UAL takes advertising aim at Southwest

[KCFlyer]

Oh I got to see how you could do that! If so you should have applied to be the PR spokesman for flyi. KC you are now on the clock.

They do it about the same way as ignoring fuel hedges when proclaiming that UAL beats SWA in the financials department. The do it about the same way as declaring 10.5 billion in debt that is wiped out by screwing over creditors as a "profit". Numbers can be very fun to play with when one really wants to.

 

[Ch. 12]

And if it matters, UAL will report a profit in 2006 that EXCEEDS $10 BILLION.

Can we get back to this? Bus- With you being a superior being to all of us as you have noted in the past, how can you not tell the "subtle" difference between the definition of "revenue" vs. "profit"? Seeing as UAL (entire parent company) only brought in 4.6 billion in operating REVENUE in 3Q '05, how on Earth can the make $10B in PROFIT for the coming year? Yes...I'll give you that in addition to the operating REVENUE, they then took a negative "REVENUE" of $1.9 B due to reorg. Waive that and you are back to just under $5B of revenue per quarter...therefore $20B of REVENUE in a year. If UAL can have costs that are only half of their REVENUE (therefore leading to a $10 B PROFIT), then...well let's just shut down all the other carriers b/c UAL would have done something that no carrier has ever even come close to.

Please note that for future reference, a PROFIT is something that the company actually retains after expenses are taken out. It is obvious that you mean REVENUE which is just the money that they take in...and that means very little since the airline industry has such a low (often negative) profit margin. To even make an argument based on revenue is pointless b/c if costs are out of control...all the revenue in the world won't make a difference. But to make an argument claiming that REVENUE is the same as PROFIT is just plain ignorance. I hope UAL does make a $10B profit b/c that would sure stump Wall Street (and the rest of the world since it would be a majestic feat).

Oh...and your assertions that WN's PROFIT (you used it correctly there!) was made up of investments...how about researching before pulling numbers from your rear. If you want the actuals, WN's last annual statement has them generating $6.5 B in operating REVENUE and an additional $65M in other revenue. In other words, these investments totaled only 1% of all revenue. Oh...and their PROFIT was $313M...only 3% of what you say that UAL will get in '07.

I know it's confusing with all of those statements and line items to understand but since you accuse others (I believe you call them "liberals) of repeating lies to try to get others to believe them...maybe you should check your hugely ignorant assertions.

 

[Bear96]

One source is the ratio of employees to A/C I got from US during BK number 2 so it's relatively current.

UA was 103 employees per Mainline A/C
SWA has 83 employees per A/C

That is 19.5 percent differential.

I'm not sure what a statstic like this would show, when you are comparing airlines with vastly different average airplane sizes. A 747 is a lot bigger than a 737, meaning more seats and passengers, etc., per plane, and you would expect a carrier that has a larger planes in its fleets to have more employees per plane, to handle everything from more reservations to serving more drinks on board. The 737 is the smallest airplane in the UA fleet.

Employees per seat, or better yet per seat mile, may be a more useful comparison.

 

[Busdrvr]

Can we get back to this? Bus- With you being a superior being to all of us as you have noted in the past, how can you not tell the "subtle" difference between the definition of "revenue" vs. "profit"?

Please note that for future reference, a PROFIT is something that the company actually retains after expenses are taken out. It is obvious that you mean REVENUE which is just the money that they take in...and that means very little since the airline industry has such a low (often negative) profit margin. To even make an argument based on revenue is pointless b/c if costs are out of control...all the revenue in the world won't make a difference. But to make an argument claiming that REVENUE is the same as PROFIT is just plain ignorance. I hope UAL does make a $10B profit b/c that would sure stump Wall Street (and the rest of the world since it would be a majestic feat).

Oh...and your assertions that WN's PROFIT (you used it correctly there!) was made up of investments...how about researching before pulling numbers from your rear. If you want the actuals, WN's last annual statement has them generating $6.5 B in operating REVENUE and an additional $65M in other revenue. In other words, these investments totaled only 1% of all revenue. Oh...and their PROFIT was $313M...only 3% of what you say that UAL will get in '07.

I know it's confusing with all of those statements and line items to understand but since you accuse others (I believe you call them "liberals) of repeating lies to try to get others to believe them...maybe you should check your hugely ignorant assertions.

