Us Airways / America West Merger

[FWAAA]

The point is that passengers book their travel and pay their fee, but most of the time do not travel to some point in the future, which could be months away. Thus, the majority of the passengers flying this summer will have their revenue accounted for much earlier. Q2 and Q3 are the best financial months for an airline and if a company cannot turn a profit during this period, it sends an ominous signal for the airline.

[post="275023"][/post]​

About the bolded portion: The ticket purchases don't become REVENUE until the passengers fly. Until then, their money does not show up on the income statement at all. Nowhere.

As pointed out by Cosmo, until the passengers fly, their money shows up on the balance sheet as cash or, in the case of credit card purchases on bankrupt airlines, as a restricted cash entry (essentially, a receivable) and an offsetting Air Traffic Liability entry. And after flight, then the credit card processor will release the cash to the airline. And the revenue will finally show up on the income statement as Revenue for that month (or quarter, as the case may be).

 

[USA320Pilot]

Cosmo:

I believe United has done a good job negotiating industry competitive contracts, managing its cash, and meeting its DIP financing requirements. But the company, like US Airways and others, still faces huge challenges.

In the case of United it has to figure out how to deal with the Appellate Court setback on aircraft leases that have placed over 100 aircraft at risk of repossession, current fuel prices and its drag on earnings, figure out how to grow revenue, obtain exit financing and articulate a POR.

Today Forbes published an article titled Re-Uniting United. According to the column Forbes contacted a group of aviation experts. Among them: airline consultant Robert W. Mann Jr., Calyon Securities analyst Ray Neidl and Standard & Poor's analyst Philip Baggaley. They were asked what challenges United faces once it exits bankruptcy in early 2006. The consensus forecast: Turbulence is ahead, and Tilton should keep his seat belt tightly fastened. Here's the story:

See Story

By the way, the analysts agree with my recent comment that the company could get smaller. According to Forbes' slide show, "United will have no choice but to emerge as a smaller carrier--about 16% slimmer in the U.S. A greater portion of domestic flying will be outsourced to regional carriers such as SkyWest and Mesa Airlines Group."

Moreover, the analysts confirmed what I had been hearing about aircraft financiers and United. Similar to US Airways' problem, "Fed up with Tilton's hardball bankruptcy tactics, lenders like GECAS, General Electric's aircraft-leasing arm, are pushing to take planes back after a major court victory. Gone are the days of favorable lease rates. The airline stands to lose wide-body 767 and 777 jets flown on some of UAL's most lucrative routes in Europe and the Pacific," Forbes reported.

Meanwhile, today the Chicago Tribune reported that Glenn Tilton expects the company to post a profit in 2006. Here's the story:

See Story

Regards,

USA320Pilot

P.S. Forbes also reported that "In addition, United stands to lose $300 million in code-sharing revenue when bankrupt U.S. Airways Group merges with America West Holdings."

 

[whlinder]

P.S. Forbes also reported that "In addition, United stands to lose $300 million in code-sharing revenue when bankrupt U.S. Airways Group merges with America West Holdings."

[post="275179"][/post]​

Forbes can report what they want, but whether the codeshare continues is up to UA and the DOT.

 

[eolesen]

Forbes can report what they want, but whether the codeshare continues is up to UA and the DOT.

[post="275238"][/post]​

The codeshare could continue on paper, but I doubt there's anything which requires US/HP to be selling US* space on UA flights in markets that they could be selling as US/HP.

 

[ClueByFour]

P.S. Forbes also reported that "In addition, United stands to lose $300 million in code-sharing revenue when bankrupt U.S. Airways Group merges with America West Holdings."

[post="275179"][/post]​

How much does US stand to lose, and what percentage of U's overall revenues does it reflect versus UA?

US needs UA and Star a helluva lot more than the reverse.

 

[diogenes]

Your communication style is typical of the so called pilot "darksiders" and when would now be a good time to get over your anger?
USA320Pilot

[post="275029"][/post]​

A true 'dark side' moment.

When Glass pulls the helmet off, and says "USA320Pilot, I am your father."

:blink:

May the farce be with you

 

[700UW]

DIO, LMFAO!

 

[Cfm56]

Heard in the crew lounge: "Two ugly parents hoping for a beautiful child".

