Us Airways U United Airlines Update

[Cosmo]

By the way, there is further reason to believe there will be a corporate combination between our two companies.

You're incredible, Chip. You don't provide even a vague rationale to explain why such a combination would take place, especially after the mostly upbeat report about United's most recent bankruptcy court hearing (which, incidentally, you've done your utmost to trash). So why would you keep repeating this nonsense, unless it's just to hear yourself talk?

Your constant drumbeat of "United and US Airways will have a UCT/ICT/merger but I can't tell you how I know this" is becoming more and more shrill and, frankly, sounds increasingly desperate on your part. Perhaps this is due to the worsening competitive and financial situation facing your own carrier, US Airways. Regardless, if you actually took the time to read the bankruptcy court transcript from last Friday's hearing, or listened to Tilton's weekly "Eye-On-UAL" messages, or looked at United's recent monthly and quarterly financial reports, it would be clear even to you that United is planning to emerge from bankruptcy as an independent operation -- and you have provided NO evidence to the contrary. The fact that US Airways or Bronner may want to merge with United post-bankruptcy doesn't mean much if United doesn't share that desire, and by all current indications, they don't!

BTW, you've made three posts since my previous post showing that you were wrong in your characterization of United's October results in comparison to some analysts' predictions of the carrier's 4th quarter 2003 numbers, such that you contradicted one of your own posts from early November. Yet you've ignored my post and I still haven't seen an admission of wrong-doing from you on an item that everybody else reading this board KNOWS you screwed up on. What's the matter -- will your head explode if you say (or type) the words "I made an error" or "I was wrong"?

 

[ual06]

" By the way, there is further reason to believe there will be a corporate combination between our two companies.

Regards,

Chip "


??????????


Dream, Dream, Dream

 

[Cosmo]

One more thing, Chip --

The following comment was made by United's counsel at last Friday's bankruptcy court hearing:

Thus, rather than letting artificial timing constraints limit its accomplishments inside of Chapter 11, United's accomplishments and the flexibility provided by the Company's improved financial performance, are driving its timing in Chapter 11.

Don't you think that this was a slap at US Airways, insinuating that United may spend a longer time in Chapter 11 but will likely have better post-bankruptcy prospects than US Airways has seen, at least to date?

 

[767jetz]

767jetz:

I disagree with your post because I normally use words like could or should versus will.

Chip,

Why won't you respond to a direct question? We are still waiting for you to account for your incorrect spectualtions of UA losing $400 - $500Million in Q4.

I find it interesting that you are incapable of admitting you and your analysts are wrong.

By the way, USAir stabilizing it's business plan is a BIG question mark. According to some of the news articles I've read on this issue from this board today, the number of skeptics is growing rapidly.

IMHO, as UA continues it's momentum, and USAir's position slips, the likelyhood of consolidation increases, but not the way you envision it. IMO it could take the form of Bronner liquidating to get his investment out, and UA absorbing some of US's few valuable assets. Do I like that idea? Absolutely not! I don't want to see good folks lose their jobs, and I don't want the integration headaches for UA. It would be better for US to get their act together and continue the current codeshare arrangement. But the prospect of US stabilizing it's business without further shrinking and cuts, is getting smaller.

 

[USFlyer]

Good lord, how many times can we beat the same dead horse?!

 

[trollydolly]

To whom it may concern;

Mr. Tilton was just in Frankfurt, and held a meeting at one of the hotels in the downtown area. At this meeting many questions were asked. Specifically if there would be a merger between U and UA. His immediate response was that UA has been working with U and there code share agreement in order to help strengthen both carriers, but as far a a merger between the two carriers, the answer was a flat out no. Merger talks are not even on the table, just "Star" talks and code share talks. I hope this clears up any rumors or specualtions about a merger, and it comes from a good source, the CEO of UA.

Best Regards

 

[737nCH11]

It clears it up for me, but I guarantee you that Chip will say that Tilton is lying.

 

[TheLarkAscending]

767jetz:

I disagree with your post because I normally use words like could or should versus will. By the way, there is further reason to believe there will be a corporate combination between our two companies.

Regards,

Chip

Really?

 

[767jetz]

767jetz:

I disagree with your post because I normally use words like could or should versus will. By the way, there is further reason to believe there will be a corporate combination between our two companies.

Lark,

BINGO

Funny how a person can make a claim in one sentence, and then contradict themselves in the very next. Very credible, huh?