You sure are slow for a "top 1%" guy. Considering you are a member of "management" at a "legacy" carrier lends clarity to the real reasons the legacy carriers have struggled so much over the last half decade.

Now let's go over your "points".

1. No, you are incorrect, I MEANT PROFIT. The "Profit" will be largely in the form of writeoff from the balance sheet. If a company loses over $10 billion in debt over a period, then to "fix" the numbers, the company must either account for this with lower asset values, OR WITH A SPECIAL "ADJUSTMENT" TO THE BALANCE SHEET. Does it indicate that in the future the company will be able to pull of $10 billion Q profits? NO. The point was to illustrate to certain posters the complete folly of their past assumptions concerning the relative strength of the UNDERLYING business at UAL. For example, UAL would post an OPERATING PROFIT, and then add additional BK "Charges" to the income statement and this would push the results to a negative number. These posters would then rant about the unprofitability of UAL and how UAL should "just go away". My mention of the absolutely HUGE quarterly PROFIT that UAL will post in Q1 was to point out the HYPOCRACY of these posters. If you are going to count the huge charges in BK, then you must ALSO count the huge writeoffs if you are to be consistant. Do you now understand? Do we need to go over this more slowly?

2. My contention that UAL's JETS are more profitable than WN's JETS was based on the Q3 2005 numbers. This is the MOST RECENTLY reported period. If you can use your advanced 99% intellect and vast management experience, then you should be able to (without any help) find SWA's Q3 SEC filing. In that filing, you will see that SWA claimed GAINS FROM HEDGING THAT WERE LARGER THAN THEIR PROFIT. UAL made a billion $'s in 1999, BUT IT'S IN THE PAST AND IRRELEVENT. That is why I chose the MOST RECENT performance.


Piney,
SWA's "legacy" is ANYTHING but industry wages and benefits. The only reason they are now "industry leading" in 737 wages (not pilot wages) is due to other airlines LOWERING wages after giving higher wages for the previous 30 years of SWA's existance. And SWA has NEVER given out a Defined Benefit plan. One has to wonder if SWA would even EXIST if they had given industry standard wages from day one.

WKOFH,
I believe the "croc" is considered by many to be a "dinosaur". Not all dinosaurs die, some adapt to the new enviroment and thrive. I'm hopefull your example, GM, is turning the corner. The new Tahoe/Yukon/Escalade, and new offerings from Pontiac give me hope.

I'd disagree with your contention that terrorism didn't destroy the "old" UAL. The credit ratings prior to 911 would indicate that UAL was not on the verge of BK. Additionally, one of the reasons UAL was performing below the industry is that our biggest rival, AMR was enjoying a HUGE cost advantage via lower wages. That was about to end. Additionally, prior to 911, I think AMR had the financial power (and will) to have destroyed Jblu in it's infancy, and DAL would have stymied AirTrans growth prospects.

As to the "blame everyone else" attitude, does it matter WHO you blame? What is important is how you act.

 

[Ch. 12]

1. No, you are incorrect, I MEANT PROFIT. The "Profit" will be largely in the form of writeoff from the balance sheet. If a company loses over $10 billion in debt over a period, then to "fix" the numbers, the company must either account for this with lower asset values, OR WITH A SPECIAL "ADJUSTMENT" TO THE BALANCE SHEET. Does it indicate that in the future the company will be able to pull of $10 billion Q profits? NO. The point was to illustrate to certain posters the complete folly of their past assumptions concerning the relative strength of the UNDERLYING business at UAL. For example, UAL would post an OPERATING PROFIT, and then add additional BK "Charges" to the income statement and this would push the results to a negative number. These posters would then rant about the unprofitability of UAL and how UAL should "just go away". My mention of the absolutely HUGE quarterly PROFIT that UAL will post in Q1 was to point out the HYPOCRACY of these posters. If you are going to count the huge charges in BK, then you must ALSO count the huge writeoffs if you are to be consistant. Do you now understand? Do we need to go over this more slowly?

Perhaps you should go over it more slowly for yourself. The reason that there are various financial statements and not just one is that they don't all tie together. Yes...a debt writeoff would be reflected on the BALANCE SHEET by subtracting liabilities but you don't just get a revenue stream from writeoffs. Liabilities and revenues are two totally different things.

