United Revenues Increasing

[USA320Pilot]

Ukridge:

Time will tell how this all turns out and it's only because of you, who admittedly is a sophist, that this discussion has occured on this board.

However, people can choose to believe my comments or not, but I have never purposely mislead anybody.

Nonetheless, here's a balanced article (the hyperlink below) describing the United's situation where I believe Associated Press reporter Dave Carpenter has an appropriate perspective, especially with the fall travel season and September 11 anniversary approaching.

United Airlines Remains Unprofitable

In conclusion, I believe why the United supporters are so emotional is that they are scared because of the in-court restructuring uncertainty. That’s understandable, but here’s a valid question. If other exit financing is not unavailable, which up to this point has not been obtained, would it be better for United to sell assets to Delta, US Airways, or another carrier to enable an emergence or liquidate?

After all, as Carpenter wrote, “Based on its target of a spring 2004 emergence from Chapter 11, the airline is roughly halfway through an overhaul it began Dec. 9 with the largest bankruptcy filing in aviation history. But the success of its reorganization isn't assured. The airline industry, while gradually recovering, is still weak. Even $300 million in government aid couldn't prevent United from posting a $623 million second-quarter loss - its 12th straight deficit.â€￾

"The world's No. 2 carrier reported a net loss of $112 million in announcing results Monday for July, its eighth month in Chapter 11 bankruptcy," Carpenter wrote.

Ukridge, are Carpenter’s comments true or false?

Best regards,

Chip

 

[Busdrvr]

Nonetheless, here's a balanced article (the hyperlink below) describing the United's situation where I believe Associated Press reporter Dave Carpenter has an appropriate perspective, especially with the fall travel season and September 11 anniversary approaching.

United Airlines Remains Unprofitable

If other exit financing is not unavailable, which up to this point has not been obtained, would it be better for United to sell assets to Delta, US Airways, or another carrier to enable an emergence or liquidate?

After all, as Carpenter wrote, “Based on its target of a spring 2004 emergence from Chapter 11, the airline is roughly halfway through an overhaul it began Dec. 9 with the largest bankruptcy filing in aviation history. But the success of its reorganization isn't assured. The airline industry, while gradually recovering, is still weak. Even $300 million in government aid couldn't prevent United from posting a $623 million second-quarter loss - its 12th straight deficit.â€￾

"The world's No. 2 carrier reported a net loss of $112 million in announcing results Monday for July, its eighth month in Chapter 11 bankruptcy," Carpenter wrote.

Ukridge, are Carpenter’s comments true or false?

UAL06,
YOU WIN!! Of course we ALL knew which articles Chip would pick. Chip, WTH is Dave Carpenter? Does he warrent extra notice since his name is "Dave"?

Exit financing is currently being worked out. Admittedly, the ATSB will be very carefull, since U's plan for recovery has fallen short of all it's assumptions. BTW Chip, please explain to us all who don't have the understanding of BK that you have just what the "loss" in July has to do with UAL meeting ALL it's dip requirements (since U missed it's DIP requirements, you should the know pitfalls). Please clear it up for us. What is the definition of EBITAR Chip? What was UALs performance in July with respect to EBITAR? (hint probably a "profit" of approx 150-200 million). At least be consistant iwth the numbers you use. Don't babble on about "net" when only EBITAR matters.

 

[USA320Pilot]

Busdrvr & 767jetz:

To answer your question I do not know the exact tail numbers of the United EETC's owned by RSA, controlled by the US Airways chairman, however, I was just told by US Airways senior management RSA holds paper. Personally, I do not care which aircraft they are.

However, in your frustration it has become clear that you feel the need to spare with me. Normally, I do not engage in that type of internet activity, except when their is clear misrepresentation.

Therefore, can you tell me if the following two paragraphs are true or false?

For the second quarter US Airways took took a $92 million charge related to the stock granted to employees as part of its restructuring. What's interesting is the stock has not even been distributed, yet. Without this unusual charge, the net profit including other one-time items would have been $105 million, which would have been the highest of the network carriers.