You and I both know the word for people like that. (starts with "N")

 

[767jetz]

...as far a a merger between the two carriers, the answer was a flat out no. Merger talks are not even on the table, just "Star" talks and code share talks.

Thanks for the info trollydolly.

It sounds pretty clear to me. It's the same message echoed by every one of my sources too. But there will be one person who will claim it is just a public front to hide the transaction du jour.

 

[767jetz]

Chip Munn stated on Nov. 1, 2003:

"If the Denver Posts comments today (that United's planes are booked more fully and at higher fares than last year, analysts predict a fourth-quarter loss in the range of $400 million to $500 million," not including bankruptcy costs) come true, than United could be in deep, deep trouble by the first week in March when the POR must be filed, where the airline could lose about $1 billion in Q4 and Q1, not including bankruptcy costs."

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Chip Munn stated on Nov. 23, 2003:

"Question #4 – United posted a net loss of $149 million in October; therefore, if they lost $251 million in November and December the $400 million target will be hit. The $400 million number was obtained from the Denver Post who said analysts predicted the numbers."

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Chip,

We are still waiting for you to respond to this. There are 2 issues.

First is the fact that your prediction and that of your sources were not only wrong, but it appears you weren't even in the ball park! Still you fail to admit that your sources are indeed often wrong. When faced with proof, you consistently avoid accounting for you speculations, and usually try top drop the subject.

Gee, isn't it just so convenient to say, "well I just don't read every post. I must have missed that one."

Second is the fact that you contradicted your very own words. You try to twist words to make it seem like your statements were correct all along when they obviously were not. Most people consider this flat out lying Chip. You darn well that you were wrong, but you still won't admit it.

Are you afraid that admiting your sources are wrong might cast doubt on their accuracy in the future? Don't worry, everyonge already knows you and your sources are consistently wrong. We all know that nothing significant from your speculations and predictions has come true yet. We just want you to admit the truth.

 

[AAviator]

Oh come on, he's only calling it an "update"

Read this. http://www.planebusiness.com/perspectives/...1099jester.html

Some of Chips earlier work?

 

[ClueByFour]

Good lord, how many times can we beat the same dead horse?!

Glue at 11.

 

[USA320Pilot]

To all of the United employees/interested parties who posted in this topic:

What I find interesting is the emotion you bring to the US Airways board while you rarely post on the United board. If my comments are not true, then why do you waste your time posting on the US Airways board with so much emotion?

Why not spend your time doing something else?

767jetz, I have taken a few days away from "Internet sparring" to spend more time with my family. My son has a serious medical condition and as many readers know we already had two of our children prematurely killed in separate car accidents. Therefore, cool it with your "smart aleck" comments.

I'm not in much mood to spend time debating my comments with you. But, you know exactly where the comments came from on the $400 to $500 million so grow up and stop trying to "shoot the messenger".

United reported a net income for October of $25 million that excluded reorganization expenses of $149 million, therefore, the loss was $124 million. Therefore, it's not hard to figure out how the company could lose $400 to $500 million, as the Denver Post reported (not Chip Munn, which you knew when you posted your comment).

Regardless, United has significant challenges to over come if it’s going to emerge. Furthermore, Glenn Tilton is providing spin, just like Dave Siegel did, because if a bankrupt airlines true financial picture became public knowledge there would likely be passenger defection, thus a liquidation could be a self fulfilling prophecy.

However, the 174 unresolved EETC's are becoming a difficult renegotiation, the 3 remaining UCT airport municipal bond negotiations (in default since last April) have yet to see a resolution, the ACA/Mesa/Dulles fiasco seems to be getting worse, and the pension issue is likely to become an enormous challenge with the disappointing congressional news prior to this week's recess.

Last Tuesday the Senate left Washington, D.C. without providing a "unanimous consent" instead of a roll call vote that would have given a legislative solution to United's huge underfunded pension problem. ALPA R&I now believes there will not be legislative relief for the Chicago-based company's DB retirement plans even though there is one more small opportunity when Congress goes back into session December 9.

In fact, Senate staff members have told US Airways and ALPA lobbyists that any pension relief would still require a "unanimous consent", which they consider very difficult to obtain on such a demanding issue with so little time left before the next recess and the end of year requirements.

Maybe that is why United ALPA spokeswoman Captain Scotty Clark was so despondent in her November 26 recorded message at 800-THE-ALPA. Clark talked about the "disappointment and frustration" for all United pilots in her prepared comments clearly indicating the huge problem.