You sure are slow for a "top 1%" guy. Considering you are a member of "management" at a "legacy" carrier lends clarity to the real reasons the legacy carriers have struggled so much over the last half decade.

Now let's go over your "points".?

Forget your #2...for some reason you think I had some point about WN and UAL productivity, etc...I didn't. I am not in the battle with you over whether or not UAL will find success in the future...I hope that they do. But I can't let you make up numbers or misconstrue financials despite your 99.5% intellect.

And as I've stated before but your FoxNews mind can't seem to get beyond your own spin...I'm not an executive. To blame me for the failure of the airlines is the same as to blame you personally for all fatalities stemming from aircraft accidents. Seems pretty idiotic, doesn't it? It's no wonder you have few friends on these boards. Your Napoleon complex gets the best of you.

 

[mga707]

Hey MORON, they'll have a profit in excess of 11 BILLION for the first Q ALONE. But I'll make a deal with you, if UAL posts a quarterly profit over 10 billion, you'll start a string anouncing to the world what we already know, that you're an IDIOT. If the profit for Q 1 is less than $10 billion, I'll do the same. Deal?

Not only are you (as always) a TOTAL a-hole, but an absolute lunatic as well.
Do you even know what ten/eleven BILLION is?
Even oil companies don't earn a fraction of that!

$10 billion profit--what a joke!

 

[Ch. 12]

Not only qare you a TOTAL a-hole, but an absolute lunatic as well.
Do you even know what ten/eleven BILLION is?
Even oil companies don't earn a fraction of that!

$10 billion profit--what a joke!

I think Bus used to be an Enron accountant prior to his current career as God.

 

[mga707]

But yet the IMBECILE attacks me personally for even mentioning such heresy. It's that kind of unmitigated lack of class from SWA employees like 707 that spin me up and give me the beak. What makes it worse is he is completely uninformed about the issue, and shows himself to be an idiot as well as a jac**ss.I

I'n not, nor have ever been, a WN employee. IDIOT.
Back to your 10-billion-dollar-profit fantasyland!

 

[Busdrvr]

Not only qare you a TOTAL a-hole, but an absolute lunatic as well.
Do you even know what ten/eleven BILLION is?
Even oil companies don't earn a fraction of that!

$10 billion profit--what a joke!

So then I'm assuming you are "taking the deal"? If UAL reports a profit in Q1 2006 that is in excess of 10 billion, then you'll start a string proclaiming your ignorance. If not, I will. Deal?

Chapt 11,
What part are you not understanding? I never said UAL would get a big check for $10 billion. You seem to be caught up on revenue. Again, I don't like using GAAP as a basis for the relative strength of a company or it's future prospects. I'm merely looking for consistancy from those who ignorantly do. So how about you Chapt 12? When I'm right, and UAL posts a NET PROFIT for the Q of greater than $10 Billion, will you have the first post in MGA's string proclaiming your ignorance also? As folks have been saying for the entire BK, "a loss is a loss", likewise, if you believe that, then "a profit is a profit". It's not my view. I'm more a DCF guy for established companies, and a real options guy for capital investment. I'm just holding them to THEIR OWN standards.

Oh and BTW, The Income Statement, Balance sheet and cash flow statement ABSOLUTELY tie together. People go to jail if they don't. If you reduce the amount on one side of the ledger on the balance sheet, you MUST have the same effect on the other side. Likewise, you can't go "willy nilly changing" the balance sheet without reflecting the change on the income statement. The hugely negative retained earnings line on UAL's balance sheet will be "corrected" with an EQUALLY huge special item on the income statement which will then be recorded as a HUGE addition to quarterly income. Yet no cash traded hands. Likewise, if your bank decided out of the goodness of their hearts that the would "forgive" your mortgage, you'd enjoy a pleasent stay in the federal pen if you did not claim that writeoff of your debt by the bank as INCOME on your tax return. Yet no cash changed hands. EGADS!!

