Progress Update

[Ukridge]

A few days here in the former colonies (for those who are checking IP addresses!) and after a most pleasant flight on United I thought I would check in with the regulars for an update. It has been a few weeks since I have been able to peruse the boards so taking the indolent's way out I thought I would simply post a few enquiries and forgo the detailed searching.
1. I read that United has extended its business plan submission. Is this a good sign or merely neutral? Are there others who were ready to submit a competeting version? Other than your announced LCO, what seems to be the "end game" plan for United? Static existence, shrinkage, or vigorous competetion?
2. In line with the first point, are there indications that United is ready to enter the ring and compete full apace or can we rather expect for more and more of the work to be subsumed into the he Star and parceled to the other carriers?
3. Against all predictions and public "expert" opinion is it just possible that Mr. Tilton is an apt and capable businessman? I know this is in contraposition to all that has been written by the "aviation class" but how is it that he has suceeded so well in his career while most commentators are simply hacks working for the squids? (translation: squid = newspapers. Newspapers are printed with ink) What I am trying to elicit is that could it be that Mr. Tilton very well may right the good ship while others who sit outside the arena merely collect pay for the verbal tripe they gush? I do not know enough about the industry to perform the adequate analysis that some of you can. As an observor however, I can say that the London area is being blanketed by United advertising and that many firms have reported that United sales reps have been beating the bushes to generate travel. This to me does not sound like the unmitigated horror and abomanation to the profession that so many said Mr. Tilton would be.
4. How is the revenue picture shaping out. Was it a good summer? Is traffic on the rise? DIP hurdles?

The only suggestion that I have is that I would have United curtail the number of announcements they make after boarding. This time it seemed as if there was a litany of 20 minutes informing me of every possible item planned for the flight. As Aldous Huxely said nearly a 100 years ago - "The greatest challange of the 20th century will be silence."

 

[FWAAA]

Sounds like the finances are shaping up. The delay in filing their Plan of Reorganization was expected and not unusual - I'd say it is a neutral.

Perhaps UAL will pull it off after all.

UAL Reports August Monthly Operating Results

Wednesday September 24, 11:55 am ET

Net Income for Month of $68 Million, Excluding Reorganization Expenses

August Unit Revenue Improves 15% YOY

Positive Cash Flow and EBITDAR for August

Meets DIP Covenant for Seventh Consecutive Month


CHICAGO, Sept. 24 /PRNewswire-FirstCall/ -- UAL Corporation (OTC Bulletin Board: UALAQ - News), the holding company whose primary subsidiary is United Airlines, today filed its August Monthly Operating Report (MOR) with the United States Bankruptcy Court, and reported that the Company had a net income for August of $68 million, excluding reorganization expenses of $114 million. The majority of reorganization expenses were non-cash items resulting from the rejection of aircraft. Operating profit for the month was $105 million. UAL continued to generate positive cash flow during the month, and the Company met the requirements of its debtor-in-possession (DIP) financing for the seventh straight month.

"United delivered another very encouraging month, operationally and financially, particularly in achieving net income of $68 million," said United's executive vice president and chief financial officer, Jake Brace. "United's systemwide passenger unit revenue for August improved 15% year-over- year, with yield up 10% year-over-year, both well ahead of industry averages for the month. We met the requirements of our DIP financing covenants for August and expect to meet them for September, as well. Bookings are better than expected as we move into the Fall-Winter season. United has been working very hard to achieve these positive results, and we are all looking ahead to the Company's emergence from bankruptcy."

UAL again improved its cash position for the month, ending August with a cash balance of approximately $2.4 billion, which included $698 million in restricted cash (filing entities only). UAL began August with a cash balance of approximately $2.3 billion, which included $714 million in restricted cash (filing entities only). The Company's cash balance increased approximately $109 million for the month or approximately $4 million per day.

UAL met the requirements of its covenants for DIP financing in August. As part of its DIP financing agreements, UAL's lenders required the Company to achieve a cumulative EBITDAR (earnings before interest, taxes, depreciation, amortization and aircraft rent) loss of no more than $219 million between December 1, 2002 and August 31, 2003.

Operational Performance Excellent Despite Challenging Weather and Blackout

"In addition to the challenging weather conditions, especially heavy thunderstorms, we always must face this time of year, August also was impacted by the blackout of the electrical grid in much of the Northeastern U.S. and Canada," said Pete McDonald, United's executive vice president - Operations. "United employees once again excelled at their jobs, helping our passengers manage through the delays and rebooking caused by the blackout. Our overall operational performance remained remarkably high despite the challenges." United's flight completions was 98.8% for August and arrivals within 14 minutes of schedule remained high at 81.7%.

http://biz.yahoo.com/prnews/030924/cgw042_1.html

 

[Busdrvr]

OPERATING PROFIT OF $105 MILLION. EBITAR "Profit" should be around $200 million FOR THE MONTH. I'm sure if we look back at previous strings, Chip SURELY predicted this......

