ITRADE
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How is a carrier that is going to have 15-cent CASM going to do well?exagony said:
US couldn't cut it at 12 cents.
Sorry for repeating going twice in the same sentence.
Who Will Survive?
- Thread starter luv2fly
- Start date
US couldn't cut it at 12 cents.
Sorry for repeating going twice in the same sentence.
USA320Pilot
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John Tague, United Airlines, executive vice president for customers told the news media last Wednesday the airline has "turned the corner" in its battle to boost revenues and stop losses. Tague's comments came on the heels of the July ATA airline performance report, which has indicated the industry is starting to see improved performance.
The ATA said the positive industry RASM trend of recent persisted in July, but the demand situation remains relatively unchanged year-over-year. Domestic RASM improved 10.2%, while system RASM improved 8.1%. The Atlantic and Latin regions improved 4.0% and 4.9% respectively, however, the Pacific region still appears to be problematic off 4.0% year-over-year.
In my opinion, with the approaching fall season, returning capacity, and a bleak business outlook, the road ahead will undoubtedly continue to prove challenging for the entire industry. Even though the environment appears to be slowly improving, the industry is far from "out of the woods"
Meanwhile, in regard to United, Tague did not provide specific numbers and he said, (the positive trends) "are not strong enough to give us indications of profit," which is a requirement for the airline to obtain the loan guarantee.
Specifically, the company must present a business plan that projects a 7% profit margin within 7 years and have the plan endorsed by Fitch Rating. Moreover, according to the AP, analysts predict the Chicago-based Company would lose "more than $300 million in the quarter ending Sept. 30, even as the industry shows signs of improvement."
Regardless, I believe the July revenue numbers will boost United's chances of surviving, which is something I have said all along albeit a much smaller airline.
Seprately, the Rocky Mountain News reported airline is targeting mid-spring for exiting bankruptcy, which is different than Jake Brace's comments to Susan Carey and indicates the company is not progressing towards an orderly exit as previously presented in the Wall Street Journal interview. This should not come as a surprise because large bankruptcy reorganizations take time.
I agree with those parties interested in the success of United, Tague's comments are the most positive to come from United's executive since the company filed for bankruptcy, but there still are significant obstacles.
First, there are signs the upward revenue trend may be short-lived. Last week's East Coast power outage is likely to affect August industry revenue numbers, there is the September 11 anniversary booking problem, and the fall is the slowest travel time of the year.
Jon Ash, managing director of Global Aviation Associates, told the Denver Post United has major issues to address. The company must line up billions of dollars in exit financing, potentially re-bid for a government-guaranteed loan, address a massive pension shortfall and develop a detailed business plan. In addition, the Company must resolve issues at their Denver and Dulles and present its Plan of Reorganization to the bankruptcy court in about three months -- in December.
In my opinion, the most difficult issue will be finding exit financing and I continue to believe that United, like other bankrupt airlines in the past, may be forced to sell assets to fund it reorganization emergence, with the likely candidate to acquire such assets US Airways.
Regardless, as with the IRS tax refund and the second federal bailout, the July revenue number will boost United's chances of surviving.
Best regards,
Chip
The ATA said the positive industry RASM trend of recent persisted in July, but the demand situation remains relatively unchanged year-over-year. Domestic RASM improved 10.2%, while system RASM improved 8.1%. The Atlantic and Latin regions improved 4.0% and 4.9% respectively, however, the Pacific region still appears to be problematic off 4.0% year-over-year.
In my opinion, with the approaching fall season, returning capacity, and a bleak business outlook, the road ahead will undoubtedly continue to prove challenging for the entire industry. Even though the environment appears to be slowly improving, the industry is far from "out of the woods"
Meanwhile, in regard to United, Tague did not provide specific numbers and he said, (the positive trends) "are not strong enough to give us indications of profit," which is a requirement for the airline to obtain the loan guarantee.
Specifically, the company must present a business plan that projects a 7% profit margin within 7 years and have the plan endorsed by Fitch Rating. Moreover, according to the AP, analysts predict the Chicago-based Company would lose "more than $300 million in the quarter ending Sept. 30, even as the industry shows signs of improvement."
Regardless, I believe the July revenue numbers will boost United's chances of surviving, which is something I have said all along albeit a much smaller airline.
