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New $776m Hole In UAL Finances  
User currently offlineBestWestern From Hong Kong, joined Sep 2000, 7082 posts, RR: 57
Posted (10 years 2 months 1 week 2 days 12 hours ago) and read 2917 times:

Londons Financial times today reports a new hole in the United finances that threatens its survival

"The crisis comes as the Air Transportation Stabilisation Board, the federal body set up after September 11 to aid the airline industry, is preparing to decide on whether to grant United a $1.6bn loan guarantee."

"If the ATSB says no, United faces an uncertain future as it has few other sources of financing available to help it come out of bankruptcy."

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1084907758941&p=1012571727263






The world is really getting smaller these days
14 replies: All unread, jump to last
 
User currently offlineAa777flyer From , joined Dec 1969, posts, RR:
Reply 1, posted (10 years 2 months 1 week 2 days 8 hours ago) and read 2679 times:

Oh boy here we go again, new week another United is DOOMED thread........

User currently offlineBestWestern From Hong Kong, joined Sep 2000, 7082 posts, RR: 57
Reply 2, posted (10 years 2 months 1 week 2 days 7 hours ago) and read 2584 times:

Oh come off it.... The financial times is a reliable newspaper, and I'm just reporting what they wrote.




The world is really getting smaller these days
User currently offlineUadc8contrail From United States of America, joined Sep 2003, 1782 posts, RR: 9
Reply 3, posted (10 years 2 months 1 week 2 days 7 hours ago) and read 2585 times:

$776 mln hole in UALs finances due to what????FUEL....ua like most other carriers have big fuel costs now, im sure this will launch gerrys p.r. guys in atl to get the word out that without cuts from the pilots soon they could go the the courthouse in atl. WN is the only carrier i know of that has hedged its fuel.


bus driver.......move that bus:)
User currently offlineIfly2eat From United States of America, joined Apr 2008, 8 posts, RR: 0
Reply 4, posted (10 years 2 months 1 week 2 days 7 hours ago) and read 2536 times:

I think we all knew this already. Even UAL has released this very fact in their press releases. Is UAL doomed- NO. Is it in a dire financial situation- YES. Time will tell.


Fly the friendly skys and stay out of mine.
User currently offlineElwood64151 From United States of America, joined Feb 2002, 2477 posts, RR: 6
Reply 5, posted (10 years 2 months 1 week 2 days 7 hours ago) and read 2449 times:

Uadc8contrail:

Not quite. WN has its fuel hedged roughly 80%. That's different from being the only airline that is "hedged." CO has roughly 35% of its fuel hedged, and other airlines also have taken up this practice, though to lesser degrees.

As for UAL being doomed? I'd say US is the carrier to watch, actually. UA only if its situation does not improve over the next year.



Those who fail to learn history are doomed to repeat it in summer school.
User currently offlineAa717driver From United States of America, joined Feb 2002, 1566 posts, RR: 13
Reply 6, posted (10 years 2 months 1 week 2 days 5 hours ago) and read 2314 times:

This is exactly the type of situation several of us mentioned when describing the pitfalls of Ch. 11. I'm still stunned by how many people felt Ch. 11 was a good thing.

Ch. 11 drains cash flow which prevents many normal activities such as hedging. UAL is an unfortuante victim of this situation. Good luck.TC



FL450, M.85
User currently offlineFlyf15 From , joined Dec 1969, posts, RR:
Reply 7, posted (10 years 2 months 1 week 2 days 5 hours ago) and read 2265 times:

The ATSB was created to help out the airlines right after 9/11. Am I the only one not exactly happy that tax dollars are still being spent, almost 3 years later, to help out airlines with failing business plans that have almost nothing to do with 9/11?

User currently offlineUadc8contrail From United States of America, joined Sep 2003, 1782 posts, RR: 9
Reply 8, posted (10 years 2 months 1 week 2 days 4 hours ago) and read 2201 times:

flyf15,
what tax dollars are going to be spent?????the a.t.s.b. is cosigning on the proposed loan, that means if ua/us or any other carrier that has loans that are not repaid then you and i will be footing the bill.



bus driver.......move that bus:)
User currently offlineArtsyman From United States of America, joined Feb 2001, 4745 posts, RR: 34
Reply 9, posted (10 years 2 months 1 week 2 days 4 hours ago) and read 2201 times:

Not quite. WN has its fuel hedged roughly 80%
*****

Yes, but they are still hedged at a really high price, just not quite as high as everyone else. People always assume that when "hedged" that airlines are all of a sudden paying peanuts for fuel. Airlines buy fuel in advance and take a chance on the price going up or down, but fuel has been high for a long, long time now, and WN while hedged, still hedged at a real high rate.

If fuel prices were to drop today down to $28 bucks a barrel, WN would still have to honor their hedged purchase, and would be paying way more than they could be.

J


User currently offlineB747-437B From , joined Dec 1969, posts, RR:
Reply 10, posted (10 years 2 months 1 week 2 days 4 hours ago) and read 2191 times:

Am I the only one not exactly happy that tax dollars are still being spent

Not to defend UA's business plan (or lack thereof), but the ATSB does not spend any tax dollars (beyond the typical bureaucratic administrative costs). They simply provide collateralized loan guarantees to airlines. The actual money comes from commercial lenders.


User currently offlineSlider From United States of America, joined Feb 2004, 6787 posts, RR: 34
Reply 11, posted (10 years 2 months 1 week 2 days 1 hour ago) and read 2044 times:

This isn't so much directed toward UA, as it is a general statement about the industry.

I think the ATSB should hold off on any and all additional funding requests...immediate and permanent moratorium on all ATSB activity except for those carriers which have already received a loan.

UA's problems are much deeper than 9/11, and they, as all airlines, should deal with it in that context or go the way of the dinosaur.



User currently offlineMariner From New Zealand, joined Nov 2001, 25009 posts, RR: 85
Reply 12, posted (10 years 2 months 1 week 2 days ago) and read 1982 times:
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With the exception of UAL, the ATSB has closed up shop.

UAL, which was denied on its first application, was given leave to apply again.

For all the others, the cut off date for applications was June 28, 2002, so no other airline can apply.

cheers

mariner





aeternum nauta
User currently offlineUsatoeze From United States of America, joined Feb 2004, 358 posts, RR: 3
Reply 13, posted (10 years 2 months 1 week 2 days ago) and read 1913 times:

UA's problems are much deeper than 9/11, and they, as all airlines, should deal with it in that context or go the way of the dinosaur.

Most airlines will, unless they change their business plans. Loans and Ch. 11s are just buying them more time.

The sad thing about UA in CH 11 is that United is another airline trying to be all things to all people, instead of focusing on its core customer base. If DL goes into CH. 11 it will also be because of trying to be all things to all people without finding its niche within the industry. UA's core customers used to be the business traveler, but even before 9/11 business travel was slowing down and yet UA failed(Because of many reasons) to adjust and keep pace. I love UA, but unless the world economy develops at an unbelievable pace I feel like ultimately they are doomed to fail because there are superior domestic options as well as superior foreign options. I wish them luck.



War is a very poor political tool
User currently offlineN754pr From , joined Dec 1969, posts, RR:
Reply 14, posted (10 years 2 months 1 week 1 day 22 hours ago) and read 1782 times:

UAL should not even be flying, who is going to pay for all the money going down the toilet??

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