US partner UA obtains first labor ERP TA

[767jetz]

[blockquote]
----------------
On 11/4/2002 1:03:44 AM N628AU wrote:

There is reason to believe, Chip will say there is reason to believe.

[/blockquote]

[img src='http://www.usaviation.com/idealbb/images/smilies/9.gif'] [img src='http://www.usaviation.com/idealbb/images/smilies/9.gif'] [img src='http://www.usaviation.com/idealbb/images/smilies/9.gif']
That's a good one!

 

[Busdrvr]

[blockquote]
----------------
On 11/5/2002 12:28:52 PM AOG-N-IT wrote:
UA will not be able to rely on it's vast expanse as some kind of saving grace from Chapter 11 , should a war begin..or fuel continue to increase with the threat of war? simply put..People will stop flying on those "International Routes" that UA is so famous for...I consider U to be a forgone conclussion in this far reaching statement too!

A war in the Persian Gulf will not bolster our economy like WWII did...You will not see a massive mobilization that requires every tansportation asset available. What you will see is an increased level of fear in the flying public..and further complicated by growing econmic concerns. This is something that few carriers can shake off as liveable...UA just happens to be closer to the BK threshold than some of the other "Mega Carriers"
----------------
[/blockquote]


Couple points.
first, the scared pansies are already staying home. The US market post 911 is still below the drop that the last Iraq war caused. The folks flying now will likely NOT be scared by an Iraq war JMHO
second, any new Iraq war will NOT be as long as the previous one. there could be a very short term spike in oil, but don't expect a replay of last time.
third, If UAL gets the loan, coupled with significant cost savings and arguably the most fuel efficient fleet, from top to bottom, in the industry, UAL may then be one of the better off of all the others.

 

[chipmunn]

[P]I believe there will be interesting news announced in the future regarding UA, ILF & GECAS, among other heavy htters, and the companies EETCs.[/P]
[P]Chip[/P]

 

[AOG-N-IT]

Chips point about UA needing to get Leaner and Meaner is exactly where I draw my comparison of the two distinctly different companies.

UA will do , like U has in regards to shrinking it's fleet and employee ranks. I do not believe for a moment that UA will die..like U has the great potential of doing.

However, to say that UA is in better shape to weather things long term is a bit overly optomistic..depending on which side of the weathering coin you happen to end up on?

Increased Fuel prices with the possibility of war may kill U off for good...but then again it could fail by not providing the services it's noted for too...A direct reflection of trying to shrink too much too quickly.

UA will not be able to rely on it's vast expanse as some kind of saving grace from Chapter 11 , should a war begin..or fuel continue to increase with the threat of war? simply put..People will stop flying on those International Routes that UA is so famous for...I consider U to be a forgone conclussion in this far reaching statement too!

A war in the Persian Gulf will not bolster our economy like WWII did...You will not see a massive mobilization that requires every tansportation asset available. What you will see is an increased level of fear in the flying public..and further complicated by growing econmic concerns. This is something that few carriers can shake off as liveable...UA just happens to be closer to the BK threshold than some of the other Mega Carriers

I do not wish any ill on any airline..or any sector of the American workplace...I just believe that nobody is going to come out of this scenario in any condition or simblance of what they were in early 2001.

UA and U have a great opprotunity to feed on one anothers strengths..I only hope U can remain long enough to realize the benefits of this alliance?

 

[AOG-N-IT]

[blockquote]
----------------
On 11/5/2002 144 PM UAL777flyer wrote:



As for another war with Iraq, I do not share the view that it will be quicker than the first.

AOG-N-IT Replies..Something we actually both agree with!!

Has anyone given thought to how ugly urban combat in the streets of Baghdad will be?


AOG-N-IT Replies..I think I made the exact same observation in a previous post.

We're talking about a lot of civilian casualties, something the American people have very little tolerance of.

AOG-N-IT Replies...Our levels of tolerence are going to have to become a hell of alot more Thick Skinned to ever hope to defeat the like of the Fanatics we are facing!!


And what are our objectives? If we overthrow and kill/capture Saddam, who takes his place? What about his two psychopathic sons who are deemed to be worse than him? Do we occupy the country until a stable government is in control? If so, how long will that take?


AOG-N-IT Replies..The replacement for a Post Saddam scenarion will likely come from one of the elements that we are protecting while flying the missions in the Northern and Southern No Fly Zones..most likely a Kurdish influence will emerge.

There are simply too many unanswered questions to be able to predict quick success in a US/IRAQ sequel. It does not bode well for our industry even under the most optimistic of circumstances.

AOG-N-IT Replies...Absolutely Fricking correct Sir!!!

In the end, however, I'm confident that UA has the right guy running the show and we finally have consensus from all employee groups to do what is necessary to make this airline into a leaner, meaner competitor.