 

[737nCH11]

Nope. His Magic 8 Ball doesn't contain any positive responses.

 

[Busdrvr]

737,
I was looking for I past post where I predicted, I think, btween 100-120 in operating profit for the month. while doing so, i noticed a previous question concerning DC vs DB pension plans that i did not respond to. I'll put something together for all

 

[Ukridge]

Nice flight over from Frankfurt on the 777. Was booked on a return flight from Washington on a 767 to London. Rather interesting in that this flight left in the morning and returned to London in the evening. For someone like me who does not readily adapt to the time zone changes this was a significant improvement in the travel schedule. I ask: Why are not more flights offered that leave the former colonies in the morning and return in the evening? The aircraft is certainly in place in Europe/London for an early departure. I asked one of the air staff this and the response was that businessmen and women like to fly all night so they can do business in the morning. What?? I may be a bit out of kilter but I frankly prefer to sleep in my own bed at night instead of an airplane seat and awaken rested and fresh for the day ahead. Please supply empirical data to support the fact that one likes to arrive bleary eyed in Blighty to setttle into harness for the day.
Second, it is nostalgic to fly in an antique such as the 767 but why does United not fly this route with a 777? A visit to the aviation musuem is a nice 'passe temps" but really now. I know the purse only has a few coins in it at the moment but over the last few months I have read posters claiming that the lease rates on the larger aircraft are now mere pennies on the dollar. If so, why do they not send the 767 to the museum and use an aircraft the customer actually loves? How can United expect to compete with the likes of Lufthansa and Air France in their A340s, 400s and even 777s (AF)? If the answer is not enough load factor I would counter that marketing is not doing a good enough job advertising the flight as many (and I mean many) of my colleagues much prefer the early morning departure from the U.S. as many of us are still five hours ahead.
Cheers

 

[firstamendment]

Nice flight over from Frankfurt on the 777. Was booked on a return flight from Washington on a 767 to London. Rather interesting in that this flight left in the morning and returned to London in the evening. For someone like me who does not readily adapt to the time zone changes this was a significant improvement in the travel schedule. I ask: Why are not more flights offered that leave the former colonies in the morning and return in the evening? The aircraft is certainly in place in Europe/London for an early departure. I asked one of the air staff this and the response was that businessmen and women like to fly all night so they can do business in the morning. What?? I may be a bit out of kilter but I frankly prefer to sleep in my own bed at night instead of an airplane seat and awaken rested and fresh for the day ahead. Please supply empirical data to support the fact that one likes to arrive bleary eyed in Blighty to setttle into harness for the day.
Second, it is nostalgic to fly in an antique such as the 767 but why does United not fly this route with a 777? A visit to the aviation musuem is a nice 'passe temps" but really now. I know the purse only has a few coins in it at the moment but over the last few months I have read posters claiming that the lease rates on the larger aircraft are now mere pennies on the dollar. If so, why do they not send the 767 to the museum and use an aircraft the customer actually loves? How can United expect to compete with the likes of Lufthansa and Air France in their A340s, 400s and even 777s (AF)? If the answer is not enough load factor I would counter that marketing is not doing a good enough job advertising the flight as many (and I mean many) of my colleagues much prefer the early morning departure from the U.S. as many of us are still five hours ahead.
Cheers

Hi UK

I think you hit it right on without realizing it. Everyone would like to have the best and newest airplanes on every flight but those babies are expensive and for all we know there may be plans to retire the 767's or put them on domestic flights. But one cannot please the entire world and right now I am sure the fine folks of United are more interested in providing you a pleasant flight no matter the kind of aircraft. Funny how everyone loves the Concord and wants it to stay because it is fast...but infact, IT is a dinosuar and will soon be gone.

Also UK, replacing aircraft is costly short term because with added aircraft means added inventory, training the staff for those planes, not to mention the spare a/c for those heavy line checks that take an aircraft out of service. And although to many it may appear that money is only tight, UAL IS in Chapter 11 and can't just go bargain themselves into a great deal.

It is difficult to compare many of the carriers in Europe. When you look at the UK and a city like London, even with the LCC that are emerging, who has the strangle on Heathrow? Who dominates Paris? Frankfurt and Munich? It's easy to make alot of money when you dominate your country's air space. With money comes good credit to buy those big modern aircraft. Here in the states, there are many choices to fly internationally and even more so domestically. If the US had only 1 state carrier or 2 than I will promise you things would be different but we have this thing called deregulation that now allows anyone anywhere who has a dream to start an airline and charge what they want and go where they want to go ( with a few exeptions).

