US Airways, United Couldn't Merge, So Now They're Partners

[chipmunn]

Siegel: Revenues from alliance with United will be substantial

WASHINGTON (Aviation Daily) - US Airways President and CEO David Siegel said the revenue benefits from the airline's recently approved codesharing alliance with United Airlines will be substantial and in the hundreds of millions of dollars.

In a taped message to employees Friday (October 4), Siegel said the US Dept. of Transportation okay was great news for the company's revenues and its restructuring in Chapter 11 bankruptcy. The name of the game here is revenue, he said, adding that the importance of the alliance cannot be underestimated.

The airline will move quickly to implement the agreement and the codeshare will begin early next year. Siegel said it will start with a handful of routes but will build very quickly. He reconfirmed that passengers will be able to access either airline's airport clubs beginning Oct. 14. He specified that reciprocal frequent-flier mileage accrual will begin on Nov. 1 and club members will be able to redeem miles early next year.

Siegel reiterated to employees how important the Washington-New York-Boston Shuttle market is. Last week US Airways leapfrogged the competition, he said, by issuing five guarantees that center on its Shuttle's reliability. It is very important to remain very, very confident in our ability to provide reliable service with superiority, he said, noting that the competition from Delta Air Lines, Comair and American Eagle has intensified in this very strategic market for the carrier.

 

[chipmunn]

[A href=http://www.washingtonpost.com/wp-dyn/articles/A63138-2002Oct8.html][FONT face=Times New Roman size=3]http://www.washingtonpost.com/wp-dyn/articles/A63138-2002Oct8.html[/FONT][/A]

 

[UAL777flyer]

Unfortunately, if the DL/CO/NW alliance goes through, it will greatly diminish the value of a UA/US alliance.

 

[chipmunn]

[FONT face=Times New Roman size=3]Reports inidcate UAL has prepared a formal bankuptcy petition with the help of law firm Kirkland & Ellis, investment-banking concern Rothschild North America, and restructuring consultants McKenzie Consulting. Moreover, I understand the ATSB has the governance issue in its cross hairs. Unless something changes, no governance relief, no federal loan guarantee. [BR][BR][/FONT][FONT face=Times New Roman size=3]UAL MEC Chairman Paul Whiteford, chairman of the United pilots union, in a letter e-mailed to members last week, said the airline is at crunch time. [BR][BR][STRONG]Time is of the essence[/STRONG]. We are not under any artificial deadlines or any company, ATSB or [UNION]-imposed deadlines. We are under a [STRONG]practical deadline[/STRONG], one which cannot be postponed, delayed or set aside, Whiteford said. Quite simply, United must have a substantial loan in place [STRONG]prior to[/STRONG] mid-November.[BR][BR]UAL's fourth quarter debt payment are: [BR][BR][/FONT][FONT face=Times New Roman size=3]May 2004 10.67% Series E senior debentures November 1 $19.7 million [BR]May 2014 11.21% Series B senior debentures November 1 $20.8 million [BR]Bank revolving credit facility November 17 $300 million [BR]Aircraft-backed security December 2 $575 million [BR]Machinists union back-pay installment December 15 $70 million [BR][BR]Total 4th quarter one-time debt aymennts $985.5million[BR][BR][/FONT][FONT face=Times New Roman][FONT size=3][SPAN class=BodyFont]The third quarter First Call Consensus EPS estimate is for a -$6.61, which would be a net loss of $376, but some analysts believe the company could report a larger loss closer to $500 million, primarily due to the significant September revenue falloff. The earnings release date is November 11.[BR][BR]The daily fourth quarter cash burn rate could be about $7 million per day or about $642 million for the quarter. UA has has $985.5 million in fourth quarter debt payments and a first quarter 2003 loan payment of $400 million. [BR][BR]The total estimated operating loss and debt payments from July 1 to December 31 could be $2.004 billion.[/SPAN][BR][BR]Enron, WorldCom, & US Airways filed their bankruptcy petition on a Sunday; therefore, some sources believe a UAL bankruptcy filing could come as early as Sunday, October 13. If this does not occur, the next likely dates are October 20 or 27.[BR][BR][/FONT][/FONT][FONT face=Times New Roman size=3]Chip[BR][/FONT]

 

[RealityCheck]

These figures are meaningless while US AIRWAYS chases its customers away on a daily basis. SHORT the stock(if you can go any lower), cuz it ain't going up anytime soon.