AOG-N-IT Replies...I hope you are 100% correct again!!
----------------
[/blockquote]

 

[UAL777flyer]

Chip,

Your info is a bit skewed. While UA may still hold the paper on its 737-200's, we retired them all from the fleet post-9/11. They're presently getting a suntan in MHV. As for the B744's, we're only flying about half the fleet of 44 as it is. There are about 10-15 in long-term storage in MHV right now. I think it's a no-brainer that some more will join them, as that is UA's most costly aircraft to operate.

As for the dozen B767-200's that you speak of, you're talking about 15 year old 767's that we fly on JFK-LAX and JFK-SFO transcons. Those aircraft are coming due for extensive and expensive overhauls soon. They lack laptop power, Economy Plus, and comparible First Class and Business Class seat pitch with competitors and the rest of our fleet. So it wouldn't surprise me to see those planes go as well. Especially when Premium Transcon service is a misnomer these days. How many people actually pay for premium service now? But when compared to what we're presently flying, you're talking about maybe a dozen or so more aircraft coming out. That's not much. Many of the changes are going to come on the efficiency of operations side of things. Manpower usage, staffing utilization and requirements, streamlining work, etc. There is lots of room for improvement in those areas. I expect we'll see it incorporated into the restructuring.

As for another war with Iraq, I do not share the view that it will be quicker than the first. Has anyone given thought to how ugly urban combat in the streets of Baghdad will be? We're talking about a lot of civilian casualties, something the American people have very little tolerance of. And what are our objectives? If we overthrow and kill/capture Saddam, who takes his place? What about his two psychopathic sons who are deemed to be worse than him? Do we occupy the country until a stable government is in control? If so, how long will that take? There are simply too many unanswered questions to be able to predict quick success in a US/IRAQ sequel. It does not bode well for our industry even under the most optimistic of circumstances.

In the end, however, I'm confident that UA has the right guy running the show and we finally have consensus from all employee groups to do what is necessary to make this airline into a leaner, meaner competitor.

 

[Eris]

[blockquote]
----------------
On 11/5/2002 12:22:06 PM 767jetz wrote:

[blockquote]
----------------
On 11/5/2002 11:59:16 AM chipmunn wrote:


however, the information I report comes from informed people.


Chip[/P]
----------------
[/blockquote]
Yeah, right! Like who? AirInc.? USA Today? Maybe some super-duper-secret-insider, who you can't reveal?
----------------
[/blockquote]

You forgot about the esteemed associates on the Yahoo Message Board. They are deeply hurt that you neglected to mention them. I'll see what I can do to smooth things over for you.

 

[Busdrvr]

[blockquote]
----------------
On 11/5/2002 144 PM UAL777flyer wrote:

As for the dozen B767-200's that you speak of, you're talking about 15 year old 767's that we fly on JFK-LAX and JFK-SFO transcons. Those aircraft are coming due for extensive and expensive overhauls soon. They lack laptop power, Economy Plus, and comparible First Class and Business Class seat pitch with competitors and the rest of our fleet. So it wouldn't surprise me to see those planes go as well.
----------------
[/blockquote]

As of Dec 31st, 2001, our 18 (all owned) 767-200s averaged 19 years of age. it is my understanding that they shared engines with the now retired and flying cargo for NWA 747-200's. Just the fact that the engine is diff from the rest of the 767's could help bring about it's demise. I would like to see them flying LAX-PHX or ORD-MCO, FLL with a whole bunch of seats (250). That'd bring down CASM.

 

[Cosmo]

As part of its restructuring, United now has an agreement with KfW Bank of Germany to postpone $500 million in debt payments through 2007. While the press release doesn't contain too many details, it is certainly good news for UA that in a small way (through the code-sharing agreement) will help US Airways as well.

Here is the press release:

[A href=http://biz.yahoo.com/bw/021105/52657_1.html]http://biz.yahoo.com/bw/021105/52657_1.html[/A]

 

[Bear96]

[blockquote]
----------------
On 11/5/2002 4:29:36 PM Cosmo wrote:

As part of its restructuring, United now has an agreement with KfW Bank of Germany to postpone $500 million in debt payments through 2007. While the press release doesn't contain too many details, it is certainly good news for UA that in a small way (through the code-sharing agreement) will help US Airways as well.

Here is the press release:

[A href="http://biz.yahoo.com/bw/021105/52657_1.html"]http://biz.yahoo.com/bw/021105/52657_1.html[/A]
----------------
[/blockquote]

Uh-oh...

Chip will not like this news AT ALL.

It doesn't really match his view of how the aviation world ought to be.

Wonder how he'll spin it?

 

[767jetz]

Chip... are you there???

Hello, Chip?

Has anyone seen Chip?

I'm getting worried. He's awefully quiet...

OH CHIP!!

I hope he's O.K.

I hope he didn't choke on his dinner or something while watching the news.

