United Airlines Posts $1.3 Billion Loss

[767jetz]

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On 5/5/2003 12:35:18 PM atabuy wrote:

busdrv,
Who do you work for?
Temporary wage adjustments went into effect at the beginning of the year. I think they would have been factored in to the quarter.
The judge just approved the permanant ones in May.


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He works for UAL, so he probably knows more about our company and our contract than you do. The final concessions approved, went FAR beyond the interem 29% pay cut. We eliminated the pay 747-400 and A320 pay scale, turning them into 777 and 737 rates respectively. That''s on top of the 30% reduction on the remaining 3 pay scales. There are also huge work rule, retirement, and health insurance concessions.

Please get you facts straight.

 

[767jetz]

avek00,

Nice to see you back on our forum for another round of UA skepticism and bashing. What''s the matter? There hasn''t been enough bad press on UA for a while so you thought you''d stir the pot a bit?

Not that I believe everything written in the paper, but did you read USA Today? Sounds like we may be cash flow postive by summer.

 

[767jetz]

Some more good news for all the skeptics to cry over:

Denver Post, 5-6-03

United sees rewards of revamping
Airline expected to boost bottom line, begin hiring
By Andy Vuong, Denver Post Business Writer
Cost-cutting measures and one-time gains could enable United Airlines, which posted the largest first-quarter loss of any U.S. carrier, to boost its second-quarter bottom line by as much as $1.2 billion.

And after cutting more than 20,000 jobs in the past year, the company plans to start hiring again in June.

United said Monday that it expects to reap the benefits of renegotiated aircraft leases beginning this quarter, which could translate into savings of up to $125 million. Plus, United''s new labor contracts, implemented last week, will cut costs by an estimated $430 million during the quarter.

DETAILS
2ND-QUARTER BOOSTERS

After posting a $1.3 billion first-quarter loss, United Airlines'' second-quarter loss is expected to be significantly less because of the carrier''s cost-saving initiatives and one-time gains. Estimated savings and gains:

$430 million in savings from new labor contracts

$125 million in savings from renegotiated aircraft leases

$270 million government war- relief fund

$365 million tax refund (actual figure)



The company also received a $365 million tax refund in April and is expected to garner $270 million or more in war-relief aid from the government this month.

The savings and one-time gains come on the heels of a $1.3 billion first-quarter net loss and at a time when the carrier is under pressure to show financial improvements to meet crucial bankruptcy loan covenants.

Analysts believe the company''s second-quarter financial performance will provide a better gauge of where the company stands in its restructuring efforts.

"Given that some of these new arrangements are starting to kick in now, (the second quarter) will be more of a picture of what it might look like in the future, certainly more so than the first quarter," said Nicolas Owens, an airline analyst with Morningstar.

Wall Street analysts polled by Thomson First Call on average expect United to post a $600 million second-quarter operating loss, which doesn''t include one-time charges and gains, such as the tax refund. The company posted an operating loss of $958 million in the first quarter.

United didn''t disclose how many aircraft leases it has renegotiated, only saying that it has made "substantial progress" and expects to see "significant savings" in the second quarter. The company, which is looking to save $500 million annually through new aircraft and airport leases, has until August to complete lease negotiations.

United secured annual labor concessions of $2.6 billion last week. The new contracts cut wages, changed work rules and allowed the company to permanently close massive maintenance centers in Indianapolis and Oakland.

United said Monday that it will focus on revenue-boosting initiatives, such as fare sales, now that it has completed most of its cost-cutting efforts.

"Over the next several months ... we will build on several recent initiatives, including the introduction in January of lower business fares, as well as increased advertising about fare sales and targeted fare promotions," the company said in a taped message to employees.

United slashed fares by up to 70 percent in January.

The company can implement another fare sale because it has been able to cut costs drastically while operating under bankruptcy protection, said Richard Gritta, a professor of finance and transportation at the University of Portland in Oregon.

"They can price lower than everybody else. Because of that, they can terrorize their competition," Gritta said.

Also Monday, United said it will start hiring again this summer because its new labor contracts will lead to thousands of early retirements by June 30.

"There will be a need to bring employees back into the workforce," said spokesman Jeff Green.

He said the company will start by recalling workers who have been furloughed or placed on temporary unpaid leave.

United''s flight attendants union also said the company will likely start recalling laid-off employees in June because of increases in flight schedules.

United filed for bankruptcy in December.

