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UAL Loan Denied  
User currently offlineBoingGoingGone From , joined Dec 1969, posts, RR:
Posted (10 years 4 weeks 1 hour ago) and read 7317 times:

Ouch...

http://biz.yahoo.com/rc/040617/airlines_united_loan_1.html

82 replies: All unread, showing first 25:
 
User currently offlineN777UA From United States of America, joined Mar 2010, 0 posts, RR: 0
Reply 1, posted (10 years 4 weeks 1 hour ago) and read 7063 times:

The article released on chicagotribune.com stated that the boards decision was based on their belief that United was capable of surviving bankruptcy without the loan guarantee....something that CEO Glenn Tilton stated a week or so ago.

User currently offlineInnocuousFox From United States of America, joined Dec 2003, 2805 posts, RR: 15
Reply 2, posted (10 years 4 weeks 1 hour ago) and read 7057 times:

I can't blame them... it's a dangerous situation.


Dave Mark - Intrinsic Algorithm - Reducing the world to mathematical equations!
User currently offlineBoingGoingGone From , joined Dec 1969, posts, RR:
Reply 3, posted (10 years 4 weeks 1 hour ago) and read 7053 times:

That would be good news then. If anyone is going to go, it should be US Airways first, not that I want to see any go.

[Edited 2004-06-18 01:46:29]

User currently offlineJBLUA320 From United States of America, joined May 2002, 3179 posts, RR: 19
Reply 4, posted (10 years 4 weeks 1 hour ago) and read 7040 times:
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BoeingGoingGone,

You make it sound like there is a systematic process as to which airlines should go out of business first... care to elaborate?

JBLU


User currently offlineInnocuousFox From United States of America, joined Dec 2003, 2805 posts, RR: 15
Reply 5, posted (10 years 4 weeks 1 hour ago) and read 7001 times:

"You make it sound like there is a systematic process as to which airlines should go out of business first... care to elaborate?"

Yeah, whoever is in the worst shape goes first. It's all very orderly.  Insane



Dave Mark - Intrinsic Algorithm - Reducing the world to mathematical equations!
User currently offlineBoingGoingGone From , joined Dec 1969, posts, RR:
Reply 6, posted (10 years 4 weeks 1 hour ago) and read 6997 times:

I'd hate to see any airline go before US Airways which has been unhealthy for so long that I wouldn't touch them with a ten foot pole. I'd also add I wouldn't mind seeing one or two of the market sucking LCC's fall apart as well.

Anyone can suck the life out of a solid O&D market like JFK to LAX, but it takes a real airline to serve a small city, even if it's done at a loss. When JetBlue actually flies somewhere that involves risk I'll strip and run naked through the streets. I'm certain this will never happen, so don't have a heart attack. Unfortunately, the side effect is that the major carriers suffer. Don't give me the "it's competition" crap either.


User currently offlineAa777flyer From , joined Dec 1969, posts, RR:
Reply 7, posted (10 years 4 weeks ago) and read 6968 times:

Actually I see this as a GOOD thing for UAL. Since UAL will beable to restructure without the governments help, it is better to do it independantly without government getting their hands in on UAL's business.

User currently offlineNIKV69 From , joined Dec 1969, posts, RR:
Reply 8, posted (10 years 4 weeks ago) and read 6947 times:

BoeingGoingGone,

I am with you, I would like to see US go first. UA seems to be able to survive, I hope they do I am flying them in three months!

As for LCC going it doesn't seem likely. Even though I would choose CO over WN or B6 the majority of people out there love them. They are here to stay.


User currently offlineJBLUA320 From United States of America, joined May 2002, 3179 posts, RR: 19
Reply 9, posted (10 years 4 weeks ago) and read 6938 times:
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I'd hate to see any airline go before US Airways which has been unhealthy for so long that I wouldn't touch them with a ten foot pole. I'd also add I wouldn't mind seeing one or two of the market sucking LCC's fall apart as well.

Im probably missing the point, BUT...