Maybe he's in a meeting with his reliable sources.

There is reason to believe Chip will either have a theory about the latest news being a precursor to liquidation, or that Chip will be awefully silent on the subject.

Are you there Chip?

 

[avek00]

FWIW, in the case of US, the company obtained RATIFIED agreements from ALPA and AFA, but was nonethless forced to file for Chapter 11 because its creditors (esp. those with aircraft-backed debt) and lessors were unwilling to grant the company sufficient relief out-of-court. Simply put, the folks at US experienced many highs in the initial phases of their own restructuring, only to end up in bankruptcy anyways.

I'm not trying to rain on the parade at UAL, but today's info. has to be viewed in its proper context. One major hurdle has been overcome, but there are still several landmines out there that could literally put UAL in BK tomorrow, such as:

1. Aircraft-backed debtholders and lessors who may not grant UA any relief;

2. The failure to obtain meaningful concessionary contracts from the IAM, AFA, or other workgroups; and

3. The inability of the company to successfully reform its corporate governance structure, should the ATSB or UAL's lenders find the current structure to be unacceptable; and of course,

4. The inability to obtain an ATSB-backed guarantee.

Again, today's news is something to be happy about, but don't let the euphoria overshadow the gravity of UAL's current situation.

 

[767jetz]

----------------
On 11/5/2002 8:03:46 PM avek00 wrote:

Enough with the Chip-bashing.

Why? It's better than 'avek00' bashing, isn't it? Besides, he brings it on himself.

I'm not trying to rain on the parade at UAL, but...

Yes you are. The sun is shining here today! A well deserved bump in morale and stock price. Now go rain somewhere else. We're all well aware of the pitfalls ahead.

 

[chipmunn]

[BR][FONT face=Times New Roman size=3]Today's announcement that UA and Kreditanstalt fur Wiederaufbau (KfW) reached agreement to restructure EETCs is good news for both US & UA because each airlines loan guarantee application projects increased revenues from the domestic code share. If either airline fails before obtaining the loan guarantee, these revenue projections may not be available, placing the other carrier's application at risk.[/FONT][BR][BR][FONT face=Times New Roman size=3]Moreover, there are rumblings on Wall Street and in Washington that ILF and GECAS may not renegotiate UA EETCs and are not happy about taking another haircut after the US filing, which they believe could create an industry domino effect. Will this effect UA's attempt for an out of court restructuring? I do not know, but it's being discussed and a big issue.[/FONT][BR][BR][FONT face=Times New Roman size=3]In fact, it's such a big problem that UA chief financial officer Jake Brace felt the need in a Rueters interview to discuss the issue when he said the remaining $375 million due on the enhanced equipment trust certificates (on December 2) will either have to be paid then or refinanced. But because the debt is publicly held by numerous holders, that will be a more difficult task, he said.[/FONT][BR][BR][FONT face=Times New Roman size=3]This week has seen two important agreements with the ALPA ERPII and the KfW accords that will buy UA time and boost hope for an out of court restructuring. Nonetheless, there are still many hurdles to overcome and I encourage all UA unions to reach and ratify agreements ASAP to encourage creditors, vendors, and lessors to reach voluntary restructuring agreements.[/FONT][BR][BR][FONT face=Times New Roman size=3]Chip [BR][BR][/FONT]

 

[UAL777flyer]

In all fairness to Chip, I think the continued pot-shots people are taking at him should stop. It's one thing to disagree with his opinion. I do at times, myself. But do it in a respectful way. I truly believe his heart is in the right place. Sometimes he overdoes it with repeating the same information ad nauseum, but his purpose and intent is to see his company survive and prosper. So give the guy a break.

That being said, the UA debt restructure was a significant hurdle that was overcome. However, many more obstacles remain. But progress is progress no matter how you slice it. Now we move on to the next obstacle. And Tilton will find a way to overcome that too. ILFC and GECAS may say one thing behind the scenes, but their exposure to UA is significant. Is it in their best interests to push UA into Ch.11 and be lucky to see pennies on the dollar? I don't think so. So when push comes to shove, I believe they'll deal with UA. Because my opinion is that a restructured UA has the ability to repay the loans and restructured debt down the road. Unfortunately, in the world of aircraft financing, that's the way the coookie crumbles. They significantly mark-up aircraft in a booming market. Now they're taking a bath in a bust market. That's the way business goes. Nothing is guaranteed. At the end of the day, they'll play ball because forcing UA into Ch.11 means UA will most likely do what US did and look to return those aircraft that have leases being paid currently well above market rates. Tell me how ILFC, GECAS and others win in that scenario? They don't. So don't believe all that you're hearing through snippets in the press. The duck may appear to be swimming smoothly on the surface, but below the water, the feet are paddling furiously. In other words, SIGNIFICANT progress is being made behind the scenes. It's just not being made public.