 

[Finish or Ignore]

Cosmo:

By the way, the analysts agree with my recent comment that the company could get smaller. According to Forbes' slide show, "United will have no choice but to emerge as a smaller carrier--about 16% slimmer in the U.S. A greater portion of domestic flying will be outsourced to regional carriers such as SkyWest and Mesa Airlines Group."


Regards,

USA320Pilot

[post="275179"][/post]​

Thank goodness Forbes now has a "credible" source of information!

 

[Finish or Ignore]

USA320
Friendly advice before I leave:

Try to learn difference between "messenger" and "company mouthpiece"

This will be of tremendous benefit to you.

 

[AAviator]

AAviator:

What are you talking about? By the way, thanks for copying my phrases because mimicking me is a great compliment.

In regard to courage, as a furloughee who asked me to send him daily emails so he could be updated on the company, when would now be a good time for you to get over your anger and bitterness and move on? A pilot furlough can be tough and I empathize with your situation, but there is much, much more to life.

Life is too short to harbor such ill feelings because it only hurts the person who keeps those thoughts. It's not healthy, man.

Regards,

USA320Pilot

[post="275076"][/post]​

First, I'm not furloughed. Secondly, the question I asked you couldn't be more simple. Are you or are you not the author known as "the crystal palace court jester" ?

Point blank. Yes or no.

Integrety. Pure and simple.

I'll give you a clue as to where I work too. Lets see if you can figure it out?

Regards,

AAviator

 

[USA320Pilot]

Busdrvr:

In regard to your question on "goodwill", it is my understanding that "goodwill" in the accounting sense is the difference between the actual value of an asset as it is booked by a company, and the price that the company actually paid for that asset. Sometimes it is referred to as "blue sky" but it always references an intangible component of a transaction.

Meanwhile, like America West United cannot fund a corporate combination with US Airways because the Chicago-based airline is broke and failed in the market place like the Arlington-based airline. I suspect when United exeuctives came to CCY a few months ago they wanted US Airways to use its financing partners to help United emerge from bankruptcy and fund a merger between the two companies, although I'm not certain that's the case.

However, it appears United is still unable to articulate a plan of reorganization (yet) and that is likely one reason why US Airways selected America West over United as its new M&A partner.

See Story

Meanwhile, according to Business Travel News, "The renewed US Airways also would maintain domestic United Airlines and worldwide Star Alliance affiliations, becoming the only current domestic LCC to participate in a global airline alliance."

See Story

Regards,

USA320Pilot

 

[Busdrvr]

"In regard to your question on "goodwill", it is my understanding that "goodwill" in the accounting sense is the difference between the actual value of an asset as it is booked by a company, and the price that the company actually paid for that asset."

then you'd be wrong (again)...

http://home.att.net/~s-prasad/GW.htm

Typically, goodwill is the value of a "customer base" or "good name' you're buying when you buy or merge companies. It is also the PV of the future steam of income you expect to get from the purchase OVER normal levels of profit. In practice, good will is booked to prevent companies from buying an airline for say 2 billion, when the sum tangible value of all the assets minus debt equals zero then having to book a $2 billion loss on the deal. Instead they book $2 billion in "good will". But please explain how you ever made the connection good will and advance purchase airline tickets. It's ok to admit you were spouting off without having a clue.



"Meanwhile, like America West United cannot fund a corporate combination with US Airways because the Chicago-based airline is broke and failed in the market place like the Arlington-based airline. I suspect when United exeuctives came to CCY a few months ago they wanted US Airways to use its financing partners to help United emerge from bankruptcy and fund a merger between the two companies, although I'm not certain that's the case."

Good thing you're not "certain" because your're wrong (again). Maybe they came to "CCY" looking for some jets? UAL needs some, U wants to get rid of more.... In any case it's the ELK GROVE TOWNSHIP based airline. Expect the POR to be filed in a month and a half (end of July). sorry, UAL has no interest in being extorted into paying higher than market rates for Jets, MX and regional lift to line the pockets of Guido the Airline CEO (at Air Willy and AC) or the "disposable jet company"

However, it appears United is still unable to articulate a plan of reorganization (yet) and that is likely one reason why US Airways selected America West over United as its new M&A partner.