 

[Fly]

It is true about the recalled flight attendants. ALL flight attendants on voluntary furlough MUST now rebid their furloughs. With 3000+ (with an estimate of about 4000) flight attendants retiring on June 30th, United is now short f/a's!!! Hurray for everyone! This is what AMR should have done in their TA.....make the new retirement package so cruddy that everyone leaves before it goes into effect

 

[Busdrvr]

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On 5/5/2003 5:43:56 PM Bizman wrote:


Of which 1B is restricted. That means they only have 1.2b to work with, which isn''t a lot when your losing the kind of money UAL is. Atabuy, is also correct. Pay cuts were in effect in the 1st quarter. Where are the rest of the cuts coming from to stop the bleeding. Surely you aren''t counting on a $15 drop in oil prices to ofset over 1B in losses.


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OK, 1.2 billion CASH at a cash burn rate of 2 mill a day during the worst quater of the year with a SARS outbreak, war, slow recovery, $40 a barrel oil, and BK "bookaways". Sounds to me like thats WELL over a years worth of cash. Yes paycuts WERE in effect. Explain then why with less employees YOY, making significantly less than the year befor, how could labor costs have been flat? I actually have a real good Idea why, but I''ll let you figure it out.

 

[KCFlyer]

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On 5/3/2003 1056 PM Busdrvr wrote:

" I still remember KC showing us just how "smart" the average consumer was when his "family" bought tickets on AMR (that paragon of financial stability, that we all said was about 3 months behind us, but what do we know, we're just stupid airline employees) because they considered UAL a "gamble" (remind me NOT to take KC to vegas). As UAL's future becomes more certain, even the most unsophisticated Kansans will see that buying a ticket on UAL is not a risky proposition.


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Don't recall that post Bus. I did recently book 18 of the family on Airtran - who last I saw was making a profit, and whom I considered much less of a gamble that UAL at the date those tickets were purchased, not AA. Great flights both ways, BTW. These unsophisticated Kansans also didn't see the logic in flying to Chicago to get to Tampa, but we fully enjoyed a very sophisticated Caribbean Cruise after we did get to Tampa.

Although I found it interesting that in a post on the AA board, you mention the drop in bookings when a company entered bankruptcy. Was it just "unsophisticated Kansans" or were there a few cosmopolitan Coloradans and Illinoisans and Californians that were doing likewise??

 

[Segue]

Just before PanAm went under, they had lots of promos including triple miles. I "took advantage" of the good deal, only to get stuck in Maimi when they finally shut down. Other carriers were "honoring" the tickets, but only to apply the ticket value towards a full fare walk up price. Some deal.

Bottom line is you take your chances flying a carrier that is in financial difficulties.

 

[Busdrvr]

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On 5/8/2003 2:13:46 PM KCFlyer wrote:

"Don''t recall that post Bus.  I did recently book 18 of the family on Airtran - who last I saw was making a profit, and whom I considered much less of a gamble that UAL at the date those tickets were purchased,"


If DEATH isn''t an issue


"but we fully enjoyed a very sophisticated Caribbean Cruise after we did get to Tampa.   "

Let me guess, Carnival Cruise lines?

"Although I found it interesting that in a post on the AA board, you mention the drop in bookings when a company entered bankruptcy.  Was it just "unsophisticated Kansans" or were there a few cosmopolitan Coloradans and Illinoisans and Californians that were doing likewise??
"

I FULLY acknowledge that there is a real hit to bookings when you enter BK. That''s the point. Those "bookaways" diminish as time goes on. As for Unsophisticated Kansans, I was only refering to YOU.

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[KCFlyer]

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On 5/8/2003 3:09:46 PM Busdrvr wrote:

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On 5/8/2003 2:13:46 PM KCFlyer wrote:


"Don''t recall that post Bus.  I did recently book 18 of the family on Airtran - who last I saw was making a profit, and whom I considered much less of a gamble that UAL at the date those tickets were purchased,"


If DEATH isn''t an issue

Well, all of us and all the other passengers arrived alive. Looks like they''ve improved since their one fatal accident.


"but we fully enjoyed a very sophisticated Caribbean Cruise after we did get to Tampa.   "

Let me guess, Carnival Cruise lines?

Nope, Celebrity actually. Sailed on the Horizon. Very nice ship and very nice cruise line. Kathy Lee was nowhere in sight. It must rate somewhere with UAL pilots as the wife met Bill Records on a Celebrity Alaska cruise

"Although I found it interesting that in a post on the AA board, you mention the drop in bookings when a company entered bankruptcy.  Was it just "unsophisticated Kansans" or were there a few cosmopolitan Coloradans and Illinoisans and Californians that were doing likewise??
"

I FULLY acknowledge that there is a real hit to bookings when you enter BK. That''s the point. Those "bookaways" diminish as time goes on. As for Unsophisticated Kansans, I was only refering to YOU.

Next time you lay over at MCI, you might catch a cab to the "golden ghetto" in Johnson County. Then call us unsophisticated.
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[KCFlyer]

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On 5/8/2003 5:46:39 PM GEO wrote:

Busdrvr...