Seprately, the Rocky Mountain News reported airline is targeting mid-spring for exiting bankruptcy, which is different than Jake Brace's comments to Susan Carey and indicates the company is not progressing towards an orderly exit as previously presented in the Wall Street Journal interview. This should not come as a surprise because large bankruptcy reorganizations take time.
I agree with those parties interested in the success of United, Tague's comments are the most positive to come from United's executive since the company filed for bankruptcy, but there still are significant obstacles.
First, there are signs the upward revenue trend may be short-lived. Last week's East Coast power outage is likely to affect August industry revenue numbers, there is the September 11 anniversary booking problem, and the fall is the slowest travel time of the year.
Jon Ash, managing director of Global Aviation Associates, told the Denver Post United has major issues to address. The company must line up billions of dollars in exit financing, potentially re-bid for a government-guaranteed loan, address a massive pension shortfall and develop a detailed business plan. In addition, the Company must resolve issues at their Denver and Dulles and present its Plan of Reorganization to the bankruptcy court in about three months -- in December.
In my opinion, the most difficult issue will be finding exit financing and I continue to believe that United, like other bankrupt airlines in the past, may be forced to sell assets to fund it reorganization emergence, with the likely candidate to acquire such assets US Airways.
Regardless, as with the IRS tax refund and the second federal bailout, the July revenue number will boost United's chances of surviving.
Best regards,
Chip
USA320Pilot
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Just one more point...
I believe many United employees do not like some of the information I have posted even though it is fact, because it is something they do not like, thus they take exception to my comments.
However, I have never said that United would not survive and unlike others I have said the airline should emerge from bankruptcy. However, there is still strong reason to believe that United may be forced to sell assets to survive, principally to obtain exit financing, and I guarantee you it's being discussed within the CCY and WHQ Executive Suites.
Why do you think the US PIT hub negotiations have not progressed? Could it be that these assets could be headed west...
Best regards,
Chip
I believe many United employees do not like some of the information I have posted even though it is fact, because it is something they do not like, thus they take exception to my comments.
However, I have never said that United would not survive and unlike others I have said the airline should emerge from bankruptcy. However, there is still strong reason to believe that United may be forced to sell assets to survive, principally to obtain exit financing, and I guarantee you it's being discussed within the CCY and WHQ Executive Suites.
Why do you think the US PIT hub negotiations have not progressed? Could it be that these assets could be headed west...
Best regards,
Chip
767jetz
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Sorry Chip, but I must disagree with your opinion. From talks with management, it seems that UAL will be holding onto most of it's sought after route structure and assets. Some leases are still being finalized, which will determine the final number of 777's and 747-400's that will be flown. The resolution of those leases, as well as revenue initiatives in the maintenance and training departments, and the huge reduction in expense of training once all the seat movements have subsided (Our training department has been running at 110% for some time now), the institution of pref-bidding which will also reduce costs, and the slow return of premium customers that UA has seen due to the awesome efforts of our sales and marketing departments, will coincide nicely with the slow down in traffic this fall, and should more than off-set the decline in reveue. Everyone knows the seasonal down turn is inevitable, and it has already been planned for.
Plans for the LCO (Low Cost Operation) will be forthcoming soon, and will likely take a much smaller role than originally conceived. WHEN UA emerges in the spring, the LCO will be positioned to GROW UA's domestic operation as demand permits. And unofficial word is that our application for the ATSB loan has been GREATLY bolstered in recent weeks. But don't expect any news to trickle out until it is a done deal. UA is smartly playing it's cards close to the chest. It serves no purpose to inform people outside the loop, such as analysts and observers from other airlines, as to UA's plan of attack.
Of course all of this is information from WITHIN United and not from the outside, so each individual reader can judge for themselves as to the credibility.
One more HUGE asset UA has in it's arsenal is the motivated, positive employees and relative peace amoung the ranks. I'm not saying we're having a "love - in," but don't underestimate the power of positive thinking and fierce determination.
The bottom line is that you and I have our opinions, and that's all they are... Opinions. In the end, what happens will happen. But from my perspective, I wouldn't place any money on UA selling significant assets to US or anyone else for that matter.