United Airlines reported a number of unusual one-time items. The net profit (loss) excluding one time items only represent a credit for $365 IRS tax refund and $300 million in federal aid because the other one-time items were associated with the company’s formal reorganization. Without these two gains, United would have lost $1.096 billion during the second quarter. Regardless, United still posted a quarterly loss of over $600 million.

Best regards,

Chip

 

[Busdrvr]

chip, how many months of operating profits did U report while in BK?
Tell me which part of this statement is false, NET PROFIT ARE COMPLETELY IRRELEVENT. ONLY EBITAR MATTERS TOWARD MEETING DIP REQUIREMENTS (AND INCREASING CASH RESERVES).

So now you finally admit that you don't have a clue if the RSA owns ANY EETC's on UAL jets. For all you know, little Davie has a minority position on 1 757. That sucking sound is your credibility going away............

 

[exagony]

Chippie is just upset he went to a dead end, soon to be out of bx regional carrier like U unstead of sticking it out at UA. Shows how good an analyist he is. The only problem with that sucking sound being Chippies credibility being sucked out is - don't you need some credibility to start with?

 

[737nCH11]

Chip,

Your comment about UAL's Q2 loss is false. At a business lunch that I attended in the Chicago area, a senior UAL exec stated that sans the restructuring charges UAL's loss would have equaled or been less than AMR's Q2 loss.

I have always been willing to listen to your arguments, as everyone has a right to their opinion. However, it is becoming increasing obvious that you have some personal axe to grind either with UAL or with it's employees. Because of this reason, I won't be reading your future posts. If you find that you have some verifiable bit of information, or you find that you have something constructive to add to this board, pm me and maybe I'll reconsider.

Sincerely,

737


P.S. Way to go UAL employees! You guys and gals have had some huge obstacles along the way (and a few more to go), but you are proving every day that United Will Stand!

 

[Cosmo]

Therefore, can you tell me if the following two paragraphs are true or false?

For the second quarter US Airways took took a $92 million charge related to the stock granted to employees as part of its restructuring. What's interesting is the stock has not even been distributed, yet. Without this unusual charge, the net profit including other one-time items would have been $105 million, which would have been the highest of the network carriers.

United Airlines reported a number of unusual one-time items. The net profit (loss) excluding one time items only represent a credit for $365 IRS tax refund and $300 million in federal aid because the other one-time items were associated with the company’s formal reorganization. Without these two gains, United would have lost $1.096 billion during the second quarter. Regardless, United still posted a quarterly loss of over $600 million.

Well, Chip, I've been waiting for you to bring up the subject of United's second quarter results again!

To answer your question, I believe that your first paragraph is correct in part, regarding the $92 million charge, although I don't know if US Airways' net income without that charge really would have exceeded all the other network carriers' reported net incomes. Maybe it would, maybe it wouldn't, since I haven't seen a detailed comparison. But more importantly, is it a fair comparison with other carriers if only US Airways' net income is adjusted?

However, that's not really why I'm posting ...

Since you asked, it gives me great pleasure to point out that your second paragraph does indeed contain a FALSE statement. (Actually, it contains two errors, but I'm not going to quibble about the "$365 [sic] IRS tax refund" being off by a few hundred million dollars.) The sentence shown below ...

Without these two gains, United would have lost $1.096 billion during the second quarter.

... is demonstrably false. In your continuing effort to show any of United's results in the worst possible light, you neglected to actually look at the carrier's financial tables included in the press release. Had you done so, you would have noticed that there was no entry in the income tax line for the 2nd quarter of 2003. Thus, while the $365 million income tax refund was a cash flow item for United during that quarter, it was not an income statement item because the income tax credits were recorded in one or more prior quarters.

So United's net loss without the tax refund and the Federal aid would have "only" been around $730 million in the 2nd quarter. While that's still a very large number, it doesn't fully reflect the employee salary and benefit cost and aircraft lease cost reductions (among other things) implemented during the quarter. And it's well below the bogus "$1.096 billion" figure that you have repeatedly posted since United's numbers were released at the beginning of this month.

Perhaps you should review United's 2nd quarter 2003 financial results a bit more carefully. Here is United's press release to assist you. And carefully note the numbers in the income statement towards the bottom of the press release.

