Singapore_Air From United Kingdom, joined Nov 2000, 13722 posts, RR: 20 Reply 1, posted (10 years 8 months 3 weeks 3 hours ago) and read 3342 times:
However, the airline did meet it's first financial target made since filing for Chapter 11 Bankcruptcy.
"The pressure is mounting for the company to quickly come to terms with labor and get some of these additional cost cuts in place to stem cash losses. March will be weaker as a result of the falloff in demand that became apparent by mid-month (due to the Iraq war). April is likely to be weaker than March," said Fitch Ratings analsyst William Warlick.
In January, UAL posted a loss of US$382 000 000. Operating loss improved from US$331 000 000 in January to US$307 000 000 in February.
"They're comfortably under the targets in February, but the trend is negative and the targets become more onerous as you go on through the year," said Mr. Warlick.
UAL said it was required to post an EBITDAR (earnings before interest, tax, depreciation, amortisation and re.... what? I think that's wrong) loss of no more than US$964 000 000 from 1 December 2002 to 28 Feburary 2003. Mr. Warlick estimates an EBITDAR loss of US$450 000 000 cumalatively for that period
Information was gathered from the above hyperlinked webpage. Full information can be viewed by clicking the above hyperlinked webpage. nformation was rephrased and not copied and pasted unlike others with the exception of quotes.
FlyPNS1 From United States of America, joined Nov 1999, 6281 posts, RR: 25 Reply 3, posted (10 years 8 months 3 weeks 2 hours ago) and read 3312 times:
The first DIP convenant was extremely easy to meet. Basically, the first DIP convenant said, just keep on losing money...just don't lose it at a faster rate than you are currently losing it. From here on out is where it gets hard, UAL has to show big time improvement in terms of cash-flow.
If the war in Iraq was not happening, I would say UAL had a decent chance of meeting the upcoming convenants. However with the war in full effect, it's hard to tell how UAL can make a lot of progress. It's likely UAL will either need gov't help or need the convenants renegotiated.
Artsyman From United States of America, joined Feb 2001, 4745 posts, RR: 36 Reply 6, posted (10 years 8 months 3 weeks ago) and read 3109 times:
I feel shit for the UAL employees. It really sucks worrying about this, and even though we all hope for the best, it is a scary thought to have to rethink your entire career, life, mortgage, and lifestyle. At Continental things are not bleeding as badly, but it is scary all the same.
Artsyman From United States of America, joined Feb 2001, 4745 posts, RR: 36 Reply 8, posted (10 years 8 months 3 weeks ago) and read 3079 times:
Boy artsyman, why the change of heart?
Is this a nicer more realistic side we haven't seen before?
Not new feelings really, In the past most of the discussions have been of a non personal nature, but with the losses being sustained for this long, it is hard to not feel this.
My feelings on Continentals survival havent changed a bit, in truth I am probably more optimistic now than before, but I guess I am just seeing article after article of layoffs for people and it is really sad to see it. Unlike a lot of jobs, airline jobs often are a lifestyle, not just a job.
UAL777 contrail, things are bad for UAL, and for what it is worth, I really hope the best for you. Good luck
Singapore_Air From United Kingdom, joined Nov 2000, 13722 posts, RR: 20 Reply 10, posted (10 years 8 months 2 weeks 6 days 23 hours ago) and read 3014 times:
777236ER: As a person pressed for time, I haven't got time to waste writing that stuff at the end all the time. Hence, I copy and paste from old posts... and hence you keep noticing regardless of the subject and irrelevant content of your posts.
Ryanair From United Kingdom, joined Jul 1999, 654 posts, RR: 0 Reply 11, posted (10 years 8 months 2 weeks 6 days 22 hours ago) and read 2961 times:
It is very sad, no business can loose that sort of money consistantly and survive. I really feel for UAL Employees, I have recently found myself in a very similar situation, it's a horrific place to be and withthe war almost impossible to break out of. Goodluck!