It is the nature of the game for airlines to rise and fall throughout time, and that the industry always semi-recovers (atleast) from a loss... but what is the method behind actually WANTING an airline (several in your case) to go under? It might help a legacy, but it still hurts people in the end.

If jobs are going to be lost, isn't it most fair for the jobs to come from the airline that can't pull through (regardless of how long they have been in trouble)? I guess it depends mostly on your management, but survival of the fittest should be in full effect. If that means kissing goodbye to a legacy, as much as it'd suck, what can you do about it?

I dont understand why USAirways should go out first simply because its been struggling the longest. Have they been milking the federal banks THAT much? I know I see this industry through largely inexperienced eyes, but if an airline has been in trouble for a year and goes under before an airline thats been struggling for ten, is it really "violating" the rules of the game, or is it merely unfair because your not getting your desired outcome?

Not trying to ruffle any feathers... just make sense of this in my head

JBLU






User currently offlineAviatorTJ From United States of America, joined Jul 2003, 1838 posts, RR: 7
Reply 10, posted (10 years 4 weeks ago) and read 6925 times:

Well I will be sure to continue to help out by flying them as often as I can. In all of the times I have flown them, they continue to amaze me with their excellence in service. Good luck UAL.

User currently offlineBoingGoingGone From , joined Dec 1969, posts, RR:
Reply 11, posted (10 years 4 weeks ago) and read 6906 times:

If US goes, 34 million people shift to the other carriers making them all more than viable due to the new increased demand. UAL also has a much better route structure and fewer people (general public) are affected. I look at it from the standpoint of how it will affect the industry. USAirways, bad for employees, good for the industry. UAL bad for both.

User currently offlineJBLUA320 From United States of America, joined May 2002, 3179 posts, RR: 19
Reply 12, posted (10 years 4 weeks ago) and read 6896 times:
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Fair enough  Smile

JBLU


User currently offlineNIKV69 From , joined Dec 1969, posts, RR:
Reply 13, posted (10 years 4 weeks ago) and read 6899 times:

Yes I have to agree, all my flights with UAL have been great, good service and on time! Clean planes as well. I think they will survive.

User currently offlineBlackbird1331 From United States of America, joined Apr 2004, 1892 posts, RR: 0
Reply 14, posted (10 years 4 weeks ago) and read 6888 times:

You mean, Darwin rules. Business, just business.


Cameras shoot pictures. Guns shoot people. They have the guns.
User currently offlineBoingGoingGone From , joined Dec 1969, posts, RR:
Reply 15, posted (10 years 4 weeks ago) and read 6867 times:

Who's the hell is Darwin?  Smile/happy/getting dizzy

User currently offlineInnocuousFox From United States of America, joined Dec 2003, 2805 posts, RR: 15
Reply 16, posted (10 years 4 weeks ago) and read 6836 times:

"Who's the hell is Darwin?"

It's fascinating to see how this thread has evolved.



Dave Mark - Intrinsic Algorithm - Reducing the world to mathematical equations!
User currently offlineDeltaffindfw From United States of America, joined Sep 2003, 1438 posts, RR: 1
Reply 17, posted (10 years 4 weeks ago) and read 6822 times:


Charles Darwin

Survival of the fittest...


User currently offlinePdpsol From United States of America, joined Feb 2004, 1106 posts, RR: 6
Reply 18, posted (10 years 4 weeks ago) and read 6800 times:

As with all firms under Chapter 11 protection of the United States Bankruptcy Code, UA is operated under an 'Estate' which represents the interests of all its creditors. If UA's managers can convince its Creditors Committee and the bankruptcy judge overseeing its case it has a CREDIBLE plan to operate profitably and offer creditors SOME return, UA would be able to emerge from bankruptcy. Of course, its shareholders will never, ever see anything...

Unfortunately, UA has NO credible plan to operate profitably. Its creditors would most likely be thrilled to accept a less-than 50 cent return on their claims. The problem lies in UA's inability operate under ANY scenario, even if ALL its creditors were wiped out.

Airlines do not possess liquid assets; their 'strategic' value cannot be easily transferred to others and their hard assets may not be worth much in today's environment.

