Thrust From United States of America, joined Sep 2003, 2686 posts, RR: 10 Reply 1, posted (8 years 11 months 3 weeks 4 days 10 hours ago) and read 5796 times:
what was their last quarter loss? Because 87 million is well...not good UA really can't afford these losses, and the fact they are restructuring and cutting pension funds during this time, well, an 87 million loss is an ominous sign.
TWFirst From Vatican City, joined Apr 2000, 6346 posts, RR: 53 Reply 8, posted (8 years 11 months 3 weeks 4 days 10 hours ago) and read 5692 times:
>>How does a company post hundred million dollar loses the last 18 quarters in a row and continue to operate?<<
SIMPLE. It borrows money. Lots of it. It files for bankruptcy, therefore it's protected from creditors. It lowers it's liabilities through the bankruptcy process and when it believes it's cost structure and business model is such that it can make a profit going forward, it exits bankruptcy.
Artsyman From United States of America, joined Feb 2001, 4745 posts, RR: 36 Reply 9, posted (8 years 11 months 3 weeks 4 days 10 hours ago) and read 5674 times:
United have twice borrowed vast amount of money to help them ride through this bankrupcy. Aside from needing to overcome an $8.3 billion dollars shortfall to their pension, they will also have billions of dollars of debt repayments from the borrowings from the this bankrupcy.
Even without these alarming problems, I still think United will struggle just to get profitable.
LegendDC9 From , joined Dec 1969, posts, RR: Reply 15, posted (8 years 11 months 3 weeks 4 days 9 hours ago) and read 5589 times:
Isn't it amazing though, that UA and US far that matter, with all these losses, quarter after quarter are still able to find lendors? Nothing against these airlines but any other business would be cut off with a credit rating that would not allow it to borrow for chewing gum. Still, every month we hear someone else coming to the "rescue" only to see their cash infusion go up in smoke. If I was a major bank, looking at lending money I would tell UA; You can only borrow against actual assets, treat them like they walked into a pawn shop. You want money? I want an office building, how about the space for your city ticket office in down town Chicago? New York? London? I move in now... If you default, I keep it. Fair, isn't it?
Thrust From United States of America, joined Sep 2003, 2686 posts, RR: 10 Reply 16, posted (8 years 11 months 3 weeks 4 days 9 hours ago) and read 5574 times:
A MONTHLY LOSS, TWFirst! THey are doomed. 87 million per month means they will be out of cash very shortly. If this restructuring operation fails, UA will be finished. the lendors are running out, and so is time....this is not how to get out of bankruptcy by June 2005.
Artsyman From United States of America, joined Feb 2001, 4745 posts, RR: 36 Reply 17, posted (8 years 11 months 3 weeks 4 days 9 hours ago) and read 5569 times:
You can only borrow against actual assets, treat them like they walked into a pawn shop.
They are borrowing against actual assets. Planes etc. The problem going forward is now, that some of the lenders are now trying to reposses planes and assets, and courts are blocking them. If this continues, UAL will not get another penny.
Chapt 11 is pretty pathetic at the best of times, but when the person you are refusing to pay for their planes is not allowed to take them back because you are not paying for them, then there is something wrong.
LegendDC9 From , joined Dec 1969, posts, RR: Reply 20, posted (8 years 11 months 3 weeks 4 days 9 hours ago) and read 5494 times:
"Chapt 11 is pretty pathetic at the best of times, but when the person you are refusing to pay for their planes is not allowed to take them back because you are not paying for them, then there is something wrong."
Can you explain what you wrote here, I am not sure I follow. The difference between what I am saying and what is going on is this: If you are the airline and put your airplane up as collatoral to guarantee a loan and you go into BK, the court can void out that contract to and you will be out the money. UA still has possesion of these assets even though they owe billions of dollars, so where does it end? under my "evil" plan, anything you put up as collateral, I want physical possesion of. So in general it is a trade, cash for assets. You pay up, you can have it back, if you don't, I keep it. Obviously aircraft cannot be a part of the equation since banks have no need to just "hold" aircraft. However, real estate space in big cities is always at a premium and that can be transfered over be used, just sign it over.
Yes, I know, this is pretty nuts but with UA not being able to pay up and are under court protection, why would you not want to guarantee your loan this way?
Byrdluvs747 From United States of America, joined Jul 2004, 2265 posts, RR: 1 Reply 21, posted (8 years 11 months 3 weeks 4 days 9 hours ago) and read 5478 times:
I also don't understand how UA can continue to lose sooo much money and still remain in business. At what point does someone say enough is enough?
I don't want UA to die, but I just can't believe a company, even one the size of UA, can post loses of $80 million a month for the past 18 months and still have investors willing to part with their money.