Artsyman From United States of America, joined Feb 2001, 4745 posts, RR: 36 Reply 12, posted (10 years 8 months 2 weeks 6 days 22 hours ago) and read 2940 times:
To UAL777 contrail, or any other United employee, have any of you seen a plan from the company that shows that with changes, these losses can be eliminated and the covenants met. I have seen the odd mention of a 9% pay cut etc, but a 9% pay cut isnt going to put much of a dent in 13.1 million dollars per day loss.
Is there anything realistic that you guys are seeing that actually adds up to a turnaround of over 13 million per day ?
Since the chapt 11 filing, I hear the odd murmer of we will get through this, and eat the competition etc, but since the filing, the losses have remained staggering and there doesnt seem to be any magic pill coming. Is there something I am missing ? I hope so
Speedport From United States of America, joined Sep 2001, 284 posts, RR: 0 Reply 17, posted (10 years 8 months 2 weeks 6 days 18 hours ago) and read 2746 times:
... am I missing something ?
Yes. You are missing a 1.5 billion cash balance. United loss less in February than it did in January despite higher fuel costs, having to continue payments on some aircraft leases and a downturn in traffic. Other airlines don't have to report their financials on a monthly basis, do we really know how much they are losing today as opposed to the fourth quarter of last year?
United has made some progress. Isn't there still much to be done? No one in their right mind would argue otherwise.
They will be able to make 2.5 billion in yearly cuts by 4/18, either by judicial order or union agreement. Following that, they will get 700 million in DIP financing and will be able to re-file for the 1.8 billion loan guarantee. There is no way the ATSB would be able to deny the loan guarantee once United makes 2.5 billion in labor cuts alone. Will this be enough? Is anything at this point too little to late? I have heard plenty of biased opinion, that is for sure.
United has the power of bankruptcy court to do just about anything it wants to meet the May 1 covenant. If this weren't sufficient, chapter 7 would have already been filed.
I don't blame people for taking an "I'll believe it when I see it" attitude. I simply take note when they finally "see it" and quickly change their tune.
Artsyman From United States of America, joined Feb 2001, 4745 posts, RR: 36 Reply 18, posted (10 years 8 months 2 weeks 6 days 17 hours ago) and read 2735 times:
Yes. You are missing a 1.5 billion cash balance
But they announced today that they will lose at least 1.2 billion in the first quarter alone, that leaves almost no room for error as the first quarters end at the end of March
I don't blame people for taking an "I'll believe it when I see it" attitude
I am not giving it any of that, I am trying to understand how they are going to stop the rot. Thanks for your explanation above, I hope it works, but I must confess to still being skeptical.
Scottb From United States of America, joined Jul 2000, 6440 posts, RR: 33 Reply 20, posted (10 years 8 months 2 weeks 6 days 16 hours ago) and read 2687 times:
I don't believe that UAL would be able to access funds from a loan guaranteed by the U.S. government until after emergence from bankruptcy protection. Given that the total DIP financing comes to $1.5 billion which would be repaid upon emergence, the net available via the guarantee (which, I believe, is a $2 billion loan with $1.8 billion guaranteed by the U.S. taxpayer) would be $500 million. So it's pretty clear that UAL has to be generating cash before it emerges from Chapter 11. US Airways doesn't get access to its guaranteed loan until it exits bankruptcy.
While it is true that UAL is sitting on $1.5 billion in cash, they do owe money on an unspecified number of aircraft leases, and that will certainly reduce the cash pile. And while it is excellent news that the company hit the February EBITDAR target, the targets get tougher to meet as time passes, so the cost cuts are crucial. UAL, though, got some very good news in that they will be receiving a $365 million tax refund; that money will be sorely needed.
Speedport From United States of America, joined Sep 2001, 284 posts, RR: 0 Reply 21, posted (10 years 8 months 2 weeks 6 days 16 hours ago) and read 2675 times:
But they announced today that they will lose at least 1.2 billion in the first quarter alone
??? Since the first quarter hasn't ended yet, I don't know how you arrived at your figure. United announce 749 million in losses for January and February. They also announced that at the end of the month of February, they had a cash balance of 1.5 billion. I am not sure if this figure includes the 365 million they will get back from the IRS. I do believe United has been carrying this figure somewhere on their books even though they are just now getting the refund.