So... the Air Transport Supervisory Board made the RIGHT decision by refusing to offer loan guarantees to UA.


User currently offlinePdpsol From United States of America, joined Feb 2004, 1106 posts, RR: 6
Reply 19, posted (10 years 4 weeks ago) and read 6779 times:

I should caveat my last post with:

UA cannot operate profitably under any scenario, given its current cost structure.

Of course if UA were to implement policies to radically reduce its cost structure, then it would be able to operate profitably. However, it's clear UA's employees are unwilling/unable to accept the working conditions those policies would require.


User currently offlineArtsyman From United States of America, joined Feb 2001, 4745 posts, RR: 34
Reply 20, posted (10 years 4 weeks ago) and read 6742 times:

I agree with some of the others in saying that ultimately this could be a good thing for UAL. This means if they want to survive,k they need to make the unpopular cuts, and get it done. I believe that it is possible for them to do this, and ultimately think that it is the rght decision.

J


User currently offlineUnited1 From United States of America, joined Oct 2003, 5929 posts, RR: 9
Reply 21, posted (10 years 4 weeks ago) and read 6732 times:

I wouldn't count United out quite yet This was plan A, United going away is plan Q we're now on B. In other words we have a long way to go before UA going under becomes a reality. Remember UA was turned down because the feds feel that United can survive without a loan not because the situation is hopeless.

This is not a bad thing actually this could turn out to be a very good thing. Accepting a loan guarantee from the government would have put many restrictions on United and prevented it from expanding for years. And as we all know no airline has ever shrunk itself to profitability. This probably means that an equity investor will have to step forward/be found and life will go on.

Should be interesting to see what Plan B is if nothing else... Smile

later
Chuck



Semper Fi - PowerPoint makes us stupid.
User currently offlineFLY777UAL From United States of America, joined May 1999, 4512 posts, RR: 3
Reply 22, posted (10 years 4 weeks ago) and read 6680 times:

"However, it's clear UA's employees are unwilling/unable to accept the working conditions those policies would require."

...and those employees as well as the working conditions would be which ones, exactly? As I can remember, all of the employee groups gave up quite a bit salary and working condition-wise in order to help the company succeed...

F L Y 7 7 7 U A L


User currently offlineUnited1 From United States of America, joined Oct 2003, 5929 posts, RR: 9
Reply 23, posted (10 years 4 weeks ago) and read 6666 times:

PdPsol wrote:
"However, it's clear UA's employees are unwilling/unable to accept the working conditions those policies would require"

Where do you get that idea from? UA's current Union contracts (all of which were negotiated in BK) were all reached consenualy. No one had a contract forced upon them in court and based on what I hear coming out of WHQ most of the employees seem rather optimistic even happy the direction that things are going.

Chuck


[Edited 2004-06-18 02:48:28]


Semper Fi - PowerPoint makes us stupid.
User currently offlineArtsyman From United States of America, joined Feb 2001, 4745 posts, RR: 34
Reply 24, posted (10 years 4 weeks ago) and read 6620 times:

here do you get that idea from UA's current Union contracts (all of which were negotiated in BK) were all reached consenualy. No one had a contract forced upon them in court
***

Tell that to the union group that refused the companies offer and thus forced the company into Chapt 11 in the first place.

Now, the writing is on the wall, and if they want to keep their jobs, they will have to take the cuts that are offered, or they will be maning the shake machine at McDonalds.