Plans for the LCO (Low Cost Operation) will be forthcoming soon, and will likely take a much smaller role than originally conceived. WHEN UA emerges in the spring, the LCO will be positioned to GROW UA's domestic operation as demand permits. And unofficial word is that our application for the ATSB loan has been GREATLY bolstered in recent weeks. But don't expect any news to trickle out until it is a done deal. UA is smartly playing it's cards close to the chest. It serves no purpose to inform people outside the loop, such as analysts and observers from other airlines, as to UA's plan of attack.
Of course all of this is information from WITHIN United and not from the outside, so each individual reader can judge for themselves as to the credibility.
One more HUGE asset UA has in it's arsenal is the motivated, positive employees and relative peace amoung the ranks. I'm not saying we're having a "love - in," but don't underestimate the power of positive thinking and fierce determination.
The bottom line is that you and I have our opinions, and that's all they are... Opinions. In the end, what happens will happen. But from my perspective, I wouldn't place any money on UA selling significant assets to US or anyone else for that matter.
USA320Pilot
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767jetz:
767jetz said: "One more HUGE asset UA has in it's arsenal is the motivated, positive employees and relative peace amoung the ranks. I'm not saying we're having a "love - in," but don't underestimate the power of positive thinking and fierce determination."
Chip asks: 767jetz, would you care to comment on Paul Whiteford's recent code-a-phone message regarding United management's decision to change an employee's pass privileges if an employee calls in sick? Furthermore, could you tell us about how Whiteford characterized the move as a step back in labor relations?
In regard to selling assets, my information came from the highest sources within US Airways. Will it occur? Maybe, maybe not...but it has been and continues to be discussed.
Again, I have never said United would not survive, however, I continue to believe the company may be forced to sell assets to obtain exit financing. Regardless, I believe we will know more about this before the holiday's becuase the United POR must be submitted to the bankruptcy court in early December.
Best regards,
Chip
767jetz said: "One more HUGE asset UA has in it's arsenal is the motivated, positive employees and relative peace amoung the ranks. I'm not saying we're having a "love - in," but don't underestimate the power of positive thinking and fierce determination."
Chip asks: 767jetz, would you care to comment on Paul Whiteford's recent code-a-phone message regarding United management's decision to change an employee's pass privileges if an employee calls in sick? Furthermore, could you tell us about how Whiteford characterized the move as a step back in labor relations?
In regard to selling assets, my information came from the highest sources within US Airways. Will it occur? Maybe, maybe not...but it has been and continues to be discussed.
Again, I have never said United would not survive, however, I continue to believe the company may be forced to sell assets to obtain exit financing. Regardless, I believe we will know more about this before the holiday's becuase the United POR must be submitted to the bankruptcy court in early December.
Best regards,
Chip
PITbull
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Chip,
With what money? U states "they have NO money. Do you know of money that Dave doesn't know about?
How does U buy UAL's assets with NO money? And how do you explain that to the State of PA? Gee, chip, can I have what your somok'in. Cause your picure is alot prettier than Dave's of U's position. I'm hearing that U might have a problem in the future with the paying the ATSB loan and now your talking about U buying UAL assets? Woah!
PS: You have implied in many posts that you doubt that UAL will survive or ever come out of BK. No back peddling allowed.
With what money? U states "they have NO money. Do you know of money that Dave doesn't know about?
How does U buy UAL's assets with NO money? And how do you explain that to the State of PA? Gee, chip, can I have what your somok'in. Cause your picure is alot prettier than Dave's of U's position. I'm hearing that U might have a problem in the future with the paying the ATSB loan and now your talking about U buying UAL assets? Woah!
PS: You have implied in many posts that you doubt that UAL will survive or ever come out of BK. No back peddling allowed.
Chip, you just don't get it!
You have no creditibity anymore, for months you post about a RJ agreement that never came, you write an article for The Charlotte Observer which was full of false facts, you talk about the UCT or ICT which has not come to fruition. Then you become Dave's #1 fan and tell all the other unionized folks to accept concessions or quit, then when Dave takes away your pension you become his biggest critic and say the airline should fail and when all the other posters give you a taste of your own medicine and tell you to quit you run and hide and disapear off the boards for months and come back like you just drank from Dave's pitcher of koolaide.