More likely, U picked the person who made an offer (ANY offer). I honestly hope it works out for you guys (well, most of you guys....)

Meanwhile, according to Business Travel News, "The renewed US Airways also would maintain domestic United Airlines and worldwide Star Alliance affiliations, becoming the only current domestic LCC to participate in a global airline alliance."

weren't you saying U should be "dumping" Star for the "Evil empire"? Oh well, wrong again

 

[USA320Pilot]

Busdrvr:

Busdrvr said: “Maybe (United employees) they came to "CCY" looking for some jets? UAL needs some, U wants to get rid of more.â€￾ In any case it's the ELK GROVE TOWNSHIP based airline.

USA320pilot comments: I doubt UAL came to CCY to obtain US Airways jets, since the company cannot pay its pensions, just extracted more concessions from its employees, has not been able to reach new agreements on up to 80 current jets, and will likely be in bankruptcy for at least 3 years, if not longer. UAL has not been able to obtain exit financing and repeatedly needs.

The good news for UAL employees according to the Chicago Tribune is that last Monday, another effort by the airline to exit bankruptcy also moved forward when United announced it has purchased four Boeing 767s that it has been leasing from creditors. The deal is subject to bankruptcy court approval. The purchase price was not disclosed, said United spokeswoman Jean Medina. The airline still has 70 to 80 leases to be renegotiated, she said.

The Tribune also noted frustration is beginning to grow that United has yet to submit a reorganization plan, said Joseph Schwieterman, an economics professor at DePaul University who specializes in transportation.

"Investors are ready for United to stick to a timetable, to announce a schedule and live by it," he said.

http://www.chicagotribune.com/business/chi...ack=2&cset=true

In regard to the United code share, I believe it would be better for US Airways to be with a stronger carrier, but it appears the new US Airways has elected to shift its North American code sharing alliance to internal U.S. flights and international North American connections to Air Canada. This is likely another reason United executives were upset at being "shunned" by US Airways when their conversations were overheard by US Airways employees when they recently left CCY. By the way, I understand United executives were very, very upset at the US Airways executive suite when they left CCY. One reason is likely to be that the Elk Grove Township-based company, in a suburb near Chicago, stands to lose hundreds of millions of dollars in code share revenue and will most likely have to be made up with more cost cuts or additional revenue gains.

By the way, if US Airways is of no consequence then why do you visit this message board with so much emotion? If my comments have no merit then why do you not just ignore them?

Regards,

USA320Pilot

 

[Busdrvr]

By the way, if US Airways is of no consequence then why do you visit this message board with so much emotion? If my comments have no merit then why do you not just ignore them?

Because YOUR COMMENTS ARE QUITE OFTEN UNINFORMED AND IDIOTIC. I wouldn't want the three remaining people who actually believe a word you say to look stupid by quoting you to freinds and family. Consider it a public service. I'd hate some former employee to flunk a Community College accounting course because they remembered some bad definitions you put out on the board....

I doubt UAL came to CCY to obtain US Airways jets, since the company cannot pay its pensions, just extracted more concessions from its employees,

United announced it has purchased four Boeing 767s that it has been leasing from creditors.

Well which is it. Can UAL afford to buy jets or not? I see consistancy is one of your strong points

UAL has not been able to obtain exit financing and repeatedly needs.

An outright lie and you know it. The financing is lined up and has been reported to be. Yet you ignore anything that doesn't support your delusions.

By the way, I understand United executives were very, very upset at the US Airways executive suite when they left CCY.

And what is your source? The janitor? Oh wait, I'm sorry, it was the whole BOD who immediately checked your schedule so they could hold a meeting on your jumpseat.

stands to lose hundreds of millions of dollars in code share revenue and will most likely have to be made up with more cost cuts or additional revenue gains.

Likely not. the truth is UAL stands to gain many of the loyal U following as theyshift more and more to toward being UAL customers. U are already "cutting back" on some of the transcons. Now, instead of the option to codeshare on to a UAL flight to HNL (on a 777) you will require them to ride on a 757 operated by an airline with one of the worst customer service records in the industry. Plus with your record of destroying good compnaies after merging with them, UAL stands to gain all the 'loyal" AWA customers also.