I find it to be extremely interesting that, in your haste to accentuate just about any negative news regarding United, you would be so careless with financial details that could be so easily checked and, if necessary, corrected. But then I suppose that your breathless commentary wouldn't have been anywhere near as dramatic if you didn't claim that United's quarterly loss exceeded $1 billion, whether it was true or not.

And as I've mentioned to you previously, if you're going to challenge folks to find errors in your posts, IMHO you really should make damn sure that there aren't any such errors for anyone to find. Otherwise your credibility will be (further?) diminished.

 

[737nCH11]

His credibility meter is pegged at zero.

 

[AirplaneFan]

767jetz:

Do you think it's possible that the information I have posted is fact, but is something you do not like, thus you take exception to my comments?

Chip,

Ummmmmmm.... NO.
I don't think it's possible, because I happen to know that it is NOT fact.
The only reason I take exception to your comments is because you post opinion and speculation AS fact.

The botom line is that it is your OPINION against everyone else's OPINION. Folks will judge for themselves who to believe. But only time will tell.

By the way, have you ever noticed that no one here goes to the US board to predict undesirable things to the US employees and spread rumor as fact? In fact the only things I post there are positive views on UA to rebutt your constant negativity and predictions of undesirable outcomes for UA employees.

No one here wants your negative spin. Quiet frankly I doubt any one see's you for more than the opinionated self-righteous spinster that you are. So why don't you save it for another audience who wants to hear it. You've turned into the guy that crashes a party, that know one wants around, and won't take a hint and leave.

I would agree that many of you guys like to rip Chip. Of course, the reason why the moderators of the US Aviation board haven't taken Chip to task is because HE HASN'T DONE ANYTHING WRONG. His posts are informative and well sourced. Of course some of you don't like it because it doesn't fit into your polyana view of the world.

The facts are that UAL is still losing money, two years after the recession is over and in one of the buziest travel months of the year. Midway is done (virtually done?) with airport modifications which will help SW and ATA. ACA has for the moment said that they no longer want to be a feeder for UAL at IAD.

So I don't think that UAL is out of the woods by any stretch of the imagination. The only area of disagreement with Chip is that I don't think any of the hub-n-spokes is set up to survive long term the way they are currently constituted.

 

[Analyst]

Chip, Keep up the informative postings. Your information is accurate regarding the UAL situation and it is understandable that the employees are very frustrated with their airline and future.

 

[737nCH11]

And your definition of accurate is?????

 

[trollydolly]

FOR AN AIRLINE THAT SEEMS TO BE SELLING (OR GOING TO SELL) ITS ASSETS, THIS SURE IS A HUGE CONTRIDICTION. IN ADDITION, COULD THIS NEWS BE A SMALL PART (CHINA) OF UAL'S BUISNESS PLAN? Sorry that I pasted the whole article, but I could not resist.

United Airlines to resume full trans-Pacific services next month
MARGARET WONG
Associated Press

HONG KONG - United Airlines said Tuesday it will restore all trans-Pacific flights next month, including those from Hong Kong, as it attempts to recover from the sharp downturn in air travel caused by SARS.

Meanwhile, United's chief executive, Glenn Tilton, who begins a two-day trip to Beijing on Wednesday, said he will discuss cooperation plans with mainland Chinese airlines to help United expand into the booming mainland Chinese aviation market.

United, the world's No. 2 carrier, slashed 75 percent of its flights in and out of Hong Kong at the peak of the severe acute respiratory syndrome outbreak, said Mark Schwab, a United vice president.

The airline, which earns 17 percent of its revenue from trans-Pacific routes, has been gradually restoring its services since SARS fears eased in June, Schwab said. The airline will also resume daily flights between Hong Kong and Singapore on Oct. 26, he said.

SARS first surfaced in mainland China late last year and killed 299 people in Hong Kong. The virus prompted travel warnings across Asia and devastated Hong Kong's tourism industry.

United Senior Vice President Graham Atkinson said the airline is "seeing a significant upturn in terms of business travelers' pent-up demand," but a full recovery is only expected by the end of this year or early next year.