Chip US has only $1.5 billion in unrestricted cash, how is Dave gonna go buy assets, and I don't want to hear that Bronner will finance it, because any money loaned has no more collateral for any such loan and our revenue stream cannot support it.
Are you a fan of the movie Cybil?
Because we never know which Chip is gonna post what!
You have no creditibity anymore, for months you post about a RJ agreement that never came, you write an article for The Charlotte Observer which was full of false facts, you talk about the UCT or ICT which has not come to fruition. Then you become Dave's #1 fan and tell all the other unionized folks to accept concessions or quit, then when Dave takes away your pension you become his biggest critic and say the airline should fail and when all the other posters give you a taste of your own medicine and tell you to quit you run and hide and disapear off the boards for months and come back like you just drank from Dave's pitcher of koolaide.
Chip US has only $1.5 billion in unrestricted cash, how is Dave gonna go buy assets, and I don't want to hear that Bronner will finance it, because any money loaned has no more collateral for any such loan and our revenue stream cannot support it.
Are you a fan of the movie Cybil?
Because we never know which Chip is gonna post what!
USA320Pilot
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PITbull & Lavman:
As I understand it, the PIT hub negotiations are being held hostage, among other things, to UA and its exit financing, with the potential to move US assets westward should UA be unable to secure the financing to emerge, by the time it needs to submit its POR to the bankruptcy court in early December.
As far as financing any UA asset acquisition by US, US has the best legacy carrier credit rating, although its not very good by market standards, and the US chairman of the board has said he (or RSA) would acquire UA assets if it made sense for US (in three separate interviews). The informed Wall Street speculation is David Bronner is hedging his UA EETC's and may want to transfer certain aircraft from UA to US, since he holds certain UA aircraft debt paper.
Lav, did you miss those comments in the press by the US chairman of the board or are you purposely electing to not recognize them?
In regard to PITbull's comments about "back peddling", I have repeatedly said UA could survive, but I believe the company could be fragmented. Moreover, there have been constant discussions between the two Executive Suites regarding this topic for well over a year, as we have discussed, therefore, PITbull I believe you are mistaken.
Meanwhile, even though US has about $500 million in restricted cash, this is money that will be spent on certain expenses per the financial covenants, thus the June 30 cash on hand is still about $2.0 billion. Lav, I'm surprised you do not understand this...
Lav, what are you talking about regarding an RJ agreement?
Regards,
Chip
As I understand it, the PIT hub negotiations are being held hostage, among other things, to UA and its exit financing, with the potential to move US assets westward should UA be unable to secure the financing to emerge, by the time it needs to submit its POR to the bankruptcy court in early December.
As far as financing any UA asset acquisition by US, US has the best legacy carrier credit rating, although its not very good by market standards, and the US chairman of the board has said he (or RSA) would acquire UA assets if it made sense for US (in three separate interviews). The informed Wall Street speculation is David Bronner is hedging his UA EETC's and may want to transfer certain aircraft from UA to US, since he holds certain UA aircraft debt paper.
Lav, did you miss those comments in the press by the US chairman of the board or are you purposely electing to not recognize them?
In regard to PITbull's comments about "back peddling", I have repeatedly said UA could survive, but I believe the company could be fragmented. Moreover, there have been constant discussions between the two Executive Suites regarding this topic for well over a year, as we have discussed, therefore, PITbull I believe you are mistaken.
Meanwhile, even though US has about $500 million in restricted cash, this is money that will be spent on certain expenses per the financial covenants, thus the June 30 cash on hand is still about $2.0 billion. Lav, I'm surprised you do not understand this...
Lav, what are you talking about regarding an RJ agreement?
Regards,
Chip
767jetz
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Chip asks: 767jetz, would you care to comment on Paul Whiteford's message regarding United management's decision to change an employee's pass privileges if an employee calls in sick?
767 jetz responds:
No I don't really care to comment, but since you insist...
I think you are blowing it out of proportion. But since you are not a UA pilot, you do not know the internal politics revolving around this issue. I'll bet that 90% of the pilots will not be affected and not even care because of the exceptions that cover all but the most extreme cases. But again, you wouldn't know these details since you are not privy to the additional information provided us by UA ALPA, and our flight office.