The 747: The hands who designed it were guided by god.
Thrust From United States of America, joined Sep 2003, 2686 posts, RR: 10 Reply 22, posted (8 years 11 months 3 weeks 4 days 9 hours ago) and read 5473 times:
UA has only until June 2005 to get out of Chapter 11, then they are in major trouble. Only two years of bankruptcy is a huge issue for them right now...I forget what they will earn by emerging from bankruptcy by this time, but I figure if they don't meet this date they will be in Ch. 11 truly indefinitely.
TWFirst From Vatican City, joined Apr 2000, 6346 posts, RR: 53 Reply 24, posted (8 years 11 months 3 weeks 4 days 9 hours ago) and read 5460 times:
>>I just don't understand how a company going on 3 yrs of bk is still getting sympathy from courts...<<
The court considers what is best for shareholders, and it's not often that it's best for shareholders that a company ceases to exist. Although United is posting losses, as an operating entity it's still generating revenue and thus can make payments to creditors. If a company ceases to exist, it stops generating revenue. So if the court believes there is a possibility that a company can continue to survive in the long term, it is not going to order liquidation.
(edited for typo)
[Edited 2004-12-21 23:24:44]
An unexamined life isn't worth living.
25 Scotron11: That is what happened when some lenders tried to repossess 14 UAL aircraft pledged as collateral. The bankruptcy Judge issued a temporary restraining
26 Aa777jr: I think UA will go down in the record books for classic filing and handling of Chp 11. If I'm not mistaken, my Bankruptcy textbook makes reference to
27 Rparker537: People need to remember that accounting ("profit" and "loss") terms are NOT cash terms. You can lose money due to non-cash charges (write-offs, for ex
28 N867bx: Interesting story in the Minneapolis paper on Monday. http://www.startribune.com/stories/535/5141415.html Don't know how to make it clickable, I'm not
29 Avek00: "Isn't it amazing though, that UA and US far that matter, with all these losses, quarter after quarter are still able to find lendors?" Actually, both
30 Mm320cap: Never in my life have I seen a thread where such a huge lack of understanding has been spouted with such vigor. I'm not even going to bother to try to
31 ORD2PHL: Actually the last profit for NW was the last time they posted their earnings report. NW isn't doing to badly. BAH. From NWA's 10-Q as filed with the S
32 StowAway: >UA has only until June 2005 to get out of Chapter 11
33 N867bx: Mm320cap Ignorant or not we all will watch and learn. I simply would not put a wager on UA surviving. If the market for used aircraft gets better, GE
34 Mm320cap: N867bx, I wouldn't wager on United surviving either. That is why I have dusted off my resume and started applying elsewhere. However, the people posti
35 StowAway: >StowAway: "United is a waste of taxpayer's money." Huh? Are you high, or just stupid? United is surviving right now in spite of the government, not b
36 Mariner: Mm320cap: I sympathize with your position - I very much hope that United survives and have said so, many times, on this board from the first day of th
37 N867bx: Mm320cap: Good luck on keeping your job. I've been out of the industry since 1998. I really miss the job. I don't miss the uncertainty that many of yo
38 PVG: I think that the term cash-flow needs to be applied. You can increase your cash on hand and still post an accounting loss. With regards to whether the
39 Aa777jr: Actually the last profit for NW was the last time they posted their earnings report. NW isn't doing to badly. BAH. From NWA's 10-Q as filed with the S