Tilton said he will discuss with mainland Chinese carriers' possible cooperation, such as code-sharing, frequent-flyer programs and facility sharing.

The code-sharing agreement would allow United to put its UA flight numbers on its mainland partner's services and sell seats as if they were on United flights.

Tilton declined to name a partner but hinted that it might be Air China.

"In the event that a code-share with Air China would happen, that would be a good thing and would benefit passenger connectivity," Tilton said. He said the possible tie-up was one of the "worst-kept secrets" in the airline industry.

Tilton said the Asia-Pacific market, with its potentially huge economic growth, presents the "most significant" international opportunity for United.

"We are more committed than ever to the region, to China, to Hong Kong," Tilton said.

Tilton said he hopes the Chinese partners will eventually become a member of Star Alliance, a network of 16 carriers that includes United, Air Canada, Deutsche Lufthansa and Singapore Airlines.

Selina Chow, chairman of the Hong Kong Tourism Board, said despite a strong rebound in the short-haul market, the number of visitors from the United States in July was still down 42 percent compared with the same month last year.

"This is understandable because it always takes a bit more time to rebuild confidence in the long-haul market and convert interest into actual travel," Chow said.

American travelers are the fourth largest group of visitors to Hong Kong, with more than 1 million arriving here last year, according to Chow.

 

[737nCH11]

Trollydolly,

This article is totally false. According to an interview with Dr. Dave Bronner in the Birmingham Gazette, UAL CEO Glen Tilton has a severe MSG allergy, and will soon be transferring all China flying to USAir. This may hold for all SFO flying also, as the airport is so close to China Town. h34r:

 

[767jetz]

Gee, you're right! It DOES sound like an airline ready to sell assets just to keep it's head above water! Also sounds like an airline without a plan and a bleak future. This will kill any hope of obtaining exit financing or an ATSB guarantee. Who in their right mind would want to invest in an airline that can print money in Asia??

Oh no! Maybe Chip was right! :blink:


NOT...

 

[USA320Pilot]

I’m going to volley back and forth or exchange internet jabs on this subject, but even though United has made formal restructuring progress, the company’s future appears murky and the carrier may be forced to sell assets to emerge.

In regard to RSA owning United EETC's, the information was provided to me by US Airways senior management. Specifically, which tail numbers? I do not know nor do I care because that's not the point.

Meanwhile, United did narrow its July net loss to $112 million in July from a $310 million in June, but the fall travel season will be a challenge for all ATA companies. I believe it’s good news that the company’s revenue climbed 10% in July year-over-year, which exceeded the ATA average of 8.1 percent, but I believe this needs to be put into perspective. Let’s not forget that United was dead last for hub-and-spoke RASM for Q2, so it’s difficult to analyze a 10% jump for the same period last year. What I would like to know, which is only reported on a quarterly basis (except for Continental), what’s the Chicago-based airlines RASM in relation to its peers?

Regardless, the in-court restructuring clock is ticking because the company has just about three months to submit its POR, settle major disputes at Denver and Dulles, answer a motion filed with the court by the hub cities (Los Angeles, San Francisco, Chicago, Denver, and New York City) probably apply and hopefully receive a loan guarantee, fund its pension plans where Tilton told employees in a recorded message the retirement concessions are not enough to meet its obligations, find some sort of exit financing, or find an equity plan sponsor. Furthermore, if the face of post Labor Day traffic declines, United must continue to meet more stringent DIP financing requirements to be cash flow positive, obtain certain revenue targets, and have a cumulative EBITDAR of $46 million in October and $112 million in November.

Can it be done? Yes, but with the seasonal decline in fall travel, the amount of work that needs to be done quickly, and the need to emerge, the company may be forced to sell assets to emerge.

Again, is it better to sell assets to US Airways to keep the revenue within the alliance, sell assets to other competitors, or liquidate the company if the airline cannot obtain exit financing? Let’s be honest here, if United had such a strong POR then why, up to this point, has the airline been unable to obtain exit financing, since up to $1.5 billion in DIP financing will have to be repaid to emerge from court protection?

Best regards,

Chip