This is another example of you trying to sound informed, when in fact you have only a very rudimentary understanding and certainly lack a large portion of the facts. It's not your problem, so don't worry about it.
Ua is still running like a fined tuned clock and the moral is far higher than it is at US, AA, and many other airlines.
Chip asks: In regard to selling assets, my information came from the highest sources within US Airways. Will it occur? Maybe, maybe not...but it has been and continues to be discussed.
767jetz responds:
Are these the same "highest sources" you've been using all along? So far the track record for your sources is highly suspect.
Of course it is being discussed within USAir executive office, Sherlock! As well as AA, NWA, and CO as well. Everyone has been banking on UA's demise or fragmentation, or at the very least making plans just in case. They would be neglecting their responsibility if they did not have a plan for all contingencies, regardless how unlikely. You can be sure there were and still are vultures circling USAir "just in case." Just because it is being dicussed does not increase the likely hood, nor does it bolster your credibility.
No matter how you try to spin it my friend, the news that has come out of WHQ recently is indisputably positive and casts a large shadow over your prediction of UA having to sell significant assets in order to emerge. Rest assured that exit financing will be secured in due time.
Once again, you (and your high sources) are on the outside, and we are on the inside. You can believe your sources and I can believe mine. The rest of the world will form their own opinions.
And one more point I will bring to light for others to consider. Notice that even with all the in-fighting going on at US, UA employees do not come here and CONSTANTLY badger the US employees with unwanted opinions of unfavorable outcomes for them. We basically have been posting postive news about UA, when it applies to the discussion at hand, to rebutt Chip's negative spin.
All I can say is that I wish the US employees the best, and assure those who are interested, that UA is turning the corner and will not be fragmenting. We are codeshare partners... We should all start acting like it!
jetz
767 jetz responds:
No I don't really care to comment, but since you insist...
I think you are blowing it out of proportion. But since you are not a UA pilot, you do not know the internal politics revolving around this issue. I'll bet that 90% of the pilots will not be affected and not even care because of the exceptions that cover all but the most extreme cases. But again, you wouldn't know these details since you are not privy to the additional information provided us by UA ALPA, and our flight office.
This is another example of you trying to sound informed, when in fact you have only a very rudimentary understanding and certainly lack a large portion of the facts. It's not your problem, so don't worry about it.
Ua is still running like a fined tuned clock and the moral is far higher than it is at US, AA, and many other airlines.
Chip asks: In regard to selling assets, my information came from the highest sources within US Airways. Will it occur? Maybe, maybe not...but it has been and continues to be discussed.
767jetz responds:
Are these the same "highest sources" you've been using all along? So far the track record for your sources is highly suspect.
Of course it is being discussed within USAir executive office, Sherlock! As well as AA, NWA, and CO as well. Everyone has been banking on UA's demise or fragmentation, or at the very least making plans just in case. They would be neglecting their responsibility if they did not have a plan for all contingencies, regardless how unlikely. You can be sure there were and still are vultures circling USAir "just in case." Just because it is being dicussed does not increase the likely hood, nor does it bolster your credibility.
No matter how you try to spin it my friend, the news that has come out of WHQ recently is indisputably positive and casts a large shadow over your prediction of UA having to sell significant assets in order to emerge. Rest assured that exit financing will be secured in due time.
Once again, you (and your high sources) are on the outside, and we are on the inside. You can believe your sources and I can believe mine. The rest of the world will form their own opinions.
And one more point I will bring to light for others to consider. Notice that even with all the in-fighting going on at US, UA employees do not come here and CONSTANTLY badger the US employees with unwanted opinions of unfavorable outcomes for them. We basically have been posting postive news about UA, when it applies to the discussion at hand, to rebutt Chip's negative spin.
All I can say is that I wish the US employees the best, and assure those who are interested, that UA is turning the corner and will not be fragmenting. We are codeshare partners... We should all start acting like it!
jetz
USA320Pilot
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767jetz:
I find your emotion interesting, however, Whiteford discussed how the change in sick policy and pass privileges were a step back to "old labor relations". Did you miss that? I interpreted Whiteford's comments to be very emotional and pointed.
Regardless, was Tague's revenue news more about the industry ATA report or UA itself?