I think they'll get it done

J


25 FLY777UAL : Artsyman: "Tell that to the union group that refused the companies offer and thus forced the company into Chapt 11 in the first place." ...now would t
26 Artsyman : You talk about them as if they are just plain stupid and ignorant to the fact that the company needed them to make the appropriate cost reductions. **
27 United1 : Artsyman: The Mechanics Union voting down the contract didn't send UA into BK. BK was virtually a foregone conclusion whether or not that contract had
28 Artsyman : Chuck, You could be right, but the common perception from the media and from the industry in general, was that that decision was the final straw that
29 FLY777UAL : Okay...now I see! Sorry about that! Just wondering, though, from your point of view--do you really feel that the headphones and liquor on internationa
30 United1 : Artysman: I'll give you one thing the mechanics Union can be very intense/stubborn sometimes it seems to there own detriment. I never could quite figu
31 Airzim : United1, And as we all know no airline has ever shrunk itself to profitability. Can you say Continental?
32 NWAFA : UAL did NOT deserve the Loan. It is now time for them to act like every other company and be responsible! It makes me nervous as my sister is a FA wit
33 STT757 : "And as we all know no airline has ever shrunk itself to profitability" I'll strongly disagree with that statement, I'll use the most successful Corpo
34 Cx123 : Don't know why CO is shutting doen the AUS routes??? It is the most profitable route now.
35 Ramerinianair : Boeinggoinggone, I just read your post and all I can say is AMEN TO THAT!!!!! -S.R.
36 Artsyman : from your point of view--do you really feel that the headphones and liquor on international flights will make that much of a cost difference? *** Thos
37 N79969 : If it doesn't kill you, it just makes you stronger. As a UAL quasi-partisan, I am glad that UA did not get this loan guarantee out of a kind of tough
38 United Airline : SO MEAN AND SO UNFAIR!!!!!! US AIRWAYS GOT IT and why not United Airlines???? Is it a MUST that they have to further downsize or do further cuts?
39 Post contains images Alpha 1 : Actually I see this as a GOOD thing for UAL. Since UAL will beable to restructure without the governments help.. Say that again? They haven't even tur
40 StevenUhl777 : “A majority of the board believes that the likelihood of United succeeding without a loan guarantee is sufficiently high so as to make a loan guaran
41 WGW2707 : I think it's probable that Cx123 was referring to Continental Micronesia, which historically has been one of the more valuable assets for CO. The unpr
42 Artsyman : what the ATSB is saying in not so many words is that UAL has done a good enough job restructuring on its own, management convinced them UA is a viable
43 Artsyman : I'll bet a latte that Tilton and Brace go to JP and negotiate a financing package **** Steven, I'll take your bet. I say that none of those financial
44 Post contains links Mariner : Steven: But why are they going back to the ATSB?: http://biz.yahoo.com/rc/040617/airlines_united_statement_1.html "We do not believe that the Board wa
45 N79969 : " Think about that statement for just a minute...what the ATSB is saying in not so many words is that UAL has done a good enough job restructuring on
46 StevenUhl777 : they worded this statement to cover their ass in an election year in case UA folds--pure and simple. Illinois and California have a lot of electoral v
47 Post contains images UAFan17 : I just hope that UA does whats necesary to survive otherwise im stuck flying ATA to Aruba.
48 UAL777 : UA is a viable airline. They even stated they made a "small profit" in May. They also stated that fuel prices are 700 million dollars over their estim
49 Artsyman : UA is a viable airline, they have just been hit harder since 9/11 (due to SARS and the pacific, and no fuel hedges) than other carriers. *** UAL were
50 Tcfc424 : Is everyone missing the fact that UAL turned a PROFIT last quarter? So they lost out on some additional cushion. I am by far the best UAL supporter...
51 Post contains links Artsyman : is everyone missing the fact that UAL turned a PROFIT last quarter? **** Ok, as you obviously missed it, I'll post it here for you, UAL lost 459 milli
52 Leelaw : Doesn't this beg the question: what was more "compelling" about the US plan that they got the dough "guarantee" from the ATSB? Does UA merely cut and
53 Tsully : Pdpsol wrote: "However, it's clear UA's employees are unwilling/unable to accept the working conditions those policies would require." Yes, please tel
