AA7573E From United States of America, joined Nov 2003, 475 posts, RR: 2
Reply 1, posted (9 years 7 months 3 weeks 5 days 6 hours ago) and read 3298 times:
All debt exit financing. That's brilliant. Why don't they look for some equity instead of hobbling themselves with future huge balloon payments? Oh yeah, that's right, because nobody in their right mind would float the equity needed to right that ship.
Getting out of BK is great, and it seems inevitable that over the course of 3 years UA should find a way. But getting out on pure debt BK exit financing is foolhardy. It only delays the inevitable.
Way to go UA. Another foot in the long term grave. And just wait to see which board positions the exit lenders take, as they always do in these deals. That is all UA needs is bankers with no industry experience nabbing board seats. Great. Net net, huge debt covenants give you short term liquidity, but the long term implications, combined with giving up additional board control of your organization is the beginning of a whole new batch of issues for UA.
StevenUhl777 From , joined Dec 1969, posts, RR:
Reply 5, posted (9 years 7 months 3 weeks 5 days 5 hours ago) and read 3159 times:
Quoting AA7573E (Reply 1): bankers with no industry experience nabbing board seats.
I'll agree that you're raising a legitimate concern...although the current board doesn't seem to have a lot of airline experience either, as that's partially why they're in the situation they're in.
As far as the banks go, it's these same banks providing the exit financing who also provided DIP financing to UAL. So, they are well aware of the industry economics, as well as UA's, so I would argue that maybe the banks have some experience with what's going on.
We'll see...time will tell. Whether UA sets it's foot in a grave or not will depend on how well this restructuring effort truly went.
HunUtazo From United States of America, joined Jul 2005, 235 posts, RR: 0
Reply 7, posted (9 years 7 months 3 weeks 5 days 4 hours ago) and read 3107 times:
Quoting StevenUhl777 (Reply 5): As far as the banks go, it's these same banks providing the exit financing who also provided DIP financing to UAL. So, they are well aware of the industry economics, as well as UA's, so I would argue that maybe the banks have some experience with what's going on.
They're the very same banks that own the majority of ALL the legacy airlines...
Swank300 From United States of America, joined Jan 2005, 49 posts, RR: 0
Reply 9, posted (9 years 7 months 3 weeks 5 days ago) and read 2943 times:
What I don't understand is why would any airline in Ch 11 want to race to get out of bankruptcy right now. I understand that they are "milking it" which isn't fair to the other airlines I suppose, but with low-cost competition and the inability to raise fares even by $ 5-10 and the seemingly never-ending rising cost in oil and gasoline prices, the airlines keep getting hit over the head by obstacle after obstacle. I keep hearing from airline analysts that it isn't the oil prices that are the problem. It is the fact that there is so much competition that they have no pricing power. People need to fly, and would most probably pay an extra $10, $20 or possibility even $50 per ticket to fly if airlines imposed it on them.
Two of UA's major competitors, Delta and Northwest are only now saying that they may very well file for bankruptcy while their stock prices flounder around $2. They aren't exactly in a prime position right now. At least UA has some flexibility when it comes to what they owe and when they must pay. Am I totally off base here???
UAL777 From United States of America, joined Aug 2003, 1597 posts, RR: 5
Reply 10, posted (9 years 7 months 3 weeks 4 days 19 hours ago) and read 2821 times:
No swank you are not, but dont worry as this thread grows, it will be infused with nonsense by the UA haters of Airliners.net. They will make statements that make no sense and will make you want to pluck your eyeballs from their sockets because you will not be able to believe what you are reading. Go to CVS right now and buy the biggest bottle of aspirin you can find.