After almost 25 years, the LCC are collectively (note the word LUV fans) getting it right and it is affecting the "full service carriers", what ever that means anymore. So my question to you is Did you enjoy your flight? Friendly staff? Arrived on time?
Get your luggage?. If so that is what counts. In the past United has always been on the forefront of technology. They were the first to fly the 777 and are the only US carrier to even fly the 747, mustless the 747-400. Their route network along with their alliances provide great travel opportunities. Let them get pass this Chapter 11 thing and they will be back stronger than ever.

BTW, I work for a competitor and not United.

Cheers

 

[Ukridge]

First,

My remarks are not be be contsrued as a complaint about the arrival time, staff, or service which were of course first rate. On the Frankfurt flights and the other flights to Washington, United plys the route with a 777 and therefore I assumed than any flight to the city/airport (Heathrow) where only two american carriers have access would automatically be on a 777.
I am perplexed at the reference to state ownership. United already has a number of 777s many with possible reduced leases. This is the reason for the enquery as to their usage. If one has already sunk the cost, trained the staff, and outfitted the aircraft I thought it would by necessity follow that we would see them on the early London flight as well. The question raised was concerning the advantage of the new leases on the 777s and 400s. Would it not be the correct time to use them and compete?
Does not Northwest Airlines operate the 747-400 as well as a number of older versions?
Again touching on state ownership. This is a very much discussed topic here at the moment. BA and Lufthansa have both been severed from state ownership for a number of years though BA did get a very nice packet from Lady (at the time Mrs.) Thatcher to send them on their way. On the other hand i am not sure how this relates to airport usage. All indications point to a nearly unlimited expansipon potential at Paris - there certainly are no restrictions at he moment though admittedly I cannot speak for US flights. Munich is another airport that is not full and offers more room for growth.. The state carrier concept is nearly dead in Europe.. One need only look at the demise of Sabena and Swiss to realize the path that is beng followed. I have heard that KLM and AF have announced nupitals. It seems the only left over vestiges are Alitalia and Olympic and I cannot really speak for the former.
It would seem the issue is not slot control (other than at Frankfurt at Heathrow of course) but the Star doing all the flying for the likes of United. How many times does United fly to Germany a day? How many times does LH fly to the former colonies? I think one would need exponential notation to express the number.
Cheers

 

[Bear96]

Ukridge,

The 767 vs. 777 answer is really much more simple than than getting into a discussion about state ownership...

The 777 is considerably larger than the 767 and so it would require that many more seats to fill to operate profitably. If the demand were there, you would see a 777 or even a 747 on that flight (one of the evening IAD-LHR flights (UA918) is going back to a 747 for the winter schedule). I understand the daylight IAD-LHR flight generally operates with a fairly light load (I know, I know, some people will chime in that on the particular day they were on it it was packed but I am speaking on average), so as long as that is the case, UA will keep the smaller equipment on it.

BTW while you may be the exception, I believe it is generally true that most people travelling on a tight business schedule would rather not waste an entire day in the air. I don't have any "empirical" proof; just my own observations and opinions. However, I do think there is a good deal of proof simply by looking at the fact that 99% of all eastbound transatlantic services operate at night-- if enough $$$ preferred the daytime option, there would be more daytime service. That is one reason you see almost all US--S.Am. services on almost all carriers operating at night in both directions, even though that means a horribly long sit at the other end with the corresponding hit in airicraft utilization.

Plus with the eastbound transatlantic time change, there is the added complication that such daytime flights would not be very conducive to connections, on either end.

 

[Ukridge]

Thanks Bear. I did not mean to delve into the discussion of state ownership though I was puzzled by First's reference to it. I was thinking about it as I typed which was reflected in my poor spelling. I trust the forum readers will overlook it in this case.
Your reasons seem valid. I was originally only relating that as a customer the 777 is a very comfortable aircraft vs. the 767. Perhaps it is merely perception but as we know that is 90% of reality is it not? I am surprised though to learn that the early morning flights are lightly loaded.

 

[ual06]

Careful there Ukridge. By expressing your preference for an early morning flight back to Europe, you may be reveling your age group. Them thar young chargers feel they don't need to rest. (Please excuse the lack of the Queens English.)

In reference to the B-767 being an antique, my "Ticket" starts with a DC-3 and ends with a B-747. At one point, I flew an old Navy bird that was delivered to the Navy the month I was born. Before that I flew a Bird that was listed in "Jane's All The
Worlds Aircraft" as a vintage aircraft.

You mentioned that you like the B-777 - in my opinion, at least on "ride", it is definitely way behind the DC-8.

But, to each his own.

Thanks for your support of UAL and the Star Alliance.