40 N754pr: I think I need to get that UA 744 in the new scheme quick.... at this rate they will close down.
41 Mm320cap: OK, here we go. StowAway, No, I don't really feel better. One of the things that I hope that you learn a little later in your life is that there is no
42 Planenutz: Because I travel a lot for business my company maintains TravelGuard as an insurance retainer for me when I travel. I received an email from them sayi
43 Cloudy: The court considers what is best for shareholders, and it's not often that it's best for shareholders that a company ceases to exist. Although United
44 Flashmeister: The notion of UAL's three applications to the ATSB is maddening. The company provided three unrealistic financial pictures to the ATSB, got special di
45 Scotron11: As bad as it would be for the PBGC, lets hope the IAM and AFA agree a similar deal with UAL on the termination of their current defined plans. Under t
46 OHLHD: Really bad. How in this world is it possible to let such a company still run their business. I hope that UA survives, but wouldn´t it be better if th
47 Luv2fly: Planenutz Working in the travel related industry let me say this. Travel guard no longer covering UA flights is not a good sign. Everytime I have seen
48 TWFirst: Cloudy... thanks for the clarification and further explanation. I intended to use the word creditors where I used the word shareholders in that first
49 MasseyBrown: OHLHD, the US bankruptcy law (Chap 11) is written to give the bankrupt company almost every opportunity to reorganize and recover from its losses. Rig
50 Sllevin: I am a big proponent of Chapter 11 as an effective tool to restore value to creditors and (where possible) stockholders. The primary intent of Chapter
51 Mariner: Mm320cap: I think you're splitting hairs. The "3rd" rejection was really only a formal confirmation of the "2nd". And yes, while it included the expla
52 Ckfred: I think UA has a January date to either come up with a plan for exiting Chapter 11, or the court will allow third parties to make offers for taking ov
53 UAL747DEN: Im very sad to say it but I just might think that my beloved ///UNITED AIRLINES is on its way out. I cannot believe what they have done with the pensi
54 Mm320cap: I'll try this again, and then I have to go fly another trip. Mariner, I'm still not sure how you can truly think that the ATSB criteria was met by Fro
55 Mariner: Mm320cap: I guess we have a different understanding of why the ATSB was created. The legislation specifically states that it was for those airlines wh
56 UA772IAD: "United won't go down until the government lets it go down." Interesting idea stowaway. After reading this, I thought... is the government trying to k
57 Slider: The rumblings I'm hearing is that the aircraft market is picking up and leased aircraft prices are regaining traction after having been damn near deci
58 Isitsafenow: Sooner or later, UAL is going to be out of $$$$$$$. I think we ALL know this don't we? As I have always said.."when ya can't make payroll....its turn
59 Mm320cap: Mariner, I wasn't going to reply in this thread anymore, but I did want to send you one final note. First, my apologies. My frustration is definitely
60 Mariner: Mm320cap: There is no need to apologize. My point was actually more general than aimed specifically at you. It does seem to me that UAL - I mean gener
61 StowAway: >Interesting idea stowaway. After reading this, I thought... is the government trying to keep UA (and maybe even US) alive? If you think about it, bot
62 Artsyman: There was quite a lot of noise from the analysts today on UAL. It was reported that even if you do NOT count the increase in fuel prices this year, UA
63 Annoyedfa: Sad but looks like their not going to make it. My cousin works for Goldman Sachs I want to see if I can find out some real info for us.
64 Tango-Bravo: Gee, whatever happened to their wunderkind (TED)? I thought they were making boatloads of profit for UA -- after all, their load factor is hovering so
65 Mm320cap: StowAway, Thanks for the post, and for understanding the difficult times we are going through. Your question is, what is United going to do to change
66 Cloudy: But then, as I recall from my history classes, pundits and experts of highest repute in the middle ages also knew for certain that the Earth is flat -
67 UA772IAD: From what I understand, TED is profitable, but only at this point because it's taken over former mainline routes. With all due respect, TED is not onl
68 CTHEWORLD: MM320Cap, This is the place to vent, especially when idiots, who have no skin in the game, no deep understanding of how the industry works, and no clu
69 Ual777contrail: ~~~~How does a company post hundred million dollar loses the last 18 quarters in a row and continue to operate? Could you imagine UAL being in BK and
70 UA744Flagship: Gee, whatever happened to their wunderkind (TED)? I thought they were making boatloads of profit for UA -- after all, their load factor is hovering so
71 UniTED: Why is it such a problem for the US to loan UA (a vital part of the US economy, as well as AA, DL, NW, CO, etc...) a several million when they are BLO
72 Mariner: UA772IAD: I hate to burst your bubble, but you can't book JetBlue on the web travel booking sites (Orbitz, Travelocity, etc.). And if you check Travel
73 Annoyedfa: Sorry uniTED: I don't want my tax dollars going to a airline that is doing nothing but failing. Am I happy it's going for a war.. No not at all, but I
74 StowAway: >>This is the place to vent, especially when idiots, who have no skin in the game, no deep understanding of how the industry works, and no clue in gen
75 Wdleiser: In my opinion, you will see United getting rid of 744's and gaining A346's before going under. As stated before on this forum, Airbus has an interest
76 Isitsafenow: Airbus has an interest in UAL? So what? Boeing owned 7 1/2 per cent of United(stock ownership in UAL) in the late 70's. Do you wish to continue this c
77 ORD2PHL: You're missing the point, Airbus has an interest in UA due to the fact that Airbus is one of the creditors with the most to lose if UA fails; United h
78 Isitsafenow: ORD2PHL....."Airbus COULD help arrange exit financing....... Then why don't they do it instead of fiddle around like everyone else connected to the UA
79 PVG: Doesn't Airbus think about its other customers when making these decisions? I mean NWA seems to have decided to go with Airbuses, why would Airbus now