Why? Because United recently informed the SEC that without legislative relief, the company would be required to put $4.8 billion into its DB Plans during the next five years, with most of the payments due by 2006. Simply put, the company cannot do this.

Therefore, in my opinion, considering my experience on Capital Hill doing pension lobbying and witnessing Bankruptcy Court pension termination hearings, it appears the only way United can obtain a loan guarantee and emerge is to terminate the pension(s). But, the question is, to meet the 7% profit margin within 7 years required by the ATSB; can the company afford a replacement DC Plan in light of deteriorating industry fundamentals?

In regard to ACA, this issue seems to be getting worse for United. The Dulles-based airline amended its complaint and included United in the suit. Furthermore, three days ago ACA said it was in the process of seeking written consent from shareholders, which will significantly delay the Mesa takeover bid.

Separately, regardless of what you say, there are reports United cannot easily replace over 100 RJs/Turboprops to provide Dulles feed without ACA in the picture, unless Mesa gains control of the regional company with the hostile takeover bid.

Last summer I told you that United had DIP problems and then reported Captain Duane Woerth's comments to the US Airways MEC made in open session, but you vehemently told me Woerth and I were wrong.

But, low and behold, United's bankruptcy attorney Jim Sprayregen recently told the bankruptcy court, “some of the aforementioned challenges placed great strain on United's business operations earlier in 2003. At that time, it appeared possible that our financial performance would not recover sufficiently to avoid a violation of our DIP covenants by around mid-year, and possible liquidity constraints in early 2004."

How could that be? Moreover, did United management lie only last summer or could they be doing it again?

Meanwhile, it appears Ted is not all as advertised and last week Crain's Business News made some interesting points. The periodical said the marketing hoopla surrounding Ted obscures the fundamental question of whether United Airlines' new high-concept, low-fare airline-within-an-airline can compete profitably with fast-growing discount rivals. As it prepares for takeoff from Denver to 12 vacation destinations in February, Ted is flying into a stiff head wind of skepticism about its ability to bring costs in line with lower fares. "It could be even less profitable than the main line," says Robert Mann Jr., an aviation consultant in Port Washington, N.Y. "If the costs aren't much less and the revenues are much less, the economics aren't as good as for the main line." Skeptics note that United still has higher costs than any low-fare airline, even after Elk Grove Township-based parent UAL Corp. laid off almost one-fourth of its workforce and won $5 billion in labor concessions and other annual cost savings in Bankruptcy Court over the past year. United is the latest of many struggling airlines to spin off a low-fare venture in recent years, none of which — including Shuttle by United, which was shut down in late 2001 — have succeeded against the all-discount carriers, such as Dallas-based Southwest Airlines.

The 1½-cent difference -- As of Sept. 30, United's costs were 9.88 cents per available seat-mile, an industry benchmark measuring costs across every mile each seat is flown, vs. 8.34 cents for Frontier Airlines, its main rival at Denver. That penny-and-a-half puts United's costs more than 18% higher than Frontier's. "That could make a big difference," says New York-based Blaylock & Partners analyst Ray Neidl, Crain's reported.

Bob Mann is a highly respected consultant who has been employed by ALPA and APA. When he says, "It could be even less profitable than the main line," you should be concerned because I believe the ATSB will have the same thoughts as Mann.

In conclusion, I am tired of debating this issue and for you to try and be "I told you so's". Without pension relief, no reasonable ACA/Mesa/Dulles solution in sight, and Ted likely to have poor P&L, United has significant problems and maybe the UCT is not dead after all, although, I now believe an AF-KLM type of merger could be the likely type of corporate transaction completed by the business partners.

Regardless, both companies need to stabilize their business before they can consider a merger, but consolidation is inevitable.

Respectfully,

Chip

 

[tadjr]

To all of the United employees/interested parties who posted in this topic:

What I find interesting is the emotion you bring to the US Airways board while you rarely post on the United board. If my comments are not true, then why do you waste your time posting on the US Airways board with so much emotion?

Maybe because you continue to start threads with titles such as....

Us Airways U United Airlines Update

on the US board. Could that be the reason they come here? On a personal note, Chip while I enjoy your "inside source" thoughts, you really need to knock off the UA poster bashing. Why does it matter why they come here instead of the UA board? If you dont want them to read and respond, dont post it, otherwise debate what they post, answer their questions when they ask you (and start reading all posts cause you tend to only miss the ones where they ask you questions) and notice that they dont just respond here to the threads you start, but tend to chime in on other threads where relevant and welcomed without someone questioning why they are here. Get over it already!