

But while officials of the airline express confidence that United also will meet its lenders' May 31 benchmark, it must make dramatic improvement to get back to positive cash-flow by the end of October as required. United reported a loss from operations of $297 million in April.

United's creditors also have grown impatient with its failure to disclose more details of how it plans to return to profitability, although it has until Oct. 6 to file a reorganization plan in federal bankruptcy court.

John Tague, United's newly appointed executive vice president for customer initiatives, said the airline is now turning its full attention toward how to boost revenue after having restructured many of its costs.

United, which filed for Chapter 11 bankruptcy in December, lost an industry-worst $1.34 billion in the first quarter of 2003.

United's stock, which was delisted by the New York Stock Exchange earlier this year, fell 10 cents to $1.82 Wednesday on the over-the-counter market.