 

[Ch. 12]

You truly have no clue, do you Busdriver? Yes...certain aspects of the financial reports tie together. Yes...an operating profit will lead to a positive net cash flow from op activities on the statement of cashflows. Yes...the interest from investments in both the balance sheets and stmt of cash flows will be credited as non-operating revenue. But no...not every line item will be displayed in every report and completely tied together. The three reports compare apples, oranges, and bananas...all fruits (therefore related) but all very different. That balance sheet is about assets and liabilities...i.e. liquidity. If you writeoff debt, you are reducing a liability. In other words, you are getting things that you would have owed on off the books. When you write that off, you don't get any revenue and you therefore don't get any profit (simple revenue minus expenses). It's like if you default on your mortgage. The bank takes your home and you no longer have the liability to pay that loan. But you don't PROFIT from that and the only place you would note it is in having less that you are liable for.

I'm going to guess that what you are trying to get at is that UAL would be in a better cash position and have better liquidity if they write off $10 billion in loans. But what you so incorrectly point out in your "know-it-all" arrogance is just flat wrong. This isn't even taught in accounting 101...this is more like 5th grade math and a little logic. So no...I don't think I'll be very sorry nor will I be apologetic when UAL does NOT post a $10B profit next qurter. But I can guarantee that you will not correct yourself nor will you admit that you are wrong.

I've said it before and I'll say it again...pride and ignorance make a horrible combination.

Good luck on having a $10B profit. UAL...the new Chevron!!!!

 

[Globetrotter11]

Busdrvr,

You are making perfectly good sense in your postings about United getting ready to post a record "paper" profit. One that is closely connected to the "paper" losses of the recent past.

It seems that some of the other posters are in way over their head in trying to refute this fact. I say let it rest, and see what they say when the earnings are posted.

Peace,

Globetrotter11

 

[Ch. 12]

Busdrvr,

You are making perfectly good sense in your postings about United getting ready to post a record "paper" profit. One that is closely connected to the "paper" losses of the recent past.

It seems that some of the other posters are in way over their head in trying to refute this fact. I say let it rest, and see what they say when the earnings are posted.

Peace,

Globetrotter11

Earnings do not equal profits. Glad that neither of you handle my investments. I know that SH Equity may go up when liabilities go down but that is FAR from a profit. I broke down what Bus was trying to say and what you are thinking as well in my previous post but please don't confuse "earnings" with "profits". A company needs "profits" to keep running in the longterm. Just b/c SH equity becomes overstated, that does not make it a profitable company. You two are looking at oranges and calling them apples. I'm merely trying to get you back to the right tree b/c they are vastly different.

So...knowing basic fact that:
-The balance sheet consists of assets, liabilities, and SH equity
-The income statement consists of revenues, expenses, and ultimately imputed PROFITS

Where are the two of you crossed up over how a debt (liability) writeoff will create revenue and therefore PROFIT? As I stated in my previous post...I understand that Bus's intention is that the debt writeoff will be a ST liquidity boost due to a positive cashflow (yes...this is what you talk about when you talk about "on paper") but there is no profit from a debt writeoff.

 

[Fly]

When UAL showed paper losses everyone would jump all over them screaming to "shut em down" if they lose so much. So, with that thought in mind, these same people should be applauding UAL when they show extraordinary profits too.

 

[KCFlyer]

When UAL showed paper losses everyone would jump all over them screaming to "shut em down" if they lose so much. So, with that thought in mind, these same people should be applauding UAL when they show extraordinary profits too.

Not when those "profits" come at the expense of "one time write offs" related to debt associated with those "paper losses".

 

[Ch. 12]

When UAL showed paper losses everyone would jump all over them screaming to "shut em down" if they lose so much. So, with that thought in mind, these same people should be applauding UAL when they show extraordinary profits too.

Fly-

I never screamed anything near "shut em down". I just don't care about paper "profits" (mis-titled but will use the term inaccurately since that is all that some can comprehend). I want to see UAL and other carriers post a real profit and for the industry to become strong again. Whatever your recollection about people "jumping all over UAL", I shouldn't be factored in b/c I've never said a bad word about UAL. I hope the best for them. And I hope they do get a $10B "profit"...even on paper. B/C knowing that a "profit" is the revenue minus expense, that would really impress me. I would worship UAL if that were to happen. But let's not get into the financial misnomers presented above. Back to your post...I've never wanted to shut United down so even though I would normally assume that a post related to the prior post would be directed at the prior poster...I will have to assume that you don't mean me in this case b/c I have never wished doom for them.

Best of luck,

Ch. 12