In regard to second quarter revenues, would you care to comment on the information reported at ChipsPlace.com? For specific information click onto Rumor Control, Daily Airline News, then click onto the August 15 report. What does the ATA second quarter data indicate about industry data and the relation between US & UA?
Moreover, what's your opinion of this story?
At last, some good news for airlines.
By the way, I was just wondering, why are you so sensitive and emotional if you believe my information is false?
Best regards,
Chip
I find your emotion interesting, however, Whiteford discussed how the change in sick policy and pass privileges were a step back to "old labor relations". Did you miss that? I interpreted Whiteford's comments to be very emotional and pointed.
Regardless, was Tague's revenue news more about the industry ATA report or UA itself?
In regard to second quarter revenues, would you care to comment on the information reported at ChipsPlace.com? For specific information click onto Rumor Control, Daily Airline News, then click onto the August 15 report. What does the ATA second quarter data indicate about industry data and the relation between US & UA?
Moreover, what's your opinion of this story?
At last, some good news for airlines.
By the way, I was just wondering, why are you so sensitive and emotional if you believe my information is false?
Best regards,
Chip
PITbull
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767jetz,
And I salute you sir. I am of the hope that United succeeds as our brothers and sister at AFA are depending on UAL to succeed. AFA as a union must have UAL succeed as well. The f/as at UAL are the largest carrier for our union.
I wish you all the best and success along with side of us.
We have all suffered together since 9/11 and we shall never forget what happpend and all that has ensued . I believe we are all in this together as an Industry, and we emerged from BK and so shall you, when UAL is good and ready.
And I salute you sir. I am of the hope that United succeeds as our brothers and sister at AFA are depending on UAL to succeed. AFA as a union must have UAL succeed as well. The f/as at UAL are the largest carrier for our union.
I wish you all the best and success along with side of us.
We have all suffered together since 9/11 and we shall never forget what happpend and all that has ensued . I believe we are all in this together as an Industry, and we emerged from BK and so shall you, when UAL is good and ready.
USA320Pilot
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Lavman:
Lavman said: "Chip there are no more assets left in PIT, there is minimal mainline flying all to be replaced by RJS, you change more then a chamelon."
Chip comments: Lavman, with all due respect, I believe you are wrong. If an agreement is reached with Pennsylvania officials, Chris Chiames, US Airways' senior vice president of corporate affairs, has told the media a number of times that the hub would keep its present mainline schedule. Lav, I believe that's about 137 flights per day, which makes PIT the third busiest airport in the US system.
Best regards,
Chip
Lavman said: "Chip there are no more assets left in PIT, there is minimal mainline flying all to be replaced by RJS, you change more then a chamelon."
Chip comments: Lavman, with all due respect, I believe you are wrong. If an agreement is reached with Pennsylvania officials, Chris Chiames, US Airways' senior vice president of corporate affairs, has told the media a number of times that the hub would keep its present mainline schedule. Lav, I believe that's about 137 flights per day, which makes PIT the third busiest airport in the US system.
Best regards,
Chip
PITbull
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Chip,
Flights have eroded in PIT since May. We are down to 104 daily main line flights.
97 on weekends. Management will not commit to keeping minimum mainline flights in PIT. Regardless of what they say, they will not put it in writing. Period. That to me, means anything can change. PA State Representatives will not take those risks with PA tax dollars. They don't want to end up with just an RJ LCC carrier for the amount of tax dollars U demands in cost savings and improvements. They (PA) want more of a committment for the risks in giving tax dollars to this airline that just emerged from BK and still claims to have NO MONEY with all these costs savings.
Too much of a gamble for the state. They took those risks in the early 90's and now they are straddled with airport debt, and it s with the same carrier.
Flights have eroded in PIT since May. We are down to 104 daily main line flights.
97 on weekends. Management will not commit to keeping minimum mainline flights in PIT. Regardless of what they say, they will not put it in writing. Period. That to me, means anything can change. PA State Representatives will not take those risks with PA tax dollars. They don't want to end up with just an RJ LCC carrier for the amount of tax dollars U demands in cost savings and improvements. They (PA) want more of a committment for the risks in giving tax dollars to this airline that just emerged from BK and still claims to have NO MONEY with all these costs savings.
Too much of a gamble for the state. They took those risks in the early 90's and now they are straddled with airport debt, and it s with the same carrier.