Here is a paragraph from the DJN in an article I just discovered:
"UAL Corp., which reported further losses for February, is taking advantage of its bankruptcy-court proceedings to squeeze deeper savings from its workers and equipment lessors. As a result, some analysts believe recent concerns that the United Airlines parent could be forced to liquidate have been overblown."
BTW, the war relief pay cuts United will be seeking are 9% for all unions, up to 18% for management.
UAL744Flagship - No time frame for re-filing. They undoubtedly will have to wait until after they meet their covenants in May and June. Part of the plan was to repay some of the DIP money with money from the loan guarantee. Whether the ATSB will allow United to use the loan for such a purpose remains to be seen. If all goes well, I could see them re-filing by mid-summer.
As for the loan keeping United out of bankruptcy, it was all a PR stunt to pressure the unions to make concessions and to enlist big names to pressure the ATSB. Had United received the guarantee back in December, they would have filed bankruptcy anyway. They just wouldn't have filed when they did. When would they have filed had they received the guarantee? Right about now I should think.
Speedport From United States of America, joined Sep 2001, 284 posts, RR: 0 Reply 24, posted (10 years 8 months 2 weeks 6 days 12 hours ago) and read 2612 times:
Artsyman - OK. Projections are projection and actual is actual. Many said United wouldn't be able to meet the first covenant and United did. Personally, I wonder where those people are now seeing they have been proven wrong.
United says they have 1.5B cash on hand after accounting for the losses in January and February. This puts them with 1.5B essentially in the middle of the quarter. If they do indeed lose 1.2B for the entire quarter, that would still give them between 700 and 800 million cash on hand. With aggressive cost cutting in April, they can conceivably make it until May. If we do hang on, and meet the covenant, then we get an infusion of 700M in cash. That would put us back to around 1.5B. 2.5B in labor cuts will save United around 625M per quarter. Lets say United is able to save another 1B through non-labors cuts. That would add up to around 875M saved per quarter. Even if you apply those saving to our worst performance, and I believe anyone would agree a 1.2B loss per quarter is the worst, we would only burn around 300M per quarter. This would buy us time to work on increasing revenue to close that 300M gap. Will it be tough? Yes. Are there too many variables to be able to accurately predict what the future holds? Yes. Is it impossible? No.
MD-90 - Yeah, like, whatever. BTW, how are those pilot negotiations going?
"We have hit a major snag in negotiations," Gregg Overman of the Allied Pilots Association said. "American Airlines' management wants to furlough close to 1,000 pilots before turning on the calculator."
25 MD-90: I don't know, but right now I think it looks very bleak for United.
26 Ual777contrail: md-90, you don't understand the whole gist of things. speedport, why hasn't the resubmission of the loan guarantee ever been brought up by the unions?
27 Artsyman: ual777, I am not sure that AA would want to file for the loan anyways. I would assume that in the event of them filing Chapt 11, they will do similar
28 Continental: UA777, I guess I do. I think United's done, they are just a few nails away from sealing the coffin... co
29 Speedport: 777contrail - The door was not closed on future submissions. The ATSB said they had not reached a "final" decision. This left the door open for United
30 Artsyman: Artsyman - Cash is king in the airline business. Everyone knows this now more than ever. I find it quite funny to hear some airline CEOs say they don'
31 Speedport: You're right. Handing out money isn't the answer. I don't think anyone would really mind getting a few hundred million, but you're right. Temporary ta
32 Artsyman: Temporary tax relief isn't the answer either and I doubt the government is willing to make tax relief permanent. ********************************** I
33 N777UA: All the 360 million is is money the US government owed UAL...it isn't tax relief, or a bailout. Doesn't matter if they mad 360 mil in Feb or lost it..