What is your morbid fascination with Airtran''s "death" flights??? Has not UAL had a few of their own? Those living in glass houses..

You are a sap.



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GEO - my signature is in honor of Busdriver.

 

[GEO]

Busdrvr...

What is your morbid fascination with Airtran's "death" flights??? Has not UAL had a few of their own? Those living in glass houses..

You are a sap.

 

[Busdrvr]

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On 5/8/2003 5:46:39 PM GEO wrote:

Busdrvr...

What is your morbid fascination with Airtran''s "death" flights??? Has not UAL had a few of their own? Those living in glass houses..

You are a sap.



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Are you refering to the Hijacking? Valudeath/Airtran had more inflight FIRES than the REST OF THE INDUSTRY COMBINED last year.

 

[Busdrvr]

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On 5/8/2003 5:53:09 PM KCFlyer wrote:

GEO - my signature is in honor of Busdriver.

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What I''m sure KC will have his lawyers tell the court if irresponsible Valupilots/ Valumechanics kill some of his loved ones. (yeah right). His byline is his way of rationalizing the antics of those incompetant pilots who couldn''t get better jobs (usually because they have a few of those incidents on their records). KC, I see your state in awash in red ink, are you gonna take a huge paycut to balance the books, are do you want the gov to just raise taxes? I think the best course would prob be to outsource to ARK.

 

[KCFlyer]

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On 5/8/2003 9:43:41 PM Busdrvr wrote:

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On 5/8/2003 5:53:09 PM KCFlyer wrote:


GEO - my signature is in honor of Busdriver.

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What I''m sure KC will have his lawyers tell the court if irresponsible Valupilots/ Valumechanics kill some of his loved ones. (yeah right). His byline is his way of rationalizing the antics of those incompetant pilots who couldn''t get better jobs (usually because they have a few of those incidents on their records). KC, I see your state in awash in red ink, are you gonna take a huge paycut to balance the books, are do you want the gov to just raise taxes? I think the best course would prob be to outsource to ARK.


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Not really rationalizing anything. In fact, the thought crossed my mind while reading an old book by Ernie Gann - Fate is the Hunter. Are you saying that all the names listed in the front of that book are only the incompetent pilots? And is it really a negative on a pilots record if a pilot has a fire onboard (your latest straw to grasp at in dissing AirTran)? How about heading for a mountain in a 747? Does a fire onboard outweigh an incident like that? My signature is for your benefit - I''m pretty sure that a lot of your fellow UAL pilots cringe when you bring the "safety" factor into play. While UAL has an admirable recent safety record, that wasn''t always the case. Kudos to all who had a hand in improving it over the past years. But don''t become so overconfident that you feel something will never happen to you - Those NTSB investigators are pretty good about assigning "pilot error" when there isn''t any pilot around to defend him/herself.

Sorry bus, while my state is bleeding some red ink, the county isn''t, although some state funding has been cut back, the county still has a pretty good cash cushion and tax increases are not forecast. They aren''t looking at either paycuts, outsourcing or givebacks, as our wages are not really above "market rates", and we''ve been pretty good about doing more with less.

 

[Busdrvr]

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On 5/9/2003 8:48:48 AM KCFlyer wrote:


Sorry bus, while my state is bleeding some red ink, the county isn't, although some state funding has been cut back, the county still has a pretty good cash cushion and tax increases are not forecast.    They aren't looking at either paycuts, outsourcing or givebacks, as our wages are not really above "market rates", and we've been pretty good about doing more with less. 

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Not above market rates?! were you the ONLY qualified applicant? No?! then you are above market rates.

As for Valudeath, why do you think they bought Airtran? They wanted those nice sleek 737-200s to augment the fleet? They thought "citrus" was a really cool callsign? They DID NOT buy Airtran to change the name. You can do that without having to buy a whole other company (just ask the guys at all american, alegheny, usair, usairways.) They bought Airtran because they needed a new POI. at an airline the POI is basically GOD. Some are VERY liberal (SWA's allows someone other than the flight crew to do the walkarounds and allows handflown CAT III approaches, both unheard of at other major airlines), some are not. Following the everglades incident (captained by an EAL scab), the POI at Valudeath refused to allow them to grow until he was satified that they would be able to do it safely. this seemed to be a long time off considering the age and mechanical condition of the core DC-9 fleet (some jets had long been retired by DAL AND an airline in TURKEY). so what did they do? they found a POI that would turn his head and allow unfettered growth, AND BOUGHT HIM. Unfortunately they had to also buy Airtran (a GREAT little company at the time) and it's jet's (now retired). I'm sure knowing that at least one FAA inspector (thier OWN POI) thought they were dangerous gives you a warm fuzzy when you put 18 of your loved ones in thier hands, but hey, you saved enough to pay for parking right?