US/UA Official Merger Thread II

[phx___it]

"Good gravy, can't anyone shut this yo-yo up? "

I like USA320's posts. That's me though. I actually read all of that post.
Unfortunatly it paints a bleak picture for me.

Regulation, de-regulation, cabotage. That wouldn't fit the pattern or our belief in capitalism.

 

[767jetz]

Excerpts of comments by Kathryn Mikells, vice president of Investor Relations, United Airlines.

How We Stack Up Competitively:

"...the question that I get asked most frequently by our investors is "How does United stack up versus peers, and what changes are we making in the business to get back to profitability?" The simple answer is: we stack up quite well, with financial performance competitive with other network carriers and a relatively strong liquidity position, and, importantly, we are taking aggressive actions to improve profitability.

In 2007, our pretax margin was about 3%, better than American, roughly equivalent to Delta and just a percentage point behind Continental. Much has been said about our roughly half-billion-dollar first-quarter loss. While disappointing, our results were driven by a $618 million year-over-year increase in fuel expense. All of the network carriers are in the same boat. All reported a similar increase in fuel costs, all lost money in the first quarter, and all saw their margin fall year-over-year. United saw its pre-tax margin deteriorate by roughly 5-6 percentage points in the first quarter compared with the same time in 2007. Continental came in a little better than we did, with their pre-tax margin deteriorating 4-5 percentage points. All the other network carriers' margin results were on par or worse than ours; Delta saw a 5-6 point reduction in pre-tax margin, while American dropped by 7 points, Northwest by 10 points and US Airways saw the largest decline with their pre-tax margin declining almost 12 percentage points


So why all the buzz about our first quarter loss? While all the network carriers lost money, our loss was higher than theirs. Why? Because our first and fourth quarter performance is always worse than most peers and is offset by better-than-average second and third quarter performance. Over a full year, seasonality equals out, and as our full-year 2007 performance well demonstrates, our financial results are competitive overall. During the winter quarters, many of our peers benefit from the capacity that they have flying to Central and Latin America, as well as north-south capacity flying along the East Coast. In contrast, the strength of United's transcon network and our leading position on the West Coast gives us a boost in the summer months that bridge across the second and third quarters.

We are reducing domestic capacity substantially. We are using the pricing power we enable through capacity discipline to support fare initiatives, seeking to pass along the higher commodity costs to customers. And we are accelerating our efforts to unbundle products and services to provide more choice for our customers and to generate more revenue as they pay for the products that they use and value. All told, we expect these initiatives to generate $600 million in revenue by next year.

We are also reducing our non-fuel costs and cutting our planned capital spending this year by $200 million.

The work we have done to strengthen the airline and improve our balance sheet puts us in a better position to address the current industry challenges that we face. We ended last quarter with $2.9 billion in unrestricted cash, on par with our network peers. Importantly, we have more than $3 billion in unencumbered assets allowing us to raise capital if needed, in stark contrast to some of our peers that have already leveraged most of their assets. This fiscal responsibility extends to our position relative to new aircraft. Because we have no new aircraft on order, unlike many of our peers, our capital requirements are relatively modest over the next few years. As part of our balance sheet restructuring, we smoothed out our required debt payments, and since our exit, we have reduced debt by some $2.8 billion. Two weeks ago, we renegotiated the financial covenants required by our $1.5 billion credit facility, making it easier for us to maintain compliance, and giving us the flexibility we need to execute against our plan. All of this means that we have a strong liquidity position and more modest demands on our cash over the next few years versus most of our peers-better positioning United, our company, to withstand the difficult environment we now face.

So just to wrap up, we are well positioned to manage through this tough environment:

* Our financial performance is competitive
* Our cash balance is comparable and we have more unencumbered assets than most, giving us more flexibility to raise money if we need it
* Finally, we are not sitting still, our action plan is aggressive and it's well under way"

 

[Edward]

Good gravy, can't anyone shut this yo-yo up?

Hey USA320, go back to rubbing Pollock's belly and leave us alone, will ya'?

Personal attacks will get you time off as this poster just received. The cornfield is filling up rather quickly.

 

[Richard]

The only reason for merging your airline is to add air and gold to your golden parachute. The consumers do not benefit, the employees are not benefiting. The titans are justifying their gains by rationalizing whatever it takes to line their pockets.

This message board has obviously been feeling political heat, hence a loss of credibility as a source of the free exchange of ideas and facts.
Sticks and stones break your bones but words...............................

Good Day

I will address this point.

We have been feeling no political heat, as there is no way we can be influenced. We are completely independent and impartial.

The rules of the board are simple. You can discuss the ISSUES all you want. You may NOT discuss other posters, and may not call names, insult or otherwise make personal comments about the PEOPLE on these boards.

Many of you choose to ignore that rule, hence the large population of the corn field.

Folks it's a simple choice. If you don't like the rules here, don't post. If you constantly ignore the rules you won't be allowed to post.
When YOU own the board, you can make your own rules. Otherwise, you can play by our rules or not at all.

 

[WCT]

US Airways and UA merger means more debt, continued seperate contracts withstanding for Fa's and Pilots!! :down: More downsizing and bigger money LOSER in the long run!!! Keep US Airways MY US Airways!! United is toxic business for US, and unions won't stand this mess! Fix our problems, deal with fuel, and make our assets WORK!!!

 

[john john]

This message board has obviously been feeling political heat, hence a loss of credibility as a source of the free exchange of ideas and facts.
Sticks and stones break your bones but words...............................

Good Day

IMO

 

[Richard]

Folks,

One last time. Do NOT continue the argument about this board and its rules here. If you have an issue with that PM a moderator. It has NOTHING to do with a potential merger between US and UA.

Enough already.

If you have questions about policy PM a moderator.

End of discussion.

 

[whlinder]

Importantly, we have more than $3 billion in unencumbered assets allowing us to raise capital if needed,

Mileage Plus?

 

[Cosmo]

Mileage Plus?

IIRC, that $3 billion figure is mostly unencumbered aircraft and related spare parts. But you're right, Mileage Plus could be "monetized" as well, for an amount variously reported to range between $3 billion and $7.5 billion. And the SFO maintenance base could be sold, too, although I don't know how much United could get for it.

 

[whlinder]

I had seen the 3bil figure tossed around for a Mileage Plus valuation and didn't think UA had 3bil of other unencumbered assets.

I'm kind of curious how much asset valuations on airlines have changed as the price of oil has risen.

 

[sharktooth]

Just curious, what is the basis of this statement?

"....This message board has obviously been feeling political heat, hence a loss of credibility as a source of the free exchange of ideas and facts...."

At least one rather prolific poster has been given time off from his job for things he said, things that were somewhat out of character (critical of management), considering his written history.

Also, word has gotten back to individuals that their comments were being scrutinized by some of the more unscrupulous members of management.

To be truly free, to possess the ability to speak one's mind without fear of interdiction, one should have a reasonable right to privacy, something americans have been giving away hand over fist for the last seven years. The chilling effects of what a few managers have done will have negative and serious blowback over the next few years, in their inevitably futile attempt to keep the dirt from escaping from under the carpet.

 

[Richard]

I guess some people are in need of a reading lesson.

This thread is closed.

Keep the new one on topic........and the topic is the possible merger....it's not labor, it's not board policy or politics, it's the possible merger...PERIOD.