 

[firstamendment]

Thanks Bear. I did not mean to delve into the discussion of state ownership though I was puzzled by First's reference to it. I was thinking about it as I typed which was reflected in my poor spelling. I trust the forum readers will overlook it in this case.
Your reasons seem valid. I was originally only relating that as a customer the 777 is a very comfortable aircraft vs. the 767. Perhaps it is merely perception but as we know that is 90% of reality is it not? I am surprised though to learn that the early morning flights are lightly loaded.

UK,

I also did not turn the thread to the issue of state owned carriers. Infact, I never even made reference to that as the focal point to this thread or for that matter even call the European carriers state carriers. Maybe I should have used FLAGSHIP. You and Bear read into what you chose so I will clarify. The point I was making is that Luftansa, BA, and Air France pretty much rule the skies of their countries and as I stated can easily make money on their monopolies. That isn't a judgement, btw, but a fact AND monopolies mean $$$ and money helps expansion or replacement aircraft.

Also, let me clarify...if you retire all your 767 and replace them with say the 777's, those 767 pilots don't just hop over into training to quailify for that 777 for nothing. And the more a/c you have on the property, the more added spares for heavy line checks.

Point being? All that cost money regardless of lease cost. Why is it some of you are always looking to pick a fight or read something sinister in an opinion? I see this alot on all these threads. Not everyone remarks on a post to antagonize, but go ahead, I'm sure someone will have a typical bitter, victimized, smartass airline employee remark on this so go ahead and spew your venom. BTW, I applaud the early flight UAL has added and infact applauded them for their innovations, which would include more varied schedules.

 

[Ukridge]

"Why is it some of you are always looking to pick a fight or read something sinister in an opinion? I see this alot on all these threads. Not everyone remarks on a post to antagonize, but go ahead, I'm sure someone will have a typical bitter, victimized, smartass airline employee remark on this so go ahead and spew your venom"

First,
Now I am doubly perplexed. I certainly did not make my remarks to Bear about state ownership in a way that was critisizing your post, it was rather that I was confused by it. For those who have suffered through reading my posts they may gain many impressions that are not favourable but I do not think I could be characterized as a "typical bitter, victimized .... airline employee" who has venom to spew. If fact I preface most of my posts with the disclaimer that I am merely asking a question since I do not posses a facile expertise of the industry. In fact the only thing that I am sure of is what the word "sanguine" means!
Nor does my puzzlement over the state ownership issue reflect a desire to pick a fight. I thnk the ghost of Chip is too much present.
Again, what confuses me is that you spoke of the dominace that the European carriers enjoy in their respective countries. Undoubtedly, many were sent into privitization with a full purse (and AF will shortly join this group). The likes of EasyJet, Ryanair, and others are however, quickly reforming the landscape. Look at Heathrow. Yes, BA is a major carrier but have you seen the likes of Virgin? They ring BA's bell every day. BMI is also starting to play a significant role in England. Air France and Lufthansa are both extraordinarily concerned about the rise of the "less costs" (as they call them). This purported dominance is being assailed daily.
I now understand the issue of the costs. Though as a customer I certainly can book my flight on the aircraft that I most enjoy if my schedule allows.


UAL06
I would have very much liked to have taken a ride in a DC-3. Lufthansa restored a Junkers 52 that they fly around and sell rides. If I heard correctly, it is staffed by off-duty pilots who treat this aircraft as a member of the family. Even the DC-8 would prove memorable.
Do not miscontrue my remarks about the 767 as being critical. I speak only from the passangers point of view and I know the pilots and crew have certain aspects of aircraft that they prefer. We who ride in the back do indeed like the 777 and the 400 and though i have not been on it, I hear the 340 is comfortable as well. As I said to Bear, it is possible that one could show that the 767 actually gives more leg room, head room, etc.. But the "perception" of the 777 with the headphones that at my age I can actually hear and the moving map make it the choice. As one RAF pilot once said to me. "Fly during the day, sleep at night - thats the key to a long and prosperous life." He as well was not constitutionally disposed to all-night flying
Wishing all of you at United the best of success.
Cheers

 

[Busdrvr]

The 767-300 fleet is top to bottom, one of the newest on the property

People go from th 767 to the 777 because it pays WAY more

The coach seats in the 767 are WIDER than the 400's

Unless UAL can sell the additional seats on a 777 at a cost that excedes the addional costs associated with the 777, then the 767 is the clear choice.

Utilizing 767's and 747-400's puts pressure on the lease prices for the 777.

 

[ZMAN777]

....Second, it is nostalgic to fly in an antique such as the 767 but why does United not fly this route with a 777? ...

In answer to your question I'll add that UAL is planning just this very thing starting next Spring. Not sure which month they're targeting but my sources tell me the 777 will be on the morning flight (UA922 I believe!) IAD-LHR. How's that?

Cheers,
Z