BoeingBoy
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- Nov 9, 2003
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Saw this in Aviation Daily and thought I'd post it for your entertainment...
Jim
ATSB Still Unclear On UAL Loan Guarantee; Tilton Delays Chapter 11 Exit Again
By Steve Lott
06/08/2004 10:55:10 AM
The Air Transportation Stabilization Board (ATSB) is now in final deliberations on United's application for a loan guarantee, but a decision date is unclear, prompting the carrier to seek another extension for its emergence from bankruptcy, CEO Glenn Tilton told The DAILY yesterday in Singapore.
Tilton said he felt it was a "prudent" decision to delay the airline's Chapter 11 exit until fall at the earliest. "There is no certainty on my part as to when the ATSB will make its ruling," he said. It was less than three weeks ago that Tilton said he was still shooting for an August emergence (DAILY, May 20). "I've always said we are going to be very methodical and very patient in our bankruptcy process."
Tilton discounted recent reports that the carrier's chances of winning a government loan guarantee are shrinking, saying he believes the airline only days ago made a compelling business case to the ATSB board that it is worthy of a loan guarantee. The airline's four top executives presented the case and also brought lawyers and advisers to the meeting to help answer questions for the three ATSB members and their respective staffs. The board has since requested some clarification on minor details, but it's now mostly a waiting game.
Some observers believe an ATSB decision could come within weeks, while others say it will take longer. "The ball is in their court," Tilton told The DAILY and would not predict when a decision will be announced. "I'm not really on pins and needles," he said. "We still have some work yet to do before we can emerge." He noted the airline is still working through the dispute over its Section 1114 filing that aims to cut some retiree benefits and is still negotiating with some of its lessors on aircraft rates.
"It isn't as if there isn't work to be done in the Chapter 11 process as we await judgment from the ATSB." Another reason for postponing emergence is "a level of uncertainty about fuel prices." United is unhedged, and its expenses will be hundreds of millions of dollars higher than expected this year because of the record high fuel prices.
Tilton reported, however, that United still manages to generate $4 million-$5 million per day in cash. "We are improving our cash position," he said, adding that cash reserves are "very solid." He reiterated his point that United would have made an operating profit in the first quarter if it weren't for the jump in fuel prices.
Tilton has yet to unveil details of his "Plan B" if ATSB denies the loan guarantee, but he gave assurances yesterday that funding is available and United will emerge with or without the loan guarantee.
Aviation Daily is a newsletter from Aviation Week's Business Intelligence Services. If you already subscribe, login here.
Jim
ATSB Still Unclear On UAL Loan Guarantee; Tilton Delays Chapter 11 Exit Again
By Steve Lott
06/08/2004 10:55:10 AM
The Air Transportation Stabilization Board (ATSB) is now in final deliberations on United's application for a loan guarantee, but a decision date is unclear, prompting the carrier to seek another extension for its emergence from bankruptcy, CEO Glenn Tilton told The DAILY yesterday in Singapore.
Tilton said he felt it was a "prudent" decision to delay the airline's Chapter 11 exit until fall at the earliest. "There is no certainty on my part as to when the ATSB will make its ruling," he said. It was less than three weeks ago that Tilton said he was still shooting for an August emergence (DAILY, May 20). "I've always said we are going to be very methodical and very patient in our bankruptcy process."
Tilton discounted recent reports that the carrier's chances of winning a government loan guarantee are shrinking, saying he believes the airline only days ago made a compelling business case to the ATSB board that it is worthy of a loan guarantee. The airline's four top executives presented the case and also brought lawyers and advisers to the meeting to help answer questions for the three ATSB members and their respective staffs. The board has since requested some clarification on minor details, but it's now mostly a waiting game.
Some observers believe an ATSB decision could come within weeks, while others say it will take longer. "The ball is in their court," Tilton told The DAILY and would not predict when a decision will be announced. "I'm not really on pins and needles," he said. "We still have some work yet to do before we can emerge." He noted the airline is still working through the dispute over its Section 1114 filing that aims to cut some retiree benefits and is still negotiating with some of its lessors on aircraft rates.
"It isn't as if there isn't work to be done in the Chapter 11 process as we await judgment from the ATSB." Another reason for postponing emergence is "a level of uncertainty about fuel prices." United is unhedged, and its expenses will be hundreds of millions of dollars higher than expected this year because of the record high fuel prices.
Tilton reported, however, that United still manages to generate $4 million-$5 million per day in cash. "We are improving our cash position," he said, adding that cash reserves are "very solid." He reiterated his point that United would have made an operating profit in the first quarter if it weren't for the jump in fuel prices.
Tilton has yet to unveil details of his "Plan B" if ATSB denies the loan guarantee, but he gave assurances yesterday that funding is available and United will emerge with or without the loan guarantee.
Aviation Daily is a newsletter from Aviation Week's Business Intelligence Services. If you already subscribe, login here.