54 Leelaw : Perhaps the bedrock problem is that even after a 28% pay cut the pilot is paid $217K and after an 11% pay cut the V.P. is paid $668K. Is there somethi
55 AirframeAS : Basically....like what everyone else says, the ATSB felt that UA can survive without any loan gaurentees. I agree with that. Im sure that UA will surv
56 Ludavid777 : Well too bad for United, I dont give them much hope. Sucks to be them... I want to see how many concessions their employees are willing to take. Now w
57 MD-90 : There are a LOT more pilots than there are VIPs that make that kind of money. You're talking about VP level execs, and even if you have too many of th
58 NWDC10 : I think when labor takes a % cut in pay, management should atleast "match" that same % cut in pay. Wheather it be 28% or so. Robert NWDC10
59 KITH : Yes yes, the evil management. Its a free society and tilton came from Texaco where I'm sure his salary was comparable. He works almost every day of th
60 UAL777 : United Airlines Posts Modest May Profit Monday June 14, 5:30 pm ET "DALLAS (Reuters) - United Airlines said on Monday it will report a modest profit f
61 Artsyman : That's from Reuters Artsyman. A PROFIT for may. **** Maybe if you re-read the article, it says an operating profit, that is not a profit. When you fac
62 UA744KSFO : STT757, Do you really think that it was good for the consumer to lose service to SYD, MEL, CNS, BNE, AKL, and the other South Pacific destinations whe
63 Artsyman : Do you really think that it was good for the consumer to lose service to SYD, MEL, CNS, BNE, AKL, when CO trimmed down? Was it good for the DEN consum
64 777ualsfo : When CO pulled out of Denver, fares went up right away and access to Jet and mainline service disappeared from the secondary airports (COS, GJT etc),
65 Mariner : 777ualsfo: "I'm sure Frontier will increase their rates and go for the high profitable routes as well." No more than they are already doing. Frontier'
66 Tsully : Artsyman, Actually I think you need to re-read the article: "DALLAS (Reuters) - United Airlines said on Monday it will report a modest profit for May
67 Lj : And on top of that, analysts and JP Morgan were so confident in what management presented to the ATSB that they backed it up with another round of fin
68 Artsyman : tsully, spin it however you want, they lost money in May J
69 STT757 : CO shutting down the Denver hub allowed them to redeploy those assets to EWR and IAH which grew substantialy and are now very successful, and when CO
70 Elwood64151 : While I disagree with the posts that state that one or more airlines need to collapse so that the rest can survive (after all, if they all cut their c
71 StevenUhl777 : Hmmm...I thought about this whole thing a while longer, and something occurred to me. - UAL wants $1.6B, right? - And they lost it for a 2nd time... -
72 Mariner : Steven: If I understand you correctly, then, for the first time, you've lost me. That would be the most reprehensible scenario I have heard in a long
73 Artsyman : What confuses me that UAL and all it's employees that we have on airliners.net all state that everything is so rosy that they "do not need this loan"
74 Uadc8contrail : What confuses me that UAL and all it's employees that we have on airliners.net all state that everything is so rosy that they "do not need this loan"
75 Artsyman : uadcontrail, My comment was a generalization, but I do accept your point. I don't think that the cuts that UAL are going to need are wages. I think it
76 Uadc8contrail : j, we should drop south america, strengthen the varig alliance and focus on asia and what we have going to europe, also really look at all the routes
77 StevenUhl777 : Mariner: As in the past, I don't agree with UAL going for this ATSB loan as hard and fast as they have been, my preference would be for them to do wha
78 Post contains links Mariner : Steven: Thanks for the clarification. It didn't change much, but at least I understand your position better. I think the situation is slightly out of
79 Artsyman : And I surely don't understand why UAL has been granted permission to apply for a third time. I guess it is political pressure again, and one member of
80 Post contains images ORDINDUAFLYER : Quoted from Mariner: "...Tilton and Brace spent most of Wednesday with the ATSB, so why didn't they make the Board aware?..." I'm about as pro-UAL as
81 Post contains links Mariner : ORDINDUAFLYER: It seems you and I are not the only ones who are puzzled: http://www.rockymountainnews.com/drmn/business_columnists/article/0,1299,DRMN
82 Scotron11 : Something seems "fishy" to me. Why have UA been given an opportunity to apply for a 3rd time? From articles here and in newspapers (by the by, NYTimes
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